Showing papers in "Emory law journal in 2013"

Quantitative Legal Prediction--or--How I Learned to Stop Worrying and Start Preparing for the Data-Driven Future of the Legal Services Industry

Abstract: INTRODUCTIONThis Essay is about solutions-real solutions that law schools can deploy right now to improve the education we provide. And it is about how to overcome obstacles to implementing those solutions right now. This is how change happens.We have all heard a great deal about the problems facing legal education (and the legal profession more generally). Pundits have gone on for years about how law graduates are ill prepared for practice.1 More recently, there has been a seemingly endless barrage of commentary about the difficulty recent law graduates face in finding jobs.2Often these commentators suggest extreme remedies (such as closing down all United States law schools or completely deregulating law practice so that anyone can offer legal services).3 Others suggest less extreme, but unrealistic remedies (such as forcing law faculties to change how they teach, stopping them from writing so that they can teach more, or doing away with faculty governance so that they have no say over these matters).4My goal here is not to debate the many criticisms that have been leveled at legal education. While these criticisms may be overstated at times,5 I will start from the premise-which I believe is hard to debate-that most law schools could do a better job than they currently do to prepare their graduates to practice law and to get jobs.I will start by discussing a potential solution to these problems that is nonextreme, well researched, and relatively well accepted within the legal academy: the recommendations contained in the 2007 Carnegie Foundation report on legal education, titled Educating Lawyers (Carnegie Report).6 I will then explore why the Carnegie Report recommendations are still far from fully implemented in most U.S. law schools. Finally, I will recommend a set of realistic strategies for law schools to more fully implement the Carnegie Report's recommendations, and introduce a nationwide initiative called Educating Tomorrow's Lawyers that is designed to facilitate this process.I. THE CARNEGIE SOLUTIONMost critics of legal education focus on two basic problems in American law schools. First, they charge, law schools do not adequately prepare graduates for legal practice.7 Law schools might do a decent job of teaching their students how to read and analyze appellate cases, most critics concede.8 But this is only a small part of the skill set required to be a lawyer, and the critics claim that law schools do not do a very good job of teaching the remainder of that skill set.9 That is, law schools do not prepare practice-ready lawyers.A second, and related, criticism is that law graduates have had an increasingly hard time finding good jobs.10 Some of this may be related to the recent recession and may ease as the economy recovers. Other parts of this problem may be the result of a "new normal," in which there are competitive forces impacting law practice that will not change even after the economy recovers.11 However, for purposes of this Essay, I will assume that at least part of the problem lies in the realm of legal education. Specifically, law schools could do a better job of preparing their graduates to compete for high-quality legal jobs if we did a better job of preparing practice-ready lawyers.12What might surprise many outside of the legal academy is that there is a potential set of solutions to these problems that is close-at-hand: the recommendations of the Carnegie Report.13 The authors of that report compared legal education to other forms of professional education, to the elements of the practice of law, and to adult learning theory, and reached two basic conclusions.14 First, the report concluded that American law schools do a relatively good job of teaching students about legal doctrine and how to determine that doctrine and its limits.15 But, the Carnegie Report concluded, law schools have traditionally not done a very good job of teaching the skills for deploying that doctrine in the service of real clients or the professional identity required to understand the role of a lawyer. …

Theorizing Forms for Social Enterprise

Abstract: Jurisdictions across the country and around the globe are enacting legislation enabling founders of social enterprises to adopt specialized forms to house their entities. These forms blend elements traditionally found in nonprofit organizational forms, such as commitment to a social mission, with elements from for-profit business structures, such as the ability to attract investors. These legal forms appear to offer founders and investors the ability to "do well by doing good " and give consumers and employees access to "companies with a soul. " These aspirations, however, have not yet been fully realized by any of the specialized forms currently available. In other work, I have described and critiqued the specifics of the various new forms, both here and abroad. This Article takes a step back, and examines the broader theoretical question of what specialized forms would have to provide in order for them to help social enterprise to realize its claimed potential.IntroductionSocial enterprise is a hotly contested term. For present purposes, though, a general idea will suffice. By social enterprise, I mean an organization formed to achieve social goals using business methods. Think companies that use one- for-one models1 like TOMS shoes2 and Warby Parker,3 or employ "hard-to- employ," low-income, or foreign-born individuals like Greyston Bakery4 and Hot Bread Kitchen.5 Think of your favorite green or locally sourced business or of one serving customers at the bottom of the pyramid.6 Founders, proponents, and evangelists of social enterprise, sometimes called social entrepreneurs, have big aspirations for it.Enthusiasts argue social enterprises will have a more positive and sustainable impact on people and planet than ordinary for-profit businesses.7 They claim social enterprises can do more good for more people than traditional nonprofits because their financing and business methods make them more efficient, effective, and scalable.8 These advocates see social enterprises as a different and exciting new way forward, but they lambast one very improbable obstacle: legal form.9Under this view, traditional for-profit and nonprofit legal forms frustrate social entrepreneurs' bold new vision for achieving social change.10 The backward, old law forces a founder to choose between two equally inadequate categories. If she forms a for-profit, particularly a for-profit corporation, shareholder primacy will force her to single-mindedly focus on profit, with no way to protect the social mission of the entity or its founders. If she forms a nonprofit, this social vision can be protected, but business strategies, especially equity capital, are foreclosed. These mutually exclusive legal categories, the story goes, prevent social enterprises from pursuing mutually reinforcing commitments to profit and social good-and shortchange us all in the process.Across the country and around the globe, jurisdictions have begun to respond to these claims by offering a variety of specialized legal forms intended to house social enterprises. Thus far, these include the low-profit limited liability company, the benefit corporation, the benefit LLC, the flexible purpose corporation, and the social-purpose corporation.11 More will likely proliferate. Much legal scholarship in this fledgling area, including my own, has focused on understanding and critiquing the specifics of these enactments and proposals.12 This Article does something new. It begins to theorize whether and how any legal form can do the work desired by social enterprise founders.This work falls along three principal dimensions: permitting, achieving, and branding the difference of social enterprises. Social entrepreneurs begin with their desire to blend their profit-making and social missions in a single entity. They believe in the unique ability of social enterprise to solve social problems and return profits to owners. Rather than hiding these dual aspirations behind a veneer of "business as usual" or under a halo of selflessness, these founders want to claim their social enterprises' blended missions explicitly. …

How the Poor Got Cut Out of Banking

Abstract: The United States currently has two banking systems-one for the rich, one for the poor.1 It was not always this way. In the past, the U.S. government has enlisted certain banking institutions to serve the needs of the poor and offer low-cost credit to enable low-income Americans to escape poverty. Credit unions, savings and loans, and Morris Banks are three prominent examples of government-supported institutions with a specific focus of helping the lowincome. Unfortunately, these institutions are no longer fulfilling their missions, and high-cost, usurious, and sometimes predatory check cashers and payday lenders have quickly filled the void. These fringe banks do not provide the poor with useful credit and further bury them in debt.This Article tracks the neglected history of government-sponsored institutions designed to offer credit to the indigent and explains how each abandoned its initial purpose. In doing so, the Article highlights the shifts in modern banking that rapidly increased competition among banks and caused homogenization in form. Alternative banking institutions could not survive deregulation and were forced to assimilate and operate like mainstream banks, with heightened profits as their sole objective. The poor were the victims.This Article proposes the reestablishment of government-sponsored banks to serve the poor. Options include redesigning existing government measures and a novel proposal to use the existing Postal Service branches to offer lowcost, short-term credit to the low-income. Such proposals have strong historic roots and could offer credit services to millions of Americans.INTRODUCTIONPoverty in the United States is rising while economic mobility is declining. A complex variety of factors and circumstances cause poverty, making its alleviation a difficult puzzle for even the most committed policy makers. Pernicious poverty implicates every facet of society and the legal structure, but most obviously, poverty is about money-the lack of it, the inability to make it grow, and the inability to borrow it. Low-income individuals have unique financial needs and challenges and cannot be offered banking services as though they are simply rich people with less money. It is on this front that the U.S. banking system is failing the poor.A recent study found that over half the population of the United States would not be able to access $2,000 in thirty days to respond to an emergency.2 Further, approximately one-in-four households in the United States (28.3%) are "unbanked"-meaning they have no formal relationship with a bank-or "underbanked"-meaning they do not have access to incremental credit.3 Thus, they must rely on payday lenders, check cashers, or other fringe banking institutions to meet their short-term credit needs. These lenders are often usurious, sometimes predatory, and almost always much worse for low-income individuals than the services offered by traditional banks to their customers.Many scholars and policy makers agree that fringe banks have high costs for the poor4 and further dislocate them from traditional banking institutions by preventing them from building up a credit history.5 Many have advocated regulating such institutions or even banning them.6 Proposals include technical regulatory changes aimed at usurious rates,7 increased disclosure,8 and other consumer protection measures.9 Rather than joining the chorus of scholars looking to improve payday lending and check-cashing institutions, this Article takes a more fundamental approach: it seeks to examine the gaping hole that these services are currently filling.Throughout most of U.S. history, the credit needs of the poor were met by banking institutions specifically created and designed to appeal to them. Credit unions were a populist innovation designed to give the poor control, choice, and ownership over their money, with the protection of federal insurance.10 The Savings and Loan (S&L) was created to enable middle- and working-class homeownership. …

Having It Both Ways: How Charter Schools Try to Obtain Funding of Public Schools and the Autonomy of Private Schools

