Thursday, June 30, 2016

JOTWELL: Malveaux on Marcus on public interest class actions

The new Courts Law essay comes from Suzette Malveaux (Catholic), reviewing David Marcus, The Public Interest Class Action (Geo. L.J.), which considers the special role of the public-interest, equitable-relief class action and how to shield it from the Court's recent narrowing decisions.

Posted by Howard Wasserman on June 30, 2016 at 02:11 PM in Article Spotlight, Civil Procedure, Howard Wasserman | Permalink | Comments (0)

Wednesday, June 01, 2016

JOTWELL: Wasserman on Lain on The Irrepressible Myth of SCOTUS

I have the new Courts Law essay, titled The Irrepressible Myth of SCOTUS, reviewing Corinna Lain (Richmond), Three Supreme Court "Failures" and a Story of Supreme Court Success (Vand. L. Rev.). Lain's article is part of a symposium on Erwin Chemerinsky's The Case Against the Supreme Court.

And I just could not resist the title.

Posted by Howard Wasserman on June 1, 2016 at 12:33 PM in Article Spotlight, Howard Wasserman | Permalink | Comments (1)

Wednesday, May 18, 2016

JOTWELL: Steinman on Pidot on tie votes

The new Courts Law essay comes from Adam Steinman (Alabama), reviewing Justin Pidot, Tie Votes in the Supreme Court (forthcoming in Minn.L. Rev.), a timely study of the history and effects of evenly divided Courts.

Posted by Howard Wasserman on May 18, 2016 at 10:17 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Monday, May 02, 2016

JOTWELL: Walsh on Blackman and Wasserman on marriage equality

The new Courts Law essay comes from Kevin Walsh (Richmond), reviewing Josh Blackman and my The Process of Marriage Equality (Hastings Const. L.Q.), which explores some of the procedural issues underlying marriage-equality litigation leading to and after Obergefell. And which appears to be something that is not going away.

Posted by Howard Wasserman on May 2, 2016 at 11:31 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (3)

Thursday, April 14, 2016

JOTWELL: Lahav on Prescott & Spier on Settlement

The new Courts Law essay comes from Alexandra Lahav (UConn) reviewing J.J. Prescott and Kathryn Spier's A Comprehensive Theory of Settlement (forthcoming N.Y.U. L. Rev.), which offers a broad understanding of settlement within civil litigation.

Posted by Howard Wasserman on April 14, 2016 at 12:01 PM in Article Spotlight, Civil Procedure, Howard Wasserman | Permalink | Comments (0)

Friday, April 01, 2016

Litigant Autonomy After Scalia--and Thanks!

           In two previous posts, I reviewed new GMU Law namesake Justice Scalia’s approach to litigant autonomy—or at least, what I think his writings and cases suggest about that approach. Briefly, Scalia seemed to think litigant claim-control rights are substantive entitlements conferred by the law that creates in personam-style rights of action. I also criticized this view.

            One response is, “who cares” whether or not claim-control entitlements are conferred by the law that creates rights of action. Due process requires affording litigants protection for their claim-control interests. So, even if claim control entitlements don't vest through the law that creates a right of action, protection for claim-control flows from basic due process guarantees.

            My interest in how we derive autonomy rights stems from the fact I’m pretty much convinced by Sergio Campos’s thin account of the protection that ought to be afforded litigant autonomy as a matter of due process. If you buy Sergio’s due process argument, as I tend to do, and are a skeptic about the claim that autonomy is a positively conferred substantive right, it means that there's more space for work theorizing why we protect litigant autonomy to the degree that we do.

            There’s already interesting work out there pursuing that project. I highly recommend Ryan Williams' piece on litigant autonomy, Due Process, Class Action Opt Outs, and the Right Not to Sue, available here. He makes an important move by reframing opt out as a protection afforded claim-owners’ interests in controlling whether to assert a claim in the first place.

            In this paper, I rotate our view of litigant autonomy in a slightly different direction. The power to control a claim is not just the power to control whether to assert it—but where to assert it. It’s the power to put legal issues and remedial interests on a court’s dispute resolution agenda.  

            In the article, I make two claims about agenda-setting power conferred by claim-control—the first, which I will quickly summarize below the line for those who might be interested, is that the shift opens the door to appreciating that litigant autonomy actually does some important work in our system of judicial federalism.

            Although federal-state jurisdictional concurrency is characterized in a number of different ways, I take the conventional view: concurrency uses judicial competition to break down or check concentration of the business of dispute resolution in the federal system.

            Concurrency does this in part through what might be called agenda-setting rules—rules that specify who gets to pick between competing forums. Subject to some exceptions, our system generally employs a plaintiffs-pick-the-forum rule, reflected in, say, the well-pleaded complaint rule and voluntary/involuntary rule in diversity jurisdiction. Together, both empower plaintiffs to control which courts, state or federal, get to decide their case by exploiting aspects of claim-control--their control the theory of the case and the party structure.

            Scholars puzzle over the plaintiff-picks-the-forum rule. Considered in isolation, it plausibly furthers the anti-concentration goal of concurrency-- largely because plaintiffs have historically tended, for a variety of reasons, to prefer state over federal court.

            But, the plaintiff-picks rule really gains its force as a check on federal consolidation when it is layered on top of the principle that individual plaintiffs control their own claims—or in other words, when plaintiff-picks is hitched to a regime of litigant autonomy.   Litigant autonomy decentralizes the power to set the judicial agenda among a network of claim owners. Because litigants, in turn, naturally tend to have different forum preferences, that decentralization tends to fragment litigation across federal and state forums.

            Not perfectly, of course. And not evenly. But it does so nonetheless. That’s, indeed, exactly what we see when we take the class device away, as we have, for the most part, in mass torts. The federal class action consolidates remedial interests in federal court in part because it overrides class members’ autonomy and with it their exploit the theory of the case and party structure to control where their claims end up. Take the class action away, give class members control over their own claims, and some chunks of mass litigation inevitably radiate out of federal courts reach into state court as litigants exploit their claim-control to park there claims there. True before CAFA. True after.

            This fact, I argue, points out the plausibility of treating the traditional claim-control entitlement as traditional component of the system of concurrency—one that furthers that system’s anti-concentration goals.

            That’s my first claim—litigant autonomy does some work in our system of judicial federalism. My second claim is that appreciating litigant autonomy’s role in the system of concurrency has some interesting formal implications for federal class action doctrine—one that allows us to draw on intertwined separation of powers and federalism principles to make a case for narrow constructions of Rule 23. (The argument also reinforces the claim made by others that the Court ought to be deferential to the rulemaking bureaucracy—treating it, effectively, as a stand-in for Congress or, put another way, as a system of internal separation of powers--a point I’m exploring in a current working paper).

            My argument, incidentally, echoes older, and lost, approach to litigant autonomy that appears in mid-century cases (see the oft-neglected concluding part of State Farm Fire & Casualty v. Tashire, where the Court construes statutory interpleader's application to mass torts narrowly in order to protect litigants’ “substantial right” to choose a state forum, for example). Rather than summarize this second claim, I’ll let you read the article yourself, if you are interested.

            Thanks to Howard and Prawfs for the invite to blog over the last month!

Posted by Mark Moller on April 1, 2016 at 01:48 PM in Article Spotlight, Civil Procedure | Permalink | Comments (0)

Wednesday, March 30, 2016

JOTWELL: Thomas on Coleman on efficiency

The new Courts Law essay comes from Suja Thomas (Illinois), reviewing Brooke Coleman's The Efficiency Norm (B.C. L. Rev.), which explores the way the concept of efficiency has been defined and applied in civil litigation.

Posted by Howard Wasserman on March 30, 2016 at 04:05 PM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Tuesday, March 22, 2016

Debating the Infield Fly Rule in Penn Law Review

In December, Penn Law Review published A Step Aside: Time to Drop the Infield Fly Rule and End a Common Law Anomaly, by U.S. District Judge Andrew J. Guilford and his law clerk, Joel Mallord. While there have been rumblings in many places against the Infield Fly Rule, this was the first full, sustained scholarly critique of the rule. My response, Just a Bit Aside: Perverse Incentives, Cost-Benefit Imbalances, and the Infield Fly Rule, has now been published on Penn Law Review Online.

Posted by Howard Wasserman on March 22, 2016 at 09:54 PM in Article Spotlight, Howard Wasserman, Sports | Permalink | Comments (5)

Kar and Mazzone on Why President Obama Has the Constitutional Power to Appoint Scalia's replacement

Robin Kar and Jason Mazzone (both of Illinois) have posted  Why President Obama Has the Constitutional Power to Appoint--and Not Just Nominate--a Replacement for Justice Scalia to SSRN. The abstract is after the jump.

The opportunities that SSRN, Law Review Supplements, blogs, and other sites provide for this type of immediate-and-scholarly work is a boon to legal scholarship.

After Justice Antonin Scalia’s recent death, politicians wasted no time before teeing up a political battle over his replacement. Republican Senators—led by Senate Majority Leader Mitch McConnell—immediately announced that they will not consider or vote on any replacement nominees from the current President. In doing so, they have taken a position that may be constitutionally problematic in ways that have not yet been fully appreciated. Now that President Obama has nominated Judge Merrick Garland to the Supreme Court, this problem requires greater attention.

The crux of the problem is that an outright refusal on the part of the Senate to consider any nominee from President Obama arguably works a delegation of an elected President’s Supreme Court appointment power to an unknown successor. While the Appointments Clause of the Constitution allows Congress to delegate a President's appointment power in certain instances, it does not permit delegation with respect to Supreme Court appointments. Hence this delegation raises a potential problem of separation of powers. Historical practice also cautions against any effort to delegate to a future President the authority to nominate and appointment a member of the Supreme Court. We show that there are 104 cases in which an elected President has faced a vacancy on the Supreme Court and began the appointment process prior to the election of a successor. In all 104 cases, the sitting President was able to both nominate and, with the advice and consent of the Senate, appoint a replacement Justice. We explain why this is a better reading of historical precedent than any limited to consideration of the last 80 years. Hence, constitutional text, structure and history suggest that the Senate Republicans’ current plan not to act at all on any Obama nominee may violate the Constitution. Given this possible constitutional problem, there are also heightened prudential risks to the position Senate Republicans have taken.

