Northwestern Law Legal Working Paper Series

Electoral College Reform Is Heating Up, And Posing Some Tough Choices

Robert Bennett — Mon, 27 Feb 2006 11:46:36 PST

Electoral College reform is beginning to get some attention, with two different emphases, a move to institute a nationwide popular vote without a constitutional amendment, and a move to forbid faithless electoral votes. There is no logical incompatibility between the two, but in political and public policy terms, there are tensions between them. This paper evaluates the relative merits and importance of the two efforts and explores the tensions in simultaneous pursuit of the two.

Taming the Electoral College

Robert Bennett — Wed, 15 Feb 2006 13:53:56 PST

"Taming the Electoral College" is a book to be published by Stanford University Press in the spring of 2006. It explores poorly understood aspects of the electoral college, including two possibilities in particular that pose the most serious danger for American democracy. These are, first, determination of the president by "faithless electors" who ignore the popular votes in their states and, second, choice of the president in the House of Representatives, which is required if no electoral college majority votes in favor of a single candidate. In any given election neither of these outcomes is likely, but the 2000 election showed that we would do well to take each seriously and act now to prevent them from occurring. Both possibilities could be dealt with through constitutional amendment, but amendment is difficult to achieve, and all the more so for electoral college reform. With this in mind the book offers non-constitutional solutions to the electoral college processes. It also offers a way to work toward popular election of the president without a constitutional amendment. The book provides a short critical history of the electoral college; and deploys political and constitutional theory as aids to understanding.

Did Reform of Prudent Trust Investment Laws Change Trust Portfolio Allocation?

Max M. Schanzenbach et al. — Wed, 07 Dec 2005 11:38:24 PST

This paper investigates the effect of changes in state prudent trust investment laws on asset allocation in noncommercial trusts. The old prudent man rule favored “safe” investments

such as government bonds and disfavored “speculation” in stock. The new prudent investor rule, now widely adopted, relies on modern portfolio theory, freeing the trustee to invest based on risk and return objectives reasonably suited to the trust and in light of the composition of the trust portfolio as a whole. Using state- and institution-level panel data from 1986-1997, we find that after a state’s adoption of the new prudent investor rule, trust institutions held about 1.5 to 4.5 percentage points more stock at the expense of “safe” investments.

Accordingly, we conclude that trustees are sensitive to changes in trust fiduciary law. Even though trust investment laws are nominally default rules, such rules matter in the presence of

agency costs and unreliable judicial enforcement of opt outs.

Perpetuities or Tax: Explaining the Rise of the Perpetual Trust

Max M. Schanzenbach et al. — Mon, 07 Nov 2005 15:06:09 PST

By abolishing the Rule Against Perpetuities, 21 states have validated perpetual trusts. The prevailing view among scholars is that the 1986 generation skipping transfer (GST) tax prompted the movement to abolish the Rule by conferring a salient tax advantage on long-term trusts. However, an alternate view holds that demand for perpetual trusts stems from donors’ preference for control independent of tax considerations. Proponents of both views have adduced supporting anecdotal evidence. Using state-level panel data on trust assets prior to the adoption of the GST tax, we examine whether a state’s abolition of the Rule gave the state an advantage in the jurisdictional competition for trust funds. We find that, prior to the GST tax, a state’s abolition of the Rule did not increase the state’s trust business. By contrast, in a prior empirical study we found that, between the enactment of the GST tax and 2003, states that abolished the Rule experienced a substantial increase in trust business. Accordingly, we conclude that the enactment of the GST tax sparked the modern perpetual trust phenomenon. Understanding the impetus for the rise of the perpetual trust throws light on the debate over recent proposals to liberalize the law of trust termination and modification and to amend the GST tax. Our empirical assessment of competing explanations for the rise of the perpetual trust also contributes to the literature on the bequest motive.

Reflections on the Law and Economics of Copyright Scope and its Implications for Fair Use

Matthew J. Sag — Wed, 02 Nov 2005 09:49:09 PST

Uncertainty as to the optimum extent of protection has generally limited the capacity of law and economics to translate economic theory into coherent doctrinal recommendations in the realm of copyright. The article explores the relationship between copyright scope and welfare from a theoretical perspective to develop a framework for evaluating specific doctrinal recommendations in copyright law. This analysis of copyright scope establishes that (1) the efficiency of private ordering is the key determinant of the ideal level of copyright scope; (2) the complexity of the welfare-scope relationship is such that we are unlikely to be able to ascertain a generalizable optimal level of copyright scope – the relationship will clearly be subject to substantial variation, both within and between industries; (3) doctrinal recommendations which aim to optimize copyright scope in the abstract but do not account for the effect of a doctrinal change on transaction costs or uncertainty are necessarily incomplete.

