The recent crisis in the wake of the Enron debacle has demonstrated the importance of enlisting gatekeepers – such as accountants, underwriters, and lawyers – to prevent corporate fraud. But while a consensus may exist over the basic need to expand liability to gatekeepers, little is known about the appropriate scope of such liability. Going beyond the capital-market context, this Article develops a framework to determine the scope of gatekeeper liability for client misconduct. Specifically, the Article analyzes the fundamental tradeoff between the potentially adverse impact of gatekeeper liability on relevant markets and the incentives such liability provides for gatekeepers to foil wrongdoing. Expanding the scope of their liability will make gatekeepers increase the price of their services to reflect their liability exposure. Although initially appealing as a means to screen out wrongdoers, this price increase may turn out to have adverse consequences when clients vary with respect to their wrongful intentions: Rather than screen out wrongdoers, gatekeeper liability may drive out only law-abiding clients. Enhanced liability, however, will also induce gatekeepers to monitor clients and prevent them from committing misconduct. The Article explores the policy implications of this analysis for determining which third parties should face gatekeeper liability, identifying the adequate scope of gatekeeper liability, and recognizing the shortcomings of gatekeeper liability as an instrument of social policy. The Article concludes by putting forward a tentative outline of the proper regime of gatekeeper liability for securities fraud.
For nearly two centuries, legal historians have believed that the medieval English jury differed fundamentally from the modern jury. Its members hailed from the immediate vicinity of the dispute and came to trial already informed about the facts. Jurors based their verdicts on information they actively gathered in anticipation of trial or which they learned by living in small, tight-knit communities where rumor, gossip, and local courts kept everyone informed about their neighbors’ affairs. Interested parties might also approach jurors out of court to relate their side of the case. Witness testimony in court was thus unnecessary. The jurors themselves were considered the witnesses – not necessarily eyewitnesses, but witnesses in the sense that they reported facts to the judges. They were self-informing; they “came to court more to speak than to listen.”
Eldred v. Ashcroft, as decided by the Supreme Court in January 2003, added another chapter regarding the relationship between copyright law and freedom of speech to the judicial “chain novel” that has been in the writing for the past three decades. The Court affirmed the constitutionality of the Sonny Bono Copyright Term Extension Act of 1998 (“CTEA”), which extended the copyright term by twenty years, both for existing works and for new works. As in previous chapters, the Court reached the conclusion that there is no conflict between the two legal fields. It repeated the judicial sound bite that “the Framers intended copyright itself to be the engine of free expression.” Eldred nicely fits the conflict discourse, which is mostly one of denial. But Eldred also included novel and interesting elements that offer a new direction to the conflict discourse, or at least a potential for redirection.
Eldred raises many intriguing copyright law and constitutional law questions. Here, however, I wish to focus on the possible ramifications the case might have on the conflict discourse with respect to its constitutional level. Surprisingly, Eldred is the first facial constitutional challenge to copyright law in 213 years. As copyright law continues to expand into new territories and in unpredictable ways, and as new bills are introduced at a staggering rate to further the scope of the rights of copyright owners, it is crucial that we study the contours of copyright law. This need is especially acute in light of the Court’s comment that “[w]hen, as in this case, Congress has not altered the traditional contours of copyright protection, further First Amendment scrutiny is unnecessary.”
Laura Dickinson’s recent article in this journal substantially improves appreciation of how the United States has detained suspects and instituted military commissions as well as of the roles played by the controversial procedure and tribunals when fighting terrorism. She meticulously traces how detentions and the commissions evolved, trenchantly criticizes them, and persuasively shows international tribunals’ comparative advantage. Dickinson accords relevant domestic case precedent a somewhat laconic analysis, however. For example, she briefly mentions separation-of-powers concerns and Supreme Court opinions that detentions and military commissions implicate while rather tersely assessing Ex parte Quirin, the Second World War decision on which President George W. Bush’s Administration has heavily relied to detain suspects, to create the tribunals, and to support numerous antiterrorism initiatives, especially litigation. Dickinson suggests that closer evaluation of these critical rulings is unwarranted because they lack application for her work and others have explored the opinions. Dickinson’s treatment allows many observers, most prominently cabinet members and federal judges, to overstate Quirin and to ignore Youngstown Sheet & Tube Co. v. Sawyer.
Dickinson contributes substantially to the ongoing debate over the use of detentions and military commissions in national emergencies. She illuminates myriad complex phenomena and convincingly demonstrates how international tribunals are preferable. Her recommendation may prove superior in terms of theory, policy, and international law. Nonetheless, the very realpolitik that Dickinson so incisively criticizes, and is so clearly exemplified by the Bush Administration’s war on terrorism, mandates elaboration of the governing United States case law.
