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October 31, 2006
Shopping at the AALS Meat Market
Since I'm on the appointments committee this year, I will be enjoying the ritual this Friday and Saturday of engaging in a marathon of interviews with prospective law professors. Since I bet more than a few candidates have done some reconnaissance on GW's appointments committee, they might be reading this blog. The secret password for getting a callback is "concurring." Just kidding, of course. . .
For candidates who want some advice on surviving the event, we have several posts here at Concurring Opinions that might be of use, including one of my own. I don't have much to add to what has already been said regarding advice. What's so odd about the law professor hiring process is that it seems to be shrouded in mystery when you're on the market, yet when you're on the other side, so many things that were mysterious seem obvious.
Anyway, I'm excited about the group of candidates GW's committee is interviewing later this week. We've got dozens of interviews lined up in a row, so I sure hope our candidates are interesting. At Concurring Opinions, we have a number of law professor wannabe readers, and to all of you who will be at the AALS conference this week, best of luck!
Posted by Daniel Solove at 07:11 PM | Comments (0) | TrackBack
Corporate Law “Reform” in Multiple Dimensions
In an earlier post, I discussed the U.S. Chamber of Commerce’s foray into the growing conflict over the corporate internal affairs doctrine and whether that doctrine rises to the level of a constitutional imperative. Of course, the Chamber’s efforts in this area are but one small piece of a much larger overall strategy in addressing the production and content of American corporate law. In an article in Sunday’s New York Times, other pieces of that strategy now have become apparent.
The Chamber and others reportedly will launch a campaign following the election in which they may seek to scale back requirements imposed under the Sarbanes-Oxley Act, limit liability of accounting firms, make it harder for prosecutors to bring cases against individuals and firms, limit what they view as overzealous state-level enforcement, eliminate the private right of action under Rule 10b-5, and require some investor claims to be arbitrated. According to the article, they intend to achieve most of these objectives though agency action rather than resorting to legislation.
Wow. The “post-post-Enron” backlash cometh. . . .
We will have to see how all of this plays out, but I will offer three tentative impressions.
1) The Multi-Dimensional Attack. Okay, this isn’t news, but it is a healthy reminder. Tort reform and deregulation efforts – or whatever you want to call them – are most effective if undertaken in multiple dimensions. That is, to reduce or eliminate unwanted regulatory interference, one may focus on altering not only the substance of the law, but also choice-of-law (federal-state and state-to-state) and choice-of-forum (e.g., federal, state, judicial with jury, judicial without jury, nonjudicial). We see the latter two dimensions in the Securities Litigation Uniform Standards Act of 1998, and the last dimension in the Class Action Fairness Act of 2005 and the largely successful efforts to make the Federal Arbitration Act a super-statute, sweeping away lesser statutes before it. Of course, when the three work in conjunction, the perfect deregulatory storm can result. Take, for example, the regulation of welfare benefit plans under ERISA – a vacuous federal regulatory regime combined with broad preemption that stymies state regulatory efforts combined with very limited avenues for individual relief due to ERISA’s remedial scheme and deference to plan administrators. All three of these dimensions are present in the proposals in the Times’ story and the Chamber’s internal affairs doctrine initiative. My point here is not that these initiatives, if successful, will mean that corporate law will end up just like ERISA; rather, it is to remember that all of this stuff which might appear to be so disparate is very much interrelated.
2) Federalism/Schmederalism. At first blush, it’s ironic that some of those who will be supporting these reform efforts were waving the federalism flag when Sarbanes-Oxley and its underlying regs were under consideration. Indeed, these new proposals to preempt state regulatory and enforcement efforts (in fact, authorizing the SEC to do it!) and related efforts to federalize corporate choice of law don’t sound particularly consistent with the norms of federalism – e.g., so much for local experimentation. But, of course, that is until you consider that this was never really about federalism. It’s about getting the preferred regulatory content and the preferred regulators.
3) The Corporate-Law Way. While the prior two impressions may be applicable to other areas, aspects of this are unique to corporate law. The most direct way to achieve uniformity, non-interference, and desired regulatory content would be federal preemption of the field (whether this is viable as a political matter is another question). But the Chamber’s proposals call only for preempting certain state-level regulation – the kinds we have seen recently in, say, New York and California. And while submitting securities claims to arbitration is proposed, there appears to be no similar push to commit all corporate-law disputes in publicly traded firms to arbitral fora. Well, this is because of the unique way in which corporate law is produced at the state level, the law that Delaware produces as a result, and these groups’ preferences for Delaware’s law and courts. An unstated goal here is to maintain and entrench this law-production system.
Just to be clear, while I think some of these proposals raise grave concerns, I am not saying that all aspects are unworthy of consideration. I am suggesting that policy makers take care to consider the whole multi-dimensional picture (including the visible and not-so-visible) in evaluating the merits of each of them.
Posted by Timothy_Glynn at 11:42 AM | Comments (1) | TrackBack
October 30, 2006
Further Studies of Bilateral Free Trade Agreements Needed
As Larry Helfer writes, the United States has "regime shifted" in international trade, moving from the multilateral, global negotiations in the WTO, where liberalizing trade has stalled, to bilateral or regional agreements. These agreements have received insufficient attention.
In a recent paper written as part of a symposium in honor of Margaret Jane Radin, I offer one example of how we might approach such studies. In the paper, "Exporting DMCA Lockouts," I compare anti-circumvention provisions in all of the post-DMCA FTAs. To do this, I ran dozens of blacklines, comparing those provisions in various FTAs with each other. This comparative approach revealed a significant amount about the negotiating position of the United States, viz., what aspects of these provisions on which the U.S. would be flexible. Such an approach provides information not only for other potential FTA counterparties, but also demonstrates the extent of our commitment to largely not budge from very strong anti-circumvention rules.
The amount of material for future scholarship in such an approach is quite large. Many aspects of human endeavors are affected by these FTAs--which bind not only our trading partners, but ourselves. Thus, there is a large need for academic inquiry into what these FTAs require.
Here's my abstract for the paper, which can be downloaded here.
