Monthly Archives: May 2019

How We Regulate Wage Theft

Jennifer J. Lee & Annie Smith, Regulating Wage Theft, 94 Wash. U. L. Rev. __ (forthcoming 2019), available at SSRN.

How best to combat wage theft? In a new paper, Regulating Wage Theft, Jennifer Lee and Annie Smith join the debate with insights from an original hand-coded dataset of State and local anti-wage theft laws enacted from 2005 up through 2018. They know not only who enacted these laws and when, but also the strategies those laws use to combat wage theft. The upshot: Most such laws rely on worker complaints and other enforcement strategies that are less likely to succeed in preventing or redressing wage theft. But, in a few places here and there, the laws use strategies that may do a lot better, and thus are worth a closer look.

The paper’s core: a curated census of anti-wage-theft laws. Unlike past efforts, the paper covers enacted State and local laws over a longer time period. Lee and Smith searched generally in legal databases for laws regulating wage payment or information related to wage payment in every State, the District of Columbia, and the 30 most populous cities. They also scoured secondary sources and talked to worker centers and State departments of labor. They ignored such laws that only increased the minimum wage rate; addressed worker misclassification; required paid sick leave; made “only technical revisions” without “fundamentally” changing the enforcement regime; “would be considered pro-employer provisions”; only covered work performed pursuant to city contracts; or were “subsequently repealed, preempted by state statute, or otherwise invalidated” (Pp. 13-14). Continue reading "How We Regulate Wage Theft"

Personalizing Copyright Law Using Consumer Demographics

Adi Libson & Gideon Parchomovsky. Toward the Personalization of Copyright Law, 86 U. Chi. L. Rev.  527 (2019).

Most people assume, if implicitly, that there is a substantial element of uniformity in our IP system. At first blush, our copyright and patent laws extend a (presumably) uniform set of rights to (presumably) uniform authors and inventors, who can then sue (presumably) uniform unauthorized users. Scholarship for some time now has already noted that the bundle of rights is not actually uniform, and has theorized on the optimal tailoring of rights to particular industries and subject-matters. More recently the literature has started to unpack the implicit assumption of creator uniformity using data on the demographics of authors and inventors. Statistically speaking, the data has shown that creators of different races, genders and ages diverge in the rate and direction of their creative efforts. In this new and exciting article, Libson and Parchomovsky begin to unpack the assumption of user uniformity using user demographics.

Legal enforcement of copyrights entails benefits and costs. On the benefit side, it provides authors with an incentive to create, by securing to them the exclusive exploitation of their works. On the cost side, it reduces access to creative works, by endowing the author with a monopoly-like power. Optimally, copyrights would only be enforced against high value consumers (thus achieving the incentive rationale), but not against those with valuations lower than the market price (thus achieving the access rationale). In theory, allowing free access to those who cannot afford the market price would be efficient, as it would allow them access without sacrificing the author’s incentive. In practice, however, this cannot be done because many who are willing and able to pay would masquerade as ones who are not, and authors have no crystal ball to reveal consumer valuation. Copyright enforcement thus makes sure that those who can pay would, realizing that the access cost is borne as a necessary evil. Continue reading "Personalizing Copyright Law Using Consumer Demographics"

Bowie’s Gap

Nikolas Bowie, The Government-Could-Not-Work Doctrine, 105 Va. L. Rev. 1 (forthcoming, 2019), available at SSRN.

Without much fuss, writing with easy, accomplished clarity, Nikolas Bowie puts forward two striking ideas interacting dramatically in his article The Government-Could-Not-Work-Doctrine.

