Law Commons^™

Foreword: The New Estates, Lance Liebman

Faculty Scholarship

Telecommunications Law is under pressure from fast-paced technological advances and changes in the industry structure. As the high-stakes debates plays itself out in federal and state legislatures, agencies and courts, the academic study is struggling to catch up. The author poses provocative questions about the present and future of Telecommunications Law. Of paramount interest are the ill-fitting legal categories that continue to influence crucial determinations about the level of First Amendment protection accorded various communications media, and the reach of Constitutional Takings doctrine that pits incumbent regulated industries against government regulators and up-start competitors looking to shake-up the established order. …

What Law Is Like, George P. Fletcher

Faculty Scholarship

It is not easy to do philosophy in the tradition of Wittgenstein and Malcolm. The human mind gravitates toward authority – the Bible, great teachers, poets, gurus, even judges. Lawyers, in particular, are captives of authoritive constitutions, statutes, cases, and ruling doctrines. We cannot make a move without citing a source as a backup.

Perhaps this is the way it should be, for as lawyers or legal theorists, we speak in a particular legal culture and tradition. We cultivate that tradition, even as we dissent and subject it to criticism. The tradition is defined by the authorities that have shaped …

Standard Form Contracts, Avery W. Katz

Faculty Scholarship

Among legal commentators, standard form contracts have long been received with distrust, and the rules governing their interpretation have engendered considerable controversy. While economic analysis has little to say regarding the libertarian objection to standard form contracts or their relationship to personal autonomy, it can help evaluate their effects on efficiency and the distribution of the gains from trade. From such a perspective, standard forms should be analyzed like any other productive input, comparable to design, marketing, and technical support. Whether their use raises any special regulatory or policy concerns, therefore, depends on their implications for the standard litany of …

The Rise Of Sublocal Structures In Urban Governance, Richard Briffault

Faculty Scholarship

The dominant law and economics model of local government, based on the work of Charles M. Tiebout, assumes that decentralization of power to local governments promotes the efficient delivery of public goods and services. In his seminal article, A Pure Theory of Local Expenditures, Tiebout contended that the existence of a large number of local governments in any given area permits a "market solution" to the question of how to determine the level and mix of government services that people desire. The multiplicity of local governments in an area means that, as long as each locality is free to …

Municipal Powers Under Seqra, Michael B. Gerrard

Faculty Scholarship

The State Environmental Quality Review Act (SEQRA) confers considerable powers on New York State municipalities. In fact, most municipalities are probably unaware of the full scope of authority they are given by this statute.

In Honor Of Stefan A. Riesenfeld, Lori Fisler Damrosch

Faculty Scholarship

In this issue dedicated to Professor Riesenfeld, his achievements as a scholar and teacher will appropriately receive central attention. As a contributor who also worked with him in his Washington days, I would like first to recall a few anecdotes from that time (which I hope he remembers as fondly as I do) and then turn to an assessment of his contributions to the literature on the interface between the constitutional and international law of treaties.

The Net Profits Puzzle, Victor P. Goldberg

Faculty Scholarship

The use of "net profits" clauses in the movie business poses a problem. The standard perception is that Hollywood accounting results in successful films showing no net profits. If that is indeed so, then why have they survived for over four decades? This Essay argues that a successful movie will fail to yield net profits only if a "gross participant" (a major star whose compensation is in part a function of the film's gross receipts) becomes associated with the film. Since the net profits participants typically are associated with a project first, the question becomes: Why would they be willing …

Campaign Finance, The Parties And The Court: A Comment On Colorado Republican Federal Campaign Committee V. Federal Elections Commission, Richard Briffault

Faculty Scholarship

Last term, In Colorado Republican Federal Campaign Committee v. Federal Election Commission, the Supreme Court considered a direct attack on the constitutionality of the Federal Election Campaign Act's ("FECA") limits on political party expenditures. Colorado Republican was the Court's first campaign finance case in six years and the first in which the four Justices appointed by Presidents Bush and Clinton had an opportunity to participate. Colorado Republican was also the first case in the twenty-year regime of Buckley v. Valeo concerned with the constitutionality of restrictions on parties. Coming at a time of rising public concern, increased legislative activity, …

