Law Commons^™

Into The Void: Governing Finance In Central & Eastern Europe, Katharina Pistor

Faculty Scholarship

Twenty years after the fall of the iron curtain, which for decades had separated East from West, many countries of Central and Eastern Europe (CEE) are now members of the European Union and some have even adopted the Euro. Their readiness to open their borders to foreign capital and their faith in the viability of market self-governance as well as supra-national governance of finance is both remarkable and almost unprecedented. The eagerness of the countries in CEE to join the West and to become part of a regional and global regime as a way of escaping their closeted socialist past …

Banking Reform In The Chinese Mirror, Katharina Pistor

Faculty Scholarship

This paper analyzes the transactions that led to the partial privatization of China’s three largest banks in 2005-06. It suggests that these transactions were structured to allow for inter-organizational learning under conditions of uncertainty. For the involved foreign investors, participation in large financial intermediaries of central importance to the Chinese economy gave them the opportunity to learn about financial governance in China. For the Chinese banks partnering with more than one foreign investor, their participation allowed them to benefit from the input by different players in the global financial market place and to learn from the range of technical and …

Chevron'S Two Steps, Kenneth A. Bamberger, Peter L. Strauss

Faculty Scholarship

The framework for judicial review of administrative interpretations of regulatory statutes set forth in the landmark Chevron U.S.A. v. Natural Resources Defense Council decision prescribes two analytic inquiries, and for good reason. The familiar two-step analysis is best understood as a framework for allocating interpretive authority in the administrative state; it separates questions of statutory implementation assigned to independent judicial judgment (Step One) from questions regarding which the courts role is limited to oversight of agency decisionmaking (Step Two).

The boundary between a reviewing court's decision and oversight roles rests squarely on the question of statutory ambiguity. For while courts, …

Redesigning The Sec: Does The Treasury Have A Better Idea?, John C. Coffee Jr., Hillary A. Sale

Faculty Scholarship

Symposiums supply a snapshot in time. By observing the common assumptions and shared frameworks of a collection of scholars writing contemporaneously, one gains both insight into the intellectual world of a past era and the ability to measure its distance from our own. Twenty-five years ago the Virginia Law Review organized a noted symposium (the "1984 Symposium") to celebrate the 50th anniversary of the SEC. A number of prominent scholars participated, and its articles have been much cited.

In (Partial) Defense Of Strict Liability In Contract, Robert E. Scott

Faculty Scholarship

Many scholars believe that notions of fault should and do pervade contract doctrine. Notwithstanding the normative and positive arguments in favor of a fault-based analysis of particular contract doctrines, I argue that contract liability is strict liability at its core. This core regime is based on two key prongs: (1) the promisor is liable to the promisee for breach, and that liability is unaffected by the promisor's exercise of due care or failure to take efficient precautions; and (2) the promisor's liability is unaffected by the fact that the promisee, prior to the breach, has failed to take cost-effective precautions …

Post-Modern Meditations On Punishment: On The Limits Of Reason And The Virtues Of Randomization, Bernard E. Harcourt, Alon Harel, Ken Levy, Michael M. O'Hear, Alice Ristroph

Faculty Scholarship

In this Criminal Law Conversation (Robinson, Ferzan & Garvey, eds., Oxford 2009), the authors debate whether there is a role for randomization in the penal sphere - in the criminal law, in policing, and in punishment theory. In his Tanner lectures back in 1987, Jon Elster had argued that there was no role for chance in the criminal law: “I do not think there are any arguments for incorporating lotteries in present-day criminal law,” Elster declared. Bernard Harcourt takes a very different position and embraces chance in the penal sphere, arguing that randomization is often the only way to avoid …

Our Twenty-First Century Constitution, Peter L. Strauss

Faculty Scholarship

Accommodating our Eighteenth Century Constitution to the government that Congress has shaped in the intervening two and a quarter centuries, Professor Strauss argues, requires accepting the difference between the President’s role as “Commander in Chief” of the Nation’s military, and his right to seek written opinions from those Congress has empowered to administer domestic laws under his oversight. Thus, the question for today is not whether the PCAOB offends Eighteenth Century ideas about government structure, but the question asked by Professors Bruff, Lawson, and Pildes – whether the relationships between PCAOB and SEC, SEC and President meet the constitutional necessity …

