Digital Commons Network^™

How Markets Work: The Lawyer’S Version, Mitu Gulati, W. Mark C. Weidemaier

Faculty Scholarship

In this article, we combine two sources of data to shed light on the nature of transactional legal work. The first consists of stories about contracts that circulate widely among elite transactional lawyers. Surprisingly, the stories portray lawyers as ineffective market actors who are uninterested in designing superior contracts, who follow rather than lead industry standards, and who depend on governments and other outside actors to spur innovation and correct mistakes. We juxtapose these stories against a dataset of sovereign bond contracts produced by these same lawyers. While the stories suggest that lawyers do not compete or design innovative contracts, …

Collective Action Clauses For The Eurozone, Michael Bradley, Mitu Gulati

Faculty Scholarship

One of the primary policy initiatives instituted in response to the Eurozone sovereign debt crisis is a requirement that all Eurozone sovereign bonds issued after January 1 2013 include provisions referred to as Collective Action Clauses or CACs. These CACs allow for a super-majority of creditors to impose restructuring terms on minority holdouts. This article assesses the likely effect of this proposal on the borrowing costs of sovereign debtors. Contrary to much of the literature, we find that the presence of CACs leads to a lower cost of capital, especially for below-investment grade bonds

Interpretive Methodology And Delegations To Courts: Are "Common-Law Statutes" Different?, Margaret H. Lemos

Faculty Scholarship

No abstract provided.

Jack Balkin’S Rich Historicism And Diet Originalism: Health Benefits And Risks For The Constitutional System, Neil S. Siegel

Faculty Scholarship

In Living Originalism, Jack Balkin reasons from two points of view — the perspective of the constitutional system as a whole and the perspective of the faithful participant in that system. First, he provides a systemic account of constitutional change, which he calls “living constitutionalism.” Second, he offers an individual approach to constitutional interpretation and construction, which he calls “framework originalism” or “the method of text and principle.”

Reasoning from the systemic perspective, Balkin develops a compelling theory of the processes of constitutional change. Balkin may insufficiently appreciate, however, that public candor about — or even deep awareness of — …

Happiness Surveys And Public Policy: What’S The Use?, Matthew D. Adler

Faculty Scholarship

This Article provides a comprehensive, critical overview of proposals to use happiness surveys for steering public policy. Happiness or “subjective well-being” surveys ask individuals to rate their present happiness, life-satisfaction, affective state, etc. A massive literature now engages in such surveys or correlates survey responses with individual attributes. And, increasingly, scholars argue for the policy relevance of happiness data: in particular, as a basis for calculating aggregates such as “gross national happiness,” or for calculating monetary equivalents for non-market goods based on coefficients in a happiness equation.

But is individual well-being equivalent to happiness? The happiness literature tends to blur …

Regulating Shadows: Financial Regulation And Responsibility Failure, Steven L. Schwarcz

Faculty Scholarship

In the modern financial architecture, financial services and products increasingly are provided outside of the traditional banking system—and thus without the need for bank intermediation between capital markets and the users of funds. Most corporate financing, for example, no longer is dependent on bank loans but raised through special-purpose entities, money-market mutual funds, securities lenders, hedge funds, and investment banks. This shift, referred to as “disintermediation” and described as creating a “shadow banking” system, is so radically transforming finance that regulatory scholars need to rethink their assumptions. Two of the fundamental market failures underlying shadow banking—information failure and agency failure—were …

Legitimacy And Lawmaking: A Tale Of Three International Courts, Laurence R. Helfer, Karen J. Alter

Faculty Scholarship

This article explores the relationship between the legitimacy of international courts and expansive judicial lawmaking. We compare lawmaking by three regional integration courts — the European Court of Justice (ECJ), the Andean Tribunal of Justice (ATJ), and the ECOWAS Community Court of Justice (ECCJ). These courts have similar jurisdictional grants and access rules, yet each has behaved in a strikingly different way when faced with opportunities to engage in expansive judicial lawmaking. The ECJ is the most activist, but its audacious legal doctrines have been assimilated as part of the court’s legitimate authority. The ATJ and ECOWAS have been more …

