Faculty Chapters

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  Rebuilding the Citadel: Privity, Causation, and Freedom of Contract

  Richard A. Epstein

  One of the fundamental choices that the law must make in dealing with physical and financial harm is whether to deal with these through the legal commands of the tort law or through the business arrangements of private contracts. The modern direction on this question has tended to displace contractual arrangements, which frequently impose sharp restrictions on the recovery of consequential damages, with tort rules that allow an injured plaintiff to recover the full measure of compensation for physical injury while allowing contractual limitations to control the recovery for financial loss. One theme of this chapter is that the structure of the arrangements in the two cases are sufficiently similar to undercut that distinction in ways that allow contract rules to govern in both settings. A second theme is to examine the decline of the privity rules, which traditionally allowed a purchaser to sue only his or her immediate vendor for various forms of harm. The original justification of privity was an effort to force distant parties, for example, manufacturer and consumer when there is an intervening retailer, to get into privity with each other. But the actual history is otherwise in that the principle of freedom of contract was largely rejected at the same time that the privity limitation was overcome: contracting was not possible even for parties in privity. Ironically, however, the privity limitation continues to play a role in a number of important contexts, environmental and financial losses, where unlimited liability is thought to be potentially ruinous.

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  The Economist in Spite of Himself

  Richard A. Epstein

  I chose this chapter's title in order to hint at the weakness of my credentials for being classified as a 'founder' of law and economics. In order to make out this negative claim, I shall have at times to be regrettably autobiographical in order to explain my own three-stage intellectual progression. The first stage was an initial hostility to the larger claims of law and economics. The second stage was a cautious conversion to its use. The third state, which reflects my current view, is that, properly understood, economics is indispensable both for work on a wide range of technical legal problems and for work in such collateral disciplines as legal history and moral philosophy. One reason for tracing the path of my own intellectual development is that, I suspect, it parallels the evolution of thought of many other individuals. Normative intellectual work requires a lot of trial and error in which theories that seem to give satisfactory answers in their initial areas of application work less well on matters somewhat further removed. In my case, this evolution of substantive views covers several key dimensions. The first shift involves what might be regarded as the locus of inquiry. Lawyers do not enter particular disputes as social planners. They are most likely to be called on to give advice when something has gone wrong: a contract has been breached; an injury has occurred. Their job is to figure out who is responsible for that loss by looking at the parties who are immediately involved in it. In many cases, it is to prevent cases of rank injustice, which should inspire sentiments of outrage and dismay. The case method of instruction, which is frequent in common law countries, only reinforces the view that lawyers get involved at the back-end of any transaction, where their role is to find a convenient, just or proper resolution to a particular dispute. That function is in conscious opposition to the desire to plan and shape the way in which people should conduct themselves in ordinary life. Today I think that this after-the-fact approach is incomplete for a number of reasons. First, lawyers do a large amount of planning of transactions for their clients, in which the objective is to avoid rather than to resolve disputes. That is why law schools offer courses in such subjects as business planning, estate planning, and land planning. Second, from a social perspective, any reasoned decisions in individual cases will do more than lay to rest particular disputes in the name of finality and social order. Judicial decisions do not consist solely of orders of who should pay whom or do or refrain from particular actions. Owing to the generality of their reasons, judicial opinions necessarily influence future conduct by other individuals in similar transactions. The legal analyst, therefore, has to learn to paint on a somewhat broader canvas than any initial preoccupation with troublesome disputes might otherwise suggest.

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  The Historical Variation in Water Rights

  Richard A. Epstein

  At the outset let me admit that I do not know anything about the peculiar rules of any regimes in water rights within 5000 miles of Australia. The systems that I understand are the American markets and the English markets, especially with regard to the influences that the latter have had in shaping the operation of the former. What I propose to do here therefore is to offer a complementary approach to the one provided by Freebairn in Chapter 2 of this book. I hope to explain how it is possible to work through all of the problems he identified, not so much via the modern system designs for the administrative state, but looking at the institutional origins and evolution of water law through three stages: at common law, through legislation, and then ultimately through constitutional challenge, which counts as the hallmark of the American system. Water rights, precisely because they are so difficult to calibrate and so difficult to quantify, have proved to be the source of immense complexity not only at the theoretical level, but also in the fits and starts of their historical evolution. My task is to give some hints about its winding course of development. In searching for a convenient starting place, I can think of no better place to look than one of my favourite philosophers, John Locke, who for all his brilliance made a profound, and hence instructive, mistake in the analysis of water law. Our point of departure is the basic Lockean theory of the origins of private property which starts with the bald general proposition that any individual acquires ownership of a particular thing by ‘mixing’ it with his labour (Locke 1689). The proposition was said to be as good for the acquisition of rights in a litre of water as in an acre of land. If you can mix your labour in order to acquire title to land, then you can mix your labour to remove water from the fountain and thereby make the water your own. There is no doubt that the first part of this proposition resonates with the common law tradition, which itself echoes the Roman, that in the initial position land was treated as a res nullius, or literally, as a thing owned by no one. Individual acquisition by taking possession was thought to be appropriate to the common lawyers no matter how much or little labour was used (so in that they rightly differed from Locke in calling for less stringent conditions for ownership). But at the same time both the Roman and English tradition of customary water rights differed sharply from the Lockean conception on water rights. Water in the original position was regarded not as a res nullius, but as a res commune, that is, as property that was owned by the community at large, although the precise domain was never specified. The jurisdictional issues, such as the one that Freebairn referred to in Chapter 2 over the boundaries between Melbourne water and county water, were left unaddressed in the original common law and Roman formulations, which aspired to a higher level of universality. For our purposes, however, the important point about the term, res commune, is that it establishes a background legal environment for water rights that is the exact opposite of what it is for land. As a first approximation, the paradigmatic act for acquiring ownership of land (reducing it to private possession) now constitutes the quintessential violation of the communal rights to water. The fundamental inquiry into the formulation of property rights in these two settings is this: what accounts for the profound differences in the starting point for the allocation of property rights in these two regimes? Once their polar differences are explained, the follow-up question is whether courts or legislatures find ways to soften these differences as the details of the overall systems get fleshed out.