Abstract: IntroductionSince 1992, forty-two states and the District of Columbia have enacted legislation for charter schools.1 As of December 2011, there were 5,700 charter schools educating 1.9 million students.2 Charter schools are characterized as public schools that receive autonomy from a variety of rules and regulations that traditional public schools must follow.3 In exchange for this increased autonomy, charter schools are accountable to the requirements that established in the charter.4 Failure to satisfy those requirements could result in the closing of the school.5Charter schools and "traditional public schools" are similar in that they are directly subsidized by a combination of primarily state and local taxes based on their enrollments.6 However, the authorization process for these two types of schools can be quite different. Local education agencies (LEAs), which are usually school districts that are governed by elected school boards, decide to open new traditional public schools/ While LEAs may open new charter schools in many states, some state statutes grant chartering authority to nonprofit private entities that are governed by boards of directors consisting of private citizens.8 Traditional public schools and charter schools may also differ in terms of how they are governed. While LEAs generally govern traditional public schools, many states permit private boards of directors to operate charter schools.9 Another key difference between traditional public schools and charter schools is that charter school governing boards might choose to contract a private entity, or educational management organization (EMO), to manage and operate the school.10This Article discusses how charter schools have used their hybrid characteristics to obtain the benefits of public funding while circumventing state and federal rights and protections for employees and students that apply to traditional public schools. The first Part explains how charter schools have emphasized their "public" characteristics to withstand state constitutional challenges that they are ineligible for public funding because they are private schools or fall outside of a system of public schools.The second and third Parts of this Article explain how charter schools have emphasized their private characteristics to avoid having to comply with state and federal protections that protect employees and students. Specifically, the second Part discusses how privately run charter school boards and EMOs have evaded state union election laws by arguing that they are private entities that are covered by the National Labor Relations Act (NLRA), a federal statute that governs private-sector employment. The third Part discusses how charter schools have attempted to evade federal constitutional and statutory protections for employees and students by arguing that they are not state actors pursuant to 42 U.S.C. § 1983, a federal statute that establishes a cause of action for deprivations of federal constitutional and statutory rights under the color of state law.11 These Parts also point out that attempts to circumvent state and federal protections for students and employees may have unintended consequences, such as inviting federal involvement in charter school labor policies, or causing state courts to revisit the question of whether charter schools are public schools eligible for funding under state constitutional law.I. Charter Schools, Public School Funding, and State ConstitutionsPlaintiffs have alleged that the private characteristics possessed by charter schools render them ineligible for funding under state constitutions. Charter schools have survived these challenges by convincing courts that they are sufficiently public to be eligible for funding. This section discusses how charter schools have withstood challenges under two types of constitutional provisions based on their private characteristics: (1) state constitutional provisions that prohibit funding to these types of schools and (2) state constitutional provisions requiring the state to provide a uniform or efficient system of public schools. …

The Anti-Crowd Pleaser: Fixing the Crowdfund Act's Hidden Risks and Inadequate Remedies

Abstract: A new form of startup financing is poised to turn the world of early-stage financing on its head. The Crowdfund Act-part of the Jumpstart Our Business Startups Act of 2012-will permit middle-class citizens to invest online in startups for the first time. After the SEC finishes its rulemaking, equity crowdfunding-modeled on the success of rewards-based crowdfunding websites, such as Kickstarter and Indiegogo-will allow startups and eligible small businesses to raise up to $1 million over a twelve-month period by issuing equity shares to mom-and-pop retail investors through online "funding portals."A swelling tide of scholarship, media reports, and security industry publications warns about the risk of fraud inherent in the online selling of equity shares in startups to unsophisticated investors. However, this literature largely omits discussion of the problems with the new civil liability provision included in the Crowdfund Act-an express private action provision that will raise the transaction costs of crowdfunding and ensnare unwary issuers in its liability trap. In an attempt to address the fraud concern, Congress drafted this new civil liability provision as well as a detailed and extensive set of disclosure requirements for issuers to navigate. The new liability provision, which broadens the language of Section 12(a)(2) of the Securities Act of 1933, imposes liability on the issuer and its officers and directors for false or misleading statements or omissions in any written or oral communication. A plaintiff need only prove that an untrue statement or misleading omission occurred and that the defendant did not exercise reasonable care, even if loss causation, reliance, and scienter are not shown.This Comment analyzes the hidden transaction costs in the Crowdfund Act, particularly the severe liability cost this provision imposes on issuers. Crowdfunded offerings present a new environment in which innocent but inexperienced entrepreneurs face increased risk of making a misstatement or misleading omission. Crowdfunded offerings confront a number of issues not faced by mature companies making public offerings, including the high failure rate of startups, the difficulty of working with emerging technology, the entrepreneurial psychological predisposition to risk, a lack of sophisticated disclosure assistance, and a dearth of due diligence.This Comment argues that the new liability provision not only will sweep too broadly-indiscriminately catching negligent entrepreneurs and fraudsters in its swath-but will also fail to provide an effective remedy for defrauded investors. Given the relatively small amount of money in play in a crowdfunded offering and the expense and difficulty of bringing a class action securities lawsuit, plaintiffs' attorneys are unlikely to pursue cases involving fraudulent behavior. This Comment concludes that the best solution to both issues is to impose scienter as an element of the civil liability provision while also awarding attorneys' fees to plaintiffs' attorneys successful on the merits at trial. This solution will decrease the up-front and hidden transaction costs for issuers and will incentivize plaintiffs' attorneys to pursue issuers committing fraud. Finally, this solution continues the SEC's goal of balancing securities regulations to protect investors and the integrity of the market, while keeping transaction costs low enough to maintain the utility of the market as this revolutionary experiment in startup financing takes root.INTRODUCTIONWhen startup Pebble Technology founder Eric Migicovsky needed additional funding to take his invention, a "smartwatch" that pairs with smartphones and runs apps, from prototype to production, he started off on the traditional road-he pitched his idea to the established venture capital firms in Silicon Valley.1 But, as is frequently the case, the traditional venture capital firms turned Migicovsky down.2 Migicovsky's startup then took a new, but increasingly common, approach: it turned to "the crowd" for funding. …

Privatization and Its Discontents

Abstract: INTRODUCTIONThe question of what government should control exclusively and what it should delegate to private entities is as old as government itself. In ancient Greece, ownership of forests and mines rested with the government, but the government "contracted out the work to individuals and firms."1 And in ancient Rome, the private sector "fulfilled virtually all of the state's economic requirements," like tax collection, supplying the army, and feeding the sacred geese of the Capitol.2 Though privatization is nothing new,3 it's becoming an increasingly important issue as government gets bigger and its functions multiply. As the pressure to privatize increases, we must be mindful of its advantages and pitfalls.Privatization comes in two basic flavors.4 First is the shift in the production of goods and services from the government to the private sector,5 such as privatizing Amtrak or the Tennessee Valley Authority. This process belongs to the world of law and economics6 and won't be addressed here, except to say that privatization of production is generally a good thing. Moving in the opposite direction-toward communism-doesn't work.This Article will focus on the second flavor of privatization, meaning the shift of government functions to private control.7As you likely know, privatization offers many benefits. When combined with competition, it can improve efficiency and lower costs.8 FedEx and UPS compete with each other and drive down prices, while still turning a profit.9 Contrast that with the U.S. Postal Service, which loses billions of dollars a 10 year.Privatization also leads to specialization. In fact, the modern administrative state is built on the idea that the government needs agencies to specialize.11 For example, areas like medicine and air quality are beyond Congress's ability to manage directly, so it established the FDA and the EPA. And sometimes, the experts needed to work in these agencies are easier to find-or at least easier to motivate using market incentives-in the private sector. Thus, by privatizing certain government functions, we can allow private companies with specialized expertise to run them.When you combine competition and specialization, you get efficiency. Efficiency isn't something you can usually count on in government because the incentives are misaligned.12 If you're the government and your costs increase, you can just raise taxes. But if you're a private company, you have to figure out how to reduce costs or increase revenue, or you'll go bankrupt.These benefits mean that privatization of many government functions is not at all controversial. Nobody minds if Atlanta hires a private construction firm to build a city office building. And we don't complain when janitorial services at federal buildings are performed by private contractors rather than government employees. But what about privatizing core government functions?Public institutions are public for a reason. Sometimes, it's because of the tragedy of the commons.13 We all need clean air and feel that the governing rules should be written with public input and enforced by a politically accountable entity, so we established the EPA. Sometimes, it's a collective action problem.14 We all need national defense and want to ensure that military power is used at the direction of our elected, civilian commanders, so we formed a public military. And sometimes, it's a moral sensibility. We want to deter crime and punish criminals, but we don't want victims to exact private retribution.Privatizing such core government functions can give us some gains in efficiency, but we risk forfeiting the benefits of the institutions' public character-in particular, equality and accountability.15 This Article will focus on areas where the pressure to privatize and the challenges to equality and accountability are most acute-education, prisons, the military, and the justice system. By focusing on each of these in turn, we hope to highlight some of the pitfalls of privatization and suggest some ways to avoid them. …

Students, Security, and Race

Abstract: In the wake of the terrible shootings in Newtown, Connecticut, our nation has turned its attention to school security. For example, several states have passed or are considering passing legislation that will provide new funding to schools for security equipment and law enforcement officers. Strict security measures in schools are certainly not new. In response to prior acts of school violence, many public schools for years have relied on metal detectors, random sweeps, locked gates, surveillance cameras, and law enforcement officers to promote school safety. Before policymakers and school officials invest more money in strict security measures, this Article provides additional factors that should be considered. First, drawing on recent, restricted data from the U.S. Department of Education, this Article presents an original empirical analysis revealing that low-income students and minority students are much more likely to experience intense security conditions in their schools than other students, even when taking into account neighborhood crime, school crime, and school disorder. These findings raise concerns that such inequalities may continue or worsen as policymakers provide additional funding for security measures. Second, this Article argues that strict security measures do not support longterm solutions needed to effectively prevent school violence. Indeed, strict security measures may exacerbate the underlying problems by creating barriers of adversity and mistrust between students and educators.In addition, this Article offers recommendations to address the disproportionate use of security measures on low-income and minority students and to curb violence more effectively. It urges school officials and policymakers to support programs that build trust and collective responsibility instead of providing grants for strict security measures. Further, it recommends that the Department of Education's Office of Civil Rights play a more active role in addressing the disproportionate use of strict security measures on minority students.INTRODUCTIONPerhaps never before has our nation been more focused on school security. The horrific massacre of twenty children and six educators at Sandy Hook Elementary School in Newtown, Connecticut, on December 14, 2012, has provoked intense feelings of sadness, anger, and perplexity.1 Naturally, parents, educators, policymakers, and communities are searching for immediate solutions to ensure students' safety.2 In response to this tragedy, many state legislatures and local school boards are considering whether to allocate additional funding to schools for purchasing security equipment and hiring law enforcement officers.3Before policymakers and school officials make these substantial financial commitments, there is much to consider. Just two days prior to the shootings, on December 12, 2012, another event took place that has since been overshadowed by the Newtown tragedy, but is related to the current response. On that day, a U.S. congressional hearing was held to discuss, for the first time, ending the so-called school-to-prison pipeline.4 The school-to-prison pipeline refers to the practice of funneling students directly to the juvenile correction system from schools, or suspending or expelling students from schools, thereby creating conditions where those students are more likely to be arrested.5 This disturbing trend disproportionately affects minority students, especially African-American boys, depriving many of these students of the benefits of an education, future employment, and participation in our democracy.6While violence and school safety are serious issues that must be addressed, the congressional hearing held just two days before the Newtown shootings highlights another serious problem that our nation faces: the disparate treatment of minority students in public schools. To further illustrate, earlier in 2012, the U.S. Department of Education's Office of Civil Rights (OCR) released data from a national survey of over 72,000 schools around the country serving approximately eighty-five percent of the nation's students. …

