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Full-Text Articles in Law

Understanding Macs: Moral Hazard In Acquisitions, Ronald J. Gilson, Alan Schwartz Jan 2004

Understanding Macs: Moral Hazard In Acquisitions, Ronald J. Gilson, Alan Schwartz

Faculty Scholarship

The standard contract that governs friendly mergers contains a material adverse change clause (a "MAC") and a material adverse effect clause (a "MAE"); these clauses permit a buyer costlessly to cancel the deal if such a change or effect occurs. In recent years, the application of the traditional standard-like MAC and MAE term has been restricted by a detailed set of exceptions that curtails the buyer's ability to exit. The term today engenders substantial litigation and occupies center stage in the negotiation of merger agreements. This paper asks what functions the MAC and MAE term serve, what function the ...


Editorial: The European Union As A Constitutional Experiment, George Bermann Jan 2004

Editorial: The European Union As A Constitutional Experiment, George Bermann

Faculty Scholarship

In the constellation of international governance regimes, the European Union occupies a singular place, and not merely because it has recently engaged in the process of drafting a document whose title includes the words A Constitution for Europe'. Even if that particular document, or any such document, were never to see the light of day as a fully adopted and ratified instrument (an eventuality I consider to be unlikely), the EU will already have been constitutionalised, albeit in a fashion unfamiliar to those who, like most of us, are accustomed to the constitutions of Nation States. To claim that the ...


Al Capone's Revenge: An Essay On The Political Economy Of Pretextual Prosecution, Daniel C. Richman, William J. Stuntz Jan 2004

Al Capone's Revenge: An Essay On The Political Economy Of Pretextual Prosecution, Daniel C. Richman, William J. Stuntz

Faculty Scholarship

Most analyses of pretextual prosecutions – cases in which prosecutors target defendants based on suspicion of one crime but prosecute them for a separate, lesser crime – focus on the defendant's interest in fair treatment. Far too little attention is given to the strong social interest in non-pretextual prosecutions, and to the ways in which identifying a defendant's true crime promotes prosecutorial accountability and deterrence. This essay explores the credibility problems created by prosecutorial strategies of the sort used to get Al Capone, and offers some theories about why these strategies have become so characteristic of federal, and not local ...


Derivatives And The Bankruptcy Code: Why The Special Treatment?, Franklin R. Edwards, Edward R. Morrison Jan 2004

Derivatives And The Bankruptcy Code: Why The Special Treatment?, Franklin R. Edwards, Edward R. Morrison

Faculty Scholarship

The collapse of Long Term Capital Management (LTCM) in Fall 1998 and the Federal Reserve Bank's subsequent efforts to orchestrate a bailout raise important questions about the structure of the Bankruptcy Code. The Code contains numerous provisions affording special treatment to financial derivatives contracts, the most important of which exempts these contracts from the "automatic stay" and permits counterparties to terminate derivatives contracts with a debtor in bankruptcy and seize underlying collateral. No other counterparty or creditor of the debtor has such freedom; to the contrary, the automatic stay prohibits them from undertaking any act that threatens the debtor ...


Scrubbing The Wash Sale Rules, David M. Schizer Jan 2004

Scrubbing The Wash Sale Rules, David M. Schizer

Faculty Scholarship

Loss limitations are an ugly but inevitable feature of any realization-based income tax. In essence, because the system mismeasures gains, it also has to mismeasure losses. Otherwise, the timing option inherent in the realization rule would allow taxpayers to defer gains (thereby reducing the tax's present value) while accelerating losses (thereby preserving the deduction's present value).

The wash sale regime of Section 1091 is one of our system's most important brakes on the timing option. Yet it is only a slight exaggeration to say that compliance with the regime is voluntary for very wealthy taxpayers – or, at ...


The "Inexorable Zero", Bert I. Huang Jan 2004

The "Inexorable Zero", Bert I. Huang

Faculty Scholarship

For over a quarter century, legal arguments about segregation, discrimination, and affirmative action have invoked the image of the "inexorable zero" – complete absence of any women or minorities at a given school or workplace. Yet as evocative as the phrase might be, its precise doctrinal import has remained elusive. This Note recounts the original use of the concept in a landmark Title VII case and documents a current circuit split. It then articulates theoretical grounds upon which the concept’s intuitive appeal might rest. Finally, it excavates a further, more complex rationale that the Supreme Court may have contemplated at ...


