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Full-Text Articles in Law

Lipton And Rowe's Apologia For Delaware: A Short Reply, Ronald J. Gilson Jan 2001

Lipton And Rowe's Apologia For Delaware: A Short Reply, Ronald J. Gilson

Faculty Scholarship

In Unocal Fifteen Years Later I offered a respectful but negative assessment of the Delaware Supreme Court's post-Unocal efforts to walk a line between managerialists who believe directors should be able to block a hostile takeover, and those who believe the ultimate decision whether to accept a takeover bid belongs to the shareholders. I suggested that Delaware law could be repositioned without requiring the Delaware Supreme Court to confess error by allowing shareholder adopted bylaws that repeal or amend poison pills. Martin Lipton and Paul Rowe responded to my essay by arguing that recent economic challenges to efficient market ...


The Methodological Commitments Of Contemporary Contract Theory, Jody S. Kraus Jan 2001

The Methodological Commitments Of Contemporary Contract Theory, Jody S. Kraus

Faculty Scholarship

Autonomy and economic theories of contract seem to provide incompatible accounts of contract law. In this Chapter, I argue that what appear to be first-order disagreements over particular contract doctrines are really implicit second-order disagreements reflecting the divergent methodological commitments of autonomy and economic theories. I argue that autonomy theories accord priority to the normative project of justifying existing contract doctrine, treat contract law as consisting in the plain meaning of doctrine, require contract theory to explain the distinctive character of contract law, and take the ex post perspective in adjudication. In contrast, economic theories accord priority to the positive ...


Unocal Fifteen Year Later (And What We Can Do About It), Ronald J. Gilson Jan 2001

Unocal Fifteen Year Later (And What We Can Do About It), Ronald J. Gilson

Faculty Scholarship

The coincidence of the new millennium and the fifteenth anniversary of the Delaware Supreme Court's announcement of a new approach to takeover law provides an occasion to evaluate a remarkable experiment in corporate law; the Delaware Supreme Court's development of an intermediate standard of review for appraising defensive tactics. This assessment reveals that Unocal has developed into an unexplained and likely inexplicable preference that control contests be resolved through elections rather than through market transactions. In doing so, the remarkable struggle between the chancery court and the supreme court for Unocal's soul is canvassed. The author also ...


The Acquiescent Gatekeeper: Reputational Intermediaries, Auditor Independence And The Governance Of Accounting, John C. Coffee Jr. Jan 2001

The Acquiescent Gatekeeper: Reputational Intermediaries, Auditor Independence And The Governance Of Accounting, John C. Coffee Jr.

Faculty Scholarship

The role of "gatekeepers" as reputational intermediaries who can be more easily deterred than the principals they serve has been developed in theory, but less often examined in practice. Initially, this article seeks to define the conditions under which gatekeeper liability is likely to work – and, correspondingly, the conditions under which it is more likely to fail. Then, after reviewing the recent empirical literature on earnings management, it concludes that the independent auditor does not today satisfy the conditions under which gatekeeper liability should produce high law compliance. A variety of explanations – poor observability, implicit collusion, and high agency costs ...


A Defense Of Shareholder Favoritism, Stephen J. Choi, Eric L. Talley Jan 2001

A Defense Of Shareholder Favoritism, Stephen J. Choi, Eric L. Talley

Faculty Scholarship

This paper considers the efficiency implications of managerial "favoritism" towards block shareholders of public corporations. While favoritism can take any number of forms (including the payment of green-mail, diversion of opportunities, selective information disclosure, and the like), each may have the effect (if not the intent) of securing a block shareholder's loyalty in order to entrench management. Accordingly, the practice of making side payments is commonly perceived to be contrary to other shareholders' interests and, more generally, inefficient. In contrast to this received wisdom, we argue that when viewed ex ante, permissible acts of patronage toward block shareholders may ...


Frictions As A Constraint On Tax Planning, David M. Schizer Jan 2001

Frictions As A Constraint On Tax Planning, David M. Schizer

Faculty Scholarship

In recent years, the government has enacted a series of narrow tax reforms targeting specific planning strategies. Sometimes these reforms stop the targeted planning, but sometimes they merely prompt a new, more wasteful variation. The difference often lies in so-called frictions, which are constraints on tax planning other than the tax law, such as fees, accounting or regulatory treatment, credit risk, and the like. While frictions are important, reformers often lack key information, and legal academics should help provide it. This Article offers general observations about frictions that deter end runs. Most promising are strong "discontinuous" frictions that impose significant ...


