Law Commons^™

New Tech V. New Deal: Fintech As A Systemic Phenomenon, Saule T. Omarova

Cornell Law Faculty Publications

Fintech is the hottest topic in finance today. Recent advances in cryptography, data analytics, and machine learning are visibly "disrupting" traditional methods of delivering financial services and conducting financial transactions. Less visibly, fintech is also changing the way we think about finance: it is gradually recasting our collective understanding of the financial system in normatively neutral terms of applied information science. By making financial transactions easier, faster, and cheaper, fintech seems to promise a micro-level "win-win" solution to the financial system's many ills.

This Article challenges such narratives and presents an alternative account of fintech as a systemic, macro-level phenomenon. …

Split Derivatives: Inside The World's Most Misunderstood Contract, Dan Awrey

Cornell Law Faculty Publications

Derivatives are the "bad boys" of modern finance: exciting, dangerous, and fundamentally misunderstood. These misunderstandings stem from the failure of scholars and policymakers to fully appreciate the unique legal and economic structure of derivative contracts, along with the important differences between these contracts and conventional equity and debt securities. This Article seeks to correct these misunderstandings by splitting derivative contracts open, identifying their constituent elements, and observing how these elements interact with one another. These elements include some of the world's most sophisticated state-contingent contracting, the allocation of property and decision-making rights, and relational mechanisms such as reputation and the …

Money's Past Is Fintech's Future: Wildcat Crypto, The Digital Dollar, And Citizen Central Banking, Robert C. Hockett

Cornell Law Faculty Publications

This Essay argues that crypto-currencies will soon go the way of the ‘wildcat’ banknotes of the mid-19th century. As central banks worldwide upgrade their payments systems, the Fed will begin issuing a ‘digital dollar’ that leaves no licit function for what the Author calls ‘wildcat crypto.’ But the imminent change heralds more than a shakeout in fintech. It will also make possible a new era of what the Author calls ‘Citizen Central Banking.’ The Fed will administer a national system of ‘Citizen Accounts.’ This will not only end the problem of the ‘unbanked,’ it will also simplify monetary policy. Instead …

The 'Too Big To Fail' Problem, Saule T. Omarova

Cornell Law Faculty Publications

“Too big to fail” – or “TBTF” – is a popular metaphor for a core dysfunction of today’s financial system: the recurrent pattern of government bailouts of large, systemically important financial institutions. The financial crisis of 2008 made TBTF a household term, a powerful rhetorical device for expressing the widely shared discontent with the pernicious pattern of “privatizing gains and socializing losses” it came to represent in the public’s eye. Ten years after the crisis, TBTF continues to frame much of the public policy debate on financial regulation. Yet, the analytical content of this term remains remarkably unclear.

Taking a …

Noncitizens In The U.S. Military: Navigating National Security Concerns And Recruitment Needs, Muzaffar Chishti, Austin Rose, Stephen W. Yale-Loehr

Cornell Law Faculty Publications

Foreign nationals have served in the U.S. military throughout American history. Indeed, in many chapters in U.S. history, they have been encouraged to serve with the promise of expedited avenues for naturalization. However, in recent years, noncitizens have faced increasing hurdles to serving their new country. Citing national security concerns, Congress and the U.S. Department of Defense (DOD) have introduced a series of policies that significantly increase the vetting requirements for noncitizen military recruits and modify the processes by which they are trained and given a chance to naturalize. These new policies have limited the enlistment of noncitizen soldiers, delayed …

Teaching Students To Use Feedback To Improve Their Legal-Writing Skills, Lara Gelbwasser Freed, Joel Atlas

Cornell Law Faculty Publications

In an age in which writing-software programs tout formative feedback on student papers and advertise clear and compelling sentences, the roles of professor and student in the assessment and outcome-achievement process may appear passive, or even supplanted. Using feedback to improve learning, however, requires both professor and student to play active roles. In legal education, law professors are tasked with identifying and assessing learning outcomes. And much has been written about these tasks as they relate to both doctrinal and legal-writing courses. But less attention has been devoted to law students’ role in responding to feedback on their writing and …

Bone Crusher 2.0: The Fourth Annual Greg Lastowka Memorial Lecture, James Grimmelmann

Cornell Law Faculty Publications

No abstract provided.

