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The Win-Win That Wasn’t: Managing to the Stock Market’s Negative Effects on American Workers and Other Corporate Stakeholders
Get PDFEasterbrook and Fischel’s work suggests that society as a whole would achieve the best results if corporate leaders focused only on raising stock prices, leaving other institutions to tend to all other interests. But the idea that making societally-important corporations govern to the whims of the stock market would be a win-win for investors, other corporate stakeholders, and our society as a whole has proven incorrect. At bottom, Easterbrook and Fischel failed to contend with the real world realities that allow investors to profit by shifting distributions and political power to themselves, while shifting costs and risks to workers, creditors, consumers, and taxpayers. In this Article, prepared for a Symposium celebrating Easterbrook and Fischel’s work, we evaluate Easterbrook and Fischel’s predictions and find that their failures are attributable to flaws in their assumptions about corporate influence over the political process and the extent to which stockholders could not succeed unless the corporation respected other stakeholders and society
Changing Property Rights in the Family: Evidence from an Inheritance Reform
No full textWe analyze a Swedish reform that shifted the right to inherit an estate from children to parents. If parents are altruistic toward children and there are no transaction costs, a change of property rights in the family has no impact on the consumption of parents and children. We test and reject this prediction with new hand-collected data on wills and estates linked to panel data on labor supply and durable consumption. Our results show that the inheritance reform increased parents’ car ownership, increased the fraction of parents living in a house, and reduced parents’ labor supply. The magnitude of this response suggests that parents reacted to the reform as if all wealth previously inherited by children expanded their own budget constraint. The frequency and contents of parents’ wills reveal that many parents, especially the wealthy, used wills to protect their spouses from claims on the estate made by children
Property Versus Antidiscrimination: Examining the Impacts of Cedar Point Nursery v. Hassid on the Fair Housing Act
Get PDFThe Fair Housing Act is a groundbreaking federal law enacted in 1968 during the civil rights movement. Reflecting a policy judgment that the public’s interest in eliminating housing discrimination outweighs a prejudicial landlord’s property right to exclude, it prohibits landlords from rejecting tenants on a discriminatory basis. However, as the Act’s promises remain in the process of fulfillment, the Supreme Court’s 2021 decision in Cedar Point Nursery v. Hassid has placed it into unprecedented danger: by holding that a regulation authorizing temporary occupations of private property constituted a per se taking that requires compensation under the Takings Clause, Cedar Point threatens the constitutionality of the Act, which grants tenants a similar temporary right to access rental properties.
This Comment takes up the task of finding an escape valve for the Act within the current legal landscape. Looking to Cedar Point’s Court-created exceptions, this Comment argues that the Act should fall under the “open to the public” exception because case law, common law considerations, and the normative value in preserving an important antidiscrimination law all support a finding that the Act regulates the business of offering dwelling rentals, a type of business open to the public
Just Say No? Shareholder Voting on Securities Class Actions
Get PDFThe U.S. securities laws allow security-holders to bring a class action suit against a public company and its officers who make materially misleading statements to the market. The class action mechanism allows individual claimants to aggregate their claims. This procedure mitigates the collective action problem among claimants, and also creates potential economies of scale. Despite these efficiencies, the class action mechanism has been criticized for being driven by attorneys and also encouraging nuisance suits. Although various statutory and doctrinal “solutions” have been proposed and implemented over the years, the concerns over the agency problem and nuisance suits persist. This paper proposes and examines a novel mechanism that attempts to preserve the benefits of the class action system while curtailing its costs: allowing a company’s shareholders to vote on securities class actions. The shareholders can vote on the structural dimensions of securities class actions, e.g., whether to allow class actions at all, limit discovery, impose fee-shifting, etc., before any class action suit has been filed (ex ante voting) or vote to determine the course of a specific class action suit, e.g., whether to terminate or settle a class action (ex post voting). The paper analyzes the conditions under which allowing shareholders to manage and control securities class actions can benefit the shareholders across the board and its potential limitations
Digital Privacy for Reproductive Choice in the Post-Roe Era
Get PDFThe overruling of Roe v. Wade has unleashed a torrent of regulatory and punitive activity restricting previously lawful reproductive options. But the turn to the expansive criminal law and new schemes of civil liability creates novel concerns, quite distinct from the pre-Roe landscape a half-century ago. Reproductive choice, and its nemesis, turn upon information. For pregnant people, deciding on a choice of medical care entails a search for advice and services. Information is at a premium for them. Meanwhile, efforts to regulate abortion began with clinic closings. But they will quickly extend to civil actions and criminal indictments of patients, providers, and those who facilitate abortions. Like the pregnant themselves, criminal and civil enforcers depend on information. And in the contemporary context, the informational landscape, and hence access to counseling and services such as medication abortion, is largely mediated through digital forms of communication. In an era when most people use search engines or social media to access information, the digital architecture and data retention policies of those platforms will determine not only whether the pregnant can access medically accurate advice but also whether the act of seeking health information places them in legal peril.
