Law Commons^™

How Algorithmic Trading Undermines Efficiency In Capital Markets, Yesha Yadav

Vanderbilt Law School Faculty Publications

This Article argues that the rise of algorithmic trading undermines efficient capital allocation in securities markets. It is a bedrock assumption in theory that securities prices reveal how effectively public companies utilize capital. This conventional wisdom rests on the straightforward premise that prices reflect available information about a security and that investors look to prices to decide where to invest and whether their capital is being productively used. Unsurprisingly, regulation relies pervasively on prices as a proxy for the allocative efficiency of investor capital.

Algorithmic trading weakens the ability of prices to function as a window into allocative efficiency. This …

From Blame To Punishment: Disrupting Prefrontal Cortex Activity Reveals Norm Enforcement Mechanisms, Owen D. Jones, Justin W. Martin, Joshua W. Buckholtz, Michael T. Treadway, Katherine Jan, David H. Zald, Rene Marois

Vanderbilt Law School Faculty Publications

The social welfare provided by cooperation depends on the enforcement of social norms. Determining blameworthiness and assigning a deserved punishment are two cognitive cornerstones of norm enforcement. Although prior work has implicated the dorsolateral prefrontal cortex (DLPFC) in norm-based judgments, the relative contribution of this region to blameworthiness and punishment decisions remains poorly understood. Here, we used repetitive transcranial magnetic stimulation (rTMS) and fMRI to determine the specific role of DLPFC function in norm-enforcement behavior. DLPFC rTMS reduced punishment for wrongful acts without affecting blameworthiness ratings, and fMRI revealed punishment-selective DLPFC recruitment, suggesting that these two facets of norm-based …

Zivotofsky V. Kerry: A Foreign Relations Law Bonanza, Ingrid Wuerth Brunk

Vanderbilt Law School Faculty Publications

This short paper on Zivotofsky v. Kerry gives an overview of the case and analyzes its significance for international law in constitutional interpretation and for the Supreme Court’s “normalization” of foreign relations law.

In terms of the overall significance of the case, it is a bonanza of foreign relations issues and doctrine: the executive Vesting Clause, the President as the “sole organ” of the nation, the need for the nation to speak with “one voice,” Curtiss-Wright, Youngstown, diplomatic history and practice, the Republic of Texas, secrecy and dispatch, Citizen Genet, the Spanish-American war, international law in constitutional interpretation, formalism and …

Functionally Suspect: Reconceptualizing 'Race' As A Suspect Classification, Lauren Sudeall

Vanderbilt Law School Faculty Publications

In the context of equal protection doctrine, race has become untethered from the criteria underlying its demarcation as a classification warranting heightened scrutiny. As a result, it is no longer an effective vehicle for challenging the existing social and political order; instead, its primary purpose under current doctrine is to signal the presence of an impermissible basis for differential treatment. This Symposium Article suggests that, to more effectively serve its underlying normative goals, equal protection should prohibit not discrimination based on race per se, but government actions that implicate the concerns leading to race’s designation as a suspect classification. For …

Judicial Review Of Agency Benefit-Cost Analysis, W. Kip Viscusi, Caroline Cecof

Vanderbilt Law School Faculty Publications

This Article evaluates judicial review of agency benefit-cost analysis ("BCA") by examining a substantial sample of thirty-eight judicial decisions on agency actions that implicate BCA. Essentially, the Administrative Procedure Act tasks federal courts with ensuring that federal agency action is reasonable. As more agencies use BCA to justify their rulemakings, the court's duty often requires judges to evaluate the reasonableness of agency BCAs. In this Article, we discuss the challenges that trigger judicial review of agency BCAs and the standards that govern the review. We then present specific examples of how courts analyze BCAs. Overall, we find many examples of …

Contextualizing Gay‐Straight Alliances: Student, Advisor And Structural Factors Related To Positive Youth Development Among Members, Matthew P. Shaw

Vanderbilt Law School Faculty Publications

Gay-straight alliances (GSAs) may promote resilience. Yet, what GSA components predict well-being? Among 146 youth and advisors in 13 GSAs (58% lesbian, gay, bisexual, or questioning; 64% White; 38% received free/reduced-cost lunch), student (demographics, victimization, attendance frequency, leadership, support, control), advisor (years served, training, control), and contextual factors (overall support or advocacy, outside support for the GSA) that predicted purpose, mastery, and self-esteem were tested. In multilevel models, GSA support predicted all outcomes. Racial/ethnic minority youth reported greater well-being, yet lower support. Youth in GSAs whose advisors served longer and perceived more control and were in more supportive school contexts …

The Myth Of The Condorcet Winner, Paul H. Edelman

Vanderbilt Law School Faculty Publications

There is consensus among legal scholars that, when choosing among multiple alternatives, the Condorcet winner, should it exist, is the preferred option. In this essay I will refute that claim, both normatively and positively. In addition, I will suggest that a different approach, based in behavioral economics, might be a more productive way to model the choices that legislatures make among multiple alternatives.