Regulating the Privatized Security Industry: The Promise of Public/private Governance

Abstract: As governments around the world increasingly turn to contractors to provide government services in the sphere of military and foreign affairs, significant problems of accountability arise. Traditional public governmental mechanisms of regulation and accountability, as well as accountability through litigation, are often inadequate or unavailable. International legal instruments similarly offer only minimal enforcement of human rights or other public- regarding norms, and in any event they may not always apply to nonstate actors. As a result, we must find new forms of public/private governance and oversight in this rapidly expanding area of military and quasi-military operations.The widespread role of contractors in the wars in Afghanistan and Iraq highlights these challenges.1 At many times during these conflicts, the ratio of contractors to troops hovered around one to one, reflecting a huge shift in the way the U.S. government projects its power overseas.2 As the Commission for Wartime Contracting has documented, the U.S. government increased the use of contractors at the same time that it radically reduced the number of contracting oversight personnel, weakening the kind of managerial oversight that can help prevent abuses.3 Although many contractors performed their jobs admirably-and indeed many gave their lives in what is a generally untold story of sacrifice during these wars-when some did commit abuses there were very few workable accountability mechanisms on the back end.4 The debarment system5 is notoriously ineffectual,6 and criminal cases have often stalled due to botched evidence-gathering, jurisdictional gaps, and other problems.7In my own work, I have long argued that, to the extent that we care about ensuring that contractors respect core public values such as human rights, we should look toward new modes of accountability and constraint to protect those values.8 In particular, the human rights community has sometimes tended to focus on the creation of new treaties to address nongovernmental actors, or they have limited their vision to tackling governmental misconduct rather than misconduct by private contractors. While such efforts are tremendously important, I have suggested that there are other innovative accountability mechanisms that are equally (if not more) important, such as reforming the terms of the contracts themselves, developing codes of conduct, and building a variety of governmental and nongovernmental accreditation regimes.9Now, we have a promising example pushing in some of these new directions. The human rights community, partnering with industry and government, has produced a voluntary International Code of Conduct for Private Security Service Providers (hereinafter "IC°C" or "the Code"),10 along with a proposed governance and oversight mechanism in order to enforce the Code.11 Both the Code and oversight mechanism are the product of many years of dedicated work by what may seem to be an unlikely partnership of actors in a strikingly open and transparent process.12 The resulting mechanism has yet to take effect, but its parameters are sufficiently established that a preliminary evaluation is appropriate.13In this Article, I first describe the development of both the Code and its accompanying oversight mechanism as well as some of the key features of this regime. Then, I evaluate the emerging regime and its potential to reflect and promote core public values. Such values include, substantively, the values of human dignity embedded in human rights and humanitarian law, as well as the procedural values of global administrative law: public participation, transparency, and accountability. And I will examine both the process by which this regime was created and the substantive terms and enforcement mechanism of the regime itself. In the end, although we will need to wait to see how this Code is ultimately implemented and enforced, I conclude that it holds a great deal of promise both as an accountability mechanism for private military contractors and as a model for future public/private accountability regimes. …

Proxy Advisory Firms: A Guide for Regulatory Reform

Abstract: Proxy advisory firms exist at the nexus of some of the most high-profile corporate law discussions-most notably, the shareholder voting process, which has recently been the subject of much scholarly and legal debate. As proxy advisory firms are used prevalently by institutional investors to aid them in voting their proxies, it is no surprise that the firms now find themselves the target of regulatory reform efforts. While proxy advisory firms are frequently discussed in the news, criticized by boards of directors and corporate law scholars, and trumpeted by their clients, there is still a significant amount of misinformation and mischaracterization about their function, use, and influence. Because the SEC has announced its intentions to regulate the proxy advisory industry, an informed understanding of proxy advisory firms and their influence on the shareholder franchise is necessary for the promulgation of sound and nonreactive regulatory measures.This Comment parses critics' concerns with the proxy advisory industry and reconciles the motivations for regulation with how proxy advisory firms function and are used. Particularly, this Comment dispels the notion that proxy advisory firms wield too much influence over institutional investors and shareholder voting, and it explains that the fears of conflicts of interest are likely overstated. Utilizing Anthony Downs's research on the application of economic theory to democratic voting, this Comment demonstrates that proxy advisory firms are vital in facilitating the rational, efficient exercise of the shareholder franchise. In light of these findings, this Comment proposes a regulatory approach that subjects proxy advisory firms to federal oversight without imposing unjustified, onerous measures. By using a piecemeal regulatory approach-centered on amending Securities Exchange Act of 1934 Rule 14a-2(b)(3) to require that proxy advisory firms disclose significant relationships with corporate issuers and providing explicit guidance to institutional investors regarding their fiduciary duties to vote proxies in their clients' best interests-proxy advisory firms can be regulated without impairing their utility or the ability of their clients to cast informed votes.INTRODUCTIONIn the aftermath of the Enron and WorldCom accounting scandals, the subprime mortgage crisis, and the rise of institutional investors, a battle has broken out over how much power shareholders should have in the corporate decision-making process. Corporate traditionalists1 have long argued that vesting power in anyone outside of management is foolish and undermines the health of publicly traded corporations.2 Despite their objections, corporate traditionalists are losing this fight; shareholder voting is becoming more prominent and powerful.3In response, advocates of the traditional corporate power structure have initiated a counteroffensive, aiming criticisms at the purported power behind the shareholder vote: proxy advisory firms.4 Proxy advisory firms are information-gathering companies hired by institutional investors to issue voting recommendations regarding everything from executive compensation to proposed mergers.5 While this service may seem unobjectionable on its face, it has produced a wave of criticism predicated on the argument that proxy advisory firms are not mere "researchers" who advise their clients on the best way to vote, but instead power behind the power-exerting undue influence over their clients and lacking accountability and adequate monitoring.6The Securities and Exchange Commission (SEC), in keeping with its newfound ethos of aggressive responses to potential problems, has taken up the sword on behalf of those who fear the influence and unaccountability of proxy advisory firms. After publishing the Concept Release on the U.S. Proxy System (Concept Release), which solicited feedback regarding how proxy advisory firms operate and how they should be regulated, the SEC announced that it would be "considering how to provide guidance" on how to regulate proxy advisory firms. …

Bad Briefs, Bad Law, Bad Markets: Documenting the Poor Quality of Plaintiffs' Briefs, Its Impact on the Law, and the Market Failure It Reflects

Abstract: For a major field, employment discrimination suffers surprisingly low-quality plaintiffs' lawyering. This Article details a study of several hundred summary judgment briefs, finding as follows: (1) the vast majority of plaintiffs' briefs omit available caselaw rebutting key defense arguments, many falling far below basic professional standards with incoherent writing or no meaningful research; (2) low-quality briefs lose at over double the rate of good briefs; and (3) bad briefs skew caselaw evolution, because even controlling for win-loss rate, bad plaintiffs' briefs far more often yield decisions crediting debatable defenses. These findings are puzzling. In a major legal service market, how can clients persistently choose bad lawyers, lawyers persistently perform so poorly, and judicial and ethics authorities tolerate this situation? Answers include poor client information, ethics authorities' limited ability or will to discipline bad lawyers, and two troubling lawyer behaviors: (1) overoptimistically entering the field without realizing, until suffering losses, that it requires intensive research and writing; and (2) knowingly litigating on the cheap, rather than expending briefing effort to maximize case value, because contingency-paid lawyers may profitably run "mills" and live off quick, small settlements. A survey of the worst brief-writers' law firms hints that the problem may be a mix of the former (nonspecialists in over their heads) and the latter (knowingly litigating cheaply). This Article offers the following reforms that, while no cure-all for a problem stemming from stubborn market forces, could help: (1) expanding educational efforts, including law school experiential learning, bar resource-sharing, and bar exam reform; (2) enhancing client access to information on lawyers by liberalizing ethics rules restricting expertise claims and public access to court files; (3) broadening the supply of competent lawyers by liberalizing rules restricting the standing to sue of discrimination "testers" and ethics rules on corporations owning law firms; and (4) toughening ethics enforcement against the worst offenders, who almost all go unpunished now."We Have Met the Enemy and He Is Us"-Walt Kelly1INTRODUCTIONEmployment discrimination features surprisingly low-quality plaintiffs' lawyering for a field that reflects important federal policy2 and, at six to ten percent of the federal docket, is one of the most common case types.3 This Article details a study showing that, on the summary judgment motions that dispose of employment cases with "almost Pavlovian . . . frequency,"4 the vast majority of plaintiffs' briefs omit available caselaw rebutting key defense arguments and lose at more than double the rate of competent briefs. These bad briefs cause broad harms: to the plaintiffs suffering poor representation, to the caselaw resulting from poorly opposed motions, and to the lawyers themselves-at least those unaware that their cases were doomed from the start. This finding raises a series of questions as to how clients persistently choose bad lawyers, lawyers persistently perform poorly, and judicial and ethics authorities tolerate this state of affairs.Part I explains this Article's study. Part I.A describes how this Article uses the "same-actor" defense to test plaintiffs' briefing quality because the defense is the topic of dueling caselaw. Numerous summary judgment decisions credit this defense, finding that a strong inference of nondiscrimination arises when the same actor who hired the plaintiff was also the one who fired her; yet in the same circuits, other decisions reject the defense. This intra-circuit split makes for an excellent objective test of plaintiffs' summary judgment brief quality: if a defendant's brief cites cases crediting the same-actor defense, there is no excuse for the plaintiff's opposing brief not to cite caselaw within the same circuit rejecting the defense. …

