Law Commons^™

Contracting In The Modern World, Enrico Baffi

enrico baffi

In this paper I try explore some of the basic features of modern mass contracting. In my opinion, there are basically four characteristics of modern mass contracting: a)he reduced negotiations; b) the dissemination of standard form contracts; c) the presence of abusive clauses; d) and the recapitulation of the contract and its execution in a single act of stipulation. All the changes are the consequences in the changes of relative costs of activities: a) The reduction in negotiations is the result first of all of the costs that this activity requires and of the costs required to manage personalized contracts; …

The Problem Of Internalization Of Social Costs And The Ideas Of Ronald Coase, Enrico Baffi

enrico baffi

This work examines the influence of Coasian thought on the analysis of externalities as used by economists and legal economists. Ronald Coase, a Chicago scholar, advanced a series of criticisms of the Pigovian tax system; the theorem that bears his name is merely the best known. In his 1960 work, he sought to demonstrate that the internationalization of social costs was not always socially useful and in many casesimossible. In addition, he identified other institutional solutions to which systems can - and often do - resort. One of these solutions is to simply authorize the harmful activity without introducing mechanisms …

The Problem Of Internalization Of Social Costs And The Ideas Of Ronald Coase, Enrico Baffi

enrico baffi

This work examines the influence of Coasian thought on the analysis of externalities as used by economists and legal economists. Ronald Coase, a Chicago scholar, advanced a series of criticisms of the Pigovian tax system; the theorem that bears his name is merely the best known. In his 1960 work, he sought to demonstrate that the internationalization of social costs was not always socially useful and also difficult if not impossible to realize. In addition, he identified other institutional solutions to which systems can - and often do - resort. One of these solutions is to simply authorize the harmful …

Intangible Economic Loss In Louisiana, John Stanton

John Stanton

This casenote follows the development of caselaw in Louisiana addressing the problem of intangible economic loss, (i.e., pure economic loss or supply-chain liability), an issue which all jurisdictions struggle to handle consistently. In particular, the piece notes the tension between the practicality of the Robins Dry Dock prohibitory rule and the equitable nature of using the standard negligence analysis. After noting the current state of confusion, a proposed way forward is suggested that allows for meritorious claims even without a proprietary interest, but does not allow for the industry-crippling liability of which the Robins Dry Dock progeny feared.

Efficiency Themes In Tort Law From Antiquity, M Stuart Madden

M Stuart Madden

Hellenic philosophers assessed the goals of society as: (1) the protection of persons and property from wrongful harm; (2) protection of the individual’s means of survival and prosperity; (3) discouragement of self-aggrandizement to the detriment of others; and (4) elevation of individual knowledge that would carry forward and perfect such principles. Roman law was replete with proscriptions against forced taking and unjust enrichment, and included rules for ex ante contract-based resolution of potential disagreement. Customary law perpetuated these efficient economic tenets within the Western World and beyond. The common law, in turn, has nurtured many of the same ends. From …

How Statistical Sampling Can Solve The Conundrum Of Compensation Disclosures Under Dodd-Frank, Michael Ohlrogge

Michael Ohlrogge

One of the more controversial measures of the Dodd-Frank bill is its requirement that companies report the ratio of their CEO’s compensation to that of their median employee. Critics of this provision have claimed that for large companies with employees and subsidiaries throughout the world, compliance with this measure alone could cost millions of dollars a year, due to the difficulties in identifying the median employee. This paper demonstrates that the Securities and Exchange Commission, which is charged with implementing this provision, has the latitude to direct companies to calculate the figure using a statistical sampling procedure which would greatly …

Greater And Lesser Powers, Samuel Levin

Samuel Levin

During much of the twentieth century it was relatively stylish for lawyers, judges and justices to argue that an exercise of power was permissible because "the greater power [to do something else] necessarily includes the lesser power [to do this]." Unfortunately, sloppy and unprincipled uses that merely reflected the intuitions of those who invoked it has largely discredited the argument, although it still makes some relevant appearances.

This paper argues that there is a principled way to apply the argument: by looking to the relative harms caused by each exercise of power. However, any notion of "necessarily includes" needs to …

Museum Strategies: Leasing Antiquities, Silvia Beltrametti

Silvia Beltrametti

This is the first attempt to study leasing in the context of the international trade in cultural artifacts. This article advances a heated debate in the field of cultural heritage law, which centers on whether cultural artifacts of ancient civilizations should belong to the modern nation states from which they are excavated or to humankind in general, by proposing an alternative analytic framework based on leasing, which would make it possible for objects to circulate but at the same time stay under the ownership and jurisdiction of their respective source countries.

