Faculty Bibliography

A conversation between Pablo Arrocha Olabuenaga and Naz Khatoon Modirzadeh on the origins, objectives, and context of the 24 February 2021 'Arria-formula' meeting convened by Mexico.

Alibaba, the NYSE-traded Chinese ecommerce giant, is currently valued at over $500 billion. But Alibaba’s governance is opaque, obscuring who controls the firm. We show that Jack Ma, who now owns only about 5%, can effectively control Alibaba by controlling an entirely different firm: Ant Group. We demonstrate how control of Ant Group enables Ma to dominate Alibaba’s board. We also explain how this control gives Ma the indirect ability to disable (and perhaps seize) VIE-held licenses critical to Alibaba, providing him with substantial additional leverage. Alibaba is a case study of how corporate control can be created synthetically with little or no equity ownership via a web of employment and contractual arrangements.

In this article, I bring two key issues in constitutional studies--institutional regime type and electoral system choice--in conversation with each other, and examine their interaction through a normative framework concerning the role that constitutions ought to play in shaping their party systems. The main goal is to offer a theoretical defense (ceteris paribus) of moderated parliamentarism--as superior to its alternatives such as presidentialism, semi-presidentialism, and other forms of parliamentarism. Moderated parliamentarism entails a strong bicameral legislature in which the two chambers are symmetric (i.e. they have equal legislative powers) and incongruent (i.e. they are likely to have different partisan compositions). It has a centrist chamber whose main function is to supply confidence to the government, and a diversified chamber whose main function is to check this government. The confidence and opposition chamber is elected on a moderated majoritarian electoral system (such as approval vote or ranked-choice/preferential vote system, but not first-past-the-post); the diversified chamber--a fully independent checking and appointing chamber--is constituted on a proportional representation model (moderated by a reasonably high threshold requirement for translating votes into seats). The confidence and opposition chamber is elected wholesale for shorter terms. It alone has the power to appoint and fire a unified political executive headed by a prime minister. The checking and appointing chamber is independent of the confidence and opposition chamber as well as of the political executive; its members have longer and staggered terms. Moderated parliamentarism combines the benefits of different regime types and electoral systems in a way that optimizes four key constitutional principles in relation to political parties: it protects the purposive autonomy of parties and enables their ability to keep the four democratic costs low; it serves the party system optimality principle by making it more likely that every salient voter type will have a party to represent it, but also distinguishes between governance parties (which are likely to dominate the confidence and opposition chamber) and influence parties (which will have a space in the checking and appointing chamber); it aids the party-state separation principle by giving significant (and over-weighted) checking powers to smaller parties in the checking chamber; and it promotes the anti-faction principle by distinguishing between smaller influence parties that are polarizing factions from those that are not factional (and punishing the latter a lot less severely than the former). The traditional debates between presidentialism and parliamentarism, and between majoritarian and proportional electoral systems have endured for as long as they have because each system brings something attractive to the table. Moderated parliamentarism seeks to combine the most attractive elements of each--checks and balance from presidentialism, anti-factionalism of majoritarian electoral systems, and political pluralism of proportional representation systems. Because these virtues are in tension, no system can maximize each of them without incurring a cost for another. Moderated parliamentarism is one way to optimize the virtues of each system and yet yield a stable and effective regime type.

The objective of this chapter is the critical analysis of the primary tool for collective rights defense in Brazil: the class action lawsuit that is part of the Brazil’s microsystem for collective litigation. The key question is whether the country’s class action system has satisfactorily served its purpose of deterring and punishing rights violations by large businesses in Brazil. Our hypothesis is that such tool has proved insufficient as a remedy for infringements of the rights of third parties (consumers, workers, investors and even government organs) by private companies.

