Law Commons^™

Exponential Growth Bias And The Law: Why Do We Save Too Little, Borrow Too Much, And Fail To React On Time To Deadly Pandemics And Climate Change?, Doron Teichman,, Eyal Zamir, Professor Of Commercial Law

Vanderbilt Law Review

Many human decisions, ranging from the taking of loans with compound interest to fighting deadly pandemics, involve phenomena that entail exponential growth. Yet a wide and robust body of empirical studies demonstrates that people systematically underestimate exponential growth.

This phenomenon, dubbed the exponential growth bias (“EGB”), has been documented in numerous contexts and across different populations, using both experimental and observational methods.

Despite its centrality to human decisionmaking, legal scholarship has thus far failed to account for the EGB. This Article presents the first comprehensive study of the EGB and the law. Incorporating the EGB into legal analysis sheds a …

The Inequity Of Informal Guidance, Joshua D. Blank, Leigh Osofsky

Vanderbilt Law Review

The coexistence of formal and informal law is a hallmark feature of the U.S. tax system. Congress and the Treasury enact formal law, such as statutes and regulations, while the Internal Revenue Service offers the public informal explanations and summaries, such as taxpayer publications, website frequently asked questions, virtual assistants, and other types of taxpayer guidance. Throughout the COVID-19 pandemic, the IRS increased its use of informal law to help taxpayers understand complex emergency relief rules implemented through the tax system.

In contrast to many other legal scholars who have examined important administrative law issues regarding informal tax guidance, in …

Nondelegation In The States, Benjamin Silver

Vanderbilt Law Review

American public law is on the precipice of a nondelegation revival. Yet scholars have largely ignored the greatest wellspring of American nondelegation law: that of the states. As a result, the nondelegation literature is badly in need of a broad and deep examination of state nondelegation. This Article takes up that task by describing the kaleidoscope of contexts in which states apply the nondelegation doctrine. Significantly, state nondelegation reaches deep into public law and covers far more than the legislature-to-agency delegations that preoccupy the discussion at the federal level. This Article analyzes this mess of state nondelegation jurisprudence, arguing that …

Finding The Boundaries Of Equitable Disgorgement, Cameron K. Hood

Vanderbilt Law Review

The disgorgement of “ill-gotten gains” is a significant mechanism for enforcing the securities laws. By compelling a violator of the securities laws to forfeit their illegal proceeds, disgorgement serves as a strong deterrent for securities fraud and an important method by which investors are compensated for unjust losses in the market—and today accounts for the recovery of billions of dollars annually. Despite its importance, commentators in recent years began to call into question the
availability of the disgorgement remedy for the SEC. The SEC purses disgorgement under the agency’s grant for seeking equitable relief for the benefit of investors; however, …

Will Corporations Deliver Value To All Stakeholders?, Lucian A. Bebchuk, Roberto Tallarita

Vanderbilt Law Review

Amid growing concerns for the effects that corporations have on stakeholders, supporters of stakeholder governance advocate relying on corporate leaders to use their discretion to protect stakeholders, and they seem to take corporate pledges to do so at face value. By contrast, critics question whether corporate leaders have incentives to protect stakeholders and to follow through on pledges to do so. We provide empirical evidence that can contribute to resolving the debate between these rival views.

The most celebrated pledge by corporate leaders to protect stakeholders was the Business Roundtable's 2019 Statement on the Purpose of a Corporation (the "BRT …

Authoring Prior Art, Joseph P. Fishman, Kristelia Garcia

Vanderbilt Law Review

Patent law and copyright law are widely understood to diverge in how they approach prior art, the universe of information that already existed before a particular innovation's development. For patents, prior art is paramount. An invention can't be patented unless it is both novel and nonobvious when viewed against the backdrop of all the earlier inventions that paved the way. But for copyrights, prior art is supposed to be virtually irrelevant. Black-letter copyright doctrine doesn't care if a creative work happens to resemble its predecessors, only that it isn't actually copied from them. In principle, then, outside of the narrow …

Deliberately Indifferent: Institutional Liability For Further Harassment In Student-On-Student Title Ix Cases, Jacob R. Goodman

Vanderbilt Law Review

Sexual harassment is an unfortunate problem far too many have experienced. Universities and other educational institutions owe a duty, both legal and moral, to protect students from sexual harassment, and in turn to allow students to receive the full benefits of their education. But a circuit split has limited students' ability to hold educational institutions liable. This circuit split results in the absurd scenario where an individual must experience sexual harassment more than one time to hold their educational institution liable. This Note attempts to fix that by proposing Title IX (the law governing sexual harassment at educational institutions) adopt …

Policing, Masculinities, And Judicial Acknowledgment, Nicholas J. Prendergast

Vanderbilt Law Review

In the 1980s, the Supreme Court held that courts must consider the “totality of the circumstances” when deciding the reasonableness of a police officer’s conduct in an excessive force suit. To this day, the precise meaning of “reasonableness” remains elusive. For years, courts around the country have struggled to articulate what police conduct should and—equally as saliently— should not be considered during reasonableness determinations. Thus far, the Supreme Court has been unwilling to substantively clarify its reasonableness doctrine. This lack of clarity has led to an untenable patchwork of differing legal frameworks throughout the United States.

