Law Commons^™

Synecdoche, Gerald Torres

Cornell Law Faculty Publications

This article suggests that the ideas of synecdoche and metonymy are not just figures of speech in which the part stands in for the whole. They are potentially useful metaphoric devices to understand the politics of institutional change through the inclusion of the formerly excluded.

Capture: here the hazard is that those who find themselves in a position to use institutional power may find themselves subject to pressure to conform to the norms and values of those who have traditionally benefitted from the conventional use of that institution's authority. This will often be subtle and it may merely be a …

Bubbles, Busts, And Blame, Robert C. Hockett

Cornell Law Faculty Publications

I argue that financial asset price bubbles and busts, such as those we have recently experienced in the mortgage and securities markets, are compatible with market efficiency, individual rationality, and even ethically unobjectionable behavior. The reason is that they constitute classic recursively self-amplifying collective action problems, the hallmark of which is the efficient aggregation of individually rational behaviors into collectively calamitous outcomes. In the present case, individuals rationally "legged the spread" between cheap borrowing costs and credit-fueled capital gains rates, neither of which market actors could affect in their individual capacities even when knowing that credit would have eventually to …

Regulating Financial Innovation: A More Principles-Based Proposal?, Dan Awrey

Cornell Law Faculty Publications

Modem financial markets are characterized by complexity, seemingly perpetual innovation, chronic asymmetries of information and expertise, and pervasive agency costs. Perhaps nowhere are these characteristics-or their attendant regulatory challenges-more pronounced than within OTC derivatives markets. Mounting effective responses to these challenges must be considered amongst the most difficult and important tasks confronting financial regulators. Prescriptive, rules-based approaches toward financial regulation have thus far proven inadequate to this task. Through the utilization of outcome-oriented principles, enhanced dialogic relationships, intensive supervision, and targeted and proportional (yet vigorous) enforcement, "more principles-based" financial regulation (MPBR) manifests the potential to overcome these challenges and, in …

The Marginality Of Citizens United, Michael C. Dorf

Cornell Law Faculty Publications

No abstract provided.

Derivatives And The Legal Origin Of The 2008 Credit Crisis, Lynn A. Stout

Cornell Law Faculty Publications

Experts still debate what caused the credit crisis of 2008. This Article argues that dubious honor belongs, first and foremost, to a little-known statute called the Commodities Futures Modernization Act of 2000 (CFMA). Put simply, the credit crisis was not primarily due to changes in the markets; it was due to changes in the law. In particular, the crisis was the direct and foreseeable (and in fact foreseen by the author and others) consequence of the CFMA’s sudden and wholesale removal of centuries-old legal constraints on speculative trading in over-the-counter (OTC) derivatives.

Derivative contracts are probabilistic bets on future events. …

Sequencing The Issues For Judicial Decisionmaking: Limitations From Jurisdictional Primacy And Intrasuit Preclusion, Kevin M. Clermont

Cornell Law Faculty Publications

This Article treats the order of decision on multiple issues in a single case. That order can be very important, with a lot at stake for the court, society, and parties. Generally speaking, although the parties can control which issues they put before a judge, the judge gets to choose the decisional sequence in light of those various interests.

The law sees fit to put few limits on the judge's power to sequence. The few limits are, in fact, quite narrow in application, and even narrower if properly understood. The Steel Co.-Ruhrgas rule generally requires a federal court to decide …

Extending The European Debt Discussion To Broader International Governance, Odette Lienau

Cornell Law Faculty Publications

Although Europe is no stranger to sovereign debt troubles, the focus of international debt governance for several decades has been on the developing world. Discussions surrounding the efficacy and appropriateness of crisis mechanisms have been shaped by this political reality. But the current focus on Europe itself may generate changes in how public and private actors view international debt governance and the legitimacy of crisis mechanisms. In these remarks, I will focus on two ways in which Europe might serve as a test case for broader governance practices. First, I will discuss the ramifications of the European Union’s potential adoption …

The Dodd-Frank Act: A New Deal For A New Age?, Saule T. Omarova

Cornell Law Faculty Publications

This short essay is an attempt to present a few early "big picture" observations on the broad regulatory philosophy underlying the Dodd-Frank Act. The question raised here is whether the Dodd-Frank Act, in fact, provides a blueprint for the twenty-first-century version of the New Deal - a qualitatively new approach to resolving the regulatory challenges posed by today's financial markets. Answering this complex question in full is hardly possible at this stage in the process, when many critical details of the new legal and regulatory regime are yet to be determined. Nevertheless, it is worthwhile to reflect upon some of …

