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Unenforceable Securitization Contracts
No full textA “portfolio” here is a bundled set of contracts. In this Article, we address a commercially important example, where a local bank finances home purchases. The bank bundles the resultant contracts—the mortgage-backed securities (MBS)—into a portfolio, which it then sells to a firm, denoted an “originator.” The originator buys portfolios from several local banks and sells the portfolios to a large bank, which markets the portfolios to public- investment vehicles, such as trusts. “Portfolio contracts” govern each of these sale
Cruzan and the Other Evidentiary Standard: A Reconsideration of a Landmark Case Given Advances in the Classification of Disorders of Consciousness and the Evolution of Disability Law
No full textIt is more than a bit ironic that the decision in Cruzan v. Director, Missouri Department of Health hinged on the relationship of evidentiary standards and the Due Process Clause of the Fourteenth Amendment. The question before the U.S. Supreme Court was whether Missouri's Supreme Court had correctly ruled that they could assert a clear and convincing evidence standard for consequential decisions made by surrogates on behalf of an incompetent patient. The U.S. Supreme Court affirmed the Missouri court's decision and asserted that there had been no violation of the Due Process Clause. For the majority, the question
of evidence related to the quality of knowledge that might allow a surrogate to make a decision to withdraw life-sustaining therapy. In the absence of clear and convincing evidence to the contrary, treatment would continue and thus life would be preserved.
In his dissent, Justice Brennan, joined by Justices Marshall and Blackmun, also focused on the quality of the evidence. But he took a different approach. He did not dispute the State's legitimate interest in protecting the rights of the incompetent. Rather, he argued that care could only be provided legitimately when it was known to cohere with Nancy Cruzan's wishes. The goal was not to prolong Ms. Cruzan's life but to preserve her liberty. To do so, it would be necessary to provide "Nancy Cruzan, now incompetent, with as accurate as possible a determination of how she would exercise her rights under these circumstances" If it were determined that continued treatment was consistent with her prior preferences, the State could "legitimately assert an interest in providing that treatment." Short of that knowledge, the goal was to be as accurate as possible in discerning what her wishes might be.
Justice Brennan continued by asserting that "accuracy, therefore, must be our touchstone," maintaining that "until Nancy's wishes have been determined, the only state interest that may be asserted is an interest in safeguarding the accuracy of that determination."'' He argued that by establishing a clear and convincing evidence standard, Missouri had paradoxically "fashioned a rule that lessens the likelihood of accurate determinations." Instead of speaking to the specificity of Ms. Cruzan's wishes, Missouri's presumption towards treatment in the absence of known preferences "skew[ed] the result away from a determination that as accurately as possible reflect[ed] the individual's own preferences and beliefs."' Worse than preserving life, that standard was "a rule that transform[ed] human beings into passive subjects of medical technology."' Justice Brennan argued that Missouri could neither safeguard patient choice by misappropriating it nor by depriving surrogates of their rightful prerogative of making choices on behalf of those closest to them
Constitutional Law for NIMBYs: A Review of "Principles of Home Rule for the 21st Century" by The National League of Cities
No full textModel laws play an extremely important role in the history of "home rule "for local governments in the United States. So it is of no small moment that the National League of Cities (NLC) proposed a new Model Constitutional Home Rule Article (the Model Article) last February.
Unfortunately, the Model Article is severely flawed. Rather than systematically addressing and responding to the various contemporary problems of local governance, it is laser-focused on a single issue: the spate of preemptive laws passed by politically-conservative state legislatures in recent years to override policies adopted by politically'- liberal cities. To address these preemptive laws, the NLC suggests the adoption of a suite of provisions that would radically increase and protect the powers of local governments. But while the Model Article suggests very substantial expansions of local authority, it does not balance this with any new limits, even in areas where local governments systematically create huge societal costs. The NLC barely mentions many of the most important problems in contemporary local governance, including zoning and the housing crisis, police brutality, subsidies for firm location, unrepresentative local elections, segregation, and underfunded public employee pension programs. Further, the Model Article does not propose any substantive requirements that would address these issues and would substantially frustrate state legislative efforts aimed at limiting socially-costly local policies in these areas. It does not address questions of incorporation
or annexation, granting new powers to our existing set of local governments, despite the problems their boundaries create for regional economic output, segregation, and inequality. The NLC report also implicitly takes a strong ideological position about what types of policies local governments can and should adopt, something that its putatively neutral rhetoric about the value of localism and laboratories of democracy does not support.
