Law Commons^™

Are People In Federal Territories Part Of “We The People Of The United States”?, Gary S. Lawson, Guy Seidman

Faculty Scholarship

In 1820, a unanimous Supreme Court proclaimed: “The United States is the name given to our great republic, which is composed of states and territories.” While that key point is simple, and perhaps even obvious, the constitutional implications of such a construction of “the United States” as including federal territories are potentially far reaching. In particular, the Constitution’s Preamble announces that the Constitution is authored by “We the People of the United States” and that the document is designed to “secure the Blessings of Liberty” to the author and its “Posterity.” If inhabitants of federal territory are among “We the …

The Surprising Virtues Of Data Loyalty, Woodrow Hartzog, Neil M. Richards

Faculty Scholarship

Lawmakers in the United States and Europe are seriously considering imposing duties of data loyalty that implement ideas from privacy law scholarship, but critics claim such duties are unnecessary, unworkable, overly individualistic, and indeterminately vague. This paper takes those criticisms seriously, and its analysis of them reveals that duties of data loyalty have surprising virtues. Loyalty, it turns out, can support collective well-being by embracing privacy’s relational turn; it can be a powerful state of mind for reenergizing privacy reform; it prioritizes human values rather than potentially empty formalism; and it offers solutions that are flexible and clear rather than …

Legislating Data Loyalty, Woodrow Hartzog, Neil Richards

Faculty Scholarship

Lawmakers looking to embolden privacy law have begun to consider imposing duties of loyalty on organizations trusted with people’s data and online experiences. The idea behind loyalty is simple: organizations should not process data or design technologies that conflict with the best interests of trusting parties. But the logistics and implementation of data loyalty need to be developed if the concept is going to be capable of moving privacy law beyond its “notice and consent” roots to confront people’s vulnerabilities in their relationship with powerful data collectors.

In this short Essay, we propose a model for legislating data loyalty. Our …

Comment On Proposed Regulation: Prudence And Loyalty In Selecting Plan Investments And Exercising Shareholder Rights, David H. Webber

Shorter Faculty Works

In my view, while it is a significant improvement over its predecessor, the proposed rule’s persistent relegation of job creation/preservation to the status of mere “collateral benefit” is a mistake and undermines ERISA’s duty of loyalty. In reality, job creation and preservation are inextricably linked to fund financial health. Relegating that fact to a mere collateral benefit means trustees fail to consider the effect on a pension of investing in projects that eliminate the jobs of the fund’s own participants, or ignore the benefit of creating new jobs and thereby new pension contributors. This runs counter to President Biden’s executive …

Changemakers: Finding The Perfect Niche, Michael Bowden

Life of the Law School (1993- )

No abstract provided.

Fiduciary Law And The Law Of Public Office, Ethan J. Leib, Andrew Kent

Faculty Scholarship

A law of public office crystallized in Anglo-American law in the seventeenth and eighteenth centuries. This body of law—defined and enforced through a mix of oaths, statutes, criminal and civil case law, impeachments, and legislative investigations—imposed core duties on holders of public executive offices: officials needed to serve the public good, not their own private interests; were barred from acting ultra vires; could often be required to account to the public for their conduct in office; and needed to act with impartiality, honesty, and diligence. Officeholding came to be viewed as conditional, with officers removable for misdeeds. These substantive duties …

A Duty Of Loyalty For Privacy Law, Neil M. Richards, Woodrow Hartzog

Faculty Scholarship

Data privacy law fails to stop companies from engaging in self-serving, opportunistic behavior at the expense of those who trust them with their data. This is a problem. Modern tech companies are so entrenched in our lives and have so much control over what we see and click that the self-dealing exploitation of people has become a major element of the internet’s business model.

Academics and policymakers have recently proposed a possible solution: require those entrusted with people’s data and online experiences to be loyal to those who trust them. But many have concerns about a duty of loyalty. What, …

Corporate Adolescence: Why Did “We” Not Work?, Donald C. Langevoort, Hillary A. Sale

Georgetown Law Faculty Publications and Other Works

This article explores a series of rent-seeking behaviors and fiduciary deficits that are playing a role in the “growth” and demise of U.S. companies. Start-up financing occurs through exemptions that remove disclosure obligations required in public markets, assuming that private ordering suffices. The exemptive-privilege premise is that parties to financing rounds will be faithful agents, i.e., fiduciaries, to their sources of capital. Where there are conflicts of interest, fiduciary deficits will arise unless either the threat of litigation for breaches of duty sufficiently deters the resulting opportunism or the sources of capital are themselves sufficiently watchful and savvy to combat …

