An Opportunity for Demand Side Innovation

Rebecca S. Eisenberg & W. Nicholson Price II, Promoting Healthcare Innovation on the Demand Side, Oxford Academic J.L. & Biosciences (2017).

The intersection of healthcare information goods, resulting products, and the legal system is frequently reduced to unhelpful binary generalizations such as “regulation (particularly drug safety and data laws) impedes innovation.” Eisenberg and Price helpfully consign such caricatures to the past, substituting far more nuanced (and a lot more interesting) reflections on healthcare and innovation.

Their primary contribution is to describe a different idea of innovation; one based on the demand side rather than the supply side. This is to be contrasted with the “Innovation Law Beyond Intellectual Property (IP)” literature which has examined non-IP mechanisms such as grants, prizes, or insurance to incentivize innovation without utilizing exclusionary patent rights. Those approaches, while they may have been shaped on the demand side, are executed on the supply side (such as a government subsidy paid to a drug company to encourage production of an unprofitable drug). In contrast, Eisenberg and Price are interested in true demand-side innovation based on the data accessible to payers; providers or insurers and, optimally, vertically integrated stakeholders such as large HMOs. These payers, the authors argue, could leverage the enormous clinical and prescribing data sets they can access “to develop new information about drug toxicity, comparative effectiveness, precision medicine, and to perform other forms of innovation.” If successful, “[t]he incentives of payers to cut costs… could be a corrective counterweight to the incentives of product sellers to maximize their own patent-protected profits.” Continue reading "An Opportunity for Demand Side Innovation"

When Less is More

Why are employees who sue to obtain workplace leave under the Family Medical Leave Act of 1993 (FMLA) almost twice as likely to win their cases as those who bring discrimination cases under Title VII of the Civil Rights Act of 1964 (Title VII)? The title of Kate Webber’s intriguing article reflects an intuition many feminists and family law scholars already bring to the table: courts find women more sympathetic when they make claims that conform to their appropriate gender roles (as they do when they ask for family leaves) than when they challenge those norms in the workplace (as they do when they make a claim that the workplace is discriminatory). Webber unpacks this intuition, first by identifying differences in the statutory schemes that might help to explain the gap in success rates between the two statutes, and then by examining the ways in which the content of the legal protections each statute provides might understandably trigger different ideological and cognitive responses by judges. The analysis is both cautious and compelling. It is also surprisingly optimistic, concluding that family leave laws provide a legislative model that may actually be more effective than Title VII in reducing institutional workplace inequality.

Other scholars have noted the differences between Title VII and the FMLA.1 The most important of these differences for Webber’s purposes is that the FMLA, though motivated by the desire to relieve work-family conflicts especially among women, is a gender-neutral employee benefit, much like minimum wage laws and OSHA regulation. To win an FMLA claim, a claimant need only show that she was entitled to the benefit and did not get it. In contrast, Title VII creates a civil right available on the basis of membership in a protected class. A Title VII claimant must show both that she experienced an adverse employment action and that this action was caused or motivated by the claimant’s sex, race, religion, or other protected characteristic. The difference is structural: the former defines the status quo; the latter challenges it. Continue reading "When Less is More"

Back to the Essentials

Michael Buckland, Information and Society (The MIT Press Essential Knowledge Series, 2017).

Judging from its title, Professor Michael Buckland‘s book seems to be yet another introduction into the relationship between information and society. Upon reading it you encounter a well-organized, simply but not simplistically written concise introduction enriched by historical references to what was once called library science and is now more often referred to as (non-mathematical) information science.

As such, it fits well into the MIT Press series that has brought us among others John Palfrey’s Intellectual Property Strategy or Samuel Greengard’s The Internet of Things. Continue reading "Back to the Essentials"

Do Claims About Claims to Claims Matter?

