Anat R. Admati, It Takes a Village to Maintain a Dangerous Financial System
in Just Financial Markets? Finance in a Just Society
(Lisa Herzog ed., forthcoming 2017), available at SSRN
It Takes a Village to Maintain a Dangerous Financial System, a chapter by Anat Admati in a forthcoming book should be required reading for legislative actors who are thinking about reviewing rules of financial regulation introduced after the onset of the global financial crisis.
Before the global financial crisis, policy-makers believed in risk-free assets and risk mitigation techniques. The Basel Committee on Banking Supervision developed capital adequacy standards to identify and neutralize a range of risks associated with the business of banking. But the crisis revealed weaknesses in the standards, and in their divergent and inadequate implementation, as well as new risks that the standards did not address. At the same time, as Andrew Haldane, Chief Economist at the Bank of England, has acknowledged, “the economic and financial crisis … spawned a crisis in the economics and finance profession.” In responding to the financial crisis, the G20, the Basel Committee on Banking Supervision, the Financial Stability Board, and the IMF announced a new commitment to focus on improving international standards for bank regulation and to ensure that the standards were implemented effectively. Regular reports by these bodies note concerns relating to financial stability, but suggest that they are making progress in achieving the agreed objectives for financial, and particularly bank, regulation. Continue reading "An Unsafe Financial System"
When Amazon announced that it was expanding its Dash Button Program, its stock went up 2.3%. Amazon’s Dash button refers to a wi-fi enabled device that can be attached to a cupboard or refrigerator and allows a customer to order a specific item, such as more laundry detergent, simply by pressing the button. While some wondered whether consumers really needed this, others wondered whether the law was ready for this. As recent events reveal (such as the tragedy of Tesla’s self-driving automobile accident), technology is raising legal questions more quickly than lawmakers can anticipate or respond to them. In her article, Contracting in the Age of the Internet of Things: Article 2 of the UCC and Beyond, Stacy-Ann Elvy considers whether contract law is ready for the Internet of Things, and concludes that the answer is a regretful but resounding No. Contract law is woefully behind the times when it comes to dealing with issues raised by the Internet of Things (“IOT”). Elvy does a frightfully good job of identifying some of the potential problems—are such devices agents? (Probably yes). How should courts assess consumer assent when contracts are entered into through IOT devices? (It’s complicated). Perhaps most frightening of all—won’t the “legion of data” generated by the IOT worsen the preexisting information asymmetry in favor of companies? (Certainly).
Elvy’s article makes three primary arguments. First, where IOT devices enter into contracts on behalf of consumers, existing laws regulating e-commerce may not adequately protect consumers. Second, Article 2 of the UCC and contract law generally are ill-equipped to deal with the IOT. Finally, information asymmetries, exacerbated by the data generated by the IOT, will shift the power balance even more in favor of companies. Elvy makes certain proposals to recognize and respond to these changes in the contracting environment brought about by the IOT. Her proposed changes to Article 2 include prohibiting post-contract formation disclosure of terms in consumer IOT contracts, prohibiting the use of unilateral amendments and defining unconscionability to include high levels of information asymmetry. Elvy also recommends that courts consider the extent to which consumers can access and control the data which they generate. Her proposals are exhaustive and thoughtful and well-worth a read. A short review does not do them justice. Continue reading "Is Contract Law Ready for the Internet of Things?"
Hannah J. Wiseman, Negotiated Rulemaking and New Risks: A Rail Safety Case Study
, Wake Forest J.L. & Pol’y
(forthcoming 2017), available at SSRN
Hannah Wiseman’s insightful case study has forced me to rethink my views both on negotiated rulemaking and, more broadly, on all forms of notice and comment rulemaking. Negotiated rulemaking (Reg-Neg) adds one important step—negotiation—to the familiar notice and comment process. Reg-Neg got a lot of attention, both positive and negative, a quarter of a century ago. Many agencies experimented with the process. The D.C. Circuit expressed its approval of Reg-Neg in its 1988 opinion in NRDC v. EPA, 859 F. 2d 156, and Congress legitimated the process by enacting the Negotiated Rulemaking Act of 1990, 5 U.S.C. §§ 561-570.
After attracting an initial flurry of scholarship—pro and con—and after an initial period in which many agencies tried the process, Reg-Neg seemed to disappear both from the scholarly literature and from agency practice. Professor Wiseman has found, and studied, an important context in which Reg-Neg continues to be used, with results that do not fit well with either the views of its supporters or its detractors. Continue reading "Rethinking Negotiated Rulemaking"
In Accommodating Pregnancy, Professor Bradley Areheart takes on the ambitious project of evaluating the current law of pregnancy discrimination in the workplace. Professor Areheart reviews the existing proposals to “accommodate” pregnancy under workplace laws, disagreeing with any characterization of pregnancy as a disability. The article suggests alternative ways of providing these same types of accommodations while avoiding the “disability” label. It is also one of the first published works to examine the Supreme Court’s recent decision in Young v. UPS – a case alleging pregnancy discrimination in the workplace that has generated substantial discussion and debate among legal scholars.
Courts and litigants have struggled for decades with how to formulate the rights of pregnant employees in the workplace. Professor Areheart begins by examining the various protections afforded by the Americans with Disabilities Act (ADA) and the Pregnancy Discrimination Act (PDA). In place of treating pregnant workers as disabled or advancing pregnancy-specific accommodation rights, Professor Areheart suggests a different model. Under this new approach, he identifies alternatives that would not present the same risks he identifies for disabled workers yet would still provide important accommodations to pregnant employees. The approach considers accommodation law from a more “gender-symmetrical” point of view. Continue reading "Pregnancy, Accommodation, and the Workplace"