Law Commons^™

Verification Institutions In Financing Transactions, Ronald J. Mann

Faculty Scholarship

One of the most common problems in commercial transactions is the resolution of information asymmetries, situations in which one party to the transaction knows more about a relevant fact than the other party. The natural response of the disadvantaged party is to attempt to investigate the transaction for itself – to investigate the matter with "due diligence" – but often such an investigation will be expensive and, however diligently undertaken, leave the truth of the matter uncertain. A law-centered approach to the problem would call for the development of warranties and covenants that the party with superior information would give …

Why Start-Ups?, Joseph Bankman, Ronald J. Gilson

Faculty Scholarship

The prototypical start-up involves an employee leaving her job with an idea and selling a portion of that idea to a venture capitalist. In many respects, however, the idea should be worth more to the former employer. The former employer can be expected to have better information concerning the employee-entrepreneur and the technology, have opportunities to capture economies of scale and scope not available to a venture capital-backed start-up, and will receive more favorable tax treatment than the start-up should the innovation fail. In connection with an auction of the idea, the former employer should have both a more accurate …

The Legal Infrastructure Of High Technology Industrial Districts: Silicon Valley, Route 128, And Covenants Not To Compete, Ronald J. Gilson

Faculty Scholarship

In recent years, scholars and policymakers have rediscovered the concept of industrial districts – spatial concentrations of firms in the same industry or related industries. In this Article, Professor Gilson examines te relationship between high-technology industrial districts and legal infrastructure by comparing the legal regimes of California's Silicon Valley and Massachusetts's Route 128. He contends that legal rides governing employee mobility influence the dynamics of high technology industrial districts by either encouraging rapid employee movement between employers and to startups, as in Silicon Valley, or discouraging such movement, as in Route 128. Because California does not enforce post-employment covenants not …

Precedential Cascades: An Appraisal, Eric Talley

Faculty Scholarship

About a half century ago, a handful of social scientists began to formalize what was to become the analytical heart of neoclassical economics. Under the broad rubric of "general equilibrium theory," these scholars demonstrated (in varying degrees of mathematical sophistication) the longstanding intuition behind the so-called "invisible hand": that is, that competitive markets could convert apparent disarray and fragmentation into order and harmony. More explicitly, general equilibrium theory demonstrated how a decentralized collection of self-interested individuals could, through competitive market transactions, allocate scarce goods and services in a socially efficient manner. An equally powerful corollary attended this central insight: that …

The Place Of Victims In The Theory Of Retribution, George P. Fletcher

Faculty Scholarship

Remarkably, the theory of criminal law has developed without paying much attention to the place of victims in the analysis of responsibility or in the rationale for punishment. You can read a first-rate book like Michael Moore's recent Placing Blame and not find a single reference to the relevance of victims in imposing liability and punishment. In the last several decades we have witnessed notable strides toward attending to the rights and interests of crime victims, but these concerns have yet to intrude upon the discussion of the central issues of wrongdoing, blame, and punishment.

Admittedly, victims and their sentiments …

In God's Image: The Religious Imperative Of Equality Under Law, George P. Fletcher

Faculty Scholarship

This Essay argues that the principle of equality under law is best grounded in a holistic view of human dignity. Rejecting modem attempts to justify equality by reducing humanity to a particular actual characteristic, it articulates a religious imperative to treat people equally by drawing on biblical as well as modern philosophical sources. The principle "all men are created equal," as celebrated in the Declaration of Independence and Gettysburg Address, draws on this holistic understanding of humanity. This admittedly romantic approach to equality generates a critique of contemporary Supreme Court doctrine, including the prevailing approaches to strict scrutiny, affirmative action, …

Disenfranchisement As Punishment: Reflections On The Racial Uses Of Infamia, George P. Fletcher

Faculty Scholarship

The practice of disenfranchising felons, though decreasing, is still widespread. In this Article, Professor George Fletcher reflects on the use of disenfranchisement as punishment, the lack of a convincing theoretical justification for it, and its disproportionate impact on the African.American community. Fletcher presents a number of powerful arguments against the constitutionality of the practice, but he emphasizes that there is a deeper problem with disenfranchisement as punishment: It reinforces the branding of felons as an "untouchable" class and thus helps to prevent their effective reintegration into our society.

A Note On Presumptions With Sequential Litigation, Antonio E. Bernardo, Eric L. Talley

Faculty Scholarship

This note extends the Bernardo, Talley & Welch (1999) model of legal presumptions to study situations where litigation efforts are spent sequentially rather than simultaneously. The equilibria of the litigation stage are presented as functions of the underlying presumption. The equilibria and comparative statics are shown to be qualitatively similar to those of the simultaneous version. However, sequentiality allows the principal to pre commit to a litigation strategy, and thus possibly preempt any litigation effort whatsoever by the agent.

Rethinking The Uniformity Norm In Commercial Law: Optimal Institutional Design For Regulating Incomplete Contracts, Robert E. Scott

Faculty Scholarship

This paper begins with the claim that the state's primary role in uniformly enforcing commercial contracts is to regulate incomplete contracts efficiently. This role requires the state to perform two interdependent but conceptually distinct functions. The first is an interpretive function – the task of correctly (and uniformly) interpreting the meaning of the contract terms chosen by parties to allocate contract risk. The second is a standardizing function – the task of creating broadly suitable default rules or assigning standard meanings to widely used contract terms. Correct interpretation argues for a "textualist" or plain meaning interpretation of the express terms …

Privatization And Corporate Governance: The Lessons From Securities Market Failure, John C. Coffee Jr.