This Article offers an in-depth analysis of the core legal issues concerning abortion related digital privacy after the end of Roe. It demonstrates first that digital privacy for pregnant persons in the United States has suddenly become a tremendously fraught and complex question. It then maps the treacherous social, legal, and economic terrain upon which firms, individuals, and states will make privacy-related decisions. Building on this political economy, we develop a set of moral and economic arguments to the effect that digital firms should maximize digital privacy for pregnant persons within the scope of the law and should actively resist states’ efforts to conscript them into a war on reproductive choice. We then lay out precise, tangible steps that firms should take to enact this active resistance. We explore here in particular a range of powerful yet legal options for firms to refuse cooperation with restriction-focused criminal and civil investigations. Finally, we present an original, concrete and immediately actionable proposal for federal and state legislative intervention: a statutory evidentiary privilege to shield abortion-relevant data from warrants, subpoenas, court orders, and judicial proceedings aimed at limiting the availability of reproductive care
Peltzman Revisited: Quantifying 21st- Century Opportunity Costs of Food and Drug Administration Regulation
Get PDFPeltzman’s work is revisited in light of two recent opportunities to quantitatively assess trade-offs in drug regulation. First, reduced regulatory barriers to drug manufacturing associated with the 2017 reauthorization of generic-drug user fee amendments were followed by more entry and lower prices for prescription drugs. A simple, versatile industry model and historical data on entry indicate that easing restrictions on generics discourages innovation, but this cost is more than offset by benefits from enhanced competition, especially after 2016. Second, accelerated vaccine approval in 2020 had unprecedented net benefits as it improved health and changed the trajectory of the wider economy. Evidence suggests that cost-benefit analysis of Food and Drug Administration (FDA) regulation is incomplete without accounting for substitution toward potentially unsafe and ineffective treatments that are outside FDA jurisdiction and heavily utilized before FDA approval. Moreover, the policy processes initiating the regulatory changes show an influence of Peltzman’s findings.
Consumer losses from purchases of ineffective drugs or hastily marketed unsafe drugs appear to have been trivial compared to gains from innovation. (Peltzman 1974, p. 82
The Neglected Origins of the Hearsay Rule in American Slavery: Recovering Queen v. Hepburn
No full textStreaming Property
Get PDFPeople acquire property rights in objects and real estate in order to capture the stream of services that these assets can provide over time. The thing or parcel itself is merely a delivery mechanism, a way of packaging and protecting rights to that value stream. And, significantly, these assets cannot stream services to anyone without a set of facilitating conditions and complementary goods, such as public infrastructure, that do not lie within the asset owner’s individual control. This Essay argues that we can gain fresh traction on inequality by recasting property as service streams rather than as owned things. Doing so emphasizes the costs of structuring property entitlements in ways that monopolize or squander streams of services. It also reveals new opportunities to repackage valuable service streams into asset-like formats to create durable and flexible claims on resources. Finally, a focus on services directs fresh attention to what people actually want and need from resources over time—a dynamic inquiry whose answer encompasses the spatial and ecological services that are now of overwhelming importance
Geoffrey Stone, Informal 1
No full textGeoffrey R. Stone, professor in the Law School at the University of Chicago.
University of Chicago Photographic Archive, [apf7-01364], Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.
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