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Full-Text Articles in Law

Legal Ground Rules In Coordinated And Liberal Market Economies, Katharina Pistor Jan 2005

Legal Ground Rules In Coordinated And Liberal Market Economies, Katharina Pistor

Faculty Scholarship

Two parallel literatures have explored differences across legal and economic systems,noting that countries can be loosely grouped into liberal vs. coordinated market economies on the one hand, and common law vs. civil law countries on the other. These two groups largely overlap. Liberal market economies (LMEs) tend to have a common law tradition, while coordinated market economies (CMEs) belong to the civil law family (French or German). This paper argues that this overlap is not coincidental. The link between legal and economic systems are social preferences reffected in basic norms, or ground rules, found in substantive and procedural laws ...


An Empirical Investigation Of Liquidation Choices Of Failed High-Tech Firms, Ronald J. Mann Jan 2005

An Empirical Investigation Of Liquidation Choices Of Failed High-Tech Firms, Ronald J. Mann

Faculty Scholarship

This paper compares a dataset of failed venture-backed firms to information about the firm's liquidation choices. The first finding is that firms in California are much less likely to use the bankruptcy process than firms in other states, largely because of their ability to use a cheaper and less formal assignment for the benefit of creditors procedure. The paper explores a number of reasons why that procedure succeeds in California more than it does elsewhere, including differences in statutory support for the procedure, the sophistication of market participants in California, the close-knit venture communities in California, and unusual rules ...


Marine-Salvage Law And Marine-Peril-Related Policy: A Second-Best And Third-Best Economic-Efficiency Analysis Of The Problem, The Law, And The Classic Landes And Posner Study, Richard S. Markovits Jan 2005

Marine-Salvage Law And Marine-Peril-Related Policy: A Second-Best And Third-Best Economic-Efficiency Analysis Of The Problem, The Law, And The Classic Landes And Posner Study, Richard S. Markovits

Faculty Scholarship

This Article (1) delineates the different kinds of allocative costs that marine-peril contingencies can generate and the different kinds of marine-peril-related decisions that can generate allocative inefficiency (marine-salvage-operation investment decisions; decisions about whether to offer to attempt or to actually attempt marine rescues; decisions about the character of the marine-rescue attempts that are made; decisions by potential rescuees to accept or reject offers of marine-rescue attempts; and decisions by potential rescuees to make or reject various marine-peril-avoidance moves); (2) defines the formal meaning of "the most-allocatively-efficient response a State can make to marine-peril contingencies;" (3) explains why, standing alone, judge-prescribed ...


The Past, Present, And Future Of Violent Crime Federalism, Daniel C. Richman Jan 2005

The Past, Present, And Future Of Violent Crime Federalism, Daniel C. Richman

Faculty Scholarship

The goal of this article is to show intergovernmental relations at a crossroads. For two decades, the net costs of the federal interaction with state and local governments in the criminal area were absorbed nationally, with the benefits felt locally. Now, the federal commitment to terrorism prevention, and the role federal authorities envision state and local agencies playing in this endeavor demand certain sacrifices and offer uncertain rewards. Precisely where we will go from here remains to be seen, but this, somewhat impressionistic essay is an attempt look back to where we have been and to chart the course we ...


Broken Windows: New Evidence From New York City And A Five-City Social Experiment, Bernard E. Harcourt, Jens Ludwig Jan 2005

Broken Windows: New Evidence From New York City And A Five-City Social Experiment, Bernard E. Harcourt, Jens Ludwig

Faculty Scholarship

In 1982, James Q. Wilson and George Kelling suggested in an influential article in the Atlantic Monthly that targeting minor disorder could help reduce more serious crime. More than 20 years later, the three most populous cities in the U.S. – New York, Chicago and, most recently, Los Angeles – have all adopted at least some aspect of Wilson and Kelling's theory, primarily through more aggressive enforcement of minor misdemeanor laws. Remarkably little, though, is currently known about the effect of broken windows policing on crime.

According to a recent National Research Council report, existing research does not provide strong ...


"Contracting" For Credit, Ronald J. Mann Jan 2005

"Contracting" For Credit, Ronald J. Mann

Faculty Scholarship

Credit card transactions might be at once the most perilous and least regulated consumer credit transaction. The relative lack of regulation is surprising considering the way consumers use cards in payment and borrowing markets. Card agreements have many of the traditional shortcomings associated with standardized financial contracts. They are lengthy and detailed. They conceal terms of economic import. They are complex. They use technical language requiring an advanced understanding of legal and financial concepts. Moreover, the agreements define a transactional structure that plays into several common behavioral biases, which unite to desensitize consumers to the risks of borrowing. Card agreements ...


