Sep 26, 2011 Susan Fortneylegalpro
Robert K. Vischer
, Big Law and the Marginalization of Trust, 25 GEORGETOWN J. LEGAL ETHICS ____ (forthcoming 2011), available at
SSRN.
In many respects, law practice involves a brave new work of global lawyering. On a daily basis, lawyers from Main Street to Wall Street represent clients with transnational legal needs. At the same time, lawyers face pressure to reduce the costs of delivering legal services. Cost containment initiatives include outsourcing legal work to subcontractors who provide services at a lower cost. Whether legal work is sent to Indiana or India, outsourcing results in less personal connections between clients and the lawyers who originally were retained to handle the representation. Increasingly, in-house counsel unbundle the corporation’s legal work, dividing the work among numerous law firms rather than relying on one firm to meet needs on a full-service basis. For many, these trends threaten the very fabric of the trust relationship between clients and their attorneys. In his forthcoming article, Big Law and the Marginalization of Trust, Professor Robert Vischer examines the role of trust in the current climate and economic reality of global lawyers. As the title suggests, the article considers whether trust is a casualty of the trends in the structure, operation, and regulation of law firms. Rather than simply declaring trust dead, Professor Vischer persuasively explains why trust is of vital importance to lawyers, the clients we serve, and society.
The article is particularly interesting in providing context for understanding the concept of trust and the role it plays in professional relationships. Professor Vischer starts by discussing the nature of trust and the difference between cognitive and affective trust, referring to the definition of trust as a “state of mind that enables its possessor to be willing to make herself vulnerable to another—that is to rely on another despite a positive risk that the other will act in a way that can harm the trustor.” (quoting A Cognitive Theory of Trust by Claire A. Hill and Erin Ann O’Hara). The discussion of vulnerability is particularly timely given that a few experts have urged the 2020 Ethics Commission to consider adopting separate ethics rules to regulate large law firms that represent sophisticated clients who can presumably protect themselves and are therefore not vulnerable. This relates to Professor Vischer’s observation that different potential clients may require different degrees and manifestations of trust.
Professor Vischer examines the trends that strain the viability of what he calls “relational trust” between lawyers and their clients. These trends include globalization, the “disaggregation” of legal services, the rise of in-house counsel, the decline of self-regulation, and the multi-disciplinary practice of law. With each of these trends Profess Vischer considers the effect on trust as an attribute of the attorney-client relationship and the impact on the relationship. For example, what are the personal and professional liability implications for an attorney representing clients from around the world? Such clients may not be reluctant to sue the attorney for malpractice because the clients do not feel connected to the attorney. As pointed out by Professor Vischer, the lack of face-to-face interactions is not conducive to trust and trust diminishes as social distance increases. This risk reminded me of my own experience with a client representative who I knew only through telephone and electronic communications. When the relationship was tested because of allegations by opposing counsel, I believe that the client may not have fully embraced my account of the situation. Since that time, I have wondered if the client’s assessment may have been different had the client and I had a stronger professional relationship. Clients who don’t know their attorneys beyond a signature line on an email or a voice on a telephone conversation may be more inclined to sue their lawyers for malpractice. Findings from studies related to medical malpractice claims reveal that patients are less inclined to sue physicians when there has been good communication with patients, even when medical error occurs. Communication and interpersonal dealings help build trust between clients/patients and their service providers. With heavier reliance on electronic communications and greater distance between clients and their attorneys, attorneys need to be intentional in taking steps to cultivate their relationships with clients. In this sense, fostering trust improves the quality of representation for clients, while lowering attorney’s liability exposure.
Fostering trust also promises to enhance attorney sense of professional fulfillment. A close trust relationship with clients moves the attorney down the continuum from technician to valued shepherd and counselor.
A final aspect of trust relates to the professional relationships among attorneys, especially those who work together in law firms. On a daily basis, newspaper articles and internet posts bemoan the decline of collegiality and professionalism within firms. Associates condemn law firm managers who lay off associates rather than reducing profits per partner. Partners criticize associates when they act in a disloyal manner, such as when associates disclose proprietary firm information on popular websites. Partners also lament when lateral moves disrupt the stability and economic foundation of their law firms. With lawyer mobility and disputes, lawyers question whether there is anything “firm” about law firm practice. Lawyers may not trust one another when their relationships with other firm lawyers appear to be temporary associations rather than long term commitments. As a result, lawyers may yearn for the revitalization of the traditional approach to partnership in which lawyers are committed to and trust their partners.
Thanks to Professor Vischer for providing a thorough analysis of the current trends that strain the attorney-client relationship. He gives readers an opportunity to seriously consider the role of trust plays in productive relationships. As he persuasively asserts, trust not only matters, but is essential distinguishing feature of an attorney-client relationship.
Sep 23, 2011 Anna Gelperncorp
It is so very lucky that Sarah Woo chose to write Regulatory Bankruptcy: How Bank Regulation Causes Firesales as one article, not the four it could have been. When she died this summer, the legal academy lost a truly original thinker and careful researcher who asked the right questions—and had the knowledge, insight, and judgment to answer them. It is a huge loss.
Regulatory Bankruptcy is the rare article that finds smart answers to interesting questions, which also happen to be good answers to very important questions. The project occupies the intersection of bankruptcy, financial regulation, risk management, and crisis response, and makes theoretical and empirical contributions to each of these fields. I especially appreciate the way in which it helps flesh out the under-studied relationship between law and macroeconomic policy.
The article’s core argument goes to bankruptcy theory: the assumption that creditors seek to maximize individual asset recovery values in bankruptcy cases. Over the years, bankruptcy theorists have argued bitterly over the prescriptive implications of the maximizing assumption—whether it is socially desirable—but barely over the description. More recently, scholars have chipped away at the edges of the description, for example, where securitization or credit derivatives alter creditor incentives.
Woo’s case study goes to the heart of the bankruptcy paradigm: mid-market banks making simple secured loans for commercial real estate development. Her theoretical model suggests that banks, which manage risk on a portfolio basis, may suffer higher losses from asset concentration than from deterioration of individual assets. In their push to reduce concentration (or the proportion of commercial real estate loans in their portfolio), banks will rush to liquidate collateral, such as half-built homes, which would fetch far more if completed. This effect is especially pronounced in an economic downturn, and exacerbated by bank regulation and supervision.