Our law has no mind of its own. In times past, we have fancied law a product of the Deity, and we are still apt to depict it as something transcendent, or even broodingly omnipresent, if not divine. Some of our lawmakers maintain a tradition of donning garments befitting oracles when they utter their pronouncements.
The Age Discrimination in Employment Act (“ADEA”) was enacted to promote the ability of older workers to compete in today’s marketplace. It recognized a disturbing change in the way that companies were treating older workers. Historically, older workers were regarded as a valuable commodity because of their skill and experience. The advance of the modern age brought about a shift in ideologies in corporate America. Older workers came to be considered a liability in the fast-paced business world. Congress drafted the ADEA to eliminate unfounded stereotypes of older workers as less productive and more expensive to employ. It gave statutory protection against discrimination to anyone over forty years of age.
The role of the Takings Clause of the Fifth Amendment in requiring compensation for government actions that treat landowners unequally is seldom explored. This is remarkable given that the Supreme Court has said for more than a century that the Takings Clause “prevents the public from loading upon one individual more than his just share of the burdens of government, and says that when he surrenders to the public something more and different from that which is exacted from other members of the public, a full and just equivalent shall be returned to him.”
One might infer from this description of the Fifth Amendment that the regulatory takings doctrine should have developed as a comparative right (a species of equal protection law)—a right to be treated legally the same as other property owners in a community, or to receive compensation when differential treatment is justified. Indeed, when the Supreme Court first held that the Fourteenth Amendment incorporated the rule that government may not take private property without just compensation, it relied on the Equal Protection Clause, not the Due Process Clause.
The main argument presented in this Article is that the harms and social costs of copyright cannot be summarized just in terms of enclosure and exclusion. Copyright law, I will argue, also has a silencing effect toward noninfringing creative materials of other independent creators and producers.
In June 2002, the United States Supreme Court approved an Ohio program that made available publicly supported vouchers for children in Cleveland to attend private (nonsectarian) and religious schools. Writing for a five-member majority in Zelman v. Simmons-Harris, Chief Justice William Rehnquist held that the Ohio program did not violate the Establishment Clause of the First Amendment because it (1) has a valid secular purpose of providing educational assistance to poor children; (2) is neutral with respect to religion and provides assistance to a broad class of citizens; and (3) provides aid to religious institutions only as a result of independent decisions made by the parents of the school children participating in the program. The Chief Justice further explained that the ruling was consistent with a line of judicial reasoning dating back to 1983, when the Supreme Court approved an education tax deduction adopted in Minnesota. In a concurring opinion, Justice Sandra Day O’Connor took a broader view of First Amendment jurisprudence, indicating that the majority ruling in Zelman was consistent with case law that allowed tax exemptions and other forms of government aid for religious institutions. Justice Clarence Thomas also concurred with the majority. Citing Brown v. Board of Education, Justice Thomas emphasized that the program in question was a well-intentioned attempt by the state “to provide greater educational opportunity for underprivileged minority students.” He further opined that incorporating the Establishment Clause to prohibit the kind of educational choice that the Ohio program provides would have the ironic effect of employing the Fourteenth Amendment to curtail liberty rights protected by the Free Exercise Clause of the First Amendment.
United States courts of appeals and a number of state appellate courts permit their judicial panels to designate certain decisions as unworthy of publication and as “non-precedential” even though an opinion has been written that justifies them. The designation is based on an assessment by the decisional panel that the resolution of the appealed issues has not added new law to the jurisdiction’s already existing body of law. Judge Richard Posner has described this criterion as “imprecise and nondirective.” An empirical study “casts serious doubt on whether the official criteria for publication of opinions provide a meaningful guide to the judges.” Once a decision-with-opinion receives the “non-precedential” label, it may not be used as authority in future cases by any of the jurisdiction’s courts, and lawyers are prohibited from citing it in their briefs and oral arguments. These opinions were once called “unpublished” and were distributed only to the parties to the appeal, but they are now widely available through online databases and through the Federal Appendix, a new West publication. This Article uses the noun “non-precedent” and the adjective “non-precedential” to refer to these opinions.
The selective publication policy evolved in the precomputer era when courts and judicial councils worried about their physical ability to publish hard copies of the ever-increasing number of court opinions, the costs to the legal community of acquiring and storing voluminous law reporters, and overwhelming law-finding devices.