David Fontana (George Washington University Law School) & David Schleicher (Yale University - Law School) has posted The Basketball Court. Here is the abstract:
Public law scholars often consider how to separate power among and within governmental entities in order to encourage that power to be used effectively. However, public law scholars only rarely bring the insights they have developed about the separation of powers to bear on questions of how to design private business firms. But these firms often need their own private separation of powers to diffuse power among their officials and ensure compliance with foundational firm objectives.
This Article considers an emerging form of the private separation of powers: a private supreme court-like institution internal to a single firm. The consistent application of firm rules may be commercially valuable in some contexts, and private supreme courts can help provide firms with that kind of consistency.
We consider the case for private supreme courts from the perspective of one illustrative example: sports leagues, and, in particular, the National Basketball Association (“NBA”). We argue that the NBA should create a “Basketball Court,” a somewhat-independent adjudicatory body that uses the tools of judicial decision-making to interpret league rules in a consistent way that can provide commercial value to the NBA. Creating a court-like body would promote the ability of the NBA to convince spectators of the fairness of competition, encourage casual spectators to make the types of emotional and financial investments that turn them into rabid fans, and dissuade governments from regulating their sports.
We pattern our discussion of a court-like structure on the Oversight Board created by Facebook (now Meta) in 2018. The Oversight Board has largely been considered for what it means for speech, but we are interested in what it means for private institutional design more generally. Creating a court-like institution with independent judges writing opinions justifying their interpretations of private firm rules will be desirable for many, the NBA included.
