Faculty Chapters

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  Forum (and Law) Shopping

  Franco Ferrari

  According to some courts, '[f]orum shopping is a dirty word' (Atlantic Star v Bona Spes [1974] AC 436, 471). Although this may be an exaggeration, it is true that there is hostility towards 'forum shopping' and that the term has disparaging—if not pejorative—connotations (Friedrich K Juenger, 'Forum Shopping, Domestic and International' (1989) 63 Tul.L.Rev. 553, 553), indicating something that commentators and courts consider to be, if not 'evil', at least deplorable and, therefore, must be deterred. It is to reach that goal that various policies against forum shopping have developed on both a local and broader level.

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  Sale Contracts and Sale of Goods

  Franco Ferrari

  Scholars have always devoted a lot of attention to international sales contracts and, in particular, to contracts for the international sale of goods. In light of the importance of the latter type of sales contracts, considered to be the 'mercantile contract par excellence', the 'lifeblood of international commerce', and therefore 'the pillar of the entire system of commercial relations', this is unsurprising. And it is equally unsurprising that it is these sales contracts that have garnered the most attention from those attempting to promote certainty and predictability, 'the bedrock desiderata of [any] commercial law' (Robert Scott, 'The Uniformity Norm in Commercial Law: A Comparative Analysis of Common Law and Code Methodologies' in Jody Kraus and Steven Walt (eds), The Jurisprudential Foundations of Corporate and Commercial Law (CUP 2000) 149. 149, 176 note 3), let alone international commercial law, by attempting to create uniform rules. In this respect, reference has to be made to attempts to achieve certainty and predictability by creating a uniform set of substantive rules with the intention of overcoming the economic players' supposedly worst enemy, namely national borders and the differences between national legal systems, which constituted (and still constitute) 'an obstacle to economic relationships which constantly increase among citizens of different countries; an obstacle above all for the enterprises that are involved in international commerce and that acquire primary resource or distribute goods in different countries which all have different law' (Francesco Galgano, 'Il diritto uniforme: la vendita internazionale' in Francesco Galgano and others (eds), Atlante di diritto privato comparato (5th edn, Zanichelli 2011) 245).

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  UNCITRAL

  Franco Ferrari

  On 17 December 1966, the United Nations Commission on International Trade Law, UNCITRAL, was set up at Hungary's request by the United Nations General Assembly by its Resolution 2205 (XXI) of 17 December 1966. Originally headquartered in New York and relocated to Vienna in I 979, UNCITRAL consists of a limited, but steadily increasing number of member states of the United Nations. When it was created, UNCITRAL was composed of 29 Member States of the United Nations; subsequently, membership was expanded to 36 (1973) and thereafter to 60 (2002) states. The increase in the number of Member States (elected for terms of six years) makes it easier to guarantee that the various geographic regions and the principal economic and legal systems of the world are represented. This becomes apparent if one considers that the 60 states include 14 African states, 14 Asian states, 8 Eastern European states, 10 Latin American states and Caribbean states and 14 Western European and other states. UNCITRAL's secretariat is provided by the International Trade Law Division of the United Nations Office of Legal Affairs (OLA), whose director also serves as the Secretary to UNCITRAL. The secretariat has different tasks, including the preparation of studies, reports and draft texts on issues that are being considered for potential inclusion in UNCITRAL's work programme. It is also responsible for elaborating and revising working papers and legislative texts on issues already included in the work programme. The secretariat is also tasked with reporting on the annual meetings of UNCITRAL (the venues of which alternate between Vienna and New York) as well as on the meetings of the various Working Groups which carry out the substantive preparatory work on the issues included in UNCITRAL's work programme.

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  Uniform Substantive Law and Private International Law

  Franco Ferrari

  The expression 'uniform law' indicates a set of identically worded legal rules that are binding on a general level in more than one jurisdiction where they are also supposed to be interpreted and applied in the same manner. Actually, for such sets of rules to be considered uniform law, they must have been created with the intention to be interpreted and applied in one and the same manner throughout the jurisdictions where they are in force. Where this so-called animus unificandi is lacking, it may well be possible for the laws of different jurisdictions to be identical to each other, but they will nevertheless not constitute uniform law. This is why, for instance, the spontaneous, unintentional creation of identically worded legal rules in different jurisdictions as an answer to similar problems arising in practice do not constitute uniform law. The same is true as regards the unilateral reception of foreign legal rules—even though this may lead to legal rules of various jurisdictions being identical. Law that is simply 'harmonized', that is, law that has not been created with the intention of getting rid of the existing differences, but rather with the goal of merely reducing those differences (as is the case for the law originating from most EU directives), does not constitute uniform law. This does not mean that only those legal rules that fully correspond to each other can be considered uniform law. If this were the case, it would be impossible to ever speak of uniform law, as fully corresponding legal rules are very rare, even where the wording of the legal rules is identical. The reasons for divergence are manifold, such as the fact that the uniform texts are often drafted in different languages and are interpreted and applied differently in practice (see Tribunale di Rimini, 26 November 2002 [2003] Giur. it. 896). Therefore, the starting point for determining whether there is uniform law is the degree of intended similarity of the legal rules in question. Where the maximum degree is intended, ie where the law is supposed to be one and the same, uniform law may exist despite any factors that may have a negative impact on the uniformity aimed at. Where, however, from the outset, the efforts are merely aimed at the creation of a similar, harmonized law, one cannot speak of uniform law.