None of this means that the Senate cannot vote against President Obama’s nominees on a wide range of grounds. The Senate also has broad discretion to determine its procedures for vetting a nominee. But the delegation problem identified in this Article provides a significant reason for Republican Senators, sworn to uphold the Constitution, to rethink their current position. They should instead consider and vote upon Garland or any other timely submitted nominee.

Posted by Howard Wasserman on March 22, 2016 at 11:48 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (6)

Wednesday, March 16, 2016

JOTWELL: Mulligan on McCuskey on Submerged Precedent (again)

The new Courts Law essay comes from Lumen Mulligan (Kansas), reviewing Elizabeth McCuskey's Submerged Precedent (Nev. L. Rev.). This is the second reviewof McCuskey's article, following on Brooke Coleman's review last month. McCuskey has obviously struck a chord with Fed Courts/Civ Pro types.

Posted by Howard Wasserman on March 16, 2016 at 10:27 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Thursday, March 03, 2016

JOTWELL: Sassman on Bray on the new equity

The new Courts Law essay comes from Wyatt Sassman, reviewing Samuel Bray's The Supreme Court and the New Equity (Vand. L. Rev.), which explores the Court's recent new approach to equitable cases and the equitable powers of the federal judiciary.

Posted by Howard Wasserman on March 3, 2016 at 10:27 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Thursday, February 04, 2016

Discussing the Vanishing Civil Trial

Thanks to Howard for letting me linger here a few extra days. I wanted to close with a plug for a terrific new article in Judicature by U.S. District Judge D. Brock Hornby, entitled Imagined Conversations: The Decline in Federal Civil Trials. The steady drop in the federal civil trial rate since the 1960s is well-known, but Judge Hornby offers a concise and fresh take on the topic by envisioning a no-holds-barred conversation between old law school classmates who now occupy a variety of senior legal positions, from judges to trial counsel to corporate general counsel. 

The article is a great read: short, entertaining, and fast-moving. It will be required reading for my civil procedure students.  Most importantly, it keenly and respectfully identifies the many interrelated factors have contributed to the drop in civil trials over the past several decades. It should provoke useful discussions between unabashed proponents of civil trials (like myself) and those who are more agnostic.

Relatedly, I was thrilled to see that the same issue of Judicature features a compelling plea from John Rabiej to open federal PACER records for academic research without the need for district-by-district waivers.

Both pieces are well worth your time.  To shamelessly borrow a phrase from Larry Solum, download them while they’re hot!

Posted by Jordan Singer on February 4, 2016 at 03:29 PM in Article Spotlight, Civil Procedure | Permalink | Comments (0)

JOTWELL: Coleman on McCuskey on "submerged" decisions

The new Courts Law essay comes from Brooke Coleman (Seattle), reviewing Elizabeth McCuskey's Submerged Precedent (forthcoming Nev. L. Rev.), which examines the substantial body of reasoned district court decisions that are often not publicly available.

Posted by Howard Wasserman on February 4, 2016 at 12:26 PM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Tuesday, January 19, 2016

JOTWELL: Tidmarsh on Hill on financing class actions

The new Courts Law essay comes  from Jay Tidmarsh (Notre Dame) reviewing a student note by Tyler Hill (Yale), Financing the Class; Strengthening Class Action Through Third-Party Investment (Yale L.J.).

Posted by Howard Wasserman on January 19, 2016 at 09:25 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Tuesday, January 05, 2016

JOTWELL: Effron on Moore on the amended FRCP

The new Courts Law essay comes from Robin Effron (Brooklyn), reviewing Patricia Hatamayar Moore's The Anti-Plaintiff Pending Amendments to the Federal Rules of Civil Procedure and the Pro-Defendant Composition of the Federal Rulemaking Committees (Cin. L. Rev.). As I get ready to teach Civ Pro this semester and to cover the new discovery rules (which Chief Justice Roberts highlighted in his year-end report), the article and Robin's review are both essential.

Posted by Howard Wasserman on January 5, 2016 at 11:12 AM in Article Spotlight, Civil Procedure, Howard Wasserman | Permalink | Comments (0)

Thursday, December 03, 2015

JOTWELL: Leong on Nielson & Walker on qualified immunity

The new Courts Law essay comes from Nancy Leong (Denver), reviewing Nielson and Walker's The New Qualified Immunity (forthcoming S. Cal. L. Rev.), which explores how lower courts are and should apply the discretionary two-step approach to qualified immunity under Pearson. Both the article and Nancy's review essay are worth a read.

Posted by Howard Wasserman on December 3, 2015 at 01:38 PM in Article Spotlight, Howard Wasserman | Permalink | Comments (4)

Monday, November 16, 2015

JOTWELL: Erbsen on Trammell and Bambauer on personal jurisdiction

The new Courts Law essay comes from Allan Erbsen (Minnesota), reviewing Trammell & Bambauer, Personal Jurisdiction and the "Interwebs" (Cornell L. Rev.).

Posted by Howard Wasserman on November 16, 2015 at 11:39 AM in Article Spotlight, Civil Procedure, Howard Wasserman | Permalink | Comments (0)

Monday, November 02, 2015

JOTWELL: Pfander on Williams on Marks

The new Courts Law essay comes from James Pfander (Northwestern-Pritzker), reviewing Ryan C. Williams, Questions Marks: Plurality Decisions and Precedential Constraint, which discusses lower courts' misuse of Marks v. United States in identifying controlling precedent from plurality opinions.

Posted by Howard Wasserman on November 2, 2015 at 11:11 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (9)

Wednesday, October 28, 2015

JOTWELL: Mullenix on Levens on security class actions

The new Courts Law essay comes from Linda Mullenix (Texas), reviewing an outstanding student comment on developing an approach to class actions over high-frequency trading.

Posted by Howard Wasserman on October 28, 2015 at 09:31 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Sunday, October 11, 2015

Lisa McElroy's "Called On"

COPB cover full_001Lisa McElroy (Drexel) has published Called On, a novel about law school that Tony Mauro calls "This Generation's One L." Lisa tells me that Dan encouraged her in this project early on and she mentions him in the acknowledgements.

Posted by Howard Wasserman on October 11, 2015 at 07:25 PM in Article Spotlight, Books, Howard Wasserman | Permalink | Comments (0)

Wednesday, October 07, 2015

Should the Umpqua shooter's mother be liable?

Chris Harper-Mercer was 26 years old when he killed 9 people last week. He was a troubled young man living at home, who should not have had access to guns. And yet he had access to 14 of them. http://www.nytimes.com/2015/10/06/us/mother-of-oregon-gunman-wrote-of-keeping-firearms.html?_r=0

Chris lived with his mother, Laurel Harper. Laurel bragged about keeping fully loaded magazines for her AR-15 and AK-47 semiautomatic rifles in easy access in her house. Laurel also knew that Chris had emotional problems. Should Laurel, and other parents of mass shooters, be held liable for the actions of their adult children?

Professor Shaundra Lewis, (Thurgood Marshall School of Law), asks this question in her timely piece, The Cost of Raising a Killer--Parental Liability for the Parents of Adult Mass Murderers, 61 Villanova L. Rev. 1 (forthcoming 2015). http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2669869 As she explains in her abstract:

[T]he shooter’s parents almost always knew their offspring were seriously mentally ill beforehand . . .  Despite knowing her son was severely mentally unstable, Nancy [Lanza] left her son home unsupervised with unfettered access to her arsenal of weapons while she went on vacation.  This provided her son with the perfect opportunity to make a practice run to Sandy Hook Elementary School, where he later used her firearms to shoot and kill kindergartners and first-graders.  

Using Nancy Lanza’s case and other notorious mass shooting cases as examples, this article [explores] if, and under what circumstances, a parent can be held civilly liable for their adult child’s mass shooting pursuant to general common law negligence jurisprudence [particularly] parental negligence law. [It first] address[es] whether there can be parental liability for parents of adult mass shooters based upon a special relationship under current law.  [Then it analyzes] negligence [doctrines] in general and its complexities, as well as explores whether a duty to protect or warn can be established in mass shooting cases.  [Next it] examines whether the parents in the real-life examples referenced above breached a duty to protect or warn [and] whether those parents’ breaches caused the shooting victims’ injuries or deaths.  [The Article] concludes that in some circumstances parents can, and should, be held liable for their misfeasance or nonfeasance that leads to their child’s mass killing.  It further posits that the . . . possibility of parents being subjected to financial liability for their child’s mass shooting will not only incentivize parents to take more aggressive measures to keep firearms out of their mentally unstable child’s hands but to obtain the mental health assistance their child so desperately needs—measures that in the end will make everyone (including their child) safer.  [The Article concludes with] advice to parents for dealing with significantly mentally ill, adult offspring residing in their home.   

Although I agree that financial liability would incentive parents to limit access to guns, I wonder whether it might also encourage parents to cut ties with their adult children precisely when they need the most support. Nonetheless, Lewis’s article shines a light on the sadly recurring question of whether parents should be responsible for the preventable actions of their adult children.

I’m Andy Kim, Assistant Professor at Concordia University School of Law. My own research focuses on criminal law and empirical analysis of the law. I’ll be guest blogging for the month. Hope you enjoy!

 

Posted by Andrew Chongseh Kim on October 7, 2015 at 11:25 AM in Article Spotlight, Blogging, Criminal Law, Current Affairs, Law and Politics | Permalink | Comments (11)

Tuesday, October 06, 2015

JOTWELL: Walker on Cyr on judicial appointments in Canada

The new Courts Law essay comes from Janet Walker (Osgoode Hall), reviewing Hugo Cyr, The Bungling of Justice Nadon's Appointment to the Supreme Court of Canada.

Posted by Howard Wasserman on October 6, 2015 at 07:12 PM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Tuesday, September 22, 2015

JOTWELL: Vladeck on Hart & Wechsler

The latest Courts Law essay comes from our own Steve Vladeck, reviewing the new Seventh Edition of Hart & Wechsler's The Federal Courts and the Federal System. I am a Low, Jeffries, and Bradley person myself, but Steve's review at least makes me want to take a look.

