Law Commons^™

Qalys And Policy Evaluation: A New Perspective, Matthew D. Adler

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“QALYs” (Quality-Adjusted Life Years) are a metric for health and longevity very widely employed by health researchers. Surveys are used to assign health states a quality ranking on zero-one scale, with zero representing a health state no better than death and one perfect health. The total QALY value of a health profile is calculated as the time spent in its component health states, each weighted by its quality. Until a few years ago, despite the huge academic literature on QALY measurement, this approach was seldom used by policymakers in the U.S. But there have been recent signs of governmental interest …

Ip And Antitrust Policy: A Brief Historical Overview, Herbert J. Hovenkamp

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The history of IP/antitrust litigation is filled with exaggerated notions of the power conferred by IP rights and imagined threats to competition. The result is that antitrust litigation involving IP practices has seen problems where none existed. To be sure, finding the right balance between maintaining competition and creating incentives to innovate is no easy task. However, the judge in an IP/antitrust case almost never needs to do the balancing, most of which is done in the language of the IP provisions. The role of antitrust tribunals is the much more limited one of ensuring that any alleged threat to …

Equity Analysis And Natural Hazards Policy, Matthew D. Adler

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What is an “equitable” policy for mitigating the impacts of hurricanes, earthquakes, floods, and other natural hazards? Economists tend to see “equity” or “distribution” as irreducibly political and subjective. But, in truth, equity analysis and cost-benefit analysis are on a par. Both require a normative justification. Moreover, normative argument can help us structure equity analysis, just as it can cost-benefit analysis. This chapter, written for a forthcoming book on natural hazards policy after Katrina, argues that equity is a normative consideration distinct from efficiency or overall well-being. It then argues that equity is individualistic, not group-based; ex post, not ex …

Patent Portfolios, Gideon Parchomovsky, R. Polk Wagner

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This article presents a new theory of patent value, responding to growing empirical evidence that the traditional appropriability premise of patents is fundamentally incomplete in the modern innovation environment. We find that for patents, the whole is greater than the sum of its parts: the true value of patents lies not in their individual worth, but in their aggregation into a collection of related patents, a patent portfolio. The patent portfolio theory thus explains what is known as “the patent paradox”: in recent years patent intensity—patents obtained per research and development dollar—has risen dramatically even as the expected value of …

Tradable Pollution Permits And The Regulatory Game, Jason S. Johnston

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This paper analyzes polluters' incentives to move from a traditional command and control (CAC) environmental regulatory regime to a tradable permits (TPP) regime. Existing work in environmental economics does not model how firms contest and bargain over actual regulatory implementation in CAC regimes, and therefore fail to compare TPP regimes with any CAC regime that is actually observed. This paper models CAC environmental regulation as a bargaining game over pollution entitlements. Using a reduced form model of the regulatory contest, it shows that CAC regulatory bargaining likely generates a regulatory status quo under which firms with the highest compliance costs …

The Residency Match: Competitive Restraints In An Imperfect World, Kristin Madison

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Several years ago physicians filed a lawsuit alleging that “the match,” the more than fifty-year-old system by which medical students and other applicants are assigned to medical residency programs, violates Section 1 of the Sherman Act. Last year, without hearings or substantive debate on the issue, Congress found that the match was “highly efficient” and “pro-competitive” and granted a retroactive antitrust exemption for its operation. These seemingly incompatible views invite further analysis of the merits of the residency match from the perspective of public policy. This article considers the arguments of match advocates and critics, evaluating both theoretical models and …

The Corporate Form As A Solution To A Discursive Dilemma, Edward B. Rock

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I examine the connection between the discursive dilemma and corporate law. The discursive dilemma (or doctrinal paradox) is a distinctive social choice problem that was first identified by Kornhauser and Sager and later used as the basis for a theory of organizational personality by Pettit. I examine the ways in which the corporate form prevents the emergence of the discursive dilemma in the firm context and the extent to which the presence of the discursive dilemma can provide the foundation for a theory of corporate personality.

