Robert C. Hockett & Saule T. Omarova, The Finance Franchise
, 102 Cornell L. Rev.
(forthcoming, 2017), available at SSRN
In The Finance Franchise, Bob Hockett and Saule Omarova take on the dual myths underpinning contemporary financial regulation: that capital is both inherently scarce and privately provided. They painstakingly document (and illustrate in simple graphics for those of us whose banking savvy is confined to remembering their ATM PIN number) the state’s role in the provision of financial products and services ranging from plain-vanilla loans to digital currencies. They reveal how, at base, all of these products and services depend on the full faith and credit of national governments to assume ultimate liability for privately-issued debt and to monetize privately-issued debt by allowing the putative private debt-holder to spend the debt proceeds as if they were currency.
In short, Hockett and Omarova demonstrate that because the state serves these two functions, “modern finance is not primarily scarce, privately provided and intermediated but is, in its most consequential respects, indefinitely extensible, publicly supplied, and publicly disseminated. At its core, the modern financial system is effectively a public-private partnership that is most accurately, if unavoidably metaphorically, interpreted as a franchise arrangement.” (P. 4.) Continue reading "Bringing Back the State into Regulatory Scholarship"
James Grimmelmann & Daniel Westreich, Incomprehensible Discrimination
, 7 Calif. L. Rev. Online
164 (2017), available at SSRN
I’m a fan of off-beat approaches to legal scholarship, having attempted a couple of efforts myself. And I try to keep up with developments in the real world that threaten to impact our discipline, like the concern about “Big Data” that has begun to appear in the law journals. So it’s no surprise that I was very taken by a particularly creative piece by Professors James Grimmelmann and Daniel Westreich, which combines an amusing conceit with dead-on analysis of an emerging and important question.
Incomprehensible Discrimination explores one aspect of a much longer article that appeared recently in the California Law Review by Solon Barocas and Andrew Selbst on data-driven algorithmic methods of making employment decisions. The aspect Grimmelmann & Westreich explore is the ability of such analyses to find correlations between, say, job performance and any of a variety of data points with no apparent causal connection to better performance. Barocas and Selbst conclude that traditional disparate impact analysis is not likely to invalidate these kind of selection process. Given sufficient data and robust tests of significance, it’s hard to conclude that reliance on such factors is irrational, even in the absence of any articulable explanation for what one has to do with the other. For Grimmelmann and Westreich, that’s exactly the problem. Continue reading "Comprehending Causation and Correlation"
Angela Vallario, The Elective Share Has No Friends: Creditors Trump Spouse in the Battle Over the Revocable Trust
, 45 Capital U. L. Rev.
(forthcoming, 2017), available at SSRN
Some of our inheritance laws still seem closer to those existing in 1217 instead of 2017. For example, the elective share statutes in a number of states still echo the old common law doctrine of dower. In her new article, The Elective Share Has No Friends: Creditors Trump Spouse in the Battle Over the Revocable Trust, Angela Vallario makes a persuasive case for statutory reform, especially in light of recent trust reform in many of those same states effectively putting creditors in a more favorable position than a surviving spouse.
Professor Vallario begins by describing the current state of the elective share in the United States. She notes that twenty-five of the nation’s separate property states have reformed their elective share statutes to more clearly reflect a joint partnership theory of marriage. However, sixteen states have failed to do so and retain what Vallario calls the “traditional” elective share. Vallario reminds readers that the traditional elective share was built on the remnants of dower. Surviving spouses who are disinherited can claim either a one-half or one-third share of the decedent’s estate. But the term “estate” under traditional statutes has included only probate assets, not non-probate assets like life insurance, joint tenancy property with third parties and trust property. Continue reading "Unfinished Business: Reforming the Elective Share"
The House Republican Blueprint for corporate tax reform would replace our century-old corporate income tax, which we all know and love (or hate), with a “destination-based cash flow tax” (DBCFT), which for many of us remains a mystery. The academic foundation upon which the House proposal is built is a working paper by Alan Auerbach (UC Berkeley), Michael Devereux (Oxford), Michael Keen (IMF), and John Vella (Oxford) (collectively “the authors”), entitled “Destination-Based Cash Flow Taxation.” Given the current turmoil in Washington, it seems unlikely that a DBCFT will be enacted any time soon. Problems with our current system for taxing business income with an international dimension, however, are unlikely to go away on their own. If you want to get up to speed on a radical solution with substantial academic and political support, this paper is an absolute must-read.