Prison Accountability and Performance Measures

Abstract: A few decades of comparative studies of public vs. private prison performance have failed to give a strong edge to either sector in terms of quality. That supposed market incentives haven't delivered spectacular results is unsurprising, since, by and large, market incentives haven't been allowed to work: outcomes are rarely measured and are even more rarely made the basis of compensation, and prison providers are rarely given substantial flexibility to experiment with alternative models.This Article argues that performance measures should be implemented more widely in evaluating prisons. Implementing performance measures would advance our knowledge of which sector does a better job, facilitate a regime of competitive neutrality between the public and private sectors, promote greater clarity about the goals of prisons, and, perhaps most importantly, allow the use of performance-based contracts.Performance measures and performance-based contracts have their critiques, for example: (1) the theoretical impossibility of knowing the proper prices, (2) the ways they would change the composition of the industry, for instance, by reducing public-interestedness or discouraging risk-averse providers, and (3) the potentially undesirable strategic behavior that would result, such as manipulation in the choice of goals, distortion of effort away from hard-to-measure dimensions or away from hard-to-serve inmates, or outright falsification of the numbers. I argue that these concerns are serious but aren't so serious as to preclude substantial further experimentation."Here arises a feature of the Circumlocution Office, not previously mentioned in the present record. When that admirable Department got into trouble, and was, by some infuriated member of Parliament . . . attacked on the merits . . . as an Institution wholly abominable and Bedlamite; then the noble or right honourable [member] who represented it in the House, would smite that member and cleave him asunder, with a statement of the quantity of business (for the prevention of business) done by the Circumlocution Office. Then would that noble or right honourable [member] hold in his hand a paper containing a few figures, to which, with the permission of the House, he would entreat its attention. . . . Then would the noble or right honourable [member] perceive, sir, from this little document, which he thought might carry conviction even to the perversest mind . . . , that within the short compass of the last financial half-year, this much-maligned Department . . . had written and received fifteen thousand letters . . . , had made twenty-four thousand minutes . . . , and thirty-two thousand five hundred and seventeen memoranda . . . . [T]he sheets of foolscap paper it had devoted to the public service would pave the footways on both sides of Oxford Street from end to end, and leave nearly a quarter of a mile to spare for the park . . . ; while of tape- red tape-it had used enough to stretch, in graceful festoons, from Hyde Park Corner to the General Post Office. . . . No one . . . would [then] have the hardihood to hint that the more the Circumlocution Office did, the less was done, and that the greatest blessing it could confer on an unhappy public would be to do nothing."-Charles Dickens, Little Dorrit1"The results obtained from ENRD's civil and criminal cases in fiscal year 2012 alone were outstanding. We secured over $397 million in civil and stipulated penalties, cost recoveries, natural resource damages, and other civil monetary relief, including almost $133 million recovered for the Superfund. We obtained over $6.9 billion in corrective measures through court orders and settlements, which will go a long way toward protecting our air, water and other natural resources. We concluded 47 criminal cases against 83 defendants, obtaining nearly 21 years in confinement and over $38 million in criminal fines, restitution, community service funds and special assessments. …

Beyond School Finance: Refocusing Education Reform Litigation to Realize the Deferred Dream of Education Equality and Adequacy

Abstract: The academic achievement gap between poor, minority students and their wealthier white peers has been one of the most troubling and persistent policy problems in the United States throughout its history. For the past forty years, education reformers have turned to the courts to increase educational opportunities for minority and impoverished children by increasing their access to funding. Success in court has been mixed. While the Supreme Court's decision in San Antonio Independent School District v. Rodriguez foreclosed the possibility of a federal right to equalized education expenditures, education reform plaintiffs in many states have been able to secure a state constitutional right to equalized education funding. Yet, despite these judicial victories, education reformers have failed to achieve their ultimate goal of equalizing educational opportunity. A substantial achievement gap that cuts along racial and socioeconomic lines still exists. Thus, the focus on disparities in education expenditures appears misplaced.This Comment proposes that litigants should redirect their attention to challenging inequitable or inadequate distributions of skill-based education inputs at the local level. This new approach is superior to the current focus on school finance challenges because researchers have increasingly found that skill-based inputs, such as teacher quality, are substantially related to improved academic outcomes. The approach this Comment proposes is also superior to finance suits because courts should be more receptive to these locally focused challenges, which raise fewer justiciability concerns than school finance suits. Accordingly, these new claims have the potential to lead to greater success in the courtroom and the classroom.INTRODUCTIONEducation inequality and inadequacy have plagued American society for years in a phenomenon that is commonly referred to as the achievement gap. This academic achievement gap cuts along racial and socioeconomic lines, and it appears to be growing wider. Poor, minority students continue to perform academically at much lower levels than wealthier, white students. While publicly provided education has traditionally been seen as an equalizing force between the rich and poor, analysis of the achievement gap suggests that the current public education system is having the opposite effect. Although poor black and Hispanic students often enter school less prepared than their white peers, the gap between these groups actually increases over the course of a student's academic career.The idea that the achievement gap widens while students are receiving their formal education seems counterintuitive. However, it becomes less surprising when one considers that poor, minority students generally are taught by the least qualified teachers and are put in classes that teach the least challenging curriculum. The resulting achievement disparity is shocking. As one education policy organization observed, "17-year-old African American and Latino students have skills in English, math, and science similar to those of 13-year-Whites.Education reformers have often turned to the courts for help in closing this 8 achievement gap. In pursuit of this goal, reform-oriented plaintiffs have had an almost single-minded focus in their litigation over the past forty years-increasing the amount of funding available to educate poor, minority students. However, their dogged persistence has failed to achieve equity and adequacy, 10 despite numerous judicial decisions in their favor. Minority students in the twelfth grade still perform academically at the level of white students in the 11 eighth grade. This is true even in states where education reform plaintiffs have won major judicial victories that led to increased education spending for 12 poor, minority students.The fact that the achievement gap persists in states where school finance litigants have won judicial victories suggests that more money does not ensure greater educational outcomes. …

Long-Term Contracting the Way to Renewable Energy Investment: Lessons from Brazil Applied to the United States

Abstract: Fostering development of a renewable energy industry is critical to ensuring energy security and sustained economic development. The United States recently lost its status as global leader in new financial investment in renewable energy, while investment in renewable energy has increased in the developing world. For example, Brazil is the sixth largest investor in renewable energy and has moved up in renewable energy rankings. It is time for the United States to regain its leadership role and create a stable climate for renewable energy investment.This Comment argues that the current legal framework in the United States is inefficient in stimulating continuous investment in electricity generation from renewable resources. The start-and-stop approach created by reliance on tax incentives, a patchwork of state laws, and the inability of many power producers to secure long-term power purchase agreements fail to provide potential investors with the long-term predictability they need. An examination of Brazil's legal framework for investment in renewable energy demonstrates that a mechanism that assures a certain return on investment over a long period of time is crucial to promote continuous investment in renewable energy projects and related industries.This Comment ultimately recommends that the United States encourage more continuous investment in renewable energy by adopting a national renewable portfolio standard and requiring utilities to enter into long-term contracts with nonutility power producers through a competitive process to meet the requirement, unless a utility can meet it in a more cost-effective manner by generating the required amount of renewable energy itself.IntroductionAs of 2010, the United States still relied on fossil fuels for about 81% of its primary energy requirements.1 In contrast, renewable resources-those that "regenerate and can be sustained indefinitely"2-supplied about 8% of energy consumed and electricity generated in the United States.3 Even though total new financial investment in renewable energy in the United States has been growing,4 the overall increase in renewable energy generation has been small and unsteady.5 Moreover, in recent years the United States lost to China the position of global leader in new, renewable energy investment6 and, until May 2013, the position of most attractive country for renewable energy in Ernst & Young's quarterly Renewable Energy Country Attractiveness Indices.7Slow growth of renewable energy in the United States has been attributed to various factors, including the following: high capital costs; low power purchase agreement (PPA) rates; inability to lock in long-term purchase agreements; regulatory hurdles; demise of key federal incentives; and erosion of Congress's support for subsidies.8 Since 2008, a fall in natural gas prices has exacerbated these barriers by promoting the building of natural gas plants and depressing further contract terms for renewable energy projects.9The United States' fall to China as global leader in new, renewable energy investment represented a trend of energy investment shifting toward developing countries.10 In various regions of the developing world, investment in renewable energy has increased as governments strive to diversify their country's energy mix.11 For example, in 2010, new financial investment in renewable energy in South and Central America, excluding Brazil, nearly tripled.12 Brazil itself was the world's sixth largest investor in renewable energy as of 2012.13 It produces almost all of the world's sugar-based ethanol and has been working to add more small hydroelectric, biomass, and wind power to its energy mix.14 In fact, largely due to strong growth in its wind market, Brazil broke into the top ten ranked countries in Ernst & Young's November 2011 Renewable Energy Country Attractiveness Indices.15Around the world, countries such as Brazil, China, India, Spain, and the United Kingdom have been working to reap the benefits that renewable energy offers. …

