Law Commons^™

Aaron Twerski: Practical Wisdom At Ground Zero, Anthony J. Sebok

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This Article celebrates Professor. Aaron Twerski’s “practical wisdom” in crafting a solution (with Jim Henderson) to a problem faced by Judge Alvin Hellerstein in the so-called 9/11 First Responder cases. The problem was that Congress did not include these plaintiffs within the Victims Compensation Fund (“VCF”) despite there being every reason to suspect that the interaction of workersman’s compensation law and tort law, if left to operate on their own, would generate a politically unacceptable outcome. Despite his clear misgivings – —expressed decades earlier – —about allowing those who control the workplace to enjoy the benefits of limited liability guaranteed …

Third-Party Releases Under The Bankruptcy Code After Purdue Pharma, Jeanne L. Schroeder, David G. Carlson

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The biggest bankruptcy case ever (as measured by unsecured claims against a debtor-in-possession) is In re Purdue Pharma, LLC. The bankruptcy court affirmed a plan discharging the Sackler family (equity owners and often officers of Purdue) of all “derivative” claims that belonged to the debtor-in-possession. The settlement was bought for a substantial sum payable over time by the Sacklers. A debtor-in-possession is the sole owner of a derivative claim and has the power to bind all the creditors to a settlement. Under the Bankruptcy Code, a plan discharging derivative claims is confirmable. In fact, as we will, show, a great …

Taking Misappropriation Seriously: State Common Law Disgorgement Actions For Insider Trading, Jeanne L. Schroeder

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In two recent cases, Kokesh v. SEC, and Liu v. SEC, the U.S. Supreme Court cut back substantially on one of the Securities and Exchange Commission’s most important enforcement powers. This is the ability to seek disgorgement from persons who violate the federal securities laws, depriving them of their ill-gotten gains.

Previously, the Supreme Court had developed a largely property-based theory of insider trading. Why is insider trading evil? Because material nonpublic information is property that the trader has fraudulently obtained and must not use for his own purposes

In this article I bring these thoughts together. I …

Going Rogue: The Supreme Court's Newfound Hostility To Policy-Based Bivens Claims, Joanna C. Schwartz, Alexander A. Reinert, James E. Pfander

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In Ziglar v. Abbasi, 137 S. Ct. 1843 (2017), the Supreme Court held that a proposed Bivens remedy was subject to an exacting special factors analysis when the claim arises in a “new context.” In Ziglar itself, the Court found the context of the plaintiffs’ claims to be “new” because, in the Court’s view, they challenged “large-scale policy decisions concerning the conditions of confinement imposed on hundreds of prisoners.” Bivens claims for damages caused by unconstitutional policies, the Court suggested, were inappropriate.

This Essay critically examines the Ziglar Court’s newfound hostility to policy-based Bivens claims. We show that an …

From The Frying Pan To The Fire: Scotus’ Fsia Inaction As Further Permitting Executive Branch Intervention In “Takings Exception” Cases And Its Consequences In Forcing Holocaust Plaintiffs To Return To Europe, Richard H. Weisberg

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The Supreme Court of the United States (“SCOTUS”) very recently punted and left wide a circuit split on a key question under the Foreign Sovereign Immunities Act (“FSIA”): Do plaintiff Holocaust victims need to return to the country that wronged them in order to proceed in a United States federal court that otherwise had jurisdiction over their claims? While sending down unresolved a conflict between the D.C. and Seventh Circuits, in a companion case also involving Holocaust victims, SCOTUS essentially ended an action against Germany by taking the strong suggestion of the Executive Branch through its Solicitor General that a …

Fraudulent Transfers: Void And Voidable, David G. Carlson

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This Article explores the civil procedure attendant to private fraudulent transfer litigation (primarily outside the context of bankruptcy). In such litigation, courts ponder whether fraudulent transfers are void or voidable. In fact, they are both simultaneously! According to the theory "at law," a fraudulent transfer is "void." That is, a creditor with a judgment could simply levy the property from a fraudulent grantee as if the grantee had no property rights. This Article questions the constitutional viability of this ancient attitude. Meanwhile, "equity" viewed the transfer as voidable. The grantee gets title, but the title might be set aside. The …

New Federalism And Civil Rights Enforcement, Alexander A. Reinert, Joanna C. Schwartz, James E. Pfander

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Calls for change to the infrastructure of civil rights enforcement have grown more insistent in the past several years, attracting support from a wide range of advocates, scholars, and federal, state, and local officials. Much of the attention has focused on federal-level reforms, including proposals to overrule Supreme Court doctrines that stop many civil rights lawsuits in their tracks. But state and local officials share responsibility for the enforcement of civil rights and have underappreciated powers to adopt reforms of their own. This Article evaluates a range of state and local interventions, including the adoption of state law causes of …