Federalism And Antitrust Reform, Herbert J. Hovenkamp

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Currently the Antitrust Modernization Commission is considering numerous proposals for adjusting the relationship between federal antitrust authority and state regulation. This essay examines two areas that have produced a significant amount of state-federal conflict: state regulation of insurance and the state action immunity for general state regulation. It argues that no principle of efficiency, regulatory theory, or federalism justifies the McCarran-Ferguson Act, which creates an antitrust immunity for state regulation of insurance. What few benefits the Act confers could be fully realized by an appropriate interpretation of the state action doctrine. Second, the current formulation of the antitrust state action …

The Fair Value Of Cornfields In Delaware Appraisal Law, Lawrence Hamermesh, Michael L. Wachter

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The Delaware Supreme Court’s opinions in Weinberger and Technicolor have left a troublesome uncertainty in defining the proper approach to the valuation of corporate shares. That uncertainty – increasingly important as going private mergers become more frequent – can be resolved by a blend of financial and doctrinal analysis. The primary problem—the potential opportunism by controlling shareholders in timing going private mergers—can be addressed by a more complete understanding of corporate finance. The definition of fair value must include not only the present value of the firm’s existing assets, but also the future opportunities to reinvest free cash flow, including …

Regulating Local Variations In Federal Sentencing, Stephanos Bibas

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Though in theory federal criminal law applies uniformly in all places, in practice federal charging, plea bargaining, and sentencing practices vary widely from place to place. Sentencing disparities are good when they reflect local knowledge about local crime problems and concerns. They are bad when they spring from bias, local lawyers' and judges' hostility to national policy choices or perhaps when they reflect disagreement with federal strategies. This Article critiques fast-track programs, which award huge discounts in immigration and drug cases along the southwest border, as bad variation that undermines the ideal of national uniformity. It then considers the wide …

Imputed Conflicts Of Interest In International Law Practice, Geoffrey C. Hazard Jr.

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No abstract provided.

Initial Interest Confusion: Standing At The Crossroads Of Trademark Law, Jennifer E. Rothman

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While the benchmark of trademark infringement traditionally has been a demonstration that consumers are likely to be confused by the use of a similar or identical trademark to identify the goods or services of another, a court-created doctrine called initial interest confusion allows liability for trademark infringement solely on the basis that a consumer might initially be interested, attracted, or distracted by a competitor's, or even a non-competitor's, product or service. Initial interest confusion is being used with increasing frequency, especially on the Internet, to shut down speech critical of trademark holders and their products and services, to prevent comparative …

Bargaining For Takings Compensation, Abraham Bell, Gideon Parchomovsky

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Efficiency and fairness require paying full compensation to property owners when their property is taken by eminent domain. Yet, to date, the evidentiary challenge of proving subjective value has proved insurmountable, and current law requires condemnees to settle for fair market value. This Article proposes a self-assessment mechanism that can make full compensation at subjective value practical. Under our proposal, property owners must be given the opportunity to state the value of the property designated for condemnation. Once property owners name their price, the government can take the property only at that price. However, if the government chooses not to …

Discounts And Exclusions, Herbert J. Hovenkamp

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The discounting practices of dominant firms has emerged as one of the most problematic areas of private antitrust enforcement against single-firm conduct. The most difficult discount practices to assess are bundled, or multi-product discounts in situations where no significant rival produces every product that is included in the bundle. A debate has emerged over whether such discounts are properly assessed under a legal test that analogizes them to predatory pricing or to tying. Defendants typically prefer predatory pricing analogies, requiring a showing that the price of the assembled bundle was below a relevant measure of cost, such as marginal cost …

The Promise And Limits Of Voluntary Management - Based Regulatory Reform: An Analysis Of Epa's Strategic Goals Program, Jason S. Johnston

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This paper presents a case study of a voluntary environmental program initiated by the U.S. EPA in the late 1990's, the Strategic Goals Program (SGP). This program was intended to create incentives for job shop metal finishers, an industry of small and medium sized enterprises, to improve and even go beyond compliance with existing federal regulations by investing in pollution prevention. The SGP's incentives included direct technical assistance and limited financial assistance, but the primary carrot it offered participants was more flexible regulatory treatment by state and local regulators. Although SGP clearly helped some firms discover ways to both cut …

The Story Of Brady V. Maryland: From Adversarial Gamesmanship Toward The Search For Innocence?, Stephanos Bibas

