1

Who Pays for the Law?

A couple of posts discussing the Google Print case have mentioned how they see it as an opportunity to get a court decision clarifying the scope of fair use on line. This makes me wonder: is there a public goods problem with respect to fair use law itself?

Fair use is notoriously fuzzy. Judicial opinions reduce the fuzziness somewhat by providing additional data points. These opinions benefit a wide range of parties by providing them with more guidance. Yet the cost of producing a ruling is borne largely by the private parties engaging in the litigation. So, in theory, will the existing system under-produce fair use law?

Perhaps it’s not meaningful to talk about an “optimal” level of legal guidance. But it remains the case that: (a) many potential fair users (particularly small-scale users) operate with insufficient guidance about what constitutes fair use; and (b) these folks are dependent upon large companies like Google being willing to litigate these (or analogous) issues to a decision.

So, if we want more clarity regarding the scope of fair use, how do we best produce it? Should we somehow subsidize fair use litigation (for example, by fee-shifting)? Or should we rely on a regulatory mechanism, like fair use regulations promulgated by the copyright office? (Michael Carroll of Villanova has a very interesting draft, proposing an administrative solution). Or are we comfortable with the existing level of guidance?

I assume this issue is not unique to copyright, and would be interested to find out whether other areas of the law have adopted responses to this.

4

Madison on Law P0rn

Oscar Madison has been tracking the amount of law p0rn he receives. The numbers are staggering. He’s getting a pound per day of the stuff. And it’s far less titillating than the name suggests — it’s and endless stream of law-school brochures, all designed to elicit positive U.S. News responses. Madison’s (illustrated!) post mocks numerous the lunch presentation lists (all involving places he would never go). And he reserves special ire for NYU’s magazine with its “Dworkin on Dworkin” cover story.

We’ve got the solution for you, Oscar. Leave behind all that law p0rn and focus on blawg p0rn! Our brochures are much lighter than NYU’s — we promise!

Did you know that Concurring Opinions just brought in a rising star, Dave Hoffman, as a lateral addition to the blog? Or that our blawg-and-privacy center has just tripled its budget? You’re invited to a free lunch presentation tomorrow, by the way, which will be held at an undisclosed location in rural Virginia. I hope that you can make it. And even if not, perhaps you’ve got time to read this month’s highlight article, “Solove on Solove.”

[UPDATE: In the interest of avoiding drawing in people running google searches for p0rn, I've switched to misspelling the term with a zer0.]

3

Blog Posts: Conversation or Publication?

book7a.jpgBlog posts exist in an uneasy position between permanent publications and more informal discussion. How ought they to be viewed when assessing a person’s reputation as a thinker and writer?

This question was inspired by a recent discussion about the propriety of deleting blog posts one strongly regrets posting. Christine Hurt (law, Marquette) at Conglomerate wrote:

[B]loggers are not just diary-keepers in pj’s but contributors to a national dialogue. Of course, journalists seek to be skeptical of this notion, and I think that suspicion is warranted if bloggers live by different rules, including the rule that any post can be deleted if the poster has a change of heart. When a television journalist says something on television, those words are recorded forever. When someone writes an op-ed for the NYT, then once the paper is printed, the op-ed is there forever.

What exactly are blog posts? Publications such as op-eds? Or just talk in an ongoing conversation? Or something of both? This issue is important because it will affect how blog posts come to be used in evaluating the blogger as a thinker and writer. That’s because we have very different standards in evaluating what people say in publications and what people say in conversations.

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0

Judge Alito’s Blog

alito1.jpgApparently, blogging experience seems to be one of the major factors in getting a nomination to the Supreme Court. Harriet Miers had a blog, and now (no surprise) Judge Alito has a blog too.

Hat tip: A3G. My theory: A3G is the one behind these blogs. A3G, time to fess up. . .