The Normative and Historical Cases for Proportional Deportation

Abstract: Is citizenship status a legitimate basis for allocating rights in the United States?In immigration law the right to remain in the United States is significantly tied to citizenship status Citizens have an absolutely secure right to remain in the United States regardless of their actions Noncitizens' right to remain is less secure because they can be deported if convicted of specific criminal offenses This Article contends that citizenship is not a legitimate basis for allocating the right to remain This Article offers normative and historical arguments for a right to remain for noncitizens This right should be granted to members of the society-those with significant connections, commitment, and obligations to the State Citizenship status is one proxy for identifying members, but it can be both under- and over-inclusive Numerous green card holders are committed to, have strong connections to, and undertake obligations to the United States Deporting these individuals for crimes like perjury, receipt of stolen property, or failure to appear in court can be excessively harsh It can mean depriving "a man and his family of all that makes life worth while [sic]" Deportation should only be utilized when it is a proportionate response to criminal activityINTRODUCTIONGerardo Antonio Mosquera, Sr was a green card holder in the United States for twenty-nine years before he was deported to a country where he barely spoke the language1 At the age of twenty-nine, after residing in the United States for almost twenty years, he sold a $10 bag of marijuana to a paid police informant2 Gerardo was arrested and he pleaded guilty to the sale and transportation of 06 grams of marijuana3 He was sentenced to ninety days in jail, three years' probation, and a $150 fine4 Gerardo served his sentence and paid his fine His crime constituted an aggravated felony under the 1996 reforms to the Immigration and Nationality Act5 Having an aggravated felony conviction meant that he was deportable and ineligible for discretionary relief6 No judge heard about Gerardo's twenty-nine years of lawful residence in the United States, his US citizen children and wife, his employment record, or the hardship that his family would experience if Gerardo were deported7 There was no relief available to Gerardo, and he was removed from the United States in December 19978The outcome of this case would have been very different for someone like a hypothetical Antoinette She was born in the United States but raised in England since the age of two Her entire family lives in England and Antoinette has spent no time in the United States since her departure At the age of twenty-five she decided to pursue graduate studies in the United States If, after being in the United States for one year, Antoinette sold a $10 bag of marijuana to a paid police informant, she would not be at risk of being removed to England because she is a US citizen Pursuant to the Fourteenth Amendment, her birth in the United States makes her a US citizen9 She would only be subject to a criminal sentence similar to what Gerardo faced: ninety days in jail, three years' probation, and a $150 fine Gerardo arguably has stronger connections to the United States, and thus a stronger liberty interest in remaining in the United States than Antoinette Antoinette however is the one with the right to remainIn this Article I argue that the right to remain should not depend on citizenship status The right to remain should be granted to members of the society-those with significant connections, commitment, and obligations to the State Citizenship status is one proxy for identifying members, but it can be both under- and over-inclusive, as demonstrated by Gerardo and Antoinette Numerous green card holders, like Gerardo, are committed to, have strong connections to, and undertake obligations to the United States10 Deporting these individuals for crimes like perjury, receipt of stolen property, or failure to appear in court can be excessively harsh …

Drawing on Daubert: Bringing Reliability to the Forefront in the Admissibility of Eyewitness Identification Testimony

Abstract: Eyewitness identification evidence has long been recognized for its tendency toward unreliability and its susceptibility to suggestion. At the core of eyewitness identification is the ability to recognize unfamiliar faces-a memory process that can be distorted by factors intrinsic to the nature of memory as well as by extrinsic suggestive identification procedures, such as lineups. Because the guilt or innocence of a criminal defendant is often at stake in cases where eyewitness identification is at issue, this potential for distortion is particularly worrisome. In fact, this concern is borne out in statistical data about wrongful convictions in the United States, showing that mistaken identifications are the leading cause of wrongful convictions in the country.Eyewitness identification evidence possesses a unique combination of factors that distinguishes it from other types of evidence: not only is it prone to unreliability, but it also has a strong influence on the jury. Further, it is not susceptible to the traditional protections of the adversarial system, such as confrontation and cross-examination. These features set eyewitness identification testimony apart from other types of evidence, warranting special attention by courts. The United States Supreme Court has long recognized the particularly sensitive nature of eyewitness identification testimony in a line of cases in which it found that an identification procedure has the potential to be so unnecessarily suggestive, and thus unreliable, that it violates a defendant's due process rights. However, the current rule only affords protection to cases in which law enforcement officers orchestrated an unnecessarily suggestive procedure, disregarding the equally strong potential for unreliable identifications stemming from situations without any improper police behavior or any suggestive behavior at all.This Comment argues that the Court's current framework for approaching the problem of eyewitness identification testimony is too narrow and under- inclusive. This Comment proposes that courts should look to Daubert v. Merrell Dow Pharmaceuticals s heightened evidentiary standard for admitting expert scientific evidence, with its focus on reliability, as a guide for admitting eyewitness identification testimony. Then, this Comment proposes a new framework for admitting eyewitness identification testimony, which, like the Daubert standard, would be centered on a reliability assessment that is based on factors known to affect the accuracy of eyewitness identification.INTRODUCTIONHuman memory, while remarkable in many ways, does not operate like a video camera. On the contrary, what people remember is greatly influenced- and often distorted-by interactions between the mind and its surroundings. Nowhere is the potential fallibility inherent in human memory more glaring than in the courtroom, where eyewitnesses regularly testify to the identity of a criminal defendant based on their memory of a culprit's face.Through efforts such as the Innocence Project,1 the potential for mistaken eyewitness identification has become evident.2 In fact, the leading cause of wrongful convictions in the United States is mistaken eyewitness identification;3 staggeringly, more than 75% of innocent prisoners exonerated by DNA evidence were found guilty at least in part on the basis of mistaken eyewitness identifications.4 This statistic highlights the miscarriage of justice that can occur if an eyewitness makes a mistaken identification: not only is an innocent person imprisoned, but the true perpetrator of the crime also escapes justice.As efforts such as the Innocence Project suggest, mistaken eyewitness identifications frustrate the truth-seeking goals of the justice system. Courts have attempted to improve identification procedures, such as lineups, to prevent mistaken identifications; however, courts must also address eyewitness identification mistakes that arise not only from procedural problems in control of the justice system, but also from the imperfect nature of memory itself. …

The Law of the Body

Abstract: This Article posits that a "law of the body" is overdue. In the absence of clarity about the legal status of the human body, courts have constructed a collection of circumstantially defined categories for resolving the question of human body ownership and use. This patchwork approach is awkward, unwieldy, incoherent, and, by many lights, ultimately unjust. Many able minds have been applied to critiquing the distributive consequences of a regime in which we cannot-at any point in our lives-"own" our own bodies (or its constituent parts), but other people can and do. But what has been missing from these conversations is a conceptual foundation for understanding the living human body as property. This Article supplies that piece of this byzantine puzzle. Specifically, the thesis presented here holds that by employing a property framework to understanding the legal status of the human body we can explain with coherence and consilience our existing legal commitments concerning the treatment of the human body.Moreover, this Article addresses the standard objections to explicitly acknowledging the human body as an object of property and demonstrates that they are predicated on a series of misunderstandings. These misunderstandings generally fall into three categories: misunderstandings about the nature of "property"; conceptual misunderstandings about bodies and selves and the capacity to own oneself; and misunderstandings about the necessary consequences of adopting a property framework with respect to the human body. Once these misapprehensions are clarified, the intellectual path will be cleared for a "law of the body" to emerge, and legislators, courts, and scholars can begin the important work of shaping it into a doctrine that is consistent with our normative ends.INTRODUCTIONPeople have begun to sell their skin. This is not meant euphemistically, as a pornographer may be said to sell "skin."1 Instead, people have begun to sell their actual skin tissue as advertising space.2 In these arrangements, the seller agrees to obtain a tattoo of a company's logo or other advertising mark. The tattoos are temporarily (or sometimes permanently) affixed to the seller's arm or back-or, occasionally, forehead-and serve as novel advertising for the buyer. Through this transaction the seller's body is transformed into a commercial space, and, more remarkably, it adopts an attribute once thought to be antithetical to a living and intact human body: the seller's body assumes an aspect of alienability. A third party now enjoys a property-like interest in an aspect of the seller's living human body.3In executing such an agreement, the seller's body becomes a commodity- an alienable economic good.4 But is it accurate to say that the seller owned that which he sold? How should we characterize the legal relationship that the seller has with his own living body?To illustrate the complexities inherent in this question, consider a second way in which skin has become a commodity. Disembodied human skin is used by biotech companies to create an array of products, ranging from life-saving skin grafts to cosmetic lip fillers and anti-aging creams.5 The skin used in these products is sold to biotech companies by tissue procurement agencies and hospitals.6 Agencies obtain skin tissue from donated cadavers.7 Hospitals sell skin tissue that would otherwise be discarded from surgical procedures-for example, the amputated foreskins of circumcised babies.8 Biotech companies purchase the tissue and convert it into useful and profitable products.9 A chain of skin ownership stretches from the procurement agency to the biotech company to the patient who receives a skin graft. But what of the person whose body originally produced the skin tissue? Did the originator of the skin ever "own" it in the same sense that the biotech company owned it?Advancements in biotechnology have complicated this question of human body ownership by producing an extraordinary array of uses for the human body. …

Government Choices in Innovation Funding (With Reference to Climate Change)

Abstract: Huge amounts of money will soon be spent by governments and private entities to develop technology to reduce the costs of climate change mitigation and adaptation, and to deploy new energy and transportation infrastructures. Incredibly, we still lack any good idea of the best means of providing massive amounts of government or private money so as to promote the most innovation and technology diffusion at the lowest cost. This Article seeks to support better analyses of, and decision making regarding, the choices of government innovation-funding mechanisms by discussing the limits of current analyses and providing a taxonomy of such measures. It also proposes future work to better analyze what we know about these choices and their relative effectiveness, and it discusses new measures to expand our knowledge base, which include: (1) better tracking of government innovation-funding inputs and outputs; (2) better documentation of and self-conscious decision making regarding funding choices; and (3) creating experiments that go beyond existing natural experiments.

