ADVANCES IN RESEARCH
The faculty at the University of Pennsylvania Carey Law School dedicate themselves to producing research and scholarship that addresses the most pressing issues facing society today. Our professors’ pathbreaking work not only pushes the legal academy forward but also reshapes real-world policy.
Their interdisciplinary approach yields both new insights and practical approaches on constitutional and corporate law, climate change, criminal law reform, judicial use of artificial intelligence, advancing racial justice, and more. Their work exemplifies diverse methodologies and perspectives, revealing the wide range of modes of thought and areas of academic inquiry that thrive here at the Law School.
In this issue of Advances in Research, we offer a snapshot of some of the most noteworthy research and scholarship conducted by our faculty over the past year. The featured faculty members include both longstanding experts in their fields and promising scholars at the beginning of their careers. We hope you enjoy this edition.
Sincerely,
Sophia Z. Lee Dean and Bernard G. Segal Professor of Law
POSTMORTEM PRIVACY
“[O]ur analysis reveals that the current law—which focuses on commercial value after death as the prime basis to extend rights, issue injunctions, and award damages— has it backwards, or at least off kilter.”
ALLEN
Henry
R. Silverman Professor of Law and Professor of Philosophy and
JENNIFER E. ROTHMAN
Nicholas F. Gallicchio
Professor of Law
In their article, “Postmortem Privacy,” published in the Michigan Law Review, Anita L. Allen and Jennifer E. Rothman evaluate the current legal landscape of the right of privacy for the dead and justifications for defending postmortem privacy rights. Privacy rights have been widely understood to terminate with a person’s death. Yet, as Allen and Rothman demonstrate in this pathbreaking piece, “the reality on the ground deviated from this common pronouncement early on and the divergence is so great today that sustained consideration of postmortem privacy is essential.”
The authors highlight the urgency of this work in light of “technology that allows for the reanimation of deceased performers and loved ones” and the trail of digital assets left behind by the dead. Their piece presents reasons for postmortem privacy rights to exist and provides “a foundational framework that can direct these and other efforts to protect postmortem privacy, without jeopardizing the rights of the living to meaningfully engage with those who have come before them.”
They highlight the need to recalibrate the haphazard and at times troubling approach to postmortem privacy that currently exists. They contend that “privacy should be for everyone, not just the famous, and should empower survivors and future-decedents to limit the commercialization of the dead.” Yet, as they demonstrate, “instead, the current system incentivizes unrelated companies to exploit and profit from the dead without meaningfully protecting postmortem privacy.” Their article provides a path forward on which “to build a more coherent, fair, and predictable postmortem privacy.”
To lay their foundation, Allen and Rothman trace the history of postmortem privacy in tort law and then turn to the concept’s acceptance beyond tort law in areas such as constitutional law, intellectual property law, federal statutes such as the Privacy Act and Freedom of Information
on research by
ANITA L.
L. ALLEN
Act (FOIA), the protection of financial information, digital and electronic privacy rights, and evidentiary privileges. The authors’ analysis reveals a “seemingly inconsistent and even haphazard way in which regions of postmortem privacy protection have developed, particularly when adopted by statute.”
Based on these findings, the authors seek to provide clarity toward developing “thoughtful, coherent, and fair legal policies respecting postmortem privacy,” and the only way to do so, they write, is by “identifying what could support the postmortem privacy that we see proliferating throughout the law.” Their analysis focuses on “three primary categories of justifications for postmortem rights: the interests of the deceased, the living, and society”; they further break down “the interests of the living into those of the future-decedents and those of relational-living, whose connection with a decedent could support a relational privacy claim to the dead person.”
They find that the interests of the living, including futuredecedents, offer the most convincing justifications for providing postmortem privacy rights, but they emphasize that balancing conflicting interests and setting boundaries are essential. In the final section of the piece, Allen and Rothman offer “possible boundaries and guideposts,” for postmortem privacy, which include important considerations such as who is eligible for postmortem rights, who can speak for the dead, and how long such rights should extend beyond death. They also explore further potential limitations on postmortem rights, including the freedom of speech, collective grief, and commemoration.
E. ROTHMAN
From the article:
The law of postmortem privacy isn’t a misnomer. We have shown that privacy concerns do not die with us. They linger with the living and with legal claims that extend our privacy interests beyond the grave. But the law is haphazard, inconsistent, and at times incoherent. The reasons for defending postmortem privacy rights offered in this Article comprise a different vision of postmortem privacy rights than that which currently exists. There are legitimate reasons to recognize some limited postmortem privacy rights grounded in the interests of decedents, the living, and society. But postmortem privacy must be reformulated to focus on furthering the interests of future-decedents and the relational-living. It must be better shaped to achieve these goals, while also maintaining harmony with broader social objectives. In light of our analysis, postmortem privacy should not be restricted only to those who are famous, nor should it focus primarily on monetary harms. Instead, our analysis reveals that the current law—which focuses on commercial value after death as the prime basis to extend rights, issue injunctions, and award damages—has it backwards, or at least off kilter.
read the full article.
Anita L. Allen is one of the nation’s first and most influential privacy scholars. She serves on the Board of Directors of the Future of Privacy Forum and is past Chair of the Board of the Electronic Privacy Information Center. Allen is a member of the American Academy of Arts and Sciences and the National Academy of Medicine and a past President of the American Philosophical Association.
Jennifer E. Rothman holds a secondary appointment at the Annenberg School for Communication. She is the leading expert on the right of publicity and internationally recognized for her scholarship in the fields of intellectual property, personality rights, and freedom of speech. Rothman is the Reporter for the Uniform Law Commission’s Study on the Protection of Name, Image, and Likeness Rights. She also created Rothman’s Roadmap to the Right of Publicity
ANITA
JENNIFER
Crime Shapes Insurance Insurance Shapes Crime
by TOM BAKER
William Maul Measey Professor of Law (co-author)
“Crime creates demand for insurance but supplying insurance may promote crime,” write Tom Baker and Anja Shortland of King’s College, London, in the Journal of Legal Analysis.
In their article, they examine five case studies of insured crimes (auto theft, art theft, kidnap and hijack for ransom, ransomware, and payment card fraud) and find a co-evolutionary process through which insurers engage with insureds, governments, and legal and extralegal third parties to mitigate losses, particularly when criminal innovations destabilize the insurance market.
“‘Insurance as crime governance’ stimulates demand for security, shapes criminal incentives, engages with the state to combat crime, and tolerates some crime in the interest of profitability,” they write.
From the article:
Insurers have the incentive to reduce the frequency and severity of payouts. On the other hand, insurers understandably hesitate to impose conditions that make crimes extremely difficult to commit (such as armed guards), because they are expensive and unattractive for customers and undermine the demand for insurance. As the critics assert, insurance can even promote crime. Lax underwriting may reduce self-protection, and insurance can fund criminal profits beyond what individual victims would be able to raise or afford. Theft, ransomware, and abductions become less risky to commit if insurers create processes to keep the assets, data, or hostages—and hence the criminals—safe while facilitating ransom payments.
“It is unreasonable to ask the insurance industry to be uniquely responsible for ensuring that insurance governance furthers the public interest.”
We agree that the insurance industry does not have the incentive to suppress crime to the point where insurance becomes unnecessary. But neither do insurers have the resources, the political mandate, or the (police) powers to do so. Taking collective action is difficult in global insurance markets. Nevertheless, as we describe and analyze in this article, insurers in some property and financial crime domains manage to act collectively in ways that, consistent with their financial incentives, stabilize crime in the interest of insurability. They create institutions to decrease the volatility of crime, reduce the severity of extreme losses, and limit the potential for correlated losses. By encouraging their customers to protect themselves against crime and creating processes for detecting and prosecuting criminals, insurers reduce opportunistic crime. When committing a crime becomes an organizational challenge and a highrisk venture, losses become more predictable and selling insurance less risky.
If insurers successfully help to reduce opportunistic crime, they are left with sophisticated and organized criminal gangs as their main adversaries. This creates the potential for strategic interaction between crime and insurance. If criminals adjust their business model to tap into generous insurance funded pay-outs, losses may become extreme. If other sophisticated criminal gangs copy the innovation, these increased losses may become correlated and, thus, catastrophic. Hence, insurers have the incentive to manage the maximum return criminals can get from each crime and to direct (or lobby for) resources to catch the most egregious offenders. Insurers can also encourage criminals to reduce
the collateral damage of their crimes in the interest of insurability. Finally, insurers may reduce the supply of insurance, by reducing the maximum limits, increasing deductibles, or both. Partial insurance increases customers’ self-protection efforts. At the extreme, a credible threat of withdrawing all insurance from a particular area or activity may force criminals into a compromise.
When we look at insurance for profit-motivated crime, we observe that insurers have indeed created a raft of institutions to obtain leverage over criminals. There are both carrots and sticks.
Baker and Shortland note that insurance organizations employ a host of tools and a market logic to govern crime in the interests of insurability. However, they write, prior research, particularly in legal scholarship, emphasized the profit motivation of insurers and explained the limits of private governance by insurers. While insurance as governance research has identified “insurers as private regulators of societal risks” (Avraham & Porat), that research has never suggested that insurers do so for any reason other than their own interests, nor has it suggested that insurers’ interests can always be counted upon to line up with the public interest.
