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Saturday, April 30, 2011

The Benefits of Opt-in Federalism

The Affordable Care Act (“ACA”) is the most-discussed legislation in recent memory.  That’s not surprising, because there’s a lot in it worth talking about.

Perhaps you’ve heard: ACA mandates people make insurance bargains (or pay a tax/penalty).  Question—what legal rules govern these crucial bargains? ACA’s answer is fascinating.  The legislation uses an innovative mechanism to make and choose law: something I call “opt-in federalism,” where individuals choose, in part, between federal and state rules.

Opt-in federalism is a conceptually fascinating and theoretically promising means to optimize law, as compared to more traditional national or federalist approaches.  ACA is imperfect, perhaps fatally so, but opt-in federalism is conceptually independent of ACA’s particulars and thus worth talking about, whatever ACA’s fate.  At least that's what my article says.  I just uploaded the latest draft to SSRN; it's a working draft, so I'd be delighted to hear thoughts from interested readers.

In writing and researching the piece, I had the pleasure of reading the recent work of people like Dan Schwarcz, Amy Monahan, Abby Moncrieff, and Elizabeth Weeks Leonard, all of whom are thinking worthwhile thoughts about ACA, health care, choice, and federalism.  Check ‘em out. 

That’s all for me; it’s been terrific fun guesting on Prawfs.  Have a great summer.  And wear sunscreen.

Posted by Brendan Maher on April 30, 2011 at 10:47 PM | Permalink | Comments (0) | TrackBack

Friday, April 29, 2011

My New Exam Rule

I should have come to this resolution earlier, but I have finally figured out (after only 17 years) something noteworthy about exams: Exams should be either time pressured or space pressured, but not both. If they are both, students tend to feel that they didn't get to show you everything they know, even if we professors realize that these factors don't really make much difference in a student's overall performance, since every student takes the exact same exam. [If you are one of my students reading this post, and you took an exam that I wrote that was both time and space pressured, I realize that my new resolve won't be much consolation to you.] 

Posted by Lyrissa Lidsky on April 29, 2011 at 08:48 PM in Lyrissa Lidsky, Teaching Law | Permalink | Comments (15) | TrackBack

WHAT?!? Copyright and the Royal Wedding

Official_engagement_photo_1
They look lovely, don't they? And now, I will, as I've been asked, provide this credit: Copyright 2010 Mario Testino.
ARRGGHHHHH!!

I watched some of the royal wedding this morning, and I must say, it made me feel all warm and fuzzy inside. It reminded me a lot of my own wedding. I mean, mine was a lot smaller, of course, but it was smiles and sunshine all around. And like today's wedding, it featured an exquisitely beautiful bride and a slightly funny-looking groom.

What a lovely day. Naturally, my thoughts turned toward intellectual property law.

It was at that point I was shocked to find out something that was WAY different with my wedding. I managed to negotiate MUCH better legal terms with our wedding photographer than Will & Kate did. Specifically, I had our photographer agree that my wife and I would be deemed the authors of all photographs, and all rights and copyright interests in the photographs were assigned to us in perpetuity. It was our freaking wedding, after all.

So how is it that Will & Kate left the copyright to their official pictures with their photographer?!? Persons using the photos for editorial use are required to include this credit: Copyright 2010 Mario Testino. THAT DRIVES ME CRAZY!!! I can't stand it when any wedding couple lets a photographer bully them around on rights issues. But for the British Monarchy to do this? It's positively disgraceful! It makes me want to BASH MY HEAD INTO A WALL! I mean I just can't freaking believe it!!!!!!!!!!

C'mon people, stop getting screwed around by photographers on rights issues! Have a spine!! And if you are heir to being the head of state of a commonwealth that embraces more than 100 million people spread around the globe, then WISE UP AND START RULING SOME BRITANNIA!!!

OMG, I am so worked up right now. I can't even begin to talk about how law professors habitually cave to student law-review editors by signing away copyright to articles. I would completely lose it and have a coronary.

Posted by Eric E. Johnson on April 29, 2011 at 04:21 PM in Intellectual Property | Permalink | Comments (5) | TrackBack

Judicial recusal in constitutional cases

I want to flesh out something that came up in the comments to my post on the argument that Judge Walker should have recused himself or at least disclosed his relationship status in the Prop 8 case. The argument, in essence, is that as a gay man in a relationship who might want to marry his partner, Walker stood to directly benefit from his decision. Now, as I argued, I think the argument fails on its own weight. But it also has wider implications than just gay marriagen, because we could think of any number of cases in which a judge would gain just as great a civil benefit as Judge Walker would from the marriage decision.

In fact, it seems to me that we every jduge benefits from every decision in constitutional (or to go broader, "public law") cases. Judges remain members of civil society; they therefore benefit from virtually any decision elaborating on the scope of constitutional rights (especially if the decision expands those rights), at least to the same extent as any other member of that society. And this may be especially true for district court judges, who are more likely to remain a part of their local communities. So perhaps our understanding of recusal/disclsoure rules must be different in such cases, because we could imagine many cases triggering ths same arguments that the Prop 8 intervenors have raised, extending well beyond the Equal Protection arena. I would like to hear from those who know something about judicial ethics--would we require recusal or disclosure in any of these cases? And should we?

I suggested two examples in the comments to my initial post. One is a judge hearing an obscenity case who enjoys non-obscene pornography--although, as Orin pointed out, Judge Kozinski actually did recuse from an obscenity case after he posted sexually oriented materials to a web site, although that may be a unique example or it just may be Judge Kozinski. A second would be a judge who sends her children to parochial school hearing a case involving vouchers (not involving the school to which she sends her child)--a decision upholding the voucher program may mean it will be cheaper for her to send her children to school.

Let me try a third: Imagine a district judge invalidating a system of DUI checkpoints established by the municipality in which she lives and works. At a minimum, that judge benefits from her decision in that she will not be burdened by having to pass through the checkpoints. But she also may benefit from it in that, if she ever does drive after drinking, she has less chance of being caught. And even more so (to take it to the real extreme) if the judge has a drinking problem and is, in theory, more likely to drive under the influence. I assume we would not require this judge to recuse or to disclose: 1) I live/work/drive in this city or 2) I go out to drink at bars and restaurants and parties sometimes and I drive home.

Or another example: The question of data mining of medical information and whether states can regulate the practice, on which SCOTUS heard oral argument this week. A judge  who upholds the state regulations on data mining in this case upholds a right of informational privacy--and may benefit from that decision, in that her medical records now will be protected against unconsented-to disclosure.

One might argue that the benefit in all of these cases is less direct and immediate than the benefit Walker might obtain as a gay man wanting to get married. But I would argue that the real difference is that the class of people who benefit from these decisions is much larger; more people will benefit from a right to information privacy in medical data or a right to drive the streets without worrying about random checkpoints than will benefit from the right to marry someone of the same sex. But that does not change the point that the judge benefits from her constitutional decisions simply by being a member of civil society who enjoys constitutional rights. That benefit is unavoidable. We either accept it as part of our understanding of the system or we will lose a lot of constitutional litigation and judicial review.

Posted by Howard Wasserman on April 29, 2011 at 08:51 AM in Constitutional thoughts, Howard Wasserman, Law and Politics | Permalink | Comments (14) | TrackBack

Thursday, April 28, 2011

Tuscaloosa

It falls to me, as one of the few, if not the only, blogging law faculty here at Alabama, to say a few words about the tornado and the state of things here.

As anyone who has seen the remarkable footage knows, the tornado itself was vast and powerful, and tore right through the heart of the city. For those, like my family and I, who were not in its path, life could be far worse. We have food, shelter, access to phones and the Internet (obviously), and power, although many lack power and all of us are depending on the radio, Internet, and each other for information. For others, even leaving aside the loss of life, things are devastating. Many people lost their homes. With the power out in stretches of town, gas and other basic resources are scarce. Familiar places and businesses simply disappeared for several city blocks. The hospitals are sorely taxed. Some communities here and elsewhere in the state, often those with the most disadvantages to begin with, have been especially hard hit. At least two public schools were destroyed or rendered non-functional. There is a curfew in effect. We will need time and help to recover from this, and I know many would appreciate your aid, donations, and kind thoughts. Please consider giving when and as you can.

From a more parochial perspective, I have been very proud of the law students here, many of whom did suffer the loss of their homes and other privations. They have banded together to help each other without hesitation. Knowing these students as I do, I'm not surprised, but I am moved nonetheless. The administration has also been very active in reaching out to students and the broader community. I don't doubt that our clinical faculty and students will find many ways to help Tuscaloosa's residents over the next year or two, and show once again the value of clinical education in making real lawyers who are ready to serve.

It's an unfortunate truth that, high "rankings" or not, one sometimes has to work harder to show faculty recruits and others why they might want to live in a college town, let alone one in the Deep South. Having clerked in the state, I had no such questions when my wife, our two young children, and I decided to move to Tuscaloosa. In the midst of what is unquestionably a crisis, I am even more confirmed in my view that what sets apart places like this is a powerful sense of community. I am friends with my law school colleagues, of course, and (especially here) with my students too. But our community stretches beyond that, taking in the larger university community, the neighbors who took us in to wait out the tornado, the children who have befriended my children and become part of our extended family, the friends and strangers who have stayed in our home these past two nights, and the many friends who brought food and company when our son was born prematurely here some two years ago.

Mawkishly but fittingly, I am often reminded, living here, of the closing lines in To Kill a Mockingbird, in which Scout muses on the ways in which friends and neighbors in a genuine community help without question and create debts that can never be repaid -- without ever so much as thinking about those debts, because that is just what one does for one's own. If asked, I wouldn't hesitate, even and perhaps especially now, to tell people that Tuscaloosa is my town and that I love it.

Posted by Paul Horwitz on April 28, 2011 at 10:52 PM in Paul Horwitz | Permalink | Comments (11) | TrackBack

When the Right Interpretation of the Law is a Scary One (CFAA Edition)

A divided 9th Circuit panel decided U.S. v. Nosal today. The case initially looks like a simple employee trade secret theft case, but the Court's interpretation of the Computer Fraud and Abuse Act has potentially far reaching ramifications. Here's the thing - the court (in my view) reached the right ruling with the right statutory interpretation. However, that interpretation could possibly make many people liable under the CFAA that probably shouldn't be.

I discuss more below.

Here are the basic facts: Nosal is charged with conspiracy to violate the CFAA, 18 U.S.C. 1030 because he conspired with employees at his former employer. Those employees accessed a database to obtain secret information that Nosal allegedly used in a competing business. Importantly, those employees had full access rights to that database. They didn't hack, steal a password, rummage around, or anything else. They just logged on and copied information. Those employees had agreements that said they would not use the information for purposes other than their employment. I suspect that the agreement would not have even been necessary if it were reasonably clear that the information was trade secret, but that's an issue for another post.

The provision at issue is 1030(a)(4), which outlaws: "knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value...."

 

The district court dismissed the indictment, ruling that the employees could not have exceeded authorization. The court relied on a prior case, called LVRC HoldingsLLC v. Brekka, to rule that the employees could not have exceeded authorized access because database access was within their employment. According to the lower court, one can only exceed authorization if one wanders into an area where there is no authorized access. The appellate panel talks about drive letters. If the employees could access the F: drive, but not the G: drive, then any data taken from the F: drive for any purpose could not exceed authorized access, but gathering data from the G: drive would exceed because the employees were not supposed to go there. By analogy here, there could be no exceeded authority because the database was part of the employee access rights.

The Ninth Circuit panel disagreed. It starts with the definition in 1030(e)(6):

the term “exceeds authorized access” means to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter

The Court focuses on the "so" term. It argues that "so" would be superfluous under the district court's reading. After all, exceeding authorized access means you must have had the right to be there in the first place. To limit this to different areas of the database doesn't work, since the statute plainly outlaws access to the computer when such access is then used to obtain information that the accessor is not entitled to obtain.

The problem with this reading, of course, is that the employees arguable were entitled to obtain the information. Not so, says the Court - and this is where the trade secret angle comes in. The employees were decidedly (or at least allegedly) not entitled to access the information if the purpose was to leak it to Nosal. 

How does the court deal with LVRC? It appears that the two cases are consistent:

1. LVRC says that "without authorization" requires no access at all to a drive, not exceeded authorization (there are some parts of the statute with require no authorization, and some where exceeded authorization is enough).

2. LVRC makes clear that where employers set access policies and communicate them, then employees may be deemed to have acted without authorization.

3. LVRC envisions exactly the result in this case: 

Section 1030(e)(6) provides: "the term `exceeds authorized access' means to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter." 18 U.S.C. § 1030(e)(6). As this definition makes clear, an individual who is authorized to use a computer for certain purposes but goes beyond those limitations is considered by the CFAA as someone who has "exceed[ed] authorized access." On the other hand, a person who uses a computer "without authorization" has no rights, limited or otherwise, to access the computer in question.

Of course, it is not this easy. LVRC had a footnote:

On appeal, LVRC argues only that Brekka was "without authorization" to access LVRC's computer and documents. To the extent LVRC implicitly argues that Brekka's emailing of documents to himself and to his wife violated §§ 1030(a)(2) and (4) because the document transfer "exceed[ed] authorized access," such an argument also fails. As stated by the district court, it is undisputed that Brekka was entitled to obtain the documents at issue. Moreover, nothing in the CFAA suggests that a defendant's authorization to obtain information stored in a company computer is "exceeded" if the defendant breaches a state law duty of loyalty to an employer, and we decline to read such a meaning into the statute for the reasons explained above. Accordingly, Brekka did not "obtain or alter information in the computer that the accesser is not entitled so to obtain or alter," see 18 U.S.C. § 1030(e)(6), and therefore did not "exceed[ ] authorized access" for purposes of §§ 1030(a)(2) and (4).

This footnote seems directly contrary to the outome in Nosal. It is also an example of something I tell my cyberlaw students - make every argument you can! How could LVRC not have made the exceeded authorization argument directly on appeal? Surely that issue merited more than a footnote.

The court doesn't deal with this footnote, but instead makes some factual distinctions that work for me. First, in LVRC the defendant had unfettered access with no clear rules about the data. Second, in this case there is a clear trade secret misappropriation, whereas in LVRC the allegation was a nebulous "breach of duty" argument without any real showing that the email accessed would be competitively used against LVRC.

Maybe it is because of my background in trade secret law, and I suspect that I may be in the minority among my cyberlaw colleagues, because I think this was the right interpretation and the right outcome.  Exceeding authorized access has no meaning if it does not apply in this case. To me, at least, this was a textbook case of access that starts authorized, but becomes unauthorized as soone as the nefarious purpose for the access is revealed.

And now the scary part

That said, this is still scary - but the problem is with the law, not the court's ruling. Why is it scary?

First, employees who look where they shouldn't could now be considered a criminal under the CFAA, so long as they are looking at material they know they shouldn't be accessing.

Second, this is not necessarily limited to employees. Anyone using a website who starts using information from it in a way that the web operator clearly does not desire could theoretically be criminally liable.

Now that's scary.

The Nosal court tries to explain this away by saying that fraudulent intent and obtaining something of value are required under 1030(a)(4). True enough, but that's not the only subsection in the CFAA. Section 1030(a)(2), for example, outlaws simply obtaining information. Sure, the penalties may not be as severe, but it is still barred.

So, how do we reconcile this case with common sense? Are all web users now criminals if they lie about their age or otherwise commit minor violations? I doubt it. 

