In Fiduciaries We Trust


When an individual hires a lawyer to represent her in a legal matter, that lawyer assumes a fiduciary responsibility to the client. Likewise, when board members of a publicly traded company make financial decisions that will affect the future of the business, they do so in their fiduciary relation to shareholders. But what about public officials, government agencies, and politicians? Do they have a fiduciary responsibility to their constituents? Should their roles be thought of in this way?

Professor Ethan Leib is interested in exploring questions that lie midway between public and private law. A scholar of contracts and constitutional law and theory, Leib received a B.A., J.D., and Ph.D. from Yale as well as an M.Phil. in political thought and intellectual history from Cambridge. Before joining the Fordham Law faculty, he was a professor of law at the University of California, Hastings College of the Law, served as a law clerk to Chief Judge John M. Walker Jr. of the U.S. Court of Appeals for the Second Circuit, and worked as an associate at Debevoise & Plimpton LLP in New York. His scholarship has appeared in prominent journals and he has written for broader audiences in the New York Times, USA Today, and the Washington Post, among other publications.

In this excerpt of “Fiduciary Political Theory: A Critique” 125 Yale Law Journal 1820 (2016), he and co-author Stephen R. Galoob examine fiduciary principles to determine whether or not they can illuminate relationships in public law.

“Fiduciary political theory” is an intellectual project that uses fiduciary principles to analyze aspects of public law. The idea that fiduciary principles apply to public offices (rather than solely to relationships in private law, where fiduciary norms originate) has a long pedigree, with roots in the writings of Cicero, Grotius, Locke, and the Federalist Papers.

In recent years, legal scholars and political philosophers from around the globe have revived this tradition. Several fiduciary political theorists address environmental and Indian law, where legal doctrines most explicitly invoke fiduciary concepts. Democratic theorists also invoke fiduciary principles to analyze the inevitability of discretion and the need for constraint that arise in basic questions of political representation and political legitimacy. More recent efforts of fiduciary political theorists investigate domains such as constitutional law, international law, administrative law, election law, the law governing public officials, and even the basic structure of political authority.

This Essay provides a framework for analyzing the usefulness and limitations of fiduciary political theory. Our thesis is that fiduciary principles can be fruitfully applied to many domains of public law. However, other domains are incompatible with the basic structure of fiduciary norms. In these domains, fiduciary political theory is not viable. The main contributions of this Essay are to reveal the underlying structure of fiduciary norms and to show when fiduciary political theorizing is likely (or unlikely) to work.

[S]ome scholars doubt the viability of fiduciary political theory on the basis of putative disanalogies between public and private law.1 However, this kind of skepticism reaches only some types of fiduciary political theory—namely, those that seek to analogize private law fiduciaries with public law actors. Such skepticism does not indict fiduciary political theory as such. Our focus here is on a broader, more structural concern. The most serious possible objection to fiduciary political theory—one that threatens the enterprise as such—is that private law fiduciary norms are fundamentally incompatible with the structure of public law norms.

A. The Structure of Fiduciary Norms

What, then, are the features of fiduciary norms that determine the viability of fiduciary political theory?

In this section we identify three … structural features that are crucial to understanding how fiduciary norms differ from other kinds of legal norms. … [E]ach of the features
we identify can be appreciated by almost all fiduciary
legal and political theorists.2

1. Deliberation

Norms typically govern behavior.3 However, some norms are deliberation-sensitive4—that is, they can “bear[]
upon what goes on inside people’s heads” by “demand[ing]that we have or form certain attitudes and that we think or deliberate in certain ways.”5 When a norm is deliberation-sensitive, whether someone lives up to it depends on whether she forms the attitudes, thinks, or deliberates in the ways that the norm requires.6

Several scholars have noticed that fiduciary norms are deliberation-sensitive.7 For example, according to the “shaping account” of fiduciary loyalty that we have articulated in previous work, a fiduciary acts loyally only if she attributes non-derivative significance to the interests of her beneficiary.8 A fiduciary whose deliberation is not shaped by the beneficiary’s interests does not live up to the duty of loyalty, regardless of how she otherwise behaves.9

Other types of legal norms are not deliberation-sensitive in the ways that fiduciary norms are. For example, tort law norms are, in general, deliberation-insensitive: violation of a tort law duty of care is triggered by an action and (for the purposes of tort law) an act is an “external manifestation of an actor’s will.”10 Likewise, default contractual norms are generally deliberation-insensitive: usually, whether one lives up to her contractual obligations is a matter of how she behaves.11

Criminal law norms, by contrast, are usually sensitive to deliberation in the form of mens rea. How an individual deliberates determines, in part, whether she is subject to criminal liability. However, the deliberation-sensitivity of criminal norms differs from that of fiduciary norms. In judging whether someone has lived up to a criminal norm, behavior is a threshold issue. An agent’s deliberation is relevant only insofar as her behavior does not conform to that prescribed by the norm; deliberation is not relevant independently of behavior.12 The same conclusion does not apply to fiduciary norms, where deliberation is a freestanding requirement.