J. Maria Glover, A Regulatory Theory of Legal Claims, 70 Vand. L. Rev. 221 (2017).

Oftentimes when we call a thing someone’s “property,” we do so to invoke a very specific picture of the owner’s rights to that thing. To call something “property” often entails significant limits to what one can do to regulate the thing. The Due Process Clause and Takings Clause both enter the picture. Even outside of legal discourse, the term “property” has a rhetorical power that brings to mind what Blackstone called the “sole and despotic dominion” one can exercise over the thing. That is why “[m]ine is often one of the first words toddlers learn.” To quote an old American Express commercial, ownership, like membership, “has its privileges.”

So one would think that conceptualizing a thing as “property” would have an important effect on how we think about the thing. But what if it doesn’t? What if it actually leads to inconsistent, irreconcilable views in different contexts? What if it turns out that thinking about something as “property” does not provide much analytic clarity at all?

This is the bold thesis of J. Maria Glover’s A Regulatory Theory of Legal Claims, where Glover takes on longstanding debates about the conceptual status of the legal claim. Civil procedure scholars continue to debate whether the legal claim is a party’s “property,” as opposed to an aspect of procedure that is subject to the discretionary regulation of the court. Glover’s goal is not to resolve the debate but to dissolve it, as a debate that does not have the significance that the debaters give it. Continue reading "Do Claims About Claims to Claims Matter?"

Bylaws, Politics, and the Institutional Structure of Delaware Corporate Law

David Skeel, The Bylaw Puzzle in Delaware Corporate Law, 72 Bus. Law. 1 (2016/2017), available at SSRN.

Although corporate bylaws are, by and large, the mundane and technical instruments of day-to-day governance that most understand them to be, they have nevertheless become a key front in the battle for corporate governance supremacy. Shareholders, for their part, possess an inalienable statutory right to adopt, amend, and repeal bylaws, and this represents the only corporate governance action of any consequence that shareholders can undertake unilaterally—prompting creative efforts by activists to augment their own governance power at the expense of boards via this mechanism. At the same time, however, the Delaware General Corporation Law (DGCL) authorizes corporations to give directors concurrent bylaw authority via the charter—a power often granted, permitting boards to respond in kind. This straightforwardly tees up a collision of competing shareholder and board authority in Delaware corporations that neither the courts nor the legislature have definitively resolved.

In the article cited above, David Skeel examines these dynamics through recent clashes that prompted targeted responses from both the courts and the legislature alike. The Delaware Supreme Court, in decisions issued in 2008 and 2014 respectively, struck down a proposed bylaw requiring the corporation to reimburse shareholder proxy expenses under certain circumstances, but then upheld a “loser-pays” bylaw aimed at restricting corporate litigation. “This divergence of outcomes is mildly puzzling by itself,” Skeel observes, “but the outcomes get even more puzzling when we consider the response of Delaware lawmakers,” as the legislature swiftly “overruled its courts each time” (in 2009 and 2015 respectively). (P. 4.) Skeel’s article deftly unravels this “bylaw puzzle,” but in so doing looks well beyond competing conceptions of corporate governance. In Skeel’s view, the bylaw puzzle ultimately provides a lens through which to perceive more clearly some of the most fundamental political and institutional dynamics driving the formation of Delaware corporate law—including the differing institutional postures of Delaware’s courts and legislature, the threat posed by the potential for shareholders to file corporate lawsuits outside Delaware, and Delaware’s complex interactions with the federal government as alternative sites of corporate law production. Continue reading "Bylaws, Politics, and the Institutional Structure of Delaware Corporate Law"

The New Institutionalism in Contract Scholarship

Matthew Jennejohn, The Private Order of Innovation Networks, 68 Stan. L. Rev. 281 (2016), available at SSRN.