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  Quasi-Constitutional Law: The Rise of Superstatutes

  William N. Eskridge Jr. and John A. Ferejohn

  Not all statutes are created equal. Appropriations laws perform important public functions, but they are usually shortsighted and have little effect on the law beyond the years for which they apportion public moneys. Most substantive statutes adopted by Congress and state legislatures reveal little more ambition: they cover narrow subjects or represent legislative compromises that are short-term fixes to bigger problems and cannot easily be defended as the best policy result that can be achieved. Some statutes reveal greater ambition but do not penetrate deeply into American norms or institutional practice. Even fewer statutes successfully penetrate public normative and institutional culture in a deep way. These last are what we call super-statutes. A super-statute is a law that (1) seeks to establish a new normative or institutional framework for state policy and (2) over time does ‘‘stick’’ in the public culture and generates popular support and confirmation, such that (3) the super-statute and its institutional or normative principles have a broad effect on the law—including an effect beyond the four corners of the statute. Super-statutes are typically enacted only after lengthy normative debate about a vexing social or economic problem, but a lengthy struggle does not assure that a law will become a super-statute. The law must also prove robust as a solution, a standard, or a norm over time, such that its earlier critics are discredited and its policy and principles become axiomatic for the public culture. Sometimes a law just gets lucky, catching a wave that makes it a super-statute. At other times, a thoughtful law is unlucky, appearing at the time to be a bright solution but losing its luster because of circumstances beyond the foresight of its drafters.

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  The WTO on Trial

  Susan Esserman and Robert L. Howse

  [In Fall 2002], a judicial panel of the World Trade Organization (WTO) issued a controversial ruling in a high-stakes corporate tax dispute between the United States and the European Union. Paying scant attention to the complexities of the case, the panel authorized Brussels to implement retaliatory sanctions of $4 billion—an unprecedented sum—against Washington. Notably, around the same time the United States and its European allies were also making headlines with another fierce legal battle: that over the authority of the International Criminal Court to prosecute American soldiers for alleged misdeeds committed abroad. In the nineteenth century, Clausewitz famously wrote that war is politics conducted by other means; today, as these examples illustrate, the same could be said for the law. Many disputes that used to be settled by negotiation or even by force of arms now end up before a proliferating range of international courts, tribunals, and arbitral panels. Legal briefs are replacing diplomatic notes, and judicial decrees are displacing political compromises. Less often considered is whether this ascendant legalism is good or bad for global prosperity and stability. In most cases, it turns out, it is still too early to say. There is one exception, however: the WTO. Nowhere else has international conflict resolution by judges emerged more forcefully or developed more rapidly. As in a domestic court—but unlike in most international bodies-WTO dispute settlement is both compulsory and binding. Member states have no choice but to submit to it and must accept the consequences of the WTO's ruling. But what, exactly, does the WTO's record reveal about how it has used its unprecedented powers? . . . Will the dramatic judicialization of international trade be reversed? So far, trade experts have revealed deep ambivalence about the WTO's experiment with binding adjudication, and there is little clear sense of where the system should go from here. At the WTO's inception in 1995, the organization's provisions for legal dispute settlement were touted as state of the art and the crown jewels of the WTO system. Today, however, even some of the organization's original architects and supporters complain that the process has gotten out of hand. Critics accuse the WTO's appellate tribunal of improper judicial activism, much as conservative American jurists lambasted the U.S. Supreme Court in the 1960s and 1970s. Developing countries, meanwhile, complain that not all states are equal in their ability to use the WTO's laws to advance their own interests. Litigation, they argue, draws on different skills, resources, and even cultural attitudes than does diplomacy, placing certain nations at a real disadvantage. An accurate assessment of the WTO's judicial record finds that the system has indeed reduced the role of international diplomacy, while strengthening the rule of law. At the same time, a number of measures, described below, should be implemented to strengthen the rule of law still further while also providing incentives for resolving trade disputes through negotiated solutions—a more prudent approach when the rules are unsettled and political and cultural differences are a large part of the problem.

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  Do Courts Interpret the CISG Uniformly?

  Franco Ferrari

  It is common knowledge that in order to create legal uniformity it is insufficient to merely create and enact uniform instruments, because "even when outward uniformity is achieved[ ... ], uniform application of the agreed rules is by no means guaranteed, as in practice different countries almost inevitably come to put different interpretations upon the same enacted words." In order to reduce this danger of diverging interpretations by courts of different countries, the drafters of the United Nations Convention on Contracts for the International Sale of Goods, hereinafter CISG, included, like the drafters of other uniform law conventions, a well known provision, Article 7(1), by virtue of which in interpreting the CISG "regard is to be had to its international character and to the need to promote uniformity in its application." As many commentators have pointed out, this means that one should not read the Convention through the lenses of domestic law, but rather in an "autonomous" manner. In other words, in interpreting the CISG one should not resort to the meaning generally attached to certain expressions within the ambit of a particular legal system. However, it has often been stated in legal writing that in view of "the need to promote uniformity in [the CISG's] application", it is insufficient to consider the CISG an autonomous body of rules. In order to achieve the CISG's ultimate goal, the creation of uniform· ity, it is also necessary to consider the practice of other jurisdictions, i.e., "what others have already done." This is why it cannot surprise that many commentators have advocated that courts resort to decisions rendered by foreign judicial bodies. The purpose of this paper, however, is not to give an account of the discussions that can be found in legal writing regarding Article 7(1) CISG; rather, this paper wants to examine whether courts take into account the aforementioned mandates set forth in Article 7(1) CISG, i.e. whether they, too, have "regard to the CISG's international character and to the need to promote uniformity in its application."

