Oct 19, 2011 John Floodlegalpro
Milton C. Regan, Jr.
Taxes and Death: The Rise and Demise of an American Law Firm, in Austin Sarat, ed.,
Law Firms, Legal Culture, and Legal Practice, 52
Stud. in Law, Politics, and Society 107 (special issue) (2010), available at
SSRN.Milton Regan has chronicled the troubled times of law firms before in Eat What You Kill: The Fall of a Wall Street Lawyer (2004). On both occasions the firms appear to have undergone profound changes in culture that have eventually destabilized them and either wrought dire consequences for the lawyers or caused the death of the firm. Regan is a methodical obituarist.
He ascribes two underlying causes to these cultural shifts. One is the tenuous hold a law firm has on its share of the market. Lawyers might move taking clients with them or new specialist firms might aggressively shift into an established market drawing business away from others. The firm’s mix of top quality work may get diluted with less valued work. The second is the organizational dynamics of the law firm. Law firms operate under continuing centrifugal forces as practice groups proliferate and new rainmakers join putting management in the position of persuading and cajoling others to stay. Emmanuel Lazega refers to these factions as composing a Montesquieu structure of interlocking competing networks. And there is the everpresent problem of ethical fading—lawyers inured to certain liminal behaviours—when lawyers may no longer realize how their behaviour may be characterized. There are two absences in Regan’s analysis: one is the role of regulation and its interaction with ethics and the other is the rise and domination of the professional services firm.
The law firm has become emblematic of the modern legal profession. Since the Cravath system came to idealize the growth and functioning of the law firm in the 20th century, its development has been both inexorable and upward (Galanter & Palay; but cf. Wilkins & Gulati). Since the 1990s law firms have sought to recreate themselves as global entities competing with other global professional service firms (Flood). For some this has entailed developing firm-specific capital (e.g. Skadden Arps [Caplan]) while for others it has meant a futile quest for dominance and riches (e.g. Finlay Kumble [Eisler]). In the 21st century law firms are evolving into quite sophisticated professional service firms (PSF) with highly developed corporate structures. (See Morgan & Quack.) This situates Regan’s tale in an intermediate space between old-style lawyering and new-style conglomerate practice. We can read this story as the death rattle of the ancient regime.
Jenkens & Gilchrist was a small but high-end law firm in Texas with desires to grow, especially into New York. But its profits per partner (PPP) were insufficient to attract the best lateral hires even though by Texas standards it was successful. (See Sida Liu’s review of profits.) Having been through a bad spell in the early 1980s the firm had rebuilt itself but it remained at heart a regional law firm. Then enter stage left Paul Daugerdas in 1998.
Daugerdas was a lawyer and an accountant who had worked for Arthur Andersen and Altheimer & Gray where he had developed a tax shelter practice. (Both of these firms have subsequently folded.) He claimed he could bring in a book of business worth $6 million a year and moreover he wanted to be compensated based on his revenues, not those of the firm. After much argument over Daugerdas himself and the legitimacy of his work he was taken on. In his first year at Jenkens he generated $28 million in revenue, the firm’s PPP rose and the firm went from 77th to 57th in the AmLaw 100.
Within a couple of years of hiring Daugerdas the Office of Tax Shelter Analysis was formed by the government and the IRS went hunting for taxpayers who had bought illicit tax shelters. Jenkens & Gilchrist soon came within range and found itself mired in investor litigation which resulted in a multi-million dollar settlement against the firm. Despite this Jenkens was also investigated by the US Attorney’s Office in Manhattan and found itself rapidly losing lawyers—from 600 in 2001 to 144 in 2006. Once the firm had admitted that it had marketed fraudulent tax shelters the end was ineluctable. Jenkens paid a $76 million penalty and went out of business in 2007. Moreover, approximately 1,400 investors advised by Jenkens owed interest and penalties. Daugerdas, himself, went on trial for fraud in March 2011. (See indictment here.)
Regan examines the case of Jenkens & Gilchrist in the light of competition dynamics and cultural segmentation. Jenkens was fortunate to find itself in a field of work which paid by the percentage rather than the hour, could be repeated, and also to an extent could be protected from external view. Competitively, Jenkens was ready to move into new and lucrative markets.
Inside the firm, however, it was known that there was risk attached to hiring Daugerdas but not how much. First, there was the question of the legitimacy of his practice and the risks it posed to the firm if challenged by the government. Jenkens seriously under-estimated the force of the IRS attack. Second, Daugerdas’s role in Jenkens was fraught in that he demanded his own compensation structure and that he wouldn’t necessarily be bound by firm policies. He was, in effect, a solo practitioner within the firm based in another office which was outside management’s control.
I have deliberately referred to Regan’s story as an obituary, one not just of a particular law firm but more of a dying old guard—a fossilized nomenklatura who are being replaced by sophisticated siloviki.The new corporatized professional service firms (Faulconbridge & Muzio)are less beholden to maverick leaders than to committees, risk managers (vide Enron and Andersen), and to potential external investors as liberalizing regulatory reforms course through the world. It is important to understand how (r)evolution in professionalism occurs so we can understand the new structures that are appearing before us. Many are based on the new emerging forms of regulation at national and global levels. These have come about through anti-competition authorities pursuing a free market agenda in respect of professional services and firms. One example is the introduction of outcomes-focussed regulation in the UK by the Solicitors’ Regulation Authority. (See Chambliss on regulators and ethical culture, the Legal Services Board “rationale of regulation”.) Although US lawyers might like to think that they will remain immune from foreign incursions into their self-governance, they are seriously mistaken as Laurel Terry’s work on GATS has shown. How quickly and to what extent the US legal profession will find itself bound up in the new professionalism is open. Yet, in this respect, Regan’s story is a cautionary tale of a law firm’s collapse in the face of the expanding regulatory state.
References
Caplan, L. 1994. Skadden: Power, Money, and the Rise of a Legal Empire. Farrar, Straus & Giroux.
Eisler, K 1990. Shark Tank: Greed, Politics, and the Collapse of Finley Kumble, One of America’s Largest Law Firms. Beard Books.
Faulconbridge, J & Muzio, D. 2008. Organizational Professionalism in Global Law Firms. 22 Employment and Society 7.
Flood, J. 1996. Megalawyering in the Global Order: The Cultural, Social and Economic Transformation of Global Legal Practice. 3 International Journal of the Legal Profession 169.
Galanter, M & Palay, T. 1991. Tournament of Lawyers: The Transformation of the Big Law Firm. University of Chicago Press.
Lazega, E. 2001. The Collegial Phenomenon: The Social Mechanisms of Cooperation Among Peers in a Corporate Law Partnership. Oxford University Press.
Morgan, G & Quack, S. 2006 Global networks or global firms? The organizational implications of the internationalisation of law firms, in Ferner, A et al, eds. Multinationals and the Construction of Transnational Practices: Convergence and Diversity in the Global Economy, Palgrave Macmillan.
Regan, M. 2004. Eat What You Kill: The Fall of a Wall Street Lawyer. University of Michigan Press.
Terry, L. 2010. From GATS to APEC: The Impact of Trade Agreements on Legal Services. 43 Akron Law Review 875.