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  Exploitative Abuses of Intellectual Property Rights

  Harry First

  It is the standard view in the United States that US antitrust law does not reach acts of exploitation by a monopolist. The focus in monopolization cases is on exclusionary conduct—conduct that excludes competitors on some basis other than efficiency and thereby allows a firm either to gain or to maintain monopoly. Courts do not pay attention to a monopolist’s conduct that is just unfair to its rivals, or even to conduct that is flat-out deceptive. Section 2 of the Sherman Act is concerned with harm to competition, the courts remind us, not harm to competitors. Indeed, and perhaps surprisingly, courts in Section 2 cases are not even concerned with higher prices in themselves—“rent extraction.” As the D.C. Circuit Court of Appeals wrote in Rambus (a case to which we will return), “[e]ven if deception raises the price secured by a seller, . . . it is beyond the antitrust laws’ reach.” When it comes to the use of intellectual property rights, this unwillingness to look at exploitation would appear to be even stronger. Early on the Supreme Court affirmed the right of a monopoly patent holder to exploit its rights to the fullest, constrained only by market demand. In United States v. General Electric, decided in 1926, the Court allowed GE to license its light bulb patents to a competing light bulb manufacturer and to set the price at which the competitor could sell its bulbs. Chief Justice Taft wrote: “[T]he patentee may grant a license . . . under the specifications of his patent for any royalty or upon any condition the performance of which is reasonably within the reward which the patentee by the grant of the patent is entitled to secure . . . One of the valuable elements of the exclusive right of a patentee is to acquire profit by the price at which the article is sold. The higher the price, the greater the profit, unless it is prohibitory.” Outside the United States, however, the law seems to be otherwise. Article 102 of the TFEU prohibits “abuse” of a dominant position, with a specific clause to catch the imposition of “unfair” selling prices or trading practices. Many countries follow the European Union’s approach. China’s condemnation of abuse of dominance includes selling at “unfairly high prices,” or “other abusive practices” as determined by the enforcement authority (Art. 17). South Africa specifically condemns, as an abuse of dominance, the charging of an “excessive price” (Sec. 8). India prohibits a dominant firm from imposing “unfair” prices in the purchase or sale of goods or services (Sec. 4(2)(a)(ii)). Korea prohibits a dominant firm from pricing “unreasonably” or “unreasonably interfering” with the business activities of other enterprises (Art. 3-2). Japan prohibits “private monopolization” à la United States (Art. 3), but also condemns unfair trade practices, which include “dealing at unjust prices” and dealing with another party on terms that “restrict unjustly” the other party’s business (Arts. 19, 2(9)). Without denying this substantial divergence in general between the United States and the rest of the world, it turns out that there may be fewer differences between the United States and other jurisdictions when it comes to judging exploitative behavior by intellectual property rights holders with market power. For despite the oft-stated unwillingness to condemn exploitation under US antitrust laws, and even despite the broad license given to intellectual property rights holders in General Electric, legal doctrine and enforcement policy in the United States is much more willing to rein in exploitative behavior by intellectual property rights holders than might otherwise be supposed. The purpose of this chapter is to describe the areas in which antitrust law (or competition law, as it is generally referred to outside the United States) constrains intellectual property rights holders from unduly exploiting their monopoly power when licensing or using their intellectual property rights. “Exploitation” is here used in the sense of “taking advantage” of downstream purchasers by extracting rents, either through higher prices or though the imposition of nonprice terms. Some forms of exploitation might lead to exclusion, for example where exploitative behavior raises rivals’ costs or increases entry barriers, and thus the line between exploitation and exclusion is not always perfectly clear. Nevertheless, a critical distinction is the focus on harm to the immediate buyer (or licensee) without any necessary concern for ultimate effects on consumer welfare or deadweight welfare loss. From a normative standpoint, this chapter argues that intervention to prevent this type of exploitation is consistent with sound competition policy. Preventing intellectual property rights holders from undue exploitation of their rights is an important aspect of economizing on the reward that we give intellectual property rights holders to incentivize innovation. The argument over how much short-term monopoly loss we are willing to incur so as to get long-term innovation is a familiar one in the intellectual property literature. Although some argue, in effect, that “too much is not enough,” antitrust tradition is on the side of placing some limits on monopoly profits and placing greater reliance on the incentives that competitive markets provide. Many of the cases this chapter discusses are in that tradition. This chapter focuses on three areas in which antitrust enforcers have intervened to prevent exploitation. The first involves patents subject to FRAND (fair, reasonable, and non-discriminatory) licensing obligations (FRAND-committed patents), a major area in which courts and agencies have been willing to prevent excessive pricing. The second area involves disclosure requirements that can be imposed on patent holders to prevent the exploitation of licensees or potential licensees. The third is post-expiration royalties. The chapter concludes with some observations about the emerging policy consensus regarding abusive licensing by patent holders with market power.

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  General Principles Governing Criminal Liability of Corporations, Their Employees and Officers

  Harry First

  The purpose of this chapter is to provide the general framework that governs the imposition of criminal liability on those who may become defendants in business crime cases. Potential defendants in such cases are the enterprise itself (whether the enterprise is organized as a corporation or in some other form), the enterprise's managers (which can include officers and directors), and the employees who actually “did” the illegal act in question. Although these general principles apply without regard to the specific crime in question, it is important to keep in mind that these principles have evolved in the context of specific crimes. The rules that judges have chosen have thus inevitably been influenced by judicial attitudes toward the crimes in question. Criminal law, after all, is a form of regulation; when it is applied in a business context, criminal law is a form of economic regulation. To properly apply and develop these rules the overall economic regulatory environment from which the rules emerge must be understood. The chapter begins by reviewing the historical setting in which the modern rules governing entity criminal liability first developed in the United States. Next, the chapter explores the basic rules for entity liability; in addition to exploring the requirements of the “Black Letter Rule” on entity criminal liability, the chapter sets out a legal framework for dealing with the complexities of modern crimes committed in an organizational setting. The third part of the chapter deals with the legal position of the human actors in these cases-the employees who performed the acts in question, their direct supervisors, and those within the enterprise who direct policy (or fail to direct it). The fourth part of the chapter focuses on the prosecutorial policies regarding entity liability that the U.S. Department of Justice is currently following in the exercise of its prosecutorial discretion. Included in this part is a discussion of the use of non-prosecution and deferred prosecution agreements. The chapter concludes with some observations on the future direction of corporate and managerial liability. In today's very complex business and deregulatory environment, there are tremendous pressures to use the criminal law in more innovative ways to deter business conduct that produces unacceptable results. These pressures are particularly intense when manufacturing defects or unsafe working conditions result in deaths or cause extreme environmental harm; but the pressures are also strong when financial manipulation causes major economic harm. These pressures not only create the potential for expanded criminal liability but also provide an opportunity to reexamine the relevance of certain defenses. Thus, this chapter places some emphasis on emerging theories of liability and on those government and defense arguments that could find more ready acceptance in the context of business crime than they have in the context of street crime.