The Relative Costs Of Incorporating Trade Usage Into Domestic Versus International Sales Contracts, Avery W. Katz Jan 2004

The Relative Costs Of Incorporating Trade Usage Into Domestic Versus International Sales Contracts, Avery W. Katz

Faculty Scholarship

This Comment expands upon Clayton Gillette's defense of Article 8(2) of the Convention on the International Sale of Goods (CISG), which directs tribunals to incorporate international trade usage into private contracts governed by the Convention, unless the parties agree otherwise. The Comment attempts to offer a more robust and systematic account of when substantive interpretative doctrines such as trade usage might be desirable, as well as why such doctrines appear to be especially useful in the transnational setting of the CISG. It argues that Gillette's account is incomplete because he does not provide an explanation of why ...


The (New?) Right Of Making Available To The Public, Jane C. Ginsburg Jan 2004

The (New?) Right Of Making Available To The Public, Jane C. Ginsburg

Faculty Scholarship

The Berne Convention 1971 Paris Act covered the right of communication to the public incompletely and imperfectly through a tangle of occasionally redundant or self-contradictory provisions on "public performance," "communication to the public," "public communication," "broadcasting," and other forms of transmission. Worse, the scope of rights depended on the nature of the work, with musical and dramatic works receiving the broadest protection, and images the least; literary works, especially those adapted into cinematographic works, lying somewhere in between. The 1996 WIPO Copyright Treaty rationalized and synthesized protection by establishing full coverage of the communication right for all protected works of ...


The International Privacy Regime, Tim Wu Jan 2004

The International Privacy Regime, Tim Wu

Faculty Scholarship

Privacy has joined one of many areas of law understandable only by reference to the results of overlapping and conflicting national agendas. What has emerged as the de facto international regime is complex. Yet based on a few simplifying principles, we can nonetheless do much to understand it and predict its operation.

First, the idea that self-regulation by the internet community will be the driving force in privacy protection must be laid to rest. The experience of the last decade shows that nation-states, powerful nation-states in particular, drive the system of international privacy. The final mix of privacy protection that ...


Regulating Teenage Abortion In The United States: Politics And Policy, Carol Sanger Jan 2004

Regulating Teenage Abortion In The United States: Politics And Policy, Carol Sanger

Faculty Scholarship

Thirty-four US states currently require pregnant minors either to notify their parents or get their consent before having a legal abortion. The Supreme Court has upheld the constitutionality of theses statutes provided that minors are also given an alternative mechanism for abortion approval that does not involve parents. The mechanism used is the 'judicial bypass hearing' at which minors persuade judges that they are mature and informed enough to make the abortion decision themselves. While most minors receive judicial approval, the hearings intrude into the most personal aspects of a young woman's life. The hearings, while formally civil in ...


Incorporation By Law, Joseph Raz Jan 2004

Incorporation By Law, Joseph Raz

Faculty Scholarship

My purpose here is to examine the question of how the law can be incorporated within morality and how the existence of the law can impinge on our moral rights and duties, a question (or questions) which is a central aspect of the broad question of the relation between law and morality. My conclusions cast doubts on the incorporation thesis, that is, the view that moral principles can become part of the law of the land by incorporation.


Global Credit Card Use And Debt: Policy Issues And Regulatory Responses, Ronald J. Mann Jan 2004

Global Credit Card Use And Debt: Policy Issues And Regulatory Responses, Ronald J. Mann

Faculty Scholarship

The rise of card-based payments has transformed the landscape of payments in the last half century, from one dominated by government-supported paper-based payments to one dominated by wholly private systems. The rise of those payments presents a number of policy problems, the most serious of which is the empirically demonstrable likelihood that use of the cards here and elsewhere contributes to an undue level of consumer credit and that borrowing on the cards contributes to a rise in the level of consumer bankruptcy. Because increasing financial distress imposes substantial externalities on the economies in which it occurs, the global rise ...


