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  Judicial Organization and Administration

  Lewis A. Kornhauser

  Volume 8 to Encyclopedia of Law and Economics, Second Edition. With contributions from some of the leading scholars in law and economics, this comprehensive book summarizes the state of economic research on litigation, procedure and evidence. Among the topics covered are the settlement negotiations; discovery; the incentive to sue; theories of legal evidence; evidentiary misconduct; and the privilege against self-incrimination. Procedural Law and Economics will be a valuable reference tool for academics and post graduate students in law, business, and economics. Anyone with a general interest how legal process does and should work will also find much to interest them in this book.

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  Alexy’s Theory of Constitutional Rights and the Problem of Judicial Review

  Mattias Kumm

  In A Theory of Constitutional Rights Robert Alexy provides an account of the structure and domain of constitutional rights. The core claim relating to the structure of rights is that constitutional rights are principles and that proportionality analysis is necessarily at the heart of reasoning about what principles require in real contexts. The core claim relating to the proper domain or scope of rights is that there are good grounds for recognizing a general right to liberty and a general right to equality. A conception of rights that shares these two features defines what I will refer to in the following as the ‘Rationalist Human Rights Paradigm’ (RHRP). Both features raise controversial questions and have been the focus of considerable debate. For the purpose of this chapter I will leave those debates aside and simply assume that these features correctly describe normatively attractive and widespread features of constitutional rights practice in liberal democracies. The focus here is on the institutional question: if rights do have the structure and occupy the domain that Alexy suggests, what is the justification for courts setting aside legislation in the name of adjudicating rights? That question is tied to the classical chestnut of an issue that is the legitimacy of judicial review. But it becomes more focused and specific when tied to the particular theory of rights that Alexy defends. The structure of a theory of rights has direct implications for the understanding of the practice of judicial review. What then are the specific problems and best justifications of a practice of judicial review that embraces the RHRP? I will address that question in three steps. In a first step I will seek to deepen the puzzle and illustrate the counterintuitive nature of judicial review that has such a structure. Given the nature of questions that the judiciary must address when applying the proportionality test, and given that a right to liberty and equality are implicated in most of what public authorities do, such a choice seems to raise serious concerns relating to both democratic legitimacy and institutional competence. In a second step I will describe and assess the way Alexy addresses these issues in a recent article in ICON. I will argue that, notwithstanding some necessary clarifications and qualifications, he succeeds in establishing that judicial review is in principle compatible with representative democracy. But he does not succeed in making an affirmative case for judicial review. In order to make that case, Alexy’s account needs to be complemented by other arguments. In a third part I will develop the broad outlines of an affirmative argument for judicial review. At the heart of the affirmative case for judicial review is the claim that it institutionalizes a liberal right to justification.

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  Rethinking Constitutional Authority: On the Structure and Limits of Constitutional Pluralism

  Mattias Kumm

  It is widely recognized that European constitutional practice has a pluralist structure. The legal orders of Member States are not hierarchically integrated into the European legal orders. Instead, from the point of view of Member States’ highest courts, the status of European Union law is a matter to be determined with reference to national constitutional norms. The relationship between the European legal order and the legal orders of Member States has been the focus of much writing on pluralism in he European Union. What the recent Kadi decision has clarified is that—according to the European Court of Justice (ECJ) and in contrast with the position of the European Court of First Instance (ECFI)—the relationship between the European legal order and UN law should also be conceived in pluralist terms. The ECJ has insisted that the EU legal order is not hierarchically integrated into an international legal order, in which UN law supersedes all other Treaty law as established by Article 103 UN Charter. Instead, EU law determines on its own terms the conditions under which UN resolutions may be enforced by European law. The legal orders established by Member States, the European legal order and the international legal order are thus, from the perspective of the highest courts of the respective legal orders, to be conceived as distinct and separate legal orders that are not hierarchically integrated in the more encompassing legal order. The Kadi decision is an invitation to deepen questions relating to legal pluralism, by focusing not just on familiar terrain of the relationship between EU law and the law of Member States, but also the relationship between EU law and UN law. Generally, there are two jurisprudential questions that a pluralist legal structure raises. The first concerns the management of the interface between pluralist (non-hierarchically integrated, heterarchical) legal orders and has been the focus of a great deal of scholarly attention in the context of the relationship between EU law and national law. If different legal orders find themselves in a non-hierarchical relationship to one another, how should they manage their relationship to one another? In recent years commentators have pointed out that, notwithstanding the pluralist nature of legal practice, the relevant actors—and courts in particular—have established mechanisms and designed doctrines that allow for constructive mutual engagement between different legal orders. Joseph Weiler, for example, has pointed to the constitutionally tolerant nature of Member States’ engagement with European law and has identified in that tolerance the normative core of the European integration project. On a doctrinal level Miguel Maduro has described the ‘contrapuntal’ nature of the interaction between the ECJ and Member States’ courts. And this author has argued that the doctrines typically used by national courts can be reconstructed as the result of applying constitutional principles that are shared across legal orders in Europe to questions of conflicts between different legal norms. Legal pluralism in Europe is thus guided, constrained and structured in a way that might justify describing that practice in constitutional terms, even in the absence of hierarchical ordering conventionally associated with constitutionalism.5 These authors—and others—have provided an account of the relationship between different legal orders that clarify how legal coherence is possible even absent hierarchical integration. The idea of constitutional pluralism carves out a third way of conceiving of the legal world between hierarchical integration within one legal order on the one hand and a deep pluralism on the other, where actors of each legal order proceed without systemic regard for the coherence of the whole. Authors addressing the Kadi decision from this angle, as Grainne de Búrca and Daniel Halberstam together with Eric Stein to some extent do, analyse whether the ECJ or at least the Advocate General’s opinion has appropriately engaged and taken into account the prerogatives of the international order when articulating its position and what exactly that might mean in practical terms under the circumstances. The following will leave these questions aside.