In her lead paper for a symposium in her honor, Margaret Jane Radin warns that our intellectual property laws are being rewritten in ways that neglect values embedded in neighboring legal subdisciplines, such as contract, competition, and free speech law. The effect has been to aggrandize the rights of intellectual property holders, at the expense of others in society. In my comment, I apply her elegant insight to an oft-neglected realm: our spirited efforts to export our ever-strengthening intellectual property law through bilateral trade agreements. Radin critiques the Digital Millennium Copyright Act's anti-circumvention provisions, which some companies have cleverly sought to deploy to bar competition in the after-market. Companies are seeking to exploit DMCA anti-circumvention to obtain monopolies, with varying success, in unexpected areas such as garage door openers, printer cartridges, and online multiplayer games.I show how, through bilateral and regional free trade agreements, the United States is exporting the DMCA's controversial and strict anti-circumvention provisions. All of the free trade agreements negotiated by the United States post-DMCA mandate the adoption of anti-circumvention provisions by our partners. A review of each of these agreements demonstrates that they carry the DMCA's cramped vision of permissible circumvention. They thus ignore what Radin describes as the legal milieu of intellectual property, in particular, competition law, foisting upon our trading partners rules that corporations may exploit to gain monopolies in the after-market for their products. This leads to the irony that measures to free trade might lead to a legal framework that facilitates monopolies in the after-market.
Posted by Anupam_Chander at 10:45 PM | Comments (0) | TrackBack
Xoxohth, Civility, and Prestige: Part I
Xoxohth claims to be the "most prestigious law school admissions discussion board in the world." According to its marketing materials, it controls 70% of the online "market" for "higher education and career discussion", with around 6000 posts a day on various topics. One of its founders reports that the site receives 350,000 to 500,000 unique visitors every month, making it significantly more trafficked than any other law blog, with the exception of Volokh. (By comparison, we get 60-70K unique hits a month.)
But.
Among many legal scholars and administrators, there is a shared impression that discussion at XO is overrun by sexist, racist, anti-semitic, and just plain foolish talk. The well-known Leiter-XO engagement (see here) is just one example, but it isn't alone. Based on correspondence, I have learned that multiple law school deans and assistant deans have dealt with the Board when trying to mediate online disputes involving their school's students. XO has been threatened with legal action (at least twice) involving alleged defamation on the board, although the site is not, to my knowledge, involved in pending litigation. Some wish the entire XO discussion board was a hoax (although others think it may be providing a public service) and some, well, some are mad as hell:
If this is what other lawyers are going to be like, I want out. They make us all look like utter a[*******]. People should avoid law school because it sucks, not because of these jerks.I've written a bit about the Board before, in the context of a US News citation dispute, and since then, I've been in contact with one of the Board's administrators, Anthony Ciolli, a 3L at Penn Law. I think the board is pretty fascinating, primarily because its anonymity enables, and its format records, discussions among rising lawyers that are frank and heterodox (in legal culture) with respect to race, gender relations, and professional development. It isn't the only forum for such discussions, but it may be the largest.
In subsequent posts, I will be exploring three basic questions about XO.
1. What is it? I will set out the history of the Board, arising from a disaffected group of folks talking at a Princeton Review website. I will then try to get a handle on the actual discussions on XO. As Prof. Leiter pointed out, many posts on XO contain frankly racist and sexist talk. What percentage of the whole? Is the remainder entirely about law school and law firm rankings, and, if not, what else is being discussed? Other questions: who makes up the XO community? what motivates folks to spend time and effort on the various discussions? how is the site governed? how are disputes resolved? how much money does it take in?
2. Is XO Representative of Law Students? I wonder if XO strips away the mask of civility and gives us a view on how rising lawyers think. Law self-imagines as a service profession, at least in part, but posters on XO are significantly more concerned with utilitarian ends (particularly, maximizing prestige). How unique is this community and this view within the general legal profession?
3. Why should we care? Here, I'll take on some of the bigger, normative, questions. In particular, one of the "strengths" of XO is that it isn't moderated, but, that lack of moderation may be correlated with very ugly speech. Does the combination of moderation and anonymity produce net social benefits? That question would seem to turn on alternative fora, and the basic question here is whether law schools are failing to enable frank talk about law firm life and the importance of rankings, if we think that these discussions belong in school. Should law school deans be in the business of trying to shut XO down? Should professors encourage Bar Admissions C&F committees to ask "are you now, or have you ever been . . . " questions?
I think the series of posts will be interesting. I'm gathering data and information from a variety of sources: if you have any special insights about XO, you are free to send them to me via email. (I'm closing comments on this post, on the theory that they are likely to be immoderate. Unless you tell me otherwise, I will assume that I can quote and attribute any emails.)
Look for more in the coming days and weeks.
[Update: Part I.1; Part I.2; and (3; 4) related posts].
Posted by hoffman at 02:33 PM | TrackBack
A Global Financial Regulator?
Barney Frank, who will likely take over the House Financial Services Committee if the Democratics win next week, has this to say to the Financial Times about regulatory cooperation:
'Doesn’t that sound like fun,' Mr Frank said . . . 'Joint action is theoretically [good] but what does that mean? In American baseball, if the runner and the ball arrive at the base at the same time, the tie goes to the fielder. Who breaks a tie if there is a disagreement over policy between the SEC and FSA?'Those are some scary words for folks who are already worried about the federalization of corporate law. About SOX itself, Frank said:Asked if a supra-national regulator would be needed, he told the Financial Times: 'I don’t know. At this point that’s something to look into.'
[T]he idea that Sarbox could be more widely applied abroad was “not going to happen” because it was being watered down in the US.Business and financial leaders in Europe continue to fret about the possibility that Sarbox could find its way to the UK and elsewhere through the back door, such as if a stock exchange in the US acquired one in the UK.
Asked if Europeans were justified of such concerns, Mr Frank said: “It’s not going any further. Six months from now it will be less of a burden for companies than it is today.” His view reflects a belief in Washington that Sarbox should not be changed through Congress.
Instead, the two regulators responsible for overseeing how it is implemented – the SEC and Public Company Accounting Oversight Board, the accounting watchdog – should clarify how sections of the law should be implemented.
