Law Commons^™

Should Corporations Have A Purpose?, Jill E. Fisch, Steven Davidoff Solomon

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Corporate purpose is the hot topic in corporate governance. Critics are calling for corporations to shift their purpose away from shareholder value as a means of addressing climate change, equity and inclusion, and other social values. We argue that this debate has overlooked the critical predicate questions of whether a corporation should have a purpose at all and, if so, what role it serves.

We start by exploring and rejecting historical, doctrinal, and theoretical bases for corporate purpose. We challenge the premise that purpose can serve a useful function either as a legal constraint on managerial discretion or as a …

Administrative Law In The Automated State, Cary Coglianese

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In the future, administrative agencies will rely increasingly on digital automation powered by machine learning algorithms. Can U.S. administrative law accommodate such a future? Not only might a highly automated state readily meet longstanding administrative law principles, but the responsible use of machine learning algorithms might perform even better than the status quo in terms of fulfilling administrative law’s core values of expert decision-making and democratic accountability. Algorithmic governance clearly promises more accurate, data-driven decisions. Moreover, due to their mathematical properties, algorithms might well prove to be more faithful agents of democratic institutions. Yet even if an automated state were …

Compensation, Commodification, And Disablement: How Law Has Dehumanized Laboring Bodies And Excluded Nonlaboring Humans, Karen M. Tani

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This essay reviews Nate Holdren's Injury Impoverished: Workplace Accidents, Capitalism, and Law in the Progressive Era (Cambridge University Press, 2020), which explores the changes in legal imagination that accompanied the rise of workers' compensation programs. The essay foregrounds Holdren’s insights about disability. Injury Impoverished illustrates the meaning and material consequences that the law has given to work-related impairments over time and documents the naturalization of disability-based exclusion from the formal labor market. In the present day, with so many social benefits tied to employment, this exclusion is particularly troubling.

Prosecuting Civil Asset Forfeiture On Contingency Fees: Looking For Profit In All The Wrong Places, Louis S. Rulli

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Civil asset forfeiture has strayed far from its intended purpose. Designed to give law enforcement powerful tools to combat maritime offenses and criminal enterprises, forfeiture laws are now used to prey upon innocent motorists and lawful homeowners who are never charged with crimes. Their only sins are that they are carrying legal tender while driving on busy highways or providing shelter in their homes to adult children and grandchildren who allegedly sold small amounts of low-level drugs. Civil forfeiture abuses are commonplace throughout the country with some police even armed with legal waivers for property owners to sign on the …

Administrative Law In A Time Of Crisis: Comparing National Responses To Covid-19, Cary Coglianese, Neysun A. Mahboubi

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Beginning in early 2020, countries around the world successively and then together faced the same rapidly emerging threats from the COVID-19 virus. The shared experience of this global pandemic affords scholars and policymakers a comparative lens through which to view how differences in countries’ governance structures and administrative responses affected their ability to manage the various crisis posed by the pandemic. This article introduces a special series of essays in the Administrative Law Review written by leading administrative law experts across the globe. Case studies focus on China, Chile, Germany, Italy, New Zealand, South Africa, and the United States, as …

The Irony Of Health Care’S Public Option, Allison K. Hoffman

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The idea of a public health insurance option is at least a half century old, but has not yet had its day in the limelight. This chapter explains why if that moment ever comes, health care’s public option will fall short of expectations that it will provide a differentiated, meaningful alternative to private health insurance and will spur health insurance competition.

Health care’s public option bubbled up in its best-known form in California in the early 2000s and got increasing mainstream attention in the lead up to the 2010 health reform, the Patient Protection and Affordable Care Act (ACA). The …

Is The Digital Economy Too Concentrated?, Jonathan Klick

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Concentration in the digital economy in the United States has sparked loud criticism and spurred calls for wide-ranging reforms. These reforms include everything from increased enforcement of existing antitrust laws, such as challenging more mergers and breaking up firms, to an abandonment of the consumer welfare standard. Critics cite corruption and more systemic public choice problems, while others invoke the populist origins of antitrust to slay the digital Goliaths. On the other side, there is skepticism regarding these arguments. This chapter continues much of that skepticism.

The Costs Of Critical Habitat Or Owl’S Well That Ends Well, Jonathan Klick, J.B. Ruhl

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When the Fish and Wildlife Service designated land in four counties of Arizona as “critical habitat” necessary for the protection of the endangered cactus ferruginous pygmy‐owl, property values dropped considerably. When the owl was later delisted, property values jumped back up. We use difference-in-difference and synthetic control designs to identify this effect with Zillow property value data. The results provide an estimate of the costs of this critical habitat designation, and they are considerable, contrary to the regulators’ position that critical habitat protection imposes no incremental costs beyond the original endangered species listing.

