Post by John Golden

From June 29 to July 1, the University of Amsterdam hosted a “summer school” on “Contract Law in a Liberal Society.”  The gathering featured extended presentations by Aditi Bagchi of the Fordham University School of Law, Hanoch Dagan of Tel Aviv University’s Buchmann Faculty of Law, and Martijn Hesselink of the University of Amsterdam, as well as additional short presentations of completed works or works in progress by more junior scholars.  This post describes aspects of the presentations by Bagchi, Dagan, and Hesselink as I perceived them.

Read More…

Post by Sadie Blanchard, Research Fellow Yale Law School

At the last session of this spring’s Seminar in Private Law, we considered dispute resolution in universities. The speakers were Jonathan Holloway, Dean of Yale College and Professor of African American Studies, History, and American Studies, and Mary Rowe, who teaches at MIT’s Sloan School of Management and was MIT’s Ombuds for over 40 years. In view of the tumult on campuses over the past year, it seemed apt to consider universities as part of our survey of dispute resolution beyond the state. What is distinctive about conflicts in this setting? What processes are best suited to resolve or manage them? Are protests evidence of a failure of dispute resolution, or are they a desirable or inevitable form of complaint?

Read More…

Post by Henry Smith

Last week I took part in some events at the Intensive Doctoral Week at Sciences Po in Paris.  This is a conference for Ph.D. students in law from all over France, organized by Mikhail Xifaras of Sciences Po Law School, and it features panels devoted to a wide range of topics.  One of two on property focused on the future of communal property, with panelists Bob Ellickson, Séverine  Dusollier, Maria Rosaria Marella, and myself (with my name spelled “Henri” no less!).  The notion of common property has a long pedigree and is very important in the work of legal scholars such as Bob Ellickson and Carol Rose and economists such as Gary Libecap and Elinor Ostrom.  The Europeans have a renewed interest in communal property for two reasons. First, they believe that it is a way of breaking down the supposedly hyper-individualist notion of property enshrined in the civil code.  Second, communal property can be used to solve cutting-edge problems like providing new forms of low-income housing. 

Read More…

Posted by: yarbel | 23rd Jun, 2016

The Future of Property in SIOE — Henry Smith

Post by Henry Smith

I just finished up as President of the Society for Institutional and Organizational Economics (SIOE), which had its annual meeting this year at Sciences Po in Paris (I hosted the conference last year at Harvard when I was President-Elect). As is the custom, I gave a very short address at the conference dinner. My topic was well within the domain of private law: I suggested that the notion of property used in institutional and organizational economics was ironically thin, that institutional analysis could be turned back on property itself, and that this would require continued methodological openness. Property problems often involve too many actors and too much complexity for purely analytical methods and at the same time not enough actors or too much feedback for statistical techniques to work either. What we need is a dose of “systems theory.” More can be found here.

Posted by: yarbel | 22nd Jun, 2016

Who is Entitled to a Fair Price? — Aditi Bagchi

Post by Aditi Bagchi

Making waves recently was a ruling by the Delaware Court of Chancery that Michael Dell and the private equity firm Silver Lake paid too little for Dell when they bought the company in 2013 in a leveraged buyout. See http://courts.delaware.gov/Opinions/Down…. Vice Chancellor J. Travis Laster concluded in an appraisal proceeding that shares were worth about $17.62 rather than the $13.75 that shareholders were paid.

The court arrived at this result without finding that Mr. Dell and management breached their fiduciary duties. To the contrary, they appear to have taken many “praiseworthy” steps in the sales process. No one else came forward with a clearly better offer. The court found, however, that there were structural problems with the accuracy of the market valuation of the company, including some inherent conflicts of interest but, more importantly, limitations in the valuations by potential classes of buyers, including shareholders (short-termism), private equity (high return expectations), and strategic acquirers (integration risk). The result is that the company was found to be worth more than anyone was willing to pay for it.

Read More…

Post by Greg Klass

A few weeks ago I posted on the Second Circuit’s decision in US ex rel. O’Donnell v. Countrywide Home Loans, which held that Countrywide’s knowing delivery of effectively worthless loans to Fannie Mae and Freddie Mac, without disclosing that fact, was not fraudulent. One way to read the decision is as affirming the well established, and to some baffling, rule that a party to a contract has no duty to disclose its breach of the contract, no matter how knowing or material. (For more evidence of bafflement on this count, see Brandon Garrett’s fine post on the case.)

I mentioned in my post that the result might have been different had the Countrywide plaintiffs’ False Claims Act claim not been dismissed. Those who are interested in that road not taken in Countrywide might take a look at the Supreme Court’s decision last Thursday in Universal Health Services v. United States ex rel. Escobar, which addressed the implied certification doctrine under the FCA. In its most robust form (and oversimplifying a bit), the implied certification rule says that the mere act of submitting a claim for payment on a covered contract represents compliance with the contracts material terms, as well as with other governing laws and regulations. Or what is functionally equivalent: If the contract, a law or a regulation requires compliance, there is a duty to disclose any material noncompliance when requesting payment. Had this rule applied, Countrywide would have almost certainly been subject to the FCA’s treble damages and per-claim fines.

