Goetz Looks Back on Landmark Career

May 24, 2006
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Charles Goetz

When Charles Goetz was a Ph.D. candidate in the University of Virginia's economics program, he often took tests with no "right answer" and wrote papers in which the question, not the answer, was the true puzzle. It might take him five hours to understand an assignment, but less than half that time to craft a response, which is just the way his instructors, including Nobel laureates James Buchanan and Ronald Coase, wanted it.

"That teaching method taught you to have original thoughts," said Goetz. "A phrase that Buchanan used to use was, you had to train yourself to take a problem that everybody else was looking at, then walk either to the right or left a hundred yards and look at it from a different perspective, and that was how you did original work."

Goetz went on to have many original thoughts in his career at U.Va.'s Law School, becoming one of the founders of the influential law and economics movement. Thirty-one years ago, Goetz, who is retiring this year, became the first full-time non-law professor the Law School hired, one of a very few at law schools nationwide at the time, as institutions were beginning to move toward an interdisciplinary approach. In his own scholarship and in collaborations with Robert Scott, Goetz's work marked the ways in which economic concepts could be applied to law. In his partnership with Scott and in his own pursuits, Goetz served as an "intellectual catalyst" for the Law School, said Dean John C. Jeffries Jr. His efforts were so successful that today many of his ideas are accepted as just part of the law curriculum.

"He's been a real dramatic addition to the faculty, and was instrumental in helping to transform Virginia into an unparalleled academic law school," Scott agreed. "Charlie had an innate understanding and appreciation of law and legal institutions that was way above all his contemporaries….He has the ability to turn the hourglass upside down, look at it, and question it in an entirely fresh way. Once he applied that creative lens on a problem you could see a problem shaped in unique ways you never understood before."

From Economics to Law

Goetz had planned on going to law school even as an undergraduate at Providence College, but a freshman English course in which his teacher taught one day from atop his desk began to change his mind-"sometimes I can't believe that they're actually paying me money to teach Shakespeare," Goetz recalled him saying. "They probably weren't paying him very much, but it got me to thinking that maybe that would be a neat thing to do."

After earning his Ph.D. Goetz eventually found a permanent home teaching economics at Virginia Tech. However, "I was being drawn into administration." He headed the school's 75-student economics graduate program, and it seemed likely he would soon move into leading the entire Economics department or be dean of the graduate school. "It would be a great surprise to anybody at the University of Virginia Law School that I would be a good administrator because I've cultivated the opposite reputation since then, but if you asked people at Virginia Tech they would say the very opposite," Goetz admitted.

Virginia's dean invited Goetz to visit at the school, and soon offered him a job. "No economist ever gave an absolute 'no' in advance but in all candor I didn't think that I probably would be interested," Goetz said, "Once I got here I found out it was really kind of exciting-I found the people exciting. I could see that there would be a lot of application of kinds of economic theory that I knew."

At the time only a couple of the best law schools-Yale and Chicago-had economists. "I think that probably there was a segment of the faculty that thought this was letting the devil in by the back door," Goetz said, explaining that the application of economics to law was pioneered by more conservative academics, in a similar way Keynesian economics was pioneered by those who happened to be on the left of the spectrum in the late 1940s and early 1950s. Over time, with both concepts, "People began to see it was just a tool of legal reasoning. It didn't really have any ideological tinge to it."

Goetz was determined to be a professor of law within five years-not just an economics professor teaching in a law school. In his first years he purposely taught courses that were outside his comfort zone-property, local government, contract law-so he might become more expert. "In retrospect it was a strategy that worked out well."

Law schools also taught their students differently. Students would often be graded based on one final exam, whereas in Ph.D. programs students were under constant pressure with papers and tests every week.

"By the time I got here, the 'Paper Chase' model of people standing up in class and reciting had already become passé,'" he said, and today even cold calling is unfashionable. "I think law schools could learn from [the more constant pressure of Ph.D. programs], but I think it would be very difficult to implement because of the size of the class."

On the other hand, Goetz felt satisfied to teach in an area of academia that produced students who "might actually do something" about a given problem after graduating.

A Scholar and a Teacher

In Goetz's first year at the law school he had an office almost directly across from Bob Scott's. One day he overheard Scott arguing with Professor Warren Schwartz that liquidated damages did indeed serve a useful purpose-an idea with which most economists at the time disagreed. "I remember at one point jumping up and saying, 'Bob Scott's right, and what's more, I can prove it.'" By the next day he had constructed economic models for their first joint article.