Wilkins, D & Gulati, M. 1998. Reconceiving the Tournament of Lawyers: Tracking, Seeding, and Information Control in the Internal Labor Markets of Elite Law Firms. 84 Virginia Law Review 1581.
Oct 17, 2011 Elizabeth Johcrim
Mary D. Fan,
Beyond Budget-Cut Criminal Justice, 90
N.C. L. Rev. __ (2011-2012, forthcoming), available at
SSRN.
The effect of budget cuts on criminal justice systems seems obvious enough. Shrunken police departments result in low enforcement priorities (or non-enforcement) for non-violent offenses. Fiscally constrained prosecutorial resources mean that some offenses will be ignored rather than prosecuted. But what of prisons? Certainly many prison systems around the country have suffered similar fates as police departments and prosecutor’s offices: attempting to do the same (or more) with less. In many states, prisoners have faced even harsher conditions of confinement, including overcrowding, reduced medical attention, and fewer resources for substance abuse treatment and job training.
Yet as Mary D. Fan observes in her timely and thought-provoking Beyond Budget-Cut Criminal Justice, the economic downturn of the past few years has yielded an unexpected result: the emergence of certain penal reforms that were once thought to be politically impossible. Many criminal justice scholars have lamented the steady rise of incarceration rates in the United States; we imprison people at a higher rate than any other country in the world. This “incarceration stagnation,” as Fan puts it, continues despite a well-documented crime drop in the 1990s, evidence of diminishing gains as incarceration rates continue upward, and public opinion polls suggesting that a primary focus on incapacitation (rather than rehabilitation and alternatives to imprisonment) may be misguided. Public officials have typically avoided serious solutions to the incarceration crisis, for fear of appearing “soft on crime,” and suffering the electoral consequences. The recent recession, however, has created opportunities for legislators facing budget emergencies to explore and propose a variety of reforms.
Some of these measures are decidedly modest; about half of the states have introduced “back-end” sentence reductions in their early release and parole programs so that individual prisoners receive small adjustments in their sentences in the interest of collective fiscal savings. Wisconsin has introduced “Taco Tuesdays” to save $2 million dollars a year by shaving off ten cents per inmate meal. Other measures, though, are decidedly more ambitious. Fan draws upon many examples. In 2008, Mississippi amended a law requiring prisoners to serve 85 percent of their sentences, so that parole boards could decide to release prisoners after serving 25 percent of their sentences. In 2009, New York amended its law to give counties the discretion to establish “local conditional release committees” to review applicants for early release. In 2010, the Colorado House of Representatives passed a bill with bipartisan support that lowers the penalties for several drug possession and use crimes.
So what accounts for these newer, post-recession experiments? According to Fan, these efforts have become politically palatable because of a shift in the social meaning of penal reforms that embrace rehabilitation, community supervision, and reduced sentencing severity over ever increasing incarceration. Penal reforms have become possible because legislators and politicians in many states have been able to convince their constituencies that these measures are cost-effective without any increased risk to the public. This approach avoids traditional attacks on these reforms as coddling criminals or risking public safety. Of course these reforms pose risks to their supporters as well. Reforms face considerable public backlash when a parolee benefitting from a new early release program commits a particularly horrific and widely publicized crime. Likewise, the political climate of some states continues to elicit strident criticism against penal reforms even in the face of budgetary emergencies.
Another, though less important, part of this emerging legal and political climate is the Supreme Court’s new willingness to apply the Eighth Amendment’s proportionality review in noncapital cases such as Graham v. Florida, 130 S. Ct. (2011), and Brown v. Plata, 131 S. Ct. 1910 (2011). In both instances, Fan sees a renewed role for courts to intervene in penal policies at a time when penal severity is being questioned on a variety of fronts. While Fan does not see judicial intervention as taking on a primary role in transforming criminal justice policies, she argues that this judicial interest is part of a “perfect storm” of circumstances that are making real and significant penal change possible.
So how can we ensure that a pattern of what Fan calls “rehabilitation pragmatism” gains a permanent foothold in our national conversation about criminal justice policy? Fan suggests public officials consciously embrace a fiscally responsible, evidence-based approach to penal policies that focuses on alternatives to automatically increasing sentences and warehousing prisoners. Unlike the rehabilitative ideal of the first half of the twentieth century, this rehabilitation pragmatism is less interested in the moral transformation of the prisoner and more concerned with cost-effective measures that nevertheless assure the public of its safety. Fan draws our attention to a moment in our history that may well be a turning point for prison policies that desperately need political will and legislative attention.
Oct 14, 2011 Daria Roithmayrjuris
Last fall, the New York Times reported that in the halls of academia, studying culture was no longer, like Lord Voldemort, “that which must not be named.” Culture was officially back on the poverty research agenda. According to the story, much of this newfound respectability had come courtesy of William Julius Wilson, the Harvard scholar who has long argued on both culture and structure fronts. In 2009, Wilson published a book, More Than Just Race, in which he marshaled the best of sociological research to argue that both structural barriers and cultural impediments keep poor people of color trapped in poverty. In the end, Wilson concluded that the structures of racism and the globalizing economy matter far more than the cultural behavior that conservatives love to blame. But in the essay that this review focuses on, Wilson focuses less on which trumps which. Instead, he makes a strong case for a “unified framework” to integrate both structure and culture.
If I might put the argument in a stylized form, Wilson shows in essence that structure and culture are related to each other in a positive feedback loop, in which structure shapes culture, and culture in turn shapes and contributes to structure. So for example, Wilson points out the way in which segregation and a globalizing economy produce informal illegal economies, in which the “code of the street” and distrust of the police become commonplace cultural norms as rational responses to illegality and isolation. These codes of the street and their accompanying frameworks of meaning—distrust of the police, for example–contribute in turn to the perpetuation of segregation and diminished access to jobs. And the cycle goes round and round. In integrating structure and culture into one analytical framework, Wilson continues to make a strong case (as he has for twenty years) that the study of culture should enjoy full respectability in the academy. It seems left academics are finally listening.
But it wasn’t always so. Until recently, in the long-running and often tedious debate about the causes of persistent inequality, people who did work on persistent inequality fell into two camps, largely defined by political ideology. The structuralists, or those on the left, emphasized structural causes, like residential segregation but didn’t say much about culture. The culturalists, or those on the right, focused on cultural traits like teen pregnancy and the propensity to work in unskilled jobs that don’t require English. The structuralists on the left accused anyone in their ranks who was working on culture of “blaming the victim.” The culturalists on the right focused on issues of personal responsibility and cultural deficit, and said next to nothing about structural issues like job access.
But why choose sides in that endeavor, asks Wilson? In both the book and the essay, Wilson points out that focusing on either structure or culture to the exclusion of the other offers an analysis that is incomplete. For Wilson, social structure refers to the social positions, social roles, and networks of social relations that configure people into particular positions and relationships. Structure is made up of two more specific categories of behavior: social acts, like stereotyping, discrimination and exclusion (of the individualist sort), and institutional social processes, like racial profiling, racial tracking in schools and Jim Crow laws of segregation. With regard to social processes, Wilson includes not just the obvious but also processes that are more indirectly connected to race–like the globalized and technology-driven economic displacement that disproportionately affects people of color because they lack skills and spatial access to jobs, owing to past discrimination.