The Interpretive Dimension Of Seminole Rock, Kevin M. Stack

Vanderbilt Law School Faculty Publications

A lively debate has emerged over the deferential standard of review courts apply when reviewing an agency's interpretation of its own regulations. That standard, traditionally associated with Bowles v. Seminole Rock & Sand Co. and now more frequently attributed to Auer v. Robbins, states that a court must accept an agency's interpretation of its own regulations unless the interpretation is "plainly erroneous or inconsistent with the regulation." This Article argues that a court's choice of method for interpreting regulations” including how it determines which agency interpretations are inconsistent with the regulation ” may be just as important, if not more …

The Normalization Of Foreign Relations Law, Ganesh Sitaraman, Ingrid Wuerth

Vanderbilt Law School Faculty Publications

The defining feature of foreign relations law is that it is distinct from domestic law. Courts have recognized that foreign affairs are political by their nature and thus unsuited to adjudication, that state and local involvement is inappropriate in foreign affairs, and that the President has the lead role in foreign policymaking. In other words, they have said that foreign relations are exceptional. But foreign relations exceptionalism, "the belief that legal issues arising from foreign relations are functionally, doctrinally, and even methodologically distinct from those arising in domestic policy,” was not always the prevailing view. In the early twentieth century, …

Against Immutability, Jessica A. Clarke

Vanderbilt Law School Faculty Publications

Courts often hold that antidiscrimination law protects “immutable” characteristics, like sex and race. In a series of recent cases, gay rights advocates have persuaded courts to expand the concept of immutability to include not just those traits an individual cannot change, but also those considered too important for anyone to be asked to change. Sexual orientation and religion are paradigmatic examples. This Article critically examines this new concept of immutability, asking whether it is fundamentally different from the old one and how it might apply to characteristics on the borders of employment discrimination law’s protection, such as obesity, pregnancy, and …

Lessons From The Turn Of The Twentieth Century For First-Year Courses On Legislation And Regulation, Kevin M. Stack

Vanderbilt Law School Faculty Publications

This essay — part of a special journal issue on Legislation and Regulation and Regulatory State courses as core elements of the law school curriculum — approaches the debate over adopting these courses by looking back to the controversy stirred by teaching administrative law in law schools at the beginning of the twentieth century. This essay argues that sources of resistance to administrative law at that time not only help to explain the slow pace of adoption of “Leg-Reg” and “Reg-State” courses today, but also inform what material these new courses should cover. At the turn of the century, both …

Pricing Lives For Corporate And Governmental Risk Decisions, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

The 2014 GM ignition-switch recall highlighted the inadequacies of the company's safety culture and the shortcomings of regulatory sanctions. The company's inattention to systematic thinking about product safety can be traced to the hostile treatment of corporate risk analyses by the courts. This Article proposes that companies should place a greater value on lives at risk than they have in previous risk analyses and that they should receive legal protections for product risk analyses. Companies' valuations of fatality risks and regulatory penalties have priced lives too low. The guidance provided by the value of a statistical life, which is currently …

Property Is The New Privacy, Suzanna Sherry

Vanderbilt Law School Faculty Publications

Richard Epstein’s new book, The Classical Liberal Constitution, is the latest entry in what might be called conservative foundationalist constitutional theory. The movement’s primary goal is to elevate judicial protection of economic rights to the same level that is currently accorded to non-economic or personal rights, and thus to make it much more difficult for the government to regulate economic activity. Freedom of contract, for these theorists, is on a par with freedom of speech, and property rights are as important as privacy rights. Epstein’s version of the theory, although sophisticated and nuanced, is ultimately unpersuasive for reasons I catalogue …

Foresight Bias In Patent Law, Sean B. Seymore

Vanderbilt Law School Faculty Publications

Much of patent reform has focused on efforts to make it harder to obtain and enforce low-quality patents. The most straightforward way to achieve this goal is to raise the substantive standards of patentability. What is often ignored in discussions about raising patentability standards is that high-quality inventions can slip through the cracks. What is more troubling is that sometimes this happens because of bias. This Article draws attention to foresight bias, which occurs when a decision-maker lets over-pessimism and an oversimplified view of the future influence the patentability determination. Foresight bias leads to a patent denial regardless of the …

Behavioral War Powers, Ganesh Sitaraman, David Zionts

Vanderbilt Law School Faculty Publications

A decade of war has meant a decade of writing on war powers. From the authority to start a war, to restrictions on fighting wars, to the authority to end a war, constitutional lawyers and scholars have explored the classic issues (war initiation, prosecution, and termination) through the classic prisms (text, history, and function) for a new generation of national security challenges. Despite the volume of writing on war powers and the urgency of the debates in the context of Iraq, Afghanistan, Libya, and Syria, war powers debates are widely seen as stagnant. We introduce a new set of perspectives …

