[*PG379]MARRIAGE MAKES CENTS: HOW
LAW & ECONOMICS JUSTIFIES
SAME-SEX MARRIAGE

Ryan Nishimoto*

THE GAY RIGHTS QUESTION IN CONTEMPORARY AMERICAN LAW. By Andrew Koppelman. Chicago and London: the University of Chicago Press 2002. Pp. 154.

Abstract:  Andrew Koppelman’s book presents the legal and moral case for gay equality. He contends that various arguments, such as privacy and sex discrimination, justify the equal treatment of gay men and lesbians. By analogizing the struggle for equality to the debate surrounding same-sex marriage, Koppelman suggests that although change will come, the courts are presently too far ahead of public opinion to recognize same-sex marriage. This Book Review examines how law and economics removes the debate to a pragmatic theater, compelling recognition of same-sex marriage.

Disputes about homosexuality evoke visceral emotions.1 Religious views, stereotypes, and social pressures all contribute to the negative preconceptions of gay men and lesbians, and the public discourse on homosexuality has long been dominated by disgust, confusion, and ignorance.2 Thus, efforts of gay men and lesbians to seek legal recognition and validation for their relationships have been faced with hostility, largely derived from these negative cultural attitudes, rather than from any internal logic.3

Andrew Koppelman confronts this prejudice in his book, The Gay Rights Question in Contemporary American Law.4 Historically, the United States Supreme Court has been hesitant to identify gay men and lesbians as a suspect class; therefore it has not applied heightened scru[*PG380]tiny to laws that discriminate against them.5 Koppelman attacks the constitutionality of such discriminatory laws on the basis of privacy and sex discrimination.6

Koppelman next debunks the defenses made in support of laws that discriminate against gay men and lesbians.7 To do this, he observes that the general question of legal equality for homosexuals is a paradigm of the specific issue of same-sex marriage.8 That is, if heterosexual marriage (and by implication, heterosexuality) is able to achieve a distinctive good that same-sex marriage (or homosexuality) cannot achieve, then Koppelman suggests that the traditional definition of marriage as strictly heterosexual may be defensible.9 On the other hand, if same-sex marriage could achieve ends that are equally valued as those achieved by heterosexual couples, then the legal discriminations against same-sex couples are arbitrary and indefensible.10 Koppelman quickly disposes of the bulk of common objections to homosexuality, arguing that the claims rest on faulty logic or false empirical claims.11

Unfortunately, Koppelman does not devote more of this chapter to criticizing the tendency of same-sex marriage critics to dwell in moral arguments and ignore the pragmatic.12 Koppelman structures a [*PG381]coherent moral defense to the traditional moral arguments posited by new natural law theorists, concluding that the gender of one’s partner is a morally insignificant factor in evaluating sexual conduct.13 However, he stops short of advocating a full recognition of same-sex marriage, deferring to the emotional concerns of critics.14 This Book Review will extend Koppelman’s defense of same-sex marriage by demonstrating how a cost-benefit perspective fully justifies its recognition.

Part I will explain how to escape the emotionally-charged morality arguments of same-sex marriage by using law and economics, which provides a pragmatic and rational approach toward the justification of same-sex marriage. Part II will describe how same-sex couples can gain some of the legal benefits of marriage by contracting their relationships, but ultimately rejects this “solution” as costly and insufficient. Part III will explore the legal alternatives that same-sex couples have in becoming domestic partnerships or civil unions. Such efforts are insufficient, however, because limiting same-sex relationships to these terms and refusing to recognize the couple as “married” sends a message that these unions are second-class units and not to be mistaken for marriages. By contrast, this section will also weigh society’s transactional cost in recognizing same-sex unions as “marriages.”

I.  Law, Economics, and Same-Sex Marriage: A Pragmatic Approach to an Emotional Debate

A majority of Americans presently oppose same-sex marriage.15 These attitudes are strongly motivated by religious beliefs and an emotional response to deeply-held and preconceived notions against homosexuality.16 Critics of same-sex marriage commonly make moral [*PG382]arguments, alleging that the immorality of same-sex conduct or relationships justifies the traditional definition of marriage as exclusively heterosexual.17 Because marriage is closely related to morality and values, it is often difficult to convince people to make objective assessments of the data and enter into a reasonable debate.18 Unfortunately, this emotional approach occludes the economic realities faced by same-sex couples.19 A rational choice model, on the other hand, addresses the costs that the couple and society incur through contin[*PG383]ued prohibition of same-sex marriage.20 Such a model can be found in the school of thought known as law and economics.21