For the NLC, with great new powers come absolutely no new responsibility or limits. The Model Article would allow and encourage
local governments to exclude outsiders and create regulatory confusion inside metropolitan areas. It would generate a substantial amount of harm to metropolitan economies and inequality in the name of allowing even small home rule local governments to choose their own policies without interference from outsiders. No state should adopt the NLC's recommendation
When Prosecution is Not Enough: How the International Criminal Court Can Prevent Atrocity and Advance Accountability by Emulating Regional Human Rights Institutions.
No full textIn 1998, a half-century after the Nuremberg trials of Nazi war criminals, a diplomatic conference finalized the Rome Statute of the International Criminal Court (ICC). Only four years later, that treaty entered into force following its ratification by sixty states. The creation of a permanent, global tribunal to prosecute those responsible for the worst international crimes fulfilled a dream kept alive throughout the Cold War. International human rights activists, diplomats, and jurists offered grand ambitions for the ICC. It would not only punish political leaders and military commanders who had committed genocide, crimes against humanity, and war crimes, but also would deter others from committing such mass atrocities. After the fall of the Berlin Wall in 1989, hope had surged among the international liberal elite that they could create a new, peaceful world order in which mass atrocities would be rare, and in which those responsible would be called to account. While sobered by the failure of international powers to stop genocide and crimes against humanity in the former Yugoslavia and Rwanda in the early 1990s, they were heartened by the UN Security Council's creation of new international criminal courts: the "ad hoc" International Criminal Tribunal for the Former Yugoslavia (ICTY), in 1993, and the International Criminal Tribunal for Rwanda (ICTR), in 1994. "To tribunal advocates, [the ICC, ICTY, and ICTR] represent[ed] the zenith of the international human rights movement. With such institutions in place, getting away with mass murder would no longer be the norm but the exception. "
Today, a quarter-century later, the record of international criminal tribunals is disappointing and the prospects for similar initiatives look bleak. International criminal law has not ushered in a new world order.4 The ICTY took nearly twenty-five years and approximately three billion dollars to try just over 100 defendants. Partially international "hybrid" tribunals created by the United
Nations and the governments of Cambodia and Sierra Leone have spent tens of millions of dollars to convict fewer than ten defendants each. Trials in all these tribunals have proceeded excruciatingly slowly, taking years from arraignment through appeal. In several cases, justice delayed has become justice denied. For example, former Serbian President Slobodan Milosevic and former Khmer Rouge Foreign Minister Ieng Sary died four and two years into their respective trials at the ICTY and the Extraordinary Chambers in the Courts of Cambodia (ECCC): their cases terminated with no findings as to guilt. People in the regions subject to these international criminal tribunals have reacted to their work with ambivalence at best. The modest impacts of the ICTY and ICTR on politics, law, and intercommunal reconciliation in the former Yugoslavia and Rwanda have been a major theme of journalism and scholarship on those courts.7 Most important, atrocities remain common: governments and insurgents continue to torture and slaughter civilians in Syria, Nigeria, Yemen, Myanmar, and elsewhere
Two Letters on Democracy and Dysfunction
No full textDear Jack, I've been remiss in beginning our exchange about the wonderful symposium at Drake University in September, not only because of ordinary busyness but also, of course, because of "events on the ground" that are so central to the various issues raised in our book and then at the symposium. Inasmuch as the central issue is whether our institutions, let alone some "center," can hold against the various winds and arrows buffeting them, every day seems to bring new examples of ever-increasing pressure. Only in this past week, for example, Great Britain gave Prime Minister Boris Johnson an overwhelming majority in Parliament, even though his party received only a grand total of around 44 percent of the total vote. On its face, this raises obvious questions about the merits of the voting system, including the reliance on single-member districts and first-past-the-post winners that the United Kingdom and the United States are really quite exceptional among countries across the globe in relying on. At the same
time, the House Judiciary Committee voted to impeach President Donald Trump, and the whole House will certainly accept the recommendation, triggering a trial in the Senate where Majority Leader Mitch McConnell has already declared his role to be a faithful agent of the White House in defending the President. There is not even a pretense of being faithful to the oath that every senator will take to act impartially and be guided by the evidence. They are instead acting like a version of the Red Queen in
Wonderland; though instead of sentence first, evidence afterward, in this case it will be to announce acquittal first coupled with total disdain for the evidence (or for calling witnesses who might supply important evidence). It is understandable that the President is not supportive of his impeachment; what is more ominous, though, is his clear attempt to stir up animosity among his base at the "traitors" and "scum" who are not willing to kowtow to his leadership
Corporate Law as Myth
No full textThis Article shows that a variety of fundamental rules of corporate law are based on myth. The Article explains that the myths on which corporate law is based play an important role in attracting public acceptance and support for what otherwise would likely be unpopular and controversial regulations. Thus, one can view the role played by myth in corporate law in a particular context as having either positive or negative characteristics depending on one's opinion of the social value of the underlying legal rule that is being buttressed and affirmed by the myth.