The Limits Of Eu Hedge Fund Regulation, Dan Awrey

Cornell Law Faculty Publications

This article examines the mechanics of the recently adopted EU Alternative Investment Fund Managers Directive. On balance, the results of this examination are not encouraging. The EU has failed to mount a persuasive case for why the Directive represents an improvement over existing national regulatory regimes or prevailing market practices in several key areas. Furthermore, by attempting to shoehorn an economically, strategically and operationally diverse population of financial institutions into a single, artificial class of regulated actors, the EU has established what is in many respects a conceptually muddled regulatory regime. Most importantly, however, the Directive's approach toward the amelioration …

Multiplicity In Federalism And The Separation Of Powers, Josh Chafetz

Cornell Law Faculty Publications

By highlighting multiplicity in the federalism context, Alison LaCroix’s new book does constitutional scholarship a great service. Her tracing of the federal idea in the 1760s and 1770s, as well as her tracing of jurisdictional ideas in the early Republic, is thorough and insightful. But it is unclear why her focus suddenly narrows from the federal idea—the idea that multiplicity in levels of government was a virtue rather than a vice—to federal jurisdiction. Certainly, as this Review has endeavored to show, her claim that federalism discourse after 1787 reduced entirely (or even primarily) to jurisdictional debates cannot stand.

And this …

In Defense Of Noncapital Habeas: A Response To Hoffmann And King, John H. Blume, Sheri Lynn Johnson, Keir M. Weyble

Cornell Law Faculty Publications

For decades, federal habeas corpus review of state court judgments has generated wide-ranging, sometimes heated, debate among judges, policymakers, and scholars. In their 2009 Essay, Rethinking the Federal Role in State Criminal Justice, Professors Joseph L. Hoffmann and Nancy J. King added their voices to the exchange, contending that federal habeas corpus review of noncapital state court convictions and sentences should, with narrow exceptions, be abolished. They contend that the expenditure of money, time, and effort necessary to provide review in such cases is no longer justifiable and that those resources should be redirected to creating a federal initiative for …

Three Concepts Of Roles, W. Bradley Wendel

Cornell Law Faculty Publications

One of the many themes in the work of Fred Zacharias was the question of the moral status of role obligations or how roles should be moralized. This paper, written for an issue of the San Diego Law Review dedicated to the memory of Professor Zacharias, explores three alternative ways of conceiving of the relationship between morality and role obligations: strong role differentiation, which posits that roles can change the normative situation of actors; what I call the nexus view, which holds that roles are merely a shorthand for the intersection of existing ordinary moral obligations; and the concept of …

Sandbagging: Default Rules And Acquisition Agreements, Charles K. Whitehead

Cornell Law Faculty Publications

In the M&A world, a buyer "sandbags" a seller when, knowing the seller has materially breached a warranty, it closes the deal and then asserts a post-closing claim. Traditionally, the buyer must have relied on the warranty, without knowledge of the breach, in order to prevail. The modern trend, with some exceptions, permits the buyer to sue without regard to knowledge. Parties, in both cases, can contract around the default rule--so that the default rule should affect how acquisition agreements are structured. Yet, a survey of publicly available deals, from July 2007 to June 2011, reveals that--regardless of default rule--roughly …

Wall Street As Community Of Fate: Toward Financial Industry Self-Regulation, Saule T. Omarova

Cornell Law Faculty Publications

This Article proposes an approach to regulatory design that aims to create structural incentives for the emergence of a new model of embedded self-regulation in the financial industry. Without a doubt, the ideas laid out in this Article are more of a thought experiment than a polished set of fully developed regulatory proposals. These ideas and suggestions need a great deal of additional thought and a deeper, more granular and rigorous analysis of their potential consequences, benefits, and costs. Moreover, this Article explores only how to create conditions conducive to the emergence of comprehensive industry self-regulation that is embedded in …

Bowman Lives: The Extraterritorial Application Of U.S. Criminal Law After Morrison V. National Australia Bank, Zachary D. Clopton

Cornell Law Faculty Publications

No abstract provided.