First, I think there must be some independent wrongful action associated with the action - a tort that common folk would understand to be wrongful. In this case, trade secret misappropriation was clear. LVRC v. Brekka went the other way because it was not at all clear the action was independently wrongful and thus something the employer would never authorize. I tend to think that browsewrap agreements on websites won't cut it.

Second, the wrongful action has to be tied somehow to the unauthorized access. In other words, lying about your age shouldn't affect access rights generally, but lying about your age might very well be a problem if the reason you did so was to prey on young children. I'll leave others to debate how this might apply to the Lori Drew case. The recent case of MDY v. Blizzard makes this connection for the Digital Millenium Copyright Act, and it seems like a reasonable one under the CFAA as well.

The CFAA scares me, and it should scare you, too. But its not as scary as many make it out to be - at least I hope not.

Posted by Michael Risch on April 28, 2011 at 04:41 PM in Information and Technology, Intellectual Property | Permalink | Comments (10) | TrackBack

Introducing the Law Review Review

As Dan previewed last week, Prawfs is officially launching today a new feature, the “Law Review Review.”  Our goal is to provide an ongoing space for discussion, description, and evaluation of the process for transmitting scholarly legal ideas.  Mostly, of course, that process involves law reviews, and mostly those are of the student-edited variety.  But we hope in time to discuss other outlets.      

So, for example, some of the posts you can expect to see soon include interviews with journal editors, more content from Chad Oldfather’s awesome dataset of law review publications, and a lengthy soft-focus feature on Redyip, harbinger of law review season.  (Note: all promised content subject to Redyip availability and other factors; see our ad in Men's Health for more details.)  Chad & I will do some quantitative analysis of his data, including (we hope) an examination of the effect of blind review on journal decisions.  If you miss one, you’ll be able to find all our posts by clicking on the “law review review” link on the left-hand side of your screen (scroll down; it's under "categories"). 

Much of the success of the project will depend on thoughts and contributions from you -- so by all means write to us.  We have a dedicated e-mail, lawreviewreview [at] gmail.  Suggestions and questions are welcome.          

And now, since we are law professors, after the jump, some existential questions.

Some might ask whether the study of the law review process merits any time or attention.  Even if so, the law professor blogotariat already has no shortage of commentary about ourselves and our own work.  Much of it must surely be tedious to that portion of our readers who are not as fascinated by us as are we.   Why, then, do we budget more time in front of the mirror?

Speaking only for myself on this front, my answer is that the instruments for scholarly communication are important.  The academy is an institution, and institutions benefit from reflective self-governance guided by data.  So I’m hoping to contribute at least incrementally to both the process of reflection and also to the data.    

Here is my hope and plan for what we won’t do.  We won’t complain about our own personal sorrows with the review process solely for the sake of bemoaning them.  (I do that at lunch every day, so I hardly need to do it on a blog…) We won’t single out editors or boards for criticism because we didn’t like what they did with our commas.  And we certainly won’t gratuitously link to other blogs just to get them to notice us.  (We also will try not to take ourselves too seriously.)

Oh, and, who am I?   I’m Galle -- you might remember me from such blogging hits as “Unemployment Insurance -- Less Boring Than You Think” (0 comments) and “Taxes -- No, Really, They’re Fun” (also, um, 0 comments).   I’m around to check the inbox and crunch the occasional number.  But you’ll see content from lots of other folks under the LRR banner.          

Posted by BDG on April 28, 2011 at 09:33 AM in Law Review Review | Permalink | Comments (5) | TrackBack

Everyday Life: Teaching

Teaching should be easy to explain. We all do it, after all. But as I thought about it, I realized that we do not necessarily share similar teaching experiences. So this is as much an anthropological exercise in answering the question “What do those people on the other side of campus do?” as it is an exploration of the demands of everyday academic life.

With that in mind, let me set out some basic parameters. As I’ve mentioned before, my teaching load fairly closely tracks the experiences of faculty teaching in the Humanities and Social Sciences at major research universities. There are plenty of professors of History at different sorts of colleges or universities who have very different teaching expectations (many more preps, far smaller classes, far larger classes, far less variation of classes, etc). But for those of us who teach at research universities with PhD programs, the normal teaching load is typically something like a 2-2 or 2-3 (or maybe a 3-3) load, where each course meets 3 hours a week. Often, a person with a 3-3 load will teach 2 sections of one course and a single section of another course each semester.

So, now we can start trying to do some math. Let's assume 6 classroom hours a week for a semester.  To that, you add office hours. I worked at one place where the rule was that we had to schedule six office hours a week (that might have been a state law, I can’t recall). Absent a mandate, I tend to schedule about 4-5 office hours a week, with some additional provisions. First, I answer student emails as quickly as I can, which usually means in an hour, unless I get the email during the night. As a result, I get a lot of student email. Second, I add 1-2 office hours the weeks that papers are due and the weeks that I give papers back. Third, I always offer to meet at other times with students who can’t make office hours. Fourth, I seem to spend a fair amount of time talking to individual students before and after class. It’s hard to factor all those extras in, so let’s just say I have 5 hours of office hours each week and leave it at that.

In addition to office hours, I need an hour of prep time for each undergraduate hour of class time, and two hours of prep time for each hour of grad student class time. I used to try to have prep time and office hours overlap, or coincide, but every time I did that, I had students in my office when I needed to prep the course. So the prep hours are extra, even though I often don’t have students come to office hours.

That means that in a semester when I’ve got a three hour grad seminar and a three hour undergrad course I’ve got twenty hours tied up every week: Six hours for classes, five for office hours, three hours for prepping the undergrad course, and six hours for prepping the grad course.

But that’s a week without grading. For a normal upper level undergrad course (American Legal History, one semester of Constitutional History) I typically assign three papers and then give a take home final. All four papers (that is, including the final) will be about 6-8 pages, typed, double spaced. It usually takes me 30-45 minutes to grade a single paper; that includes reading it and writing comments, re-reading the papers that struck me as border line, and entering grades. I like to get papers back within a week of having them turned in, but sometimes it can take ten days. Assuming a class of 40 students, and a seven day turn around, that’s about 5.5 papers a day. In a week when the papers are good and I don’t need to do a lot of re-reading, that means an additional 2 hours and 45 minutes of work on that class each day that week, or almost 20 extra hours that week.

Grad classes usually do not have multiple assignments; instead the grade depends on class participation (which may involve leading a discussion) and a seminar paper, typically a 20-30 page paper turned in at the end of the semester. But there are still weeks when I have to spend more than nine hours on a grad course. Usually, I will allow (or require) grad students to turn in a draft of their paper.  It can take 2-3 hours to read and comment on a draft. So in a grad class of eight, I will have an extra twenty or so hours of looking at drafts. I usually also try to write up some comments on a student’s presentation in a grad seminar, reviewing my notes and writing that up takes roughly 30 minutes. Those grading and commenting obligations tend to fall in the last month or so of the semester, so for that whole of that last month I typically spend an extra 20-25 hours on my grad seminar, on top of the nine hours of class time and prep.

So in a semester in which I have an upper level undergrad course and a grad seminar, I spend twenty hours a week on teaching most weeks. But that’s normal only about half the time, since seven weeks every semester (the three weeks I’m grading undergrad papers and the last four weeks of the grad seminar) I’m actually working anywhere from a low of 5-6 hours more (the weeks when I’m just doing grading for the grad seminar) to 20 hours more (when I’m grading undergrad papers) a week. Or to put it another way, I do roughly 80 extra hours of grading over the course of a semester, on top of the 20 hours of teaching and teaching related stuff I do every week.

And that doesn’t count finals week, which is literally a week on my side of campus. Grading finals, I cut out the comments and just take notes that I can refer to if I need to explain a grade down the road if I’m asked to do so. But even so, grading the take home finals and entering undergrad grades takes me about 25 hours from start to finish (if I’m lucky, start is not Friday at noon, and finish is not the next Monday, at noon, but all too often it’s pretty close). Grading the grad papers can be easier, assuming I saw fairly complete drafts, but even so, I spend 30-40 hours grading and entering grades during finals week.

So over the course of an entire semester, including finals week, I spend about 110 hours grading (80 during classes, 30 hours during finals week).

But is that all, you ask? Nope. 

Sometimes I have graduate students who are assigned to either grade for me, or are teaching sections of a course. That is supposed to give me time for other things. But in fact, I find it’s a bit of a wash. I may spend somewhat less time grading (though see below), but I spend more time talking about assignments before I write them (getting feedback from the grad students about assignments I’ve drafted, or by asking them to write draft assignments and then discussing how and why their drafts might be changed to be more effective). I spend more time talking to grad students about expectations before they start grading. And I spend time meeting with the grad students to either discuss their grades before we hand the papers back (particularly necessary if I’ve never worked with the students before) or to discuss individual problem papers of various types. With graders or teaching assistants doing the grading, I may spend 10 hours on an assignment, rather than 20, but I still spend time on the assignment.

And even in courses where I have grad students, I grade the finals and at least one other paper, every semester. I do that for several reasons: First, the grad students do have other work to do and I bitch at them if they get behind on that work, whether it is course work or writing their dissertations. Given that, I feel some obligation to give them time to actually do the work I tell them to do. Second, if an undergraduate student is going to flunk my course (and that happens) I want to have had a hand in providing the grades that made that happen. Third, if I’m going to write a letter of recommendation for an undergraduate (and most students take my legal history classes because they think that I will write the letter that gets them into law school) then I need to have some recollection, even if dim, of that student’s writing abilities.

So even when I have grad students helping me, I grade a paper and the final that semester. And that means that at some points in that semester my life is sheer unmitigated hell. I don’t get graders or teaching assistants unless I have a class of more than 65 (I think) undergraduates. If I have three teaching assistants, that means I have somewhere over 120, and probably closer to 160 students in my course at the start of the semester. Even with attrition, I have found myself grading between 55 and 150 papers. That can take me up to two weeks, or all of spring break, and it means somewhere between 28 and 75 hours of grading to get that paper marked.

And there’s more! I normally also have grad students who are working on MA papers or dissertations. Like all of us, they research and write at different rates. But generally an MA paper takes an academic year to research, write up, revise, revise again, and defend. I’d guess I put in about 15 hours on an MA paper each semester of that year, in terms of meetings with the MA student, reading drafts, etc.

A PhD dissertation evolves over such a long time it’s harder to quantify. For a semester, when a student is writing up a dissertation proposal, it’s like a semester’s worth of work on an MA paper in terms of demands on my time. So that’s 15 hours or so for a semester. Then for a year or so, when the student is researching and getting oriented, I may spend most of my time giving pep talks and advice about things to read and places to research. That might take as little as 5 hours of my time a semester. But once the student is settled, and starting to write chapters, all bets are off. At the very least, a student turning out a chapter a semester needs about as much of my time as  a student writing an MA paper--15 hours a semester. But once there are several chapters, we need to start talking about the way they relate to one another, and I need to read, and re-read, the chapters in groups to make recommendations about revisions and about going forward. At that point, I probably spend closer to 25 hours of work with a student in a semester. And the semester before the student defends a dissertation demands even more time than that. Say 30-40 hours of reading and talking about the dissertation and final revisions that last semester. And those are just my graduate students, I’m also on MA and PhD committees where I have little or no obligation to read drafts of chapters, but the semester a student defends I have to read the entire MA thesis or dissertation, which can take anywhere from 2-8 hours.

Then there are the undergraduates who write Honors Theses, which a fair number of them do because at both the schools I’ve worked at that is the only way to graduate with something more than Honors. In length, an Honors Thesis is about as long as an MA paper (think mid sized law review article), but in terms of support undergraduates need much more help than MA students. So I’d figure I usually spend two semesters, and 25 hours a semester, with an undergrad writing an Honors Thesis.

And those are fairly consistent obligations. All other things being equal, this fall will be the first time in eight years (I think) in which I do not have an MA student, a PhD student who is at the writing stage, or an undergrad doing an Honors Thesis. In most years, I have had at least two students who fit into one of those categories (two PhD students writing, an MA student and an undergrad doing an Honors Thesis, etc).  

Given all that, we can more or less come up with an idea of how much time I spend on teaching in a typical semester. Let’s say I have one undergrad course, of 40 students, one grad seminar of 6, one MA student, and one PhD student who is in the writing stage. I spend 20 hours in teaching, office hours and course prep each week, not counting finals week.  I am not reliable on the question of how many weeks there are in a semester, but I think there are fourteen weeks of actual classes, plus a week for finals. Assuming that’s right, that’s 240 hours of class time, class prep, and office hours. Then we need to add 98 hours of grading (80 hours for grading undergrad papers and finals and about 18 hours for grading the drafts and final papers I get in the grad seminar). That’s 338 hours. Then we add in 40 hours of working with grad students  (15 hours for the MA student, 25 hours for the PhD student).  

That’s 378 hours, which averages out to just over 25 hours a week over the 15 weeks of the semester.

Needless to say, that’s not in synch with the assumption that I spend 50% of my time (or less) during the academic year teaching.

Of course, that’s also a typical semester in a very artificial sense. I don’t teach a grad seminar every semester, or even every year. I’ve had some semesters when I taught two upper level undergrad courses of 35-40 students each. I’ve had semesters when I’ve taught an upper level undergrad course of 35 and a combined law student/grad student course of 60, when 5 of the 60 were grad students writing seminar style papers and the remaining 55 were law students who were graded on a book analysis (5-7 pages) and a take home final (7 pages). Some semesters I teach an undergrad seminar of 20, and an upperlevel undergrad course of 40. I’ve sometimes taught a required methods and skills course to 40 undergraduates that required weekly short assignments, instead of the three longer papers and a take home final. And the years when I was spending 30-40 hours a week as assistant chair of my department, I was only teaching one course a semester.

I’d guess, however, that even in the semesters where I’ve taught small courses, or only one course, that I still spent 15 hours a week on teaching and grading on average because I usually I was working with a grad student or an undergrad writing an Honors Thesis as well. And in the semesters I’ve had big classes, I might have spent as much as 30 hours a week, on average, grading and teaching. So in light semesters, teaching and teaching related stuff including grading may occupy just over a third of a 40 hour week, in heavy semesters it can take up almost all of that three-fourths of that 40 week, and in normal semesters, it occupies about two-thirds of the 40 hour work week.  

Of course, some of that time is fluid—during office hours when I have no students, I can read a draft of an Honors Thesis, or write comments on presentations in the grad seminar, or grade papers.  At the same time, there are some semesters when the papers take more than 30 minutes to grade, on average.  (Typically, it takes longer to grade the first round of papers in  class than the last set, because at the beginning of a semester I need to spend more time figuring out where the students are academically, and they aren’t yet sure what I expect). So I’d say the averages are fairly accurate.

Posted by ERD on April 28, 2011 at 08:47 AM | Permalink | Comments (3) | TrackBack

Thoughts and Prayers to Tuscaloosa

Hoping that everyone in the Prawfs family is safe after a harrowing experience.  We're thinking of you, and hope to help if we can.

UPDATE: Details on donating to the Red Cross here.

Posted by Matt Bodie on April 28, 2011 at 08:04 AM | Permalink | Comments (0) | TrackBack

Liberal Federalists Lose

On Wednesday, the Supreme Court unsurprisingly held 5-4 that the Federal Arbitration Act preempted California’s rule prohibiting contractual waivers of class arbitrations.  Justice Breyer, writing for the dissent: “[F]ederalism is as much a question of deeds as words. It often takes the form of a concrete decision by this Court that respects the legitimacy of a State’s action in an individual case. Here, recognition of that federalist ideal, embodied in specific language in this particular statute, should lead us to uphold California’s law, not to strike it down.  We do not honor federalist principles in their breach.”

