Category: Book Reviews

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Amazing New Corporate Law & Econ Book

If you are interested in corporate law, especially economic analysis of it, you likely will enjoy an impressive new book collecting original pieces by 30 prominent corporate law scholars. Edited by Claire Hill and Brett McDonnell of the University of Minnesota, the book canvases every important topic in corporate law.

After an overview that traces the history of the economic analysis of corporate law, the book addresses corporate constituencies, governance, gatekeepers, government oversight and a few other hot topics not classified.

Within constituencies, topics consider the directors’ role, the roles of other corporate actors, including shareholders, creditors, employees, and other stakeholders along with broader notions of the public interest. 

Internal governance looks at fiduciary duties, shareholder litigation, outside directors, shareholder activism and executive compensation.  

Gatekeeper pieces address lawyers and auditors, as well as rating agencies,  research analysts, D&O insurers and investment banks.

Jurisdiction looks at both domestic federalism as well as comparative perspective.

Unclassified topics address self-dealing, behavioral economics, and market efficiency.

The scholars are the following professors:

Ahdieh,   Atanasov, Bainbridge, Black, Blair, Bodie,  Ciccotello,  Clarke, Cunningham, Darbellay, Davidoff, Fairfax,  Ferri, Fisch,  Frankel, Gilson, Griffith, Hill, Kraakman, Langevoort, Lee, McDonnell, Painter, Partnoy, Smith,  Thomas,  Thompson, Walker, and Whitehead.  

The table of contents to this impressive volume follows. Get it while it’s hot!!

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BOOK REVIEW: A New (Scientific) Look at the SG and the Court (reviewing Black and Owens’s The Solicitor General and the United States Supreme Court: Executive Influence and Judicial Decisions)

Ryan C. Black & Ryan J. Owens, The Solicitor General and the United States Supreme Court: Executive Influence and Judicial Decisions (Cambridge University Press, 2012)

I think a strong Solicitor General can have a very considerable influence on the Court.

– Erwin Griswold

Recently the Justices asked the Solicitor General’s office for its views on two cases, one concerning the Clean Water Act, and the other concerning the immunity of a foreign government’s central bank when the U.S. seeks to seize its assets.  Though standard fare, the request reminds us of the importance that of SG’s office in our system of justice.  To understand the workings of the Court, it is important to understand the workings of the SG’s office and how the two interact. Or as Lincoln Caplan put it in his The Tenth Justice: The Solicitor General and the Rule of Law (1987): “The relationship between the Supreme Court and the SG’s office has long been more intimate than anyone at either place likes to acknowledge.”  Indeed.  Thankfully, some of that intimacy is subject to scrutiny, as a forthcoming book on the subject reveals.

A newly released book is sure to be of interest to Court watchers. I refer to The Solicitor General and the United States Supreme Court: Executive Influence and Judicial Decisions (Cambridge University Press, 2012) by political science professors Ryan C. Black (Michigan State University) and Ryan J. Owens (University of Wisconsin, Madison).  Both have written extensively, and continue to do so, on the Court, its workings, and on constitutional law generally.  As their book and other works make clear, different SG’s approach their job quite differently and what they do can sometimes shape the resulting law announced by a majority of the Court. (See Michael McConnell, “The Rule of Law and the Solicitor General,” 21 Loy. L.A. L. Rev. 1105 (1988), and Steven Calabresi, “The President, the Supreme Court & the Constitution,” 61 L. & Contemp. Probs. 66 (1998).)

 

“Learned in the law”

The Office of the Solicitor General (OSG) is a curious institution.  On the one hand, the SG is the lawyer for the Executive Branch, yet on the other hand the SG enjoys chambers at the Supreme Court as if he or she were a “tenth justice.”  Though the SG is independent of the Court, the Justices are frequently dependent on the SG’s counsel.  Not surprisingly, then, federal law (28 U.S.C. § 505) requires that the SG, and no other, be “learned in the law.”