The DBCFT has two components: a cash flow tax, which alters the timing and sometimes the substance of includibility and deductibility, and the destination-based “border tax adjustments” that have already found their way (sometimes incoherently) into the popular press. Continue reading "The Most Significant Proposed Change in the History of U.S. Corporate Taxation"
Lee Anne Fennell, Fee Simple Obsolete
, 91 N.Y.U. L. Rev.
1457 (2016), available at SSRN
“And don’t throw the past away. You might need it some other rainy day.” These lyrics to Peter Allen’s song, Everything Old is New Again, sum up the fee simple absolute (“fee simple”) perfectly. This antiquated doctrine that is the backbone of our real property system, the most adored and alienable of the estates in land, receives new life, a new purpose even, in Lee Anne Fennell’s compelling article, Fee Simple Obsolete.
Fennell gives the reader just enough history about the development and context of the fee simple to lay the foundation for a discussion with the reader about the ways in which the old fee simple has become an anachronism in a largely urban society. With eighty percent of Americans living in urban centers, the need for flexibility in reconfiguring precious urban land is at a premium. Continue reading "Everything Old is New Again: Breathing New Life into the Fee Simple Absolute"
Arbitral institutions like to be discreet, and would perhaps be content if it were generally assumed that they perform a merely clerical and administrative function. Such a posture would be untenable. The tasks necessarily allocated to such bodies are central to any assessment of the legitimacy of the arbitral process. Given that commentators those looking for a soapbox seem to find it easy to have categorical opinions about arbitration, with an intensity inversely proportional to their acquaintance with facts, this is a welcome book, dispassionate but critical, which should allows its readers to bring greater discipline to their analysis—whatever may be their ideological predispositions.
Behind a deceptively bland title, Rémy Gerbay provides a conceptual framework which should allow evaluation of the international arbitral mechanism to be conducted with greater seriousness. A French scholar who has particularly cosmopolitan credentials, he holds degrees not only from his native country but also Switzerland, the United States, and the United Kingdom; and practicing licenses in the US and England. Now a lecturer at the School of International Arbitration at Queen Mary University of London, he had previously distinguished himself as a young Deputy Registrar of the London Court of International Arbitration—an experience which allows him to write with authority and meaningful perspectives on this subject. Continue reading "Qui Custodiet Custodes? A Hard Look at International Arbitral Institutions"
William H. Simon, Attorney-Client Confidentiality
, Geo. J. Legal Ethics
(forthcoming, 2017), available at SSRN
In a concise and elegant essay, titled Attorney-Client Confidentiality: A Critical Analysis, William H. Simon offers a compelling justice-based critique of the doctrine of confidentiality. Defined broadly to encompass all “information related to the representation” of a client, the traditional doctrine, dubbed by Simon “strong” confidentiality (p. 1), forbids disclosure unless narrow exceptions apply (see Rule 1.6). Challenging both the expanse of the doctrine and its categorical posture, Simon instead advances what he calls “moderate confidentiality”—a duty that would “mandate preservation of confidentiality except where disclosure is clearly necessary to avert substantial injustice.” As Simon explains:
The moderate duty is sensitive to context and demands complex judgment on the part of the lawyer. In every case where confidentiality threatens to work injustice, the lawyer must weigh the value of client loyalty against the competing harm disclosure would avert. By contrast, the strong confidentiality of current doctrine is more categorical in form and seems designed to minimize judgment. Once there is a presumptively confidential communication, the lawyer is directed to consult a list of exceptions. If there is no relevant exception, confidentiality prevails over competing considerations, no matter how weighty they are. (P. 2.)
