Monthly Archives: January 2017

Getting to Grips with Discrimination

Deborah Hellman, Two Concepts of Discrimination, 102 Virginia L. Rev. 895 (2016), available at SSRN.

Since the mid-1970s, the Supreme Court has insisted with increasing fervor upon an anticlassification norm as the central principle of Equal Protection law. In the past decade, alternative legal solutions to inequality have emerged as competitors with the anticlassification norm. In 2009, the late Justice Scalia observed, in his concurrence in Ricci v. DeStefano, that the disparate impact theory of liability available under Title VII of the 1964 Civil Rights Act required employers to categorize by race. Given the priority of colorblindness, Justice Scalia observed, it might therefore fall afoul of the Equal Protection Clause. Two basic instruments for racial equality—both a part of the federal statutory law of antidiscrimination for a half century—suddenly seemed in collision course. This conflict is at the heart of Deborah Hellman’s excellent new article.

The conflict between anticlassification and disparate impact has receded more recently. In a June 2015 decision interpreting the Fair Housing Act, Justice Kennedy brokered an uneasy truce. Yet the pressing and fundamental theoretical question raised by Justice Scalia’s Ricci concurrence has not dissipated: How is it that anticlassification and disparate impact can both purport to mitigate racial discrimination, and yet conflict? Is the disagreement a divergence of tactics—a question of whether one thinks one can get beyond race without accounting for race? Is it the result of a divide between ideal and nonideal theory? Or does it represent a more profound divide over the nature and substance of equality? Continue reading "Getting to Grips with Discrimination"

Getting to Grips with Discrimination

Deborah Hellman, Two Concepts of Discrimination, 102 Virginia L. Rev. 895 (2016), available at SSRN.

Since the mid-1970s, the Supreme Court has insisted with increasing fervor upon an anticlassification norm as the central principle of Equal Protection law. In the past decade, alternative legal solutions to inequality have emerged as competitors with the anticlassification norm. In 2009, the late Justice Scalia observed, in his concurrence in Ricci v. DeStefano, that the disparate impact theory of liability available under Title VII of the 1964 Civil Rights Act required employers to categorize by race. Given the priority of colorblindness, Justice Scalia observed, it might therefore fall afoul of the Equal Protection Clause. Two basic instruments for racial equality—both a part of the federal statutory law of antidiscrimination for a half century—suddenly seemed in collision course. This conflict is at the heart of Deborah Hellman’s excellent new article.

The conflict between anticlassification and disparate impact has receded more recently. In a June 2015 decision interpreting the Fair Housing Act, Justice Kennedy brokered an uneasy truce. Yet the pressing and fundamental theoretical question raised by Justice Scalia’s Ricci concurrence has not dissipated: How is it that anticlassification and disparate impact can both purport to mitigate racial discrimination, and yet conflict? Is the disagreement a divergence of tactics—a question of whether one thinks one can get beyond race without accounting for race? Is it the result of a divide between ideal and nonideal theory? Or does it represent a more profound divide over the nature and substance of equality? Continue reading "Getting to Grips with Discrimination"

Whittling Away at Trademark Law’s Notions of Harm

In recent decades, numerous scholars have challenged trademark law’s various conceptions of harm. Unlike copyright and patent law, trademark law positions itself as a harm-avoidance regime, rather than a mechanism for capturing economic rents. At least under the dominant theoretical model, the law seeks to promote competition by ensuring the accuracy and reliability of source-indicating symbols in markets. In practice, however, the harm narrative often breaks down under scrutiny. Recent articles have taken issue with the assorted harms that trademark law purports to prevent. From dilution by blurring to “irrelevant” confusion, critics have argued that at least some of the injuries targeted by trademark law are illusory.