A.  Background of Law and Economics

Law and economics proposes legal rules which are to be established and reviewed in light of fundamental economic principles.22 Underlying these economic principles is the assumption that people strive to maximize their utility from a set of preferences.23 These preferences are chosen by accumulating an optimal amount of information from a variety of sources.24 Simply defined, economics can be understood as rational choice, in which resources are limited in relation to human desires.25 Rational choice, however, need not be conscious; it merely predicts that one will choose means to achieve ends at the least possible cost.26

Law and economics theorists conclude that that government intervention in most transactions inevitably produces negative outcomes because such intervention is inherently flawed.27 Rather than submitting to government regulation, private parties are better situated to make their own decisions, with very specific and limited exceptions.28 In general, government intervention produces inefficiencies.29 At best, government tampering with the marketplace [*PG384]does nothing; far too often, however, it aggravates the problem it attempted to fix in the first place.30

B.  Law and Economics as Applied to Marriage

Marriage, as a contractual relationship, falls within law and economics analysis.31 Like the marketplace, marriage allows for parties to contract for maximum utility.32 Hence, proponents of law and economics regularly view marriage through the economic lens.33 Unfortunately, with same-sex marriage, law and economics theorists have been unjustifiably reluctant to make the application.34 Yet, if same-sex marriage creates benefits that outweigh its externalities, then law and economics must advocate its recognition.35 Although such an analysis is not the only one that can or should be made in defense of same-sex marriage, there is ample room for an argument that defends same-sex marriage as a policy that promotes economic efficiency.36 By focusing on the pragmatics of same-sex marriage, law and economics avoids the emotionally-laden morality defenses that have dominated the debate.37 Such an argument may prove instrumental in winning over public sentiment.38

II.  Economic Cost-Benefit Analysis of Same-Sex Marriage

Because American society grants significant financial benefits to married couples, withholding of this status denies important benefits to same-sex couples.39 U.S. law reflects the belief that economic sharing and investment in a marriage are beneficial to the partners and to the larger society.40 Society expects married couples to make financial [*PG385]decisions as a team.41 Therefore, American law protects marital partners who contribute economically to the relationship, while simultaneously imposing significant economic penalties on partners who contribute to the dissolution of the relationship.42 These laws have a significantly beneficial impact on the married couple’s economic well-being, enabling the couple to make decisions to optimize their financial condition.43 In this way, the law assists the married couple and endorses the continuation of their relationship through financial incentives.44

Same-sex couples can also create a more economically efficient partnership by using existing contract law to gain the legal benefits awarded to married couples.45 For example, same-sex couples can draft wills to ensure care for the surviving partner upon the other partner’s death.46 They can seek powers of attorney to gain legal decision-making rights should one partner require medical intervention.47 Couples can draft ante-nuptial agreements for division of property, thereby gaining some of the rights granted married partners in the event of divorce.48 There are, however, two problems with reliance on contracts to form a “legal marriage.”49 First, because marriage is a complex, long-term relationship, such contracts create substantial transaction costs.50 Any ambiguities in the contract do not have the benefit of developed case law.51 Without recognition of status, courts may not enforce contracts for short-term relationships because they may resemble contracts for sex. Likewise, the courts may refuse to enforce contracts for long-term “covenant” marriage because of the [*PG386]problem of “over-optimism” at the time of marriage.52 Second, many benefits of marriage, such as employer medical benefits and tax deductions, simply cannot be gained by private contract.53 Such costs make private contract a poor substitute for state recognition of same-sex marriage.54

A.  Private Contracts Incur Significant Transaction Costs

Because contracting the many benefits of a long-term committed relationship exacts heavy transaction costs, many gay men and lesbians are deterred from investing the time needed to draft such documents.55 Even if the couple enters into a contract, courts may choose not to uphold the terms, or the benefit may be dependent upon a third party recognizing the union of the same-sex couple.56 Two areas are particularly costly to gay men and lesbians: intestate succession of property and adoption and custody of children.57

1.  Intestate Succession

In 2000, the Washington Court of Appeals held that Frank Vasquez, a gay man, was not entitled to inherit his life partner’s assets because members of the same sex cannot enter into a qualifying marital or quasi-marital relationship.58 Although the Washington Supreme Court later reversed the decision, remanding the case to the trial court for a trial on the merits, the case underscores the heavy transaction costs inflicted on gay men and lesbians whose life partners die intestate or who make an invalid will.59 If an individual fails to make a valid will, the laws of intestate succession are triggered, which are [*PG387]heavily biased toward traditional families.60 Under the Uniform Probate Code, in accord with all but two United States jurisdictions, surviving non-marital partners do not receive intestate inheritance rights.61 The surviving partner of a same-sex union is therefore forced to litigate his or her rightful inheritance in the courts.62

