Monthly Archives: May 2018

Resisting Contract Law’s Paradigm Slip Through Shared Meaning

Robin B. Kar & Margaret J. Radin, Pseudo-Contract & Shared Meaning Analysis, 132 Harv. L. Rev. (forthcoming 2019), available at SSRN.

By now, it’s old news that contracts have undergone a transformation in the couple of decades and not for the better. Just thirty years ago, it was a relatively rare occasion when the average American entered into a contract. It may have been a lease or a home purchase, or maybe a car rental agreement. But to purchase a shirt at the mall did not require signing a contract unless it was to sign one’s name on a credit card slip. What a difference the Internet makes. Now, people routinely are deemed to have entered into “contracts.” In their article, Robin Bradley Kar and Margaret Jane Radin address this phenomenon, putting the term “agreement” and “contract” in scare quotes to underscore how these types of “contracts” have “fundamentally different meanings” from their traditional counterparts. (P. 5.)They come up with a more appropriate term for these types of unread, ubiquitous contracts – pseudocontracts – and note the importance of using a different term to describe a different concept because the “use of homonymous terms for concepts that have evolved to have different meanings can mislead one to think that there is no fundamental difference” between the traditional contracting scenario and the one that online consumers routinely encounter. They write that “one must consider how contemporary methods of communication have altered the way parties use language during contract formation.”

Kar and Radin article is both normative and descriptive in that it describes how contract law should address interpretation issues and explains what courts have been doing – at least when they do it correctly (i.e. before ProCD and its ilk mucked things up and made teaching 1L Contracts so much more difficult). Their article is lengthy and chock-filled with terms which neatly capture hard-to-explain concepts. For example, they describe the incremental changes that contract law has undergone to doctrinally accommodate digital contracts as a “paradigm slip” which has the overall result of fundamentally changing core doctrinal concepts such as assent. They explain that their approach – “shared meaning analysis” is not “an alien approach to contract interpretation” but is “consistent with long-standing approaches that are rooted in a nuanced and careful assessment of the shared meaning that private parties produce when they use language to form contracts.” (P. 8.) This is basically the same “contextual” approach adopted by the Restatement (Seconds) of Contracts and the Uniform Commercial Code, but which courts have applied in an uneven and erratic manner. Their approach does more than explain what courts have done (when they are applying interpretation rules correctly); it provides more transparency and “precision to traditional approaches by building on the well-known linguistic distinction…between what sentences mean (including any sentences delivered in boilerplate text) and what people mean when they use language to communicate with one another (including to form contracts.”) (P. 9.) Kar and Radin turn to the work of Paul Grice, a philosopher of language, who distinguished between the meaning of a sentence and what a speaker means when using that sentence within a particular context. Continue reading "Resisting Contract Law’s Paradigm Slip Through Shared Meaning"

#Resistance, with Candor

Are we all still “Legal Realists now?” So it is often assumed. But there are reasons to wonder. Today, it seems, many legal scholars are private Legal Realists only. Their public writing—whether scholarship, public commentary, or legal advocacy—shows few traces of Realism. They are writing to persuade judges or the general public. That counsels against admitting their arguments are malleable and have as much to do with external factors as the “internal” practice of law. To persuade this audience without causing resistance or cynicism, they cannot put all their cards on the table. Is that concealment Legal Realism, or something else—perhaps bad faith?

This question is especially relevant in the Age of Trump. Many legal scholars today are engaged in what Twitter calls #Resistance to the Trump presidency. They see an urgent need to convince judges to counter Trump’s actions. That includes a willingness to urge judges to stretch or reshape existing law. Any Legal Realist understands that this kind of stretching is possible, if not inevitable. They know that judges work with plastic materials and that the springs of their decisions are both “external” and “internal” to the law. Given the perceived urgency of “resistance” to the administration, will scholar-advocates openly acknowledge all this, at the risk of scaring off judges or alienating the public? Or will they keep such thoughts to themselves, insisting publicly that they only seek loyal interpretation and enforcement of “the law?” Continue reading "#Resistance, with Candor"

Administrative Law Scholarship in Our Present Political Moment

In the Fifth Edition of the Administrative Law Treatise, released in 2010, Richard Pierce described a raging debate within the academic community and the courts at that time over the appropriate role of democratic values and institutions in the administrative state. This debate encompassed such topics as the validity of unitary executive theory, how best to resolve disagreements between Congress and the President, and how to manage the risk that courts would become “the primary architects of national policy through their efforts to keep agencies within legal boundaries.” Eight years later, that same debate over the values, institutions, and structures of contemporary governance still rages on. A trio of pieces published last fall by Harvard Law Review both exemplifies and contributes to that ongoing conversation. As the author of this academic year’s Harvard Law Review Foreword, Gillian Metzger has penned a bold and provocative defense of the modern administrative state. Aaron Nielson and Mila Sohoni provided thoughtful response essays. Collectively, these pieces demonstrate scholarly engagement at its best.