The first is advertised in the title of his article: The proposition that government is supposed to work is constitutional, Bowie stresses. It is itself a notion properly treated as of primary relevance in processes of bringing to bear other constitutional considerations. In particular, he asserts, government efforts ought ordinarily to win our respect if they declare their general applicability to be integral to their aims. Vaccination programs, we may especially appreciate these days, count as paradigm illustrations. Claims to exceptions, however deeply felt and honorably motivated, should not prevail absent directly pertinent, emphatically couched constitutional directives. “We cannot always be in every political majority.” (P. 62.) Individuals who resist general dictates should consider tactics founded in philosophies of civil disobedience. Bowie mobilizes, inter alia, Jesus of Nazareth, Mohandas Gandhi, and Martin Luther King, Jr. (P. 3). Continue reading "Bowie’s Gap"

The Nature of Judicial Power

Daniel M. Brinks & Abby Blass, The DNA of Constitutional Justice in Latin America (2018).

Scholarship on the exercise of judicial power often focuses on its nurture: how judges operate to protect their authority in a complex system of personal incentives, institutional constraints, and political uncertainty. In their recent book, The DNA of Constitutional Justice in Latin America (2018), Dan Brinks and Abby Blass instead focus on the nature of judicial power, producing a magisterial analysis of judicial design. They argue that a court’s formal institutional design can indicate the kind of political influence it was intended to exercise. And in so doing, they present a beautifully integrated theory complete with robust quantitative and qualitative empirical support.

The book aims to provide a “unifying political account of the origins of the different models of constitutional justice that have emerged in Latin America since the 1970s” (P. 2), and its conceptual contributions are limited to that set of countries. Nevertheless, Brinks and Blass develop a theory that has universal appeal, and scholars of global or regional constitutionalism in other geographic areas will benefit from reading and drawing on this work. Continue reading "The Nature of Judicial Power"

Waging War on Dynastic Wealth with a Wealth Tax

Nothing incites more dread in law students and professors than the words “Rules Against Perpetuities” (RAP).  As states continue to pass laws abolishing or effectively nullifying the doctrine, professors celebrate deleting this topic from their syllabi. Professor Kades demonstrates why, from a social policy perspective, society at large should dread the death of the RAP. In this article, he challenges this trend and demonstrates the negative consequences resulting from dynasty trusts, following the demise of the RAP.

Prof. Kades starts with a brief discussion of wealth and income inequality. Relying, in part, on Thomas Piketty’s research, Prof. Kades discusses how wealth inequality has a greater impact on wealth concentration than income inequality. His research supports the notion that wealth inequality has outpaced income inequity amongst the top wealth holders. He attributes this phenomenon, in part, to a mixture of wealthier individuals earning a higher rate of return on investments and their ability to save a larger part of their income. As inequality grows, individuals have more property to transfer via inheritance. Continue reading "Waging War on Dynastic Wealth with a Wealth Tax"

Letting Some Light In: Resolving a Key Question Regarding Communication-and-Resolution Programs

Allen Kachalia, Kenneth Sands, Melinda Van Niel, Suzanne Dodson, Stephanie Roche, Victor Novack, Maayan Yitshak-Sade, Patricia Folcarelli, Evan M. Benjamin, Alan C. Woodward & Michelle M. Mello, Effects of A Communication-And-Resolution Program on Hospitals’ Malpractice Claims and Costs. 37 Health Aff. 1836 (2018).

Allen Kachalia and ten co-authors’ new piece, entitled Effects of a Communication-and-Resolution Program on Hospitals’ Malpractice Claims and Costs, offers an insight to address one of the most daunting challenges that looms over the field of tort law—and, indeed, one of the most daunting challenges that confronts the “sister professions” of law and medicine more generally. The question is how to address the problem of preventable medical injury. In human terms, the problem is enormous. Roughly 35 million Americans are hospitalized annually, and the best evidence suggests that approximately 1% of those individuals will be victims of bona fide medical malpractice, while perhaps another 1.3% will be “preventably,” though not necessarily negligently, hurt by the care they receive. That adds up to some 800,000 individuals. Further, while many of these injuries are minor or transient, others are serious. Each year, 44,000 to 98,000 Americans die because of medical mistakes, which means that medical errors may cause more deaths per year than all other accident types, combined.