Relational contract scholarship is at a pivot point. On the one hand, the relationalist revival that has dominated contracts scholarship for almost half a century may be on the wane. Relational contract scholarship has evolved during this period into separate, and often dueling, intellectual traditions. One camp consists of scholars who are typically associated with the “law and economics” movement; in the other camp are scholars who more readily identify with the “law and society” tradition.1 While relationalists have been quarreling with each other, a younger cohort of law and economics scholars, armed with impressive technical skills, have abandoned relational questions in favor of projects that are capable of being analyzed through formal models or sophisticated empirical techniques. In turn, many other of the brightest stars in contract are formally trained in analytic philosophy and focus their energies on classical contract doctrine and the extent to which it adheres to deontological principles grounded in Kantian notions of autonomy. At its best, this new contracts scholarship is analytically elegant and generates counter-intuitive insights. But its analytical rigor requires strong simplifying assumptions. As a consequence, the bulk of this work is a far remove from the complex environment of relational contracting.

This pessimistic view of the legacy of relational scholarship is tempered, however, by the rise of a new institutionalist school of contract scholarship that offers the promise of an accommodation between the dueling branches of relational theory and a counterweight to the elegant but abstract analysis of the philosophers and economists.2 The new institutionalists reflect the older relationalists in their commitment to the belief that the institution of contract can only be understood by observing the law “in action,” but they go beyond relational theory to explore both the potential and the limitations of contract design in a world of uncertainty: how can we understand the circumstances in which different contractual patterns are used to organize different kinds and speeds of innovative activity? A particularly noteworthy example of this new institutionalist school is a recent article by Matthew Jennejohn, The Private Order of Innovation Networks, published recently in the Stanford Law Review. Continue reading "The New Institutionalism in Contract Scholarship"

The Surprising Origins of the Interstate Commerce Commission

Jed Handelsman Shugerman, The Dependent Origins of Independent Agencies: The Interstate Commerce Commission, the Tenure of Office Act, and the Rise of Modern Campaign Finance, 31 J.L. & Pol. 139 (2015), available at SSRN.

 

Many law review articles fail to live up to the promise of their titles or abstracts, leaving disappointed readers in their wake. Others have titles that hide the ball. Behind the wordy and somewhat bland title of Jed Shugerman’s 2015 article—The Dependent Origins of Independent Agencies: The Interstate Commerce Commission, the Tenure of Office Act, and the Rise of Modern Campaign Finance—lies a fascinating new take on the origins of independent agencies.

The identification of the Interstate Commerce Commission (ICC) as the first modern independent regulatory agency is familiar to scholars of American administrative law. The ICC, created in 1887, was the first federal agency with the hallmarks of independence—multiple commissioners appointed by the President with the advice and consent of the Senate, staggered terms of specified duration (six years in this case), removal by the President only for “inefficiency, neglect of duty, or malfeasance and office,” and a requirement of bipartisan membership. Continue reading "The Surprising Origins of the Interstate Commerce Commission"

What Law Do Legal Theorists Need to Know?

M. Sornarajah, Resistance and Change in the International Law on Foreign Investment (Cambridge University Press, 2015).

A question seldom asked is what actual legal knowledge legal theorists require in order to theorize about law, or, indeed, what areas of law they should visit in order to confirm their theories. Without wishing to suggest there might be a mandatory list of legal subjects, or a set of legal treatises that amount to required reading, my present purpose is to draw attention to an area of law and its treatment in a recent book by M. Sornarajah that would not obviously fall within the purview of legal theorists but which offers them particularly stimulating material.

The area of law is international law on foreign investment, an area Sornarajah is well positioned to write about, being commonly regarded as one of the founding expositors of a specialist sub-discipline of international law,1 whose rapid development in recent decades is a significant manifestation of the fragmentation of international law. This area of law, whose development has centred on the place and role allowed to arbitration on international investment treaties, accordingly provides an extraordinarily accessible set of data regarding the creation, recognition, and development of law. Continue reading "What Law Do Legal Theorists Need to Know?"