9

Alito and Securities Law: Part II

As Prof. Ribstein notes, there has been a significant amount of interest, both on the internet and offline, in Judge Alito’s record as a “business friendly” jurist. The emerging consensus is (for marketeers) bullish. Forbes quotes Ted Frank as saying “All and all, business wins,” and then (rather wistfully) the magazine continues that the “stock market may have signaled its agreement on Monday; the Dow Jones Industrial Average had risen 49 points at midday.”

In any event, I’ve done a bit more research into Judge Alito’s record as a judge in securities cases, and I think defense attorneys may not want to uncork the champagne just yet.

As I noted when discussing the Burlington Coat factory case, the Judge does not appear hostile (as some do) to securities claims as a general matter. Rather, he appears to want to force plaintiffs to plead scienter with particularity, and to measure materiality by its market impact. In this post, I’ll continue my analysis of two additional Alito securities decisions that Prof. Ribstein didn’t focus on.

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2

Beware of the Big Bad Bloggers

forbes.jpgIt’s Halloween, and who is the biggest scariest monster on the block? Me. That’s because I’m one of them “bloggers” according to a sensationalistic article published in Forbes Magazine.

The article, written by Daniel Lyons and entitled “Attack of the Blogs,” has been drawing the ire of the blogosphere. A stew of fear and vitriol, the article begins with the sentence:

Web logs are the prized platform of an online lynch mob spouting liberty but spewing lies, libel and invective.

He also writes:

Blogs started a few years ago as a simple way for people to keep online diaries. Suddenly they are the ultimate vehicle for brand-bashing, personal attacks, political extremism and smear campaigns. It’s not easy to fight back: Often a bashing victim can’t even figure out who his attacker is. No target is too mighty, or too obscure, for this new and virulent strain of oratory.

Bloggers should certainly be responsible and law-abiding, and bloggers shouldn’t (and don’t) have an immunity from lawsuits for defamation or invasion of privacy.

What is most ironic, however, is that after attacking bloggers for being lawless brigands, Lyons proceeds to offer some tips for “fighting back” against the bloggers that are equally as unethical and lawless as the bloggers in his caricature:

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10

Alito: The Business Friendly Justice?

Larry Ribstein has a great new post up on the jurisprudence of Third Circuit Judge Samuel Alito, a potential SCOTUS nominee. He sums up:

In short, Alito has displayed a marked tendency to enforce contracts as written, specifically including choice of law/forum and arbitration provisions that are intended to mitigate litigation costs. He’s also obviously aware of the problems that can be caused by lax proof standards and open-ended liability.

On the list that Prof. Ribstein has created, I was particularly interested in In re Burlington Coat Factories Sec. Lit. Prof. Ribstein says that decision involves a “deni[al] securities claims for failure to adequately allege scienter and materiality, and for lack of a duty to update.” My reading of the decision produced a somewhat more complicated picture, which may give some insights into Alito’s opinions about securities complaints.

First, unlike the district judge whose opinion the Third Circuit was passing on, Alito’s opinion is significantly more respectful of the pleading standard, reversing (in effect) a dismissal on materiality grounds. This decision – if representative of Alito’s larger jurisprudence – suggests that he is not particularly hostile to securities plaintiffs. In the end, the opinion does dismiss claims on 9(B) grounds, but with leave to re-plead.

Most significantly, the Judge appears to buy into the efficient capital markets hypothesis without hesitation, dismissing one claim which failed to result in a market reaction with the following reasoning.

In the context of an “efficient” market, the concept of materiality translates into information that alters the price of the firm’s stock. . . . This is so because efficient markets are those in which information important to reasonable investors (in effect, the market) … is immediately incorporated into stock prices. … Therefore, to the extent that information is not important to reasonable

investors, it follows that its release will have a negligible

effect on the stock price.

There are two basic problems with the idea that non-price-movement should mean immateriality as a matter of law. First, there will be times when market-wide distortions will dampen reaction to disclosures — which is why we require litigants to conduct expensive loss causation analyses which correct for the effect of the market-basket. Second, the behavioral finance literature, summarized by Ribstein (in a great paper) here, should give pause to judges, plaintiffs and others who seek to rely heavily on the ideal of a perfectly well-functioning market. To be fair, we can’t blame Judge Alito for not being aware of this literature back in 1997, but it would be interesting to know what he thinks today.

