Media Mentions

It is well known that one of the best services a retail broker can provide is not answering the phones during a crash. The market is down, the customers panic, their timing is terrible, they want to sell at the bottom, they call you up to say “sell everything,” you say “we’re sorry all our representatives are assisting other customers, your call is important to us,” they hang up and get distracted, the market rallies, they forget about selling, you have saved them a fortune, good work. I don’t think any retail broker has this as an official policy; it seems legally dicey and hard to pull off in practice.  ...But here are a blog post and paper from Lucian Bebchuk and Roberto Tallarita about “The Illusory Promise of Stakeholder Governance.” As the title suggests, they are skeptical. For one thing, unlike a lot of stakeholder-governance advocates, they try to draw a clear distinction between the second and third theories, and dismiss the second theory as just another form of shareholder value.

Fashions change and presidential administrations come and go, but the feud between corporate guru Martin Lipton of Wachtell Lipton Rosen & Katz and Harvard law professor Lucian Bebchuk will apparently always be with us. On Tuesday night, Wachtell put out a client alert castigating Bebchuk for a new paper, "The Illusory Promise of Stakeholder Governance." (Bebchuk summarized the paper in a March 2 post at the Harvard Forum on Corporate Governance.) Lipton, as you probably know, has been a leading advocate for the new corporate paradigm of directors and officers considering the interests not just of shareholders but of an array of stakeholders, from employees and suppliers to those who live in environments affected by the corporation’s actions.

An article by Cass Sunstein: The Supreme Court heard oral arguments on Tuesday in the most important separation-of-powers case in several decades. The central issue is simple: Did Congress violate the Constitution in making the Consumer Financial Protection Bureau independent of the president when it created that agency in 2009? Under the law as it now stands, the president can fire the bureau’s director only for “inefficiency, neglect of duty, or malfeasance in office.” Whether that restriction is constitutional bears on the entire structure of the U.S. government. Many federal agencies are “executive,” in the sense that their heads work for the president and can be discharged for whatever reasons he likes. That’s true, for example, of the Departments of State, Defense, Transportation, Agriculture, Justice, Education, Energy, Labor, Interior, Treasury and Commerce. It’s also true of the Environmental Protection Agency.

An attorney for Micheal Baca, a former Colorado member of the Electoral College, told the U.S. Supreme Court this week that the state of Colorado unconstitutionally violated Baca’s right to vote for the presidential candidate of his choice in 2016, calling it an act without precedent in American history. The state’s punishment of Baca, if it stands, would allow state governments to stop the Electoral College from electing candidates who have not released their tax returns, not visited the state, or who support policies the state government opposes, argued the attorney, Lawrence Lessig of Harvard Law. “A state’s power to appoint electors does not grant it the power to control or remove appointees,” he wrote in a legal brief Monday...In his brief Monday, Lessig often cited the Constitution and American history. There were more than 180 instances of electors voting against their state’s wishes — what Lessig calls “anomalous electoral votes” — without punishment until 2016, he told the Supreme Court. In 1968, for example, an elector chosen to support Richard Nixon voted instead for George Wallace. The matter was debated in Congress and it was determined the vote for Wallace should count. “Voting is the core act of discretion and free judgment on which our system of constitutional government depends,” Lessig wrote, adding that Electoral College voting “may not be controlled by a state.”

The Federal Reserve announced Tuesday morning it’s making an emergency half percentagepoint rate cut, as fears continue to mount about the global spread of COVID-19. Marketplace host Kai Ryssdal spoke to Daniel Tarullo, a former member of the Federal Reserve’s Board of Governors and professor at Harvard Law School, about what the central bank’s decision process may have been like. “The mood was probably a fairly somber one,” Tarullo said. “I suspect a lot of preliminary discussions were held last week.” Despite the rate cut, the Dow fell 700 points today. Tarullo said the market reaction implies that the Fed’s announcement may have further worried people about the severity of COVID-19.

A letter to the editor by Nancy Gertner: The Globe’s Feb. 19 editorial called on the government to appeal Judge Leo Sorokin’s 90-page decisionthrowing out the convictions of Kenneth Brissette and Timothy Sullivan on extortion-related charges(“Stopping corruption is everyone’s business”). Why? “When 12 jurors find that they know public corruption when they see it, their findings ought to count for something.” This glib comment ignores the facts of the case, Sorokin’s extensive findings, and most important, the law. Surely the jury’s findings “ought to count for something,” but not when government lawyers, as Sorokin expressly found, misstated the law, urged the jury to convict on a theory that the court had ruled out, and presented a closing argument “saturated with mischaracterizations of the evidence.” Certainly the jury’s findings should “count for something,” but the standard — that jurors “know corruption when they see it” — could not be more off the mark.