This article bridges the gap between the traditional law and economics of copyright and specific doctrinal analysis, applying the above conclusions as metrics for assessing doctrinal proposals. The usefulness of applying these metrics in either rejecting or improving doctrinal recommendations is illustrated with reference to the predominant law and economics theories of fair use.

What is Legal Doctrine

Emerson Tiller et al. — Tue, 28 Jun 2005 09:17:17 PDT

Legal doctrine is the currency of the law. In many respects, doctrine is the law, at least as it comes from courts. Judicial opinions create the rules or standards that comprise legal doctrine. Yet the nature and effect of legal doctrine has been woefully understudied. Researchers from the legal academy and from political science departments have conducted extensive research on the law, but they have largely ignored the others’ efforts. Part of the reason for this unfortunate disconnect is that neither has effectively come to grips with the descriptive meaning of legal doctrine. In this article, we attempt to describe the concept of legal doctrine and propound various theories of how legal doctrine may matter in judicial decision making and how those theories may be empirically tested.

The Virtual Sociality of Rights: The Case of "Women's Rights are Human Rights"

Annelise Riles — Thu, 02 Jun 2005 14:36:24 PDT

This essay traces the relationship between activists and academics involved in the campaign for "women's rights as human rights" as a case study of the relationship between different classes of what I call "knowledge professionals" self-consciously acting in a transnational domain. The puzzle that animates this essay is the following: how was it that at the very moment at which a critique of "rights" and a reimagination of rights as "rights talk" proved to be such fertile ground for academic scholarship did the same "rights" prove to be an equally fertile ground for activist networking and lobbying activities? The paper answers this question with respect to the work of self-reflexivity in creating a "virtual sociality of rights."

Encountering Amateurism: John Henry Wigmore and the Uses of American Formalism

Annelise Riles — Thu, 02 Jun 2005 14:36:22 PDT

This article explores the productive uses of amateurism in comparative law through a close reading of the life and work of John Henry Wigmore, the founder of the American tradition of comparative law who first came to the subject as a young missionary for the Langdellian style of American legal education in turn-of-the-century Japan. Drawing on anthropological and linguistic theory, the article explains amateurism as a post-Realist epithet for formalism. It seeks to counter the received view of the discipline as a pure product of American and European critiques of legal classicism by demonstrating how Wigmore's turn to the performative dimensions of legal formalism, at a moment when formalism found itself under Realist attack, provided a sustaining vision of the discipline. The power and creativity of formalist performance, as well as its limitations and even dangers, as deployed by Wigmore, raise questions relevant beyond comparative law about the aesthetic dimensions of American formalism.

The Case of the Foreign Lawyer: Internationalizing the U.S. Legal Profession

Carole Silver — Thu, 02 Jun 2005 14:36:20 PDT

This article contriubtes a new perspective to existing scholarship on internationalization of the legal profession by focusing on the increasing presence of foreign lawyers in U.S. law schools and law firms. It analyzes the interaction between foreign-educated lawyers and the legal profession in the U.S. based upon two sources of information: first, a series of interviews with foreign-educated lawyers and U.S. law firm hiring partners regarding experiences in law school and in firms, and second, a database comprised of biographical information for more than 300 foreign-educated lawyers who were working in New York during 1999 and 2000. The various roles occupied by foreign lawyers in U.S. law schools and law firms are considered, including serving as substitutes for U.S. J.D. graduates and as connections to foreign legal markets. Despite their rhetoric of internationalization, U.S. law firms remain essentially domestic institutions; they have rarely integrated foreign-educated lawyers into their structures in the U.S. However, in order to meet the growing competition from accounting and consulting firms as well as from foreign law firms, U.S. lawyers may need to reconsider their reliance upon this domestic mindset.