“Sometimes, the state is absent or impaired, organized at the wrong level, slow to act, or simply focused on other priorities,” the authors write. “In such a case, no one should expect anything from the insurance industry other than governance according to a market logic of the kind revealed in our case studies.” read the full article.
TOM BAKER
Tom Baker is a highly regarded insurance expert, a leading scholar of insurance law and policy, and a devoted law teacher. His research explores insurance law, institutions, and markets using methods from history, economics, psychology, and sociology.
INFLUENCE by INTIMIDATION
CARY COGLIANESE
Edward B. Shils Professor of Law and Professor of Political Science; Director, Penn Program on Regulation
In “Influence by Intimidation: Business Lobbying in the Regulatory Process,” published in The Journal of Law, Economics, and Organization, Cary Coglianese and Alex Acs, Associate Professor in the Department of Political Science at The Ohio State University, uncover a long-theorized but previously hidden source of influence by interest groups over public policymaking. In analyzing how business groups can influence policymaking through intimidation—“a form of persuasion, but one based on the provision not of policy information but of political information”—they are able for the first time to provide systematic empirical evidence of the “second face” of interest group power over what issues go onto or remain on the policy agenda.
Their study investigates how a group’s lobbying expenditure directed at a regulator can, with little more, signal the group’s ability to challenge an action the regulator might undertake. Their theory builds from the idea that groups make costly political expenditures in part to convey their ability to impose costs on their opponents—regulatory agencies.
“In the context of regulatory policymaking, active lobbying by an interest group can convey to a regulator a credible prospect that the group would be able to block the regulator, such as by elevating a potential conflict with the agency to other arenas such as Congress, the White House, or the judiciary,” they write.
on research by
“Intimidation can shape regulatory outcomes to the advantage of certain firms, both through a chilling effect, where lobbying derails nascent regulatory plans, as well as a retreating effect, where opposition to published proposals leads to their withdrawal.”
“Groups generally have an incentive to establish this credibility early in the regulatory process, before an agency adopts a proposal they oppose,” Coglianese and Acs explain. “If an unwanted proposal is nevertheless issued, perhaps without advance knowledge by interest groups opposed to the proposal, these groups can use active lobbying to convey their strength and seek to convince the agency to retreat.”
They put their theoretical model of influence by intimidation to the test, analyzing data on agency rulemaking across the entire federal government during the 100th through the 113th Congresses. They find evidence that business lobbying has both a “chilling” and a “retreating” effect. Specifically, they report that:
When looking at aggregate data of lobbying activity and the issuance of new regulatory proposals, we find that more business lobbying at an agency is associated with that agency issuing fewer proposals, especially proposals that require a larger upfront investment. When looking at the lobbying activity surrounding individual regulatory proposals that have been issued—i.e., not chilled—we find that lobbying by a business interest that opposes a new regulatory proposal is associated with a greater likelihood that the agency retreats and withdraws the proposal.
Noting that previous political science research has focused on the comments that interest groups file on proposed rules to see if agencies make subsequent changes in their final rules consistent with those comments, Coglianese and Acs observe that existing research misses entirely those rules that never get introduced in the first place or never become final because they are dropped by agencies at some point along the way in the face of interest group opposition. They conclude that:
Commenting may be the most visible and easily studied influence-seeking behavior in the regulatory process, but our analysis casts some doubt on whether it is, at least by itself, the most influential tactic available to businesses and other interest groups. Our model and empirical evidence suggest that lobbying—and, by extension, intimidation— may be more significant in terms of shaping what regulatory
agencies do. The ability to chill regulations from being proposed in the first place—a type of “second face” of power—seems a much more significant power that can be wielded by those opposed to regulation than any ability to convince agencies to soften their regulatory proposals even as they still issue them as final rules. Similarly, the ability to influence agencies to such a degree that they will withdraw already published regulatory proposals seems a substantial policy victory that lobbying—and, hence, intimidation— can achieve.
Coglianese and Acs open a new window into regulatory policymaking and into the ways that interest groups can influence that process. They draw attention to a mechanism of influence that has been underappreciated in the context of agency rulemaking, whereby business lobbying communicates political information, not just policy information, to shape policy outcomes to their advantage.
“When successful, this strategy of intimidation can reduce the number of new regulations an agency adopts, in part because the strategy rests on the implicit threat that groups can appeal the outcomes they oppose to a regulatory agency’s principal,” they write.
Coglianese and Acs explain how distinctive their empirical study of business lobbying is due to its focus on the way that lobbying can chill the production of regulatory activity or lead regulators to retreat from their intended courses of action.
“Past empirical research on agency rulemaking has tended to overlook both the retreating and chilling effects of lobbying, as it has focused in isolation on interest group participation in the comment process without considering the inferences regulators can draw from groups’ lobbying efforts,” they write. “But on the basis of our analysis, business groups appear to be more influential in shaping rulemaking outcomes than has been previously appreciated—particularly by using lobbying to shape agencies’ agendas and to influence what regulations are never developed.”
read the full article.
Cary Coglianese specializes in the study of administrative law and regulatory processes, with an emphasis on the empirical evaluation of alternative processes and strategies and the role of public participation, technology, and business-government relations in policymaking.
AUTHORITARIAN POLICE AND POLICING IN EAST ASIA
A. Cozen Professor of Law & Professor of Political Science; Director, Center for the Study of Contemporary China
In Regime Type and Beyond, The Transformation of Police in Asia, published by Cambridge University Press, Jacques deLisle contributes “Authoritarian Police and Policing in East Asia: Scope, Patterns, and Paradoxes.” He notes that the phrases “Authoritarian police” and “authoritarian policing” present terminological and conceptual challenges. He writes that the Venn diagram of “authoritarian,” “police,” and “policing” is complex, contestable, and contested.
“The police are generally—and, arguably, inherently—authoritarian organs, clearly so in authoritarian polities, but also in democratic and hybrid ones,” deLisle writes. “Police forces have authoritarian structures of command and responsibility (although they vary considerably in their degree of centralization, subordination to political authorities, and accountability under law). He notes that in East Asian authoritarian regimes, police can resemble military units, blurring the line between police and military or paramilitary; this is especially true, he writes, when the authoritarian rule includes “special” or “political” police—different from “ordinary” police.
From the chapter:
Although external legal accountability is generally weak for police (and for the state more generally), it is not absent in East Asian authoritarian regimes. Authorities in colonial Hong Kong empowered an independent anticorruption body to address police misbehavior that undermined governing capacity and harmed the regime’s image. Half a century later, Hong Kong prodemocracy voices called for legal accountability for police misconduct and abuse in handling the 2019–2020 protests that had badly damaged the public image of the police and the SAR government more broadly. In the PRC, some opportunities to seek legal review of police behavior are available under the Administrative Litigation Law and less formal legal rule-invoking measures, and the Xi-era state supervision law
on research by
JACQUES DELISLE
Stephen
“Although external legal accountability is generally weak for police (and for the state more generally), it is not absent in East Asian authoritarian regimes.”
and commissions contemplate a more law-centered (if heavily party-dominated) approach to corruption by state officers, including police. In these varied measures for legal accountability and law-based discipline of the police, there are perhaps echoes of the Legalist school of political thought in China, which argues that a potent and secure state requires strong and harsh laws governing the state’s agents to incentivize them to perform their duties zealously and in accordance with the state’s rules.
For authoritarian regimes in East Asia, the unappealingly constraining aspects of legality for the police may hold rule-consequentialist appeal, overriding shorter-term, actconsequentialist calculations that weigh against accepting legal constraints. Legal rules sometimes hamper or frustrate police in the immediate pursuit of their mandates (for example, by impeding torture, coerced confessions, or arbitrary detention of alleged criminals or perceived regime opponents, or by requiring higher-level or outside-thepolice approval for some measures). But such legal rules and the restrictions they impose still may serve regime aims and interests—for example, by checking police indiscipline or overzealousness that can trigger public anger, distrust, or opposition toward police (and perhaps the regime) and impede the police’s ability to perform tasks that are desirable, even essential, for the regime.
deLisle notes that changes in police and policing and their roles have occurred throughout East Asian authoritarian regimes; sometimes this has happened and will continue to happen “without much conscious agency, but others will be, and have been, shaped— albeit often not as intended—by political and social choices.”
He concludes:
Those choices are framed, and their consequences affected, by pervasive paradoxes and resulting ambivalences of police and policing in authoritarian East Asia: expanding police duties and functions can bring perilous reductions in police efficacy, legitimacy, and responsiveness to the regime; greater legitimacy and authority for the police can be both a boon and a bane for the regime’s legitimacy and authority; police-related law and legal reforms can both constrain and empower police; and reforms of a broadly rule-oflaw, democratic, or liberal character to the police, or to the broader political system, can reduce some of the pathologies of authoritarian police behavior, but they may fall short and can lead to perverse results. Shared problematics thus do not portend simple convergence among East Asian authoritarian regimes’ police and policing, much less inevitable progress toward what advocates of democratic or postauthoritarian police and policing may seek or expect.
