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The Price of Fairness
Get PDFThe COVID-19 pandemic led to acute supply shortages across the country as well as concerns over price increases amid surging demand. In the process, it reawakened a debate about whether and how to regulate “price gouging”—a controversy that continues as inflation has accelerated even as the pandemic abates. Animating this debate is a longstanding conflict between laissez-faire economics, which champions price fluctuations as a means to allocate scarce goods, and perceived norms of consumer fairness, which are thought to cut strongly against sharp price hikes amid shortages.
This Article provides a new, empirically grounded perspective on the price gouging debate that challenges several aspects of conventional wisdom. We report results from a survey experiment administered to a large, nationally representative sample during the height of the pandemic’s initial wave. We presented participants with a variety of vignettes involving price increases, eliciting their reactions along two dimensions: the degree of unfairness they perceived, and the legal response they favored. Overall, we find that participants are more tolerant of price increases than either the existing behavioral economics literature predicts or most state price gouging statutes countenance. But we also find that price fairness perceptions can be highly sensitive to context. For example, participants are much more tolerant of moderate price increases if they previously are asked to contemplate large price increases. Moreover, participants are substantially more willing to accept a price increase when it is accompanied by an apology or a public-minded rationale, such as supporting furloughed employees, or both. We explore the implications of our findings for behavioral economics, pricing practices, and legal reform
Is Corporate Law Nonpartisan?
Get PDFOnly rarely does the United States Supreme Court hear a case with fundamental implications for corporate law. In Camey v. Adams, however, the Supreme Court had the opportunity to address whether the State of Delaware\u27s requirement of partisan balance for its judiciary violates the First Amendment. Although the Court disposed of the case on other grounds, Justice Sotomayor acknowledged that the issue will likely be raised again. The stakes are high because most large businesses are incorporated in Delaware and thus are governed by its corporate law. Former Delaware governors and chief justices lined up to defend the state\u27s nonpartisan approach to its judiciary. The case raises the question of why nonpartisanship is considered to be an advantage for Delaware and whether the processes by which corporate law are made are generally politically partisan or not. Despite these developments, however, the place of political partisanship in corporate law has been largely overlooked.
This Article offers a framework for analyzing the role of political partisanship in corporate law. It begins by showing that there is suggestive evidence of a relationship between political partisanship and the substance of corporate law at the state level. When corporate law materially differs across states, those differences are often predicted by which party controls the state\u27s government. Political party entrepreneurs also lobby for corporate law reforms at the state level. Yet, Delaware adopts a conspicuously nonpartisan approach to corporate law. It is widely observed that how Delaware makes corporate law-from its constitution, to its legislature, to its judiciary-is unusual. It is designed to insulate that law from political partisanship. More surprisingly, this began when Delaware first became a leading home to incorporations a century ago. In fact, the same thing was true of New Jersey during its brief period of prominence before Delaware. Why?
We suggest that the answer relates to corporate law\u27s central debate regarding the market for corporate law. In the United States, the internal affairs doctrine allows a corporation to choose the state whose corporate law governs it by incorporating in the jurisdiction of its choice. This doctrine produces a form of regulatory competition that is structurally biased to produce a winner that favors demand-side interests-i.e., the interests of corporate decision-makers themselves. Understanding this dynamic has been one of corporate law\u27s foundational concerns. We complement that literature by arguing that nonpartisanship provides a competitive advantage in Delaware\u27s quest to appeal to these interests. Delaware\u27s approach affords great weight to the interests of nationally diverse and heterogeneous shareholders, which makes it less likely that the state will sacrifice shareholders’ interests to please local constituents. The internal affairs doctrine thus indirectly works to favor incorporations to a state with a nonpartisan approach.
