Articles

In this Article, Richard Painter uses contractarian economic theory to demonstrate general trends in professional responsibility rules, including gradual migration away from standards and toward defined rules and increased use of default rules and opt-in rules. Many rules, however, remain broad standards, and immutable rules remain the principal mechanism for regulating conduct that affects third parties. This Article discusses how additional default rules and opt-in rules, if carefully chosen with protection of third parties in mind, could enrich professional responsibility codes enormously. This Article also proposes that the American Bar Association more clearly define opt-out mechanisms in existing default rules and in some cases make them easier to use earlier in representation of clients. In other cases, aspirational rules, including ethical considerations similar to those in the Model Code, could reinvigorate reputational enforcement of ethics norms, particularly if coupled with disclosure of information about lawyer compliance. Finally, this Article proposes that law firms be encouraged or perhaps required to adopt their own codes of professional responsibility. Law firm codes would fill gaps in the law, address agency problems within law firms, and enhance the quality of feedback that lawyers give to each other about ethics within firms.

Assistant Professor of Clinical Law, New York University. B.A., 1987; J.D., 1993, Yale University.

In this Article, Professor Michael Wishnie addresses the current pressing problem of denial of benefits to legal immigrants under the 1996 Welfare Reform Act in the context of a deeper inquiry into the very heart of immigration law: From where does the federal government derive the power to regulate its borders? Can Congress devolve this power to the states? Looking deeply into jurisprudence and textual sources, as well as history, he ascertains that this authority always has been exclusively federal and that to permit devolution would be to contradict the entire notion of sovereignty. Thus, Professor Wishnie concludes that any devolution of authority over immigration to the states, such as that contained in the 1996 welfare reforms, may not receive the judicial deference traditionally granted to federal immigration law. Instead, any state exercise in the immigration arena, even pursuant to Congress’s explicit approval, must be evaluated under thirty years of precedent subjecting state discrimination against permanent resident aliens to heightened scrutiny.

Newton D. Baker, Baker and Hostetler Professor, College of Law, and Professor, College of Medicine and Public Health, The Ohio State University; Visiting Professor of Law, Spring 2000, Washington and Lee University. B.A., 1970, University of California, Santa Cruz; J.D., 1975, University of Chicago.

While the United States, virtually alone among developed countries, relies primarily on private health insurance to deliver access to health care services, private health insurance is not unknown elsewhere in the world. In this Article, Timothy Jost surveys the mixed public and private health insurance systems of Australia, Chile, Germany, and the Netherlands, as well as the largely public systems of Canada, France, and the United Kingdom. He shows that countries that place significant reliance on private health insurance also regulate the private insurance market heavily; only where private insurance merely supplements universal public insurance is the private market largely unregulated. Professor Jost concludes from his comparative analysis that market-reliant systems are unlikely to reduce the growing number of Americans who are uninsured, and that the differences between highly regulated private insurance systems and largely public insurance systems are less pronounced than generally assumed. While the United States politically is unlikely to move towards public insurance, he writes, a turn towards greater privatization would tend to worsen, rather than improve, the problem of the uninsured.

Assistant Professor of Law, Temple University. B.A., 1991, J.D., 1994, University of Pennsylvania. Vice President and Dean of Graduate Studies and Professor of Sociology, University of Texas at Austin. B.A., 1970, Michigan State University; A.M., 1972, Ph.D., 1975, University of Chicago. Leo Gottlieb Professor of Law, Harvard University. B.S., 1970, Houston University; J.D., 1976, Rutgers University

In 1999, Professors Jacoby, Sullivan, and Warren undertook an empirical study of bankruptcy filings to understand better the circumstances that brought middle-class families to a state of financial collapse. The information gathered in the study, known as Phase III of the Consumer Bankruptcy Project, revealed that an estimated more than half a million middle-class families turned to bankruptcy courts for help after illness or injury that year. The findings of the study illustrate how bankruptcy files document the economic problems families encounter when bills mount and incomes fall in the aftermath of a medical problem. In this Article, Professors Jacoby, Sullivan, and Warren present the data from their study to illustrate that hundreds of thousands of middle-class families in the United States are devastated economically each year under the current health care finance system. Their data indicate that focusing on the presence or absence of health insurance alone would lead to an incomplete solution. Instead, the authors suggest that since bankruptcy effectively serves as part of the health care payment system, bankruptcy policy should be included in any comprehensive review of health care financing policy.

