Faculty Bibliography

This book is a collection of edited cases, original text, questions, and problems designed for use in a law school level course on agency, partnerships, and limited liability entities. A key feature of this casebook is the extensive coverage of limited liability entities, especially unincorporated limited liability companies (LLCs). The authors include cases on such LLC topics as formation, interpretation of the operating agreement, piercing the LLC "veil," fiduciary obligation, expulsion of an LLC member, and dissolution. Also included is a section on the question of whether membership interests in LLCs and limited partnerships are a security. This edition has been meticulously updated with important cases and rules.

Opinions on government policies vary widely. Some people feel passionately about the child obesity epidemic and support government regulation of sugary drinks. Others argue that people should be able to eat and drink whatever they like. Some people are alarmed about climate change and favor aggressive government intervention. Others don't feel the need for any sort of climate regulation. In The Cost-Benefit Revolution, Cass Sunstein argues our major disagreements really involve facts, not values. It follows that government policy should not be based on public opinion, intuitions, or pressure from interest groups, but on numbers―meaning careful consideration of costs and benefits. Will a policy save one life, or one thousand lives? Will it impose costs on consumers, and if so, will the costs be high or negligible? Will it hurt workers and small businesses, and, if so, precisely how much? As the Obama administration's "regulatory czar," Sunstein knows his subject in both theory and practice. Drawing on behavioral economics and his well-known emphasis on "nudging," he celebrates the cost-benefit revolution in policy making, tracing its defining moments in the Reagan, Clinton, and Obama administrations (and pondering its uncertain future in the Trump administration). He acknowledges that public officials often lack information about costs and benefits, and outlines state-of-the-art techniques for acquiring that information. Policies should make people's lives better. Quantitative cost-benefit analysis, Sunstein argues, is the best available method for making this happen―even if, in the future, new measures of human well-being, also explored in this book, may be better still.

Throughout the book, the authors note the cross-border implications of U.S. rules, and compare, where appropriate, the U.S. financial regulatory framework and policy choices to those in other places around the globe, especially the European ...

We are living in an age of political turbulence, social division, and resistance. The resistance that formed in reaction to the election of Donald Trump styles itself a force to defend constitutional rights, democratic norms, and the rule of law in the United States. Perhaps the New Republic best explained its advent: the Resistance had been born of partisan—that is, Democratic—fury after “liberalism had been dealt its most stunning and consequential defeat in American history.” “For the first time in decades, liberalism has been infused with a sense of energy and purpose,” with millions of people devoted to a singular cause: resisting Trump.

We study the effects of legal protection on the likelihood of efficient trade. Fairness norms that affect the parties’ willingness to pay (WTP) and willingness to accept (WTA) may depend on how strongly the entitlement is protected. We show that our participants can be divided into three groups corresponding to three fairness norms: negative types, whose WTP and WTA are decreasing in the strength of the legal remedy; positive types, whose WTP and WTA are increasing in the strength of the legal remedy; and flat types, whose WTP and WTA do not depend on the strength of the legal remedy. We find that type is role dependent such that a higher WTP and a lower WTA—the combination most conducive to efficient trade—is obtained with a weaker legal remedy.

In important contexts, people prefer option A to option B when they evaluate the two separately, but prefer option B to option A when they evaluate the two jointly. In consumer behavior, politics, and law, such preference reversals are often a product of the pervasive problem of "evaluability." Some important characteristics of options are difficult or impossible to assess in separate evaluation, and hence choosers disregard or downplay them; those characteristics are much easier to assess in joint evaluation, where they might be decisive. But the empirical findings do not resolve central questions: Is either mode of evaluation reliable? Which mode of evaluation is better? Some people insist that joint evaluation is more reliable than separate evaluation, because it offers more information. But that conclusion is far too simple. In joint evaluation, certain characteristics of options may receive excessive weight, because they do not much affect people's actual experience or because the particular contrast between joint options distorts people’s judgments. In joint as well as separate evaluation, people are subject to manipulation, though for different reasons. It follows that neither mode of evaluation is reliable. The appropriate approach will vary depending on the goal of the task – increasing consumer welfare, preventing discrimination, achieving optimal deterrence, or something else. Under appropriate circumstances, global evaluation would be much better, but it is often not feasible. These conclusions bear on preference reversals in law and policy, where joint evaluation is often better, but where separate evaluation might ensure that certain characteristics or features of situations do not receive excessive weight.

Including excerpts from the Restaements (Second) of Judgments, U.S. Constitution, U.S. Code, Transnational Rules of Civil Procedure, State Long -Arm and Venue Statutes, and Recent Supreme Court Case Law.