The SG’s influence can hardly be denied. As David O. Stewart has observed: “The Justices have relied on the SG to screen unworthy petitions for certiorari and to provide a complete statement of the relevant law.  And they have granted a disproportionately high proportion of the SG’s petitions for certiorari, invited his views on cases ion which the government was not a party and tended to rule in his favor.” (Book Review, ABAJ, Nov. 1, 1987, at 136.)  So, exactly, how influential is the OSG when it comes to what the Court does or does not do?  Professors Black and Owens answer that question by way of a remarkable illustration offered up in the first chapter of their nine-chapter book. This illustration, about which more will be said momentarily, sets the stage for a rigorous and detailed examination, replete with charts, of the work of the OSG and how it helps shape Supreme Court law.  Their work-product derives largely from, among other things, cert pool memos, private docket sheets, and other archival data collected by them and other scholars. The result is a remarkable, as their discussion of National Organization of Women v. Scheidler (1994) illustrates.

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BOOK REVIEW: Judging Judges — Yet Another Posner Book Coming Soon

In contemporary law, his name ranks among the greats.  He is Judge Richard A. Posner.  Among many others, Posner’s works have in more recent times caught the attention of Justice Stephen Breyer, who not infrequently draws on or refers to the Seventh Circuit jurist’s writings.  See e.g., Dorsey v. United States (2012), Mayo Collaborative Servs. v. Prometheus Labs., Inc. (2012), Golan v. Holder (2012, dissenting), McDonald v. City of Chicago (2010, dissenting), Bilski v. Kappos (2010, concurring), Merck & Co. v. Reynolds (2010), and Chambers v. United States (2009).

Whatever the extent of his popularity at the Supreme Court, Judge Posner is one of the few federal jurists to be openly critical of the Court, and in a judicial opinion no less.  Consider, for example, a 1996 antitrust opinion in which then Chief Judge Posner took a few analytical and rhetorical swipes at the Court’s ruling in Albrecht v. Herald Co. (1968).  Therein, Posner argued that the Albrecht opinion was rife with “infirmities” and suffered from “its increasingly wobbly, moth-eaten foundations.” The Supreme Court agreed and quoted Posner approvingly, and then reversed its holding in AlbrechtSee State Oil Co. v. Kahn (1997).  Admittedly, such judicial behavior – both at the circuit and Supreme Court levels – is an anomaly.   Still, there is precedent, and its bears the Posner name.

Beyond Judge Posner’s many erudite (and sometimes controversial) judicial opinions, the Chicago-based jurist has published scores of scholarly articles and some 40 books on a variety of subjects.  Coming this January, Judge Posner returns to one of his favorite topics: judging judges, including the work of Supreme Court Justices.  Before saying anything more about his next book on this subject, permit me to flag a new article he has published entitled “The Rise and Fall of Judicial Restraint,” 100 Cal. L. Rev. 519 (2012).   Here is an abstract of that article:

Judicial self-restraint, once a rallying cry for judges and law professors, has fallen on evil days. It is rarely invoked or advocated. This Essay traces the rise and fall of its best-known variant—restraint in invalidating legislative action as unconstitutional—as advocated by the “School of Thayer,” consisting of James Bradley Thayer and the influential judges and law professors who claimed to be his followers. The Essay argues, among other things, that both the strength and the weakness of the School was an acknowledged absence of a theory of how to decide a constitutional case. The rise of constitutional theory created an unbearable tension between Thayer’s claim that judges should uphold a statute unless its invalidity was clear beyond doubt (as it would very rarely be), and constitutional theories that claimed to dispel doubt and yield certifiably right answers in all cases.

Among Thayer’s most noted followers, Posner includes Justices Oliver Wendell Holmes, Louis Brandeis, and Felix Frankfurter along with Supreme Court scholar Alexander Bickel.   (Re Bickel, see here for a recent online Symposium on the 50th anniversary of the publication of his The Least Dangerous Branch.)

 

Forthcoming book

Against that backdrop, we come to Judge Posner’s next book: The Behavior of Federal Judges: A Theoretical and Empirical Study of Rational Choice (Harvard University Press, January 2013, $49.95).  Judge Posner is a co-author, the two others being Lee Epstein (professor of law and political science, University of Southern California) and William M. Landes (professor emeritus of law and economics, University of Chicago Law School).