In Wilson’s view, culture includes two categories of collective behavior—first, national beliefs and viewpoints on race shared by society at large, and second, intra-group beliefs, habits, modes of behaviors. This latter category includes (most importantly for Wilson) cultural frameworks of meaning—shared visions of human behavior and of the rules of meaning connected to that behavior. In social capital terms, for example, beliefs about who is trustworthy might be a cultural framework connected to decisions about whether a person ought to refer a friend or family member to one’s own employer for a job if she thinks her reputation might be on the line.
In this essay, Wilson explains that structure—e.g., segregation and poverty—produces particular cultural practices and frameworks of meaning that in turn shape the response to, and indeed cause, poverty. Referring to Elijah Anderson’s work, for example, Wilson notes that the “code of the street” maxim to “keep to yourself,” can be understood as both an adaptive trait that promotes safety in unsafe Philadelphia neighborhoods where people feel unable to rely on the police and an impediment to forming resource networks that deliver material and informational support. Likewise, from Sudhir Venkatesh’s work, Wilson points out that the “code of shady dealings” that emerges to mediate disputes in a city’s underground economy both adaptively facilitates relationships in that economy and impedes integration into a broader society. Thus, cultural modes of behavior both reflect and create structure, in a positive feedback loop that defies dissection. And such behavior is not just rational, but also cultural, in that it reproduces itself through social learning, from parents and from peers.
In my enthusiasm for the argument, I am happy to be critical at the same time. I want Wilson to be even more explicit about the crucial theoretical move from culture back to structure in the feedback loop. I know the standard conservative arguments about the way in which teen-age pregnancy and lawlessness cause racial poverty. Are Wilson, Anderson and Venkatesh making the same cause-and-effect kinds of arguments for this part of the feedback loop? Does their “culture causes (or shapes or contributes to) poverty” half of the loop look the same, or differ in any theoretical way from conservative claims, beyond adding the other half of the “poverty causes culture” leg of the feedback loop? Hard to say from the essay, though Wilson says more in the book. And certainly this is a question that dances close to the perennial “blame the victim” controversy.
I also wonder whether the argument to pay attention to “culture causes structure” might be badly timed, post-economic crash, when structure seems to dominate the landscape. Recent research documents that the recent economic crash rolled back wealth gains for a large section of the US populace. To be sure, wealth for black and brown plummeted far more so than for whites. But many middle-class whites have now felt the pinch if not the pain of displacement and job loss, more than ever before, and even the country’s biggest banks have become beneficiaries of affirmative action of a sort, as they struggled with the fallout of a major “structural adjustment.” Maybe this is the time where scholars should be hammering home arguments about structure, with less reference to the link to culture and more reference to experiences like straight-up access to jobs. Focusing on culture might divide where references to common experience might unite.
These are all minor quibbles, of course. Wilson ends his essay by joining Orlando Patterson to argue against political correctness–studying culture does not require that we ignore or downplay structure. I heartily agree. If the New York Times report is any indication, young scholars on the left are also now listening. Perhaps, post-economic crash, conservatives will now be willing to listen to arguments about structure as well.
Oct 12, 2011 Toni Williamsequality
Martha T. McCluskey,
How the ‘Unintended Consequences’ Story Promotes Unjust Intent and Impact, 21
La Raza L.J. __ (Forthcoming 2011), available at
SSRN.
One of the more unnerving aspects of the recent financial crisis is the speedy recovery of those large financial firms that survived the crash. Gifted with eye-watering sums of virtually free credit and liberated from the ‘toxic’ assets that their financial engineering created, global financial firms such as Goldman Sachs reported higher than ever earnings in 2009 and 2010. Elsewhere in the economy, the prospects of recovery are remote and receding. The reframing of the crisis as ‘fiscal’ rather than ‘financial’ has forced sovereign countries to take out unsustainable loans in order to appease their bondholders. Jobs, pensions, and public services have been slashed in the US and across Europe. US homes are being lost to foreclosures at an extraordinary rate (some reports estimating up to 10-13 million foreclosures) as the consequences of the crisis continue to rip through the economy. Compounding the direct dispossession of those whose homes are taken, foreclosure actions blight entire neighborhoods, exerting yet more pressure on whatever little equity in their homes residents may have sheltered from the predatory lenders.
The juxtaposition of business as usual on Wall Street and in the City of London with the destruction of homes, livelihoods and other means of economic security of workers and the unwaged, pensioners and children in the US and Europe shows that neoliberalism’s project of robbing the poor to give to the rich has survived the crisis, gathering strength in its wake. Martha McCluskey’s illuminating working paper, How the ‘Unintended Consequences’ Story Promotes Unjust Intent and Impact, analyses the persistence of upward redistribution in policy making and asks how one of its key supporting narratives can be resisted. The paper provides an excellent overview of the crisis for equality theorists who are not specialists in the intricacies of neoliberal “financialization”. It explains some of the decisions within financial firms–and by some regulators–that created the crisis; and vividly illustrates the devastating impact of those decisions on US communities, particularly Communities of Colour. McCluskey uses the example of the financial crisis effectively to illustrate the argument that the “unintended consequences” narratives in policy discussions about egalitarian regulation serves to rationalize the legal underpinnings of upwardly redistributive measures and perpetuates “the ideology that law is powerless to disrupt a naturalized order of inequality outside of law” (P. 9).
The paper includes a succinct summary of the career of “unintended consequences” narrative, referencing legal realist studies of “law in action” and Robert Merton’s more conceptual 1936 essay before turning to the late twentieth century incorporation into claims about the futility of progressive regulation. While scholars working in traditions such as legal realism or law and society have documented empirically various types of unintended consequences–benign, malign, and perverse–the regulatory futility literature, predominantly influenced by law and economics, typically focuses only on the alleged perversity of distributionally egalitarian initiatives. Rent control, interest rate ceilings, minimum wage laws, environmental regulation and so on are attacked as self-defeating measures that unintentionally exacerbate the problems of those whom they purport to ‘help’. Drawing on the work of liberal theorists such as Cass Sunstein (as well as the more predictably conservative claims of mainstream law and economics and financial market commentators), McCluskey illustrates the pervasiveness of claims about the perversely harmful effects of egalitarian policies and their power to inhibit progressive measures notwithstanding the absence of robust evidence–or in many instances any evidence–about the impact of progressive policies that are dismissed rather than enacted.
McCluskey locates the ideological power of the unintended consequences narrative to foster upward redistribution in the ways that policy debates compare the mythological perfect consequences of the hypothetical free market with the complex compromises that often attend egalitarian regulation and the well-documented limitations of regulatory agencies. This comparison centralizes law as an inherently flawed actor and instrument of progressive regulation, limited in its effective capacity to direct power towards desired egalitarian ends. With respect to the market, by contrast, the ideology of self-regulation through self-interest erases law from view. In effect, the work of law in structuring the ground rules of the market is rendered invisible, its deployment of rules of property and obligation that enable–and potentially constrain–the exercise of power disappears. Through this erasure of law–and power–the unintended consequences narrative contributes to the embrace of the market as a legitimate source of economically just solutions rather than as a subordination of justice to the structural inequalities of contemporary neoliberalism.