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  The Idea of Thick Constitutional Patriotism and its Implications for the Role and Structure of European Legal History

  Mattias Kumm

  A sense of cohesion grounded in a common identity is widely believed to be a prerequisite for a functioning democratic European polity. If the European Union is to master successfully the tasks assigned to it in the Constitutional Treaty and, using a non-consensual procedure, decide on policies that concern the security of its citizens or have significant distributive effects, then a sufficiently thick common identity is believed to be necessary both to legitimate and to ensure the functioning of the polity in the long term. There is little doubt that such an identity is currently missing. The question is what such an identity should be and whether the political pre-requisites for the development of such an identity exist. Are there historical experiences and accomplishments that enable European citizens to understand themselves as having suffered a common past and which animate them to see themselves engaged in the construction of a common political future? What are the appropriate narratives around which a European identity could, over time, develop? What should the focus of a self-conscious politics of memory be? What are the implications for the role and structure of European historiography, in particular for the European legal and political historiography? One well-known answer to this question is that the basic principles of the liberal democratic constitutional tradition should be understood as the focal point for the development of such a common identity. The constitutional commitment to human rights, democracy and the rule of law. In short, constitutional patriotism could be the basis for a common European identity.

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  The Moral Point of Constitutional Pluralism: Defining the Domain of Legitimate Institutional Civil Disobedience and Conscientious Objection

  Mattias Kumm

  This chapter offers a new interpretation of the well-known “pluralist” constitutional theory of the European Union. It first discusses the structure, implications, and shortcomings of two widely endorsed theoretical frameworks used by different courts at different times that are incompatible with constitutional pluralism properly so-called: Democratic Statism and Legal Monism. After analyzing the structure of these positions and their implications for conflict between legal orders, the chapter briefly describes the contours of a so-called Constitutionalism. Constitutionalism is the name of a conceptual framework that can help make sense of the idea of constitutional pluralism both analytically and normatively, while also being able to generate an account of the conditions under which hierarchical integration is preferable to pluralism.

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  Constructing Commons in the Cultural Environment

  Michael J. Madison, Brett M. Frischmann, and Katherine J. Strandburg

  We are poised between an old world that no longer works and a new one struggling to be born. Surrounded by centralized hierarchies on the one hand and predatory markets on the other, people around the world are searching for alternatives. The Wealth of the Commons explains how millions of commoners have organized to defend their forests and fisheries, reinvent local food systems, organize productive online communities, reclaim public spaces, improve environmental stewardship and re-imagine the very meaning of “progress” and governance. In short, how they’ve built their commons. In 73 timely essays by a remarkable international roster of activists, academics and project leaders, this book chronicles ongoing struggles against the private commoditization of shared resources—often known as market enclosures—while documenting the immense generative power of the commons. The Wealth of the Commons is about history, political change, public policy and cultural transformation on a global scale—but most of all, it’s about individual commoners taking charge of their lives and their endangered resources.

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  Financial Private Regulation and Enforcement

  Geoffrey P. Miller

  The topic of financial private regulation and enforcement concerns the activities of private firms in the financial sector which are involved in cross-border activities – Citigroup, Bank of America, HSBC, UBS, JPMorgan Chase, RBS, BNP Paribas, Barclays, Morgan Stanley, Goldman Sachs, Deutsche Bank, HBOS, Société Générale, Banco Santander, American Express, Nomura, and so on. For convenience of reference, I will refer to this type of organization as an ‘internationally active financial services firm’ (IAFSF). This chapter will categorize different types of private regulation and enforcement applicable to IAFSFs and then offer some tentative thoughts about the underlying forces that may determine the phenomena under observation, with special reference to the HiiL Concept Paper, ‘The Added Value of Private Regulation in an Internationalised World? Towards a Model of the Legitimacy, Effectiveness, Enforcement and Quality of Private Regulation’. The principal subject of investigation will be the activities of IAFSFs under US law, but attention will be given to international standards and regulations as well.