Whitman And The Fiduciary Relationship Conundrum, Lisa Fairfax

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While the law on insider trading has been convoluted and, in Judge Jed S. Rakoff’s words, “topsy turvy,” the law on insider trading is supposedly clear on at least one point: insider trading liability is premised upon a fiduciary relationship. Thus, all three seminal U.S. Supreme Court cases articulating the necessary elements for demonstrating any form of insider trading liability under § 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 made crystal clear that a fiduciary relationship represented the lynchpin for such liability.

Alas, insider trading law is not clear about the source from which the fiduciary …

Stewardship 2021: The Centrality Of Institutional Investor Regulation To Restoring A Fair And Sustainable American Economy, Leo E. Strine Jr.

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In this essay, which formed the basis for the luncheon keynote speech at the Rethinking Stewardship online conference presented by the Ira M. Millstein Center for Global Markets and Corporate Ownership at Columbia Law School and ECGI, the European Corporate Governance Institute, the essential, but not sufficient, role of regulation to promote more effective stewardship by institutional investors is discussed. To frame specific policy recommendations that align the responsibilities of institutional investors with the best interests of their human investors in sustainable wealth creation, environmental responsibility, the respectful treatment of stakeholders, and, in particular, the fair pay and treatment of …

The First Amendment And The Right(S) Of Publicity, Jennifer E. Rothman, Robert C. Post

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The right of publicity protects persons against unauthorized uses of their identity, most typically their names, images, or voices. The right is in obvious tension with freedom of speech. Yet courts seeking to reconcile the right with the First Amendment have to date produced only a notoriously confused muddle of inconsistent constitutional doctrine. In this Article, we suggest a way out of the maze. We propose a relatively straightforward framework for analyzing how the right of publicity should be squared with First Amendment principles.

At the root of contemporary constitutional confusion lies a failure to articulate the precise state interests …

A Truce In Criminal Law's Distributive Principle Wars?, Paul H. Robinson

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Crime-control utilitarians and retributivist philosophers have long been at war over the appropriate distributive principle for criminal liability and punishment, with little apparent possibility of reconciliation between the two. In the utilitarians’ view, the imposition of punishment can be justified only by the practical benefit that it provides: avoiding future crime. In the retributivists’ view, doing justice for past wrongs is a value in itself that requires no further justification. The competing approaches simply use different currencies: fighting future crime versus doing justice for past wrongs.

It is argued here that the two are in fact reconcilable, in a fashion. …

On Environmental, Climate Change & National Security Law, Mark P. Nevitt

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This Article offers a new way to think about climate change. Two new climate change assessments — the 2018 Fourth National Climate Assessment (NCA) and the United Nations Intergovernmental Panel’s Special Report on Climate Change — prominently highlight climate change’s multifaceted national security risks. Indeed, not only is climate change a “super wicked” environmental problem, it also accelerates existing national security threats, acting as both a “threat accelerant” and “catalyst for conflict.” Further, climate change increases the intensity and frequency of extreme weather events while threatening nations’ territorial integrity and sovereignty through rising sea levels. It causes both internal displacement …

Environmental Soft Law As A Governance Strategy, Cary Coglianese

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Soft law governance relies on nongovernmental institutions that establish and implement voluntary standards. Compared with traditional hard law solutions to societal and economic problems, soft law alternatives promise to be more politically feasible to establish and then easier to adapt in the face of changing circumstances. They may also seem more likely to be flexible in what they demand of targeted businesses and other entities. But can soft law actually work to solve major problems? This Article considers the value of soft law governance through the lens of three major voluntary, nongovernmental initiatives that address environmental concerns: (1) ISO 14001 …

Antitrust: What Counts As Consumer Welfare?, Herbert J. Hovenkamp

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Antitrust’s consumer welfare principle is accepted in some form by the entire Supreme Court and the majority of other writers. However, it means different things to different people. For example, some members of the Supreme Court can simultaneously acknowledge the antitrust consumer welfare principle even as they approve practices that result in immediate, obvious, and substantial consumer harm. At the same time, however, a properly defined consumer welfare principle is essential if antitrust is to achieve its statutory purpose, which is to pursue practices that injure competition. The wish to make antitrust a more general social justice statute is understandable: …