For banking scholars, such findings are only partly intuitive. When bank supervisors press their charges to boost capital adequacy ratios, banks can either raise capital in the numerator, or sell assets in the denominator. The choice between categories and within each category is influenced by regulation and market conditions. For example, if regulators define qualifying capital narrowly, and it is relatively expensive to issue, banks will try to shed assets—especially those that carry high regulatory capital charges, come with supervisory penalties, and can fetch more in the market. In this world, it is perfectly plausible that a bank would choose to sell a “good” asset that has a high regulatory cost.
In Woo’s findings, regulation amplifies the risk management effect. Banks already benefit from reducing portfolio concentration; they benefit even more by responding to supervisory pressure to diversify. A key new twist comes with an economic downturn or a policy change: either or both can create across-the-board pressure on banks to sell assets, leading to fire sales and further depressing prices (bankruptcy contagion). Woo’s addition to financial regulatory literature thus is a mirror image of her bankruptcy contribution: in bankruptcy, she shifts focus from the debtor to creditors as a group; in banking, she illuminates the effects of regulatory policy on debtors as a group, and on other creditors.
If the core argument of the article is innovative, Woo’s execution is especially impressive. She develops her basic model by simulating loss rates in hypothetical bank portfolios with different levels of concentration in real estate construction and development. She finds that under stressed conditions concentration risk could become even more important than individual loan quality in driving portfolio losses, owing to loss correlation. Put differently, a bank with a decent but concentrated real estate portfolio may well lose more in a recession than a bank that made lower-quality real estate loans, but diversified better across sectors. The article proceeds to document a regulatory policy shift beginning in 2006 which resulted in across-the-board pressure on U.S. financial institutions to diversify real estate risk.
The empirical heart of the project is Woo’s analysis of data from real estate developer bankruptcies, combined with FDIC/FFIEC data on portfolio concentration and capital adequacy of the developers’ bank creditors. The hypothesis is that banks with higher real estate concentration ratios are more likely to ask bankruptcy courts to lift the automatic stay, allowing the banks to sell the underlying collateral (unfinished developments). To this un-quant, the analysis suggests pretty persuasively that concentration ratio trumps many other factors in driving bankruptcy fire sales.
The article ends with specific and sensible policy recommendations for bankruptcy reform and systemic risk regulation. More importantly, it helps inform bank regulators of bankruptcy, and bankruptcy judges of bank (and regulator) incentives, with implications far beyond the immediate context of the real estate case study. Woo is remarkably in tune with the latest economics research on crises and macroprudential regulation, yet she goes further to show that legal scholarship–as in her rich account of bankruptcy and banking law in action–has much to teach economists in this area. Her careful tracing of the ways in which “micro prudence” on the part of individual institutions, risk managers, judges, and regulators can become “macro risk” for the economy is smart, interesting, right, and immensely valuable.
Sarah Woo only just began teaching at NYU last year. She leaves behind an amazing range of articles, from contracts and project finance to bankruptcy, rating agencies and systemic risk regulation, along with blog and Jotwell contributions. Few people could or would take on the challenges she chose.
I met Sarah once last January, when she presented a version of Regulatory Bankruptcy and commented on other panelists’ papers—except that her commentary came complete with original (“quick and dirty”) data and graphs, which left both beneficiaries and observers momentarily speechless. I have kept her PowerPoint on my desktop, to remind myself of the effort and generosity we owe our colleagues and our audiences.
Sep 21, 2011 Angela Harriscrim
In her hilarious book Bossypants (which is another thing I like lots but alas, falls outside my mandate), Tina Fey reveals some insider knowledge about the male-dominated world of Saturday Night Live: “Male comedy writers piss in cups. Also, they like to pretend to rape each other. It’s . . . Don’t worry about it. It’s harmless, actually.”
I had that anecdote in mind as I began preparing to write this review of Kim Buchanan’s article. Then, in a moment of synchronicity, two days before I actually sat down at my computer to write, I ran across this joke in a free humor magazine, the kind printed on newsprint and assembled to support advertisements for local businesses in small rural towns. I apologize in advance for its offensiveness, but it completely makes my – and Buchanan’s – point.
A small little white guy is arrested and thrown in the county jail overnight on some misdemeanor charge. He notices that a huge black dude is also sharing the same cell. He tries not to make eye contact with him but much to his dismay the big black dude approaches him and announces “7 foot tall, 350 pounds, 20 inch dick, 3 pound left ball, 3 pound right ball, Turner Brown.”
The small white guy faints! The big black dude picks up the small white guy and brings him to, slapping his face and shaking him, and asks the small white guy, “What’s wrong?”
The small white guy says, “Excuse me, but what did you say?”
The big black dude looks down and says, “7 foot tall, 350 pounds, 20 inch dick, 3 pound left ball, 3 pound right ball, my name is Turner Brown.”
The small white guy says, “Thank God! I thought you said, ‘Turn around.’”
Where do these jokes come from, and why do they persist? As its title suggests, Buchanan’s article is about prisons, but more importantly it is about “us” – about sexual violence against men, inflicted by men, and about how this violence is largely accepted and condoned not only in social life but in the law. Examining the available data, including data gathered in the wake of the recently passed Prison Rape Elimination Act (PREA), Buchanan argues that many prisons are saturated with sexual violence, ranging from harassment to the most brutal rapes. This violence, however, is not the inevitable consequence of crowding antisocial individuals together. Buchanan notes that in some prisons there is “zero tolerance” for sexual violence, and very low rates of violation. The problem is a widespread administrative culture in which sexual violence is not only tolerated by staff but incorporated into the prison order: institutions where inmates are sagely advised by staff, “Fight or fuck,” where everyone accepts that men unable to protect themselves may be “turned out,” and where gay, bisexual, and transgender victims of sexual violence may be taunted and told that they must have enjoyed it.
Buchanan’s title cleverly invokes second-wave feminism, which her article simultaneously challenges and builds upon. Second-wave feminists, seeing that violence against women was all too often treated as an inevitable feature of life that it was a woman’s responsibility to avoid, argued that all men received a benefit from this violence. The “male protection racket” told women that if you didn’t have a man of your own, you had better get one quickly, to protect you from the violence of other men. This system, of course, also worked to secure compulsory heterosexuality by announcing open season on lesbians.