Deregulatory Takings, Breach Of The Regulatory Contract, And The Telecommunications Act Of 1996, William J. Baumol, Thomas W. Merrill

Faculty Scholarship

Professors Baumol and Merrill reply to Deregulatory Takings and Breach of the Regulatory Contract, published last year in this Review, which argued that the price incumbents may charge potential competitors for bottleneck facilities under the Telecommunications Act of 1996 should be based not on forward-looking costs but on historical costs. Professors Baumol and Merrill contend that pricing with reference to historical costs would depart from the principles called for by economic analysis for efficient pricing and they further argue that neither the Takings Clause nor the regulatory contract precludes the use of forward-looking costs in setting prices. If a taking …

Employees, Pensions, And The New Economic Order, Jeffrey N. Gordon

Faculty Scholarship

The "New Economic Order" in the United States is a regime of trade liberalization, a robust market in corporate control, and labor market flexibility. Among the consequences over the 1980-1995 period is a divergence between the growth rate of corporate profits and stocks prices, which have increased by approximately 250% in real terms, and wages, which have barely increased at all, except for the top quintile. Contrary to popular belief employees have not significantly participated through their pension funds in this stock market appreciation. In the historically dominant defined benefit pension plan, the sponsoringfirm, not the employee, is the residual …

William J. Brennan, Jr., American – In Memoriam, Gerard E. Lynch

Faculty Scholarship

No abstract provided.

Securities Disclosure In A Globalizing Market: Who Should Regulate Whom, Merritt B. Fox

Faculty Scholarship

One of the most dramatic examples of increasing interaction across national boundaries in recent years has been the burgeoning volume of transnational transactions in corporate equities. Most developed capitalist countries impose affirmative obligations on issuers of corporate equity to disclose certain information about themselves. While these obligations are imposed on issuers, they are triggered by transactions. The growth in transnational transactions is thus increasingly raising difficult issues concerning the reach of differing national regimes. Given the magnitude of legal resources devoted to compliance with such disclosure regulations, they promise to feature prominently in the larger discussion of the role of …

Cyberspace Sovereignty? – The Internet And The International System, Tim Wu

Faculty Scholarship

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of the Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.

By linking with the Internet, we don't mean absolute freedom of information. I think there is a general understanding about this. If you go through customs, you have to show your passport. It's the same with management of information. There is no contradiction at all between the development of telecommunications …

From The Bottom Up, Kent Greenawalt

Faculty Scholarship

This Article is about carrying out informal instructions given by people in authority. Although many scholars have written about how legal interpretation resembles interpretation in fields such as literature and religion, few have compared informal instructions and legal rules. My most basic assumption in this Article is that focus on informal situations can illumine the standards people use in performing instructions and the kinds of meaning they attribute to instructions. As my title implies, if we reflect on what amounts to faithful or desirable performance of informal directives and the more conceptual question of what these prescriptive standards "mean," we …

Legal Design And The Evolution Of Commercial Norms, Jody S. Kraus

Faculty Scholarship

The Uniform Commercial Code determines the content of most commercial law default rules by incorporating common merchant practices. The success of this incorporation strategy depends on the likely efficiency of evolved commercial practices. In this Article, I use the best available theory of cultural evolution to analyze how and why commercial practices evolve. This analysis confirms that the incorporation strategy is far superior to a system in which lawmakers rely predominantly on individual analysis and experimentation to design commercial law. But the analysis also demonstrates that common commercial practices, and the laws incorporating them, are unlikely to be optimal, in …

The Fine Art Of Judging: William T. Allen, Ronald J. Gilson

Faculty Scholarship

I feel more than a little conflicted about writing to commemorate Bill Allen's completion of his term as Chancellor of Delaware. Economists understand the inefficiencies that result when private and public benefits diverge: people seek their advantage even though the public bears more than offsetting costs. That pretty well describes the dissonance I'm experiencing about this event. The benefit to me of gaining a good friend as a neighbor, and to the NYU Law School community from the addition of this remarkable man as a colleague and teacher, are dwarfed by the cost to the entire corporate law community from …

Brave New World?: The Impact(S) Of The Internet On Modern Securities Regulation, John C. Coffee Jr.