Our framework also offers new insights into the debate on the federalization of corporate law and the Supreme Court litigation. Specifically, we argue that within First Amendment jurisprudence, the Supreme Court can—and should—carefully consider its ruling’s effects on Delaware nonpartisanship
Hawks and Doves: Evaluating Presidential Powers and Duties Against Congress\u27s Power to Declare War
Get PDFWhat would happen if Congress declared war against the president’s wishes? Would the president be forced to prosecute the war? Or are there mechanisms, whether through the system of checks and balances or the president’s own delegated, independent powers, that give the president the authority to disregard Congress’s declaration? This Note argues that a declaration of war must go through the process of bicameralism and presentment to be valid. Thus, the president has the authority to veto a declaration of war. If Congress overcomes the president’s veto, this Note concludes that the president must prosecute the war. The president does not have the independent authority under the commander-in-chief power to overcome Congress’s declare-war power. Further, the president has a separate duty under the Take Care Clause to faithfully execute the law, which includes a declaration of war
Creditors Strike Back: The Return of the Cooperation Agreement
Get PDFIn the low interest rate environment that followed the Great Recession, a fanatical demand for high-yield investments provided private equity firms an opportunity. Newfound borrower leverage facilitated credit documents with few creditor safeguards and various loopholes. Borrowers subject to these “sponsor-favorable” terms now had options in times of financial distress. More specifically, they had the option to strike first.
Utilization of coercive exchanges began in earnest around 2015 and has since flourished. Unmonitored portfolio companies experiencing financial distress now regularly rely on questionable interpretations of ambiguous contractual provisions to surreptitiously move assets away from creditors’ collateral baskets and subordinate lenders. These unprecedented acts of financial war are pure, self-interested behavior designed to seize and redistribute value. Creditors in this multiplayer prisoner’s dilemma have two choices: (i) cooperate with its creditor group and attempt to prevail by securing a majority coalition, or (ii) defect and work with the borrower who promises to share some of the spoils of victory.
Scholars have thoroughly detailed private equity’s plan of attack. But what is missing is an exploration of creditor countermeasures to these new coercive exchanges. This Essay attempts to conceptualize the decision to coordinate and analyze the benefits and costs of cooperation. Further, this Essay explores the prevalent terms and basic design of cooperation agreements based on my unique review of a number of private disputes.
The possibility of opportunistic behavior casts a long shadow in these battles of financial titans. The benefits of a coordinated response are clear, but there still exist many obstacles, including threats of free riding. And borrowers have myriad weapons in their arsenal to splinter adversary groups. In choosing between cooperation and defection, creditors know there may be no honor among thieves.
“The first principle of Economics is that every agent is actuated only by self-interest. [But invariably an agent must choose to act] without, or with, the consent of others affected by his actions. In [a] wide sense[], the first species of actions may be called war; the second contract.
Redlining Reimagined: Race-Neutral Alternatives in the Likely Wake of Affirmative Action
Get PDFFor a decade, Justice Clarence Thomas has sharply criticized the Court\u27s treatment of affirmative action, the race-conscious university admissions processed used to pursue the educational benefits associated with diverse classrooms. Calling affirmative action a faddish theory that the Constitution abhors, Justice Thomas signaled his readiness to overrule Grutter v. Bollinger, which endorsed the practice in 2003.
Justice Thomas and the Court\u27s originalist Justices have a new opportunity to strike down affirmative action in the Students for Fair Admissions litigation. Students for Fair Admissions, a non-profit organization founded by Edward Blum, is suing Harvard College and the University of North Carolina, Chapel Hill. It alleges that the universities\u27 affirmative action programs are unconstitutional—chiefly, because they are repugnant to the Fourteenth Amendment and Title VI of the Civil Rights Act.
SFFA claims to represent rejected applicants from the universities, though the litigation has a peculiar focus on the universities\u27 behavior generally, not their treatment of the aggrieved applicants. This Commentary examines the factual records of both suits, highlighting the key differences between Harvard and the University of North Carolina and the parties\u27 positions in briefing and oral argument.