The Author's Place In The Future Of Copyright, Jane C. Ginsburg

Faculty Scholarship

Vesting copyright in Authors – rather than exploiters – was an innovation in the 18th century. It made authorship the functional and moral center of the system. But all too often in fact, authors neither control nor derive substantial benefits from their work. In the copyright polemics of today, moreover, authors are curiously absent; the overheated rhetoric that currently characterizes much of the academic and popular press tends to portray copyright as a battleground between evil industry exploiters and free-speaking users. If authors have any role in this scenario, it is at most a walk-on, a cameo appearance as victims …

There Is No Single Field Of Law And Development, Katharina Pistor

Faculty Scholarship

Let me begin – following Ohnesorge following Trubek and Santos – with the notion that the concepts of “law and development” and “rule of law” are closely intermingled with the process of legal reform in developing countries and the role foreign advisers and multilateral institutions play in that undertaking. Describing the “field” in this fashion reveals that the glue that holds together a set of disparate activities by disparate actors (for under what other circumstances do we assume common ground between family and securities lawyers, or professors and world bankers?) is a shared belief in the virtue of law.

Abolishing The Time Tax On Voting, Elora Mukherjee

Faculty Scholarship

A “time tax” is a government policy or practice that forces one citizen to pay more in time to vote compared with her fellow citizens. While few have noticed the scope of the problem, data indicate that, due primarily to long lines, hundreds of thousands if not millions of voters are routinely unable to vote in national elections as a result of the time tax, and that the problem disproportionately affects minority voters and voters in the South. This Article documents the problem and offers a roadmap for legal and political strategies for solving it. The Article uses as a …

On The Origins Of Originalism, Jamal Greene

Faculty Scholarship

For all its proponents' claims of its necessity as a means of constraining judges, originalism is remarkably unpopular outside the United States. Recommended responses to judicial activism in other countries more typically take the form of minimalism or textualism. This Article considers why. Ifocus particular attention on the political and constitutional histories of Canada and Australia, nations that, like the United States, have well-established traditions of judicial enforcement of a written constitution, and that share with the United States a common law adjudicative norm, but whose political and legal cultures less readily assimilate judicial restraint to constitutional historicism. I offer …

Selling Originalism, Jamal Greene

Faculty Scholarship

Justice Scalia has described an originalist approach to interpretation as a prerequisite to faithful application of a written Constitution. If, says he, constitutional judicial review is implicit in the notion that the Constitution is paramount law, as has been settled in this country at least since Marbury v. Madison, then that review must be guided by the ordinary tools of legislative interpretation. In a democracy, serious legislative interpretation requires that judges keep faith with the meaning of the text as understood at the time of enactment, not as desired by those judges or by anyone else who does not, …

Facial And As-Applied Challenges Under The Roberts Court, Gillian E. Metzger

Faculty Scholarship

One recurring theme of the Roberts Court's jurisprudence to date is its resistance to facial constitutional challenges and preference for as-applied litigation. On a number of occasions the Court has rejected facial constitutional challenges while reserving the possibility that narrower as-applied claims might succeed. According to the Court, such as-applied claims are "the basic building blocks of constitutional adjudication." This preference for as-applied over facial challenges has surfaced with some frequency, across terms and in contexts involving different constitutional rights, at times garnering support from all the Justices. Moreover, the Roberts Court has advocated the as-applied approach in contexts in …

The Law Of Armed Conflict And Detention Operations In Afghanistan, Matthew C. Waxman

Faculty Scholarship

In reflecting on the arc of US and coalition detention operations in Afghanistan, three key issues related to the law of armed conflict stand out: one substantive, one procedural and one policy. The substantive matter – what are the minimum baseline treatment standards required as a matter of international law? – has clarified significantly during the course of operations there, largely as a result of the US Supreme Court's holding in Hamdan v. Rumsfeld. The procedural matter – what adjudicative processes does international law require for determining who may be detained? – eludes consensus and has become more controversial …

Davis V. Fec: The Roberts Court's Continuing Attack On Campaign Finance Reform, Richard Briffault

Faculty Scholarship

In Davis v. FEC, decided on the last day of the October 2007 Term, a closely divided Supreme Court invalidated the so-called Millionaires' Amendment, which was a provision added to the Federal Election Campaign Act ("FECA") as part of the Bipartisan Campaign Reform Act ("BCRA") of 2002 to make it easier for Senate and House candidates to raise private contributions when they run against an opponent who uses a substantial amount of personal wealth to pay for his or her campaign. From the reform perspective, the loss of the Millionaires' Amendment was not of great moment. The Amendment was …

