Law Commons^™

Risk-Seeking Governance, Brian J. Broughman -- Professor Of Law, Matthew T. Wansley -- Assoc. Professor Of Law

Vanderbilt Law Review

Venture capitalists (“VCs”) are increasingly abandoning their traditional role as monitors of their portfolio companies. They are giving startup founders more equity and control and promising not to replace them with outside executives. At the same time, startups are taking unprecedented risks—defying regulators, scaling in unsustainable ways, and racking up billion-dollar losses. These trends raise doubts about the dominant model of VC behavior, which claims that VCs actively monitor startups to reduce the risk of moral hazard and adverse selection. We propose a new theory in which VCs use their role in corporate governance to persuade risk-averse founders to pursue …

Efficiency And Equity In Regulation, Caroline Cecot

Vanderbilt Law Review

The Biden Administration has signaled an interest in ensuring that regulations appropriately benefit vulnerable and disadvantaged communities. Prior presidential administrations since at least the Reagan Administration have focused on ensuring that regulations are efficient, maximizing the net benefits to society as a whole, without considering who benefits or who loses from these policies. Critics of this process of regulatory review have celebrated President Biden’s initiative, hoping that distributional analysis and the pursuit of equity will displace traditional tools and interests such as cost-benefit analysis and the pursuit of efficiency. Meanwhile, supporters of the current process are concerned that pursuing equity …

Zombie Energy Laws, Joshua C. Macey

Vanderbilt Law Review

This Article traces the development of three legal rules—cost recovery for vertically integrated utilities, the requirement that regulators assess the financial viability of energy projects before issuing a certificate of public convenience and necessity, and the filed rate doctrine—that emerged out of the view that electric power companies should be shielded from market forces. It argues that important elements of these legal rules have become “zombie energy laws.” Zombie energy laws are statutes, regulations, and judicial precedents that continue to apply after their underlying economic and legal bases dissipate. Zombie energy laws were originally designed to protect consumers by, among …

The Waiting Game: How States Can Solve The Organ-Donation Crisis, Meredith M. Havekost

Vanderbilt Law Review

Thousands of patients in the United States live in limbo every day waiting for a lifesaving organ transplant, and the gap between the number of people who need a transplant and the number of available organs widens every year. Every state currently allows individuals to unilaterally indicate their intent to donate their organs upon death, but in practice, family members are frequently allowed to override the express intentions of decedents. In addition, the current U.S. "opt-in" system fails to reach its full potential because many eligible decedents never express their desires to become or not to become organ donors, and …

The Securities Black Market: Dark Pool Trading And The Need For A More Expansive Regulation Ats-N, Brian P. Baxter

Vanderbilt Law Review

Procedural law in the United States seeks to achieve three interrelated goals in our system of litigation: efficient processes that achieve "substantive justice" and deter wrongdoing, accurate outcomes, and meaningful access to the courts. For years, however, procedural debate, particularly in the context of due process rights in class actions, has been redirected toward more conceptual questions about the nature of legal claims-are they more appropriately conceptualized as individual property or as collective goods? At stake is the extent to which relevant procedures will protect the right of individual claimants to exercise control over their claims. Those with individualistic conceptions …

Regulation Of Emerging Risks, Matthew T. Wansley

Vanderbilt Law Review

Why has the EPA not regulated fracking? Why has the FDA not regulated e-cigarettes? Why has NHTSA not regulated autonomous vehicles? This Article argues that administrative agencies predictably fail to regulate emerging risks when the political environment for regulation is favorable. The cause is a combination of administrative law and interest group politics. Agencies must satisfy high initial informational thresholds to regulate, so they postpone rulemaking in the face of uncertainty about the effects of new technologies. But while regulators passively acquire more information, fledgling industries consolidate and become politically entrenched. By the time agencies can justify regulation, the newly …

A Laboratory Of Regulation: The Untapped Potential Of The Hhs Advisory Opinion Power, Christopher J. Climo

Vanderbilt Law Review

Of late, the federal government's approach to regulation of hospitals and other healthcare providers asks them to do more with less. Both the government and private insurers have increasingly assigned hospitals and other providers with financial responsibility for the quality of the care they provide to federal beneficiaries.' At the same time, experts predict that reimbursement rates by both the government and private insurers will fall as a result of the Affordable Care Act's recent efforts to increase access to healthcare. Facing a widening gap between expectations of quality and availability of financial resources, healthcare providers will need to pursue …

Managing Manure: Using Good Neighbor Agreements To Regulate Pollution From Agricultural Production, Tory H. Lewis

Vanderbilt Law Review

In an episode of the popular television series Seinfeld, George Costanza narrowly avoids stepping in a pile of horse manure and emphatically declares, "[M]anure's not that bad. I don't even mind the word 'manure.' You know, it's, it's 'nure,' which is good and a 'ma' in front of it. MA-NURE. When you consider the other choices, 'manure' is actually pretty refreshing."'

