Showing papers in "Yale Law Journal in 1982"

Bankruptcy, Non-Bankruptcy Entitlements, and the Creditors' Bargain

Abstract: Bankruptcy, at first glance, may be thought of as a procedure geared principally toward relieving an overburdened debtor from "oppressive" debt. Yet this discharge-centered view of bankruptcy is correct neither from an historical perspective nor from a realistic appraisal of the presence and operation of most of the provisions in the federal bankruptcy laws over the years.' For although discharge of the debtor (and such related issues as "exemptions" that enable an individual debtor to keep assets out of the bankruptcy pool) may well be the motivating cause of a majority of bankruptcy cases,2 most of the bankruptcy process is in fact concerned with creditor-distribution questions. Assets are marshalled so that they can be allocated among those holding claims against the debtor or the debtor's property. Claims are determined so that participants in the allocation process may be assembled. And the rules governing priorities determine who, among the claimants, will get 'what and in what order.

The Origins of Judicial Activism in the Protection of Minorities

Abstract: During the first third of the twentieth century, the Supreme Court afforded constitutional protection to certain vaguely defined substantive interests that have since been loosely tied together under the label of \"substantive due process.\" Throughout that period, a rich and complex dissenting tradition was carried on first in the opinions of Holmes, then Brandeis and, still later, Stone. That dissenting tradition-an elaboration of the teachings of Professor James Thayer of Harvard Law School-placed the majoritarian lawmaking process at the center of constitutional theory. Judicial review was suspect insofar as it invalidated outcomes of this presumptively legitimate process. The thrust of the Holmes, Brandeis, and Stone opinions was largely negative at first. Though the three dissenters also attacked the internal inconsistencies that any theory of substantive entitlements will necessarily manifest, most often they emphasized the simple fact that the Court was thwarting majoritarian mechanisms of social choice. Their delegitimation strategy revolved around the supposed superiority of democratic-that is, legislative-choice mechanisms to any judicially imposed theory of sub-

Monitors and Freeriders in Commercial and Corporate Settings

Abstract: The usefulness of private arrangements and legal rules for the maintenance and promotion of social and economic relationships depends, in great part, on their effective enforcement. Enforcement, however, is not possible unless violations are first detected. It therefore seems critical to consider the ability and motivation of legal actors to monitor each other's behavior.1 The level of monitoring in a simple two-party transaction is likely to be efficient. The monitor will continue to expend effort as long as his cost of doing so is less than his expected benefit. But when there are many potential monitors with overlapping interests, the optimal level may prove more elusive. An individual seeking to reduce his own monitoring costs may attempt to rely on the efforts of others; such \"freeriding,\" 2 if widespread, will lead to undermonitoring. Overlapping interests can also lead to duplicative efforts on the part of potential monitors. From an economic perspective, both undermonitoring and overmonitoring are undesirable.' This Article considers the possibility that legal relationships and rules relieve monitoring difficulties, including the freeriding problem, and thereby promote joint enterprises. In particular, it examines the role that monitoring plays in commercial and corporate settings. Part I considers the role of security interests in determining creditor priorities in bank-

The Discretionary Constitution: Institutional Remedies and Judicial Legitimacy

Abstract: Federal courts have been asked with increasing frequency in recent years to grant injunctive decrees that would restructure public institutions in accordance with what are asserted to be the commands of the federal Constitution. This type of litigation has become such a familiar part of the legal landscape that it has acquired a distinct vocabulary: the lawsuit is called an \"institutional suit,\" and a resulting remedial injunction an \"institutional decree.\"' The variety and importance of the institutions involved, the range of issues that courts must address, and most important, the broad discretionary powers trial courts must exercise in framing remedial decrees set modern institutional suits substantially apart from other forms of litigation. These suits pose a number of difficult problems concerning the appropriate role of federal judicial power in our society. The most fundamental of these problems is legitimacy. There are a number of ways to analyze the legitimacy of judicial action in this area. Several recent articles have taken a Frankfurterian approach, arguing for or against institutional suits based on assumed or asserted ap-

