Recognizing the Value of Failure in Civil Litigation

Alexander A. Reinert, Screening Out Innovation: The Merits of Meritless Litigation, 89 Ind. L. J. __ (forthcoming 2014) available at SSRN.

Throughout life, we are told that we should learn from our mistakes.  Alex Reinert, in Screening Out Innovation:  The Merits of Meritless Litigation, forces us to consider why civil litigation shouldn’t have to do the same.  Reinert elegantly defines meritless–as distinct from frivolous–litigation, argues why the civil justice system should value it, and argues that Congress, the Court, and federal rulemakers should change the way they think about substantive and procedural change.

In civil litigation, the question of how to manage the tension between efficiency and justice has been resolved by resort to an argument that frivolous claims should be screened out, and screened out early.  That proposition appears uncontroversial on its face.  Yet, changes like the Twiqbal pleading standard and the Private Securities Litigation Reform Act (PSLRA) are criticized for taking this proposition too far.  The argument is that these efforts to achieve efficiency screen out meritorious cases along with the frivolous.  Those in favor of these changes respond by arguing that it is worth sacrificing a few meritorious cases because the overall system benefits when frivolous cases are eliminated.  Proponents argue this leaves more room for meritorious cases to receive careful attention.  What gets left out of this debate, at least explicitly, is the role of meritless cases in the system and how those meritless cases should be valued when considering substantive and procedural reform. Continue reading "Recognizing the Value of Failure in Civil Litigation"

 
 

What’s Left of Mandatory Shareholder Primacy?

Lyman Johnson & Robert Ricca, The Dwindling of Revlon, Wash. & Lee L. Rev. (forthcoming 2014) available at SSRN.

My colleague Lyman Johnson and his co-author Robert Ricca have written an important new paper on the Delaware Supreme Court’s well known Revlon doctrine.  They make two noteworthy points in their article.  First, they argue that courts have interpreted Revlon‘s scope too narrowly, excluding from its coverage cases that do not actually result in a deal.  Second, they show that in actual practice Revlon is much less important than commentators and lawyers have appreciated.  So, the only Delaware case mandating short-term share price maximization ends up not only having more restricted application than its logic and policy might otherwise appear to require; its limited practical relevance indicates an even weaker doctrinal commitment to shareholder primacy than academics and others realize.

The Delaware Supreme Court decided the Revlon case in 1986, in the midst of a flurry of important rulings necessitated by the explosion in hostile takeover activity.  These cases called on the court to balance its traditional emphasis on the board of directors’ authority and responsibility to determine the corporation’s future against shareholders’ interest in unimpeded access to tender offer premia.  Lurking in the background were broadly held concerns about the social costs of hostile takeovers.  In the event, the court came down on the side of management’s broad (though not unlimited) discretion to deploy defensive measures to block unwelcome hostile tender offers, except in narrow circumstances defined in the Revlon case.  As elaborated in subsequent decisions, Revlon requires that management set aside its own views about what’s best for the corporation and its shareholders and instead seek to obtain the best price reasonably available for the company’s shares.  This duty arises if management initiates an active bidding process that will result in a sale leading to breakup of the company; or, if in response to a bidder’s offer, it abandons its long-term strategy in favor of a transaction that will result in breakup of the company; or, if it approves a transaction that will result in a change in control of the corporation. Continue reading "What’s Left of Mandatory Shareholder Primacy?"

 
 

Viewing the Arbitrary and Capricious Test as a Set of Function-Specific Criteria

Louis J. Virelli III, Deconstructing Arbitrary and Capricious Review, 92 N.C.L. Rev. (forthcoming, 2014), available at SSRN.

The Administrative Procedure Act’s “arbitrary and capricious” standard has been a source of power for the courts, but also a source of bewilderment. It is a source of power because it provides courts with the authority to set aside agency action and, in particular, agency rulemaking, perhaps the most important and characteristic tool of regulatory governance. It is a source of bewilderment because its defining terms are enigmatic. Fairly early in its history, the D.C. Court of Appeals interpreted it as requiring courts to take a “hard look” at the agency’s action. Despite this formulation’s popularity, it has failed to dispel the mystery, first because it is excessively metaphorical, but even more seriously because it is deeply ambiguous. Does it mean that the court must take a hard look at the way the agency reached its decision (a procedural hard look), or rather that the court is insisting that the agency take a hard look at the evidence and arguments being presented to it (a substantive hard look)? The Supreme Court’s decision in Motor Vehicle Manufacturers Assoc. v. State Farm Ins. became the leading decision on the subject because it parsed the substantive hard look standard, providing at least some operationally defined criteria by which the agency’s application of the evidence can be assessed.