Reconsidering Trials In Absentia At The Special Tribunal For Lebanon: An Application Of The Tribunal's Early Jurisprudence, Maggie Gardner

Cornell Law Faculty Publications

Since Nuremburg, no individual has been prosecuted in an international or internationalized court entirely in his or her absence. That may soon change. The Special Tribunal for Lebanon, which is empowered to try defendants in absentia, has now confirmed its first indictment. While its trial in absentia procedures were met with concern and criticism from some quarters when they were first announced, reconsideration is warranted in light of subsequent judicial developments. The judges of the Special Tribunal for Lebanon have now established in their preliminary decisions an interpretive approach to the Tribunal’s Statute that is adamantly purposive. This purposive approach …

The Psychological Foundations Of Behavioral Law And Economics, Jeffrey J. Rachlinski

Cornell Law Faculty Publications

Over the past decade, psychological research has enjoyed a rapidly expanding influence on legal scholarship. This expansion has established a new field—“Behavioral Law and Economics” (BLE). BLE’s principal insight is that human behavior commonly deviates from the predictions of rational choice theory in the marketplace, the election booth, and the courtroom. Because these deviations are predictable, and often harmful, legal rules can be crafted to reduce their undesirable influence. Ironically, BLE seldom recognizes that its intellectual origins lie with psychology more so than economics. This failure leaves BLE open to criticisms that can be answered only by embracing the underlying …

The Origins, Nature, And Promise Of Empirical Legal Studies And A Response To Concerns, Theodore Eisenberg

Cornell Law Faculty Publications

This Article describes the origins of three movements in legal academia: empirical legal studies (ELS), law and society, and law and economics. It then quantifies the distribution across scholarly fields (for example, economics and psychology) of authors in these movements’ journals and reports the impact of the movements’ scholarly journals. By focusing on two leading law and economics journals, this Article also explores the effect of a journal being centered in law schools rather than in a social science discipline. It suggests that ELS has achieved rapid growth and impact within the academic legal community because of (1) its association …

African Customary Law, Customs, And Women's Rights, Muna Ndulo

Cornell Law Faculty Publications

The sources of law in most African countries are customary law, the common law and legislation both colonial and post-independence. In a typical African country, the great majority of the people conduct their personal activities in accordance with and subject to customary law. Customary law has great impact in the area of personal law in regard to matters such as marriage, inheritance and traditional authority, and because it developed in an era dominated by patriarchy some of its norms conflict with human rights norms guaranteeing equality between men and women. While recognizing the role of legislation in reform, it is …

Responses To The Ten Questions, Aziz Rana

Cornell Law Faculty Publications

This essay responds to a question posed by the William Mitchell Law Review for its annual national security issue: Has Obama Improved Bush's National Security Policies? I maintain that Obama Administration practices have been marked by striking continuities with those of the previous Administration. I then attempt to explain these continuities by discussing how American policymakers across the political spectrum share basic assumptions about the concept of national security and the need for an aggressive and interventionist foreign policy.

Joint Intentions To Commit International Crimes, Jens David Ohlin

Cornell Law Faculty Publications

The following article is an attempt to provide a coherent theory that international tribunals may use to ground the imposition of vicarious liability for collective crimes. Currently, the case law and the literature is focused on a debate between the Joint Criminal Enterprise (JCE) doctrine applied by the ICTY and the co-perpetration doctrine applied by the ICC, which defines co-perpetrators as those who have joint control over the collective crime. The latter doctrine, influenced by German criminal law theory, has recently won many converts, both in The Hague and in the Academy, because it allegedly avoids many of the pitfalls …

Russia & Legal Harmonization: An Historical Inquiry Into Ip Reform As Global Convergence And Resistance, Boris N. Mamlyuk

Cornell Law Faculty Publications

This Article examines several waves of intellectual property (IP) regulation reform in Russia, starting with an examination into early Soviet attempts to regulate intellectual property. Historical analysis is useful to illustrate areas of theoretical convergence, divergence, and tension between state ideology, positive law, and "law in action." The relevance of these tensions for post-Soviet legal reform may appear tenuous. However, insofar as IP enforcement has emerged as one of the largest hurdles for Russia's prolonged accession to the World Trade Organization (WTO), these historical precedents may help explain Russia's apparent theoretical and political disconnect from the WTO. If Russian policymakers …

An Empirical Analysis Of Empirical Legal Scholarship Production, 1990-2009, Michael R. Heise

Cornell Law Faculty Publications

Inspired by the retirement of Professor Tom Ulen of the University of Illinois, the author considers the growth and development of empirical legal scholarship over two decades—a period of time that corresponds, not coincidentally, with Professor Ulen’s career. Starting in the 1990s when empirical scholarship had not yet “caught on,” the author first documents the increase in quantity of empirical scholarship over two decades. Next, the author applies a law and economics perspective to the recent surge in empirical scholarship, explaining that the trend has been fueled by an increase in the number of empirically trained scholars and also by …

The Elephantine Google Books Settlement, James Grimmelmann

Cornell Law Faculty Publications

The genius - some would say the evil genius - of the proposed Google Books settlement was the way it fuses legal categories. The settlement raised important class action, copyright, and antitrust issues, among others. But just as an elephant is not merely a trunk plus legs plus a tail, the settlement was more than the sum of the individual issues it raised. These “issues” were really just different ways of describing a single, overriding issue of law and policy - a new way to concentrate an intellectual property industry.