Faculty Scholarship

It is now a trite commonplace that the advent of the Internet will in time revolutionize securities regulation. Merely the facts that the Internet has somewhere between thirty and sixty million users worldwide today (with an estimated ten to thirty million in the United States) and that some 800,000 U.S. investors already have online brokerage accounts establish that there is a potential global market that can be accessed at very low cost. But the magnitude of the market says little about what will be the character and effect of this approaching revolution.

Technological change is not a new phenomenon for …

The Role Of Criminal Law In Policing Corporate Misconduct, Gerard E. Lynch

Faculty Scholarship

In the early 1990s, I spent a couple of years as Chief of the Criminal Division in the Office of the U.S. Attorney for the Southern District of New York. One of my principal responsibilities was to hear "appeals" from defense lawyers, usually, although not exclusively, in white collar crime cases. These lawyers felt that their clients should not be indicted, or that the plea offer they had received from the prosecutor in charge of the case was unduly severe. Sometimes their arguments were essentially factual contentions that the government had the wrong take on the evidence – that the …

Capture Theory And The Courts: 1967-1983, Thomas W. Merrill

Faculty Scholarship

The Administrative Procedure Act ("APA") is a framework statute, not a complete code. Its central provisions are rather spare, and a number of important questions are not covered at all. It comes as no surprise, therefore, that the judicial gloss on the APA has taken on a large significance over time. It should also come as no surprise that this interpretative mantle has assumed a different shape with different generations of judges. In this respect, our experience with the APA parallels that with the Constitution. Occasionally there is a feint in the direction of enforcing the "original understanding" of the …

Explaining The Pattern Of Secured Credit, Ronald J. Mann

Faculty Scholarship

Granting collateral to secure loans is a prominent feature of the U.S. economy, but, surprisingly, we do not understand how borrowers and lenders decide whether to engage in a secured or an unsecured transaction. In this Article, Professor Mann argues that existing theories of secured lending are inadequate because the theories' predictions have not been tested against empirical data. To understand the actual pattern of secured credit, Professor Mann interviewed more than twenty borrowers and lenders in various sectors of the economy. Based on the evidence gathered in these interviews, as well as on preexisting empirical studies, this Article develops …

The Bylaw Battlefield: Can Institutions Change The Outcome Of Corporate Control Contests?, John C. Coffee Jr.

Faculty Scholarship

What, if anything, can institutional investors do to influence the course and outcome of corporate control contests? The traditional answer was relatively little. To be sure, institutions could tender their shares in a tender offer or vote in a proxy contest to oust the incumbent board, but such a role was essentially reactive and contingent. It required that an offer actually be made before institutions could respond on an after-the-fact basis. Similarly, institutions have occasionally conducted precatory proxy campaigns calling upon the board to redeem its poison pill, but management was free to ignore these requests (and has done so).

Contract Formation And Interpretation, Avery W. Katz

Faculty Scholarship

Much research in law and economics, following Coase's insight that the effects of a legal rule depend on the ability of those whom it governs to bargain around it, has undertaken to explain how substantive entitlements such as property rights influence the bargaining process. Perhaps more important than any substantive rights or duties in this regard, however, is the extensive body of contract doctrine that governs the procedural mechanics of exchange. The formal rules of contract formation, by attaching consequences to the various acts and omissions that bargainers can choose from in a negotiation, affect the parties' incentives to make …

Asteroids And Comets: U.S. And International Law And The Lowest-Probability, Highest Consequence Risk, Michael B. Gerrard, Anna W. Barber

Faculty Scholarship

Asteroids and comets pose unique policy problems. They are the ultimate example of a low probability, high consequence event: no one in recorded human history is confirmed to have ever died from an asteroid or a comet, but the odds are that at some time in the next several centuries (and conceivably next year) an asteroid or a comet will cause mass localized destruction and that at some time in the coming half million years (and conceivably next year), an asteroid or a comet will kill several billion people. The sudden extinction of the dinosaurs, and most other species 65 …

Territoriality, Risk Perception, And Counterproductive Legal Structures: The Case Of Waste Facility Siting, Michael B. Gerrard

Faculty Scholarship

The siting of hazardous and nuclear waste facilities has proven to be a task of enormous difficulty in our federal system. In this Article, the Author argues that one of the major causal factors for this difficulty is that the legal regime surrounding waste facility siting decisions is not structured in a manner sensitive to the human factors involved. The siting of a hazardous waste facility is likely to generate a negative community response where the imposition of externally made decisions and externally generated wastes fails to take into account the innate human trait of territoriality. Territoriality is a powerful …

The Folklore Of Investor Capitalism, John C. Coffee Jr.