Motives And Fiduciary Loyalty, Stephen R. Galoob, Ethan J. Leib

Faculty Scholarship

How, if at all, do motives matter to loyalty? We have argued that loyalty (and the duty of loyalty in fiduciary law) has a cognitive dimension. This kind of “cognitivist” account invites the counterargument that, because most commercial fiduciary relationships involve financial considerations, purity of motive cannot be central to loyalty in the fiduciary context. We contend that this counterargument depends on a flawed understanding of the significance of motive to loyalty. We defend a view of the importance of motivation to loyalty that we call the compatibility account. On this view, A acts loyally toward B only if …

Fiduciary Legal Ethics, Zeal, And Moral Activism, David Luban

Georgetown Law Faculty Publications and Other Works

The recent turn to fiduciary theory among private lawyer scholars suggests that "lawyer as fiduciary" may provide a fresh justification for legal ethics distinct from moral and political accounts propounded by theorists in recent decades. This Article examines the justification and limits of fiduciary legal ethics. In the course of the investigation, it argues that the fiduciary relation of lawyer to client as defined in the ethics codes does not align perfectly with fiduciary principles in other legal domains, such as agency, trust, or corporate law. Lawyers are fiduciaries of their clients. Does that mean lawyers can never throttle back …

Authors’ Response: An Enquiry Concerning Constitutional Understanding, Gary S. Lawson, Guy I. Seidman

Faculty Scholarship

One of Professor Lawson’s first students, alluding to a 1985 article with the provocative title “Why Professor [Marty] Redish Is Wrong about Abstention,” declared that his ambition was to inspire someone to write an article entitled “Why [the student] Is Wrong about XXX.” The student claimed that, regardless of what filled in the “XXX,” this event would be the pinnacle of academic accomplishment.

If that view is even close to the mark, then having an entire conference devoted to explaining why Professors Lawson and Seidman are wrong about the Constitution is an extraordinary honor. In all seriousness, we are genuinely …

Are Literary Agents (Really) Fiduciaries?, Jacqueline Lipton

Articles

2018 was a big year for “bad agents” in the publishing world. In July, children’s literature agent Danielle Smith was exposed for lying to her clients about submissions and publication offers. In December, major literary agency Donadio & Olson, which represented a number of bestselling authors, including Chuck Palahnuik (Fight Club), filed for bankruptcy in the wake of an accounting scandal involving their bookkeeper, Darin Webb. Webb had embezzled over $3 million of client funds. Around the same time, Australian literary agent Selwa Anthony lost a battle in the New South Wales Supreme Court involving royalties she owed to her …

Designing Deregulation: The Potus's Place In The Process, Joan Macleod Heminway

Scholarly Works

Candidates for U.S. president — like those for any elected office or leadership position — make promises about what they will do if they are elected to office. If we take time to think through what must be done to fulfill those promises, however, we may find that the action or forbearance of Congress, the federal courts, or others is required to achieve the pledged objectives. Nevertheless, we expect the president to make good on those campaign commitments — and more. Our current president, for example, ran a campaign in which deregulation was a centerpiece.

This essay interrogates the role …

Time To Act: Response To Questions Posed By The Expert Panel On Sustainable Finance On Fiduciary Obligation And Effective Climate-Related Financial Disclosures, Cynthia Williams, Janis P. Sarra

Commissioned Reports, Studies and Public Policy Documents

The Expert Panel on Sustainable Finance has been commissioned by the Canadian Government to determine how best to generate sustainable finance, a significant challenge given the carbon intensity of Canada’s economy. The Expert Panel has defined sustainable finance as capital flows, risk management activities and financial processes that assimilate environmental and social factors as a means of promoting sustainable economic growth and the long-term stability of the financial system. While there are numerous strategies to be deployed to move Canada to a financially sustainable future, this report addresses two critically important issues: fiduciary obligation of corporate- and pension-fiduciaries, and national …

Time To Act: Response To Questions Posed By The Expert Panel On Sustainable Finance On Fiduciary Obligation And Effective Climate-Related Financial Disclosures, Janis P. Sarra, Cynthia Williams