This issue exists in …

The Ghost Of John Hart Ely, Ryan D. Doerfler, Samuel Moyn

Vanderbilt Law Review

The ghost of John Hart Ely haunts the American liberal constitutional imagination. Despite the failure long ago of any progressive constitutional vision in an increasingly conservative Supreme Court, Ely’s conjectures about the superiority of judges relative to legislatures in the protection of minorities and the policing of the democratic process remain second nature. Indeed, they have been credible enough among liberals to underwrite an anxious or even hostile attitude toward judicial reform. In order to exorcise Ely’s ghost and lay it to rest, this Article challenges his twin conjectures. First, the Article argues that there is little historical and no …

What Property Does, Christopher Serkin

Vanderbilt Law Review

For centuries, scholars have wrestled with seemingly intractable problems about the nature of property. This Article offers a different approach. Instead of asking what property is, it asks what property does. And it argues that property protects people’s reliance on resources by moderating the pace of change. Modern scholarly accounts emphasize voluntary transactions as the source and purpose of reliance in property. Such “transactional reliance” implies strong, stable, and enduring rights. This Article argues that property law also reflects a very different source of reliance on resources, one that rises and falls simply with the passage of time. This new …

The Informed Jury, Daniel Epps, William Ortman

Vanderbilt Law Review

The right to a criminal jury trial is a constitutional disappointment. Cases almost never make it to a jury because of plea bargaining. In the few cases that do, the jury is relegated to a narrow factfinding role that denies it normative voice or the ability to serve as a meaningful check on excessive punishment.

One simple change could situate the jury where it belongs, at the center of the criminal process. The most important thing juries do in criminal cases is authorize state punishment. But today, when a jury returns a guilty verdict, it authorizes punishment without any idea …

High-End Bargaining Problems, William W. Clayton

Vanderbilt Law Review

Many important areas of the law place great confidence in the ability of contracting parties to bargain effectively. In this Article, I question the wisdom of a formalistic faith in bargaining by identifying flaws in the bargaining process at the high end of the market, where parties are sophisticated and have substantial resources to aid them in bargaining.

My analysis focuses on the private equity fund industry, which is widely regarded as one of the most elite contracting spaces in the market. Because of rigorous investor qualification laws and other distinctive features of private equity funds, this industry enjoys many …

What’S The Deference? Interpreting The U.S. Sentencing Guidelines After Kisor, Liam Murphy

Vanderbilt Law Review

For more than three decades, the U.S. Sentencing Guidelines have constrained the punishment doled out by federal judges, limiting discretion that was once nearly unlimited and bringing standardization to the penological decisionmaking process. For twice as long, the Supreme Court has constrained judges in a different way—by requiring that administrative agencies receive deference when they interpret the meaning of their own regulations. At the convergence of these two domains sits “commentary,” or interpretive notes the U.S. Sentencing Commission appends to the otherwise congressionally approved Guidelines. In Stinson v. United States, the Court made clear that commentary should be reviewed and …

Stress Testing Governance, Rory Van Loo

Vanderbilt Law Review

In their efforts to guard against the world's greatest threats, administrative agencies and businesses have in recent years increasingly used stress tests. Stress tests simulate doomsday scenarios to ensure that the organization is prepared to respond. For example, agencies role-played a deadly pandemic spreading from China to the United States the year before COVID- 19, acted out responses to a hypothetical hurricane striking New Orleans months before Hurricane Katrina devastated the city, and required banks to model their ability to withstand a recession prior to the economic downturn of 2020. But too often these exercises have failed to significantly improve …

Challenging The Challengers: How Partisan Citizen Observers Contribute To Disenfranchisement And Undermine Election Integrity, Kate Uyeda

Vanderbilt Law Review

Almost every state allows political parties to sponsor and train private citizens to serve as election observers and sometimes even to challenge the eligibility of other private citizens to vote. These partisan citizen observers, referred to in this Note as “PCOs,” have far too often perpetuated the racism, disenfranchisement, and discrimination that already plague our democratic processes. While election observers can play a valuable role in preserving and maintaining the integrity of our elections at all levels, existing regulations do not effectively guard against discriminatory or intimidating PCO behavior. This Note analyzes the social and legal harms that may result …