Both perma-prawfs and guest-prawfs filed amicus briefs in this case.  Thoughts on the opinion?  Lawrence Cunningham’s already got up a good post over at CO.

Posted by Brendan Maher on April 28, 2011 at 02:37 AM | Permalink | Comments (1) | TrackBack

Wednesday, April 27, 2011

"Accomplishing" Electronic Filing in the Seventh Circuit

I just filed my first brief in the Seventh Circuit on Monday. Along with the requisite hard copies, the Seventh Circuit requires an electronic copy of the brief and appendix. Starting May 1, 2011, all electronic filings must be "accomplished" (Court's language) using the Appellate CM/ECF System. Sound good?

Not so fast. Submitting your brief electronically in the Seventh can be "accomplished" if you are using a PC. However, if you are using a Mac, you will not be able to file electronically unless you have the Snow Leopard operating system. There is some sort of work around, in that on the day the brief is due (the time that you actually try to file six times clicking on the "if you are using a mac" instruction box, and are met with an error message each time) and you call the clerk in a panic, you can look online to download some sort of "bootcamp" program to finagle a "work around" for the missing "java" in Leopard, and you may be able to "accomplish" your filing. Or you can quickly burn a pdf (non-scanned!) copy of your brief and bring it on a disk to the clerk since it is still before May 1.

I learned from a clerk that the Seventh is the last circuit to go electronic.  Even if you don't practice, you may be on amicus briefs or the clinic in your school may file briefs in the Courts of Appeals. So here is my question: how is online filing "accomplished" in other circuits? Do the other Circuits' electronic filing systems accommodate any, all or only some mac operating systems?

Posted by DBorman on April 27, 2011 at 10:47 PM | Permalink | Comments (0) | TrackBack

More Prawfs Lawfs!

PBW_prawfs_lawfs_riddles_logo

It's time for more Prawfs Lawfs riddles!

Why wouldn't the dean let the rookie professor teach Oil & Gas Law?

[answer]

Why did students find the tax professor's lectures disgusting?

[answer]

What did the professor of commercial law say when the student asked him whether his class on Article 4 would be worthwhile?

[answer]

Posted by Eric E. Johnson on April 27, 2011 at 10:01 PM in Games | Permalink | Comments (0) | TrackBack

"Myth of the Rational Market": Wrap Up

MythoftheRationalMarket pb c

Many thanks to Benjamin Means, Lynn Stout, David Zaring, and especially our author Justin Fox for a terrific book club on The Myth of the Rational Market.  I hope the club will be a resource for folks in the future who are reading the book for class or for enlightenment (or both).

Here's a wrap-up of all the posts for the club:

And if you still haven't picked up the book, you can buy it at:

Thanks again to Justin Fox and all of our commenters.

Posted by Matt Bodie on April 27, 2011 at 09:00 PM in Books | Permalink | Comments (0) | TrackBack

Where modern financial theory is worse than Ptolemaic

MythoftheRationalMarket pb c

Matt Bodie wants to know whether I think "modern financial theory is more like the theory of evolution, Newtonian physics, or the Ptolemaic universe." (I was stumped by the Ptolemaic bit at first, but he explains it well.) Matt also figures that I'd probably say Newtonian physics—that is, it delivers a lot of useful answers, but it fails to explain a lot of important phenomena. Sounds about right.

This happens to be the parallel that people in academic finance prefer, too. So I do worry that maybe it's a little too generous. Modern finance and economics seem to be quite useful in answering small, focused questions. They don't do so well on big-picture stuff. That means somebody exclusively trained in mathematical finance or economics probably won't do a better job of predicting the course of the economy or the stock market than somebody with knowledge of history, politics, psychology, etc. Of course, a monkey throwing darts may outperform both—which would make the efficient markets guys happy. But models that make no room for business cycles or market bubbles maybe aren't the best models to use in trying to understand business cycles and market bubbles.

The most troubled aspect of modern financial theory is probably its approach to risk. Since the 1960s, the argument has been that while it's almost impossible to predict the future price of a stock or other financial instrument, it is possible to say something meaningful about the riskiness of that instrument (that is, the bounds within which that price will fluctuate). This is true, most of the time. It's just never true when it matters most—in times of crisis. And it's not just that financial risk models have a habit of failing to capture these fat-tailed risks. It's that the widespread adoption of risk-management techniques based on these models seems to bring on the very crises that invalidate those models. So in that aspect, modern financial theory seems worse than Ptolemaic. (Help me out here, people: what's a worse-than-Ptolemaic example from the history of science?)

Posted by Justin Fox on April 27, 2011 at 01:14 PM in Books | Permalink | Comments (6) | TrackBack

Everyday Life: Service

Some time ago (sigh) I promised some thoughts on the burdens of “normal academic life.”  A combination of an unusual bit of writer’s block and the fact that the post got to be far too long to be a single post got in the way.  But here’s the first part of that follow up. Because it’s hard to capture the various pressures of normal academic life in a single blog post, this will be more than a little episodic. To make the episodes track modestly, I’ve set them under the loathsome headings familiar to us all. I thought I’d begin with the least of them and work my way up.

Service: I should first reveal that I am a firm believer in the ideal, if not all the present manifestations, of shared governance. Partly that’s a matter of political, or perhaps economic, philosophy—I think labor (that's us!) should play a strong role in helping determine the direction of any business or enterprise. Partly that’s a reflection of my concededly idealistic sense that in a time of great upheaval in higher education faculty voices, which presumably represent the interests of scholarship and teaching, should not only be heard,  but should shape discussion. So I have little sympathy for those who complain about committee work, or sabotage it so that they can avoid it in the future. But I also have little sympathy for those who seek it out as a path towards work in administration, or to avoid teaching or research.

That said, I will be the first to admit and complain that committee work is an incredible time suck. That is partly because many committees spend a lot of time talking about what they are about, rather than getting things done (or getting things stopped, I do not think committees should simply meet to sign off on initiatives).  For a profession that includes whole segments that study organizational behavior, political action, psycho-social interactions, and social movements of various sorts, we are ludicrously bad at the practice of self governance.  There are structural and idiosyncratic reasons for that, but it is also a product of professional incentives that are defined by both sides of the administration-faculty divide.  

Many faculty are cynical about committee work, believing that administrations will pay no attention to any committee report that does not conform to its goals. I won't go that far, but I have served on my share of committees where some administrators seemed to want to make it difficult to get the information the committee needed to actually do its job. At the same time, committee work is rarely rewarded (the only type of service that is, typically, rewarded is administrative service), and so those who undertake it and engage in it seriously find themselves on the short end of salary determinations and/or promotion decisions, while those who avoid it in order to put more time into research or teaching are rewarded. That creates its own vicious circle: If committee work is not rewarded, then there is no reason to take it seriously, with the result that many committee members do not take it seriously, which, in turn, means much committee work is a waste of time. At the same time, the common assumption that anyone who can avoid committee work will do so means that those who do not avoid it are somewhat suspect. In the end, committee work becomes a burden that falls on the few people who are either eager to do it (for good or for ill, see above), feel an obligation (to the institution, to a community, or to those whose oxes the committee might gore), or are unable to run fast enough when a chair or dean comes calling.

Added to that is the impact, which may be a bigger issue on some parts of campus than others, of the rising numbers of adjunct faculty. Fairness (specifically the often hideously low salaries paid to adjuncts in many departments) suggests that adjuncts should not be asked to do committee work.

To the extent that committees represent the institutional views of faculty, there are also institutional reasons why temporary employees should not be asked to do committee work (let’s bracket the fraught issue of whether some adjuncts are effectively permanent faculty in practice if not protection; it seems clear that is the case, but it’s a whole other problem).  The increase in numbers of adjuncts and other temporary hires (postdocs, instructors) obviously means that the load of committee work is divided among a dwindling pool of full time faculty.  For those departments that try to spare untenured faculty from committee work (a policy I have mixed feelings about), the pool of potential committee members is even smaller.

The population of temporary faculty can also increase service work in other, less obvious, ways—by requiring the creation of committees that mentor and/or monitor the work done by adjuncts or temporary faculty.  Adjuncts are often vulnerable (or feel themselves to be vulnerable) to student pressure over grades or course content and need a mentor (or mentoring committee) to provide back up and support. While some adjuncts or non-tenure/tenure track faculty have extensive teaching experience, many do not and need the support of teaching mentors and peer observations. That is particularly true, of course, of those adjuncts or temporary instructors who are recent graduate students on VAPs or similar positions, since their future job prospects presumably hinge on some competence in the classroom. VAPs, and postdocs, like graduate students, may also expect (and deserve) faculty mentoring in terms of writing feedback, help negotiating the job market, practice giving job talks, and letters of recommendations.

Letters of recommendation are another area of service that can take an enormous amount of time. While some graduate programs (law, for example) have a standardized letter, many do not. That means multiple letters for students who are applying to different graduate programs, a process complicated by the fact that there is no standard form to accompany the letter. So what could be a simple letter becomes complicated by the necessity of navigating through forms that ask you to rank students in all sorts of different categories, and may or may not require cutting and pasting parts of a letter of recommendation.

It is my understanding that some professional organizations have standardized letters for job applicants, and job counseling services at some universities allow students to set up credentials files that include letters of recommendation.  But not all universities do that, and not all academic disciplines have standardized the letter of recommendation process for job applicants (whether they should is another question, I’m inclined to think personalized letters are preferable). In the current job market that means that a faculty member with a single student on the market can write tens of letters of recommendation in a given year.   

But those are predictable obligations that I am willing to accept are a necessary part of my job. I am less enthused about the fact that every graduate student of mine who applies for a tiny research grant (for a week, say) or every undergraduate who wants to do a spring break abroad program needs a letter of recommendation from me. If an archive or museum (or funding committee) cannot tell why a researcher would benefit from a trip to an archive, I am not sure how a letter from me helps. Likewise, if a student’s transcript and application does not demonstrate why he or she would benefit from being allowed to go to Paris for spring break, I don’t know what I can add in a letter to do the trick (or sabotage his or her chances).  So while I write many letters that I think I should write, I find myself increasingly writing lots of letters that strike me as useless. Needless to say, those letters are often one off deals that require special forms, or otherwise cannot be easily created by editing some other letter. So the single letter to help a student get a one week grant may easily take more time than the letters I write to support one student applying to four graduate programs.

And the increasing use of temporary faculty adds to the letter writing burden, as well. Students sense, and probably rightly so, that graduate programs, future employers, fellowship and grant funding organizations, and even university programs are less likely to be impressed by a letter from an adjunct or an instructor or a graduate student. And so full time, tenure track faculty are asked to write most letters of recommendation. Often, I’m afraid, that trade off is unwise; my letter about a student I taught in a class of 45 or 175 will probably be considerably less thoughtful or informed than  a letter by a graduate student who taught the student in a discussion section of 20 students or an instructor who taught the student in a course of 30 students. Our biases about hierarchy, which trickle down to our students, are inconsistent with our reality. Though, of course, if we are going to ask (allow?) instructors, adjuncts or graduate students to write about the students whose work they know best,  we need to give them access to computers, printers, letterhead, postage meters, and so on. And, of course, we need to pay them to do that work, if we are going to ask them to do it as well as teach.

And then there is external service, evidence of which seems to be increasingly important in tenure and/or promotion cases. My promotion form, for example, has whole sections that ask about my experiences referring articles for journals and university presses, my work on editorial boards or professional associations. It wants to know how many prize committees I’ve been on, how many lectures or talks I’ve given to local schools and local community groups. It wonders what I’ve done to help museums. And it wants me to list all the books I’ve reviewed for professional journals (typically this is counted as a service, rather than as a publication, though a lengthy review essay is an exception to that rule).

That sort of work can add up. I typically referee 1-2 articles a semester for journals, and referee a book manuscript every 12-18 months. I give a talk to a communittee or student group once every semester. I’ve served on three editorial boards over the course of my career, one required no work at all, one required a fair amount of input in terms of setting out the journal's publishing plans, and one comprises the bulk of my article refereeing duties. I've done less work for professional organizations; I've only been on two prize committees, but one was for a book prize and that took quite a bit of time. (My recollection is we had over 30 books to review, but that may reflect my fevered imagination and not reality).  

I read fast, and I write pretty fast too, but even so all that reading and writing and talking sneaks up on me sometimes, especially when I also have obligations to read drafts of dissertation chapters and conference papers by graduate students, or drafts of work by colleagues, as well.

Eight years ago, in an article on the burdens of service the Chronicle of Higher Education quoted one tenured faculty member at Brown to the effect that “The only way to move forward is to get some funding to get outside leave." If my own experience this year is any indication, being on leave doesn’t completely stop the pressure of service—letters of recommendation can’t be put off, nor can dissertation chapters, or conference papers written by grad students. In addition, I had to go back to campus to read tenure and promotion files so I could vote on two cases that came up this year, and I’ve participated in dissertation defenses and qualifying exams by conference call (I suppose that might count as teaching, not service).

But there is no question that the pressures of service, in terms of time of commitment but also in terms of interfering with setting aside periods devoted to research or writing or class preparation, does add up. The result is that research becomes something most easily done on vacation (when, on my side of campus at least, we typically do it for free), or on leave, rather than during the academic year.

Posted by ERD on April 27, 2011 at 10:57 AM | Permalink | Comments (1) | TrackBack

Tuesday, April 26, 2011

public law schools & administrative searches

In a post on The Faculty Lounge, Jacqui Lipton asked about the use of search firms in administrative searches. Somewhat counter-intuitively, Orin Kerr commented that he thought search firms could be helpful in identifying potential lateral faculty candidates because "[s]chools are often terrible at identifying who is good and who can move," but that "[d]eanship vacancies are very public, and anyone interested in being a Dean knows how to apply." I would have suggested the opposite: that faculty appointments committees can do a capable of job of getting the word out to faculty candidates and then evaluating them, but that it can be difficult for faculty to try to recruit potential dean candidates to apply and that faculty might not be best suited to gather and evaluate information about candidates. Perhaps a search firm can do a better job of gathering and sorting information and of recruiting reluctant candidates -- indeed, perhaps the hiring of a firm can serve a signaling function about the seriousness with which some law schools are taking their search. But maybe not -- I think reasonable people can differ on the signaling and information gathering points.

I think where Orin is missing something is the problem faced by some public law schools. If it can work at arm's length to enable a public law school to recruit sitting deans who would be understandably shy about having their interest known, a search firm would be very helpful for schools in states with strong open meetings and open records laws. In the University of Florida's most recent presidential hiring, the very final list of applicants, made public a mere day before the final three candidates were announced, had several names that had not previously appeared on the search website. These new names included the person that the university ultimately hired, who at the time was president at the University of Utah. There was likely no way that would have been possible in this state, where all meetings and applications are public, unless the university used a search firm that shielded the search committee from the recruitment process. I leave aside whether this practice is within the spirit (or even, frankly, the letter) of the state open records and "sunshine" law. But it's undoubtedly quite useful to search committees, and an element of the search process that private schools are generally shielded from.

I'm currently on a search committee for a new career services director for which we're using a search firm. It's extremely helpful, because this is a position for which no one on the committee has any experience in hiring and our initial search failed. It's my first experience with a search firm, and I must say that thus far I'm quite impressed. In this case it was clear that the faculty-chaired committee, with a mix of faculty and administrators, was simply not well suited at recruitment and at gathering information.