2. Conscientiousness

Norms have conditions of success. We use the term “compliance” to describe success in living up to a norm and “breach” or “violation” to describe failure to live up to a norm.13 There are several possible modes of complying with a norm. Two modes that are most relevant to our discussion are “following” and “conforming.”14 Someone follows a norm when she not only behaves or deliberates as the norm requires, but also justifies these actions by the fact that the norm requires these behaviors or deliberations.15 Someone conforms to a norm when she behaves or deliberates as the norm requires, “not because of the norm, but because of other considerations associated with the norm.”16 Following a norm is more demanding, since it imposes second-order standards regarding how the norm figures into one’s practical deliberation. Because following is so demanding, some commentators see conformity as the default mode of complying with a norm.17

Fiduciary norms impose standards of compliance. Complying with the fiduciary duty of loyalty requires a special conscientiousness regarding the interests or ends of the beneficiary. Patterns of behavior or deliberation that lack this conscientiousness breach fiduciary norms.18 Thus, not just any token of conformity counts as complying with a fiduciary norm. There are many possible ways to describe the conscientiousness that fiduciary norms require. … Each of these formulations suggests that fiduciary norms are not agnostic about compliance: certain ways of conforming to fiduciary duties do not count as living up to fiduciary norms.19

… [F]iduciary norms are subject to what some philosophers call the “wrong kinds of reasons” problem.20 … Some reasons to value an object have nothing to do with the object’s value. These are not good reasons to value an object.21 The same basic argument applies to a variety of attitudes and beliefs. That someone is generous is the right kind of reason to admire her; that her benefactor will pay me to admire her is the wrong kind of reason.22

Contract, tort, and criminal norms do not require conscientiousness, nor do they invite the “wrong kinds of reasons” problem. Someone who refrains from killing another person for morally inappropriate reasons (for example, solely because he does not want to risk the chance of imprisonment) has complied with the criminal norm against homicide. Someone who fulfills his end of an agreement solely out of concern for his commercial reputation has lived up to the contractual norm regarding performance. Someone who does not injure another simply because it would not be fun has not violated any norm of tort.

In sum, fiduciary norms have standards of conscientiousness, while contract, tort, and criminal norms do not. Because of these standards, fiduciary norms invite “wrong kinds of reason” problems.

3. Robustness

Fiduciary norms also involve a species of what Phillip Pettit calls “robustly demanding” values.23 According to Pettit, someone can enjoy a robustly demanding value “only insofar as [he]enjoy[s]a corresponding, intuitively thinner benefit … not just actually, but across a certain range of possibilities, where the extent of that range determines the degree of robustness with which [he]enjoy[s]it.”24

The demands imposed by fiduciary norms are robust in all of these ways. Consider the paradigmatic fiduciary duty of loyalty. Whether an agent is loyal depends not only on how she acts to advance a principal’s interests or ends, but also on her disposition to act in circumstances where those interests or ends change. Part of the robustness of loyalty concerns how the beneficiary’s interests or ends must matter to the fiduciary. Loyalty inevitably has a counterfactual element: “regardless of what the beneficiary’s interests happen to be, if these interests were different, then the loyal fiduciary’s deliberative situation would be different as well.”25 If a fiduciary is disposed not to revise her deliberation in accordance with changes in the beneficiary’s interests or ends, then she is not loyal to the beneficiary.

The robustness of the demands on fiduciaries distinguishes these types of norms from norms of contract and tort. For example, because harm is an element of tort liability, an agent (T) does not necessarily violate a norm of tort law in circumstances where T’s conduct does not harm a victim (V), but would have harmed V under alternative facts that (unbeknownst to T) do not apply. In other words, as discussed above, tort norms do not usually assign liability for what in criminal law are called impossible attempts.26 Likewise, suppose that A and B have a contract regarding doing X. A would not violate any contractual norm if she does X but would not have done Y had the contract concerned Y-ing.

These conclusions are not true for fiduciary norms. Impossible attempts violate fiduciary norms. T would breach a fiduciary duty if he took an action whose purpose is to harm V, even if that action did not actually harm V. Likewise, A would breach fiduciary norms if she does X but, in alternative circumstances in which doing Y was in B’s best interest, would be committed not to do Y. Because fiduciary norms reject the manifestation requirement, how a fiduciary is disposed to behave or deliberate in non-actualized circumstances affects whether she lives up to her fiduciary duties.

[H]ere is our framework for determining when fiduciary political theory is likely to work: Because fiduciary norms are deliberation-sensitive, have standards of conscientiousness, and impose robust demands, fiduciary political theory will only be capable of illuminating domains of public law where these features are at home. We use this framework to show how some efforts at fiduciary political theory illuminate, others appear to be incomplete, and still others are subject to criticism.


1 See, e.g., Seth Davis, The False Promise of Fiduciary Government, 89 Notre Dame L. Rev. 1145, 1162 (2014).

2 The structural features identified here are implicit in fiduciary norms, although these features are only rarely made explicit in fiduciary law.