Posted by Howard Wasserman on September 22, 2015 at 09:30 AM in Article Spotlight, Books, Howard Wasserman | Permalink | Comments (0)

Tuesday, September 08, 2015

The Future of Housing

In February 2015 I participated in a fascinating conference at Washburn University School of law called "The Future of Housing: Equity, Stability, and Sustainability."  The conference covered three distinct but interrelated problems that our system of housing must face and overcome in the near future. (Articles from that symposium can be found here).  Since participating in that February conference, nearly every day I am struck anew by how vital it is that we as a nation craft effective solutions to housing challenges.

First, we are facing a crisis of de facto housing segregation and inequity in this country. Today, fifty years after the creation of HUD and 47 years after the passage of the Fair Housing Act, housing discrimination and the effects of racially-determined disparate policies regarding homeownership continue to plague our society. Current housing patterns are as equally segregated as they were back in 1968 when the Fair Housing Act was passed.  The New York Times reported on Sunday that "[e]conomic isolation is actually growing worse across the county, as more and more minority families find themselves trapped in high-poverty neighborhoods without decent housing, schools or jobs, and with few avenues of escape." As the article explains, housing disparity in this country came about not by accident but by deliberate design among all sectors of the housing market, private lenders, private property sellers, and - most disturbingly - the federal government agencies tasked with growing homeownership for the nation. The Federal Housing Administration very much served as an "architect" of segregation in the 1930s and 40s, conditioning mortgage funding on neighborhood racial homogeneity (and - even then - granting funding almost exclusively to white homebuyers). These policies were also reflected in other housing initiatives that shaped the landscape of housing today - in particular the GI bill that significantly grew homeownership in this country, but only for whites. Efforts to combat housing inequities today are hamstrung by a cumbersome "disparate impact" jurisprudence (see Professor Rigel Oliveri's article here) and the reality that it is harder to un-do a nation's housing patterns built on segregation than it would have been not to have the segregation-creating policies to begin with.  At least this summer the Supreme Court refrained from further limiting the scope of the Fair Housing Act in the Inclusive Communities case, but that alone is unlikely to lead to housing parity.

In addition to the continuing need to address housing inequity, our country still must re-establish (or establish for the first time, depending on your perspective), a stable residential mortgage market.  In the aftermath of the 2008-to-present Financial Crisis sparked by the 2007 subprime mortgage meltdown, much has been written and said about allocation of blame. To date, however, we still have an incomplete picture of how to solve systemic financial instability going forward. Professor David Reiss has made a recent, insightful contribution to the stability question in his recent article, Underwriting Sustainable Homeownership: The Federal Housing Administration and the Low Down Payment Loan, wherein he advocates that the Federal Housing Administration be preserved, but that its underwriting approach be significantly re-worked in order to create a more efficient and effective home finance system.

In addition to equity and stability issues, we must continue to bear in mind the challenge of housing sustainability. Volatile gas prices and disenchantment with suburbia (see here and here, for example) are now calling into question longstanding assumptions about zoning, neighborhood design, and community housing goals.  Automobile dependence, large-footprint houses, and suburban communities perhaps should become anachronisms as our housing policy modernizes and recognizes realities of sprawl, pollution, and suburban population de-connectedness (food for thought: see here and here).  

These challenges are not easily overcome. How can this country solve the problem of entrenched housing segregation patterns, particularly without problematic government mandate?  How can market volatility be eradicated when we continue to have financial institutions (both government sponsored and private) that today are not only "too big to fail," but are even BIGGER than ever before? And is it really possible to reconsider and possibly reverse patterns of development that are encouraged (or required) by legislation (from the local to the federal level) and enshrined in centuries of the common law? 

I leave you with these questions, in the hopes that together we can craft solutions and build a better future of housing.

I have so very much enjoyed this stint as a guest blogger at prawfsblawg. Thank you for this opportunity. And thanks to all of you who are working - in all the various important subject matter areas - toward positive developments for our law and our society.

 

Posted by Andrea Boyack on September 8, 2015 at 11:19 AM in Article Spotlight, Culture, Current Affairs, Property | Permalink | Comments (5)

Tuesday, September 01, 2015

(Repost): Section on Fed Courts: Annual Award for Best Untenured Article

The AALS Section on Federal Courts is pleased to announce the fourth annual award for the best article on the law of federal jurisdiction by a full-time, untenured faculty member at an AALS member or affiliate school ­and to solicit nominations (including self-nominations) for the prize to be awarded at the 2016 AALS Annual Meeting in New York, NY. 


 
The purpose of the award program is to recognize outstanding scholarship in the field of federal courts by untenured faculty members. To that end, eligible articles are those specifically in the field of Federal Courts that were published by a recognized journal during the twelve-month period ending on September 1, 2015 (date of actual publication determines eligibility). Eligible authors are those who, at the close of nominations (i.e., as of September 15, 2015), are untenured, full-time faculty members at AALS member or affiliate schools, and have not previously won the award.
 
Nominations (or questions about the award) should be directed to Tara Leigh Grove at William and Mary Law School (tlgrove@wm.edu). Without exception, all nominations must be received by 11:59 p.m. (EDT) on September 15, 2015. Nominations will be reviewed by a prize committee comprised of Professors Janet Cooper Alexander (Stanford), Tara Leigh Grove (William & Mary), Caleb Nelson (Virginia), Judith Resnik (Yale), and Amanda Tyler (Berkeley), with the result announced at the Federal Courts section program at the 2016 AALS Annual Meeting.

Posted by Howard Wasserman on September 1, 2015 at 05:59 PM in Article Spotlight, Howard Wasserman, Teaching Law | Permalink | Comments (0)

Friday, August 14, 2015

Lien Priority Rules!

Property law luminaries R. Wilson Freyermuth and Dale A. Whitman have published a concise and powerful article in the July/August edition of the ABA’s Probate & Property magazine that is both clarifying and compelling with respect to the continuingly contentious issue of residential real estate lien priority.

The priority contest between first mortgage lenders and homeowner’s associations was a dormant (or even non-existent) issue until the Foreclosure Crisis of 2008. But the Foreclosure Crisis changed the context of residential real estate lien priority questions in two ways:

  • First, home values plummeted and for the first time, a significant number of homes were “underwater” – meaning that the value of the home was less than the amount of loans secured by liens thereon. When an asset’s value covers the full face amount of all liens, lien priority doesn’t much matter in terms of whether or not a lienholder will be paid (even though, of course, it still significantly governs procedure and effect of foreclosure of liens).  When an asset’s value fails to cover the amount of its liens, however, the question of priority becomes crucial. In this environment of scarcity, the first in line gets paid, and the later in line may not. 
  • Second, the sheer volume of mortgage loan defaults increased ten-fold, overwhelming the judicial system and the foreclosure departments of banks and servicers. The massive increase in number of defaulted loans (together with the widespread confusion that resulted from over-zealous loan securitization and avoidance of traditional mortgage assignment through the use of MERS – which is a topic for another day) led to previously unimagined delays in foreclosure and a huge increase in the number of homes facing foreclosure, particularly in certain states and communities where the mortgage defaults clustered.  When lienholders delay foreclosure, priority very much matters because liens with higher priority can foreclose and wipe out junior liens.

These two significant context changes arising from the Financial Crisis have not fully abated, even seven years later.  And so, today, priority rules very much matter to any holders of residential real estate liens.

Homeowner Associations are one type of lienholder that is unfairly harmed by this combination of underwater mortgages and high quantity of loan default/foreclosure delay.  In approximately 30 states, a mortgage lien has complete priority over HOA liens, and foreclosure delay coupled with failure to pay association dues can lead to community financial disaster.  Sometimes HOAs are vilified in the media and in popular parlance, but it remains true that even if you hate the concept of an HOA, it is supremely unfair to have financially responsible people living in a neighborhood end up paying their defaulting neighbors’ “fair share” of community common costs.

In approximately 20 other states, statutes (including the state’s version of the Uniform Condominium Act or the Uniform Common Interest Ownership Act) have granted a limited priority to association liens, typically in the amount of six months of association dues.  When mortgage foreclosures were relatively rare and occurred relatively promptly, HOAs merely waited for a mortgage lender to foreclose and then took the 6-months worth of unpaid assessments off the top of the lender’s foreclosure recovery.  When the Foreclosure Crisis hit, it was unclear how this priority would work in cases where a 1st mortgage lender had delayed foreclosure. Could an association independently foreclose its limited priority lien and obtain 6-months worth of back assessments?  If so, what would be the effect of that foreclosure if the 1st mortgage lender failed to redeem its interest by paying off that super-priority portion of the association lien? (See Community Collateral Damages: A Question of Priorities discussing a description of the problem circa 2010).

In 2012, a Washington Court of Appeals held that the limited priority HOA lien acted like any other lien with a higher priority, meaning that the HOA could foreclose its lien with property notice to junior lienholders (including the holder of the first mortgage), and this foreclosure would operate to extinguish the first mortgage lien. Summerhill Village Homeowners Ass’n v. Roughly, 270 P.3d 639 (Wash Ct. App. 2012). Two years later, the DC Court of Appeals and the Nevada Supreme Court agreed with this interpretation. Chase Plaza Condo. Ass’n, Inc. v. J.P. Morgan Chase Bank, N.A., 98 A.3d 166 (D.C. Ct. App. 2014); SFR Investments Pool 1, LLC v. U.S. Bank, N.A. 334 P.3d 408 (Nev. 2014).  The Joint Editorial Board for Uniform Real Property Acts also endorsed this view, stressing that treating the limited priority portion of a HOA’s lien as a lien with “true” priority was essential to strike “an equitable balance between the need to enforce collection of unpaid assessments and the obvious necessity for protecting the priority of the security interests of lenders.” 

