Yearly Archives: 2018
Jul 11, 2018 Christopher M. BrunerCorporate Law
George S. Geis,
Traceable Shares and Corporate Law, 113
Nw. U. L. Rev. __ (forthcoming 2018), available at
SSRN.
Theories of corporate governance, and associated normative claims about the optimal balance of power between shareholders and boards of directors, often gloss over—or ignore entirely—”the recessed plumbing of back-end clearing processes.” To be sure, growing empirical literatures inform such debates by illuminating various strategies of exit and voice deployed by important categories of investors, yet the accuracy, efficiency, and integrity of securities trading and voting mechanisms often go unexplored. In the article Traceable Shares and Corporate Law, George Geis provides a fascinating window onto the complex mechanics of clearing and voting in publicly traded companies—and particularly how “distributed ledgers and blockchain technology” may revolutionize these processes, with potentially profound implications for corporate law and governance.
As Geis recounts, by the 1960s, transfer of physical stock certificates had become unworkable due to substantial growth in trading volume. The solution to this problem was “unidentified fungible bulk” shareholding. Shares now typically reside at the Depository Trust & Clearing Corporation (DTCC), with legal title held by a subsidiary called Cede & Company, which appears as the record holder of the stock in corporate stockholder lists. Accordingly, when the stock is sold from one investor to another, DTCC simply “transfers beneficial ownership electronically from seller to buyer via bookkeeping adjustments”—obviating the need for slow, cumbersome, and expensive transfers of physical stock certificates. Continue reading "Distributed Ledgers, Traceable Shares, and the Division of Power in Corporate Law"
Jul 10, 2018 Aditi BagchiContracts
About fifteen years ago, Bruce Mann’s Republic of Debtors offered an intriguing narrative about the origins of American bankruptcy law. Among other claims, Mann suggested that debt became respectable when respectable people found themselves in debt. When debt moved in from the fringe, our legal treatment of debt softened.
Anne Fleming tells a related story in our treatment of debt, but her focus is on poor debtors in New York City. Although the small sum loans that she studies may be on the fringe of finance, her account makes clear that the debtors who have relied and continue to rely on fringe finance are many, and together constitute a large, struggling class of workers. They are not outliers to our economic model but an integral part of it. We rely on their low wage labor and their debt-fueled consumption. And we have not devised any alternative to debt, no large-scale method by which low-income people can survive adverse events—at least not one that imposes lighter costs than perpetual debt. Continue reading "How Do We Regulate Contracts That We Need and Hate?"
Jul 9, 2018 Jodi ShortAdministrative Law
In The American Deep State, Jon D. Michaels pushes back against the increasingly shrill rhetoric charging that shadowy forces deeply embedded within the federal bureaucracy have commandeered the reins of government and are thwarting the President and undermining the democratically expressed will of the people. Michaels does not shrink from the “deep state” terminology, but rather seeks to co-opt it in an ode to what he calls “bureaucratic depth.”
Michaels extols numerous advantages of bureaucratic depth. First, he notes that bureaucratic depth is, as a practical matter, what makes the state work. It is a measure of state capacity. The deep bench of civil servants in the United States “mak[e] and enforce[e] regulations, design[] and run[] welfare programs, combat[] crime and corruption, and provid[e] for national defense.” These functions simply do not work—or do not work well, consistently, and non-corruptly—in states that lack bureaucratic depth. Second, Michaels argues that for precisely this reason, bureaucratic depth generally facilitates the implementation of the president’s agenda. Presidents should not, as a matter of course, wish for a hollowed out administrative state if they want to advance a political agenda. Finally, Michaels argues that bureaucratic depth can serve important stabilizing and accountability functions. “In those rare instances when presidents (and their hand-chosen agency heads) go beyond the proverbial pale, those in the civil service are particularly well-positioned to challenge, and even to resist, directives lacking a scientific, legal, or commonsensical foundation.” At base, his argument is that bureaucratic depth advances important rule-of-law values by serving as a check on lawless exercises of presidential power. Those outside the civil service are unlikely to have the combination of inside knowledge and protection from retaliation necessary to promote transparency about unlawful, unethical, or extraordinarily unwise presidential initiatives. Continue reading "In Praise of Bureaucracy"
Jul 6, 2018 Bethany BergerLexNative Peoples Law
The United States Constitution—that great experiment in creating a “more perfect union,” more democratic, egalitarian, and libertarian—was founded in sin. These sins include, among others, slavery and political exclusion of people of color and women of all races. They also include the erasure of sovereignty required to found a country on a continent occupied by existing indigenous sovereigns. Many before Seth Davis, including Milner Ball, Philip Frickey, Nell Newton, David Wilkins, and Robert Williams, have wrestled with this founding constitutional evil. Several things, however, distinguish Professor Davis’s American Colonialism and Constitutional Redemption. The result is an important addition to the canon of federal Indian law.