Whether or how a constitution's guarantees respecting basic right and liberties are to take effect in "horizontal" cases, those involving relations among persons and groups outside of government, has been and remains a matter of debate in liberal-democratic societies. The liberal political philosophy of John Rawls has sometimes been charged with a normative tilt against full extension of the guarantees to these "private" relations. I find the opposite to be true. Given Rawls's conception of the constitution as a society's higher-legal framework for assurance of fairness in its basic structure, along with the justificatory function that Rawls assigns to the guarantees in a constitution thus conceived and the idea of these guarantees comprising a unified "scheme of liberties" guaranteed equally to all, it follows that norms of private law allowing construction of basic of liberties of some by acts of others in civil society should be subject to review for proportional justification. But not every liberty-hostile exercise of a protected basic liberty will come under the scope of such review. For those that do not, liberalism must find some other response.

Employers and governments are interested in the use of serological (antibody) testing to allow people to return to work before there is a vaccine for SARS-CoV-2. We articulate the preconditions needed for the implementation of antibody testing, including the role of the U.S. Food & Drug Administration.

The current SARS-CoV-2 pandemic has killed thousands across the world. SARS-CoV-2 is the latest but surely not the last such global pandemic we will face. The biomedical response to such pandemics includes treatment, vaccination, and so on. In this paper, though, we argue that it is time to consider an additional strategy: the somatic (non-heritable) enhancement of human immunity. We argue for this approach and consider bioethics objections we believe can be overcome.

The Trump Administration’s effort to get rid of the Obama Administration’s Deferred Action for Childhood Arrivals program, or DACA, failed before the Supreme Court in Department of Homeland Security v. Regents of the University of California. In this essay—adapted from a presentation given to an American Bar Association section in September 2020—Brian Wolfman reviews DACA, the Supreme Court’s decision, and its administrative-law implications. The failure of the Trump Administration to eliminate DACA may have had significant political consequences, and it surely had immediate and momentous consequences for many of DACA’s hundreds of thousands of beneficiaries. In the aftermath of the Court’s decision, some commentators noted, however, that the Supreme Court’s ruling it is not a major legal landmark—that it involves only the application of settled administrative-law principles. Wolfman largely agrees. Nonetheless, the decision’s administrative-law holdings are interesting, and the Court’s ruling contains several of what Wolfman sees as “extras”—little nuances that may affect the law over time and that should interest administrative-law nerds. This essay reviews those “extras” too.

The author, a professor at Harvard Law School, argues that concerns about the perils of short-termism—and support for measures that would insulate corporate leaders from the outside pressures that allegedly make them myopic—are long on alarming rhetoric and short on empirical evidence or economic logic. Furthermore, he writes, the threat of hedge fund activism should be expected to discourage managerial slack and underperformance, thus playing an important disciplinary role and incentivizing leaders to enhance shareholder value.

More than most books, Michael J. Sandel’s The Tyranny of Merit: What’s Become of the Common Good?1 presents special challenges for reviewers. The reason, frankly, is that he is writing about “us” (i.e., the likely audience)—and even more certainly those invited to offer systematic reviews. That is, we are, by any measure, “successes” in the American academy (and, perhaps, even elsewhere), whether measured by the institutions in which we teach, the salaries we make, or the more general recognition that we have been privileged to receive at least from people or groups with which we specially identify. What accounts for this success? One flattering response, of course, is that we “deserve” it because of our own inherent capacities and efforts—our own “merit”—however we choose to define that often slippery term. This also entails, whether we wish to acknowledge it or not, the proposition that those “below” us in the pecking order have no real justification for any complaints they might have. They are merely envious—and, recall, envy is one of the seven deadly sins—of the success we have rightfully achieved by excelling them in a variety of relevant capacities, ranging from raw intelligence to a willingness to work hard and defer mundane gratifications. And, incidentally, that is true as well if “we” are tempted to demean instead of honor those above us in the relevant pecking order. Not everyone can make (or deserves to make) the all-star team, and we should be grateful for the opportunity to play in the major leagues.