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  Online Music

  Harry First

  Perhaps no industry has been more fundamentally challenged by the growth of the Internet and its related technologies than the recorded music industry. For most industries, the Internet mainly provides a new, albeit potentially far more efficient, channel of distribution. For the recording industry, however, the Internet has challenged the basic product the industry makes and the way it does business. The recording industry has mostly bundled prerecorded music into packages (“albums”); the Internet offers consumers the opportunity to unbundle music and choose only the songs they want to hear. The recording industry has maintained tight control over which artists get to distribute their work to the public; the Internet offers the opportunity for artists to deliver music directly to consumers. The recording industry has created the endproduct on which songs are sold (music on CDs, tape, and vinyl records); computer software and hardware allows consumers to capture recorded music on the media of their choice. The recording industry has owned the copyrights to the music they sell; computer software and Internet connections allow consumers to obtain music for free, in seeming disregard for= copyright protection and the economic interests of the copyright holders. The initial response of the recording industry to some of the challenges posed by the Internet was the creation of two joint ventures, pressplay and MusicNet, to distribute music online. Producer joint ventures to control Internet distribution are not unique to the recording industry (the airline, hotel, and motion picture industries have also started such ventures), but the recording industry joint ventures dealt with some particularly challenging issues of antitrust, copyright, and innovation policy. When the online music joint ventures were announced, they appeared to offer more competition and significant efficiency benefits, creating new entrants with a new product in a new market. Given the concentrated nature of the prerecorded music industry, however, and the ability of the record companies to control the licensing of their music to online music distributors, it was also clear that the joint ventures deserved closer antitrust scrutiny. Indeed, the Department of Justice and the European Commission opened investigations of the two ventures even before the ventures began their operations. Two and one-half years later the Department of Justice announced that it had closed its investigation because its “theoretical concerns ultimately were not supported by the evidence.” However appropriate this decision might be as a matter of enforcement policy, however, the Department’s explanation focused only on the ventures’ licensing practices and sheds little light on the appropriate analysis of the ventures’ formation. The thesis of this chapter is that the formation of these producer joint ventures was not justified by any efficiencies and that their formation was anticompetitive. More broadly, this chapter argues that the brief history of this industry demonstrates the danger to competition posed when the producers of essential inputs in a concentrated market join together to control downstream distribution, a danger exacerbated in this industry, involving, as it does, the distribution of intellectual property products. The chapter begins with a description of the business and legal environment in which the joint ventures were formed and then traces how both have developed since the ventures’ formation. The chapter then provides an analysis of whether the formation of the two joint ventures violated Section 1 of the Sherman Act. The chapter concludes with some observations regarding record industry joint ventures in today’s rapidly changing market for the distribution of online music.

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  Can Antitrust Policy Protect the Global Commons from the Excesses of IPRs?

  Eleanor M. Fox

  Can antitrust protect the global commons from the excesses of intellectual property protection? Antitrust law might be seen as a natural tool to limit excessive IP monopolies, for antitrust law protects competition and competition is the antithesis of monopoly. This chapter gives small comfort, however, to those who hope to restrike a balance in favor of more antitrust and less intellectual property protection. The most obvious channels through which antitrust could assert greater dominance over intellectual property protections (e.g., an antitrust duty to license) are not available in many or most jurisdictions. The chapter ends by exploring one less obvious channel wherein antitrust law might modestly push back the boundaries of undue IP protection; namely, limiting the antitrust doctrine of immunity for petitioning the government for an anticompetitive measure or outcome. The cases drawn upon are from the United States, but the doctrine of immunity is shared by most antitrust jurisdictions in the world. The point is a small one and is raised not because it could give great relief to the problem of anticompetitive uses of IP-derived power. Rather, it is raised in the context of the essential limits to antitrust. I ask: if there is any point at which the antitrust/IP balance might reasonably be expected to shift in favor of antitrust, where is that point? The answer is: erosion of the petitioning immunity.

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  The Myths of Marbury

  Barry Friedman

  There are three types of stories told about Marbury v. Madison and the establishment and maintenance of judicial review. They are all, in their own fashion, wanting. The reason is that none of these stories takes sufficient account of popular will as the primary force in establishing and maintaining the judiciary's power to say what the Constitution means. It is often said that in Marbury v. Madison, the greatest judicial decision ever rendered, the legendary Chief Justice John Marshall created the power of judicial review. But this is demonstrably incorrect. The power of judicial review is noteworthy because it commands the compliance of officials with the rule of law. Marbury may have declared an enactment unconstitutional, but the judgment in Marbury required nothing of anybody save the judges themselves. Had John Marshall required something of those in power, he likely would have been rebuffed. In reality, it was long after Marbury that the power of judicial review would command acquiescence from government officials on a regular basis. There are those who take a considerably less grandiose view of Marbury, but even those who tell a more modest Marbury story apparently share a belief that judges have the power to establish and maintain the practice of judicial review. According to the modest story, all that happened in Marbury is that the Supreme Court (speaking through Marshall of course) recognized the obvious: that in deciding a case, judges—just like other government officials—must consult and follow the Constitution. Still, these Marbury minimalists acknowledge that today judicial constitutional pronouncements are supreme. This, we are told, occurred through a process of judicial “usurpation.” Not everyone accepts that the judges are so powerful. There is a third group who believes that as a matter of naked politics, the judiciary is indeed “the least dangerous branch;” and that “possessed of neither the purse nor the sword” judicial authority requires explaining. Under this account judicial review depends on the grace of the political branches, and especially the legislature. Judges have the power they do, it turns out, not because they took it, but because those in power gave it to them, or at least let them have it. Frequently lost in these accountings of judicial power are the rest of us: The People. There is an entirely different story of Marbury that can be told, and probably should be. It is a story that rests the power of judicial review squarely on the back of popular acquiescence. This recounting does not necessarily claim popular support for the establishment of judicial review, which turns out to be a remarkably complex question. But the maintenance of judicial review is unequivocally a function of popular acceptance. And in this exercise of popular will, our elected representatives are not a perfect proxy for our views. When it comes to protecting judicial review, the People may stand on their own, apart even from their elected agents. The discussion that follows largely is devoted to explaining why the stories we tell about the establishment and maintenance of judicial review are problematic. It is an exercise in clearing the way for alternative understandings about the politics of judicial review. Part I tackles “judicial power” stories, i.e., those that rest the power for creating judicial review on the backs of judges, explaining that this was not the case. Part II critiques the many different theories regarding why it is that those who have political (or other) power would choose to accept judicial review, showing how these stories are wanting. Part III offers a brief sketch of an alternative-the notion that judicial supremacy arose as a function of popular acquiescence, and that popular support maintains the institution today—and notes the implications for this alternative theory.