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Brin’s “Existence,” the Fermi Paradox, and the Future of Privacy

I just finished David Brin’s “Existence,” his biggest new novel in years.  Brin, as some readers know, has won multiple Hugo and Nebula awards for best science fiction writing.  He also wrote the 1999 non-fiction book “The Transparent Society: Will Technology Force Us to Choose Between Privacy and Freedom?”.  More about that in a bit.

Existence is full of big ideas.  A main focus is on the Fermi Paradox, which observes that we would expect to find other forms of life out there among the hundreds of billions of suns, but we haven’t seen evidence of that life yet.  If you haven’t ever thought through the Fermi Paradox, I think it is a Genuine Big Question, and well worth contemplating.  Fortunately for those who like their science mixed with fiction, Brin weaves fifty or so possible answers to the Fermi Paradox into his 550-page novel.  Does climate change kill off other races?  Nuclear annihilation?  Do aliens upload themselves into computers once they get sophisticated (the “singularity”), so we never detect them across the void?  And a lot, lot more.

It took me a little while to get into the book, but I read the last few hundred pages in a rush.  I’ve had the pleasure to know Brin for a bunch of years, and find him personally and intellectually engaging.  I was pleased to read this, because I think it will intrigue curious minds for a long time as our telescopic views of other planets deepen our puzzlement about the Fermi Paradox.

As for privacy, my own view is that the privacy academics didn’t take his 1999 book seriously enough as an intellectual event.  One way to describe Brin’s insight is to say that surveillance in public becomes cheaper and more pervasive over time.  For Brin, having “control” over your face, eye blinks, location, etc., etc. becomes futile and often counter-productive once cameras and other sensors are pervasive and searchable.  Brin picked up on these themes in his earlier novel, “Earth,” when elderly people used video cameras to film would-be muggers, deterring the attacks.  In the new novel, the pervasive use of the 2060 version of Google Glasses means that each person is empowered to see data overlays for any person they meet.  (This part is similar to the novel “Rainbow’s End” by Brin’s friend Vernor Vinge.)

Surveillance in public is a big topic these days.  I’ve worked with CDT and EFF on USvJones.com, which asked law academics to propose doctrine for surveillance in public.  Facial recognition and drones are two of the hot privacy topics of the year, and each are significant steps towards the pervasive sensor world that Brin contemplated in his 1999 book.

So, if you like thinking about Big Ideas in novel form, buy Existence.  And, if you would like to retain the Fair Information Principles in a near future of surveillance in public, consider Brin more carefully  when you imagine how life will and should be in the coming decades.

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New Titles from NYU Press

Here are some recent titles from NYU Press:

Killing McVeigh: The Death Penalty and the Myth of Closure
Jody Lynee Madeira

 
Life without Parole: America’s New Death Penalty?
Edited by Charles J. Ogletree, Jr. and Austin Sarat

 

Run for the Border: Vice and Virtue in U.S.-Mexico Border Crossings
Steven W. Bender

 

At Liberty to Die: The Battle for Death with Dignity in America
Howard Ball

 

Not Guilty: Are the Innocent Acquitted?
Daniel Givelber and Amy Farrell

 

The Right to Be Parents: LGBT Families and the Transformation of Parenthood
Carlos A. Ball

 

Papa’s Baby: Paternity and Artificial Insemination
Browne C. Lewis

 

Please check out the above books. You can propose a review of one of these books or another recent title not on the list. We’re aiming for reviews between 500 – 2000 words, ideally about 1000 words. Please email your proposals to me.

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Stanford Law Review, 64.6 (2012)

Stanford Law Review

Volume 64 • Issue 6 • June 2012

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BRIGHT IDEAS: Q&A with Bruce Schneier about Liars and Outliers

Bruce Schneier has recently published a new book, Liars and Outliers: Enabling the Trust that Society Needs to Thrive (Wiley 2012).  Bruce is a renowned security expert, having written several great and influential books including Secrets and Lies and Beyond Fear.

Liars and Outliers is a fantastic book, and a very ambitious one — an attempt to conceptualize trust and security.  The book is filled with great insights, and is a true achievement. And it’s a fun read too.  I recently conducted a brief interview with Bruce about the book:

Q (Solove): What is the key idea of your book?