“One Size Can Fit All” – On The Mass Production Of Legal Transplants, Ralf Michaels

Faculty Scholarship

Law reformers like the World Bank sometimes suggest that optimal legal rules and institutions can be recognized and then be recommended for law reform in every country in the world. Comparative lawyers have long been skeptical of such views. They point out that both laws and social problems are context-specific. What works in one context may fail in another. Instead of “one size fits all,” they suggest tailormade solutions.

I challenge this view. Drawing on a comparison with IKEA’s global marketing strategy, I suggest that “one size fits all” can sometimes be not only a successful law reform strategy, but …

Narrative, Truth, And Trial, Lisa Kern Griffin

Faculty Scholarship

This Article critically evaluates the relationship between constructing narratives and achieving factual accuracy at trials. The story model of adjudication— according to which jurors process testimony by organizing it into competing narratives—has gained wide acceptance in the descriptive work of social scientists and currency in the courtroom, but it has received little close attention from legal theorists. The Article begins with a discussion of the meaning of narrative and its function at trial. It argues that the story model is incomplete, and that “legal truth” emerges from a hybrid of narrative and other means of inquiry. As a result, trials …

Presidential Power, Historical Practice, And Legal Constraint, Curtis A. Bradley, Trevor W. Morrison

Faculty Scholarship

The scope of the President’s legal authority is determined in part by historical practice. This Essay aims to better understand how such practice-based law might operate as a constraint on the presidency. Some scholars have suggested that presidential authority has become “unbounded” by law, and is now governed only or primarily by politics. At the same time, there has been growing skepticism about the ability of the familiar political checks on presidential power to work in any systematic or reliable fashion. Skepticism about law’s potential to constrain in this context is heightened by the customary nature of much of what …

Restructuring A Sovereign Debtor’S Contingent Liabilities, Mitu Gulati, Lee C. Buchheit

Faculty Scholarship

How should the contingent liabilities of a sovereign be treated in a general restructuring of the debts of that sovereign? This question has played only a minor role in past sovereign debt restructurings because the size of such contingent liabilities has in most cases been small. In recent years, however, slathering government guarantees on third party debt has become the tool of choice for many countries in their efforts to quell an incipient panic in their financial markets. Some of those sovereigns are now, or may soon be, in the position of needing to restructure their debts. Ignoring large contingent …

Nonsense And The Freedom Of Speech: What Meaning Means For The First Amendment, Joseph Blocher

Faculty Scholarship

A great deal of everyday expression is, strictly speaking, nonsense. But courts and scholars have done little to consider whether or why such meaningless speech, like nonrepresentational art, falls within “the freedom of speech.” If, as many suggest, meaning is what separates speech from sound and expression from conduct, then the constitutional case for nonsense is complicated. And because nonsense is so common, the case is also important — artists like Lewis Carroll and Jackson Pollock are not the only putative “speakers” who should be concerned about the outcome.

This Article is the first to explore thoroughly the relationship between …

Reverse-Commandeering, Margaret Hu

Faculty Scholarship

Although the anti-commandeering doctrine was developed by the Supreme Court to protect state sovereignty from federal overreach, nothing prohibits flipping the doctrine in the opposite direction to protect federal sovereignty from state overreach. Federalism preserves a balance of power between two sovereigns. Thus, the reversibility of the anti-commandeering doctrine appears inherent in the reasoning offered by the Court for the doctrine’s creation and application. In this Article, I contend that reversing the anti-commandeering doctrine is appropriate in the context of contemporary immigration federalism laws. Specifically, I explore how an unconstitutional incursion into federal sovereignty can be seen in state immigration …