In What Can Harm the Reputation of a Trademark?, Michael Handler adds to this literature with a critical look at dilution by tarnishment. Tarnishment, defined in the Lanham Act as “association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark,” explicitly addresses itself to harm. On its face, it requires not only proof of some association between the famous mark and the diluting one, but a demonstrable risk that the challenged use is likely to harm the famous mark’s reputation. Yet courts have suggested (and some have held) that they will presume such a risk when marks resembling famous ones appear on unsavory products. Tarnishment, in other words, assumes that creating a mental association between a famous mark and some distasteful product can sully the trademark’s reputation, even when consumers realize that there’s no relationship between the two parties. Handler questions that presumption. In particular, he “quer[ies] whether this form of dilution – to the extent it encompasses conduct beyond the boundaries of the traditional, confusion-based, trademark infringement action – is, in fact, a ‘harm’ of which the law should take cognizance.” Continue reading "Whittling Away at Trademark Law’s Notions of Harm"

Whittling Away at Trademark Law’s Notions of Harm

In recent decades, numerous scholars have challenged trademark law’s various conceptions of harm. Unlike copyright and patent law, trademark law positions itself as a harm-avoidance regime, rather than a mechanism for capturing economic rents. At least under the dominant theoretical model, the law seeks to promote competition by ensuring the accuracy and reliability of source-indicating symbols in markets. In practice, however, the harm narrative often breaks down under scrutiny. Recent articles have taken issue with the assorted harms that trademark law purports to prevent. From dilution by blurring to “irrelevant” confusion, critics have argued that at least some of the injuries targeted by trademark law are illusory.

In What Can Harm the Reputation of a Trademark?, Michael Handler adds to this literature with a critical look at dilution by tarnishment. Tarnishment, defined in the Lanham Act as “association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark,” explicitly addresses itself to harm. On its face, it requires not only proof of some association between the famous mark and the diluting one, but a demonstrable risk that the challenged use is likely to harm the famous mark’s reputation. Yet courts have suggested (and some have held) that they will presume such a risk when marks resembling famous ones appear on unsavory products. Tarnishment, in other words, assumes that creating a mental association between a famous mark and some distasteful product can sully the trademark’s reputation, even when consumers realize that there’s no relationship between the two parties. Handler questions that presumption. In particular, he “quer[ies] whether this form of dilution – to the extent it encompasses conduct beyond the boundaries of the traditional, confusion-based, trademark infringement action – is, in fact, a ‘harm’ of which the law should take cognizance.” Continue reading "Whittling Away at Trademark Law’s Notions of Harm"

Reconciling the First Amendment with the Regulation of Professional-Client Communications

Claudia E. Haupt, Unprofessional Advice, 19 U. Pa. J. Const. L. (forthcoming 2017), available at SSRN.

The application of First Amendment principles to professional speech raises a seemingly irresolvable challenge. On the one hand, a core First Amendment principle is that government should not discriminate against speech based solely on its content. On the other hand, it is well settled that physicians and other professionals can be subject to malpractice liability for giving “unprofessional” advice—despite the fact that doing so depends precisely on the sort of content discrimination that the First Amendment normally does not allow. In light of this discrepancy, some have suggested that professional-client interactions should be treated as an exception to normal First Amendment principles, in order to preserve the law’s ability to protect clients from unprofessional advice.

Rejecting that approach, Claudia Haupt’s forthcoming article, Unprofessional Advice, argues that efforts to limit unprofessional advice are entirely consistent with “the claim that “[p]rofessional speech should receive robust First Amendment protection.” The article builds on Haupt’s previous work, Professional Speech, which set out a comprehensive theoretical and doctrinal framework for understanding professional speech. Taken together, the two pieces provide a coherent and convincing approach to resolving several ongoing policy debates. Continue reading "Reconciling the First Amendment with the Regulation of Professional-Client Communications"

Reconciling the First Amendment with the Regulation of Professional-Client Communications

Claudia E. Haupt, Unprofessional Advice, 19 U. Pa. J. Const. L. (forthcoming 2017), available at SSRN.

The application of First Amendment principles to professional speech raises a seemingly irresolvable challenge. On the one hand, a core First Amendment principle is that government should not discriminate against speech based solely on its content. On the other hand, it is well settled that physicians and other professionals can be subject to malpractice liability for giving “unprofessional” advice—despite the fact that doing so depends precisely on the sort of content discrimination that the First Amendment normally does not allow. In light of this discrepancy, some have suggested that professional-client interactions should be treated as an exception to normal First Amendment principles, in order to preserve the law’s ability to protect clients from unprofessional advice.

