Yearly Archives: 2017

A New Look at the Theory of the Firm

Tamara Belinfanti & Lynn A. Stout, Contested Visions: The Value of Systems Theory for Corporate LawU. Pa. L. Rev. (forthcoming 2017), available at SSRN.

Tamara Belinfanti and Lynn Stout’s Contested Visions: The Value of Systems Theory for Corporate Law, forthcoming in the University of Pennsylvania Law Review, brings systems theory to the theory of the firm. I picked the paper up expecting a cross-disciplinary reference to the work of Niklas Luhmann and other social theorists. But the reference here is to another branch of the systems inquiry, the cross-referents of which go to engineering, biology, and computer, environmental and management science. Belinfanti and Stout include a succinct and lucid primer of the basic points. They then deploy them against the most important point in the quadripartite case for shareholder value as the purpose of the firm.

A little law and economics background needs to be provided to show the importance of the intervention. Microeconomics does not yield shareholder value maximization as the purpose of the firm as a primary proposition. Indeed, in a frictionless world with complete markets, optimality would mean maximizing the yield to every actor connected to the firm rather than just the yield to the shareholders. Shareholder primacy emerges once frictions and incomplete markets are interpolated. It follows from four more particular assertions: first, an instruction to maximize for multiple constituents would be incoherent; second, the shareholder interest, as the residual interest, points management in the most productive direction; third, the shareholders are vulnerable, relatively speaking, because other firm constituents can protect themselves with contracts; and, fourth, a multiple constituent model would lack yardsticks with which to measure management performance, where the shareholder model can measure performance with standard metrics like the stock price and periodic earnings. Continue reading "A New Look at the Theory of the Firm"

Arbitration and Procedural Pluralism in Family Law

Barbara A. Atwood, The New UFLAA: Providing Needed Standards for Efficiency and Fairness, 39(4) Family Advocate 38 (2017), available at SSRN.

In July 2016, the Uniform Law Commission gave final approval to the Uniform Family Law Arbitration Act (UFLAA). Barbara Atwood was the drafting committee’s Chair and Linda Elrod was its Reporter. In The New UFLAA: Providing Needed Standards for Efficiency and Fairness, Professor Atwood offers an overview of the UFLAA’s history, the problems to which it responds, and the hard choices that had to be made in its drafting.

Arbitration has a bad reputation in large segments of the legal profession and legal academy. It is associated with provisions in consumer and employment agreements—mandatory arbitration with class action waivers meant to make challenges to improper behavior both private and impractical, and there are documented instances of the process being run by private arbitration companies with suspiciously one-sided win rates for the business or employer. It is also associated with Supreme Court decisions that have read the Federal Arbitration Act in controversially broad ways, in the process making it very hard to challenge arbitration provisions in court on grounds of unconscionability, lack of consent, or related grounds. Arbitration was also recently in the news when the Republican Congress and the current President combined to overturn a Consumer Financial Protection Bureau rule that would have limited use of such provisions in financial documents. Why would anyone want to have that unpopular mess in family law? Continue reading "Arbitration and Procedural Pluralism in Family Law"

Suing on the Shoulders of Others

Suzanne Lenon & Danielle Peers, ‘Wrongful’ Inheritance: Race, Disability and Sexuality in Cramblett v. Midwest Sperm Bank, 25 Feminist Legal Stud. 141 (2017).

While few seriously hold up litigating as a path to happiness, lawyers, historians, and activists often associate an expanded capacity to sue with increased justice. Thus the married woman’s right to sue in her name and minorities’ prerogative to respond to discrimination and hate crimes via legal proceedings are markers of progress. However costly and uncertain litigation is, the real issue is of course the potential for oppression wherever the powerful unjustifiably limit one group’s scope for legal action relative to that enjoyed by others. Crucially, my examples don’t typically evoke the worry that increasing one potential plaintiff’s options imposes costs on another historically subordinated group. The example in Suzanne Lenon and Danielle Peers’ engaging new essay in Feminist Legal Studies does precisely that.

The authors invite us to scrutinize the content and context of a lawsuit that a short time ago would have been unthinkable. Their point of departure is the complaint for wrongful birth brought by Jennifer Cramblett, a white lesbian, against the sperm bank that mistakenly provided her with sperm from an African-American donor, leading to a child of mixed race. The novelty inheres in the space for a committed lesbian couple to present in court its ambition to have a child by assisted reproduction as ordinary and reasonable. Lenon and Peers call us to examine the set of assumptions – the legal and social inheritance of white privilege – by which having a healthy child of mixed race might occasion compensable harm. They argue convincingly that the white lesbian’s lawsuit confirms, indeed reinforces, discourses that subordinate others. Continue reading "Suing on the Shoulders of Others"

Hey Lexis, Hey Westlaw: Please Include All Appellate Decisions in Your Databases!