Posted by hoffman at 10:04 AM | Comments (5) | TrackBack
October 29, 2006
Columbia's Center for Contract and Economic Organization
Bob Scott, freshly arrived at Columbia Law, and Patrick Bolton, of the University's Business School, have organized a new Center on Economics and Contract Law. From the description:
The Center for Contract and Economic Organization was created to exploit the synergies between the University’s leading scholars in contract theory and the economics of information and the faculty at the Law School, who are themselves among the nation’s most prominent legal scholars in the law and economics of contracts, commercial transactions and business organizations. The singular focus that links these various scholars is the study of the mechanisms of contracting both inside and outside the firm: Why do economic actors write the contracts that they do? How are these choices affected by variations in economic organization? And, how can (and do) lawyers (and the law) facilitate efforts to develop more efficient mechanisms for contract and transactional design? While several other universities have centers that focus more specifically on corporate structure and governance, the Center is both unique and uniquely placed to make major contributions to existing knowledge.Great stuff!Collaborations among scholars at the Center (including visiting fellows) not only advances primary work in contract theory but supports empirical study of existing institutions and contracting behaviors. A central focus of the Center is the integration of the work of theorists from both law and economics. The goal is twofold: to develop richer theories that incorporate a more realistic conception of legal institutions and of the observed behavior of economic actors, and to use these new frameworks to analyze and critique existing legal and business practices. In brief, the Center supports scholarly collaborations in law, business and economics for the purpose of better understanding (and improving) real world transactions and institutions.
In service of these goals, the Center sponsors a number of continuing initiatives. It supports visiting fellows from each of the major disciplines for research sabbaticals lasting from several weeks to as long as a semester in duration. The Center sponsors several major conferences–an annual interdisciplinary academic conference as well as occasional conferences that engage both academic and professional participants. There is also a continuing workshop in which scholars from around the University evaluate and critique work-in-progress presented by leading academics. In future years, interdisciplinary colloquia will focus as well on the work of students interested in sustained scholarly research and collaboration with Center faculty. Ultimately, the Center plans to coordinate joint degree programs that specialize in the study of contract and organization theory.[emphasis added]
Posted by hoffman at 12:46 PM | Comments (0) | TrackBack
William of Ockham Goes to Commercial Law Class
A lot of legal argument consists of mastering the reasons for and against various recurring dualisms in the law. For example, there is the well-worn dichotomy between rules and standards. Rules provide ex ante certainty and easy resolution of disputes ex post. Standards reduce the incentives for parties to engage in undesirable but rule-skirting behavior ex ante and provide greater substantive fairness ex post. Another example is substance vs. procedure. For example, in administrative or corporate law should judges scrutinize the substance of the decisions that were made, or should they confine themselves to looking only at the procedures used to reach the decision?
A key to understanding the U.C.C., and with it commercial law, is another distinction that students have a harder time wrapping their minds around. I call it the divide between realism and nominalism. During the middle ages scholastic philosophers debated whether or not universals had actual existence independent of any particular instance of the universal, or whether ultimately all that existed was the particulars themselves. The U.C.C. makes a lot more sense, I believe, once you recognize that it in so far as it is possible, it is aggressively committed to nominalism.
What do I mean? Llewellyn, Gilmore, and the other drafters of the U.C.C. had the Legal Realists’ hatred of legal abstractions. Accordingly, they strived as much as possible to divorce the adjudication of commercial disputes from the manipulation of conceptual legal essences. For example, pre-U.C.C. law dealt with the question of risk of loss by determining when “title” passed from seller to buyer. Llewellyn dispensed with the concept of title and instead provided a set of specific rules governing specific situations. Article 9’s treatment of the sale of accounts provides another example. Definitionaly, the Code creates a series of rules by which the sale of accounts is governed by rules that ordinarily deal with the creation and enforcement of security interests. The sale of an account, however, is not the same thing as the creation of a security interest. Determining the difference between the transactions, however, does not hinge on deductions from the attributes of a sale but rather from concrete provisions of Article 9.
Explaining this conceptual distinction is a fun exercise, and provides a nice way of injecting jurisprudential discussions into teaching the U.C.C. It also helps to drill an extremely important rule of thumb into the heads of students: If you are trying to resolve a legal dispute by drawing implications from the nature of legal concepts like title, security interest, perfection, attachment, or the like you are on extremely unstable ground. Go find a code section.
It’s law as William of Ockam would have done it.
Posted by oman at 10:13 AM | Comments (0) | TrackBack
October 28, 2006
Academics & Search Engines
To balance what I've just written on politics & search, let me excerpt an article considerably more sympathetic to the "manipulation of results" enterprise:
Let’s say you’re a law professor who is trying to build a reputation as an expert on affirmative action. In the past, you’d build that reputation by publishing articles in various high-profile publications, or journals with scholarly credentials. Many of those articles would show up in a Google search using the key words “affirmative action,” of course, but they’d be scattered all over the results. Because Google considers links to be a kind of vote endorsing the content of a given page, if you created a specific page called “affirmative action” — where your various articles and thoughts were collected — and encouraged others to link to that page, you could very quickly “own” affirmative action in Google. (Right now, none of the top results are associated with an individual, and most are intended as neutral, dictionary-style definitions and discussions. But that needn’t be the case.) And of course, once your page made it to the Top 10, positive feedback would be likely to propel your page higher in the rankings, as more people linked to the page, having found it originally via Google.***
This strategy happens to be old news to the bottom-feeders of the digital world: the spam artists who have long hacked the Google database to ensure that their sites rank highly when people search for “sex” and “blackjack” and “cheap Canadian meds.” But just because the spammers got there first doesn’t mean that Google-centric positioning cheapens the work of intellectuals. The Nation and Harper’s exploit the very same postal system that the junk mail impresarios use, after all.***
[It may be] inevitable that intellectuals who are interested in speaking to a wider audience will orient their work around Google’s rising influence. [F]or the mainstream understanding of complex issues, Google (and Wikipedia, whose entries often rank near the top of Google searches) are quickly becoming central authorities.
I'm a bit less optimistic about this development than Johnson is, if only because I've long worried about unintended consequences of ranking systems. But I may just be expressing an academic prejudice against populist editing. And I must say that sites like this, by Vernellia R. Randall, are a great public service that likely deserve to be the top hit for a Google search for "race and health."
Posted by Frank_Pasquale at 03:06 PM | Comments (0) | TrackBack
October 27, 2006
Political Google-Bombing
As the midterms approach, yet another tiresome tactic is polluting the information ecosystem: the manipulation of search engine results to paint an unflattering picture of political opponents. Generally called "Googlebombing," I think this development is only good for one reason: it will call people's attention to the politics of search engines as all-purpose information finders.