First, Professor Davis engages with theorists outside federal Indian law to an unusual degree. Professor Davis specifically takes on fiduciary theorists like Evan J. Criddle and Evan Fox-Decent, but also engages with other constitutional theorists like Sanford Levinson, Aziz Rana, and Jack Balkin; political theorists like Carole Pateman, Jennifer Nedelsky, and Robin West; race theorists like Dorothy Roberts and Miguel de la Torre; and even political figures like President Barack Obama and Reverend Adam Clayton Powell Sr. While other scholars of federal Indian law have written noteworthy works in other areas, few have so deftly connected their work to debates outside the field. The result is an article that helps to bring the law of Native people into mainstream debates, and out of the niche in which it is sometimes cabined. Continue reading "Can the Constitutional Sin of Colonialism be Redeemed?"
Jul 5, 2018 Anne Marie LofasoWork Law
In the movie 1776, Benjamin Franklin infamously remarks to John Dickinson, “Revolutions…come into this world like bastard children—half improvised and half compromised.” The compromise, of course, was slavery. The rest of the dialogue and its context, which explains the improvisation, is often omitted in discussion of this scene. Recall that Franklin asks John Hancock to poll the Pennsylvania delegation on the question of independence. Franklin votes yea; Dickinson, nay. This is how the decision of American independence lands squarely on the shoulders of Judge James Wilson, who ultimately votes yea. As Dickinson incredulously and rhetorically posits, “And is that how new nations are formed? By a nonentity seeking to preserve the anonymity he so richly deserves?”
If we compare the founding of our nation with the foundational federal labor law statutes of the twentieth century, which statute—the Wagner Act or the Taft-Hartley Act—is the labor law compromise? Most American labor scholars would probably say Taft-Hartley. After all, the Wagner Act, as Professor Karl Klare has correctly observed, “was perhaps the most radical piece of legislation ever enacted by the United States Congress.” Moreover, it is Taft-Hartley that, among other things, narrowed the definition of employee by eliminating the National Labor Relations Act’s (NLRA’s) protection of supervisors and independent contractors and diluted the union’s legal economic weapons by eliminating the secondary boycott. But the late Austro-British labor scholar, Otto Kahn-Freund, would argue that the Wagner Act was in fact a compromise by the American labor movement. As Kahn-Freund allegedly explained, “What the law giveth, the law can taketh away.” And taketh away it did—not merely via congressional amendments but via Supreme Court judgments and ultimately by the Board itself. Continue reading "Union Improvisation: The Parent of Social Justice"
Jul 4, 2018 Phyllis C. TaiteTrusts & Estates
Discussions about wealth accumulation and economic equality invariably lead to discussions about income and wealth inequalities. Professor Erez Aloni‘s article, The Marital Wealth Gap, takes the discourse to a new level by adding the connection between marriage and wealth inequality. Specifically, Professor Aloni indicates how the family structure impacts wealth by comparing the accumulation of wealth among married households in the top ten percent to all households in the bottom ninety percent. He coins this differential “the marital wealth gap.” Further, the article exposes various policies that reinforce wealth inequalities that serve as the foundation for the marital wealth gap. Finally he discusses the cause and harms caused by the gap and possible solutions for narrowing the gap.
In his analysis, Professor Aloni explores whether the success of married couples is the cause of the wealth advantage and he analyzes the various legal mechanisms that reinforce the wealth privilege that married households enjoy. In other words, he posits that law and policy facilitate measures to maximize wealth holdings for married households. Professor Aloni proposes the state should decouple wealth benefits from marriage by dismantling the architecture that supports preferences based on marriage. Continue reading "Is Marriage a Proxy for Wealth?"
Jul 3, 2018 Martha ChamallasTorts
Scott Skinner-Thompson,
Privacy’s Double Standards, 93
Wash. L. Rev., (forthcoming), available on
SSRNIn an age of growing income inequality and daily reminders of the privileged lives led by the rich and famous, it should come as no surprise that tort law might come to mimic the glaring disparities in the larger culture. The thesis of Scott Skinner-Thompson’s new article is that the courts have done just that in adjudicating privacy claims for the tort of public disclosure of private facts. Specifically, Skinner-Thompson argues that in applying the black letter law, courts have systematically favored privileged plaintiffs (often celebrities) without showing a similar regard for ordinary individuals, particularly plaintiffs from marginalized communities.