The medical malpractice system—the civil justice system’s attempt to address the above injuries—also takes a significant toll. The system’s direct cost is substantial: Administrative costs alone (in legal fees and insurer overhead) reportedly top $6 billion annually. Its indirect costs are considerable, as an abiding fear of liability reportedly impacts the tests physicians perform, the medication they prescribe, and the referrals they make, which contributes to “defensive medicine” (which is, itself, costly). And, the physicians who are sued are, by all accounts, deeply, and negatively, affected. Continue reading "Letting Some Light In: Resolving a Key Question Regarding Communication-and-Resolution Programs"

An Erie Tale

Brian L. Frye, The Ballad of Harry James Tompkins, 52 Akron L. Rev. 531 (2019).

Although Westlaw contains thousands of cases with a party named “Erie,” there is only one Erie. This abridged citation evokes expansive concepts. Erie is shorthand for normative and descriptive accounts about how the constitutional system operates, the origins of legal rules, and the nature of judicial reasoning. Invocations of Erie can shimmer with veneration, prickle with disdain, or tingle with dread. Either way, references to Erie pervade scholarship and case law.

Despite the myriad meanings that Erie has acquired, there was until now a consensus about the underlying facts. Late on a dark night in Pennsylvania, Harry Tompkins was walking home on a path parallel to railroad tracks. A protrusion from a passing train knocked him beneath the wheels, which severed his right arm. Trains are not supposed to have protrusions. The railroad therefore was liable for negligence if it owed Tompkins a duty of care. Pennsylvania law rejected a duty of care because it deemed Tompkins a trespasser even though he was on a well-worn path. Tompkins’ lawyers wisely did not sue in Pennsylvania. Instead, they sued in a federal court in New York because they anticipated that the court would ignore Pennsylvania law in favor of “general law.” This strategy led to a large but short-lived jury verdict. The Supreme Court held on appeal that the trial court should have applied Pennsylvania law. On remand, Tompkins received no compensation for his life-changing injury. Continue reading "An Erie Tale"

Manipulation, Dark Patterns, and Evil Nudges

Daniel Susser, Beate Roessler & Helen Nissenbaum, Online Manipulation: Hidden Influences in a Digital World, available at SSRN.

Congress has been scrambling to address the public’s widespread and growing unease about problems of privacy and power on information platforms, racing to act before the California Consumer Privacy Act becomes operative in 2020. Although the moment seems to demand practical and concrete solutions, legislators and advocates should pay close attention to a very timely and useful work by a set of philosophers. In a working paper entitled Online Manipulation: Hidden Influences in a Digital World, three philosophers–Daniel Susser, Beate Roessler, and Helen Nissenbaum–offer a rich and nuanced meditation on the nature of “manipulation” online. This article might provide the conceptual clarity required for the broad and sweeping kind of new law we need to fix much of what ails us. Although the article is theoretical, it could lead to some practical payoffs.

The article’s most important contribution is the deep dive it provides into the meaning of the manipulation, a harm separate and distinct from other harms more often featured in today’s technology policy discourse. Powerful players routinely deprive us of an opportunity for self-authorship over our own actions. Advertisers manipulate us into buying what we don’t need; platforms manipulate us into being “engaged” when we would rather be “enlightened” or “provoked” or “offline”; and political operatives manipulate us into voting against our interests. Taken together, these incursions into individual autonomy feed societal control, power imbalances, and political turmoil. The article builds on the work of many others, including Tal Zarsky, Ryan Calo (in an article that has received well-deserved praise from Zarsky in these pages), and Frank Pasquale, who have all written about the special problems of manipulation online. Continue reading "Manipulation, Dark Patterns, and Evil Nudges"

A Path to International Tax Reform and Improved Wealth Distribution Across the Globe

Tarcísio Diniz Magalhães, What Is Really Wrong with Global Tax Governance and How to Properly Fix It, 10 World Tax J. (2018).