A Selection-Corrected Estimate Of Chevron’S Impact On Agency Deference, Griffin S. Edwards

Griffin S Edwards

The ruling in Chevron v. Natural Resources Defense Council dramatically changed how judges rule in favor of federal administrative agencies. Previous research has found both theoretically and empirically that Chevron favors agencies and their interpretation of statutes, but the magnitude of Chevron’s impact remains unclear due to possible selection issues biasing the post-Chevron world. Accounting for the possibility that incentives change both to the challenger of an agency and the agency itself post-Chevron, I estimate a break in the trend of agency deference on the date Chevron was decided. This allows me to exploit the exogenous cases that were pending …

Protecting The Innocent With A Premium For Child Safety Regulations, Jacob P. Byl

Jacob P. Byl

Federal agencies regulate many products and activities that impact the safety of children. When conducting an economic analysis of a proposed rule, agencies should put a premium on saving the lives of children when analyzing the costs and benefits of regulation. This Article uses original evidence from the infant car seat market to determine that a child-specific benefit measure should be one and a half to two times that of an adult.

Carrots And Sticks From Obama’S Solyndra And Beyond, Paul Boudreaux

Paul Boudreaux

The most prominent environmental issue of the 2012 presidential election was the Solyndra debacle, in which the Obama administration lent more than $500 million to a solar energy company that later went bankrupt. Such financial “carrots” have been a centerpiece of President Obama’s environmental policy. This Essay uses the Solyndra story to expose the fatal flaws of a policy of carrots, including their inherent susceptibility to politicization and the government’s inaccuracy in making “bets” in the private market. If the environmental community is serious about difficult legal steps, such as combating global warming, it should eschew the allure of carrots …

Carrots And Sticks From Obama’S Solyndra And Beyond, Paul Boudreaux

Paul Boudreaux

ABSTRACT The most prominent environmental issue of the 2012 presidential election was the Solyndra debacle, in which the Obama administration lent more than $500 million to a solar energy company that later went bankrupt. Such financial “carrots” have been a centerpiece of President Obama’s environmental policy. This Essay uses the Solyndra story to expose the fatal flaws of a policy of carrots, including their inherent susceptibility to politicization and the government’s inaccuracy in making “bets” in the private market. If the environmental community is serious about difficult legal steps, such as combating global warming, it should eschew the allure of …

Kids, Counsel And Costs: An Empirical Study Of Indigent Defense Services In The Los Angeles Juvenile Delinquency Courts, Cyn Yamashiro

cyn yamashiro

In the landmark case In re Gault, the Supreme Court guaranteed juveniles virtually all of the criminal due process rights previously granted to adults. Arguably the most vital of those rights is the right to competent counsel. Scholars have studied how systems provide legal counsel and have questioned the use of certain models to provide defense services. Los Angeles County utilizes two distinct models for the provision of defense services: a contract-panel attorney model and a public defender office. This study looks at data from over 2,800 juvenile court case files from the Los Angeles juvenile courts and asks the …

Judicial Non-Compliance In A Multi-Level, Non-Hierarchical Legal Order: Isolated Accident Or Omen Of Judicial Armageddon?, Arthur Dyevre

Arthur Dyevre

In a multi-level, non-hierarchical court system, where courts at the upper echelon do not have the power to reverse the decisions of courts at the lower level, judicial cooperation appears crucial to the effectiveness of the higher-level law. For this reason, the recent judgment of the Czech Constitutional Court, which declared the decision of the Court of Justice in the Landtová case ultra vires, would seem to deal a terrible blow to the authority of European Union law. As doomsayers will be quick to point out, the Czech decision could set a dangerous precedent that may well one day bring …

Caremark's Irrelevance, Mercer E. Bullard

Mercer E Bullard

In re Caremark Int’l Inc. Derivative Litig. is commonly held out as the iconic corporate law case on liability for a failure of legal compliance, but the true source of corporate law as to legal compliance is the higher standard established by other sources of law. The expected cost of liability, both criminal and civil, for violations of federal healthcare regulations, for example, is a far stronger determinant of corporate compliance systems than potential liability under Caremark. Other areas of industry-specific regulation, such as for financial services, telecommunications and energy, similarly play a greater role than state corporate law in …