Boards Of Directors As Mediating Hierarchs, Margaret M. Blair

Vanderbilt Law School Faculty Publications

In June of 2014, the board of directors of Demoulas Supermarkets, Inc.-better known as Market Basket, a mid-sized chain of grocery stores in New England-decided to oust the man who had been CEO for the previous six years, Arthur T. Demoulas.' Most likely, the board of directors did not anticipate what happened next: Thousands of employees, customers, and fans of Market Basket boycotted the stores and staged noisy public protests asking the board to reinstate "Arthur T., The reaction by employees and customers made what had been a simmering, nasty, intrafamily feud within the closely held Market Basket chain into …

America's Disposable Youth: Undocumented Delinquent Juveniles, Karla M. Mckanders

Vanderbilt Law School Faculty Publications

Through discriminatory rhetoric state and local officials construct delinquent juvenile immigrant youth as the embodiment of a threat to public safety and American values. Accordingly, alleged delinquent undocumented immigrant children who have spent the majority of their lives in the United States, are subjected to discrimination and exclusionary practices, which enable lessened protections under the law. This article critically analyzes how undocumented delinquent youth, mainly Latino males, are constructed through the various narratives of immigrant children that are perpetuated by the media and policymakers, and how this impacts their treatment within the juvenile justice and immigration systems. Central to this …

The Origins Of Legislation, Ganesh Sitaraman

Vanderbilt Law School Faculty Publications

Although legislation is at the center of legal debates on statutory interpretation, administrative law, and delegation, little is known about how legislation is actually drafted. If scholars pay any attention to Congress at all, they tend to focus on what happens after legislation is introduced, ignoring how the draft came to exist in the first place. In other words, they focus on the legislative process, not the drafting process. The result is that our account of Congress, the legislative process, and the administrative state is impoverished, and debates in statutory interpretation and administrative law are incomplete. This Article seeks to …

Stemming The Rising Risk Of Credit Inequality, Francesca L. Procaccini

Vanderbilt Law School Faculty Publications

In the wake of the devastating effects of the global financial crisis and the collapse of the national housing market, non-profit organizations, private citizens, and government agencies have increasingly filed discrimination lawsuits against creditors and mortgage lenders for extending credit to minority borrowers on terms less favorable than those offered to white borrowers with similar risk profiles. These lawsuits argue that creditors pursued discriminatory policies, which, although neutral on their face, have had an adverse and indefensible “disparate impact” on minority borrowers in violation of numerous antidiscrimination laws, including the Equal Credit Opportunity Act (ECOA).

Indeed, volumes of evidence now …

Form Vs. Function In Rule 10b-5 Class Actions, Amanda M. Rose

Vanderbilt Law School Faculty Publications

The Supreme Court’s widely anticipated decision last term in Halliburton Co. v. Erica P. John Fund, Inc. did little to change the fundamental landscape of securities fraud litigation in the United States. Rule 10b-5 class actions premised on the “fraud-on-the-market” presumption of reliance may still be brought, although it is now clear that defendants may present evidence of lack of price distortion to rebut that presumption at the class certification stage. Halliburton does, however, raise a variety of new questions that will keep plaintiffs’ lawyers and defense counsel fighting for years to come. Determining the answers to these questions will …

Say On Pay Around The World, Randall Thomas, Christoph Van Der Elst

Vanderbilt Law School Faculty Publications

Shareholders have long complained that top executives are overpaid by corporate directors irrespective of their performance. Largely powerless to stop these practices, in 2002, they prevailed upon the U.K. Parliament to adopt legislation requiring public companies to permit their shareholders to have a mandatory, non-binding vote on the compensation of their top executives (Say on Pay). Since that time, there has been a wave of such legislation enacted in countries around the world, including the U.S., Australia, Belgium, the Netherlands, and Sweden, while Switzerland, Germany and France appear to be moving rapidly in the same direction. In this article, we …

The End Of Class Actions?, Brian T. Fitzpatrick

Vanderbilt Law School Faculty Publications

In this Article, I give a status report on the life expectancy of class action litigation following the Supreme Court's decisions in Concepcion and American Express. These decisions permitted corporations to opt out of class action liability through the use of arbitration clauses, and many commentators, myself included, predicted that they would eventually lead us down a road where class actions against businesses would be all but eliminated. Enough time has now passed to make an assessment of whether these predictions are coming to fruition. I find that, although there is not yet solid evidence that businesses have flocked to …

Coitus And Consequences In The Legal System: An Experimental Study, Joni Hersch, Beverly Moran