Buchanan’s observations about the taken-for-grantedness of sexual violence in prison and the seeming complacency about it in the outside world eerily recall a time when women who were raped would routinely be blamed for dressing too provocatively. Her analysis of how male victims of sexual violence are similarly ignored, disbelieved, held responsible, or told that it must have been consensual clearly draws on second-wave feminist analysis. Buchanan also draws on this analysis when she shows how the world of prisons and jails is as effectively shielded from legal scrutiny as was the home in an earlier era. Then, as now, the creation of a “private” sphere free from legal intervention made room for an informal order patrolled by patriarchal violence.
But Buchanan’s article also demonstrates what second-wave feminists missed: the rules of masculinity subject men to one another as mercilessly as they subject women to men. Rather than being uniformly privileged by misogynist and homophobic violence, men are complexly burdened as well as benefitted. Moreover, the masculine order that this violence secures rules the outside world as well as the world of incarceration. Despite important decisions like Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75 (1998), holding that Title VII bars same-sex sexual harassment, Buchanan notes that a kind of double standard persists in which same-sex violence and harassment perpetrated by straight men receives less scrutiny and punishment than either different-sex harassment, or same-sex harassment perpetrated by sexual minorities. Title VII as well as prison administration, it seems, secures the ability of straight-identified men to dominate other men.
Finally, Buchanan’s article is about a racialized sex/gender panic on the part of white men that crystallizes in the joke I repeated at the beginning of this review (and hundreds of variations scattered throughout popular culture). In her fascinating cultural history, Manliness and Civilization, Gail Bederman suggests that the male fantasy of vulnerability to rape by a “big black dude” may have its roots in the late nineteenth century, when white male masculinity entered a period of crisis from which it has never fully emerged. Buchanan demonstrates that the fantasy persists as a “myth” about prison rape – the belief held by experts as well as laypersons that the perpetrators of prison rape are disproportionately black and the victims disproportionately white. There is no good evidence to believe that prison rape is raced in this way. Yet the fantasy persists.
Buchanan has pulled off a tour de force of critical legal theory, seamlessly weaving together the race, gender, and sexuality dimensions of hegemonic masculinity. Her article demonstrates both the continued vitality of feminist theory and the need to think beyond second-wave analyses. And her article, most importantly, connects the “inside” and the “outside” of prison. Buchanan makes an assault on the wall that separates “them,” the criminals, from “us.” Male-on-male sexual violence, and the heteropatriarchal masculinity that produces it, is truly ours. In true feminist fashion, it is time to see that what is taken as natural and normal is contingent on a social order, not biology. And it is time to take this violence, in its sexualized, gendered, and racialized dimensions, seriously.
Sep 19, 2011 Sophia Z. Leelegalhist
While histories of the United States are just beginning to creep into the 1980s, Daniel Rodgers has produced a panoptic intellectual history that takes his readers into the twenty-first century. As someone who came of age in what Rodgers compellingly titles the “age of fracture,” I found it disconcerting to read about my own intellectual development in a history book. Okay, what I really mean is that it made me feel old. But I suspect that it would make Rodgers happy to learn that his book stretched out and rematerialized time for this reader. After all, coursing through the book is dismay at how the abstraction of time and discounting of history has impoverished everything from economic to political theory. In other words, his book is, in part, a historian’s lament, and it should appeal to historians for this reason alone. The Age of Fracture is also a meditation on the causes of America’s current tattered social welfare state, a capstone to the story begun by Rodgers in his equally breathtaking Atlantic Crossings: Social Politics in a Progressive Age (1998). Legal historians should take particular interest in the book. It places in historical context a number of trends in legal thought, from law and economics to originalism.
Rodgers argues that during the closing decades of the twentieth century, liberals’ and conservatives’ concepts of power, time, identity, wealth, and community fragmented, becoming thinner, smaller, and more malleable. Individual choices replaced historical and structural forces as explanatory variables. Rodgers deftly interweaves trends from across the political spectrum. He argues that the Foucauldian turn among leftist academics was of a piece with conservatives’ embrace of rational choice theory (both trends dematerialized power). Colorblind constitutionalism, Rodgers also contends, shared implications with black intellectuals’ “celebration of paradox, improvisation, and hybridity” in 1990s race theory (both discounted the heavy hand of the past in shaping the present). (140)
In The Age of Fracture, ideas, economies, and public policy are both causal engine and historical effect. According to Rodgers, a new age of ideas dawned because reigning economic theories failed to explain or ameliorate the stagflation of the 1970s. The resulting crisis created an opening for previously peripheral ideas like Milton Friedman’s monetarism and new ones like supply-side economics. Rodgers attends to how markets drove ideas in more implicit and localized ways as well, arguing, for instance, that poststructuralist theory became dominant among feminist scholars because it allowed women breaking into the academy to vie discursively in continental-theory-heavy, male-dominated faculties. But if economics drives ideas, ideas drive policy. Rodgers traces carefully the way theories of the micro, the plastic, and the volitional on the left and the right eroded support for an interventionist state. Thanks to both libertarian and communitarian theory, for example, “[t]he domain of citizenship, which had expanded in the post-World War II years, . . . began to shrink.” (198) Public policy, in turn, shaped economies, a point driven home by a devastating account of the shock therapy that transition economics prescribed for Eastern Europe’s emerging nations during the 1990s.
The legal academy should feel validated by The Age of Fracture. It is represented in nearly every chapter of the book (more attention, I should note, than historians receive). Rodgers also depicts legal theory as a driver of intellectual trends, not merely an echo of innovations in the social sciences and humanities. Law and economics features prominently in his chapter “The Rediscovery of the Market,” colorblind constitutionalism and critical race theory in “Race and Social Memory,” employment discrimination and critical legal studies in “Gender and Certainty,” hate speech and communitarian-driven education policy in “The Little Platoons of Society,” and originalism in “Wrinkles in Time.” The primary intellectual histories of twentieth-century legal thought, Laura Kalman’s The Strange Career of Legal Liberalism (1996) and Morton J. Horwitz’s The Transformation of American Law, 1870-1960: The Crisis of Legal Orthodoxy (1992) are less concerned with the broader intellectual contribution of legal scholars, with Kalman focusing on the impact of intellectual trends on legal thought and Horwitz focusing on the impact of legal thought on the law. This makes The Age of Fracture not only an appealing book for legal academics, but an important book for legal historians.
