Open Access. Powered by Scholars. Published by Universities.®

Law Commons

Open Access. Powered by Scholars. Published by Universities.®

Articles 1 - 30 of 818

Full-Text Articles in Law

Municipal Fiber In The United States: A Financial Assessment, Christopher S. Yoo, Jesse Lambert, Timothy P. Pfenninger Jul 2021

Municipal Fiber In The United States: A Financial Assessment, Christopher S. Yoo, Jesse Lambert, Timothy P. Pfenninger

Faculty Scholarship at Penn Law

Despite growing interest in broadband provided by municipally owned and operated fiber-to-the-home networks, the academic literature has yet to undertake a systematic assessment of these projects’ financial performance. To fill this gap, we utilize municipalities’ official reports to offer an empirical evaluation of the financial performance of every municipal fiber project in the U.S. operating in 2010 through 2019. An analysis of the actual performance of the resulting fifteen-project panel dataset reveals that none of the projects generated sufficient nominal cash flow in the short run to maintain solvency without infusions of additional cash from outside sources or debt ...


Herbert Hovenkamp As Antitrust Oracle: Appreciating The Overlooked Contributions Of The New Harvard School, Christopher S. Yoo Jul 2021

Herbert Hovenkamp As Antitrust Oracle: Appreciating The Overlooked Contributions Of The New Harvard School, Christopher S. Yoo

Faculty Scholarship at Penn Law

My colleague, Herbert Hovenkamp, is almost universally recognized as the most cited and the most authoritative US antitrust scholar. Among his many honors, his status as the senior author of the authoritative Areeda and Hovenkamp treatise makes him the unquestioned leader of the New Harvard School, which has long served as the bellwether for how courts are likely to resolve emerging issues in modern antitrust doctrine. Unfortunately, its defining tenets and its positions on emerging issues remain surprisingly obscure. My contribution to this festschrift explores the core commitments that distinguish the New Harvard School from other approaches to antitrust. It ...


Influence Through Intimidation: Evidence From Business Lobbying And The Regulatory Process, Alex Acs, Cary Coglianese Jul 2021

Influence Through Intimidation: Evidence From Business Lobbying And The Regulatory Process, Alex Acs, Cary Coglianese

Faculty Scholarship at Penn Law

Interest group influence in the policy process is often assumed to occur through a mechanism of exchange, persuasion, or subsidy. Here, we explore how business groups may also exert influence by intimidating policymakers—a form of persuasion, but one based not on the provision of policy information but of political information. We develop a theory where a business firm lobbies a regulator to communicate political information about its capacity to commit to future influence-seeking activities that would sanction the regulator. The regulator assesses the credibility of this message by evaluating the firm’s commitment to lobbying. Guided by our theory ...


The Deregulation Deception, Cary Coglianese, Natasha Sarin, Stuart Shapiro Jun 2021

The Deregulation Deception, Cary Coglianese, Natasha Sarin, Stuart Shapiro

Faculty Scholarship at Penn Law

President Donald Trump and members of his Administration repeatedly asserted that they had delivered substantial deregulation that fueled positive trends in the U.S. economy prior to the COVID pandemic. Drawing on an original analysis of data on federal regulation from across the Trump Administration’s four years, we show that the Trump Administration actually accomplished much less by way of deregulation than it repeatedly claimed—and much less than many commentators and scholars have believed. In addition, and also contrary to the Administration’s claims, overall economic trends in the pre-pandemic Trump years tended simply to follow economic trends ...


Do Esg Mutual Funds Deliver On Their Promises?, Quinn Curtis, Jill E. Fisch, Adriana Z. Robertson Jun 2021

Do Esg Mutual Funds Deliver On Their Promises?, Quinn Curtis, Jill E. Fisch, Adriana Z. Robertson

Faculty Scholarship at Penn Law

Corporations have received growing criticism for their role in climate change, perpetuating racial and gender inequality, and other pressing social issues. In response to these concerns, shareholders are increasingly focusing on environmental, social, and corporate governance (ESG) criteria in selecting investments, and asset managers are responding by offering a growing number of ESG mutual funds. The flow of assets into ESG is one of the most dramatic trends in asset management.

But are these funds giving investors what they promise? This question has attracted the attention of regulators, with the Department of Labor and the Securities and Exchange Commission (SEC ...


Taking Stock Of Chapter 11, David A. Skeel Jr. May 2021

Taking Stock Of Chapter 11, David A. Skeel Jr.