Given the importance and ambiguity of the arbitrary and capricious test, it is hardly surprising that the scholarly literature on the subject is voluminous. One approach that commonly appears is the effort to articulate a single test or standard that would enable courts to determine whether an agency decision is arbitrary or capricious. In this innovative and insightful article, Louis Virelli adopts the opposite approach. His idea is to multiply the number of considerations that the arbitrary and capricious test includes, combining both substantive and procedural standards. The point of this proliferation is not to make judicial review more demanding; he agrees with the prevailing view that the agency is the principal decision maker in our system and is entitled to considerable deference from the judiciary. But he argues that the administrative decision-making process necessarily consists of various discrete, qualitatively different steps, and that the standard for arbitrary and capricious action should vary in accordance. Thus, the hard look doctrine should be viewed as “a collection of more targeted inquiries into specific aspects of agency action.” Continue reading "Viewing the Arbitrary and Capricious Test as a Set of Function-Specific Criteria"

 
 

Fundamentally at Odds: Is the Sex Industry Compatible with the Mandates of Title VII?

Lua Kamál Yuille, Sex in the Sexy Workplace, 9 Nw. J.L. & Soc. Pol’y 88 (2013).

With the continual evolution of anti-discrimination law and an endless array of new, unexplored wrinkles and nuances of the law seemingly unfurled with each new holding, it is more important than ever that scholars persist in identifying open issues and problems in the jurisprudence. One of the primary practical benefits of scholarship in the field of employment discrimination has been to expose the gaps and cracks in the law’s coverage and regulation of the workplace, and the best scholars have made their contributions by surveying the landscape, contouring the fault lines, and proposing solutions. Sex in the Sexy Workplace by Professor Lua Kamál Yuille does just this.

Addressing itself to the issue of how to properly adjudicate the hostile work environment sexual harassment claim of a non-sexualized worker (like assistants, etc.) in a so-called “sexy workplace,” the article deftly raises the issue of how neither the law of sexual harassment, nor any of the critiques levied at that law, adequately responds to this unique situation in a way that vindicates the victim or recognizes the injustice of what has been allowed to occur. It then posits what Professor Kamál Yuille terms a “doctrinal fix that draws inspiration from the ‘bona fide occupational qualification’ and ‘business necessity defense’ exceptions to Title VII’s prohibition on workplace discrimination.” Finally, the article seizes upon the opportunity to point to this particular deficit in the law as being illustrative of a more rudimentary tension worthy of note in the law of sexual harassment: the so-called “sex industry,” Professor Kamál Yuille claims boldly, “is fundamentally incompatible with the principles of Title VII’s prohibition of gender discrimination.” Continue reading "Fundamentally at Odds: Is the Sex Industry Compatible with the Mandates of Title VII?"

 
 

Expanding Surrogate Decisionmaking

Alexander A. Boni-Saenz, Personal Delegations, 78 Brook. L. Rev. 1231 (2013).

There are certain decisions that most individuals would agree are deeply personal and should be made by the individual, not the state, or a third party. The decision to marry, divorce, relocate, execute a will, or donate one’s organs are among those decisions. But what if an individual has lost the cognitive capacity, due to accident or illness, to make these decisions? In the health care context, individuals increasingly delegate decisions about medical treatment to a representative. States encourage individuals to delegate these decisions by making durable power of attorney for health care forms readily available on their websites. When individuals fail to plan for loss of decisional capacity, states often rely on a statutory list of potential surrogates (such as a spouse, an adult child, a parent, etc.) or court-appointed guardians to make health care decisions on their behalf.

Health care decisions are as personal as any decision can be. Yet, while delegation is increasingly accepted in the health care context, the law generally does not allow individuals to delegate other personal decisions such as the decision to marry, divorce, or execute a will. Why not? What are the harms, if any, of not allowing delegation of personal decisions? Should a person who lacks decisional capacity be doomed to remain in an unhealthy marriage? Should he be bound by his state’s intestate succession scheme even if it is contrary to his values and preferences? These are the questions that Alexander A. Boni-Saenz tackles in Personal Delegations. Continue reading "Expanding Surrogate Decisionmaking"

 
 

Federal Preemption and Products Liability

Daniel J. Meltzer, Preemption and Textualism, 112 Mich. L. Rev. 1 (2013).