A (Schneier): Liars and Outliers is about trust in society, and how we induce it. Society requires trust to function; without it, society collapses. In order for people to have that trust, other people must be trustworthy. Basically, they have to conform to the social norms; they have to cooperate. However, within any cooperative system there is an alternative defection strategy, called defection: to be a parasite and take advantage of others’ cooperation.

Too many parasites can kill the cooperative system, so it is vital for society to keep defectors down to a minimum. Society has a variety of mechanisms to do this. It all sounds theoretical, but this model applies to terrorism, the financial crisis of 2008, Internet crime, the Mafia code of silence, market regulation…everything involving people, really.

Understanding the processes by which society induces trust, and how those processes fail, is essential to solving the major social and political problems of today. And that’s what the book is about. If I could tie policymakers to a chair and make them read my book, I would.

Okay, maybe I wouldn’t.

Q: What are a few of the conclusions from Liars and Outliers that you believe are the most important and/or provocative?

A: That 100% cooperation in society is impossible; there will always be defectors. Moreover, that more security isn’t always worth it. There are diminishing returns — spending twice as much on security doesn’t halve the risk — and the more security you have, the more innocents it accidentally ensnares. Also, society needs to trust those we entrust with enforcing trust; and the more power they have, the more easily they can abuse it. No one wants to live in a totalitarian society, even if it means there is no street crime.

More importantly, defectors — those who break social norms — are not always in the wrong. Sometimes they’re morally right, only it takes a generation before people realize it. Defectors are the vanguards of social change, and a society with too much security and too much cooperation is a stagnant one.

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Infrastructure can change how you think

Better late than never! Plenty of kind words about Brett’s book already. Let me add just a few thoughts on the achievement that Infrastructure is.

I think sometimes the books that end up being the most useful and enduring are the ones that lay out the basics. Richard Posner’s “Economic Analysis of Law” is the classic in this genre. In that book Professor Posner simply applied micro-economic analysis to every area of law and in doing so laid a foundation that changed almost everything.

Brett’s book is similarly, deceptively basic and foundational. But the fact is that if you take Infrastructure analysis seriously it can infect the way you think about almost anything. In fact, I would definitely count myself as an infected by Brett’s work in exactly this way. Once you become convinced that certain economic functions have a fundamental public component there is no going back.

Full disclosure: I’d already been infected by Brett’s work before reading his new book. But Infrastructure puts it all together in one place, in an easy-to-assign book. And Brett is arguably meant to be a book writer, it seems to suit him.

There are two areas where I wish the book had gone further. The first was in the Section on current debates. I feel I had a good sense of what Brett’s analysis means for Net Neutrality and intellectual property. But what about the treatment of apps by platforms, a raging debate in contemporary antitrust? What about search engine economics? What about something completely different, like healthcare? The book ends by saying readers by this point should have their own thoughts, but to be honest I wanted more of Brett’s.

Second, I wish I had a better sense of how exactly Brett’s work intersects with the debates surrounding scale economics, which have had a recent resurgence of importance in Antitrust enforcement. Infrastructure-providing firms are by nature going to be large. Sometimes very large, and sometimes monopolistic. Should we give up on competition in these areas? When to take seriously arguments of necessary scale? When to discount them? Does Brett envision a less competitive infrastructure layer, justified by the public benefits he describes?

Of course its unfair to speak of what’s not in a book, for no book can cover everything. So let me close by saying: read Infrastructure and you will never see the world quite the same again.

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Frischmann Predicts Prometheus

Thanks so much to Frank, Danielle, and Deven for inviting me to participate in this symposium. It’s a great pleasure to discuss my colleague Brett Frischmann’s timely, engaging, and important book about infrastructure.

I’m going to focus my comments on Frischmann’s theory of intellectual infrastructure and how it relates to the structure of intellectual property law. Just a few days after the release of Infrastructure, the Supreme Court handed down its decision in Mayo Collaborative Services v. Prometheus Laboratories. That case presented the question whether certain diagnostic claims were within the scope of patentable subject matter under section 101 of the Patent Act. The Court held that they were not, in a manner that is strikingly consistent with Frischmann’s theory. Hence the title of my post. But Frischmann’s theory may also go a long way toward bringing some order to an area of patent law that has long been confused.