Jacques deLisle’s research and teaching focus on contemporary Chinese law and politics, including: legal reform and its relationship to economic reform and political change in China, the international status of Taiwan and cross-Strait relations, China’s engagement with the international order, legal and political issues in Hong Kong under Chinese rule, and U.S.-China relations.
JACQUES DELISLE
THE TROUBLE with TIME SERVED
on research by KIMBERLY KESSLER FERZAN L’95
Herbert F. Goodrich Professor of Law and Professor of Philosophy; Co-Director, Institute of Law & Philosophy
In “ The Trouble with Time Served,” published in the BYU Law Review, Kimberly Kessler Ferzan L’95 objects to jail as pretrial detention counting toward punishment and explores what should replace time served.
“Whether we adopt compensation, or some other reform,” Ferzan writes, “we cannot move forward until we sever detention and punishment. Time served must go.”
Ferzan asks readers to imagine they are a juror in a high-profile case.
The court decides that you need to be sequestered, and rather than putting you up at the local Holiday Inn, the state provides its own “hotel.” You have a roommate, a toilet in the room, and bars instead of walls. Instead of a concierge, a guard subjects you to a cavity search. You are in jail.
“Whether we adopt compensation, or some other reform, we cannot move forward until we sever detention and punishment. Time served must go.”
This would clearly be unacceptable to you. You haven’t done anything wrong to warrant this sort of treatment by the state. Indeed, it would seem hard for you to believe that the state’s interest in this particular criminal case would override your rights so as to justify placing you in a cell.
Yet, we routinely treat people like this. Material witnesses— witnesses—are housed in our jails. But jails are primarily intended for pretrial detainees. Throughout the United States, almost a half a million defendants are detained pretrial on any given day. And these detainees are disproportionately people of color. The Supreme Court says that this treatment of pretrial detainees is not punishment. How could it be? Pretrial detainees have not had a trial to determine their guilt. They are presumed innocent at this point. The entire process for putting them behind bars took only a minute or two, and in some states, they would not have had a right to an attorney before being jailed. Some will have their cases dismissed or will be found not guilty. But what would justify such treatment if it were not punishment?
Maybe the Supreme Court is wrong to say that pretrial detention is not punishment. At one point, it did seem to recognize that the promiscuous use of pretrial detention would effectively pre-punish detainees. Other courts have acknowledged the same fact. Scholars, journalists, and even the average person on the street consistently conflate the distinction between jail and prison.
But there is one simple fact that puts the lie to our lips when we claim that pretrial detention isn’t punishment, and it is this: Every state and the federal government provide for credit for time served. All that time spent in
pretrial detention counts toward the punishment. We don’t even blink at the commensurability. At least Scotland is willing to call it what it is—they call their practice “backdating the sentence.”
Ferzan maintains that the practice of crediting detainees for time served “appears to be a welcome mechanism for mercy and justice,” but it is actually “perverse”:
She continues:
It harms the innocent. A defendant who is found not guilty, or whose case is dismissed, gets nothing. Crediting time served also allows the state to avoid internalizing the full costs of pretrial detention, thereby making overinclusive detention standards less expensive. Finally, crediting time served links prevention with punishment, retroactively justifying punitive, substandard conditions. The bottom line is this: Time served is not a panacea. To the contrary, it contributes to criminal justice pathologies.
Ferzan’s article demonstrates that “crediting time served is a destructive practice on egalitarian, economic, expressive, and retributive grounds.” She suggests that detainees should be financially compensated to replace time served. “Given that many detentions are premised upon a theory similar to a Fifth Amendment taking, compensation is warranted for all defendants—both the innocent and the guilty—and can lead to positive reforms,” she concludes. “Only by abandoning credit for time served can the link between prevention and punishment be severed, such that detention will be more limited and more humane.”
read the full article.
Kimberly Kessler Ferzan L’95 teaches criminal law, evidence, advanced criminal law, and advanced law and philosophy seminars. Her work focuses on criminal law theory, and she is the co-editor-in-chief of Law and Philosophy.
KIMBERLY KESSLER FERZAN L’95
CORPORATE DEMOCRACY and the INTERMEDIARY VOTING DILEMMA
on research by JILL E. FISCH
Saul A. Fox Distinguished Professor of Business Law (co-author)
“ Corporate Democracy and the Intermediary Voting Dilemma” by Jill E. Fisch and Jeff Schwartz of the University of Utah’s S.J. Quinney College of Law and published in the Texas Law Review argues that institutional intermediation is at an inflection point. They point out that scholars, investors, and policymakers are frustrated by the status quo, where mutual fund and pension fund managers are largely unaccountable for their voting and engagement efforts. The concern is exacerbated by the increasingly values-infused nature of corporate governance.
“This has led to a slew of reform proposals, as well as fund managers themselves experimenting with change. The alternative receiving the most attention—pass-through voting—is also the most problematic. Paradoxically, the probable result of returning voting power to individual shareholders would be to disenfranchise them,” Fisch and Schwartz write.
Instead, Fisch and Schwartz offer a novel proposal to engage shareholders in the stewardship process without displacing fund managers. Their proposal, which they term “informed intermediation” would require fund managers to ascertain the preferences of their beneficiaries. “Like pass-through voting,” they continue, “Our proposal would engage shareholders in the stewardship process. This is particularly important given
SHAREHOLDER ENGAGEMENT
FUND MANAGER AUTHORITY
PASS-THROUGH VOTING
“…[P]olicymakers are increasingly frustrated by the status quo, where mutual fund and pension fund managers are largely unaccountable for their voting and engagement efforts.”
the values infused nature of corporate governance today. Crucially, however, we would leave voting power and ultimate authority with fund managers, allowing them to continue to play their valuable— even essential—role in corporate governance.”
From the article:
Corporate governance is changing. For the past two decades, the focus of shareholder voting and engagement was deconstructing impediments to shareholder power and increasing managerial accountability. The goal of these interventions was to increase firm value by reducing agency costs. Increasingly, however, environmental and social issues have risen to the fore. This new focus is arguably more about values than value.
This Article is the first to argue that, because of this shift, institutional intermediaries—namely pension and mutual fund managers—can no longer vote and engage on the affairs of their portfolio companies without seeking the input of the pension-plan participants and mutual fund shareholders who are their beneficiaries. We argue that the fiduciary duties of fund managers compel them to seek this input. We further argue that regulators should supplement existing fiduciary standards by adopting formal requirements that managers of mutual funds and pension funds seek input from their beneficiaries on their views, reflect those views in both their engagement efforts and their votes, and publicly disclose how they have complied.
At the same time, we caution against an approach in which fund managers shirk their intermediary role by implementing pass-through voting or rigidly voting in proportion to the preferences expressed by their beneficiaries. Instead, fund managers should engage in informed intermediation—a stewardship process in which they continue to exercise voting power over the securities in the portfolios that they manage and retain discretion in how to incorporate the input they receive from fund
beneficiaries. This enables professional fund managers to use their sophistication and experience to translate beneficiary preferences—which might be incomplete, vague, or contradictory—into individualized and informed votes at each of their portfolio firms. It also preserves the ability of fund managers to leverage the economic power of dispersed beneficiaries consistent with their historical success in reducing the traditional collective action problems associated with shareholder voting. In reconceptualizing the role of intermediaries, this approach maintains the benefits of intermediation while better aligning intermediary stewardship with beneficiary best interests.
Fisch and Schwartz write that the key to their proposal is its flexibility in giving fund managers space to design their own engagement tools and to deviate from the beneficiary views they receive. In particular, they warn that regulators should give fund managers freedom to innovate in how they do so based on factors such as the individual characteristics of the fund and its beneficiaries.
“If fund managers fear a stiff response from regulators, however, they may herd toward similar ways to solicit beneficiary preferences and adhere strictly to the expressed preferences they collect. To avoid this pallid version of compliance, regulatory oversight, at least initially, would be most effective if it takes the form of a ‘light touch’ in which regulators advise fund managers of emerging best practices or prompt them to remedy perceived deficiencies,” they propose.
“Fund managers should be able to respond to regulator inquiries in the same manner that issuers respond to SEC comments—by explaining the process by which they solicited beneficiary input, the input received as a result of that process, and how that input factored into their decisions.”
Fisch and Schwartz conclude by observing that “[i] n many ways, informed intermediation looks like representative democracy and has the same benefits.”
read the full article.
Jill E. Fisch is an internationally known scholar whose work focuses on the intersection of business and law, including the role of regulation and litigation in addressing limitations in the disciplinary power of the capital markets.
JILL E. FISCH
of INSTALLMENT FINES THE FAILED PROMISE
JEAN GALBRAITH Professor of Law; Deputy Dean (co-author)
“Installment fines now are used against defendants for whom they make no sense—those who will never have the ability to pay up over time.”
In theory, the use of installment fines make it easier for lower-income people to pay their economic sanctions.
But as Jean Galbraith and Beth Colgan of the UCLA School of Law write in “ The Failed Promise of Installment Fines,” published in the University of Pennsylvania Law Review, initial fines, fees, surcharges, and restitution are collectively set at levels that can take years to pay off under the best of circumstances; steep late penalties, collection costs, and further sanctions are added on; and collections are often not administered in a humane way.