Faculty Scholarship

Should privatization be "fast" or "slow"? Should policymakers adopt a "Damn the torpedoes, full speed ahead" approach that accepts the inevitability of some overreaching by controlling shareholders, but justifies this cost as necessary to realize and expedite the efficiency gains incident to privatization? Or should privatization proceed more cautiously because of the risks of market failure and political corruption that may result when control seekers are tempted to bribe and seduce the judicial and regulatory systems to achieve the private benefit of control? These tempting private benefits arise, of course, precisely to the extent that privatization preceded the creation of …

Public Funding And Democratic Elections, Richard Briffault

Faculty Scholarship

Our existing federal campaign finance system – the product of Watergate Era legislation and the Supreme Court's 1976 decision in Buckley v. Valeo – is in a state of disarray. The system is no longer capable of accomplishing the goals pursued by Congress and embraced by the Court a quarter-century ago: full disclosure of the sources of campaign money; limitations on large contributions by individuals; prohibitions on the use of corporate and union treasury funds; and voluntary, partial public funding, with spending limits, in the Presidential election. Indeed, the current law may actually have negative consequences, with unindexed contribution limits …

Introduction To The Special Issue, George A. Bermann

Faculty Scholarship

The subject of this year's topical issue of the Columbia Journal of European Law promises to be topical for some time to come. Every model of European integration that has been competing for consideration-whether within the Union institutions or within the corridors of national power, or virtually anywhere for that matter presupposes a European identity of sorts. But just at the time that a "European" identity might hope to be developing in the midst of the "national" identities with which it was commonly contrasted, the identity "landscape" has itself been growing more complex. Forces of globalization, and more particularly the …

Punishment Or Treatment For Adolescent Offenders: Therapeutic Integrity And The Paradoxical Effects Of Punishment, Jeffrey A. Fagan

Faculty Scholarship

Throughout much of its history, the American juvenile court maintained a goal of rehabilitation of the individual, and placed custody and punishment as secondary or ancillary goals in the pursuit of "remaking the child's character and lifestyle." To its founders, the development of a separate juvenile court reflected a fundamental distinction between sanctions based on characteristics of the offender, and punishment based on the offense. Juvenile court dispositions were designed to determine why the child was in court, and what could be done to avoid future appearances. Judge Julian Mack's classic statement of the original theory of the juvenile court …

Diverse Perspectives And The Religion Clauses: An Examination Of Justifications And Qualifying Beliefs, Kent Greenawalt

Faculty Scholarship

Some of the most complex questions about constitutional provisions governing religion concern the status of various kinds of convictions. Put most simply, how do undoubted religious convictions compare with convictions that appear to have little to do with religion, with convictions that derive from negative answers to religious questions, and with convictions that seem to be on some borderline of what may count as religion? In this Essay, I focus on two kinds of questions about this range of convictions.

Part I of the Essay explores justifications underlying the religion clauses of federal and state constitutions. It asks how explicitly …

Teaching Reasoning, Vincent A. Blasi

Faculty Scholarship

Reasoning skills of a certain sort are taught well in the traditional law school curriculum. No matter how good her previous education, the typical law student surely acquires an improved facility at testing propositions by considering hypothetical applications. Many students learn a lot about linguistic indeterminacy, unintended consequences, the allocation of decision-making responsibility, and how much turns on which questions are asked and how they are framed. It is a rare, indeed obtuse, person who completes a legal education still temperamentally inclined to refute unwelcome ideas when distinguishing them will do.

Where legal education falls short, I think, is with …

Copyright And Intermediate Users' Rights, Jane C. Ginsburg

Faculty Scholarship

The impending "Digital Millennium" has amplified the assertion of users' rights in U.S. copyright law. Copyright has been reimagined as a "law of users' rights" whose acolytes caution copyright owners not to stand as piggish impediments to the progress of learning and culture in the Digital Age. Proponents advance a variety of arguments in support of a user rights construct of copyright law, from the historical to the philosophical to the pragmatic. I propose to address some of these. But first it is important to specify what I mean by "users' rights" in U.S. copyright law today.

User rights in …

The Supreme Court, Sexual Citizenship And The Idea Of Progress, Kendall Thomas

Faculty Scholarship

Is American Progressive Constitutionalism dead ... yet? I propose to seek the beginnings of an answer to this question in the pages of a recent decision by the United States Supreme Court. I do feel obliged to say this, not because I am committed to a court-centered adjudicative conception of American constitutionalism; to the contrary. But rather, because the decision on which I want to focus seems to me to offer a rich resource for critical reflection on the idea of self-government whose connections to Progressive Constitutionalism give us our topic this afternoon.

Economic Development, Legality, And The Transplant Effect, Katharina Pistor, Daniel Berkowitz, Jean-Francois Richard

Faculty Scholarship

This paper analyzes the determinants of effective legal institutions (legality) and their impact on economic development today using data from 49 countries. We show that the way the law was initially transplanted and received is a more important determinant than the supply of law from a particular legal family (i.e. English, French, German, or Scandinavian). Countries that have developed legal orders internally, adapted the transplanted law to local conditions, and/or had a population that was already familiar with basic legal principles of the transplanted law have more effective legality than "transplant effect" countries that received foreign law without any similar …

Does Venture Capital Require An Active Stock Market?, Ronald J. Gilson, Bernard S. Black

Faculty Scholarship

The United States has both an active venture capital industry and well-developed stock markets. Japan and Germany have neither. We argue here that this is no accident – that venture capital can flourish especially – and perhaps only – if the venture capitalist can exit from a successful portfolio company through an initial public offering (IPO), which requires an active stock market. Understanding the link between the stock market and the venture capital market requires understanding the contractual arrangements between entrepreneurs and venture capital providers especially the importance of exit by venture capitalists and the opportunity, present only if IPO …