Law Commons^™

Market Myopia's Climate Bubble, Madison Condon

Faculty Scholarship

A growing number of financial institutions, ranging from BlackRock to the Bank of England, have warned that markets may not be accurately incorporating climate change-related risks into asset prices. This Article seeks to explain how this mispricing can exist at the level of individual assets drawing from scholarship on corporate governance and the mechanisms of market (in)efficiency. Market actors: 1. Lack the fine-grained asset-level data they need in order to assess risk exposure; 2. Continue to rely on outdated means of assessing risk; 3. Have misaligned incentives resulting in climate-specific agency costs; 4. Have myopic biases exacerbated by climate change …

The Ethics Of Research That May Disadvantage Others, Christopher Robertson

Faculty Scholarship

In prospective interventional research, a treatment may provide an advantage for the recipient over other humans not receiving it. If the intervention proves successful, the treated are better able to compete for a scarce ventilator, a class grade, or a litigation outcome, potentially risking the deaths, jobs, or incomes of non-treated persons. The concerns for “bystanders” have typically focused on direct harms (e.g., infecting them with a virus), unlike the mere competition for rivalrous goods at issue here.

After broadly scoping this problem, analysis reveals several reasons that such research is typically permissible, notwithstanding the potential setbacks to the interests …

Mandating Disclosure Of Climate-Related Financial Risk, Madison Condon, Sarah Ladin, Jack Lienke, Michael Panfil, Alexander Song

Faculty Scholarship

Climate change presents grave risk across the U.S. economy, including to corporations, their investors, the markets in which they operate, and the American public at large. Unlike other financial risks, however, climate risk is not routinely disclosed to the public. Insufficient corporate disclosures have persisted despite the Securities and Exchange Commission’s (“SEC”) issuance of regulatory guidance on the topic, the emergence of voluntary disclosure frameworks and standards, and growing calls from major investors for improved disclosure. Given the inadequacy of the current regime, the SEC should take further action to fulfill its statutory mandate to protect investors and promote efficiency, …

Externalities And The Common Owner, Madison Condon

Faculty Scholarship

Due to the embrace of modern portfolio theory, most of the stock market is controlled by institutional investors holding broadly diversified economy-mirroring portfolios. Recent scholarship has revealed the anti-competitive incentives that arise when a firm’s largest shareholders own similarly sized stakes in the firm’s industry competitors. This Article expands the consideration of the effects of common ownership from the industry level to the market-portfolio level, and argues that diversified investors should rationally be motivated to internalize intra-portfolio negative externalities. This portfolio perspective can explain the increasing climate change related activism of institutional investors, who have applied coordinated shareholder power to …

Disproportionate Exposure To Antibiotics In Children At Risk For Invasive Pneumococcal Disease: Potential For Emerging Resistance And Opportunity For Antibiotic Stewardship, Kevin Outterson

Faculty Scholarship

We compared antibiotic prescribing for children with and those without an underlying chronic condition associated with increased risk for invasive pneumococcal disease. Children with a chronic condition had significantly greater cumulative exposure to antibiotics and higher rates of prescriptions per person-year than those without a chronic condition; this population is at increased risk for the emergence of multidrug-resistant pathogens.

Reconsidering Realization-Based Accounting For Equity Compensation, David I. Walker

Faculty Scholarship

The U.S. equity compensation landscape continues to evolve. Recent innovations have improved the linkage between pay and firm-specific performance, but have added complexity. Against that backdrop, this Article urges reconsideration of the accounting rules for equity pay. Under current rules, most equity pay awards are expensed based on grant date valuation with no updating for changes in value post grant. This Article advocates the adoption of a mark-to-market or realization-based approach under which the expense recorded for all equity pay awards would ultimately be trued to the value received by employees. Increasingly, equity pay awards are more analogous to commissions …

Anonymization And Risk, Ira S. Rubinstein, Woodrow Hartzog

Faculty Scholarship

Perfect anonymization of data sets that contain personal information has failed. But the process of protecting data subjects in shared information remains integral to privacy practice and policy. While the deidentification debate has been vigorous and productive, there is no clear direction for policy. As a result, the law has been slow to adapt a holistic approach to protecting data subjects when data sets are released to others. Currently, the law is focused on whether an individual can be identified within a given set. We argue that the best way to move data release policy past the alleged failures of …

Law And Politics, An Emerging Epidemic: A Call For Evidence-Based Public Health Law, Michael Ulrich