Balance In The Taxation Of Derivative Securities: An Agenda For Reform, David M. Schizer Jan 2004

Balance In The Taxation Of Derivative Securities: An Agenda For Reform, David M. Schizer

Faculty Scholarship

By now, it is well understood that aggressive tax planning among high-income individuals and corporations represents a grave threat to the U.S. tax system, and that derivatives are staples of this planning. In response, the usual recommendation is consistency, which means that the same tax treatment should apply to economically comparable bets, regardless of what form is used. Yet because consistency is unattainable, this Article develops an alternative theory: Policymakers should strive instead for balance. This means that for each risky position, the treatment of gains should match the treatment of losses. For example, if the government bears 15 ...


The Role Of Well-Being, Joseph Raz Jan 2004

The Role Of Well-Being, Joseph Raz

Faculty Scholarship

"Well-being" signifies the good life, the life which is good for the person whose life it is. I have argued that well-being consists in a wholehearted and successful pursuit of valuable relationships and goals. This view, a little modified, is defended , but the main aim of the article is to consider the role of well-being in practical thought. In particular I will examine a suggestion which says that when we care about people, and when we ought to care about people, what we do, or ought to, care about is their well-being. The suggestion is indifferent to who cares and ...


Be Careful What You Wish For: Legal Sanctions And Public Safety Among Adolescent Offenders In Juvenile And Criminal Court, Jeffrey Fagan, Aaron Kupchik, Akiva Liberman Jan 2004

Be Careful What You Wish For: Legal Sanctions And Public Safety Among Adolescent Offenders In Juvenile And Criminal Court, Jeffrey Fagan, Aaron Kupchik, Akiva Liberman

Faculty Scholarship

Three decades of legislative activism have resulted in a broad expansion of states' authority to transfer adolescent offenders from juvenile to criminal (adult) courts. At the same time that legislatures have broadened the range of statutes and lowered the age thresholds for eligibility for transfer, states also have reallocated discretion away from judges and instituted simplified procedures that permit prosecutors to elect whether adolescents are prosecuted and sentenced in juvenile or criminal court. These developments reflect popular and political concerns that relatively lenient or attenuated punishment in juvenile court violates proportionality principles for serious crimes committed by adolescents, and is ...


Monogamy's Law: Compulsory Monogamy And Polyamorous Existence, Elizabeth F. Emens Jan 2004

Monogamy's Law: Compulsory Monogamy And Polyamorous Existence, Elizabeth F. Emens

Faculty Scholarship

Marriage and monogamy feature prominently on the public stage, but not all romantic relationships come in pairs. While people across the political spectrum debate the different-sex requirement of civil marriage, this article focuses on another limiting principle of monogamy's core institution: the twoness requirement. In particular, the article elaborates the practice and ethical principles of contemporary relationships of more than two people, called polyamory. Such relationships take many forms and aspire to several identifiable values, including radical honesty, consent, and the privileging of more sexual and loving experiences over other activities and emotions such as jealousy.

The article asks ...


Corporate Governance, Executive Compensation And Securities Litigation, Eric L. Talley, Gudrun Johnsen Jan 2004

Corporate Governance, Executive Compensation And Securities Litigation, Eric L. Talley, Gudrun Johnsen

Faculty Scholarship

It is generally accepted that good corporate governance, executive compensation and the threat of litigation are all important mechanisms for incentivizing managers of public corporations. While there are significant and robust literatures analyzing each of these policy instruments in isolation, their mutual relationship and interaction has received somewhat less attention. Such neglect is mildly surprising in light of a strong intuition that the three devices are structurally related to one another (either as complements or substitutes). In this paper, we construct an agency cost model of the firm in which corporate governance protections, executive compensation levels, and litigation incentives are ...


On Gun Registration, The Nra, Adolf Hitler, And Nazi Gun Laws: Exploding The Gun Culture Wars, Bernard E. Harcourt Jan 2004

On Gun Registration, The Nra, Adolf Hitler, And Nazi Gun Laws: Exploding The Gun Culture Wars, Bernard E. Harcourt

Faculty Scholarship

Say the words "gun registration" to many pro-gun Americans and you are likely to hear that one of the first things that Hitler did when he seized power was to impose strict gun registration requirements that enabled him to identify gun owners and then to confiscate all guns, effectively disarming his opponents and paving the way for the Holocaust. One of the more curious twists in the historical debate, though, is that the most vocal opponent of this argument is also pro-gun. It is the National Alliance, a white supremacist organization. According to them, "German Firearms legislation under Hitler, far ...