Fee-Shifting Statutes And Compensation For Risk, Maureen S. Carroll

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A law firm that enters into a contingency arrangement provides the client with more than just its attorneys' labor. It also provides a form of financing, because the firm will be paid (if at all) only after the litigation ends; and insurance, because if the litigation results in a low recovery (or no recovery at all), the firm will absorb the direct and indirect costs of the litigation. Courts and markets routinely pay for these types of risk-bearing services through a range of mechanisms, including state fee shifting statutes, contingent percentage fees, common-fund awards, alternative fee arrangements, and third-party litigation …

Competition Wrongs, Nicolas Cornell

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In both philosophical and legal circles, it is typically assumed that wrongs depend upon having one’s rights violated. But within any market-based economy, market participants may be wronged by the conduct of other actors in the marketplace. Due to my illicit business tactics, you may lose profits, customers, employees, reputation, access to capital, or any number of other sources of value. This Article argues that such competition wrongs are an example of wrongs that arise without an underlying right, contrary to the typical philosophical and legal assumption. The Article thus draws upon various forms of business law to illustrate what …

The Myth Of Personal Liability: Who Pays When Bivens Claims Succeed, James E. Pfander, Alexander A. Reinert, Joanna C. Schwartz

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In Bivens v. Six Unknown Named Agents, the Supreme Court held that federal law creates a right to sue federal officials for Fourth Amendment violations. For the last three decades, however, the Court has cited the threat of individual liability and the burden of government indemnification on agency budgets as twin bases for narrowing the right of victims to secure redress under Bivens. In its most recent decisions, Ziglar v. Abbasi and Hernandez v. Mesa, the Court said much to confirm that it now views personal liability less as a feature of the Bivens liability rule than …

Designing And Enforcing Preliminary Agreements, Albert H. Choi, George Triantis

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Preliminary agreements—variously labeled as memoranda of understanding, letters of intent, term sheets, commitment letters, or agreements in principle—are common in complex business transactions. They document an incomplete set of terms that the parties have agreed upon, while anticipating further negotiation of the remaining provisions. They often create legal obligations, particularly a duty to negotiate in good faith. This duty has been the subject of a substantial number of judicial opinions over the past few decades and yet continues to be regarded as a confusing and unpredictable issue in contract law. Legal scholarship is hamstrung in its analysis of the case …

Civil Procedure And Economic Inequality, Maureen Carroll

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How well do procedural doctrines attend to present-day economic inequality? This Essay examines that question through the lens of three doctrinal areas: the “irreparable harm” prong of the preliminary injunction standard, the requirement that discovery must be proportional to the needs of the case, and the due process rights of class members in actions for injunctive relief. It concludes that in each of those areas, courts and commentators could do more to take economic inequality into account.

Giving Back A Fraudulent Transfer: A Defense To Liability?, David G. Carlson

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In Whitlock v. Lowe (In re Deberry) (5th Cir. 2019), the Fifth Circuit court of appeals found it obvious that if a transferee gives back fraudulently transferred funds (which the debtor then dissipates), the transferee has a complete defense to liability to the transferor’s bankruptcy trustee. This puts the Fifth Circuit at odds with the Sixth and Seventh Circuits, where the prepetition give-back counted as no defense. This article concludes that a more nuanced position should mediate between these extremes, based on an “innocent donee” defense retrieved from Nineteenth Century precedent. The article emphasizes that if bad faith transferees for …

Class Actions, Indivisibility, And Rule 23(B)(2), Maureen Carroll

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The federal class-action rule contains a provision, Rule 23(b)(2), that authorizes class-wide injunctive or declaratory relief for class-wide wrongs. The procedural needs of civil rights litigation motivated the adoption of the provision in 1966, and in the intervening years, it has played an important role in managing efforts to bring about systemic change. At the same time, courts have sometimes struggled to articulate what plaintiffs must show in order to invoke Rule 23(b)(2). A few years ago, the Supreme Court weighed in, stating that the key to this type of class action is the “indivisible” nature of the remedy the …

The Politics Of Access: Examining Concerted State/Private Enforcement Solutions To Class Action Bans, Myriam E. Gilles

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Procedural and substantive constraints on the ability of ordinary people to access the civil justice system have become all too commonplace. The “justice gap” owes much to cuts in funding for legal aid and court administration, heightened pleading standards, ever-rising costs of discovery, increasingly restrictive views on standing to sue, and the co-opting of small claims court by businesses seeking to collect debts, among other obstacles in the path to the courthouse. But the most consequential impediment, surely, is the enforcement of mandatory arbitration clauses with class action bans, which bar consumers and employees from bringing or being represented in …