Goetz, who was used to waiting six months to a year to get an article accepted in a peer-reviewed economics journal (you would not send the article to more than one journal at a time), got a message from the Columbia Law Review a couple days after sending the article out to five or six journals. Goetz assumed they had a question on the article but then-professor John Jeffries, who was passing by, told him, "'Oh, no, they want to accept it,'" Goetz remembered. "And indeed they did."

When looking back on the successful partnership, the subject of a recent Virginia Journal and Olin Conference Festschrift, Goetz agreed with Professor Paul Mahoney, who said the ideas their series of articles brought forth now seem obvious, but they were anything but at the time. Goetz pointed back to Buchanan's training in original thinking by looking at problems from a different perspective; often difficult problems in economics can be solved with simple concepts-knowing which concepts to apply is the difficult part.

"We were looking at contract law from a new perspective at a time when the academic community was ready," Scott said. "Contract law had suffered for some years from a lack of fresh approaches and our method of analysis was primarily to try to rationalize and explain."

Scott recalled his decade-long collaboration with Goetz as mutually rewarding. "We hit it off very well intellectually and personally and became very good friends…. I think he has one of the most creative and brilliant minds of any collaborator I've ever worked with."

Not all was smooth sailing in Goetz's scholarly pursuits. He was the first to write a casebook on law and economics, and even now gives it a mixed review. "The casebook I did was in retrospect much too hard," he said. "I wrote it in what I thought was the traditional mold of law casebooks where you leave a lot of rabbits hidden in there so that the professors can then pull the rabbit out of the hat. I realized after the book was out for a couple of years that the problem was that the professors couldn't find the rabbits."

For professors teaching from the book, "seeing the application to the law is really the hard thing."

Goetz is proud of the book he co-authored with a former student, Fred McChesney, a law professor at Northwestern University who also teaches in the Kellogg School of Management. Their collaboration, Antitrust Law: Interpretation and Implementation (Lexis, 1998; 2d ed. 2002) included some traditional casebook fare-looking at old cases-but was innovative in its approach to materials. Because the Supreme Court decisions in antitrust cases can often be ambiguous, the real lawyering, Goetz explained, gets done in district courts and appeals courts, from which the book includes an unusually large number of examples. The book also includes materials like complaints, expert's reports, and jury instructions. Examining real jury instructions for all-too-frequent incorrect, misleading, or unfair guidance is "a good way for the students to test themselves."

"It's actually very, very difficult to explain and summarize some of the points of antitrust law in the kind of language a jury could understand," he said. "Everybody reads all these appellate decisions, and that's kind of exciting in your first year, but three years of that, in my opinion, is one of the things that makes students tail off in their interests as they go through law school."

Alumna Ilonka Aylward, who graduated from the Law School in 2001, took every class Goetz taught during her years here: Contracts, Modern Methods of Proof, Antitrust, Law and Economics. "Then I ran out of classes," said Aylward, who now practices family law in Charlotte, N.C.

"He teaches to make sense out of the world," she said. "In the early 1990s, there was this popular game called Magic Eye. At first glance, you were looking at a paper covered with overlapping flat flashy dots. If you learned to look at it just right, though, you would see through the dots and all of a sudden find a puppy, a house, or a whole underworld kingdom. Once you finally saw the image, you could never understand how you could have missed this in the first place. Once you go though Professor Goetz's classes, the world seems less like a senseless collection of unrelated dots, and more like a puppy.

"For students contemplating legal careers, his training gives the ability to make sense of the law," she added. "In that sense, it does not matter what class he happens to teach-you can take antitrust from him, and acquire tools indispensable for the practice of family law."

Alumnus Paul Moore '98 also took every class Goetz offered.

"As a teacher, he was very tough, principally because he expected you to constantly think, but at the same time he was always very fair," said Moore, who worked as a federal prosecutor in the Department of Justice's antitrust division after law school and now serves as an associate with Lieff Cabraser Heimann & Bernstein, LLP in San Francisco. "Your brain had to be turned on the entire time you were with him."

Moore, who majored in economics at Georgetown University, said Goetz encouraged students to take a step back and look at what principles underpin a given issue. Goetz was always more than willing to talk about test answers and course topics outside of the classroom, he added. "He was very supportive emotionally," Moore said. Even after Moore graduated, "He was always willing to hear from me and talk with me, but at the same time always took the opportunity to teach me something."

Goetz also taught Hew Pate '87, a former assistant attorney general in the Department of Justice's Antitrust Division.

"Professor Goetz's economic analysis struck me as the best possible thematic approach to contracts and it served me well in later years," said Pate, now head of the Hunton & Williams Global Competition Practice Group. "He has always remained a loyal and supportive friend to former students."