Enter yet a THIRD context change resulting from the Financial Crisis: The conservatorship of Fannie Mae and Freddie Mac. On September 6, 2008, the Federal Housing Finance Authority (FHFA) placed Fannie Mae and Freddie Mac (which are Government Sponsored Enterprises or GSEs) into federal conservatorship.  This unprecedented move likely saved residential mortgage lending as we know it, but has fundamentally changed the players involved in the residential mortgage market.  Back in 2008 and 2009, it appeared that FHFA conservatorship was some form of bankruptcy and possibly even a federal wind-down of Fannie Mae and Freddie Mac, but the GSEs have bounced back into the black and today are even turning a profit (now for the government).  The FHFA shows no sign of turning the reins back over to shareholders or otherwise ending the now seven-year-old conservatorship of the GSEs.

What does the FHFA conservatorship of Fannie Mae and Freddie Mac have to do with the association-mortgage lender lien priority question? Well, in cases where Fannie and Freddie are the secondary mortgage lender for a first mortgage lien, the FHFA now claims it has the power to stop or invalidate foreclosures of liens that are above GSE first mortgages in priority according to state law. That means, for example, that even though Nevada has held that the limited priority portion of a HOA’s lien is a true super-priority lien that extinguishes a first mortgage lien if that lienholder fails to redeem its interest in foreclosure (meaning: if the first mortgage holder doesn’t pay off the nine months of unpaid association dues before the HOA forecloses), that Fannie and Freddie can simply opt out of Nevada’s laws regarding lien priority and enforcement. 

FHFA’s argument that a lien with higher priority than a Fannie/Freddie interest cannot be foreclosed without its consent arises from the language of 12 U.S.C. §4617(j)(3):

No property of the Agency shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the Agency, nor shall any involuntary lien attach to the property of the Agency. 

Similar language in the FDIC statute has been held to preclude foreclosure of super-priority state tax liens on property of banks put into FDIC receivership. FHFA reasons, therefore, that liens prior to Fannie Mae or Freddie Mac mortgages can only be validly foreclosed with FHFA consent.

Freyermuth and Wilson do a masterful job dissecting and destroying this argument. I would encourage everyone to read their thorough and compelling analysis. The “Readers Digest” version of their argument is as follows: 

  1. FDIC receivership is a qualitatively different context than FHFA conservatorship of the GSEs because FDIC receivership is short-term. FDIC receivership is a form of bank bankruptcy, and thus the consent provision operates as a merely temporary stay.  The FHFA conservatorship, on the other hand, has gone on the better part of a decade now, and it shows no sign of stopping. In Matagorda County v. Russell Law, the case that interpreted the FDIC statute as establishing FDIC consent as a prerequisite to effective foreclosure of a priority lien, the court carefully explained that a temporary delay in the ability to foreclose did not impact 5th Amendment rights of the lienholder, but the court did note that “unmitigated delay, coupled with diminishment of distinct investment-backed expectations may, at some point” amount to an uncompensated taking. 19 F.3d 215, 224-25 (5th Cir. 1994)(emphasis in original).
  2. Stays such as the automatic stay in bankruptcy are also qualitatively different than the stay in the FHFA context because FHFA decisions with respect to GSE conservatorship are non-reviewable. The FHFA has long claimed that its actions as a conservator of the GSEs are not subject to judicial review, and the Second Circuit confirmed this in Town of Babylon v. Federal Housing Finance Agency, 699 F.3d. 221 (2d Cir. 2012). Other circuits have followed suit. Thus, whereas a lienholder hamstrung by bankruptcy’s automatic stay can seek relief under the Code (for example, under §363 or through appellate review), there is no avenue to contest the FHFA’s failure to consent to a foreclosure of an HOA lien on property burdened by a Fannie or Freddie mortgage. FHFA consent, therefore, can be given or withheld in FHFA’s sole and absolute discretion.
  3. During the past several years, FHFA has evidenced its intent and consent to be bound to state lien priority law in multiple ways and contexts. For example, Fannie and Freddie servicing guidelines specifically instruct its servicers to pay off priority liens and a promise to reimburse the servicers for doing so. As Freyermuth and Wilson aptly point out, there would be no need for or purpose to this instruction if the priority liens could not be foreclosed without FHFA consent.  FHFA has also consistently operated as if it were bound by state law lien priority and enforcement rules in making arguments in various lawsuits wherein priority contests were decided.
  4. Finally, Freyermuth and Wilson point out that it is not at all clear that even the FDIC consent provision applies to private parties. The 5th Circuit, for one, has specifically ruled that the provision requiring consent to foreclosure of prior liens is specific and limited to tax liens held by local governments and does not extend to private entities. FDIC v. McFarland, 243 F.3d 876 (5th Cir. 2001). Because HOAs are private entities, their liens would thus be unaffected by the cited statutory provision requiring prior FHFA consent to foreclose, even if that provision were interpreted the same way.

Freyermuth and Wilson conclude:

The notion that FHFA and the GSEs can thumb their noses at time-honored state law priority rules is deeply offensive. The GSEs themselves have, in the past, consistently acted as though they were fully bound by those rules. From the inception of the uniform Fannie Mae-Freddie Mac 1-4 family mortgage and note instruments, for example, the GSEs have always been careful to obtain reviews by local counsel to ensure that the documents conformed to the varying laws of the individual states. They have asserted no federally preemptive right to disregard state law. Their claim to the power to ignore state priority law under HERA is unexpected. It is not justified by any emergency because—whatever the exigencies of the mortgage crisis—the procedure that allows an otherwise-first mortgage lender to protect its lien from destruction by the foreclosure of a prior owners’ association lien is perfectly clear and simple to employ. Any such destruction is a consequence of nothing more than Fannie’s or Freddie’s servicer being asleep at the switch. There is no reason the homeowners’ association should be punished for the servicer’s carelessness; rather, Fannie or Freddie should seek reimbursement from the servicer for such losses. The authors hope and believe the courts will understand this and will continue to hold the GSEs to the normal standards of state priority law.

I couldn’t agree more.

 

Posted by Andrea Boyack on August 14, 2015 at 12:17 PM in Article Spotlight, Property | Permalink | Comments (0)

Wednesday, August 12, 2015

The Process of Marriage Equality

The Process of Marriage Equality, co-authored with Josh Blackman (South Texas), is now up on SSRN and coming to a journal office near you. This is a comprehensive take on the unique civ pro/fed courts/jurisdiction issues that arose during the litigation campaign leading to Obergefell. It incorporates and expands on my earlier discussions of some of these issues, published here and at Northwestern Law Review Online, and the stuff Josh has been writing at his blog.

The abstract is after the jump.

This article offers the first comprehensive history of the marriage-equality litigation process leading from Windsor to Obergefell. It explores how four aspects of federal procedure and jurisdiction doctrine both enabled and frustrated marriage equality’s advance to the Supreme Court. First, we examine common misconceptions about how judgments, injunctions, and judicial precedent control real-world conduct and how litigation brings about legal reform. These misconceptions reached their nadir in Alabama in spring 2015. Guided by Chief Justice Roy Moore, Alabama officials properly declined to follow persuasive precedent, prompting unfortunate and inaccurate comparisons to George Wallace and Massive Resistance to Brown and desegregation. Second, we examine the pivotal, but underappreciated, role of stays pending appeal in constitutional litigation. In particular, we consider how denials of stays triggered concurrent races to the courts of appeals and to the altars. The Court’s transmission of signals through unexplained stays and denials of certiorari exacerbated the confusion in the lower courts and the states, highlighting a penumbra of what one scholar calls the Court’s “shadow docket.” Finally, we examine unsuccessful efforts by state attorneys to move marriage cases out of federal court by initiating state-court litigation and urging federal abstention. This article makes a first contribution to the scholarly discussion of marriage equality by focusing on the critical, but underdeveloped, procedural nuances of high-stakes civil rights litigation. By considering the process of marriage equality, we better understand this societal evolution and future constitutional revolutions. 

Posted by Howard Wasserman on August 12, 2015 at 01:49 PM in Article Spotlight, Civil Procedure, Constitutional thoughts, Howard Wasserman | Permalink | Comments (1)

Tuesday, August 11, 2015

JOTWELL: Malveaux on Porter on Rules interpretation

The new Courts Law essay comes from Suzette Malveaux (Catholic), reviewing Elizabeth Porter's Pragmatism  Rules (Cornell L. Rev., forthcoming), which unpacks competing methodologies and approaches to interpreting the Federal Rules.

Posted by Howard Wasserman on August 11, 2015 at 02:31 PM in Article Spotlight, Howard Wasserman | Permalink | Comments (1)

Monday, August 10, 2015

History of satire

I have been radio silent for the past couple weeks, trying to put the final touches on a new article for August submission (more on that in a few days, hopefully). So, in honor of Jon Stewart's final episode last week, I will do a "hey, check-this-out" post, recommending this week's Backstory podcast, National Lampoon: Satire in American History, and the accompanying essay on the role that satirical magazines played in the 1884 presidential election (Cleveland Defeats Blaine).

I stopped regularly watching Stewart (I would watch pieces online, but it stopped being appointment viewing), largely because at some point I became unable to watch satire of a media and political landscape that is so ridiculous as to be self-satirizing. Making fun of it seemed redundant. Still, I enjoy discussions of satire as a form, especially as it implicates the First Amendment (the podcast features Rod Smolla talking about Hustler v. Falwell) and current politics (there is a short segment on why conservative satire does not catch on to the same degree).

Posted by Howard Wasserman on August 10, 2015 at 09:31 AM in Article Spotlight, First Amendment, Howard Wasserman | Permalink | Comments (0)

Thursday, July 30, 2015

Law-of-Baseball Bleg

I already have the title for a future paper--"Tie Goes to the Runner" and Other Myths of Baseball Rules. The paper will explore baseball rules that everyone believes/assumes are one way and that often are captured in a common, pithy cliche; in fact, they are entirely different, if not the precise opposite, from what everyone thinks. For example, the one from the paper title. As kids, we always yelled "tie goes to the runner" to justify having a runner be safe when the play was too close to call; in fact, the runner is out unless he affirmatively beats the throw--in other words, tie goes to the fielder (Bruce Weber's As They See 'Em has a great discussion of this).

Now I just need some content. So far, I have identified five rules that fit the bill, thanks in part to suggestions from participants in a SEALS discussion group earlier this week: 1) Tie goes to the runner; 2) Infield Fly Rule only applies to balls on the infield; 3) "One base on an overthrow"; 4) "Hand is part of the bat" (so getting hit on hand when hand on bat is a foul ball); 5) The runner cannot run out of the baseline (this rule, and the common misunderstanding of it, came up during the 2013 World Series).