The Radical Majoritarianism Of Rule 23(B)(2), Myriam E. Gilles, Gary Friedman

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One often reads that, “because of the group nature of the harm alleged and the broad character of the relief sought,” Rule 23(b)(2) classes are necessarily “homogenous and cohesive group[s] with few conflicting interests.” But that truism is debatable; at minimum, it begs the question of what counts as a “conflicting interest.” After all, class members often have conflicting positions with respect to the outcome of litigation — especially in significant injunctive-relief complex, structural reform cases of the type that Rule 23(b)(2) addresses. For example, it may be the case that a minority within an injunctive class would prefer to …

Erie Step Zero, Alexander A. Reinert

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Courts and commentators have assumed that the Erie doctrine, while originating in diversity cases, applies in all cases whatever the basis for federal jurisdiction. Thus, when a federal court asserts jurisdiction over pendent state law claims through the exercise of supplemental jurisdiction in a federal question case, courts regularly apply the Erie doctrine to resolve conflict between federal and state law. This Article shows why this common wisdom is wrong.

To understand why, it is necessary to return to Erie’s goals, elaborated over time by the U.S. Supreme Court. Erie and its progeny are steeped in diversity-driven policy concerns: concerns …

Can John Coffee Rescue The Private Attorney General? Lessons From The Credit Card Wars, Myriam E. Gilles

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Partisans on one side of the class action debates argue that the class device is a critical enforcement tool that increases much-needed access to justice. Combatants on the other side scoff that class actions are tools for shaking down corporations for settlement payments and attorneys’ fees in unmeritorious cases. In his most recent book, Entrepreneurial Litigation: Its Rise, Fall and Future, John C. Coffee puts both sides in their place, providing an account that, he aptly tells us, “has long been missing in the literature, in large part because academics writing in this area either have been so ideologically committed …

Anti-Incarcerative Remedies For Illegal Conditions Of Confinement, Margo Schlanger

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Opposition to mass incarceration has entered the mainstream. But except in a few states, mass decarceration has not, so far, followed: By the end of 2014 (the last data available), nationwide prison population had shrunk only 3% off its (2009) peak. Jail population, similarly, was down just 5% from its (2008) peak. All told, our current incarceration rate - 7 per 1,000 population - is the same as in 2002, and four times the level in 1970, when American incarceration rates began their rise. Our bloated prisoner population includes many groups of prisoners who are especially likely to face grievous …

The Second Circuit And Social Justice, Matthew Diller, Alexander A. Reinert

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The Second Circuit is renowned for its landmark rulings in fields such as white collar crime and securities law — bread and butter issues growing out of Wall Street’s preeminence in the financial landscape of the nation. At the same time, the Second Circuit has a long tradition of breaking new ground on issues of social justice. Unlike some circuit courts which have reputations in the area of social justice built around one or two fields, such as the Fifth Circuit’s pioneering role in civil rights litigation or the Ninth Circuit’s focus on immigration, there is no one area of …

Whren's Flawed Assumptions Regarding Race, History, And Unconscious Bias, William M. Carter Jr.

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This article is adapted from remarks presented at CWRU Law School's symposium marking the 20th anniversary of Whren v. United States. The article critiques Whren’s constitutional methodology and evident willful blindness to issues of social psychology, unconscious bias, and the lengthy American history of racialized conceptions of crime and criminalized conceptions of race. The article concludes by suggesting a possible path forward: reconceptualizing racially motivated pretextual police encounters as a badge or incident of slavery under the Thirteenth Amendment issue rather than as abstract Fourth or Fourteenth Amendment issues.

Prisoners' Rights Lawyers' Strategies For Preserving The Role Of The Courts, Margo Schlanger

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This Article is part of the University of Miami Law Review’s Leading from Below Symposium. It canvasses prisoners’ lawyers’ strategies prompted by the 1996 Prison Litigation Reform Act (“PLRA”). The strategies comply with the statute’s limits yet also allow U.S. district courts to remain a forum for the vindication of the constitutional rights of at least some of the nation’s millions of prisoners. After Part I’s introduction, Part II summarizes in several charts the PLRA’s sharp impact on the prevalence and outcomes of prison litigation, but demonstrates that there are still many cases and situations in which courts continue to …