Rethinking The "Law And Finance" Paradigm, Katharina Pistor

Faculty Scholarship

The label "Law and Finance" stands for a body of literature that has dominated policy-making and academic debates for the past decade. The literature has its origin in a series of papers co-authored by Andrei Shleifer, Rafael La Porta, Florencio Lopez-de-Silanes and a cohort of other researchers, including Robert Vishny, Simeon Djankov et al. (hereinafter referred to as LLS et al.). More than ten years after "Law and Finance" was first published, it seems appropriate to step back and consider the contribution this literature has made, but also to point out where it has gone astray and deviated attention from …

The Costs Of Carbon: Examining The Competitiveness And International Trade Dimensions Of The Waxman-Markey House Bill, Svetlana German

Sabin Center for Climate Change Law

As the United States considers unilateral climate change action, uncertainty exists as to the compatibility of the proposed trade related measures to global warming. This paper considers the rationale behind any trade measures designed to address competitiveness and carbon leakage following the introduction of unilateral climate change legislation (Part I). The paper then assesses the international legality of the proposed measures in the Waxman-Markey Bill under World Trade Organisation (WTO) law (Part II) and proposes alternative mechanisms that may yield economically sound solutions while remaining mindful of equitable principles (Part III).

The Warren Court, Legalism And Democracy: Sketch For A Critique In A Style Learned From Morton Horwitz, William H. Simon

Faculty Scholarship

Morton Horwitz's Transformation books developed a critical approach that elaborates the underlying premises of legal doctrine and compares them to suppressed or ignored alternative perspectives. However, Horwitz's Warren Court book is largely an appreciation of the Court's doctrine that accepts at face value its underlying premises and the judges' claim to vindicate democratic values. In this essay, I speculate on what a Transformation-style critique of the Warren Court might look like and suggest that the Court is vulnerable to criticisms analogous to those the Transformation books make of earlier doctrine. I suggest that book ignores an alternative perspective on social …

Civil Liability And Mandatory Disclosure, Merritt B. Fox

Faculty Scholarship

This Article explores the efficient design of civil liability for mandatory securities disclosure violations by established issuers. An issuer not publicly offering securities at the time of a violation should have no liability. Its annual filings should be signed by an external certifier – an investment bank or other well-capitalized entity with financial expertise. If the filing contains a material misstatement and the certifier fails to do due diligence, the certifier should face measured liability. Officers and directors should face similar liability, capped relative to their compensation but with no indemnification or insurance allowed. Damages should be payable to the …

Taking Action In New York On Climate Change, Michael B. Gerrard, David Driesen, Veronica Eady Famira, J. Kevin Healy, Katrina Kuh, Edward Lloyd, Eileen Millett, David Paget, Virginia Robbins, Patricia Salkin, James Sevinsky, James Van Nostrand

Faculty Scholarship

The New York State Bar Association (NYSBA) Task Force on Global Warming (the Task Force) has been convened by NYSBA President Bernice Leber to summarize New York’s existing laws and programs regarding climate change and to make specific proposals that the State can implement in a timely and cost-effective fashion to reduce greenhouse gas (GHG) emissions and to prepare for the impacts of climate change. New York has taken many steps to address climate change; however, there is much more that can be done. The Task Force has not attempted to comprehensively suggest every possible action, but rather has selected …

Ascertaining The Parties' Intentions In Arbitral Design, George A. Bermann

Faculty Scholarship

Supreme Court case law teaches us that the federal interest in arbitration does not consist of enforcing agreements to arbitrate according to some sort of abstract or ideal arbitral model, but rather according to the particular arbitral model upon which the parties had agreed. This body of law is driven by the same notions of party autonomy that underlie the law of arbitration generally. That parties may agree to forego access to national courts in favor of arbitration is an initial manifestation of that attitude. By logical extension, the parties also enjoy extraordinary latitude in determining the features that "their" …

Creditor Control And Conflict In Chapter 11, Kenneth M. Ayotte, Edward R. Morrison

Faculty Scholarship

We analyze a sample of large privately and publicly held businesses that filed Chapter 11 bankruptcy petitions during 2001. We find pervasive creditor control. In contrast to traditional views of Chapter 11, equity holders and managers exercise little or no leverage during the reorganization process. 70 percent of CEOs are replaced in the two years before a bankruptcy filing, and few reorganization plans (at most 12 percent) deviate from the absolute priority rule to distribute value to equity holders. Senior lenders exercise significant control through stringent covenants, such as line-item budgets, in loans extended to firms in bankruptcy. Unsecured creditors …