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  Outsider Antitrust: ‘Making Markets Work for People’ as a Post-Millennium Development Goal

  Eleanor M. Fox

  The United Nations has published the Sustainable Development Goals, which it aspires to achieve by 2030. The goals aspire to end poverty and hunger, build dignity, and create an inclusive, safe, and environmentally sound society. To much of the world community, markets are the problem, not the solution. This chapter argues the contrary; namely, that markets properly harnessed to work for development and for the people are an essential prong in the plan to end poverty, hunger, and exclusion by empowering people to help themselves. It shows how Competition Law in the service of markets helps to achieve these goals.

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  The New World Order—A Trialogue from Behind the Veil of Ignorance

  Eleanor M. Fox

  We have assembled three thought leaders of the world, Ji, Li and Mi. We have lowered the veil of ignorance, and they are behind it. They do not know whether they have been born in a rich country or a poor country, whether they are privileged or deprived. They are presented with a challenge: People, we are in new and uncertain times. Globalization has shrunk the world. Trade and investment barriers are down and falling, until recent retrenchments. Imports flood our countries. Big businesses buy abroad, and export jobs. Automation is shrinking exponentially the number of workers needed for every task. Half of all jobs are at serious risk of disappearance by reason of automation. Business concentration is increasing, even while the new generation of technological whizzes build viral edifices in garages. Huge mergers that reach to the ends of the earth are cleared as to-competitive by competition authorities around the world, even though they consolidate industries into two or three players. Prices of life-saving drugs soar hundreds of percentage points at the will of the patent holders. Meanwhile, inequality indexes spike, incomes of the rich and enabled soar, and personal mobility is static or reduced. In the wake of 2008, then Brexit, and then Trump, nations harbor a new spirit of nationalism and parochialism, threatening progress towards a more open and inclusive world. Figures say that millions of people have been lifted out of poverty by freer trade and competition (meaning that the poverty-stricken households make fraction more rather than a fraction less than $1.90 a day) and even these gains are at risk of eclipse by the re-closing of national frontiers. It is to this world of dark clouds, mixed signals and ambiguous patterns of ist rising on the altars of the sibyls that we call you together at this retreat on the top of Mount Olympus. You are the competition, and trade-and-competition, policy thinkers of the world. But all is not right in the world of competition, so some people say. We ask you, what is the problem? What is the answer? Are these omens from the gods a competition problem at all—or are some rogues, whether from false ideology, wrong information, or self-interest, trying to place on the lack of competition policy the societal burdens of the world? You may lounge and reflect at this lodge on Mount Olympus until you, under some veil of ignorance, come to conclusions about the real competition problems of the world and how to solve them. Then you must report your answers to the most honorable Professor Joel Moneger, who will set about to implement the solutions—so, mind you, the solutions must be implementable. Then we will lift the veil of ignorance. As Ji, Li and Mi assemble for their task, we flash back to just before the veil fell. We see that Ji is from an industrialized country and represents large corporations; Li is from a poor developing country, was a former competition official and works in a non-governmental organization, and Mi is an academic hailing from an emerging economy. But under the veil of ignorance, our experts do not recall their backgrounds. They agree to lay out the questions and seek the answers. Just as they settle in, they meet a sybil on a patch of dirt near a steamy geyser. Barefoot, she is dancing in circles, her head lowered in a trance. They say, “Oh Sybil, the micro-economic problems of the world have just been placed on our shoulders. What is the answer?” The sybil, dancing furiously, lifts her head only slightly. She says: “Equity is equity and power is power.” “What does it mean?” says Li to Ji and Mi. They all discuss what the Sybil meant and each has a different interpretation. Then the three experts enter the lodge and begin their deliberations. Ji: I do not understand at all why we have been called together. What is the problem? Life is messy. Competition is messy. Economic life has its joys and its ills; its winners and losers. The ills can be serious. But that is not our problem. Li: We have to consider, what is the problem. Mi: I see two sets of questions. Let us start with the first—What are the antitrust/market harms in the world that are not solved by our existing competition laws and institutions, in spite of our intense modes of cooperation? If they exist, how should we solve them? Then we reach the second set: Our leader has reminded us of the sad social conditions in the world of deep poverty and increasing inequality. Are these a competition problem? Do they have a competition solution? What can competition law do? All agree to the plan

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  Punishment and Welfare: Social Problems and Social Structures

  David W. Garland

  In the sociology of punishment and comparative penology it has become common to observe significant connections between ‘punishment’ and ‘welfare’—or more precisely, between a jurisdiction's penal practices and its institutions of public assistance. In this chapter I discuss these connections and ask how they might best be understood. After reviewing the existing literature, I argue that future research ought to view the relationship between penal and welfare policy in relation to the social problems these policies purportedly address (usually thought of as ‘crime’ and ‘poverty’ respectively) and also in relation to the larger social and economic processes that shape these policies and generate these problems. These relationships are neither straightforward nor well understood, and one aim of this chapter is to introduce greater clarity into our discussions of these issues. I begin by discussing the relationship between punishment and welfare as it features in current research and the scholarly literature. I then turn to the less-discussed question of how penal and welfare policies relate to the social problems that they purport to address and to the political and socio-economic structures within which they operate. The punishment-welfare connection is currently conceptualized in two rather different ways—as a historical relationship and as a comparative correlation—and I discuss each of these in turn.

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  Decentralizing Religious and Secular Accommodations

  Roderick M. Hills Jr.