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  Beyond the Culture of Control

  David W. Garland

  The Culture of Control (Garland 2001), together with the effusion of commentary, criticism and debate that followed its publication, forms part of a collective project that has been rapidly unfolding in the sociology of punishment over the past several years. The central concern of that project is to develop a critical understanding of the practices and discourses of crime control that have recently come to characterise a number of contemporary societies, notably the United States and the UK. This is a research programme whose existence owes less to particular authors than to the remarkable transformations that have occurred in the social and penal fields and to the momentous effects experienced by everyone involved. The Culture of Control develops a sociological description of the contemporary field, a genealogical account of its emergence, an analysis of its central discourses and strategies, and an interpretation of its social functions and significance. Whatever the value and validity of these analytical claims, there was clearly some virtue in developing a rather precise and comprehensive account with which others could take issue, and one effect of the book has been to focus debate, to sharpen disagreement, and to refine matters of theoretical and empirical controversy. The response that the book has provoked demonstrates the vitality of that collective project and the extent to which scholars are now actively engaged in seeking to understand the penological present. Beyond its assessment of the book's claims, this response has offered up a whole series of alternative descriptions and explanations, emphasizing different factors, arguing for different interpretations and highlighting different national trajectories. Some matters are now settled and others are as much in doubt as ever they were, but the upshot is that we now have a clearer sense of the phenomena to be explained, of the questions at issue, and of the kinds of research—above all, theoretically focused studies of how different societies have responded to the control problems posed by late modernity—that should help resolve them. The present essay will not be concerned to defend my book against criticisms, correct misreadings or restate my intentions. There have been many opportunities for exchanges of that kind: critics not convinced then will remain unconvinced now, and readers of the book will, in any case, be able to make up their own minds. I want instead to use this occasion to try to advance matters a little by taking up some constructive suggestions, refining or extending some of my original claims and sketching out several new lines of research that might now be pursued. Before turning to these matters, however, I want first to deal with the question of theory and the role that it plays in The Culture of Control. Of all the issues that critics have addressed, the matter of the book's engagement with ‘theory’ has been the most contentious, the most varied, and, to my mind, the most confused. Thus while several commentators have singled out the book's theoretical contribution for special praise, others have expressed ‘disappointment’ that the book was not more overtly theoretical, or more faithfully Foucauldian or more concerned with ‘the centrality of sophisticated theory’. In the light of these comments, and in a context where the use of ‘theory’ too often means the worshipful invocation of a theorist's name or the rolling out of ready-made concepts that bear little relationship to actual research, it might be useful to begin by discussing what theory is and what it is for.

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  Democratic Constitutionalism: The Bickel-Ackerman Dialectic

  David Golove

  Any theory of constitutional law for a constitutional democracy must perforce offer an explanation of the relationship between basic democratic norms and constitutionalism and, at least in the American case, for the practice of judicial review. The enduring challenges are familiar: Why should we be ruled by the dead hand of the past, allowing judgments made by our forebears, even if by a majority or supermajority of them, to override democratic decisions we make today? And, why should a court have final say over the interpretation and application of the Constitution and hence the way we govern ourselves on fundamental issues? These questions collectively express the tension that Alexander Bickel famously captured in his phrase, “The Counter-Majoritarian Difficulty,” and they have provoked a generation of theorists to offer a bewildering array of answers. Yet, few of Bickel’s successors have actually managed to meet the formidable goal which he set for himself—to articulate a theory that both sustains a robust role for constitutionalism and judicial review but still roots the ultimate justification for constitutional principles in the actual ongoing consent of (a majority of ) the people. Without meaning to prejudge any larger issues in democratic theory, I will call a constitutional theory meeting the latter requirements democratic and the family of such theories democratic constitutionalism. Most constitutional theories are democratic in the minimal sense that they consider the approval of the people ab initio a necessary condition to the validity of a constitution. Far more controversial, however, is the proposition that consent must be ongoing. Under a constitutional system that permits ready amendment by a majority, ongoing consent does not present a special problem. In such a system, the absence of amendment gives rise to a presumption of ongoing consent. Because of the peculiar difficulty of amendment in the case of the American Constitution, however, no such presumption is available. Thus, for any theory which is democratic in the sense I have specified, the need to ensure ongoing consent will necessarily influence one or more of the theory’s critical components: the choice of interpretive methodologies, the assignment of institutional responsibilities for constitutional interpretation, and the attitude towards constitutional change outside the formal amendment process. There are, of course, many familiar theories that are not democratic in my sense. They seek various other means to mitigate or resolve the tension between democracy and constitutionalism, including by advocating a broad construction of governmental powers, defending an aggressive judicial role when it comes to perfecting the democratic system itself, or insisting that the Constitution is, or should be, justice-seeking first and democratic second. Whatever the version, however, none are democratic because they do not insist that the principles of constitutional law must themselves ultimately be rooted in the ongoing consent of the people. In this essay, I examine two competing efforts to meet this Bickelian ideal—Bickel’s own theory and that of perhaps his most prominent student, Bruce Ackerman. Although both theories aspire to be democratic, they offer diverging accounts on many fundamental issues, most strikingly in their approaches to judicial review and constitutional interpretation. These differences, I will claim, are themselves rooted in contrasting accounts of democracy and popular sovereignty: Ackerman’s republican dualism, with its emphasis on reasoned deliberation, leads him to endorse a strictly backwards looking, preservationist theory of interpretation and judicial review; Bickel’s Burkean consensualism yields a more fluid interpretive methodology and room for a larger more creative role for the elite judiciary. Nevertheless, reconciliation of their accounts is both possible and desirable. I will argue that Ackerman is right in emphasizing the importance of rare moments of heightened popular mobilization in inaugurating new constitutional regimes, but wrong in thinking that the character of such new regimes can be fixed in single moments of enactment. Constitutionalism is an always ongoing project. Bickel, in turn, is right in viewing constitutional change as a fluid process, but wrong in insisting on gradualism and incremental change and in dismissing the possibility of self-conscious popular revision of fundamental law. In the first section, I demonstrate how both Bickel and Ackerman are exemplars of democratic constitutionalism. In the next section, I show how their contrasting approaches to judicial review and constitutional interpretation are rooted in their differing accounts of democracy. In the final section, I offer some critical reflections and propose a tentative synthesis that combines the stronger aspects of both of their approaches.

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  When Should Courts Be Empowered to Make Child-Rearing Decisions?

  Martin Guggenheim

  American popular culture is deeply connected with the law. Rarely does a year go by without several legal cases capturing the attention of the American public. The year 2000 was no exception. What was perhaps somewhat unusual was that two cases which achieved center stage were in the field of family law. This chapter presents a happy opportunity to discuss important principles of family law with an audience already somewhat familiar with the background details.

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  Choice of Business Entity: Weighing the LLC Against the Alternatives

  Brant J. Hellwig

  The debate over which type of entity constitutes the best vehicle through which to conduct a business enterprise or to hold investment property never seems to go away. The longevity of the discussion is likely due to fact that the determination of the preferred entity is driven largely by tax considerations, and the relevant tax provisions do not stay fixed for any extended period. Yet lately there has developed a conventional wisdom that the various advantages of the limited liability company (LLC) has rendered the choice of entity debate moot. This chapter begins by outlining the comparative advantages of the LLC form. After doing so, the chapter then details particular instances in which an S corporation or a C corporation could nonetheless be the preferred business entity choice.