In so doing, Simon first rejects the two common justifications for strong confidentiality: the notion that strong confidentiality is needed to foster trust in the attorney-client relationship, which in turn makes the representation more effective, and the vindication of law and legal rights. Both justifications are codified in comment 2 to Rule 1.6. The comment reads in relevant part, “[confidentiality] contributes to the trust that is the hallmark of the client-lawyer relationship. The client is thereby encouraged to seek legal assistance and to communicate fully and frankly with the lawyer even as to embarrassing or legally damaging subject matter. The lawyer needs this information to represent the client effectively,” and adds that “[a]lmost without exception, clients come to lawyers in order to determine their rights and what is, in the complex of laws and regulations, deemed to be legal and correct.” (Rule 1.6, cmt 2.) Continue reading "Just Confidentiality"
Jessica L. Roberts & Elizabeth Weeks Leonard, What Is (and Isn’t) Healthism
, 50 Ga. L. Rev.
833 (2016), available at SSRN
As we are all aware, the current political time is one of great upheaval and unsureness in numerous areas, with health care and the health care system repeatedly taking center stage. The change in the presidential administration coupled with the Republican majority in both houses of Congress have led to many new approaches to the health care system being proposed, debated, hurriedly being voted on, amended, withdrawn, and subjected to a hot and passionate debate. As this is going on, recent polling has made it clear that a significant percentage of the voting population in this country had no or minimal understanding about how health care laws affect them and their loved ones, leading to a pattern of voting in the 2016 elections that often appeared to be against voters’ self-interest.
As we grapple with analyzing and communicating the ramifications of proposed changes, the analytic approach to assessing the effect of health care policy delineated in Roberts’ and Weeks Leonard’s article, What is (and isn’t) Healthism, has much to offer in a climate wildly different than the one in which it was written. Healthism, as this article and a forthcoming book define it, is a form of discrimination based on a person’s health status. As the article states in the introduction, the passage of the Affordable Care Act in 2010 created significant protections for persons with health problems. For example, that law prevents discrimination in the health insurance market against those with preexisting conditions. Taking the question of disparate treatment further, the authors consider the possibility that a person’s health status could be the basis for disparate treatment in a number of other areas, such as employment and the provision of services, privileges, or opportunities. In light of the possibility of multiple arenas for this type of discrimination, the article asks when, if at all, the law should intervene to protect persons from these wrongs, and then presents a framework for answering that question. Continue reading "Healthism in the Current Political Climate"
Every major dimension of contemporary American family law underwent transformation in the 19th Century. Indeed, I have argued at considerable length that American family law was invented in the 19th Century. Many of the most difficult and intractable legal issues in the field carry 19th Century legal rules, doctrines, ideologies, debates, and practices forward to the present. Some of these vestigial aspects of 19th Century family law emerge in a slurry of semi-congealed elements that took shape then and have stayed in play despite major transformations in the field since; others persist in their 19th Century form, albeit with more contemporary contents. It’s impossible to work in contemporary American family law without asking oneself, again and again, what did happen with this issue or that in the transformative-yet-reactionary 19th Century?
But for those of us who are not legal historians, answering that question is very hard work. There are plenty of classics to turn to, from Michael Grossberg’s Governing the Hearth to Hendrik Hartog’s Some Day All This Will Be Yours. But a new resource offers a comprehensive, elegantly curated collection of primary documents that shed light on a range of the most important themes: Gendered Law in American History by Richard Chused and Wendy Williams. This rich resource—more than 1200 pages—is ideal summer reading for family law enthusiasts! Continue reading "Found in the Archive"
These are interesting times to be an historian of democracy. Historians are beginning to explore the myriad ways that people outside of and even within political officialdom have pressed their claims for recognition, respect, and inclusion in politics, governance, and society. This work is steadily reshaping our understanding of the historical relationships between law, democracy, and the state. At the same time, we have witnessed recently the emergence of a politics that appears to many to have up-ended many of our ideas and practices of democracy. Political ethics of virulent self-aggrandizement, relentless short-term thinking, and total retaliation, in particular, are increasingly prominent. In this moment of heightened attention the question persists: what is democracy?
Too often we reduce democracy to principles like majoritarianism, egalitarianism, or to institutions like voting and elections. In Toward Democracy, James Kloppenberg refuses to be cabined by reductionist or essentialist conceptions of democracy. Instead, his focus is on how Western thinkers developed an ethical (as opposed to an institutional) framework for democracy, a set of “principles” and “premises” which, he claims, grew out of Christianity. These ethics form a dissonant political harmony that makes democracy a fragile political experiment, containing both the highest aspirations of humanity and the seeds for their betrayal. Continue reading "Democracy’s Golden Rules"