Professor Daniel Meltzer’s article on federal preemption and statutory interpretation is not exactly a torts article. But for those of us who believe that federal preemption in products liability is among a handful of the most pressing and controversial tort issues today, Preemption and Textualism, is an essential read. One of the nation’s most admired federal courts scholars, recently back from a stint in the Obama administration, Professor Meltzer is an ideal commentator on contemporary debates about the proper scope of federal preemption doctrine.

Meltzer’s target is the interpretive method of textualism. Textualism, he argues, is not up to the task of handling the important preemption issues before the Supreme Court. In particular, Meltzer demonstrates that, while Justice Thomas denounced “obstacle preemption” as inviting unconstrained judicial lawmaking, neither Thomas’s reliance on statutory text nor his putative rejection of obstacle preemption holds up to close analysis.1 In the end, Justice Thomas, like his conservative brethren, inevitably turns to purposive analysis. Continue reading "Federal Preemption and Products Liability"

 
 

After the Financial Crisis

Richard Eccleston, The Dynamics of Global Economic Governance:  The Financial Crisis, the OECD and the Politics of International Tax Cooperation (Edward Elgar, Cheltenham, 2012).

The breadth of global tax evasion has made public headlines and brought attention to the initiatives of the Organisation for Economic Co-operation and Development (OECD), alongside the G20 and other international bodies.  As Richard Eccleston reports, “the sheer magnitude of the threat that international tax evasion poses, denying governments approximately $250 billion per year – more than 15 times the sum spent on humanitarian aid globally in 2011 – ensures that the issue is gaining prominence on the international political agenda.” (P. 33) When taxpayers evade their obligations, the world suffers.  How could anyone not be gripped?

The Dynamics of Global Economic Governance:  The Financial Crisis, the OECD and the Politics of International Tax Cooperation is a welcome addition to the literature on the regulatory responses to international tax evasion, authored in the light of the global financial crisis.  Richard Eccleston, a political scientist in Tasmania, shifts the typical legal scholar’s lens from the legal frameworks that facilitate tax evasion to a careful and insightful exploration or the role of political actors in facilitating tax cooperation in response to that evasion.  The work is supported by interviews with more than 40 national tax officials, business and NGO representatives, OECD and UN staff. Continue reading "After the Financial Crisis"

 
 

Patterns and Problems in Professional Discipline Cases

Leslie Levin, Misbehaving Lawyers: Cross-Country Comparisons15 Legal Ethics 357 (2012), available at SSRN.

Commentaries on lawyer discipline often refer to practice areas that are involved in grievances. Discussions of lawyer discipline devote far less attention to examining the circumstances of particular grievances or the characteristics of the lawyers facing disciplinary charges. That is one reason why I especially liked Professor Leslie Levin’s Misbehaving Lawyers: Cross-Country Comparisons. This article was published in a special issue of Legal Ethics—the preeminent international legal ethics journal.

In his preface to the issue, Richard Abel described the premise of the special issue as follows: “we can illuminate the nature of and explanations for lawyer misconduct and the relative advantages of different regulatory responses by comparing case studies of lawyers disciplined a variety of countries.”1 In the special issue, experts presented fascinating case studies of lawyers disciplined in the authors’ home countries. Following these case studies, Professor Levin’s essay identifies similarities and differences among the cases studies written by experts from Canada, the Netherlands, the United Kingdom, Australia, and New Zealand. Anyone interested in lawyer conduct should read Professor Levin’s essay because it provides a concise and thoughtful analysis of patterns and problems that emerge from the accounts presented in the articles in the special issue. Legal profession scholars, lawyers who defend and prosecute disciplinary cases and malpractice cases, jurists, educators, and individual practitioners can learn a great deal by reflecting on Professor Levin’s observations. Continue reading "Patterns and Problems in Professional Discipline Cases"

 
 

Small Things Matter in Environmental Law

• Dave Owen, Critical Habitat and the Challenge of Regulating Small Harms, 64 Fla. L. Rev. 141 (2012).
• David E. Adelman, Environmental Federalism: When Numbers Matter More than Size, U. Texas Working Paper Series (2013), available at SSRN.

Most people, when they think of environmental pollution, think of large, industrial factories pumping out noxious fumes into the air, putrid liquids into the water, and barrels of toxic wastes into the soil. For instance, almost every newspaper article, blog post, or television story about climate change has as an image of the smokestack of a major power plant or factory.