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  Al-Qaeda, September 11, 2001

  Stephen Holmes

  Many of the key actors in the 9/11 drama articulated their grievances using archaic religious language. But the very fact that the code involved is ancient while the behaviour that needs to be explained is recent suggests the inadequacy of causal theories that overemphasize the religious element. This chapter examines whether non-religious motives may well have been predominant in the 9/11 mission. To pursue this suggestion, the inquiry is divided into two parts, discussing first the perpetrators and then the instigators and supervisors of the plot.

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  European Communities-Trade Description of Sardines: Textualism and Its Discontent

  Henrik Horn and Joseph H. H. Weiler

  The facts of EC-Sardines are simple enough. A European Communities (EC) regulation stipulated that the designation Sardines could be used on preserved fish only for the genus Sardina pilchardus. The broad rationale claimed for this measure was to prevent consumer confusion. Allegedly European consumers associated the appellation “Sardines” with the pilchardus genus. Subsequently the Codex Alimentarius Commission set an international standard which effectively would allow other types of fish e.g. the genus Sardinops sagax, to use the word Sardine as part of its packaging designation. Peru, which exports Sardinops to Europe could not, under the Community regulation, use the designation Sardines in any shape or manner even though this prohibition would be contrary to the international standard set by the Codex Commission. Obviously, this would have adverse effects on the marketability of Peruvian sardines. Peru challenged the Community regulation claiming it violated Art. 2.1, 2.2, and 2.4 of the Agreement on Technical Barrier to Trade (TBT) as well as Art. III.4 of the General Agreement on Tariffs and Trade (GATT). The Panel exercised judicial economy and decided the case entirely on the basis of Art. 2.4 TBT . . .

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  Canada—Export Credits and Loan Guarantees for Regional Aircraft (WT/DS222/R): A Comment

  Robert L. Howse and Damien J. Neven

  This panel report represents another installment in the long-standing litigation between Canada and Brazil over subsidization of sales of commuter jets by both countries. The report addresses a set of claims by Brazil closely related to prior claims concerning the practices of the Export Development Corporation as well as industrial policy entities in the Canadian province of Quebec. Brazil specifically challenged certain recent transactions where these federal and provincial entities provided certain kinds of financing assistance in connection with the sale of Bombardier aircraft (namely to Air Wisconsin, Atlantic Coast Airlines, Comair, Kendell, and Air Nostrum). For the most part the panel applied existing jurisprudence on export subsidies to the factual record. In particular, the panel applied a “private investor principle”, verifying in all instances whether the conditions that were granted by the export development and industrial policy agencies were more favorable than the conditions that were available from alternative private sources. However, it is extremely difficult to provide an adequate commentary on the panel’s comparison between the conditions available in the market and those granted by the agencies because vital factual information concerning the transactions in question has been removed from the panel report for reasons of commercial confidentiality. Thus, in our Report, we focus on several specific areas, largely of a procedural and preliminary nature, where the panel made apparently novel findings of law that have some systemic or general significance for WTO jurisprudence and practice. Some preliminary comments on the general approach of the panel may however be in order. It is striking that the panel paid a lot of attention to the distinction between programs that leave some discretion to the authorities granting subsidies which may be unlawful and programs which instruct the authorities to do so. According to the panel, only programs which instruct the authorities to grant unlawful export subsidies are as such unlawful, despite the fact that the declared objective of these programs is to grant export subsidies (which are likely to be unlawful). Hence, everything appears as if the programs are not unlawful because one can exclude that they may not pursue the objective that has been assigned to them. The apparent contradiction between the objectives assigned to the agencies and the behavior that they are meant to pursue in order to comply with the WTO framework is reinforced by the application of the private investor principle. According to this benchmark, particular loans and guarantees are lawful if they could have been obtained from private investors. Here again, the behavior of the agency is lawful where it mimics the behavior of private sources of funds—which suggests that they should not have been public agencies in the first place or at the very least that their public status (and the particular objectives that they are supposed to pursue in light of this status) should be seen as irrelevant. Overall, one can thus wonder about the effectiveness of a legal framework that imposes behavioral norms on an institution that are in contradiction with its “raison d’être”. This raises the broader question of whether the constraints imposed by the SCM agreement are reasonable. A discussion of this issue goes much beyond the scope of this chapter. It is worth mentioning however that subsidies can sometimes be highly desirable and that the blanket prohibition on export subsidies contained in the SCM agreement may not be warranted.

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  United States – Section 211 Omnibus Appropriations Act of 1998 (WT/DS176/AB/R): A Comment

  Robert L. Howse and Damien J. Neven

  As usual the authors have divided their labor, based on expertise. In particular, the economic analysis in section 4 was the responsibility of Damien Neven; Robert Howse’s own understanding of the costs and benefits of international trade law rules with respect to intellectual property protection in general depends on a rather different framework for analysing the problem. However, in so far as the legal and economic analysis of the Havana Club case itself is concerned, which deals only with trademarks as a form of IP protection, the authors are in agreement. The first part of the chapter (section 2) summarizes the facts of the case and the decision taken by the Appellate Body (AB). [Neven and Howse] emphasize two issues that the AB dealt with, namely the extent to which the TRIPs may contain a substantive obligation to grant protection to a trademark registered in another country and National Treatment. Section 3 discusses the notion of trademarks, the trade-offs involved in protecting trademarks and the extent to which trademark protection should be coordinated across jurisdictions. We observe that there is a strong case in favor of trademark protection in terms of alleviating moral hazard and adverse selection in product choices but we also identify instances where trademark protection can be abused. We also observe that the case for coordination across jurisdictions is less compelling for trademarks than other forms of intellectual property. We find that the international law of trademark protection is generally reflective of this insight, achieving only a minimum of harmonization and imposing constraints mainly when there is a significant external effect that would not be otherwise internalized, namely where the interests of foreigners are at stake. Section 4 highlights and discusses the extent to which the AB has limited the scope for harmonization of trademark provisions across WTO Members and in particular has rejected the positive integration that would be induced by some mutual recognition of trademark provisions across countries. Section 4 takes a broader perspective and discusses how national treatment affects firms’ incentive to set intellectual property rights and the outcome that arises when national treatment applies. This outcome is compared with that which arises under alternative policy regimes and in particular under independent setting of IP rights for domestic and foreign holders and under mutual recognition. It is found that National Treatment is not as attractive as in other areas (like those covered by Art. III) and that mutual recognition, which has been rejected by the AB even in a limited form, has attractive features.