Posted by Mark Fenster on April 26, 2011 at 04:44 PM | Permalink | Comments (7) | TrackBack

Picking your spots and your arguments

Opponents of marriage equality are, rightfully so, offended by the use of the epithet "bigoted" to describe their position. They also are resistent to the equation of marriage equality (and LGBT equality generally) and race and gender equality. Fair enough. But if advocates of the anti-marriage position want to avoid being lumped in with retrograde opponents of racial equality of a generation ago, they might be well-advised to avoid adopting retrograde arguments.

Case in point: The motion filed Monday in the distict court by the intervenors defending Proposition 8, arguing that the ruling by Judge Walker (who has since retired) should be vacated on the ground that Judge Walker should have recused himself from the case. Why? Because Judge Walker, who is openly gay, has been involved in a long-term relationship and failed to disclose that relationship. That--combined with a number of rulings with which the intervenors disagreed and the fact that Judge Walker reached a different result as to the constitutionality of the ban on same-sex marriage under the U.S. Constitution--demonstrates at least the appearance of partiality and a nonwaivable conflict of interest. The intervenors were quick to qualify their argument:

It is important to emphasize at the outset that we are not suggesting that a gay or lesbian judge could not sit on this case. Rather, our submission is grounded in the fundamental principle, reiterated in the governing statute, that no judge “is permitted to try cases where he has an interest in the outcome.” In re Murchison, 349 U.S. at 136. Surely, no one would suggest that Chief Judge Walker could issue an injunction directing a state official to issue a marriage license to him. Yet on this record, it must be presumed that that is precisely what has occurred. At a bare minimum, “[r]ecusal is required” because former Chief Judge Walker’s long-term committed relationship, his failure to disclose that relationship at the outset of the case, his failure to disclose whether he has any interest in marriage should his injunction be affirmed, and his actions over the course of this lawsuit give rise to “a genuine question concerning [his] impartiality.” Liteky, 510 U.S. at 552.

First, if you have to state that qualification to your argument, your argument is probably in trouble.

Second, the irreducible force of their argument is just that--no gay or lesbian judge should sit on this case. The intervenors' argument explicitly equate a ruling recognizing a general right with a ruling granting that right to Walker himself as the plaintiff. Worse, if the concern is that Walker himself might want to marry (and thus would directly benefit from the ruling), his relationship status actually is not relevant. Logically, it is enough that Walker is gay and may someday hope to get married, because such a judge still will benefit from that ruling. Walker's benefit might be more immediate because he actually has someone in his life whom he might want to marry and is not still waiting to meet the right person. But he still would benefit from the ruling, even if he had not yet met "The One," because the opportunity to marry would be open to him.  I suppose the only acceptable gay judge might be one who is gay and has sworn off the institution of marriage (although I suppose the intervenors then would argue that the judge should recuse because he bears some patent hostility to the institution of marriage, meaning he is willing to make a ruling that destroys the institution).

Third, some opposition to marriage equality rests on some notion that recognizing same-sex marriages harms opposite marriages and the heterosexuals in those marriages. If that is the case, couldn't you argue that a heterosexual judge (married or unmarried) should have to recuse, since he will benefit from a ruling  upholding Prop 8, since it "protects" the institution in a way that benefits his opposite-sex marriage. Or take it out of the "same-sex marriage devalues my marriage" argument. Suppose a lawsuit was brought arguing that all civil marriage violates the Establishment Clause by giving civil recognition to what is at bottom a religious determination (I have heard this floated in academic circles). Wouldn't a married judge have to recuse, because the ruling would either benefit or invalidate her marriage? Wouldn't a single judge have to recuse, because she may someday hope to marry--which would be possible or impossible, depending on her ruling? Obviously this argument is not likely to come to court. But the point is that any lawsuit about the status of the institution of marriage affects everyone who is or may hope to be married.

Fourth, any recusal argument is destined to fail and to be poorly received if it appears that the argument imposes on judges who fall within a historically disadvantaged group obligations that judges outside that group do not bear. So, consider: Is there any situation in which a heterosexual judge would ever be required to disclose to the parties her relationship status (putting aside where, say, the judge was in a relationship with someone who owned stock in the defendant company) or her sexual orientation? If the answer is no, then we cannot impose such an obligation on a gay, lesbian, or bisexual judge.

Finally, when arguments such as this come up, I like to go back to the opinion by Judge Leon Higginbotham, one of the earliest Black district judges, then on the Eastern District of Pennsylvania (and later the Third Circuit) in Commonwealth of Pa. v. Local Union 542, Int'l Union of Operating Engineers. In a Title VII action by a class of black workers, the defendant union sought Higginbotham's recusal. Higginbotham refused in a broad, scholarly, and pointed opinion (one that even he recognized, apologetically, may be "too long and prolix") in which he recognized that the unavoidable theory of the recusal motion is that a black judge cannot fairly adjudicate a case involving race relations. As he put it:

Perhaps, among some whites, there is an inherent disquietude when they see that occasionally blacks are adjudicating matters pertaining to race relations, and perhaps that anxiety can be eliminated only by having no black judges sit on such matters or, if one cannot escape a black judge, then by having the latter bend over backwards to the detriment of black litigants and black citizens and thus assure that brand of "impartiality" which some whites think they deserve.

Now the situation in that case was different than this one, since the recusal argument was based on a speech that the judge had made to a group of Black historians on the history of race relations. So the recusal argument was based not on Higginbotham's status (at least not explicitly) but on the positions he took in that speech. And much of the opinion is about the ability of judges to speak, particularly in academic and intellectual settings, on issues. Higginbotham also scored some shots by noting that the defense attorneys' had previously litigated cases involving black workers before him without objection--because in those cases the attorneys were representing the black workers.

But in some ways, the argument in the Prop 8 case is less defensible. Local 542 was arguing that Higginbotham had been an advocate on the issue, that he had taken sides on the merits. Here, the intervenors are arguing that Walker status as a gay man--or at least a gay man in a relationship--is a per se bar, at least to resolving a case involving LGBT rights, which could benefit him as a LGBT person.

Posted by Howard Wasserman on April 26, 2011 at 03:30 PM in Constitutional thoughts, Current Affairs, Howard Wasserman, Law and Politics | Permalink | Comments (25) | TrackBack

The Fine Print....

I just received an offer from Spirit Airlines promising $50 off of a roundtrip flight only to notice this in the fine print:  " This offer is valid only on new, non-refundable roundtrip bookings made for travel from July 3, 2011 - July 4, 2011."  On reflection, that's not much of a deal.

Posted by Chris Lund on April 26, 2011 at 03:11 PM | Permalink | Comments (0) | TrackBack

Predicting Strategic Defaults

"Strategic default" is the label we're giving to homeowners who make a deliberate choice to stop paying their (often underwater) mortgages even though they have still have at least some capacity to do so.  FICO is claiming that it has new, more accurate tools to predict which homeowners will strategically default.  Their press release is here--the full report requires registration.  Here's the short of it:

FICO Labs researchers have found that, as a group, strategic defaulters tend to be more savvy managers of their credit than the general population, with higher FICO Scores, lower revolving balances, fewer instances of exceeding limits on their credit cards and lower retail credit card usage.  This indicates that strategic defaulters display a different type of credit behavior than distressed consumers who miss payments.

They conclude that, based on these criteria, "[t]he riskiest borrowers were found to be 110 times more likely to commit a strategic default than the least risky borrowers."  That final point is astonishing; I'm amazed that a bunch of criteria that general could lead to such precise results.  If true though, that's really impressive.  I guess the point of all this is to enable banks to preemptively negotiate with those likely to commit strategic defaults.

Posted by Chris Lund on April 26, 2011 at 03:08 PM | Permalink | Comments (0) | TrackBack

Fox on the Wavy Line between Scholarship and Business

Myth of the rational market

One thing you notice about the difference between finance and law scholarship is that while the legal corporate guys don't practice, except as expert witnesses, or maybe with a board gig or two, Fox's book interestingly depicts the way that financial research and financial ventures often are twinned.  Ben Graham did value investing in the 30s and 40s, when there was a lot of value to be had - and he downed tools when he concluded that the values had been priced away.  Andrei Shleiffer and Robert Visny co-founded LSV Asset Management.  Robert Merton and Myron Scholes helped set up LTCM, Fama is associated with Dimensional Fund Advisers, and so on.  I don't think it's in the book, but Bob Shiller recently started an investment bank and took his Series 7 exam.

The list of leading legal scholars who litigate is much lower.  Fox notes the irony that all these believers in the efficient markets hypothesis essentially set themselves up to beat the market (p. 225).  I think it is also interesting to compare the relationship between the two parts of academia and their constituency in the real world.  The legal academy is completely dependent on the willingness of the legal community to enforce guild rules requiring people to go to law school.  But, as judges Harry Edwards and John Roberts have sighed, legal scholarship no longer is of much use to practitioners.

Finance looks a little different.  The ability to turn out employees for financial firms sure must help the finance departments.  And in very real ways, what said departments do is to figure out things you can or cannot trade on.  Then, some of them even go trade on it.  But the relationship is fraught.  The "real world" tends to get a chip on its shoulder when dealing with academics (less the case with law school, I think), while academics crave the respectibility of pure science, rather than the grubbiness of, as Larry Summers puts it, "making ketchup."  Fox is good on exploring that relationship, as he must, given that he is reounting the history of an idea (in scholarship), and its eventual triumph (at least in the views of academics who kept testing it against asset prices, if not actual money managers).

I don't really have a bottom line with regard to these law and finance institutional relationships, but I will say that law and finance have had a very good run in the academy since the 1980s, and I think part of that good run - growing pay, prestige, &c - is due to the fact that both have strong constituencies outside of it.  You can't say that about sociology - or even about much of the rest of contemporary economics.  

Posted by David Zaring on April 26, 2011 at 02:41 PM in Books | Permalink | Comments (0) | TrackBack

Scientific Theories and the Efficient Market

Myth of the rational market

Like David, I thought the theoretical core of Myth was the material on Thomas Kuhn's The Structure of Scientific Revolutions.  Although Myth is an intellectual history of a theory, it really cares about the people who devised the theory, and it spends a lot of time on how they -- as individuals -- shaped its various permutations.  It is careful in its history/sociology; it explains the importance of a particular journal to the field, for instance, and how it acquired that reputation.  Now, however, the theory is in crisis.  And the obvious question is: what next?

It's unfair to demand that an author to tell us more about the future at the end of a history.  After all, that is Myth's criticism of  the efficient capital markets hypothesis (ECMH), in a sense -- you can't depend on the past to predict the future, especially when you're predicting human behavior.  I think the book's assessment of the present is very fair: it shows an uneasy uncertainty, with both "sides" in the debate conceding ground to the other.  But it leaves open the question that remains on everyone's mind: where do we go from here?

I'd like to ask a related but more specific question: how do we go from here?  Do we use the methodologies that developed ECMH to try to figure out what went wrong and move from there?  Or do we take an entirely new approach?  I would be interested in Justin's take on the high-level mathematical theory that drove ECMH and its offshoots.  Do we go back to the mathematical drawing board?  Or do we now turn to empirical social psychology?  Or neuroscience?  Or moral philosophy?  Or some mish-mash of everything?

I think part of what Myth is saying is that we have to be more ecumenical, more open to insights from outside the academic mainstream.  Fox's harshest criticism in the Afterword is for the "mindless conformism" that led economists to assume the ECMH was the only answer.  But academia is driven by methodology, and by differentiating between "good" methodologies and "bad."  Can economic theory as taught in grad schools today take us to the new answers?  Or do economists need to look outside, like Thaler did with Kahneman and Tversky, to find a new approach for the future?

I guess, if I were to frame this in analogies, I'd ask Justin whether he thinks the modern financial theory is more like the theory of evolution, Newtonian physics, or the Ptolemaic universe.  Evolution is still regarded as the scientific consensus, but it initially spawned political outgrowths (e.g., eugenics) that mistakenly carried the ramifications of the theory too far.  In contrast, much of Newtonian physics still applies, but the theory of relativity has debunked some of its further outreaches and, in so doing, changed some of our basic assumptions about how the world works.  And the Ptolemaic universe is now viewed as a crude and simplistic approach that was, perhaps, the best guess at the time, but was wildly incorrect.

Based on my reading of the book, I would guess that Justin would compare ECMH with Newtonian physics.  ECMH will continue to provide the core of future research, but some of its maxims will be disproven and reworked along the way.  So we are still waiting for the "theory of relativity" to come to economics.  But this would imply that economists are the ones to reform economics, just as physicists reformed physics.  Physics is a science of natural phenomenon, while economics is all about human behavior.  Perhaps "economics" needs more non-economists to refine or even rethink some of its models.  That would seem to call on social psychologists and neuroscientists, or even sociologists, biologists, and/or computer scientists, to rework our understandings of how the mind works within the economic structure.  Can these insights be incorporated into economics as it is currently framed?  Right now, from this vantage, it is impossible to imagine economics without mathematical models.  Can we have models without oversimplification?

Posted by Matt Bodie on April 26, 2011 at 01:51 PM in Books | Permalink | Comments (1) | TrackBack

Civil Procedure in Patent Clothing

The Federal Circuit Court of Appeals recently decided an important patent civil procedure case (en banc) about the scope of injunctions. Tivo obtained an injunction against Echostar in a long-running patent infringement case relating to DVR software. The injunction included two features:

1. Don't distribute any new products that infringe, and

2. Disable recording in a particular list of products that have been adjudicated as infringing.

So, Echostar "designed around" the patent, or so it believed. It distributed its modified DVR software in new products and re-enabled recording in the existing products using the modified software.

The district court held that the change by Echostar was insignificant and thus infringing, because its "design around" infringed the patent in a different way. Echostar argued that any attempt to design around the patent warranted a new trial.

The court also held that disable means disable, and reenablement - even if non-infringing - was contempt of court. Echostar argued that the injunction was overbroad, and it was improper to enjoin non-infringing products.

So, the question on appeal was how patent contempt proceedings should proceed. I discuss below.

First, the easy issue  - the disablement injunction. This one is cut and dry. The injunction - though surely overbroad - was not appealed by Echostar, nor did Echostar file a motion to modify the injunction. Quite simply, it misread the injunction (whether intentionally or not is a question I will leave to others, though let this be a cautionary tale).

As such, the court ruled that this was an easy case - if you are enjoined, you must follow the injunction, appeal it, or convince the court that it is overbroad. Overbreadth complaints are not well taken after the injunction is violated.

I'm not a Civ Pro guru, but this seems to comport with my general understanding of injunction law. It is also the rule I followed in practice, which was painful the few times I had a client on the wrong side of a nutty ex parte temporary restraining order in trade secret cases. ("The defendant is enjoined from talking to any of its customers about anything, including the existence of this order.")

The second issue is slightly more interesting - at what point does the defendant get a new trial to determine whether a design around is still infringing? In the past, the court had a bit of discretion to determine whether or not there is a "colorable" difference in products between the original and the design around. Indeed, the first panel to hear Tivo v. Echostar relied on this to say that the district court was within its right to find infringement by other means.

The en banc panel retained the "colorable differences" test with respect to whether a contempt proceeding was proper - if the new product is more than colorably different, then there is no contempt. This consideration looks at the changes to the disputed patent claim elements by the defendant, and considerable changes mean the court cannot even get into an infringement inquiry. In ththis case, the court remanded so the district court could determine whether there are more than colorable differences in Echostar's new product; the language seems like a clear hint that there are colorable differences.

The court added a new wrinkle, ruling that patentees must also show that the new product infringes even if there are no colorable differences.  Of course, this makes a lot of sense - if the injunction is to not infringe, then one must infringe to violate the injunction. But when would there be no colorable differences, but also no infringement? More often than you would think, especially where the infringed element is a very small piece of a big puzzle. 