Search engines can suppress controversy, and at first glance the tactics of the "Google Bombers" may seem an admirable effort to bring salience to oft-overlooked stories:
If things go as planned for liberal bloggers in the next few weeks, searching Google for “Jon Kyl,” the Republican senator from Arizona now running for re-election, will produce high among the returns a link to an April 13 article from The Phoenix New Times, an alternative weekly. Mr. Kyl “has spent his time in Washington kowtowing to the Bush administration and the radical right,” the article suggests, “very often to the detriment of Arizonans.”
But such efforts ignore the value of organic search results untainted by the classic forces of power and profit. I don't mind if paid results are determined by who has the most money or best way to manipulate the system, but organic results at a general purpose search engine are held out to be an accurate account of what is the case. A search for Jon Kyl should, ideally, produce among the highly ranked organic results some relatively balanced portrayals that give voters a good sense of what he stands for. It is deeply troubling to think that a cabal of his opponents (or supporters) could crowd such results off the top pages in order to advance their agenda. The manipulators also risk provoking search engines into downranking political sites, or at least those heavily interlinked ones which (look like they) are trying to artificially affect the results.
The groups profiled in the article should also know that they can easily be outmatched in the production of digital astroturf. Yet one of their ringleaders sanguinely "hopes[more] political campaigns would take up the tactic, which he called 'search engine optimization,' as a standard part of their arsenal." I admit that search engine optimization is a very complex topic, but it often boils down to the commodification of salience: if you give enough money to the SEO, they try to get you ranked high in response to certain queries. Given the already overwhelming influence of the "dollar primary," the last thing we need to do is to extend that dynamic into the world of online politics.
PS: The speakers at this panel had some interesting insights on the topic...more on that later. I can already sense some people will think I'm mistaking Google for Wikipedia. But one can spot an unhealthy dynamic without necessarily committing to a particular way of stopping it. I suppose my biggest beef here is with the sense that an "arms race" of google-bombing is inevitable/desirable.
Posted by Frank_Pasquale at 09:16 PM | Comments (4) | TrackBack
Race, Sports, and Hustle
Critical race analysis of sports law is a deep and rich scholarly topic. (See here for a nice example). It came to mind when a friend forwarded me this list, from the Major League Baseball website, which seeks to recognize the "Look Again Player of the Year". As sponsor Joe Buck explains:
Behind every great team on the diamond, lurking in the shadow of baseball superstars, live the role players who sacrifice for their team in often unrecognized effort.In other words, who are the overlooked hustle guys? The fan favorites. The gritty, wants-it-more, working-man's players.
Notice anything interesting about the list?
Still missing it? Go here. Or here (which is a bit more accurate on the race issue).
Posted by hoffman at 12:17 PM | Comments (4) | TrackBack
October 26, 2006
Pay the Poor to Be Citizens
A colleague suggests that there might be a relationship between a series of seemingly random observations:
- A sudanese cell-phone billionaire announced a prize for good governance, to be awarded to current African leaders when they step down from office. According to news reports, "each leader awarded the prize will receive $5 million spread over 10 years after leaving office. If still alive when the initial prize is exhausted, prize-winners will receive another $200,000 annually until they die."
- The Arizona Voter Reward Act, which would establish a $1,000,000 prize whose proceeds would go to a randomly-selected voter, is on November 7th's ballot. The state's Chamber of Commerce is opposed: Harvard's Info/Law project is more open minded. Most think the law would be
plainly illegalpreempted by federal law even if passed. - Jury pay rates are embarassingly low, if meant to be compensatory. Some jurisdictions are funding pilot projects to study if pay raises will increase compliance with jury service.
The law of governance (both the regulation of the governors and the governed) has long resisted the idea that ordinary people wearing their civic-actor roles ought to be amenable to monetary incentives. Perhaps this intuition arose from antiquity, where service to the state was by the rich, who (in the ideal) owed a duty arising from their class status to participate in government. Recurring political kerfuffles on judicial and legislative pay suggest that for many citizens, the commodification of civic service remains unpleasant. But that view of civic engagement is problematic, especially where society’s commitment to civic virtue is no longer backed up by effective enforcement, and the habits of civic engagement are in decline. As a normative matter, I have trouble understanding why carrots are unavailable to citizens who vote or serve on juries, but given without question to legislators who work (or despots who don't).
The main objection I’ve heard is that we don’t want people who don’t care enough about the relevant issues to participate. This sounds quite a bit like the case against champerty, or paying clients to bring suit. As Steve Bainbridge observed, the champerty allegations against Milberg might boil down to an economic argument that champerty encourages nuisance lawsuits, which are socially wasteful. But it is not clear to me that voting can ever be wasteful. The process of voting is usually accompanied by certain formalities that caution, channel, and evidence its importance (to steal a line from Fuller). People who vote are probably more likely to view themselves as social stakeholders – just like folks who sign petitions and then associate themselves with their contents.
I’ve also heard the view expressed that even if we think payments are normatively acceptable, lotteries are a bad mechanism to increase turnout. The literature suggests that folks prefer certain gains to uncertain ones, therefore, the argument goes, shouldn’t we simply pay people, say, $5.00 to vote?
I doubt it. Large probabilities are difficult to calculate – and it seems likely that optimistic citizens will usually overestimate their chances of winning the election lottery, therefore their expected return on voting will be higher than in the case of a certain wage. It is also true that payment-through-lottery may smell less objectionable to those who think that civic duties ought not be compensated. Lotteries, after all, were the thin edge of the gambling revolution.
I will say, however, that if we're to properly motivate leaders in Africa to retire at the end of their terms, the sums involved would have to be significantly larger. A depressing list, presented to the Senate, estimates the cash available to enterprising strongmen:
* General Sani Abacha of Nigeria: $20 billionGiven these opportunities, a $5,000,000 prize looks tiny. Better, under such circumstances, to take out our bundle of sticks.
* President Félix Houphoüet-Boigny of Ivory Coast: $6 billion
* General Ibrahim Babangida of Nigeria: $5 billion
* President Mobutu Sese Seko of Zaire: $4 billion
* President Mousa Traore of Mali: $2 billion
* President Henri Bedie of Ivory Coast: $300 million
* President Denis N'guesso of Congo: $200 million
* President Omar Bongo of Gabon: $80 million
* President Paul Biya of Cameroon: $70 million
* President Haile Mariam of Ethiopia: $30 million
Posted by hoffman at 06:02 PM | Comments (3) | TrackBack
Hyman's Inferno
Devilish rhetoric is hot nowadays--ranging from the Chavez diatribe at the U.N. to "apocalypse chic" to the Left Behind series. Now the Cato Institute is getting in on the act, publishing an expanded version of David Hyman's law review article Medicare Meets Mephistopheles as a book.