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  United States—Tax Treatment for ‘‘Foreign Sales Corporations’’ Recourse to Arbitration by the United States Under Article 22.6 of the DSU and Article 4.11 of the SCM Agreement (WT/DS108/ARB): A Comment

  Robert L. Howse and Damien J. Neven

  This chapter discusses the decision by the arbitrator on suspension of concessions (‘‘retaliation’’) in the dispute between the US and the EU legislation. By way of background, the first part of the chapter (section 2) regarding the tax treatment of offshore corporate income under US describes the operation of the US scheme, including as revised after the first round of WTO rulings. We observe that the arbitrators have adopted an unconventional approach with respect to the notion of countermeasures, which emphasizes the incentive to induce compliance while largely jettisoning proportionality between the countermeasure and the injury suffered by the wronged state as a meaningful normative constraint. Section 4 considers this approach from the perspective of established principles of international law and highlights a number of important shortcomings. Section 5 takes this approach for granted and asks whether countermeasures could actually be relied upon in order to induce compliance. We conclude with respect to export subsidies, the incentives of complainants are such that under-enforcement can often be expected. The prospect of inducing compliance through countermeasures thus appears to be somewhat poor and at odds with established principles of international law.

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  Between Civil Libertarianism and Executive Unilateralism: An Institutional Process Approach to Rights during Wartime

  Samuel Issacharoff and Richard H. Pildes

  Times of heightened risk to the physical safety of their citizens inevitably cause democracies to recalibrate their institutions and processes, and to reinterpret existing legal norms, with greater emphasis on security, and less on individual liberty, than in ‘‘normal’’ times. This has been true for France during its experience with Middle Eastern terrorism in the 1980s; for Germany during its encounter with the domestic terrorism of the Baader-Meinhof gang in the 1970s; for Great Britain during the sustained violent conflict in Northern Ireland; for Italy in its conflicts with law-and-order terrorist bombings in the 1970s; for Spain during the 1980s; for India in its struggles to maintain order in the midst of the largest and one of the most heterogeneous democracies in the world; and for Israel during its long-running struggle with terrorism. It is now true for the United States, as the government (national and state) modifies the legal framework designed for normal times to adjust to the radical new security threat posed by militant Islamic fundamentalism reflected in the events of September 11, 2001. These changes may be effective or counterproductive, necessary or excessive. But that change will take place is certain, based on the experience of all modern democracies confronted with security threats of this type and magnitude. Yet in the political culture today, at least in the United States, acknowledgment of this reality is clouded by the polarized assertions of two factions. On one side are executive unilateralists. Reasoning from the correct starting point that the security domain necessitates a greater degree of the distinct qualities possessed by the executive branch—“speed, secrecy, flexibility, and efficiency that no other governmental institution can match”—these advocates conclude that unilateral executive discretion, not subject to oversight from other institutions, is required. On the other side are what might be called civil libertarian idealists. Advocates of this view sometimes deny that shifts in the institutional frameworks and substantive rules of the trade-offs between liberty and security do indeed regularly take place during times of serious security threats; at other times, they recognize that these shifts have occurred in the past but refuse to accept any induction from experience that would legitimate them in the future. The American constitutional system has the longest experience with these issues. The United States has not, before now, been subject to the kind of security threats, or the risk of external wars with domestic consequences, that have characterized many European democracies; yet with military governments imposed for over a decade in parts of the country, a civil war that slaughtered 600,000 citizens, foreign saboteurs, and risk of military attack, the United States has hardly been immune from the struggle to accommodate liberal values in extreme political circumstances. This chapter begins by chronicling the American experience with these issues, to gain perspective on how they have been addressed by the constitutional regime that historically has most prized individual liberty. That experience reveals that the judicial approach in this area has been, on the whole, more complex, and oriented toward different questions, than either executive unilateralists or civil libertarian idealists recognize. Contrary to the modern civil libertarian stance, the American courts have only rarely addressed the issues through the framework of individual constitutional rights. Yet contrary to the executive unilateralist position, courts have also been reluctant to find that the executive has unfettered discretion to make trade-offs between liberty and security. Instead, the courts have developed a process-based, institutionally oriented (as opposed to rights-oriented) framework for examining the legality of governmental action in extreme security contexts. Through this process-based approach, American courts have sought to shift the responsibility of these difficult decisions away from themselves and toward the joint action of the most democratic branches of the government. We then shift from past to present. Intriguingly, the few judicial decisions to date which address the new legal structures emerging in the United States embody the same framework for analysis that American courts have used in earlier eras of exigent circumstances. Despite the flourishing since the 1960s of a rights-based mode of discourse among political philosophers and abstractly oriented constitutional theorists, the American courts continue to employ a process-based, institutionally focused approach. That approach permits deviations from the ordinary legal structures and rules, but it rarely endorses the position that the executive can make these deviations through unilateral decision. By revealing this process-based approach to the American judicial role during wartime, this chapter aims to suggest (but not answer) several large theoretical questions. One is comparative. The American courts work in a system of separated and divided executive and legislative powers. When the American courts emphasize the importance of institutional endorsement by both political branches of new legal structures for addressing exigent security concerns, they can therefore rely on two institutional actors, with different democratic pedigrees, different incentives, and different interests to which they respond, to provide the political judgment behind policies adopted in the name of security. Separation-of-powers systems can also introduce temporal space between the moments at which each institution acts. Is the deference American courts show to the judgments of “the political branches” appropriate only within a system of separated and divided legislative powers? Or is this deference justified even when courts confront the unified executive-legislative powers of a parliamentary regime, which characterize most European democracies? A second large question concerns process-based approaches to issues of individual rights and constitutionalism more generally. In the American legal academy, process-based approaches came under withering intellectual critique in the 1980s. Despite the academic criticism, process-based approaches have had an enormous pull on American courts and continue to do so—particularly in times of crisis. In exploring the actual experience of constitutional democracy during crisis, it is therefore important to ask why, despite the theoretical questions about process-based reasoning, such methodologies continue during crises to have such a powerful grip on courts. Does this record suggest a problem in the intellectual critique of such approaches? Or does it suggest a problem in how courts have conceived their task in difficult circumstances?