Members of the Electoral College get their authority from the US Constitution, not states, and shouldn't be punished for voting their conscience when it comes to presidential nominees, Harvard professor Lawrence Lessig told the Supreme Court in a court filing Monday. The case, which the justices will hear next month with a ruling expected by July, adds another hot-button political issue to the Supreme Court's docket in the middle of the presidential election... "This Court should restore the practice that has governed for more than 220 years and make clear that while states have plenary power 'to appoint' electors, it is the 'Electors' who have the power 'to vote' free of state control," wrote Lessig of the advocacy group Equal Citizens, representing the Colorado elector and the Powell voters. A state must appoint electors, but once that happens, Lessig argues, its power ends...Lessig suggests a hypothetical to the Supreme Court, asking that if states are allowed to enforce who electors vote for, there may not be a way to stop them from adding other conditions such as blocking candidates who don't release their tax returns. "If a state has the power to direct electors to vote consistent with the election returns, a state has the power to forbid electors from voting for candidates who fail to release their taxes returns, who fail to visit the electors' state, or who fail to commit to any political position deemed by a state legislature to be important and correct."

You don’t always need to camp for days on the sidewalk to grab a seat at a US Supreme Court hearing. But this week, this winter, is different. On March 4 the justices are hearing arguments in one of the most anticipated cases of the term—June Medical Services v. Russo. The matter stems from a Louisiana law ostensibly designed to protect women’s health, but with the practical effect of limiting abortion access. The high court already ruled in 2016 that a similar law out of Texas, which required doctors at clinics to be associated with local hospitals, was unconstitutional because it unduly burdened women without advancing a legitimate government interest. But that was before justices Neil Gorsuch and Brett Kavanaugh were appointed by US president Donald Trump...An amicus brief from legal scholars, including Lee Bollinger of Columbia University and Laurence Tribe from Harvard, argues that there’s no real difference between the Louisiana and Texas cases and that the Fifth Circuit’s decision masks “recalcitrance” behind alleged factual considerations. The outcome here should be clear, they say, urging the justices to rein in lower courts who fail to follow the law and arguing that the implications extend far beyond the abortion context.

Sen. Elizabeth Warren is crusading against big banks as one of her core platforms for the 2020 presidential election, but it’s her social media policies that may have the most direct impact on bitcoiners. Namely, she’s taken a hard stance against bank overreach, wants to reduce risky corporate lending and weaken the “monopoly influence” of companies like Citibank, Wells Fargo and Google...Warren has apparently not made any public statements directly related to a clear policy on bitcoin. Yet, it’s her platform on curtailing rampant disinformation campaigns – the promotion of falsehoods online for political or commercial ends – that relates most directly to the bitcoin market. Digital media experts believe current market conditions for cryptocurrency are shaped by social media chatter, some of which is deliberately designed to misinform and misdirect...Oumou Ly, a staff fellow at Harvard’s Berkman Klein Center working on the disinformation research program, said disinformation campaigns impact “financial markets and stock market movements.” It stands to reason that bitcoin markets are not an exception. “We don’t, at this time, have great metrics for how to measure the impacts of disinformation,” Ly said. “As a starting point, I think Warren has the strongest platform related to finding misinformation.”

In the past three months, regulators appointed by President Donald Trump have disrupted ambitious plans to combat climate change in electric grids serving 85 million people in the U.S., from Chicago to New York to Washington. It was easy: an agency just rewrote some obscure pricing rules. With that, the Federal Energy Regulatory Commission cranked up to a new boil the simmering debate over whether the U.S. should get its electricity from fossil fuels or sources that don’t spew carbon. The commission’s Republican majority decided the playing field should be leveled so no one generator gets special treatment. “They’re taking these markets in a totally different direction than states want to go,” said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School. “It could backfire quickly.” The rulings set up a battle over whether left-leaning states including New York, New Jersey and Illinois can effectively promote clean power. Wind and solar have long depended on state quotas and subsidies for growth, and those incentives could now be hobbled.

An article by Noah Feldman: If you’re voting on Super Tuesday, the Supreme Court calendar has a message for you. This week, the court will consider a raft of blockbuster cases on immigration, abortion, and the future of the Consumer Finance Protection Bureau. Today, the court also accepted a case on the fate of the Affordable Care Act. The message could not be clearer: unless Democrats elect a president whose coattails produce a Senate majority, the future of the Supreme Court is going to be intensely conservative, and it’s going to have a major effect on the future of our politics. Traditionally, Democrats have paid less attention to the composition of the Supreme Court as a campaign issue than have Republicans. That’s been a mistake. For decades, liberals won landmark Supreme Court victories on the occasionally liberal tendencies of two Ronald Reagan appointees, Justices Sandra Day O’Connor and Anthony Kennedy. Those days are behind us. President Donald Trump’s Supreme Court nominees, Justices Neil Gorsuch and Brett Kavanaugh, won’t be softening their hardline conservatism in the foreseeable future.