Read More…

Posted by: yarbel | 14th Jun, 2016

SIOE 2016 — Dan Kelly

Post by Dan Kelly

 

The Society for Institutional and Organizational Economics (SIOE) (formerly, the International Society for New Institutional Economics (ISNIE)) is hosting its 20th Annual Conference this week, June 15-17, at Sciences Po in Paris, France.  The conference website includes details on this year’s program and links to abstracts and papers.

Read More…

Post by Henry Smith

At last month’s American Law and Economics Annual Meeting, I attended a very interesting session on Commercial Law and Contracts, at which the first two papers were in tension with each, as were their authors – in a polite way!  The first was “The Common Law of Contract and the Default Rule Project,” by Alan Schwartz and Bob Scott.  They argue that the program over the last century by academics, codifiers, and Restaters (“drafters”) to supply transcontextual defaults rules that apply in a wide variety of contracts was doomed to fail. Common law contract supplied a limited number of defaults that do have this feature, such as expectations damages for breach of contract.  Going beyond these traditional rules faced the drafters with a dilemma.  They did not have knowledge enough to supply defaults that would make sense for particular industries.  So they chose the transcontextual route, but to create additional defaults here required them to fudge the content, opting for fuzzy or underspecified standards based on custom and reasonableness, and commercial parties have not been receptive to these efforts, often opting out of them. 

Read More…

Post by John Golden

In the forthcoming article Reconceptualizing Copyright’s Merger Doctrine, Pamela Samuelson of Berkeley Law provides an extended review of copyright law’s merger doctrine.  Courts have periodically invoked this doctrine in restricting the extent to which copyright protections apply to the expression of an idea when, as Samuelson puts it, “that idea is incapable of being expressed, as a practical matter, in more than one or a small number of ways.”  Samuelson’s article seeks to quash a number of “myths” about the doctrine, touching on aspects of its substantive scope, the frequency of the doctrine’s applicability, and its history as a creature of “common law adjudication.”  Samuelson concludes, among other things, that (1) the doctrine serves as an important “limiting principle of U.S. copyright law”; (2) the doctrine can affect copyrightability as well as copyright scope; and (3) courts should avoid an overly narrow view of the doctrine, thereby helping it realize its potential as a means for “mediating conflicts between and among the interests of first and second-generation authors, of third parties affected by those disputes, and of the public.”

This blog post focuses on another aspect of Samuelson’s article, its discussion of how the merger doctrine relates to other limiting doctrines in copyright.  These other doctrines include the following: (1) the scènes à faire doctrine, which limits the extent to which copyright covers standard or indispensable elements of expression (such as conventional poses in portraits, see William W. Fisher III et al., Reflections on the Hope Poster Case, 25 Harv. J.L. & Tech. 243, 259 (2012)); (2) copyright law’s originality requirement; (3) exclusions of facts, ideas, and other functional subject matter from copyright protection.  At one point, Samuelson suggests that courts’ relative lack of confidence in their mastery of copyright law’s content or justifications might explain some of the apparent proliferation of doctrinal overlaps.  She writes, “Courts sometimes perceive the other doctrines as overlapping with merger, but in some cases, courts invoke multiple doctrines when seemingly unsure which doctrine would provide the soundest grounding for the court’s decision.”

Read More…

Post by Greg Klass

On Monday the Second Circuit released its decision in US ex rel. O’Donnell v. Countrywide Home Loans. This is a major case—in terms of dollar amounts (the trial court had assessed a $1.27 billion penalty against Countrywide), for understanding the law’s ability to deal with the wrongs that caused the subprime mortgage crisis, and with respect to the legal question of where to draw the line between contracts and torts. There’s much more going on in the case than I can summarize here. But here are some initial thoughts on it. Some of them also appear in Dan Fisher’s excellent piece in Forbes.

The legal framework is a little complex, but the basic thrust of the decision is that there was no evidence that Countrywide ever made a false representation to Freddie Mac and Fannie Mae about the quality of the mortgages it was selling. The initial contract of sale promised to deliver “investment quality mortgages,” but that was just a promise. There was no evidence that at the time Countrywide made it the company intended to do anything else—that it committed promissory fraud. It is clear that Countrywide subsequently intentionally breached that promise by delivering lots and lots mortgages that it knew were crap. (If you haven’t seen or read The Big Short, you might be shocked by Judge Rakoff’s post-verdict summary of the bullshit Countrywide trafficked in.) But, according to the Second Circuit, there was no evidence that it ever made any additional representations—after the initial contract to sell—as to the quality of those mortgages. No lie, no fraud.

A few observations:

Read More…

Older Posts »

Categories