Removals To Somalia In Light Of The Convention Against Torture: Recent Evidence From Somali Bantu Deportees, Daniel J. Van Lehman, Estelle M. Mckee

Cornell Law Faculty Publications

This paper presents the results of a survey of Somali Bantu deported from the United States from 2016 to 2018, to determine whether they were subjected to torture upon arrival in Somalia. Of the 20 deportees interviewed, 55 percent suffered torture at least once, with the highest percentage—66.7 percent—experienced by individuals deported in 2018. The abuse, which included kidnapping, stabbings, and beatings with truncheons and whips, meets the definition of torture under Article 3 of the Convention Against Torture. Individuals were intentionally subjected to severe pain and suffering for an unlawful purpose: ransom. Further, most of the abuse was inflicted …

The Silliness Of Magical Realism, Kevin M. Clermont

Cornell Law Faculty Publications

Relative plausibility, even after countless explanatory articles, remains an underdeveloped model bereft of underlying theory. Multivalent logic, a fully developed and accepted system of logic, comes to the same endpoint as relative plausibility. Multivalent logic would thus provide the missing theory, while it would resolve all the old problems of using traditional probability theory to explain the standards of proof as well as the new problems raised by the relative plausibility model. For example, multivalent logic resolves the infamous ‘conjunction paradox’ that traditional probability creates for itself, and which relative plausibility tries to sweep under the rug.

Yet Professors Allen …

Abstention At The Border, Maggie Gardner

Cornell Law Faculty Publications

The lower federal courts have been invoking “international comity abstention” to solve a range of problems in cross-border cases, using a wide array of tests that vary not just across the circuits, but within them as well. That confusion will only grow, as both scholars and the Supreme Court have yet to clarify what exactly “international comity abstention” entails. Meanwhile, the breadth of “international comity abstention” stands in tension with the Supreme Court’s recent reemphasis on the federal judiciary’s obligation to exercise congressionally granted jurisdiction. Indeed, loose applications of “international comity abstention” risk undermining not only the expressed preferences of …

Constitutional Maturity, Or Reading Weber In The Age Of Trump, Josh Chafetz

Cornell Law Faculty Publications

Anxiety abounds about the state of American constitutional democracy in “the age of Trump.” A wide range of commentators have raised serious and profound questions about the resilience of our political institutions and the capacity of our current political leadership.

This Essay, written for a Constitutional Commentary symposium on “Constitutional Law in the Trump Era,” attempts to get a handle on that anxiety by taking a step back and viewing our contemporary situation through a broader lens—a lens crafted in a different time and place, but responsive to a related set of political questions.

In particular, this Essay turns to …

Listeners' Choices, James Grimmelmann

Cornell Law Faculty Publications

Speech is a matching problem. Speakers choose listeners, and listeners choose speakers. When their choices conflict, law often decides who speaks to whom. The pattern is clear: First Amendment doctrine consistently honors listeners' choices for speech. When willing and unwilling listeners' choices conflict, willing listeners win. And when competing speakers' choices conflict, listeners' choices break the tie. This Essay provides a theoretical framework for analyzing speech problems in terms of speakers' and listeners' choices, an argument for the centrality of listener choice to any coherent theory of free speech, and supporting examples from First Amendment caselaw.

Accounting For Awards: An Examination Of Juror Reasoning Behind Pain And Suffering Damage Award Decisions, Krystia Reed, Valerie P. Hans, Valerie F. Reyna

Cornell Law Faculty Publications

What do civil jurors think about when they are asked to make damage award decisions? Given the secrecy of the jury deliberation process, often we are unaware of jurors' thought processes. This Article presents the results from three studies in which mock jurors explained the reasoning behind their damage awards for pain and suffering. We highlight the most common explanations and distinguish between reasons justifying high and low pain and suffering awards. We conclude with a discussion for what this means for attorneys during trial.

Comprehensive Rezonings, Sara C. Bronin

Cornell Law Faculty Publications

Of all powers given to local governments, the power to zone is one of the most significant. Zoning dictates everything that gets built in a locality—and thus effectively dictates all of the key activities that take place within it. Nationwide, most zoning codes were adopted in the first half of the twentieth century. Many, including the zoning codes of New York City and Chicago, were significantly revised in the 1960s. While these codes have been revised piecemeal, just a few American cities have undergone a comprehensive revision: replacing the old code with a completely new one.