Serial Entrepreneurs And Small Business Bankruptcies, Douglas G. Baird, Edward R. Morrison Jan 2005

Serial Entrepreneurs And Small Business Bankruptcies, Douglas G. Baird, Edward R. Morrison

Faculty Scholarship

This empirical study suggests that, far from ensuring assets are put to their best use, Chapter 11 encourages small-business entrepreneurs to remain too long with failed businesses before trying to start (or work for) new ones. Small entrepreneurs open and close a number of businesses over the course of their careers as they search for the business (or employer) that offers the best match with their skills. Chapter 11 delays this matching process and, over this dimension, differs little from rent control and other government policies that encourage socially wasteful lock-in of scarce resources. These costs may not be large ...


Going-Private Decisions And The Sarbanes-Oxley Act Of 2002: A Cross-Country Analysis, Ehud Kamar, Pinar Karaca-Mandic, Eric L. Talley Jan 2005

Going-Private Decisions And The Sarbanes-Oxley Act Of 2002: A Cross-Country Analysis, Ehud Kamar, Pinar Karaca-Mandic, Eric L. Talley

Faculty Scholarship

This article investigates whether the passage and the implementation of the Sarbanes-Oxley Act of 2002 (SOX) drove firms out of the public capital market. To control for other factors affecting exit decisions, we examine the post-SOX change in the propensity of public American targets to be bought by private acquirers rather than public ones with the corresponding change for foreign targets, which were outside the purview of SOX. Our findings are consistent with the hypothesis that SOX induced small firms to exit the public capital market during the year following its enactment. In contrast, SOX appears to have had little ...


The Effectiveness Of Juvenile Correctional Facilities: Public Versus Private Management, Patrick J. Bayer, David Pozen Jan 2005

The Effectiveness Of Juvenile Correctional Facilities: Public Versus Private Management, Patrick J. Bayer, David Pozen

Faculty Scholarship

This paper uses data on juvenile offenders released from correctional facilities in Florida to explore the effects of facility management type (private for-profit, private nonprofit, public state-operated, and public county-operated) on recidivism outcomes and costs. The data provide detailed information on individual characteristics, criminal and correctional histories, judge-assigned restrictiveness levels, and home zip codes – allowing us to control for the non-random assignment of individuals to facilities far better than any previous study. Relative to all other management types, for-profit management leads to a statistically significant increase in recidivism, but relative to nonprofit and state-operated facilities, for-profit facilities operate at a ...


Do Patents Facilitate Financing In The Software Industry?, Ronald J. Mann Jan 2005

Do Patents Facilitate Financing In The Software Industry?, Ronald J. Mann

Faculty Scholarship

This paper is the first part of a wide-ranging study of the role of intellectual property in the software industry. Unlike previous papers that focus primarily on software patents – which generally are held by firms that are not software firms – this Article provides a thorough and contextually grounded description of the role that patents play in the software industry itself.

The bulk of the Article considers the pros and cons of patents in the software industry. The Article starts by emphasizing the difficulties that prerevenue startups face in obtaining any value from patents. Litigation to enforce patents is impractical for ...


Causation By Presumption? Why The Supreme Court Should Reject Phantom Losses And Reverse Broudo, John C. Coffee Jr. Jan 2005

Causation By Presumption? Why The Supreme Court Should Reject Phantom Losses And Reverse Broudo, John C. Coffee Jr.

Faculty Scholarship

The Supreme Court is about to hear Dura Pharmaceuticals Inc. v. Broudo, a case in which the Ninth Circuit significantly liberalized the "loss causation" standards applicable to federal securities litigation. In response to a companion article by Professor Merritt Fox, which favors such a liberalization and even the abandonment of loss causation as a necessary element, Professor Coffee argues that any change in causation standards that permits a plaintiff to escape showing a decline in the security's stock market price attributable to the material misstatement or omission gives rise to perverse incentives, which would likely result in the award ...


Statutes That Are Not Static – The Case Of The Apa, Peter L. Strauss Jan 2005

Statutes That Are Not Static – The Case Of The Apa, Peter L. Strauss

Faculty Scholarship

Judges interpreting statutes evidence a certain ambivalence whether they are interpreting the texts before them as artifacts whose meaning was fixed as of their date of enactment, or as present-day texts whose meaning may be shaped by subsequent events – whether intervening judicial decisions, or the adoption of new statutes (as distinct from amendments, an easy case) whose instructions bear on the issues they present. Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council stridently referred the meaning of the Administrative Procedure Act's rulemaking provision back to the political compromise struck at its enactment in 1946; the opinion insisted ...