The book does a great job clarifying some complex Medicare law--the glossary and primer on Fraud and Abuse Laws alone are worth the purchase price. However, consistency is not a virtue of the book's Screwtape-inspired narrator. He first suggests that Medicare is problematic because "'single working mothers in Nebraska (often themselves lacking health insurance) [are] footing the bill for gold-plated health care provided to high-income Medicare enrollees in Miami'" (41). But soon enough, the grand design becomes apparent:
If Medicare were wholly means-tested, it would be instantly transformed into a program for poor seniors, instead of one for the poor, the wealthy, and everyone in between. Once the Medicare program does not include all the elderly, it becomes much easier for legislators to impose significant funding and benefit cuts . . . . (89)
This is a pretty scary vision; as Ezra Klein notes, in Hyman's ideal world, "those who make poor decisions, or simply get really ill, face financial ruin."
While Hyman thinks moral hazard drives "gluttonous" overuse of health services, recent scholarship (reported here) is undermining that shibboleth of consumer-directed health reformers. Certainly there are some ways in which cost-controlling measures could save health care dollars. But Hyman and other free marketeers seem to ignore the fact that expenditures on the chronically ill (which are largely nondiscretionary) are driving cost pressures.*
There's a bonus excerpt from Richard Epstein's forward to the book after the jump....
Perhaps the most entertaining part of the book is this fable from Richard Epstein on the wisdom of privatizing all health care:
I was about 22 years old when Medicare was first established in 1965, and to this day I remember my initial reaction to it. Think of two ways in which a group of 10 teenagers can drink soda at a luncheon counter. One is to get a large pitcher and have 10 thirsty kids each use a straw to take out what he or she wants. The second is to divide the soda into glasses, and assign them one to a person. Let there be 10 pints and each teenager's initial entitlement is one pint either way. The patterns of consumption of the soda will not be the same in these two arrangements. Even if by some miracle each person gets the same amount of soda in the two configurations (which they won't), we can be 100 percent confident that the soda will be more rdpidly consumed when all 10 teenagers slurp their soft drink from the common pitcher. Consumption rates will slow markedly if each has his or her own glass, for slow sipping now results in greater satisfaction, not a reduction in individual share.
Well, there you have it. Chemotherapy is just like a coke on a hot day. You get a whole bunch of cancer patients who don't have to pay for their meds, and they'll just use 'em up like there's no tomorrow.
Of course, anyone familiar with Epstein's Mortal Peril wouldn't be shocked by the analogy; there he proclaims:
The most common formulation of the egalitarian ideal skirts difficulties by holding that everyone has a right to health care regardless of ability to pay. The major question is: Why is this principle appropriate for health care when it's been rejected for vacation homes and fast cars? (112)
What's so bizarre about this rhetoric is how often an Epstein will oscillate between
a) an assumption that health care is a unitary phenomenon, such that any "right to health care" is (an inevitably incoherent) right to "the very best health care by all people" and
b) an assumption that there are many levels of health care, and that we can only incentivize the creation of higher levels of health care by charging a lot for them.
Epstein reminds us that "Equal health expenditures on rich and poor alike would not equalize health care," as if that sort of equality is on any realistic agenda of US policy change. He then warns that "costs of equalization in terms of lost production would be so great that everyone would suffer." Thank heavens a few merciful hospitals realize that the opposite is often the case.
*For more on the relative proportion of expenditures on the chronically ill, see John Jacobi, Consumer Directed Health Care and the Chronically Ill, 38 U. Mich. J.L.Reform 531 (2005).
Photo Credit: Gustave Dore/Wikipedia Commons.
Posted by Frank_Pasquale at 05:37 PM | Comments (4) | TrackBack
A ruler has twelve inches . . . Queen Elizabeth was a ruler . . . Queen Elizabeth was also a ship.
A recent Gmail ad shows the perils of assiciation. Here's a genuine (slightly redacted) screenshot of the e-mail and the ad. Take a look at the topic and the resulting advertisement.
My colleagues and I were talking about a murder case (actually, about a blog post about a murder case). The term "electric chair" appeared nowhere in the conversation, though. However, I was shown an ad -- one of Gmail's famous, targeted ads -- for cheap "electric chairs." In this case, following the advertising link, motorized recliners and wheelchairs.
Murder does not associate directly with wheelchairs; this seems to be a case of two-step association. The obvious explanation is that I was shown this ad because Gmail's AI ran two association checks, one right after the other. First, "They're talking about murder. What terms go well with murder? Electric chair!" And second, "So, what do you do for someone who might be interested in electric chairs? I know -- let's offer him a motorized recliner!"
It's comical, really -- a little like a live version of the nonsense sequence I learned in grade school: A ruler has twelve inches . . . Queen Elizabeth was a ruler . . . Queen Elizabeth was also a ship . . . Ships sail in the sea . . . and so on. (The little sequence goes on to talk about fins and Finns, Russian and rushin, etc.) It's an easy illustration of the principle: Just because A-associates-with-B and B-associates-with-C does not mean that A-associates-with-C.
A measuring-stick is not a ship, even if Queen Elizabeth is a ruler. Ships do have fins and Finns do fight Russians but that doesn't mean that ships fight Russians; Finns fight Russians and fire engines are rushin', but that doesn't mean that Finns fight fire engines. (Does anyone else remember the little couplets?) And a discussion of murder does not mean that I'm interested in motorized recliners, thank you very much.
I sure hope that Homeland Security is doing a better job than Gmail at this whole "making associations" business.
Posted by Kaimipono at 02:58 PM | Comments (5) | TrackBack
The Fog of Admin: Beliefs about Beliefs
I've just started teaching "standards of review" in my administrative law course, and as admin maven Richard Murphy has noted, pinning down the doctrine can feel like "lassoing smoke." Even the top scholars in the field appear to disagree on basic premises. I think the nub of the difficulty has to do with the "meta-" ness of the enterprise. When a court tries to determine if agency action is "arbitrary and capricious," it's often assessing the head of the agency's beliefs about an ALJ's beliefs about the parties' beliefs about the matter at issue.