Rejecting that approach, Claudia Haupt’s forthcoming article, Unprofessional Advice, argues that efforts to limit unprofessional advice are entirely consistent with “the claim that “[p]rofessional speech should receive robust First Amendment protection.” The article builds on Haupt’s previous work, Professional Speech, which set out a comprehensive theoretical and doctrinal framework for understanding professional speech. Taken together, the two pieces provide a coherent and convincing approach to resolving several ongoing policy debates. Continue reading "Reconciling the First Amendment with the Regulation of Professional-Client Communications"

Criminal Law’s Borders

When a sanction as massive and punitive as deportation is triggered by a criminal sentence, it is all but inevitable that the system responsible for processing and administering the criminal sentence will be transformed by its proximity to this substantial “collateral” effect. Mona Lynch’s Backpacking the Border: The Intersection of Drug and Immigration Prosecutions in a High Volume U.S. Court, provides new and important insights into the nature and degree of this transformative effect. In her Backpacking article, she illustrates how drug prosecutions in one high-volume U.S. district court along the southern border have ceased to be driven by the presumptive goal of deterring and punishing drug crimes at all; instead, they operate almost entirely in the service of migration control objectives. “[I]mmigration policy has become so criminalized here that the immigrant status rather than criminal status of the defendants in drug cases drives the adjudicatory logics and practices.” (P. 5.)

Lynch’s article is the product of a comparative qualitative field research study that she conducted in four federal district court jurisdictions around the United States. She conducted in-depth interviews and engaged in direct observation of court proceedings, “supplemented by analysis of social artifacts and secondary source data.” (P. 5.) Her particular interest was finding out how drug cases are selected and adjudicated in the federal court system, and her focus was on legal process rather than legal outcomes. By analyzing four distinct jurisdictions, she hoped to see how local courtroom actors in distinct contexts “conceptualize and shape outcomes.” Id. This particular paper draws from her work in “the Southwestern district,” which is one of the highest-volume federal district courts in the country, which has a caseload of primarily drug and immigration crimes. While she noted local variations in all four of the districts she studied, “all three of the non-border districts had modes of adjudicating cases that bore resemblance to each other and that diverged considerably from” the southwestern border district that she studied. (P. 6.) Continue reading "Criminal Law’s Borders"

Criminal Law’s Borders

When a sanction as massive and punitive as deportation is triggered by a criminal sentence, it is all but inevitable that the system responsible for processing and administering the criminal sentence will be transformed by its proximity to this substantial “collateral” effect. Mona Lynch’s Backpacking the Border: The Intersection of Drug and Immigration Prosecutions in a High Volume U.S. Court, provides new and important insights into the nature and degree of this transformative effect. In her Backpacking article, she illustrates how drug prosecutions in one high-volume U.S. district court along the southern border have ceased to be driven by the presumptive goal of deterring and punishing drug crimes at all; instead, they operate almost entirely in the service of migration control objectives. “[I]mmigration policy has become so criminalized here that the immigrant status rather than criminal status of the defendants in drug cases drives the adjudicatory logics and practices.” (P. 5.)

Lynch’s article is the product of a comparative qualitative field research study that she conducted in four federal district court jurisdictions around the United States. She conducted in-depth interviews and engaged in direct observation of court proceedings, “supplemented by analysis of social artifacts and secondary source data.” (P. 5.) Her particular interest was finding out how drug cases are selected and adjudicated in the federal court system, and her focus was on legal process rather than legal outcomes. By analyzing four distinct jurisdictions, she hoped to see how local courtroom actors in distinct contexts “conceptualize and shape outcomes.” Id. This particular paper draws from her work in “the Southwestern district,” which is one of the highest-volume federal district courts in the country, which has a caseload of primarily drug and immigration crimes. While she noted local variations in all four of the districts she studied, “all three of the non-border districts had modes of adjudicating cases that bore resemblance to each other and that diverged considerably from” the southwestern border district that she studied. (P. 6.) Continue reading "Criminal Law’s Borders"

This Is Not Your Parents “Market Efficiency” . . .

Dan Awrey, The Mechanisms of Derivatives Market Efficiency, 91 N.Y.U. L. Rev. 1104 (2016).

“Market efficiency” is one of the most widely used, and frequently over-used, concepts in modern financial economics and its cross-disciplinary offspring, law and economics. Every student taking corporate finance or securities regulation knows about the Efficient Market Hypothesis. Every policy proposal must grapple with the issue of how it would impact the relevant market’s “efficiency.” And, of course, innumerable law review articles employ the vocabulary of “market efficiency” to support a variety of doctrinal, empirical, and normative claims. Yet, this theoretically elegant concept often seems to be a rather imperfect representation of what actually happens in real-life financial markets. The latest financial crisis made this problem simply impossible to ignore. Of course, a sensible way to bridge the gap between theory and practice is to refine or revise the theory, so that it provides a better explanation of the relevant reality. That’s easier said than done, however. Not surprisingly, the post-crisis explosion of academic writings on financial markets and regulation has produced disappointingly little by way of true theoretical advancement, at least so far.