To give a taste of what you can expect, Rodgers has an almost subversive account of originalism. It was, Rodgers argues, “Constitutional conservatism’s flirtation with timelessness.” (242) For Rodgers, originalism, despite its practitioners’ excavation of historical sources and efforts to divine the historical meaning of language, has much in common with postmodern and deconstructionist theory. Rodgers contends that end-of-days fiction like Tim LaHaye’s Left Behind series laid the ground for conservatives to accept originalism, because both “short-circuit[ed] time” by “making not only the past but the future immediately accessible to the present.” (231) In this deft move, Rodgers synchronizes originalism’s promise to transport us back to 1788 or 1868 with the temporal pastiche found in postmodern aesthetics. Originalism, Rodgers observes, marked a change in conservatives’ relationship to time. Traditionally associated with Burkean incrementalism and stability, conservatives now sought to “to locate a trap door through which one could reach beyond history and find a simpler place outside of it.” (241) For conservative constitutionalists, as for transition economists, Rodgers suggests, trying to “slip[] instantly across time” in the name of stabilization could have profoundly destabilizing effects. (241)
Rodgers’s reading of originalism or of the age of fracture is not the final word. The splitters among us could look at all Rodgers has lumped together and find far more difference than similarity (this might be missing the point, however: bold and sweeping synthesis, Rodgers implies, is what is needed in an age of fracture). The book, however, is an incredibly well-crafted and provocative offering, one that prods legal historians to look for counterintuitive connections and to place legal thought in the broader swim of ideas. If it sounds intriguing to ponder what Robert Bork and the Crits, not to mention Charles Murray and Judith Butler, had in common, The Age of Fracture is the book for you.
Sep 15, 2011 George Mundstocktax
The recent shuttering of Borders reminded us all of the huge competitive advantages that online merchants enjoy over brick-and-mortar retailers. Foremost among these advantages is the ability to exploit Quill Corporation v. North Dakota, 504 U.S. 298 (1992), and avoid collecting use tax on sales so as to achieve a practical 5 to 10% price advantage. Quill held that a state could require use tax collection only from a seller with a “physical presence” in the state. Michael Mazerov’s Amazon’s Arguments Against Collecting Sales Tax Do Not Withstand Scrutiny (2010) presents a complete analysis of the issues here. (An earlier version was published at 54 State Tax Notes 728 (2009).)
Mr. Mazerov carefully dissects all of the arguments against taxation using Amazon as a case study. He starts by looking at the argument that multistate tax collection would unduly burden interstate sellers. He points out that Amazon already collects tax in every state of the union but one for customers like Target. Amazon even collects value added taxes on foreign sales. Supporting U.S. states presumably would require only “the flip of a (software) switch.”
Amazon also argues that it would be unfair for it to pay tax to states that afford it no benefit. Mr. Mazerov describes how Amazon, through the artful use of subsidiaries and other techniques, does not collect tax even for many states where it has physical facilities and employees. And, more importantly, Amazon obviously benefits from the laws and government of every state in which it sells. In particular, Mr. Mazerov reminds us that Amazon is a book seller, so it certainly benefits from the eduction systems of market states.
Mr. Mazerov makes a particularly interesting point about how the current regime encourages perverse business location decisions. Amazon chose Washington State over California as its home so that it would not be required to collect California tax. In a Quill world, interstate sellers locate in small market states.
Now, states are pursuing interstate sellers by enacting so-called “Amazon” statutes, which give tax jurisdiction to the state if the seller has an “affiliate” in the state. An affiliate is a business with a physical presence in the state that refers business to the multistate seller.) These statutes currently are being tested in the courts. Mr. Mazerov points out that Amazon statutes are some help here. But, they discourage using local affiliates. Amazon terminated its affiliates in California when the state enacted an Amazon statute. The best fix would be for the U.S. Congress finally to accept the Supreme Court’s invitation in Quill and legislate here. Borders’s bankruptcy shows what another 20 years of waiting will do.
Sep 12, 2011 Mark Greenbergjuris
Scott J. Shapiro,
Legality (Belknap Press 2011).
Scott Shapiro’s splendid new book offers a novel theory of the nature of law: legal systems are essentially systems for complex, impersonal social planning, and legal norms are plans. The book provides a new perspective on law, which is both refreshing and fruitful. By thinking about the origins, purposes, and essential features of plans, we gain insight into law. A significant side benefit is that the book connects law to topics in contemporary philosophy of action.
Legality has more virtues than I can discuss here. To begin with, although the book is a highly original contribution to the philosophy of law, it presupposes relatively little background. It is also extremely clearly and engagingly written. The book would therefore make a superb text for a law school, advanced undergraduate, or graduate course. And, because Shapiro frames the issues in new ways, even those portions of the book that introduce and discuss familiar positions and issues provide much food for thought for specialists as well as the more general reader.
For example, early in the book, Shapiro explains what he calls “the Possibility Puzzle.” Legal norms come from institutions with the power to create legal norms, such as legislatures. An institution has the power to create legal norms because of a legal norm that gives it that power, for example a constitutional norm that grants legislative power to a particular body. But where does that norm come from? As Shapiro explains, there is a chicken and egg problem here. In order to solve the problem, we need either a legal norm that does not come from an institution with the power to create legal norms or an institution that has the power to create legal norms but does not derive that power from a legal norm.
Shapiro argues that Hume’s law – an “ought” cannot be derived from an “is” – is a severe obstacle to legal positivist attempts to solve the Possibility Puzzle, because such attempts purport to derive legal norms from nonnormative social facts. HLA Hart’s account is a case in point. According to that account, a convergent practice of legal officials is supposed to generate a social rule, the rule of recognition, that solves the chicken and egg problem. Shapiro offers a subtle interpretation of Hart’s approach to the challenge posed by Hume’s law and argues that, in the end, the approach fails.
On the other hand, however, Shapiro maintains that anti-positivist or natural law attempts to solve the Possibility Puzzle run into the “Problem of Evil”: grounding legal authority in moral authority or moral norms makes it difficult to see how evil legal systems and evil legal norms are possible. Shapiro uses these engaging and easily understood framing devices throughout the book, for example in bringing out the problems in other legal positivist accounts and in arguing for his own theory.