The Supreme Court will hear arguments on Tuesday in a case over whether the Consumer Financial Protection Bureau, the regulatory agency established in the wake of the 2008 financial crisis, is constitutionally structured. The case, key to the future of the CFPB, could also have broad implications on other independent federal agencies, according to experts. A decision is expected by the end of June. The dispute turns on whether the CFPB’s director is given too much independence... Herz said the case took on a new significance because of the controversy over the sentencing last month of Republican operative Roger Stone, a friend of the president who was convicted crimes related to witness tampering and lying to Congress. After Trump suggested on Twitter that the sentence sought by the Justice Department was too stiff, top DOJ officials overruled career prosecutors in order to seek a more lenient sentence. That move prompted all the Justice Department attorneys working on the case to remove themselves from it in a shocking mass exodus. The developments came as some scholars, including Harvard Law School professor Cass Sunstein, have proposed that Congress make the Justice Department an independent agency.

Congress cannot enforce its duly-authorized subpoenas against the executive branch using the judicial branch, according to a blockbuster federal court ruling released late Friday afternoon that shocked and appalled several legal experts. In the case stylized as Committee on the Judiciary v. Donald F. McGahn, the U.S. Court of Appeals for the District of Columbia ruled that former White House counsel Don McGahn did not have to abide by a congressional subpoena issued by the House Judiciary Committee during last year’s failed impeachment-and-removal effort. The lengthy 88-page decision contains a wealth of controversial legal material–spanning the decision, a concurrence and a dissent–for scholars and lawyers to agree with and object to but the basic reasoning for the court’s opinion is that the question itself is simply non-justiciable...Harvard Law Professor Laurence Tribe shared his thoughts via email: "I found the court’s opinion wholly unconvincing, the concurring opinion transparently forced, and the dissent at least initially persuasive. The net effect of this circuit court decision, if upheld by SCOTUS, would be to destroy the vital impeachment power altogether whenever a president digs in and essentially dares the country to “come and get me while I hold all the evidence that proves my guilt of the highest crimes imaginable.” That just cannot be the way our Constitution was designed to work. It was not a suicide pact. We can only hope that Chief Justice [John] Roberts isn’t ready to sign on to so lawless a vision of our republic."

Not a single significant policy or initiative proposed by the candidates for the Democratic presidential nomination is likely to survive a Supreme Court review. Nothing on guns, nothing on climate, nothing on health care—nothing survives the conservative majority on today’s court. Democrats can win the White House with a huge popular mandate, take back the Senate, and nuke the filibuster, but Chief Justice John Roberts and his four associates will still be waiting for them. If the Democratic candidates are serious about advancing their agenda—be it a progressive agenda or a center-left agenda or a billionaire’s agenda—then they have to be serious about undertaking major, structural Supreme Court reform...As Harvard Law professor Laurence Tribe, a proponent of term limits in theory, explained the difficulties to me, “For several years, I was inclined to favor term limits, but I’m increasingly doubtful that the Supreme Court, as currently composed, would agree that Article III can be interpreted the way it would have to be in order to make Supreme Court appointments terminable after a fixed number of years...That, in turn, suggests that the massive effort and political capital that would be required to get a federal statute enacted limiting the terms of Supreme Court justices just wouldn’t be worth it.” This is the most difficult barrier for many court reform proposals: the current Supreme Court.

A podcast by Noah Feldman: Marc Lipsitch, an epidemiologist at Harvard University, predicts that between 40 to 70 percent of adults in the world will become infected with the coronavirus.

In a 2-to-1 decision, a three-judge panel on Friday held that the dispute between the House and the president over the subpoena for former White House counsel Donald McGahn to appear and give testimony is not one the courts can decide. The court, in essence, held that this is a political dispute for which courts cannot be the referee. The notion that courts cannot weigh in to enforce subpoenas seems odd, to put it mildly. In holding that Congress can’t seek redress in the courts, the court encourages presidents to stonewall Congress and get away with illegality. Constitutional scholar Laurence Tribe observed: “The net effect of this circuit court decision, if upheld by the Supreme Court, would be to destroy the vital impeachment power altogether whenever a president digs in and essentially dares the country to ‘come and get me while I hold all the evidence that proves my guilt of the highest crimes imaginable.’ ” He added, “That just cannot be the way our Constitution was designed to work. It was not a suicide pact.” The court did not reach the merits of the case. The majority specifically did not address the president’s claim of absolute immunity. There were actually two votes against the proposition that a president can simply deny access to witnesses and documents.