Faculty Scholarship at Penn Law

In this Essay, written for a symposium honoring Sam Gerdano, I offer an assessment of current Chapter 11 theory and practice. The most distinctive feature of current Chapter 11 practice is the extent to which the parties now enter into intercreditor agreements, restructuring support agreements and other actual contracts governing their rights and responsibilities. One question raised by the dramatic shift in bankruptcy practice is whether the leading normative theory of bankruptcy, the Creditors’ Bargain Theory, is now obsolete, as some scholars have suggested. The Creditors’ Bargain Theory explains bankruptcy as a solution to coordination problems that might lead to ...


Digital Cluster Markets, Herbert J. Hovenkamp Apr 2021

Digital Cluster Markets, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

This paper considers the role of “cluster” markets in antitrust litigation, the minimum requirements for recognizing such markets, and the relevance of network effects in identifying them.

One foundational requirement of markets in antitrust cases is that they consist of products that are very close substitutes for one another. Even though markets are nearly always porous, this principle is very robust in antitrust analysis and there are few deviations.

Nevertheless, clustering noncompeting products into a single market for purposes of antitrust analysis can be valuable, provided that its limitations are understood. Clustering contributes to market power when (1) many customers ...


Secured Transactions Law Reform In Japan: Japan Business Credit Project Assessment Of Interviews And Tentative Policy Proposals, Megumi Hara, Kumiko Koens, Charles W. Mooney Jr. Apr 2021

Secured Transactions Law Reform In Japan: Japan Business Credit Project Assessment Of Interviews And Tentative Policy Proposals, Megumi Hara, Kumiko Koens, Charles W. Mooney Jr.

Faculty Scholarship at Penn Law

This article summarizes key findings from the Japan Business Credit Project (JBCP), which involved more than 30 semi-structured interviews conducted in Japan from 2016 through 2018. It was inspired by important and previously unexplored questions concerning secured financing of movables (business equipment and inventory) and claims (receivables)—“asset-based lending” or “ABL.” Why is the use of ABL in Japan so limited? What are the principal obstacles and disincentives to the use of ABL in Japan? The interviews were primarily with staff of banks, but also included those of government officials and regulators, academics, and law practitioners. The article proposes reforms ...


The “Value” Of A Public Benefit Corporation, Jill E. Fisch, Steven Davidoff Solomon Apr 2021

The “Value” Of A Public Benefit Corporation, Jill E. Fisch, Steven Davidoff Solomon

Faculty Scholarship at Penn Law

We examine the “value” a PBC form provides for publicly-traded corporations. We analyze the structure of the PBC form and find that other than requiring a designated social purpose it does not differ significantly in siting control and direction with shareholders. We also examine the purpose statements in the charters of the most economically significant PBCs. We find that, independent of structural limitations on accountability, these purpose statements are, in most cases, too vague and aspirational to be legally significant, or even to serve as a reliable checks on PBC behavior. We theorize, and provide evidence, that without a legal ...


Vertical Control, Herbert J. Hovenkamp Mar 2021

Vertical Control, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Antitrust litigation often requires courts to consider challenges to vertical “control.” How does a firm injure competition by limiting the behavior of vertically related firms? Competitive injury includes harm to consumers, labor, or other suppliers from reduced output and higher margins.

Historically antitrust considers this issue by attempting to identify a market that is vertically related to the defendant, and then consider what portion of it is “foreclosed” by the vertical practice. There are better mechanisms for identifying competitive harm, including a more individualized look at how the practice injures the best placed firms or bears directly on a firm ...


A Lesson From Startups: Contracting Out Of Shareholder Appraisal, Jill E. Fisch Mar 2021

A Lesson From Startups: Contracting Out Of Shareholder Appraisal, Jill E. Fisch

Faculty Scholarship at Penn Law

Appraisal is a controversial topic. Policymakers have debated the goals served by the appraisal remedy, and legislatures have repeatedly revised appraisal statutes in an effort to meet those goals while minimizing the cost and potential abuse associated with appraisal litigation. Courts have struggled to determine the most appropriate valuation methodology and the extent to which that methodology should depend on case-specific factors. These difficulties are exacerbated by variation in the procedures by which mergers are negotiated and the potential for conflict-of-interest transactions.

Private ordering offers a market-based alternative to continued legislative or judicial efforts to refine the appraisal remedy. Through ...