Most people’s perceptions are wrong. It has long been the case that much of the degradation of our natural environment is the result of the accumulation of thousands, millions, even billions of individual actions by people across the United States and around the world. Climate change, for example, is the result of the decision of each of us to drive a car powered by fossil fuels, eat meat, fly in planes, heat our house with fossil fuels, and other similar, seemingly trivial actions. Moreover, these misconceptions are not limited to the general public or general journalists—environmental law scholars and policy makers have fallen into this trap as well. Even when scholars and policy makers have recognized the importance of small harms for environmental law and policy, there is often little information about how important they are, or what, exactly the implications are for our current legal and regulatory systems.

Two recent articles—Dave Owen’s piece, Critical Habitat and the Challenge of Regulating Small Harms, and David E. Adelman’s article, Environmental Federalism: When Numbers Matter More than Size—are welcome efforts to address the gaps in our understanding of how small harms matter to environmental law and why they matter. Moreover, they both are outstanding examples of a recent trend in environmental law to jump on the empirical legal studies bandwagon—both collect and use substantial amounts of data in their analyses. Continue reading "Small Things Matter in Environmental Law"

 
 

Forget About Noah’s Ark

Irus Braverman, Zooland: The Institution of Captivity (2012).

Irus Braverman’s recent book Zooland is a wonderful read on a topic that is of both historical and current interest—zoos. How should we view zoos given the frank admission by all, including zoo advocates, that zoo animals are captives, forced to forgo what would otherwise be a superior existence in order to serve the pedagogical and conservationist agenda that zoos have cultivated as justifications for their existence? These animals have been conscripted as “ambassadors for their species” (P. 8) and are in a sense turned into “body doubles”—“stand-ins for the real animals” and their wild habitats about which they are supposed to be raising awareness (P. 58). Perhaps zoos are effective at raising this awareness. Braverman is distinctly agnostic on the question of whether zoos are generally a good or bad thing.

Legal historians will be interested in the shift Braverman describes from zoos as sites of entertainment, a variation on the old menagerie style collection of animals, preferably exotic, that would then perform various colonialist and empire-building functions, to the (arguably) more laudable conservationist rationale and its accompanying practices often targeted at educating adults and children about species and habitat decline and destruction. The real animals are “just the hook” as one of Braverman’s interview subjects, Jim Breheny of the Bronx Zoo, puts it. (P. 41.) They are meant to draw you in. What they draw you into, as Braverman’s book details, is a world of contradictions. Braverman calls what she has found a Foucauldian “power of care,” minute in its regulation of the daily lives of zoo animals and profound in its reach into such fundamental aspects of the animals’ lives as the question of which animals are allowed to reproduce and which are not, which will be put on board “Noah’s Ark” and saved and which will not. The regimentation of the animals’ lives serves another disciplinary end: “Whereas once zoos were in the business of entertainment through taxonomic exhibitions,” Braverman writes, “now they discipline the public into caring about nature.” (P. 90.) Continue reading "Forget About Noah’s Ark"

 
 

Liberty, Equality, and the Rule of Law

T.R.S. Allan, Freedom, Equality, Legality in James R. Silkenat, James E. Hickey Jr., Peter D. Barenboim, The Legal Doctrines of the Rule of Law and the Legal State (Springer, 2014), chapter 11.

There is an innovative, very influential, and deeply pernicious tradition in English law and jurisprudence equating liberty with license and the rule of law with legal despotism. The beauty of this short chapter by T.R.S. Allan lies in its full implicit refutation of this shared misconception, as found in Thomas Hobbes, John Austin, and H.L.A. Hart, and its shorter explicit repudiation of their gentle contemporary apologist, Joseph Raz. Allan embraces traditional conceptions of the rule of law, demonstrates their central position in British jurisprudence, and makes sense of the doctrines of A.V. Dicey, often misstated as mere legal formalism.

“The rule of law and not of men” in its original, best, and most coherent sense is the antithesis of arbitrary power. This is both a political ideal and a constitutional doctrine: law and government are only legitimate when they serve justice and the common good of their subjects. To legislate, adjudicate, or execute the laws to any other end is contrary to the proper purposes of law, and therefore corrupt. “Liberty” consists in subjection to just laws, made for the common good — not (as some would have it) the simple license to do what one wants. Continue reading "Liberty, Equality, and the Rule of Law"