The Modern Business Organization: Bargaining under Constraints

Abstract: This Article presents a perspective, a system of classification, a way of thinking, and some theories about joint economic enterprises, about how people organize the pooling of resources in a business venture. Drawing concepts from both law and economics, it suggests that the most useful way to analyze the modern business enterprise is to interpret the terms of the economic arrangements of a firm (partnership, corporation, cooperative) and the terms of the related economic arrangements that should not be analyzed separately from the firm (distributorship, loan agreement, employment contracts) as a series of bargains subject to constraints and made in contemplation of a long-term relationship.' The four basic elements of the series-of-bargains model are risk of loss, return, control, and duration; the three major constraints that limit bargaining over those elements are government regulation, limitations on specificity, and conflicting interests and goals. Lawyers and economists who want to understand and work with the problems of business organi-

Capital Punishment as a System

Abstract: The contemporary debate over capital punishment has been conducted principally in terms of whether it is an effective deterrent,' appropriately retributive, 2 racially discriminatory,3 arbitrary,4 or inevitably prone to error.' In support of their positions, the contending sides have offered statistical and anecdotal arguments on deterrence, racial discrimination, and arbitrariness, as well as value judgments concerning whether the death penalty is, on the one hand, properly retributive or, on the other, morally acceptable. But, as the debate has proceeded over the past fifteen years, courts have imposed more than 2,000 capital sentences.\" The resulting pattern of decisions has introduced a new means of assessing the viability of the capital sentencing process. This Article explores the implications of this pattern of capital punishment decisions. It argues that the capital convicting and sentencing process has necessarily become extraordinarily careful to avoid executing those who are innocent or who deserve some sentence other than death. The substantial number of defendants sentenced to death who have subsequently been found innocent, and the much greater number who have been convicted or sentenced in violation of law, demonstrate the need to employ such scrupulous care. Because of the large number of nullified convictions and sentences that have resulted from the exercise of such care, only one person has been executed against his will during the past fifteen years; three others have been executed because they refused to contest their convictions or sentences. Yet over 1000 death-sentenced prisoners are

Abscam, the Judiciary, and the Ethics of Entrapment

Abstract: The government's undercover adventure known as "Abscam"'-or misadventure, depending on one's point of view-is now history. Every public official brought to trial has been found guilty. The courts have passed on the propriety of the government's conduct and, with the exception of a few dissenting judges, have given their imprimatur both to the general operation and the particular techniques used.2 Moreover, since the trap successfully ambushed highly-placed individuals, the government's undercover methods have been subjected to close scrutiny by Congress and the public as well.'

Natural Law, Positivism, and the Limits of Jurisprudence: A Modern Round

Abstract: In his recent collection of essays,' Joseph Raz presents and defends a version of positivism; in his first book-length contribution to legal philosophy,' John Finnis explores a natural law perspective. These two books, both published by Oxford, may thus serve as a reminder of the persistence of the debate between legal positivists and those adhering to the natural law tradition. As this review will show, the books demonstrate that these apparently contradictory schools of thought both can and must be integrated to enhance our understanding of the complex phenomenon of law. Rather than rival theories of law, positivism and natural law are, and should be taken to be, complementary and equally necessary approaches to a social institution of the utmost importance. The call to integrate these theories of law is anything but revolutionary. Sensitive legal scholars, even those who clearly identify themselves as adhering to one school or the other, have always granted that the two perspectives are complementary rather than contradictory, and that the appeal of neither is transitory? Raz and Finnis, while presenting approaches

The Nature of Judicial Review

Abstract: In The Nature of the Judicial Process,' Cardozo is concerned with the sources of common law: how do judges decide cases; what counts as justification for decisions that rest uneasily, if at all, on precedent and that are not required by a written text? Although evidently struck by the power common-law judges exercise in such situations, Cardozo was not moved to question the legitimacy of that power Instead, he considered it sufficient to explain and classify the various methods courts use in reaching decisions This predominantly descriptive approach assumes, among other things, that judges ought to make the common-law, that is, ought to fashion principles and policies into standards of decision Cardozo's assumption remains the conventional understanding: while we may disagree strongly with particular decisions, we rarely question the authority of common-law courts, even in pivotal cases Judicial review is another matter Almost every important case that displeases some sizeable group leads to questions about the legitimacy of the famous doctrine proclaimed in Marbury v Madison2 To speak only of the recent past, it was some sixteen years after publication of The Nature of the Judicial Process that judicial review of New Deal legislation brought the executive and the Supreme Court into direct confrontation3 More recently, the segregation,4 reapportionment,' and abortion cases have provoked very serious attacks on the Court In addition, the attempt to find a justification for judicial review is again engaging the attention of