One of Legality’s great strengths is that, although Shapiro is on the legal positivist side of the positivist/anti-positivist debate, his book engages with anti-positivist theorists to a much greater extent than many legal positivist works. Shapiro is sympathetic to anti-positivist motivations and tries hard to respond to the arguments of anti-positivist theorists. In some instances, he makes substantial concessions to their positions.
An example is that Shapiro agrees with the natural law claim that law has a moral purpose, and that, to the extent that it fails to serve that purpose, it fails to do what it is supposed to do. Similarly, Shapiro rejects Hart’s claim that legal terms such as “obligation” have a different sense from the corresponding moral terms. He holds that the law uses these terms to make moral claims.
Another notable example is that Shapiro recognizes that Ronald Dworkin has made extremely serious criticisms of legal positivism—criticisms to which no positivist has yet adequately responded. Shapiro devotes a couple of chapters to trying to answer Dworkin. (One important point of disagreement: in my view, Shapiro is wrong to maintain that Dworkin’s theory of law depends on a claim about the intentions of legal creators – that they are “necessarily committed to a ‘best-lights’ analysis.” 308.) In sum, one reason Shapiro’s book is valuable – and admirable – is that, rather than passing natural law theory by, it seriously engages with and tries to respond to it.
Most significantly, Legality develops an original account of law in terms of the notion of a plan. A particularly rewarding aspect of the book is its discussion of plans and their relation to legal systems and legal norms. In his appealing and lucid style, Shapiro explores the characteristic features of plans, the needs to which they are responsive, the way in which they are created, and their relation to rationality. He makes the ingenious proposal to understand legal systems as complex systems for impersonal social planning and to understand legal norms as plans, including plans for planning. Like a legal system, planning is an extraordinarily effective instrument for guiding and organizing the conduct of agents who have complex goals but limited rationality and varying degrees of trust in themselves and each other. For example, like legal norms, plans can be created in advance to compensate for anticipated failings of rationality or lack of trust and can be left incomplete and filled in as more information becomes available.
Plans are specialized norms that have just the features, Shapiro argues, that are needed to solve central problems in legal philosophy. The solution to the Possibility Puzzle, for instance, is to be found in the possibility of planning: “we are able to create law because we are able to create and share plans” (181). In Shapiro’s view, the chicken and egg problem is solved because the power to plan derives from norms of instrumental rationality that are not themselves created by people. Because legal norms ultimately rest on these norms, Shapiro’s account is consistent with Hume’s law.
Shapiro thinks that plans are positivistic, i.e. that the content of a plan depends only on nonnormative facts. Because, on his account, the content of the law is the content of a plan – typically, of course, a highly complex plan with many sub-plans, sub-sub-plans, and so on – he concludes that his theory vindicates legal positivism. (More precisely, the content of the law comprises not only the content of the plan but also certain entailments of it.) I want to raise a question about this aspect of Shapiro’s theory. If a terrorist has a plan to blow up a bridge, the content of that plan plausibly is simply whatever he intends. Shapiro sensibly takes the position, however, that in the case of the content of the law, the content of the relevant plan is not wholly constituted by the content of any actual intentions or other psychological states (though the content of various intentions of diverse people may be relevant to the content of the plan). As I would put it, the relevant plan is imputed or constructed.
I believe (though I cannot argue here) that once we are in the business of imputing or constructing the content of the relevant plan, we cannot avoid relying on values to do so. (For related discussion, see my “The Communication Theory of Legal Interpretation and Objective Notions of Communicative Content”; see also my “Legislation As Communication? Legal Interpretation and the Study of Linguistic Communication” in A. Marmor and S. Soames, The Philosophical Foundations of Language in the Law (Oxford: OUP 2011), pp. 217-256, especially pp. 232-233 and section 6.) Shapiro agrees with this point, but he thinks that the relevant values are those of the legal system.
In my view, however, the very same difficulty arises when we ask how the practices of the legal system determine its values. Shapiro says that interpreters must extract the objectives of the legal system from the texts and other practices. But, to stay with this epistemic way of talking, an interpreter cannot move from facts about what various people did, thought, and said to conclusions about the objectives of the legal system without deciding which actors’ decisions or utterances are relevant to the legal system’s objectives, precisely what bearing those events have, how much weight they deserve, and so on. It is difficult to see how the right answer to such questions could not depend in part on moral facts, such as facts about fairness and democracy. For example, a particular past decision might be relevant, and relevant in a particular way, because it would be unfair for it not to be relevant in that way, given the expectations that it reasonably created; conversely, another decision might not affect the content of the plan because, given who made the decision or how it was made, it would be unfair for that decision to have a bearing on the content of the plan.
So I suspect that, if Shapiro is right that the content of the law is the content of a plan, whatever may be the case with respect to other kinds of plans, the content of the relevant plan necessarily depends on moral facts. My disagreement on this issue does not affect my overall judgment of the book: the interest, power, and illumination of Legality far transcend its implications for the legal positivism/anti-positivism debate.
Sep 12, 2011 Ekow Yankahjuris
Scott J. Shapiro,
Legality (Belknap Press 2011).
Analytical jurisprudence has a peculiar status in American law schools to say nothing of philosophy departments. Most law professors find it an utterly inscrutable or arid project. More generous souls have the vague impression that it is important and like that one or two of their colleagues engage in it, but their gentle forbearance is not to be mistaken for interest. Even those steeped in the subject are often discouraged by the increasing narrowness of the “What is Law” question. It takes a good deal of squinting to see the live question surrounding the nuanced positions on the extent to which morality determines whether something can be considered law; that is, the “validity conditions of a legal system.”
Against this rather gloomy landscape, Scott Shapiro has introduced an illuminating new book, Legality. Though there are few who are as knowledgeable about analytical jurisprudence as Shapiro, his book is admirable not for its attempt to dazzle with intricacies. Rather, Shapiro’s work is laudable because it makes accessible decades of debate in modern jurisprudence while still providing a novel contribution. Most importantly, Shapiro revives the heartbeat of the debate, showing why it matters and synchronizing it with legal issues recognizable to those outside of the small world of analytical jurisprudence. This accessibility means that those who know this debate will find the preliminaries unnecessarily long, a quarter of an already rather long book. Yet, it is no small thing that Shapiro manages to explain half a century of thick debate in a way that interested audiences of lawyers, and perhaps more immediately relevant, undergraduates and law students can understand its contours. Speaking for the many professors who have shied away from teaching the subject, Shapiro’s book makes one reconsider the profitability of reintroducing this debate in the classroom.