Obviously this problem occurs elsewhere in law, and there are many deference standards that try to address it. Perhaps in line with Lawrence Rosen's work on the cultural influence of law, I'm beginning to think some of these standards are filtering into academic and public discourse. One can "map" some controversies as boiling down to points about the deference certain beliefs are owed. For example,
1. Belief: A majority of Americans believe in God.
2. Belief about belief: Some academics criticize this belief. (Dawkins's The God Delusion; Dennett's Brights.)
3. Belief about belief about belief: Commentators criticize the critics. (Eagleton on Dawkins; Wieseltier on Dennett)
4. Belief about belief about belief about belief: Others intervene. (Leiter on Wieseltier on Dennett).
The debate can be a little dizzying, but as Eagleton notes, it's often necessary to "repudiate the brand of mealy-mouthed liberalism which believes that one has to respect other people’s silly or obnoxious ideas just because they are other people’s." Nevertheless, Eagleton cautions how projects like Dawkins' risk making a category mistake about the phenomenon they attempt to discredit:
[T]o claim that science and religion pose different questions to the world is . . . to claim that while faith, rather like love, must involve factual knowledge, it is not reducible to it. For my claim to love you to be coherent, I must be able to explain what it is about you that justifies it; but my bank manager might agree with my dewy-eyed description of you without being in love with you himself.
In other words, in a pluralistic society, we're all obliged to develop the capacity to respect varieties of personal knowledge. . . . without, of course, falling into radical skepticism. I think the difficulty of that balance mirrors the difficulty of developing any coherent account of deference doctrine in admin (which, as Murphy notes, is "a complex brew of improbable fictions and proceduralism").
Photo Credit: Flickr/B. Jones.
Posted by Frank_Pasquale at 01:05 PM | Comments (1) | TrackBack
CEOs, Just Cause, and $$$$
With the Disney case and now Grasso grabbing headlines, disputes over large payouts to former corporate executives have garnered great attention of late. Last week, another such dispute boiled to the surface, this time in the form of an appeal from an arbitration award in favor of Robert J. O’Connell, the terminated former CEO of MassMutual Financial Group. Sample media accounts can be found here, here, and here.
According to these stories, MassMutual’s allegations of O’Connell’s wrongdoing included, among other things, having affairs with several female employees, making $23 million on questionable “shadow” stock trades, intervening to prevent disciplinary actions against family members who held senior positions, and buying a fancy company-owned condo at a below-market price. The arbitration panel found that MassMutual failed to prove some of these allegations, failed to adhere to procedures for termination set forth in O’Connell’s contract, and otherwise failed to demonstrate just cause as defined in that contract. The panel did find that the firm was entitled to a return of the $23 million. Nevertheless, it awarded O’Connell compensation under the agreement worth between $40 and $50 million. MassMutual is now seeking to overturn the award in a Massachusetts court.
Without more information, we can’t tell whether the arbitrators got it right or wrong, but let’s focus instead on the contract itself. Here is how one report described the substantive portion of the just cause provision:
According to O'Connell's contract he signed in 1998 when he joined MassMutual, he could be fired for a criminal conviction, theft or embezzlement, as well as for "conduct that constitutes willful gross neglect or willful gross misconduct ... resulting in material harm to the company."
Assuming this description is accurate, the term smacks of board of director abandonment of core principles of corporate governance. While there are many just cause provisions in employment contracts that are not the least bit problematic, this is the CEO we are talking about, this is quite a just cause provision, and the compensation at stake is, well, large.
The CEO is the person the board of directors must rely on to run the business, and this kind of provision hamstrings the board’s ability to ensure the CEO does in fact do so faithfully and effectively. Under the terms of the contract, “mere” incompetence, uncooperativeness, or awful judgment are not enough to justify termination. A “mere” breach of fiduciary duty isn’t either. Same with sexual harassment. Indeed, “willful gross misconduct” isn’t enough unless the firm can prove resulting “material harm” to the company. Sure, the firm could still fire such an incompetent, uncooperative, duty-breaching, harassing, or wrongdoing CEO, but, in a context such as this one, only with a $40-50 million payout. This would put a chill in the air in almost every boardroom, and reinforce the reluctance of boards to admit publicly their mistakes in hiring a CEO by firing him. The outcome in this case may make things even chillier.
Call me old-fashioned, but a board’s agreeing to such a deal – imposing ex ante further constraints on its ability to engage in effective oversight – strikes me as, at minimum, a breach of the duty of care. I am fully aware the law may not be there, but it should be.
Posted by Timothy_Glynn at 12:58 PM | Comments (3) | TrackBack
Trial by Lots
After one particularly frustrating and confusing day in law school, I remember vehemently defending trial by ordeal to one of my classmates. (Unfortunately, I was that kind of law student.) For example, in ancient Israel they seem to have resolved litigation from time to time by resort to a kind of holy set of dice, known as the Urim and Thummim, which would be cast to decide who would win a case. There is much to commend such a system. It is quick, efficient, eliminates any advantage that one party might have because of wealth or power, and in an actuarial sense it is completely predictable. One can't say the same thing, for example, about American tort law. It would seem that the Honorable Gregory Prensell of the U.S. District Court for the Middle District of Florida shares some of these sentiments. In Avista Management, Inc. v. Wausau Underwriters Ins. Co., No. 6:05-CV1430ORL31JGG, 2006 WL 1562246 (M.D. Fla. June 6, 2006), he issued the following order:
This matter comes before the Court on Plaintiff's Motion to designate location of a Rule 30(b)(6) deposition (Doc. 105). Upon consideration of the Motion--the latest in a series of Gordian knots that the parties have been unable to untangle without enlisting the assistance of the federal courts--it isI still think it would have been cooler if Judge Prensell had ordered the parties to throw a set of sacred dice.ORDERED that said Motion is DENIED. Instead, the Court will fashion a new form of alternative dispute resolution, to wit: at 4:00 P.M. on Friday, June 30, 2006, counsel shall convene at a neutral site agreeable to both parties. If counsel cannot agree on a neutral site, they shall meet on the front steps of the Sam M. Gibbons U.S. Courthouse, 801 North Florida Ave., Tampa, Florida 33602. Each lawyer shall be entitled to be accompanied by one paralegal who shall act as an attendant and witness. At that time and location, counsel shall engage in one (1) game of "rock, paper, scissors." The winner of this engagement shall be entitled to select the location for the 30(b)(6) deposition to be held somewhere in Hillsborough County during the period July 11-12, 2006. If either party disputes the outcome of this engagement, an appeal may be filed and a hearing will be held at 8:30 A.M. on Friday, July 7, 2006 before the undersigned in Courtroom 3, George C. Young United States Courthouse and Federal Building, 80 North Hughey Avenue, Orlando, Florida 32801.