Can anyone think of others? Suggestions welcome in the comments.

Posted by Howard Wasserman on July 30, 2015 at 09:31 AM in Article Spotlight, Howard Wasserman, Sports | Permalink | Comments (17)

Tuesday, July 28, 2015

The Art of Lawyering and Beyond

PkosuriPraveen Kosuri (left), the director of Penn Law School's entrepreneurship clinic, has a neat new piece, Beyond Gilson: The Art of Business Lawyering.  Here's the abstract:

Thirty years ago, Ronald Gilson asked the question, “what do business lawyers really do?” Since that time legal scholars have continued to grapple with that question and the implicit question of how business lawyers add value to their clients. This article revisits the question again but with a more expansive perspective on the role of business lawyer and what constitutes value to clients. Gilson put forth the theory of business lawyers as transaction cost engineers. Years later, Karl Okamoto introduced the concept of deal lawyer as reputational intermediary. Steven Schwarcz attempted to isolate the role of business lawyer from other advisors and concluded the only value lawyers added was as regulatory cost managers. All of these conceptions of business lawyering focused too narrowly on the technical skills employed, and none captured the skill set or essence of the truly great business lawyer. In this article, I put forth a more fully developed conception of business lawyer that highlights skills that differentiate great business lawyers from the merely average. I then discuss whether these skills can be taught in law schools and how a tiered curriculum might be designed to better educate future business lawyers.

What Professor Kosuri captures is that it’s a complex world out there, and trying to distill the essence of business lawyering through one particular science (rather than art) is going to be radically incomplete.

Nevertheless, his approach continues in an analytic tradition of identifying characteristics from the outside, and suggesting essentially that others, for want of a better word, mimic those characteristics. My view ups the stakes even more, because I think being a great business lawyer is not only beyond the acquisition of technical skills, it’s also beyond the acquisition of art. Stated more plainly, to learn the art, to acquire the characteristics Professor Kosuri describes, you have to want them first.

Which raises the question of teachability. I’m pretty sure we instill this affect, this emotional predisposition, more through our modeling of behavior than we do by way of teaching through our words.  There's been a lot of discussion of Atticus Finch in the last few weeks, and who knows how many people Harper Lee inspired to be lawyers through To Kill a Mockingbird (and, hence, the downer of finding out that he may not have been as godlike as previously thought). I confess that I have never read To Kill a Mockingbird, and have only seen parts of the movie. My lawyer hero was Henry Drummond from Inherit the Wind, the fictionalized Clarence Darrow, and his cross-examination (taken in large part from the Scopes trial transcripts) of Matthew Brady, the fictionalized William Jennings Bryan, was the apotheosis of lawyering.

Well, you grow up and it turns out that making a living as a litigator in, say, 1979 or 1985 isn't (for most of us) like trying the Scopes case. But that doesn't diminish the impact of "be like" as the source of one's desire to learn a particular way of practicing one's craft.

And isn't the hardest place either to teach or model "be like" from behind a podium in a lecture hall?

Posted by Jeff Lipshaw on July 28, 2015 at 08:02 AM in Article Spotlight, Corporate, Lipshaw | Permalink | Comments (1)

Thursday, July 23, 2015

God Doesn't Play Dice, Spooky Action at a Distance, If You Have a Hammer, Everything Looks Like a Nail, Ships Passing in the Night, and Other Metaphors For Belief and Debate

Canstockphoto12155245This is a reflection about disciplines and theory, in particular, law and economics.  I preface it by saying that I think economics is a fascinating subject, I took a lot of econ classes in college (mostly macro), and I was an antitrust lawyer for a long time, which meant that I had to have some handle on micro as well.  What provokes this particular reaction is a new piece by Bob Scott (Columbia), a far more distinguished contract theorist than I, on the same subject, contract interpretation, on which I've been writing and blogging this summer.  Bob and I aren't just ships passing in the night. (If we were, he'd be the aircraft carrier in the photo at left.) We are sailing in different oceans. I have been thinking the last few days about why. (I should say that Bob and his frequent co-author, Alan Schwartz, have acknowledged my previous critiques in print. The sailing metaphor is about our concepts, not the fact of the dialogue!)

I'll come back to the specifics later. What I want to consider first is those circumstances in which reasoned discussion is or is not even possible. A couple years back I read a fascinating article by a philosopher named Brian Ribeiro, in which he assessed truly hard cases of conflicting belief, i.e., those instances in which the interlocutors disagree but are not ignorant of critical facts, are sufficiently educated, and are under no cognitive disabilities. A perfectly good example is religious belief. If you are a Mormon or a Catholic, you are going to believe things about which no amount of reasoned argument will change my belief. Rather, a change has to be the result of a conversion.  To quote Ribeiro, "If reconciliation is to occur, then one of us must forsake reason-giving (non-rationally) reject our old rule, and (non-rationally) accept a new rule, thereby ending the dispute."

It's pretty easy to see that issue in the case of religion, but my contention here is that it happens all the time in academia, i.e., we are ships passing in the night because we begin with an affective set of foundational beliefs upon which we base our sense-making of experience, and the affect is simply not amenable to anything but a conversion experience if there is to be a change.  The first part of the title is a reference to Einstein's famous quip about quantum mechanics, and has to do with something very fundamental about how you believe one event causes another (like particles influencing each other simultaneously at distances greater than light could travel in that instant - the issue of "entanglement" that Einstein called "spooky action at a distance").

I'm not saying that one can't be converted. I suspect there would be some experiment that could have brought Einstein around, just like Arthur Eddington's experiment brought Newtonians around to Einstein's general relativity. The issue arises at a meta level, when you don't believe that there can be evidence that would change your belief. Sorry, but I don't think even my believing Christian friends whose intellects I  respect beyond question are going to get me to believe in the divinity of Jesus Christ.

I'm pretty sure that there's no bright line that cabins off the meta issue of belief solely to matters of religion, however. My friend and next door neighbor, David Haig, is an esteemed evolutionary biologist at Harvard. He and I occasionally partake of a bottle of wine on a Saturday or Sunday afternoon, and come around at some point to the "hard question of consciousness." This is the unresolved scientific and philosophical question of the phenomenon of consciousness. At this point, the debate is not so much about whether there is a reductive explanation, but whether there can ever be one (that's why it's still as much a philosophical as scientific debate). David and I pretty much agree to disagree on this, but my point is that reasoned discussion morphs into belief and conversion at some point.  That is, if presented with a theory of consciousness that comports with the evidence, I'd be pretty stupid not to be converted (just as if Jesus showed up with Elijah at our next Passover Seder and took over reading the Haggadah). But for now, he believes what he believes and I believe what I believe. (There's a philosophical problem of induction buried in there, because usually the basis of the belief that we'll solve the problem is our past experience of solving heretofore unresolvable problems.)

How this ties back to something as mundane as contract law after the break.

First, I owe it to Bob to plug his forthcoming Marquette Law Review article, Contract Design and the Shading Problem, the abstract of which is as follows:

Despite recent advances in our understanding of contracting behavior, economic contract theory has yet to identify the principal causes and effects of contract breach. In this Essay, I argue that opportunism is a primary explanation for why commercial parties deliberately breach their contracts. I develop a novel variation on opportunism that I identify as “shading;” a behavior that more accurately describes the vexing problems courts face in rooting out strategic behavior in contract litigation. I provide some empirical support for the claim that shading behavior is both pervasive in litigation over contract breach and extremely difficult for generalist courts to detect, and I offer an explanation for why this is so. In contrast to courts of equity in pre-industrial England, generalist courts today are tasked with the challenge of interpreting contracts in a heterogeneous global economy. This has left generalist courts incapable of identifying with any degree of accuracy which of the litigants is behaving strategically. I advance the claim that ex ante design by commercial parties is more effective in deterring opportunism in litigation than ex post evaluation of the contractual context by generalist courts. I illustrate this claim by focusing on the critical roles of uncertainty and scale in determining how legally sophisticated parties, both individually and collectively, design their contracts. By deploying sophisticated design strategies tailored to particular environments, parties are able both to reduce the risk of shading and to cabin the role of the decision maker tasked with policing this difficult to verify behavior. I conclude that judges and contract theorists must attend to the unique characteristics of the contracts currently being designed by sophisticated parties because it is the parties, and not the courts, that reduce the risks of opportunistic shading in contract adjudication. 
What Bob is wrestling with is how to fit the problem of contract language into the law and economics of contracts.  "Theory" would predict that contracts are a check on opportunism, and therefore we ought to see a reduction in opportunistic behavior, particularly as between sophisticated parties who write complex agreements. But we see LOTS of opportunistic behavior and so how do we explain it? Well, it must be because somebody is acting opportunistically, and pushing an ex post interpretation of the language that couldn't realistically have been what it meant when the parties agreed to it ex ante.
 
Economic theory of contract law - i.e., the relationship of contracting behavior to the reduction of opportunism - demands a causal relationship between the act of making a contract and the application of that contract to resolve a dispute that occurs later in time.  Moreover, if the contracting parties are rational, they ought to trying to make their contracts as "complete" as possible, that is, to anticipate as many "state contingencies" as they can. To quote Bob Scott: "Faced with this wide gap between theory and reality, the answers to a critical empirical question remain elusive: how do sophisticated parties adjust ex ante to the prospect of breach ex post?"
 
Bob and I don't disagree that the world is rife with opportunistic behavior, and it occurs as much in the case of sophisticated market actors as with anybody else.  Why we are ships passing in the night has to do with our respective orientation to theory and causation. I'm being presumptuous here, but I think for an economist to delink the ex ante contracting behavior from the ex post opportunism is, like Einstein, to accept spooky action at a distance. The theory is the hammer and, if you have it, the problem looks like a nail.
 