Vanderbilt Law School Faculty Publications

Scholars have found that men who physically harm their intimate partners receive less punishment than men who harm strangers. In other words, in the criminal setting, coitus has consequences. In particular, for female victims, the consequence is often a legal system that offers little or no protection. Until the experimental study presented here, no one has asked whether the same is true in civil actions. This original experimental survey, fielded on eight hundred participants, provides the first-ever evidence on whether legal decision makers hold sexual activity against females in civil settings. Participants received four scenarios- a homicide, a workplace sexual …

Back To The Future, Michael A. Newton

Vanderbilt Law School Faculty Publications

This essay refocuses the debate over autonomous weapons systems to consider the potentially salutary effects of the evolving technology. Law does not exist in a vacuum and cannot evolve in the abstract. Jus in bello norms should be developed in light of the overarching humanitarian goals, particularly since such weapons are not inherently unlawful or unethical in all circumstances. This essay considers whether a preemptive ban on autonomous weapons systems is likely to be effective and enforceable. It examines the grounds potentially justifying a preemptive ban, concluding that there is little evidence that such a ban would advance humanitarian goals …

Behavioral War Powers, Ganesh Sitaraman, David Zionts

Vanderbilt Law School Faculty Publications

A decade of war has meant a decade of writing on war powers. From the authority to start a war, to restrictions on fighting wars, to the authority to end a war, constitutional lawyers and scholars have explored the classic issues (war initiation, prosecution, and termination) through the classic prisms (text, history, and function) for a new generation of national security challenges. Despite the volume of writing on war powers and the urgency of the debates in the context of Iraq, Afghanistan, Libya, and Syria, war powers debates are widely seen as stagnant. We introduce a new set of perspectives …

Law And The Art Of Modeling: Are Models Facts?, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

In 2013, the Supreme Court made the offhand comment that empirical models and their estimations or predictions are not 'findings of fact" deserving of deference on appeal. The four Justices writing in dissent disagreed, insisting that an assessment of how a model works and its ability to measure what it claims to measure are precisely the kinds of factual findings that the Court, absent clear error cannot disturb. Neither side elaborated on the controversy or defended its position doctrinally or normatively. That the highest Court could split 5-4 on such a crucial issue without even mentioning the stakes or the …

Authors, Online, Daniel J. Gervais

Vanderbilt Law School Faculty Publications

The fate of professional creators is a major cultural issue. While specific copyright rules are obviously contingent and should be adapted to the new realities of online distribution and easy reuse, professional authorship remains necessary. I also believe that to be a professional author, creators need time, which, in turn, does require some form of payment. We need healthy financial flows to allow professional authors to make a decent, market-based living. This requires a move away from one-size-fits-all copyright and the resulting "tug of norms" that requires a shift of the entire policy package to the benefit of one category …

Beyond Gridlock, Michael P. Vandenbergh, Jonathan A. Gilligan

Vanderbilt Law School Faculty Publications

Private climate governance can achieve major greenhouse gas (“GHG”) emissions reductions while governments are in gridlock. Despite the optimism that emerged from the Earth Summit in Rio de Janeiro, Brazil in 1992, almost a quarter century later the federal legislative process and international climate negotiations are years from a comprehensive response. Yet Microsoft, Google and many other companies have committed to become carbon neutral. Wal-Mart has partnered with the Environmental Defense Fund to secure 20 million tons of GHG emissions reductions from its suppliers around the world, an amount equal to almost half the emissions from the US iron and …

Why Choose? A Response To Rachlinski, Wistrich & Guthrie, Terry A. Maroney

Vanderbilt Law School Faculty Publications

In "Heart Versus Head," Rachlinski, Guthrie, and Wistrich present experimental findings suggesting that judges sometimes rule on the basis of emotion rather than reason. Though there is much of value in their findings, they have presented a false choice. The experiments do offer strong evidence that judges' decisions can be influenced by the "affect heuristic," insofar as they show that prompting generalized feelings of good/bad and like/dislike can sway legal rulings that ought to be answered entirely on traditionally legalistic grounds. However, the experiments do not speak more broadly to the influence of judicial emotion, which is a far more …

Indemnification As An Alternative To Nullification, Robert A. Mikos

Vanderbilt Law School Faculty Publications

The federalization of criminal law arguably threatens the states’ traditional police powers. Congress has criminalized myriad activities the states condone (or at least tolerate); it has denied federal criminal defendants rights they would enjoy in state proceedings; and it has imposed harsher punishments for crimes proscribed by both levels of government. In many instances, Congress’s decision to supplant the policy choices made by the states appears unjustified by any legitimate federal interest. The conventional wisdom suggests there is very little the states themselves can do to stop the federalization of criminal law and the resultant diminution of state prerogatives. The …