Markets of course are every bit as capable of generating unintended consequences as are regulators. Indeed the central item of faith of the efficient market, Adam Smith’s “invisible hand”, is postulated as an unintended consequence–albeit benign–of the exercise of self-interest; and among the contested accounts of the recent financial crisis are explanations of the crash as a perverse unintended consequence of financial innovation. According to the dominant narrative, however, market actors, even elite financial market actors, purportedly lack the capacity to control market forces so that the perverse unintended consequences generated by their decisions do not become a reason to eschew the market.
Insisting that law is far from “powerless to disrupt a naturalized order of inequality” generated by the notion of the essentialized market situated outside law, McCluskey provokes readers to challenge the simple-minded complacency of the unintended consequences narrative. Her directions for critical engagement indicate the need to counter the ways that the insertion of “unintended consequences” in policy debates “obscur[es] contested interests and ideologies”, contributes to the normalization of elite wrongdoing as in financial frauds of the predatory lenders, attributes the results of structural inequality to individual failings, and above all “conveys a false sense of inevitability to harmful policies, evading analysis of alternative policy choices with better results”.
Beyond its systematic analysis of how law is implicated in policies of upward redistribution, McCluskey’s paper engages the reader in thinking critically about the potential role of law “in resisting the upward transfer of resources” (P. 9); and in fashioning alternative economic arrangements, a project that grows more urgent as the effects of the crisis continue to intensify inequality, destroy economic security and corrode peace of mind.
Oct 10, 2011 Laura Heymannip
Julie E. Cohen,
Copyright as Property in the Post-Industrial Economy: A Research Agenda, 2011
Wisc. L. Rev. 141, available at
SSRN.
Copyright law in the United States has traditionally been justified in both economic and property-based terms. In order to incentivize the socially optimal amount of creativity, the story goes, we grant to authors a certain bundle of rights over the work they create for a limited (although significant) period of time. Without this incentive, copyists, who need only to recoup the cost of copying and not the cost of production, would undermine the creator’s opportunity to profit from the work. The story thus assumes that commercial exploitation of creative work is the natural (and desired) end of the creative process and that some form of legal entitlement is needed as a means to that end. The focus thus shifts to the work itself: If the work demonstrates the required originality and modicum of creativity, and is fixed in a tangible medium of expression, it qualifies for copyright protection, regardless of the truth of the incentive narrative.
The longevity of the economic narrative derives, in part, from the identity of the players in the early copyright debates, in which printers and stationers were the primary agitators for increased rights over creative works and individual authors merely useful characters to make more human the arguments. But as various commentators have noted over the years, the economic story can be told only by some creators. We can assume, for example, that if Disney or Random House or Atlantic Records were not able to turn a profit from the creative works they bring to market, they would soon be out of the business. But for others, creativity stories are not tales of buying and selling; they are tales of emotion, passion, and inspiration, of creating without being motivated by commercial exploitation. Such artists are not completely indifferent to how their work is used – they might, for example, very much care about getting credit for their work so as to build their reputational, if not economic, capital. But the traditional copyright narrative, which assumes commercialization, does not map well onto the motivations and interests that these artists demonstrate. We might, therefore, ask whether the Constitution’s goal of “promot[ing] the progress of Science” would be better achieved by focusing less on whether a work is copyrightable and more on the interests of those involved in distributing that work to the public.
In an essay prepared as part of a thought-provoking symposium on intergenerational equity and intellectual property, Julie Cohen engagingly encourages us to rethink the traditional copyright narrative by instead viewing copyright through the lens of corporate property policy. By abandoning the fiction that copyright incentivizes creativity, we can acknowledge that copyright’s primary function is, as Professor Cohen puts it, “to enable the provision of capital and organization so that creative work may be exploited” and thus properly characterize copyright as “industrial policy for the so-called creative industries” (pp. 142-43) – the Disneys and Random Houses who are incentivized by copyright’s benefits. Corporate property policy would view copyright not, as is traditionally done, as a species of real property law – which believes that stewardship is best advanced by a system of exclusive ownership – but as a regulatory tool “designed with the immediate purpose of incentivizing the intermediation and privatization of culture while minimizing cultural obstruction” that would prevent future creators from building on what has come before (p. 149). The corporation is more than simply a fictitious entity that holds assets; rather, it represents a way of coordinating multiple sets of stakeholders and of governing resources through the disaggregation of ownership and management. By talking of managers, employees, and shareholders rather than of owners and users, we can come to recognize copyright as inherently relational and free ourselves from the limited set of regulatory options that property law provides. No longer would an adjudication of the proper scope of copyright law rely on defining the metes and bounds of the property rights at issue; rather, the law would focus on the nature of the relationships between and among copyright’s players.
With the research agenda thus framed, a variety of projects present themselves. One might, for example, as Dan Burk and Catherine Fisk have done, interrogate more closely copyright’s work-for-hire doctrine, investigating whether agreements between employers and employees provide adequate conditions for creativity, including whether appropriate attention is given to employees’ reputational interests. (One starting point might be the language of the Copyright Act itself. Section 201(b), which states that “the employer or other person for whom the work was prepared is considered the author for purpose of this title,” protects corporations’ ownership interests in creative works but does little to acknowledge the noneconomic concerns of the employees putting pen to paper.) Additionally, as Professor Cohen astutely suggests, copyright law might learn from the way corporate law provides oversight of managers by shareholders, thus concerning itself with accountability and intergenerational stewardship in ways that a property-rights regime does not. Corporate law has, the essay also notes, already engaged with various issues, such as social welfare concerns, employment conditions, and collective bargaining, that are not native to property law but that may well become central to copyright law in a modern age. There are, undoubtedly, many more rich connections to be made.
As is to be expected from an article directed at upending the existing framework, however, there are still details to be worked out. If copyright law is still to be about economic incentives, then it seems eminently sensible to retrain copyright’s focus on the corporate intermediaries that are most likely to respond to such incentives rather than to continue to tell a dubious creativity tale. But even if we recount copyright’s new narrative in the context of the traditional “creative industries,” we still must determine who plays which roles in the story and whether the narrative has anything to say about creativity outside the corporate structure. Who are to be the shareholders and who the managers of Mickey Mouse or Harry Potter, to take two oft-used examples? And how should a view of copyright as corporate property policy think about the teenager uploading her guitar composition to YouTube or the fan fiction writer posting a new episode to a fan site? Is such intrinsically motivated creativity simply a byproduct of copyright’s subsidy of the creative industries? Or can copyright as corporate property policy regulate terms of service and other agreements so as to reflect the noneconomic interests of such creators, thereby incentivizing distribution, if not creativity itself?