Mome In Hindsight, Ronald J. Gilson, Reinier Kraakman Jan 2005

Mome In Hindsight, Ronald J. Gilson, Reinier Kraakman

Faculty Scholarship

Two decades ago, the Virginia Law Review published our article "The Mechanisms of Market Efficiency" (MOME), in which we tried to discern the institutional underpinnings of financial market efficiency. We concluded that the level of market efficiency with respect to a particular fact depends on which of several market mechanisms – universally informed trading, professionally informed trading, derivatively informed trading, and uninformed trading operates to reflect that fact in market price. Revisiting our article is particularly appropriate today. A new framework for evaluating the efficiency of the stock market, called "behavioral finance," and a growing number of empirical studies pose a ...


Featuring The Three Tenors In La Triviata, Victor P. Goldberg Jan 2005

Featuring The Three Tenors In La Triviata, Victor P. Goldberg

Faculty Scholarship

In the "Three Tenors" case the FTC found an agreement a violation of the antitrust law despite the fact that there was no way it could be anticompetitive. The Commission failed to heed the lessons of Coase's classic paper on the nature of the firm, making a sharp distinction between activities within a firm (legal) and across firm boundaries (not legal). Analytically, there should be no distinction. The decision to integrate activities by contract rather than ownership is a matter of relative transactions costs. Since the boundaries of the firm are, ultimately, an economic decision reflecting the costs and ...


When Do American Judges Enforce Treaties?, Tim Wu Jan 2005

When Do American Judges Enforce Treaties?, Tim Wu

Faculty Scholarship

This paper advances a theory of judicial treaty interpretation and enforcement in the American legal system.

Today, the doctrine of self-execution dominates the study of judicial enforcement of treaties in U.S. courts. This paper, based on an extensive study of the record of treaty practice in U.S. courts, suggests a different analysis.

Treaty enforcement has in practice varied on who judges are asked to enforce a treaty against – the party alleged to be in breach – whether States, the Executive, or Congress. This paper shows this pattern thorough the history of U.S. treaty practice.


Liberalism And Tort Law: On The Content And Economic Efficiency Of A Liberal Common Law Of Torts, Richard S. Markovits Jan 2005

Liberalism And Tort Law: On The Content And Economic Efficiency Of A Liberal Common Law Of Torts, Richard S. Markovits

Faculty Scholarship

This Article has three parts. Part I begins by delineating the protocol one should use to determine whether a society is an immoral society, an amoral society, a goal-based society of moral integrity, or a rights-based society of moral integrity (i.e., a society that engages in a bifurcated prescriptive-moral practice that strongly distinguishes moral-rights claims (about the just) from moral-ought claims (about the good), that is committed to the lexical priority of the just over the good, and that fulfills its commitments to some hard-to-specify, requisite extent). Part I then proceeds to outline the protocol one should use to ...


A Theory Of Corporate Scandals: Why The U.S. And Europe Differ, John C. Coffee Jr. Jan 2005

A Theory Of Corporate Scandals: Why The U.S. And Europe Differ, John C. Coffee Jr.

Faculty Scholarship

A wave of financial irregularity broke out in the United States in 2001-2002, culminating in the Sarbanes-Oxley Act of 2002. A worldwide stock market bubble burst over this same period, with the actual market decline on a percentage basis being somewhat more severe in Europe. Yet, no corresponding wave of financial scandals involving a similar level of companies broke out in Europe. Indeed, those scandals that did arise in Europe often had American roots (e.g., Vivendi, Ahold, Adecco, etc.). Given the higher level of public and private enforcement in the United States for securities fraud, this contrast seems perplexing ...


The Promise Of Internet Intermediary Liability, Ronald J. Mann, Seth R. Belzley Jan 2005

The Promise Of Internet Intermediary Liability, Ronald J. Mann, Seth R. Belzley

Faculty Scholarship

The internet has transformed the economics of communication, creating a spirited debate as to the proper role of federal, state, and international governments in regulating conduct that relates to or involves the internet. Many have argued that internet communications should be entirely self-regulated – either because they cannot or should not be the subject of government regulation. The advocates of that approach would prefer a no-regulation zone around internet communications, based for the most part on the unexamined view that internet activity is fundamentally different in a way that justifies broad regulatory exemption. At the same time, it is undisputed that ...