Galbraith and Colgan call installment fines “a blight on U.S. criminal justice,” as they are often “used against defendants for whom they make no sense—those who will never have the ability to pay up over time.”
The authors urge, at minimum, using constitutional law or policy reforms to transform the system so it’s “no longer a racket— so that additional costs, fees, surcharges, and restitution are either eliminated or set holistically with fines, and so that the cumulative financial penalties are set at achievable and time-limited levels from the beginning.”
on research by
From the article:
In the 1970s, the Supreme Court prohibited the thencommon practice of incarcerating criminal defendants because they lacked the money to immediately pay off their fines and fees. The Court suggested that states could instead put defendants on installment payment plans. This suggestion came against a backdrop of impressive success stories about installment fines—including earlier experiments in which selected defendants had reliably paid off modest fines through carefully calibrated payment plans. Yet as this Article also shows, installment fines practices of today differ significantly from those early experiments, as lawmakers have increased fine amounts, added on fees, surcharges, and restitution, and penalized nonpayment through additional costs and other sanctions. This has turned installment fines into tools of long-term oppression. Further, the early experiments were only ever limited solutions that left behind people in the most precarious financial circumstances, widened the government’s net around only those of limited means, and raised the risk that crime policy would be driven by revenue generation aims rather than justice. Those problems continue today. For all too many, installment fines are unaffordable, endless, and arbitrarily administered—and applied instead of better and more equitable solutions.
So how did a system once celebrated for its promise come to inflict so much misery? The authors identify two distinct but related explanations, which in turn have implications for addressing the abuses of the present era.
First, the installment fines practices changed radically over time. Early experiments with installment payments involved fines that could be paid off in weeks or months. These experiments were administered by judges who imposed obligations that could be feasibly met and who offered flexibility for defendants who had good cause to miss payments. Under these conditions, installment fines could and did work for the defendants selected for the programs—and these success stories were the ones that framed the discussion of installment fines in the Supreme Court litigation. But as installment fines increasingly became the norm, they took on a very different character. Instead of being the domain of reform-minded judges,
they were administered by often uncaring judicial bureaucracies. And as installment payments for economic sanctions became more common, the potential of these sanctions as revenue-generators became more apparent to lawmakers looking to reduce taxes and look tough on crime. The economic sanctions became much heavier, the collection processes added further penalties, and installment payments became long-term traps.
Second, installment fines have only ever been partial and incomplete solutions. As a normative matter, the use of installment payments as the sole accommodation to income disparities raises serious concerns about equity. Poor defendants who must scrimp to pay economic penalties over months and years will suffer far more from these penalties than defendants with the means to pay them easily and immediately. And as a practical matter, paying installment fines requires access to reliable and adequate income—often a nonstarter for defendants with health limitations, with prior convictions that reduce their access to jobs, or with families to support. Early adopters of installment fines recognized this limitation and offered this “privilege” only to handpicked defendants who had the potential to pay, while leaving others to suffer in prison. Further, the promise of increased collections from these defendants carried a risk that the use of installments would be driven by revenue generation aims, rather than sound policy. When the Court gave its imprimatur to installment fines, it elided over these problems and steered away from more transformative solutions, such as scaling economic sanctions to defendants’ financial circumstances. In ending incarceration for nonpayment, it also brought installment fines to populations who will never be able to pay them. This problem persists today.
Galbraith and Colgan further “urge consideration of other paths, such as well-designed variants on the day-fines system and evaluation of whether low-level offenses on the books have costs that exceed their benefits.” They argue that major reforms are long past due.
read the full article.
Jean Galbraith is a scholar of public international law and of U.S. law as it relates to foreign affairs. Her research focuses on how legal and institutional design choices affect international cooperation and global justice.
research by
DAVID HOFFMAN
William A. Schnader Professor of Law (co-author)
In “ Generative Interpretation,” published in the New York University Law Review, David Hoffman and Yonathan A. Arbel of the University of Alabama School of Law offer an innovative approach to determining contracting parties’ meaning, which they call generative interpretation. The idea is simple: applying large language models to contractual texts and extrinsic evidence to predict what the parties would have said at contracting about what they meant.
“Giving courts a convenient way to commit to a cheap and predictable contract interpretation methodology would be a major advance in contract law, and parties may start to include them in their choice-of-law repertoire,” they write. “We argue that even today’s freshly-minted LLMs can be of service.”
From the article:
In the coming months and years, we’re sure you will read examples of lawyers and judges using ChatGPT and related tools in perverse, sometimes outright silly ways, and reaching absurd results you think would have been avoided had they just buckled down and done their jobs like careful jurists ought to. Or, worse, they’ll have these tools generate pedestrian prose that looks like soulless briefing or opinion-writing,
“Giving courts a convenient way to commit to a cheap and predictable contract interpretation methodology would be a major advance in contract law, and parties may start to include them in their choice-oflaw repertoire.”
DAVID HOFFMAN
but in fact is built on a throne of lies. There’s no question that AI will sometimes be a crutch for lazy or harried lawyers who simply didn’t focus on the details: It might not be ideally pitched at the kinds of people who are reading sentences with care 20,000 words into a law review article.
And yet it’s precisely because LLMs are cheap and workmanlike that they will be of real use in contract interpretation. The biggest single problem with all currently available approaches to contract interpretation isn’t that they are incapable of getting correct results some of the time. It’s that they are inaccessible to ordinary parties. Non-wealthy individuals who suffer breach have to lump it, tilt against corporations in internal dispute resolution systems, or face financially ruinous fees and prevail in pyrrhic victories. Simply put: There is an access-to-justice problem at the center of contract law as pernicious as the better recognized ones in criminal and constitutional adjudication. The costs and uncertainties of interpretating deals, which form the core of contract litigation, materially contribute to this problem.
These models are useful because they offer new tools— fast, cheap, sometimes incorrect ones—in service of old interpretative goals. Courts will soon take a phrase like “dozen” and ask ChatGPT to interpret it, rather than turning to the dictionary or Google; or will ask the model what’s the likely assumption a contract makes when it leaves a gap; or will check if the model thinks an insurance policy
contemplated deft burglars. They’ll do so both covertly and overtly, both sua sponte and in response to briefing. Almost certainly the first briefs to affirmatively argue for the use of the tool will come from resource-constrained firms. LLMs are already applicable to live problems that courts face every day, and it would be naïve to think they aren’t using them.
Hoffman and Arbel note that lawyers and judges are already experimenting with these models in law offices and chambers across the country, some covertly, others less so. In their view, “Generative interpretation is a tool with important implications for legal practice and contract theory. Because language models are attentive to context, and because they can voraciously digest long texts, they offer a much more robust form of textualism. The models’ complex encoding of language far outstrips that of any dictionary, and extensive training data give them a superior sensitivity to actual usage. All of that promises a considerably better way to predict meaning, but it won’t replace judges. Attempting to do so would ignore the model’s real limitations, which include their opacity, hallucinatory nature, latent biases, and susceptibility to adversarial attacks by sophisticated parties.”
Hoffman and Arbel argue that generative interpretation paves an important middle ground between too-cold textualism and toohot contextualism. Because generative interpretation is easy to deploy, cheap, and accurate, and because it is not prone to those specific biases, it suggests a workable third way, they conclude.
read the full article.
David Hoffman is a widely cited scholar who focuses his research and teaching on contract law. His work is typically interdisciplinary, built through collaboration with co-authors from a variety of fields. Hoffman writes about all aspects of contracting theory and practice, informed by empirical evidence.
THE CRITICAL ROLE of HISTORY AFTER DOBBS
on research by
SERENA MAYERI
Arlin M. Adams Professor of Constitutional Law and Professor of History (by courtesy)
“History can counsel against past errors and justify affirmative approaches to protecting rights and combating inequality.”
In the Journal of American Constitutional History, Serena Mayeri argues that Dobbs v. Jackson Women’s Health Organization (2022) uses a flawed method of “history and tradition” to deny fundamental freedoms. Mayeri advocates instead for critical histories in legal, constitutional, and political arguments about reproductive rights and justice after Dobbs
In “ The Critical Role of History After Dobbs,” Mayeri critiques the Dobbs majority’s historical account, where Justice Samuel Alito’s opinion derives “an unbroken tradition” of “criminal punishment” for abortion since “the earliest days of the common law” from archaic authorities such as Henry de Bracton, Sir Matthew Hale, and William Blackstone. This factual narrative is selective and distorted at best, she argues. Moreover, it relies on the views of “Englishmen who condoned witch-hunting, marital rape, coverture, and all manner of misogyny” as the “arbiters of twenty-first century Americans’ ability to control their reproductive lives.” This narrow version of history and tradition is both antidemocratic and a radical departure from how the Court has interpreted the constitution’s equality and liberty provisions for the past half-century.