  It is common for laws to accommodate religious practices by exempting them from otherwise generally applicable rules. Although the term accommodation is not conventionally used to refer to protections for secular belief, the law sometimes also “accommodates” secular principles by excluding religious activities (say, studying theology) from otherwise generally available benefits provided by the state (for instance, state-funded college scholarships). The first sort of accommodation is associated with the Free Exercise Clause of the US Constitution, while the second is associated with the First Amendment’s Establishment Clause. Both, however, are just as frequently the result of either express statutory language or constitutionally inflected statutory construction in which courts strain to construe apparently general laws to contain exemptions. Regardless of the form of the accommodation, such exemptions present the dilemma of defining what it means to coerce the faithful or nonreligious, because both the existence and the absence of the accommodation might be taken to be coercive. If the state enforces its laws without any religious accommodation, the constituents of religious bodies (shareholders, officers, employees, etc.) may be forced to violate their conscience. If the state makes an exception for religiously motivated organizations, then other constituents of such bodies (employees, customers, tenants, etc.) with different views will be stripped of otherwise applicable protections from those organizations’ power. The same dilemma confronts secular accommodations. If the state provides a benefit such as subsidies for religious and secular schools alike, secular taxpayers may complain that they are being coerced into paying for religious education with which they disagree. If the state excludes religious schools alone from such otherwise generally available subsidies, then religious schools may complain about antireligious discrimination. The problem of religious and secular accommodations can be understood as a species of a more general difficulty that I shall call “reasonable and deep disagreement” (or RADD, for the sake of convenience). A RADD arises whenever the enforcement of one person’s reasonable conception of fundamental liberty deprives another person of an equally reasonable and equally fundamental conception of liberty. The depth of RADDs arises from disagreement over baselines of entitlement. When social and legal consensus provides no commonly acknowledged baseline against which the disputing parties can measure their rights, one side of the dispute can plausibly claim that any resolution of the RADDs constitutes an invasion of their fundamental rights. There is no neutral ground between coercing the organization into violating its religious scruples or allowing that organization to coerce its constituents (employees, customers, contractors, etc.) into obeying the organization’s religious commitments. There is likewise no neutral ground between forcing a taxpayer to help pay for subsidies to religious organizations’ activities and discriminatorily singling out those religious organizations by depriving them of subsidies that secular organizations receive. Losers in political fights over such religious or secular accommodations, therefore, are unlikely to acquiesce in political compromise. Because they are reasonable disagreements, RADDs also present no plain, crisp solutions: each side has plausible arguments to back its position, giving it all the more reason to dig in its heels. This chapter suggests that decentralization of a federal regime can help reduce these RADD-induced maladies. Rather than assign the power to resolve RADDs exclusively to the national government, the law ought to allow subnational governments to modify or waive national rules on accommodation. The choices of such subnational bodies will inevitably leave the secular or religious side of a RADD dissatisfied in any particular case. The federal system as a whole, however, extends equal concern and respect to rival and reasonable conceptions of religious liberty by giving each conception a larger area in which it can be acknowledged as authoritative. Such federalism broadens what Jeremy Waldron calls the “right of rights”—that is, the right of citizens to say what their rights mean, where disagreement about the rights’ content is reasonably disputed. The final part of this chapter explores specific mechanisms with which some mix of constitutional law and statutory construction can safeguard subnational governments’ power to define religious and secular accommodations.

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  Loyalty in Adversity

  Stephen Holmes

  Because the future is fundamentally unpredictable, the struggle to attain and preserve political power is always a voyage into the unknown. Unpredictability is a challenge confronting all rulers, from the usurper prince to the elected republican leader. In Machiavelli’s words, all rulers—whether they observe or disregard conventional moral rules—aspire and cling to power “in good or in adverse fortune”. Unforeseen circumstances regularly make a mockery even of the best laid plans. Prudence is obviously preferable to folly. But dramatic reversals of fortune can and do occur with little regard for the wishes of even the most gifted and wily wielders of power.

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  Public Morals

  Robert L. Howse

  The concept of ‘public morals’ has been defined as ‘standards of right and wrong conduct maintained by or on behalf of a community or nation’. Its content can differ from state to state, depending on factors such as prevailing social, cultural, ethical and religious values. A related concept, ‘public order’, refers to ‘the preservation of the fundamental interests of a society, as reflected in public policy and law’. Either expression demands that governments are granted the right to adapt these terms according to their own value systems. In international economic law, ‘public morals’ is an expression that occurs in the General Exceptions provisions of the General Agreement on Tariffs and Trade (GATT) (Article XX) and the General Agreement on Trade in Services (GATS) (Article XIV), where it denotes one of the purposes or grounds on the basis of which the World Trade Organization (WTO) may maintain, consistent with the overall framework of the Article in question, measures that would otherwise be inconsistent with its obligations under the GATT or GATS. The meaning of public morals in these provisions is summarized by Van den Bossche in his contribution to this Encyclopedia. The jurisprudence to date indicates a number of issues that may arise in determining whether a Member’s measures are justified as a protection of public morals that do not arise when relying on other policy goals.

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  English Liberties Outside England: Floors, Doors, Windows, and Ceilings in the Legal Architecture of Empire

  Daniel J. Hulsebosch

  In what ways did ‘English liberties and privileges’ circulate through the seventeenth-century English Empire? This essays explores the functions of liberty claims in the extra-English territories of the English king and finds that the language served progressively multiple and overlapping purposes, from allowing overseas emigrants to return home and advertising familiar rights in the new colonies, to serving claims that the colonial legal environment was similar to England’s—and even vice versa. Paying attention to the function of liberty claims across the century also sheds light on how they began to change the meaning of liberty itself: from a royally granted privilege to a right deserved by all subjects.

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  Economics of Federalism

  Robert P. Inman and Daniel L. Rubinfeld

  This chapter provides an overview of the political economy of federalism. The core of the chapter focuses on the classic Tiebout framework and its support for a decentralized federal system. However, it goes beyond the Tiebout world in suggesting a framework that is expanded to take into account bargaining among governmental units. The chapter also describes political models of legislative and executive branch decision-making that suggest the potential benefits and costs associated with centralized government. Ultimately, the choice of an “optimal” level of decentralization depends on the relative importance one places upon economic efficiency and the potentially competing values of political participation, economic fairness, and personal rights and liberties.