Pandemic Response As Border Politics, Michael R. Kenwick, Beth A. Simmons

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Pandemics are imbued with the politics of bordering. For centuries, border closures and restrictions on foreign travelers have been the most persistent and pervasive means by which states have responded to global health crises. The ubiquity of these policies is not driven by any clear scientific consensus about their utility in the face of myriad pandemic threats. Instead, we show they are influenced by public opinion and preexisting commitments to invest in the symbols and structures of state efforts to control their borders, a concept we call border orientation. Prior to the COVID-19 pandemic, border orientation was already generally …

Understanding The Revenue Potential Of Tax Compliance Investment, Natasha Sarin, Lawrence H. Summers

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In a July 2020 report, the Congressional Budget Office estimated that modest investments in the IRS would generate somewhere between $60 and $100 billion in additional revenue over a decade. This is qualitatively correct. But quantitatively, the revenue potential is much more significant than the CBO report suggests. We highlight five reasons for the CBO’s underestimation: 1) the scale of the investment in the IRS contemplated is modest and far short of sufficient even to return the IRS budget to 2011 levels; 2) the CBO contemplates a limited range of interventions, excluding entirely progress on information reporting and technological advancements; …

Sobering Up After The Seventh Inning: Alcohol And Crime Around The Ballpark, Jonathan Klick, John M. Macdonald

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Objectives: This study examines the impact of alcohol consumption in a Major League Baseball (MLB) stadium on area level counts of crime. The modal practice at MLB stadiums is to stop selling alcoholic beverages after the seventh inning. Baseball is not a timed game, so the duration between end of the seventh inning (last call for alcohol) and the end of the game varies considerably, providing a unique natural experiment that allows us to estimate the relationship between alcohol consumption and crime near a stadium on game days to non-game days and to areas around sports bars that fans also …

Testing For Negative Spillovers: Is Promoting Human Rights Really Part Of The “Problem”?, Anton Strezhnev, Judith G. Kelley, Beth A. Simmons

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The international community often seeks to promote political reforms in recalcitrant states. Recently, some scholars have argued that, rather than helping, international law and advocacy create new problems because they have negative spillovers that increase rights violations. We review three mechanisms for such spillovers: backlash, trade-offs, and counteraction and concentrate on the last of these. Some researchers assert that governments sometimes “counteract” international human rights pressures by strategically substituting violations in adjacent areas that are either not targeted or are harder to monitor. However, most such research shows only that both outcomes correlate with an intervention—the targeted positively and the …

The Proof Is In The Process: Self-Reporting Under International Human Rights Treaties, Cosette D. Creamer, Beth A. Simmons

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Recent research has shown that state reporting to human rights monitoring bodies is associated with improvements in rights practices, calling into question earlier claims that self-reporting is inconsequential. Yet little work has been done to explore the theoretical mechanisms that plausibly account for this association. This Article systematically documents—across treaties, countries, and years—four mechanisms through which reporting can contribute to human rights improvements: elite socialization, learning and capacity building, domestic mobilization, and law development. These mechanisms have implications for the future of human rights treaty monitoring.

Regulatory Abdication In Practice, Cary Coglianese

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“Meta-regulation” refers to deliberate efforts to induce private firms to create their own internal regulations—a regulatory strategy sometimes referred to as “management-based regulation” or even “regulation of self-regulation.” Meta-regulation is often presented as a flexible alternative to traditional “command-and-control” regulation. But does meta-regulation actually work? In her recent book, Meta-Regulation in Practice: Beyond Normative Views of Morality and Rationality, Fiona Simon purports to offer a critique of meta-regulation based on an extended case study of the often-feckless process of electricity regulatory reform undertaken in Australia in the early part of this century. Yet neither Simon’s case study nor her book …

The Expansive Reach Of Pretrial Detention, Paul Heaton

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Today we know much more about the effects of pretrial detention than we did even five years ago. Multiple empirical studies have emerged that shed new light on the far-reaching impacts of bail decisions made at the earliest stages of the criminal adjudication process. The takeaway from this new generation of studies is that pretrial detention has substantial downstream effects on both the operation of the criminal justice system and on defendants themselves, causally increasing the likelihood of a conviction, the severity of the sentence, and, in some jurisdictions, defendants’ likelihood of future contact with the criminal justice system. Detention …

On The Meaning Of Antitrust's Consumer Welfare Principle, Herbert J. Hovenkamp

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This brief essay addresses the ambiguities in the meaning of “consumer welfare” in antitrust, exploring the differences between the Williamson, Bork, and current understanding of that term. After weighing the alternatives it argues that the consumer welfare principle in antitrust should seek out that state of affairs in which output is maximized, consistent with sustainable competition

Taxing Bitcoin And Blockchains—What The Irs Told Us (And What It Didn’T), David J. Shakow

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The IRS recently issued its second description of how it will treat Bitcoin and other blockchain assets. Some of its analysis leaves open questions that invite further consideration, and important issues remain unresolved. Moreover, because the popular Bitcoin blockchain uses a "proof of work" consensus procedure, issues relating to the alternative "proof of stake" procedure have been neglected.