Eventually, the surviving partner may win some or all of the estate.63 Even if the couple had established the proper combination of testamentary documents, lifetime transfers, and beneficiary designations, however, winning possession is a difficult and lengthy process; without formal documentation, the process becomes even more difficult.64 Without the legal right to a partner’s assets, the survivor is often placed at the mercy of the deceased partner’s relatives who are considered the legal heirs. 65 In order to win possession, the survivor would have to litigate his or her claim and demonstrate to the court the level of commitment to the deceased partner.66 Admittedly, same-sex couples could contract to avoid the state’s intestate succession laws.67 Many couples are reluctant or unable to do this, however, and inevitably, some same-sex couples will fail to execute wills before one of the partners dies.68

[*PG388]2.  Adoption and Custody

Same-sex couples also incur heavy transaction costs when adopting or seeking custody of children.69 When a same-sex couple has a child, only one partner can be the biological parent of the child.70 Without legal recognition of same-sex marriage, it is therefore difficult for the non-biological same-sex partner to establish a legal relationship with the child.71 Thus, the same-sex couple must rely on the legal system to gain joint parental rights.72

Unlike marriages where one of the adults is a step-parent, however, the same-sex partner of a person who has a child is not eligible for a step-parent adoption.73 Instead, the same-sex couple must secure a “second-parent adoption” from a court.74 This is a costly and lengthy process, the outcome of which depends on large part on the judge’s feelings toward homosexuality.75 Unlike heterosexual step-parents, who are automatically eligible to adopt their partner’s child, a petitioning gay or lesbian parent faces extensive social work assessment to establish suitability, a process that is lengthy as well as being emotionally and financially costly.76 Moreover, many states simply do not permit such adoptions.77 Thus, even if the parents overcome the lengthy, [*PG389]costly obstacles in their path, a judge may simply choose not to authorize the adoption.78

The high transaction cost of adoption, including the stress of entering the legal system, submitting the family to standards rooted in homophobia, and the uncertainty of testing legal theories, deters many gay or lesbian non-biological parents from seeking legal adoption of a child.79 Those that choose not to adopt face legal rules that consider one partner a parent and the other a legal stranger to the child.80 Should the relationship dissolve, a costly custody battle often ensues, with the non-legal parent at a distinct disadvantage.81 In some jurisdictions, the non-legal parent is without standing to seek custody or even visitation rights in relation to the child he or she has helped to raise.82 In others, the parent would be at the same legal disadvantage as a third party attempting to establish legal parent status.83

Even though same-sex couples can contract many terms of their relationship, the associated costs are often prohibitive.84 Furthermore, contracting a family does not require just money but also access to the legal profession.85 The legal language alone is a deterrent from drafting and filing declarations.86 As a result, many people who feel excluded from the legal system fail to claim the benefits and the rights [*PG390]to which they are due.87 Furthermore, costly transactions are merely one inefficient market aspect of same-sex marriage; many legal rights common to married couples lie out of reach of private contract.88

B.  Private Contract Is Insufficient to Gain the Full Benefits of Marriage

Despite the power of private contract, it is impossible for same-sex couples to gain all of the benefits afforded married couples by contracting their relationships.89 Same-sex partners are excluded from insurance awards, social security benefits, public pensions, worker’s compensation, income tax benefits, and estate tax benefits.90 They cannot contract to sue for wrongful death of a spouse, to receive compensation given to families of crime victims, or to be appointed conservator or guardian of an invalid family member.91 Nor can they contract the right to make health care decisions for a family member or even to visit a loved one in a hospital or prison.92 Furthermore, exclusionary zoning laws, restrictive statutory provisions, and narrow judicial constructions of the meaning of “family” discriminate against same-sex couples in their efforts to secure housing.93 Housing becomes further problematic for same-sex couples when applying for rent control, right of successorship, homeowner associations, and mortgages.94

Moreover, same-sex couples are excluded from employee family health care, group insurance, discounted “family rates” in assorted organizations, and the ability to hold real estate by the entirety.95 This is particularly evident in the area of personal insurance benefits that employers extend to the families of employees.96 Gay and lesbian employees are often denied coverage of their same-sex partner because, being unable to marry, their partners are not considered “spouses” or [*PG391]“dependents,” as required by employers’ benefit plans.97 Because same-sex partners generally do not fit the state definition of either spouses or dependents, insurance is not extended to cover both partners.98