The Story Of United States V. Salerno: The Constitutionality Of Regulatory Detention, Daniel C. Richman Jan 2005

The Story Of United States V. Salerno: The Constitutionality Of Regulatory Detention, Daniel C. Richman

Faculty Scholarship

Is it constitutional for the government to lock up people without waiting to convict them at trial? If it is, what are the limits on the government's power to lock up anyone it deems dangerous? These are issues raised by preventive detention provisions in bail statutes, and addressed in United States v. Salerno. The controversy about these bail statutes, once so hotly contested, has died down. But the broader questions about the government's power to detain suspected criminals without giving them the benefit of full criminal process remain unresolved, and have taken on a new urgency as the ...


The Bustle Of Horses On A Ship: Drug Control In New York City Public Housing, Jeffrey Fagan, Garth Davies, Jan Holland, Tamara Dumanovsky Jan 2005

The Bustle Of Horses On A Ship: Drug Control In New York City Public Housing, Jeffrey Fagan, Garth Davies, Jan Holland, Tamara Dumanovsky

Faculty Scholarship

For decades, violence, drugs and public housing have been closely linked in political culture and popular imagination. In 1990, the Department of Housing and Urban Development (HUD) made funds available to public housing authorities to combat drug and crime problems. This program, the Drug Elimination Program (DEP) combined several strategies under one administrative umbrella: police enforcement, drug treatment, drug prevention, youth and gang outreach, community organizing, integrated health and social service agencies, and tenant mobilization projects. In New York, the Housing Authority spent $165 million on DEP in its 330 public housing sites between 1990 and 1996. Yet there has ...


Principles Of Contract Design, Robert E. Scott, George G. Triantis Jan 2005

Principles Of Contract Design, Robert E. Scott, George G. Triantis

Faculty Scholarship

Economic contract theory postulates two obstacles to complete contracts: high transaction costs and high enforcement (or verification) costs. The literature has proposed how parties might solve these problems under a stylized litigation system, but it does not address the question of how parties design contracts under the existing adversarial system, that relies on the parties to establish relevant facts indirectly by the use of evidentiary proxies. We advance a theory of contract design in a world of costly litigation. We examine the efficiency of investment at the front-end and back-end of the contracting process, where we focus on litigation as ...


Essay – The Author's Name As A Trademark: A Perverse Perspective On The Moral Right Of «Paternity»?, Jane C. Ginsburg Jan 2005

Essay – The Author's Name As A Trademark: A Perverse Perspective On The Moral Right Of «Paternity»?, Jane C. Ginsburg

Faculty Scholarship

The US Supreme Court in its 2003 decision in Dastar v. Twentieth Century Fox, construing the Lanham Federal Trademarks Act, deprived authors of their principal legal means to enforce attribution rights in the US. I have elsewhere criticized the Dastar Court's analysis, and have urged amending the Copyright Act to provide express recognition of the attribution right. This time, however, I propose to reconsider the foundation for the attribution right; I draw on literary and historical sources to supplement legal arguments concerning the meaning of the author's name. I will suggest that, contrary to the usual characterization of ...


Intellectual Property, Innovation, And Decentralized Decisions, Tim Wu Jan 2005

Intellectual Property, Innovation, And Decentralized Decisions, Tim Wu

Faculty Scholarship

This essay proposes a new way to assess the desirability of intellectual property rights.

Traditionally, intellectual property assignment is assessed based on a incentive/monopoly pricing tradeoff. I suggest they should be further assessed by their effects on the decision architectures surrounding the property right – their effects on how firms make product innovation decisions. The reason is that different decisional structures for product development can be are fundamental to the performance of firms, industries, and even the economy as a whole.

The organizational economics literature can help with this assessment. It makes an important and useful distinction between hierarchical (centralized ...


Takeovers In The Boardroom: Burke Versus Schumpeter, Ronald J. Gilson, Reinier Kraakman Jan 2005

Takeovers In The Boardroom: Burke Versus Schumpeter, Ronald J. Gilson, Reinier Kraakman

Faculty Scholarship

This article was written for a symposium on the occasion of the 25th anniversary of Martin Lipton's 1979 article, Takeover Bids in the Target's Boardroom. In our view, Takeover Bids is a Burkean take on a messy Schumpeterian world that, during 1980s, reached its apex in Drexel Burnham's democratization of finance through the junk bond market. But the irony is that today, long after the Delaware Supreme Court has adopted many of Lipton's views, there is a new market for corporate control that no longer poses the threats – or supports the opportunities – that the market of ...