Needless to say, if I were on the judiciary committee, we’d have fewer questions on intellectually moribund subjects like con law, and many more of the following type(s): “How should judges go about evaluating the question of whether the stock market is fully efficient? Can securities class actions survive evidence of irrational decisionmaking?”

[UPDATE: I've investigated Judge Alito's securities decisions further here.]

5

Why Blawging is Bad For Law

Hello Folks.

I’ve joined Co-Op today from Prawfsblawg. This is by my count the fifth time I’ve introduced myself at a new blog-home. That makes me a bit of an itinerant blogger. It is also pretty ironic, because I generally think that the institution of blogging/blawging threatens to fundamentally disrupt some very valuable aspects of how law is currently organized, administered and transmitted.

To take an example I posted on recently on Prawfs, consider what happens to the common law when the primary sources which form its skeleton — judicial opinions – become the fodder for the entertainment of an audience of millions of eager web-surfers. Yes, I’m talking about you, Howard. It isn’t that How Appealing, and like blawgs, are bad. Indeed, I visit Howard’s blawg every day, and it is an invaluable resource. It is that Howard’s popularity, and the increasing linking of opinions by the MSM-online, provides incentives for judges to write witty, funny, entertaining, short, glib opinions, instead of careful, boring, technically precise ones. That is, to the extent that lower-court judges want to be noticed and profiled by (kind of silly) websites like these, it makes sense to be more like Scalia and Douglas than Souter and Rutledge.

Some might protest: surely federal judges don’t care much about having their opinions widely publicized? They have life tenure, and they care only about not being reversed. But the motivations of federal judges seem to me to be an open question, and I think that if I could somehow chart the growth of funny and media friendly opinions, we’d see a small bump beginning with the introduction of WL and a huge increase in the last five years.

So, why is this bad?

To find out, you’ll have to visit here again, as I will be retuning to this topic soon.

6

A Warm Welcome to David Hoffman

hoffman2.jpgI am delighted to announce that Professor David Hoffman will be joining us from PrawfsBlawg. Dave teaches at Temple University’s Beasley School of Law. He teaches contracts, law and economics, and business associations.

His most recent scholarship has focused on empirical and behavioral investigations of corporate and securities law. His recent articles include: The ‘Duty’ To Be a Rational Shareholder, 90 Minn. L. Rev. (forthcoming 2005), Nullificatory Juries, 2003 Wisc. L. Rev. 1115 (with Kaimipono Wenger), How Relevant is Jury Rationality?, 2003 U. Ill. L. Rev. 507, and Can Law and Economics Be Both Practical and Principled?, 53 Ala. L. Rev. 335 (2002) (with Michael O’Shea).

His topics of interest are behavioral law and economics, securities law, dispute resolution, corporate law, legal theory, and empirical studies.

We’re absolutely thrilled to have Dave on board!

4

The Problem with Superprecedent

constitution5.jpgJack Balkin (law, Yale) has an excellent post over at Balkinization about my colleague Jeffrey Rosen’s New York Times essay about superprecedents. The notion of superprecedent is that there are cases that are so firmly entrenched that they ought not to be overturned despite being in error. Roe v. Wade is the superprecedent that most have in mind.

In his post, Jack Balkin explains that a strategy of many conservatives is to “accept Roe as settled (as modified by Casey) but begin to chip away at it over the long haul.”

He explores three justifications for superprecedents. The first justification is that a precedent has held on for a long time and weathered some attacks. But this justification does little to justify why the precedent deserves to stand.

A second justification is that a lot of law has built up upon a precedent. The precedent serves as “a support beam in a house that, even if not installed correctly or in the right place, cannot now be removed without seriously endangering the safety of the occupants.”

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