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  DNA and the Fifth Amendment

  Erin E. Murphy

  Bill Stuntz caused me trouble for as long as I can remember. He first caused me trouble as a young lawyer, because as a public defender I had grown pleasantly accustomed to throwing constitutional rights at all the perceived ills of the criminal justice system. You know that old saw, “when all you have is a hammer, everything looks like a nail”? Well, to a public defender, every problem looks like a potential motion. To thus be told that in fact it was my motion that was the problem—well, that was disconcerting. Reading Bill Stuntz’s work may have convinced me to put down my hammer, but it left me wanting to reach for a match. Fortunately, I managed to overcome such destructive impulses and joined academia in order to think constructively about the criminal justice system. Unfortunately, that just brought me to my second problem with Stuntz, which is the one that I encountered as a young scholar and continue to encounter even today. That problem is this: Every time I think I have some new idea or path-breaking original thought, I do a little research only to find that Bill Stuntz already had the same realization years earlier and, worse yet, published something about it. In fact, he usually wrote better, more clearly, and with more nuance and careful understanding than I ever could. But it was always hard to become too upset, since if I had to get scooped, I cannot think of a nicer or smarter person to claim as having preempted me. In all fairness, though, I must also admit that, in true Stuntzian fashion, the trouble that he caused me as a public defender and as an academic also served to lift me up in both professions. As a young practicing lawyer interested in pursuing an academic career, reading his work helped to affirm for me that my two paths were not incompatible—that it was possible and even desirable to be a scholar deeply invested in questions related to how criminal justice actually works in the real world. And as an academic, I have countless times relied on his insight to guide me in the exploration and development of my own thoughts about the criminal justice system. It is these two lessons—now legacies—of Bill Stuntz’s that I keep in mind as I turn to an emerging issue particular to my own research: namely, the problem of genetic evidence in the criminal justice system, with specific emphasis on its relationship to the Fifth Amendment. This chapter begins with an overview of the relationship between DNA and Fifth Amendment doctrine today, which could really be summed up quite briefly in three words: There is none. But I will proceed by urging one way in which a link might be forged, which is through an analogy to the compelled documents cases. The chapter concludes by acknowledging that, yet again, Bill Stuntz is causing me trouble, because the two major arguments against such an approach—both of which I find entirely persuasive—come directly from him.

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  Institutions and the Demands of Justice

  Liam B. Murphy

  This chapter discusses the A Theory of Justice John Rawls writes that "justice is the first virtue of social institutions." It presents the all fundamental normative principles that apply to the design of institutions apply also to the conduct of people. The chapter suggests that Rawls understands contract and property law and the background institutions of taxation and transfer as together belonging to the one structure that should be evaluated as a whole by principles of justice. Gerald Cohen's incentives argument was intended to show that Rawls's own account of justice, properly interpreted, tolerated far less inequality than Rawls and others had supposed. He notes that Rawls sometimes lists the institution of the family as part of the basic structure. The standard way of thinking about the problem of what are reasonable moral/political demands focuses on the cost or sacrifice imposed on complying agents.

