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- 1 supplemental audio file
This paper critiques Brook Gotberg’s recent proposal to reform preference law by creating a new safe harbor for preferences in chapter 11 while repealing certain existing preference defenses in chapter 7. The proper path of reform in this area would preserve preference recovery as a feature of chapter 11 reorganization law while raising the monetary limits on minimum recoveries, restricting financial contract safe harbors and bolstering ordinary trade creditor defenses across both chapter 11 and chapter 7.
Academics, reformers, and business leaders all yearn for a single, objective, easy-to-read measure of corporate performance that can be used to judge the quality of public corporation law and practice. This collective desire is so powerful that it has led many commentators to grab onto the first marginally plausible candidate: share price.
Contemporary economic and corporate theory (as well as recent business history) nevertheless warn us against unthinking acceptance of share price as a measure of corporate performance. This Essay offers a brief reminder of some of the many reasons why stock prices often fail to reflect true corporate performance, including the problem of private information; obstacles to effective arbitrage; investors' cognitive defects and biases; options theory and the problem of multiple residual claimants; and the problem of corporate spillover effects that erode diversified shareholders' returns. These considerations argue against assuming there is a tight connection between stock prices and underlying corporate wealth generation. A corporation or a corporate law system designed around the philosophy that anything that raises share price is good is likely to produce a firm that cooks its books; that avoids long-term projects that won't appeal to unsophisticated investors; that chases after investment fads and fancies; that tries to opportunistically exploit creditors, employees, and customers; and that pursues business strategies that harm its diversified shareholders' other investment interests.
The Essay concludes that, if we allow our desire for a universal performance measure to blind us to the fallibility of share price, we court costly error. The Essay examines three recent examples of just such erroneous triumphs of hope over experience: the rise and fall of the Revlon doctrine; the 1990s infatuation with options-based executive compensation; and academics' current preoccupation with event studies, regressions on Tobin's Q, and other forms of empirical scholarship that attempt to judge the quality of corporate law and practice according to changes in share price.
The Patient Protection and Affordable Care Act (ACA) effected numerous changes in the legal regime governing health care and health insurance. Among the ACA’s more controversial provisions is the so-called contraceptive mandate, which requires employer-provided health care insurance plans to provide coverage of all FDA approved contraceptive methods.
On March 25, 2014, the Supreme Court will hear oral argument in the Hobby Lobby and Conestoga Wood cases, in which the shareholders of two for-profit family-owned corporations argue that requiring them to comply with the contraception mandate violates the Religious Freedom Restoration Act.
Forty-four law corporate law professors filed an amicus brief in these cases, arguing that the essence of a corporation is its “separateness” from its shareholders and that, on the facts of these cases, there is no reason to disregard the separateness between shareholders and the corporations they control. The Brief is replete with errors, overstated claims, or red herrings, and misdirection.
Contrary to the Brief’s arguments, basic corporate law principles strongly support the position of Hobby Lobby and Conestoga Wood. In particular, the doctrine known as reverse veil piercing provides a clear and practical vehicle for disregarding the legal separateness of those corporations from their shareholders and thus granting those shareholders standing to assert their free exercise rights.
What are the terms of legitimate punishment in a liberal democracy? Traditional approaches to this question tend to focus on the purposes punishment is supposed to serve (deterrence, retribution, rehabilitation, moral education, etc.) while giving little if any consideration to the coercive deployment of state power punishment represents. In this article, I take the coercive nature of state punishment as my starting point. My aim is to determine what normative constraints, if any, exist on the state's power to punish criminal offenders in a liberal democracy - a determination, I argue, that is especially urgent given the current size of America's prison population.
To answer this question, I draw on the work of John Rawls. I do so because I share Rawls' view that, if the exercise of state power in a liberal democracy is to be legitimate, it must be justifiable in terms that all members of society subject to that power would accept as just and fair. Rawls' deliberative model was originally intended for questions of ideal theory, on which all members of society are assumed to act justly towards others. The first task of the paper is thus to render Rawls' model applicable to problems of partial compliance, of which punishment is one. Ultimately I argue that, assuming conditions of partial compliance, deliberating parties would approach the task of selecting principles of punishment by considering the implications of various alternative principles as if they could end up as either crime victim or punished offender once they enter society as citizens.