Rationalizing Risks To Cultural Loss In Resource Development, Sari M. Graben

Sari M Graben

Abstract In this article, I consider the implications of culture for valuation of cultural loss in cost benefit analysis. I argue that rational choice models have a difficult time quantifying cultural values because they have yet to grapple with the way experts tasked with cost benefit analysis translate knowledge about cultural worldviews for the purposes of comparison. This translation can alter the valuation of the risk so as to undermine the representation of a loss, rather than identify it. However, instead of rejecting the consideration of cultural loss in cost-benefit analysis outright, I build on dialogical approaches to governance that …

How Government Guarantees In Housing Finance Promote Stability, David Min

David Min

In the aftermath of the financial crisis, major reforms of the U.S. housing finance system are likely. One of the key issues facing policy makers in this area is whether and to what extent the federal government should maintain its current role in the residential mortgage markets. Since the New Deal, the federal government has guaranteed the primary sources of housing finance in the United States—bank and thrift deposits, and the obligations of the mortgage securitization conduits Fannie Mae, Freddie Mac, and Ginnie Mae.

The prevailing view of government guarantees is that they increase financial instability because they encourage excessive …

How Government Guarantees In Housing Finance Promote Stability, David Min

David Min

In the aftermath of the financial crisis, major reforms of the U.S. housing finance system are likely. One of the key issues facing policy makers in this area is whether and to what extent the federal government should maintain its current role in the residential mortgage markets. Since the New Deal, the federal government has guaranteed the primary sources of housing finance in the United States—bank and thrift deposits, and the obligations of the mortgage securitization conduits Fannie Mae, Freddie Mac, and Ginnie Mae.

The prevailing view of government guarantees is that they increase financial instability because they encourage excessive …

Putting Boomers To Pasture: Does The 2010 Mippa Legislation Reinforce The Nursing Home Bias?, Robert S. Bloink

Robert S Bloink

Unfunded health care expenses pose one of the greatest threats to the postretirement income security of seniors in America today. It is estimated that the average couple retiring in 2012 will require savings of approximately a quarter million dollars dedicated solely to their unfunded postretirement health care expenses, but this estimate does not factor in the expensive long-term care that most retirees will require toward the end of their lives. That the quarter-million dollar figure does not include the rapidly increasing cost of long-term care should alarm both retirees and those baby boomers approaching retirement age today. Controversial healthcare reform …

Building A Better America: Tax Expenditure Reform And The Case Of State And Local Government Bonds And Build America Bonds, Blaine G. Saito

Blaine G. Saito

Currently most subnational government borrowing in the United States is done via tax-exempt muni bonds. But they are riddled with problems. They are inefficient at delivering the subsidy, and they create economic distortions of investment choices. They are inequitable, and they have significant democratic deficiencies. Direct payment Build America Bonds (BABs) provide an alternative, as they directly pay a cash subsidy to a subnational government. While there are simple technical problems that can easily be remedied, BABs face significant political hurdles that will prevent the permanence of the program. Policy entrepreneurship is a way forward. The piece also discusses how …

Vertical Boilerplate, James Gibson

James Gibson

Despite what we learn in law school about the “meeting of the minds,” most contracts are merely boilerplate -- take-it-or-leave-it propositions. Negotiation is nonexistent; we rely on our collective market power as consumers to regulate contracts’ content. But boilerplate imposes certain information costs, because it often arrives late in the transaction and is hard to understand. If those costs get too high, then the market mechanism fails. So how high are boilerplate’s information costs? A few studies have attempted to measure them, but they all use a “horizontal” approach -- i.e., they sample a single stratum of boilerplate and assume …

Legal Applications Of Modern Finance, Matthew E. Cavanaugh Mba Cpa Esq.

Matthew E. Cavanaugh MBA CPA Esq.

While scholars and practitioners have applied economics to law successfully for decades, there has been almost no similar application of modern finance. Courts have used the central concept of classical finance, time value of money, for many years, but their use is still unsophisticated.

This article details two ways to apply modern finance to law. This article first describes a method of improving courts’ time value of money calculations, by using a systematically complete four factor analysis to determine the appropriate discount rate. This article then describes a method of calculating future damages that uses market price of risk, based …

Ten Dollars For 10,736 Mortgages: Should Nominal Consideration Supersede Real Property Recording Law, John P. Hunt

John P Hunt

Our review of mortgage securitization transactions from 2005 to 2007 suggests that many intermediate mortgage transfers structured as promissory note sales involved the exchange of only nominal or other dubious consideration. The Uniform Commercial Code requires consideration “sufficient to support a simple contract” as a prerequisite for treatment of a transaction as a promissory note sale. Treatment as a sale triggers the Code’s “mortgage follows the note” provisions, which may protect transactions from claims that the mortgages involved are unenforceable, are vulnerable to competing claimants, or were never transferred in the first place. Mortgage securitization transactions are potentially exposed to …

