Courts and scholars point to the sharing economy as proof that our labor and employment infrastructure is obsolete because it rests on a narrow and outmoded idea that only workers subjected to direct, personalized control by their employers need work-related protections and benefits. Since they diagnose the problem as being our system’s emphasis on control, these critics have long called for reducing or eliminating the primacy of the “control test” in classifying workers as either protected employees or unprotected independent contractors. Despite these persistent criticisms, however, the concept of control has been remarkably sticky in scholarly and judicial circles.
This Article argues that critics have misdiagnosed the reason why the control test is an unsatisfying method of classifying workers and dispensing work-related safeguards. Control-based analysis is faulty because it only captures one of the two conflicting ways in which workers, scholars, and decisionmakers think about freedom at work. One of these ways, freedom-as-non-interference, is adequately captured by the control test. The other, freedom-as-non-domination, is not. The tension between these two conceptions of freedom, both deeply entrenched in American culture, explains why the concept of control has been both “faulty” and “sticky” when it comes to worker classification.
This is the first academic work to show the need for, or to offer, a regulatory framework for exchange-traded funds (“ETFs”). The economic significance of this financial innovation is enormous. U.S.-listed ETFs now hold more than $3.6 trillion in assets and comprise seven of the country’s ten most actively traded securities. ETFs also possess an array of unique characteristics raising distinctive concerns. They offer what we here conceptualize as a nearly frictionless portal to a bewildering, continually expanding universe of plain vanilla and arcane asset classes, passive and active investment strategies, and long, short, and leveraged exposures. And we argue that ETFs are defined by a novel, model-driven device that we refer to as the “arbitrage mechanism,” a device that has sometimes failed catastrophically. These new products and the underlying innovation process create special risks for investors and the financial system.
Lawmakers are looking for Affordable Care Act savings in the wrong place. Removing sick people from risk pools or reducing health plan benefits—the focus of lawmakers’ attention—would harm vulnerable populations. Instead, reform should target the $210 billion worth of unnecessary care prescribed by doctors, consented to by patients, and paid for by insurers.
This Article unravels the mystery of why the insurance market has failed to excise this waste on its own. A toxic combination of mismatched legal incentives, market failures, and industry norms means that the insurance market cannot solve the problem absent intervention.
One of the most enduring debates in corporate law centers on why Delaware has become the dominant state in the market for corporate charters. Traditionally, two perspectives dominated the debate, the “race-to-the-top” perspective that sees competition among states as driving legal rules toward efficiency and the “race-to-the-bottom” perspective that sees competition among states as driving legal rules toward the interests of corporate managers. The two dominant perspectives have struggled to explain why approximately half of large companies incorporate in Delaware, while the other half incorporate in their home states. Whether the choices are attributable to the quality of state law, the characteristics of the companies themselves, or both has given rise to a large, but inconclusive empirical literature.
This Article argues that there was an important causal link, to date unrecognized, between the widespread dissatisfaction with the jury in the United States during the Gilded Age and Progressive era among many elite lawyers and judges and choices by U.S. policymakers and jurists about colonial governance in Puerto Rico and the Philippines. The story starts with the Insular Cases—landmark Supreme Court decisions from the early twentieth century holding that jury rights and some other constitutional guarantees did not apply in Puerto Rico and the Philippines until and unless Congress had taken decisive action to “incorporate” the territories into the union, which it never did. The conventional wisdom among scholars is that the Supreme Court in these decisions shamefully ratified the U.S. government’s discrimination and domination over the peoples of newly-acquired colonies. Racism and cultural chauvinism are blamed as primary causal factors.
The Article shows that Congress, the executive, the courts, and local legislatures in the Philippines and Puerto Rico granted almost every single right contained in the Constitution to the territorial inhabitants, with the exception of the jury. While racism was present and causally important, it is also true that U.S. governance in the territories was not a project of wholesale discrimination. Motivations, goals, and outcomes were complex. Protection of rights of local inhabitants was a key concern of U.S. policymakers. But the jury was considered a unique case, different than other rights.
