Law Commons^™

Does It Hurt A State To Introduce An Income Tax?, David J. Shakow

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In an article in the Wall Street Journal, Arthur Laffer argued that, since 1960, the introduction of state income taxes reduced the relative size of a state’s gross state product and its relative per capita personal income. This paper criticizes Laffer’s conclusions on a number of grounds. 1. He uses incorrect figures for per capita income. In fact, relative per capita income rose in a majority of states that introduced an income tax since 1960. 2. The results are not clear when a state’s data is compared to other states in its region, rather than to the United States as …

Vertical Restraints, Dealers With Power, And Antitrust Policy, Herbert J. Hovenkamp

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The Supreme Court’s Leegin decision has now brought the rule of reason to all purely vertical intrabrand distribution restraints. But the rule of reason does not mean per se legality and occasions for anticompetitive vertically imposed restraints may still arise. Of all those that have been suggested the most plausible are vertical restraints imposed at the behest of a powerful dealer or group (cartel) of dealers.

Although a vertical distribution restraint resembles a dealer cartel in that both limit intraband competition, a manufacturer restraining the distribution of its product shuns the excess dealer profits a dealer cartel would seek. Accordingly, …

Recessions And The Social Safety Net: The Alternative Minimum Tax As A Countercyclical Fiscal Stabilizer, Brian Galle, Jonathan Klick

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As recent events illustrate, state finances are procyclical: during recessions, state revenues crash, worsening the effects of economic downturns. This problem is well known, yet persistent. We argue here that, in light of predictable federalism and political economy dynamics, states will be unable to change this situation on their own. Additionally, we note that many possible federal remedies may result in worse problems, such as by creating moral hazard that would induce states to take on excessively risky policy, both fiscal and otherwise. Thus, we argue that policymakers should consider so-called “automatic” stabilizers, such as are found in the federal …

Product Life Cycle Theory And The Maturation Of The Internet, Christopher S. Yoo

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Much of the recent debate over Internet policy has focused on the permissibility of business practices that are becoming increasingly common, such as new forms of network management, prioritization, pricing, and strategic partnerships. This Essay analyzes these developments through the lens of the management literature on the product life cycle, dominant designs, technological trajectories and design hierarchies, and the role of complementary assets in determining industry structure. This analysis suggests that many of these business practices may represent nothing more than a reflection of how the nature of competition changes as industries mature. This in turn suggests that network neutrality …

Privacy Torts: Unreliable Remedies For Lgbt Plaintiffs, Anita L. Allen

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In the United States, both constitutional law and tort law recognize the right to privacy, understood as legal entitlement to an intimate life of one’s own free from undue interference by others and the state. Lesbian, gay, bisexual, and transgender (“LGBT”) persons have defended their interests in dignity, equality, autonomy, and intimate relationships in the courts by appealing to that right. In the constitutional arena, LGBT Americans have claimed the protection of state and federal privacy rights with a modicum of well-known success. Holding that homosexuals have the same right to sexual privacy as heterosexuals, Lawrence v. Texas symbolizes the …

The New Financial Deal: Understanding The Dodd-Frank Act And Its (Unintended) Consequences, David A. Skeel Jr.

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Contrary to rumors that the Dodd-Frank Act is an incoherent mess, its 2,319 pages have two very clear objectives: limiting the risk of the shadow banking system by more carefully regulating derivatives and large financial institutions; and limiting the damage caused by a financial institution’s failure. The new legislation also has a theme: government partnership with the largest Wall Street banks. The vision emerged almost by accident from the Bear Stearns and AIG bailouts of 2008 and the commandeering of the bankruptcy process to rescue Chrysler and GM in 2009. Its implications for derivatives regulation could prove beneficial: Dodd-Frank will …

Free Speech And The Myth Of The Internet As An Unintermediated Experience, Christopher S. Yoo