As I've written (ad nauseam, but at least here and here), I have a completely different view of the causal connection (or, to put it more bluntly, the lack of one) between the creation of ex ante contract text and ex post contract opportunism.  All law and economics scholars would (I think) agree that "complete contracts" - i.e. contracts that can in theory anticipate every state contingency - don't and will never exist in the real world. I think the concept, as a matter of fundamental belief, is so ephemeral and fantastical that I can't accept it even as the basis from which to begin an argument. Similarly, I believe the phrase "mutual intention of the parties" is right up there with "the present King of France" in terms of nominally coherent descriptions of non-existent things.  On the other hand, I can understand if an economist would look at my view as saying, in essence, God plays dice with the world, or as contending that I've reduced the behavior to something like spooky action at a distance.
 
What's interesting about all of this is my suspicion (confirmed by my exchanges with Bob offline) that we'd probably face practical problems as pragmatic lawyers in very similar ways. The dialogue is really about fundamental orientations to making sense of the world.

Posted by Jeff Lipshaw on July 23, 2015 at 10:21 AM in Article Spotlight, Legal Theory, Lipshaw | Permalink | Comments (2)

Wednesday, July 15, 2015

"We Begin with the Assumption that Contracts Matter...."

GULATI 0375292One of my reads this summer, because it's relevant to my piece on "lexical opportunism," has been a fascinating little book by Mitu Gulati (Duke, left) and Robert Scott (Columbia, right), The 3 1/2 Minute Transaction: Boilerplate and the Limits of Contract Design (Chicago, 2012). The subject matter is a puzzler: why did sophisticated law firms keep including a particular contract provision (the "pari passu" clause) in sovereign debt agreements when (a) almost nobody could present a credible explanation of its purpose, and (b) a highly publicized case affirmed an interpretation of the clause that threatened to undermine all attempts to restructure sovereign debt? Scott new 9-09

Let me start with words of praise. This is a good read and good work. Anybody seriously looking at issues in contract theory ought to be reading it. But it's refreshing to read the results of an academic, empirical piece where the authors are so frank about their bemusement and their inability to come up with a satisfying explanatory theory. Professors Gulati and Scott come at the problem with a neoclassical economic perspective, and find that "these hard-nosed Wall Street lawyers told us stores about rituals, talismans, alchemy, the search for the Holy Grail, and Zeus." (5)  It's pretty clear 173 pages later they'd agree that the conclusion - sticky boilerplate and herd behavior - is a whimper rather than a bang.

I confess that Ayn Rand's The Fountainhead and Atlas Shrugged were staples of my intellectual youth. I've since come to terms with some of the hokum and inherent contradictions in the philosophy (she hated Kant, and I kind of know why - her response to the limits of reason was to opt for an orthodoxy of logic, including the foundational posits that logic requires), but many of her bon mots come back to me at opportune times.  The apropos quote here is from Francisco d'Anconia to Dagny Taggart: "Contradictions do not exist. Whenever you think that you are facing a contradiction, check your premises. You will find that one of them is wrong."

So.... One of the fundamental puzzles for Gulati and Scott is why sovereigns incur any costs toward lowering the cost of capital by way of contract design, and yet economists seem to think that contract design is irrelevant. The bridge from that to their assessment begins as follows: "In any case, as contracts scholars, we begin with the assumption that contracts matter." (23)

That bothers me.  Let's try these variants.  "As philosophers, we begin with the assumption that metaphysics matter." "As human anatomy scholars, we begin with the assumption that appendixes matter." "As physicists, we begin with the assumption that phlogiston matters." What's going on is a demonstration of the subtle ways in which descriptive theory has a normative component, even if the normative element is as basic as something like "this activity should be amenable to explanation by way of theory." If you start with neo-classical welfare-maximizing as the default in human decision-making - i.e., ceteris paribus, that's how the world ought to operate - no wonder it's a puzzle when it doesn't turn out to work that way. (I'm not sure if old Ayn ever got to the part of the Critique of Pure Reason that works through this - it's buried in an Appendix to the Transcendental Dialectic, beginning at pages A643/B671.)

If we check our premises, maybe contracts don't matter.

Posted by Jeff Lipshaw on July 15, 2015 at 07:44 AM in Article Spotlight, Books, Lipshaw, Science | Permalink | Comments (1)

Tuesday, July 14, 2015

Catalyzing Fans

Just in time for Dan's Yahrzeit (last week on the Hebrew calendar, this weekend on the English), Catalyzing Fans has finally been published in the Harvard Journal of Sports & Entertainment Law (co-authored with Michael McCann and me). The article appears alongside comments by Andrew Schwartz, David FagundesMitchell Berman, and Adam Chodorow.

Given how Dan felt about sports, it is ironic that his final academic word has its greatest application in that arena (Dan was always trying to pull the project into broader applications, where Mike and I saw sports as likely the exclusive province for this idea). The comments fit well together and with the original piece and I think Dan would have been happy with how our article and the whole thing came out. It is a fitting tribute.

Posted by Howard Wasserman on July 14, 2015 at 06:42 PM in Article Spotlight, Howard Wasserman | Permalink | Comments (4)

Crazy in Alabama: Judicial Process and the Last Stand Against Marriage Equality

My essay Crazy in Alabama: Judicial Process and the Last Stand Against Marriage Equality in the Land of George Wallace has been published at Northwestern University Law Review Online.

This puts together much of what I have been writing here about the mess in Alabama between January and the Court's decision in Obergefell. I reach the same basic conclusion--obnoxious Roy Moore rhetoric aside, everything that happened in Alabama in those six months was consistent with the judicial process and with the traditional scope of injunctions and district court precedent.

Posted by Howard Wasserman on July 14, 2015 at 09:31 AM in Article Spotlight, Civil Procedure, Constitutional thoughts, Howard Wasserman, Law and Politics | Permalink | Comments (0)

Sunday, July 12, 2015

"No Contracts"

For all that lawyers and law professors traffic in language, sometimes I think language is to lawyers as water must be to fish. That is, if you live in it, it's kind of hard to step back and realize the universe could be constituted out of some other medium.

Cutie-fish-in-waterUp here, the cable provider is Charter, and it runs a lot of commercials. The actor in the commercial for its business services trumpeted yesterday that one of the benefits of subscribing was "no contracts!"  Well, you and I both know that there HAS to be a contract. God knows Charter will be disclaiming SOMETHING - like, for example, the potential for consequential damages to a business if the internet connection goes down.  

What we all know is that "no contracts" actually means something other than its literal meaning.  "No contracts" means only that the subscriber won't be held to a fixed term, and will be able to cancel its service without much notice to Charter. OMG, the plain meaning is precisely the opposite of the plain meaning!

The particular conceit of the smartest people in our profession - and I mean both practitioners and professors - is that words and sentences are capable, with the right skills, of exactitude that approaches an asymptotic limit. Within a certain school of contract law theorists, this gets expressed as the idea of an "incomplete contract," as though the idea of a complete contract, one that contemplates EVERY possible state contingency, is something any more conceivable than the Kabbalists' notion of God (the Ayn Sof - "there is no end"). I put the term "complete contract" in the same conceptual category as I do non-words like "gruntled," "dain," and "combobulated." 

Below the break, I fulminate on this idea - that plain meaning is like Schrödinger's cat, existing and not existing at the same time - in the context of statutes (i.e. King v. Burwell) and contracts. (Full disclosure: I'm the guy who, when any student in my contracts class says the words "mutual intention of the parties," starts making "woo-woo" noises and acting out the Vulcan mind-meld.)

I don't usually wade into the great issues of the day, but I thought I ought to read the King v. Burwell opinions.  If you put aside the politics, Chief Justice Roberts's opinion is a pretty well-trod exercise in the interpretation of a text: what does it mean for a health care exchange to be "established by the state"? Does that mean state itself  has to put the exchange in place under its law, or does it also mean an exchange that the federal government has established for the state as the default?  

For contracts professors, it's not too surprising.  If you read Justice Traynor's opinion in Pacific Gas & Electric Co. v. G.W. Thomas Drayage & Rigging Co., a seminal case in the law of interpretation, it's the same "literal reading" versus "contextual reading" of an indemnity clause. Indeed, if you look at the language in PG&E, it's the equivalent of Charter's "no contracts," and the court says, "Oh no, it can't possibly mean that!"

Two implications come to mind.

First, whether language ever really maps even an individual purpose or intention, much less the elusive "mutual intention of the parties" in a contract or "congressional intent" is the subject of the piece I posted on SSRN several weeks ago: Lexical Opportunism and the Limits of Contract Theory. My point there is that the elusiveness of language as map undercuts attempts to make broad economic or moral theoretical statements about contract law; I suspect it's the same for statutory interpretation. The text is the text and, in any hard case about its application, we are all opportunists.

Second, it's also almost impossible to state a rule for when you ought to abide by the plain textual meaning or look at the context. Sometimes "no contracts" could really mean "no contracts." There are some documents whose very value is in their formalism - letters of credit, negotiable instruments, promissory notes - and you really do do a disservice by allowing a contextual reading of the language.  Hence, Judge Kosinski's criticism of the PG&E rule in the Trident case: it "casts a long shadow of uncertainty over all transactions negotiated and executed under the law."

Personally, I don't know what the hell "established by the State" was supposed to mean, and was relieved to have the ACA once again upheld because I think it's good policy (or better than the non-policy that existed  before). 

But in terms of the language issue, I can't help hearing the debate as though I'm listening to two fish argue how wet the water is.

Posted by Jeff Lipshaw on July 12, 2015 at 08:04 AM in Article Spotlight, Legal Theory, Lipshaw | Permalink | Comments (1)

Wednesday, July 08, 2015

AALS Section on Federal Courts: Annual Award for Best Untenured Article on the Law of Federal Jurisdiction

The following comes from Tara Leigh Grove, on behalf of the AALS Section on Federal Courts.

The AALS Section on Federal Courts is pleased to announce the fourth annual award for the best article on the law of federal jurisdiction by a full-time, untenured faculty member at an AALS member or affiliate school ­and to solicit nominations (including self-nominations) for the prize to be awarded at the 2016 AALS Annual Meeting in New York, NY. 