Not everyone shares George's enthusiasm for animal excrement. Agricultural waste has been a source of community distress for generations. In 1932, a California appellate court determined that a dairy, hog-raising, and cattle-raising operation constituted a nuisance under state law. …

Opting Out Of Regulation: A Public Choice Analysis Of Contractual Choice Of Law, Erin A. O'Hara

Vanderbilt Law Review

This Article uses public choice theory to analyze the function of choice-of-law clauses in contracts. Choice-of-law clauses are now quite common and are increasingly enforced, especially with the proliferation of international and Internet transactions. Because these clauses can be used by parties to avoid regulation, academics are now vigorously debating the extent to which this contractual opt out should be permitted. The Article presents a positive political theory of the interplay of legislative action and the enforcement of choice of law. It demonstrates that the important normative debate over choice of law is somewhat misguided because both sides fail to …

Bargaining Theory And Regulatory Reform: The Political Logic Of Inefficient Regulation, David B. Spence, Lekha Gopalakrishnan

Vanderbilt Law Review

In this Article David Spence and Lekha Gopalakrishnan pro- pose a new understanding of regulatory bargaining. Economists and others have long argued that the American regulatory system is unnecessarily inefficient. Critics charge that the system is both substantively inefficient, in that it sometimes mandates the use of inefficient means for achieving a regulatory goal, and procedurally inefficient, in its over-reliance on rules. These arguments have led to a wave of regulatory reform experiments in the federal bureaucracy, many of which seek to promote positive-sum changes in regulatory policy through bargaining among private- and public-sector stakeholders. As several commentators have noted, …

Monitoring Governmental Disposition Of Assets: Fashioning Regulatory Substitutes For Market Controls, Harold J. Krent, Nicholas S. Zeppos

Vanderbilt Law Review

Each year, the government sells and leases public assets worth billions of dollars. FCC auctions to allocate rights to electromagnetic spectrum generated over twenty billion dollars within a three-year period, and proceeds from mineral leases, timber sales, and disposition of real estate from defaulting thrifts have surpassed several billion dollars annually.

From the taxpayer's perspective, however, government sales and leases have been deplorable. The government has donated valuable resources to preferred claimants, allocated scarce broadcast and oil rights resources by lottery, and sold both public land and mineral rights to private parties at a fraction of the market price. Although …

Provoking Introspection: A Reply To Galanter & Palay, Hull, Kelly, Lesnick, Mclaughlin, Pepper, And Traynor, Patrick J. Schiltz

Vanderbilt Law Review

I have benefitted enormously from reading the Responses, and I am grateful to all of the commentators for entering into this conversation with me. There is much in each of the seven Responses to which I would like to reply-sometimes to agree, sometimes to disagree, sometimes to elaborate, sometimes just to express puzzlement. Unfortunately, though, my time and space are extremely limited. Given those limitations, I will first reply generally to Marc Galanter and Thomas Palay, Michael Kelly, Howard Lesnick, Stephen Pepper, and Michael Traynor, all of whom seem to be at least somewhat sympathetic to the underlying theme of …

Regulatory Takings And Ripeness In The Federal Courts, Gregory M. Stein

Vanderbilt Law Review

The Supreme Court held in 1987 that compensation is required automatically whenever a municipality takes property by regulation. The Court has also held repeatedly that federal courts cannot even hear such claims until the landowner meets a demanding ripeness test. Landowners are often unable to survive the protracted ripening period even though their claims might ultimately have proved to be valid. And the occasional municipality that loses a takings case may be liable for a huge award that reflects the lengthy ripening period. Federal courts have persistently refused to acknowledge this tension between takings law and takings procedure.

This Article …

A Theory Of The Regulation Of Debtor-In-Possession Financing, George G. Triantis

Vanderbilt Law Review

The profile of Chapter 11 of the Bankruptcy Code in public consciousness has surged recently. Other than the automatic stay on the enforcement of claims, the most publicized feature of bankruptcy reorganizations is debtor-in-possession (DIP) financing. Indeed, along with the bankruptcy stay, DIP financing is the motivation for many Chapter 11 filings. Under Section 364 of the Code, a firm in bankruptcy (the debtor in possession) can finance its ongoing operations and investments by issuing new debt that enjoys any one of various levels of priority, all of which rank higher than the firm's prepetition unsecured debt.' The debtor's financing …

Cable Television's Emerging Two-Way Services: A Dilemma For Federal And State Regulators, Frank W. Lloyd