Quibbling about jurisprudence classics with Shapiro may be its own sort of fun, but it would distract from Shapiro’s real accomplishment–breathing fresh air into the debate. Shapiro’s novel contribution is to apply the insights in philosophy of action, particularly Michael Bratman’s theories of intentions, to show how law can be seen as a model of social planning. Shapiro attempts to show why a planning theory leads to a positivist theory of law, excluding morality from determining what constitutes law and showing the practical effects for current legal questions.
The core claim of the book is illustrated in a simple and charming story of cooking dinner with a friend. From this, Shapiro spins a tale of the formation and organization of a cooking club to highlight the perfectly quotidian intuition that whether having dinner alone or organizing a cooking club, planning is necessary to achieve our basic goals. The more complicated our goals the more sophisticated our plans must become. Further, and this is crucial for Shapiro, in order to be useful a plan must possess a certain amount of stability. There is no point in painstakingly planning a gourmet meal if when you walk into the grocery store you wonder anew what to cook. Plans can be incomplete or revised in light of new information, but as a general matter plans must resist constant tinkering or reevaluation. Echoing Raz on authority, Shapiro concludes that plans must be accessible without re-evaluating the underlying merits on which the plan was originally based.
This telegraphs the plan of attack. Shapiro uses an analogy between law and the plans generally to generate “a planning theory of law.” On Shapiro’s account, legal institutions are forms of planning which allow large groups to achieve that which they could not otherwise. Critically, just as evil plans are still plans allowing human beings to channel their agency, the plans that constitute law need not be moral to constitute valid law. The only “moral aim” of law is a minimal one; solving the problems that arise as social tasks and ambitions grow more complex. Arguing that law, like plans, must resist reevaluation of its underlying (moral) merits to be useful grounds Shapiro’s positivism on novel grounds.
Elsewhere, I have argued for positivism premised on a conceptual connection between law and coercion. I argued both that coercive norms distinguish the normative systems best described as law and that alternative models of positivism can not adequately defend positivism’s holy grail, the separation between law and morality. Even Shapiro’s thoughtful dinner model illustrates why. Plans can do a great deal to coordinate action and facilitate massive socially coordinated events without a commitment to excluding arguments grounded in morality. “My wife and I will move to Paris, find new jobs and raise our kids in the best way possible” is a plan, even if incomplete and certain to lead to revaluation and argument down the road. “Do not subject others to cruel and unusual punishment” is also “a plan” of sorts even if it leads to the same. Likewise, the 14th Amendment might rule out discrimination against African-Americans while leaving unspecified whether the elderly are protected against age discrimination. Nor is it dispositive, as Shapiro argues, that moral criteria will not only leave some plans undetermined but may, on occasion, unsettle plans that were once settled. One need only avoid plans that would be radically and uselessly undetermined.
Further, even if plans need to be relatively stable, it’s unclear that one would want this stability at the cost of excluding moral criteria. Plans are open to moral evaluations from the inside. We criticize, guide and correct our plans with moral reasons not simply evaluate the attractiveness of completed plans with a removed eye. This is especially true because, as Shapiro points out, the plans that constitute law are not an equally shared activity; for many people law represents a set of plans which are imposed upon them. It is this criticism which drives critical (race, feminist, class, etc…) legal views. (Notice Shapiro falls into a common habit of using examples that feature roughly democratic and morally innocuous circumstances.) Given his interest in the ways in which law places people in varying power roles depending on the extent to which they are trusted to properly fulfill those roles, it is strange that Shapiro spends so little time on this. Perhaps this is because for Shapiro, while there is a reason for many of us to adopt the plan in effect around here, he is agnostic about any general obligation to follow the law.
Of course, the point of the positivist project is to establish that the existence of laws are one thing and their morality another. Replying to those who argue that the moral criteria within law can generate legal rights in the same way that morality can guide plans by repeating that planning forecloses this leaves those seeking to engage jurisprudence exasperated or befuddled. Further, to ultimately conclude that the distinction between morally derived legal rights and “law” proper turns on Davidson’s model of the different ways in which obligations can be described will seem to many a terribly slender reed for such an important claim.
This brings us to the most global concern with Shapiro’s model. Why should one accept that law is perfectly analogous to the kind of positivistic planning Shapiro proposes? Many thoughtful judges, lawyers and scholars think quite the opposite. One of the things law allows is for us to frame deep practical moral disagreements of a certain kind and discuss, argue, and alter them while continuing to govern society. While Shapiro is not opposed to this objection, pointing to scholars such as Jeremy Waldron and Akhil Amar, he holds these claims exist outside the law. That claim, I have suggested, cannot come solely from describing law as a type of plan.
Lastly, Shapiro is to be much admired for an intricate discussion tying the core questions of legal philosophy to the legal questions of our day. Shapiro proposes that the “planning model” of law can answer not only “retail” questions of law, but inform broader questions about the amount of discretion officials should wield, their interpretative methodology, etc. Despite lacking the space to discuss these claims, the attempt to link the debates in jurisprudence with live questions may be the most important spirit of the text. While the success of that claim ultimately turns on whether one is convinced by Shapiro’s model, it cannot be doubted that Shapiro’s book, which clarifies and advances analytical jurisprudence, is bound to be a classic text.
Sep 9, 2011 Ruthann Robsonequality
Julie Nice,
How Equality Constitutes Liberty: The Alignment of CLS v. Martinez, 38
Hastings Const. L.Q. 631 (2011), available at
SSRN.
The controversial decision of the United States Supreme Court last year in Christian Legal Society v. Martinez involved a dispute at Hastings College of Law. On one side, the College of Law applied its blanket nondiscrimination policy as a prerequisite for recognition of student groups. On the other side, the student organization Christian Legal Society, backed by the national organization, argued that a nondiscrimination policy that included sexual orientation infringed on its religious freedom. Thus, the case can be easily understood as just another battle in the continuing war between equality (for sexual minorities) and liberty (of religious freedom) fought on the field of various First Amendment doctrines. Too much of what I’ve read about the case succumbs to this reductive reading.