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  Legal Responses to Conflict of Interest

  Stephen Issacharoff

  Conflicts of interest abound in the law. The core attorney–client relationship is a classic example of a principal–agent relationship, with all the attendant and endemic tensions and risks of opportunistic behavior. The basic legal definition of attorney, as set forth in the standard law reference, “denotes an agent or substitute, or one who is appointed and authorized to act in the place or stead of another”. The ability to act on behalf of another of itself creates conflicts that are “intrinsic to the exercise of trust”. Much of legal regulation, including that directed at attorney–client relations, attempts to mediate the conflicts inherent in a world where dependence on agents is the norm. This chapter will assess distinct legal responses to conflicts of interest. The aim will not be to catalogue the range of conflicts that the law recognizes or to identify all of the various regulatory responses that may be tried. Rather, the object will be to use a couple of examples of significant conflicts of interest, whether labeled as such or not, to map the types of regulatory methodologies that may be employed. By mapping different responses to conflicts of interest onto certain regulatory patterns, the costs and benefits of different approaches can be assessed. In particular, identifying the range of regulatory responses may help clarify the competing tensions that exist in principal–agent relations, such as that between attorney and client. The primary risk is that of agent misbehavior in terms of misappropriation of goods or gains that properly belong to the principal. At the same time, however, there is a corresponding risk in burdening principal–agent relations with more direct legal oversight than they may bear, particularly if the costs of compliance exceed the gains to be had in representing a principal. The area that concerns me most is one in which it is unlikely that market mechanisms alone can protect the principals. This may be for a variety of reasons. Most significantly, there are undertakings in which the interest of the principals is both diffuse and of low overall value, but where the interest of the agent is highly concentrated and of great value. Another obstacle to parties protecting themselves through ordinary market mechanisms is high information costs that make effective monitoring difficult. This can result from either the difficulty of acquiring the information or the inability for a diffuse group to monitor at all. The latter may be partially moderated by the use of intermediaries, or “super-agents” as I refer to them in a paper with Daniel Ortiz, but this then moves the monitoring problem up one level to the issue of who monitors the monitors of the agents. The third obstacle is high barriers to entry for rivals to agents who may seek to win over the representation of the principals and, in so doing, provide assistance in scaling back agency costs. The higher the barriers to entry, the less effective market challenge becomes. The next question is how the law responds to such conflicts of interest. Here I would categorize three different mechanisms. The first is substantive regulation. By this, I mean specific prohibitions on certain substantive decisions of the agent. The classic examples include such obvious ones as rule of attorney professional conduct stating that client funds must be held in segregated accounts and may not be invested in the attorneys’ home, business, or other private undertakings. This approach turns on ex ante rules of prohibition on defined acts. Alternatively, there may be rules of prohibition applied ex post, what generally falls under the rubric of liability rules. Thus, we find liability regimes that create a risk of fine or even incarceration if a fiduciary bond is broken and there is resulting harm. Much of the “gatekeeper” system in the corporate and securities world turns on this sort of fiduciary liability and the prospect that gatekeepers will sufficiently internalize the prospective costs of a breach of their duties as a deterrent to misconduct. Finally, there is the prospect of what I shall term procedural regulations. Here, the examples are prohibitions not on substantive outcomes, but on the participation in decision making by conflicted agents. Examples here would include the prohibition on government officials negotiating contracts with firms in which they have or have had a financial involvement. At issue is not whether the contract was in the public interest or not, or whether it was subject to self-serving manipulation, but the appearance of corruption of the agent. What is significant here is that the emphasis is on process barriers that do not turn on a substantive assessment of the outcome of the transaction. I will conclude that, as a general matter, procedural regulation is the single most effective strategy for dealing with conflicts of interest. Substantive regulation is difficult to apply and suffers from the same information deficits as exist generally in the principal–agent relationship. Liability regimes suffer from a dependence on the proper ability of agents to internalize the cost calculus, something that may be compromised by heuristic biases that tend toward seeing desired short-term objectives free of the full liability consequences. Procedural regulation is effective in that it cuts straight to the heart of the matter, by attempting to remove the conflict of interest altogether.

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  Ascriptive Groups and the Problems of the Liberal NGO Model of International Civil Society

  Benedict Kingsbury

  The growing sense that there exists, or ought soon to exist, an international civil society has begun to inspire among its participants and proponents a quest for a more complete articulation of normative principles, perhaps even a kind of constitution, to guide the future development of such a society and to build a sense of coherence and solidarity among its adherents. In this chapter I will argue first that an operational code of liberal freedom of speech and freedom of association has been the de facto guide in the construction of international civil society and, second, that this code encourages voluntaristic nongovernmental organizations (NGOs) but is not well suited to ascriptive groups (in which membership is based more on birth than volition) exercising governmental powers such as some indigenous peoples' organizations. A richer international constitutionalism will be needed to address accountability, mandate, representation, and participation in relation to these groups. In the absence of such a theorized constitutional structure for international civil society, I argue that some modest progress on these questions may be made by drawing on an incipient internationalized public law of indigenous peoples' issues.

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  Economic Rationality in the Analysis of Legal Rules and Institutions