Further, who decides whether there has been infringement? Should the court make the decision? Is the defendant entitled to a new trial? Here the opinion is not very helpful. Quoted below is the court's announced rule, which seems to imply that this is a judicial function that doesn't require a new trial:

[T]he court is required to evaluate the modified elements of the newly accused product against the asserted claim, on a limitation by limitation basis, to ensure that each limitation continues to be met. In making this infringement evaluation, out of fairness, the district court is bound by any prior claim construction that it had performed in the case. The patentee bears the burden of proving violation of the injunction by clear and convincing evidence, a burden that applies to both infringement and colorable differences.

This seems clear - the district court judge should go element by element to see if infringement remains. Simple enough, right? Except for when the court is not supposed to make the determination. In this very case, for example, the court states: "It is also possible that, in a new infringement proceeding, a fact finder could conclude that the PID filter in EchoStar's redesigned device meets the "parsing" limitation and that the devices continue to infringe the asserted claims, but that should not be decided in a contempt proceeding."

This quote leaves the question unclear - should any infringement be retried? Defendants everywhere would argue that yes, every claim of non-infringement must be retried.

I'm not so sure. I think the best way to read the case is that the retrial of infringement only happens where the court finds colorable differences. In other words, where the redesign is targeted at the specific claim elements that were disputed and proven at trial. If the changes are only small, then the judge can verify that there is still infringement (or not). But where the changes are big and targeted at disputed claim elements, then allegations of continued infringement by other product features must be retried. This interpretation helps reconcile the seemingly contradictory quotes above, and also makes sense in practice.

There are longer term consequences from this rule. First, it might give an incentive to overlitigate, because patentees will now want to prove as many alternate forms of infringement as possible. Of course, maybe they do that anyway. Second, it puts pressure on the rule that winning parties cannot appeal arguments they lost. After all, it is much cheaper to file a contempt claim than to retry infringement in case of a design around, and then appeal the court's errors.

Even so, this seems to be a reasonable marriage between basic civil procedure rules and specialized patent rules about what it means to violate an infringement injunction.

Posted by Michael Risch on April 26, 2011 at 10:56 AM in Civil Procedure, Intellectual Property | Permalink | Comments (7) | TrackBack

Just How Mythical Is the Rational Market?

 MythoftheRationalMarket pb c

The Myth of the Rational Market has lots and lots of people in it, and it's not as polemical as the title makes it sound. These observations came up repeatedly in yesterday's posts—which I found very interesting because they both reflected choices I made early in the process of writing the book. Same goes for David Zaring's question: "Should You Be Assigning the Myth of the Rational Market To Your Class?" (Note from my wife, a law school grad: yes yes yes yes!) 

Myth was not a financial crisis book. If I had turned the manuscript in on time, it would have been published in 2005. Back then, I figured that getting mainstream attention for the book was a long shot, so I needed to write it in a way that would appeal to professors at business schools, law schools, and elsewhere who might assign to their student. I figured that meant (1) not paring the cast of characters down as much as I would have if optimizing narrative flow had been my only concern and (2) not calling people idiots.

I still did leave lots of interesting and important scholars by the wayside. The omission that continues to bother me the most is probably MIT's Andy Lo. He's been one of the most nuanced and constructive critics of the efficient market worldview, and in early drafts of the book he played a significant role. As I pared things down, though, his story mostly disappeared. Then there's the stuff that I just plain missed, like the 1977 Edward M. Miller paper that Lynn Stout discusses. But the goal was to have most of the major papers and scholars that someone in the field should know about represented in the book, rather than just picking four or five people to focus on.

As for my studied neutrality, I wasn't that neutral. Gene Fama feels pretty strongly that I painted him as the villain, while Dick Thaler, Andrei Shleifer, and Larry Summers seem happy enough about how the book turned out. (I'm still not sure whether Bob Shiller, another major figure in my narrative, is aware that the book exists). But yeah, I wanted people on both sides of the rational-market divide to be able to read the book and find it useful.

So what do I think about the efficient market hypothesis? That in certain contexts it's really smart and useful, and in others it's silly and dangerous. Second-guessing the judgments of financial markets is not something to be done lightly, and most of the time most of us are better off not trying to. But that's different from saying that financial markets are always right, and will always steer economies optimally as long as they are freed from government interference. The first claim is one of modesty, the second of hubris. Yet both have been made and continue to be made under the banner of the efficient market.

Posted by Justin Fox on April 26, 2011 at 08:50 AM in Books | Permalink | Comments (0) | TrackBack

Monday, April 25, 2011

The Market Myth

Myth
For initiates, as Fox shows, the idea of the rational market seems to have arrived with the force of revelation:  “After about ten minutes it just hit me, this has got to be true.  The idea for me was so powerful; I said to myself, ‘This is order in the universe.’” (105) (quoting Rex Sinquefield, MBA student at the University of Chicago circa 1970 and former Catholic seminarian).

To the extent that the idea of the rational market is not just an ordinary factual proposition but a framework for ordering experience—something that “has got to be true”—then it becomes difficult to evaluate.  Perhaps this is why Fox’s title describes the rational market as a “myth.”  The word choice suggests that the rational market is more than a false belief.  When faced with a myth, we are more likely to ask whether it is useful than whether it is literally true.  A myth is a way of explaining a natural or social phenomenon that makes it part of a broader world view, investing it with symbolic value that can legitimate and reinforce norms of behavior.  The interpretation of myth, therefore, cannot be separated from the human context in which it arises.

Fox appears to take this approach.  He observes that the straightforward problem with the theory of the rational market is that it was clear all along “that price movements also sometimes reflected false information, incorrect interpretation, and plain old mood swings.” (102)  Yet, rather than dismissing the rational market idea as utopian economics, Fox maintains that the “unwillingness to give up on theories even when their underpinnings had been largely demolished was, like so many things about rational market finance, not entirely crazy.” (235)  As Fox recounts, economists have made important advances using the rational market as a guide, even if their fundamental assumptions were shaky at best.

In the end, Fox concludes mildly that the rational market can help shape individual judgment but should not “substitute” for it.  There is more to say about the relationship of myth, financial theory, and markets, and it is a sign of the quality of Fox’s book that it rewards the reader’s attention and invites further inquiry.  Given space limitations, I will simply close with a question:  does the rationality of the market depend upon who is asking?  Finance scholars, investors, government regulators, bankers, and taxpayers may have different perspectives.  After all, a theory that usefully motivates academic research can still prove destructive if let loose in the world.

Posted by Benjamin Means on April 25, 2011 at 08:31 PM in Books, Corporate | Permalink | Comments (1) | TrackBack

Should You Be Assigning The Myth of the Rational Market To Your Class?

Myth of the rational market

Tomorrow, I'll look more at a particular aspect of the The Mythof the Rational Market.  Today I want to look at the big picture, which I will do by asking whether this intellectual history of a scholarly movement - one almost entirely composed of economists, as Matt and Lynn's posts have observed - belongs in academic articles and on syllabi.  It's a great account, and certainly synopsizes the right people.  I could see it working very well at Wharton, particularly in a non-required, paper-oriented course.  Moreover, because I'm a fun loving guy, I recently listened to Robert Shiller's basic finance lectures at Yale, and many of the economists covered in the course - Holbrook Working, Modigliani, Fama and French, &c - are in the book, so it could be the right kind of supplement for hardworking students in survey courses too. 

The book is focused on finance.  We don't get too much of "Fama lifts weights every day," or "Merton Miller never did stop talking about the enormous marlin that got away from him and Hemingway off of Cuba."  I actually like those stories, and find that they help me to keep straight the arguments between the weights guy and the distance running guy, or whatever.  And so while no one wants cute overload, my personal taste for cute was not met by the book - though, that's also a reason why the book works in an academic context.

What about the method?  Well, you have to buy into the concept of intellectual history in the first place, but one of IH's huge methodological problems, selection bias, is mitigated by Fox's very large (to my mind, quite comprehensive) cast of characters.  I think there's a patina of Thomas Kuhn's Structure of Scientific Revolutions here, which is discussed most on pp.203-05.  Finance got quantitative and rationalist in an effort to understand an important phenomenon that many market participants - the scientists working under the old paradigm - were getting exactly wrong by speculating, following charts, and possibly even value-investing.  Many low hanging fruit were picked.  And now, Fox concludes, we're still in the world of Ptolemean epicycles, given that the first thing that all behavorial economists say is that markets work.  Here's his winning summation: "The creator of the efficient market hypothesis no longer believed that prices were right, while some of the efficient market's fiercest critics found themselves teaching in the classroom that ... prices were right" (p. 300).  I'd like the book even better if we had an even stronger sense of what they external forces that drove the turn to rationality in the first place, and its takeover.  Was it science envy?  Soemthing technocratic about the 20th century?  The usual expert conspiracy against the laity?  If Fox has a view, I think he held it close, which makes the book difficult to sum up in a bumper sticker, if that sort of thing is to your taste.

Posted by David Zaring on April 25, 2011 at 06:43 PM in Books | Permalink | Comments (1) | TrackBack

The Real Reason Why K&S Dumped DOMA?

I haven't seen all of the stories on today's news re: King & Spaulding, former SG Paul Clement, and the DOMA litigation, but I wonder if we might be missing part of why this case became increasingly unpopular within K&S... Apparently, the following clause was in the contract between the House of Representatives and the firm:

[P]artners and employees who do not perform services pursuant to this Agreement will not engage in lobbying or advocacy for or against any legislation … that would alter or amend in any way the Defense of Marriage Act and is pending before either the U.S. House of Representatives or the U.S. Senate or any committee of either body during the term of the Agreement.

Whether or not there are legal problems with enforcing such a provision against the many employees of King & Spaulding, isn't it likely that internal opposition within the firm in light of this proviso might have had just as much to do with today's news as the external, political pressure? 

Update: This is what I get for not staying glued to my computer. See Huffington Post for more on the contract issues... But if this meme is already out there, how come it's not part of any of today's coverage?

Update, Part II: See also Metro Weekly's coverage here.

Posted by Steve Vladeck on April 25, 2011 at 02:24 PM in Constitutional thoughts, Current Affairs, Steve Vladeck | Permalink | Comments (2) | TrackBack

A Cast of Thousands

Myth-paperback

There are fifty people in the "Cast of Characters" at the end of The Myth of the Rational Market.  I get the feeling, though, that perhaps this was the publisher's limit.  "Thousands" is an exaggeration, but there are dozens if not hundreds of folks running through this book.   I read the "Cast" before digging in, and I have to confess to some skepticism that these people would all be brought to life in a vibrant yet manageable way.  But I think the book pulls it off.

Explaining finance theory through people is a brilliant but well-nigh impossible approach.  The Scylla and Charybdis of this enterprise are simplifying things into banality, on the one side, or swirling down too deep into the complexity on the other.  The book treads closer to the complexity, which -- as an academic -- is where you want the error to be.  But I think both experts and interested non-experts will be able to engage with this tome on its own terms.  

Myth is focused on the characters.  From the colorful Irving Fisher and the overlooked Holbrook Working, up through the indefatigable Eugene Fama and the chastened Michael Jensen, Myth brings the people behind the theories into vivid display.  Like Lynn, I might have liked to see the book take on another academic or two.  Jensen's work was incredibly influential on the law of business and finance, and Henry Manne's article on the market for corporate control gets its appropriate due.  But the real "translators" for the finance literature in law were Frank Easterbrook and Daniel Fischel.  Fischel's book on Milken is mentioned in passing, but The Economic Structure of Corporate Law was critical in making finance theory into corporate law maxims.  In addition, it might have been nice to see a digression into Coase, Williamson, and transaction cost economics.  But this really would have been a digression in a book focused more on the stock market than the firms that make up that market.

 Fox's editors are probably rolling their eyes right now, as "more academics" is probably not what they were looking for.  Indeed, it is remarkable how well the book caters to the interests of an academic crowd while at the same time remaining readable and engaging.  With one or two exceptions, we learn almost nothing about the character's personal lives, but their intellectual lives are brought into striking relief.  We learn enough personal details to remember them without losing the focus on the theories that are the true subject of inquiry.  I loved Myth's engagement with ideas -- it is fascinated by the details of CAPM, the Black-Scholes(-Merton) pricing model, and behavioral economics, to name a few.  Despite its subtitle, it is more interested in theory than in practice, and it does just about as good a job at explaining the intellectual history of the efficient capital markets hypothesis as I think could be done.   But it does so by discussing the people involved, and how their careers were shaped by theory.

In a follow-up post, I want to discuss what the book concludes in terms of theory, and push a little bit on the book's ultimate message.  But I would strongly encourage those who know the models, or want to know the models, to get the better understanding that Myth provides.

Posted by Matt Bodie on April 25, 2011 at 11:52 AM in Books | Permalink | Comments (0) | TrackBack

Lynn Stout on "The Myth of the Rational Market"

Here are Lynn's thoughts for the Club:

The Myth of the Rational Market is a book about the intellectual history of financial theory.  Described thus, you might think it would make readers’ eyes glaze over.  But Justin Fox makes the intellectual history of finance fascinating: full of drama, intrigue, conflict, triumph, and defeat.

He accomplishes this by focusing not only on the key ideas of 20th century finance, but also on the personalities who developed those ideas.  (Like any good playwright, Fox provides his readers with a  “cast of characters.”)   He describes the tragedy of Irving Fisher, “the greatest American economist of the first half of the twentieth century,” now remembered mostly for his ill-timed 1929 prediction that the stock market had reached a “permanently high plateau.”  He recites the intellectual odyssey of Michael Jensen, a guru of market perfection who became enthralled in his later years with the idea that markets rely on the integrity of those who participate in them.  And—delightfully and at last—he tells the tale of Jack Treynor.  (Treynor’s story is known to many in finance, but few outside it.)  In the late 1950s, Treynor, then a consultant at Arthur D. Little, developed what is now widely conceded to be the first Capital Asset Pricing Model (CAPM).  He showed his draft to John Lintner of Harvard Business School, who passed the manuscript on until it eventually found its way into the hands of William Sharpe, a UCLA economics doctoral candidate.  Sharpe published his own version of the CAPM in September 1964, and in 1990 was awarded the Nobel Prize in Economics for his work.  (Note to Nobel committee: Jack Treynor is alive and well in California, and it’s not too late to call.)

With stories like these, almost any good writer could make finance palatable.  But Fox does more; he not only brings out the personalities of 20th century finance, he also brings out the “personalities” of finance theories themselves, including the tantalizing utopia of the rational, efficient market that prices all stocks at fundamental value; the Black-Scholes options pricing model with its hidden but fatal assumption that the future will repeat the past; and Jensen’s “agency cost” theory of the firm, the intellectual origin of modern managers’ obsessive quests to increase “shareholder value.”  He shows how these ideas eventually were challenged by, and have had to wrestle (often to an uneasy standstill) with new theories, like the idea of irrational investors whose emotions and “adaptive expectations” cause them to trade too much and to systematically under- and overvalue securities.