As progress in the biosciences soldiers forth, new breakthroughs can often be swept up in a common narrative, that is, the narrative of science as a disruptive threat. Responding to perceived threats, policymakers the world over have frequently overreacted to these developments by enacting shortsighted legislation. These knee-jerk reactions often entail a ban or pause on the science to be explored, thereby foregoing a dialog or term-limited oversight. In this paper, we explore the history and transparency of such moratoria.

Across Europe and the Americas, the Enlightenment brought intellectual and institutional tumult over that most basic attribute of the political economy – its medium. By the time the age was over, money operated according to a new design. It enabled a set of financial practices that were unprecedented: modern money worked synergistically with circulating public debt, capital markets, and commercial banking. Together, that quartet of innovations transformed the political economies of the West. The essay considers the themes of that change, including the depth of conceptual innovation on money and finance, the range of institutional experimentation, and the contentious nature of the debate. The essay takes a short tour of the Enlightenment quartet to suggest how interdependent was (and is) the development of those institutions.

In this chapter, we analyze three instances that illustrate the political economy of corporate governance. First, we examine how the politics of organizing financial institutions affects, and often determines, the flow of capital into the large firm, thereby affecting, and often determining, the power and authority of shareholder-owners. Second, we show how continental European nations have been slow in developing diffusely owned public firms in the years after World War II. The third political economy example deals with management in diffusely owned firms. The chapter also looks at the historical organization of capital ownership in the United States, noting how the country’s fragmented financial system limited the institutional blockholders and increased managerial autonomy over the years. Finally, it discusses the power of labor in postwar Europe, political explanations for the continuing power of the American executive and the board in recent decades, other political economy channels for corporate governance, and the limits of a political economy analysis.

In this chapter I examine whether short-termism in stock markets justifies using corporate law to further shield managers and boards from shareholder influence, to allow boards and managers to pursue their view of sensible long-term strategies in their investment and management policies even more freely. First, the evidence that on stock market short-termism is mixed and inconclusive, with managerial mechanisms under-rated sources of short-term distortions, including managerial compensation packages whose duration often is shorter than that of institutional stockholding; further insulating boards from markets would exacerbate these managerial short-term-favoring mechanisms. Nor are courts well positioned to make this kind of basic economic policy, which if serious is better addressed with policy tools unavailable to courts.

This chapter examines how mergers, acquisitions, and restructuring are regulated, both within the formal body of corporate law and as that law interacts with other bodies of law such as securities (including listing standards), antitrust, industry-specific regulation, and regulations of cross-border transactions. It begins with an overview of relevant terminology and scope of M&A and restructuring and how they differ from other corporate transactions or activities. It then considers major types of M&A transactions, the core goals of corporate law or governance, and other bodies of law (antitrust, industry-based regulation, regulation of foreign ownership of business, and tax) that give special treatment to M&A and restructuring, and sometimes interact with corporate law and governance. It also looks at laws that constrain M&A transactions and those that facilitate them. It concludes by summarizing empirical research and discussing what variations in types and modes of regulation governing M&A and restructuring transactions imply.

This chapter examines the impact of private and public enforcement of securities regulation on the development of capital markets. After a review of the literature, it considers empirical findings related to private and public enforcement as measured by formal indices and resources, with particular emphasis on the link between enforcement intensity and technical measures of financial market performance. It then analyses the impact of cross-border flows of capital, valuation effects, and cross-listing decisions by corporate issuers before turning to a discussion of whether countries that dedicate more resources to regulatory reform behave differently in some areas of market activities. It also explores the enforcement of banking regulation and its relationship to financial stability and concludes by focusing on direct and indirect, resource-based evidence on the efficacy of the US Securities and Exchange Commission’s enforcement actions.

This chapter reviews the benefits and costs of using indices, in particular the G- and E-indices, in empirical corporate governance research. As with corporate governance itself, the widespread use of corporate governance indices have both costs and benefits. The literature has identified a number of concerns with the use of these indices including concerns over measurement error, endogeneity, reverse causation, omitted variables and proper identification of the actual mechanisms by which corporate governance might matter. On the other hand, these indices enjoy several important benefits that explain their continued and widespread use. It concludes that event study methodology and the utilization of legal shocks/regulatory discontinuities for identification will likely play an ever greater role in future research.