On "Confusing Ideas": Reply

Abstract: The argument can be challenged in the usual ways. One can challenge the major premise by denying that all empty and confusing concepts should be banished from normative discourse. One can challenge the minor premise by denying that equality is an empty and confusing concept. Or one can challenge both premises together. Professor Steven Burton does none of these things, at least not directly. Instead, he challenges the argument by replacing the major premise with one he assumes I would want to accept, replacing the minor premise with one he believes I would have to accept, and then suggesting that the premises combine to produce results I would never accept. The argument, as he reformulates it, can also be stated as a syllogism:

Health Law Comes of Age: Economics and Ethics in a Changing Industry

Abstract: Health law is booming. This field of legal practice hardly existed twenty years ago; it is now becoming one of the more important legal specialties. Until recently, practice in the \"medico-legal\" field was largely limited to the defense of hospitals and physicians in malpractice actions and to occasional issues in criminal law. Today, \"health law\"1 is a diverse and burgeoning enterprise. The National Health Lawyers Association alone boasts more than 2200 members. There are also specialty groups of hospital lawyers, food and drug lawyers, mental health lawyers, and others. Professional journals, books, courses, and symposia on health law are proliferating. These developments reflect the dynamic growth of the health industry. Health care is now the nation's third largest industry (after construction and agriculture), with national health expenditures that exceeded $280 billion in 1981. Health costs have leaped from about 4.0 percent of our gross national product in 1960, to 5.9 percent in 1970, and to 9.8 percent in 1981. Health care constitutes about one-third of the service sector and is the fastest growing portion of this fastest growing sector of our economy.2 The recent surge in health law practice has also been spurred by enactment of a formidable array of laws and regulations concerning Meditare/

Comment on A Theory of the Consumer Product Warranty

Abstract: Professor George Priest's recent article, A Theory of the Consumer Product Warranty,' performs a valuable service by reminding us that consumers can sometimes reduce losses from defective products more cheaply than manufacturers. Where losses from product defects are essentially unavoidable, consumers may be the most efficient insurers of those losses. Professor Priest's comprehensive and technically proficient analysis of the implications of these points for the content of consumer product warranties is an important contribution to the literature. Nonetheless, I believe that Professor Priest's article has serious analytic flaws. 2 In addition, its policy suggestions are premised on a mistaken assumption about the law on an important point.' Partly because of these mistakes, the article provides little support for its principal thesis, or for the implication derived from the thesis that complete judicial deference to the terms of consumer product warranties would reduce the losses from defective products. After briefly summarizing Professor Priest's article, I will detail and document these criticisms.

Comment On ‘Empty Ideas’: Logical Positivist Analyses of Equality and Rules

Abstract: In a recent article in the Harvard Law Review,1 Professor Peter Westen directs his considerable capacity for logical analysis at the idea of equality. Professor Westen asserts and defends "two propositions: (1) that statements of equality logically entail (and necessarily collapse into) simpler statements of rights; and (2) that the additional step of transforming simple statements of rights into statements of equality not only involves unnecessary work but also engenders profound conceptual confusion."2 Therefore, he says, equality is an "empty idea" that "should be banished from moral and legal discourse as an explanatory norm."' Many, no doubt, will wish to defend equality as a concept with independent content, at least in some situations. This Comment takes a different tack. "Statements of rights" (rules) are the heroes of Professor Westen's story, though they are spared the scrutiny lavished on equality. He seems to regard rules as suitable norms for explanatory moral and legal discourse-norms that in themselves are independent of equality, imbued with content, and comparatively simple to apply without confusion.4 Us-