Faculty Scholarship

Ideally, Thurman Arnold should review this book. In his The Folklore of American Capitalism, Arnold dissected the ideology and rationalizations by which the business community of an earlier day defended its legitimacy and perquisites. Michael Useem, a sociologist at the Wharton School, also has an interest in the ideology of the business community: how corporate managers view the new institutional investors, how they justify resistance, and the tensions and inconsistencies between their critiques of money managers and their own behavior. This is an underutilized perspective (which law and economics inherently tends to overlook), and Useem is at his best …

The Invisible Barbecue, Eben Moglen

Faculty Scholarship

Past legislation subsidizing the development of infrastructural technology has borne the mark of political corruption. The subject matter of the Telecommunications Act of 1996 falls within the same category of legislation that has fallen prey to this process in the past. In an effort to discern whether such forces are at work today, Professor Moglen undertakes a critical examination of the metaphors that pervade the current scholarly discourse on the subject of telecommunications law. Terms such as "Superhighway," "Broadcasting," and "Market for Eyeballs" reveal a great deal about the implicit assumptions at work behind the current scholarship and legislation, and …

Police Discretion And The Quality Of Life In Public Places: Courts, Communities, And The New Policing, Debra A. Livingston

Faculty Scholarship

The advent of community and problem-oriented policing – the so-called "quality-of-life" policing philosophies – raises complex questions concerning police discretion in addressing minor street misconduct and judicial response to that discretion. In this Article, Debra Livingston addresses these questions by reassessing the ways in which courts have employed the facial vagueness doctrine to limit police discretion in the performance of "order maintenance" tasks. Livingston contends that aggressive employment of the facial vagueness doctrine is an inadequate mechanism for limiting police discretion and at the same time could impair positive change in the direction of community and problem-oriented policing. As an …

Congressional Reviews Of Agency Regulations, Daniel Cohen, Peter L. Strauss

Faculty Scholarship

On March 29, 1996, President Clinton signed Public Law 104-121, the Contract with America Advancement Act of 1996. Title II, the Small Business Regulatory Enforcement Fairness Act of 1996 ("Act"), among other things, added a new chapter 8 to Title 5 of the United States Code. Chapter 8 requires congressional review of agency regulations. Beginning March 29, 1996, all federal agencies, including independent agencies, are required to submit each final and interim final rule for review by Congress and to the General Accounting Office (GAO) before the final or interim final rule can take effect (hereinafter final and interim final …

The Truth About Secured Financing, Robert E. Scott

Faculty Scholarship

The debate over the social value of secured credit (and the appropriate priority for secured claims in bankruptcy) is entering its nineteenth year. Yet the continuing publication of succeeding generations of articles exploring the topic have yielded precious little in the way of an emerging scholarly consensus about the nature and function of secured credit. Put simply, we still do not have a theory, of finance that explains why firms sometimes (but not always) issue secured debt rather than unsecured debt or equity. Moreover (and perhaps because of the lack of any plausible general theory), we lack any persuasive empirical …

International Aspects Of Fundamental Tax Reconstructing: Practice Or Principle, Michael J. Graetz

Faculty Scholarship

The globalization of economic activity, including the expansion of international trade, the amazing ability of international capital markets to transfer capital rapidly across borders, and the movement in Europe toward greater economic unification, have made it more difficult for nations independently to fashion tax laws that properly balance their own equity, economic efficiency and simplicity goals. This is what makes this conference to analyze the international aspects of recent proposals to replace the federal income tax with some form of consumption tax, with particular emphasis on the Nunn-Domenici "USA" tax and the Armey-Shelby flat tax ("flat tax"), so important. As …