Trends In Prisoner Litigation, As The Plra Enters Adulthood, Margo Schlanger

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The Prison Litigation Reform Act (PLRA), enacted in 1996 as part of the Newt Gingrich "Contract with America," is now as old as some prisoners. In the year after the statute's passage, some commenters labeled it merely "symbolic." In fact, as was evident nearly immediately, the PLRA undermined prisoners' ability to bring, settle, and win lawsuits. The PLRA conditioned court access on prisoners' meticulously correct prior use of onerous and error-inviting prison grievance procedures. It increased filing fees, decreased attorneys' fees, and limited damages. It subjected injunctive settlements to the scope limitations usually applicable only to litigated injunctions. It made …

Individualized Injunctions And No-Modification Terms: Challenging "Anti-Reform" Provisions In Arbitration Clauses, Myriam E. Gilles

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The Supreme Court’s recent decisions in AT&T Mobility v. Concepcion and American Express v. Italian Colors have considered only whether class actions for monetary damages may be barred by arbitration clauses requiring individual adjudication. The Justices have not examined the enforceability of arbitration clauses or arbitral rules which explicitly prohibit claimants from seeking or arbitrators from granting broad injunctive relief in an individual dispute. I term these "anti-reform" provisions because they broadly prohibit an individual arbitral claimant from seeking to end a practice, change a rule, or enjoin an act that causes injury to itself and to similarly-situated non-parties. This …

Trial And Settlement: A Study Of High-Low Agreements, J. J. Prescott, Kathryn E. Spier, Albert Yoon

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This article presents the first systematic theoretical and empirical study of highlow agreements in civil litigation. A high-low agreement is a private contract that, if signed by litigants before trial, constrains any plaintiff’s recovery to a specified range. In our theoretical model, trial is both costly and risky. When litigants have divergent subjective beliefs and are mutually optimistic about their trial prospects, cases may fail to settle. In these cases, high-low agreements can be in litigants’ mutual interest because they limit the risk of outlier awards while still allowing mutually beneficial speculation. Using claims data from a national insurance company, …

European Legal Development: The Case Of Tort: Comparative Studies In The Development Of The Law Of Tort In Europe, Vol 9, Anthony Sebok

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This review addresses volumes 7-9 of the series Comparative Studies in the Development of the Law of Torts in Europe, edited by John Bell and David Ibbetson and published by Cambridge University Press.

Cy Pres In Class Action Settlements, Rhonda Wasserman

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Monies reserved to settle class action lawsuits often go unclaimed because absent class members cannot be identified or notified or because the paperwork required is too onerous. Rather than allow the unclaimed funds to revert to the defendant or escheat to the state, courts are experimenting with cy pres distributions – they award the funds to charities whose work ostensibly serves the interests of the class “as nearly as possible.”

Although laudable in theory, cy pres distributions raise a host of problems in practice. They often stray far from the “next best use,” sometimes benefitting the defendant more than the …

Future Claimants And The Quest For Global Peace, Rhonda Wasserman

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n the mass tort context, the defendant typically seeks to resolve all of the claims against it in one fell swoop. But the defendant’s interest in global peace is often unattainable in cases involving future claimants – those individuals who have already been exposed to a toxic material or defective product, but whose injuries have not yet manifested sufficiently to support a claim or motivate them to pursue it. The class action vehicle cannot be used because it is impossible to provide reasonable notice and adequate representation to future claimants. Likewise, non-class aggregate settlements cannot be deployed because future claimants …

Screening Out Innovation: The Merits Of Meritless Litigation, Alexander A. Reinert

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Courts and legislatures often conflate merit-less and frivolous cases when balancing the desire to keep courthouse doors open to novel or unlikely claims against the concern that entertaining ultimately unsuccessful litigation will prove too costly for courts and defendants. Recently, significant procedural and substantive barriers to civil litigation have been informed by judicial and legislative assumptions about the costs of entertaining merit-less and frivolous litigation. The prevailing wisdom is that eliminating merit-less and frivolous claims as early in a case’s trajectory as possible will focus scarce resources on the truly meritorious cases, thereby ensuring that available remedies are properly distributed …

Federal Judicial Center International Litigation Guide: Recognition And Enforcement Of Foreign Judgments, Ronald A. Brand

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This publication was prepared for the U.S. Federal Judicial Center as a guide for Federal Judges on the recognition and enforcement of foreign judgments. It covers applicable law in federal courts, the issues raised when a foreign judgments recognition case, grounds for non-recognition (and their sources in the law), and recent developments that may affect future adjustments in the rules. The law in those states that have adopted one of the Uniform Acts is covered, as is the law in states that remain under a common law system for recognition and enforcement of judgments. Also covered is the 2005 Hague …