At the center of a fundamental and heated debate about the purpose that corporations should serve, an increasingly influential “stakeholderism” view advocates giving corporate leaders the discretionary power to serve all stakeholders and not just shareholders. Supporters of stakeholderism argue that its application would address growing concerns about the impact of corporations on society and the environment. By contrast, critics of stakeholderism object that corporate leaders should not be expected to use expanded discretion to benefit stakeholders. This Article presents novel empirical evidence that can contribute to resolving this key debate. During the hostile takeover era of the 1980s, stakeholderist arguments contributed to the adoption of constituency statutes by more than thirty states. These statutes authorize corporate leaders to give weight to stakeholder interests when considering a sale of their company. We study how corporate leaders in fact used the power awarded to them by these statutes in the past two decades. In particular, using hand-collected data, we analyze in detail more than a hundred cases governed by constituency statutes in which corporate leaders negotiated a sale of their company to a private equity buyer. We find that corporate leaders have used their bargaining power to obtain gains for shareholders, executives, and directors. However, despite the risks that private equity acquisitions posed for stakeholders, corporate leaders made very little use of their power to negotiate for stakeholder protections. Furthermore, in cases in which some protections were included, they were practically inconsequential or cosmetic. We conclude that constituency statutes failed to deliver the benefits to stakeholders that they were supposed to produce. Beyond their implications for the long-standing debate on constituency statutes, our findings also provide important lessons for the ongoing debate on stakeholderism. At a minimum, stakeholderists should identify the causes for the failure of constituency statutes and examine whether the adoption of their proposals would not suffer a similar fate. After examining several possible explanations for the failure of constituency statutes, we conclude that the most plausible explanation is that corporate leaders have incentives not to protect stakeholders beyond what would serve shareholder value. The evidence we present indicates that stakeholderism should be expected to fail to deliver, as have constituency statutes. Stakeholderism therefore should not be supported, even by those who deeply care about stakeholders. This paper is part of a larger research project of the Harvard Law School Corporate Governance on stakeholder capitalism and stakeholderism. Another part of this research project is The Illusory Promise of Stakeholder Governance by Lucian A. Bebchuk and Roberto Tallarita.

It is widely recognized that bankruptcy law can stymie regulatory enforcement and present challenges for governments when regulated businesses file for Chapter 11. It is less-widely understood that bankruptcy law can present governments with opportunities to advance policy goals if they are willing to adopt tactics traditionally associated with activist investors, a strategy we call “government bankruptcy activism.” The bankruptcy filings by Chrysler and General Motors in 2009 are a famous example: the government of the United States used the bankruptcy process to help both auto manufacturers resolve their financial distress while promoting the policy objectives of protecting union workers and addressing climate change. A decade later, the government of California applied its bargaining power in the Pacific Gas & Electric Company’s Chapter 11 case to protect climate policies and the victims of wildfires. These examples illustrate that, by tapping into the bankruptcy system, governments gain access to the exceptional powers that a debtor enjoys under bankruptcy law, which can complement the traditional tools of appropriations and regulation to facilitate and accelerate policy outcomes. This strategy is especially useful in times of urgency and policy paralysis, when government bankruptcy activism can provide a pathway past veto players in the political system. However, making policy through the bankruptcy system presents potential downsides as well, as it may also allow governments to evade democratic accountability and obscure the financial losses that stakeholders are forced to absorb to help fund those policy outcomes.

Constitutional theory dating to Montesquieu identified three branches of government, each with a specific function: the legislature enacted general rules, the executive enforced the rules, and the judiciary resolved disputes about the rules’ meaning and application. Every government had to have these branches in some form; that is, the branches were necessary elements in a governance structure. In addition, the branches were exhaustive: that is, taken together they did everything a government could do.

Through a combination of organic growth and acquisitions, LKQ Corp. became the leading aftermarket auto parts distributor in the U.S. by the early 2000s. Beginning in 2012, the company began similarly consolidating the European marketplace. However, by 2017, the company still lacked a meaningful presence in Germany, which was the largest automotive market in Europe. Stahlgruber AG, the largest German distributor, became available as an acquisition opportunity. Senior LKQ management had to decide whether to participate in the sale process, and if so, how high to bid. Bain Capital, which was also making aggressive moves into the European marketplace, was likely to be the other significant bidder. On one hand, “Project Jigsaw” (named as such because Stahlgruber would be the jigsaw piece in the center of the European puzzle) represented a once-in-a-lifetime opportunity for LKQ. On the other hand, the competitive bidding process would force LKQ to stretch financially. The case presents the challenges and opportunities presented by the Stahlgruber acquisition.

