Law Commons^™

Voting (Insincerely) In Corporate Law, Zohar Goshen

Faculty Scholarship

Voting lies at the center of collective decision-making in corporate law. While scholars have identified various problems with the voting mechanism, insincere voting — in the forms of strategic voting and conflict of interests voting — is perhaps the most fundamental. This article shows that insincere voting distorts the voting mechanism at its core, undermining its ability to determine transaction efficiency. As further demonstrated, strategic and conflict of interests problems frequently coincide with one another: voting strategically often means being in conflict, and many fact patterns present aspects of both problems. Finally, this article claims that although the two problems …

Litigation Governance: A Gentle Critique Of The Third Circuit Task Force Report, John C. Coffee Jr.

Faculty Scholarship

The Third Circuit Task Force on the Selection of Class Counsel (the "Task Force") has worked hard, considered everything, and exhaustively summarized the problems associated with class counsel auctions. Its views will undoubtedly resonate with most of the Bench and the vast majority of the Bar-neither of whom were enthusiastic about the prospect of auctions in the first place. Personally, I agree with the Task Force that auctions are not the most promising reform and that they may exacerbate, rather than correct, existing problems. Still, what is missing from the Task Force Report is the candid recognition that the agency …

Challenges To Fragile Democracies In The Americas: Legitimacy And Accountability, Martin Böhmer, A.R. Brewer-Carías, Helen Beatriz Mack Chang, Sarah H. Cleveland, Francisco Cox, Lourdes Flores Nano, H.W. Perry Jr., Steven Ratner, Carlos Rosenkrantz, Roberto Saba, Dean Michael Sharlot, Nicolas Shumway, Gerald Torres

Faculty Scholarship

February 25, 2000, the University of Texas School of Law hosted an extraordinary gathering to discuss the fragility of democracies in Latin America and the dangers that they face. The event was sponsored by several institutions at the University of Texas: the School of Law, the Institute of Latin American Studies, the Office of the Provost, the College of Liberal Arts Democracy in the Third Millennium Program, and the International Law Society at the School of Law.

The Liberal Commons, Hanoch Dagan, Michael A. Heller

Faculty Scholarship

Following the Civil War, black Americans began acquiring land in earnest; by 1920 almost one million black families owned farms. Since then, black rural landownership has dropped by more than 98% and continues in rapid decline – there are now fewer than 19,000 black-operated farms left in America. By contrast, white-operated farms dropped only by half, from about 5.5 million to 2.4 million. Commentators have offered as partial explanations the consolidation of inefficient small farms and intense racial discrimination in farm lending. However, even absent these factors, the unintended effects of old-fashioned American property law might have led to the …

Norm Internalization And U.S. Economic Sanctions, Sarah H. Cleveland

Faculty Scholarship

The fifty years since the adoption of the Universal Declaration of Human Rights have seen a revolution in the promulgation and universalization of human and labor rights. Human rights conventions have proliferated in the areas of civil and political rights, social and economic rights, and the rights of women, children, minorities, and refugees. Many of these conventions have been ratified by a majority of the nations of the world. International monitoring of human and labor rights compliance is conducted by international institutions such as the U.N. Human Rights Commission and the International Labour Organization (ILO), by regional entities such as …

The Issuer Choice Debate, Merritt B. Fox

Faculty Scholarship

This article responds to Professor Romano’s piece in this issue. It concerns our ongoing debate with regard to the desirability of permitting issuers to choose the securities regulation regime by which they are bound. Romano favors issuer choice, arguing that it would result in jurisdictional competition to offer issuers share value maximizing regulations. I, in contrast, believe that abandoning the current mandatory system of federal securities disclosure would likely lower, not increase, U.S. welfare. Each issuer, I argue, would select a regime requiring a level of disclosure less than is socially optimal because its private costs of disclosure would be …

Religion And American Political Judgments, Kent Greenawalt

Faculty Scholarship

This Article addresses the extent to which officials and citizens should rely directly on their religious convictions to reach political judgments and make political arguments. Reviewing opposing "exclusive" and "inclusive" positions, this Article suggests that officials generally should not articulate arguments in religious terms. Many officials should have a greater freedom to rely on religious bases of judgments, and private citizens should not regard themselves as constrained in the manner of officials. This approach, defended initially from the perspective of detached political philosophy, fits comfortably with a variety of overarching religious views. The constraints it suggests should be regarded as …

Title Vii And Religious Liberty, Kent Greenawalt

Faculty Scholarship

Title VII of the 1964 Civil Rights Act, which forbids religious discrimination in employment, raises in microcosm some extremely thorny questions about religious liberty; questions more familiar to most of us in constitutional settings. In focusing on these questions in their Title VII context, I am more interested in fundamental conceptual issues than in the precise details of what that law should be taken to provide.