Far from abandoning history, Mayeri contends that the past provides crucial resources for constitutional interpretation. Rather than freezing constitutional meaning in a time when women and people of color were excluded from the polity, interpreters should read the original constitution as meaningfully changed by the Thirteenth, Fourteenth, Fifteenth, and Nineteenth Amendments. They should look not only to the views of the constitution’s framers but to the ideas and experiences of those excluded from lawmaking and from political voice. In courts and legislatures and beyond, we can find in the past both inspiring stories of resistance and cautionary tales about
injustices that social movements and constitutional changemakers have fought and overcome. Mayeri’s essay goes on to detail how advocates already draw upon history in battles over how to interpret federal and state constitutions before and after Dobbs.
From the abstract:
This essay explores critical roles for history in legal, constitutional, and political arguments about reproductive freedom and democracy after Dobbs. These critical approaches define differently the historical voices and sources that matter; the constitutional principles and lessons to be drawn from the past; and the roles that history and tradition should play in shaping our present and future. Critical histories read the Reconstruction Amendments as a mandate for emancipation and for the eradication of all forms of bodily and reproductive coercion. They elevate the voices of those who long were excluded from political participation and place abortion restrictions in a longer history of reproductive control and anti-democratic political traditions. Critical histories can and do inform the interpretation of state as well as federal constitutional provisions in and outside of court. From courtrooms, legislatures, and campuses to workplaces, street protests, and dinner tables, these histories play a more crucial role than ever in informing legal and political discourse about reproductive justice and the future of democracy.
read the full essay.
Serena Mayeri’s scholarship focuses on the historical impact of progressive and conservative social movements on legal and constitutional change. Her first book, Reasoning from Race: Feminism, Law, and the Civil Rights Revolution received the LittletonGriswold Prize from the American Historical Association and the Darlene Clark Hine Award from the Organization of American Historians.
SERENA MAYERI
on research by
SANDRA G. MAYSON Professor of Law (co-author)
In “Bail at the Founding,” published in the Harvard Law Review, Sandra G. Mayson and Kellen R. Funk of Columbia University Law School aspire to fill a gap in legal-historical scholarship through their account of bail law and practice in the Founding era, from approximately 1790 through 1810.
They endeavor “to tackle a set of related questions: Was pretrial detention a ‘carefully limited exception’ in the Early Republic? If so, what were the legal limits? What were constitutional excessive-bail and right-tobail clauses understood to mean? What role did money play in the Founding-era bail system? And finally, which elements of the current pretrial system are ‘deeply rooted in this Nation’s history and tradition’ in the sense of having been established or enshrined in the Founding era?”
“The clearest tradition that the Founding-era law and practice of bail reveals is a tradition of unrealized legal ideals.”
From the article:
How did criminal bail work in the Founding era? This question has become pressing as bail, and bail reform, have attracted increasing attention, in part because history is thought to bear on the meaning of bail-related constitutional provisions. To date, however, there has been no thorough account of bail at the Founding. This Article begins to correct the deficit in our collective memory by describing bail law and practice in the Founding era, from approximately 1790 to 1810. In order to give a full account, we surveyed a wide range of materials, including Founding-era statutes, case law, legal treatises, and manuals for magistrates; and original court, jail, administrative, and justice-of-the-peace records held in archives and private collections. The historical inquiry illuminates three key facts. First, the black-letter law of bail in the Founding era was highly protective of pretrial liberty. A uniquely American framework for bail guaranteed release, in theory, for nearly all accused persons. Second, things were different on the ground. The primary records reveal that, for those who lived on the margins of society, bail practice bore little resemblance to the law on the books, and pretrial detention was routine. The third key point cuts across the law and reality of criminal bail: both in theory and in practice, the bail system was a system of unsecured pledges, not cash deposits. It operated through reputational capital, not financial capital. This fact refutes the claim, frequently advanced by opponents of contemporary bail reform, that
cash bail is a timeless American tradition. The contrast between the written ideals and the actual practice of bail in the Founding era, meanwhile, highlights the difficulty of looking to the past for a determinate guide to legal meaning.
Mayson and Funk write, “As it does today, bail pending a criminal trial in the Founding era involved a vast regulatory system that managed competing norms in a complex balance of written and unwritten, national and local, ancient and modern law.”
Through their study, the authors found that a straightforward “‘history and tradition’ of bail” was difficult to ascertain. Instead, they write, “The clearest tradition that the Founding-era law and practice of bail reveals is a tradition of unrealized legal ideals. Since 1787, our law has proclaimed a commitment to pretrial liberty and careful limits on detention, and has failed to live up to those commitments.”
Mayson and Funk conclude: “Since 1787, too, people have labored to hold the law to its word. A history of bail at the Founding illuminates a world in which those struggles played out on a field of legal practices and cultural meanings quite different from our own. How to honor core constitutional commitments in our local courts and jails today cannot be directly resolved by history, but the study of the past can at least relieve us of the sense that the practices we have are what they have always been.”
read the full article.
Sandra G. Mayson researches and writes in the fields of criminal law, constitutional law, and legal theory, with a focus on the role of preventive restraint in the criminal legal system. Learn more and peruse digitalized, historic original court and jail records at https://bailatthefounding.net.
SANDRA G. MAYSON
TOWARD
ABOLITIONIST REMEDIES
CARA MCCLELLAN GED’12
Director of the Advocacy for Racial and Civil Justice Clinic and Practice Associate Professor of Law (co-author)
Cara McClellan GEd’12 and Jamelia N. Morgan of the Northwestern Pritzker School of Law are co-authors of “ Toward Abolitionist Remedies: Police (Non)Reform Litigation After the 2020 Uprisings,” published in the Fordham Urban Law Journal, as well as attorneys on the legal team for the plaintiffs in the case of Smith v. City of Philadelphia.
The lawsuit, one of more than 40, was filed in the wake of the protests following the murder of George Floyd, of which Derek Chauvin, a white Minneapolis Police Department officer, was convicted. In too many cases, write McClellan and Morgan, police responded to protesters with excessive force and the very brutality that led people to protest police in the first place.
“The legal team in the Smith lawsuit tried to balance our responsibility to recommend a proposal that would be successful in reaching an agreement with local municipal actors, while also seizing the moment to creatively pursue our clients’ demands and visions for transformative and enduring change,” they write. “Our clients’ demands and visions required pursuing what we term here as ‘abolitionist remedies.’ Abolitionist remedies are those that further abolitionist theoretical and political commitments, goals, and practices, but with a specific focus on non-reformist reforms that may be achieved through litigation or policy change.”
From the article:
The tragic underlying facts in that case involved not only an attack on protesters, but also a broader attack on residents and bystanders who happened to be in a predominately Black community where the protests occurred. On May 31, 2020, when protesters took to the street in the 52nd and Market Street area of West Philadelphia, the Philadelphia Police (PPD) arrived en masse in armored vehicles. The PPD repeatedly unleashed a variety of dangerous militarystyle munitions, including rubber bullets, tear gas, and pepper spray against protesters, residents, and bystanders throughout the neighborhood. Later reports revealed that early in the day on May 31, Mayor Jim Kenney, Police Commissioner Danielle Outlaw, and other high-level city officials broadly authorized the use of “non-lethal
“Though
litigation is often thought of as a vehicle for incremental change, pursuing abolitionist remedies is feasible through impact litigation as we have demonstrated.”
munitions” in West Philadelphia in response to allegations of a dangerous situation and “looting” of commercial establishments. But the Department’s use of tear gas, rubber bullets, and other less-than-lethal munitions went far beyond the commercial corridor where businesses were located. They extended down streets that were entirely residential and where no protest activity occurred.
As a result, many of the individuals who were tear gassed and subjected to police violence were not engaged in protest, but simply going about their daily activities in their neighborhood. For example, plaintiff Amelia Carter was walking down 52nd Street near her home when a gas canister landed right in front of her. As the gas surrounded her, she could not breathe or see. As she neared her home, gas canisters were shot down her residential street, and she was hit with tear gas again. When she reached her block, she saw other injured residents, including an elderly woman who had been hit in the head by a rubber bullet, sitting on her neighbor’s front steps. Ms. Carter attempted to enter her home, but it was full of tear gas, forcing her to go back outside. She saw armored vehicles continue firing tear gas onto residential streets, and she could hear residents yelling at the police that “kids live here” and to “go home.”
Because the horrific injuries alleged in the Smith v. Philadelphia complaint implicated the policing of neighborhood residents, the plaintiffs believed that a remedy needed to address not only police interactions with protesters, but also police interactions with community members more generally.
In writing about the case’s settlement with the City and its broader implications, the authors conclude:
Abolitionist remedies permit a radical imagining of how to achieve legal remedies consistent with the goals of clients who are part of abolitionist movements. These remedies are consistent with abolitionist goals of promoting harmreduction while pursuing non-reformist reforms. Though litigation is often thought of as a vehicle for incremental change, pursuing abolitionist remedies is feasible through impact litigation as we have demonstrated.
McClellan and Morgan urge scholars and practitioners to use their work as a foundation as they “continue to examine the strategies for helping abolitionist clients to achieve legal remedies, as well as the ethical challenges such representation presents.”
read the full article.
Cara McClellan GEd’12 is the Founding Director and Practice Associate Professor of the Advocacy for Racial and Civil (ARC) Justice Clinic, which provides students with hands-on experience working in civil rights litigation and policy advocacy around systemic racism.