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  Elections

  Richard H. Pildes

  Legitimate elections are not sufficient to ensure democracy, but they are its most necessary condition. Regular and genuine elections remain the primary institutional mechanism through which rulers are made accountable to those in whose name they exercise political power. We can envision elections without democracy (indeed, we have plenty of experience of exactly that), but it is difficult to envision modern democracy without meaningful elections. Yet if elections are central to democratic systems of governance, the precise ways in which elections and representative institutions are structured vary greatly across democratic countries. At a high level of generality, a consensus exists regarding the minimal conditions under which elections must take place to be legitimate, such as a broadly distributed suffrage among citizens, the right to speak freely about political matters, the right to form political associations, including political parties, and the right to run for office. But no broad consensus exists on the relationship between democracy, elections, and the forms that political structures must take for countries to be ‘democratic’. Some democracies use first-past-the-post elections, others use proportional representation; some are parliamentary systems, others presidential systems; some democracies view separated legislative and executive powers as central, others do not; some democracies have bicameral legislatures, others, unicameral. In addition, different democracies have dramatically different institutions for overseeing the electoral process and disputes concerning elections. Through constitution or statute, some countries expressly create various independent institutions to oversee and preserve the workings of the electoral process. Other countries leave these issues to be addressed by the ordinary institutions of government, whether courts or political institutions. In some countries, election districts are designed by sitting legislators; in other countries, by independent commissions. Comparative assessment of democracy and elections can thus focus at any of many different levels. It can focus on questions of institutional design; some studies, for example, offer typologies that compare the design of democratic institutions, with an emphasis on questions such as the extent to which different systems permit simple majorities to authorize action or require broad consensus (across groups and interests) to do so. Comparative studies can instead attempt to assess the policy consequences of different ways of organizing elections and institutions. Within political science, for example, a great deal of literature exists trying to assess the comparative performance of presidential versus parliamentary systems, particularly with respect to their stability or risk of lapsing into authoritarian rule. Other social scientists seek to explore how policy outcomes are affected by the particular design of democratic institutions—for example, whether the size of election districts affects the extent of political corruption or policies concerning economic growth. Or comparative analysis can focus on the level of policy, such as by comparing legislatively adopted rules regarding matters such as who is eligible to vote, what preconditions to voting must be met, including voter registration issues, and the like. This chapter will focus on comparative discussion of the issues surrounding elections that have tended to come before judicial institutions. Over the last generation, we have witnessed what I elsewhere have called ‘the constitutionalization of democratic politics’. Starting with the US Supreme Court’s one-person, one-vote decisions in the 1960s, and accelerating greatly over the last 20 or so years, courts throughout the world have become more and more actively engaged in evaluating the design of democratic institutions and processes. Court decisions now routinely engage certain expressive aspects of democracy and elections, such as who should be understood to have the right to participate, and can also have significant instrumental consequences on the ways in which democracies function, such as when courts determine what kinds of regulations of election financing are constitutionally permissible. In addressing various constitutional challenges to the way legislative rules structure democratic participation and elections, courts struggle to reconcile protection of essential democratic rights; the need to permit popular experimentation with the forms of democracy; the risk of political insiders manipulating the ground rules of democracy for self-interested reasons; and the need to protect democracy against anti-democratic efforts that arise through the political process itself.

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  The Legal Academy and the Temptations of Power: The Difficulty of Dissent

  Richard H. Pildes

  Academic institutions, in theory, should be among the most robust sites in which dissent against conventional or widely shared views of policy and law ought to find easy expression. Indeed, that has long been part of the justification for the general principle of institutional academic freedom that protects these institutions from certain types of political interference, as well as the justification for specific organizational features of the academy, such as tenure. On the surface, the costs of such dissent should be relatively minimal compared to those of dissent in other sites: few institutional structures exist within which potential dissenters are as structurally protected in their ability to form and express dissident views. Academics are not vulnerable, for example, to economic retaliation for the expression of their views. The benefits of dissent should also be large: academics have better access to platforms for recognition of their dissent than do many other potential dissenters. And when it comes to issues of politics—defined broadly and loosely as the substance of law and policy, or the design of governance, legal, and policy-making institutions—the legal academy ought to be a principal source of criticism, challenge, and reexamination of dominant or widely held orthodox views. Yet the legal academy is more compromised, and increasingly so, in its ability to play this role than I believe those in the academy or outside recognize. The reason has to do with the paradox of the relationship of legal academics to actual political power. Many legal academics directly study the substance of public policy or law, or the institutional contexts in which policy is made and implemented, such as agencies, courts, legislatures, or the executive branch. Thus, many legal academics develop precisely the expertise most relevant for challenging the processes, structures, and substance of law and policy. Yet unlike academics in most other disciplines (with the exception, perhaps, of economics), and certainly unlike most humanities academics, legal academics can, if they wish, have the opportunity, and often the reality, of effective influence over policy and law. They can do so directly by being appointed to office, including judgeships and executive branch positions. Indeed, when the Obama administration came to power, seven or so professors at Harvard Law School alone went into government. But even those who do not directly move back and forth between formal roles in government can become direct participants in the systems of government and litigation in ways few academics in other positions can. They might testify before Congress regularly as experts in a field. They might be involved in partisan political campaigns, where their expertise on policy can be much desired. They might sign amicus briefs to courts or otherwise be involved in the litigation process. Some legal academics, for example, are experts on class-action litigation and regularly provide strategic advice or participate as experts in these high-stakes, high-money contests. Others perform similar roles in areas like labor-management conflicts. Those who do so inevitably work always on one side or the other of these kinds of conflicts, given the importance the main players in these areas put on being on one side or the other of these conflicts. These various forms of practical engagement surely have enormous benefits, both in the classroom and in scholarship. But they also come with significant risks, including risk to the ability to play one of the most important roles that justifies academic institutions, the role of being able to stand apart from existing constellations of power or interest or conventional wisdom on issues of moment. In this chapter, I first identify the various ways in which the paradoxical position of the legal academic and the temptations of access to political and legal power threaten the ability of the legal academy to be a source of dissent, and then I explore how legal academics ought to think about the benefits and risks of the unique position of academics closely connected to the institutions and actors who wield actual political and legal power. This chapter is not intended to be a moralistic exercise, nor an exercise in criticism. I have participated in many of the forms of practical engagement I discuss. Instead, the chapter is meant to prompt self-reflection about how we ought to think about the appropriate role of legal academics and self-consciousness about the trade-offs and risks involved in practical engagement for a discipline so closely connected to political power and the centers of commerce in American society.