Grant Gilmore and the Illusion of Certainty

Abstract: There is, to my mind, no way to put into words the abysmal loss that I feel, that we all share, now that Grant Gilmore is no longer with us. I cannot eloquently address that loss, and so I will not try. Instead, let me recount some happier recollections of better days-of Grant Gilmore as a teacher and a scholar, a colleague and a friend. In the fall of 1952, exactly thirty years ago, I was a second year student at this law school and a member of Grant Gilmore's class in commercial law. I believe the class met in the room that I still think of as room 114. I recall having the good fortune to be seated somewhat to the left of center, so that when Grant swung around in his chair as he addressed the class, I had a fair chance of catching at least the middle and almost invariably the end of the questions that were being put to us. Our agenda was the development of commercial law, principally under the then still extant Uniform Sales Act.' As Grant Gilmore's questions unfolded, each more penetrating and less answerable than its immediate predecessor, the class learned, painfully, to abandon its last vestiges of hope for certainty in the law. The next year a student borrowed my commercial law notes from that fall, only to return the notes the following day, in high dudgeon; they contained nothing but questions, interminable questions. The borrower was, of course, right; the notes were, however, accurate. A student's first response to a Gilmore class was excitement, exhilaration at a masterful demonstration of the Socratic method and of legal realism-but that was only the first response. The enduring message was that abandonment of the illusion of certainty did not signal nihilism, or anarchy, or anti-intellectualism. On the contrary, we learned, as Grant wrote the following year in his celebrated article on good faith purchase, that \"[t]he only legal certainty is the certainty of legal change.\"' In all his teaching, and in his scholarly work in commercial law, Grant

Style Matters: A Review Essay on Legal Writing

Abstract: Lawyers are, among other things, professional writers. Because they are paid well for their prose, it is reasonable to assume that most of them write well. This assumption may be reasonable, but it is false. Most lawyers-even many who have risen to the top of the profession-write badly. Let us look at three examples of the kind of writing we read every day. Each was written by a successful lawyer-one judge, one professor, and one practitioner.' I selected the judge and the practitioner because they have published articles on legal writing, the professor because he has been praised for his prose. My first example comes from an opinion discussing the withholding of federal revenue-sharing funds. A judge of the United States Court of Appeals wrote in dissent:

The Best Evidence of the Effect of Products Liability Law on the Accident Rate: Reply

Abstract: The differences between Professor Whitford's views' and mine are of crucial importance to the law of products liability. Our objectives-indeed, the objectives of all interested in the field-are similar: to identify policies that, other things equal, will reduce the seriousness and frequency of injuries suffered by consumers. Professor Whitford and I differ sharply, however, in our predictions of the empirical effects of modern products liability policy. According to Professor Whitford, the policy adopted by courts over the last twenty years-the expansion of manufacturer liability beyond that undertaken in warranties-is likely to have reduced the rate of product defects.2 According to my investment theory,3 on the other hand, if consumer and manufacturer investments in safety are substitutes at the margin, the expansion of manufacturer liability is likely to have increased the rate of defects and the rate of consumer injuries.4 The vast number of product-related injuries compels us to examine these different implications very carefully. It is estimated that in 1977 alone, for example, consumers in the United States suffered 36 million product-related injuries.5 Professor Whitford's criticism of my article rests upon a misunderstanding of the nature of scientific reasoning. Whitford demands that my investment theory, as a "complete" theory, explain every phenomenon associated with product warranties and directly refute every conceivable alternative warranty theory.6 These requirements allow Whitford to confer

The Commercial Culpability Scale

Abstract: The Uniform Commercial Code is a labyrinth. The answer to most commercial problems may require not only fastidious attention to the language of the most relevant Code provision but also cross-references to other sections. Whether the commercial lawyer seeks to determine before a transaction who bears a particular risk, or after a failed transaction who must suffer the loss, the lawyer must tread the Code's terrain carefully, lest he err. The lawyer's task would be made easier were there some pattern underlying the Code's allocation of risk of loss. Although such a pattern could not provide a definitive answer to particular problems, it would indicate generally who should bear a risk and thus help to insure that all relevant Code provisions have been considered. Knowledge of such a pattern would also facilitate interpretation of the relevant provisions. Not least of all, identifying a pattern would advance an intellectual understanding of the Code's goals and achievements, which in turn could aid its revision during changing times. In this Article, I argue that the Code provisions evince a pattern that I term the \"culpability scale.\" The culpability scale identifies a hierarchical set of rules to allocate loss. These rules are based upon the mental state, conduct, or position of the parties involved. Most culpable are those who violate the \"intention principle\": persons who intentionally create the event or situation that gives rise to possible loss by someone more innocent. If no one who intentionally created the loss-causing event can be discovered, loss is allocated based on a \"knowledge principle\" to that party who knew of the relevant circumstances.1 In the absence of a party with intent or knowledge, loss is allocated according to the \"negligence principle\" to that party who reasonably could have discovered the event or situation before acting or who otherwise failed to exercise due care.2 Fi-