A comprehensive rezoning can …

Gains, Losses, And Judges: Framing And The Judiciary, Jeffrey J. Rachlinski, Andrew J. Wistrich

Cornell Law Faculty Publications

Losses hurt more than foregone gains-an asymmetry that psychologists call "loss aversion." Losses cause more regret than foregone gains, and people struggle harder to avoid losses than to obtain equivalent gains. Loss aversion produces a variety of anomalous behaviors: people's preferences depend upon the initial reference point (reference-dependent choice); people are overly focused on maintaining the status quo (status quo bias); people attach more value to goods they own than to identical goods that they do not (endowment effect); and people take excessive risks to avoid sure losses (risk seeking in the face of losses). These phenomena are so pervasive …

Congressional Power To Strip State Courts Of Jurisdiction, Michael C. Dorf

Cornell Law Faculty Publications

The very substantial literature on the scope of congressional power to strip courts of jurisdiction contains a gap: it does not discuss the source of the affirmative power of Congress to strip state courts of their jurisdiction. Laws granting exclusive federal court jurisdiction over some category of cases are necessary and proper to the exercise of the power to ordain and establish lower federal courts, but what power does Congress exercise when it strips both state and federal courts of jurisdiction? The answer depends on the nature of the case. In stripping all courts of the power to hear federal …

Trade And Development In An Era Of Multipolarity And Reterritorialization, Chantal Thomas

Cornell Law Faculty Publications

This essay will consider two phenomena emergent within international trade law and policy: multipolarity (the emergence of new global powers alongside existing hegemons) and reterritorialization (the rise, sometimes in quite virulent form, of economic nationalism as a basis for asserting State controls over, and barriers to, cross-border trade). These new dynamics present serious challenges and dangers. This essay will consider whether they might also create opportunities for reshaping the international economic order to be more supportive of the longstanding concerns of developing States. In doing so, the essay will elucidate key aspects of both the global political economy and the …

Economic Rationality And Ethical Values In Design-Defect Analysis: The Trolley Problem And Autonomous Vehicles, W. Bradley Wendel

Cornell Law Faculty Publications

The trolley problem is a well-known thought experiment in moral philosophy, used to explore issues such as rights, deontological reasons, and intention and the doctrine of double effect. Recently it has featured prominently in popular discussions of decision making by autonomous vehicle systems. For example, a Mercedes-Benz executive stated that, if faced with the choice between running over a child that had unexpectedly darted into the road and steering suddenly, causing a rollover accident that would kill the driver, an automated Mercedes would opt to kill the child. This paper considers not the ethical issues raised by such dilemmas, but …

A Structural Approach To Case Synthesis, Fact Application, And Persuasive Framing Of The Law, Lara Gelbwasser Freed, Joel Atlas

Cornell Law Faculty Publications

Lawyering-skills courses, although typically writing-focused, address a wide array of topics. Indeed, to prepare an effective legal document, students must not only write well but analyze well. And, although teaching the pure-writing aspects of the course is certainly a challenge, teaching the analysis-related skills is often the most difficult.

Among the thorniest of these skills are synthesizing cases, applying facts, and persuasively framing the law. Professors struggle to teach these skills, and students consistently struggle to understand and implement them. To lighten the burden for both professors and students, we have approached these skills structurally and, in doing so, have …

The Constitutional Politics Heller Launched, Michael C. Dorf

Cornell Law Faculty Publications

No abstract provided.

A Cooperative Federalism Approach To Shareholder Arbitration, Zachary D. Clopton, Verity Winship

Cornell Law Faculty Publications

Arbitration dominates private law across an ever-expanding range of fields. Its latest target, however, may not be a new field as much as a new form: mandatory arbitration provisions built into corporate charters and bylaws. Recent developments in corporate law coupled with signals from the Securities and Exchange Commission suggest that regulators may be newly receptive to shareholder arbitration. What they do next may have dramatic consequences for whether and how corporate and securities laws are enforced.

The debate about the merits of arbitration is well worn, but its application to shareholder claims opens the door to a different set …

Balanced Judicial Realism In The Service Of Justice: Judge Richard D. Cudahy, Elizabeth Mertz, Cynthia Grant Bowman

Cornell Law Faculty Publications

There is a quiet irony to be found in scholarly writings about the judiciary, which often center around high-profile jurists selected as the “great” judges. But there are great judges who do not receive or even want such widespread recognition, and who do not discuss their philosophy of judging—they simply focus on the job in front of them. Judges who operate with humility can often be very quiet about their legacies—brushing the issue off, as if uncomfortable with the attention. Anyone who knew Judge Richard D. Cudahy of the United States Court of Appeals for the Seventh Circuit will recognize …

Truthfulness As An Ethical Form Of Life, W. Bradley Wendel

Cornell Law Faculty Publications

This essay, a contribution to a symposium at Duquesne Law School entitled Resurrecting Truth in American Law and Public Discourse, was inspired by an observation made by Bernard Williams, in his paper “Saint-Just’s Illusion.” Williams noted that the issue of moral objectivity always come back to what to do with disagreement in matters of morality, and what sorts of considerations might lead the other party out of error. And in his book, Truth and Truthfulness, Williams argued (among other things, in a rich and subtle work) that the dispositions of truthfulness cultivated by citizens of a liberal political community are …