Ring-Fencing, Steven L. Schwarcz

Faculty Scholarship

“Ring-fencing” is often touted as a regulatory solution to problems in banking, finance, public utilities, and insurance. However, both the precise meaning of ring-fencing, as well as the nature of the problems that ring-fencing regulation purports to solve, are ill defined. This article examines the functions and conceptual foundations of ring-fencing. In a regulatory context, the term can best be understood as legally deconstructing a firm in order to more optimally reallocate and reduce risk. So utilized, ring-fencing can help to protect public-benefit activities performed by private-sector firms, as well as to mitigate systemic risk and the too-big-to-fail problem inherent …

Equality Arguments For Abortion Rights, Neil S. Siegel, Reva B. Siegel

Faculty Scholarship

Roe v. Wade grounds constitutional protections for women’s decision wheth­er to end a pregnancy in the Due Process Clauses. But in the four decades since Roe, the U.S. Supreme Court has come to recognize the abortion right as an equality right as well as a liberty right. In this Essay, we describe some distinctive features of equality arguments for abortion rights. We then show how, over time, the Court and individual Justices have begun to employ equal­ity arguments in analyzing the constitutionality of abortion restrictions. These arguments first appear inside of substantive due process case law, and then as claims …

Lawyers In The Shadows: The Transactional Lawyer In A World Of Shadow Banking, Steven L. Schwarcz

Faculty Scholarship

This article examines how the role of transactional lawyers should change in the new world of shadow banking. Although transactional lawyers should consider the potential systemic consequences of their client's actions, their actions should be tempered by their primary duties to the client and by their responsibilities to the l,egal system more broadly.

Founding Legal Education In America, Paul D. Carrington

Faculty Scholarship

No abstract provided.

Some Pluralism About Pluralism: A Comment On Hanoch Dagan’S “Pluralism And Perfectionism In Private Law”, Jedediah Purdy

Faculty Scholarship

No abstract provided.

Risk-Shifting Through Issuer Liability And Corporate Monitoring, Martin Gelter

Faculty Scholarship

This article explores how issuer liability re-allocates fraud risk and how risk allocation may reduce the incidence of fraud. In the US, the apparent absence of individual liability of officeholders and insufficient monitoring by insurers under-mine the potential deterrent effect of securities litigation. The underlying reasons why both mechanisms remain ineffective are collective action problems under the prevailing dispersed ownership structure, which eliminates the incentives to moni-tor set by issuer liability. This article suggests that issuer liability could potentially have a stronger deterrent effect when it shifts risk to individuals or entities holding a larger financial stake. Thus, it would …

What Is Philosophy Of Criminal Law?, Youngjae Lee

Faculty Scholarship

No abstract provided.

A Fiduciary Theory Of Judging, Ethan J. Leib, David L. Ponet, Michael Serota

Faculty Scholarship

For centuries, legal theorists and political philosophers have unsuccessfully sought a unified theory of judging able to account for the diverse, and oftentimes conflicting, responsibilities judges possess. This paper reveals how the law governing fiduciary relationships sheds new light on this age-old pursuit, and therefore, on the very nature of the judicial office itself. The paper first explores the routinely overlooked, yet deeply embedded historical provenance of our judges-as-fiduciaries framework in American political thought and in the framing of the U.S. Constitution. It then explains why a fiduciary theory of judging offers important insights into what it means to be …

Judicial Review Of Mediated Settlement Agreements: Improving Mediation With Consent, Jacqueline Nolan-Haley

Faculty Scholarship

No abstract provided.

Who Is Responsible For Libor Rate-Fixing?, Mark R. Patterson

Faculty Scholarship

No abstract provided.

