Law Commons^™

Consumer Preferences For Performance Defaults, Franklin G. Snyder, Ann M. Mirabito

Michigan Business & Entrepreneurial Law Review

Commercial law in the United States is designed to facilitate private transactions, and thus to enforce the presumed intent of the parties, who generally are free to negotiate the terms they choose. But these contracts inevitably have gaps, both because the parties cannot anticipate every situation that might arise from their relationship, and because negotiation is not costless. When courts are faced with these gaps in a litigation context, they supply default terms to fill them. These defaults usually are set to reflect what courts believe similar parties would have agreed to if they had addressed the issue. These “majoritarian” …

From Environmental Rights To Environmental Rule Of Law: A Proposal For Better Environmental Outcomes, Jessica Scott

Michigan Journal of Environmental & Administrative Law

With the recent lead contamination crisis in Flint, Michigan, the unfavorable United States country report of the former United Nations Special Rapporteur on the human right to safe drinking water and sanitation seems prescient. The Special Rapporteur’s report highlighted the problem of drinking water contaminated from lead pipes and the disproportionate burdens Black Americans face in accessing safe drinking water. The report argues that the U.S. should address these issues by explicitly recognizing a human right to safe drinking water and sanitation under U.S. law.

Like the Special Rapporteur, much of the literature and some environmental advocates call for environmental …

An Empirical Study Of Implicit Takings., James E. Krier, Stewart E. Sterk

Articles

Takings scholarship has long focused on the niceties of Supreme Court doctrine, while ignoring the operation of takings law "on the ground" in the state and lower federal courts, which together decide the vast bulk of all takings cases. This study, based primarily on an empirical analysis of more than 2000 reported decisions ovcr the period 1979 through 2012, attempts to fill that void. This study establishes that the Supreme Court's categorical rules govern almost no state takings cases, and that takings claims based on government regulation almost invariably fail. By contrast, when takings claims arise out of government action …

Carrot Or Stick? The Shift From Voluntary To Mandatory Disclosure Of Risk Factors, Karen K. Nelson, Adam C. Pritchard

Articles

This study investigates risk factor disclosures, examining both the voluntary, incentive-based disclosure regime provided by the safe harbor provision of the Private Securities Litigation Reform Act as well as the SEC's subsequent mandate of these disclosures. Firms subject to greater litigation risk disclose more risk factors, update the language more from year to year, and use more readable language than firms with lower litigation risk. These differences in the quality of disclosure are pronounced in the voluntary disclosure regime, but converge following the SEC mandate as low-risk firms improved the quality of their risk factor disclosures. Consistent with these findings, …

Judging Judicial Elections, Michael S. Kang, Joanna M. Shepherd

Michigan Law Review

Melinda Gann Hall’s new book Attacking Judges: How Campaign Advertising Influences State Supreme Court Elections suggests what seems impossible to many of us—a powerful defense of today’s partisan judicial elections. As judicial races hit new levels of campaign spending and television advertising, there has been a flood of criticism about the increasing partisanship, negativity, and role of money. In view of the “corrosive effect of money on judicial election campaigns” and “attack advertising,” the American Bar Association (ABA) recommends against judicial elections, which are currently used to select roughly 90 percent of state judges. Justice O’Connor, who has championed judicial-election …

Understanding Noncompetition Agreements: The 2014 Noncompete Survey Project, J. J. Prescott, Norman D. Bishara, Evan Starr

Articles

In recent years, scholars and policymakers have devoted considerable attention to the potential consequences of employment noncompetition agreements and to whether legislatures ought to reform the laws that govern the enforcement of these controversial contractual provisions. Unfortunately, much of this interest—and the content of proposed reforms—derives from anecdotal tales of burdensome noncompetes among low-wage workers and from scholarship that is either limited to slivers of the population (across all studies, less than 1%) or relies on strong assumptions about the incidence of noncompetition agreements. Better understanding of the use of noncompetes and effective noncompetition law reform requires a more complete …

Sec Investigations And Securities Class Actions: An Empirical Comparison, Stephen J. Choi, Adam C. Pritchard

Articles

Using actions with both an SEC investigation and a class action as our baseline, we compare the targeting of SEC-only investigations with class-action-only lawsuits. Looking at measures of information asymmetry, we find that investors in the market perceive greater information asymmetry following the public announcement of the underlying violation for class-action-only lawsuits compared with SEC-only investigations. Turning to sanctions, we find that the incidence of top officer resignation is greater for class-action-only lawsuits relative to SEC-only investigations. Our findings are consistent with the private enforcement targeting disclosure violations at least as precisely as (if not more so than) SEC enforcement.

Economic Crisis And The Integration Of Law And Finance: The Impact Of Volatility Spikes, Edward G. Fox, Merritt B. Fox, Ronald J. Gilson

Articles

The 2008 financial crisis raised puzzles important for understanding how the capital market prices common stocks and in turn, for the intersection between law and finance. During the crisis, there was a dramatic five-fold spike, across all industries, in “idiosyncratic risk”—the volatility of individual-firm share prices after adjustment for movements in the market as a whole.

This phenomenon is not limited to the most recent financial crisis. This Article uses an empirical review to show that a dramatic spike in idiosyncratic risk has occurred with every major downturn from the 1920s through the recent financial crisis. It canvasses three possible …

Reforming (But Not Eliminating) The Parental Discipline Defense, Hazel Blum

University of Michigan Journal of Law Reform

This Note argues that although states should retain the parental discipline defense, their legislators should rewrite their statutes to limit the defense to a specific range of disciplinary methods that social science research has shown to have either net-beneficial or net-neutral effects on children. Part II explores religious and cultural attitudes about corporal punishment, including an overview of traditional American attitudes toward corporal punishment. Specifically, it explores how religious teachings, including Evangelical Christianity, Methodism, and Judaism, affect attitudes towards parental discipline. Additionally, Part II will examine the build-up to and aftermath of Sweden’s ban on corporal punishment—the first nation worldwide …

Portmanteau Ascendant: Post-Release Regulations And Sex Offender Recidivism, J. J. Prescott

Articles

The purported purpose of sex offender post-release regulations (e.g., community notification and residency restrictions) is the reduction of sex offender recidivism. On their face, these laws seem well-designed and likely to be effective. A simple economic framework of offender behavior can be used to formalize these basic intuitions: in essence, post-release regulations either increase the probability of detection or increase the immediate cost of engaging in the prohibited activity (or both), and so should reduce the likelihood of criminal behavior. These laws aim to incapacitate people outside of prison. Yet, empirical researchers to date have found essentially no reliable evidence …

Testing Racial Profiling: Empirical Assessment Of Disparate Treatment By Police, Sonja B. Starr

Articles

In this Article, I explore why measuring disparate-treatment discrimination by police is so difficult, and consider the ways that researchers' existing tools can make headway on these challenges and the ways they fall short. Lab experiments have provided useful information about implicit racial bias, but they cannot directly tell us how these biases actually affect real-world behavior. Meanwhile, for observational researchers, there are various hurdles, but the hardest one to overcome is generally the absence of data on the citizen conduct that at least partially shapes policing decisions. Most crime, and certainly most noncriminal "suspicious" or probable-cause-generating behavior, goes unreported …