CARA MCCLELLAN GED’12
DEMOCRACY’S BUREAUCRACY
Voter registration has become foundational to our elections, yet how we manage voter registration lists has largely escaped academic attention, writes Michael Morse C’13 in “Democracy’s Bureaucracy: The Complicated Case of Voter Registration Lists,” published in the Boston University Law Review
“That oversight is understandable—lists of who is registered to vote and where can seem trivial against the backdrop of the “’voting wars,’” writes Morse. “But it is also unfortunate—it has meant we have not taken full account of the rise of a strange breed of national, but not federal, efforts to coordinate voter registration lists across states; the ways in which voter lists are being co-opted to offer the appearance of voter fraud; and the opportunity to build a more inclusive democracy by integrating jurisdictionally balkanized lists to reflect the mobility of the electorate.” on research by
MICHAEL MORSE C’13 Assistant Professor of Law
From the article:
“Our collective lack of attention has left us unprepared for a ‘war on election administration.’”
This Article calls attention to the development and derailment of a novel cross-governmental bureaucracy for voter registration. It focuses specifically on voter registration lists as the vulnerable backbone of election administration.
In short, the constitutional allocation of election authority has left a mobile electorate scattered across fifty different state registration lists. The result is more than a tenth of the electorate is likely registered in their former jurisdiction and more than a third is not registered at all. The solution, in the vocabulary of election officials, has become “list maintenance”—or, identifying when voters, previously registered at one address, subsequently move or die, often by matching administrative data or coordinating across agencies.
Morse’s article traces national (not federal) efforts to coordinate voter registration lists across states, offering the first comprehensive account of the Electronic Registration Information Center (ERIC), a nonprofit corporation run by state chief election officials to facilitate list maintenance by pooling voter registration and other critical voter data, from state driver’s license records to the federal death file. According to Morse, ERIC “offers a much-improved approach to list maintenance using confidential voter registration and motor-vehicle records, although the complexity of the task means it is not without error.”
He notes that ERIC is facing a coordinated legal and political attack and that “as part of ‘[p]erhaps the widest-reaching example of structural interference in elections,’ ERIC has begun to unravel: nine Republican states have quit the bipartisan group.” Morse argues that “disjointed voter registration lists are an easily exploited democratic vulnerability, partly due to the unintended effects of federal privacy law.” Simply comparing voter registration lists across states—where there is often no unique national identifier—can “produce the appearance of fraud where none exists,” he writes, and he explores recent attacks on election administration, which he terms “vigilante list maintenance.”
He notes that “[t]hese efforts complement the attacks on ERIC by exploiting public, but necessarily incomplete, access to administrative records to purportedly reveal discrepancies in voter registration.”
Morse offers a series of policy solutions to both fortify list maintenance from attack and promote enfranchisement. He argues that the “‘voting wars follow a familiar narrative”:
The voting wars are typically framed by pitting the goals of access and integrity against one another. The familiar narrative was developed in the context of voter identification laws—if a poll worker asks a voter for identification, the requirement (may) restrict access and (may) bolster integrity. But not all aspects of election administration neatly fit that framework. More accurate voter registration lists can improve both access and integrity. Yet the voting wars framework cabins list maintenance either as an effort to prevent fraud or as an effort to suppress voting. That binary has led scholars and policymakers alike to largely overlook the development of a cross-governmental election bureaucracy, as well as the exploitation of, and the opportunities to improve, election administration.
Morse concludes that “[o]ur collective lack of attention has left us unprepared for a ‘war on election administration,’ and urges “a more sophisticated understanding of democracy’s bureaucracy” to “inform efforts to both fortify election administration and transform list maintenance into a tool for enfranchisement.”
read the full article.
Michael Morse C’13 studies voting rights, election administration, and the criminal justice system. His work combines empirical methods and novel administrative data with traditional legal scholarship. He has a secondary appointment in the political science department.
on research by
ELIZABETH POLLMAN Professor of Law; Co-Director, Institute for Law & Economics
In “Startup Failure,” published in the Duke Law Journal, Elizabeth Pollman explores the fate of the vast majority of venture-backed startups: failure—even though they “famously aim for a successful ‘exit’ by going public or selling to another company through an acquisition deal and achieving financial return for all equity holders.”
“Startups play an increasingly pivotal role in the U.S. economy, and successful exits attract significant scholarly examination and regulatory focus,” Pollman writes. Her pathbreaking article, on other hand, delves into understanding how both law and culture facilitate dealing with startups’ failure, which, she writes “plays an underappreciated role in supporting the system.”
She notes, “Legal scholarship has provided accounts of various components, such as M&A transactions, acqui-hires, and assignments for the benefit of creditors (“ABCs”), but no prior work has provided a systematic account or theory.”
From the article:
This Article provides a theory of startup failure: how law and culture have shaped a system for dealing with the large number of startups that cannot reach an exit that will produce a financial return for all participants. It makes three central contributions. First, the Article explains why bankruptcy law does not fit the needs of most distressed startups and highlights how their capital structures are indeed designed to avoid bankruptcy except in unusual circumstances. Second, and most critically, the Article reveals how dealing with failure through a variety of alternative means serves a vitally important role in sustaining the venture capital ecosystem. In particular, soft-landing acquisitions, acqui-hires, and assignments for the benefit of creditors allow entrepreneurs, investors, employees, and creditors to “fail with honor” and redeploy their talent and capital into other ventures. Third, the Article sheds light on rising challenges for dealing with startup failures amid evolving practices and regulatory agendas, with implications for facilitating efficient failure in corporate, antitrust, and insolvency law.
Pollman highlights the significance of how the law manages startup failure, arguing that it has broad implications for the startup ecosystem. She explains that “the ability to withdraw from involvement or recoup some of the investors’ capital affects ex ante incentives to invest in a startup,” shaping the initial willingness of investors to take risks. Additionally, she notes that “the speed, efficiency, and reputational consequences of startup failure” influence whether entrepreneurs are motivated to launch new ventures and impact the career prospects of the many employees working in the technology sector.
Beyond these financial and reputational effects, Pollman emphasizes that these dynamics also affect “the flow of talent and technological know-how,” as well as whether entrepreneurs choose to stay connected to the intellectual property they have developed or move on to new ventures. She ultimately argues that allowing startups and their participants to fail in a structured and dignified manner—“with honor”—is essential to sustaining the very system that has produced some of the greatest business successes in U.S. history.
ELIZABETH POLLMAN
Pollman explores regulatory and doctrinal opportunities to improve the legal framework surrounding startup failure. She notes that recent legislative proposals have sought to “ratchet up antitrust scrutiny of acquisitions by large technology companies,” with some even advocating for an outright ban on Big Tech acquisitions. While such measures aim to address competition concerns, Pollman highlights a less-discussed risk: these restrictions could “drain the startup and venture capital ecosystem of an important pressure relief valve” by limiting the availability of soft landings that allow failed startups to recycle talent and technology. She argues that regulatory responses should be carefully calibrated to ensure they do not hinder the efficient resolution of startup failures that do not pose significant competition risks.
Moreover, Pollman suggests that state laws could enhance the efficiency of handling startup failures by clarifying doctrinal ambiguities in fiduciary duties that frequently challenge startup boards. She also proposes that lessons from California’s state insolvency procedures could be extended to other emerging startup hubs across the country.
Pollman emphasizes that while “the value of supporting failure often attracts less regulatory and scholarly attention than the shiny allure of success,” failure and success are deeply interconnected within the startup and venture capital ecosystem, which plays a crucial role in fostering innovation and generating economic and social impact.
She concludes, “Recent developments in venture capital and the regulatory environment may strain these existing practices and underscore the value of exploring a range of possible doctrinal and regulatory responses to reduce the costs of failure. Although success is naturally the aim for startups and the venture capital industry that funds them, improving the pathway to failure is inextricably linked to this goal.”
“Although success is naturally the aim for startups and the venture capital industry that funds them, improving the pathway to failure is inextricably linked to this goal.”
Elizabeth Pollman is an expert in business law. She teaches and writes in the areas of corporate law and governance, as well as startups, venture capital, and entrepreneurship.
read the full article.
on research by
KATE SHAW Professor of Law (co-author)
“On August 2, 2022, Kansas voters overwhelmingly rejected a proposed constitutional amendment that would have written abortion protections out of the state constitution. Three days later, Indiana passed and signed into law one of the most restrictive abortion bans in the country.”
So begins “Dobbs and Democracy,” published in the Harvard Law Review by Kate Shaw and Melissa Murray, Frederick I. and Grace Stokes Professor of Law at the New York University School of Law. The authors note that these events occurred less than two months after the Supreme Court decided Dobbs v. Jackson Women’s Health Organization, overturning Roe v. Wade and Planned Parenthood of Southeastern Pennsylvania v. Casey—formerly the twin pillars of the Court’s abortion jurisprudence.
“The Dobbs majority’s interest in returning the abortion question to the American people was likely not in service of the settlement of a vexed and contentious issue.”
“Because both events were framed in public debates as referenda on Dobbs and the future of reproductive rights,” write Shaw and Murray, “some commentators suggested that these developments vindicated the Dobbs majority’s assertion that ‘[i]t is time to heed the Constitution and return the issue of abortion to the people’s elected representatives.’”