Thomas Piketty’s work brought the reality of unequal distributions of wealth into mainstream media and popular discourse. In the tax world, the conversation now regularly turns to a consideration of whether and how the international tax regime contributes to existing patterns of wealth and income distribution across nations. Certainly, the tax norms and rules that shape the basic roadmap of international tax (including source, residence and permanent establishment provisions) contribute to existing distributions of wealth—and relatedly taxable income—across jurisdictions. Why do these patterns persist? And perhaps more importantly, what would it take for change?

A recent article by Tarcísio Diniz Magalhães aims to develop answers to both questions. That article builds on an active conversation in international tax. In responding to the question, Magalhães argues that the international tax world we see today is the product of a 100 years of tax policy advocacy and design by a subset of nations and actors—and that this subset has maintained a hold on international tax policy norms through a combination of power and expertise. Although the story of developed economies dominating the origins of international tax is not new, Magalhães offers a nuanced argument regarding how these countries have maintained their level of influence in policy design. His weaving of technical tax expertise into a narrative that has typically been cast as a raw power play provides a closer look at the mechanisms by which privileged positions can be maintained. This process of tax law design is, in his view, more important than the substantive outcomes—although the substantive outcomes have been less than ideal from the perspective of many developing countries. Continue reading "A Path to International Tax Reform and Improved Wealth Distribution Across the Globe"

“Property” as a Dynamic Technology, and Its Consequences

Lee Anne Fennell, Property Beyond Exclusion, 61 William & Mary L. Rev. __ (forthcoming 2019), available at SSRN.

While the layperson tends to think of “property” in terms of things, modern legal discourse tends to conceive of property as a “bundle of sticks,” i.e., a collection of rights with respect to land, or to tangible and intangible objects.1 In her new article Property Beyond Exclusion, University of Chicago law professor Lee Anne Fennell has a different take. Fennell focuses not so much on any specific contents of the bundle; rather, her focus is on the changes in their nature.

Professor Fennell’s thesis in Property Beyond Exclusion is that rights generally associated with landed property increasingly should not be structured around physical boundaries. While physical demarcation of parcels of land remains our “workhorse strategy,” it is “becoming less efficacious and more costly” (P. 3). Continue reading "“Property” as a Dynamic Technology, and Its Consequences"

Families, Inc.

Allison Anna Tait, Corporate Family Law, 112 Nw. U. L. Rev. 1 (2019).

From Dallas and Dynasty to Hobby Lobby, NewsCorp, and the First Family, American culture is replete with the successes (and failures) of family businesses. But interestingly, even as family businesses are touted as the “backbone” of the American economy (P. 5.), they fall outside of the logic of corporate law. Corporate law posits that firms, whether publicly traded or privately held, seek to maximize shareholder profits. That is, corporate law “presupposes rational actors making rational choices” aimed at maximizing shareholder value. (P. 4.) On this theory, it is the individual’s responsibility to make decisions that will protect her interests, economic or otherwise, in the business.

But as Allison Anna Tait makes clear in Corporate Family Law, the assumptions that undergird most businesses do not always hold true for family businesses. As an initial matter, corporate family members do not acquire their interests in the business in the same way that others do. Rather than purchasing shares through bargaining in a market, most family members acquire their interest in the family business through entrepreneurship, or more likely, as bequests and gifts. As importantly, corporate family members do not bargain in the same way as traditional corporate shareholders. Corporate family members are, in the terms of behavioral economics, “bounded” rational actors, whose decisions are not shaped exclusively by a desire to maximize profits. (P. 4.)  Their interests, by contrast, “are enmeshed in a complex set of interlocking relationships that intertwine the personal with the professional.” (P. 4.) As such, their decisions may be impacted by “personal tensions, desires, and loyalties.” (P. 5.) Continue reading "Families, Inc."