All posts filed under: Faculty Scholarship

Stock Market on iPhone

Financial Weapons of War

A new type of warfare is upon us. In this new mode of war, finance is the most powerful weapon, bullets are not fired, financial institutions are the targets, and almost everyone is at risk. Instead of smart bombs, improvised explosives, and unmanned drones –– economic sanctions, financial restrictions, and cyber programs are the weapons of choice. This is the reality of modern financial warfare. This Article offers an early examination of this new mode of war. It explores the new financial theater of war, analyzes the modern arsenal of financial weapons, highlights emerging legal tensions, and proposes key recommendations for current and future financial warfare. The Article begins with a general survey of the modern financial infrastructure, the emerging battlefield of modern warfare. Next, it provides a more detailed inventory of the financial weapons of war. It accounts for traditional weapons like economic sanctions, anti-money laundering regulations, and banking restrictions, as well as cyber weapons like distributed denial-of-service attacks, data manipulation hacks, and destructive intrusions. It also explains how these weapons are used in …

“Gruesome” Evidence, Science, and Rule 403

Can science step in and assist in Rule 403 determinations of “unfair prejudice”? When confronted with “gruesome” evidence, all too often autopsy photos or images of severe injuries, judges must assess whether there is a risk of unfair prejudice or misleading the jury and then, if the risk is present, “may” exclude the proof.1 Yet there is no court-dictated workable metric for assessing when either risk is present beyond boilerplate terminology such as whether the “[e]vidence… makes a conviction more likely because it provokes an emotional response in the jury or otherwise tends to affect adversely the jury’s attitude toward the defendant wholly apart from its judgment as to his guilt or innocence of the crime charged.”2 The standard is akin to that used to describe when material is obscene — an “I know it when I see it” approach to decision-making.3 This approach begets arbitrariness. That this is so may be seen by contrasting claims of unfair prejudice in criminal and civil cases. The default in criminal seems to be that of admissibility, demonstrated in the extreme …

Map, Glasses, Notebook

Mapping a Hidden World of International Regulatory Cooperation

Almost exactly one decade ago, Law and Contemporary Problems published a highly influential symposium entitled The Emergence of Global Administrative Law. The articles in that issue described rapidly changing patterns of transnational regulation, identified an emerging “global administrative space,” and explored normative questions raised by shifts in authority to transnational administrative processes. At roughly the same time, network scholars described a “new world order,” in which transnational governance networks increasingly conducted regulatory functions across a wide variety of issue areas. Both literatures introduced new conceptualizations of trends in international cooperation and standard-setting. This symposium’s focus on “international regulatory cooperation” revisits themes explored in the global administrative law and networks literatures. Broadly conceived, international regulatory cooperation consists of arrangements to promote cooperation in the design, monitoring, and enforcement or ex post management of regulation, with a view to supporting the consistency of rules across national borders. The topic has returned to the center of the diplomatic and scholarly agenda, in part as a result of the regulatory failures that contributed to the global recession. Indeed, as …


Turning the Kaleidoscope: Toward a Theory of Interpreting Precedents

A full generation of legal scholarship has analyzed methods of interpreting statutory and constitutional provisions. Different works have emphasized text, original intent, original reception, and dynamic “living” meaning as academics have argued over which methodological systems describe current practice, and which systems are normatively best. Comparable methodological debates have not occurred with respect to judicial decisions. This Article examines precedents as a third category of legal authorities that — much like statutes and constitutions — sometimes present vague answers to important legal questions. This Article’s system of precedential interpretation will challenge unexamined intuitions about “reading cases,” with collateral implications for statutory and constitutional interpretation as well. I consider four categories of historical materials to generate different sorts of precedential meaning: (i) an opinion’s text, indicating a decision’s declared meaning; (ii) adjudicative context, reflecting a precedent’s implied meaning; (iii) reception by contemporary analysts, which depict understood meaning; and (iv) subsequent doctrinal applications, which identify developmental meaning. These categories offer analogies to forms of textualism, originalism, and dynamism that are well known in other legal contexts. Different …


‘Ideology’ or ‘Situation Sense’? An Experimental Investigation of Motivated Reasoning and Professional Judgment

This paper reports the results of a study on whether political predispositions influence judicial decision making. The study was designed to overcome the two principal limitations on existing empirical studies that purport to find such an influence: the use of nonexperimental methods to assess the decisions of actual judges; and the failure to use actual judges in ideologically-biased-reasoning experiments. The study involved a sample of sitting judges (n = 253), who, like members of a general public sample (n = 800), were culturally polarized on climate change, marijuana legalization and other contested issues. When the study subjects were assigned to analyze statutory interpretation problems, however, only the responses of the general-public subjects and not those of the judges varied in patterns that reflected the subjects’ cultural values. The responses of a sample of lawyers (n = 217) were also uninfluenced by their cultural values; the responses of a sample of law students (n = 284), in contrast, displayed a level of cultural bias only modestly less pronounced than that observed in the general-public sample. Among …