Human beings should live in places where they are most productive, and megacities, where information, innovation, and opportunities congregate, would be the optimal choice. Yet megacities in both China and the United States are excluding people by limiting the housing supply. Why, despite their many differences, is the same type of exclusion happening in both Chinese and U.S. megacities? Urban law and policy scholars argue that Not-In-My-Back-Yard (“NIMBY”) homeowners are taking over megacities in the U.S. and hindering housing development. They pin their hopes on an efficient growth machine that makes sure “above all, nothing gets in the way of building.” Yet the growth-dominated megacities of China demonstrate that relying on business and political elites to provide affordable housing is a false hope. Our comparative study of the homeowner-dominated megacities of the U.S. and growth-dominated megacities of China demonstrates that the origin of exclusionary megacities is not a choice between growth elites and homeowners, but the exclusionary nature of property rights. Our study reveals that megacities in the two countries share a property-centered approach, which prioritizes the maximization of existing property interests and neglects the interests of the ultimate consumers of housing, resulting in housing that is unaffordable. Giving housing consumers a voice in land use control and urban governance becomes the last resort to counteract this result. This comparative study shows that the conventional triangular framework of land use—comprising government, developers, and homeowners—is incomplete, and argues for a citizenship-based approach to urban governance.
In one of his columns, the economist Paul Krugman observed that “liberals don’t need to claim that their policies will produce spectacular growth. All they need to claim is feasibility: that we can do things like, say, guaranteeing health insurance to everyone without killing the economy.” Krugman’s belief that providing everyone with health insurance is desirable unless doing so would “kill the economy” expresses a familiar, if debatable, position. Many of us believe that some goods should be provided to everyone, and they should be provided even if their provision comes at a cost in economic efficiency. The underlying belief is that some goods are essential to leading decent, independent lives, and their provision therefore has a special priority. As a society, we owe it to each other to secure the basic conditions necessary for people to lead decent and independent lives.
Like health, physical safety is a strong candidate for inclusion on a list of the essential conditions of a decent and independent life. Illness usually takes the form of physical harm, and accidental injury can impair basic powers of agency as much as ill-health can. Assertions that safety has priority over garden-variety “needs and interests” are commonplace in popular discourse. You might, therefore, expect to find a debate in the legal literature on risk and precaution over whether or not safety, too, should be prioritized over efficiency and secured to the extent that it is feasible to do so. Prominent federal statutes take this very position. Indeed, they echo Krugman’s exact word choice in requiring that the risks of certain activities be reduced as far as it is “feasible” to do so, and they mean the same thing that he does in choosing this word. “Feasible risk reduction” requires that the risks in question be reduced as far as possible without killing the activity in question. A chorus of contemporary commentators, however, insists that feasible risk reduction is not just normatively mistaken; it is indefensible. Jonathan Masur and Eric Posner, for example, argue that statutes prescribing feasible risk reduction have no defensible normative underpinning. Feasibility analysis, they write, “does not reflect deontological thinking . . . [and] does not reflect welfarism in any straightforward sense,” and “[n]o attempt to reverse-engineer a theory of well-being that justifies feasibility analysis has been successful.” According to this line of thought, efficiency is the only plausible standard of precaution, and its handmaiden, cost-benefit analysis, is the only plausible test.
Although sometimes difficult to detect, governmental power abuses can have detrimental impacts. Property tax assessments provide an effective lens to examine this phenomenon because, given the complexity of calculating property tax assessments, it is difficult for citizens to know when local government has exceeded its legitimate taxing authority and crossed into the realm of illegal extraction. Michigan is an ideal case study because it protects property owners by making assessment-related power abuses more visible through a unique state constitutional provision: property tax assessments cannot exceed 50 percent of a property’s market value. Abuses have persisted nevertheless. Between 2011 and 2015, one in four properties in Detroit were subject to property tax foreclosure, and inflated property tax assessments that violate the Michigan Constitution are the unseen thread in this complex tapestry of foreclosure.