The purpose of the award program is to recognize outstanding scholarship in the field of federal courts by untenured faculty members. To that end, eligible articles are those specifically in the field of Federal Courts that were published by a recognized journal during the twelve-month period ending on September 1, 2015 (date of actual publication determines eligibility). Eligible authors are those who, at the close of nominations (i.e., as of September 15, 2015), are untenured, full-time faculty members at AALS member or affiliate schools, and have not previously won the award.
 
Nominations (or questions about the award) should be directed to Tara Leigh Grove at William and Mary Law School (tlgrove@wm.edu). Without exception, all nominations must be received by 11:59 p.m. (EDT) on September 15, 2015. Nominations will be reviewed by a prize committee comprised of Professors Janet Cooper Alexander (Stanford), Tara Leigh Grove (William & Mary), Caleb Nelson (Virginia), Judith Resnik (Yale), and Amanda Tyler (Berkeley), with the result announced at the Federal Courts section program at the 2016 AALS Annual Meeting.

Posted by Howard Wasserman on July 8, 2015 at 04:15 PM in Article Spotlight, Civil Procedure, Howard Wasserman, Teaching Law | Permalink | Comments (0)

JOTWELL: Levy on Huq on constitutional justice

The new Courts Law essay comes from Marin Levy (Duke), reviewing Aziz Huq's Judicial Independence and the Rationing of Constitutional Remedies (Duke L.J.) (forthcoming), which links the use of fault rules limiting constitutional remedies to the judiciary's efforts to protect its institutional interests. Have a look.

Posted by Howard Wasserman on July 8, 2015 at 09:43 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Tuesday, July 07, 2015

John Yoo and Me on the Supreme Court and the Separation of Powers

As part of "Celebrate Liberty" month (a joint project of the Federalist Society and the Washington Times), today's Times includes dueling op-eds by John Yoo and me on the separation of powers after and in light of the most recent Supreme Court Term. Here's John's piece; here's mine.

Perhaps not surprisingly, both pieces focus on the marriage cases. John's starts from the premise that "the Supreme Court cannot finally determine any fundamental constitutional dispute," and goes from there to urge popular resistance to the decision from those who disagree--not through disobedience or defiance, but rather "by seeking judicial nominees who will restore primary control over family law and marriage to the states." Thus, as John concludes, "Like the opponents of Roe v. Wade, they can create a political and cultural environment that makes a return to the Court’s proper role possible. While such a campaign could take decades, as has the movement to restore control over abortion to the states, conservatives should work within the bounds of tradition, even when the Court does not." 

My piece takes somewhat of a different view. Seizing upon the Obergefell dissenters' claims about the anti-democratic nature of the decision, I argue that an ambitious Supreme Court is actually a healthy thing for the separation of powers (as Madison argued in the Federalist No. 51), so long as the Court is properly exercising judicial power in the formal sense--by deciding cases and controversies within its jurisdiction. Thus, as I conclude, "it’s long-past time that we learned the difference between rulings that exercise judicial power that doesn’t exist, and those that exercise established judicial power to reach a result with which we disagree." It's one thing to criticize Obergefell for reaching the wrong answer to the constitutional question; it's quite another to criticize it for answering that question in the first place. (And the same works in reverse--progressives might critique HellerCitizens United, and Shelby County on the merits, but it's hard to dispute the claim that the constitutional questions in those cases were properly before the Court, but cf. Fisher.)

Even though we didn't have a chance to see each other's drafts in advance (or, as such, to respond to each otther), I actually think these pieces fit quite nicely--and help to illuminate the ever-ongoing debate over the proper judicial role.

Posted by Steve Vladeck on July 7, 2015 at 10:08 AM in Article Spotlight, Steve Vladeck | Permalink | Comments (15)

Saturday, July 04, 2015

Wine, Soda Pop, and Law Schools - More on "Law Review Lift (Drag)"

Some time this month I will get to a relatively more serious topic, like textual opportunism, but for right now I'm still fiddling around with Al Brophy's ranking system.  

So 10+ that I don't bury the lead, let me say up front that I have played some simple-minded statistical games with Al's data.  What I come up with is that, among academics, "brand," as with soda pop, means a lot, and it is relatively sticky and independent of what is going on with the students.

I also think it's pretty obvious that there is a relationship between the "brand" and student data (i.e. high correlations between any ranking system and LSAT scores, for example). What got me interested, however, as I noted a few days ago, was the differential when Al included or didn't include a different and interesting stat: how often the school's main law review (not its faculty) got cited. My intuition is that what other profs think about placing articles in a school's review (based on my own experience) is a lot like the peer reputation score, except that it does measure a revealed preference (i.e., when you rank "peer reputation" as a participant in USNWR, it doesn't cash out to anything; placing an article does!)

The problem with all of these systems, in which we are "ranking" something with many complex factors (like wine) is that the judgment is qualitative, even if it looks quantitative. Often it's qualitative simply because it's qualitative (e.g., "peer reputation"), but even when it's fully quantitative it's qualitative because of the judgments one makes in weighting the quantitative factors.  I was once a partner in a big law firm. Our partnership agreement called for compensation to be determined by a committee, which in turn used a list of factors like "billable hours," "service to the firm," "client responsibility," etc. Every two years the committee turned out a ranking that set your compensation relative to all the other partners. Similarly, if you aren't a hermit during early March of each year, you hear about a double ultra secret committee in Indianapolis deciding which of the "bubble teams" gets into the NCAA basketball tournament. Same thing.  Recent results? Body of work? Bad losses? Good wins?

In any event, I played with Al's data and made some scatter plots and regressions in Excel, all of which follow the break.

20+I should note that I ran my little exercise by one of the toughest critics of empirical work I know, not for an endorsement, but to see if it was okay to "bin" the data into that 10+, 20+, and 30+ differentials between Al's 2 variable and 3 variable results. My interlocutor (who will remain nameless to protect the innocent) said that binning was okay if there was some theory behind it, but his or her very, very fulsome and thoughtful reply to my question reaffirmed my belief that data without judgment is blind (and judgment without data is empty, to be fair, in each case paraphrasing Kant). The big issue is whether just a few outliers are responsible for the outcomes (which you can see by eyeballing the scatter plots). That may be true here. So with that disclaimer, and recognizing this is a blog post, for God's sake, and not a peer reviewed research paper, here's what I came up with.


If you plot law review "lift (drag)" of 10+, you come up with a positive correlation to law review volume number (.339).  See chart above the break. 30+

If you do the same for "lift (drag)" of 20+ and 30+, you come up with even higher correlations, .42 and .55, respectively.  (See above left and right.)

What do I conclude? Probably nothing more than common sense would tell me: "brand" makes a difference; it takes a long time to develop one; and once you have it established, it sticks around enough to bias other data.

Posted by Jeff Lipshaw on July 4, 2015 at 03:39 PM in Article Spotlight, Life of Law Schools, Lipshaw | Permalink | Comments (1)

Thursday, July 02, 2015

Playing With Al Brophy's Alternative Law School Rankings - Student Centered vs. Student/Scholarship Centered Results

I have all sorts of analytic issues with law school rankings - e.g., reputation means a lot, but it really is based on feedback loops and is really, really sticky; linear rankings by number hide the fact that it's a bell curve on things like reputation, and linear differences in the middle of the pack don't mean much). But it's still interesting navel gazing, and makes a big difference (I think) in professional and academic careers.

Image.ashxYesterday, Al Brophy (UNC) posted an update to his alternative to USNWR, Ranking Law Schools, 2015: Student Aptitude, Employment Outcome, Law Review Citations.  He uses three variables, entering median LSAT score, employment outcomes (JD required; no school-funded jobs; no solo practitioners), and citations to the school's main law review.  That latter one is interesting because it doesn't measure the scholarly influence of the school's faculty, but instead the school's brand for purposes of law professors placing their articles.  

Al did two analyses, one using only the student variables (LSAT and employment - the "2 var" rank) and one using all three (the "3 var rank").  His Table 2 shows the relative 2 var and 3 var rank for each school, but his comparison are all as against USNWR.  I was interested in "law review lift" versus "law review drag."   So I made a list from Al's Table 2, arbitrarily taking a difference of ten or more as the cutoff.

After the jump, you can see a list of schools whose ranking with their law reviews improves by ten spots or more (law review lift) or whose ranking drops by ten spots or more when the law review gets included (law review drag).  I'll leave it to you to theorize about meaning, if any.

Law review stats enhance student stats ten spots or more
Illinois
Indiana
Florida State
Houston
Utah
George Mason
Cardozo
Cincinnati
Lewis & Clark
Pepperdine
Hastings
Connecticut
San Diego
Brooklyn
Chicago-Kent
Albany
Indiana - Indianapolis
Hofstra
Oregon
DePaul
William Mitchell
American
Catholic
Howard
Akron
Michigan State
Marquette
Seattle
Cleveland State
Vermont
Santa Clara
New York Law School
Ohio Northern
Widener (Delaware Journal of Corporate Law)
McGeorge
Toledo
San Francisco
Suffolk
 
Law review stats drag student stats ten spots or more
 
Georgia
Arizona State
UC-Irvine
Kentucky
Baylor
Georgia State
New Mexico
Oklahoma
Montana
Tulsa 
New Hampshire
Florida International
Rutgers-Camden
Drexel
Syracuse
Hawaii
Idaho
Stetson
South Dakota
Campbell
Duquesne
Chapman
Northern Illinois
North Dakota
Samford (Cumberland)
CUNY
Wyoming
Nova Southeastern
Texas A&M
Oklahoma City
Arkansas-Little Rock
Dayton
Liberty
Elon
Faulkner
Florida A&M

Posted by Jeff Lipshaw on July 2, 2015 at 08:11 AM in Article Spotlight, Law Review Review, Life of Law Schools, Lipshaw | Permalink | Comments (0)

Tuesday, June 09, 2015

JOTWELL: Thornburg on Schwartz on the information benefits of discovery

The new Courts Law essay comes from Elizabeth Thornburg (SMU), reviewing Joanna C. Schwartz, Introspection Through Litigation (Notre Dame Law Review), which explores the ways that discovery enables and incentivizes institutional litigants to examine and change their own actions and processes. I was particularly intrigued in how the substantive rules surrounding § 1983 litigation (notably Monell) actually undermine those information-gathering and "introspection" incentives.

