Law and Economics Commons^™

Social Choice, Crypto-Initiatives And Policy Making By Direct Democracy, Thad Kousser, M D. Mccubbins

University of San Diego Law and Economics Research Paper Series

The initiative process was created originally to enable citizens to enact public policy directly and in so doing to overturn the dominion of interest groups and of state and local party machines. In recent years, initiatives have been thought to serve as a check on legislative authority and to provide the people with a means to pressure the legislature into adopting more public regarding policies. Indeed, the general consensus emerging from the most recent academic research is that, at their worst, initiatives are benign, while at their best, they serve to further the interests of electoral majorities.

A few scholars, …

Canonical Construction And Statutory Revisionism: The Strange Case Of The Appropriations Canon, Daniel B. Rodriguez, Mathew D. Mccubbins

University of San Diego Law and Economics Research Paper Series

In this article, we consider the impact of positive political theory on legislative interpretation and, in particular, the debate over interpretive canons. Our vehicle for this consideration is the appropriations canon. By virtue of this canon, courts construe narrowly legislative changes to statutes made through the appropriations process. We consider the underlying logic and rationale of this canon -- essentially, that the appropriations process is unrepresentative and insufficiently deliberative -- and use this analysis to investigate, more broadly, the processes of canonical construction in the modern statutory interpretation jurisprudence. Canonical construction, we argue, must be attentive to the equilibrium effects …

The Web Of Law, Thomas A. Smith

University of San Diego Law and Economics Research Paper Series

Scientists and mathematicians in recent years have become intensely interested in the structure of networks. Networks turn out to be crucial to understanding everything from physics and biology, to economics and sociology. This article proposes that the science of networks has important contributions to make to the study of law as well. Legal scholars have yet to study, or even recognize as such, one of the largest, most accessible, and best documented human-created networks in existence. This is the centuries-old network of case law and other legal authorities into which lawyers, judges, and legal scholars routinely delve in order to …

Descriptive Trademarks And The First Amendment, Lisa P. Ramsey

University of San Diego Law and Economics Research Paper Series

The protection of exclusive rights in descriptive trademarks is an unconstitutional restriction of speech under the First Amendment. Trademark laws that prohibit a competitor from using trademarked descriptive words to sell a product fail to satisfy the Central Hudson test for evaluating the constitutionality of commercial speech regulations. The use of a descriptive term to accurately describe a product is not misleading expression regardless of whether another business claims trademark rights in that term. Although the government has a substantial interest in protecting the ability of consumers to identify and distinguish among the products of a business and its competitors, …

Procedural Justice, Lawrence B. Solum

University of San Diego Law and Economics Research Paper Series

"Procedural Justice" offers a theory of procedural fairness for civil dispute resolution. The core idea behind the theory is the procedural legitimacy thesis: participation rights are essential for the legitimacy of adjudicatory procedures. The theory yields two principles of procedural justice: the accuracy principle and the participation principle. The two principles require a system of procedure to aim at accuracy and to afford reasonable rights of participation qualified by a practicability constraint.

The Article begins in Part I, Introduction, with two observations. First, the function of procedure is to particularize general substantive norms so that they can guide action. Second, …

Strict Liability For Gatekeepers: A Reply To Professor Coffee, Frank Partnoy

University of San Diego Law and Economics Research Paper Series

This article responds to a proposal by Professor John C. Coffee, Jr. for a modified form of strict liability for gatekeepers. Professor Coffee’s proposal would convert gatekeepers into insurers, but cap their insurance obligations based on a multiple of the highest annual revenues the gatekeepers recently had received from their wrongdoing clients. My proposal, advanced in 2001, would allow gatekeepers to contract for a percentage of issuer damages, after settlement or judgment, subject to a legislatively-imposed floor. This article compares the proposals and concludes that a contractual system based on a percentage of the issuer’s liability would be preferable to …

Encumbered Shares, Shaun Martin, Frank Partnoy

University of San Diego Law and Economics Research Paper Series

The fundamental assumptions in the law and economics literature about shareholder voting and the one-share/one-vote rule are flawed. The classic view is that share ownership is necessary and sufficient to create voting rights and that such rights should be directly proportional to share ownership. We demonstrate that this assumption is unfounded, both for shares that are “economically encumbered” (held by shareholders who are not pure residual claimants; e.g., a shareholder who owns one share and is also short one or more shares) as well as shares that are “legally encumbered” (held or associated with more than one shareholder; e.g., shares …

Estate Tax Repeal And The Budget Process, Karen C. Burke, Grayson M.P. Mccouch

University of San Diego Law and Economics Research Paper Series

This article examines the Bush Administration’s proposal, as part of its proposed fiscal year 2005 budget, to extend permanently the repeal of the federal estate tax. The article considers the budgetary impact of permanent estate tax repeal and discusses procedural impediments to use of the reconciliation process for permanent tax cuts. The article also notes the possibility of a durable compromise solution involving retention of the estate tax with lower rates and a higher exemption.

Does The Tax Law Discriminate Against The Majority Of American Children: The Downside Of Our Progressive Rate Structure And Unbalanced Incentives For Higher Education?, Lester B. Snyder

University of San Diego Law and Economics Research Paper Series

Our graduate income tax structure provides an incentive to shift income to lower-bracket family members. However, some parents have much more latitude to shift income to their children than do others. Income derived from services and private business-by far the majority of American income-is less favored than income derived from publicly traded securities. The rationale given for this discrimination is that parents in services or private business, as opposed to those in securities, do not actually part with control of their property. This article explores these tax broader (yet subtle) tax benefits and their impact on the majority of children …

An Economic Analysis Of Domain Name Policy, Karl M. Manheim, Lawrence B. Solum

University of San Diego Law and Economics Research Paper Series

One of the most important features of the architecture of the Internet is the Domain Name System (DNS), which is administered by the Internet Corporation for Assigned Names and Numbers (ICANN). Logically, the DNS is organized into Top Level Domains (such as .com), Second Level Domains (such as amazon.com), and third, fourth, and higher level domains (such as www.amazon.com). The physically infrastructure of the DNS consists of name servers, including the Root Server System which provides the information that directs name queries for each Top Level Domain to the appropriate server. ICANN is responsible for the allocation of the root …