Development On A Cracked Foundation: How The Incomplete Nature Of New Deal Labor Reform Presaged Its Ultimate Decline, Leo E. Strine Jr.

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Mariano-Florentino Cuéllar, Margaret Levi, and Barry R. Weingast’s excellent essay, Twentieth Century America as a Developing Country, Conflict, Institutional Change and the Evolution of Public Law, celebrates the period during which the National Labor Relations Act facilitated the peaceful resolution of labor disputes and improved the working conditions of American workers. These distinguished authors make a strong case for the essentiality of law in regulating labor relations and the importance of national culture in providing a solid context for the emergence of legal regimes facilitating economic growth and equality. This reply to their essay explores how the New Deal’s failure …

Management-Based Regulation, Cary Coglianese, Shana M. Starobin

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Environmental regulators have embraced management-based regulation as a flexible instrument for addressing a range of important problems often poorly addressed by other types of regulations. Under management-based regulation, regulated firms must engage in management-related activities oriented toward addressing targeted problems—such as planning and analysis to mitigate risk and the implementation of internal management systems geared towards continuous improvement. In contrast with more restrictive forms of regulation which can impose one-size-fits-all solutions, management-based regulation offers firms greater operational choice about how to solve regulatory problems, leveraging firms’ internal informational advantage to innovate and search for alternative measures to achieve the intended …

Lessons From China's Response To Covid-19: Shortcomings, Successes, And Prospects For Reform In China's Regulatory State, Jacques Delisle, Shen Kui

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China’s response to COVID-19 offers a case study of law, the regulatory state and governance in China. The costly delay in the initial response reflected distinctive features of the Chinese system, including perverse incentives local-level officials face to try to cover up problems, fragmentated institutions and rules, and politically weak public health bureaucracies. After the initial shortcomings, China’s largely successful efforts to contain the pandemic also reflected defining features of the Chinese system, including a highly capable, centralized and authoritarian party-state that could mobilize vast resources, coordinate across fractious institutions, create ad hoc government and party leadership bodies, and deploy …

What’S In Your Wallet (And What Should The Law Do About It?), Natasha Sarin

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In traditional markets, firms can charge prices that are significantly elevated relative to their costs only if there is a market failure. However, this is not true in a two-sided market (like Amazon, Uber, and Mastercard), where firms often subsidize one side of the market and generate revenue from the other. This means consideration of one side of the market in isolation is problematic. The Court embraced this view in Ohio v. American Express, requiring that anticompetitive harm on one side of a two-sided market be weighed against benefits on the other side.

Legal scholars denounce this decision, which, …

Whither The Regulatory “War On Coal”? Scapegoats, Saviors, And Stock Market Reactions, Cary Coglianese, Daniel E. Walters

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Complaints about excessive economic burdens associated with regulation abound in contemporary political and legal rhetoric. In recent years, perhaps nowhere have these complaints been heard as loudly as in the context of U.S. regulations targeting the use of coal to supply power to the nation’s electricity system, as production levels in the coal industry dropped by nearly half between 2008 and 2016. The coal industry and its political supporters, including the president of the United States, have argued that a suite of air pollution regulations imposed by the U.S. Environmental Protection Agency during the Obama administration seriously undermined coal companies’ …

The Dormant Foreign Commerce Clause After Wynne, Michael S. Knoll, Ruth Mason

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This Essay surveys dormant foreign Commerce Clause doctrine to determine what limits it places on state taxation of international income, including both income earned by foreigners in a U.S. state and income earned by U.S. residents abroad. The dormant Commerce Clause similarly limits states’ powers to tax interstate and foreign commerce; in particular, it forbids states from discriminating against interstate or international commerce. But there are differences between the interstate and foreign commerce contexts, including differences in the nationality of affected taxpayers and differences in the impact of state taxes on federal tax and foreign-relations goals. Given current Supreme Court …