Professor Cohen concludes her essay with a note of caution, warning that “the corporate-law analogy does not inspire great optimism” as a political matter (p. 164). And it is true that reform is often slow in coming and resistant to implementation, whether at the level of statute or at the level of systems. But reform can’t happen without agenda setting, and significant reform often requires us to rethink our ideological commitments. In a short but very rewarding essay, Professor Cohen’s proposal provides us with a way to do just that.
(Many thanks to Mark Badger and Jessica Silbey for their thoughts on a draft version of this post.)
Oct 7, 2011 Kathryn Wattsadlaw
Jody Freeman & Jim Rossi,
Agency Coordination in Shared Regulatory Space, 125
Harv. L. Rev. ____ (Forthcoming 2012), available at
SSRN.
Areas of fragmented and overlapping delegations of power to administrative agencies are common today. For example, fifteen federal agencies play roles in the American food safety arena. Similarly, twelve different agencies deal with exports, and numerous agencies regulate the financial sector, including the SEC, CFTC, OCC, FHA, FDIC, OTS and the Federal Reserve. In addition, as President Obama recently quipped during a State of the Union Address, we have one agency (the Department of the Interior) that is in charge of salmon while they are in fresh water, but a different one (the Department of Commerce) that handles them when they are in saltwater.
Despite the prevalence of these sorts of overlapping delegations in the regulatory arena, legal scholars generally have approached administrative law through a single-agency lens. In a forthcoming Harvard Law Review article titled Agency Coordination in Shared Regulatory Space, Professors Jody Freeman and Jim Rossi seek to change this picture. Specifically, Professors Freeman and Rossi depart from what they call the “single-agency focus that is so foundational to administrative law” by offering the “first comprehensive discussion in the legal literature of the problem of fragmented and overlapping delegations of power by Congress to administrative agencies.”
Freeman and Rossi’s aim is largely descriptive. They begin by describing various theories that scholars have articulated to explain why the legislative process creates agency coordination problems in the first place, including game-theoretic models that explore potential strategic benefits to Congress of creating overlapping or redundant agency jurisdiction. Then they move on to describe what they see as the primary challenge raised by overlapping jurisdiction: the problem of “coordination” in a “shared regulatory space.” Freeman and Rossi explain that conceptualizing the challenge as one of “coordination” is preferable to conceptualizing it as a problem of “redundancy.” This is so, they explain, because collapsing or eliminating agencies to reduce duplicative functions would likely produce the same coordination problems in “ever-larger bureaucracies.” In addition, given the scope and complexity of congressional delegations to agencies, Freeman and Rossi suggest that there is an “irreducible minimum” of overlap and fragmentation that calls out for coordination tools and strategies.
The remainder of Freeman and Rossi’s article focuses on how we might mitigate the “stubborn and serious crisis of coordination.” Specifically, they describe how both Congress and the President already have numerous tools they can use to promote coordination. For example, Congress can resort to structural integration of agencies, inter-agency consultation provisions, and congressionally required joint rulemaking to facilitate agency coordination, and the Executive branch can utilize memoranda of understanding, White House oversight, and coordinated rulemaking. The hard question, according to Freeman and Rossi, is determining which of these tools have the most promise in a given setting. In other words, which tools will achieve coordination benefits that will justify the investment of time and resources and the increase in agency decision costs?
In thinking about which coordination tools might offer the most promise, Freeman and Rossi conclude that the more binding, transparent and substantive the tool, the more likely it will be to “control bureaucratic drift and the easier for principals to monitor,” but with the concomitant effect of raising agency decision costs. As a result, different tools might be more or less appropriate in different circumstances. Take joint rulemaking, for example. It will drive up agency costs and will take away agency flexibility by resulting in a durable agency policy choice that can be changed only via an act of Congress or another notice-and-comment rulemaking. Hence, Freeman and Rossi argue that joint rulemaking might be “especially beneficial in instances where agencies are establishing substantive regulatory standards for financial markets or industry, or where certainty and uniformity are more important to a regulatory program than flexibility.” In contrast, inter-agency consultation provisions might be most useful in areas where expertise, data or additional perspectives are needed.
In the end, in addition to its significant descriptive contributions, Freeman and Rossi’s article stakes out a strong normative commitment in favor of more coordination among agencies. In Freeman and Rossi’s view, more effective coordination among agencies has the potential to “generate valuable expertise and information, improve the quality of agency decision making, harmonize potentially inconsistent approaches, and reduce both public and private transaction costs.” Members of the legislative and executive branches will be well-served by carefully reading Freeman and Rossi’s article and giving serious thought to which tools each branch might use to most effectively achieve the coordination benefits that Freeman and Rossi describe. Scholars too will benefit from following Freeman and Rossi’s lead and giving more sustained attention to the trade-offs of various coordination tools rather than continuing to think of administrative law largely through a single-agency lens.
Oct 5, 2011 Martin H. Malinworklaw
The great recession has hit state and local governments nationwide very hard. Many have turned to the unions that represent their employees for wage, benefits and work rule concessions in an effort to reduce expenditures. When they have been unable to secure such concessions, they have resorted to unilateral action abrogating their collective bargaining agreements. Their actions have taken many forms. Some are redressable under the contract’s grievance and arbitration procedures or in unfair labor practice proceedings before the state public sector labor relations agency. However, in many cases such redress is not available, leaving the only avenue an action alleging an unconstitutional impairment of contract.
Stephen Befort‘s article, “Unilateral Alteration of Public Sector Collective Bargaining Agreements and the Contract Clause,” tackles head on the extremely important and timely topic of when unilateral modifications of public employee collective bargaining agreements in response to fiscal crises constitute an unconstitutional impairment of contract. Befort first provides a brief background on the development of public sector labor law and public sector collective bargaining. He observes that where unilateral modification of public employees’ collective bargaining agreements is accomplished through legislation, public sector labor relations acts are of little utility because the legislature is not the employer. Consequently, the only generally available avenue of contest is under the Contract Clause of the Constitution. Befort then provides useful and detailed background to the development of Contract Clause jurisprudence in general.
Befort observes that “[w]hile the severity of the 2009-10 budget crisis is relatively unique, the existence of public sector budget crises are not.” (P. 9.) He catalogues four periods of public sector budget crises over the past 30 years: 1982, 1991, 2003-04 and 2009-10. He examines the Contract Clause challenges to legislative enactments that abrogated collective bargaining agreements during each cycle. He provides detailed discussion of each case that arose in each cycle. From this exhaustive description, he derives an array of what he finds to be the most significant factors used by the courts. These include the severity of the fiscal crisis, foreseeability of the fiscal emergency at the time of entering into the contract, the substantiality of the impairment of the contract, the availability of alternatives to modifying the collective bargaining agreement, whether the impairment operates prospectively only or retroactively, and whether the burden of the fiscal crisis is spread among a large number of constituents or is disproportionately placed on the employees.
Befort critiques the courts’ approaches on three grounds. First, he finds that many courts have been overly deferential to the judgments of state legislatures. He persuasively urges that such deference is inconsistent with the Supreme Court’s decision in United States Trust Co. of N.Y. v. New Jersey, 431 U.S. 1 (1977), where the Court opined that deference must be circumscribed when a court is reviewing a state’s impairment of its own contracts because a state can always find uses for extra money where that money is obtained by impairing its contractual obligations instead of raising taxes. The Court thus required state action which impaired its own contracts to be reasonable, in the sense that the parties did not foresee at the time of contracting the possibility of the changed circumstances, and necessary in the sense that there were no less drastic alternatives available. Befort demonstrates how a number of courts reviewing impairments of public employee collective bargaining agreements have fallen short of the U.S. Trust standard.