Judicial Review For Enemy Fighters: The Court’S Fateful Turn In Ex Parte Quirin, The Nazi Saboteur Case, Andrew Kent

Faculty Scholarship

The emerging conventional wisdom in the legal academy is that individual rights under the U.S. Constitution should be extended to noncitizens outside the United States. This claim - called globalism in my article - has been advanced with increasing vigor in recent years, most notably in response to legal positions taken by the Bush administration during the war on terror. Against a Global Constitution challenges the textual and historical grounds advanced to support the globalist conventional wisdom and demonstrates that they have remarkably little support. At the same time, the article adduces textual and historical evidence that noncitizens were among …

The Regulation Of Race In Science, Kimani Paul-Emile

Faculty Scholarship

The overwhelming majority of biological scientists agree that there is no such thing as race among modern humans. Yet, scientists regularly deploy race in their studies, and federal laws and regulations currently mandate the use of racial categories in biomedical research. Legal commentators have tried to make sense of this paradox primarily by looking to equal protection strict scrutiny analysis. However, the colorblind approach that attends this doctrine — which many regard as synonymous with invalidation — does not offer a particularly useful way to think about the use of race in research. It offers no way to address how …

Shields, Swords, And Fulfilling The Exclusionary Rule's Deterrent Function, James L. Kainen

Faculty Scholarship

When the exclusionary rule prevents the prosecution from using evidence necessary to bring a case to trial, the rule deters illegality while raising no issue about how it might interfere with usual factfinding processes. However, when a case proceeds to trial although a court has suppressed some prosecution evidence, courts need to decide the extent to which the defendant may benefit from the absence of the proof without opening the door to its admission. The exclusion of any relevant evidence raises similar questions, and courts often say the exclusionary rule is a shield from suppressed evidence, but not a sword …

State Speech And Political Liberalism, Abner S. Greene

Faculty Scholarship

Jim Fleming and Linda McClain have written an impressive book on the responsible exercise of rights, which flows from prior writing by each.Their title, "Ordered Liberty," is a bit of a misnomer, however. When one thinks of that phrase, one thinks of the ways in which we balance liberty against order, i.e., against security, police power, controlling the excesses of liberty. Responsibility in the exercise of rights is an aspect of how rights are orderly, but the major hard cases involving rights are hard because significant claims of harm are in play. Think of much of constitutional criminal procedure, free …

Google And Search-Engine Market Power, Mark R. Patterson

Faculty Scholarship

A significant and growing body of commentary considers whether possible manipulation of search results by Google could give rise to antitrust liability. Surprisingly, though, little serious attention has been paid to whether Google has market power. Those who favor antitrust scrutiny of Google generally cite its large market share, from which they infer or assume its dominance. Those who are skeptical of competition law’s role in regulating search, on the other hand, usually cite Google’s 'competition is only a click away' mantra to suggest that Google’s market position is precarious. In fact, the issue of Google’s power is more complicated …

The Relational Infrastructure Of Law Firm Culture And Regulation: The Exaggerated Death Of Big Law, Russell G. Pearce, Eli Wald

Faculty Scholarship

In recent years, the ethical infrastructure and culture of law firms has come under attack from commentators, such as Larry Ribstein, Bill Henderson, and Marc Galanter, who, in related ways, predict "the death of Big Law." They assert that the individualistic ethical infrastructure and culture of large firms undermine their commitment to professional values and will result in their failure to prepare for, and to survive, long term economic and technological trends. We identify a contradiction at the heart of this analysis. While these critiques correctly identify the individualistic flaws of law firm culture, they share the same individualistic assumptions. …

Oil And Water: Mixing Taxable And Tax-Exempt Shareholders In Mutual Funds, Jeffrey M. Colon

Faculty Scholarship

As of 2012, roughly 23% of U.S. households’ assets and 50% of retirement assets are invested in mutual funds, thus making mutual funds one of the most important investment vehicles for U.S. households. The federal taxation of mutual funds and mutual fund shareholders has played a vital role in the development of mutual funds and their appeal to U.S. investors. Despite the significant amount of mutual fund assets held in retirement accounts, there has been very little analysis of the issues that arise when taxable and tax-exempt shareholders invest together in the same mutual fund. A substantial body of research …