Posted by Howard Wasserman on June 9, 2015 at 08:51 AM in Article Spotlight, Civil Procedure, Howard Wasserman | Permalink | Comments (0)

Tuesday, May 26, 2015

LSA Panel in Memory of Dan Markel

At 11:30 a.m. this Friday at the Law & Society Association Annual Meeting in Seattle, there will be a Service Panel, entitled Combining Academic Work and Social Media Presence, held in Memory of Dan Markel. Panelists include former GuestPrawf Hadar Aviram. We hope any Prawfs authors and readers who are in Seattle can attend.

Posted by Howard Wasserman on May 26, 2015 at 12:25 AM in Article Spotlight, Blogging, Howard Wasserman | Permalink | Comments (1)

Wednesday, May 13, 2015

JOTWELL: Coleman on Carroll on class action reform

The new Courts Law essay comes from Brooke Coleman (Seattle), reviewing Maureen Carroll's  Class Action Mypoia (forthcoming Duke L.J.), which argues that efforts at class-action reform must recognize the differences among types and forms of class actions.

Posted by Howard Wasserman on May 13, 2015 at 09:31 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Wednesday, April 29, 2015

Fontana and Braman empirically test the countermajoritarian difficulty

David Fontana and Donald Braman (both of GW) discuss their study showing that, on the question of marriage equality, people do not [ed: oops] care whether marriage equality is established by SCOTUS or by Congress. Opinions on same-sex marriage were unchanged by the institution that established it.

Posted by Howard Wasserman on April 29, 2015 at 10:58 AM in Article Spotlight, Constitutional thoughts, Howard Wasserman, Law and Politics | Permalink | Comments (6)

Sunday, April 19, 2015

Deferred Prosecution Agreements: Right Problem, Wrong Fix

Yglesias has a good write-up of the problems with regulating big financial firms, but he (and Elizabeth Warren) get to the wrong solutions. 

To paraphrase, the problem is that many regulated firms are effectively judgment proof.  We may threaten sanctions against accounting firms that commit fraud, or chemical firms that dump waste into the river, or banks that swindle their counter-parties.  The problem is that the typical criminal sanction is too big, since indictment triggers a run on the firm by its employees, trading partners, and (eventually) creditors.  Prosecutors have therefore basically stopped indicting, leading to the rise of deferred-prosecution agreements, as nicely chronicled by my law school classmate Brandon Garrett. 

For Yglesias, and to lesser degree Garrett, the deferred prosecution agreement is too wimpy.  Since firms know that the government won’t indict, they have no reason to cave, leading to quite defendant-friendly deals.  This leads to under-deterrence.  Yglesias endorses Sen. Warren’s proposed solution, which is to credibly put the threat of indictment back on the table.

But prosecutors are not wrong to avoid indictment, since that leads to over-deterrence.  Over-deterrence is bad not only for firms that sink too much money into compliance, but also for society.  It’s like the problem of medieval justice: if the sentence for every crime is hanging, bandits have no marginal incentive to avoid killing their victims.

My own view, as I sketch in this new draft, is that the problem is caused by the choice of ex post remedies.  When regulators are facing defendants who are, in effect, judgment proof, the better solution is to switch to other incentives.  So, for example, we might impose a tariff on chemicals that would be hazardous if dumped, or use anti-trust to keep banks too small to impose systemic risks.  Obviously, there’s a tradeoff: not all firms will dump the chemical.  A key part of my argument is that regulators can adjust their ex ante prices to account for expected variations in ex post behavior; firms that are at higher risk of dumping pay more for the chemical.  

(Cross-posted at the Law & Economics Prof Blog)

Posted by BDG on April 19, 2015 at 05:28 PM in Article Spotlight, Criminal Law | Permalink | Comments (7)

Tuesday, April 14, 2015

The Moral Psychology of the Fair Play, Fair Pay Act

Yesterday, four members of Congress introduced the “Fair Pay, Fair Play Act,” a bill that would entitle owners of copyrights in sound recordings to recover royalties for radio airplay of those tracks on terrestrial radio stations. That performers don’t receive such royalties may seem surprising, but it’s just one of many strange outcomes generated by the statutory labyrinth that is the Copyright Act.

At first blush, the rationale for such a revision seems simple and appealing. Performers work hard to create sound recordings, so when radio stations broadcast those recordings, why shouldn’t they get paid? After all, the songwriters who wrote those tunes get a royalty each time they are played. But upon closer examination, this rationale is more puzzling. The purpose of copyright law, expressed in the Constitution, is to promote the progress of science and the useful arts (including creative innovation) by means of financial incentives secured by exclusive rights in authors’ works of authorship.

Copyright’s incentives story may explain the FPFPA going forward (performers may be more likely to create future sound recordings if they can expect more remuneration via performance rights), but this account cannot make sense of the retroactive application of the law to already-created songs. And much of the industry force behind the act comes from performers who recorded older, classic tracks who feel aggrieved that they have not gotten royalties from their hit recordings for decades.

So if incentives cannot explain this sense of entitlement to recover additional royalties for past creation, what does? One account may lie in Mark Lemley’s snappy new essay, Faith-Based IP, discussed by Amy Landers in her earlier post on this site. The musicians and Congresspeople behind FPFPA may simply be relying on the notion that copyright owners have pre-political rights that should be recognized regardless of whether the existence of those rights would drive innovation, or even regardless of whether those rights would generate social welfare. At the surface, this may be a plausible account, but I want to propound a different account, one that draws on a forthcoming paper I co-authored with Chris Buccafusco, The Moral Foundations of Copyright Infringement. I elaborate this alternative theory below the fold.

In our paper, Chris and I show that the FPFPA is hardly unique. There are countless examples in which owners of copyrighted works express outrage over unauthorized use in ways that bear no relationship to the classic IP incentives account, and that may even bear no relationship to their economic interests at all. Sometimes people even seek suppression of unauthorized use that might help them economically, such as when fashion designers sought stronger IP protection despite evidence that design piracy may actually help their brands.

This only shows the depth of the puzzle, though, not its solution. And while some have argued that authors deserve non-economically based rights in their works of authorship for reasons divorced from welfare considerations, Chris and I look instead to contemporary cognitive science for an explanation. In particular, our account invokes moral foundations theory, which posits the existence of at least five different heuristic dyads—harm/care, fairness/cheating, loyalty/subversion, purity/degradation, and authority/subversion—that describe the mental architecture of our experience of transgression.

It’s easy to explain why authors of extant sound recordings would root for the FPFPA. Everyone wants more money. But why would the situation of such authors case strike a chord with unaffected third parties such as the bill’s congressional sponsors, and even the public more broadly? Our moral-psychological account indicates that what is afoot here is instead the intuitive sense shared by many people that formal inequities (such as compensating songwriters but not performers for radio play of the same track) grate on our moral sensibilities, regardless of welfare considerations. Unlike the incentives theory, our account explains the FPFPA in its prospective and retrospective applications, since in both instances performers are equally aggrieved by the fact that songwriters get performance royalties but they do not.

This is different than a mere “rights” account because such accounts often (though not always or necessarily) descend into conclusory circularity. The idea of a right is a legal conclusion about relative entitlements, but is often used instead (and especially in some of the high-flown rhetoric about the FPFPA) as an argument for that conclusion instead (or as well). Hence the dismissals, like Lemley’s, of rights-based arguments about IP as rootless and “faith-based.”

But while Chris and I argue that the moral-psychological account provides a richer sense of non-welfarist approaches to IP (especially the instinctive responses of laypeople, including creators and owners of works of authorship, to unauthorized use) than simply dismissing them as rights-voodoo, this does not mean that copyright law should be determined by moral-psychological considerations. Our moral intuitions may feel righteous but that does not at all mean that acting on those intuitions serves the social good. After all, some of the great evil done in human history has likely been animated by a sense (however wrong) of moral righteousness.

What we end up suggesting is a moral-psychological realist approach to IP law. You can still be committed to the incentivist story of copyright while acknowledging that our moral intuitions operate in tension with those welfarist aims. In fact, you might get better outcomes from the incentivist perspective by basing copyright law on a vision of actors that acknowledges their complex moral psychology rather than assuming that they are simple utility-maximizing homines economici. How to do this, of course, is a harder question, but one suggestion we make in the paper is that copyright law should respect only lawsuits motivated by copyright-relevant harm (i.e., attempts to protect a copyright monopoly, not to seek revenge or vindicate a sense of injustice or grab extra rents).

The Moral Psychology of Copyright Infringement (available on SSRN) is forthcoming later this year in the Minnesota Law Review, but we are still making revisions, so comments are most welcome.

Posted by Dave_Fagundes on April 14, 2015 at 04:46 PM in Article Spotlight, Information and Technology, Intellectual Property, Music | Permalink | Comments (0)

JOTWELL: Campos on Davis on standing for states

The new Courts Law essay comes from Sergio Campos (Miami, visiting at Harvard), reviewing Standing Doctrine's State Action Problem (forthcoming, Notre Dame L. Rev.) by Seth Davis (UC-Irvine) on who and when people have standing to assert governmental interests.

Posted by Howard Wasserman on April 14, 2015 at 11:21 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Tuesday, March 31, 2015

JOTWELL: Mullenix on Robreno and asbestos settlements

The new Courts Law Essay comes from Linda Mullenix (Texas), reviewing The Federal Asbestos Product Liability Multidistrict Litigation (MDL-875): Black Hole or New Paradigm? (Widener Law Review) by Judge Eduardo Robreno of the Eastern District of Pennsylvania. Judge Robreno discusses the resolution of the asbestos MDL (feared as a "litigation black hole"), over which he presided.

Posted by Howard Wasserman on March 31, 2015 at 10:29 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)

Tuesday, March 17, 2015

JOTWELL: Tidmarsh on Zimmerman on presidential settlements

The new Courts Law essay comes from Jay Tidmarsh (Notre Dame) reviewing Adam Zimmerman's Presidential Settlements, which explores the power of the President to resolve large-scale disputes, even at the expense of the rights of individual claimants.

Posted by Howard Wasserman on March 17, 2015 at 10:58 AM in Article Spotlight, Howard Wasserman | Permalink | Comments (0)