The Fourth Amendment is generally seen as a procedural provision blind to a defendant’s conduct in a given case, distinguished on that very ground from the Supreme Court’s frequently moralistic assessment of conduct in its due process privacy caselaw. Yet ever since the Court recentered Fourth Amendment protections around an individual’s reasonable expectations of privacy, it has consistently tied those protections to the nature and, specifically, the social value of the activities involved. As in its substantive due process cases, the Court frequently allots Fourth Amendment privacy interests based on its moral evaluation of private acts, privileging conventional social goods like domesticity, romantic relations, and meaningful emotional bonds. And in some cases—most notably those involving aerial surveillance, home visitors, and drug testing—the Court has adopted an expressly retrospective analysis, tying Fourth Amendment rights to a defendant’s actual conduct at the time of a search. This unrecognized strain of moralism in the Fourth Amendment is a troubling development, unmoored from the Amendment’s text, hostile to its well-documented history, and obstructive of its practical operation in regulating police abuses. Not least, that moralistic approach upends prevailing understandings of privacy, as a refuge from the pressures and expectations of society. Especially in the electronic age, as digital technologies vastly expand the police’s ability to parse categories of private data, the Court must cabin its moralistic turn, restoring a richer view of Fourth Amendment values as encompassing individualistic and unorthodox pursuits. This Article identifies two immediate steps for moving forward: renouncing the Court’s privileging of “intimate” over impersonal conduct and reconsidering the controversial binary-search doctrine gleaned from the Court’s drug-testing cases. More fundamentally, it joins an ongoing debate about the adequacy of the Court’s privacy-based Fourth Amendment framework, suggesting both the importance and the difficulty of restoring a Fourth Amendment attuned to liberal values of individualism and moral autonomy. Finally, this Article addresses what the surprising rise of Fourth Amendment moralism suggests about constitutional privacy rights more broadly. Belying the value of privacy as a sanctuary from social judgment, the Court’s persistently moralistic jurisprudence challenges the extent to which our Constitution has ever protected, and perhaps can ever protect, a robust right of “privacy” as such.

This chapter discusses the multiple roles played by the members of the Human Rights Committee in giving effect to the rights guaranteed by the International Covenant on Civil and Political Rights. It argues that the most important contribution the members make to the human rights project consists in their credible, professional elaboration of those rights, particularly by means of the Committee’s Views and General Comments, as emphasized by the International Court of Justice in the Diallo case. While the Committee members should be open to learning from the insights of other treaty bodies, they should resist urgings toward a simplistic harmonization. The texts and interpretations of other ‘core’ human rights treaties must be used with care in the members’ independent exercise of their own interpretive function.

Merger and acquisition deals are governed by merger clauses which are negotiated between the bidder and target in order to communicate deal terms, specify risk sharing between the parties, and describe dispute management provisions in case of litigation. In a large sample of manually collected U.S. deal contracts involving publicly traded bidders and targets, we construct merger clauses indices based on legal scholars’ ex-ante prediction and examine the relationship between announcement returns and different types of merger clauses. We find that bidder protective clauses correlate with higher bidder returns while target protective clauses and pro-competition clauses correlate with higher target returns. We also find that bidder and target protective indices have larger impacts on announcement abnormal returns for “bad” deals than for “good” deals. Finally, we find that the inclusion of more bidder protective clauses leads to lower deal completion rates while the inclusion of more target protective clauses and pro-competition clauses has no impact on deal completion rates. These results are consistent with the expert lawyer/efficient contracting view of Cain, Macias, and Davidoff Solomon (2014), and Coates (2016), and against merger contracts as boilerplate agreements.

Legal protection for traditional knowledge raises difficult questions at the intersection of innovation policy and knowledge governance, with important implications for Indigenous peoples’ rights. A significant source of tension has been the difficulty in delineating entitlement interests in traditional knowledge consistent with prevailing doctrinal limits to intellectual property rights, such as the public domain. This paper advances the idea that, properly applied, the public domain does not constitute a barrier to the effective protection of traditional knowledge, and that a thoughtfully designed, custom-built public domain for traditional knowledge would align traditional knowledge protection with the overall architecture of the global innovation framework.

Patient-centered outcomes research (PCOR) is becoming increasingly common. However, there is little evidence regarding what novel ethical challenges, if any, are posed by PCOR with relevance to institutional review board (IRB) oversight and human subjects protections. This article reports the results of a national survey of all IRB chairpersons from research-intensive institutions in the United States. Findings address the responsibilities of IRBs and the challenges associated with PCOR review and oversight. IRB chairpersons varied in their judgment of PCOR’s overall value to the scientific enterprise and to research at their institution. Furthermore, 27% of respondents considered patients serving in nontraditional roles to be research subjects even when they are not enrolled in research. There was also variation in the training and safeguards their IRBs require for patient partners. Our results suggest that guidance should be developed around ethical and regulatory issues associated with PCOR oversight.