Separation And The Function Of Corporation Law, Ronald J. Gilson Jan 2005

Separation And The Function Of Corporation Law, Ronald J. Gilson

Faculty Scholarship

This article is part of a symposium in honor of William Klein on the subject of a functional typology of corporation law. Any typology must be animated by an underlying theory whose terms dictate the lines the typology draws. Here the focus is on the level of the theory that might animate the architecture of the grid. In particular, the article addresses the separation theorem, which states the implications of complete capital markets on shareholder preferences concerning corporate investment policy. The proposition is that the presence of markets in the characteristics that determine equity value makes a radical difference in ...


Policing L.A.'S Skid Row: Crime And Real Estate Development In Downtown Los Angeles [An Experiment In Real Time], Bernard E. Harcourt Jan 2005

Policing L.A.'S Skid Row: Crime And Real Estate Development In Downtown Los Angeles [An Experiment In Real Time], Bernard E. Harcourt

Faculty Scholarship

Disorderly neighborhoods in the United States were the center of heated debate and much political initiative at the turn of the twenty-first century. Among criminal law scholars, sociologists, and students of policing, New York City drew the most attention, and presented the question whether order-maintenance policing really brought down crime and transformed disorderly neighborhoods like Times Square into high-end, commercially viable, urban communities. In this debate, the NYPD was generally the lead protagonist and crime reduction the dominant plot.

But is that right? Did the NYPD's "broken windows" policing really lead the urban renewal in New York City? Or ...


Against Prediction: Sentencing, Policing, And Punishing In An Actuarial Age, Bernard E. Harcourt Jan 2005

Against Prediction: Sentencing, Policing, And Punishing In An Actuarial Age, Bernard E. Harcourt

Faculty Scholarship

Actuarial methods – i.e., the use of statistical rather than clinical methods on large datasets of criminal offending rates to determine different levels of offending associated with one or more group traits, in order to (1) predict past, present or future criminal behavior and (2) administer a criminal justice outcome – now permeates the criminal law and its enforcement. With the single exception of racial profiling against African-Americans and Hispanics, most people view the turn to the actuarial as efficient, rational, and wealth-maximizing. The fact is, law enforcement agencies can detect more crime with the same resources if they investigate citizens ...


The Story Of Vermont Yankee: A Cautionary Tale Of Judicial Review And Nuclear Waste, Gillian E. Metzger Jan 2005

The Story Of Vermont Yankee: A Cautionary Tale Of Judicial Review And Nuclear Waste, Gillian E. Metzger

Faculty Scholarship

This Essay explores the puzzle of Vermont Yankee v. NRDC. Vermont Yankee stands as a definitive rejection of judicial efforts to control burgeoning informal rulemaking by adding to the procedural requirements contained in the Administrative Procedure Act. Yet judicial expansion of the APA's procedural requirements has continued apace, and the Court's simultaneous sanction of searching substantive scrutiny sits oddly with its excoriation of the D.C. Circuit for that court's perceived procedural excesses. To understand Vermont Yankee, the Essay puts the decision in its administrative and judicial context, exploring the case law and practical dilemmas facing administrators ...


Controlling Shareholders And Corporate Governance: Complicating The Comparative Taxonomy, Ronald J. Gilson Jan 2005

Controlling Shareholders And Corporate Governance: Complicating The Comparative Taxonomy, Ronald J. Gilson

Faculty Scholarship

The focus of comparative corporate governance scholarship is shifting from takeovers to controlling shareholders in recognition of the fact that public corporations everywhere but in the U.S. and U.K. are characterized by a shareholder with effective voting control. Debate is now turning to the merits of controlling shareholder systems, both on their own terms and in comparison to the U.S. and U.K. widely held shareholding pattern. To date, the debate has treated the controlling versus widely held distinction as central, disagreeing over whether a particular country owed its characteristic shareholder distribution to the quality of minority ...


Legal Protection Of Technological Measures Protecting Works Of Authorship: International Obligations And The Us Experience, Jane C. Ginsburg Jan 2005

Legal Protection Of Technological Measures Protecting Works Of Authorship: International Obligations And The Us Experience, Jane C. Ginsburg

Faculty Scholarship

The ongoing transposition of the EU Information Society Directive's requirement that member States adopt of legal prohibitions of the circumvention of technological protections of works of authorship occasions this review of international obligations and their implementation in the US. This article addresses the scope of international obligations the WIPO Copyright Treaties impose on member States to protect against circumvention, as well as the US experience with the Digital Millennium Copyright Act's prohibitions on circumvention of access and copy controls. It examines the text of the statute, codified at sec. 1201 of the 1976 Copyright Act, the five years ...