Moral Hazard Within The Greek Economic Crisis: An Analysis Of European Union Law Effectiveness In Dealing With The Greek Economic Crisis, Juan Castro, Juan Castro

Juan Castro

In this paper I will present the historical background of the current Greek economic crisis. I will delve into the causes of the fiscal and current-account deficits since Greece’s euro entry in 2001. In addition to the economic and financial information provided, I will also present cultural aspects and differences between Greece and its surrounding neighbors, primarily Germany, and how moral hazard has exacerbated the conflict. Further I will discuss the legality of the countermeasures and solutions presented and how these encroach upon European Union law treaties. Lastly I will conclude that in order for Greece and Germany to stabilize …

Deceiving Law Students: Employment Statistics & Tort Liability, Angie D. Roberts-Huckaby

Angie D. Roberts-Huckaby

Controversy is rampant in American legal education. In less than a year, an unprecedented fourteen separate class action lawsuits have been filed against fourteen different law schools. The lawsuits each allege that the schools have disseminated postgraduate employment statistics in ways that are fraudulent and misleading. Students’ primary goal, when applying to law school, is to become lawyers. Law school is not an institution students attend merely to satisfy intellectual curiosity. Law school is a grueling three-year endurance race challenging student’s intellectual reasoning, emotional rationale, and financial security. Therefore, it is critical for students to choose the right school7 Law …

Dodd-Frank's Inappropriate Treatment Of Insurance Companies: A 'Sifi' Situtation, Mark M. Makhail

Mark M Makhail

Abstract available upon request.

Financial Counterintelligence: How Changes To The U.S. Anti-Money Laundering Regime Can Assist U.S. Counterintelligence Efforts, Mark Skerry

Mark Skerry

The United States faces an onslaught of offensive foreign intelligence operations, with tactics ranging from Soviet era-style spies clandestinely inserted into its communities to modern-day economic espionage conducted by businesses on behalf of foreign powers. This article proposes a novel weapon to combat this rising threat: leverage the existing U.S. Anti-Money Laundering (AML) regime to assist counterintelligence efforts. The AML laws and regulations already require financial institutions to investigate clients’ backgrounds, monitor financial activity, and report suspicious transactions to federal law enforcement. If these financial institutions also were to report transactions that suggest foreign intelligence directly to U.S. counterintelligence elements, …

The Criminal Justice System Creates Incentives For False Convictions, Roger Koppl, Meghan Sacks

Roger Koppl

We examine the incentive structure of the various actors of the criminal justice system within an organization economics framework. Specifically, we examine the incentives of the police, forensic scientists, prosecutors and public defenders. We find that police, prosecutors and forensic scientists often have an incentive to garner convictions with little incentive to convict the right person, whereas public defenders often lack the resources and incentives to provide a vigorous defense for their clients. The “multitask problem” of organizational economics helps explain how this skewed incentive structure creates false convictions.

Defining Social And Economic Disadvantage: Are Government Preferential Business Certification Programs Narrowly Tailored?, George R. La Noue

George R. La Noue

Defining Social and Economic Disadvantage: Are Government Business Certification Programs Narrowly Tailored? George R. La Noue, Professor of Political Science and Professor of Public Policy UMBC glanoue@umbc.edu Synopsis The passage of the Public Works Employment Act (PWEA) of 1976 which set aside 10 percent of all procurement dollars awarded under the Act for “minority owned businesses” began a precedent of the use of contracting preferences for these firms in various federal programs. Later, many of these procurement programs were expanded to include women-owned businesses as beneficiaries. Soon such programs were initiated by state and local governments across the country. Race …

Necessity Is The Mother, But Protection May Not Be The Father Of Invention: The Limited Effect Of Intellectual Property Regimes On Agricultural Innovation, A. Bryan Endres, Carly E. Giffin

A. Bryan Endres

Standard innovation theory assumes that intellectual property protection is a prerequisite to the development of technological advances. Stretching back to the writing of the Constitution, a strong intellectual property system, comprised of both laws that establish intellectual property protection and a judicial or other adjudicative system to enforce the property right, has been considered necessary to stimulate innovation for the benefit of society. While not directly challenging this traditionally held belief, the authors used empirical data to test the assumption in the context of agriculture. This paper analyzed twenty years of agricultural production data from Argentina, Brazil, China, India, and …