It should now be apparent I am a serious fan of this book.  Nevertheless, like any good reviewer, I feel compelled to suggest there was one more story, and one more personality, that Fox perhaps should have mentioned.  This is the tale of how finance theory has tried to ignore the problem of “heterogeneous expectations,” meaning the reality that investors subjectively disagree with each other in their predictions for the fate of the market.  When William Sharpe first tried to publish his CAPM, it was rejected by reviewers at the Journal of Finance on the grounds that his assumption that investors  have “homogenous expectations” (make identical estimates of the risks and expected returns from different securities) was too unrealistic.  Sharpe managed to convince the Journal the CAPM still had value, and his paper was eventually published.  Ever since, most modern finance models explicitly or implicitly assume homogenous expectations.  But in 1977, Edward M. Miller published a ground-breaking paper in the Journal of Finance arguing that if investors disagreed, one could expect bubbles and crashes and stock prices might easily fail to capture fundamental value.  Because Miller’s paper flew in the face of the idea of a rational and omniscient market, it was highly controversial, and he has since moved away from the shark-filled waters of finance to write on less contentious topics, like IQ and race.  But after the Crash of 1987, Miller’s idea of investor heterogeneity has begun to creep back out from the shadows, and a number of contemporary theorists have been bold or foolish enough to explore how it might explain anomalies like the 1990s tech bubble, or stock markets where every share trades hands on average every four months.

But this is only very, very small defect in an otherwise wonderful volume.  The Myth of the Rational Market is now full of my notations, and I plan to keep it on the shelf near my desk for many years. 

Posted by Matt Bodie on April 25, 2011 at 10:52 AM in Books | Permalink | Comments (1) | TrackBack

My op-ed on the ministerial-exception case

We've had a number of posts here at Prawfs about the Court's upcoming ministerial-exception case, Hosannah-Tabor.  In the hope that the issue is not completely played out:  Here is my take in today's USA Today:

[I]t is well established that a “ministerial exception” to job-discrimination laws prevents secular courts from jumping into religious disputes that they lack the authority to address or the competence to solve. The question in the Hosanna-Tabor case is not so much whether the exception exists — it does, and it should — as how it should be understood and applied. . .

As the court of appeals recognized, this exception is “rooted in the First Amendment’s guarantees of religious freedom.” Indeed, a religious-liberty promise that allowed governments to second-guess religious communities’ decisions about what should be their teachings or who should be their teachers would be a hollow one.

To be clear, the ministerial exception is constitutionally required and valuable, but it does not rest on assumption that religious institutions and employers never behave badly. Certainly, they do. Its premise is not that churches are somehow “above the law.” They are not, and should not be. Its point is not “discrimination is fine, if churches do it.” It is, instead, that there are some questions secular courts should not claim the power to answer, some wrongs that a constitutional commitment to church-state separation puts beyond the law’s corrective reach, and some relationships — such as the one between a religious congregation and the ministers to whom it entrusts not only the “secular” education but also the religious formation of its members — that government should not presume to supervise too closely.

To be sure, not every employee of a religious institution is a “ministerial employee,” and religious institutions — like all employers — have many legal obligations to their employees. Although there are difficult questions to be asked, and many fine lines to be drawn, when it comes to interpreting and applying the First Amendment’s religious-freedom guarantees, it cannot be the role of secular government to second-guess the decisions of religious communities and institutions about who should be their ministers, leaders and teachers, any more than they should review their decisions about the content of religious doctrines.

Last October, many enjoyed a laugh at the expense of Christine O’Donnell, then a candidate for one of Delaware’s U.S. Senate seats, when she questioned the constitutional pedigree of the “separation of church and state.” Her critics were a bit too quick to poke fun. In fact, “separation of church and state” does not appear in the Constitution. Still, and even though it is often distorted and misused, the idea is a crucial dimension of religious freedom. We wisely distinguish, or “separate,” the institutions and authorities of religion from those of government. We do this, though, not so much by building a “wall,” but by respecting the genuine autonomy of these different spheres. We do this not to confine religious belief and practice but to curb the ambitions and reach of governments. . . .

Posted by Rick Garnett on April 25, 2011 at 10:28 AM in First Amendment | Permalink | Comments (0) | TrackBack

Shocking Alan Greenspan

Earlier this month, a bipartisan Senate subcommittee concluded that the financial crisis “was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”  The subcommittee was hardly staking out new ground.  An emerging consensus holds that self-interested bankers, mortgage brokers, and other players took advantage of weak or broken regulations to profit at the expense of investors, homeowners, and the larger society.  Indeed, some commentators have begun to wonder why no one has yet been indicted.

In the Myth of the Rational Market, Justin Fox tells a different story.  He leaves to others most of the reporting on too-big-to-fail financial institutions, mortgage-backed securities, and other so-called weapons of mass financial destruction.  For him, the financial crisis is of particular interest because it represents the final dismantling of the idea of the rational market.  In the aftermath of disastrously leveraged and complex financial products that seem to have been premised on the notion that real estate prices can only go up, few would still claim that markets always know best.

Yet, the idea of a rational market is far from a straw man, and Fox’s main contribution is to describe in accessible terms how the idea developed, how it was championed, and how its defenders have addressed or ignored a variety of criticisms and contradictory evidence.  Fox begins with a vignette that highlights his thesis:  former Federal Reserve Chairman Alan Greenspan’s remarkable admission that he was wrong to believe that markets are reliably self-correcting.  In testimony before the House Committee on Government Oversight and Reform, Greenspan stated that when the markets crashed, he was “shocked” and that the “whole intellectual edifice collapsed.”  In Fox’s pithy summary, Greenspan conceded “[t]hat he had misunderstood how the world works.”  

Greenspan's testimony is the stuff of a Tom Stoppard play:  an intellectual brought low by the ugly realization that his elegant theories can't be reconciled with our perpetually inelegant reality.  If Stoppard needs a new subject to tackle, Fox's book belongs at the top of his reading list.  It is a credit to Fox’s account that he presents ideas fairly and in context so that it is possible to appreciate the basis for Greenspan’s faith in the rational market as well as its shortcomings.

At times, though, Fox is almost too evenhanded.  In a follow-up post, I will point out some potential ambiguities in Fox’s analysis of what the rational market is and what it does.

 

Posted by Benjamin Means on April 25, 2011 at 09:09 AM | Permalink | Comments (0) | TrackBack

A Story About Pensions...

The Economist's special report this week is on pensions.  (My revealed preferences indicate that the Economist is apparently my favorite magazine; we get the New Yorker and Sports Illustrated, but they both end up being mostly aspirational.)  Anyway, the piece offers some nice charts and stats, and a eye-catching story as opener:

WHEN GERTRUDE JANEWAY died in 2003, she was still getting a monthly cheque for $70 from the Veterans Administration—for a military pension earned by her late husband, John, on the Union side of the American civil war that ended in 1865. The pair had married in 1927, when he was 81 and she was 18 . . .

I suppose the marriage might well indeed have been related to the pension benefits, but who wants to be cynical this early on a Monday morning?   P.S.  When did the Economist put its articles on-line for free?  Am I crazy--I remember them having a paywall not too long ago?

Posted by Chris Lund on April 25, 2011 at 08:35 AM | Permalink | Comments (2) | TrackBack

Book Club on "The Myth of the Rational Market"

Myth-paperback

Welcome to the Book Club on "The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street," by Justin Fox.  We'll be starting with contributions from Benjamin Means, Lynn Stout, David Zaring, and myself, with reactions from Justin Fox to follow.  We hope you'll particpate in the comments.

Posted by Matt Bodie on April 25, 2011 at 08:26 AM in Books | Permalink | Comments (0) | TrackBack

Friday, April 22, 2011

How Many Articles?

For the past couple of years, and for reasons akin to those that impelled the bear to go over the mountain, I’ve been working in fits and starts on compiling data on all the articles published in 37 general law reviews over a fifteen-year period.  My ultimate goal, which I’ll see if I can reach by the time of my next blogging stint, is to try to get at some of the perennial questions such as how strong the correlation between author prestige and journal rank really is, whether some journals have been consistently more likely to publish authors from lower-ranked schools, whether the authors in these journals tend to be at an early stage in their careers, and so forth.  For now what I’ve got to report is some basic information on the numbers of articles published, which I’ll set forth below.

First, some background.  By “articles” I mean pieces traditionally designated as such in law journals, and more specifically those that got there through the traditional submission process (as opposed to being contributions to symposia, named lectures, and other contributions that are likely to have found their place through some other process).  The 37 journals included represent one effort to capture something of a top-35 (but done, of course, after the fashion of the 11-team Big Ten).  No doubt it’s not the same list as the 37 journals in your top 35, and I’m not even sure I’d identify the same list were I to do it today. 

The time period involved starts in 1993 – for those journals that publish volumes tied to a calendar year, the time period was 1993-2007; for those that don’t, the period began with the 1993-94 volumes and ran through 2007-08.  There’s undoubtedly an imprecision here that makes specific year-by-year comparisons unwise, but some general trends emerge nonetheless.

Over the entire 15-year period, this group of journals published 6248 articles, which works out to an average of 416.5 per year, or 11.26 per journal per year.  That rate did not remain consistent over time.  In the first year I looked at, the average journal published 9.6 articles.  In the last year, the number was 13.7.  (It’s worth noting, however, that both of those numbers are roughly .9 off from the adjacent years, so one or both may create the impression that the trend is greater than it really is.)

Here’s a graphic representation.  The x-axis represents the year, and the y-axis the average number of articles per volume of each journal.

 

 Perhaps not surprisingly, the beginning of the relatively steep increase near the end of the period roughly coincides with the top journals’ 2005 announcement of a preference for shorter articles.

And here, from highest to lowest, are the average annual numbers of articles published by each journal:

Iowa                16.1

Michigan        14.7

Wm & Mary   14

Vandy             13.7

Ohio St.           13.6

UCLA               13.3

Stanford         13.1

Georgetown   13

Columbia        12.8

N-western      12.8

Texas              12.4

Minn               11.9

USC                 11.9

Virginia           11.8

NYU                11.7

Wash U           11.3

Average:        11.26

Cal                   11.2

Cornell            11.2

Yale                 11.2

Illinois             11.1

Penn               11.1

Wisconsin       10.9

B.U.                  10.6

Chicago           10.3

Emory             10.3

Fordham        10.1

Indiana LJ      9.9

Wash & Lee    9.5

Alabama         9.1

Harvard          9.1

Duke               8.7

B.C.                  8.6

Colorado         8.3

Georgia:          8.2

U Wash           7.3

GW                  7.1

These numbers are not at all stable on a volume-to-volume basis.  The irregular occurrence of symposia seem to be the greatest cause of variance, but there are others.  The highest number of articles in a single volume was 32 in Stanford during the last year examined; the lowest was 3 in USC during the first (both contributing, no doubt, to the effect noted above).

 

Posted by Chad Oldfather on April 22, 2011 at 07:12 PM | Permalink | Comments (14) | TrackBack

Tiger Mother Redux...

My Prawfsblawg guest membership would be taken away if I didn’t have some post on the Tiger Mother.  For your academic side, consider accounts of what Time Magazine calls the “Anti-Tiger Mother Approach,” a moniker used to describe Finland’s successful education system.   For your sensationalist side, consider dropping by the “new tiger in town"—the blog of Sophia Chua-Rubenfeld.  Lots of good stuff there—like how Amy Chua’s sense of generosity comes in part from the time she spent working at McDonalds.  You can also follow them both on Twitter.

Posted by Chris Lund on April 22, 2011 at 10:18 AM | Permalink | Comments (0) | TrackBack

Social conservatives and graduation speakers

There is a new controversy at the University of Michigan Law School, which has invited Republican Sen. Rob Portman of Ohio (who previously has served in the House of Representatives and as U.S. Trade Representative and head of OMB under George W. Bush) as its graduation speaker. A number of students  have complained to Dean Evan Caminker about the choice, citing Portman's record on gay rights--which include past votes in favor of a constitutional amendment banning same-sex marriage, the Defense of Marriage Act, and an unsuccessful 1999 proposal to prohibit gay people from adopting.

This calls to mind a similar debate three years ago over Washington University awarding an honorary degree to Phyllis Schlafly. Interestingly, the Wash U. objectors at least attempted to frame their objections to Schlafly in neutral terms: It was not about her political views (such as opposition to ERA, same-sex sexual relations, and feminism generally), but about her anti-intellectualism and demogoguery, although at the time I questioned whether those process points could be so easily separated from her substantive political views.

By contrast, a petition circulating among 3Ls, calling for Dean Caminker to withdraw the invitation, states:

We are not writing because Sen. Portman is a Republican, nor because he served in the Bush Administration. Neither is a fair or principled reason to retract his invitation. Rather, we are discouraged by this choice because Sen. Portman vocally and actively supports denying equal rights to gays and lesbians, many of whom will be attending this year’s Senior Day ceremony.

That is an explicit objection based on (some of) Portman's substantive views, without pretense to neutrality or process. The idea that Portman's views on these political issues constitute any more of a "fair or principled reason to retract his invitation" than his simple party affiliation seems dubious. Either objection goes to the heart of his substantive viewpoints.

The question becomes whether objection based on those viewpoints can be principled. We really are back to the question--Portman explicitly, Schlafly implicitly (although really just sub silentio)--of what political and social positions and viewspoints are simply beyond the pale. The view in both cases is that opposition to marriage equality and GLBT rights is nothing more than simple bigotry, an illegitimate position that should not be given the elevated platform of a graduation speech and that is "deeply unfair" to impose on the students forced to sit through it. But that seems to mean, ultimately, that, for these students and many others, even mainstream social-conservative views on questions that still are being contested have no place in a position of honor in the academy. (By the way, I do not believe there is a difference, for current purposes, between graduation speaker and recipient of an honorary degree. One could say that the latter involves some university endorsement of everything the recipient has done and believes. But at least some individual UM students, when interviewed, have suggested that letting Portman speaks involves just such an endorsement of all of Portman's political views).

Last time, in trying to determine whether the objections to Schlafly were really substantive, I asked "if not Schlafly, then who"--what person with similar views on GLBT rights would be acceptable.  Apparently for some students, at least, the answer does not include sitting U.S. Senators.

 

Posted by Howard Wasserman on April 22, 2011 at 08:43 AM in Howard Wasserman, Life of Law Schools, Teaching Law | Permalink | Comments (40) | TrackBack

Thursday, April 21, 2011

Bratz vs. Barbie Saga Twist

Today, after seven years of litigation, and after Judge Kozinski reversed the first jury award in favor of Mattel, a new jury verdict declared clear victory for MGA. In a stunning turn of events, the new jury ordered Mattel to pay MGA $88.5 million in damages for trade secret misappropriation – almost the same amount which the previous, overturned, jury had ordered MGA to pay Mattel in the earlier stages of litigation. MGA's chief executive, Isaac Larian, wept tears of joy declaring that the eventual victory “very well shows that in America, even huge corporations are not above the law.” In my forthcoming book, Innovation’s Edge: The Upside of Talent Wars, Leaks, and Constructive Destruction, I consider these kinds of market battles over human capital and ideas.

The Barbie-Bratz legal saga began in 2004, the same year that Barbie split from Ken (which Mattel no doubt saw as a publicity stunt and others interpreted as an inevitable end given lingering rumors about Ken’s sexuality). Mattel launched its attack against Bratz claiming that one of its own employees, Carter Bryant, secretly created the competing doll. Bryant was a fashion and hair style designer for high-end Barbie dolls. But he had an idea for multi-ethnic trendier girls - Zoe, Lupe, Hallidae, and Jade, who eventually made it to market as Cloe, Yasmin, Sasha and Jade: the first generation of Bratz dolls. While still employed by Mattel, he pitched the idea of Bratz to MGA Entertainment. Bryant made initial designs out of pieces he found in the Mattel recycling bin: a Barbie body and Ken (Barbie’s ex) boots. In 2000, Bryant moved to MGA. The company introduced Bratz to the toy market a year later.