Vanderbilt Law Review

Cable television as an entertainment medium has been the subject of various federal, state, and local regulatory schemes since its inception in the 1950's. The introduction of nonvideo two-way cable services that provide a capacity for responsive data and voice transmission between users of the two-way system has renewed interest in the appropriate role of government in the regulation of two-way cable services. Telephone companies in particular have pressed state and federal regulators to identify cable two-way systems as common carriers and to impose on them two-way cable common carrier regulations. In this Article Mr. Frank Lloyd discusses actual and …

Disclosure By Issuers Of Municipal Securities: An Analysis Of Recent Proposals And A Suggested Approach, Robert D. Tuke

Vanderbilt Law Review

The following considerations impacting on the disclosure issue have been developed in this Note: the uniqueness of the municipal securities industry, owing to the diverse natures of the securities, the wide variety of issuers, and the particular means of marketing the securities; the special circumstances created for underwriters by the competitive bidding process; the varied roles of other participants in the distribution process--fiscal agents, bond counsel, governmental accountants; the existing state machinery for regulation and control; the practical limitations on the SEC--both in staff capacity and expertise; the need for uniformity in disclosure to prevent weakened marketability of municipal securities …

Municipal Bonds And The Federal Securities Laws: The Results Of Forty Years Of Indirect Regulation, Bruce N. Hawthorne

Vanderbilt Law Review

Recent abuses occurring in the municipal bond markets have threatened investor confidence and caused Congress to reevaluate its original decision to exempt these securities from the Securities Act of 1933 and the Securities Exchange Act of 1934. This Note will analyze in some depth the securities regulation aspects of the municipal securities markets. First, because an understanding of the unique nature of municipal securities and their markets is essential, a description will be made of the characteristics of municipal bonds and municipal bond purchasers, the participants in the municipal securities industry, and the new issue and trading markets for municipal …

Exclusionary Zoning Practices: An Examination Of The Current Controversy, W. Harold Bigham, C. Dent Bostick

Vanderbilt Law Review

For the last 45 years the idea that local zoning administration is a highly desirable exercise of the state police power has become progressively more entrenched in urban thinking and planning. Although opponents of zoning have quarreled with details of administration or decried the failure of the Supreme Court to continuously oversee implementation of the zoning concept, they have assumed basic Euclidian zoning theory' to be beyond serious challenge. This assumption is no longer valid, for classic municipal zoning is on the firing line and its survival is by no means certain.

Introduction To Symposium On Securities, Manuel F. Cohen

Vanderbilt Law Review

Students of the securities markets, and of relevant law and regulation, will wonder whether another symposium is worthwhile. Recent years have seen a proliferation of symposia, meetings, conferences, taped messages, books, pamphlets, and other materials designed to educate the uninitiated or to provide an opportunity for debate among the sophisticated concerning the important issues of the day. This, of course, assumes that there are important issues, and merit in the continued effort at education...This symposium does not reach all the issues. It does, however, deal with certain important ones and suggests quite emphatically the need for re-examination of all. To …

Insider Trading And The Law Professors, Henry G. Manne

Vanderbilt Law Review

When Insider Trading and the Stock Market' appeared in November, 1966, I was fully prepared for a goodly amount of disagreement. I was not prepared however for the emotional, almost hostile response my book received from some members of the academic community. This is not to say that all the reviews by law professors were unsympathetic and emotional in tone. Indeed the majority of them were not, and while critical reviews outnumbered favorable ones, most were in some degree mixed, and the tone was generally scholarly, impersonal, and in many cases constructive But the response to my book in the …

Foreign Corporations And Local Corporate Policy, Stanley A. Kaplan

Vanderbilt Law Review

This article will not attempt to document the thesis that there are corporate abuses or that an enabling act is less desirable than a regulatory type of statute. It is sufficient to assert or presume that there may be internal corporate abuses and that it may be desirable for some states, if they so choose, to have corporation statutes which are more than enabling acts and which limit or regulate specified aspects of corporate conduct. The question of whether it is feasible for a state to maintain a corporation statute which attempts closely to regulate the internal affairs of the …

Firearms Legislation, Joe B. Brown

Vanderbilt Law Review

Throughout recorded history men have armed themselves with weapons for use against their fellow men and for protection from environmental hazards. An increasing population combined with increasingly effective and deadly weapons has created a problem in the control of private weapons. At the present time every state and district in the United States and the federal government have some restrictions on firearms.' Are they adequate? Many think not. A recent Gallup Poll shows that seventy-three per cent of the people in the United States would favor a law requiring a police permit before a person could buy a gun. Even …

William 0. Douglas -- His Work In Policing Bankruptcy Proceedings, John W. Hopkirk

Vanderbilt Law Review

William 0. Douglas, while associated with the Securities and Exchange Commission during the mid-nineteen thirties, was responsible for a study of methods and procedures of corporate reorganization. By examining this area of Douglas' work, we can compare the position on corporate reorganization which the Justice developed as an administrative official for the New Deal with his later consideration of the same problems as a member of the Supreme Court of the United States. Through this comparison we can observe a number of basic attitudes which were manifested by Douglas both before and since he has joined the Court. Important among …

Radiation Protection Regulation: An Opportunity For Cooperative Federalism, Robert L. Hamilton, William A.W. Krebs, Jr.