Uncorporated Professionals, John Romley, Eric L. Talley Jan 2004

Uncorporated Professionals, John Romley, Eric L. Talley

Faculty Scholarship

Professional service providers who wish to organize as multi-person firms have historically been limited to the partnership form. Such organizational forms trade the benefit of risk diversification off against the costs of diluted incentives and liability exposure in choosing their optimal size. More recently, states have permitted limited-liability entities that combine the simplicity, flexibility and tax advantages of a partnership with the liability shield of a corporation. We develop a game theoretic model of professional-firm organization that integrates the provision of incentives in a multi-person firm with the choice of business form. We then test the model's predictions with ...


Equality Without Tiers, Suzanne B. Goldberg Jan 2004

Equality Without Tiers, Suzanne B. Goldberg

Faculty Scholarship

Equality Without Tiers offers a comprehensive analysis of tiered equal protection review and argues that the current framework has outlived its utility and functions in many respects as a barrier to equality. As an alternative to the current ossified test, the article develops and tests a single standard of review aimed to provide a more finely calibrated response to the complexities of discrimination in the 21st century.

To support this argument, the article focuses first on tensions in the current tiered framework for equal protection review, pointing to, among others, the Court's variously weak and strong approaches to rational ...


"You Are Entering A Gay- And Lesbian-Free Zone": On The Radical Dissents Of Justice Scalia And Other (Post-) Queers, Bernard E. Harcourt Jan 2004

"You Are Entering A Gay- And Lesbian-Free Zone": On The Radical Dissents Of Justice Scalia And Other (Post-) Queers, Bernard E. Harcourt

Faculty Scholarship

The most renowned substantive criminal law decision of the October 2002 Term, Lawrence v. Texas, will go down in history as a critical turning point in criminal law debates over the proper scope of the penal sanction. For the first time in the history of American criminal law, the United States Supreme Court has declared that a supermajoritarian moral belief does not necessarily provide a rational basis for criminalizing conventionally deviant conduct. The court's ruling is the coup de grace to legal moralism administered after a prolonged, brutish, tedious, and debilitating struggle against liberal legalism in its various criminal ...


Unconstitutional Police Searches And Collective Responsibility, Bernard E. Harcourt Jan 2004

Unconstitutional Police Searches And Collective Responsibility, Bernard E. Harcourt

Faculty Scholarship

Jon Gould and Stephen Mastrofski document astonishingly high rates of unconstitutional police searches in their forthcoming article Suspect Searches: Assessing Police Behavior Under the U.S. Constitution to be published in Criminology & Public Policy (2004). By their conservative estimate, 30 percent of the 115 police searches they studied violated the Fourth Amendment. The vast majority of the unconstitutional searches were invisible to the courts, having resulted in no arrest, charge, or citation. Focusing exclusively on stop-and-frisk searches, an even higher proportion – 46 percent – was unconstitutional. Moreover, 84 percent of the searches involved African-American suspects.

The new study paints a troubling ...


The Decline Of The Juvenile Death Penalty: Scientific Evidence Of Evolving Norms, Jeffrey Fagan, Valerie West Jan 2004

The Decline Of The Juvenile Death Penalty: Scientific Evidence Of Evolving Norms, Jeffrey Fagan, Valerie West

Faculty Scholarship

In 2003, the Missouri Supreme Court set aside the death sentence of Christopher Simmons, who was 17 when he was arrested for the murder of Shirley Crook. The Simmons court held that the "evolving standards of decency" embodied in the Eighth Amendment's prohibition of cruel and unusual punishments barred execution of persons who committed capital crimes before their 18th birthday. This decision was based in part on the emerging legislative consensus in the states opposing execution of juvenile offenders and the infrequency with which the death penalty is imposed on juvenile offenders. The State sought a writ of certiorari ...


Conflicts In Property, Hanoch Dagan, Michael Heller Jan 2004

Conflicts In Property, Hanoch Dagan, Michael Heller

Faculty Scholarship

Property concerns conflicts – both conflicts between individuals and conflicts of interest. Conflicts between individuals have long been the paradigmatic property focus. According to this view, property debates circle around issues of autonomy and productive competition. But this is an impoverished view. In this Article, we shift attention to conflicts of interest. By helping people manage conflicts of interest, a well-governed property system balances interdependence with autonomy and productive cooperation with productive competition. We identify three mechanisms woven throughout property law that help manage conflicts of interest: (1) internalization of externalities; (2) democratization of management; and (3) de-escalation of transactions. We ...