Let’s start with the concept of intellectual infrastructure. Frischmann explains that intellectual or cultural resources can be infrastructural in the same manner as physical goods. So long as the resource is a “nonrival input into a wide variety of outputs” (275), it satisfies the characteristics of infrastructure that Frischmann so richly describes. In turn, that suggests that the case for managing the resource as a commons is strong. Frischmann then explains how this concept applies to ideas. Ideas, he writes, often are infrastructure (subject to a number of complications that I’ll put to the side). So in his view, intellectual property should protect implementations of ideas but not the ideas themselves (286). To sort one from the other, Frischmann turns to the concept of abstraction in copyright law and argues that patent law should follow a similar path.

Now consider Prometheus. The inventors in that case discovered a correlation between the effectiveness of a drug and the amount of certain metabolites of that drug in a patient’s blood. Their patent claimed a method of optimizing the dosage of the drug based on that correlation. The method was simple: (1) administer the drug; (2) determine the amount of metabolites in the patient’s blood; (3) make an inference about drug dosage based on the correlation. Doctrinally, the question before the Court was whether this amounted to a claim on a “natural law” – the correlation between drug dosage and metabolism that happens in the human body – which would be unpatentable under a long-standing exception to the scope of patentable subject matter, or a patentable application of that law.

 

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Book Review: James’s Fichte’s Social and Political Philosophy

David James, Fichte’s Social and Political Philosophy: Property and Virtue. Cambridge: Cambridge University Press, 2011.

Johann Gottlieb Fichte (1762-1814) is the third most important thinker in the tradition of German idealism (Kant and Hegel vying for most important) which later morphed into Marxism and finally into Frankfurt School critical theory as well as into Rawls’ Kantian constructivism. Though idealism is a central strand in contemporary ethics, it has not has as strong an impact in political and legal philosophy where it has been eclipsed by the social contract tradition of which Kant and, to some extent, Fichte are part. However, it is James’ contention that Fichte’s idealism is indeed relevant to his theory of the state and hence to the idea of a social contract and the further vexing question of the relation between morality and right.

In the interest of clarifying what is at stake in a properly idealist understanding of Fichte’s theory of right, let me say some general things about how idealism plays into the debate. The first thing to say, perhaps is that idealism takes as its main opponent realism, the— perhaps more familiar— idea that the world is a certain way and that we, as subject must both discover and then conform our behavior to the way the world actually is. This is captured in empirical social science or socio-biology by the thought that there is an ideal, or maximally efficient, form social organization can take and it is our task to figure out what that is so that we can model actual social organization on this ideal social organization, stripping away the sorts of things which are extraneous to this efficiency. (The case of property, discussed below, shows that this is no idle comparison.)

Idealism, for methodological as well as ethical reasons, takes the opposite approach, insisting by contrast that we, as social and moral beings, construct the world we live in. That is, the social world is not a function of the arrangements of bodies (to which minds must accommodate themselves) but rather of the attitudes of mind in the sense that the social world is the result of our varying attitudes toward each other. This is captured by the familiar claim to rational autonomy which social contract theorists from Hobbes to Rawls all take as axiomatic, to some extent. The basic point is simply that it is the will itself which constructs the world in its own image. The will of others, not their bodies, is likewise the relevant entity of ethical consideration.

This idealist perspective is usually understood as a moral perspective and is to varying degrees understood as at odds with political philosophy which deals with rights, that is with how bodies are arranged. Liberalism, in the Lockean and at least some of the Rawlsian versions, is concerned to maintain a balance between morality and political organization in the sense that it takes itself to be able to abstract from contentful moral commitment in the service of universalizable commitments about how bodies should be treated. That is, its fundamental commitment is to value neutrality with regard to people’s actions which are outside the purview of security and basic necessity.

It is this sort of liberalism which James believes Fichte challenges. Though James does not put this in terms of idealism, I think it is easy enough to put the argument together from James’ book. On the Lockean view, property is something that belongs to us because we invest it with value. This means that I am free to buy and trade it, once I have made it mine. Fichte’s fundamental argument, which actually fits quite well with the neglected third part of A Theory of Justice, is to say that it is rather property which makes subjectivity possible. Putting it this way makes room for the need for a certain kind of redistribution which is meant to facilitate the adequate development of subjectivity in the first place.

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