Befort further critiques the courts’ approaches, discerning that some courts have treated collective bargaining agreements as less worthy of protection than bonds. Befort argues that these courts too easily approve impairments that are prospective only, failing to recognize that a multi-year contract must be treated as an integrated whole. Indeed, it is common for unions and employers to backload wage increases to reduce the immediate fiscal impact while ending up with an increased base by the end of the contract’s term. Finally, Befort perceptibly points out that courts have inappropriately opined that public employees owe an extra duty of loyalty which commands from them greater sacrifice for the public interest than from other citizens.
Befort complements his critique with his recommended framework for analysis of impairment issues in public sector collective bargaining agreements. He urges that courts be true to the Supreme Court’s analysis in U. S. Trust by undertaking a de novo review of whether the impairment was reasonable and necessary to serve an important government purpose. He urges that to be reasonable, the impairment must be in response to an emergency that could not have been foreseen at the time of contracting. To be necessary, the state must demonstrate that it considered alternatives to impairing the contract and had reasonable grounds for rejecting the alternatives. Finally, he calls on courts to determine whether the state has distributed the burden of responding to the fiscal crisis broadly and equitably.
Although public sector employment has received renewed attention nationally, legal scholarship in this area remains sparse. Stephen Befort’s article provides a welcome scholarly analysis to an extremely timely topic.
Oct 3, 2011 Vicki Jacksonconlaw
David Strauss has written an elegant and compelling book, the distillation of his work on constitutional interpretation over the last decade or more. His argument is at once positive and normative. Strauss argues that most U.S. constitutional interpretation – and some of the most important and foundational of the Supreme Court’s constitutional decisions – can only be understood as a form of common law adjudication, developed over time based on practice and precedent far more than on constitutional text. As a normative matter, Strauss argues that living constitutionalism, developed and constrained through the methods of common law adjudication, is a superior approach to interpreting the Constitution than is originalism. Those not familiar with Strauss’ work should read the book; those who are will still enjoy the concision and insight with which his prior articles have been distilled.
The first two chapters include his attack on originalism and his defense of the virtues of common law constitutional adjudication. The attack on originalism synthesizes critiques of the impossibility, and undesirability, of the kind of “constraint” imposed by originalism’s commitment to interpreting in light of specific original understandings, including the difficulty of reconstruction, the challenges of “translation” and the democratic challenge of giving controlling force to the original understandings of an instrument intended for present governance. Moderate originalism, he argues, in its appeal to general principles diminishes the key feature of constraint that originalism’s proponents emphasize.
For Strauss, “common law” approaches to constitutional interpretation is the best alternative to originalism—it represents the dominant mode of interpretation and has several virtues as an interpretive approach. On the positive claim, Strauss is clearly correct in drawing attention to the importance of common law analysis of judicial precedents in resolving U.S. constitutional cases; a comparative lens further supports this conclusion. (See my piece with Jamal Greene in the Ginsburg-Dixon collection.)
Strauss’ normative arguments begin from a jurisprudential view of law’s authority deriving, not from a positive command, but from its “evolutionary origin and its general acceptability to successive generations.” (37-38). Its benefits include an epistemological humility, drawing from the wisdom of the past while permitting change, and a pragmatic concern with workability, an ability to adjust as experience warrants. These benefits of the evolutionary common law approach bear a certain relationship to a conception of “law as enquiry,” see H. Patrick Glenn, Persuasive Authority, 32 McGill L J 261, 288 (1987), an approach that is arguably more candid (44-45) and thus more accountable within both juridical and lay communities.
Strauss’ conception of the common law is one that places at least as much weight on its dynamic capacity for change as on its stability over time; it is no answer to an objection to a rule of law that it has always been done thus; some more encrusted versions of the common law might disagree. Contrary to its critics, Strauss argues, common law constitutional adjudication is not unconstrained. A core analogy he draws is to the early 20th century development of tort claims against manufacturers of mass products. Commenting on a case involving a claim for injuries caused by a defective car, Strauss shows how the privity requirement was subjected to very narrow exceptions, which then grew, and ultimately came to be abandoned, and how the courts then had to decide on the standard for manufacturer liability. (39-40). Instead of seeing this as an unconstrained choice, Strauss argues that the precedents in fact foreclosed a wide range of options. (39).
Strauss illustrate the pervasiveness, and benefits, of common law approaches to constitutional decision making in two major areas, First Amendment and equality law. His account shows the marked changes, for example, from Schenk v. United States (1919) to Brandenberg v. Ohio (1969). Strauss reminds readers that original understandings, or strong strands among them, would have permitted laws prohibiting blasphemy, or civil actions for defamation without special defenses for comments on public officials, and might even have permitted prosecutions (but not injunctions) for speech critical of the government. Modern First Amendment law, which rejects all of these possibilities, arose in the 20th century, spurred by arguments made by Holmes and Brandeis about the purpose of free speech in democracy, and reinforced by abatement of the period of panic and fear about dissident speech characteristic of the World War I period. (62-73).
In his chapter on equality law, Strauss argues that, just as the common law eventually rejected the distinction between inherently dangerous items and items in ordinary use (which had been important to defining exceptions to the privity requirement) as no longer workable, as changing society created a situation in which goods were often both dangerous and common, prior to Brown the workability of the “separate but equal” idea had been systematically placed in doubt by prior decisions finding fault with various separate but equal approaches. The course of decisions, nominally operating under the Plessy regime, had revealed flaws in its premises, or its unworkability. So that the ground had been prepared by the common law method for the decision in Brown.
The final element in Strauss’ analysis is the diminished role of constitutional text. Amendments, Strauss argues, are seldom of the same importance as interpretation in our constitutional evolution; indeed, amendments often simply ratify changes that have already occurred or, if not sustained by popular support, are largely evaded. Yet the text does play a role, as “common ground,” defining with specificity some rules where clarity is important (such as when elections occur) and even, with respect to larger issues, by providing a framework for debate (e.g., what does “equal protection” mean).
The book implicitly raises a number of questions; I note only a few here. First, how to determine what, if anything, is settled. Strauss claims that affirmative action has shown over time its workability, and implies that it has become generally accepted. (41-42). Yet the Court upheld an individually tailored affirmative action scheme by only a narrow (and highly contested) 5-4 vote in Grutter v. Bollinger (2003); is it really so well accepted? More generally, determining degrees of settlement under Strauss’ account is difficult: he suggests that Roe v. Wade is a less settled point than is Brown (96-97), but it is unclear whether he sees Roe as more or less settled than the constitutionality of affirmative action. On his account, it would seem, a case that may seem foundational at any given time may become less so as society evolves.