Studies estimate that although marital partners automatically qualify as financial dependents, a lesbian or gay man in a same-sex relationship receives employer-paid medical benefits of several thousand dollars less per year than a similarly situated married person.99 Some gay men and lesbians have attempted to litigate this inequality but have been met with limited success.100 Courts are reluctant to extend benefits to same-sex partners, all the while denying assertions of discrimination on the basis of sexual orientation or marital status.101

This dissimilar treatment puts the same-sex couple at a strong disadvantage.102 Unlike their heterosexual counterparts, the same-sex couple is not as flexible to make financial decisions, such as allowing one partner to stay at home to raise the children.103 If one partner in a same-sex couple chooses to sacrifice a career for the sake of the family and the working partner is injured or killed, the other partner is left without compensation.104 Recognition of same-sex marriage would address this economic inefficiency by entitling same-sex partners to legal protections such as life insurance, adoption, intestate inheritance, social security payments, income tax reductions, welfare payments, and property division, should the relationship dissolve.105

[*PG392] Critics fear that recognition of same-sex marriage will lead to abuses of the benefits that marriage provides, such as immigration privileges and health care packages.106 This concern, however, applies equally well to heterosexual marriage and hence, this argument is not a problem presented by recognition of same-sex marriage.107 The solution to this concern, therefore, lies not with the prohibition of same-sex marriage; rather, the problem must be handled by addressing the fraud.108 For example, the potential of immigrants fabricating a marriage to avoid deportation is not addressed by a prohibition of marriages between American citizens and foreigners, but by penalties for fraudulent marriage.109 There is no reason why such penalties could not be enforced effectively against fraudulent same-sex marriages in the same way.110

With regard to employer health insurance packages, the fear of fraudulent marriage is also unjustified.111 This concern exists largely because companies feared substantial costs associated with the medical expenses of gay men and lesbians, specifically the increase in AIDS cases.112 These concerns, however, have proven unjustified by the experience of companies providing insurance to domestic partners.113 Municipalities that led the way in extending domestic partnership health benefits have been surprised at how minimal the additional costs have been.114 Studies demonstrate that companies experienced a negligible rise in cost after offering same-sex domestic partner [*PG393]benefits, in part because the cost of AIDS treatment for an individual is typically less than the cost of covering other, more common health conditions, such as premature or multiple births, complications due to smoking or overeating, and cardiovascular problems.115 Given the small number of gays and lesbians who have enrolled for domestic partner benefits, the externalities imposed on society are minimal.116

III.  Informational Cost-Benefit Analysis of Same-Sex Marriage

The increase in benefits to domestic partners and the recent recognition of civil unions in Vermont have caused some to argue that same-sex couples have a legal alternative to marriage, eliminating the need for the “marriage” label.117 This argument forgets, however, that a separate institution, such as a domestic partnership or a civil union, is not necessarily equal to the revered institution of marriage.118

When a couple communicates that they are “married,” they establish that they are in a particular type of human relationship, characterized by a mutual long-term commitment to one another.119 While couples may admittedly have differing goals in marriage, marital partners are still generally assumed to exchange intimacy, love, and commitment that are uniquely valuable to them.120 Marriage conveys a unified relationship, commonly characterized by the sharing of affection and individual energies and efforts.121 To deny recognition of [*PG394]same-sex marriage is to deprive the couple of this highly exalted form of human association.122

According to societal expectations, marriage also communicates to the married couple a sense of permanence and exclusivity.123 Such conditions offer the marriage partners security, self-confidence, and freedom from a sense of alienation or isolation.124 A society that cares about its members will want them to experience the liberating and empowering gifts of marital love because such people will be more fulfilled, and thus more willing and able to contribute to their communities.125 If marriage is taken seriously, the marital habits of constancy, trust, honesty, fairness, and compassion will be more prevalent in society.126 Marriage provides each partner with a sense of dignity and value; through this awareness of his or her own worth, a person can participate more effectively in society.127 Public acceptance of a married couple through legal recognition and ceremonial services helps to strengthen the couple’s commitment to the relationship.128