Professor of Law, New York University. B.A., 1972, Amherst College; J.D., 1975, University of Michigan.

Numerous commentators on local government law have advocated some form of regionalization to address metropolitan problems. These recommendations emanate from a conception of local governments, particularly suburbs, as isolated, self-interested entities that ignore or exploit the plight of their neighbors, particularly central cities. In this Article, Professor Clayton Gillette puts forward a justification for decentralized entities and posits a more sanguine relationship among localities within a region. Analogizing from literature concerning firms that form long-term contractual relationships, he contends that neighboring localities may be sufficiently interdependent that they have significant incentives to cooperate through interlocal contracts that realize economies of scale or that share regional distributional burdens. He suggests that any underutilization of interlocal contract depends less on suburban disinterest or exploitation than on contracting costs and legal obstacles that do not affect interfirm relationships as readily. Thus, problems attributed by advocates of regionalization to excessive localism may be redressed best through institutional arrangements that reduce contracting costs. Nevertheless, Professor Gillette argues that some costs inherent in regional burden-sharing contracts, such as those involving observability and verifiability of contract breaches, may be irreducible. He concludes, therefore, that some contracting costs that are endemic in interlocal relations are best circumvented through informal cooperative bargains that avoid problems of monitoring and enforcement.

Professor of Law, New York University. B.A., 1980, Lewis & Clark College; M.A., 1981, University of Pennsylvania; J.D., 1989, Ph.D., 1990, Columbia University.

Some health and safety laws emphasize safety over cost considerations by invoking the principle that safety matters more than money. Other laws rely on cost-benefit analysis (CBA) that equates safety and money. In this Article, Professor Mark Geistfeld argues that, despite their apparent inconsistency, the two regulatory approaches can be reconciled. He first explains why the safety principle most plausibly stands for a distributive claim that in the context of nonconsensual risk impositions, the safety interests of potential victims deserve greater weight than the ordinary economic interests of potential injurers. Although this claim seems to be inconsistent with CBA, Professor Geistfeld analyzes cost-benefit tort rules to demonstrate how potential victims are inadequately compensated for certain types of nonconsensual risks threatening death, an inequity that can be quantified with cost-benefit methodology. He shows that the inequity is defensibly remedied by altering the duty of care to give safety interests greater weight than economic interests (the weighting sanctioned by the safety principle), which ultimately yields a well-defined decision rule that modifies CBA for certain types of nonconsensual risks threatening serious physical injury. Subsequently, he contends that modified CBA (1) satisfies the requirements of modern welfare economics, (2) can accommodate a wide range of normative concerns, and (3) closely conforms to important tort practices, suggesting that it implements a version of the safety principle closely corresponding to the version adopted by the tort system. Finally, Professor Geistfeld concludes that the value of modified CBA is illustrated by the structure it gives to the precautionary principle, a vague regulatory approach based on the safety principle that has become increasingly important and controversial in international law.

Professor of Law, New York University. LL.B., 1991, Tel Aviv University; J.D., 1994, Harvard University.

New communications technologies offer the potential to be used to promote fundamental values such as autonomy and democratic discourse, but, as Professor Yochai Benkler discusses in this Article, recent government actions have disfavored these possibilities by stressing private rights in information. He recommends that laws regulating the information economy be evaluated in terms of two effects: whether they empower one group to control the information environment of another group, and whether they reduce the diversity of perspectives communicated. Processor Benkler criticizes the nearly exclusive focus of information policy on property and commercial rights, which results in a concentrated system of production and homogenous information products. He suggests alternative policies that promote a commons in information, which would distribute information production more widely and permit a greater diversity of communications.