Stealth Governance: Shareholder Agreements And Private Ordering, Jill E. Fisch Mar 2021

Stealth Governance: Shareholder Agreements And Private Ordering, Jill E. Fisch

Faculty Scholarship at Penn Law

Corporate law has embraced private ordering -- tailoring a firm’s corporate governance to meet its individual needs. Firms are increasingly adopting firm-specific governance through dual-class voting structures, forum selection provisions and tailored limitations on the duty of loyalty. Courts have accepted these provisions as consistent with the contractual theory of the firm, and statutes, in many cases, explicitly endorse their use. Commentators too support private ordering for its capacity to facilitate innovation and enhance efficiency.

Private ordering typically occurs through firm-specific charter and bylaw provisions. VC-funded startups, however, frequently use an alternative tool – shareholder agreements. These agreements, which have largely ...


Lifting Labor’S Voice: A Principled Path Toward Greater Worker Voice And Power Within American Corporate Governance, Leo E. Strine Jr., Aneil Kovvali, Oluwatomi O. Williams Feb 2021

Lifting Labor’S Voice: A Principled Path Toward Greater Worker Voice And Power Within American Corporate Governance, Leo E. Strine Jr., Aneil Kovvali, Oluwatomi O. Williams

Faculty Scholarship at Penn Law

In view of the decline in gain sharing by corporations with American workers over the last forty years, advocates for American workers have expressed growing interest in allowing workers to elect representatives to corporate boards. Board level representation rights have gained appeal because they are a highly visible part of codetermination regimes that operate in several successful European economies, including Germany’s, in which workers have fared better.

But board-level representation is just one part of the comprehensive codetermination regulatory strategy as it is practiced abroad. Without a coherent supporting framework that includes representation from the ground up, as is ...


Duty And Diversity, Chris Brummer, Leo E. Strine Jr. Feb 2021

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

Faculty Scholarship at Penn Law

In the wake of the brutal deaths of George Floyd and Breonna Taylor, a slew of reforms from Wall Street to the West Coast have been introduced, all 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 show that ...


Should Corporations Have A Purpose?, Jill E. Fisch, Steven Davidoff Solomon Feb 2021

Should Corporations Have A Purpose?, Jill E. Fisch, Steven Davidoff Solomon

Faculty Scholarship at Penn Law

The hot topic in corporate governance is the debate over corporate purpose and, in particular, whether corporations should shift their purpose from the pursuit of shareholder wealth to pursuing a broader conception of stakeholder or societal value. We argue that this debate has overlooked the critical predicate questions of whether a corporation should have a purpose at all and, if so, why,

We address these questions by examining the historical, legal and theoretical justifications for corporate purpose. We find that none of the three provides a basis for requiring a corporation to articulate a particular purpose or for a given ...


Leases As Forms, David A. Hoffman, Anton Strezhnev Feb 2021

Leases As Forms, David A. Hoffman, Anton Strezhnev

Faculty Scholarship at Penn Law

We offer the first large scale descriptive study of residential leases, based on a dataset of ~170,000 residential leases filed in support of over ~200,000 Philadelphia eviction proceedings from 2005 through 2019. These leases are highly likely to contain unenforceable terms, and their pro-landlord tilt has increased sharply over time. Matching leases with individual tenant characteristics, we show that unlawful terms are surprisingly likely to be associated with more expensive leaseholds in richer, whiter parts of the city. This result is linked to landlords' growing adoption of shared forms, originally created by non-profit landlord associations, and more recently ...


Propertizing Fair Use, Abraham Bell, Gideon Parchomovsky Feb 2021

Propertizing Fair Use, Abraham Bell, Gideon Parchomovsky

Faculty Scholarship at Penn Law

In its current form, fair use doctrine provides a personal defense that applies narrowly to the specific use by the specific user. The landmark case of Google v. Oracle, currently pending before the Supreme Court, illustrates why this is problematic. Even if the Court were to rule that Google’s use of Oracle’s Java API’s was fair, the ruling would not protect the numerous parties that developed Java applications for the Android operating system; it would only shelter Google and Google’s particular use. This is not an isolated problem; the per use/per user rule cuts across ...


Reconsidering The Evolutionary Erosion Account Of Corporate Fiduciary Law, William W. Bratton Jan 2021

Reconsidering The Evolutionary Erosion Account Of Corporate Fiduciary Law, William W. Bratton

Faculty Scholarship at Penn Law

This Article reconsiders the dominant account of corporate law’s duty of loyalty, which asserts that the courts have steadily relaxed standards of fiduciary scrutiny applied to self-dealing by corporate managers across more than a century of history—to the great detriment of the shareholder interest. The account originated in Harold Marsh, Jr.’s foundational article, Are Directors Trustees? Conflicts of Interest and Corporate Morality, published in The Business Lawyer in 1966. Marsh’s showing of historical lassitude has been successfully challenged in a recent book by Professor David Kershaw. This Article takes Professor Kershaw’s critique a step further ...