Dan Awrey’s new article, The Mechanisms of Derivatives Market Efficiency, is one of the few rare exceptions in that respect. It is cleverly framed as an attempt to update and extend the theoretical framework originally laid out by Ron Gilson and Reinier Kraakman in their canonical 1984 article, The Mechanisms of Market Efficiency. Gilson and Kraakman were the first to identify and map out the key channels through which any particular piece of new information, depending on the cost of acquiring and processing it, gets incorporated into the publicly-traded stock prices. Among other things, they explained how numerous professional traders (broker-dealers, research analysts, investment managers, etc.) obtain, process, and disseminate costly private information, thus collectively enabling stock market prices to move to the new optimal levels. Continue reading "This Is Not Your Parents “Market Efficiency” . . ."

This Is Not Your Parents “Market Efficiency” . . .

Dan Awrey, The Mechanisms of Derivatives Market Efficiency, 91 N.Y.U. L. Rev. 1104 (2016).

“Market efficiency” is one of the most widely used, and frequently over-used, concepts in modern financial economics and its cross-disciplinary offspring, law and economics. Every student taking corporate finance or securities regulation knows about the Efficient Market Hypothesis. Every policy proposal must grapple with the issue of how it would impact the relevant market’s “efficiency.” And, of course, innumerable law review articles employ the vocabulary of “market efficiency” to support a variety of doctrinal, empirical, and normative claims. Yet, this theoretically elegant concept often seems to be a rather imperfect representation of what actually happens in real-life financial markets. The latest financial crisis made this problem simply impossible to ignore. Of course, a sensible way to bridge the gap between theory and practice is to refine or revise the theory, so that it provides a better explanation of the relevant reality. That’s easier said than done, however. Not surprisingly, the post-crisis explosion of academic writings on financial markets and regulation has produced disappointingly little by way of true theoretical advancement, at least so far.

Dan Awrey’s new article, The Mechanisms of Derivatives Market Efficiency, is one of the few rare exceptions in that respect. It is cleverly framed as an attempt to update and extend the theoretical framework originally laid out by Ron Gilson and Reinier Kraakman in their canonical 1984 article, The Mechanisms of Market Efficiency. Gilson and Kraakman were the first to identify and map out the key channels through which any particular piece of new information, depending on the cost of acquiring and processing it, gets incorporated into the publicly-traded stock prices. Among other things, they explained how numerous professional traders (broker-dealers, research analysts, investment managers, etc.) obtain, process, and disseminate costly private information, thus collectively enabling stock market prices to move to the new optimal levels. Continue reading "This Is Not Your Parents “Market Efficiency” . . ."

Contract Theory: A View From the Other Side of the Atlantic

Martijn W. Hesselink, Contract Theory and EU Contract Law, in Research Handbook on EU Consumer & Contract Law (Christian W. Twigg-Flesner ed., forthcoming), available at SSRN.

Some analyses are particularly suitable for novices, while others suit experts. Few analyses may be of interest to both. Martijn Hesselink’s contribution to a forthcoming handbook on EU Consumer and Contract Law belongs to the latter category. In this chapter, Hesselink discusses the “mismatch between much of the existing contract theory, on the one hand, and EU contract law on the other.” Ostensibly, this discussion is only relevant to a narrow audience—namely, the rather few (especially in the United States) who are interested in both contract theory and EU contract law. In fact, however, this chapter would benefit anyone interested in contract theory even if they have little interest in EU law—or conversely, anyone interested in EU contract law who may not care much about contract theory. Indeed, reading this chapter may persuade U.S. contract professionals that they should take interest in EU law, and convince EU contract people that contract theory is important to understanding their field in a broader context.

Hesselink’s chapter consists of three parts. The first part provides a highly useful typology of contemporary theories of contract law. The second delineates EU contract law and describes its basic features. The third part points to the mismatch between most contract theories and EU contract law, and explores its ramifications. Continue reading "Contract Theory: A View From the Other Side of the Atlantic"