Facial Challenges And Federalism, Gillian E. Metzger Jan 2004

Facial Challenges And Federalism, Gillian E. Metzger

Faculty Scholarship

This Essay addresses a debate that emerged in the Supreme Court's decision last Term in Tennessee v. Lane, 124 S. Ct. 1978 (2004), regarding whether challenges to legislation enacted to enforce section five of the Fourteenth Amendment should be assessed on a facial or as-applied basis. It begins by reviewing the Court's precedent involving claims that statutes exceed Congress' enumerated powers to determine how the Court thus far has approached the question of facial challenges and severability in that context. One of the main points that emerges from this review is the confusion spawned by the Court's ...


Making Sense Of Payments Policy In The Information Age, Ronald J. Mann Jan 2004

Making Sense Of Payments Policy In The Information Age, Ronald J. Mann

Faculty Scholarship

This is a substantially revised and focused version of Payments Policy in the Information Age. This essay in its new form explores how we should design a coherent payments policy, focusing on the incoherence of existing policy related to credit and debit cards. The central point of the essay is that previous analysis has failed to recognize the importance of the underlying transactions in which payments are made to issues ordinarily treated in the legal rules that regulate payment systems. Generally, I argue that issues of payments policy need to be separated into two categories: those for which determination of ...


The Poison Pill In Japan: The Missing Infrastructure, Ronald J. Gilson Jan 2004

The Poison Pill In Japan: The Missing Infrastructure, Ronald J. Gilson

Faculty Scholarship

The fact of a small number of hostile takeover bids in Japan the recent past, together with technical amendments of the Civil Code that would allow a poison pill-like security, raises the question of how a poison pill would operate in Japan should it be widely deployed. This paper reviews the U.S. experience with the pill to the end of identifying what institutions operated to prevent the poison pill from fully enabling the target board to block a hostile takeover. It then considers whether similar ameliorating institutions are available in Japan, and concludes that with the exception of the ...


The Efficient Design Of Option Contracts: Principles And Applications, Avery W. Katz Jan 2004

The Efficient Design Of Option Contracts: Principles And Applications, Avery W. Katz

Faculty Scholarship

The law of contracts has often treated options quite differently from other contractual transactions; for example, the characterization of a transaction as an option contract calls forth specially required formalities, but on the other hand often has the effect of releasing parties from doctrinal limitations on their contractual freedom, such as the duty to mitigate damages or the rule that holds excessively high liquidated damages void as penalties. Such differential treatment is challenging to explain from a functional viewpoint, in part because all contracts resemble options to the extent they are enforceable in terms of monetary damages, and in part ...


The Right To Claim Authorship In U.S. Copyright And Trademarks Law, Jane C. Ginsburg Jan 2004

The Right To Claim Authorship In U.S. Copyright And Trademarks Law, Jane C. Ginsburg

Faculty Scholarship

The U.S. Constitution authorizes Congress to secure for limited times the exclusive right of authors to their writings. Curiously, those rights, as enacted in our copyright laws, have not included the right to be recognized as the author of one's writings. Yet, the interest in being identified with one's work is fundamental, whatever one's conception of the philosophical or policy basis for copyright. That is, whether one sees copyright as a personality right conferring on the author the ownership of the fruits of her labor, or as an economic incentive scheme to promote the production of ...


Market Design With Endogenous Preferences, Aviad Heifetz, Ella Segev, Eric L. Talley Jan 2004

Market Design With Endogenous Preferences, Aviad Heifetz, Ella Segev, Eric L. Talley

Faculty Scholarship

This paper explores the interdependence between market structure and an important class of extra-rational cognitive biases. Starting with a familiar bilateral monopoly framework, we characterize the endogenous emergence of preference distortions during bargaining which cause negotiators to perceive their private valuations differently than they would outside the adversarial negotiation context. Using this model, we then demonstrate how a number of external interventions in the structure and/or organization of market interactions (occurring before trade, after trade, or during negotiations themselves) can profoundly alter the nature of these dispositions. Our results demonstrate that many such interventions frequently (though not always) share ...