Conversely, same-sex unions have been limited to alternative labels, such as “domestic partnerships” and “civil unions,” which fail to convey the same powerful societal message underlying the term “marriage.”129 Even if a state, like Vermont, were to pass a statute that paralleled marriage in its legal provisions, it would be sending a message that these unions are essentially “second class units” and somehow unworthy of the marriage title.130 Societal attitudes are critical in helping couples remain committed to one another.131 As long as lesbians and gay men are not fully accepted, their unions will “suffer from pressures to which the marriages and dating relationships of straight couples are never subjected.”132

Critics of same-sex marriage contend that its recognition would bring an information cost by diluting or obscuring the meaning of marriage.133 Under the conventional definition of marriage, a woman [*PG395]referring to her “spouse” clearly communicates her marriage to a man (as opposed to a woman).134 According to critics, if same-sex marriages were recognized, this assumption no longer holds, thereby imposing an information cost.135 Although admittedly valid, such costs are slight when weighed against the benefit that same-sex couples would receive from being able to use the term “marriage” to signal the extent of their mutual commitment.136

Non-recognition of same-sex marriage is a form of social control of gay men and lesbians.137 It enforces the cultural belief that same-sex relationships are not the equivalent of heterosexual marriages and, therefore, not deserving of equal respect.138 This creates obstacles for the same-sex couple in its efforts to remain committed to one another for life.139 Thus, same-sex couples are less likely to set down roots in local communities or to invest time and energy in making those communities thrive.140 Civil society depends on an array of intertwined communities, marriage being among the most important.141 Strong marriages assist in the growth and flourishing of healthy communities, and prohibiting marriage on the basis of sexual orientation harms both the couple and society.142

Conclusion

In his book, The Gay Rights Question in Contemporary American Law, Andrew Koppelman demonstrates the powerful legal and moral case for the equal treatment of gay men and lesbians.143 He supports his position by suggesting that the issue of gay rights closely resembles the dispute over same-sex marriage.144 The right to privacy, the problem of sex discrimination, the constitutional requirement of interstate consistency, and fallacies within the new natural law theory work to[*PG396]gether to provide a strong argument in favor of same-sex marriage recognition.145

Unfortunately, Koppelman does not provide a pragmatic analysis of same-sex marriage.146 In focusing on legal and moral issues, he fails to address the “condition of legal inferiority” imposed on same-sex couples in a society that denies them the legal benefits of marriage.147 Although his analyses are sound, they fail to compel the conclusion that same-sex marriage should be imposed by the courts.148 Instead, he states that “[civil unions are] the most that gays can possibly hope for, at least in the next few years.”149

The value of law and economics lies not in proving that same-sex marriage is a constitutional imperative, but in educating Americans that non-recognition is costly and unjustified.150 This economic approach could have been the final missing step that Koppelman implied was necessary for the judiciary to be able to act in a politically hostile environment.151 The courts are aware, and even admit, that a sudden change in marriage laws could have disruptive and unforeseen consequences.152 These consequences, however, are due in large part to the unwillingness of Americans to grant equal status to same-sex couples.153 The unwillingness stems from decades of misinformation, confusion, and disgust.154 By demonstrating the overwhelming benefits that same-sex marriage would bring to gay men, lesbians, and society, law and economics provides courts with the needed “good reason” that Koppelman deems necessary for the judiciary to be armed with entering the debate.155

[*PG397] The courts, remarkably ahead of public opinion on the issue of same-sex marriage, presently exercise caution when addressing it.156 Same-sex marriage recognition would be a dramatic change to a well-established social tradition, and history has shown that sudden acceptance by the courts is likely to trigger political backlash.157 Marriage, as a settled and fundamental social institution, is not prone to welcoming radical changes.158 As noted by Edmund Burke, “it is with infinite caution that any man ought to venture upon pulling down an edifice which has answered in any tolerable degree for ages the common purposes of society.”159

Even though settled tradition may strengthen the case for traditional marriage, however, it does not serve as an independent reason to reject change.160 Society’s particular definition of the institution does not therefore make the definition correct, and if the case for same-sex marriage is persuasive in other respects, then change must be made, despite the longstanding definition.161

[*PG398] Marriage is a loving, caring relationship that provides intimacy and security.162 It is a legal status and a social institution that simplifies and organizes crucial matters for the partners.163 Denial of this status to an already disadvantaged group of people creates market inefficiency.164 Thus, the evidence demonstrates that same-sex marriage would empower gay men and lesbians to be able to participate more fully in society.165 Continued non-recognition, on the other hand, perpetuates the disdain that society harbors against gay men and lesbians and flies in the face of economic efficiency.166 Gay men, lesbians, their children, and Americans as a whole will all be better off when we recognize the case for same-sex marriage.167

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