Law Commons^™

Beyond The Board Of Directors, Kelli A. Alces

Kelli A. Alces

The law of corporate governance places the board of directors at the top of the corporate decisionmaking structure. So, accountability for corporate decisions rests primarily on the shoulders of part-time employees who lack the time and thorough knowledge of the firm necessary to perform the board’s duties effectively. Corporate governance scholarship is similarly preoccupied with the board of directors. Scholars have debated whether to enhance or diminish the board’s authority within the firm, but all accept that a board of directors should preside over corporate decisionmaking. This Article argues that scholars on both sides of the debate have missed the …

Beyond The Board Of Directors, Kelli A. Alces

Kelli A. Alces

The law of corporate governance places the board of directors at the top of the corporate decisionmaking structure. So, accountability for corporate decisions rests primarily on the shoulders of part-time employees who lack the time and thorough knowledge of the firm necessary to perform the board’s duties effectively. Corporate governance scholarship is similarly preoccupied with the board of directors. Scholars have debated whether to enhance or diminish the board’s authority within the firm, but all accept that a board of directors should preside over corporate decisionmaking. This Article argues that scholars on both sides of the debate have missed the …

Beyond The Board Of Directors, Kelli A. Alces

Kelli A. Alces

The law of corporate governance places the board of directors at the top of the corporate decisionmaking structure. So, accountability for corporate decisions rests primarily on the shoulders of part-time employees who lack the time and thorough knowledge of the firm necessary to perform the board’s duties effectively. Corporate governance scholarship is similarly preoccupied with the board of directors. Scholars have debated whether to enhance or diminish the board’s authority within the firm, but all accept that a board of directors should preside over corporate decisionmaking. This Article argues that scholars on both sides of the debate have missed the …

Judges Who Settle, Hillary A. Sale

Hillary A Sale

This Article develops a construct of judges as gatekeepers in corporate and securities litigation, focusing on the last-period, or settlement stage of the cases. Many accounts of corporate scandals have focused on gatekeepers and the roles they played or, in some cases, abdicated. Corporate gatekeepers, like investment bankers, accountants, and lawyers, function as enablers and monitors. They facilitate transactions and enable corporate actors to access the financial and securities markets. Without them the transactions would not happen. In class actions and derivative litigation, judges are the monitors and enablers. They are required to oversee the litigation arising from bad transactions …

The Taxpayer’S Burden From Product-Related Harm, W. Jonathan Cardi, Ruth Ruttenberg, Estye Ross

W. Jonathan Cardi

Hundreds of billions of dollars are spent every year in the public sector as a result of death, injury, and illness associated with products. The taxpayer takes on this burden, a reality that ought to be considered by courts and policy makers when setting the standards for liability and levels of regulation governing products. Yet, to date, the government has made no attempt to trace specific government expenditures to product-related injuries. Indeed, due to the dearth of government data on the subject, no one to the authors’ knowledge has even constructed an estimate of product-related public expenditures. This article attempts …

Private Ordering In Light Of The Law: Achieving Consumer Protection Through Payment Card Security Measures, Edward A. Morse

Edward A. Morse

A private ordering regime has developed within the payment card industry to define appropriate security practices and to monitor compliance by network participants. Market demands for trustworthy systems upon which consumers and merchants could rely provide incentives for security, which are supplemented by privately-designed fines and sanctions imposed through contract by the card brands. Although private ordering has functioned sufficiently well to make payment cards a trusted payment method, the system is not completely secure, as data security breaches have continued to occur. This is not surprising, as complete security is not a feasible goal. Nevertheless, some have questioned whether …

More Affordable Housing, But Where, And For Whom?, Brian N. Biglin

Brian N Biglin

The Low Income Housing Tax Creit (LIHTC) is the largest subsidy for the development of affordable housing. This paper explains what developments are eligible for it, how it has been used, and its interaction with other legal frameworks. Most notably, this paper will show that the LIHTC has subsidized developments in poor areas of inner cities that generally house poor people almost exclusively, rather than mixing affordable housing with market-rate housing. This paper will show that the concentration of the LIHTC in inner cities is at odds with mandates such as New Jersey's Mount Laurel duty to develop affordable housing …

Predicting Violence, Shima Baradaran

Shima Baradaran

The last several years have seen a marked rise in state and federal pretrial detention rates. There has been very little scholarly analysis of whether increased detention is reducing crime, and the discussion that has taken place has largely relied on small scale local studies with conflicting results. This article asks whether the United States is making substantially mistaken judgments about who is likely to commit crimes while on pretrial release and whether we are detaining the right people. Relying on the largest dataset of pretrial defendants in the U.S., this article determines what factors, if any, are relevant in …