In anticipation of Justice Thomas\u27 overrule of Grutter, this Commentary chiefly explores the consequences of declaring affirmative action unconstitutional by explores topics such as standing, the Court\u27s constitutional role, Grutter\u27s bizarre sunset provision, and the efficacy of race-neutral alternatives as a proxy for attaining racial diversity in the classroom
Standardized Exclusion: A Theory of Barrier Lock-In
Get PDFThe United States has relaxed antitrust scrutiny of private standard-setting organizations in recognition of their potential procompetitive benefits. In the meantime, however, the growing importance of network industries—and the coinciding move toward vendor-led standards consortia—has welcomed new, insidious anticompetitive risks. This Note proffers one such risk: barrier lock-in. A theory of barrier lock-in recognizes that dominant vendors can capture and control standards consortia to keep standardized equipment complex and costly. These practices are exclusionary. This Note situates barrier lock-in within the existing antitrust literature and jurisprudence, provides a potential example of barrier lock-in in the 5G network equipment standardization process, and proposes two solutions for future legislative, executive, and judicial action against misbehaving standard-setters
The GPTJudge: Justice in a Generative AI World
Get PDFGenerative AI (“GenAI”) systems such as ChatGPT recently have developed to the point where they can produce computer-generated text and images that are difficult to differentiate from human-generated text and images. Similarly, evidentiary materials such as documents, videos, and audio recordings that are AI-generated are becoming increasingly difficult to differentiate from those that are not AI-generated. These technological advancements present significant challenges to parties, their counsel, and the courts in determining whether evidence is authentic or fake. Moreover, the explosive proliferation and use of GenAI applications raises concerns about whether litigation costs will dramatically increase as parties are forced to hire forensic experts to address AI-generated evidence, the ability of juries to discern authentic from fake evidence, and whether GenAI will overwhelm the courts with AI-generated lawsuits, whether vexatious or otherwise. GenAI systems have the potential to challenge existing substantive intellectual property (“IP”) law by producing content that is machine, not human, generated, but that also relies on human-generated content in potentially infringing ways. Finally, GenAI threatens to alter the way in which lawyers litigate and judges decide cases. This article discusses these issues, and offers a comprehensive, yet understandable, explanation of what GenAI is and how it functions. It explores evidentiary issues that must be addressed by the bench and bar to determine whether actual or asserted (i.e., deepfake) GenAI output should be admitted as evidence in civil and criminal trials. Importantly, it offers practical, step-by-step recommendations for courts and attorneys to follow in meeting the evidentiary challenges posed by GenAI. Finally, it highlights additional impacts that GenAI evidence may have on the development of substantive IP law, and its potential impact on what the future may hold for litigating cases in a GenAI world
Minding Rights: Mapping Ethical and Legal Foundations of ‘Neurorights’
Get PDFThe rise of neurotechnologies, especially in combination with artificial intelligence (AI)-based methods for brain data analytics, has given rise to concerns around the protection of mental privacy, mental integrity and cognitive liberty – often framed as “neurorights” in ethical, legal, and policy discussions. Several states are now looking at including neurorights into their constitutional legal frameworks, and international institutions and organizations, such as UNESCO and the Council of Europe, are taking an active interest in developing international policy and governance guidelines on this issue. However, in many discussions of neurorights the philosophical assumptions, ethical frames of reference and legal interpretation are either not made explicit or conflict with each other. The aim of this multidisciplinary work is to provide conceptual, ethical, and legal foundations that allow for facilitating a common minimalist conceptual understanding of mental privacy, mental integrity, and cognitive liberty to facilitate scholarly, legal, and policy discussions
Brief of Intellectual Property Law Professors and Scholars as Amici Curiae in Support of the Respondents
Get PDFThis amicus brief was written in support of Sanofi (generic pharmaceutical firm). The brief explains why patent claims cannot exceed the scope of what was disclosed in the patent specification. The brief argues that when a patentee invents narrowly, meaning they find and disclose only a limited set of solutions and where they cannot provide a generalizable principle that unites a broader set of solutions, then that inventor has not invented broadly. Accordingly, their claims should be limited to what was explicitly disclosed