Among the questions are: What is discrimination because of religion? How should religion be "defined"? How far should employers accommodate the religious exercise of workers? Under the First Amendment, how much accommodation can the …

Feminism At The Millennium, Carol Sanger

Faculty Scholarship

Sexism of all kinds – subtle and blatant, criminal and legal, commercial and private – is the topic of the three books under review. The books initially sort themselves out by discipline: Everyday Sexism and Subtle Sexism are anthologies whose editors and contributors are primarily sociologists; Speaking of Sex is written by a law professor and offers a more focused argument about the persistence of gender inequalities. Distinctions in authorship aside, the three books pose a pair of similar and painfully familiar questions: Why is so much still organized to the disadvantage of women, and what can (feminist) academics contribute …

European Law: Yesterday, Today And Tomorrow, George A. Bermann

Faculty Scholarship

Hans Baade's career spans a period marked by the progressive recognition of European law in American academic circles. At the time that Hans Baade decided to make the United States his academic home, historical circumstances had only recently brought to American shores a whole generation of legal scholars, mostly continental European in background and training. Aided by the compelling nature of the stories about law that they had to tell, these scholars connected strategically with an American legal academy that was then only slowly and tentatively emerging from what could be described, not unfairly, as a period of relative intellectual …

Presidents, Secretaries Of State, And Other Visible International Lawyers, Lori Fisler Damrosch

Faculty Scholarship

I invite you to join me on a journey back ninety years, to the 1911 Annual Meeting as recorded in the 1911 Proceedings (pp. 340-41). President Rovine's predecessor, the then-president of the Society, was Elihu Root, a former secretary of war and secretary of state who was at the time senator for New York (Senator Clinton, please take note!). Root would win the Nobel Peace Prize the following year. President Root proposed a toast to the honorary president of the Society, who then gave the banquet address.

High Brow, Lee C. Bollinger

Faculty Scholarship

Terry Sandalow has an extraordinary mind, its power suggested by his incredible brow and forehead. (I'm always reminded, in fact, of Melville's description of the massive size of the sperm whale's head as representing its huge intelligence.) By any measure, Terry is very smart, broadly educated, and deeply sensitive to the nuances of life. From my earliest days on the law faculty, I remember being continually impressed, at faculty discussions and seminars, by his illuminating questions and comments and aware of his reputation among students as one of the most intellectually challenging teachers. Colleagues routinely sought his advice and criticism …

The Role Of Law In The Functioning Of Federal Systems, George A. Bermann

Faculty Scholarship

Federal systems are about the distribution of legal and political power, but law is not only one of the currencies of federalism, it is also one of federalism's most important supports; this chapter considers the role that law plays in establishing and enforcing the system by which both legal and political power are distributed within the USA and the EU. Bermann explores the various ways in which the courts can, and choose to, enforce the principles of federalism beyond the classical ‘political’ and ‘procedural’ safeguards provided by the institutional structures themselves and the constraints on the deliberative process. He describes …

Mark Tushnet: The Right Questions, Philip C. Bobbitt

Faculty Scholarship

It is the most grotesque of ironies that much of twentieth-century jurisprudence has been an effort to make law into a science. This effort amounts to a reversal of a far earlier appropriation. It was the observation of regularities in gravity and the movement of the planets that reformed science and gave credence to the locution, 'the laws of nature.' Nature was "lawful" because it appeared to follow undeviatingly a certain regimen, which is to say that any deviations observed were held to be clues as to the true content of the laws that were being followed. Mathematics was the …