DONE and ORDERED.
Posted by oman at 11:21 AM | Comments (9) | TrackBack
EULA Hoops
End User Licens Agreements (EULAs) govern virtually all software programs, and their restrictive terms have tended to multiply and intensify over time. Wendy Seltzer has expertly deconstructed the new Windows Vista license, and a number of commenters have added their own complaints. The terms of use appear to eviscerate rights traditionally enjoyed by users under copyright law. Seltzer concludes:
Users never asked for these impossible limitations. Microsoft decided unilaterally to add them, claiming it could abrogate personal ownership, fair use, and first sale rights because "The software is licensed, not sold." If Microsoft faced real market competition on the home desktop, users could vote with their wallets, but anticompetitive practices and network effects [discussed here] make Microsoft a like-it-or-not proposition for most users.
Eric Goldman has also been covering the EULA wars, here and here.
Following up on these posts and some of Dave's interesting contractual hypotheticals, I'm wondering how far the EULA can go. Can someone agree to a term like "The meaning of any contested terms of this license shall be exclusively determined by an agent of the licensor, and licensee hereby waives any right to appeal that determination"? Could this just be viewed as just another form of (lawless) arbitration? Or is this type of term a bit too extreme to be recognized by a court? If anyone can point to a good discussion of the topic, I'd be grateful.
Posted by Frank_Pasquale at 11:14 AM | Comments (1) | TrackBack
October 24, 2006
A Romantic Contract?
This story has been floating around for a while, but is still great. The basic plot: after a blind date, the man demands that his date (who didn't call him back) pay him for half the cost of their meal, on an implied contract theory of recovery. Various emails and voicemails follow.
In some ways, it is a nice hypo for a contracts exam. Under what underlying legal theory would a court refuse to get involved in this dispute? Is consideration lacking? Is the subject matter of the contract too personal?
Food for thought.
Posted by hoffman at 05:35 PM | Comments (7) | TrackBack
Sentenced to 24 Years
The news of the day is Jeff Skilling's 24-year sentence. The outrage level in the blawgosphere is at DEFCON 1.
But I don't think we will see sentences like this in the future because people will eventually realize the worthlessness of issuing such draconian sentences in non-violent white collar cases. The bottom line is that these sentences are not likely to deter future criminality, as many who engaged in the conduct just did not see themselves as committing crimes.Peter Henning:
While Jeffrey Skilling receives 24 years for presiding over the collapse of Enron, former Congressman Randy (Duke) Cunningham sells his office to a string of defense contractors for a bit over $1 million and receives a sentence of 8 years. Soon-to-be former Congressman Bob Ney will likely be sentenced to less than 3 years in prison for selling out his office to lobbyists led by Jack Abramoff. How can there be such a disparity between the sentences for public corruption and the corporate frauds perpetrated by Ebbers and Skilling? The harm from public officials, especially those elected to office, who abuse their positions for personal gain is, in my opinion, nearly as great as that caused by corporate chieftains who preside over collapsing companies.Larry Ribstein:
Judge Lake may well have correctly applied the law by supposing that Skilling was tied to $80 million in investor losses. But to quote Mr. Bumble, who was told that the law supposed that his wife acted under his direction, "if the law supposes that, the law is a ass—a idiot.”Christine Hurt:
Judge Lake explained that the sentence was proportionate to the crime because Skilling effectively sentenced "hundreds, if not thousands," to a "life sentence of poverty." I think I would quibble with that statement, but I guess that's for another post.I disagree with much of these laments against the Enron prosecution, for reasons I have already discussed. Twice. To put the sentence itself in perspective, I thought it would be fun to google "sentenced to 24 years" and see what I came up. And the results were, predictably, random. A cop who stole drugs, a Dynergy executive (for accounting fraud, later reduced to six years), a retail level drug dealer, a woman busted (allegedly) for holding merely 2.72 g of cocaine, and the significant other of another large drug dealer, convicted for conspiracy.Note that Skilling gets the pain of a long sentence without even the solace of "one for the record books." To be known as the holder of the longest white-collar crime sentence, Skilling would have had to receive a sentence of 25 years and a day.
The message: federal time is hard time for lots of folks, convicted of many nonviolent offenses, in circumstances where deterrence isn't (necessarily) a strong argument for punishment. Indeed, I’d bet that most of the time spent in federal prison is for “nonviolent” crime, in that sentence enhancements for possessions of firearms and drugs dominate over bankrobbery.
If we think that violence and responsiveness to punishment are the only way to justify long sentences, why not be outraged about such punishments every day? Moreover, it seems to me that Skilling isn’t being punished for going to a jury (while others took the plea discount). He’s being punished because the jury disbelieved his testimony.
Posted by hoffman at 12:00 AM | Comments (27) | TrackBack
October 23, 2006
The Economics of Things that Flow
This week’s New Yorker has an article about water, and, specifically, a claim that it isn't well suited to traditional economic analysis. For a taste, check out the interview with author Michael Specter here.
Specter provides many examples (from different cultures) of the difficulty societies have in creating residential water markets. Folks resist thinking of water as a commodity. In other countries (particularly, those without a strong riparian law tradition) misuse is rampant. Urban dwellers demand water for free (or force industry to subsidize home use). The result: waste, extreme shortages of potable water, and disease. Specter is particularly strong when he discusses how the competition for water in India and China (in particular) has resulted in a classic tragedy of the commons: farmers competing to dig wells deeper than their neighbors, leading to a falling water table, and, ultimately contamination by salt and poisons. He also provides the somewhat astonishing factoid that water use in the United States has fallen in absolute and per capita terms in the last thirty years, largely due to demand-side reductions caused by technological development. The article claims that the technological change was in turn spurred by the Clean Water Act's pressure on industry.
The article reminded me of Frank's nice post of last week on Net Neutrality: Law, Money, and Culture. As you may recall, Frank argued against treating network access as a normal economic good, largely to avoid "another avenue for the large corporations that dominate the culture industry to fast-track their wares to consumers? In the end, network bias-toward-wealthy-entities portends ever more pervasive commercialization of cultural life." While Frank doesn't exactly come out and say so, you get the sense (reading other net neutrality folks) that the nondiscrimination principle arises from an intuition that access to a certain quantum of information is a new part of Americans' birthright endowment.