Toward Supranational Copyright Law? The Wto Panel Decision And The "Three-Step Test" For Copyright Exceptions, Jane C. Ginsburg Jan 2001

Toward Supranational Copyright Law? The Wto Panel Decision And The "Three-Step Test" For Copyright Exceptions, Jane C. Ginsburg

Faculty Scholarship

A dispute resolution panel of the World Trade Organization in June 2000 held the United States in contravention of its obligation under art. 13 of the TRIPs accord to "confine limitations or exceptions to exclusive rights to certain special cases which do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the right holder." In the dispute resolution proceeding, initiated by the European Union at the behest of the Irish performing rights organization, the contested exception, enacted in the 1998 "Digital Millennium Copyright Act," exempted a broad range of retail and ...


Do Norms Matter?: A Cross-Country Examination Of The Private Benefits Of Control, John C. Coffee Jr. Jan 2001

Do Norms Matter?: A Cross-Country Examination Of The Private Benefits Of Control, John C. Coffee Jr.

Faculty Scholarship

Recent empirical work has found that the private benefits of control differ significantly depending upon the underlying legal system in which the firm is incorporated. In particular, common law systems appear to outperform French civil law systems, but are trumped in turn by Scandinavian civil law systems. This evidence could be read to support the "law matters" thesis first advanced by Professors LaPorta, Lopez-de-Silanes, Shleifer and Vishny, which finds that "common law" legal systems incorporate superior legal protections for minority shareholders and therefore have deeper capital markets and more dispersed ownership. But the apparent superiority of Scandinavian legal systems complicates ...


Street Stops And Broken Windows: Terry, Race And Disorder In New York City, Jeffrey Fagan, Garth Davies Jan 2001

Street Stops And Broken Windows: Terry, Race And Disorder In New York City, Jeffrey Fagan, Garth Davies

Faculty Scholarship

Patterns of "stop and frisk" activity by police across New York City neighborhoods reflect competing theories of aggressive policing. "Broken Windows" theory suggests that neighborhoods with greater concentrations of physical and social disorder should evidence higher stop and frisk activity, especially for "quality of life" crimes. However, while disorder theory informs quality of life policing strategies, observed patterns of stop and frisk activity suggest that neighborhood characteristics such as racial composition, poverty levels and the extent of social disorganization are stronger predictors of race- and crime-specific police stops than is the presence of "broken windows." Furthermore, stops of minority citizens ...


Publication Rules In The Rulemaking Spectrum: Assuring Proper Respect For An Essential Element, Peter L. Strauss Jan 2001

Publication Rules In The Rulemaking Spectrum: Assuring Proper Respect For An Essential Element, Peter L. Strauss

Faculty Scholarship

The American rulemaking spectrum ranges from one Constitution, through hundreds of congressional statutes, thousands of administrative regulations, and tens of thousands of important guidance documents to innumerable more casual agency documents such as press releases or letters of advice. Our legal system treats constitutions, statutes and regulations, if valid, as binding text, subject only to the requirements that they be authorized by the superior authority and appropriately adopted following designated procedures; if valid, each of them has legislative effect on government and citizen alike, until displaced by another text validly adopted at the same or a higher level. The innumerable ...


Ratcheting Labor Standards: Regulation For Continuous Improvement In The Global Workplace, Charles F. Sabel, Archon Fung, Dara O'Rourke Jan 2001

Ratcheting Labor Standards: Regulation For Continuous Improvement In The Global Workplace, Charles F. Sabel, Archon Fung, Dara O'Rourke

Faculty Scholarship

It is a brute fact of contemporary globalization - unmistakable as activists and journalists catalog scandal after scandal – that the very transformations making possible higher quality, cheaper products often lead to unacceptable conditions of work: brutal use of child labor, dangerous environments, punishingly long days, starvation wages, discrimination, suppression of expression and association. In all quarters, the question is not whether to address these conditions, but how.


Credit Cards And Debit Cards In The United States And Japan, Ronald J. Mann Jan 2001

Credit Cards And Debit Cards In The United States And Japan, Ronald J. Mann

Faculty Scholarship

This article is an exploration in the tradition of new institutional economics of the possibility that institutional conditions have a significant role in determining the success of credit cards and debit cards. The article examines differences in credit-card and debit-card usage between the United States and Japan. Although I do not doubt that social and psychological factors have some significance, I contend that three institutional factors also have useful explanatory power: the freedom of banks to enter the industry; low telecommunication costs, and the size of the market.

The article provides a detailed description of card usage in the two ...


Competition Among Securities Markets: A Path Dependent Perspective, John C. Coffee Jr. Jan 2001

Competition Among Securities Markets: A Path Dependent Perspective, John C. Coffee Jr.

