Jan 26, 2023 Anna GelpernCorporate Law
Corporate finance and public finance have a history of sharing market infrastructure, legal forms, and colorful terms (as when an infamous distressed debt trader used “United States’ security” to mean junk). The history of sharing invites reasoning by analogy, which often morphs into genealogy and positions 19th century London as the primordial soup for today’s market institutions. It is a sensible research strategy—London was and is a fruitful place—but formal similarities sometimes obscure critical context and alternative genealogies, leaving lawyers to ponder apparently meaningless clauses and pointless transactional techniques. Enter historians.
Marc Flandreau has a large body of solo and co-authored work about the London Stock Exchange, whose dominant market position and evolving governance practices over the course of the 19th century backstopped financial globalization, colonial expansion, and economic development. Two of Flandreau’s recent papers resonate in particularly intriguing ways with contemporary challenges. Both deal with the problem of inter-creditor equity and seemingly ineffectual contracts. This review will focus on the first, more developed paper. The second is mentioned briefly in closing—” target=”_blank” rel=”noopener noreferrer”>watch this space. Continue reading "All the Roads to the Stock Exchange"
Jan 25, 2023 Edward RubinJurisprudence
David M. Driesen,
Does the Separation of Powers Justify the Major Questions Doctrine? (2022), available at
SSRN.
The Supreme Court’s use of the major questions doctrine in West Virginia v. Environmental Protection Agency to invalidate the agency’s regulation of greenhouse gas emission has elicited widespread criticism from commentators. David Driesen’s contribution to this chorus of condemnation goes to the heart of the issue, focusing on the role that the Supreme Court has arrogated to itself in reaching this decision.
The Court’s based its decision on the relationship between Congress and the Executive, speaking at length about the structural roles of these two institutions. What it forgot, as Professor Driesen notes, is that the Court is also an institution, and that any ruling it issues about the powers of other institutions must take account its own exercise of power as well. This is, to some extent, your father’s jurisprudence, a basic insight of the Legal Process School that dominated public law scholarship in the decades following World War II. It often serves as a background consideration upon which flashier modern arguments can be built, but there is a crucial difference between assimilating an important insight and forgetting about it. The Court would be well advised to note Professor Driesen’s reminder. Continue reading "A Major Answer To The Major Questions Doctrine"
Jan 24, 2023 Laura Pedraza-FariñaIntellectual Property Law
Janet Freilich & Sepehr Shahshahani,
Measuring Follow-On Innovation (Feb. 20, 2022), available at
SSRN.
Ask any patent law student why we have a patent system, and they are likely to answer that patent law addresses a fundamental market failure: the free-riding by non-inventors on the inventions of others. A patent holder’s right to exclude others from making and using her patented invention addresses free-riding directly, restoring ex ante incentives to invest in innovation. But in solving the free-riding problem, patents create a second-order problem—one that is inextricably linked to the dynamics of innovation itself. Because all knowledge, and therefore all innovation, is cumulative, patents make innovations that build upon a patented feature more costly for parties other than the inventor, who must license an invention if they are to build upon it.
The problem of “follow-on” innovation has long preoccupied both economists and legal scholars. In their excellent paper, Measuring Follow-On Innovation, Janet Freilich and Sepehr Shahshahani contribute to this debate by bringing together both a deep understanding of patent law doctrine and precise econometrics research. In so doing, they make important contributions not only to the empirical literature, but also to our current theoretical thinking about the impact of patents on follow-on innovation. Continue reading "How Do Patents Influence Cumulative Innovation?"
Jan 23, 2023 Sheila Vélez MartinezEquality
Despite our long historical presence, there is a general sociolegal invisibility of Latina/os in the United States. As with other traditionally subordinated communities within this country, the combination of longstanding occupancy and persistent marginality has fueled an increasing number of contemporary Latina/o legal scholars to engage with and try to define the contours of what it means to be Latino in the United States, as well as questions of what is our place/space now and in the future of this nation, which, as the author highlights, “thinks of itself as the conscience of the world.”
Inventing Latinos by Professor Laura Gomez is an invaluable contribution to the growing literature on Latino studies because it not only tackles the question of how Latinos came to be in the context of the United States but also looks forward and asks: “What is at stake?” and “What is to be done?” This book is important because it looks for the answers to these questions by interrogating the complicity of colonialism, imperialism, and white supremacy in inventing and maintaining hierarchies of ethnicity and race as a central part of the American project. Continue reading "How Latinos Came to Be, What Is at Stake, and What Is to Be Done"
Jan 20, 2023 Rosalind DixonInternational & Comparative Law
In his important new book, The Law as a Conversation Among Equals, Roberto Gargarella offers a new vision for both democratic politics and democratic constitutionalism. Politics, Gargarella argues, should be more both egalitarian and participatory, and premised on a form of grassroots “conversation among equals” rather than elite Schumpeterian-style competition or bargaining. Constitutionalism, in turn, should do more to enable and encourage this kind of participatory politics – through citizen assemblies as key part of a process of constitutional design and amendment, and “dialogic” models of judicial review that encourage and empower democratic participation.