Company Registration And The Private Placement Exemption, Merritt B. Fox

Faculty Scholarship

Over the last twenty years, there has been a steady shift in securities disclosure regulation away from its traditional transactional basis toward a system of company registration. Under the transaction based approach, each new public offering of a security has to be registered under the Securities Act of 1933 (the "1933 Act"), a requirement that reflects the SEC's traditional concern that the most important time to have high-quality disclosure is at the moment of a securities offering. Under the company registration approach, an established, publicly traded issuer would register just once, provide information thereafter on a periodic basis, and then …

Taxing International Income: Inadequate Principles, Outdated Concepts, And Unsatisfactory Policies, Michael J. Graetz

Faculty Scholarship

It is a pleasure to be here today to deliver the first David R. Tillinghast Lecture of the 21st century, a lecture honoring a man who has done much to shape' and stimulate our thinking about the international tax world of the 20th.

Our nation's system for taxing international income today is largely a creature of the period 1918-1928; a time when the income tax was itself in childhood. From the inception of the income tax (1913 for individuals, 1909 for corporations) until 1918, foreign taxes were deducted like any other business expense. In 1918, the foreign tax credit (FTC) …

On Insider Trading, Markets, And Negative Property Rights In Information, Zohar Goshen, Gideon Parchomovsky

Faculty Scholarship

Few issues have sparked as much debate and disagreement among Law and Economics scholars as the prohibition on insider trading. Ironically, the Supreme Court's attempts in Chiarella v. United States, Dirks v. Securities and Exchange Commission, and, most recently, in United States v. O'Hagan to clarify the scope and content of the ban on insider trading, and the subsequent reaction of the Securities and Exchange Commission ("SEC"), have only added fuel to the fire of the academic debate already raging on the issue.

The most intriguing feature of the debate on insider trading is that all contributors seek to promote …

The Soul Of A New Political Machine: The Online, The Color Line And Electronic Democracy, Eben Moglen, Pamela S. Karlan

Faculty Scholarship

In this Essay, we want to suggest two ways in which people's experience with the Internet may affect how they think politics ought to be organized, and to consider the consequences for the political aspirations of minority communities. First, the notion of "virtual communities” – that is, communities that affiliate along nongeographic lines – may provide new support for alternatives to traditional geographic districting practices. As Americans become more comfortable with the idea that people can belong to voluntarily created, overlapping, fluid, nongeographically defined communities, which may be as important as the physical communities in which they live, they may …

Regulation Fd And Foreign Issuers: Globalization's Strains And Opportunities, Merritt B. Fox

Faculty Scholarship

The globalization of the market for securities has a persistent way of straining the traditional rationales for securities regulation. At the same time, the choices it forces upon us create the opportunity to better test empirically the desirability of the regulations being imposed. Regulation FD, which stands for "fair disclosure," is the most recent example where these twin effects of globalization arise. Regulation FD is arguably the most important change to the U.S. disclosure regime since the adoption of integrated disclosure almost two decades ago. Regulation FD is intended to stop the practice of "selective disclosure," whereby an issuer withholds …

The Property/Contract Interface, Thomas W. Merrill, Henry E. Smith

Faculty Scholarship

This Article explores the distinction between in personam contract rights and in rem property rights. It presents a functional explanation for why the legal system utilizes these two modalities of rights, grounded in the pattern of information costs associated with each modality. To test this theory, the Article examines four legal institutions that fall along the property/contract interface – bailments, landlord-tenant law, security interests, and trusts – in order to determine how the legal doctrine varies as the underlying situation shifts from in personam, to in rem, to certain relations intermediate between these poles. With respect to each institution, we …

What Happened To Property In Law And Economics?, Thomas W. Merrill, Henry E. Smith

Faculty Scholarship

Property has fallen out of fashion. Although people are as concerned as ever with acquiring and defending their material possessions, in the academic world there is little interest in understanding property. To some extent, this indifference reflects a more general skepticism about the value of conceptual analysis, as opposed to functional assessment of institutions. There is, however, a deeper reason for the indifference to property. It is a commonplace of academic discourse that property is simply a "bundle of rights," and that any distribution of rights and privileges among persons with respect to things can be dignified with the (almost …

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

Faculty Scholarship

Imagine a visitor who seeks to catalog the variety of written texts American government uses to communicate its powers and its citizens' rights and obligations. She might organize those texts into the following pyramid:

• A Constitution, adopted by "the people"

• Hundreds of statutes, adopted by an elected Congress

• Thousands of regulations, adopted by politically responsible executive officials

• Tens of thousands of interpretations and other guidance documents, issued by responsible bureaus

• Countless advice letters, press releases, and other statements of understanding, generated by individual bureaucrats

On inquiry she would find that we understand passably well the …

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

Faculty Scholarship

The government often uses narrow tax reforms to target specific planning strategies. Sometimes the targeted transaction is stopped. But in other cases, taxpayers press on, tweaking the deal just enough to sidestep the reform. The difference often lies in transaction costs, financial accounting, and other 'frictions, " which are constraints on tax planning external to the tax law.

This Article contributes a methodology for determining whether frictions will block end runs, and illustrates the effect of frictions by comparing the constructive sale rule of section 1259 with the constructive ownership rule of section 1260. These reforms use the same statutory …

Have Moral Rights Come Of (Digital) Age In The United States?, Jane C. Ginsburg

Faculty Scholarship

More than any other contemporary American legal scholar, Professor Merryman has drawn attention to the moral rights claims of artists. Anything written in the field in the United States since 1976 owes inspiration to The Refrigerator of Bernard Buffet ("The Refrigerator") Professor Merryman's seminal article in the 1976 Hastings Law Journal. I feel this particularly acutely since I became interested in the issue as a law student, in 1978. It looked like a hopeful time, for Professor Merryman had shown the way, and the Second Circuit, in the then-recently decided Monty Python case, seemed to be paying heed. The …

Lucas Rosa V. Park West Bank And Trust Company, Katherine M. Franke

Faculty Scholarship

In July of 1998 something rather mundane happened: Lucas Rosa walked into Park West Bank in Holyoke, Massachusetts and asked for a loan application. Since it was a warm summer day, and because she wanted to look credit-worthy, Rosa wore a blousey top over stockings. Suddenly, the mundane transformed into the exceptional: When asked for some identification, Rosa was told that no application would be forthcoming until and unless she went home, changed her clothes and returned attired in more traditionally masculine/male clothing. Rosa, a biological male who identifies herself as female was, it seems, denied a loan application on …

Information Technology And Non-Legal Sanctions In Financing Transactions, Ronald J. Mann

Faculty Scholarship

This Essay investigates the effect of advances in information technology on the private institutions that businesses use to resolve information asymmetries in financing transactions. The first part of the Essay discusses how information technology can permit direct verification of the information, obviating the problem entirely; the Essay discusses the example of the substitution of the debit card for the check, which provides an immediate payment that obviates the need for the merchant to consider whether payment will be forthcoming when the check is presented to the bank on which it is drawn.

The second part of the Essay discusses how …

The Dynamic Analytics Of Property Law, Michael A. 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.

Tax Constraints On Indexed Options, David M. Schizer

Faculty Scholarship

Indexed stock option grants reward executives for outperforming a benchmark, such as the market as a whole or competitors in the same industry. These options offer superior incentives by limiting the influence of factors beyond an executive's control, such as general market and industry conditions. Yet indexed options are almost never used. Professor Saul Levmore seeks to explain this puzzle with norms. This comment on his article argues that tax plays a larger role in this puzzle than he acknowledges, although tax is not a complete explanation. Accounting and Professor Levmore's norms-based account are then briefly considered.

Three Nearly Sacred Books In Western Law, George P. Fletcher

Faculty Scholarship

We American lawyers pride ourselves on the secular nature of our legal system. We celebrate the separation of Church and State. We think that the moving spirit of the law is to be found not in eternal truths about the universe but in the contingent needs of social and economic policy. "The life of the law has not been logic: it has been experience," said Oliver Wendell Holmes, Jr., in a sentence that since 1881 has broadcast to every new generation of lawyers the pragmatic foundations of their craft.

We assume that we have little in common with the great …

The Securities Globalization Disclosure Debate, Merritt B. Fox

Faculty Scholarship

A global market is developing for the shares of an increasing portion of the world’s 41,000 publicly-traded issuers. This trend has given rise to an active debate concerning what United States policy should be toward regulation of their disclosure practices. This Article is a comment on this debate through the eyes of an active participant