The Politics Of Deference, Gregory A. Elinson, Jonathan S. Gould

Vanderbilt Law Review

Like so much else in our politics, the administrative state is fiercely contested. Conservatives decry its legitimacy and seek to limit its power; liberals defend its necessity and legality. Debates have increasingly centered on the doctrine of Chevron deference, under which courts defer to agencies’ reasonable interpretations of ambiguous statutory language. Given both sides’ increasingly entrenched positions, it is easy to think that conservatives have always warned of the dangers of deference, while liberals have always defended its virtues. Not so. This Article tells the political history of deference for the first time, using previously untapped primary sources including presidential …

A Machete For The Patent Thicket: Using Noerr-Pennington Doctrine’S Sham Exception To Challenge Abusive Patent Tactics By Pharmaceutical Companies, Lisa Orucevic

Vanderbilt Law Review

Outrageous drug prices have dominated news coverage of the American healthcare system for years. Yet despite widespread condemnation of skyrocketing drug prices, nothing seems to change. Pharmaceutical companies can raise drug prices with impunity because they hold patents on their drugs, which give them monopolies. These monopolies are only supposed to last twenty years, and then competing lower-cost drugs like generics can enter the market, driving down the costs of pharmaceuticals for all. But pharmaceutical companies have created “patent thickets,” dense webs of overlapping patents surrounding one drug, which have artificially extended the companies’ monopolies for years or even decades …

Duty And Diversity, Chris Brummer, Leo E. Strine, Jr.

Vanderbilt Law Review

In the wake of the brutal deaths of George Floyd and Breonna Taylor, lawmakers and corporate boards from Wall Street to the West Coast have introduced a slew of reforms aimed at increasing Diversity, Equity, and Inclusion (“DEI”) in corporations. Yet the reforms face difficulties ranging from possible constitutional challenges to critical limitations in their scale, scope, and degree of legal obligation and practical effects.

In this Article, we provide an old answer to the new questions facing DEI policy and offer the first close examination of how corporate law duties impel and facilitate corporate attention to diversity. Specifically, we …

Local Power, Alexandra B. Klass, Rebecca Wilton

Vanderbilt Law Review

This Article is about “local power.” We use that term in two distinct but complementary ways. First, local power describes the authority of local governments to enact regulatory policies in the interests of their citizens. Second, local power describes the authority of local governments to exercise proprietary control over the sources and delivery of electric power to their citizens. This dual meaning of local power is particularly important today, as an increasing number of local governments are seriously considering “municipalizing”--taking control of local electric power systems-—at the same time that, outside the electric power sector, many states are constraining local …

Preliminary Damages, Gideon Parchomovsky, Alex Stein

Vanderbilt Law Review

Historically, the law helped impecunious plaintiffs overcome their inherent disadvantage in civil litigation. Unfortunately, this is no longer the case: modern law has largely abandoned the mission of assisting the least well-off. In this Essay, we propose a new remedy that can dramatically improve the fortunes of poor plaintiffs and thereby change the errant path of the law: preliminary damages. The unavailability of preliminary damages has dire implications for poor plaintiffs, especially those wronged by affluent individuals and corporations. Resource-constrained plaintiffs cannot afford prolonged litigation on account of their limited financial means. Consequently, they are forced to either forego suing …

Dynamic Corporate Purpose: Decentralizing The Choice Over Director Orientation, Fields Pierce

Vanderbilt Law Review

The debate over corporate purpose has turned into a “gordian knot” where parties with entrenched beliefs about what the corporation should or should not be within society refuse to waver. There are inherent flaws with the governance models proposed by academics, politicians, and practitioners alike, so a novel method for setting and maintaining corporate purpose is required. This Note asks why there must be a one-size-fits-all approach to purpose and proposes a solution: dynamic corporate purpose.

This Note argues that states should not mandate all corporations hold the same corporate purpose but instead should use the logic of the public …

Unauthorized And Unwise: The Lawful Use Requirement In Trademark Law, Robert A. Mikos

Vanderbilt Law Review

For decades, the United States Patent and Trademark Office (“PTO”) has required trademark owners to comply with sundry nontrademark laws governing the sale of their trademarked goods and services. Pursuant to this “lawful use requirement,” the Agency has refused or even cancelled registration of thousands of marks used on everything from Schedule I controlled substances to mislabeled soap. This Article subjects the Agency’s lawful use requirement to long-overdue scrutiny. It suggests that in requiring compliance with other laws for registration, the PTO has lost sight of the one statute it is supposed to administer. In the process, the Agency has …