In the last decade, public enforcement of the laws governing the U.S. financial system has received widespread attention, but neither policymakers, academics nor private institutions have produced a comprehensive overview and assessment of the public enforcement system for the U.S. financial system. This Report, Rationalizing Enforcement of the U.S. Financial System (the “Report”), attempts to do just that. While we make recommendations aimed at improving aspects of the enforcement system, the primary purpose of this Report is to lay out a succinct description for the public, policymakers, and others about how the enforcement system works. The Report is divided into four chapters: Chapter 1: Enhancing the Structure of the U.S. Enforcement System – Improving Coordination and Procedural Fairness; Chapter 2: Rationalizing the Setting of Sanctions; Chapter 3: Ensuring Appropriate Use of Monetary Sanctions; and Chapter 4: Promoting Individual Accountability. Chapter 1 describes the highly-fragmented structure of the U.S. public enforcement system and the potential for overlapping enforcement actions by multiple agencies resulting from the same underlying misconduct. We also describe the lack of laws and policies mandating coordination, with the DOJ’s new anti-“piling on” policy being a recent exception, and separately, the discretion some agencies have to engage in forum shopping by unilaterally selecting the forum in which they bring enforcement actions. The chapter sets forth recommendations to formalize and standardize coordination policies and limit the ability of agencies to engage in forum shopping. Chapter 2 sets forth the laws, rules and policies that guide and constrain the setting of monetary sanctions in enforcement actions. We explain that agencies generally have vast discretion in setting sanctions because statutes and policies provide limited practical constraints. We recommend that agencies develop core principles or guideposts to avoid arbitrary, inconsistent and disproportionate penalties. We then describe the byzantine approach many agencies take to publicly disclosing information about enforcement action outcomes and present our own data analysis on monetary sanctions over a 17-year period. The chapter concludes with recommendations for enhancing transparency of enforcement action outcomes. Chapter 3 describes how monetary sanctions collected in enforcement actions are spent. In particular, the chapter describes the lack of public disclosure and sets forth recommendations to increase transparency and appropriately restrict the use of collected monetary sanctions. Chapter 4 explores the issue of individual accountability. We find that while the government has significant legal and investigative tools to identify and hold culpable individuals and firms accountable, it can face more significant challenges with respect to individuals. We set forth recommendations that we believe will better enable enforcement authorities and firms to work together to identify culpable individuals and build successful cases against them.

Halperin presents another look at choice of entity under the Tax Cuts and Jobs Act. He offers a conceptual approach to fully appreciate the actual rate of tax on corporate and passthrough income, following up on three earlier Tax Notes articles over the past eight years that had a similar goal.

Originalism might be defended on two very different grounds. The first is that it is in some sense mandatory – for example, that it follows from the very idea of interpretation, from having a written Constitution, or from the only legitimate justifications for judicial review. The second is that originalism is best on broadly consequentialist grounds. While the first kind of defense is not convincing, the second cannot be ruled off-limits. In an imaginable world, it is right; in our world, it is usually not. But in the context of impeachment, originalism is indeed best, because there are no helpful precedents or traditions with which to work, and because the original meaning is (at least) pretty good on the merits. These points are brought to bear on recent defenses of originalism; on conflicts between precedents and the original meaning; on conflicts between traditions and original meaning; and on nonoriginalist approaches, used shortly after ratification.

Some information is beneficial; it makes people’s lives go better. Some information is harmful; it makes people’s lives go worse. Some information has no welfare effects at all; people neither gain nor lose from it. Under prevailing executive orders, agencies must investigate the welfare effects of information by reference to cost-benefit analysis. Federal agencies have (1) claimed that quantification of benefits is essentially impossible; (2) engaged in “break-even analysis”; (3) projected various endpoints, such as health benefits or purely economic savings; and (4) relied on private willingness-to-pay for the relevant information. All of these approaches run into serious objections. With respect to (4), people may lack the information that would permit them to say how much they would pay for (more) information; they may not know the welfare effects of information; and their tastes and values may shift over time, in part as a result of information. These points suggest the need to take the willingness-to-pay criterion with many grains of salt, and to learn more about the actual effects of information, and of the behavioral changes produced by information, on people’s experienced well-being.

Responding to Abbe R. Gluck & Richard A. Posner, Statutory Interpretation on the Bench: A Survey of Forty-Two Judges on the Federal Courts of Appeals, 131 Harv. L. Rev. 1298 (2018).

There has been a great deal of discussion of the welfare effects of digital goods, including social media. The discussion bears on both private practice and potential regulation. A national survey, designed to monetize the benefits of a variety of social media platforms (including Facebook, Twitter, Youtube, and Instagram), found a massive disparity between willingness to pay and willingness to accept. The sheer magnitude of this disparity – a “superendowment effect” – suggests that in the context of the willingness to pay question, people are giving protest answers, signaling their intense opposition to being asked to pay for something that they had formerly enjoyed for free. Their answers are expressive, rather than reflective of actual welfare effects. There is also a question whether the willingness to accept measure tells us much about the actual effects of social media on people’s lives and experiences. It may greatly overstate those effects. In this context, there may well be a sharp disparity between conventional economic measures and actual effects on experienced well-being.