As one might expect of the Foreword, Metzger’s article is masterful in its articulation and support of two separate but related propositions. The first is her identification of a combined political, jurisprudential, and scholarly trend that she labels “anti-administrativism” and characterizes as the contemporary resurrection of a very old fight. As she opens her piece, “Eighty years on, we are seeing a resurgence of the antiregulatory and antigovernment forces that lost the battle of the New Deal.” Metzger characterizes as anti-administrativist various actions and initiatives of the Trump Administration and the Republican Congress to reduce regulatory burdens, downsize the federal government, and reform the Administrative Procedure Act. Other presidents have pursued a similar agenda, but Metzger says their “promises … largely went unfulfilled” as compared to present efforts. Metzger also classifies as anti-administrativist a number of Supreme Court and D.C. Circuit cases—some from the 2016 Term, others predating it—concerning separation of powers principles, the Chevron and Auer standards of judicial review, and other constitutional issues. Continue reading "Administrative Law Scholarship in Our Present Political Moment"

Uber, China, and Robots

Cynthia Estlund, What Should We Do After Work? Automation and Employment Law, NYU School of Law, Public Law Research Paper No. 17-28, NYU Law and Economics Research Paper No. 17-26 (Jan. 5, 2018), available at SSRN.

Reams of law review pages have been written about the effects of technological change on employment law. The typical narrative tends to portray technology as a disruptor, changing the structure of work and challenging the assumptions on which our employment law regime is built. Scheduling software, for instance, enables employers to assign workers for last-minute shifts and send them home during slow periods, creating a form of wage and hour instability that was never contemplated by wage and hour law. App-based companies build their entire business models around workers they classify as independent contractors, and yet retain some measure of labor control, putting pressure on the legal definition of “employee.”

Cynthia Estlund’s timely new working paper offers a different description of technology’s relationship to the law that both challenges and complements the narrative above. Her particular focus is automation, or the takeover of previously human-performed tasks by technology both “hard” (robots) and “soft” (algorithms). Estlund portrays automation as related to the larger trend that David Weil has labeled “fissuring,” or employers’ “flight from direct employment.” Employers might choose to hire workers through layers of subcontractors, they might convert employees to independent contractors, they might hire foreign workers in other countries, and they might replace human workers entirely with automated or machine-provided labor. In the public imagination, as Estlund points out, the shorthand for these trends might be “Uber,” “China,” and “robots.” Each of these moves reduces the number of directly employed workers, and, concomitantly, reduces employers’ legal and regulatory obligations. Instead of focusing on the effect of these moves on employment law, however, Estlund conceives of employment law, at least in part, as their cause. Continue reading "Uber, China, and Robots"

Justifying Liability without Proof of Causation

Emmanuel Voyiakis, Causation and Opportunity in Tort, 38 Oxford J. Legal Stud. 26 (2018).

In ‘Causation and Opportunity in Tort’, Emmanuel Voyiakis offers a thought-provoking analysis of some of the field’s classic causation problems. His focus is upon situations where the crux of the causal difficulty is epistemic – for some reason or other, we don’t have enough evidence to attribute causality of a particular claimant’s damage to a particular defendant’s conduct according to the civil standard of proof.

To understand Voyiakis’ approach, it’ll be useful to consider his analysis of a case and contrast it with that of some other prominent theoretical frameworks. Consider, then, the decision of the House of Lords in Fairchild v Glenhaven Funeral Services Ltd [2003] 1 AC 32. In Fairchild, D1, D2, D3, C’s employers, each successively, but independently, expose C negligently to asbestos dust. C contracts mesothelioma, an asbestos-induced cancer, but cannot prove on the balance of probabilities (more likely than not) which of D1, D2, D3 (or which combination) was a cause of C’s cancer. Scientific understanding of the aetiology of mesothelioma does not allow us to say whose exposure causally contributed to the mesothelioma. Applying the orthodox balance of probabilities approach, C will be unable to establish liability against any defendant, the probability of causation against each being only 1/3.1 The House of Lords, nonetheless, held each defendant liable in full. Continue reading "Justifying Liability without Proof of Causation"

On the Way To and From Marriage

Adam J. Hirsch, Inheritance on the Fringes of Marriage, 2018 U. Ill. L. Rev. 235.

Imagine that you are engaged to be married but die shortly before the wedding. You do not have a will. Should your fiancé be entitled to a share of your estate?

Imagine instead that shortly after your engagement, you execute a will giving your fiancé half of your estate. You end the relationship before walking down the aisle but never change your will. You are later killed in an accident. Should your ex-fiancé take under the will? Continue reading "On the Way To and From Marriage"

Understanding Tax Provisions in M&A Agreements

Gladriel Shobe, Private Benefits in Public Offerings: Tax Receivable Agreements in IPOs, Vand. L. Rev. (forthcoming 2018), available at SSRN.