Examining the American Bar Association's Ratings of Nominees to the U.S. Courts of Appeals for Political Bias, 1989-2000

James T. Lindgren — Thu, 02 Jun 2005 14:36:19 PDT

In this study, Professor Lindgren examined data on the 108 confirmed nominees to the U.S. Circuit Courts of Appeal from the administrations of George H.W. Bush and William J. Clinton. He shows - for the first time - evidence of differential treatment of nominees by the American Bar Association's rating committee. Yet this is not a simple story of apparent ABA bias toward Clinton nominees. Among confirmed nominees with the most important credential - prior judicial experience - Bush nominees fare roughly as well and sometimes even better than Clinton nominees. The problem arises for those without judicial experience. Here the apparent preference for Clinton appointees is strikingly large. Without controlling for any credentials, Clinton confirmed nominees have 9.1 times as high odds of getting a unanimous well qualified rating as do Bush confirmed nominees. Controlling for credentials, Clinton nominees have 9.7-15.9 times as high odds of getting a unanimous well qualified ABA rating as similarly credentialed Bush appointees. For those without prior judicial experience, just being nominated by Clinton instead of Bush is a stronger positive variable than any other credential or than all other credentials put together. The differences in how the ABA treats Bush and Clinton nominees reaches even to the committee's internal decision making. The ABA committee split its vote 33% of the time while evaluating Bush appointees, but only 17% of the time when evaluating Clinton appointees. This difference was concentrated among those who lacked prior judicial experience, where 50% of Bush appointees had split ratings, compared to only 10% of Clinton appointees with split ratings.

Should Parents Be Given Extra Votes on Account of Their Children?: Toward a Conversational Understanding of American Democracy

Robert Bennett — Thu, 02 Jun 2005 14:36:16 PDT

The liberal political theory that was used to rationalize the apportionment jurisprudence of the 1960s suggests--with a little republican help from the notion of "virtual representation"--the possibility of extra votes for parents on account of their children. It suggests the notion so clearly that the almost complete absence of the idea from American political discourse is something of a mystery. The mystery is deepened by the fact that apportionment is usually done according to total population. Extra voting power is thus already being cast on account of children, but by the district population as a whole, rather than parents. The extra votes idea has surfaced recently, but barely. This Article explores the implications of its mysterious obscurity. The Article proposes a conversational theory of American democracy, in which public involvement in democratic conversation is the glue that holds the system together. Competitive elections are an essential stimulus for this conversation. The conversational theory is descriptive rather than normative. This accounts for a good deal of its superior descriptive force when compared with liberal and republican theories, which are normative in inspiration and are then turned to descriptive tasks, often without an appreciation of the shift. The conversational theory comfortably accommodates the continued obscurity of the extra votes possibilities, as well as many other aspects of American political life that cry out for explanation in liberal (or republican) terms. It explains, for instance, the apparent success of the United States Senate, an institution well-suited to democratic conversation, but quite awkward in liberal terms. The extra votes idea may yet catch on, because American democracy is influenced by normative visions. Whether that happens or not, however, there is much to be learned from the fact that the idea remains largely unattended.

Legal Phenomena, Knowledge, and Theory: A Cautionary Tale of Hedgehogs and Foxes

Ronald Jay Allen et al. — Thu, 02 Jun 2005 14:36:14 PDT

This article analyzes the susceptibility of areas of legal regulation to being organized or explained by top-down deductive theories of general applicability. It hypothesizes that at least three variables determine in part the likely relevance of general theories to sets of legal phenomena, ambiguity (gaps in the law), unpredictability (computational intractability), and the comparative need for specialized and common sense reasoning. We hypothesize that as ambiguity, unpredictability, and the utility of common sense reasoning go up, the amenability of a set of legal phenomena to general theoretical approaches decreases. We thus predict that the meaning of negligence will be resistant to theoretical approaches, both economic and corrective justice, and that the nature of antitrust law will embrace the microeconomic approach. We test these predictions in various ways and find support for both of them.

The Mead Doctrine: Of Rules And Standards, Meta-Rules And Meta-Standards

Thomas W. Merrill — Thu, 02 Jun 2005 14:36:13 PDT

In United States v. Mead Corp. the Supreme Court sought to prescribe a test for determining when the Chevron doctrine applies to agency interpretations of law. The Court got off to a good start, announcing that Chevron applies when Congress has delegated authority to an agency to make rules having the force of law, and the agency has adopted an interpretation pursuant to this authority. Unfortunately, the Court was less than clear about when Congress has delegated the required authority, applying a vague standard that incorporates such elements as whether Congress has directed the agency to use relatively formal procedures, whether the agency adopts a rule of decision that generalizes to more than a single case, and whether the agency's decisional rules apply uniformly throughout its jurisdiction. This paper argues that the scope of the Chevron doctrine should be governed by a meta-rule, rather than a multifactorial standard as suggested in Mead. The paper also proposes a meta-rule: Congress should be deemed to delegate authority to an agency to make rules with the force of law when Congress has provided by statute that agency action, once final, will give rise to sanctions, forfeitures, or other adverse legal consequences for parties who violate that action.