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  The Colombian Paradox: A Thick Institutionalist Analysis

  César Rodríguez-Garavito

  This chapter examines the “Colombian paradox”: the coexistence of fairly stable political, economic, and social institutions on the one hand and very high levels of violence and territorial fragmentation on the other. Against the opposite view, which holds that Colombia is a “failed state” with collapsed institutions, the studies show that there are strong institutional niches embedded in transnational processes of managerial and technological modernization. Moreover, Colombian organizations are simultaneously solid in the institutional centers and precarious in the economic, political, and social peripheries. Clientelism—a combination of proactivity and lack of bureaucratic rationality that has contributed to the modest performance of the Colombian economy—serves as a form of suboptimal equilibrium that sustains and reproduces this asymmetry.

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  Measuring Human Rights: UN Indicators in Critical Perspective

  AnnJanette Rosga and Margaret L. Satterthwaite

  This chapter discusses several efforts to use indicators within the law of international human rights. It identifies the criticisms made to these efforts, and states that there is an increasing potential for suitable tempered indicators to play valuable roles. It then takes a look at the project of the UN Office of the High Commissioner for Human Rights, which is aimed to create internationally-prescribed indicators for a number of primary UN human rights treaties. It determines that these indicators may help in addressing the concerns of the perceived legitimacy of the supervisory committees under these treaties. This chapter also suggests that indicators may play a role in assisting peoples and publics to use the kinds of pressures and constraints on governments that human rights advocates have long sought after.

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  Antitrust Damages

  Daniel L. Rubinfeld

  Antitrust private actions have been an important component of civil enforcement in the United States since the passage of the Clayton Act. Private actions have been seen, in combination with public enforcement, as a means of achieving an appropriate level of deterrence. However, they have also been viewed as a mechanism for compensating those who were injured by illegal anticompetitive activities. In recent years, private antitrust enforcement has been growing outside the United States. Such actions are now available in parts of Asia (e.g., Japan) and in England. Private actions will almost certainly grow throughout the European Union as well. To obtain a financial recovery in a private action, the plaintiff must prove three distinct elements: (1) an antitrust violation; (2) antitrust injury; and (3) damages—a measure of the extent of the injury. In this chapter, I focus entirely on the important third element—antitrust damages. While much of the analysis is conceptual in nature, the analytical details do depend on the institutional context in which damages are applied. Therefore, unless otherwise noted it will be presumed that we are operating within the US private civil litigation system. In order to pursue an antitrust case, the plaintiff must have been injured, i.e., have standing to sue. Under federal law, only direct purchasers have such standing. Direct purchaser suits can be brought through the class action mechanism or individually. When suits are brought as class actions, plaintiffs’ damage claims are based on alleged overcharges, which are trebled if liability is proven. Individual suits may claim either overcharges or lost profits. Indirect purchasers can sue, but only in states that have passed Illinois Brick ‘repealer’ statutes. By 2008, 35 states had done so. Almost all damage awards are paid in dollars. However, the vast majority of antitrust cases that continue beyond summary judgment motions settle. Furthermore, a substantial number of those settlements involve coupon payments as well as cash. Not surprisingly, the complexity of the US system of private antitrust enforcement raises many important but difficult damages-related issues. This chapter treats a number of those issues, some of which are explicitly normative and others of which are not. I begin in section II with an analysis of antitrust overcharges. I describe the primary approaches to the analysis of overcharges and offer commentary on those methods. In section III, I move to an analysis of lost profits as an alternative to overcharges. This leads naturally to a discussion of the deterrence as well as compensation goals of antitrust. Section IV focuses on indirect purchasers; I emphasize the importance of pass-through analysis in evaluating indirect purchaser damages. Finally, in section V, I describe and evaluate the use of coupons in lieu of cash in the settlement of antitrust claims.