The article is rich in examples of disparate results linked to the identity of the plaintiff. There is the case of the gay man who loses his public disclosure lawsuit, despite being “outed” by the pastor of his church to other church members and a future in-law. Yet Hulk Hogan, the professional wrestler and reality show star, known for boasting about his sex life, wins a multi-million judgment when Gawker posts a sex tape of one of his sexual encounters. No recovery for a teenage victim of revenge porn when a website publishes a nude photo of the plaintiff she had privately sent to her boyfriend, but a sizable recovery for professional football player resulting from a tweet of his medical records indicating that he had to have a finger amputated. And on and on. Continue reading "Privacy for the Privileged Few"
Jul 2, 2018 Neil H. BuchananTax Law
Alice Abreu,
Tax 2018: Requiem for Ability to Pay, 52
Loyola L.A. L. Rev. (forthcoming 2018), available at
SSRN.
The tax bill that Republicans in Congress passed, and that Donald Trump signed in December 2017, might end up being one of the shortest-lived tax laws in U.S. history. Not only are large elements of it explicitly temporary, but the political moment that led to its passage seems already to be passing, quite likely to be followed by a time when progressive tax policy will once again be politically viable.
However, even if this bill lapses or is repealed (in whole or in part), Alice Abreu provides an important contribution to our understanding of what just happened in Tax 2018: Requiem for Ability to Pay. The title of the article telegraphs the importance of the issue that she identifies as the most unfortunate aspect of the new tax law. Whereas objective analysts knew that the bill’s changes would make the tax system less progressive than it had been, Abreu explains that seemingly unrelated elements of the bill add up to a repudiation of the very idea of progressive taxation. Continue reading "The Ability-to-Pay Principle and the Counterintuitive Distributive Justice Analysis of Alimony Payments"
Jun 29, 2018 Steve EagleProperty
“Inclusion” is one of those words that typically elicits warm and positive feelings. However, when an entire society is described as “inclusive,” the question arises—included in what? Putting the question another way, is it even possible for a community be all-inclusive?
Often, contemporary American political and legal discourse draw Manichaean distinctions between advocacy of inclusivity and of xenophobia. With regard to land use and housing issues, complete racial and socioeconomic integration of neighborhoods thus are juxtaposed against sinister demands by NIMBYs, who demand that integration take place “not in my back yard.”
Professor Kenneth Stahl is both an advocate for inclusion and an opponent of easy over-simplification. His analyses of economics, sociology, and political theory in The Challenge of Inclusion led him to observe that, at a fundamental level, the problem resides in the very notion of “community” itself. Continue reading "The Conflicting Tugs of Community and Inclusion"
Jun 28, 2018 Reuel SchillerLegal History
My mother, a life-long New Yorker, was an opinionated person. There were certain politicians she didn’t like, and, if they came up in conversation, she would not hesitate to tell you so. At the top of this list was Richard Nixon—hardly a surprising entry considering my mother’s identity as a postwar, Jewish liberal. (I don’t think Nixon would have liked my mom very much either.) Not far below Nixon was Gerald Ford. His greatest crime, of course, was pardoning “that sleazy bastard Nixon.” Ford’s perfidy, however, also hit closer to home. In 1975, as my mother’s beloved city spiraled closer and closer to bankruptcy, Ford refused to allow the use of federal resources to help New York weather its financial woes. “Ford to City: Drop Dead,” read the New York Daily News’ infamous headline after Ford announced that he would veto any federal legislation that would “bail out” the City. New York’s fiscal crisis cost my father his job at the City University of New York, so, as far as my mom was concerned, the “Drop Dead” was aimed at our family.
When it came to New York’s fiscal crisis, Ford was not the only politician who earned my mother’s scorn. A large portion of it was reserved for a man who could not have been more different from the tall, athletic, Midwestern president: Abraham Beame, the petite, uncharismatic accountant who had the misfortune to be the mayor of New York City when the crisis peaked. According to mom, it was Beame’s incompetence, his tolerance for profligate spending, and his subservience to both the corrupt Democratic political machine and municipal labor unions that brought New York to the brink of ruin.
Kim Phillips-Fein’s marvelous book, Fear City: New York’s Fiscal Crisis and the Rise of Austerity Politics, argues that my mother’s view of the crisis, which has become the received wisdom, is incorrect. She provides a detailed history of New York’s financial woes. The City, she explains, was committed to promoting social-democratic urbanism by enacting programs that promoted economic egalitarianism. These programs—free higher education, a massive city-funded system of public hospitals, cheap mass transit, for example—were expensive, but they did not cause the fiscal crisis. Instead, Philips-Fein argues that it was a combination of external circumstances (the end of the postwar economic boom, deindustrialization, and changes in securities markets) and the ideological desires of Republicans in the Ford Administration that drove New York to the brink of bankruptcy. Desperately in need of financial resources, the City was forced by Ford to cut its budget dramatically in exchange for the short-term loans that saved the City from bankruptcy. Continue reading "Urban History as Legal History"