Financial Newspaper

The Pattern in Securitization and Executive Compensation: Evidence and Regulatory Implications

The Dodd-Frank financial reforms of 2010 promised to better align risk-reward incentives by, among other things, reducing imprudent securitization (i.e., sales of financial assets) and excessive executive compensation. This would, in turn, promote systemic stability. To assess whether Dodd-Frank’s elaborate rules on securitization and compensation are likely to achieve this goal, we explore the connection between the two empirically. Using a unique dataset covering 1993-2009 — the largest of its kind — we find that securitizing banks (regulated depositaries) on average paid their CEOs twice as much as non-securitizing banks, a finding that is both statistically and economically significant. By contrast, non-bank (industrial) firms that securitized actually paid their CEOs less than non-securitizers. Because securitizing banks performed no better than other firms (non-securitizing banks or industrials), we find evidence of agency cost; because bank-originated securitizations performed especially poorly in the financial crisis, we find evidence of social cost. Our findings have important implications for Dodd-Frank, because its rules on securitization and compensation fail to account for the incentive effects of securitization by banks. Its compensation …

People laughing

Toward a Jurisprudence of Social Values

Legal theory wrestles perennially with a variety of seemingly intractable problems. I include among them questions about what we are doing when we interpret legal texts, the distinctions between hard and easy cases and between rules and standards, and the meaning of the rule of law. I argue in this essay that we can, in fact, make substantial progress toward clarifying these problems and making them much more intelligible by keeping in mind the role that social values play in law. And that role is fundamental: social values constitute the law. Part I sketches a jurisprudential framework for thinking about the relationship of social values to law. Part II suggests the utility of that framework by showing how it casts new and revealing light on the important jurisprudential puzzles noted above – puzzles about interpretation, hard and easy cases, rules and standards, and the rule of law. Download the Paper from the Washington University Jurisprudence Review  

Futuristic Roads

Competition Law for a Post-Scarcity World

Writers, economists and IP scholars have hailed signs of an incipient shift to a post-scarcity world. According to these accounts, this change is driven by rapid decreases not only in marginal cost, but also in the fixed or first unit costs of production. Whether these changes become economy-wide, or remain confined to a subset of industries, they have dramatic implications for competition law and policy. This Article is the first to address these implications. In particular, because of the incentive for incumbent firms to engage in “anti-disruption” – as examples such as the Apple/e-books antitrust case and the regulatory responses to Uber show – competition law must play an active role in assisting the transition to a post-scarcity world. How to play this role will not be simple, but the potential social welfare gains of this possible societal shift make it impossible to ignore. Download the Paper at SSRN

No Smoking Sign

A Transdisciplinary Approach to Public Health Law: The Emerging Practice of Legal Epidemiology

A transdisciplinary model of public health law, linking both its legal and scientific elements, can help break down enduring cultural, disciplinary, and resource barriers that have prevented the full recognition and optimal role of law in public health. Public health law has roots in both law and science. For more than a century, lawyers have helped develop and implement health laws; over the last 50 years, scientific evaluation of the health effects of laws and legal practices has achieved high levels of rigor and influence. We describe an emerging model of public health law uniting these two traditions. This transdisciplinary model adds scientific practices to the lawyerly functions of normative and doctrinal research, counseling, and representation. These practices include policy surveillance and empirical public health law research on the efficacy of legal interventions and the impact of laws and legal practices on health and health system operation. Download the Paper at SSRN

Big Data

Public Health Law Monitoring and Evaluation in a Big Data Future

Law is important to public health. It provides government health agencies with their jurisdiction and regulatory authority. Laws and regulations are routinely used in the name of health to regulate behavior and foster safer environments. More fundamentally, law’s influence in shaping everyday life and the socioeconomic and physical environments in which it unfolds has a powerful impact on both the level and distribution of health. Despite law’s importance, and despite the strong orientation toward scientific evaluation in public health, the study of the impact of laws and legal practices on health (“public health law research”) has been uneven. While research of the highest quality has been sustained in a few areas like auto safety and tobacco control, it has been infrequent or truncated in others, like gun control and HIV/AIDS. The research that has been supported is almost entirely aimed at evaluating deliberate legal interventions. Epidemiological research on unintended health effects of non-health laws has been almost entirely neglected. Overall, the national investment in rigorously separating the laws that help from the laws that hurt has …