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  The Story of FCC v. Pacifica (and Its Second Life)

  Adam M. Samaha

  To most people who teach and study FCC v. Pacifica Foundation, which upheld the Commission’s authority to regulate broadcast indecency, the decision probably seems ridiculous. Many view the result as too queasy about the word choices of social critics, and too comfortable with government regulators protecting mainstream audiences. Given a questionable evidentiary basis for the FCC’s child-protection mission, moreover, the principal function of the regulatory apparatus might be mollifying self-appointed representatives of polite society. Furthermore, the decision has an archaic quality. The 1973 radio broadcast of George Carlin’s Filthy Words routine rebuked by the FCC in 1975 and reviewed by the Supreme Court in 1978 is tame compared to readily accessible content in 2011. Originally, Carlin played with seven words on stage and on a vinyl album. Now, wherever internet access exists, he can be watched reading a list of over two-hundred filthy words from a long scroll. We cannot be confident, if ever we were, that the FCC can seriously affect the supply of indecent content, the demand for it, or the unwitting exposure to it. My own longstanding sympathies are with these views. As a child in the 1970s, I had access to a version of the Carlin routine that drew the FCC response in Pacifica. It was a cut on an album in my parents’ collection, and my brother and I had much of the routine memorized before either of us was ten years old. I have not been able to see my early interaction with Carlin’s routine as injurious. Quite the opposite. Many of my colleagues surely feel the same way about the value of such content. Nevertheless, the origins and outgrowths of Pacifica are worth another look. The Supreme Court’s work in that case was instigated and shaped by large-scale and persistently clashing societal forces. The 1970s might have been an acutely dramatic period of social convulsion and exhaustion, but similar episodes will recur. So, too, there always will be an avant-garde coupled with a reactionary culture. They depend on each other. And, oddly enough, the technological changes that make Pacifica seem dated could turn the tables on the case’s critics. The following chapter provides a background to Pacifica and some observations about its aftermath. The story is complicated. It involves brash content providers, conservative social movements, and shifting agency priorities, along with arguably manufactured controversies, backfiring lawyer strategies, and a surprise swing voter on the Supreme Court. Not all of the story can be told here. But I do hope to offer insight into the continuing and perhaps ironic significance of the case.

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  Rights-based Humanitarian Indicators in Post-earthquake Haiti

  Margaret L. Satterthwaite

  This chapter discusses the effects and operation of indicators that are used to guide and measure the work of humanitarian relief agencies in their on-the-ground operations in Haiti. It examines two major sets of standards that were used as a form of self-regulation by several groups of major international non-governmental organizations (NGOs)—such as the Sphere indicators—that are used by primary donors to guide certain decisions. This chapter also introduces the Sphere Handbook, which contains some regulatory silences.

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  Sexual Violence in Haiti’s IDP Camps: Survey Results

  Margaret L. Satterthwaite and Verrle Opgenhaffen

  Tectonic Shifts offers compelling on-the-ground perspectives on the aftermath of Haiti's cataclysmic earthquake. Following a critical analysis of the country's heightened vulnerability as a result of centuries of underdevelopment and misguided foreign aid interventions, the authors address a range of contemporary realities, foreign impositions, and political changes in the relief and reconstruction periods.

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  Taxation and the Financial Sector

  Douglas A. Shackelford, Daniel N. Shaviro, and Joel Slemrod

  In the aftermath of the 2008 financial crisis, a variety of taxes on financial institutions have been proposed or enacted. The justifications for these taxes range from punishing those deemed to have caused or unduly profited from the crisis, to addressing the budgetary costs of the crisis, to better aligning banks’ and bank executives’ incentives in the light of the broader social costs and benefits of their actions. Although there is a long-standing literature on corrective, or Pigouvian, taxation, most of it has been applied to environmental externalities, and the externalities that arise from the actions of financial institutions are structurally different. This chapter reviews the justifications for special taxes on financial institutions, and addresses what kinds of taxes are most likely to achieve the various stated objectives, which are often in conflict. It then critically assesses the principal taxes that have been proposed or enacted to date: financial transactions taxes, bonus taxes, and taxes on firms in the financial sector based on size, bank liabilities, or excess profits.

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  Income Tax Reform Implications of the Financial Crisis

  Daniel N. Shaviro

  Tax rules encouraging excessive debt, complex financial transactions, poorly designed incentive compensation for corporate managers, and highly leveraged homeownership all may have contributed to the financial crisis, but do not appear to have been among the primary causes. Even without a strong causal link, however, the pre-existing case for tax reform at all these margins arguably is strengthened by the 2008 financial crisis, which suggests that tax rules not only fell short of classic neutrality benchmarks but generally leaned in precisely the wrong direction.