Professor Julie Nice, of the University of San Francisco School of Law, resists the easy renditions. Her article is refreshing because she engages the theories, the doctrines, and the politics with equal urgency and depth. It is also invigorating in its accessibility: Nice’s language does not obfuscate or overwhelm. Moreover, while the article centers on a single case and was written for a symposium on CLS v. Martinez held by the Hastings Constitutional Law Quarterly, it looks backwards and forwards as well as sideways to illuminate the notions of “equality” and “discrimination.”
Nice acknowledges that the United States Supreme Court has “not yet provided any framework for understanding the ways that liberty and equality interrelate” and that no scholarly consensus or “grand theory” has emerged. In some ways, Nice’s own article contributes to this scholarly quest, although arguably her claim is the more modest one of seeking to “understand what was at stake in this particular controversy and to explore the implications of the decision.” But the “particular controversy” in CLS v. Martinez is quite complicated; much of the oral argument was devoted to the record. However, as Nice points out, the disagreement between Justice Ginsburg ‘s opinion for the Court and Justice Alito’s dissenting opinion is not so much factual as in the ultimate characterization of the facts, especially the motivations of the law school. Nice writes that where “Justice Ginsburg and the majority saw textbook neutrality, Justice Alito and the dissenters saw obvious pretext.”
Nice explains this disagreement through a difference in the lenses of time, place, and money. While this obviously resonates with the First Amendment doctrine of “time, place, and manner,” Nice’s discussion here is not primarily doctrinal. The issue of money (and perhaps, manner) is the “dangling of the carrot of subsidy, not wielding the stick of prohibition,” as Nice quotes Justice Ginsburg’s opinion. As for place, the law school’s “limited public forum” for student groups allows Ginsburg to select a more lenient level of scrutiny to evaluate the school’s action. But the time to which Nice refers is not during the law school day or calendar, it is the time of post-Lawrence and post-Romer. The Court’s 1996 decision in Romer v. Evans (declaring unconstitutional as violative of equal protection Colorado’s Amendment 2, prohibiting anti-discrimination laws that included sexual orientation) and the 2003 decision in Lawrence v. Texas (declaring unconstitutional as violative of liberty under substantive due process Texas’ criminal sodomy statute) have made a difference. At least for the majority of members of the Court, sexual minorities are now considered “a class to be deserving of ordinary constitutional protection.” It is this insight, which she names “self-evident,” that animates Nice’s article.
This is not to minimize her spectacular and succinct analysis of First Amendment precedent, which includes a discussion of the “sex discrimination trilogy,” the “sexual orientation duo,” and the “sleeper comparison” case of Ysura v. Pocatello Education Association, which involved union payroll deductions for public employees. Reading Nice’s analysis, even if one knows these cases ̶ and perhaps especially then ̶ reorients and reorganizes the doctrinal and theoretical meanings of the cases and their relationships. Also helpful is her reminder that First Amendment doctrine provides “an array of options for framing and deciding any particular dispute” and her explanation of how the opinions in CLS v. Martinez execute their choices.
But, as Nice concludes, if CLS should complain that Hastings Law School’s decision to afford equal treatment to sexual minorities has” trumped” the liberty of interest of CLS to receive governmental support for its own moral disapproval of sexual minorities, CLS would be right. However, this might be true because “CLS simply failed to persuade a majority of the Court that Hastings enacted or applied its nondiscrimination policy for recognition of student groups at least in part because of its adverse effect on fundamentalist Christians.” As such, CLS v. Martinez “effectively brings cases involving incidental effects on expressive association into the broader equality fold, requiring proof of intent before such incidental effect or disparate impact will raise the Court’s suspicion and its scrutiny.”
Additionally, and perhaps even more importantly, Nice concludes that “rather than perceiving Martinez as merely about equality trumping liberty,” it may actually enhance liberty by distinguishing between ideology and identity. On this view, the majority of the Court in Martinez refused to “perpetuate the presumption that the mere presence of an openly gay member in the Christian Legal Society necessarily would alter the organization’s message.” By refusing the conflation of identity and ideology, the case “enhances liberty, making space for an individual to embrace any religious ideology regardless of his or her sexual orientation.”
Within the space of 40 pages, Nice convinced me that not only is CLS v. Martinez “no outlier,” but also that it will come to be seen as a decisive engagement, just as we view that other Battle of Hastings.
Sep 6, 2011 Kevin E. Collinsip
Empirical studies of IP that measure the effect of IP on innovation are difficult to pull off. The cleanest way to measure the effect of IP on innovation would be to run a controlled experiment in a laboratory setting: take two similarly situated groups of innovators, subject one group to a regime of exclusive rights and the other to a public-domain regime, and then sit back and watch the differences that evolve in the two groups. Unfortunately for economists, innovators cannot be treated like laboratory rats, so actively creating the control group that is required to measure the effect of IP on innovation ranges from the difficult, indirect, and expensive to the impossible. We usually have to make educated guesses about counterfactual scenarios: we just do not know for sure what would have happened if a real-world IP regime had not existed or had existed in a different form.
In her working paper of July, 2010 titled Intellectual Property Rights and Innovation: Evidence from the Human Genome (available as NBER working paper no. 16213), Professor Heidi L. Williams, an economist at MIT, overcomes the inability of scientists to create an experimental control group by identifying a rare natural experiment—a situation in which the real world provides two similarly situated groups, one of which is subject to an IP regime and one of which is not. In Williams’ words, “[t]he contribution of this paper is to identify an empirical context in which there is variation in IP across a relatively large group of ex ante similar technologies, and to trace out the impacts of IP . . . .” (P. 1.)
Williams’ subject is the sequencing of the human genome. In the late 1990s and early 2000s, the human genome was sequenced simultaneously by two different entities: the public Human Genome Project (HGP) and the private firm Celera. Each entity had its own policy concerning IP. The HGP mandated that all of its sequence data be deposited with little delay into a publicly accessible database, and it did not impose any restrictions on the use of the data. In contrast, Celera sought to monetize its database of sequence information with a form of contract-based IP that Williams refers to as “Celera’s IP.” Williams used differences in the progress of the two entities’ efforts to identify two different groups of gene-sequence data. First, there were the gene sequences that had already been produced by the HGP as of 2001 and thus were available in the public domain as of that date, even if they were also available in the Celera database. Second, there were the “Celera genes”—those genes whose sequences were only available in Celera’s private database as of 2001 and thus could only be accessed by those who followed the conditions established by Celera’s IP. By 2003, all Celera-gene sequences had been disclosed by the HGP and were in the public domain, so Celera’s IP was temporally limited to roughly a two-year span.