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In recent years, a growing number of commentators have raised concerns that the decisions made by Internet intermediaries — including last-mile network providers, search engines, social networking sites, and smartphones — are inhibiting free speech and have called for restrictions on their ability to prioritize or exclude content. Such calls ignore the fact that when mass communications are involved, intermediation helps end users to protect themselves from unwanted content and allows them to sift through the avalanche of desired content that grows ever larger every day. Intermediation also helps solve a number of classic economic problems associated with the Internet. …

Immigration, Association, And The Family, Matthew J. Lister

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In this paper I provide a philosophical analysis of family-based immigration. This type of immigration is of great importance, yet has received relatively little attention from philosophers and others doing normative work on immigration. As family-based immigration poses significant challenges for those seeking a comprehensive normative account of the limits of discretion that states should have in setting their own immigration policies, it is a topic that must be dealt with if we are to have a comprehensive account. In what follows I use the idea of freedom of association to show what is distinctive about family-based immigration and why …

Insurance In Sociolegal Research, Tom Baker

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Insurance has a long history in sociolegal research, most prominently as a window on accident compensation and related tort law in action. Recent work has extended that research, with the result that tort law in action may be the best mapped of any legal field outside criminal law. Sociological research has begun to explore insurance as a form of governance, with effects in many legal fields and across the economy. This essay reviews developments in both bodies of work. Part one examines the relationship between liability insurance and tort law in action using the metaphors of window and frame. Part …

Book Review (Paul Frymer's Black And Blue: African Americans, The Labor Movement, And The Decline Of The Democratic Party)., Sophia Z. Lee

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No abstract provided.

Network Neutrality Or Internet Innovation?, Christopher S. Yoo

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Over the past two decades, the Internet has undergone an extensive re-ordering of its topology that has resulted in increased variation in the price and quality of its services. Innovations such as private peering, multihoming, secondary peering, server farms, and content delivery networks have caused the Internet’s traditionally hierarchical architecture to be replaced by one that is more heterogeneous. Relatedly, network providers have begun to employ an increasingly varied array of business arrangements and pricing. This variation has been interpreted by some as network providers attempting to promote their self interest at the expense of the public. In fact, these …

Liberating Copyright: Thinking Beyond Free Speech, Jennifer E. Rothman

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Scholars have often turned to the First Amendment to limit the scope of ever-expanding copyright law. This approach has mostly failed to convince courts that independent review is merited and has offered little to individuals engaged in personal rather than political or cultural expression. In this Article, I consider the value of an alternative paradigm using the lens of substantive due process and liberty to evaluate users’ rights. A liberty-based approach uses this other developed body of constitutional law to demarcate justifiable personal, identity-based uses of copyrighted works. Uses that are essential for mental integrity, intimacy promotion, communication, or religious …

The Ftc's Anticompetitive Pricing Case Against Intel, Herbert J. Hovenkamp

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The FTC’s wide ranging complaint against Intel Corporation indicates that the FTC intends to rely on the “unfair methods of competition” language in §5 of the FTC Act to reach beyond the proscriptions on unilateral conduct contained in §2 of the Sherman Act. The Supreme Court has expressly authorized such expansion, and statutory text, legislative history and legal policy all support it. While §2 reaches only conduct that threatens to “monopolize” a market, the “unfair methods of competition” language can reach improper abuses of a dominant position that fall short of creating monopoly. Further, the FTC has expertise that courts …

Presidential Control Of Administrative Agencies: A Debate Over Law Or Politics?, Cary Coglianese

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Recent controversy over the unitary executive may be part of what Steven Calabresi and Christopher Yoo have called the “oldest debate in constitutional law.” Yet in this essay, I ask whether this debate is as much legal as it is political. Focusing on the Environmental Protection Agency’s decision to grant California a waiver from national automobile emissions standards, I contrast the divergent reactions to presidential influence under President Bush and President Obama. In both administrations the EPA faced clear presidential pressure, but critics of President Bush’s involvement generally applauded the actions taken by President Obama. The main difference appears to …