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  The Financial Transactions Tax vs. the Financial Activities Tax

  Daniel N. Shaviro

  On her deathbed, Gertrude Stein reportedly asked ‘What is the answer?” but, upon hearing no reply, added “In that case, what is the question?”. In evaluating what new tax instruments, if any, to levy on the financial sector in the aftermath of the 2008 financial crisis, we would do well to emulate Ms. Stein's focus on the importance of what question is being asked. We need to know what purposes are to be served by a tax on the financial sector before we can evaluate how best to advance these purposes. The European Commission, in its recent proposal that the European Union adopt a financial transactions tax (FTT) that is directed mainly at secondary securities trading, is commendably clear about the general objectives that a financial sector levy might serve. It mentions (i) raising revenue, (ii) ensuring an “adequate (fair and substantial)” contribution from the financial sector, (iii) “reducing undesirable market behaviour and thereby stabilizing markets” and (iv) achieving coordination between different Member States' internal taxes. In my view, however, the Commission is less persuasive in arguing that these considerations support enacting an FTT—in particular, relative to the alternative it identifies, which would be to enact instead some variant of a financial activities tax (FAT), as recently proposed by the Staff of the International Monetary Fund (IMF). I will argue that the considerations identified by the Commission—some of which are more compelling than others—along with broader tax policy objectives, strongly support enacting an FAT, while raising serious questions about an FTT's desirability. Indeed, the case that a properly designed FAT is superior to the FTT is sufficiently compelling—not to mention unrebutted by the Commission's analysis—as to leave one wondering exactly why the Commission came out as it did. As for the FAT, which to date has been somewhat under-explained, I will expand on, and in at least one respect modify, the IMF Staff's analysis, while also suggesting criteria for choosing between the alternative versions that it describes. As it happens, however, there is potentially a decent rationale for enacting an FTT—albeit one that does not relate to extracting a “fair contribution” from the financial sector or easing the risk of another 2008-style economic crisis. Instead, this rationale relates to investors' incentive to seek trading gains at the expense of rival investors, whether by acting faster than their rivals on new information or by special talent (or luck) in “anticipating what average opinion expects the average opinion to be”. The competitive pursuit of trading gains can verge on being a zero-sum game. Moreover, even where some social benefit results from speeding the process whereby markets incorporate new information into asset prices, the private gain from being one microsecond faster than one's rivals may so greatly exceed this benefit as to make a tax on the activity potentially appealing—at least, if the substantial design obstacles that an FTT would face can be sufficiently well addressed to suggest that its good effects will likely outweigh its undeniable social costs. Given how little this possible rationale for an FTT has to do with the objectives identified by the European Commission, I believe that the “FTT or FAT” question is in a sense misguided. While an FAT should be enacted in any event, for reasons pertaining to the overall burden on financial sector actors and the incentives that they face, the case for a suitably redesigned FTT should rise or fall on wholly separate grounds, and largely without regard to whether an FAT is in place. The remainder of this chapter proceeds as follows. First, I discuss the FTT and FAT models that have featured in historical and more recent discussion, including by the Commission and the IMF. Second, I evaluate the objectives cited by the Commission, along with further relevant tax policy objectives, and assess their relevance to the "FTT vs FAT" choice. Third, I discuss the alternative rationale that potentially supports adopting an FTT. Finally, I offer a brief conclusion.

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  Enforcement and Recognition of Foreign Country Judgments in the United States

  Linda J. Silberman

  Transnational Joint Ventures features a collection of text, forms, and selected laws and regulations to help you in structuring joint ventures between U.S. and foreign companies. It contains country-specific information on: The European Union, Canada, China, Latin American countries and more. Highlights include an overview of transnational joint ventures, analysis of antitrust and tax considerations, and structuring the joint venture. It saves you time and money by identifying key issues in drafting international joint venture agreements.

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  Morrison v National Australia Bank: Implications for Global Securities Class Actions

  Linda J. Silberman

  Morrison v National Australia Bank, decided by the Supreme Court of the United States in 2010, is an important decision in a number of respects. It was the first United States Supreme Court case to address the extraterritorial reach of the United States securities laws, in particular, section 10(b) of the Securities Exchange Act of 1934. The Court’s invocation of the presumption against extraterritoriality had the practical impact of dramatically reducing the regulatory reach of the anti-fraud provisions of the United States securities laws and changing the landscape of United States class action litigation in the securities field. The decision has also invited renewed interest in analysing the appropriate reach of United States statutes in other areas. Because the 8-0 ruling was one of statutory interpretation only, it has left open the possibility for future legislation to extend the reach of the securities laws beyond the limits imposed in Morrison and the United States Congress has directed further study on that question.

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  Aggressive Interrogation and Retributive Justice: A Proposed Psychological Model

  Avani Mehta Sood and Kevin M. Carlsmith

  The use of aggressive interrogation techniques on terrorism suspects is typically justified on utilitarian grounds. This chapter presents evidence that those who support such techniques are actually fuelled more by retributive motives. One experimental study conducted with a broad national sample of US residents found that interrogation recommendations are more sensitive to manipulation of the target’s history of bad acts than to manipulation of his likelihood of useful knowledge. Moreover, the desire for harsh interrogation is largely isomorphic with the desire to punish, and both effects are mediated by the perceived moral status of the target. A second study demonstrated conditions under which nationality and geographical proximity of the detainee make a difference to interrogation and morality judgments. The implications of our results are discussed with regard to national policy on torture-interrogation.