The authors claim that “despite this lofty talk of returning the abortion question ‘to the people,’ the Dobbs majority’s conception of democracy quickly collapses upon close examination. That is, the Dobbs majority’s interest in returning the abortion question to the American people was likely not in service of the settlement of a vexed and contentious issue. Rather, the majority’s insistence on democratic deliberation may simply be a way station en route to the pro-life movement’s desired resolution: the complete abolition of legal abortion.”
From the article:
As this history reveals, the democratic deliberation argument that undergirded the Court’s disposition of Dobbs emerged in fits and starts, evolving and transforming over time to take its current form, which insists that Roe improperly preempted and frustrated ongoing democratic deliberation on the abortion question. To be sure, this contemporary articulation of the critique of Roe reflects essential aspects of earlier critiques, including critiques of Roe’s judicial imperialism. But the democratic deliberation argument, in its current form, is nonetheless meaningfully different from that which preceded it. Whereas the objections lodged in the immediate aftermath of Roe focused on the nature of the constitutional rights at stake and the contested nature of the abortion question, the present interest in democratic deliberation goes well beyond these concerns. As it has evolved—in tandem with the social movements opposing abortion in the wake of Roe—the democratic deliberation
argument no longer objects to Roe solely on the view that the decision misidentified the right at stake and withdrew a contested issue from majoritarian politics; rather, it makes the case that, in addition to its flawed logic and incongruence with constitutional text, Roe’s countermajoritarianism is the crucial element that justifies abandoning stare decisis in order to overrule it.
Shaw and Murray assert that a careful examination of the intellectual origins of the “democratic deliberation” argument reveals that Dobbs and its refashioning of the doctrine of stare decisis “are products of a set of interconnected legal, movement, and political efforts designed to undermine and ultimately topple Roe and Casey on the grounds that democracy demands that result.”
Even on its own terms, the Court’s appeal to democracy fails, they write. “The Dobbs majority opinion presented an extraordinarily limited, even myopic, conception of democracy—one that misapprehended the processes and institutions that are constitutive of democracy, while also reflecting a distorted vision of political power and representation. The opinion compounded these distortions by refusing to grapple with the antidemocratic quality of the interpretive method it deployed to identify fundamental rights that are worthy of judicial protection. Indeed, the majority’s adherence to a history-and-tradition analysis binds constitutional interpretation to a less democratic past in which very few Americans were meaningful participants in the production of law and legal meaning.”
They conclude, “Legal and political fights around access to abortion will largely be waged in state legislatures, state courts, state executive-branch offices, and through the mechanisms of popular democracy. But it seems all but certain that, despite its broad endorsement of democratic deliberation, the Supreme Court has not spoken its final word on this question.”
read the full article.
Kate Shaw is a constitutional law scholar and, with Melissa Murray and Leah Litman, co-hosts the Supreme Court podcast, “Strict Scrutiny.” She is a member of the American Law Institute, Senior Fellow of the Administrative Conference of the United States, and a Contributing Opinion Writer with The New York Times
BETH A. SIMMONS
In “Border Anxiety in International Discourse,” published in the American Journal of Political Science, Beth A. Simmons and Robert Shaffer of BlueLabs Analytics—an analytics services and technology provider—call for a research agenda that incorporates border discourse more centrally into international and comparative politics. Their research is based on global data gathered from almost every leader in the world from 1970 to 2020.
“A growing literature attributes border anxiety to processes of globalization,” write Simmons and Shaffer. “However, traditional measures of globalization do not fully explain rhetorical trends.”
They “theorize anxious border discourse as emotional rhetoric that often addresses strategic political goals rather than concrete and explicit international threats” and argue that this “anxious official rhetoric may be amplified through interactions in global forums.” Simmons and Shaffer write that this type of discouse, particularly coupled with a tendency to embrace it or generally negative rhetoric, can spread in ways that do not necessarily reflect actual conditions. “Nonetheless,” they write, “such discourse is not meaningless: We show it is associated with the construction of border barriers, which burgeoning research shows do not always have the intended consequences.”
From the article:
Since World War II, international leaders have awkwardly attempted to graft a liberal international order onto a system of territorially sovereign states. Twentieth-century security institutions, notably the League of Nations and the United Nations, anchored political authority firmly on the legitimacy of the modern territorial state. However, new practices and technologies have increasingly given rise to integrated markets, expanded security communities, and facilitated human mobility, challenging the institution of bounded territoriality. The confluence of territorial norms and transnational forces accelerated in the 1990s, contributing to the socalled “unbundling” of the territorial state in favor of common markets and functional regimes.
Andrea Mitchell University Professor in Law, Political Science and Business Ethics (co-author)
“Since World War II, international leaders have awkwardly attempted to graft a liberal international order onto a system of territorially sovereign states.”
Arguably, these integrative forces have fueled narratives of globalist threats to the security of states and to at least some citizens. Concerns about globalization affect attitudes about international trade and immigration. More generally, a “borderless” or “networked” world presents profound challenges to states’ political authority. Around the world, transnational terrorism, rebel movements, and organized criminal groups have become the threats du jour. Fears of human mobility have spawned narratives of ungovernability and appeals to securitization. Political theorists such as Wendy Brown write that sovereignty is “migrating from the nation state to the unrelieved domination of capital and God-sanctioned political violence.”
These conditions have the potential to usher in a broad range of fears and uncertainties for both state officials and citizens. For some, globalization represents diminished economic status, which undermines their identity as productive and successful members of their cultural and national community. These forces potentially disrupt stable group identities and threaten some citizens’ sense of ontological security. We use the term border anxiety to refer to a heightened sense of instability or vulnerability perceived to be linked with a broad range of cross-border phenomena. These may include, but are not limited to, militarized interstate or group violence criminal threats at borders, and
even licit “threats” (i.e., immigrants, asylum seekers, import competition). Such perceived threats may have only a tenuous relationship with objective conditions, but they form an important part of a growing—if vague—narrative of insecurity.
They conclude:
Over the past several decades, a growing and diverse set of states has devoted time on the world stage to international borders. Their speeches are not merely abstract references to ‘inviolable borders’ or other general principles; they signify policy concerns with clear geospatial referents. This finding alone is important: The so-called age of globalization has demonstrably been accompanied by a discourse of border (in)security. It is especially noteworthy that border salience has soared over the past 50 years, just as attempts at territorial conquests have been on the decline.
Simmons and Shaffer argue that negative sentiments about borders continue to reverberate in international contexts and are connected with border barriers, and that “international relations and comparative politics research should grapple with the paradox of border anxiety in a world of settled but permeable state borders.”
read the full article.
Beth A. Simmons is best known for her research on international political economy during the interwar years, policy diffusion globally, and her work demonstrating the influence that international law has on human rights outcomes around the world.
BETH A. SIMMONS
BA NKRUPTCY’S IDENTITY CRISIS
on research by
DAVID SKEEL
S. Samuel Arsht Professor of Corporate Law
In “Bankruptcy’s Identity Crisis,” published in the University of Pennsylvania Law Review, David Skeel writes, “Large companies that currently file for Chapter 11 look very different from the typical Chapter 11 cases of the past. The liability side of debtors’ balance sheets is much more complex and now consists primarily of secured rather than unsecured obligations. Many firms that might once have borrowed on a secured basis from a bank and on an unsecured basis from bondholders now have first and second liens instead.”
“Large companies that currently file for Chapter 11 look very different from the typical Chapter 11 cases of the past.”
Skeel notes that the emergence of the leveraged-loan market has further contributed to the prevalence of secured debt. Leveraged loans are often “securitized” and find their way into collateralized loan obligation structures, or CLOs.
Taken together, he writes, “[t]hese changes are part of the larger revolution in financial engineering in the past several decades.”
From the article:
The expansion of secured financing has shifted the center of gravity in current Chapter 11 cases. Secured creditors, not unsecured creditors, are now the principal players.
These developments are in some respects quite beneficial. By providing access to credit for struggling companies, leveraged loans may sometimes make bankruptcy unnecessary for a firm whose distress would have landed it in Chapter 11 in an earlier era. The novel financing techniques (and parallel developments) have also improved Chapter 11 in two important respects. First, cases proceed much more quickly than they once did due to factors such as milestones imposed by a debtor’s secured lenders. In addition, the new lending techniques may help break the monopoly a debtor’s pre-bankruptcy lenders have over new financing in bankruptcy as an unintended consequence of the increased multiplicity and diversity of lenders. Two or more of a debtor’s current lenders may offer competing financing bids, as in the recent Neiman Marcus bankruptcy.
While the developments have been beneficial overall, the financing revolution has exacerbated several of the biggest problems in current Chapter 11 practice. The first is the unusually high variability in outcomes in large cases as lenders enter and exit the lending syndicates and as debtors
DAVID SKEEL
and creditors exploit loopholes in the credit documents through strategies such as “uptiering” (arranging with a subset of lenders for a loan that has priority over existing senior lenders) and “dropdown” or “trapdoor” (transferring assets to subsidiaries that are not restricted under the debtor’s loan documents and using the assets as collateral for new loans). The new financing techniques exacerbate this tendency by creating new coordination issues. The coordination issues that bedevil current cases do not arise naturally due to an inability or failure to coordinate, as did the collective action problems of the past. They arise from the terms of contracts the parties negotiate with one another.