Why? The current disillusion with democracy, Gargarella argues, is driven by a fundamental desire for – and indeed expectation of – voice and participation on the part of citizens, when current democratic and constitutional models remain largely non-participatory in nature. This mismatch has grown over time and is now in urgent need of redress if we are to restore faith in the democratic constitutional project. Continue reading "Conversation or Competition Among Equals"
Jan 19, 2023 Jessica Lind MantelHealth Law
Jaime S. King, Alexandra D. Montague, Daniel Arnold & Thomas L. Greaney,
Antitrust’s Healthcare Conundrum: Cross-Market Mergers and the Rise of the System of Power, __
Hastings L. J. __ (forthcoming 2023) available at
SSRN.
In Antitrust’s Healthcare Conundrum: Cross-Market Mergers and the Rise of the System of Power, Jamie King, Alexandra Montague, Daniel Arnold, and Thomas Greaney highlight a significant gap in federal and state antitrust enforcement policy─the growing market power of healthcare systems than span multiple local geographic markets. Although antitrust enforcers have long assumed that mergers and acquisitions among providers competing in different geographic markets pose little threat to competition, the authors persuasively argue that this assumption is wrong. To support antitrust enforcement in this area, the article proposes an initial framework for cross-market merger analysis that draws upon the insights from antitrust caselaw, guidance documents from American and European Union antitrust agencies, and economic and legal scholarship.
In their review of lessons learned from conglomerate mergers outside of the health care context, the authors identify two key factors suggestive of anticompetitive effects. First, the merger creates linkages between the markets served by the merging entities when their products or services are related or complementary and can be packaged together for sale to a common customer. Second, when significant, those linkages can generate pricing power that allows one or more of the merged entities to raise prices. The article then examines how cross-sector health mergers across geographic markets can create linkages that satisfy these conditions. Continue reading "Challenging Anticompetitive Cross-Market Health Mergers"
Jan 18, 2023 Brian BixFamily Law
Rachel Rebouché,
Bargaining about Birth: Surrogacy Contracts During a Pandemic, 100
Washington University Law Review (forthcoming, 2023), available at
SSRN.
The United States is an outlier among other nations on the matter of surrogacy. While other countries are cutting back on the practice (not allowing payments to surrogates beyond compensation for expenses, allowing use only by intended parents from their own countries, or prohibiting it entirely), the trend in the United States is in the other direction: more states authorizing surrogacy and enforcing surrogacy agreements, and more states authorizing commercial surrogacy (i.e., payments to surrogates beyond their expenses), with only a few states putting residential restrictions on who can use the process. In Bargaining about Birth: Surrogacy Contracts During a Pandemic, Rachel Rebouché reports that 47 states, “either through statute or case law” (P. 6, footnote omitted), authorize surrogacy. This article, and Rebouché’s previous work, artfully explore the way that surrogacy is a practice that depends on a mixture of legal and extralegal norms.
The particular focus of the article is on how surrogacy practice was affected by the pandemic, with surrogates and intended parents negotiating restrictions on travel and potential disagreements regarding inoculation and isolation. On the whole, though, the particular complications of COVID are presented primarily as examples of more general truths about how surrogacy works. Continue reading "Divergences Between Surrogacy Law and Practice"
Jan 17, 2023 Elena LarrauriCriminal Law
All scholars that work on prison law develop a sense of dismay when they see how little law can achieve in transforming prisons into more “survivable” institutions. Even when the law is “good,” it usually is too broad, leaving an ample space of discretion to the prison administration. Judges, in turn, tend to defer to the exercise of this discretion in ways that overwhelmingly favor the interests of the institution to the detriment of the prisoners. Therefore, if one looks at the intervention of the judiciary, the sense of dismay does not wither away. The ‘activism’ of the Courts seems to produce limited changes. Be it the American Supreme Court, or the European Court of Human Rights, the fact is that the courts accept that a certain degree of humiliation is acceptable in prison, and “the [European] Court still applies a relatively high threshold by accepting that every detention holds an ‘inherent element of humiliation’ and an ‘unavoidable level of suffering’… so we can only induce from the Courts’ case law which kind of humiliation or suffering it finds ‘acceptable’ and which not.”