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This book chapter, forthcoming in Criminal Procedure Stories (Carol Steiker ed. forthcoming 2005), explains the story behind Brady v. Maryland and its broader significance in the field of criminal procedure. Brady is unusual among the great landmark criminal procedure decisions of the Warren Court. Brady requires prosecutors to give criminal defendants evidence that tends to negate their guilt or reduce their punishment. In other words, Brady mandates limited discovery instead of trial by ambush. Brady's test turns not on whether the prosecutor misled a jury or acted in good faith, but on whether the evidence is favorable and material to …

Why Defer To Managers? A Strong-Form Efficiency Model, Richard E. Kihlstrom, Michael L. Wachter

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We compare the efficiency with which management discretion and shareholder choice regulate hostile tender offers. This is the first paper in a long running debate that rigorously compares these legal rules to analyze both the critical informational assumptions and the interplay of those assumptions with principles of financial market efficiency. A critical innovation of our model is its focus on an informed management’s choice among alternative corporate policies under the protection of the business judgment rule, but where agency costs exist. We assume that corporate assets and reinvestment opportunities are efficiently priced by financial markets, but that markets never learn …

Theories Of The Employment Relationship: Choosing Between Norms And Contracts, Michael L. Wachter

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In this paper, I analyze three types of labor market relationships that are prevalent in the economy - the external labor market that exists outside of firms, and the union and nonunion employment relationships that exist inside firms. The parties' relationships in each of these markets are markedly different from one another with respect to their use of contracts versus norms, their enforcement mechanisms, and their reliance on external competitive market pressures. Why do these very distinct forms exist? This paper provides an answer to this question. To be successful, each of the structures has to resolve problems of match-specific …

When Judges Carve Democracies: A Primer On Court-Drawn Redistricting Plans, Nathaniel Persily

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This essay presents guidelines for courts that undertake to draw their own redistricting plans. Although several dozen courts over the last four redistricting cycles have drawn their own plans, there is precious little in the case law or secondary sources to provide guidance. As a result, courts vary considerably in the procedures they follow and the substantive factors they take into account in their plans. This essay discusses the unique legal constraints on court-drawn plans and assesses the costs and benefits of following various procedures or substantive redistricting principles. The unique context of each case that spurs judicial involvement will …

Unilateral Refusals To License In The Us, Herbert J. Hovenkamp, Mark D. Janis, Mark A. Lemley

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Most antitrust claims relating to intellectual property involve challenges to agreements, licensing practices or affirmative conduct involving the use or disposition of the intellectual property rights or the products they cover. But sometimes an antitrust claim centers on an intellectual property owner's refusal to use or license an intellectual property right, perhaps coupled with efforts to enforce the intellectual property right against infringers. The allegation may be that the intellectual property right is so essential to competition that it must be licensed across the board, or that a refusal to license it to one particular party was discriminatory, or that …

The Calculation Of Prejudgment Interest, Michael S. Knoll, Jeffrey M. Colon

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This Essay describes the proper method of calculating prejudgment interest based on sound financial principles. Using the paradigm that the claim plaintiff holds in litigation represents an involuntary loan from plaintiff to defendant and recognizing that in bankruptcy courts treat legal claims similarly to unsecured debt, we argue that prejudgment interest should be computed using the defendant's unsecured borrowing rate. Furthermore, we argue that courts should use a short-term, floating interest rate rather than a long-term rate in order to provide the proper incentive for the parties to settle. We criticize alternative bases for awarding prejudgment interest and address modifications …

Spare The Rod, Spoil The Director?: Revitalizing Director Fiduciary Duty Through Legal Liability, Lisa Fairfax

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No abstract provided.

Signaling Social Responsibility: On The Law And Economics Of Market Incentives For Corporate Environmental Performance, Jason S. Johnston

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This article analyzes the law and economics of market internalization: the capability of markets to both penalize and reward firms for their environmental, health and safety performance. As for market sticks, the article maintains that market transactions - both private and public sales of corporate assets as well as transactions in publicly traded securities - are an important avenue through which firms realize comparative advantages in regulatory compliance, and that such transactions have the potential to significantly enhance corporate environmental and social performance. Asset transactions tend to drive environmental cleanup and transfer assets to firms that are better able to …

Interview With Timothy J. Carson, David Spiegel, Timothy J. Carson, Legal Oral History Project, University Of Pennsylvania Carey Law School

Legal Oral History Project

For transcript, click the Download button above. For video index, click the link below.