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  The Intersection of Patent and Antitrust Law

  Christopher J. Sprigman

  Antitrust law’s treatment of potentially anticompetitive business conduct involving patents has oscillated between aggressive intervention and acceptance bordering on complacency. Pre-Chicago antitrust viewed patents as monopolies, and the exercise of patent rights as likely to raise antitrust concerns. This view led antitrust courts to construe the scope of patents narrowly, and to intervene to police licensing terms, price restraints, and other business conduct of patentees that might harm competition. It also led the federal antitrust agencies toward close policing of patent licenses. Following its Chicago reformulation, antitrust has slowly moved away from its former hostility. Some of this movement reflects a reappraisal of the respective roles that antitrust and intellectual property (IP) play in consumer and social welfare. By the advent of the agencies’ 1995 Antitrust Guidelines for the Licensing of Intellectual Property, the prevailing view had shifted markedly away from the presumed antagonism that characterized the patent-antitrust interface pre-Chicago. The IP Guidelines denied, at least implicitly, any foundational incompatibility, stating instead that ‘[t]he intellectual property laws and the antitrust laws share the common purpose of promoting innovation and enhancing consumer welfare’. Based in part on this shift in background presumptions, the IP Guidelines asserted that IP licensing was broadly procompetitive, and that the rule of reason would be applied in the antitrust analysis of licensing restraints. Influenced, undoubtedly, by these deep ideological shifts, the Supreme Court and the federal Circuit Courts are now well forward toward dismantling the structural elements of the earlier hostility. For example, in its 2006 decision in Illinois Tool Works, Inc. v. Independent Ink, Inc., the Supreme Court ruled that in a tying case the existence of a patent on the alleged tying product was insufficient, absent some other evidence that the defendant had power over price, to establish the market power predicate for tying liability. In so ruling the Court overturned its prior rule, in place since the 1947 decision in International Salt Co. v. United States, presuming that a defendant enjoyed market power in a patented tying product. Similarly, the Federal Circuit in CSU v. Xerox ruled that patent owners have a presumptive right to refuse to sell or license products incorporating the patented technology without fear of antitrust liability for unlawful refusal to deal. In so doing, the Xerox court created a special category within the antitrust law wherein refusals to deal in intellectual property are treated more leniently than refusals involving other forms of property. The continuing course of antitrust’s gradual liberalization respecting IP rights raises important questions. Has liberalization gone far enough? Has it gone too far? Unfortunately, we ask these questions against the backdrop of our continuing ignorance regarding the conditions conducive to innovation. Is innovation best encouraged by the spur of competition? Or by the shelter from competition that IP rights sometimes provide? This chapter will examine the most important recent and recurring issues at the intersection of antitrust and patent law, with the goal of assessing whether the development of the law is consistent with underlying economic principles.

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  Enforcement of Transnational Public Regulation

  Richard B. Stewart

  Enforcement of transnational public regulation is a vast topic. This chapter deals with selected aspects of the subject to focus on issues that are instructive, by way of comparison and potential synergy, with the issues of private transnational regulation that are the central concern of this volume. It addresses transnational regimes established by treaties among states, by agreements among international organizations (e.g. Codex Alimentarius), or by agreements among networks of government agencies and officials, aimed, directly or mediately, at coordinated regulation of private market actors’ conduct. It also considers the important role in enforcement of transnational regulatory administrative authorities established pursuant to such arrangements and the role of Global Administrative Law (GAL). Examples of the fields covered by transnational public regulation include environmental health and safety (‘EHS’), consumer protection, investment, financial products and services, intellectual property, and competition. Generalizing across such a wide variety of regimes and fields of regulation, presenting very different circumstances and considerations, is hazardous, but I will endeavor to provide a general framework. Because I am most familiar with EHS regimes and US law, many of the examples discussed herein will be drawn from them. The chapter does not deal with arrangements among domestic or transnational agencies for mutual recognition or recognition of regulatory equivalence. Because of the EC’s distinctive supranational legal and administrative structure, it does not treat the EC as a transnational regulatory regime. It does not deal with transnational liability regimes providing compensation for harms caused by private actors, although these may certainly have strong regulative effects. The chapter also does not address transnational application of one country’s regulatory or liability laws (including laws that may be based or are claimed to be based on global regulatory norms) to activities or actors abroad. Further, the chapter does not systematically address relations between transnational public regulation and transnational private regulation, including co-regulation and hybrid, nested, or coordinated public and private regimes, and the various ways in which they may be regarded as complements or substitutes.