Anything under the Sun Made by Humans: Patent Law Doctrines as Endogenous Institutions for Commercializing Innovation

Abstract: This Essay outlines a comparative institutional analysis among various doctrines in patent law to show how they can have different impacts on the way inventions are commercialized. It builds on a prior body of work about the positive role that property rights in patents can play in commercializing innovation to show how recent shifts in approaches to the particular legal doctrine known as patentable subject matter can be expected to have different effects on the commercialization of inventions than prior approaches. It concludes that, to the extent society wants to increase the overall rate of invention commercialization and increase overall competition as reflected in diversity in firm size among participants in the markets for commercializing innovation, society should consider reversing course on the law of patentable subject matter and return to an approach that is closer to the "anything under the sun made by man" view that was championed by the Supreme Court in the 1980s and by Congress through most of the second half of the twentieth century, updating only its gender biased language.INTRODUCTIONThis conference volume arises out of the 2012 Randolph W. Thrower Symposium, which is part of the endowed lecture series sponsored by Mr. Thrower's family and hosted by the Emory Law Journal and Emory University School of Law. The 2012 symposium was entitled "Innovation for the Modern Era: Law, Policy, and Legal Practice in a Changing World." This Essay was presented on the panel entitled "The Role of Institutions in Fostering and Disseminating Technological Innovation" and offers a comparative institutional analysis of different approaches to one of today's hot topics in modern patent law-the issue of patentable subject matter1-to elucidate the ways different approaches to institutional design in patent law can have different impacts on the markets for commercializing innovation.This Essay proceeds as follows: Part I introduces a precis on institutions and their application to intellectual property. Part II highlights some links that can be found between, on the one hand, a patent system's overall goals and the types of dispute resolution it conducts, and on the other hand, the different relationships these set up between the government and market actors. Part III lays out as a benchmark the "anything under the sun made by man" approach towards patentable subject matter that was featured in the 1952 Patent Act, championed by the Supreme Court in the 1980s, and followed by Congress through most of the second half of the twentieth century,2 as well as a contrasting more subjective approach the Court again deployed in its most recent cases. This Essay concludes by elucidating some reasons why, to the extent society wants to increase the overall rate of invention commercialization and increase overall competition as reflected in diversity in firm size among participants in the markets for commercializing innovation, society should consider largely returning to the prior approach toward the law of patentable subject matter, updating only its gender biased language.I. APRECIS ON INSTITUTIONSIn the social sciences, the term institutions refers to constraints that are human imposed-laws, rules, norms, and their enforcement characteristics; and the field known as New Institutional Social Sciences, including the narrower field known as New Institutional Economics, studies the nature and degree of the impact that institutions can have on overall economic and social performance.3 Institutions are usually considered to be largely endogenous to a given democratic society-meaning that they are seen as internally generated rather than imposed from outside-because it is generally at least some subset of the people in that society that decides which institutions are implemented.4This Essay outlines a comparative institutional analysis among various doctrines in patent law to show how they can have different impacts on the way inventions are commercialized. …

Regulation X: A New Direction for the Regulation of Mortgage Servicers

Abstract: Mortgage servicers are responsible for handling the day-to-day processing of mortgage loans. These responsibilities include processing borrower payments, transferring funds to trustees and investors, and answering borrower inquiries. Mortgage servicers are also responsible for handling delinquent loans when a borrower is late making payments. If a borrower does not cure the delinquency, mortgage servicers are responsible for choosing whether to pursue a foreclosure sale or to implement a loss mitigation option.Foreclosures are detrimental to borrowers and the surrounding community. Forcing a borrower to leave her home creates a negative feedback loop, lowering property values in the surrounding area. Loss mitigation options are pursued as an alternative to avoid the harmful effects of foreclosures.The financial crisis of 2007-2008 brought to light mortgage servicer behavior that pushed through an unnecessary number of foreclosures, even where borrowers had finalized loss mitigation negotiations with mortgage servicers. Reports attribute these foreclosures to miscommunication between servicers and borrowers and poor internal communication within servicers. The unprecedented number of foreclosures exacerbated the severity of the financial crisis.The Consumer Financial Protection Bureau (the Bureau), created by the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, has finalized new regulations aimed at stopping the servicing behavior that contributed to such unnecessary foreclosures. The new regulations are amendments to Regulation X, the implementing regulation of the Real Estate Settlement Procedures Act. The amendments, proposed under the Bureau's broad rulemaking power, require servicers to make early contact with delinquent borrowers, implement continuity-of-contact procedures, and establish loss mitigation application review procedures. This Comment explores the Bureau's enforcement powers and the legality of the amendments as permissible expressions of the Bureau's rulemaking authority. This Comment concludes that the broad deference to federal agencies under step two of the Chevron doctrine includes the amendments within the scope of the Bureau's rulemaking power.This Comment also addresses the immediate and potential effects of the amendments. The amendments' immediate effects are uniformity of industry standards and data creation. The Bureau is equipped with stronger supervisory and enforcement powers than any previous federal agency in this field. The amendments create an observable record of servicer behavior that will allow the Bureau to efficiently enforce federal consumer protection law, bringing greater accountability to the mortgage servicing industry. Despite this strong immediate effect, the amendments leave room for servicer discretion and manipulation, which would leave borrowers exposed to the prospect of unnecessary foreclosures.INTRODUCTIONMortgage servicers are responsible for the day-to-day processing of mortgage loans. This includes processing payments, communicating with borrowers and investors, and handling escrow accounts.1 Additionally, when a borrower defaults on her loan, servicers are responsible for proceeding with a foreclosure sale, which can be detrimental to the borrower and the surrounding community, or avoiding foreclosure by implementing various loss mitigation options.2 Because the residential mortgage market is the single largest market for consumer financial products and services in the United States, servicers are charged with immense responsibility.3Poor lending practices during the 1990s and early 2000s led to a wave of borrower delinquencies, causing the financial crisis of 2007-2008.4 Mortgage servicers, who faced very little government oversight and regulation, were unprepared to handle the wave of defaults. Borrowers, who in previous years might have had the opportunity to pursue a loss mitigation option, were pushed through hasty foreclosures. …

Making Knowledge and Making Drugs? Experimenting with University Innovation Capacity

Abstract: IntroductionThe innovation process for novel medical therapies needs repair.1 The United States spends more than ever before on drug discovery without a corresponding increase in new medical therapies.2 Despite major advances in knowledge concerning the underlying mechanisms of disease and new technologies for drug discovery and design, there have been few significant changes in the treatment of disease.3 While this productivity crisis may be due in part to a move beyond low-hanging fruit and toward the pursuit of more complex and elusive therapies, inefficiencies inherent in the current system of pharmaceutical innovation are also to blame.4 The segmented, proprietary model of drug development that has dominated the pharmaceutical industry for decades is becoming not only increasingly undesirable, but also unsustainable.5 Federal and state governments are reluctant to devote their shrinking budgets to basic research without more and faster tangible returns, private investors are unwilling to absorb the cost and risk involved in moving from early-stage discovery to later development stages, and pharmaceutical companies are retrenching their development efforts in response to soaring costs and a dearth of new blockbuster drug candidates. Pharmaceutical companies miss opportunities to control costs and reduce error rates because of failures to share costly and valuable information, such as toxicology results and other information about drug candidate failures.6 Inadequate investments in industry-wide process innovations, such as increasing data transparency and pooling discovery resources, lead to further missed opportunities to improve productivity. The promises that scientific advances in the understanding of disease offer for improving the treatment of disease seem increasingly out of reach, leading some members of Congress to question the significant investments being made in biomedical research.7Nobody is happy with a situation in which the cost of drug discovery is increasing while the number of novel drugs approved for human use is flat or falling.8 In response, federal and even state government policy makers are scrambling to retool the innovation process for medical therapies in ways that will deliver faster, better, and more cost-effective results.9 They are focusing in particular on strategies for increasing the speed and effectiveness of translating scientific knowledge into new medical technologies.10 Pharmaceutical companies are joining in the search for new innovation models as expiring patents on blockbuster drugs and thinning drug pipelines threaten their existing business models.11 In the pursuit of improved and cheaper ways to produce new drugs, both groups are turning to universities, traditionally the sources of early-stage drug discovery, to play an expanded role in the post-discovery drug development process. As a result of financial pressures and the lure of new funding and research opportunities, many of the larger U.S. research universities are reconsidering the roles that they play in the innovation process and experimenting with new ways of moving into spaces traditionally reserved for commercial actors.12 In doing so, they are pushing against implicit boundaries in the legal framework governing technology transfer and challenging traditional views of universities as sites for disinterested discovery and dissemination of public knowledge.This Article begins with the challenges that face the pharmaceutical industry and the related pressures on universities and investigates two questions. First, the Article considers whether universities offer any advantages over firms and governments in managing not only drug discovery, but also post-discovery drug development. Second, this Article considers the implications of an expanded university role in drug development for the existing institutional framework governing university technology development and transfer. The Article uses an experiment with drug development capacity currently underway at Emory University as a case study with which to explore these questions. …

The Foreign Corrupt Practices act and Corporate Charity: Rethinking the Regulations