The Insurance Industry's Antitrust Immunity, Herbert J. Hovenkamp

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The 1945 McCarran-Ferguson Act provides that federal legislation generally, including the antitrust laws, is “applicable to the business of insurance [only] to the extent that such business is not regulated by State law.” The statute was enacted after United States v. South Eastern Underwriters Assn. (1944), held that insurance transactions were “interstate commerce” and thus subject to the antitrust laws. That case had in turn undermined the traditional view expressed in Paul v. Virginia (1868), that insurance was not interstate commerce, but strictly local transactions. The South Eastern case followed in turn upon the Supreme Court's decision in Wickard v. …

Sex In And Out Of Intimacy, Laura Rosenbury, Jennifer Rothman

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The state has long attempted to regulate sexual activity by channeling sex into various forms of state-supported intimacy. Although commentators and legal scholars of diverse political perspectives generally believe such regulation is declining, the freedom to engage in diverse sexual activities has not been established as a matter of law. Instead, courts have extended legal protection to consensual sexual acts only to the extent such acts support other state interests, most often marriage and procreation. Although Lawrence v. Texas altered some aspects of that vision, it reinscribed others by suggesting that sexual activity should be protected from state interference only …

Tontines For The Invincibles: Enticing Low Risks Into The Health-Insurance Pool With An Idea From Insurance History And Behavioral Economics, Tom Baker, Peter Siegelman

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Over one third of the uninsured adults in the U.S. below retirement age are between 19 and 29 years old. Young adults, especially men, often go without insurance, even when buying it is mandatory and sometimes even when it is a low cost employment benefit. This paper proposes a new form of health insurance targeted at this group—the “Young Invincibles”—those who (wrongly) believe that they don’t need health insurance because they won’t get sick. Our proposal offers a cash bonus to those who turn out to be right in their belief that they did not really need health insurance. The …

International Idealism Meets Domestic-Criminal-Procedure Realism, Stephanos Bibas, William W. Burke-White

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Though international criminal justice has developed into a flourishing judicial system over the last two decades, scholars have neglected institutional design and procedure questions. International criminal-procedure scholarship has developed in isolation from its domestic counterpart but could learn much realism from it. Given its current focus on atrocities like genocide, international criminal law’s main purpose should be not only to inflict retribution, but also to restore wounded communities by bringing the truth to light. The international justice system needs more ideological balance, more stable career paths, and civil-service expertise. It also needs to draw on the domestic experience of federalism …

Oil And Water: Mixing Individual Mandates, Fragmented Markets, And Health Reform, Allison K. Hoffman

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With momentum toward national health reform, there is wide support for legislation to include an individual mandate that would require all Americans to carry health insurance. Discussion of the individual mandate has relied largely on whether the mandate will generate universal coverage as a gauge for success. This article challenges the notion that an individual mandate is successful if it leads to universal coverage, revealing a critical problem the individual mandate will face even if all Americans were to have health insurance. To uncover this problem, this article sets out a novel framework that disentangles the three different policy objectives …

Heedless Globalism: The Sec's Roadmap To Accounting Convergence, William W. Bratton

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The Securities Exchange Commission (SEC) has introduced a "Roadmap" that describes a process leading to mandatory use of International Financial Reporting Standards (IFRS) by domestic issuers by 2014. The SEC justifies this initiative on the grounds that global standardization yields cost savings and an ultimate gain in comparability, facilitating the search for global opportunities by u.s. investors and making u.s. capital markets more attractive to foreign issuers. This Article shows that the offered justification is inadequate. The SEC frames the matter as a choice between two institutional frameworks for standard setting, holding out high quality sets of standards, asking which …

Innovations In The Internet’S Architecture That Challenge The Status Quo, Christopher S. Yoo

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The current debate over broadband policy has largely overlooked a number of changes to the architecture of the Internet that have caused the price paid by and quality of service received by traffic traveling across the Internet to vary widely. Topological innovations, such as private peering, multihoming, secondary peering, server farms, and content delivery networks, have caused the Internet’s traditionally hierarchical architecture to be replaced by one that is more heterogeneous. Moreover, network providers have begun to employ an increasingly varied array of business arrangements. Some of these innovations are responses to the growing importance of peer-to-peer technologies. Others, such …

