Posted by: yarbel | 25th Aug, 2016

Private Law and Asset Shielding — Yonathan Arbel

Post by Yonathan Arbel,  postdoctoral fellow in private law, Harvard Law School (job market candidate)

One of the central questions in the New Private Law is how ‘down-to-earth’ should legal analysis be? Regardless of one’s substantive view on this debate, there is one area in which we have been insufficiently realistic: private law enforcement. There is a real gap in our understanding of how legal norms are executed by sheriffs, bailiffs, and private ordering. Understanding the limits of doctrine and law could be informative for both economic and justice-based views of the law, as well as to views that look at the law from the internal point of view.

My scholarship focuses on questions concerning the enforcement of private legal norms. In Shielding of Assets and Lending Contracts (Forthcoming, Int’l Rev. L. Econ.) I consider the problem of asset shielding. Most judgments, if not voluntarily implemented, depend on enforcement through the seizure of the judgment-debtor’s assets. The problem is that ownership is too malleable and enforcement is too constrained, so there are many ways in which people can hide, shield, or protect their assets (transfer of money to an exotic offshore trust, bankruptcy planning, sham transfer to one’s relatives, hiding money under the mattress, etc.). Some of these techniques are more complicated than others, and some people will have moral reservations about deploying certain kinds of shielding techniques, or self-interested concerns about the effects of shielding on their credit scores, but overall, there is a real temptation here – especially since criminal enforcement against those who shield is quite rare. Given this temptation, it is puzzling why people do not shield assets more often. More generally, because avoiding judgments through asset shielding undermines many private legal obligations, it is important to have an account of when people would choose to meet their obligations and, if they decide to shield, the magnitude of assets that would be shielded.

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Posted by: pgoold | 12th Aug, 2016

Why Private Law? — Patrick Goold

Post by Patrick Goold

I have a question for the readers of this blog: Why make a distinction between public law and private law? Note, my question is not what is the distinction, but why is it a useful and helpful division to make? Of course, both questions are important and interrelated, but for now, I would like to focus on the latter.

This may be the central question in the New Private Law. Prior private law scholarship has typically fallen into two broad schools. On one hand, there are the Private Law Skeptics, who argue that all law has “public” ends, and ergo all law is public. On the other hand, we find Private Law Disciples, who point to the millennia-old private-public law distinction and assume it will simply continue. New Private Lawyers are different from both traditional camps. We do not take for granted the private-public distinction. Rather, as inclusive pragmatists, we demand to know whether this is a distinction worth retaining. What good does it do us? But, contrary to Private Law Skeptics, most of us, at least intuitively, believe that something is or can be accomplished by retaining the distinction. So the question is: what is that?

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Post by Samuel Beswick, Frank Knox Memorial Fellow, SJD candidate, Harvard Law School

* At the outset I should disclose that I had a hand in drafting the plaintiffs’ claim as a solicitor at Meredith Connell, New Zealand, in 2012/13.

Although the paradigm case of a tort suit against a product manufacturer involves a claim of personal injury caused by the manufacturer’s allegedly defective product, there is a wealth of litigation concerning products whose defects do not pose a risk of personal injury. For example, currently progressing through the District Court of Minnesota is a class-action product liability lawsuit, which consolidates claims arising in eight states against James Hardie Building Products Inc. in respect of its allegedly defective Hardiplank cladding product. The plaintiffs contend that Hardiplank fails prematurely by allowing moisture ingress, which causes damage to underlying building structures and adjoining property. Their claims sound in negligence, breach of express and implied warranties, and breach of consumer protection legislation. The plaintiffs might find some reassurance in last Friday’s decision of the Supreme Court of New Zealand: Carter Holt Harvey Limited v. Minister of Education [2016] NZSC 95. 

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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.

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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?

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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. 

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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…. 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.

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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.

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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.

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