Painting Redd Offsets Green: A Case For Statutory Deuteranopia, Rommel Casis

Sabin Center for Climate Change Law

Offsets generated by projects for reducing emissions from deforestation and degradation (“REDD”) is a particularly controversial form of carbon offset. Excluded from the Kyoto Protocol mechanisms, REDD offsets are now making a comeback ever since the Bali Action Plan specifically referred to REDD. Most recently, the Copenhagen Accord recognized the crucial role of REDD and the need to enhance removals of GHG emissions by forests and agreed on the need to provide incentives to such actions to enable the mobilization of financial resources from developed countries.4 It would seem therefore that the issuance and trade of REDD offsets may finds …

Contract Design And The Structure Of Contractual Intent, Jody S. Kraus, Robert E. Scott

Faculty Scholarship

Modern contract law is governed by a two-stage adjudicative regime – an inheritance of the centuries-old conflict between law and equity. Under this regime, formal contract terms are treated as prima facie provisions that courts can override by invoking equitable doctrines so as to substantially "correct" the parties' contract by realigning it with their contractual intent. This ex post judicial determination of the contractual obligation serves as a fallback mechanism for vindicating the parties' contractual intent whenever the formal contract terms fall short of achieving the parties' purposes. Honoring the contractual intent of the parties is thus the central objective …

Heller High Water? The Future Of Originalism, Jamal Greene

Faculty Scholarship

Has originalism won? It's easy to think so, judging from some of the reaction to the Supreme Court's recent decision in District of Columbia v. Heller. The Heller Court held that the District of Columbia could neither ban possession of handguns nor require that all other firearms be either unloaded and disassembled or guarded by a trigger lock. In finding for the first time in the Court's history that a gun control law violated the Second Amendment, Justice Scalia's opinion for the 5-4 majority appeared to be a sterling exemplar of originalism, the method of constitutional interpretation that he …

Kernochan Center News - Spring 2009, Kernochan Center For Law, Media And The Arts

Kernochan Center for Law, Media, and the Arts

No abstract provided.

Agenda For Private Sector Reform: Omnibus Policy Recommendations For A Post-Crisis Market, Millstein Center For Corporate Governance And Performance

Ira M. Millstein Center for Global Markets and Corporate Ownership

The global financial crisis has exposed a raft of market weaknesses and failures The Center has concentrated on probing urgent, corporate governance-related issues where it identified apparent gaps in knowledge, insight and infrastructure. Policy Briefings have addressed the advisory vote on executive compensation; board-shareowner communications; proxy voting reform; independent board leadership; risk oversight; pay for performance; and shareowner stewardship. Using global perspectives, they address key concerns within the relevant subject areas and attempt to gather and present practical recommendations and ideas.

This report compiles summaries of the Center’s recommendations on these seven key areas from 2007 through mid-2009. The objective …

Pay, Risk And Stewardship: Private Sector Architecture For Future Capital Markets, Mariana Pargendler

Ira M. Millstein Center for Global Markets and Corporate Ownership

The recent financial crisis revealed a massive failure of institutions that populate the world’s capital markets. Banks, investors, ratings agencies, regulators and numerous other players demonstrated that confidence in market responses was misplaced. The loss of faith in capital market institutions has represented a significant hurdle to recovery as financial institutions continue to be wary of one another, and the public is wary of all of them.

Restoring trust in the system requires two distinct pillars of reform. The first pillar, reform of the financial regulatory system, both nationally and globally, has received most of the attention so far. Many …

Chairing The Board: The Case For Independent Leadership In Corporate North America, Millstein Center For Corporate Governance And Performance

Ira M. Millstein Center for Global Markets and Corporate Ownership

The number of non-executive chairmen at companies in North America has been increasing year by year. Recent figures, according to the 2008 Spencer Stuart Board Index, indicate that the last decade has seen a growing trend in separating the roles of the Chief Executive Officer (ceo) and the chairman of the board. In 1998, 16% of the s&p 500 featured distinct chairmen. Data shows that in 2008 as many as 39% appoint someone other than the ceo to chair the board. Traditionally, even in companies that split the role, the chairman was not completely independent, but rather commonly the ex-ceo …

Voting Integrity: Practices For Investors And The Global Proxy Advisory Industry, Meagan Thompson-Mann

Ira M. Millstein Center for Global Markets and Corporate Ownership

Accountability of corporate boards to shareowners rests in large part on the integrity of the system by which investors vote their proxy ballots. Shareowners rely on the vote to affect the governance of a company; corporate directors see the vote as a barometer of investor confidence in board stewardship. Outcomes determine the fate of director tenure, mergers, acquisitions, capital raising, remuneration plans and other critical decisions with sometimes profound consequences for stakeholders and the marketplace.

However, this briefing finds that the proxy voting system in the US and other markets is chronically subject to criticism that it is short on …