Abstract: American companies bring U.S. innovation and capital to all corners of the globe. The U.S. corporate presence abroad is seen not only in oil rigs and factories, but also in corporate development projects and humanitarian relief efforts.When Haiti was hit by an earthquake in 2010, U.S. companies donated over $146.8 million to the relief effort. Despite this impressive display of global engagement, commentators suggested that the U.S. anticorruption laws had discouraged corporations from greater involvement. Even with the laws in force, however, reports of corruption in the relief effort soon surfaced, derailing Haiti's recovery. Foreign aid that feeds corruption will never achieve sustainable growth, but development efforts will similarly fail if U.S. anticorruption laws discourage corporate philanthropy.This Comment analyzes the application of the Foreign Corrupt Practices Act (FCPA) to international corporate charity. It shows how the FCPA's ambiguity has the unfortunate effect of being both over- and under-inclusive, discouraging bona fide charity while at the same time failing to capture corrupt donations.This Comment proposes a modification to FCPA enforcement: the creation of a safe harbor option. This will offer businesses the opportunity to "buy" a rebuttable presumption of legitimacy for their charitable donations by publically disclosing the payments, projects, and recipients of their philanthropy. Granting a presumption of legitimacy to disclosed donations will ameliorate many of the overinclusive aspects of the FCPA. The increased disclosure will allow the public to monitor corporate charity and question suspicious gifts, ameliorating the underinclusive aspects of FCPA enforcement.A greater emphasis on disclosure-based anticorruption law will encourage robust and honest corporate philanthropy that will support long-lasting and sustainable development around the world.INTRODUCTIONIn 2010, a catastrophic 7.0 magnitude earthquake hit Port-au-Prince, Haiti.1 The Haitian people suffered devastating losses: over 200,000 people were killed2 and rebuilding costs were estimated at $14 billion.3 The corporate response was immediate,4 mobilizing over $100 million in donations in only ten days,5 eventually totaling over $146.8 million.6 Beyond direct donations, corporate leaders and business experts strategized about ways to encourage investment in the rebuilding effort and to engage Haiti in the global economy.7The generosity of the corporate response to the earthquake illustrates the unique contributions that U.S. businesses can offer to international development and disaster relief.8 American corporations fund successful development projects around the world,9 and in 2008 and 2009 donated an estimated $9-$11 billion to charitable causes each year.10 Corporations engage in philanthropy for a variety of reasons; some view it as part of their responsibility to be "a good global citizen,"11 while others focus on improving the company's image12 or maintaining a stable working environment.13 Other corporations use charitable activities to gain an edge over competitors,14 but some of these targeted donations seem more like bribery than philanthropy.15 For example, in 2002 Chevron Corporation timed the announcement of a $50 million development project to coincide with negotiations over major oil assets in Angola.16 The company pledged another $80 million when the contract was later extended,17 amid accusations that the donations were being funneled through the corrupt Angolan government's network.18A company funneling money to government leaders to win oil contracts is exactly the type of activity that the FCPA aims to eliminate. The purpose of the FCPA is to hold U.S. companies accountable for any bribes paid to foreign government officials or for failing to keep financial records that would prevent such activity from occurring.19 In the aftermath of the Haitian earthquake, however, some commentators argued that this law did more than just discourage bribery-it also discouraged corporate charity and investment in the disaster relief effort. …

Whose Defense Is It Anyway? Redefining the Role of the Legislative Branch in the Defense of Federal Statutes

Abstract: When the Obama Administration announced it would cease defending the Defense of Marriage Act (DOMA) in litigation, it demonstrated the increasing fluidity inherent in the Executive Branch custom of defending federal statutes. After three years of setting aside its opposition to DOMA, the Administration adopted a newfound interpretation of DOMA's Section Three and abruptly abandoned its defense. While the House Bipartisan Leadership Advisory Group eventually undertook the law's defense, it met obstacles in finding a litigant on its behalf. Partisan opposition to the Advisory Group's decision to defend DOMA and a prominent U.S. law firm withdrawing its representation jeopardized the law's defense.The circumstances surrounding DOMA show the vulnerability of laws enacted by Congress. While the Executive Branch has often used its enforcement powers to exert control over the effects of certain laws, recent decades have also seen it utilize its status as the primary defender of the interests of the United States to sidestep laws with which it disagrees. As statutes face constitutional legal challenges, the Executive Branch has increasingly refrained from defending statutes.This Comment argues that the Legislative Branch should undertake the primary role in statutory defense to stop the detrimental effect that the nondefense of statutes has on the separation of powers. This Comment contends that defending federal statutes is not within the President's Article II powers, and that a growing trend toward departmentalism supports the Legislative Branch's ability to argue its own interpretation of a law's constitutionality. As such, this Comment proposes a new Legislative Branch office charged with the primary responsibility of defending federal statutes and describes how such a change could occur.INTRODUCTION"After careful consideration . . . the President of the United States has made the determination that Section 3 of the Defense of Marriage Act ("DOMA"), as applied to same-sex couples who are legally married under state law, violates the equal protection component of the Fifth Amendment."1 Though vowing to continue the enforcement of DOMA,2 this declaration ended the Obama Administration's begrudging defense3 of the law.4 As pundits debated the political ramifications of President Obama's decision, the lesser discussed, but arguably most important, issue was the emerging trend of the Executive Branch refusing to defend the constitutionality of federal statutes challenged in litigation.The difficulty in responding to this trend is heightened by the fact that the constitutional parameters of the Executive Branch's defense of statutes have yet to be firmly established.5 While the practice has existed for over 140 years,6 the evolution of constitutional interpretative theory among the three branches of government has confounded the once-shared understanding of how statutes are to be defended.7 Indeed, the move from a strict adherence to judicial supremacy to a broad acceptance of departmentalism8 has contributed to the increasingly common occurrence of one branch declaring the actions of the others to be unconstitutional.9 Simultaneously, the general electorate and media's understanding of each branch's functions imposes political pressure and impedes the responses of each branch to such declarations.10 The result has been an ad hoc system of statutory defense that has muddled the question of whether and how a statute receives a defense.11 Within this context, the need to examine alternative methods of statutory defense becomes necessary to maintain a proper separation of powers.to the increasingly common occurrence of one branch declaring the actions of the others to be unconstitutional.9 Simultaneously, the general electorate and media's understanding of each branch's functions imposes political pressure and impedes the responses of each branch to such declarations.10 The result has been an ad hoc system of statutory defense that has muddled the question of whether and how a statute receives a defense. …

The Trouble with Lawyer Regulation

Abstract: The American legal profession has been a backward-looking, change-resistant institution. It has failed to adjust to changes in society, technology, and economics, despite individual lawyers' efforts to change their own practices and entrepreneurs' efforts to enter the legal marketplace to serve the needs of middle- and lower-income clients. When change does come, the legal profession is a late-arriver, usually doing no better than catching up to changes around it that have already become well ensconced. This failure robs society of what could be a positive role of the legal profession in times of change, and it deprives the profession itself of being as robust and successful as it could be.INTRODUCTIONThe history of the legal profession's self-regulation during self-identified crises-such as the present-is not a happy one. The profession has resisted change. When it did institute change, the change was directed not at the existing members of the profession, but at new entrants.1 Mostly, change that has come has been forced by influences of society, culture, economics, and globalization-not by the profession itself. Watergate, communist infiltration, the arrival of waves of immigrants, the litigation explosion, the civility crisis, and the current economic crisis have blended with dramatic changes in technology, communications, and globalization.2 In each of these instances, the profession held fast to its history and ways long after those ways had become anachronistic.3 The profession seems to repeat the same question in response to every crisis: How can we stay even more "the same" than we already are?In short, the legal profession is ponderous, backward looking, and selfpreserving. The currently functioning American Bar Association's Commission on Ethics 20/20 was established because of the dramatic changes in the economics of law practice, globalization, and technology.4 Yet its mission statement sets the tone for its work: "The principles guiding the Commission's work are protection of the public; preservation of core professional values; and maintenance of a strong, independent and selfregulated profession."5 Protect, preserve, and maintain. This most recent "reform" mission statement is strikingly similar to that of the first bar association's, born in the 1870s of "crisis" and formed to "protect, purify and preserve the profession."6 This Article recommends a more forward-looking approach that welcomes the views, and even control, of nonlawyers and innovators in business and other enterprises. My hope is that the legal profession can be more like companies that have thrived because of their innovative tendencies (e.g., Apple, IBM, and Western Union), and less like companies whose stagnancy caused large-scale problems (e.g., Kodak).7Albert Einstein taught us, "You cannot solve a problem from the same consciousness that created it. You must learn to see the world anew."8 The American legal profession tries to solve problems with the same thinking that created the problems. It clings to the past and precedent and seeks only to "protect[] . . . preserv[e] . . . and [maintain]."9 The American legal profession acts as if preserving the status quo will solve all, when in fact it will solve nothing. This backward thinking, the same thinking that preceded each crisis, exacerbates the impact of each crisis. More than anything else, the legal profession would benefit from the thinking patterns of innovative nonlawyers.When change comes to the legal profession, it is brought by forces outside the bar. For example, early twentieth-century immigrants eventually integrated themselves into the bar notwithstanding the bar's efforts to diminish and exclude them.10 Other changes in demographics and culture that led to the entry of women and African Americans into the profession were inevitable, yet were resisted by the profession at various times.11 Communism came and went without being affected by the bar's efforts to stem the tide of its professional infiltration. …

Tilted Scales of Justice? the Consequences of Third-Party Financing of American Litigation

Abstract: Third-party financing of commercial litigation is a relatively new phenomenon in the United States. Recently, there has been a substantial increase in the amount of money that third parties have invested in commercial lawsuits. Many new investment management groups have been formed in cities such as New York, London, and Sydney looking to finance the endless stream of American litigation. These groups are for-profit entities that fund all or a portion of a plaintiff's legal fees in exchange for a share of any recovery that might result from the underlying lawsuit. The third-party litigation funders, as they are often called, put their "skin in the game" by risking the loss of their investment if the underlying claim is unsuccessful. The calculated risk these third-party litigation funders take has systematically resulted in astronomical returns for the companies and their investors.In the process of seeking these astronomical returns, third-party litigation funders are causing a disparate impact on the American legal system by tipping the scales of justice in favor of plaintiffs at the expense of defendants. Supporters of third-party litigation financing in the legal community argue that, by allowing plaintiffs to seek outside financial support, barriers to justice are reduced because the funding enables cash-strapped plaintiffs to have their day in court. However, in reality, third-party litigation funders have little incentive to fund plaintiffs facing substantial barriers to justice. Third-party litigation funders invest in cases where the risk is the lowest and the possible return is the highest. Using the law to their favor, third-party litigation funders invest in cases where the underlying law giving rise to the plaintiff's claim already gives substantial advantages to plaintiffs in the form of low evidentiary thresholds and large statutory damage awards. Third-party litigation financing only magnifies these advantages by allowing plaintiffs to offload risk, increasing the number of cases adjudicated in the courts and raising the threshold amount required for plaintiffs to settle a case because of third-party funders' return requirements. Overall, third-party litigation financing threatens the compensatory and deterrent functions of the legal system while increasing inefficiency in the process.This Comment addresses third-party litigation financing's threat to the legal system by proposing three possible solutions. First, this Comment argues that caps should be imposed on the percentage of any damage award a third-party litigation funder could receive. The result of a cap on recovery for third-party litigation funders would be a decrease in the concentration of funding for only the lawsuits with the highest potential damages, which, in turn, would decrease the amount required for settlement. Plaintiffs would be less likely to go to court because their well-funded backers would have lower investment limits in order to keep their return targets on track, and many plaintiffs could not afford the cost of pursuing litigation themselves. Second, this Comment suggests that a national registration requirement be imposed for third-party litigation funders to increase accountability within the industry and inform potential consumers of third-party financing. Third, this Comment advocates for the expansion of already enacted state regulations of third-party litigation funders to protect consumers in the commercial litigation context. Overall, the caps, registration requirements, and expansion of enacted legislation balance efficiency, deterrence, and compensation while still allowing for financially constrained plaintiffs to seek the outside funding they may need to pursue a meritorious claim.INTRODUCTIONAs Michael Cannata, principal of Patent Monetization Inc., has stated, "[a]s long as the US [litigation] market continues to be one of the world's largest . . . and the biggest pay-outs are available, this is going to be attractive for [third-party] investment. …