Perhaps the analogy is facile, but is there a meaningful connection between the economics of water and information? The reason that the analogy occurs to me is that both goods the real cost is access, not consumption. Obviously, there are some important differences too (information isn't life, whatever Neal Stephenson thinks, etc.) But it might be that the lessons from the partial commodification of water in the last thirty years, and the positive consequences of regulation, could inform our experiences with informational regulation as well. Or, as the title says, is it time for an economics of things that flow?
[Will Baude points out that the idea of fugitive resources isn't new. Can anyone recommend a good primer comparing water and information economics? I obviously need to catch up!]
Posted by hoffman at 09:57 PM | Comments (2) | TrackBack
Law School Innovation Blog
Doug Berman and Paul Caron have started a new blog called Law School Innovation Blog. From the introductury post:
Welcome to the launch of a new blogging adventure: Law School Innovation (LSI). My goal starting this blog is to create a forum for discussing ... law school innovations.As a regular law blog reader, I often notice much blogging about law school dynamics and new law school endeavors at blogs such as Concurring Opinions and Empirical Legal Studies and MoneyLaw and PrawfsBlawg and The Volokh Conspiracy. (I sometime go "off-topic" at my home blog to discuss on-line companions to law journals and related bloggy topics (see, e.g., posts here and here).)
I thought it might be useful to have a dedicated blog home for these sorts of discussions, and Paul Caron and Joe Hodnicki were kind enough to embrace this new project into their Law Professor Blog Network. Topics ranging from Harvard Law School's new 1L curriculum to the recent emergence of Supreme Court clinics to blogging as scholarship to PowerPoint and internet access in the classroom are just some of the issues I hope will get discussed here.
Though my ambitions for this blog are huge, my time is limited. Thus, I hope other law professors, law students, practicing lawyers and anyone else interested in law school design and evolution will become regular contributors. I would be happy — indeed, eager — to bring on as co-blogger anyone prepared to do a post or two a week on law school innovation topics. Also, I have created a Board of Advisors for this blog. I have no idea exactly what Advisors will do, but at least such a Board is an innovation in the blogosphere.
I encourage early visitors to use the comments to tell me whether this new blog adventure seems like a good idea. If I get encouraging feedback, I'll probably invest (too much) energy in this new project; if the feedback is less encouraging, this blog may wither away once college basketball season gets going.
Posted by Daniel Solove at 09:19 PM | Comments (0) | TrackBack
Does Reading Literature Give You More Empathy?
The British Psychological Society reports the results of a new study on the effects of reading literature:
The more fiction a person reads, the more empathy they have and the better they perform on tests of social understanding and awareness. By contrast, reading more non-fiction, fact-based books shows the opposite association. That’s according to Raymond Mar and colleagues who say their finding could have implications for educating children and adults about understanding others.Finding out how much people read is always difficult because it’s socially desirable for people to report that they read a lot. Mar and colleagues avoided this by asking 94 participants to identify the names of fiction and non-fiction authors embedded in a long list of names that also included non-authors. Prior research has shown this test correlates well with how much people actually read. Among the authors listed were Matt Ridley, Naomi Wolf (non-fiction), Toni Morrison and PD James (fiction).
The more authors of fiction that a participant recognised, the higher they tended to score on measures of social awareness and tests of empathy – for example being able to recognise a person’s emotions from a picture showing their eyes only, or being able to take another person’s perspective. Recognising more non-fiction authors showed the opposite association.
The researchers surmised that reading fiction could improve people’s social awareness via at least two routes – by exposing them to concrete social knowledge concerning the way people behave, and by allowing them to practise inferring people’s intentions and monitoring people’s relationships. Non-fiction readers, by contrast, “fail to simulate such experiences, and may accrue a social deficit in social skills as a result of removing themselves from the actual social world”.
However, a weakness of the study is that the direction of causation has not been established – it might simply be that more empathic people prefer reading novels.
The study is by R.A. Mar, K. Oatley, J. Hirsh, J. dela Paz, & J.B. Peterson, Bookworms Versus Nerds: Exposure to Fiction Versus Non-fiction, Divergent Associations with Social Ability, and the Simulation of Fictional Social Worlds, 40 Journal of Research in Personality 694-712 (2006). It is available here, but for a fee.
Hat tip: Ilya Somin.
Posted by Daniel Solove at 03:21 PM | Comments (3) | TrackBack
Copyright pirates, they're certainly no Boy Scouts
And if they were ... well, I guess they wouldn't be able to get this new activity badge, would they? The MSNBC story notes:
Boy Scouts in the Los Angeles area will now be able to earn a merit patch for learning about the evils of downloading pirated movies and music. . . . The movie industry has developed the curriculum. “Working with the Boy Scouts of Los Angeles, we have a real opportunity to educate a new generation about how movies are made, why they are valuable, and hopefully change attitudes about intellectual property theft,” Dan Glickman, chairman of the Motion Picture Association of America, said in a statement Friday. Scouts will be instructed in the basics of copyright law and learn how to identify five types of copyrighted works and three ways copyrighted materials may be stolen.
An interesting way to try to rein in the Young and the Lawless, no? There are obvious issues here -- in particular, whether the Boy Scouts should be turning over instruction on a somewhat controversial issue to an advocacy group. On the other hand, if executed well, this could be a good idea. Given the widespread use of file sharing programs, and misunderstandings about law, I suspect that many Scout-age youth could use a sobering reminder that they can't just copy anything and everything.
Posted by Kaimipono at 02:50 PM | Comments (4) | TrackBack
The Young and the Lawless
I got some interesting comments a week or so on a post called "Is Anyone Against Open Access?" (on the recent movement to make legal scholarship more accessible). I wanted to respond to one point from William McGeveran, who made a point against a status quo of sotto voce infringement:
Even if users of law review content can get away with ignoring a copyright because the practical risk of suit is low, I don't think that's enough. After all, we are supposed to be committed to both (1) the law and (2) intellectual openness and interchange. Accepting quiet infringement seems to run against both principles.
McGeveran's point reminded me of an op-ed column complaining about the recent ban on internet gambling:
The temptation for good citizens to ignore a stupid law is encouraged when it is unenforceable. In this, the attempt to ba