Paris School of Economics - École d'Économie de Paris

La science économique au service de la société

17 mai - Conférence Richard Brooks, Yale Law School


Paris School of Economics Lecture Series
Paris, 17th May 2011

Venue : PSE Campus Jourdan “Grande Salle”
48 bld Jourdan
75014 Paris

To register (compulsory) : veronique.guillotin

5 pm Welcome address : François Bourguignon (PSE)

5.15 pm Lecture by Pr. Richard Brooks (Yale Law School)

“Covenants without Courts : Enforcing Residential Segregation with Legally Unenforceable Agreements”

Contemporary economic analysis of law is largely informed by models that view law as rules subject to enforcement by courts. Yet this view captures only one aspect of law’s influence on behavior. My talk will emphasize important, often overlooked, alternative mechanisms through which law directs behavior. I will illustrate these mechanisms by focusing on laws regulating residential segregation in the United States during twentieth century.
In 1917 the U.S. Supreme Court ended the country’s brief experiment with racial zoning laws, deeming them unconstitutional state action under the Fourteenth Amendment U.S. Constitution. The Constitution, however, did not prohibit private parties, the Court declared in a later opinion, from agreeing to racially segregate neighborhoods. In the wake of that opinion, a swell of activity among private actors filled deeds with restrictions prohibiting the sale, rental, use and occupancy of properties by persons of designated races, ethnicities, nationalities and religions—collectively known as racial or racially restrictive covenants. It is widely acknowledged that racial restrictive covenants were extensively used throughout the country, but not everyone agrees they mattered much.
Louis Wirth, the noted Chicago sociologist, felt covenants were ineffective because homeowners were simply too tempted by premiums they could garner selling to blacks. When neighbors sought judicial enforcement against these violators, historian Albert Hirsch observed, the courts were largely unresponsive. Black housing opportunities, according to Hirsch, were mainly constrained by a general housing shortage and through violence, not by covenants. Economist Gunnar Myrdal took the opposite view, saying that if the Supreme Court ruled covenants unconstitutional, which it did in 1948, “segregation in the North would be nearly doomed.” Of course, not only does segregation
continue today, it is by many measures considerably worse than it was when Myrdal made this statement. Yet that fact alone does not imply that covenants were ineffective in the first half of the twentieth century, or later.
The two opposing views expressed by Hirsch and Myrdal share one basic assumption. Judicial enforcement of covenants was the linchpin of their effectiveness. It was a common enough assumption, but one somewhat at odds with subsequent practice. Well after the Court ruled judicial enforcement of racial restrictive covenants unconstitutional, lawyers continued to write them into deeds. Realtors, banks, insurers and government agencies continued to reference racial covenants in their decisions and policies. Title companies continued to report them for decades. Recorders of deeds today still continue their ministerial administration of these covenants, carrying them forward notwithstanding a number of lawsuits in the 1970s and 1980s. Homebuyers and sellers, finally, continued to be guided by them.
Observing the behaviors of these actors suggests a more complicated, less court centric, account of covenants and legal agreements generally. Covenants were signals that coordinated the behavior of a variety of private individual and institutional actors—signals that remained effective without judicial unenforceability.

Richard Brooks is Leighton Homer Surbeck Professor of Law at Yale Law School. He previously taught law at both Cornell University and Northwestern University. His expertise is in law and economics, contracts, business organizations, and race and the law. Professor Brooks has a B.A. from Cornell, an M.A. and a Ph.D. from the University of California at Berkeley, and a J.D. from the University of Chicago. richard.brooks