The Social Cost Of Contract, David A. Hoffman, Cathy Hwang Jan 2021

The Social Cost Of Contract, David A. Hoffman, Cathy Hwang

Faculty Scholarship at Penn Law

When private parties perform contracts, the public bears some of the costs. But what happens when society confronts unexpected contractual risks? During the COVID-19 pandemic, completing particular contracts—such as following through with weddings, conferences, and other large gatherings—will greatly increase the risk of rapidly spreading disease. A close reading of past cases illustrates that when social hazards sharply increase after formation, courts have sometimes rejected, reformed, and reinterpreted contracts so that parties who breach to reduce external harms are not left holding the bag.

This Essay builds on that observation in making two contributions. Theoretically, it characterizes contracts ...


Caremark And Esg, Perfect Together: A Practical Approach To Implementing An Integrated, Efficient, And Effective Caremark And Eesg Strategy, Leo E. Strine Jr., Kirby M. Smith, Reilly S. Steel Jan 2021

Caremark And Esg, Perfect Together: A Practical Approach To Implementing An Integrated, Efficient, And Effective Caremark And Eesg Strategy, Leo E. Strine Jr., Kirby M. Smith, Reilly S. Steel

Faculty Scholarship at Penn Law

With increased calls from investors, legislators, and academics for corporations to consider employee, environmental, social, and governance factors (“EESG”) when making decisions, boards and managers are struggling to situate EESG within their existing reporting and organizational structures. Building on an emerging literature connecting EESG with corporate compliance, this Essay argues that EESG is best understood as an extension of the board’s duty to implement and monitor a compliance program under Caremark. If a company decides to do more than the legal minimum, it will simultaneously satisfy legitimate demands for strong EESG programs and promote compliance with the law. Building ...


Reversing The Fortunes Of Active Funds, Adi Libson, Gideon Parchomovsky Jan 2021

Reversing The Fortunes Of Active Funds, Adi Libson, Gideon Parchomovsky

Faculty Scholarship at Penn Law

In 2019, for the first time in the history of U.S. capital markets, passive funds surpassed active funds in terms of total assets under management. The continuous growth of passive funds at the expense of active funds is a genuine cause for concern. Active funds monitor the management and partake of decision-making in their portfolio companies. Furthermore, they improve price efficiency and managerial performance by engaging in informed trading. The buy/sell decisions of active funds provide other market participants reliable information about the quality of firms. The cost of active investing is significant and it is exclusively borne ...


Uncertainty > Risk: Lessons For Legal Thought From The Insurance Runoff Market, Tom Baker Jan 2021

Uncertainty > Risk: Lessons For Legal Thought From The Insurance Runoff Market, Tom Baker

Faculty Scholarship at Penn Law

Insurance ideas inform legal thought: from tort law, to health law and financial services regulation, to theories of distributive justice. Within that thought, insurance is conceived as an ideal type in which insurers distribute determinable risks through contracts that fix the parties’ obligations in advance. This ideal type has normative appeal, among other reasons because it explains how tort law might achieve in practice the objectives of tort theory. This ideal type also supports a restrictive vision of liability-based regulation that opposes expansions and supports cutbacks, on the grounds that uncertainty poses an existential threat to insurance markets.

Prior work ...


The Looming Crisis In Antitrust Economics, Herbert J. Hovenkamp Jan 2021

The Looming Crisis In Antitrust Economics, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

As in so many areas of law and politics in the United States, antitrust’s center is at bay. It is besieged by a right wing that wants to limit antitrust even more than it has been limited over the last quarter century. On the left, it faces revisionists who propose significantly greater enforcement.

One thing the two extremes share, however, is denigration of the role of economics in antitrust analysis. On the right, the Supreme Court’s two most recent antitrust decisions at this writing reveal that economic analysis no longer occupies the central role that it once had ...


Power And Statistical Significance In Securities Fraud Litigation, Jill E. Fisch, Jonah B. Gelbach Jan 2021

Power And Statistical Significance In Securities Fraud Litigation, Jill E. Fisch, Jonah B. Gelbach

Faculty Scholarship at Penn Law

Event studies, a half-century-old approach to measuring the effect of events on stock prices, are now ubiquitous in securities fraud litigation. In determining whether the event study demonstrates a price effect, expert witnesses typically base their conclusion on whether the results are statistically significant at the 95% confidence level, a threshold that is drawn from the academic literature. As a positive matter, this represents a disconnect with legal standards of proof. As a normative matter, it may reduce enforcement of fraud claims because litigation event studies typically involve quite low statistical power even for large-scale frauds.