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  Legislating Crisis

  David Kamin

  For the last several years, the congressional budget process has jumped from self-created crisis to self-created crisis. Debt limit, shutdown, sequester, and potential withholding of congressional pay have come in quick succession and have required Congress to take action to avert a problem. The result has been measurable damage to the economy and federal agencies. This has rightly engendered much commentary about the political system broadly, including the deleterious effects of polarization in American politics. And, it has also raised questions about the specific devices that led to these crises, with calls for many of them to be abolished. There is a common element to each of these devices. Congress sets a catastrophic event to occur at a specified time—and this sets up the possible crisis. It is an event that the parties create but do not really want to see occur. To put it colorfully, Congress and the President set up a mechanism that could shoot them in the foot. This chapter represents an exploration of these devices—and a modest defense of some of them, despite the recent chaos in Washington. At the very least, these devices can and are used in ways that address other legislative failings. Thus, there is a trade-off in simply throwing out such devices entirely, and, while there is a literature focused especially on the costs of individual crisis devices, there has yet to be a more complete accounting. This chapter seeks to build out this literature by describing both the benefits and costs of legislating crisis and how those benefits and costs might be weighed. But why should Congress ever create even the possibility of a crisis? There are a variety of reasons, as this chapter explores, but most of these involve changing the behavior of Congress going forward relative to what it otherwise would be without the threat of an undesirable outcome at that future point in time. One of the key conclusions of this chapter is that, in doing so, Congress may be trying to address some of its other failings. These devices may allow Congress to economize on transaction costs by declining to fully specify the way legislation will work in the future. They also allow Congress to enforce its deals and better coordinate negotiations by setting timelines. The conclusion that these devices can serve some constructive ends reflects an underlying judgment that the legislation facilitated by these devices is of some significant value to the country. In other words, it reflects the judgment that it is valuable for Congress to coordinate opportunities for fiscal deal-making, including regular updates to appropriations and broader deals with regard to the fiscal position. If the deals themselves were not valuable, then risky legislative tools used to facilitate them would not be worth employing. The wisdom of using these devices reflects a cost-benefit trade-off. On the one hand, there is the benefit of deal-making being facilitated. On the other hand, there are the actual risks associated with legislating a crisis. And, while policymakers may not actually want the crisis to transpire, the government and private sector must still plan for the crisis, which involves costs of its own, and, then, there is the risk that the crisis in fact happens. Further, these costs can be magnified by policymakers who strategically use crises in ways that do not align with the interests of their constituents. Importantly, the benefits from legislating the possibility of a crisis derive, to some degree, from the costs of that crisis. It is the potential costs that help to motivate policymaking. For example, if the crisis were not sufficiently salient, then the device would deliver little reward; it would do little to facilitate policymaking. This does not mean that a bigger crisis is always better. If the threat of a small or moderate crisis can prompt similar action from Congress as the threat of a large crisis, then clearly the smaller one—if any—should be the one used. In short, it is a question of using those devices where the benefits outweigh the costs so long as there exist no alternative devices with better benefit-cost trade-offs. It is this trade-off that leads to the tentative conclusion in this chapter that the threat of a debt limit breach is an ill-suited crisis device. This is because this particular threat poses excessive risks to the economy, and alternatives are available that better facilitate the legislative process at significantly less risk. It is also this trade-off that leads to the tentative conclusion that some of the other crisis devices discussed here—such as government shutdowns, a modified sequester, and, especially, with- holding of congressional pay – are probably worthwhile. This chapter is not meant to be a decisive and comprehensive evaluation of these devices, but, rather, an attempt to begin a more nuanced analysis of this family of legislative tools—as to their constructive goals, their costs, and the overall wisdom of using them. It is an analysis that recognizes that there is, in fact, a place for certain self-created crises in our legislative process.

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  Reflection: Death and Dignity in American Law

  Emma Kaufman

  Dignity serves many purposes in American jurisprudence. Over the past century, courts in the United States have invoked the concept of dignity to limit intrusive searches by the police and to bar discrimination on account of race and gender. Dignity surfaces in discussions of sexual violence, marriage, citizenship, and the privacy of both the body and the home. Yet nowhere is this concept more vital than debates about the death penalty. In American law, dignity’s most prominent role is to mediate the state’s capacity to kill. An account of the relationship between dignity and capital punishment requires some context. At present, the United States has the highest incarceration rate in the world. Men of color are especially likely to be imprisoned. In 2008, black men were six times more likely to be incarcerated than white men of the same age, and today, close to one in three African American men will be incarcerated in his lifetime. The penal institutions in which these people are held, though varied, are notoriously harsh. Like incarceration rates, the death penalty is related to structural inequities in wealth and power, and in particular, to race. In the now famous Baldus study, a group of social scientists found that defendants who murdered white victims were more than four times as likely to be sentenced to death as those who killed people of color. These numbers grow even more disproportionate when the defendant is black, and become especially sobering in a comparative frame. The United States is one of only 18 countries in the United Nations, a body composed of 193 member states, to use the death penalty. It is the only western country that permits the punishment of death. There was a time, not long ago, when capital punishment was illegal in the United States. In 1972, the Supreme Court ruled that the death penalty violated the Eighth Amendment’s prohibition on “cruel and unusual” punishment. That case, Furman v. Georgia, established a moratorium on capital punishment that lasted four years. The Furman decision was fractured—no justice wholly endorsed another’s reasoning—but in each concurrence, dignity did significant conceptual work. Justice William Brennan began his oft-cited opinion with a declaration: “The basic concept underlying the [ban on cruel and unusual punishment] is nothing less than the dignity of man.” He went on to extract from this claim a set of rules about when punishment comports with the Constitution. First, the Justice argued, punishment that is too severe is “degrading to the dignity of human beings.” Dignity also prohibits the “arbitrary infliction” of punishment and requires social acceptance for a sanction to be just. Finally, Justice Brennan wrote, punishment “must not be excessive,” for it violates “human dignity” to impose one punishment when an adequate and more moderate alternative exists. Justice Brennan’s voice was not the only one in Furman v. Georgia, but his reasoning reflects a key feature of dignity’s treatment in the law. In this opinion, a moment when dignity did some of its heaviest lifting, the concept was less a quality of personhood than a principle of governance. Dignity is neither clearly defined nor especially tied to human nature in the Supreme Court’s analysis of the death penalty. Instead, the term grounds a particular vision of political organization. Justice Brennan derived from dignity the values of moderation, democratic participation, and consistency in the application of law. His opinion, and others that have followed it, repeatedly stated that dignity requires “civilized” societies to constrain punishment. Justice Thurgood Marshall used similar diction, condemning the death penalty as a punishment inconsistent with “practices of other civilized nations of the world.”