TImothy J. Carson (W '70) has practiced in Philadelphia for forty years in the field of public sector law, especially public finance. He is currently a partner at Dilworth Paxson LLP. He is an elected Fellow of the American College of Bond Counsel.

Unifying Rulemaking Information: Recommendations On The New Federal Docket Management System, Cary Coglianese

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The Federal Docket Management System aims for the first time to make all information supporting federal regulation available to the public via the Internet. By making information about government regulation available online, the Bush Administration's e-Rulemaking Initiative seeks to improve the quality and legitimacy of the government's regulatory decisions. If developed properly, the Administration's new online docket management system can also facilitate legal and social scientific research that in the long term should improve regulatory policymaking.

Unleashing A Gatekeeper: Why The Sec Should Mandate Disclosure Of Details Concerning Directors' And Officers' Liability Insurance Policies, Sean J. Griffith

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This Essay explores the connection between corporate governance and D&O insurance. It argues that D&O insurers act as gatekeepers and guarantors of corporate governance, screening and pricing corporate governance risks to maintain the profitability of their risk pools. As a result, D&O insurance premiums provide the insurer’s assessment of a firm’s governance quality. Most basically, firms with relatively worse corporate governance pay higher D&O premiums. This simple relationship could signal important information to investors and other capital market participants. Unfortunately, the signal is not being sent. Corporations lack the incentive to produce this disclosure themselves, and U.S. securities regulators do …

Dangerous Clients: A Phenomenological Solution To Bureaucratic Oppression, Edward L. Rubin

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Modern administrative agencies are often unnecessarily oppressive in their day-to-day contact with people. This article traces such oppression to status differences between agency employees and clients, their relationship as strangers to one another, the institutional pathologies of the agency and the divergent incentives to which the agency employees are subject. The article then considers three solutions to this problem that have been discussed in the academic literature regarding government agencies: the imposition of due process requirements, the shift to client-centered management, and the use of market or quasi-market mechanisms. After critiquing all three solutions, the article proposes a new approach, …

Against 'Individual Risk': A Sympathetic Critique Of Risk Assessment, Matthew D. Adler

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"Individual risk" currently plays a major role in risk assessment and in the regulatory practices of the health and safety agencies that employ risk assessment, such as EPA, FDA, OSHA, NRC, CPSC, and others. Risk assessors use the term "population risk" to mean the number of deaths caused by some hazard. By contrast, "individual risk" is the incremental probability of death that the hazard imposes on some particular person. Regulatory decision procedures keyed to individual risk are widespread. This is true both for the regulation of toxic chemicals (the heartland of risk assessment), and for other health hazards, such as …

The Accelerating Degradation Of American Criminal Codes, Paul H. Robinson, Michael T. Cahill

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This Article addresses the ongoing-and, indeed, accelerating process of sporadic, piecemeal, and unnecessary legislation leading to increasing inconsistencies and irrationalities in American criminal law. After a wave of modernization in the I960s and 1970s, the past generation has not witnessed further advances, but rather a serious and growing degradation of most criminal codes. This Article offers several insights regarding criminal code degradation. First, it provides specific and concrete examples of degradation and its harmful effects. Second, drawing on their experiences as participants in the recent reform efforts of Illinois and Kentucky, the authors offer an insider's view of how the …

White-Collar Plea Bargaining And Sentencing After Booker, Stephanos Bibas

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This symposium essay speculates about how Booker's loosening of the Federal Sentencing Guidelines is likely to affect white-collar plea bargaining and sentencing. Prosecutors' punishment intuitions and the strong white-collar defense bar will keep white-collar sentencing from growing as harsh as drug sentencing, but the parallels are nonetheless ominous. The essay suggests that the Sentencing Commission revise its loss-computation rules, calibrate white-collar sentences to their core purpose of expressing condemnation, and adding shaming punishments and apologies to give moderate prison sentences more bite.