From Volume 92, Number 4 (May 2019) Convergence and then Downstream Divergence in Torts and other […]
Judges decide cases. Do they also try to influence which cases they decide? Plaintiffs “shop” for the most attractive forum, but do judges try to attract cases by “selling” their courts? Some American judges actively try to enlarge their influence by making their courts attractive to plaintiffs, a phenomenon known as “forum selling.” This Article shows that forum selling occurs outside the United States as well, focusing on Germany, a country that is often held up as the paragon of the civil law approach to adjudication. As in the United States, German courts attract cases primarily through the pro-plaintiff manipulation of procedure, including the routine issuance of ex parte injunctions in press cases and refusal to stay patent infringement proceedings when the patent’s validity is challenged in another forum. A critical difference between forum selling in Germany and the United States is that court administrators are more actively involved in Germany. As state officials, German court administrators have the incentive to consider the effect of caseloads on government revenue and the local economy, and they use their power to allocate judges to particular kinds of cases in order to make their courts attractive. They also use their power over promotion, case allocation, and resources to reward judges who succeed in attracting cases. Based on an extensive set of interviews with attorneys, judges, and court officials, this Article describes evidence of forum selling in German patent, press, and antitrust law. It also analyzes how German courts compete internationally with courts of other countries.
We review every California constitutional amendment to date, distinguishing between legislatively proposed amendments and initiative amendments. We solve the enduring mystery of how many times the California constitution has been amended. We prove that the initiative process does not have a disproportionate effect on the amendment rate of the California constitution, and that the state legislature (not the electorate) is responsible for the vast majority of California’s constitutional changes. We also debunk the myths that California’s is the longest constitution in the world and that the state uses the initiative more than any other.
Next, we discuss the substantive constitutional issues the electorate’s direct democracy powers can raise. Critics frequently blame the initiative for many of the state’s woes, but we argue that direct democracy in California is a net social good. We show that while direct democracy’s cumulative quantitative and individual qualitative effects are indeed significant, they are not so severe that structural change is warranted. We identify one flaw in the initiative process that merits a solution. Recognizing, however, that any change is an unlikely prospect, we argue that the existing checks on the electorate are capable. Because direct democracy’s harms are adequately mitigated, there is no urgent need for fundamental change.
In 2005, the perception that wealthy executives were being rewarded for failure led Congress to ban Chapter 11 firms from paying retention bonuses to senior managers. Under the new law, debtors could still pay bonuses to executives—but only “incentive” bonuses triggered by accomplishing challenging performance goals that go beyond merely remaining employed. This Article uses newly collected data to examine how this reform changed bankruptcy practice. While relatively fewer firms use court-approved bonus plans after the reform, the overall level of executive compensation appears to be similar, perhaps because the new regime left large gaps that make it easy for firms to bypass the 2005 law and pay managers without the judge’s permission. This Article argues that the new law was undermined by institutional weaknesses in Chapter 11, as bankruptcy judges are poorly situated to analyze bonus plans and creditors have limited incentives to police executive compensation themselves.
What are business entities for? What are security interests for? The prevailing answer in legal scholarship is that both bodies of law exist to partition assets for the benefit of designated creditors. But if both bodies of law partition assets, then what distinguishes them? In fact, these bodies of law appear to be converging as increasing flexibility irons out any differences. Indeed, many legal products, such as securitization vehicles, insurance products known as captive insurance, and mutual funds, employ entities to create distinct asset pools. Moreover, recent legal innovations, including “protected cells” (which were created to facilitate such products), further blur the boundaries between security interests and entities, suggesting that convergence has already arrived.
This Article identifies and defends a central distinction between business entities and security interests. We argue that while both bodies of law support asset partitioning, they do so with different priority schemes. Security interests construct asset pools subject to fixed priority, meaning that the debtor is unable to pledge the same collateral to new creditors in a way that changes the existing priority scheme. Conversely, entities are associated with floating priority, whereby the debtor retains the freedom to pledge the same assets to other creditors with the same or even higher priority than existing ones.
The transition to a low-carbon society will have winners and losers as the costs and benefits of decarbonization fall unevenly on different communities. This potential collateral damage has prompted calls for a “just transition” to a green economy. While the term, “just transition,” is increasingly prevalent in the public discourse, it remains under-discussed and poorly defined in legal literature, preventing it from helping catalyze fair decarbonization. This Article seeks to define the term, test its validity, and articulate its relationship with law so the idea can meet its potential.
The Article is the first to disambiguate and assess two main rhetorical usages of “just transition.” I argue that legal scholars should recognize it as a term of art that evolved in the labor movement, first known as a “superfund for workers.” In the climate change context, I therefore define a just transition as the principle of easing the burden decarbonization poses to those who depend on high-carbon industries. This definition provides clarity and can help law engage with fields that already recognize just transitions as a labor concept.