All Faculty Publications

While there are numerous strategies to be deployed to move Canada to a financially sustainable future, this study addresses two critically important issues: fiduciary obligation of corporate- and pension-fiduciaries, and national action on environmental, social and governance (“ESG”) financial disclosure, including climate-related financial risk disclosure. The Canadian economy is facing significant challenges and disruptions in the transition to a lower carbon world. Absent clear and innovative steps to ensure our corporations and financial institutions act to address carbon emissions and other environmental, social and governance risks and opportunities, we will be seriously prejudiced in a world that is rapidly moving …

A Fiduciary Theory Of Prosecution, Bruce A. Green, Rebecca Roiphe

Faculty Scholarship

Scholars have failed to arrive at a unifying theory of prosecution, one that explains the complex role that prosecutors play in our democratic system. This Article draws on a developing body of legal scholarship on fiduciary theory to offer a new paradigm that grounds prosecutors’ obligations in their historical role as fiduciaries. Casting prosecutors as fiduciaries clarifies the prosecutor’s obligation to seek justice, focuses attention on the duties of care and loyalty, and prioritizes criminal justice considerations over other public policy interests in prosecutorial charging and plea-bargaining decisions. As fiduciaries, prosecutors are required to engage in an explicit deliberative process …

Fiduciary Constitutionalism: Implications For Self- Pardons And Non-Delegation, Ethan J. Leib, Jed H. Shugerman

Faculty Scholarship

The idea that public servants hold their offices in trust for subject-beneficia-ries and that a sovereign’s exercise of its political power must be constrained by fiduciary standards—like the duties of loyalty and care—is not new. But scholars are collecting more and more evidence that the framers of the U.S. Constitution may have sought to constrain public power in ways that we would today call fiduciary. In this article, we explore some important legal conclu-sions that follow from fiduciary constitutionalism.

After developing some historical links between private fiduciary instruments and state and federal constitutions, we opine on what a fiduciary constitution …

Milking The Estate, David R. Hague

Faculty Articles

Recent Chapter 7 bankruptcy cases are exposing a widespread problem. Chapter 7 trustees are retaining their own law firms to represent them and then in clear breach of their fiduciary duties to creditors-requesting illegitimate legal fees to be paid by the estate. This practice is immoral and particularly harmful to creditors. Indeed, every dollar paid to the trustee and his firm is a dollar that will not be distributed to creditors. The Bankruptcy Code, remarkably, allows a trustee to retain his own law firm to represent him in his capacity as a trustee. But this inherently conflicted arrangement is not …

Regularizing The Trust Protector, Paul B. Miller

Journal Articles

Increasingly, settlors of trusts in on-shore jurisdictions are making use of trust protectors. Protectors serve a variety of functions but generally speaking they are appointed to provide additional security for settlors’ expectations that trusts will be administered in accordance with their intentions. Given the potential breadth and variety of functions performed and powers wielded by protectors, their use generates important and profound theoretical issues. Taking its cues from recent efforts to regularize trust protection, this essay addresses questions concerning the extension of fiduciary duties to trust protectors. Amongst other things, it questions the tenability of proposals for broad extension of …

Defining "Fiduciary": Differences In Fiduciary Standards Within The Securities Industry, Christine Lazaro

Faculty Publications

Investment professionals are subject to varying standards of conduct when providing advice to clients. The standards range from providing advice which is suitable to acting consistently with a fiduciary standard.

The article provides a brief history of the applicable securities statutes governing investment advice. It discusses the differences in the enactment of the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and the Employee Retirement Income Security Act of 1974.

Next, the article discusses how each statute has impacted the standards applicable to brokers and investment advisers. Investment advisers are deemed fiduciaries. Brokers are held to the …

Unauthorised Fiduciary Gains And The Constructive Trust, Alvin W. L. See

Research Collection Yong Pung How School Of Law

This article challenges the traditional assumption that all cases of unauthorised fiduciary gain warrant the same legal treatment, in particular the imposition of a constructive trust as a disgorgement remedy. It proposes a method of categorising the cases and ranking them based on the strength of the principal’s interest. It is suggested that in cases where the principal’s interest is not particularly strong, there is room for taking into account the interests of innocent third parties and affording them the necessary protection. For this purpose, the remedial constructive trust supplies the needed flexibility.