Are All Contractual Obligations Created Equal?, Doron Teichman, Yuval Feldman

Doron Teichman

At the core of the economic analysis of contract law lies the concept of options. According to this concept, parties are expected to perform their contractual duties if, and only if, the legal price of breach (i.e. damages) is lower than the cost of performance. This Article challenges this concept, and shows that peoples’ performance decisions are driven by non-instrumental forces such as moral commitments, social norms, and motivated reasoning. To demonstrate this point, this Article presents a series of three experimental surveys that measure and compare participants’ attitudes toward breaching a contract. Participants answered questions in the context of …

Shareholder Litigation After The Meltdown, Dan Morrissey

Dan Morrissey

Abstract of Morrissey Article The article examines the two principal mechanisms available to shareholders to remedy wrongdoing by managers of their corporations, class actions and derivative suits. It discusses objections to those proceedings and concludes that they lack merit. It also finds that notwithstanding legislation passed in response to the recent financial crisis these shareholder remedies are needed now more than ever to safeguard the integrity of American business. The article also reviews recent judicial decisions that have weakened these claims and proposes legislation that will reverse that trend and strengthen them.

Why Is Small Business The Chief Business Of Congress?, Mirit Eyal-Cohen

Mirit Eyal-Cohen

Small business is a sacred cow in America. In 1958, Congress created the Small Business Investment Company ("SBIC"), a unique public-private program that provides long-term capital to small entrepreneurs. From its inception, however, the SBIC has been plagued by inefficiency and failure. Yet, Congress continues to pour millions of dollars into the SBIC program, with no end in sight. What explains this failed policy course?

This article argues that the SBIC program exemplifies the pitfalls of legal and political institutional path dependency and should be replaced by private institutional lending system. Pursuant to this account, past decisions can influence future …

Capture In Financial Regulation: Can We Channel It Toward The Common Good?, Lawrence G. Baxter

Lawrence G. Baxter

Abstract

“Regulatory capture” is central to regulatory analysis yet is a troublesome concept. It is difficult to prove and sometimes seems refuted by outcomes unfavorable to powerful interests. Nevertheless, the process of bank regulation and supervision fosters a closeness between regulator and regulated that would seem to be conducive to “capture” or at least to fostering undue sympathy by regulators for the companies they oversee. The influence of very large financial institutions has also become so great that financial regulation appears to have become excessively distorted in favor of these entities and to the detriment of many other legitimate interests, …

Four Questionable Rationales For The Patent Misuse Doctrine, Thomas F. Cotter

Thomas F. Cotter

When a patent infringement defendant succeeds in proving that the patent owner has misused its patent, the patent is rendered unenforceable unless and until the misuse is purged. Case law has never clearly articulated precise criteria for determining the boundaries of the misuse doctrine, however. Although the misuse doctrine overlaps to some extent with substantive antitrust law, for example, under current law not every instance of misuse is necessarily an antitrust violation, and not every patent-related antitrust violation necessarily constitutes misuse. In this paper, I identify four possible justifications for the patent misuse doctrine that, in theory, could provide guidance …

An Economic Analysis Of Patent Law's Inequitable Conduct Doctrine, Thomas F. Cotter

Thomas F. Cotter

In recent years, patent law’s inequitable conduct doctrine has attracted considerable attention from judges, legislators, patent lawyers and commentators, culminating most recently in the Federal Circuit’s decision to reconsider en banc several aspects of the doctrine in Therasense, Inc. v. Becton, Dickinson & Co. Building on the work of other scholars, this Article proposes an instrumental view of the doctrine as, ideally, a tool for inducing patent applicants to disclose the optimal quantity of information relating to the patentability of their inventions; it then presents a formal model of the applicant’s choices in deciding how much information to reveal. The …

Corruption As Institution In Niger's Business Sector, Thomas A. Kelley Iii

Thomas A Kelley III

Suddenly it seems that US-funded international aid programs are all about building rational, predictable institutions to stimulate business in poor countries. The Millennium Challenge Corporation (MCC), a relatively new and increasingly important US aid organization, and the more venerable United States Agency for International Development (USAID), are initiating programs in poor countries around the world based on the assumption that their future stability and prosperity depends on unleashing and guiding the entrepreneurial spirit of small and medium-sized enterprises, and that this can be accomplished by improving the institutions – most particularly the laws and legal enforcement mechanisms – that regulate …

The Dodd-Frank Wall Street Reform And Consumer Protection Act: What Caused The Financial Crisis And Will Dodd-Frank Succeed In Preventing Future Crises?, Charles W. Murdock

Charles W. Murdock

Summary: The Dodd-Frank Wall Street Reform and Consumer Protection Act: What Caused the Financial Crisis and Will Dodd-Frank Succeed in Preventing Future Crises?