Amidst growing reports of abuses and rights violations in immigration detention, the Trump administration has sought to expand the use of immigration detention to facilitate its deportation policy. This study offers the first comprehensive empirical analysis of U.S. immigration detention at the national level. Drawing on administrative records and geocoded data pertaining to all noncitizens who were detained by U.S. Immigration and Customs Enforcement in fiscal year 2015, we examine who the detainees are, where they were held, and what happened to them.
We find that detention outcomes vary significantly across facility operator types (private versus non-private) and facility locations (within or outside of major urban areas). Specifically, our multivariate regression analyses show that confinement in privately operated facilities is associated with significantly longer detention and a higher number of grievances. We find a similar pattern of results for confinement in facilities located outside of major urban areas. On the other hand, confinement in privately operated facilities, and confinement in facilities located outside of major urban areas, respectively, are associated with lower risks of inter-facility transfers. These findings provide an important foundation for ongoing public discourse and policy discussions on the expanded use of detention as an immigration enforcement strategy.
A fiduciary is someone with a certain form of discretion, power, or authority over the legal and practical interests of a beneficiary. As a result of this arrangement, the beneficiary is vulnerable to predation by the fiduciary. Fiduciary relationships trigger a suite of duties, at the core of which is the duty of loyalty. In a sense, the fiduciary relationship is oriented around the possibilities of trust and betrayal. One point of fiduciary duties is to prevent betrayal or, failing that, to assure that betrayals are rectified insofar as possible. What constitutes loyalty or betrayal in fiduciary law, however, is not always clear.
Consider Item Software (UK) Ltd. v. Fassihi. Messrs Fassihi and Dehghani were corporate directors of a small software distribution company called Item Software, whose main business was selling software developed by Isograph. Dehghani was the managing director, and Fassihi was the sales marketing director. In November 1998, Dehghani decided to renegotiate the terms on which Item sold Isograph’s products. Fassihi urged Dehghani to drive a hard bargain with Isograph, so Deghani negotiated aggressively. Ultimately, the negotiations between Item and Isograph broke down, and Isograph terminated its contract with Item.
This Article argues that the Preamble to the Constitution of the United States of America deserves a primary place in constitutional law, in federal judicial decision-making, and in the nation’s civic discourse. The Preamble does more than set forth general, vague aspirations. It epitomizes the particular purposes behind the adoption of the Constitution that were desperately needed to repair and replace the faltering Articles of Confederation. The Preamble’s words were specifically and methodically chosen, both in the Preamble itself and often within the body of the Constitution. Based on their prompt affirmative vote, all members of the Constitutional Convention, which drafted the version of the Constitution that was submitted to the thirteen states for ratification, readily embraced the Preamble. Some delegates stated explicitly that it should be used as the key to interpreting the Constitution, its meanings, intentions, purposes, and limitations. Indeed, it is doubtful that the Constitution would have been ratified without the text of the Preamble prominently standing at the top of the proposed document, and the Preamble occupied a dominant and valuable position at the head of constitutional analysis throughout the nineteenth century.
In 1905, however, the United States Supreme Court decided the case of Jacobson v. Massachusetts. This case has been rarely discussed at any length and is only cited summarily. Perhaps somewhat unwittingly, the Court used language that has been understood to relegate the Preamble to a minor, insubstantial role: “Although that Preamble indicates the general purposes for which the people ordained and established the Constitution, it has never been regarded as the source of any substantive power conferred on the Government of the United States or on any of its Departments.” The Court then went on summarily to treat the Preamble as irrelevant to the case.
For nearly six decades, States have entered into approximately 3,000 bilateral investment promotion and protection treaties (“BITs”) and some multilateral treaties (“MITs”), which possess the same dual purposes as the North American Free Trade Agreement (“NAFTA”) and the Energy Charter Treaty (“ECT”). They have been signed, ratified, and entered into force for mutual benefit: investment in the States party to the BIT or MIT is mutually encouraged, in good part by each State party guaranteeing the other State party’s investors an acceptable level of legal protection, usually consisting of “fair and equitable treatment” (“FET”), “full protection and security” (“FPS”), specific rules governing compensation for expropriation, and, via a “most-favored-nation clause” (“MFN”), the same overall level of legal protection as is accorded to nationals of other States with whom the respondent State party to the BIT or MIT has similar treaties in force.
Key to the nationals of each State party who invest in the other State is the mechanism for enforcing those protections, which is known as investor-State arbitration, or investor-State dispute settlement (“ISDS”). As most treaty parties do not wish their nationals investing abroad to be compelled to dispute with the host State over whether the involved treaty has been breached decided by a national court of the host State, the parties agree in the BIT or the MIT that any dispute between a national of one party investing in the other party will be decided by, typically, a three-person arbitral tribunal, to which each party to the dispute—the investor and the host State—appoints one arbitrator. The third person, who is to chair the arbitration, is appointed by the other two arbitrators, or by the parties to the dispute, or—failing success in that effort for a stated period of time—by an agreed “appointing authority.” All three members of the arbitral tribunal are required and pledge to be independent and impartial to the arbitrating parties.