Naturalized Epistemology and the Law of Evidence

Ronald Jay Allen et al. — Thu, 02 Jun 2005 14:36:11 PDT

This paper important developments in epistemology, and defends a theoretical framework for evidence scholarship from the perspective of naturalized epistemology. It demonstrates that naturalized epistemology provides a firm conceptual foundation for much research into law of evidence. These developments in epistemology have not been much noted in legal scholarship, despite their importance in philosophy and their coincidence with some widely shared approaches to evidence scholarship. This article is a partial antidote for the unproductive fascination in some quarters of the legal academy with "postmodern" conceptions of knowledge and truth and to the even more common search by the legal professoriat for algorithms that provide answers to important legal questions. In the field of evidence, there is some interest in post-modern epistemology, and much searching for the appropriate algorithm, such as Bayesian decision theory or micro-economics, or simply the complete neglect of epistemological matters. The article argues that the naturalistic turn in epistemology of the past thirty years (especially that branch of naturalized epistemology known as social epistemology) provides the appropriate theoretical framework for the study of evidence, as it does for virtually any enterprise concerned with the empirical adequacy of its theories and the truth-generating capacity of its methodologies. Evidence scholarship and law are concerned with both, and thus naturalized epistemology provides a fruitful way of understanding the limitations of some of the existing efforts to provide theoretical and philosophical foundations to evidence law. It also provides a way to conceptualize and evaluate specific rules of evidence, and concomitantly explains what most evidence scholars do, regardless of their explicit philosophical commitments. For the great bulk of evidentiary scholars, this article should solidify the ground beneath their feet.

Some Ethical Issues Surrounding Mediation

Robert P. Burns — Thu, 02 Jun 2005 14:36:10 PDT

A progressively larger portion of social ordering occurs through mediation. Lawyers are often involved in mediation. From one perspective, mediation is simply facilitated negotiation. Thus the issues that pervade the ethics of negotiation reappear in the context of mediation without much change. Mediation, however, promises much more than facilitated negotiation. "Transformative mediation", now widely practiced, aims not primarily at maximizing outcomes, but at the moral transformation of the parties. This form of mediation poses much more fundamental questions about legal ethics and the lawyer's role. These questions implicate the general morality of legal and political discourse and the interrelationships of the moral, legal, and political spheres.

Roundtable Discussion: Corporate Governance

William J. Carney et al. — Thu, 02 Jun 2005 14:36:08 PDT

This is a transcript of a roundtable discussion between Robert Pritzker of The Marmon Group, Inc., Vice-Chancellor Jack Jacobs of the Delaware Court of Chancery, and Law Professors William Carney, Richard Painter, and Robert Sitkoff, with Professor Carney serving as moderator. The general topic was corporate governance. Among other things the participants discussed the implications of information provided by Mr. Pritzker regarding Smith v. Van Gorkom. Mr. Pritzker stated that the $55 price and the one-week deadline were established by Jerry Van Gorkom, not the Pritzkers. Mr. Pritzker also described the terms and the motivations for the Pritzkers' contribution to the settlement. Finally, in addition to analysis of the Van Gorkom decision, the panel also discussed public and private boards of directors, the Caremark decision, and corporate charitable and political contributions. The roundtable was held under the auspices of the Theory Informs Business Practices Symposium at the Chicago-Kent College of Law on April 6, 2001.

Access to Networks: Economic and Constitutional Connections

Daniel F. Spulber et al. — Thu, 02 Jun 2005 14:36:06 PDT

A fundamental transformation is taking place in the basic approach to regulating network industries. Policy makers are in the process of abandoning their century-old commitment to rate regulation in favor of a new regulatory approach known as access regulation. Rather than controlling the price of outputs, the new approach focuses on compelling access to and mandating the price of inputs. Unfortunately, this shift in regulatory policy has not been met with an accompanying shift in the manner in which regulatory authorities regulate prices. Specifically, policy makers have continued to base rates on either historical or replacement cost. We argue that courts and policy makers have largely ignored the fact that this fundamental shift in regulatory approach demands an equally fundamental shift in the approach to setting prices. Economic theory suggests that regulatory authorities should base access prices on market prices. In addition, because compelled access to most telecommunications networks requires that competitors be permitted to place equipment on the network owner's property, access requirements constitute physical takings for which market-based compensation must be paid. Although the unavailability of market-based determinants once justified basing prices on some measure of cost, the shift in regulatory policy (especially when combined with the emergence of direct, facilities-based competition made possible by technological convergence) has caused the justifications for refusing to set rates on the basis of market prices to fall away. We then use these insights to analyze access pricing with respect to three emerging regulatory issues: (1) access to unbundled network elements mandated by the Telecommunications Act of 1996, (2) the access to utility poles compelled by the 19996 amendments to the Pole Attachments Act, and (3) open access to digital subscriber line (DSL) and cable modem networks providing high-speed broadband services.

