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Legal Insurance and Its Limits
No full textCourts are buckling under the weight of a staggering access-to-justice crisis. In three-quarters of cases, at least one side lacks a lawyer, default judgments are on the rise, and most Americans with valid claims never take legal action. The situation is dire, and it understandably has policymakers casting about for a fix. On the menu are a range of uncontroversial reform ideas, such as expanding legal aid, supporting system simplification, and promoting pro bono. But it is increasingly clear that those measures—even if accomplished—would not make a dent in the problem. Attention is thus turning to other reform ideas, such as relaxing unauthorized practice of law (UPL) rules and scrapping Model Rule 5.4(d), the provision that prevents nonlawyers from even partially owning entities that deliver legal services. Both reforms are promising. But both would dilute the longstanding lawyers’ monopoly. Perhaps not surprisingly, the bar is fighting these reforms tooth-and-nail.
Into this roiling landscape, some now have a new idea: legal insurance. They suggest that legal insurance is the way to expand access to justice for middle- and working-class Americans. Reformers are also quick to point out that—unlike a relaxation of UPL restrictions or the abolition of Rule 5.4(d)—legal insurance stands to benefit lawyers.
We have seen this play before. In the 1970s, the bar seized on legal insurance as a solution to what was then seen as an urgent access-to-justice crisis afflicting the middle-class. The movement garnered enthusiastic support, not just from the bar, but also from unions, states, Congress, private insurers, and consumer groups. For a time, legal insurance even took off. By the mid-1970s, there were reportedly 5,000 distinct plans in operation, and experts predicted that, by the mid-1980s, half of practicing lawyers would be participating.
Of course, it didn’t come to pass—and remarkably, it seems the entire episode has been forgotten.
This Article recovers the lost history of the country’s first experiment with legal insurance. In so doing, it seeks to forestall another false start. In addition, by drawing on a range of disciplines—including insurance law (particularly insights concerning moral hazard and adverse selection), behavioral economics, legal ethics, and the legal profession—this Article explains why the legal insurance idea floundered, and seems destined to flounder, going forward.
It is undeniably seductive to think the access-to-justice crisis can be addressed in a way that benefits lawyers. It was seductive half-a-century ago. It is seductive now. But those who actually want to address the access-to-justice crisis need to look somewhere else
Laboratory Corporation of America Holdings v. Davis: Brief of Civil Procedure and Complex Litigation Law Professors as \u3cem\u3eAmici Curiae\u3c/em\u3e in Support of Respondents
No full textAmici are law professors with expertise in the Federal Rules of Civil Procedure, including the requirements for class certification under Rule 23(b)(3). Together, we share an interest in ensuring that the Federal Rules of Civil Procedure are construed “to secure the just, speedy and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1
Disagreement and Historical Argument or How Not to Think About Removal
No full textScholars have debated the reach of the President’s power to remove government officers for over one hundred years. This old fight is now suddenly urgent as President Trump asserts far-reaching powers to control the federal bureaucracy and the Supreme Court transforms Unitary Executive Theory into caselaw. Yet the scholarly case for an indefeasible presidential removal power has never been weaker.
This Essay continues an ongoing conversation about how to read some critical early republic evidence about removal. It briefly recapitulates the stakes of the disagreement before offering in-depth analyses of developments in Pennsylvania removal practice, including a reading of the Council of Censors’ Report from 1784. Along the way, it responds to some recent criticisms of our work by Professors Saikrishna Prakash and Aditya Bamzai.
The Essay makes two overarching arguments: First, there was no consensus in the early republic that the executive power included an indefeasible power of removal. Second, legal historians must take dissensus seriously. Historical disagreement is a fact that lawyers wishing to make legal meaning out of history need to confront. In this case, it straightforwardly undermines the notion there was a shared understanding in the early republic that the executive power included an indefeasible power of removal
Front Matter
No full textFront Matter for Volume 14, Issue 2 of Michigan Journal of Environmental & Administrative La
Trump v. CASA, Inc.: Brief of Scholars of Constitutional Law and Immigration as \u3cem\u3eAmici Curiae\u3c/em\u3e in Support of Respondents
No full textAmici are law professors whose research focuses on constitutional law and immigration. Amici have an interest in ensuring that the Fourteenth Amendment is interpreted in a manner consistent with its text and history, and accordingly have an interest in this case
Open Justice Baltimore v. Baltimore City Law Department: Brief for Scholars of Civil Procedure and First Amendment Organizations as Amici Curiae in Support of Petitioners
No full textAmici are scholars whose research and teaching focus on civil procedure, including pleading standards; an organization that provides legal assistance at no charge to individuals who have had their rights violated, including First Amendment rights; and a nonprofit, nonpartisan organization dedicated to defending freedom of speech, freedom of the press, and the people’s right to know. Their expertise is relevant to the impacts of the legal issue in this case on civil procedure and the First Amendment. Amici also have a strong professional interest in the proper disposition of cases involving civil procedure and ensuring the efficient disposition of meritorious legal claims. They write separately to address the circuit splits regarding alternative explanations, the goals and purposes of the Federal Rules of Civil Procedure throughout history, and the detrimental impact that the Fourth and Ninth Circuit standards, if allowed to stand, will have on plaintiffs who suffer from informational disadvantages when filing a complaint
Too Scared to Use: Living Wills and Orderly Liquidation of Too-Big-to-Fail Financial Institutions
No full textThe term “too big to fail” became ubiquitous following the 2007-2008 Global Financial Crisis. Lawmakers, regulators, and scholars wondered if there was a better way forward than issuing an array of ad hoc bailout packages to large financial institutions. Congress, in enacting the Dodd-Frank Act, sought to address the concern by creating a new regulatory framework to resolve large financial institutions in an orderly manner.