In Private Benefits in Public Offerings, Prof. Shobe describes the emergence and evolution of a fascinating term in initial public offerings: tax receivable agreements (TRAs). These agreements reserve for the pre-IPO owners of the business the economic value of certain tax attributes that are either created in the course of the IPO or which were created over a course of years before the IPO. TRAs are contracts between the post-IPO corporation and the pre-IPO owners, pursuant to which the corporation makes distributions to those pre-IPO owners as tax assets are used. In one variation, pre-IPO owners receive the economic benefit of basis step ups that arise in certain “turbocharged” IPOs, and in other variations the pre-IPO owners receive the economic benefit of net operating losses and historical basis in the corporation’s assets.

Shobe then goes on to evaluate the fairness of these agreements. One view that motivates her discussion is that tax assets are underpriced in IPOs, and that TRAs are one way of ensuring that the pre-IPO owners receive a “fair price” for these assets. The opposing view is that the tax assets are properly valued in IPOs already, so that the TRAs allow pre-IPO owners to extract a greater purchase price from new investors than they otherwise would, and perhaps should.

One important contribution of the paper is to describe how these agreements work, and to document how they have both proliferated and mutated into different forms. Shobe teaches the reader a great deal about this feature of IPOs and make some important observations about how they operate. Her work raises the question of why certain variants of the TRA were adopted in some IPOs and other variants were adopted in others, and why TRAs that convey the benefits of net operating losses and historical basis have become increasingly popular over time. Exploring the relationship between the form of the TRA and other characteristics of the IPO might help explain what function they serve.

Continue Reading “Understanding Tax Provisions in M&A Agreements”

Understanding Tax Provisions in M&A Agreements

Gladriel Shobe, Private Benefits in Public Offerings: Tax Receivable Agreements in IPOs, Vand. L. Rev. (forthcoming 2018), available at SSRN.

In Private Benefits in Public Offerings, Prof. Shobe describes the emergence and evolution of a fascinating term in initial public offerings: tax receivable agreements (TRAs). These agreements reserve for the pre-IPO owners of the business the economic value of certain tax attributes that are either created in the course of the IPO or which were created over a course of years before the IPO. TRAs are contracts between the post-IPO corporation and the pre-IPO owners, pursuant to which the corporation makes distributions to those pre-IPO owners as tax assets are used. In one variation, pre-IPO owners receive the economic benefit of basis step ups that arise in certain “turbocharged” IPOs, and in other variations the pre-IPO owners receive the economic benefit of net operating losses and historical basis in the corporation’s assets.

Shobe then goes on to evaluate the fairness of these agreements. One view that motivates her discussion is that tax assets are underpriced in IPOs, and that TRAs are one way of ensuring that the pre-IPO owners receive a “fair price” for these assets. The opposing view is that the tax assets are properly valued in IPOs already, so that the TRAs allow pre-IPO owners to extract a greater purchase price from new investors than they otherwise would, and perhaps should. Continue reading "Understanding Tax Provisions in M&A Agreements"

Jurisdictional Synergies in the Caribbean

Rising threats to judicial independence—in Hungary, Poland, and elsewhere around the world—are putting into stark relief the political and institutional challenges faced by “the weakest branch.” It is more important than ever to think seriously about how courts gain and maintain the legitimacy necessary for effective authority; how they develop and retain their independence; and whether judicial design might provide insights or answers.

In Between Community Law and Common Law: The Rise of the Caribbean Court of Justice at the Intersection of Regional Integration and Post-Colonial Legacies, Salvatore Caserta and Mikael Rask Madsen shed new light on these questions through the experiences of the Caribbean Court of Justice (CCJ). In addition to providing a helpful exposition on the creation and early development of the CCJ, the Article explores the elements of judicial design that have contributed to the CCJ’s growing authority and legitimacy. The most engrossing analysis is that anticipated by the title: the CCJ’s “unique double jurisdiction,” which results in “two relatively different constituencies and operational contexts” yet has created important synergies for judicial empowerment. Continue reading "Jurisdictional Synergies in the Caribbean"

#MeToo Justice

Lesley Wexler, Jennifer Robbennolt & Colleen Murphy, #MeToo, Time’s Up, and Theories of Justice, available at SSRN.

Do we really need to hear more about #MeToo or have we reached the point of saturation? Given the subject of my review, it should come as no surprise that I think there is more to say. What might be a surprise, however, is that I also believe we are approaching saturation. Exhibit A is the backlash that is already in full swing. Overexposure could be bad for #MeToo, but I do not think it will be. The culture of harassment, abuse, and diminishment in which women have existed and continue to exist requires nothing short of a counter-saturation. I say bring it on.

This is where this important article by Lesley Wexler, Jennifer Robbennolt, and Colleen Murphy comes in. The authors interrogate what justice might look like for this historic movement. They conclude that the concept of transitional justice (with some nods to principles of restorative justice) holds great promise. While individualized justice is critical, the authors argue that #MeToo should also pursue and achieve systemic change. The authors land on transitional justice, but caution that its promise will be realized only if two things happen. It must include and address the most marginalized women, and it should take a holistic view of what types of changes will lead to societal transformation. Continue reading "#MeToo Justice"

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