This report is the first in a series of reports by the Program on International Financial Systems on enhancing the market structure for trading U.S. Treasuries (“cash Treasuries”) and for repurchase agreements of U.S. Treasuries (“Treasury repos”). In this report, we assess whether policymakers should mandate central clearing in both markets. In future reports we will consider whether policymakers should require the public disclosure of transaction-level data and evaluate design considerations for the standing Treasury repo facility.

Many criminal justice reformers see risk-based sentencing—where an offender’s likelihood of returning to crime determines the amount of time they spend in prison—as a fair and efficient way to shrink the size of the incarcerated population, while minimizing sacrifices to public safety. But, as this article shows, risk-based sentencing is indefensible—even assuming the truth of a number of controversial premises that proponents take to be sufficient for its justification. Instead of trying to cut sentences for those who are least likely to reoffend, officials should focus sentence reductions on the least well-off—who tend to be the most likely to reoffend.

This course explores legal issues relating to the creation, exploitation, and protection of music and other content. It focuses on traditional regimes and models and the ways new technologies have affected strategies involved in making and distributing content. The seminar balances doctrinal and policy concerns with day-to-day legal and business practices and skills relevant to practitioners.

This chapter explores the problem of incorporating music and art into a theory of freedom of speech without also including a far wider range of human activities. Constitution writers and scholars of free expression agree that music and art are covered by principles of free expression. Exactly why they are is a bit unclear, but the unclarity has few practical implications. Examination of the coverage of music and art, though, may reveal something about free expression theory. It may show that that theory deals with subjects sharing a family resemblance rather than resting upon ‘foundations’. If so, the examination has significant theoretical implications—and almost no practical ones. Democratic governments rarely attempt to coercively regulate art and music.

Why are lies wrong? The answer bears on continuing disputes about freedom of speech and the protection of lies and falsehoods. One answer, rooted in the work of Immanuel Kant, sees lies as a close cousin to coercion; they are a violation of individual autonomy and a demonstration of contempt. By contrast, the utilitarian answer is that lies are likely to lead to terrible consequences, sometimes because they obliterate trust, sometimes because they substitute the liar's will for that of the chooser, who has much better information about the chooser's welfare than does the liar. The utilitarian objection to paternalistic lies is akin to the utilitarian embrace of Milll's Harm Principle. It is possible to see the Kantian view as a kind of moral heuristic, welcome on utilitarian grounds. The Kantian and utilitarian objections to lying have implications for the family, the workplace, advertising, commerce, and politics, and also for constitutional law.

"Drawing upon the experience of faculty from across the country, Integrating Doctrine and Diversity is a collection of essays with practical advice, written by faculty for faculty, on specific ways to integrate diversity, equity and inclusion into the law school curriculum. Chapters will focus on subjects traditionally taught in the first-year curriculum (Civil Procedure, Constitutional Law, Contracts, Legal Writing, Legal Research, Property, Torts) and each chapter will also include a short annotated bibliography curated by a law librarian. With submissions from over 40 scholars, the collection is the first of its kind to offer reflections, advice and specific instruction on how to integrate issues of diversity and inclusions into first-year doctrinal courses"– Provided by the publisher

Property has a complexity problem. Although both “property” and “complexity” are often invoked in property theory, we need more and better notions of both. Much theorizing about property law and institutions suffers from an excessive and misguided reductionism, what I call “Flatland.” The Flatland style of theorizing reduces law to a heap of rules and property to a merely additive bundle of rights. By incorporating complexity based on dense interaction into the picture, we can overcome some false dichotomies in property theory. These include the unstructured collection of “sticks,” the flattening of system, all-or-nothing formalism, misunderstandings of the role of information costs, and the assumption that purposes must be directly reflected in individual rules of property. By contrast, seeing system in property as a method of managing complexity points to the importance of exclusion versus governance; hybrid regimes of private, common, and public property; a spectrum of formalism including law versus equity; degrees of modularity and thing-ness; a combination of spontaneous and directed evolution; and a synergy of common law and legislation. Implementing these aspects of system and overcoming problematic reductionism and false dichotomies will require an encounter with practice. Applications to the law of possession, aerial trespass, nuisance, and the integration of property “bundles” demonstrate how theory can meet practice.