We are still experiencing the devastating impact of the financial crisis which came to a head on September 18, 2008 when Secretary Paulson told Congressional leaders that “[u]nless you act, the financial system of this country and the world will melt down in a matter of days.”

To prevent future crises of this magnitude, last year Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act. However, this year, legislation has already been introduced to repeal …

Mutual Fund Performance Advertising: Inherently And Materially Misleading?, Ahmed E. Taha, Alan Palmiter

Ahmed E Taha

Mutual fund companies routinely advertise the past returns of their strong-performing, actively-managed equity funds. These performance advertisements imply that the advertised high past returns are likely to continue. Indeed, investors flock to these funds despite high past returns being a poor predictor of high future returns. Thus, fund performance advertising is inherently and materially misleading and violates federal securities antifraud standards. In addition, the SEC-mandated warning in these advertisements that “past performance does not guarantee future results” fails to temper investors’ focus on past returns.

The SEC should do more to prevent investors from being misled by fund performance advertisements. …

Patent Eligible Inventions After Bilski: History And Theory, Joshua Sarnoff

College of Law Faculty

The U.S. Supreme Court has continued to require that patentable subject matter eligibility determinations under Section 101 be made by reference to three historic, categorical exclusions, for scientific principles, natural phenomena, and abstract ideas, which must be treated as if already known even when newly discovered by the applicant. Various thoughtful scholars have alternatively urged that these exclusions from the patent system should be viewed restrictively or that eligibility decisions should be avoided. But these scholars underappreciate the benefits of categorical exclusions and particularly of treating them as if they were already known prior art, and in any event the …

“Buy Stock In The Gpo”? An Empirical Analysis Of How United States V. Mead Corp. Increased The Use Of Informal Rulemaking By Federal Agencies, Ryan T. Holt

Ryan T. Holt

In the dynamic field of administrative law, no case has received more attention over the past ten years than United States v. Mead Corp., in which the Supreme Court created a threshold requirement for federal-agency action to receive Chevron deference. But despite this focus from courts and commentators, one of that case’s major implications has thus far escaped the spotlight of analysis: To what extent has Mead affected agencies’ choice of policymaking device? In an excoriating dissent, Justice Scalia forewarned that Mead would precipitate an undesirable increase in informal (so-called “notice-and-comment”) rulemaking. However, whether Mead has increased informal rulemaking over …

“Globalization Of Islamic Finance: Myth Or Reality?”, Frederick V. Perry

Frederick V. Perry

“ Globalization of Islamic Finance: Myth or Reality?” This paper investigates the question of whether the phenomenon of Islamic finance or Islamic Banking 1 is truly globalizing, that is, spreading as a universal alternative to conventional finance and banking or whether the proponents of such a view are spreading a myth or are themselves simply deluded by their own enthusiasm. The paper addresses various aspects of the globalization of Islamic finance, among others, the issue of the rise of Islamic banking in the West, Islamic jurisprudence and finance, global standards and integration of Islamic finance, and obstacles facing Islamic finance’s …

The Limits Of Wto Adjudication: Is Compliance The Problem?, Juscelino F. Colares

Juscelino F. Colares

Mainstream international trade law scholars have commented positively on the work of WTO adjudicators. This favorable view is both echoed and challenged by empirical scholarship that shows a high disparity between Complainant and Respondent success rates (Complainants win between 80 and 90 percent of the disputes). Regardless of how one interprets these results, mainstream theorists, especially legalists, believe more is to be done to strengthen the system, and they point to instances of member recalcitrance to implement rulings as a serious problem. This article posits that such attempts to strengthen compliance are ill-advised. After discussing prior empirical analyses of WTO …

Deferred Prosecution Agreements: Prosecutorial Balance In Times Of Economic Meltdown, Sharon Oded

Sharon Oded

At times when the American economy faces enormous challenges, traditional prosecutorial measures that involve high public spending and immense collateral risks may hamper economic recovery. Economic meltdowns, such as the one we have been experiencing in recent years, call for a refreshment of the prosecutorial toolkit aimed at controlling corporate misconduct. This paper discusses the newly emerged enforcement mechanism, Deferred Prosecution Agreements (DPAs), in light of the current national goal of economic recovery. It portrays the evolution of DPAs and the stimulus for its expansion that followed recent Corporate America scandals. Based on the evaluation of the major promises and …