Vanderbilt Law Review

The purpose of this article is to explore the question of how governmental responsibility for regulation of radiation hazards associated with atomic energy activities may best be allocated between the federal government and the states. While division of such responsibility is theoretically not essential--it being legally conceivable that the federal government could shoulder the entire responsibility alone or could leave it entirely to the states--various factors which will be mentioned below appear to make some sort of division of responsibility a practical necessity. To explore this question of division of responsibility, we shall first review the nature of radiation and …

Atomic Energy And The Law: A Bibliography, Eileen M. Murphy

Vanderbilt Law Review

To compile a bibliography, it is a prerequisite that one be a lover of books. It is hoped that this paper will be of assistance to those in need and secondarily, that it might possibly open the world of the bibliophile to many others and give Brooklyn a little competition. Atomic energy is a fascinating field for the bibliographer; the surface has yet to be scratched. The work presented is divided into seven sections:

I. Atomic Energy Legislation, 1946-1958.

II. Publications of the Joint Committee on Atomic Energy, 1945/46-1958.

III. Books. (Annotated.)

IV. Periodicals-U. S. and Foreign. (Annotated.)

V. Selected …

Competition Versus Regulation: The Agricultural Exemption In The Motor Carrier Act, Carl H. Fulda

Vanderbilt Law Review

Transportation of passengers or property by motor carriers engaged in interstate or foreign commerce has been subject to federal regulation by the Interstate Commerce Commission since 1935. At that time motor carriers in intrastate commerce were regulated in all the states of the Union by state commissions which controlled entry into the industry, rates, and safety of operations, but there was no comparable federal regulation. The Federal Motor Carrier Act of 1935, now part II of the Interstate Commerce Act,' was intended to fill this gap by creating a federal regulatory scheme similar to that provided by the states. In …

State Power Over The Federal Contractor: A Problem In Federalism, Arthur S. Miller

Vanderbilt Law Review

In large measure both the federal officials, whose job it is to enter the commercial market to fulfill the government's material needs, and the federal contractor, wherever he may be and of whatever size he may be, tend to look upon attempts by states to tax or regulate with a skeptical eye. The state appears as some alien interloper whose activities result only in hardship and delay to the contractor and consequent annoyance and financial cost to the federal government. By and large, accordingly, a prevailing idea in the federal procurement circles seems to be that of avoiding, whenever possible, …

A Symposium On Arbitration, Sylvan Gotshal

Vanderbilt Law Review

Twenty years ago an article on arbitration would have been an oddity in a law review. Significant of the change in thinking with regard to arbitration on the part of attorneys, bar associations, and law schools is the fact that within the past few months several law journals and reviews have had major articles devoted to various aspects of arbitration. This new literature in the legal field serves as notice to the practitioner and to the law student that arbitration has come of age. The editors of the Vanderbilt Law Review and the faculty of the Law School are, therefore, …

Local Government Law -- 1955 Tennessee Survey, Clyde L. Ball

Vanderbilt Law Review

Police Power: Conformity of Ordinance to State Statute: The town of Fayetteville enacted an ordinance imposing higher standards than those established by state and federal laws upon producers, of milk to be sold within the city. In State ex rel. Beasley v. Mayor and Aldermen of Fayetteville' plaintiff milk producer, having complied with state and federal requirements, was denied a permit to sell inside the city and sought a writ of mandamus to require the city authorities to issue the permit. Under the holding in State ex rel. Nashville Pure Milk Co. v. Shelbyville, a municipality could not refuse to …

Life Insurance, The Forbidden Fruit, William J. Rowe

Vanderbilt Law Review

Until recently life insurance has represented the most impenetrable stronghold of the professional tax avoider and his advisors. As a vehicle for the transmission of wealth to future generations with minimum tax levies, it stood unrivaled. During a policyholder's life the value of his policy for gift tax purposes was and is measured by replacement cost.' Under applicable regulations during the thirties, when insurance was transferred by way of inter vivos gift the tremendous increase in value of the policy that came with death escaped gift tax, income tax, and estate tax. But since 1941 the situation has been reversed …