Michael Kagan, Rebecca D. Gill & Fatma E. Marouf, Invisible Adjudication in the U.S. Courts of Appeals, 106 Georgetown L. J. (forthcoming, 2017).

Professors Kagan, Gill and Marouf have identified a remarkable gap in the Westlaw and Lexis databases. While those databases include all decisions designated as “published” and some other less elaborate, less detailed, decisions designated as “unpublished,” many decisions are not included at all.

The authors discovered this by studying immigration decisions on PACER. The cases involved review by the U.S. Courts of Appeals of administrative decisions by the Board of Immigration Appeals in the Department of Justice. In some cases, no appellate rulings were available, because they were sealed, for example, or because the case was resolved by a short docket entry. But even where merits decisions were issued and publicly available, many did not appear in the searchable databases, although Lexis had far more than Westlaw. Of course, in such cases the decisions are available on PACER and can be found by docket number on the Lexis and Westlaw mirrors of PACER. But the whole point of a searchable database is to find cases one does not already know about. Continue reading "Hey Lexis, Hey Westlaw: Please Include All Appellate Decisions in Your Databases!"

“A Major New Move” in Contract Interpretation

Omri Ben-Shahar and Lior Strahilevitz, Interpreting Contracts via Surveys and ExperimentsU. of Chi. Coase-Sandor Inst. for L. & Tech. Research Paper No. 791 (2017), available at SSRN.

Despite its practical importance, contract interpretation is the red-haired stepchild of the 1L classroom–the doctrine is infamously incoherent, rests on law/fact distinctions which even the Restatement elides, and testing meaning on a final exam can only succeed using artificially simple narratives. Many of us bring a rubber chicken to class at least once a semester because that fowl case is (at least) written-well and marches through alternative meanings, though the holding rests on a deus ex machina of burden shifting. It’s a stewing mess.

Chicago’s Omri Ben-Shahar and Lior Jacob Strahilevitz aim to free us of the burden of teaching both parole evidence and interpretation, and, along the way, reduce aggregate contract litigation costs and contract length, while improving readability and denying firms the ability to bully their opponents in court with expensive lawyers. If their forthcoming article, Interpreting Contracts via Survey and Experiments doesn’t achieve all its ends, it still is undeniably (in their words) a “major new move” in the field. It will generate discussion in class and in the law reviews, and it’s worth your time to read. Continue reading "“A Major New Move” in Contract Interpretation"

Discovering (Tax) Rights that the Poor Have Post-Welfare Reform

Susannah Camic Tahk, The New Welfare Rights, Brooklyn L. Rev. (forthcoming 2017), available at SSRN.

Professor Susannah Camic Tahk’s newest article is a welcome and optimistic read that opens space for future work (re)constructing the idea that the poor have rights. The New Welfare Rights has much to offer scholars and advocates alike, showing that the poor have under-appreciated rights as taxpayers or as recipients of tax-based benefits. This is an important contribution because it shows the continued possibility of claims framed in terms of “rights” even in the aftermath of welfare reform.

The New Welfare Rights begins appropriately by presenting the rise and fall of rights-based claims to welfare. As Professor Tahk highlights, rights-based claims enjoyed a brief moment in the sun, but the Supreme Court stepped back from the promise of Goldberg v. Kelly, with a series of holdings—Professor Tahk focuses on Dandridge v. Williams and Eldridge v. Matthews—hostile to the idea that the poor have a right to public support. Professor Tahk explains, “After these cases, lawyers working on issues pertaining to government benefits and rights hit a wall.” (P. 12.) So far, this is not exactly new territory. Martha Davis’ masterful history of the rise and fall of welfare rights in her book Brutal Need: Lawyers and the Welfare Rights Movement, 1960-1973 (1993) is the leading account but numerous other articles and books tell a similar story.1 With only a few exceptions2, most scholars and advocates generally accept the notion that the Courts are not receptive to arguments that the poor have rights. Somewhat less strongly stated, in today’s environment it is understood that existing recognized rights are vulnerable and the list of rights is not likely to be expanded through litigation. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 or Welfare Reform Bill, which explicitly stated that welfare was not an entitlement, is treated as final proof that the law has slammed shut on the poor. Continue reading "Discovering (Tax) Rights that the Poor Have Post-Welfare Reform"

Chevron’s Real Impact

Kent Barnett and Christopher Walker, Chevron in the Circuit Courts, 116 Mich. L. Rev. 1 (2017).

Empirical studies are often regarded as having less cachet than theory, and the circuit courts certainly have less cachet than the Supreme Court, so an empirical study of the circuit courts might be expected to rank somewhat low in the academic pecking order. But this article belongs at the top. A survey and analysis of all the federal Court of Appeals decisions from 2003 to 2013 that refer to the Chevron doctrine – some 2,272 of them – it reveals the actual operation and significance of this most famous of modern administrative law decisions. The Supreme Court invokes Chevron fairly regularly, of course, but often for the purpose of modifying it. In any case, Supreme Court decisions tend to be so politically charged that they frequently seem sui generis, a characteristic that provided the Court itself, in King v. Burwell, with still one more basis for modifying Chevron doctrine. It is in the circuit courts that the quotidian work of administrative law is carried out, and that is the pudding where the proof of Chevron‘s real impact can be found.