An article by Cass Sunstein: At this stage, no one can specify the magnitude of the threat from the coronavirus. But one thing is clear: A lot of people are more scared than they have any reason to be. They have an exaggerated sense of their own personal risk. How come? The best answer goes by an unlovely name: “probability neglect.” Suppose that a potential outcome grips your emotions, maybe because it is absolutely terrifying, maybe because it is amazingly wonderful. If so, there is an excellent chance that you will focus on it -- and pay far less attention than you should to a crucial question, which is how likely it is to occur. One of the simplest and most vivid demonstrations comes from Christopher Hsee of the University of Chicago and Yuval Rottenstreich of the University of California at San Diego. They asked a group of people how much they would pay to avoid a 1% chance of a “short, painful, but not dangerous electric shock.” They asked another, similar group of people how much they would pay to avoid a 99% chance of getting such a shock. There’s a massive difference between a 1% chance and a 99% chance. But people didn’t register that difference. To avoid a 1% chance of an electric shock, the median amount that people were willing to pay was $7. To avoid a 99% chance, the number was $10 – not a whole lot higher.

An article by Noah Feldman: The coronavirus called Covid-19 has spread beyond its origin in Wuhan, China, and has arrived on U.S. shores. I’m a law professor, not an epidemiologist, so my thoughts immediately turned to how the law would shape America’s collective response to a broader pandemic — and what the government’s power will mean for individual rights under the Constitution. It’s a question that could soon become an urgent one — I recently interviewed Marc Lipsitch, the brilliant epidemiologist who runs the Center for Communicable Disease Dynamics at Harvard’s T.H. Chan School of Public Health, for my podcast. Lipsitch told me, very calmly, that based on past pandemics and current information, 40-70% of adults in the world are likely to catch the virus in the absence of strong countermeasures. Between one and two percent of those could die. Those are frightening numbers. A pandemic of this scale, and the efforts taken to contain it, would likely result in fierce debates over civil liberties as well as legal action. There’s already been one lawsuit, and there will probably be more. (After all, it’s the American Way.)

An Apple shareholder proposal critical of the company's app removals in China received a relatively high level of support at the iPhone maker's annual meeting on Wednesday, enough to push the company to respond, experts said. The proposal, which called for Apple to report whether it has "publicly committed to respect freedom of expression as a human right," was defeated, but 40.6 percent of votes cast supported the measure, according to company figures. The proposal highlighted Apple's 2017 removal of virtual private network apps from its App Store in China. Such apps allow users to bypass China’s so-called Great Firewall aimed at restricting access to overseas sites, and Apple's action was seen as a step to preserve access to the country's vast market..."A total this high is a striking warning — and it must have come from big institutional investors, not just retail shareholders — that Apple’s human rights policy in China has become a material risk for the company’s reputation," said Stephen Davis, a senior fellow at Harvard Law School's Program on Corporate Governance. "Apple will be under great pressure to respond rather than ignore this vote," Davis said.

The re-election campaign of President Donald Trump accused The New York Times of libel Wednesday, claiming that an editorial about the Russia scandal was both "false and defamatory." Trump campaign attorneys alleged in the filing that The Times "knowingly published false and defamatory statements" about the president in a March 2019 editorial by former executive editor Max Frankel...The lawsuit is a threat to the press' First Amendment rights, Harvard Law professor Laurence Tribe told Salon by email Thursday. "The Trump lawsuit against the Times is utterly frivolous on its face in light of the First Amendment, because the allegations meet none of the settled requirements for imposing liability on behalf of an allegedly defamed public official under New York Times Co. v. Sullivan," Tribe said...Tribe added that "the lawsuit should be dismissed as soon as possible and costs should be assessed for the abuse of process. The suit is a clumsy outburst designed to chill the free press and not a responsible use of the judicial system. The lawyers who signed the complaint should be ashamed of themselves."

If Michael R. Bloomberg is elected president, he says he would be “extremely reluctant” to order the military to attack another country without congressional authorization or an imminent threat to the United States. But he left himself wiggle room, stopping short of saying it would be unconstitutional for him to use force without lawmakers’ approval in other situations...Jack Goldsmith, a Harvard Law School professor and former senior Justice Department official in George W. Bush’s administration, said that while many of Mr. Bloomberg’s responses were fairly conventional, his stated inclinations about when he would unilaterally use force abroad seemed narrower than recent presidents of both parties. “While preserving wiggle room, the thrust is that the president should not use force except in cases of self-defense, pretty narrowly conceived,” he said. “That position would rule out Trump’s use of force in Syria in response to chemical weapons attacks, Obama’s use of force in Libya and in some strikes in Iraq, and some of the broader statements of self-defense power made during the George W. Bush administration.”