The Shadow Payment System, Dan Awrey, Kristin Van Zwieten

Cornell Law Faculty Publications

Banking, derivatives, and structured finance may attract the lion's share of accolades and approbation in global finance-but payment systems are where the money is. Historically, payment systems in most jurisdictions have been legally and operationally intertwined with the conventional banking system. The stability of these payment systems has thus parasitically benefited from the unique prudential regulatory strategies imposed on deposit-taking banks. These strategies include emergency liquidity assistance or "lender of last resort" facilities, deposit guarantee schemes, and special bankruptcy or "resolution" regimes for failing banks. Importantly, these strategies have the practical effect of relaxing the strict application of corporate bankruptcy …

What Unconditional Credence In Individual Desert Claims Does Retributivism Require?, Emad H. Atiq

Cornell Law Faculty Publications

Punishing a person based on low unconditional credence in their deservingness to be punished is consistent with retributivist deontological principles. Negative retributivism absolutely prohibits the intentional or knowing infliction of undeserved harm on individuals identified as undeserving, not the intentional or knowing infliction of risks of undeserved harm on individuals. Meanwhile, the knowing infliction of undeserved harm on some unidentified individuals generates not overriding reasons against punishment, but pro tanto reasons against punishment that are to be weighed against other non-overriding reasons for punishment like crime prevention. The upshot is that uncertainty regarding any identified person’s deservingness to be punished …

Diagonal Public Enforcement, Zachary D. Clopton

Cornell Law Faculty Publications

Civics class teaches the traditional mode of law enforcement: The legislature adopts a regulatory statute, and the executive enforces it in the courts. But in an increasingly interconnected world, a nontraditional form of regulatory litigation is possible in which public enforcers from one government enforce laws adopted by a second government in the second government’s courts. That is, one government provides the executive while the second provides the legislature and the judiciary. I call this nontraditional form “diagonal public enforcement.”

Although diagonal public enforcement has escaped systematic study, one can find examples in U.S. courts going back more than a …

Procedural Retrenchment And The States, Zachary D. Clopton

Cornell Law Faculty Publications

Although not always headline grabbing, the Roberts Court has been highly interested in civil procedure. According to critics, the Court has undercut access to justice and private enforcement through its decisions on pleading, class actions, summary judgment, arbitration, standing, personal jurisdiction, and international law.

While I have much sympathy for the Court's critics, the current discourse too often ignores the states. Rather than bemoaning the Roberts Court's decisions to limit court access-and despairing further developments in the age of Trump-we instead might productively focus on the options open to state courts and public enforcement. Many of the aforementioned decisions are …

Living Apart Together As A “Family Form” Among Persons Of Retirement Age: The Appropriate Family Law Response, Cynthia Grant Bowman

Cornell Law Faculty Publications

As the Baby Boom generation enters retirement age, patterns of living among older persons are beginning to change. Unlike their predecessors, the Baby Boomers lived through the sexual revolution, divorced more easily and more often, and institutionalized new patterns of coupling, such as cohabitation. As a result, the rate of marriage has declined and the percent of the population classified as “single” has gone up. This age cohort has now moved into the sixty-five-plus group and makes up those we think of as the retirement generation, or the “Third Age” group. As longevity has increased and the divorce rate for …

Private Wealth And Public Goods: A Case For A National Investment Authority, Robert C. Hockett, Saule T. Omarova

Cornell Law Faculty Publications

Much American electoral and policy debate now centers on how best to reignite the nation’s economic dynamism and rebuild its competitive strength. Any such undertaking presents an extraordinary challenge, demanding a correspondingly extraordinary institutional response. This Article proposes precisely such a response. It designs and advocates a new public instrumentality--a National Investment Authority (“NIA”)--charged with the critical task of devising and implementing a comprehensive long-term development strategy for the United States.

Patterned in part after the New Deal-era Reconstruction Finance Corporation, in part after modern sovereign wealth funds, and in part after private equity and venture capital firms, the NIA …

Article 2 Of The Ucc: Some Thoughts On Success Or Failure In The Twenty-First Century, Robert A. Hillman

Cornell Law Faculty Publications

The volume of litigation on Uniform Commercial Code Article 2, along with the rise of e-commerce, raises the question of whether Article 2 can succeed in the twenty-first century. There are, of course, many ways to measure success or failure of legislation. One strategy, applied here, is to evaluate Article 2 against the UCC’s ambitious “purposes and policies” of simplifying, clarifying, and modernizing commercial law, supporting commercial practices, and promoting uniformity of the law among the states. In doing so, I ask three questions that help determine when particular sections of Article 2 impede these goals and are ripe for …