The European Union’s ongoing “Convention on the Future of Europe” must tackle a fundamental issue of federalism: the balance between central authority and Member State autonomy. In this Article, Ernest Young explores two strategies for protecting federalism in America—imposing substantive limits on central power and relying on political and procedural safeguards—and considers their prospects in Europe. American experience suggests that European attempts to limit central power by enumerating substantive “competences” for Union institutions are unlikely to hold up, and that other substantive strategies such as the concept of “subsidiarity” tend to work best as political imperatives rather than judicially enforceable doctrines. Professor Young then examines the “political safeguards” of Member State autonomy in the EU as currently constituted. He argues that the balance between the center and the periphery is likely to be affected by how the EU resolves basic separation-of-powers questions at the center. Efforts to address perceived deficiencies of the Union government in its resource base, lawmaking efficiency, and democratic legitimacy likewise will have a fundamental impact on federalism. Finally, Professor Young touches on two broader themes. He first asks whether Europeans, given their cultural distinctiveness, would prefer a stronger form of federalism than America has been able to maintain; if so, the American experience is relevant primarily as a cautionary tale. He then considers how Europe’s institutional experience and current debate can inform the American discourse on federalism by helping Americans break free of ideological and historical preconceptions and offering insights into emerging issues at the intersection of domestic constitutions and supranational institutions.

This Article presents the first evidence about the choice of corporate law and the market for corporate charters at an initial public offering. Though firms are free to incorporate in any of the fifty states and are said to search for optimal legal rules, they appear to simply make a binary choice: Delaware or their home state. Federalism has thus resulted in a series of local markets with one national producer, rather than a nationwide “race to the top/bottom.” This pattern raises questions about how firms choose a state of incorporation and suggests that there is a substantial home-state advantage (or home bias). Professor Daines explores reasons for this home bias and reports evidence that lawyers play a key role in determining state of incorporation and that agency costs may affect the advice they provide. Professor Daines also examines other factors that affect a firm’s domicile, including variation in state law and firm characteristics. Takeover laws do not appear to be important and there is some mixed evidence that state law may have network qualities.

Over the past century, especially after the demise of Lochner, both judges and scholars have increasingly endorsed judicial review of equality claims. The Warren Court’s jurisprudence and John Hart Ely’s theory of representation-reinforcement, for example, helped to legitimate the role of courts in requiring reasons for legislative classifications that disproportionately burden certain groups. By contrast, countermajoritarian concerns have led courts to refrain from judicial review of liberty claims. In this Article, Professor Rebecca L. Brown argues that to stay true to their democratic role courts must protect liberty in the same way that they have protected equality. Turning first to history, Brown shows that from the Revolution onward representatives have been expected to achieve what James Madison termed a “communion of interests” by according positive value to the interests of all their constituents and by subjecting themselves to the burdens they impose on others. Suspect classifications have become the prime indication of a breakdown in the legislative process—a clear sign that the communion of interests has been severed. Under Ely’s theory, judicial review is justified in these cases to reinforce a representational system gone awry. In an increasingly heterogeneous society, however, the representative process can malfunction—the communion of interest can be severed—even without the use of suspect classifications. Why then, Brown asks, should judicial review be justified for equality claims but not for liberty claims, when the underlying interests are the same and there is a failure in the representative system? Pushing Ely’s theory further, Brown offers a new approach to the judicial review of liberty claims. The approach requires courts to weigh the public reasons asserted to justify burdening individual liberties, thereby satisfying themselves that lawmakers likely would be willing to assume the same burdens they impose on others. This protection of individual liberty, Brown shows, is the logical evolution of the theory of judicial review that currently supports equality jurisprudence.