The Joy of Serious Doctrinal Analysis of Disparate Treatment and Disparate Impact Discrimination

In Confusion on the Court, Professor Michael Harper discusses how in two recent cases the United States Supreme Court appeared to confuse two critically important concepts in employment discrimination law: disparate treatment (intentional discrimination) and disparate impact (unintentional discrimination). Professor Harper’s essay is worth a Jotwell jot because it rigorously analyzes a core doctrinal issue in employment discrimination law while subtly reminding readers how issue framing can drive doctrinal analysis. I am partial to Professor Harper’s approach because it is useful to four groups: judges shaping the employment discrimination field, legal scholars thinking about the field, legal practitioners working in the field, and law students just learning about the field.

The essay considers the Court’s different approaches to seemingly similar factual situations. In Young v. UPS, 135 S. Ct. 1338 (2015), the Court viewed UPS’s application of its disability policy to refuse to accommodate a worker’s pregnancy as a disparate impact issue; whereas in EEOC v. Abercrombie & Fitch, 135 S. Ct. 2028 (2015), it viewed Abercrombie & Fitch’s application of its headwear policy to decline to hire a Muslim applicant who wore a headscarf as a disparate treatment issue. As Professor Harper notes: “The Court seemed to give contradictory answers to an important, unresolved conceptual definitional question: Does disparate treatment include assigning members of a protected group, based on their protected status, to a larger disfavored group that is defined by neutral principles and that includes others who are not members of the protected group? Or, in the alternative, does such an assignment have only a disparate impact on the protected group?” (P. 545.) Professor Harper describes how the Court analyzed the cases, explains how he thinks the Court misanalyzed the cases, and suggests future course corrections. Continue reading "The Joy of Serious Doctrinal Analysis of Disparate Treatment and Disparate Impact Discrimination"

Tort Theory in Copyright Law: Thinking about Patrick Goold’s Unbundling the “Tort” of Copyright Infringement

Patrick R. Goold, Unbundling the “Tort” of Copyright Infringement 102 Va. L. Rev. 1833 (2016), available at SSRN

Patrick Goold’s Unbundling the “Tort” of Copyright Infringement (“Unbundling”) is an ambitious and remarkably illuminating article. Its central thesis is that “copyright infringement” is best understood as a cover term for five different “copytorts”1 related to the plaintiff’s being a copyright owner. By way of comparison, “trespass” and “nuisance” in tort law are pleaded and articulated with different names even though they both pertain to wrongs related to a plaintiff’s ownership of realty; this is because they are, conceptually and practically, quite different wrongs. Copyright law has never separated out its five different legal wrongs, either through statute or through judicial elaboration, either formally or informally. It has used the one phrase “copyright infringement” indiscriminately for all. It turns out, Goold argues, that much of the confusion and conflict within copyright case law can be traced back to the failure to draw distinctions among the five copytorts. The task of the article is to outline the distinctions, thereby beginning the process of solving a number of doctrinal problems.

The three doctrinal problems Goold presents pertain to audience, harm, and analogy. As to “audience,” the question concerns the observer, or arbiter, or audience that courts should employ to determine whether allegedly infringing material is sufficiently similar to the copyrighted material: must it be such as to cause confusion to a reasonable person, an ordinary consumer, or an expert? As to “harm” (which arises in connection with a fair use defense) the question concerns “‘the effect of the [copyist’s] use upon the potential market for or value of the copyrighted work.’” (P. 1848 (quoting 17 U.S.C § 107 (2012)).) Courts have construed this factor to turn on “whether the copying caused the owner cognizable harm” (Id.); some courts in turn focus upon demand diversion, others on lost fees, and others on reputational, privacy, or other nonfinancial injuries. Finally, as to “analogy,” the question is how copyright infringement ought to be modeled as a legal wrong: is it like trespass, like conversion, like an economic tort or unfair competition, or like unjust enrichment? Continue reading "Tort Theory in Copyright Law: Thinking about Patrick Goold’s Unbundling the “Tort” of Copyright Infringement"