American Biglaw Lawyers And The Schools That Produce Them: A Profile And Rankings, Paul Oyer, Scott Schaefer

Paul Oyer

We profile the lawyers that work at the largest 300 American law firms as of the Summer of 2008. We show how gender, years of experience, prestige of law school, and other qualities vary across lawyers of different rank and firms of different prestige. Geography is an important determinant of where lawyers work, with many going to undergraduate school and law school near where they ultimately practice. Geography is less important, however, at more prestigious firms and for graduates of higher ranked firms. We then go on to rank law firms based on the prestige of the law schools they …

The Desire For Whiteness: Can Law And Economics Explain It?, Shilpi Bhattacharya

Shilpi Bhattacharya

This paper provides a new theoretical perspective on colorism by considering it from an economic point of view. I rely on three theories of law and economics that explain racial discrimination. While critiquing these theories, I also extend them to evaluate colorism. This is challenging because these theories correlate race with skin color. I use the “desire for whiteness” (DFW) as a tool for analyzing these theories and as a fundamental characteristic that distinguishes racism from colorism. This paper studies the cross-cultural applicability of these theories from beyond the traditional American labor market (ALM) to the Indian arranged marriage ‘market’ …

Rlt: A Preliminary Examination Of Religious Legal Theory As A Movement, Samuel J. Levine

Scholarly Works

No abstract provided.

Hazard In The Courtroom: Moral Hazard's Ability To Explain An Insured's Behavior And What It Means For Federal Rules Of Evidence Rule 411, Jared S. Livingston

Jared S Livingston

This note contends that considering evidence of insurance within a moral hazard framework may justify another look at the blanket exclusion of Federal Rules of Evidence Rule 411. Not only does moral hazard implicate the relevance of evidence of insurance in a negligence action, but it may also reveal that the evidence is not as prejudicial as many scholars and courts had originally supposed. As a result, Rule 411 could be over-exclusive in its application, excluding not only a wholly irrelevant part of insurance evidence--the wealth or ability-to-pay implication—but also the part of insurance evidence that implies an insured’s possible …

Collective Choice, Justin Schwartz

Justin Schwartz

This short nontechnical article reviews the Arrow Impossibility Theorem and its implications for rational democratic decisionmaking. In the 1950s, economist Kenneth J. Arrow proved that no method for producing a unique social choice involving at least three choices and three actors could satisfy four seemingly obvious constraints that are practically constitutive of democratic decisionmaking. Any such method must violate such a constraint and risks leading to disturbingly irrational results such and Condorcet cycling. I explain the theorem in plain, nonmathematical language, and discuss the history, range, and prospects of avoiding what seems like a fundamental theoretical challenge to the possibility …

Collective Choice, Justin Schwartz

Justin Schwartz

This short nontechnical article reviews the Arrow Impossibility Theorem and its implications for rational democratic decisionmaking. In the 1950s, economist Kenneth J. Arrow proved that no method for producing a unique social choice involving at least three choices and three actors could satisfy four seemingly obvious constraints that are practically constitutive of democratic decisionmaking. Any such method must violate such a constraint and risks leading to disturbingly irrational results such and Condorcet cycling. I explain the theorem in plain, nonmathematical language, and discuss the history, range, and prospects of avoiding what seems like a fundamental theoretical challenge to the possibility …

Patternicity And Persuasion: Evolutionary Biology As A Bridge Between Economic And Narrative Analysis In The Law, James Ridgway

James D. Ridgway

Although economic and narrative analysis are clearly useful in exploring legal issues, their foundations and persuasive power have not been thoroughly investigated. Evolutionary biology can now explain how human beings instinctively approach legal problems, and what features from economic and narrative analysis are rooted in the information processing functions of the brain. As a result, the most effective aspects of each can be synthesized into a new tool the archetypal narratives of human interaction. This article proposes that evolutionary biology indicates that human beings process legal arguments using three archetypal narratives: (1) the story of cooperation, which describes maximizing the …

Can The Success Of Carbon Emission Cap-And-Trade Market Be Predicted Based On The Epa’S Acid Rain Program?, Parisa S. Smith

Parisa S smith

Can the Success of Carbon Emission Cap-and-Trade Market be Predicted Based on the EPA’s Acid Rain Program? This paper explores the carbon market policy solution to the global warming phenomenon. It analyses why the Acid Rain Program (ARP) cap-and-trade model implemented in the U.S., by itself, falls short in achieving similar results for carbon emission control objectives. Toward that end, a comparison is made to analyze why the carbon market differs greatly from the acid rain market on certain essential elements, and how these differences can explain the expected differing outcomes of implementing the cap-and-trade scheme within the two problem …