Assuming The Risk: Tort Law, Policy, And Politics On The Slippery Slopes, Eric Feldman, Alison I. Stein

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Prominent jurists and legal scholars have long been critical of the doctrine of the assumption of risk, arguing that it is logically flawed and has sown confusion in the courts. This article takes a fresh look at the assumption of risk by focusing on legal conflicts over ski accidents in three ski-intensive states—Vermont, Colorado, and California. It argues that the tort doctrine of the assumption of risk remains vital, and highlights the way in which powerful political and economic actors with links to the ski industry have lobbied aggressively for state laws that codify the assumption of risk. The result …

Tying Arrangements And Antitrust Harm, Erik Hovenkamp, Herbert J. Hovenkamp

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A tying arrangement is a seller’s requirement that a customer may purchase its “tying” product only by taking its “tied” product. In a variable proportion tie the purchaser can vary the amount of the tied product. For example, a customer might purchase a single printer, but either a contract or technological design requires the purchase of varying numbers of printer cartridges from the same manufacturer.

Such arrangements are widely considered to be price discrimination devices, but their economic effects have been controversial. Tying has been attacked on the theory that price discrimination of this sort reduces consumer welfare. We show …

The Case Against Shareholder Empowerment, William W. Bratton, Michael L. Wachter

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No abstract provided.

Race, Sex, And Rulemaking: Administrative Constitutionalism And The Workplace, 1960 To The Present, Sophia Z. Lee

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This Article uses the history of equal employment rulemaking at the Federal Communications Commission (FCC) and the Federal Power Commission (FPC) to document and analyze, for the first time, how administrative agencies interpret the Constitution. Although it is widely recognized that administrators must implement policy with an eye on the Constitution, neither constitutional nor administrative law scholarship has examined how administrators approach constitutional interpretation. Indeed, there is limited understanding of agencies’ core task of interpreting statutes, let alone of their constitutional practice. During the 1960s and 1970s, officials at the FCC relied on a strikingly broad and affirmative interpretation of …

Presidential Power In Historical Perspective: Reflections' On Calabresi And Yoo's The Unitary Executive, Christopher S. Yoo

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On February 6 and 7, 2009, more than three dozen of the nation’s most distinguished commentators on presidential power gathered in Philadelphia to explore themes raised by a book authored by Steven Calabresi and I co-authored reviewing the history of presidential practices with respect to the unitary executive. The conference honoring our book and the special journal issue bringing together the articles presented there provide a welcome opportunity both to look backwards on the history of our project and to look forwards at the questions yet to be answered.

The Overstated Promise Of Corporate Governance, Jill E. Fisch

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Review of Jonathan Macey, Corporate Governance: Promises Kept, Promises Broken (Princeton, 2008)

Summary Judgment, Pleading, And The Future Of Transsubstantive Procedure, Stephen B. Burbank

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No abstract provided.

The Hidden Function Of Takings Compensation, Abraham Bell, Gideon Parchomovsky

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To date, scholars have justified the constitutional mandate to pay compensation for takings of property on the intuitively appealing grounds that fairness demands recompensing aggrieved owners; on the basis of a belief that government that fails to pay will suffer from “fiscal illusion” and take excessively; or due to the need to neutralize politically powerful property owners who would otherwise foil socially beneficial projects. This Essay offers a new explanation of the role of takings compensation in ensuring good government. Inspired by public choice theory, we argue that takings compensation is intended to reduce the incentives for corruption by limiting …

Contingent Valuation Studies And Health Policy, Matthew D. Adler

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This short comment argues that both cost-benefit analysis (CBA) and cost-effectiveness analysis (CEA) should be seen as imperfect tools for evaluating health policy. This is true, not only for extra-welfarists, but even for welfarists, since both CBA and CEA can deviate from the use of social welfare functions (SWF). A simple model is provided to illustrate the divergence between CBA, CEA, and the SWF approach. With this insight in mind, the comment considers the appropriate role of contingent-valuation studies. For full text, please see: http://www.law.upenn.edu/cf/faculty/madler/workingpapers/578A59B6d01.pdf.