Second, although in the context of U.S. debates over originalism it makes sense to look at the “living constitution” as “one that evolves, changes over time, and adapts to new circumstances, without being formally amended” (p. 1), from a broader perspective, one might think of a “living constitution” as one that evolves and changes over time, both through changed interpretations and practices, and through formal amendments. That is, one may establish the legitimacy of other sources of change without insisting on the unimportance of constitutional amendment. Strauss uses the failed history of the ERA to illustrate his claim that amendments are not important for constitutional development. After all, even though the ERA was not ratified, the Court extended fairly rigorous review of gender based classification. True, it has, but in the last ten years explicit gender classifications in citizenship laws have been upheld by the Court’s actions, based on a more relaxed form of intermediate scrutiny. See Nguyen v. INS (2001); Flores-Villar v. INS (2011) (affirming, by an equally divided court, a lower court judgment upholding a gender discrimination in citizenship laws, relying on Nguyen). The Court was closely divided on the application of intermediate scrutiny; had the ERA been passed it might well have been taken to crystallize a firmer dedication to the abolition of gender as a legitimate legal classification.
The very process of adopting an amendment may help create the kind of overwhelming national consensus on which judicial enforcement over the long run may rest. Thus, as Strauss explains, by the time amendments are ratified they are confirmatory of change that has already occurred. (116). All this seems true; but is it possible that the very process of seeking amendment may help galvanize national, as opposed to state by state, efforts at change? Even if so, this would not show that it was the amendment itself that caused the change; but how civil society organizes to promote change, in light of the procedures of Article V and any channeling effects on political organization they have, may be an important factor.
Third, are amendments really different from “precedents” in their constraining force? That amendments without lasting social support are undermined or evaded may not distinguish them from other sources of legal change, including judicial decisions and statutes. The Court’s school prayer decisions have reportedly been subject to repeated resistance; Brown plainly was for a period; and the Court’s criminal procedure rules on searches and interrogations have been widely evaded as well. (On structural issues, consider the evasion of the ruling in INS v. Chadha (1983); see Louis Fisher, The Legislative Veto: Invalidated, it Survives, 56 Law & Contemp. Probs. 273 (1993[/note]. True, to the extent an amendment is recognized as having a core content, stare decisis is not available to allow judicial overruling; this may or may not be an advantage of amendments—for Strauss, it is a disadvantage, but for proponents of whatever change is represented by a new amendment it would be an advantage.
Relatedly, to the extent that precedents are experienced as constraining one might ask further whether it is the precedents that are doing the constraining or rather the sense, by lawyers and judges operating in the U.S. legal community—of the reasonable, the possible? Of course, if this sense of what is reasonable, or plausible, is itself constructed by existing legal materials as well as by events—in politics, in society—external to the law, it becomes quite complex to differentiate the constraints of legal precedent, as experienced internally, from other influences. Yet the same could be said, as well, of the amendments.
A more difficult question is whether there is any normative basis for deciding when, if ever, constitutional change must be sought by way of amendment and when the broader array of tools is available. The answer lies, I think, somewhere in considerations of the rule of law and democracy, in ways that relate as well to the concern for specificity that Strauss identifies as bearing on interpretive latitude. (112-13). When a specific command of the Constitution—for example, that each state must have two senators—is at issue, overturning this by construction poses real threats to the rule of law. Is it impossible? No. By the same reasoning that the holding in Brown was applied, in Bollinger, to the federal government, it would be possible to reason that as, over time the Constitution has come to rest more fully on the principle of popular democracy (as evidenced by the various franchise-expanding amendments), the Fourteenth Amendment itself should now be understood to require apportionment of the Senate by population. What makes this argument implausible (or, in Strauss’ words, “unthinkable” (103-04[/note], and inconsistent with both the “rule of law” and with his conception of the Constitution as “common ground,” is the clarity of the text, not only as to the two senators rule but as to the super-entrenchment of that rule in the Constitution.
So, one can agree that the constitution is “living” and can be interpreted in light of changed understandings without necessarily agreeing that all forms of constitutional change can legitimately be made by amendment. And one can believe in the legitimacy of interpretive change by the court without necessarily agreeing that litigation, or legislation, are the preferred alternative to constitutional amendment. Amendments remain a legitimate method of constitutional change; they are of less importance than precedent because they are harder to deploy, not because they are more likely to be ignored; and they offer a uniquely democratic and iterative process for deliberative decision making.
Finally, a question about metaphors. Although “living constitution” has some provenance in the United States, see Howard McBain, The Living Constitution (1927), I want to suggest that a better metaphor would characterize the type of “organism” to which Justice Holmes referred in his opinion for the Court in Missouri v. Holland (1920), as a rooted rather than a free-floating form of life. In Canada, the term for what was created by Canada’s constituent act is the “living tree,” derived from an opinion by Lord Sankey, written in 1929, interpreting the 1867 constitutional act to include “women” in its textual word “person” so as to permit a woman to serve as a Canadian Senator (even though in 1867 the constitutional act would not have been so understood due to common law limitations on women’s capacities). As I have argued elsewhere, the “living tree” metaphor recognizes both the growth and uncertainty, and the rootedness, of a national constitution in its particular text and context. A “living constitution” conjures an organism, living like humans, and able to move around the entire world should it so desire. A “living tree,” by contrast, captures the rooted nature of this kind of living law; it is difficult, indeed, completely to escape the past, to uproot the constitution and its text from the soil in which it was first planted.
Those familiar with the Canadian “living tree” doctrine will be struck by the cover art of Strauss’ book, which evokes a tree, though whether living or dead is something of a question. A brown trunk emerges from the lower part of the book, seemingly growing out of the words in the text of the Constitution. The main part of the trunk then bends sharply to the right, at close to a 90 degree angle; its branches spring out in all directions — left, right, downward and upward. None of the branches has any color but brown; no leaves are shown. But at the outer end of some of the branch limbs appear red, or blue, stars. What is this image supposed to suggest? Is it a picture of a dead tree, suggesting what can happen to a deeply entrenched constitutional text if it is interpreted in an originalist manner? Or is it a picture of a living tree, reaching for the stars of the nation’s commitments? Perhaps the ambiguity of the cover art could be seen as reinforcing one of Strauss’ arguments, about the necessity—and importance—of interpretation over time, in understanding, and in maintaining, the organic quality of our Constitution. This review cannot do full justice to the arguments in this wonderful and accessible book—I hope you will read it.
Sep 30, 2011 Suja A. Thomascourtslaw
Brent T. White,
Putting Aside the Rule of Law Myth: Corruption and the Case for Juries in Emerging Democracies, 43
Cornell Int’l L.J. 307 (2010), available at
SSRN.
One prevailing idea is that democracy, which fosters economic development, requires the rule of law. In other words, the rule of law will remedy the economic woes of emerging democracies. Another prevailing idea is that juries are antithetical to the rule of law. Because foreign companies are less likely to invest in a country with juries, which do not follow the law, emerging democracies should not establish juries. Brent White boldly questions both of these ideas in his article Putting Aside the Rule of Law Myth: Corruption and the Case for Juries in Emerging Democracies.