Four political and sociological myths that continue to play important roles in law are examined. These are: (1) the myth that corporations are owned by their shareholders and represent ownership interests in businesses rather than mere financial claims on the cash flows of those businesses, coupled with certain political (voting) rights that protect those claims; (2) the "shareholder value myth," that corporate officers and directors are legally required to maximize firm value; (3) that subsidiary companies are
entirely independent from and not subject to the control of their parent companies and must remain so in order for the parent company to avoid liability for the contract and tort debts of the subsidiary under various alter ego and piercing the corporate veil theories of corporate law; and (4) the legal regulation of insider trading is justified because of the necessity of creating a "level playing field" among participants in financial markets. Reasonable people can disagree about whether the role played by these
myths is normatively positive or negative in each of these contexts
Enforcement Networks
No full textPolicy and academic debates often depict agencies as siloed, in solitary pursuit of their own statutory mandates. But such views overlook an important reality. Agencies do not work alone, but in fact exercise power via networks, in tandem with other federal and state agencies as well as foreign powers. While agencies have relied on networks for decades, the study of coordinated agency action has been slow to catch up. This inattention is particularly acute for enforcement, which can be a black box, with much of enforcement activity taking place outside of the public view
Regulation and Innovation: Approaching Market Failure from Both Sides
No full textRegulation is often claimed to be the enemy of socially desirable in-novation because of factors including innovation’s unpredictability and regulation’s compliance costs. In this essay, we bring two intellectual property scholars’ perspectives to bear on the question of regulation’s impact on innovation. We offer a novel, yet intuitive, analytical frame-work that takes both market demand failures, and failures of supplier appropriability into account. Traditionally, regulation seeks to mitigate market failures that create deviations between the demand portfolio perceived by suppliers and the socially optimal demand portfolio. Studies of the interplay between regulation and innovation have mostly taken this perspective, considering the impact of various regulatory transaction and compliance costs on innovation. Intellectual property law and competition law target a different sort of problem, where markets fail to supply products and services at competitive prices or to undertake innovative activities because of supplier appropriability issues
Algorithmic Accountability in the Administrative State
No full textHow will artificial intelligence (AI) transform government? Stemming from a major study commissioned by the Administrative Conference of the United States (ACUS), we highlight the promise and trajectory of algorithmic tools used by federal agencies to perform the work of governance. Moving past the abstract mappings of transparency measures and regulatory mechanisms that pervade the current algorithmic accountability literature, our analysis centers around a detailed technical account of a pair of current applications that exemplify AI’s move to the center of the redistributive and coercive power of the state: the Social Security Administration’s use of AI tools to adjudicate disability benefits cases and the Securities and Exchange Commission’s use of AI tools to target enforcement efforts under federal securities law. We argue that the next generation of work will need to push past a narrow focus on constitutional law and instead engage with the broader terrain of administrative law, which is far more likely to modulate use of algorithmic governance tools going forward
Killing Innovation?: Antitrust Implications of Killer Acquisitions
No full textKiller instinct is a key business asset. Firms live and die by their strategic choices, and the desire to outcompete rivals colors most business decisions. While many firms strive to win market share on their merits, economists have recently identified an anti-competitive practice—killer acquisition—that enables incumbents to maintain market share by burying,rather than beating, rival technologies. In these acquisitions, firms buy competitors to prevent market cannibalization, preserving profits at a price that is right for both the acquirer and the target