Abe Fortas: A Man of Courage

Abstract: As a lawyer, Abe Fortas had it all. He had a penetrating intelligence, an extraordinarily quick mind, and outstanding analytical ability. His oral arguments were a superb combination of the rational and the dramatic. A newspaperman who followed one of his more publicized corporate cases told me he would rather hear Abe Fortas argue a motion than see a Broadway musical. He had tremendous practical judgment and his advice to clients was both profound and wise. He was a principal factor in the foundation of one of our major Washington law firms, of which I have the honor to be a partner, and later became the leading Washington partner of a major Chicago law firm. In addition, he had a great public career at the Securities and Exchange Commision and in the Interior Department, and he served with distinction for three and a half years on the Supreme Court. He was also influential in the development of the Kennedy Center for the Performing Arts, in Washington, and he helped greatly to make it the institution of culture that it is today. A mere catalog of his interests and achievements could go on for pages. In a career so full of accomplishments in so many areas,'it is difficult to justify focusing on only one. But I believe one of the greatest contributions he made was to the fight for civil liberties during the so-called McCarthy period, a fight that he led and a fight to which I find myself fortunate to be able to bear witness. I first met Abe Fortas forty-five years ago when we were both SEC employees in the 1930's. He came down from the faculty of the Yale Law School as an associate director of the Protective Committee Study, of which William 0. Douglas, also of the Yale faculty, was the director. They and their staff produced a report on reorganization practices that resulted in major legislation, the Chandler Act of 1938,1 dealing with bankruptcy reorganization, and the Trust Indenture Act of 1939.2 He was also later associate director of the Public Utility Division, coping with the new Public Utility Holding Company Act in its early stages, before he left for the Interior Department. After President Roosevelt's death and the end of World War II, when

The Properties of Family and the Families of Property

Abstract: The family is in trouble; the family is \"here to stay.\"'1 Jobs are more alienating than in the past; jobs provide more security than ever before. The welfare state undermines the family; the welfare state steps in to help families. The human condition in twentieth-century industrialized countries is marked by isolation and the illusion of personal choice; the human condition in twentieth-century industrialized countries is marked by collectively guaranteed care and is devoid of unshared risks. Mary Ann Glendon's second ambitious and learned book in comparative law2 advances a thesis large enough to encompass most of these contrary assessments of modern family, work, and life. As its title indicates, The New Family and the New Property3 links changes in the human condition to changes in the legal constructs addressing them. Along the way, the book offers insights into social phenomena ranging from Egyptian dynasties' to private pensions.'

Worker Ownership and Section 8(a)(2) of the National Labor Relations Act

Abstract: American workers have long experimented with employee ownership of the industrial workplace.' Until recently, such experiments were sporadic and usually unsuccessful, overshadowed in the labor movement by the dominance of national trade unions and their focus on collective bargaining.' In the last decade, however, the idea of the worker-owned firm has achieved a new visibility. Such firms are now estimated to number between ninety and two hundred,' and the number continues to grow4 as groups of employees, in an effort to preserve their jobs, attempt to purchase plants about to be closed by corporate owners.5 Although worker-owned firms in the United States today vary widely in size and operation,' most, by their nature, exhibit some degree of worker participa-

The Conjurer's Circle--The Fifth Amendment Privilege in Civil Cases

Abstract: I. The Versatility of the Privilege as a Weapon .......... 1065 A. Occasions for Use ........................... 1065 B. Resistant to Attack ........................... 1071 1. Attacking on the Ground that the Response Will Not Incriminate .......................... 1071 2. Attacking on the Ground that Prosecution is Barred by Double Jeopardy ................ 1075 3. Attacking on the Ground that Prosecution is Barred by the Statute of Limitations ......... 1078 4. Attacking on the Ground that Prosecution is Barred by Past Grants of Use Immunity ...... 1080 C. Advantages Secured ........................... 1081