The most basic conclusion that Professors Barnett and Walker reach is that Chevron makes a difference. Contrary to prior empirical studies of Chevron‘s impact in the Supreme Court (“Chevron Supreme,” as the authors call it, since wordplay with the decision’s name is difficult to resist), they find that the win rate for the agencies in a circuit court (“Chevron Regular”) is substantially higher when the court invokes the Chevron doctrine. At 77%, it is fully 20% higher than the win rate when the court invokes Skidmore. To be sure, this is hardly a surprising conclusion, and thus lacks the counter-intuitive allure that some of the best empirical studies offer. But it is a conclusion reached only after a massive amount of careful effort and it represents an important contribution to our knowledge about Chevron’s real impact. Continue reading "Chevron’s Real Impact"

Rules for Digital Radicals

In 1971, activist and community organizer Saul Alinsky summarized lessons from a lifetime of organizing in his book, Rules for Radicals: A Pragmatic Primer for Realistic Radicals. Published in what would be the twilight of his life, Rules for Radicals was in many ways a tactical field guide for those seeking to instigate widespread social change. It still influences social movements on both the left and right. And yet, today’s wired world is much different—and more dynamic—than Alinsky’s pre-internet society, which relied largely on centralized forms of mass communication.

Now, both activists and governments operate under a new set of diffuse structures and communication mediums. Twitter, Facebook, and the like alter the terms of engagement for public protest and participatory democracy. And Zeynep Tufekci’s new book, Twitter and Tear Gas: The Power and Fragility of Networked Protest, helps us understand precisely how networked communications can amplify social movements, at the same time that it provides important notes of caution. In this way, while written as an accessible scholarly account rather than an operation manual, Tufekci’s book provides rules—or at least guideposts—for digital radicals. Continue reading "Rules for Digital Radicals"

Precedent, Preclusion, and Participation

Alan M. Trammell, Precedent and Preclusion, Notre Dame L. Rev. (forthcoming 2018).

Preclusion and precedent restrict the permissible range of actions in future litigation. Preclusion bars parties from relitigating claims or issues that have already been adjudicated in a prior action in which the litigant was present. Precedent binds all courts and parties within a relevant jurisdiction to a particular rule or holding if the decision emerged from a court with binding authority. Alan Trammell’s new article undertakes a fresh examination of the tension between these two doctrines: why are future parties bound by precedent and stare decisis regardless of their presence in a prior action, when preclusion doctrines demand prior party presence and jealously guard an absent party’s right to a day in court?

Trammell’s take is that preclusion and precedent embody two different theories of due process. Preclusion protects a “participation-oriented theory,” in which courts are focused on guarding a party’s due process right to a “day in court.” Precedent protects an “outcome-oriented theory,” in which due process bolsters decisional accuracy and protects litigants’ rights to a stable and predictable legal environment. Continue reading "Precedent, Preclusion, and Participation"

Limiting the Limitless

Ifeoma Ajunwa, Kate Crawford & Jason Schultz, Limitless Worker Surveillance, 105 Cal. L. Rev. 735 (2016).

The hottest new subject area for legal academics is privacy law. The field is still in its infancy, which means that many of the foundational issues of categorization and taxonomy remain to be worked out. Even defining privacy is thorny, as the label is applied liberally to all sorts of invasions, intrusions, disclosures, and interests, with questions about how to delineate and frame privacy concerns arising in several sub-categories. In the labor and employment context, the Restatement of Employment Law has divided privacy interests into three categories: interests in the privacy of persons and locations (including electronic ones); interests in the privacy of personal information; and interests in the nondisclosure of information that was disclosed to the employer confidentially.1 Within these broad contours, a myriad of different types of violations sit uncomfortably next to one another, each raising their own specific issues.

In Limitless Worker Surveillance, Ifeoma Ajunwa, Kate Crawford, and Jason Schultz take on one specific type of privacy invasion: workplace surveillance. Because of employers’ ownership and control of the workplace, courts have generally interpreted the common law to allow employer surveillance of working areas. Moreover, employers can expand their observation into private areas when employees give their consent to the intrusion. Management has generally run into trouble only when it surreptitiously and secretly records employees in private areas, such as bathrooms, medical examination offices, and employee homes. But routinized, disclosed surveillance is commonplace and seen as part of the job. Ajunwa, Crawford, and Schultz, however, want to disrupt this equilibrium. They argue that freedom from surveillance should be a non-waivable right, and they propose three different federal statutes, varying in scope, to enforce variations of this right against employers. Continue reading "Limiting the Limitless"