Faculty Scholarship

As Jacobson v. Massachusetts recognized in 1905, the basis of public health law, and its ability to limit constitutional rights, is the use of scientific data and empirical evidence. Far too often, this important fact is lost. Fear, misinformation, and politics frequently take center stage and drive the implementation of public health law. In the recent Ebola scare, political leaders passed unnecessary and unconstitutional quarantine measures that defied scientific understanding of the disease and caused many to have their rights needlessly constrained. Looking at HIV criminalization and exemptions to childhood vaccine requirements, it becomes clear that the blame cannot be …

Health Insurance Is Dead; Long Live Health Insurance, Wendy K. Mariner

Faculty Scholarship

Today, health insurance is no longer simply a class of insurance that covers risks to health, and it has not been so for many years. Health insurance has become a unique form of insurance — a mechanism to pay for healthcare that uses risk spreading as one of several pricing methods. The Affordable Care Act builds on this important payment function to create a complex social insurance system to finance healthcare for (almost) everyone. This article examines how the ACA draws on various conceptions of insurance to produce a quasi-social insurance system. This system poses new challenges to laws governing …

Statistical Knowledge Deconstructed, Kenneth Simons

Faculty Scholarship

The law frequently distinguishes between individualized knowledge (awareness that one’s act will harm a particular victim, e.g., driving through an intersection while aware that one’s automobile is likely to injure a pedestrian) and statistical knowledge (awareness that one’s activity or multiple acts will, to a high statistical likelihood, harm one or more potential victims, e.g., proceeding with a large construction project that one confidently predicts will result in worker injuries). Under tort and criminal law doctrine, acting with individualized knowledge is ordinarily much more difficult to justify, and, if unjustified, much more culpable, than acting with statistical knowledge. Yet the …

Dworkin's Two Principles Of Dignity: An Unsatisfactory Nonconsequentialist Account Of Moral Duties, Kenneth Simons

Faculty Scholarship

In his ambitious and wide-ranging new book, Justice for Hedgehogs, Ronald Dworkin offers an alternative to consequentialist theories of law, political morality, moral duties, and personal ethics. Respect for human dignity, he says, entails two requirements: self-respect, i.e., taking the objective importance of your own life seriously; and authenticity, i.e., accepting a personal responsibility for identifying what counts as success in your own life. For Dworkin, these two principles of dignity do triple duty. First, as a matter of personal ethics, they provide guidance about what we should do in order to live well. Second, they elucidate the rights that …

Tort Negligence, Cost-Benefit Analysis, And Tradeoffs: A Closer Look At The Controversy, Kenneth Simons

Faculty Scholarship

What is the proper role of cost-benefit analysis in understanding the tort concept of negligence or reasonable care? A straightforward question, you might think. But it is a question that manages to elicit groans of exasperation from those on both sides of the controversy.

For most utilitarians and adherents to law and economics, the answer is obvious: to say that people should not be negligent is to say that they should minimize the sum of the costs of accidents and the costs of preventing accidents. Under the economic formulation of the famous Learned Hand test, they should take a precaution …

Dimensions Of Negligence In Criminal And Tort Law, Kenneth Simons

Faculty Scholarship

This article explores different dimensions of the concept of negligence in the law. The first sections focus on the fundamental distinction between conduct negligence (unreasonable creation of a risk of harm), a conception that dominates tort law; and cognitive negligence (unreasonable failure to be aware of a risk, either through inadvertence or mistake), a conception that is much more important in criminal law. The last major section identifies five significant institutional functions served by a legal negligence standard: expressing a legal norm in the form of a standard rather than a rule; personifying fault; empowering the trier of fact to …

Risky Business: Setting Public Health Policy For Hiv-Infected Health Care Professionals, George J. Annas

Faculty Scholarship

In JULY 1991, THE UNITED STATES SENATE VOTED 81 to 18 to impose a $10,000 fine and a ten-year jail sentence on any HTV-infected physicians who treated patients without disclosing their HIV status. Senator Jesse Helms, the sponsor of the measure, explained his rationale: “Let the punishment fit the crime. . . . I believe in horsewhipping. I feel that strongly about it” (Tolchin 1991). Later, Senator Helms wrote that HIV-infected physicians who practice medicine “should be treated no better than the criminal who guns down a helpless victim on the street” (Helms 1991). In his article he explained that …

Use Of Comparative Risk Methods In Regulatory And Common Law, Michael S. Baram

Faculty Scholarship

Several persistent problems afflict risk decisionmaking. In the regulatory context, agencies confront the problems of how to prioritize risks for best use of their limited resources and how to determine "how safe is safe enough," or a risk limit, when action is to be taken on a particular risk.

In the trial courts hearing toxic tort actions, the jury must often determine whether an activity is "unreasonably dangerous" or a product is "defective" because of its risk attributes.

To resolve these problems, many have proposed the use of risk comparisons. Now that we can quantify risks, why not compare them …