Mattel sued MGA for ownership over the Bratz copyright because Bryant, the creator of Bratz was Mattel’s own employee, who secretly made drawings of the new doll’s during his employment. In Mattel internal memos, executives described the Bratz competition as a "rival-led Barbie genocide". The memo said, "this is war and sides must be taken: Barbie stands for good. All others stand for evil." While at Mattel, Bryant had signed an invention clause under which he assigned his inventions to his then-employer. Mattel argued that it owns the drawings, and a major stake in the Bratz Empire, because Bryant had a contractual agreement to turn over any design inventions to the company while he was working there. The trial continued thereafter between the two companies, Mattel’s lawyers insisting that “there is a right way and a wrong way to compete, and what [Bratz] did here is crossing that line.” At first, California jury agreed. It found that MGA had intentionally interfered with the contractual duties that Bryant owed to Mattel as an employee and aided and abetted his breach of loyalty. Although Mattel also asserted numerous claims of unfair competition, trade secret theft, and conspiracy, the jury ultimately awarded Mattel with $100 million stemming from MGA’s intentional interference with contract and copyright infringement based on the employment contract Bryant had signed.

On appeal however, Judge Kozinski, of the Ninth Circuit Court of Appeals opened with a muse about the connection between being fierce and fiercely competing:

"Barbie was the unrivaled queen of the fashion-doll market throughout the latter half of the 20th Century. But 2001 saw the introduction of Bratz, “The Girls With a Passion for Fashion!” Unlike the relatively demure Barbie, the urban, multi-ethnic and trendy Bratz dolls have attitude. This spunk struck a chord, and Bratz became an overnight success. Mattel, which produces Barbie, didn’t relish the competition. And it was particularly unhappy when it learned that the man behind Bratz was its own former employee, Carter Bryant."

The copyright dispute over Bratz raises a central question of whether an abstract idea can be pre-assigned and exclusively owned. California’s aversion to over control comes through in the distinction between an idea and the expression of that idea colorfully described by Judge Kozinski in the Ninth Circuit’s opinion:

 “Degas can't prohibit other artists from painting ballerinas, and Charlaine Harris can't stop Stephanie Meyer from publishing Twilight just because Sookie came first. Similarly, MGA was free to look at Bryant's sketches and say, ‘Good idea! We want to create bratty dolls too.’”

             In the new trial, MGA countered Mattel’s claims for ownership over Bratz with its own claims about trade secret misappropriation. MGA accused Mattel of gaining entry to toy fairs with fake IDs to steal trade secrets. The new jury found in favor of MGA and dismissed all claims of ownership of Bratz by Mattel. Despite the final verdict in the Barbie/Bratz saga, a notable result of the litigation has been the decline of both dolls. In the end, both companies ended up paying hundreds of millions of dollars in legal fees to pursue the deadlocked trials. No one really won, and the trial saga raises once again the question of how much litigation and employment intellectual property controls are too much?

Posted by Orly Lobel on April 21, 2011 at 08:58 PM | Permalink | Comments (2) | TrackBack

The Gaga Saga as a law-and-norms story

What little I observe of entertainment news has suggested that nothing titillates audiences and outlets more than a public spat (or, as the case may be, kerfuffle) between two celebrities.  Yesterday’s to-do du jour pitted Weird Al Yankovic against Lady Gaga in the court of pop-cultural opinion.  As Al described in a thorough blog post, he wanted to parody Gaga’s “Born This Way” with a knockoff titled “Perform This Way” that would poke fun at Gaga’s outrageousness (raising the question whether you can parody someone whose style borders on parody anyway).  Al, as is his custom, gave Gaga (through, it appears, her management company) copies of the lyrics, and asked for permission to make the parody.  Given that Gaga’s original song is “an earnest human rights anthem” (Al’s words and opinion, not mine), Weird Al also offered to give any profits from the song to charity.

Gaga’s management company responded that she’d have to hear the song before approving, so Al went to the considerable time and expense of creating a fully mastered sound recording, and submitted it to Gaga’s management company.  Gaga apparently finally formed an opinion:  No.  Al, peeved (in part because he seems to be aware that he probably does not even need to seek permission for parodies under federal copyright law’s fair use doctrine), went ahead and released the song on YouTube without the accompanying video that he’d been planning. 

The internets responded quickly, as they do, and the verdict was squarely on the side of Al.  The comments on Al’s blog post about the Gaga Saga were particularly malevolent toward Lady G, and in the midst of the bile-fest, a reversal occurred.  Now the word from her camp (pun fully intended) was that Gaga loved the song, and was thrilled to give permission and have Al parody the living hell out of it, video, album, and all.  The story is that Lady Gaga had never heard “Perform This Way,” and that her manager had wrongly reported that she wanted to deny permission for the parody (indeed, he appears never to have actually told her about the parody).

This ultimate outcome isn’t surprising.  Weird Al always asks for permission to do his parodies, and he almost always gets it (though there have been other testy misunderstandings, including one involving Coolio and Weird Al’s “Amish Paradise” parody of “Gangster’s Paradise”).  But how the Gaga saga unfolded is unusual, and, I think, interesting in what it tells us about how social norms interact with, and often push to the sideline, legal doctrines that formally mediate the rights of owners and users.  I say more about the interaction of copyright law and social norms, and what the Al/Gaga tiff says about it, below the fold.

Most law professionals, I’d wager, tend to be legal centralists.  That is, we assume that law is a, if not the, primary determinant of people’s conduct.  Criminal laws purportedly make would-be wrongdoers think twice before doing something awful like jaywalking or marrying someone of the same gender.  Economic actors are thought to bargain in the shadow of the baseline entitlements law creates.  But lots of evidence suggests that this legal centralist account often fails.  I just finished a paper analyzing an elaborate regulation scheme that arose, and persists, with little if any thought about available IP law.  And the Gaga saga provides an object lesson illustrating how disputes can arise and be resolved in ways that are unrelated to, and in some respects even inconsistent with, what law might predict.

Start with Weird Al’s practice of seeking permission for his signature parodies.  This move seems puzzling from a legalist perspective because Al’s works are pretty clearly the kinds of uses that are permitted pursuant to the fair use provisions of the Copyright Act.  They’re parodies (because they mock the original work directly), and while that’s not dispositive of the issue, parodies are a form of use that’s strongly favored as fair following Campbell v. Acuff-Rose and its progeny.

And yet despite his apparent entitlement to parody without permission, Weird Al goes about seeking it.  Why?  My guess is that this practice is driven by norms and practices distinctive to the music industry.  By asking artists whether he can parody their songs, Weird Al shows respect to his fellow musicians—a gesture whose effectiveness may be enhanced by the fact that it’s unnecessary.  (Consider by comparison the tradition of asking a bride’s father for permission to marry his daughter—everyone knows that it’s not necessary, but it’s a nice way of building goodwill by performing deference.)  And showing this kind of respect likely has long-term salutary effects for Al, by building a store of goodwill within the music  world, and by forestalling litigation that might otherwise ensue (if only out of spite).

The trick, of course, is:  what do you do when you ask for permission to do something you’re entitled to do anyway but get denied?  That was the conundrum in which Al found himself yesterday, and a legal centralist would likely predict that he’d go ahead and exercise his prerogative and parody away.  But he didn’t:  Instead, Al took a halfway measure, apparently conceding not to include the "I Perform this Way" in the forthcoming album, but blogging about the episode at length, and posting the song (sans video) on YouTube with notes about how Gaga had negged it.

The ensuing response was swift and conclusive:  the court of public opinion roundly rejected Lady G’s rejection of the parody, and delivered its verdict in terms ranging from tactful to the kind of unhinged-crazy that is so distinctive to internet threads.  I cannot explain why or how Gaga and her people reversed themselves, but I strongly suspect the outpouring of vitriol had something to do with it.  At the very least, the angry tweets and posts brought the issue to the attention of Gaga, who learned that her manager had negged the song without her knowing about it.  Law again appears to have played little role.  One can imagine a legalist narrative (Weird Al says, “I’m entitled to make this song anyway per fair use, so it’s going in the album, like it or not,” and in light of that admonition, Gaga capitulates), but instead we see social forces—mass outrage, directed shaming—doing the work.

It’s tempting to read too much into stories like this.  Legal debates (and non-legal debates, obv.) often get reified into their polar categories, with aficionados of each side claiming that an anecdote illustrates the truth of their preferred camp (“I told you law was ir/relevant!”).  I want to resist this temptation here, first by pointing out that (again, obv.) this single anecdote can’t do sweeping analytical work, but also by stressing that it shows at most that law is marginal, but not irrelevant.  Perhaps Weird Al’s success in gaining permission for his parodies is due in large part to the owners’ knowledge that he’s likely entitled to parody them anyway, so resistance would be futile (though it should be observed that Al was doing this well before Campbell adumbrated parody’s status as a favored category of use in 1994).  And perhaps the outrage about Gaga’s initial response was due to her denying Al what was perceived to be his entitlement at law.  So the players in the Gaga saga may not have been explicitly conducting themselves in the shadow of law, but law may have been lurking in the shadows in ways that are not obvious.

Finally, it’s also tempting to conclude that when a story like this works out for the best, that it’s more evidence that social norms tend to produce normatively attractive outcomes.  But this, too, would be premature, I think.  In this case, the screaming cacophony of the internet pushed in favor of, and may have helped achieve, what seems like the right result (under law certainly, and probably also normatively).  But this sanguine story shouldn’t lead us to be uncritically enthusiastic about the wisdom of cyber-crowds.  One sobering note is that the many posters who excoriated Lady Gaga got their facts exactly wrong.  If her official story is true (and I have no reason to think it's not), Gaga never actually denied permission for “I Perform This Way,” but you won’t see any retractions from the brave anonymous posters who were calling for her scalp before getting all the information. This isn’t to suggest that the collective voice of the internet is inevitably bad, either, but only that it has no intrinsic moral valence.  This voice is a powerful force, like gravity or desire, and like those other natural forces can be directed at bad as well as good ends.

Posted by Dave_Fagundes on April 21, 2011 at 08:16 PM in Culture, Intellectual Property | Permalink | Comments (5) | TrackBack

Patent Troll Myths

My study of non-practicing patent plaintiffs was sparked by a discussion with a colleague about where patent trolls come from. My theory was that patent trolls tended to enforce patents that startups obtained, but that lay fallow when the startups lost funding. Unfortunately, I had no data to back up my intuition, nor did anyone else. So, I thought I would gather that data.

Thus began two years of data gathering. I started with the top 10 most litigious NPE's (since 2003), as reported by Patent Freedom. With some help from Patent Freedom, I then found every case I could involving these NPEs (1011 in total) and then found every patent asserted in those cases (400 total). I then drilled down, recording information not only the patents, but who obtained them. Finally, I gathered information about the organizations that obtained patents (121 total) .

Below is a summary of some interesting things I found. There's a lot more in the draft, of course.

First, contrary to popular belief, not all NPE patents are business methods patents. Indeed, only 32 of the 400 patents (8%) included class 705 (the patent class most associated with business methods).  Another 88 patents are in patent classes usually associated with software, for a total of 31% for both business method and other software patent classes. This probably overstates the number, because patents may be assigned to more than one class.

Of course, there may be others that are not classified as software, but certainly not the other 69%.  Classifcations included telephonic communications, television, video distribution, and computer hardware. Many of the patents, unsurprisingly, related to communications -- a field of growing importance.

Second, the study finds that NPE patents do not overwhelmingly come from non-productive companies. Of the 400 patents, 286 were initially assigned to a company; there were a total of 121 unique companies listed as initial assignees on these 286 patents. More than 75% were assigned to corporations while the remainder were assigned to LLC’s and limited partnerships. Another five patents were initially assigned to three other entities: the U.S. government, a hospital, and a university.

Of the 121 entities classified, only 21, or 17%, were solely licensing entities at the time of patenting, accounting for 30 of the patents.  In other words, a small portion of the patents were obtained by the purest of patent trolls. Another 50 patents were issued to inventor-owned companies.  The remaining assignees (including some of the inventor-owned companies) either had or were attempting to build product or service based businesses at the time of the patent. There were many familiar names among these companies, including IBM, Xerox, AT&T, Motorola, Proctor & Gamble, Siemens, Harris Corporation, California Technical Institute, and Cedars-Sinai Hospital. Sales, employment, and venture capital data all imply that at least half of the companies contributing NPE patents had significant operations. 
Also contrary to conventional wisdom, the patents were not castoffs from failed startups. Only 21 of the 121 entities are out of business.
Third, the NPEs do appear to be "trollish," at least by the definition that they wait for an industry to develop. The average number of days between patent issuance and the filing of a complaint was 3124 (more than 8.5 years) with a standard deviation of 1976 days (5.4 years). Of course, this could mean that the patentees were ahead of their time, but even so, there appears to be significant delay before these patents were asserted in court. Even so, there were still plenty of patents that were rushed to the courthouse after issuance.
Fourth, contrary to the conventional wisdom that justifies patent trolls, I did not find clear evidence that NPEs enhance venture capital investments by providing an additional liquidity option. To be sure, firms with patents were 10 times more likely to obtain venture funding than firms without patents, but it is not clear that NPEs create this differential. There was no statisitically significant difference in investment percentage between a random population of patent holding firms and firms that contributed patents to NPEs.
Another consideration on this point is how many of the patents were contributed by failed startups. As noted above, only 21 of the companies who obtained NPE patents are defunct. More telling, however, is the fact that only 3 of the 21 failed companies received venture funding, while one additional company was publicly traded before going out of business. In other words, if NPEs are supposed to be a source of post-failure liquidity in order to encourage venture funding, they are doing a very poor job of it in practice. On a related note, it does not appear that many of the NPE patents come from small companies crushed by their competitors.
Fifth, I did find that NPEs provide a valuable enforcement option for individual inventors who obtain patents. In short, NPEs enforce around twice the percentage of inventor plaintiffs than appears in a random population of litigated patents.

Finally, the article makes some general observations about patent quality - namely that patents asserted by NPEs look a lot like patents asserted by productive companies according to objective measures. The next phase will look at the litigation outcomes to determine the patent quality of the studied patents. I hope to learn much more about quality over time and by technology category, among other things.

In the meantime, I look forward to any comments readers have about the study or its conclusions. I was surprised about how wrong my own intuition was, which is why I focus on the myths about patent trolls. Just about everything we thought we knew - good or bad - does not appear to be true. The article may not change too many  minds about patent trolls. Those who believe NPEs are bad for society won't care much about where they came from. However, I think that NPEs are a reflection of inventive society -- their patents come from all sorts of sources, and how we feel about NPEs should depend on how we feel about the people who invested in the research that create the patents and the role patent law played in innovation.

Posted by Michael Risch on April 21, 2011 at 03:16 PM in Intellectual Property | Permalink | Comments (8) | TrackBack

Dear Law Review Editors: How to Reject Me

Rejected

I've finished another publication submission season, and I've gotten a lot of rejections, as I'm sure virtually all law professors have. I don't mind getting rejections. But gosh, student editors frequently seem tortured sending them. To ease the process, I have a few suggestions I'd like to pass along.

First of all, liberate yourself from feelings of guilt. Understand that we don't take rejection personally. Thanks to ExpressO, the law review article submission process has become exceedingly depersonalized – and that's on both sides of the equation. I understand that law reviews are generally getting hundreds of submissions, but law professors are commonly making hundreds of submissions at once, or at the very least scores of them. As an editor of a journal and full-time law student, you've got enough going on. Don't add to that burden by feeling sorry for legal academics.