Many firms require consumers, employees, and suppliers to sign class action waivers as a condition of doing business with the firm, and three recent US Supreme Court cases, Concepcion, Italian Colors, and Epic Systems, have endorsed companies’ ability to block class actions through mandatory individual arbitration clauses. Are class action waivers serving the interests of society or are they facilitating socially harmful business practices? This paper synthesizes and extends the existing law and economics literature by analyzing the firms’ incentive to impose class action waivers. While in many settings the firms’ incentive to block class actions may be aligned with maximizing social welfare, in many other settings it is not. We examine conditions in which class action waivers can compromise product safety, facilitate anticompetitive conduct, and support harmful employment practices. Our analysis delivers a more nuanced, policy-based critique of the recent US Supreme Court cases, highlights several new unresolved issues, and identifies future challenges for legal scholarship.

Recent work has argued that a corporate discretion to advance the interests of stakeholders is illusory and undesirable. This article argues that, to the contrary, such discretion is both inevitable and desirable.

The legal principle of offset has played a key role in debt collection by private parties for centuries. In 2021, offset plays an equally essential role in the United States government’s collection of debts owed to it, accounting for billions of dollars in funds taken from outgoing payments. The right of offset arises when two parties owe each other debts. The party asserting offset can subtract what is owed to them from what they owe, allowing the parties to avoid an unnecessary transaction. Offset thus makes intuitive sense, simplifying two payment flows into one. But offset becomes far more complex when one of the parties is the federal government, which is unlike a traditional private creditor in important ways. Offset has perhaps its largest impact in the tax system, where Congress has legislated that the Internal Revenue Service (the “Service”) has the authority (and sometimes, the mandate) to offset tax refunds. Refunds are commonly offset when a taxpayer owes prior year tax liabilities, other agency debts (e.g., student loans), state taxes, or past due child support. Despite its frequent use by the Service, offset is subject to minimal procedural protections, likely due to its origin in longstanding common law doctrine. Unlike other forms of tax collection, offset does not carry a right to prepayment judicial review in Tax Court. Nor does offset require the Service to issue a notice to the taxpayer prior to taking collection action. Courts also treat offset inconsistently when the applicable taxpayer/debtor is protected by a collection stay under Title 26 or Title 11, allowing offset in some scenarios and denying it in others. Finally, Congress and the Service have often failed to use their authority to make offset more equitable, particularly as applied to low-income taxpayers. The Service has a limited administrative remedy available for taxpayers to affirmatively request bypass from the offset of their refund to a tax debt. But the remedy is little-publicized, little-used, and difficult to administer. During the COVID-19 pandemic and recession, Congress legislatively protected advance stimulus payments from some forms of offset. But Congress failed to make that protection expansive or to extend it to conventional tax refunds, both of which would have put needed funds in the hands of millions of taxpayers during an economic crisis. Similarly, the Service declined to exercise its statutory discretion to systemically suspend offset of conventional tax refunds to past tax liabilities. These issues extend to payments of the Earned Income Tax Credit (EITC), which are subject to offset. Both Congress and the Service have failed to acknowledge the EITC’s unique nature as a type of public benefit, treating it instead as a conventional tax refund subject to offset. This disproportionately hurts the low-income taxpayers, and their children, that the EITC was enacted to benefit. We argue that policymakers should pay closer attention to offset and make the necessary changes to apply it in a more equitable and logical manner.