This paper, written for ...


Compensation, Commodification, And Disablement: How Law Has Dehumanized Laboring Bodies And Excluded Nonlaboring Humans, Karen M. Tani Jan 2021

Compensation, Commodification, And Disablement: How Law Has Dehumanized Laboring Bodies And Excluded Nonlaboring Humans, Karen M. Tani

Faculty Scholarship at Penn Law

This essay reviews Nate Holdren's Injury Impoverished: Workplace Accidents, Capitalism, and Law in the Progressive Era (Cambridge University Press, 2020), which explores the changes in legal imagination that accompanied the rise of workers' compensation programs. The essay foregrounds Holdren’s insights about disability. Injury Impoverished illustrates the meaning and material consequences that the law has given to work-related impairments over time and documents the naturalization of disability-based exclusion from the formal labor market. In the present day, with so many social benefits tied to employment, this exclusion is particularly troubling.


The History And Revival Of The Corporate Purpose Clause, Elizabeth Pollman Jan 2021

The History And Revival Of The Corporate Purpose Clause, Elizabeth Pollman

Faculty Scholarship at Penn Law

The corporate purpose debate is experiencing a renaissance. The contours of the modern debate are relatively well developed and typically focus on whether corporations should pursue shareholder value maximization or broader social aims. A related subject that has received much less scholarly attention, however, is the formal legal mechanism by which a corporation expresses its purpose—the purpose clause of the corporate charter. This Article examines corporate purpose through the evolution of corporate charters. Starting with historic examples ranging from the Dutch East India Company to early American corporations and their modern 21st century parallels, the discussion illuminates how corporate ...


Restoration: The Role Stakeholder Governance Must Play In Recreating A Fair And Sustainable American Economy A Reply To Professor Rock, Leo E. Strine Jr. Dec 2020

Restoration: The Role Stakeholder Governance Must Play In Recreating A Fair And Sustainable American Economy A Reply To Professor Rock, Leo E. Strine Jr.

Faculty Scholarship at Penn Law

In his excellent article, For Whom is the Corporation Managed in 2020?: The Debate Over Corporate Purpose, Professor Edward Rock articulates his understanding of the debate over corporate purpose. This reply supports Professor Rock’s depiction of the current state of corporate law in the United States. It also accepts Professor Rock’s contention that finance and law and economics professors tend to equate the value of corporations to society solely with the value of their equity. But, I employ a less academic lens on the current debate about corporate purpose, and am more optimistic about proposals to change our ...


A Babe In The Woods: An Essay On Kirby Lumber And The Evolution Of Corporate Law, Lawrence Hamermesh Dec 2020

A Babe In The Woods: An Essay On Kirby Lumber And The Evolution Of Corporate Law, Lawrence Hamermesh

Faculty Scholarship at Penn Law

This essay examines the development of corporate law during the time span of the author's career, focusing on the interrelated subjects of valuation, corporate purpose, and shareholder litigation.


Antitrust And Platform Monopoly, Herbert J. Hovenkamp Nov 2020

Antitrust And Platform Monopoly, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Are large digital platforms that deal directly with consumers “winner take all,” or natural monopoly, firms? That question is surprisingly complex and does not produce the same answer for every platform. The closer one looks at digital platforms the less they seem to be winner-take-all. As a result, competition can be made to work in most of them. Further, antitrust enforcement, with its accommodation of firm variety, is generally superior to any form of statutory regulation that generalizes over large numbers.

Assuming that an antitrust violation is found, what should be the remedy? Breaking up large firms subject to extensive ...


Network Effects In Action, Christopher S. Yoo Nov 2020

Network Effects In Action, Christopher S. Yoo

Faculty Scholarship at Penn Law

This Chapter begins by examining and exploring the theoretical and empirical limits of the possible bases of network effects, paying particular attention to the most commonly cited framework known as Metcalfe’s Law. It continues by exploring the concept of network externalities, defined as the positive external consumption benefits that the decision to join a network creates for the other members of the network, which is more ambiguous than commonly realized. It then reviews the structural factors needed for models based on network effects to have anticompetitive effects and identifies other factors that can dissipate those effects. Finally, it identifies ...