In this essay, I argue for the critical importance of …

Risk, Speculation, And Otc Derivatives: An Inaugural Essay For Convivium, Lynn A. Stout

Cornell Law Faculty Publications

Speculative trading, including speculative trading in derivatives, is often claimed to provide social benefits by decreasing risk and improving the accuracy of market prices. This assumption overlooks the possibility that speculation can be driven not just by differences in traders' risk aversion and information investments, but also by differences in traders' subjective expectations. Disagreement-based speculation erodes traders' returns, increases traders' risks, and can distort market prices. There is reason to believe that by 2008, the market for OTC derivatives may have been dominated by disagreement-based speculation that contributed to the Fall 2008 credit crisis.

Rulemaking In 140 Characters Or Less: Social Networking And Public Participation In Rulemaking, Cynthia R. Farina, Paul Miller, Mary J. Newhart, Claire Cardie, Dan Cosley, Rebecca Vernon

Cornell Law Faculty Publications

Rulemaking—the process by which administrative agencies make new regulations—has long been a target for egovernment efforts. The process is now one of the most important ways the federal government makes public policy. Moreover, transparency and participation rights are already part of its legal structure. The first generation of federal erulemaking involved putting the conventional process online by creating an e-docket of rulemaking materials and allowing online submission of public comments. Now the Obama administration is urging agencies to embark on the second generation of technology-assisted rulemaking, by bringing social media into the process.

In this Article we describe the initial …

Rulemaking 2.0, Cynthia R. Farina, Mary J. Newhart, Claire Cardie, Dan Cosley, Cornell Erulemaking Initiative

Cornell Law Faculty Publications

In response to President Obama's Memorandum on Transparency and Open Government, federal agencies are on the verge of a new generation in online rulemaking. However, unless we recognize the several barriers to making rulemaking a more broadly participatory process, and purposefully adapt Web 2.0 technologies and methods to lower those barriers, Rulemaking 2.0 is likely to disappoint agencies and open-government advocates alike.

This article describes the design, operation, and initial results of Regulation Room, a pilot public rulemaking participation platform created by a cross-disciplinary group of Cornell researchers in collaboration with the Department of Transportation. Regulation Room uses selected live …

The Political Animal And The Ethics Of Constitutional Commitment, Josh Chafetz

Cornell Law Faculty Publications

In his article Parchment and Politics: The Positive Puzzle of Constitutional Commitment, Professor Daryl J. Levinson identifies a variety of public choice mechanisms that lead politically empowered groups to accept constitutional limitations on their political power. In this response, Professor Josh Chafetz argues that Levinson overlooks another set of mechanisms, ones which work not at the level of material interests but rather at the level of political morality. Focusing on an Aristotelian account of political morality—an account that was influential among the Framers of the U.S. Constitution and that remains influential today — Chafetz suggests that at least some …

Destructive Coordination, Charles K. Whitehead

Cornell Law Faculty Publications

An important goal of financial risk regulation is promoting coordination. Law's coordinating function minimizes costly conflict and encourages greater uniformity among market participants. Likewise, privately developed market standards, such as standard-form contracts and rules incorporated into widely-used vendor technology systems, help to lower transaction costs partly by increasing coordination.

By contrast, much of financial economics is premised on a world without coordination. Basic tools used to manage financial risk presume that changes in asset prices follow a random walk and individuals buy and sell assets independently. Thus, a bedrock premise of traditional risk management is that a portfolio manager’s actions …

Defending Disclosure In Software Licensing, Robert A. Hillman, Maureen O'Rourke

Cornell Law Faculty Publications

This Article surveys prominent kinds of disclosures in contract law-of facts, contract terms, and performance intentions. We show why the disclosure tool, although subject to substantial criticism, promotes important social values and goals, including efficiency, autonomy, corrective justice, fairness, and the legitimacy of the contract process. Further, proposals to replace disclosure with other alternatives are unrealistic because they are too expensive or complex. Our working example is the American Law Institute's Principles of the Law of Software Contracts.