  Lewis A. Kornhauser

  In the first half of the twentieth century, lawyers and legal academics referred to economic concepts and theories only to elucidate areas of laws such as antitrust, the regulation of public utilities, and taxation that had an explicit economic content. Even the suggestion that economics should play a role in the understanding of core doctrinal subjects of the common law would have been rejected as ludicrous. In the early 1960s, however, Ronald Coase (1960) and Guido Calabresi (1961) began the systematic application of the techniques of microeconomic analysis to the study of legal rules and institutions including common law legal rules and institutions. Within 15 years, the tools of microeconomics had been applied to virtually every area of law. By the end of the twentieth century, serious scholarship in almost every area of law had to address issues and arguments raised by the economic analysis of law. During the 1970s, Richard Posner (1973, 1979, 1980) claimed first that common law rules were in fact efficient (the positive claim) and second that common law rules ought to be efficient (the normative claim). Around 1980, the proliferation of economic analyses spawned great controversy in the legal academy. The controversy centered on the second of Posner’s claims: that common law rules ought to be efficient. The controversy has had two primary components. The first, at least in part internal to the community of economic analysts of law, concerns the appropriate understanding of the term ‘‘efficient.’’ On one interpretation, ‘‘efficient’’ simply means ‘‘Pareto efficient’’; that is, a legal rule is Pareto efficient if and only if there is no other rule that would induce behavior such that no person was worse off and at least one person in society was better off. On a second interpretation, ‘‘efficient’’ means ‘‘wealth-maximizing’’ where ‘‘wealth’’ is the sum of the compensating or equivalent variations of the individuals in society. This second interpretation essentially adopts cost–benefit analysis as an implementation of the Kaldor–Hicks welfare criterion. (On Kaldor–Hicks see Coleman 1980 or Kornhauser 1998b.) On the third interpretation, offered most recently by Kaplow and Shavell (2002), ‘‘efficient’’ means only that the evaluation of legal rules should be welfarist; evaluation should depend only on the well-being of the individuals in society. This third interpretation is the most general as both Pareto efficiency and the maximization of the compensating or equivalent variations are welfarist criteria. (For more extensive discussion of these claims, see Kornhauser 1998b, 2003b.) The other focus of controversy over Posner’s normative claim concerned its moral validity. Various authors, for example, Dworkin (1980a, 1980b), asserted that ‘‘wealth,’’ understood either as Pareto efficiency or as the ‘‘consumer surplus’’ generated by a legal rule, was not a value or, at least, a value that the law ought to promote. In its current incarnation, the dispute has turned to the more general moral issue of the validity of welfarism as the exclusive social goal. A commitment to economic analysis of law, however, does not entail a commitment to welfarist evaluation of legal rules and institutions. The denial of the normative claim in any of its three formulations does not undermine much of the practice of economic analysis of law. Consequently, the dispute over the normative claim has not much influenced either the internal development of the discipline or the acceptance of its approach by its critics. The dispute has merely diverted attention from the principal difference between economic analysis of law and more traditional enquiries concerning legal rules and institutions. This difference reflects distinct approaches to the normativity of law. Within the legal academy, scholars start from the premise that legal rules are norms; they primarily study the content and interpretation of those norms. By contrast, economic analysis of law, at its core, analyses the causes and effects of legal rules and institutions. Consequently, it must explain and predict how private citizens and public officials will respond to legal rules and institutions. These explanations, however, generally ignore, and sometimes deny, the normative features of legal rules. This chapter seeks to elucidate the contrasting approaches to normativity and to determine the extent to which they are incompatible. The argument, however, is complex and tentative for two reasons. Within law and jurisprudence, the concept of the normativity of law itself is controversial and elusive. Moreover, economics has substantial resources for modeling diverse phenomena. The failure of economic analysis of law to account for the normative aspects of law may be a contingent rather than a necessary feature of the practice used to explain legal behavior. The chapter proceeds as follows. In the following section, I formulate the question. I then distinguish between two distinct research programs in economic analysis of law: a modest and a strong one. The modest research program poses little or no challenge to traditional questions concerning the normativity of law. The strong research program rejects normativity. The next section sets jurisprudential accounts of the normativity of law. Then, in the central section of the chapter, I elaborate and assess the resources available to economic analysis of law to capture jurisprudential conceptions of normativity.

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  To Be a European Citizen: Constitutional Patriotism and the Treaty Establishing a Constitution for Europe

  Mattias Kumm

  A Constitution (or Constitutional Treaty) for Europe: Treaties, Intergovernmental Conferences (IGC), Conventions and other historical resources. Documents from the European Council, the Parliament, the Commission, Member States, and other European Union Institutions. Also includes a bibliography on each of the main treaties and information regarding their preparation, negotiation and ratification.

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  What Is So Special about Constitutional Rights in Private Litigation? A Comparative Analysis of the Function of State Action Requirements and Indirect Effect

  Mattias Kumm

  The contributors of this volume address various issues pertaining to 'Third Party Effect'. It provides an in-depth analysis of jurisprudence, placing problems in a comparative legal and theoretical perspective. According to a classical tenet of constitutionalism the constitution and constitutional law deal with state actors. In the 20th century the concept of 'third party effect' emerged, which has seen constitutional rights and principles apply in private relations as well. This raises various questions, such as what are the jurisprudential and political reasons of this change? Is this concept brought about by the welfare state? What are its practical consequences? Is individual liberty enhanced when the state claims to promote a right? How do such understandings influence the role of constitutional and supreme courts? Are there equivalent doctrines to the third party effect? How does the trend influence government spending and redistribution? How does the US 'state action' doctrine compare with the third party/horizontal effect doctrine familiar in other domestic and international jurisdictions?

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  The Story of Steele v. Louisville & Nashville Railroad: White Unions, Black Unions, and the Struggle for Racial Justice on the Rails

  Deborah C. Malamud

  By the time William Bestor Steele became a railroad fireman on the Louisville & Nashville Railroad (the “L & N”) in February 1910, the unions representing firemen, engineers, brakemen and other operational railroad workers (often referred to as the “Big Four” unions) were already among the oldest and strongest labor organizations in the country. Organized on a craft basis, they had successfully negotiated collective bargaining agreements since the 1880's. By World War I, they “had virtually complete control of their respective crafts throughout the country.” Among them was the Brotherhood of Locomotive Firemen and Engineers (the “BLFE” or the “Brotherhood”), established in 1873. Within the troubled history of labor unionism in the South, the railroad brotherhoods were uniquely successful in organizing workers. The success was, in part, because railroads were regulated by the federal government, which itself had recognized early that stable collective bargaining had benefits for labor peace on the rails. But one suspects that another cause for their success in the South was the role of race on the Southern railroads. The fact that Steele v. Louisville and Nashville Railroad Co. is not simply a labor law case, but also an employment discrimination case, is obvious on the surface of the Supreme Court's opinion. What is less obvious is that Steele is not simply a dispute between a labor union and unorganized black railroad employees, nor simply a dispute between private parties, nor simply a case raising questions of domestic race policy. The Steele case arose in the infancy of American labor law, at a time when the roles of courts and agencies were not yet well defined. It arose before federal employment discrimination law was even imaginable. And it arose on the eve of America's entry into World War II, a time when America's war against racism in Europe drew unfriendly foreign attention to America's racist practices at home. Against this background of uncertain law, the case illustrates the heroic, and in this case, successful efforts of black workers to use the collective strength of their own unions to seek legal redress. It also illuminates the often-futile efforts of the administration of Franklin D. Roosevelt and his chosen Supreme Court to ensure that the New Deal, which often bypassed minority workers, would at least defend the rights of the small minority among them with contractual rights worth defending.