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  Causes of the Financial Crisis and Causes of Citizen Resentment in Europe: What Law Has to Do with It

  Mattias Kumm

  The structure of financial flows in Europe, organised as inter-state transfers tied to demanding austerity conditions through the ESM mechanism, are in part responsible for resentment and backlash against the European Union by citizens. Such a structure also helps to sustain a misguided narrative about the nature of the crisis, wrongly suggesting that virtuous states are bailing out profligate ones. The central cause for the crisis in Europe is not an undisciplined spending by profligate states, but the asymmetric structural symbiosis between states and banks. Even after the reforms undertaken, states remain lenders of last resort for banks and banks remain lenders of last resort for states. Even though Draghi's daring policies have contributed significantly to loosening that link, that symbiotic relationship must be further loosened. Banks must be regulated in a way that ensures that the financial sector does not depend on massive tax-payer financed transfers in times of crisis. The reforms undertaken in the past years gesture in the right direction but often remain ineffectual or cosmetic at best. Furthermore, the public costs of bank-bailouts are to a significant extent the result of genuinely European risks, for which it would be appropriate to hold the European Union as a whole accountable. The mechanism through which to organise this European responsibility should not be inter-state transfer mechanisms, such as those foreseen by the ESM. Particularly after the establishment of a Banking Union with the ECB playing a significant supervisory role this money should be paid for by genuinely European funds, raised by European taxes or levies.

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  Global Constitutionalism and the Rule of Law

  Mattias Kumm

  The rule of law is a political ideal whose widespread political endorsement across the globe is complemented by a great deal of disagreement about its content. That disagreement is not only a function of different legal traditions emphasizing different elements as central to the ideal, reflecting particular institutional and ideological histories. Scholars also debate more generally whether the rule of law is a thin ideal, focused primarily on formal features of the law, perhaps complemented by certain minimal institutional requirements, or whether it is a thicker ideal, including further commitments to democracy and human rights. These disagreements, I argue, are ultimately about the nature and moral point of the rule of law as an ideal. In order to gain a better understanding of what is distinctive about the rule of law as an ideal in the constitutionalist tradition, what is at stake in these disagreements and how best to resolve them, the following first engages in a ground-clearing exercise and negatively distinguishes and contrasts the rule of law to three related but distinct ideas: the rule by law, the rule of men (or persons), and the rule of reason. Then the chapter spells out in more detail a positive conception of the rule of law tied to global constitutionalism, again proceeding in three parts. First, it reaps the fruits from the ground-clearing exercise and describes the ideal of the rule of law in general conceptual terms clarifying its moral point: The rule of law is an ideal that is focused on the conditions that law must fulfill in order to actually have the authority it claims to have. Second, it lays out what that means in more concrete terms in terms of domestic constitutional requirements, before describing some of its implications for critically assessing and progressively developing the global legal order.

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  Is the Structure of Human Rights Practice Defensible? Three Puzzles and Their Resolution

  Mattias Kumm

  The dominant form of global human and constitutional rights adjudication is characterized by three striking yet puzzling features. First, the scope of legally recognized human rights is not narrowly focused on things fundamental or basic to human existence, but extremely broad (call this the problem of rights inflation). Second, most rights may be limited by measures that meet the proportionality requirement, thereby appearing to undermine prominently made claims that rights are trumps or fire walls that have priority over competing policy concerns (call this the problem of casual override). And third, notwithstanding the claim that human rights are universal, the kind of things that can be found on lists in international, regional or national human rights documents vary considerably between jurisdictions and instruments. And even when provisions are worded similarly, they are often interpreted differently in different states (call this the problem of variance). In the following I will show how each of these structural features of human rights practice is connected to a distinctive moral point. Gaining a clearer understanding of each of these moral points and elucidating how they relate to one another is an important step towards the development of a more comprehensive theory of human rights. These three structural features work together to establish a practice that reflects not only a particular conception of human rights, but more generally a particular conception of law and politics: Politics is the practice of rights-based justice seeking among free and equals under conditions of reasonable disagreement. Law is the authoritative resolution of questions of justice by norms, which in terms of the procedures used to generate them and the outcomes produced are demonstrably justifiable to those addressed in terms that free and equals might reasonably accept. The structure of human rights adjudication is geared towards establishing whether or not a particular legal norm burdening an individual can be demonstrably justified to that individual under this standard. In this way human rights operationalize what Rainer Forst has called the right to justification,1 and is at the heart of a non-domination-oriented conception of law and justice. If an account along these lines provides the best justification for the practice we have, we have not only gained a deeper moral appreciation of human rights practice such as it happens to be. We are also in a better position to interpret, and progressively develop, that practice in a way to better help it realize its moral point.

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  Environmental Law and Economics

  Michael A. Livermore and Richard L. Revesz

  This chapter begins with a brief general overview of the economics of environmental law. It then focuses on recent developments in the field of environmental law and economics, with an emphasis on the experience of the United States. When setting environmental policy, decision makers must address two general types of questions. The first concerns the ends of environmental policy, and examines the socially desirable level of environmental quality. The second type of question concerns the means of policy making and focuses on the types of regulatory instruments that will be used and the allocation of responsibility between governmental actors. Section 2 addresses the first type of question concerning the goals of environmental policy. Sections 3 and 4 address the means of environmental policy, focusing on instrument choice and jurisdictional allocation, respectively.

