The Truth About Safe Harbors

Safe harbors are everywhere in law. Safe harbors have a modest, gentle appearance. They provide by rule that particular facts comply with the law and will result in no penalty. They are otherwise silent.

Safe harbors are invaluable administrative tools for the development of law. At the same time, a safe harbor's modest appearance conceals its capacity to harm those outside safe harbor boundaries, because their behavior might be treated as illegal even though the safe harbor does not say so. This collateral harm is especially likely when intermediaries implement safe harbors, because of monitoring costs, risk and uncertainty aversion, and multiple stakeholders.

Safe harbors’ incremental development of law is not illegal, and safe harbors’ deception does not automatically invalidate them. But plaintiffs who suffer collateral harm from a safe harbor can often sue an intermediary, and sometimes the government, to address their injury. Sometimes--as when a safe harbor produces an illegal result intended or controlled by a lawmaker--a court should invalidate a safe harbor because of the collateral harm it causes.