Williams measures the effect of Celera’s IP on the subsequent innovation on the Celera genes, using the subsequent innovation on the genes whose sequences were available in the HGP database by 2001 as a stand-in for a control group. Looking at both the Celera genes and the remaining genes, she observes the appearance of scientific publications addressing gene function and the development of gene-based diagnostics tests for health-care consumers through 2009. What Williams finds is that Celera’s IP had a significant dampening effect on subsequent innovation on the Celera genes on the order of thirty percent, both in terms of scientific publications and diagnostic tests.
Williams is careful to note that her data should not be interpreted as providing a direct assessment of the overall welfare effects of Celera’s privately funded efforts to sequence the human genome. She is unable to capture data on the social value of the more rapid availability of the sequence data that is attributable to Celera’s efforts or, more generally, to the value of IP’s ex ante incentives to innovate. What she claims to demonstrate is only that Celera’s IP did not serve the ex post function of providing incentives to further investigate the Celera genes or develop their commercial potential. In fact, Celera’s IP seems to have done just the opposite: it seems to have retarded post-discovery innovation on the Celera genes.
Williams’ analysis is not as simple as this short review suggests. At times engaging in statistical analysis that is difficult for a non-economist (like me) to follow, let alone to evaluate, Williams discusses her research design at length, including her extensive efforts to rule out the possibility of selection bias—a non-random initial sorting of genes into the Celera and non-Celera groups based on their promise as a target of academic inquiry or a commercially valuable therapeutic. Nonetheless, the bulk of the paper is accessible to non-economists, and its lessons for anyone interested in understanding the real-world impact of intellectual property make it a must-read piece for intellectual property scholars.
From the perspective of a scholar of intellectual property, however, there is one important issue on which Williams does not dwell: What precisely is the nature of Celera’s IP? Celera’s IP is an unusually weak form of IP—a fact that makes Williams’ findings even more compelling. As defined by Williams, Celera’s IP had nothing to do with patents. In fact, Williams could not match data about gene patents to her data, leaving her “unable to examine patenting as either an outcome or as a potential mechanism for the observed Celera IP effects.” (P. 11, n. 32.) Nor was Celera’s IP a form of trade secrecy. As of 2001, Celera’s publication of its draft Genome in Science meant that any member of the public could access and view Celera’s database. Rather, Celera’s IP existed principally in two contractual terms to which anyone who accessed Celera’s database had to agree. First, nonprofit researchers could use the data free of charge for research purposes, but anyone interested in using the Celera data for commercial purposes had to negotiate a commercial-user license with Celera. Data on the commercial-user licenses is not public, but Celera is rumored to have required a significant subscription fee that ran in the millions of dollars per year for pharmaceutical companies. Second, to prevent access to the data by commercial users who did not pay the subscription fee, the license generally prohibited redistribution of the data, but Celera would deposit sequence data into a publically available database if such deposition was required for publication of research results. If this relatively weak form of IP had the persistent negative effects on both subsequent scientific research and commercial product development that Williams documents, one can only wonder what effects stronger and more-common forms of IP might have had. Williams’ paper examines a natural experiment to provide valuable insight into the effect of IP on innovation, but, as is perhaps inevitable in the world of empirical research, it only wets our appetite, leaving us to our educated guesses about what might happen in yet other counterfactual scenarios.
Aug 22, 2011 Richard Pierceadlaw
Wendy Wagner, Katherine Barnes & Lisa Peters,
Rulemaking in the Shade: An Empirical Study of EPA’s Air Toxic Emission Standards, 63
Admin. L. Rev. 99 (2011), available at
SSRN.
Wendy Wagner, Katherine Barnes, and Lisa Peters provide a wealth of data and insights with respect to the rulemaking process in this well-researched and well-written article. They engaged in intensive empirical analysis of the ninety rulemakings in which EPA issued air toxic emission standards. For each of the rulemakings they studied three stages of the decision making process—pre-NPRM, notice and comment period, and period after issuance of a final rule.
I cannot do justice to the authors’ excellent discussion of their methodology and the implications of their findings. I will instead simply recite some of their most important findings in the hope that my summary of some of their findings will induce everyone to read this important article with care.
The authors found that the pre-NPRM period averaged a bit less than four years. During the pre-NPRM period, EPA engaged in an average of 178 contacts per rulemaking—more than twice the average number of comments EPA received after it issued the NPRM. Contacts with industry were 170 times greater than contacts with public interest groups and 10 times greater than contacts with state regulators during the pre-NPRM period.
The period between issuance of the NPRM and issuance of a final rule averaged 18 months. Industry accounted for 81% of the comments filed, while public interest groups accounted for 4% and governments accounted for 7%. The authors found that comments generally led to changes. 83% of the changes made between the proposed rule and the final rule had the effect of weakening the rule. Based on the changes made during the comment process, the authors drew the inference that EPA is influenced more by industry comments than by public interest group comments.
About 70% of the rules were changed after EPA issued a final rule—typically in response to a petition for reconsideration or a petition for review. Public interest groups participated almost as much as industry during this stage of the decision making process.
The authors also found that, while public interest groups did not participate actively or effectively with regard to the substance of the rules during the pre-NPRM period or during the comment period, they played “a forceful role … with regard to the timeline” of many of the rulemakings. Thus, 73% of the rules were issued after a court issued an order with an action deadline at the behest of a public interest group.
In short, public interest groups influence the rulemaking process almost exclusively through their activities in court before and after the agency decision making process. I agree with the authors that this limited indirect role in the agency decision making process reflects the resource constraints of the public interest groups. They lack the resources required to participate effectively in the actual agency decision making process. This insight underlines the significance of the longstanding debate with respect to the standing of public interest groups to enforce public laws in courts. If they are denied access to the courts, public interest groups may have no means through which they can influence the agency decision making process.
Anyone who is interested in the rulemaking process must read this article. It is the most valuable source of data I have found on the subject.