3 See, e.g., Richard H. McAdams & Eric B. Rasmusen, Norms and the Law, in 2 Handbook of Law and Economics 1573, 1576 (A. Mitchell Polinsky & Steven Shavell eds., 2007).

4 See Stephen Galoob & Adam Hill, Norms, Attitudes, and Compliance, 50 Tulsa L. Rev. 613, 618 (2015) (book review).

5 See Geoffrey Brennan et al., Explaining Norms 193, 245 (2013).

6 Some commentators even go so far as to argue that all social or formal norms are deliberation-insensitive. See, e.g., Eric A. Posner, Law and Social Norms 24 (2000) (“[S]ocial norms are always about observed behavior.” (emphasis omitted)); However, this position seems incorrect, since the norms of various moral and religious systems straightforwardly impose demands
on deliberation.

7 See, e.g., Lionel Smith, The Motive, Not the Deed, in Rationalizing Property, Equity, and Trusts: Essays in Honour of Edward Burn 53, 67 (Joshua Getzler ed., 2003); Arthur B. Laby, The Fiduciary Obligation as the Adoption of Ends, 56 Buff. L. Rev. 99, 103 (2008); Leo E. Strine, Jr. et al., Loyalty’s Core Demand: The Defining Role of Good Faith in Corporation Law, 98 Geo. L. J. 629, 633 (2010).

8 See Stephen R. Galoob & Ethan J. Leib, Intentions, Compliance, and Fiduciary Obligations, 20 Legal Theory 106, 115 (2014).

9 Id. at 116–18.

10 See Restatement (Second) of the Law of Torts §2.

11 E.g., Matthew S. Bedke, Explaining Compensatory Duties, 16 Legal Theory 91 (2010); Alan Schwartz & Joel Watson, Conceptualizing Contractual Interpretation, 42 J. Legal Stud. 1 (2013).

12 Joel Feinberg, Some Unswept Debris from the Hart-Devlin Debate, 72 Synthese 249, 259-60 (1987). To be sure, deliberation is relevant to criminal law, since certain patterns of deliberation can change whether specific behavior is subject to liability. Deliberation only matters, however, once the behavior has been performed.

13 Our usage here mirrors that of Brennan et al., supra note 5.

14 This distinction between following and conforming tracks the distinction that Joseph Raz makes between complying with and conforming to a norm. Joseph Raz, Practical Reason and Norms 178 (1999); see also David Owens, Shaping the Normative Landscape 15 (2012); Galoob & Leib, supra note 8; Scott Hershovitz, Legitimacy, Democracy, and Razian Authority, 9 Legal Theory 201 (2003).

15 Brennan et al., supra note 5, at 195.

16 Id. at 218.

17 See, e.g., Hershovitz, supra note 14, at 202 n.4 (citing Joseph Raz, Practical Reasons and Norms 179-82 (2nd ed., 1999)).

18 Pluralists about the requirements of loyalty can accept this conclusion while maintaining that the standards of conscientiousness vary across fiduciary contexts. See, e.g., Simon Keller, The limits of loyalty (2007); Andrew S. Gold, The Loyalties of Fiduciary Law, in Philosophical Foundations of Fiduciary Law.

19 Our claim here is only that fiduciary norms have standards of compliance; we do not make the stronger (and potentially paradoxical) claim that following is the requisite mode of complying with fiduciary norms.

20 Stephen L. Darwall, The Second-person Standpoint 15-16 (2006); Pamela Hieronymi, The Wrong Kind of Reason, 102 J. Phil. 437, 437 (2005).

21 See Wlodek Rabinowicz & Toni Rønnow-Rasmussen, Buck-Passing and the Right Kind of Reasons, 56 Phil. Q. 114, 115 (2006). “Wrong kinds of reason” problems also arise in cases, like Pascal’s wager, involving pragmatic, rather than evidential, reasons to believe. They also arise in cases like Gregory Kavka’s toxin puzzle, Gregory S. Kavka, The Toxin Puzzle, 43 Analysis 33 (1983), that involve pragmatic reasons to intend to act. See Jonathan Way, Transmission and the Wrong Kind of Reason, 122 Ethics 489, 490-91 (2012).

22 See Nathaniel Sharadin, Reasons Wrong and Right, Pac. Phil. Q. (forthcoming 2016) (manuscript at 2) (available at

23 Philip Pettit, The Robust Demands of the Good: Ethics with Attachment, Virtue, and Respect 2 (2015).

24 Id. An implication of Pettit’s definition is that the realization of a robustly demanding value “depends not only on what actually happens but also on what would happen in certain non-actual circumstances.” Nicholas Southwood, Democracy as a Modally Demanding Value, 49 Noûs 504, 505 (2015).

25 Galoob & Leib, supra note 8, at 116.

26 See Ira P. Robbins, Attempting the Impossible: The Emerging Consensus, 23 Harv. J. On Legis. 388-90 (1986).


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