Having established this perspective, and its consistency with the basic liberal ideals of moral equality and individual sovereignty, I then go on to determine the principles of punishment that would be selected by parties deliberating under these conditions and would thus constitute the terms of legitimate punishment in liberal democracy. I identify five such principles, at the heart of which is what I call, following Braithwaite and Pettit, the "parsimony principle." The basic idea of this central principle is that the punishment of convicted offenders must be no more severe than necessary to yield an appreciable deterrent effect on the commission of serious offenses.
Finally, I consider how the principles of legitimate punishment might be translated into actual criminal justice policy. Here, I concede that the inevitability of reasonable disagreement, even among legislators deliberating in good faith over what punishments the principles allow, means that in practice we can never be fully confident of the legitimacy of any punishments imposed. As I show, however, the principles of legitimate punishment I identify still provide the basis from which to call into question the legitimacy of a range of criminal justice policies currently in force in the United States, including mandatory minimums, California's "three strikes" law, the under-funding of indigent defense, and the widespread overcrowding and sexual violence in the nation's prisons and jails. In this way, the theoretical analysis I offer provides a basis for challenging the legitimacy of many criminal sentences being served right now in American prisons.
In American prisons, two of the worst pathologies—hypermasculine performance and gang activity—are best understood as strategies of self-help engaged in by people who cannot trust the prison authorities to keep them safe. Given the choice, the overwhelming majority of people in prison would prefer to drop the mask and be themselves. But letting down one’s guard is a luxury enjoyed only by people who feel safe. If we want the people we incarcerate to grow and change, we need to design and operate the prisons so that people can be in company with others without needing to be constantly afraid. In this chapter, I identify several strategies prison administrators can pursue in their facilities right now to reduce the threat of violence in men’s prisons and therefore enhance prisoners’ safety without resorting to solitary confinement. But keeping people safe while enabling them to interact with others, though essential, is not sufficient. It is also necessary to provide access to meaningful pursuits that can give individual prisoners a sense of purpose. Only then will people living behind bars be able to fully step away from the culture of the prison and reorient themselves in a healthy, pro-social, and productive direction.
The Doomsday Argument is a case-study in 'probabilistic illusion', for it rests on a web of insidious intuitions, hidden assumptions and seductive but imprecise analogies. The Argument claims that the observation that we are alive now increases the probability that Homo sapiens will become extinct in the relatively near future. It does not predict Doom at a specific time or with a specific probability. Its conclusion is more abstract and puzzling: whatever our best estimate would be (based on all available evidence, including the latest scientific, historical or other research) of the probability that our species is relatively close to extinction, it must be revised upwards. In reaching this conclusion, the Argument does not rely on evidence in the ordinary sense or, indeed, on anything peculiar to our present situation; it would yield the same conclusion at any point in human history.
It may seem preposterous that such a conclusion could be reached by armchair reasoning from the mere fact of our being alive now. Yet it would be wrong to rush to judgment. The counter-intuitive nature of probability is itself a reason for caution; moreover, the Doomsday Argument involves issues about time and existence, which are themselves notoriously resistant to intuition. Many who encounter it immediately conclude that it is unsound. Their objections tend not to hold up under scrutiny, however, and some of the initially sceptical join the ranks of the converted, which now include several eminent scientists and philosophers. The debate has endured for nearly two decades, resurfacing regularly in philosophical, mathematical and scientific journals. John Leslie, the Argument's foremost proponent, has responded indefatigably and ingeniously to a host of objections.
The widespread sense that something is wrong with it is, however, correct, and its failings illuminate a main source of our trouble with understanding probability: its close connection to randomness or unpredictability. Randomness seems to confound us. For example, we have a tendency to infer non-randomness from apparent patterns in random events (witness the incorrigible optimists who spot trends in the spins of a roulette wheel or the ups and downs of the FT Share Index); at the same time, the history of statistics suggests that, when random samples are required, we often mistake the merely haphazard - or whatever happens to be near at hand - for the truly random. As I will show, the Doomsday Argument's fundamental mistake is to rely on the intuitive but misguided notion that we can in general take ourselves to be typical humans, and thus, in effect, random samples of the species.
- Asian Pacific American Law Journal
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- Chicana/o Latina/o Law Review
- UCLA Entertainment Law Review
- The Indigenous Peoples’ Journal of Law, Culture & Resistance
- UCLA Journal of Environmental Law and Policy
- Journal of Islamic and Near Eastern Law
- Journal of Scholarly Perspectives
- National Black Law Journal
- Pacific Basin Law Journal
- UCLA Women's Law Journal