Pate recalled that students in his small-section Contracts class were terrified because of a rumor that Goetz had given three students Ds the prior year (earning him the nickname "3-D Goetz").

"We were always motivated to do all the reading and be prepared for hard questions. I remember being so obsessed with preparation for his questions that while studying the famous case of Sherwood v. Walker, about a pregnant cow named Rose 2d of Aberlone, I noticed the contract included an allowance for 'shrinkage.' I had no idea what this was, and after hours of trying to find out (this was before the Internet) I finally called a cattle slaughterhouse," Pate said. "Clearly he knew how to motivate the students."

"Once the terror abated, it quickly became apparent that Charlie was a masterful teacher," added classmate Burton Spivak '87, counsel with Cadwalader in New York. "What I most remember from that first class was his stress on the facts and the lawyer's obligation to make the best possible argument from the facts of his case. He would sometimes switch the facts to make a particular party's position more dire, and then expect us, as that party's advocate, to mount the best arguments that we could. His class was case study in how read and apply the law with intelligence, creativity, and imagination to the facts that you were dealt.
It was a fabulous first-year learning experience."

While in the 1970s law and economics was a fresh field from which to plunder applications to law, not surprisingly, new movements in the legal academy have begun to gain traction. Law and economics "as a separate thing, [is] probably less exciting and in some sense in decline, but not because it lost, but because it won as a methodology," Goetz said "At the very best law schools there are just a tremendous number of people now who integrate those kinds of ideas into the courses they teach."

Economics has bled into classes in which such methods were not always considered. "If you look at the rules of evidence in terms of cost-benefit analysis, actually it's kind of revelatory." An economist trying to craft laws based on economic principles would create the same kinds of rules as in real-life common law such as in torts and contracts, Goetz claimed. "In those common law areas of the law, dollars to donuts the rule I would predict would be the rule." An area that doesn't follow this reasoning is tax-"A lot of the rules in the code and the regulations of the IRS are simply arbitrary," Goetz slyly noted.

Outside the Curriculum

Goetz's activities outside academia also influenced how he taught classes.

For several years he served as a forensic economist-sometimes as an expert witness, but more often running the experts' side of the case. Goetz has worked on everything from the $7 billion International Uranium Cartel litigation case in 1980 (it settled) to a local pro bono case of a lawsuit involving vermiculite mining in Louisa County, Va.

The extra work, on a practical level, helped put his three children through some expensive universities ("I used to tell people that writing the check was the equivalent of having somebody drive a brand-new Mercedes off a cliff once a year."), but also honed his skills as a litigation consultant and evidence law expert, mostly for antitrust or commercial law cases. "There's just a tremendous amount lost in translation between the lawyers who know the law and the experts who know their field of inquiry," he said. Goetz would advise legal teams on which experts they needed and whether they were making mistakes. "If experts are on a wrong path, you want to know that as soon as possible. You don't want it coming out in court."

Antitrust cases have such high stakes that it was typical for them to settle (he and McChesney are currently about to publish an article on the subject in the Antitrust Review ).

Goetz looked back fondly on one of his courses, Modern Methods of Proof, which integrated lessons he learned as a consultant.

"I don't think the students always know what it is that they really need," he said. "Having been out there and actually tried out some of these things, I feel much more confident about asserting that certain things-theoretical things, very often-are potential dynamite blasts in litigation. In the end it takes smart students to really benefit from that. I really am thrilled every once in a while when I get a letter from someone that says, 'you taught us this and I just used it, and it's really very effective.'"

Goetz also co-taught the Seminar in Commercial Litigation, an innovative course that divided students into teams and had them tackle problems through teacher and student role-playing in true-to-life scenarios. For the professors, the class was time-consuming, but the rewards to students were great. For a final project, students gave presentations on a settlement negotiation or in a litigation context, and at the close of the semester, the class would conduct post-mortems of all of the problems. Unfortunately, "It was more of an expenditure of resources than a law school could afford on a permanent basis."

Even after his retirement from the Law School, Goetz plans to continue teaching in continuing legal education programs, including the Economics Program for Federal Judges at George Mason University. He wouldn't mind teaching one course per semester, but "It's become more and more of an effort for me."

Goetz has a neurological condition which causes him a certain amount of constant, low-level pain. But it won't stop him from traveling with his wife, Judy, to Italy this summer, where he once completed a postdoctoral fellowship at the University of Pavia. Goetz also speaks what he terms "passable" Italian-just one of the many intellectual accomplishments for which he should be proud.

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