Now, in terms of the form your rejection communication takes, I urge you to minimize the number of steps rejected authors have to take to find out that you've declined the article. The kindest thing you can do is communicate the gist of the message in the subject line. For example: "Oxbridge Law Review declines 'Existentialist Phenomenology and Utility Easements.'" Just a few journals do this, but I wish more would. It's classy. The WORST thing you can do is say "Please see attached letter." Just put whatever you have to say in the body of the e-mail. I know it probably comes from a place of wanting to treat the author in a dignified manner, but sending an attachment to communicate a rejection is like putting wrapping paper and a bow on an empty box.

In terms of the actual wording of the body of the e-mail, you can skip telling me how many submissions you get. I mean, of course you do. That's ExpressO. (Plus, of course, the fact that your journal is particularly awesome.) The same goes for the fact that you "have to turn down many excellent submissions." I know, I know.

Just keep it short and sweet. Here's my suggested form:

[SUBJECT LINE:]
Camford Law Journal declines "Post-Contemporary Approaches to Replevin"

[BODY:]
Dear Author,

We have reviewed your article, and we have decided not to make an offer of publication. We thank you for giving us the opportunity to read your scholarship, and we hope you will consider submitting further articles to the Camford Law Journal in the future.

Best regards,

Reed N. Toomutch
Senior Articles Editor
Camford Law Journal
toomutch@camfordlawjournal.org
www.camfordlawjournal.org

Now, if you actually read the article, and if that leaves you with some personal comment to add, then by all means, feel free. I love getting rejection letters like, "Although we decided to pass on it, our staff really liked your article. We especially appreciated the appendix with law-themed knock-knock jokes. It made us laugh out loud."

Now, if I could only find a home for my 193-page article, "A Comprehensive Empirical Treatment of Puns Involving Latin Legal Maxims" ...

Posted by Eric E. Johnson on April 21, 2011 at 12:05 PM in Life of Law Schools | Permalink | Comments (6) | TrackBack

Wednesday, April 20, 2011

Zinedine Zidane

I occasionally litigate cases before the Supreme Court; I most recently represented the respondents in Conkright v. Frommert and the petitioners in LaRue v. DeWolff, Boberg & Associates, Inc.  Such has diminished any temptation I might have to apotheosize the Court or its members.   Particularly since I lost Conkright.

Just the same, I often wonder why the urge to apotheosize, idolize, put on a pedestal, etc., is  universal.  We’ve all done it.  Everyone’s done it as a child.  As age and experience accumulate, we presumably become less susceptible to these sorts of feelings, but my strong suspicion is that the overwhelming majority of adults still indulge the urge, perhaps with respect to a favorite law professor, author, athlete, or actor.  It could be there’s an evolutionary explanation, e.g., children were more likely to survive if they believed their parents were godlike and perfect and thus reflexively obeyed parental orders without evaluating the merit of such commands.   Accordingly, maybe we’re naturally inclined to think of other persons of high status or profound accomplishment as similarly godlike.  I don’t know.  Thoughts?  Are law professors and lawyers less susceptible?

Posted by Brendan Maher on April 20, 2011 at 08:16 PM | Permalink | Comments (4) | TrackBack

Just Deserts, On Appeal

Here are a few things you should know about filing a brief in the Seventh Circuit: (1) you can file on line but; (2) you still need to file 15 paper copies, 1 original + 14 copies, with the proper color cover, in person in the Clerk's Office ("we're online, but not that online"); (3) you must also file a "digital copy," which can be the online filing but maybe not, it depends, you probably have to bring a disc containing the brief; (4) the record, ordered roughly six months ago, may still not be downloaded to the docket so you may have to, maybe not, it depends, attach a boatload of pdfs to your online brief (please don't even ask about how you would attach a a 1500+ page record to the 14+1 filings). Query: Are these my just deserts for assigning appellate briefs all these years and demanding that students submit proper copies (2) with the proper color covers?

Posted by DBorman on April 20, 2011 at 04:54 PM | Permalink | Comments (0) | TrackBack

Call for Labor & Employment Papers from the Saint Louis University Law Journal

An announcement from the Saint Louis University Law Journal:
The Saint Louis Law Journal is proud to announce its labor and employment themed Symposium Issue for Volume 56 (2011-12).  Articles in this issue will accompany articles presented last fall at the Fifth Annual Colloquium on Current Scholarship in Labor & Employment Law. 
The Journal is currently accepting scholarly papers and paper proposals for publication in this issue.  We anticipate publishing the issue in late fall 2011, and therefore would need a final draft of all accepted papers or proposals by August 1, 2011.   Articles for this issue are generally between 25 and 40 pages long.  Please send drafts or proposals to Stacy Osmond, Symposium Managing Editor, at sgoodma4@slu.edu.

Posted by Matt Bodie on April 20, 2011 at 03:24 PM in Employment and Labor Law | Permalink | Comments (0) | TrackBack

Hiring Season Begins Anew

My colleague Elizabeth Lear and I are chairing the Appointments Committee at the University of Florida Levin College of Law for the 2011-2012 academic year. We have a variety of curricular needs, so be on the lookout for the official announcement in the next few weeks.  

Posted by Lyrissa Lidsky on April 20, 2011 at 03:14 PM in Getting a Job on the Law Teaching Market, Lyrissa Lidsky | Permalink | Comments (1) | TrackBack

Entry Level Hiring 2011: Preliminary Summary

More information is available on the spreadsheet, but here’s where things stand as of April 20, 2011, first thing in the morning. (This is a preliminary report only. We are continuing to gather information. Please post new information in the comments to the original post, or email me directly, slawsky /at/ law /dot/ uci /dot/ edu.)

We have reports of 121 people having been hired, at 79 different law schools.

Five schools have reported doing no entry level hiring this year. 

Answers to some frequently asked questions:

Q: How many people who got their JD from School X were hired on this year’s entry-level market?

  JD Hiring Diagram

Harvard 17; Yale 14; NYU 10; Columbia 9; Michigan 9; Stanford 7; Berkeley 5; Chicago 4; Hastings 3; Notre Dame 3; Penn 3.

Schools in the “other” category with two JDs who were hired: Cornell, Duke, Georgetown, Howard, U British Columbia, U Virginia.

Schools in the “other” category with one JD who was hired:  Barry, Cardozo, Florida, George Washington, Hebrew U, Lewis & Clark, LSU, Maine, None [no initial JD], Northwestern, Suffolk, Tel Aviv, Texas, U Arkansas, U Conn, U Melbourne, U San Diego, U Tennessee, U Toronto, UCLA, University of Ljubljana, USC, Washington & Lee, Washington University, Wisconsin.

Update: bar graph of the above information for all you pie chart haters:

JD Schools Bar

Q: How many people who got an entry level hiring job had a fellowship, degree, or clerkship?

87 had a fellowship; 57 had an advanced degree; 76 had a clerkship. Here’s how that broke down:

Hiring Venn

Q: How long ago did these entry-level hires get their initial law degrees?

Years Since Degree
No Initial Law Degree 1; Zero to Four (Graduated 2007-2011) 17; Five to Nine (Graduated 2002-2006) 64; Ten or more (Graduated before 2002) 39. [Update: see below for bar graph, with additional category broken out.]

Q: This is wrong! I know for a fact that more people from School Y were hired!

Excellent! Please tell me, and I will add it to the spreadsheet. This is only a preliminary report; there are certainly people on the market this year whose information has not made it to this spreadsheet, and the information we have may be incomplete.We can report this information only if people send it to us. Comments on the blog are fine, or email me directly, slawsky /at/ law /dot/ uci /dot/ edu, if you would prefer not to comment on the blog. 

Q: How about Interesting Question Z?

"Interesting question Z"? What is that supposed to mean? Be more specific! The spreadsheet has lots more information—you can download it here and slice and dice this information however you want. If you find something interesting, post it in the comments, or let me know so I can post it to the blog. Or post your specific question in the blog comments, as either I or another reader will probably be willing to put together summaries of this information in a variety of ways. 

Update: Proportionate Venn for MB et al., courtesy of an anonymous poster and this website.

Proportionate Venn
 
Male/Female, for Anonymous | Apr 20, 2011 5:06:16 PM [let's say this is right within +/-2 people]:

Gender Pie

Updated Update: for ML, years since grad further broken out [now in two different graphical forms!]:

Years Since Grad 20 and More

Years Since Hiring Bar


 

Posted by Dan Markel on April 20, 2011 at 09:45 AM in Entry Level Hiring Report | Permalink | Comments (20) | TrackBack

"God's Partisans": secularization, stability, and religious freedom

Here is a short piece, in The Chronicle, by my friend and colleague Dan Philpott (Pol. Sci., Notre Dame) and others, about the failure of the "secularization" thesis to explain what's happening in the world around us.

But if American foreign-policy makers want to promote democracy and stability, they must come to realize that secularism is a poor analytical tool. The great surprise of the past generation has been the resurgence of religion's influence. Despite a powerful array of secularizing regimes, ideologies, and social trends, religion has not only outlasted its most ferocious 20th-century rivals, but in many cases, it also appears poised to supplant them.

Among other things, the piece suggests that religious freedom is a "critical [factor] when assessing whether religion is more likely, on balance, to yield peace or terrorism, democracy or authoritarianism, reconciliation or civil war."

The piece is based on the authors' excellent new book, God's Century.  Well worth a read, I think.

Posted by Rick Garnett on April 20, 2011 at 08:50 AM in Religion | Permalink | Comments (0) | TrackBack

Tuesday, April 19, 2011

If you said the ACA was unconstitutional, what would be your Con Law grade?

I was reading over this piece on the debate at Harvard over the constitutionality of the Affordable Care Act (ACA).  It got me to thinking: what if you are a Con Law professor (I'm not), and you talked about the ACA in class.  You explained that you believe (like many, if not most, of our nation's Con Law professors) that the ACA is constitutional.  Not only that, but you think the arguments for its unconstitutionality are pretty weak, given past precedent and the structure of our government.  And then, on your exam, you have a question directly asking about the constitutionality of the ACA.  Or maybe you have another hypothetical act where Congress requires everyone to buy at least 10 pounds of broccoli every year.  How do you grade it?

I'm asking because right now 50% of the district courts considering the matter have found the ACA to be unconstitutional.  At the same time, as I indicated above, my rough guess would be that most Con Law professors think the act is constitutional -- not only that, but it's clearly constitutional.  If a student submitted an answer that mirrored Judge Vinson's opinion, how would that be graded by someone who thought the opinion was clearly wrong?

I'm sure this sort of question comes up all the time in Con Law, and I may be naive to think that the ACA's constitutionality would be a rare example of the problem.  But I guess I think it might be different because (1) many people seem to think that the act is clearly constitutional, in a more definitive way than most open questions, (2) many people seem to think that Judge Vinson's reasoning is fairly suspect, in a more problematic way than other opinions on open questions, and (3) the question is still very much open, and the Supreme Court could adopt Judge Vinson's opinion when it finally addresses the matter.  Is it possible that a student could get a bad grade and yet be right about the ultimate result?  And if so, is this a problem?

Posted by Matt Bodie on April 19, 2011 at 11:51 PM in Constitutional thoughts | Permalink | Comments (16) | TrackBack

Big news in the world of expediting

Here.  " We therefore commit, effective immediately, to give every author at least seven days to decide whether to accept any offer of publication."  A few questions:

  • Will it catch on more broadly?
  • Will it change how offers are made in other ways?  Will it change to whom offers are made?
  • Does this matter to you?

HT: TaxProf Blog.

Posted by Matt Bodie on April 19, 2011 at 03:59 PM in Law Review Review | Permalink | Comments (4) | TrackBack

Musical Devotionals

In this week of rebirth and reminder, where many of us take time out from our writing and grading to commemorate and feast in various religious and community rituals, I am reminded that I never had any formal religious education or training and do not belong to a religious community. I am very grateful, however, to be included in the seasonal celebrations of friends of many faiths.

Last night I was on my way to a Passover seder  when I heard a story on NPR about the 400th birthday of the James Bible. Forgive me for the review, as many of you probably already know this, but I learned that the James Bible was the brainchild of the Scottish King who wanted to clean up references in the Bible to royal tyranny. To advance his goal, King James engaged a community of 47 scholars and theologins to draft a new version of the Bible, line-by-line, over seven years.  Although the James version is no longer the top-selling Bible, the reporter noted that over four centuries the language of the James version has become deeply imbedded into our speech and culture. See, e.g., "How the mighty are fallen" (Samuel 1:19); "Can a leopard change its spots?" (Jeremiah 13:23);  "The writing is on the wall" (Daniel 5: 5/6); and "The blind leading the blind" (Matthew 15:14).

It is the James version that our leaders turn to in times of turmoil or crisis (President Clinton on the bombing in Oklahoma City: "Let us teach our children that the God of comfort is also the God of righteousness. Those who trouble their own house will inherit the wind"; President George W. Bush after the crash of the Columbia shuttle:"Lift your eyes and look to the heavens. Who created all these? He who brings out the starry hosts one by one and calls them each by name. Because of His great power and mighty strength, not one of them is missing.")

Nice stuff, but remember: I'm not religious. I don't have a parish or temple to call my own. So this next part of the story really struck me: the James inspiration for rock music lyrics. The reporter cited the Byrds (Turn, turn, turn) (okay, I knew that one), Simon and Garfunkel (Like a bridge over troubled waters, I will lay me down), Kansas  (All we are is dust in the wind). And I thought about all of the concerts I attend (at least once a month) and the rituals in a concert setting: We sit, we stand, we clap, we sing along. We scream, we sigh. We hold up lights (or a match app on our iPhones). There is call  ("Freebird! Purple Haze!") and response (proabably not those songs). We are moved by the music, it takes us to another place, perhaps a higher place. Music is my devotional, my religion.

Last week Brendan Maher asked if we listened to music while we were writing (Music Before The Storm). Some of us do. Some of us need it. Music can be our salve for a long day and can help us to inspire our own masterpieces.

As we take some time this week to observe and reflect on our past, and hope for the best for our future and the future of society, we can remind ourselves that devotion takes many forms. It is the community we create in whatever place, with whatever friends and family, in whatever concert venue.

 

Posted by DBorman on April 19, 2011 at 10:32 AM | Permalink | Comments (2) | TrackBack

Monday, April 18, 2011

Dean Search

My law school is currently looking for a new dean; our longtime dean, Larry Hellman, is stepping down after a successful tour of duty. 

I’m on the dean search committee and cannot resist the temptation to leverage the Prawfs audience for wisdom.  We’ve obviously had lengthy internal discussions here at OCU, but tapping more brains rarely hurts.  So: care to volunteer thoughts about the ideal qualities a 21st century dean should have (or not have)? If you’ve served on a dean search committee before, any entertaining stories you’re willing to share, with names changed to protect the innocent?

Special hat tip to Al Brophy, who today said all sorts of nice things about OCU and OKC over at Faculty Lounge.

Posted by Brendan Maher on April 18, 2011 at 11:09 PM | Permalink | Comments (2) | TrackBack

How does your law school handle commencement?

The different components of my university have recently begun considering how best to handle commencement in the future, so I would love to solicit some feedback from our law professor readers.  How does your law school handle commencement?  Do you participate in the main university ceremony?  Do you have any additional ceremonies, such as hooding or a diploma ceremony, that are unique to the law school?  Or does your law school do its commencement entirely apart from the undergraduate ceremony?

Posted by Jennifer Collins on April 18, 2011 at 12:32 PM in Life of Law Schools | Permalink | Comments (0) | TrackBack