Faculty Scholarship

Today, there are an estimated 150 securities exchanges trading stocks around the world. Tomorrow (or at least within the reasonably foreseeable future), this number is likely to shrink radically. The two great forces reshaping the contemporary world – globalization and technology – impact the world of securities markets in a similar and mutually reinforcing fashion:

  1. they force local and regional markets into more direct competition with distant international markets;
  2. they increase overall market capitalization and lower the cost of equity capital, as issuers are enabled to access multiple markets; and
  3. they permit order flow and liquidity to migrate quickly from local markets ...


Playing Favorites With Shareholders, Stephen J. Choi, Eric L. Talley Jan 2001

Playing Favorites With Shareholders, Stephen J. Choi, Eric L. Talley

Faculty Scholarship

Many scholars agree that a robust market for corporate control provides a critical check on managerial opportunism within public corporations. Even prior to a tender offer, the specter of a takeover provides a powerful mechanism for aligning the incentives of managers and shareholders. Conventional wisdom, therefore, views with suspicion any practice that retards the takeover threat looming over managers who perform poorly. One such practice that has garnered particular attention of late is managerial "favoritism" towards influential block shareholders. Favoritism can take any number of forms, ranging from preferential stock subscriptions, to selective information disclosure, to outright cash payments. But ...


Can Copyright Become User-Friendly? Essay Review Of Jessica Litman, Digital Copyright, Prometheus Books 2001, Jane C. Ginsburg Jan 2001

Can Copyright Become User-Friendly? Essay Review Of Jessica Litman, Digital Copyright, Prometheus Books 2001, Jane C. Ginsburg

Faculty Scholarship

Professor Litman has written Digital Copyright for the general public, though lawyers, and especially copyright lawyers, would do well to read it. Professor Litman's message is straightforward: Copyright law is too complicated and counterintuitive. It has been written by and for copyright lawyers who represent many, but not all, of the players. Those left out include developers of new ways of communicating copyrighted works, and, most importantly, end users. But nowadays, copyright directly affects end users in ways more pervasive than could have been expected in the analog world. If copyright law doesn't make sense to those who ...


Berne Without Borders: Geographic Indiscretion And Digital Communications, Jane C. Ginsburg Jan 2001

Berne Without Borders: Geographic Indiscretion And Digital Communications, Jane C. Ginsburg

Faculty Scholarship

This lecture examines the role of borders in the Berne Convention at the time of the treaty's first passage in 1886, and today. The later 19th century was an era of increasing commerce and communication among countries whose domestic production and reproduction of works of authorship had vastly increased, thanks in part to new technologies, such as photography, lithography, and high-speed printing. But at that time, the frontiers between nations often frustrated authors' hopes for control over, or at least compensation for, the international exploitation of their works. Authors' rights ceased at their national boundaries; the world beyond foreboded ...


Endowment Effects Within Corporate Agency Relationships, Jennifer Arlen, Matthew L. Spitzer, Eric L. Talley Jan 2001

Endowment Effects Within Corporate Agency Relationships, Jennifer Arlen, Matthew L. Spitzer, Eric L. Talley

Faculty Scholarship

Behavioral Law and Economics has become an increasingly prominent field within legal scholarship, and most recently within the corporate area. A behavioral bias of particular relevance in corporate contexts is the differential between individuals' willingness to pay to obtain a legal entitlement and her willingness to accept to part with one, known as the "endowment effect." Should endowment effects pervade relationships within business organizations, it would significantly complicate much of the common wisdom within corporate law, such as the presumed optimality of ex ante voluntary agreements. Existing experimental research, however, does not adequately address whether and to what extent the ...


The Dynamic Analytics Of Property Law, Michael Heller Jan 2001

The Dynamic Analytics Of Property Law, Michael Heller

Faculty Scholarship

The standard property trilogy of private, commons, and state has become so outdated that it now impedes imagination and innovation at the frontiers of ownership. This essay suggests two approaches – creating new ideal types and synthesizing existing ones – that may help update our static property metaphors. Using these dynamic approaches to property analytics, legal theory can move beyond polarizing oppositions that have made jurisprudential debates unsolvable and rendered concrete problems invisible.


Reasoning With Rules, Joseph Raz Jan 2001

Reasoning With Rules, Joseph Raz

Faculty Scholarship

What is special about legal reasoning? In what way is it distinctive? How does it differ from reasoning in medicine, or engineering, physics, or everyday life? The answers range from the very ambitious to the modest. The ambitious claim that there is a special and distinctive legal logic, or legal ways of reasoning, modes of reasoning which set the law apart from all other disciplines. Opposing them are the modest, who claim that there is nothing special to legal reasoning, that reason is the same in all domains. According to them, only the contents of the law differentiate it from ...