First, Congress required too-big-to-fail institutions to file “living wills,” essentially planning documents that describe the institution’s path to a safe failure under the Bankruptcy Code—a failure that would not impact system-wide financial stability. Second, Congress gave “orderly liquidation authority” to the FDIC, allowing the agency to take over a too-big-to-fail institution with emergency funding if necessary. Over the past fifteen years, large financial institutions, their lawyers, and regulators have spent countless hours navigating these two hefty provisions of the Dodd-Frank Act in order to prepare for the next crisis-like event. Yet, during the March 2023 panic that started with a run on Silicon Valley Bank, nobody seemed to bother with either living wills or orderly resolution.
Why not? Leveraging financial history and economic theory, this Article illustrates the substantive and procedural flaws of the Dodd-Frank resolution regime. First, it does not offer system-wide assurance during a system-wide panic. It was designed to deal with the idiosyncratic risk associated with a single institution’s distress, not the systemic risk associated with crises. Second, to the extent that regulators wish to mitigate idiosyncratic risk, they are too hesitant to use the resolution regime when uncertainty is high during a panic, further eroding the regime’s credibility. If Congress wishes to save this resolution regime, lawmakers should consider expanding its coverage to include almost-too-big-to-fail institutions so that agencies can begin to build expertise and credibility
The Forgotten Weapon: Section 891 and the Origins of U.S. Retaliatory Tax Policy
No full textThe original version of the One Big Beautiful Bill Act (P.L. 119-21) included section 899, which would have imposed retaliatory taxes on individuals and corporations from countries that apply “discriminatory or extraterritorial” taxes to U.S. corporations, defined specifically to include digital services taxes and the undertaxed profits rule of pillar 2.
However, on June 26 Treasury Secretary Scott Bessent announced that a compromise was reached on the UTPR, and as a result, section 899 was removed from the OBBBA. Now that section 899 is gone, section 891 is the most important part of the United States’ legislative armory against “discriminatory or extraterritorial” foreign taxation.
While some may regard section 891 as a vestige of a bygone era — its origins date to the 1934 Revenue Act and were grounded in a specific dispute with France over the extraterritorial application of its dividend tax — the provision warrants renewed scrutiny in light of ongoing efforts to codify a modern response to foreign tax practices that deviate from OECD norms and treaty-based standards. If the UTPR compromise falls through, invoking section 891 is the most likely retaliatory tax response to the UTPR or to DSTs because only presidential action is required.
This article discusses the origins of section 891, and compares the French tax it was intended to counter with similar U.S. tax provisions. It also considers the possible effects of invoking section 891
Should Harvard and Other Large Nonprofits Be Taxed?
No full textIn this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah examines justifications for exempting Harvard University and other large nonprofits from tax and argues that treating those organizations like large C corporations would not be such a bad thing. The proposal to subject large university endowment investment income to the corporate tax rate of 21 percent instead of the current 1.4 percent rate has engendered significant debate. More recently, President Trump’s threat to strip Harvard University of its tax-exempt status and treat it as a taxable corporation has likewise been controversial. In their recent Tax Notes article, Harvey Dale, Daniel Hemel, and Jill Manny examine this threat and show that it is less drastic than some have supposed. They argue that because gifts are excluded from gross income under section 102, most of Harvard’s income will be tax free even if it lost its tax exemption, and its investment income most years is less than its operating expenses, meaning it would not have net taxable income. Harvard might still be subject to the corporate alternative minimum tax because it is based on book income and gifts are not excluded for book purposes, but there are ways to mitigate that. The authors explain that “if Harvard were treated as a taxable C corporation rather than an exempt organization, its own federal corporate income tax liability could be as little as zero.
Clinicians in the Loop of Medical AI
No full textAs medical AI begins to mature as a health-care tool, the task of governance grows increasingly important. Ensuring that medical AI works, works where it’s used, and works for the patient in the moment is a challenging, multifaceted task. Some of this governance can be centralized—in review by FDA or by national accreditation labs, for instance. Some must be local, performed by the hospital or health system about to use the product in their own, unique environment. But a large amount of governance is left to the individual provider in the room, the human in the loop who presumably knows the patient and the health system environment, and who can ensure that the AI system is being used in a safe and effective manner. This is a hefty burden, and a growing body of empirical research shows that physicians and other providers are poorly prepared to carry this burden. How should policymakers and industry leaders develop standards for performance that account for the variability of humans in the loop and the variation among situations they will face? The notion that the final responsibility belongs to the physician poorly reflects the reality of modern medical technology and practice. Policymakers will need to come to grips with this new reality if they aim to ensure the safe, effective use of AI accessible to patients across the entire spectrum of the health-care system