White’s proposal comes at a time in the United States—the country with the most extensive jury trial right—when juries are in decline, with jury trials occurring in approximately only 2% of criminal cases and 1% of civil cases. So, you might ask, if juries do not seem necessary in an established democracy, why should juries be the answer in emerging democracies?
White uses Mongolia as a case study, including interviews that he conducted of people there, to support his conclusion in favor of juries. He first describes how the current extensive corruption in Mongolia—bribery pervades society, including every aspect of government—was caused in part by international “shock therapy.” After almost seventy years under Communist rule, Mongolia became a democracy in 1990 after the dissolution of the Soviet Union, which had provided significant monetary support to Mongolia. International financial institutions (“IFs”) came to Mongolia and attempted to fill this gap. There were requirements, though. Shock therapy required countries, including Mongolia, to privatize and reduce the government’s size and power to receive aid. The result was less equality and more poverty than under Communist rule. Moreover, while corruption is often said to derive from the Soviet period, Mongolians reported that corruption became more widespread after the IFs came in. For example, in the aftermath of communism, when shares of publicly owned companies were quickly sold as demanded by the IFs, those in the know exploited others to acquire valuable assets to the result that a small percentage of the population became wealthy.
White goes on to describe the IFs’ attempt to promote the rule of law in Mongolia through the judiciary. But the IFs did not directly attack corruption in the judiciary—the seventh biggest bribe takers. To indirectly address corruption, the IFs worked on other reforms, including the establishment of the judiciary as a separate branch and as the ultimate authority to decide the law. But these reforms did not lead to the reduction of corruption. Indeed, problems continue to pervade the Mongolian judiciary, including a lack of transparency with few published decisions and a public perception that corruption by judges is widespread. All of this occurs with the support of IFs, which, White argues, provide computers and other building infrastructure, which legitimizes corruption.
White states that the problem in the judiciary is part of the larger societal acceptance that bribery is necessary in daily life. As White writes in a more recent essay, while Mongolians want less corruption, they “must survive in the society in which they live—and this frequently means disregarding the law.” And despite the existence of much legal behavior in the country, the negative rule of law myth remains that all actions are the result of improper, corrupt behavior.
With the lack of political will to address judicial corruption, the education of citizens has been promoted as a key component to the development of the rule of law. White criticizes the assumptions of such programs. Those assumptions—“first, rule of law is necessary for significant economic growth; second, rule of law is a prerequisite to democracy; and third, fostering a rule of law culture will plant the seeds for the actual rule of law in the future” (PP. 349-50)—lack empirical support. He explains that context is everything, because a country may not be able to follow the rule of law. Inequality, poverty, and corruption are all examples of impediments to the rule of law. And he cautions that the efforts to educate can replicate the negative rule of law myth that occurred when there was a significant difference between the Soviet government message and people’s lives.
Using Mongolia, White presents a very good argument that the importance of the rule of law to emerging democracies has been overstated. It would be helpful to hear more on why the rule of law more generally, as opposed to shock therapy specifically, is not the problem. It also would be helpful to know whether Mongolia is not unique and thus is representative of other emerging democracies.
White ends by proposing that juries are a solution to the failure of the rule of law project. He first points out studies that generally show that jury verdicts are supported by the evidence. He then emphasizes the positive roles that juries can play in emerging democracies. They can use nullification to fight against unjust laws, can reflect the values of a community, and can promote citizen participation. Moreover, juries can check judges’ corruption. Thus, contrary to popular thought, juries could indeed lead emerging democracies to the rule of law.
At a time when there are few proponents for the expansion of juries to other countries, White gives a fresh perspective on the importance of the jury, and he indirectly challenges the idea that the existence of juries will discourage investment. With such a provocative idea, it would be interesting to hear more about how White would respond to criticisms of the jury.
Through his discussion of emerging democracies, White can make us rethink the role of juries in the United States. Going back to my question of why juries are the answer in emerging democracies if they are not the answer in an established democracy, maybe we do not need juries once democracies are firmly established. If so, should the US discard them? The opposite conclusion could be that given the rule of law myth in the US, juries continue to be important here.
Sep 28, 2011 Jeffrey Coopertrustest
Martin D. Begleiter,
Son of the Trust Code – The Iowa Trust Code after Ten Years, 59
Drake L. Rev. 265 (2011), available on
SSRN.
Back in 2001, Professor Martin Begleiter published an article analyzing the drafting and revision of Iowa’s comprehensive new Trust Code, of which he was a primary author. A decade later, Professor Begleiter has released a follow-up work, Son of the Trust Code—The Iowa Trust Code after Ten Years. This new article chronicles the evolution of the Iowa Trust Code during its first decade of operation, discussing both legislative amendments and judicial pronouncements. Professor Begleiter’s new work, like his former one, not only offers a fascinating look into the legislative and judicial processes but provides invaluable lessons for other states which have recently adopted, or are considering adoption, of the Uniform Trust Code or other comprehensive legislation regulating trusts.
Three factors combine to give Begleiter’s article national relevance and enduring significance. First, his subject matter is vitally important. The promulgation of the Uniform Trust Code (“UTC”) gets my vote as being the most significant trust law development of the 21st Century. Enacted in approximately half of the states, and under consideration in numerous others, the UTC has reinforced timeless principles of trust law while revolutionizing others — generating robust scholarly debate among its many supporters and detractors. The Iowa Code, however, is not an enactment of the UTC. Rather, while it often parallels the UTC, the Iowa Trust Code was developed through an independent drafting process. Accordingly, studying the Iowa Trust Code offers an opportunity to compare and contrast Iowa’s approaches to crucial issues with the UTC’s approaches to those same issues.
Second, Professor Begleiter is uniquely suited to explore this vital subject. As a primary draftsman of Iowa’s Trust Code, Begleiter has an intimate knowledge of every aspect of Iowa’s evolving trust law. In his Article, he cites extensively to letters and e-mail correspondence among Iowa lawyers, legislators and academics, placing his readers at the center of ongoing debates and exposing them to various perspectives on crucial issues. Although Iowa publishes no formal legislative history, Begleiter’s work effectively fills that void by providing a definitive history of the Iowa Trust Code.
Third, the overall structure of Begleiter’s work makes it simple to navigate and adds to its utility. At the outset of his article, Professor Begleiter discusses some preliminary matters relating to the process of amending the Iowa Trust Code and changes to court jurisdiction over trusts. In the balance of the piece, Begleiter simply tracks the Iowa Code section-by-section, analyzing problems discovered and lessons learned during the Code’s first decade of operation. This structure provides readers with a choice as to how to navigate the article—permitting the reader to either read the article in its entirety or to efficiently skip directly to those sections discussing a particular issue of interest.
Reading this article, one cannot help but admire the depth of service Professor Begleiter has provided to the citizens and bar of Iowa in connection with the Iowa Trust Code project. After spending well over a decade on this project, he claims that he has now written all he will write regarding the Iowa Trust Code and this article marks “[t]he end” of his long dedication to that project. Given the ongoing importance of the UTC project, Iowa’s independent experience with its own trust code will continue to make an invaluable contribution to the national debate. Perhaps we shouldn’t let Professor Begleiter sail off into the trust code sunset just yet.