In 1969, the Yale Law School received a $1,000,000 grant from the United States Agency for International Development for a Program in Law and Modernization. Yale promised to study legal impediments to modernization, assess legal needs of modernization projects, train lawyers for research and development work, and disseminate knowledge. The Program was conceived by David Trubek and William Felstiner, former USAID lawyer-administrators, who, along with Richard Abel, ran it. Launched in the shadow of the Cold War, it started with the implicit promise of diffusing US liberal ideas about law and transplanting US legal institutions and culture, and was seemingly aligned with US foreign policy. Flush with USAID resources, the Program mounted innovative courses, brought Visiting Professors and Fellows with Third World expertise to Yale, supported scholars from the Third World and elsewhere seeking advanced degrees, funded research by Yale faculty, students, and Fellows, held workshops and conferences, and published Working Papers and articles. Linked with the nascent Law and Society Association, it sought to create a Comparative Sociology of Law. There were vigorous debates ranging from the nature of law and social science to the role of the US in the Third World, all on a campus roiled by student protests over the War in Vietnam and racism in the US. Gradually, the Program became a locus for critique of liberal ideas about law and social science, a source of doubts about US foreign policy, and an incubator for critical studies in law and legal sociology. By 1976, the founding directors were gone and the Program was soon closed. In 1977, nine law professors convened the first Critical Legal Studies conference: six had been involved with the Program while at Yale and the others had interacted with it.

Under the U.S. Constitution, is the executive branch unitary, and if so, in what sense? For many decades, there has been a sharp dispute between those who believe in a strongly unitary presidency, in accordance with the idea that the president must have unrestricted removal power over high-level officials entrusted with implementation of federal law, and those who believe in a weakly unitary presidency, in accordance with the view that Congress may, under the Necessary and Proper Clause, restrict the president’s removal power, so long as the restriction does not prevent the president from carrying out his constitutionally specified functions. Both positions can claim support from the original understanding of relevant clauses; both can claim to keep faith with constitutional commitments in light of dramatically changed circumstances, above all the rise of the modern administrative state. In Seila Law v. Consumer Financial Protection Bureau, a sharply divided Court enthusiastically embraced the strongly unitary position, in an ambiguous opinion that might be read to preserve the constitutionality of independent multimember commissions, but that also left a great deal of room for constitutional challenges to such commissions in their present form. The Court’s analysis purports to be rooted in the original understanding of the constitution, and not implausibly so; but the Court relies so heavily on abstract principles, such as “liberty” and “accountability,” that its analysis is not easily distinguishable from a dynamic constitutionalism suffused with political morality. The Court’s holding and analysis can thus be seen as a direct outgrowth of modern anxiety, rooted in structural concerns, about the threats posed by a powerful, discretion-wielding administrative apparatus, and a belief that presidential control is an essential safeguard.

The killings of George Floyd, Michael Brown, Trayvon Martin, and others have occurred under different factual circumstances, in different states, at the hands of both state and private actors, and have engendered different levels of outrage on the basis of their perceived egregiousness. Collectively and cumulatively, they have forced Americans to, once again, wrestle with the visible manifestation of racism and structural inequality. This confrontation is not simply a function of the inability to avert one’s eyes when faced with incontrovertible evidence of evident inhumanity and abject degradation, though it is in part that. After all, how to justify the deployment of state power to literally snuff the breath of another human being who was otherwise harmlessly restrained and presented a threat to no one? Or, how not to be appalled by three white men effectively hunting down and shooting a black man who was simply jogging? These facts are self-evidently heinous, and the only acceptable reaction is outrage. Ours is a moment rife with the possibilities of racial justice. Fundamental change seems possible. The question for the future is about how to harness this moment to make this fundamental change real and lasting. How does a movement translate its demands into actionable policy? In this Essay, we argue for a three-step incremental process, from protest to politics to law. Taking as our example the case of the Voting Rights Act, we illustrate how the Freedom Movement went from its voting rights campaign to the heart of the Democratic Party and ultimately to August 6, 1965, when President Johnson signed the Voting Rights Act into law. Fundamental change, as we show in the pages that follow, requires all three steps.