Looking at the Monopsony in the Mirror

Abstract: INTRODUCTIONAlthough still a distant second to monopoly, buyer power and monopsony are hot topics in the competition community.1 The Organisation for Economic Co-operation and Development (OECD),2 International Competition Network (ICN),3 and American Antitrust Institute (AAI)4 have studied monopsony and buyer power recently. The U.S. Department of Justice and Federal Trade Commission pay more attention to buyer power in their 2010 merger guidelines than they did in their earlier guidelines.5 With growing buyer concentration in commodities such as coffee, tea, and cocoa, and among retailers, buyer power is a human rights issue.6As this Article discusses, both monopolies and monopsonies have significant market power. A monopolist typically is characterized as the only or dominant seller in town.7 (Think of the only gasoline station along a long highway stretch, which despite its low costs charges outrageously high prices.) The monopolist can raise its price above competitive levels. The monopolist can also reduce, contrary to its customers' wishes, the quality of its products and services, product variety, and innovation. A monopsonist, on the other hand, is typically characterized as the only or dominant buyer in town.8 (Think of the factory in the one-factory town where you either work on the company's terms or you are on your own.) The monopsonist can lower the price below competitive levels for the goods and services it buys.9 The monopsonist can also reduce the quality of products it purchases and the amount of innovation that an otherwise competitive market would foster.10 As one state supreme court recently commented:The antitrust laws are as concerned about abuse of monopsony power to pay prices below a competitive level as they are about abuse of monopoly power to charge prices above a competitive level. The seller to the monopsony has been harmed as much as the buyer from the monopoly.11Monopsony and buyer-power claims are likely to arise in several important industries, including agriculture,12 health insurance,13 and retail.14 Recently, for example, the DOJ and U.S. Department of Agriculture (USDA) examined buyer power in the seed, hog, livestock, poultry, and dairy industries.15 The DOJ and USDA deserve credit for setting up their workshops. Professor Peter Carstensen, among others, expressed relief:For years many of us who follow agricultural competition issues have lamented the failure of both antitrust enforcement and market facilitating regulation to deal with continuing problems that farmers and ranchers confront in both the acquisition of inputs and the marketing of their production.16Over 4,000 people attended the public workshops in Iowa, Alabama, Wisconsin, Colorado, and Washington, D.C.17 The DOJ received over 18,000 public comments.18 Participants complained that the lack of antitrust enforcement enabled "a severely concentrated marketplace in which power and profit are limited to a few at the expense of countless, hard working family farmers" and that "high input prices, low commodity prices, or other hardships, hav[e] invested particular suppliers or buyers with greater market power."19 Many, the DOJ observed, "specifically raised the issue of monopsony power," and some expressed concern that the enforcers, courts, and competition laws were "inattentive to the monopsony problem."20 Participants complained how processors "depress[ed] the prices of crops or animals below competitive levels."21 Others raised social and moral concerns, such as the environmental toll from monopsonies.22 The U.S. livestock industry, observed several states, is more concentrated today than in 1921, when Congress enacted the Packers and Stockyards Act to respond to a market the "Big Five" packers controlled "and to ensure fair competition and fair trade practices in the marketing of livestock, meat and poultry."23 One account of the hearings stated, "What applies across the board-in cattle ranching and dairy and hog farming-is the stark and growing imbalance of power between the farmers who grow our food and the companies who process it for us, and how this imbalance enables practices unimaginable in any competitive market. …

Public-Private Partnerships and Termination for Convenience Clauses: Time for a Mandate

Abstract: For better or worse, and for richer or poorer, the line between government and private provision of goods and services is disappearing. It was never a bright line; governments have always turned to private purveyors of goods and services to acquire many of the tools required for the provision of public services.1 The sanitation workers picking up garbage may have been employed directly by a city, but they picked up the trash in trucks built by private companies. Beneath those trucks are public roads, which have almost always been built entirely by private construction companies, not government employees.2 Increasingly, however, governments at all levels are contracting out responsibility for the services themselves.3 Private enterprises now build and staff the garbage trucks.4 They build and operate roadways; they staff manual and electronic toll collection systems;5 and they plow and maintain road surfaces. Private enterprises also own and run "public" schools6 and prisons.7 On occasion, the government retains its role as financier, collecting taxes or fees with which to defray the costs of hiring the private purveyors of goods or services.8 Often, however, the government's role is limited to picking the private enterprise which will provide a good or service and negotiating the fees that the enterprise can charge for its services; the enterprise then collects the appropriate fee directly from residents and other users.9 In theory, the incentive provided by the profit motive and the absence of legal restrictions, such as civil service protections, allow private entrepreneurs to provide better quality services at lower cost than their public counterparts.10But what if things go wrong? At times, the public authorities or their constituents are dissatisfied with the performance of the private enterprise and wish to switch to another private purveyor, to return to public provision, or to eliminate the service entirely. Unless the private enterprise's lack of performance rises to the level of a breach of its contractual obligations, a government must buy its way out of the contract. And under standard contract law, such buyouts do not come cheaply. Private parties insist on receiving payments comparable to the compensation due following the government's breach of its obligation to continue the contract. Expectation damages are the norm; this measure of damages requires that the nonbreaching party be placed in the position that it would have been in had the contract been completed in accordance with its terms.11 In the normal course of events, the nonbreaching party is entitled to the discounted present value of its projected future profits. The extensive term of many of these privatization arrangements not only causes the amount of damages to balloon but also ensures that the calculation of the amount owed will be contentious and expensive to calculate.12There is an alternative. It is to follow the pattern set by federal procurement law and mandate the inclusion of termination for convenience clauses in all privatization contracts. Including such clauses would diminish a government's damage obligation in the event it desires to cancel a contract. Instead of paying expectation damages, the government would pay something closer to out-of- pocket reliance damages.13 Specifically, under a termination for convenience clause, the government need only pay "the price on work completed, actual costs incurred plus a reasonable allowance for profit on partially completed work, and nothing whatsoever on work not yet begun (thus, no lost profits on such work)."14As other commentators have noted, one-sided termination privileges are not an unalloyed blessing.15 This Article, however, argues that in the context of privatization agreements, the costs of including a termination for convenience clause are far outweighed by the benefits. Indeed, in this Article I urge that such clauses be both mandatory and nonwaivable.Part I describes the history and current use of termination for convenience clauses. …

Precedent and Reliance

Abstract: Among the most prevalent justifications for deference to judicial precedent is the protection of reliance interests. The theory is that when judicial pronouncements have engendered significant reliance, there should be a meaningful presumption against adjudicative change. Yet there remains a fundamental question as to why reliance on precedent warrants judicial protection in the first place. American courts have made clear that deference to precedent is a flexible policy rather than an absolute rule. The defeasibility of precedent raises the possibility that stakeholders who fail to mediate their reliance on precedent forfeit any claim to judicial protection through the doctrine of stare decisis.This Article explores the dynamics and implications of precedential reliance. It contends that the case for protecting reliance on precedent is uncertain. There are several reasons why reliance might potentially be worth protecting, but all are subject to serious limitations or challenges. To bolster the doctrine of stare decisis while the status of precedential reliance continues to be worked out, the Article suggests a conceptual move away from backward- looking reliance and toward the forward-looking interest in managing the disruptive impacts of adjudicative change for society at large.INTRODUCTIONPrecedent occupies an intriguing place in American legal discourse. The prospect of deference to past decisions, even decisions that are dubious or erroneous, has spawned its fair share of critics on both theoretical and practical grounds. Nevertheless, the abstract virtues of following precedent continue to draw widespread support. Among those virtues is the protection of reliance expectations. The basic claim is that stakeholder reliance should occasionally persuade judges to accept interpretations of the law they would otherwise reject.If reliance expectations possess the power to forestall the evolution and refinement of the law, there ought to be a well-developed account of where that power comes from. The explanation cannot be that judicial overrulings are breaches of promise. Consider the experience of the U.S. Supreme Court. Time and again, the Court has cautioned that while deference to precedent is "the 34 preferred course, it is not an inexorable command. The Court can, does, and will continue to overrule its precedents when it sees fit. At the same time, the Court consistently invokes precedential reliance as a prime rationale for deferring to precedent. Justice Scalia has explained this solicitude by asserting 5 that reliance on unabandoned precedent is always justifiable reliance.These two propositions-precedent is mutable; and reliance on the durability of precedent is both reasonable and entitled to judicial respect- stand in apparent tension. Indeed, the flexibility of stare decisis provides some basis for contending that it is actually unreasonable to rely on the durability of precedent. Given the unveiled reality that judicial decisions are subject to reconsideration, stakeholders might be expected to take their own measures to mitigate the costs of a potential overruling, just as actors must take precautions or purchase insurance in order to manage other types of risk. Moreover, by publicly announcing that precedents are subject to reconsideration, the Court might be seen as avoiding any normative obligation to stakeholders who would be harmed by an overruling. Precedents are not promises, and when the Court chooses to overturn a prior decision, it does nothing more than exercise an option that it previously reserved. Why, then, should precedential reliance serve as an obstacle to adjudicative change?The primary goal of this Article is to situate reliance interests within a universe of precedential uncertainty. The Article begins by drawing out some of the nuance that pervades the relationship between precedent and reliance. I hope to show that the arguments for treating precedential reliance as deserving of judicial protection are complex and warranting of greater scrutiny than they tend to receive in the caselaw. …