By Any Other Name: Rational Basis Inquiry And The Federal Government's Fiduciary Duty Of Care, Gary S. Lawson

Faculty Scholarship

Under modern law, federal legislation is subject to “rational basis review” under the doctrinal rubric of “substantive due process.” That construction of the Fifth Amendment’s Due Process Clause is notoriously difficult to justify as a matter of original constitutional meaning. Something very similar to substantive due process, however, is easily justifiable as a matter of original constitutional meaning once one understands that the Constitution, for interpretative purposes, is best seen as a kind of fiduciary instrument. Fiduciary instruments operate against a background of legal norms that notably include a duty of care on the part of agents. All federal actors …

The “Prudent Person” Standard In Esop Breach Of Duty Of Care Claims, Zien Halwani

Bankruptcy Research Library

(Excerpt)

Employee stock ownership plans (ESOPs) are a form of statutory pension program designed to invest employee retirement assets in the stock of the employer. Under the Employment Retirement and Income Securities Act of 1974 (“ERISA”), ESOP fiduciaries must discharge their duties “with the care, skill, prudence and diligence under the circumstances prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.” This is to say that under ERISA, ESOP fiduciaries are liable for breaches of duty of care, …

Taking Trust Seriously In Privacy Law, Neil Richards, Woodrow Hartzog

Faculty Scholarship

Trust is beautiful. The willingness to accept vulnerability to the actions of others is the essential ingredient for friendship, commerce, transportation, and virtually every other activity that involves other people. It allows us to build things, and it allows us to grow. Trust is everywhere, but particularly at the core of the information relationships that have come to characterize our modern, digital lives. Relationships between people and their ISPs, social networks, and hired professionals are typically understood in terms of privacy. But the way we have talked about privacy has a pessimism problem – privacy is conceptualized in negative terms, …

Fiduciary-Isms: A Study Of Academic Influence On The Expansion Of The Law, Daniel B. Yeager

Faculty Scholarship

Fiduciary law aspires to nullify power imbalances by obligating strong parties to give themselves over to servient parties. For example, due to profound imbalances of legal know-how, lawyers must as fiduciaries pursue their clients’ interests, not their own, lest clients get lost in the competitive shuffle. As a peculiar hybrid of status and contract relations, politics and law, compassion and capitalism, fiduciary law is very much in vogue in academic circles. As vogue as it is, there remains room for my “Fiduciary-isms...”, a meditation on the expansion of fiduciary law from its origins in the law of trusts through partnerships, …

Piercing The Fiduciary Veil, Colin P. Marks

Faculty Articles

Limited partnerships (LPs) and limited liability companies (LLCs) permit formation with a unique management structure in that these entities may be managed by another limited liability entity, such as a corporation. Thus, the true managers are those individuals who manage the manager. It is well settled that the managing entity, such as a corporate general partner, owes default fiduciary duties, but what of these second-tier managers? Technically, it is the managing entity that owes the duties, not the managing entity’s owners, officers, and directors, yet courts have struggled with strict adherence to this separation when it would seem inequitable to …

Equity And Trusts [2014], Hang Wu Tang

Research Collection Yong Pung How School Of Law

No abstract provided.

Sherlock Holmes And The Problem Of The Dead Hand: The Modification And Termination Of "Irrevocable" Trusts, Richard C. Ausness

Law Faculty Scholarly Articles

This Article is about the modification and termination of so-called “irrevocable” trusts. A trust may be made irrevocable at the time of its creation or it may become so at a later time. A testamentary trust is one that is embodied in a will and becomes effective at the testator’s death. Since the testator will be dead by the time the trust becomes effective, he will not be in a position to modify or revoke it. For the same reason, a revocable trust will become irrevocable when the settlor dies or when the power to revoke is released. Finally, an …

Equity And Trusts [2014], Hang Wu Tang

Research Collection Yong Pung How School Of Law

No abstract provided.

Major Investor Losses Due To Conflicted Advice: Brokerage Industry Advertising Creates The Illusion Of A Fiduciary Duty, Joseph C. Peiffer, Christine Lazaro

Faculty Publications

(Excerpt)

No national standard exists today requiring brokerage firms to put their clients’ interests first by avoiding making profits from conflicted advice. In the five years since the passage of the Dodd Frank Act, inaction by the Securities and Exchange Commission (SEC) on a fiduciary standard has cost American investors nearly $80 billion, based on estimated losses of $17 billion per year.

Amid encouraging recent signs of possible action from the Department of Labor and the SEC, there is a compelling case to be made for a ban on conflicted advice in order to protect investors. In the absence of …