Regulatory Mismatch in the International Market for Legal Services

Carole Silver — Thu, 02 Jun 2005 14:36:04 PDT

The increasingly international reach of law owes part of its momentum to individual lawyers and law firms that function as carriers of ideas, processes and policies. U.S. lawyers are important participants in this expanding influence of law, as they educate, train and deploy individuals educated and licensed in the U.S. and abroad. This article examines the ways in which law firms internationalize, and considers the regulatory environment governing crucial interactions between U.S. and foreign-educated lawyers. It builds upon prior work that investigated the impact on U.S. law firms of the development of an international market for legal services and the roles of foreign lawyers in the U.S. Regulation of the interaction between foreign and U.S. lawyers shapes the ways in which U.S. firms participate in the developing international market for legal services; it may well determine the placement and extent of that participation through U.S.-based activities. The article examines regulation of non-U.S. lawyers in state bar admission and foreign legal consultant rules, analyzes these rules and compares them to an ideal regulatory regime. It also reports on data illustrating the ways in which the regulatory status of foreign legal consultant is used by non-U.S. lawyers. The foreign legal consultant title has been adopted for use apart from the licensed status, which results in confusion. The article combines an empirical and theoretical approach, and proposes a new regulatory overlay for international law firms and lawyers.

Corporate Political Speech, Political Extortion, and the Competition for Corporate Charters

Robert H. Sitkoff — Thu, 02 Jun 2005 14:36:03 PDT

This article explores the policy bases for, and the political economy of, the law's long-standing discrimination against corporate political speech. This Article also explores the relevance of state law regulation of corporate political speech to the competition between the states for corporate charters. In the process, implications for the current political debate over soft money and the current academic debates over enacting an optional federal corporate takeover law regime and creating a securities law regulatory competition are noted. The underlying aim of this Article is to bring to bear on the relevant policy debates a shift in focus from the shareholder/manager agency relationship to the agency relationship between lawmakers and society. The Article draws on the contractarian view of the firm, the economic theory of regulation, and the study of public choice.

Symmetric Entrenchment: A Constitutional and Normative Theory

Michael B. Rappaport et al. — Thu, 02 Jun 2005 14:36:01 PDT

In this article, we defend the traditional rule that legislative entrenchment, the practice by which a legislature insulates ordinary statutes from repeal by a subsequent legislature, is both unconstitutional and normatively undesirable. A recent essay by Professors Eric Posner and Adrian Vermeule disputes this rule against legislative entrenchment and provides the occasion for our review of the issue. First, we argue that legislative entrenchment is unconstitutional, offering the first comprehensive defense of the proposition that the original meaning of the Constitution prohibits legislative entrenchments. We show that a combination of textual, historical, and structural arguments make a very compelling case against the constitutionality of legislative entrenchment. In particular, the Framers incorporated into the Constitution the traditional Anglo-American practice against legislative entrenchment, as evidenced by early comments by James Madison - comments that have not been previously discussed in this context. Moreover, legislative entrenchment essentially would allow Congress to use majority rule to pass constitutional amendments. On the normative issue, we offer a new theory of the appropriate scope of entrenchment: the theory of symmetric entrenchment. Under our theory, there is a strong presumption that only symmetric entrenchments - entrenchments that are enacted under the same supermajority rule that is needed to repeal them - are desirable. The presumption helps to distinguish desirable entrenchments that would improve upon government decisions from undesirable ones that simply involve legislatures protecting their existing preferences against future repeal. To be desirable entrenchments must generally be symmetric, because the supermajority rule that is applied to the enactment of entrenched measures would improve the quality of these measures and therefore compensate for the additional dangers that entrenchments pose. This theory steers a middle path between a strict majoritarian position, which would prohibit all legislative entrenchments, and a position that would allow legislative majorities to entrench measures.