The Personification Of The Partnership, Harwell Wells

Vanderbilt Law Review

What does it mean to say a business association is a legal person? The question has shadowed the law of business organizations for at least two centuries. When we say a business is a legal person we may be claiming that the law distinguishes its assets, liabilities, and obligations from those of its owners; or that it has a “real will” and personality apart from its owners; or that it in some way can carry or assert rights generally ascribed to natural persons. This Article sheds new light on these old questions by looking at an oft-overlooked business form, the …

Corporate Personhood And Limited Sovereignty, Elizabeth Pollman

Vanderbilt Law Review

This Article, written for a symposium celebrating the work of Professor Margaret Blair, examines how corporate rights jurisprudence helped to shape the corporate form in the United States during the nineteenth century. It argues that as the corporate form became popular because of the way it facilitated capital lock-in, perpetual succession, and provided other favorable characteristics related to legal personality that separated the corporation from its participants, the Supreme Court provided crucial reinforcement of these entity features by recognizing corporations as rights-bearing legal persons separate from the government. Although the legal personality of corporations is a distinct concept from their …

Fiduciary Duties And Corporate Climate Responsibility, Cynthia A. Williams

Vanderbilt Law Review

Corporate-law scholarship for decades has been occupied with agency costs and how to mitigate them. But when I teach the basic business organizations class, starting with agency law and looking at the fiduciary duties of care, loyalty, and full disclosure of any agent to her principal, we explore both costs and benefits of agency relationships. I do so by introducing Ronald Coase’s theory of the firm. Using an example close to most second-year law students’ experience, that of buying a suit for interviews, I contrast Brooks Brothers establishing its own factories (the “make” decision) with Brooks Brothers using supply chains, …

Underwater Mortgages For Underwater Homes: The Elimination Of Signals In The Coastal Lending Market, Peyton J. Klein

Vanderbilt Law Review

Climate change and sea level rise threaten to increase the default risk of mortgages on homes in coastal areas. Faced with this reality, small coastal lenders have begun selling more climate-sensitive mortgages to Fannie Mae and Freddie Mac, thereby transferring the risk of climate-induced default off the lenders’ books. Fannie Mae and Freddie Mac play a crucial role in supporting America’s mortgage finance system by purchasing qualifying private home loans, packaging them into investable security pools, and guaranteeing timely payment of principal and interest to outside investors. Through selling mortgages to Fannie Mae and Freddie Mac, lenders can use their …

Praxis And Paradox: Inside The Black Box Of Eviction Court, Lauren Sudeall, Daniel Pasciuti

Vanderbilt Law Review

In the American legal system, we typically conceive of legal disputes as governed by specific rules and procedures, resolved in a formalized court setting, with lawyers shepherding both parties through an adversarial process involving the introduction of evidence and burdens of proof. The often-highlighted exception to this understanding is the mass, assembly-line processing of cases, whether civil or criminal, in large, urban, lower-level courts. The gap left unfilled by either of these two narratives is how “court” functions for the average unrepresented litigant in smaller and nonurban jurisdictions across the United States.

For many tenants facing eviction, elements of the …

The People's Ledger: How To Democratize Money And Finance The Economy, Saule T. Omarova

Vanderbilt Law Review

The COVID-19 crisis underscored the urgency of digitizing sovereign money and ensuring universal access to banking services. It pushed two related ideas—the issuance of central bank digital currency and the provision of retail deposit accounts by central banks-—to the forefront of the public policy debate. To date, however, the debate has not produced a coherent vision of how democratizing access to central bank money would—and should—transform and democratize the entire financial system. This lack of a systemic perspective obscures the enormity of the challenge and dilutes our ability to tackle it.

This Article takes up that challenge. It offers a …

Police Arbitration, Stephen Rushin

Vanderbilt Law Review

Before punishing an officer for professional misconduct, police departments often provide the officer with an opportunity to file an appeal. In many police departments, this appeals process culminates in a hearing before an arbitrator. While numerous media reports have suggested that arbitrators regularly overturn or reduce discipline, little legal research has comprehensively examined the outcomes of police disciplinary appeals across the United States.

In order to better understand the use of arbitration in police disciplinary appeals and build on prior research, this Article draws on a dataset of 624 arbitration awards issued between 2006 and 2020 from a diverse range …

The Duty To Update Corporate Emissions Pledges, Nathan Campbell

Vanderbilt Law Review

Facing both internal and external market pressures, a rapidly growing number of private companies are making public, voluntary, and ambitious pledges to reduce or outright eliminate by a certain date or benchmark their greenhouse gas emissions. Yet, ambition and necessity notwithstanding, nonfulfillment of these emission reduction targets (“ERTs”) is a looming, if not an already realized, concern for markets, which are noticeably and increasingly attuned to the long-term value and climate performance of companies. In the absence of a comprehensive disclosure regime for climate performance and risk, this Note highlights the duty to update—a judicial doctrine that polices forward-looking statements, …