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  Economics of Ancient Legal Systems

  Geoffrey P. Miller

  The economic analysis of ancient legal systems is fundamentally similar to the economic analysis of modern law. The researcher observes a data set of legal materials and seeks to explain its features based on a model of human action. If the analysis is successful, it could enhance the understanding of phenomena that are poorly explained by other approaches. Certain features of ancient legal materials, however, constrain economic analysis and require modifications to the methodology. Three differences are most salient: the sources of data available to the researcher; the assumptions that the researcher brings to bear in analyzing the data; and the techniques of validation available to confirm or disconfirm theoretical hypotheses. This chapter discusses how economic analysis is conducted subject to these constraints as well as applications of economic analysis of ancient legal systems.

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  Forensic Evidence

  Erin E. Murphy

  The field of forensic science has come under increasing scrutiny in the past decades. DNA-exoneration cases revealed the pervasive problem of misuse of forensic evidence, blue-ribbon panels of experts have critiqued common methods of forensic science as fundamentally unsound, and a series of laboratory scandals have called into question the integrity of the institutions and actors who deliver forensic findings. Although this attention reveals a system of scientific evidence that is badly broken, the body of scholarly and governmental criticism of the field, along with innovations and expertise at the state and national level, offer clear pathways to reform. This chapter aims to distill that wide body of work into a broad diagnosis of the problems presented in the current state of forensic science, and synthesize some of the best and most promising proposals for reform.

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  Democratic Accountability and Policing

  Maria Ponomarenko and Barry Friedman

  Reforming Criminal Justice is a four-volume report meant to enlighten reform efforts in the United States with the research and analysis of leading academics. Broken down into individual chapters—each authored by a top scholar in the relevant field—the report covers dozens of topics within the areas of criminalization, policing, pretrial and trial processes, punishment, incarceration, and release. The chapters seek to enhance both professional and public understanding of the subject matter, to facilitate an appreciation of the relevant scholarly literature and the need for reform, and to offer potential solutions. The ultimate goal is to increase the likelihood of success when worthwhile reforms are debated, put to a vote or otherwise considered for action, and implemented in the criminal justice system. In this way, Reforming Criminal Justice hopes to bridge the gap between scholarship on the books and legal reform on the ground. The report is the culmination of a yearlong collaboration by the Academy for Justice, a loose-knit coalition of dozens of criminal justice scholars. The group’s title carries two meanings: [1] the work-product is from the “academy” (i.e., the professoriate) in its attempt to contribute to criminal justice reform; and [2] the endeavor might lead to the creation of an “academy” (i.e., a real or virtual institution) concerned with justice issues. Although the Academy for Justice may well become a platform for future projects, for now at least, it is simply a vehicle for the report.

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  China's Changing Property Law Landscape

  Shitong Qiao and Frank K. Upham

  The last four decades have seen fundamental changes in Chinese property law. The decrease in centralized control, the individualization of agricultural land use, and the rise of urban real estate markets have re-made the legal landscape to the point that the casual observer might assume that the past is not only gone but irrelevant. That would be a fundamental mistake. To understand the current situation, to predict the future, or to appreciate the comparative implications of Chinese land law one must recognize not only what has changed but also understand the historical features that underlie contemporary law and policy. The first and most striking feature from a comparative perspective has been that law serves as the final confirmation of policy reforms, rather than the precondition of the reform. Law’s role has stayed marginal and nominal to a great extent. Whether a policy initiative will be fully implemented depends not on law, but on the social and political contexts. The Household Responsibility System (HRS), for example, which liberated Chinese farmers to produce for themselves on individually allocated plots of land, was initiated by the practices of villagers, in particular those in Xiaogang Village of An’Hui province, in the early 1980s, and this system was not written into law until a 1993 constitutional amendment, by which time the system had been fully operational across the country for several years. The transfer of rural contract land, on the other hand, shows the converse: that law alone is insufficient to change social behavior. The 2002 Rural Land Contract Law allowed the transfer of rural contract land, but more than a decade later only about a quarter of rural contract land had been transferred, and small family farms are still the mainstay of China’s agricultural sector. In fact it was not until 2004 that China constitutionally recognized private property and 2007, almost three decades after a thoroughgoing market reform premised on the free exchange of private economic assets, that the National People’s Congress enacted the Property Law and fully legitimated the private property rights that were the foundation of the reform. The second fundamental point about Chinese land law is that there is no individual ownership of land. Land either belongs to the state, i.e., literally ‘all the people’, or to the collective in which it is situated. In general, this division corresponds to urban versus rural land, meaning that land within city boundaries is state owned and land outside is owned by the farming village as a collective entity. While the granting of long-term land use rights has led to vibrant urban real estate markets and fantastically rich real estate developers who make million-dollar donations to the American universities that enroll their children, the underlying ownership structure matters, and it matters even more in the countryside, where village collectives play a role beyond nominal owners, in particular in the situations of rural land expropriation. The third historical feature, the radically different treatment of urban and rural land, grows out of the second and is the source of one of the most pressing social issues facing Chinese leaders. While the underlying distinction between allodial ownership and long-term usufruct rights lurks in the background, urban land use is regulated in a manner and substance fundamentally similar to cities in Western Europe, North America, or the rest of Northeast Asia. Height, density, and use restrictions abound; governments expropriate2 urban land use rights and buildings for projects in the ‘public interest’ with consultation and compensation for displaced residents; and private real estate developers with close ties to public officials often succeed in getting the government to stretch the definitions of public interest, consultation, and compensation beyond recognition. The difference between, e.g., New York and Shanghai is the speed of urbanization and the strength of civil society and legal institutions, not the fundamental nature of legal norms. Chinese cities are growing at rates unseen in the developed world, and the relative weakness of both civil society and judicial institutions has meant that residents’ property rights in action often are a pale shadow of their legal entitlements. The relative weakness of formal property rights does not mean that they are powerless, however. Litigation against real estate developers can on occasion delay dispossession or increase compensation and the rhetoric of property rights can put political pressure on local governments to respond (Qiao, forthcoming). In other words, the treatment of urban land law is recognizable; rural land law is a different animal altogether. In an attempt both to ensure food self-sufficiency and provide a social safety net for rural-to-urban migrants, rural land can only be used legally for agricultural purposes and alienability is limited. To convert to other uses, a local municipality must formally expropriate the land, thereby transforming it from rural collective ownership to urban state ownership. It is illegal for either a farm household or a village collective to use the land for urban purposes or to transfer use rights or ownership to others for such use. In the depths of the countryside, this policy may be neither necessary nor problematic, but rapid urbanization has created extreme economic and social pressure to expand municipal boundaries. For policy and budgetary reasons discussed below, however, local governments have used their eminent domain power sparingly, and many times without seeking the required approval from the provincial or central government, resulting in massive illegal land use. As a result of these three characteristics, Chinese land law poses two related challenges to conventional property theory. First is one of the rarely questioned verities of economic theory: that clear, secure, and judicially enforceable property rights are an essential – perhaps the most essential—prerequisite to economic growth. The second question grows directly out of the first. China’s growth has not been the result of a gentler version of Stalin’s forced savings of the first half of the last century. It has come through voluntary market exchange on a massive scale, and in this sense fully vindicates economic theory. The challenge is to understand how these markets—in our case, the real estate market—operate without a well-functioning legal framework considered necessary for Coasian bargaining. While a fully satisfactory explanation of these two questions is well beyond the scope of this chapter, we will return to them in the Conclusion to begin, if not complete, the inquiry. This chapter proceeds as follows. Section 1 recounts the history of Chinese land law from the founding of the People’s Republic up to the present, including the constitutional and statutory emergence of private property and the framework of contemporary land law with a focus on the separation of land into urban and rural regimes. Section 2 explains the doctrinal framework for the annexation of farmland into growing cities and explores the financial, political, and social roles of the expropriation process within local governments and how disputes over land have become the greatest source of social conflict in China today. Section 3 presents and explains possible government responses to the development of an illegal market known as ‘small-property rights’ in which rural individuals and collectives ignore legal prohibitions and transfer or directly develop agricultural land for urban uses. Section 4 reviews the prospects for rural land reform in China, addressing the three most pressing issues: the transfer of agricultural land, the expropriation of rural land, and the possibility of granting individual farm households and/or village collectives the legal right to develop and sell their real property for non-agricultural use. Section 5 concludes by revisiting the theoretical and comparative issues raised by the changing landscape of Chinese property law.