Against this backdrop, this Article makes three primary contributions. First, no other article has argued and proven that property tax assessments in Detroit are illegal. Using assessment and sales data from 2009–2015 for the entire City of Detroit, we find that property tax assessments are substantially in excess of the state constitutional limit, and this illegality is most pronounced for lower-valued properties. Second, to remedy inflated assessments, in 2014 and 2015 Detroit’s assessor implemented assessment decreases ranging from 5 percent to 20 percent for select districts, but we find that systemic assessment inequity persisted for lower valued properties despite these reductions. Third, this Article uses the case of illegal property tax assessments in Detroit to develop a new theoretical concept called “stategraft,” which is when state agents transfer property from residents to the state in violation of the state’s own laws and to the detriment of a vulnerable group. Although the concept was developed using the Detroit case, stategraft applies beyond Detroit to many other cases, including the discriminatory fines imposed and enforced by the police and courts in Ferguson, Missouri; broken treaties with Native Americans; and abuses of civil forfeiture laws.
Over the last decade, a growing consensus has emerged: there are too many patents, and they are causing a host of problems. These problems include patent “trolling,” patent “wars,” and other wasteful societal costs. In explaining this patent overabundance, some scholars have pinpointed the United States Patent Office, the governmental body responsible for issuing patents, as the main culprit. Others have blamed patent holders themselves, identifying a number of incentives these parties have to pursue patents even in cases where doing so makes little economic sense. Overall, these analyses thus typically assume a high and relatively uniform demand for patents among inventive parties—one that the United States Patent Office is only too willing to satisfy.
Yet this focus on excessive patenting obscures the reality that parties likely differ significantly in their demand for patents and other forms of intellectual property. In economic parlance, different inventive parties are likely to exhibit different “elasticities,” or sensitivities, in their demand for patents and other types of intellectual property. This Article uses economic principles to disaggregate intellectual property demand by highlighting a number of factors that may affect a party’s demand for patents and other forms of intellectual property. It argues that resource-constrained parties are more likely to exhibit more elastic demand for patents, meaning they are more sensitive to the costs of patenting, both in general and relative to the costs of other intellectual property forms. As a result, rising costs of patenting are more likely to lead resource-constrained parties to forego patenting and rely on alternative, cheaper forms of intellectual property protection when available. Well-capitalized parties, on the other hand, are more likely to exhibit relatively inelastic, high demand for patents, regardless of the costs of other intellectual property types that may otherwise function as substitutes. Thus, well-capitalized parties tend to patent en masse and complement patenting with additional intellectual property protections when available.
One of the cornerstones of First Amendment doctrine is the general rule that content-based restrictions on all speech—apart from a few narrow categories of low-value speech—are evaluated under strict scrutiny. As many have observed, this rule has produced considerable strain within the doctrine because it applies the same onerous standard throughout the vast and varied expanse of all non-low-value speech, which includes not only the core, highest-value speech for which such stringent protection is clearly warranted, but also less valuable speech to which the application of strict scrutiny is often dissonant. Nevertheless, traditional accounts maintain that this blunt, highly prophylactic approach is necessary given the significant costs and risks associated with granting courts greater discretion to make value-based speech distinctions.
This Article challenges these accounts. I argue that courts should more explicitly recognize a broad conceptual category of what I call “middle-value speech”—that is, speech that falls within the hazy center of the speech-value spectrum between clearly high-value speech, like political speech or truthful news reporting, and clearly low-value speech, like true threats or incitement. The scope of such speech is vast, potentially encompassing speech as diverse as public disclosures of sensitive private data, sexually explicit speech, professional advice, search engine results, and false statements of fact. Yet current First Amendment doctrine broadly fails to recognize middle-value speech as a discrete conceptual category, and this failure has produced substantial costs in the form of doctrinal distortion and a lack of analytical transparency. These costs have grown precipitously—and will continue to grow—in conjunction with the First Amendment’s broad expansion beyond the familiar precincts of core ideological expression into increasingly eclectic varieties of speech.