Uncertainty—even uncertainty arising from coordination issues—is not always pernicious. If creditors sometimes find themselves on the losing side of an uptiering or dropdown transaction and sometimes on the winning, the variability of outcomes may not seem problematic. But even if the results were a wash overall, the uncertainty invites unnecessary costs as creditors jockey for inside position. And some creditors may be systematically disadvantaged as a result of the maneuvers, rarely being included in the winning coalition.
Skeel’s article considers a variety of correctives that scholars have proposed or that might be proposed. It is possible, he concludes, “that a true overhaul of Chapter 11 is needed, given the dramatic shifts in debtors’ capital structure, and that it is simply not yet apparent what that alternative framework might look like. But it seems more likely that limited adjustments to existing Chapter 11 are preferable and sufficient.”
read the full article.
David Skeel is an expert on bankruptcy and an author of several books, including True Paradox: How Christianity Makes Sense of Our Complex World (InterVarsity, 2014) and The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences (Wiley, 2011); Icarus in the Boardroom (Oxford, 2005) as well as numerous articles on bankruptcy, corporate law, financial regulation, and Christianity and law, among other topics.
“…[C]ases involving the rights of disabled people implicate the rights of everyone; we should treat these cases accordingly.”
Disability and the Ongoing Federalism Revolution
Seaman Family University Professor (co-author)
In the Yale Law Journal, Karen Tani and Katie Eyer, a Rutgers Law School Professor of Law, argue that the Supreme Court’s famous “new federalism” cases—most commonly dated to the 2000s—were built on disability-related cases decided in earlier decades and that disability-related federalism precedents will continue to be important.
In “Disability and the Ongoing Federalism Revolution,” Tani and Eyer draw on careful historical and doctrinal analysis to show that disability-related cases, often from the 1970s, 1980s, and 1990s, were building block cases in which the Supreme Court revived the Eleventh Amendment, making it more state protective, even as it declined to do that in cases that presented the same opportunities but involved race and sex. The authors theorize that there was something about the disability context that made it congenial to justices interested in a more state-protective jurisprudence—and that failed to raise red flags among justices who, in other contexts, would have opposed this move.
From the feature:
The Supreme Court’s “new federalism” revolution remains one of the most important developments in recent U.S. legal history. The Court revitalized “states’ rights” doctrines under the Tenth and Eleventh Amendments, rendering states partially or wholly immune from many types of federal litigation. Simultaneously, the Court retrenched the authority of national legislators—and aggrandized its own authority—by limiting what Congress may do under its Commerce Clause, Spending Clause, and Fourteenth Amendment powers.
But one important facet of this “new federalism” revolution has gone unappreciated: the load-bearing role of earlier disability-related cases. In the 1970s and 1980s, this Feature on research by KAREN M. TANI L’07, PHD’11
shows, the Court used disability-related cases to revive the all-but-moribund Eleventh Amendment, even as it declined to embrace Eleventh Amendment arguments in cases involving school desegregation and sex discrimination. So, too, it was disability cases that established and entrenched federalism-grounded “clear statement” rules of statutory interpretation in the 1980s and early 1990s. Likewise, a disability case in the early 1990s previewed the Court’s later diminution of Congress’s authority under Section 5 of the Fourteenth Amendment.
In crucial ways, we show, these disability precedents enabled the “new federalism” revolution of the late 1990s and early 2000s. Cases such as Seminole Tribe of Florida v. Florida (1996) could not have been reasoned as they were without earlier disability precedents. The real-world consequences have been striking: the disability-related cases we discuss— and the better-known “new federalism” cases that built on them—have reduced the enforceability of federal civil rights guarantees, threatened wide swaths of social welfare legislation, and diminished Congress’s ability to respond to pressing problems.
Moving forward, disability-related federalism precedents will remain important. Doctrines and language from these cases offer some of the best tools that state and local defendants have for extending the more dangerous facets of the “new federalism”—as evidenced by recent litigation in the lower courts involving voting rights and LGBTQ discrimination,
among other high-stakes issues. Moreover, at the Supreme Court, disability cases have continued to provide the site for new retrenchments in Congress’s spending power, alongside robust assertions of the Court’s own authority. Thus, while conventional wisdom treats the “new federalism” revolution as a historical artifact, this Feature reveals such an assessment to be both perilous and premature.
The authors argue that the disability-based building-block cases they discuss still have legal power and remain worthy of attention and discussion. In various civil rights contexts, for example, courts and litigants continue to rely on these cases—especially when they might want states to be insulated from liability.
Tani and Eyer conclude:
The simple takeaway is that cases involving the rights of disabled people implicate the rights of everyone; we should treat these cases accordingly. The complexity arises from our society’s continued ambivalence about disability rights—and, more fundamentally—about disability itself. Efforts to contest the expansion of the “new federalism” may thus have to go beyond the realm of litigation to include all the realms where we attach social meaning to ability and disability. Precedent shapes and constrains constitutional interpretation, but so, too, do the limits of our social imagination.
read the full feature.
Karen M. Tani L’07, PhD’11 is a scholar of U.S. legal history, with broad interests in social welfare law, administrative agencies, and the role of rights in the modern American state.
KAREN M. TANI L’07, PHD’11
GRID RELIABILITY in the ELECTRIC ERA
on research by SHELLEY WELTON
Presidential Distinguished Professor of Law and Energy Policy (co-author)
Shelley Welton, joined by Joshua Macey of Yale Law School and Hannah Wiseman of Penn State Law School and College of Earth and Mineral Science, advocate for a more public and comprehensive approach to grid-reliability governance in “ Grid Reliability in the Electric Era,” published in the Yale Journal on Regulation
Without fundamental changes to grid governance, they argue, the United States risks more frequent and severe grid reliability crises in the coming years. They propose a range of reforms, including a restructuring of the North American Electric Reliability Corporation (NERC) and greater centralization of reliability governance at the Federal Energy Regulatory Commission (FERC).
In the article, they explain why grid governance is a pressing challenge in today’s energy system:
Climate change complicates grid reliability in two ways. First, responding to the problem requires a transformation of the electricity grid to run on zero-carbon (“clean”) energy, even as the grid expands in order to allow the country to “electrify everything”—from vehicles to heating, cooking, and industrial processes—thereby launching a new “electric era” of energy. This transformation to a grid powered predominantly by renewable energy is well underway in the United States and will accelerate as a result of the Inflation Reduction Act of 2022. However, because of its intermittency, renewable energy requires new approaches to reliability, including nimble solutions such as battery storage, “flexible”
“The United States has the least reliable electricity system of any developed country.”
SHELLEY WELTON
power that can turn on quickly, and commitments from consumers to reduce consumption. As we explain, we believe NERC has been insufficiently proactive in responding to the shifting nature of modern grid reliability.
The second reason NERC’s job is becoming increasingly difficult stems from the effects of climate change on the U.S. grid. Climate change is worsening wildfires, exacerbating droughts that threaten the viability of hydroelectric dams as sources of electricity, and contributing to more erratic and frequent cold snaps and heat waves throughout the country—with significant attendant grid-management challenges. These reliability challenges are compounded by the aging nature of U.S. grid infrastructure and growing cyberthreats and other security risks. The United States experiences “more power outages than any other developed country” and has seen a ten-fold increase in major outages between the mid-1980s and 2012. Although most power outages occur on local distribution lines (such as a tree limb downing a line in a single neighborhood), when the larger system fails, the results are catastrophic—as illustrated by the 2021 U.S. Southern blackout. NERC itself has described these risks as “unprecedented” and warned that “two-thirds of North America [was] at risk of energy shortfalls” for the following summer.
The authors proceed to trace how the predominant theory of reliability oversight in the United States is one of selfregulation: NERC is a membership body, comprised of
companies with various industry roles, which sets and enforces rules on its members. The authors argue that even if self-regulation may have made sense at earlier points in the industry, it is a model ill-suited to the modern grid, which is made of diverse participants with divergent interests— many of whom are economically threatened by the clean energy transition.
To better align grid reliability paradigms with the modern energy landscape, the authors counsel for “a revitalized approach to U.S. grid reliability, moving along the continuum of self-regulation toward enhanced federalgovernment control.” They contend that “at minimum, NERC’s internal governance structures and the deference to utilities baked into reliability governance must change.” More ambitiously, they suggest that reliability oversight should be the provenance of federal regulators, who should be given jurisdiction broad enough to coordinate the many different system elements that go into ensuring reliability.
They conclude: “It is of paramount importance to develop a regulatory apparatus capable of managing reliability through this coming era. In the words of California Energy Commissioner Siva Gunda, ‘If we stumble on keeping the lights on, the whole climate agenda is at risk.’”
read the full article.
Shelley Welton is the Presidential Distinguished Professor of Law and Energy Policy at the University of Pennsylvania Carey Law School where she holds an affiliation with the Kleinman Center for Energy Policy in the Weitzman School.
3501 Sansom Street
Philadelphia, PA 19104