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  Cost-Benefit Analysis of Financial Regulation: An Institutional Perspective

  Richard L. Revesz

  Recent legal scholarship has focused on the feasibility of performing quantified cost–benefit analysis of financial regulations. An issue of the Yale Law Journal, published in January 2015, compellingly presents the competing positions. John C. Coates IV conducted case studies attempting to apply cost–benefit analysis to six representative financial regulations and concluded that “precise, reliable, quantified” analysis is currently “unfeasible” and as such there should be a moratorium on new cost-benefit requirements until agencies boost their analytical capacities. Eric A. Posner and E. Glen Weyl rebut Coates’s arguments that the financial sector poses a unique challenge for cost–benefit analysis and argue that the nature of finance actually makes it highly suitable for quantified analysis. Similarly, Cass Sunstein argues that “[t]here is no obvious reason . . . that financial regulation cannot be subject to [cost–benefit] analysis.” This chapter focuses on the institutional issues underlying this debate, arguing that the current structural arrangements for conducting cost–benefit analyses of financial regulation are clearly suboptimal. The independent agencies that have primary responsibility for financial regulation lack the capability to conduct cost–benefit analyses of the quality that is commonplace in the Executive Branch, in part as a result of the role of the Office of Information and Regulatory Affairs (OIRA). The shortcomings of the cost–benefit analyses prepared by the financial regulatory agencies are ominous in light of the Supreme Court’s recent decision in Michigan v. EPA. In this case, the Court invalidated a rule by the Environmental Protection Agency (EPA) on the ground that the agency had not considered costs in making the statutory determination that the rule was “appropriate and necessary.” These terms are commonplace in statutes that delegate rulemaking authority to financial regulators. For example, the governing statute of the Securities and Exchange Commission (SEC) requires agency rulemakings “to consider or determine whether an action is necessary or appropriate in the public interest.” Similarly, the Dodd–Frank Wall Street Reform and Consumer Protection Act uses “necessary or appropriate” or “necessary and appropriate” language eighty times in a variety of contexts. As a result, the requirement that the financial regulatory agencies engage in cost-benefit analysis is now likely to become more prevalent. Focusing on the institutional reforms necessary to improve the quality of the cost–benefit analyses performed by financial regulatory agencies is therefore an important challenge for the administrative state. Section I uses three case studies to illustrate the shortcomings of independent agencies with respect to cost–benefit analysis. The first involves efforts by the Nuclear Regulatory Commission (NRC) to update its estimate of the Value of a Statistical Life (VSL). The other two deal with key financial regulators: the adoption by the SEC of OIRA’s approach to cost–benefit analysis, though only after having some significant regulations struck down by the D.C. Circuit; and the request by the Commodity Futures Trading Commission (CFTC) that OIRA provide it with technical assistance. Section II focuses on institutional changes designed to improve the quality of the cost–benefit analyses prepared by the financial regulatory agencies. Possible improvements include expanding the role for the Financial Stability Oversight Council (FSOC), granting OIRA a formal role in the review of the cost-benefit analyses supporting regulatory action, and enhancing the economics capabilities of individual agencies. In each of these cases, the Executive Branch provides good models for independent agencies to emulate. I am honored to have been invited to prepare this chapter for a conference honoring the work of Jerry L. Mashaw. Like much else in modern American administrative law, the themes in this chapter were explored by Professor Mashaw decades ago. For example, in Improving the Environment of Agency Rulemaking: An Essay on Management, Games, and Accountability, he stressed the “need to reconsider the structure of agency rulemaking as a mechanism of governance,” separate from its “substantive effects in particular instances.” In this connection, he urged a shift “toward macro-political accountability for bureaucratic policymaking,” as in the form of “structures that placed policy accountability clearly at the doorstep of the Chief Executive,” and lamented that “Congress seems destined . . . to leave the independent agencies outside the ambit of any accountability structure.” Professor Mashaw defined an extraordinary rich agenda for academics to follow.