And yet, despite our knowledge of the limited capacity of law and the judiciary to produce relevant changes, most legal scholars that occupy themselves with prisons tend to have some trust, some hope, however faint, that law can achieve something. For one, because ‘sociology without law is toothless’ (and law without sociology is incapable of affecting change) (Livingstone et al., 2008). And on the other hand, because as Justin Driver and Emma Kaufman state in their outstanding article The Incoherence of Prison Law, we cannot abandon legal analysis of prison because:
“Written regulations shape nearly every facet of prison life, from when prisoners pray and how long they can grow their beards to when they can see their children [and therefore] critics of American criminal justice cannot ignore prison law.” (P. 520.)
Their paper makes an excellent summary of the reasons why we should concern ourselves with prison law. Continue reading "Keep On Pushing…"
Jan 16, 2023 Daniel BarnhizerContracts
J.J. Prescott and Evan Starr,
Subjective Beliefs about Contract Enforceability __
J. Legal Stud. __ forthcoming 2023, available at
SSRN.
In this article, J.J. Prescott and Evan Starr analyze the practical problem of how perceptions of contract enforceability can affect party behavior even when those perceptions are incorrect as a matter of law. Specifically, the authors tackle the difficult divide between the law on the books versus the law in action as famously described by Roscoe Pound. Under Pound’s formulation, the practical applications of law by parties in the real world will often diverge from the model of behavior upon which applicable laws regulating the parties’ conduct are based. As the divergence between reality and law increases, eventually either the law must adapt through development and adaptation of legal fictions to resolve the divergent applications or courts and legislatures must respond with new law. Subjective Beliefs about Contract Enforceability develops important observations regarding how parties actually respond to unenforceable contract obligations versus legal prohibitions on enforceability of certain contract terms and provides support for creation of new legal responses to address that divide.
The article approaches the general problem of perceptions of contract enforceability through the lens of employment contracts. In particular, the article analyzes the issue through the empirical question of how employees’ perceptions of the enforceability of non-compete clauses in their contracts affects their willingness to seek alternative employment even where state law prohibits enforcement of such provisions. The empirical project begins with the proposition that “[h]ow individuals behave in response to law depends on their particular and sometimes mistaken beliefs about the law’s content, including the probability of enforcement.” (P. 1.) As the authors note:
Our work is motivated by two recent findings that point to the possible influence of mistaken beliefs in this domain. First, employers use noncompetes heavily in states that explicitly refuse to enforce them. Second, noncompetes appear to influence employee mobility even in states where such provisions are unenforceable. While there are several reasons why employers might use and employees might comply with noncompetes even when employees know that a court will not enforce them (e.g., reputational harm or disutility from breaking a “promise”), one explanation for these results is that employees have mistaken beliefs about noncompete policies and that these beliefs matter to their choices. (P. 1.) Continue reading "Perceptions and Reality"
Jan 13, 2023 Jay TidmarshCourts Law
Helen Hershkoff & Luke Norris,
The Oligarchic Courthouse: Jurisdiction, Corporate Power, and Democratic Decline, 122
Mich. L. Rev. 1 (forthcoming, 2023), available at
SSRN.
Since Robert Cover’s 1981 article, many (including me) have accepted on faith that jurisdictional redundancy is a good thing. Redundancy is a feature of many complex systems. In the judicial context, redundancy creates competition among courts. According to Cover, this competition prevents ossification of the judicial process — whether that ossification arises from the self-interest of one system’s judges, from one system’s ideological capture or impasse, or from one system’s resistance to innovation. The principal cost of jurisdictional redundancy, especially in the context of state and federal courts, is its inherent messiness or inefficiency; an array of often complex doctrines polices the lines between systems (think of the rules of subject-matter jurisdiction, abstention, and full faith and credit, to name three). Concurrent jurisdiction between federal and state courts has a pedigree nearly as old as the Republic, its inefficiency often seen as a necessary cost to achieve the benefits of jurisdictional redundancy.
This sobering article by Helen Hershkoff and Luke Norris adds a new set of factors — how corporations have exploited the diffusion of adjudicatory power to evade accountability for their actions — that weaken the case for redundancy. Worse, the authors seek to demonstrate how this corporate abuse of jurisdiction bleeds over from preserving economic power to creating political power, establishing the conditions for oligarchic authority that undermines American democracy and self-government. Continue reading "Jurisdictional Abuse and American Democracy"
