- Faculty Briefs
- BeVier, Harrison Studying the State Action Doctrine
- Cohen, Other Legal Ethicists Support SEC Rule Changes Designed to Deter Business Fraud
- Monahan's Research Network Gets $3.9 Million MacArthur Foundation Grant
- Moore Introduces New Paradigm for Predicting War
- Yin to Lead Staff of Congress's Joint Committee on Taxation
In December 2002, under the auspices of the China Law Center of the Yale Law School, Kenneth S. Abraham conducted a workshop on U.S. tort law for representatives of the People's Congress of the People's Republic of China. This is part of a project in which Abraham is advising staff of the People's Congress on the preparation of a Tort Law Code for China.
In November 2002, Risa Goluboff chaired a panel at the American Society for Legal History Annual Meeting on "The Twentieth Century as Legal History." She commented on two major new books of legal history, Lawrence M. Friedman's American Law in the Twentieth Century and William E. Nelson's The Legalist Reformation: Law, Politics, and Ideology in New York, 1920-1980.
Also in November, Goluboff presented a paper, "'We Live's in a Free House Such as It Is:' Class and the Creation of Modern Civil Rights," at a conference "Law and the Disappearance of Class in the Twentieth-Century United States" jointly sponsored by the law school and the history department at the University of Pennsylvania. The University of Pennsylvania Law Review selected her paper as one of the papers presented at the conference that it will publish in a symposium issue.
In March, Michael J. Klarman spent two days at the DePaul University College of Law as the Enlund Visiting Scholar. He gave a faculty workshop and a lecture to the law school community, as well as taught a class and gave another lunch talk. Later in March, Klarman also gave a lecture at Washington and Lee University on Brown v. Board of Education, as they celebrated its 50th anniversary (a year early).
In February, Clarisa Long presented her paper, "The Patent/Copyright Interface," at the Washington and Lee School of Law faculty workshop. In March, she presented her paper, "Property as a Communicative Medium," at the Cornell Law School faculty workshop.
John Norton Moore served as an informal delegation member of the U.S. delegation to the United Nations General Assembly for the 20th anniversary of the opening for signature of the 1982 United Nations Convention on the Law of the Sea (December 2002). On this occasion, the United Nations Secretariat named Moore one of five living American personalities who contributed to the success of the Conference.
Thomas B. Nachbar published an article in the Green Bag called "Constructing Copyright's Mythology." Nachbar also spoke in February at the Models of Regulation for the New Economy symposium held by the Silicon Flatirons Institute of the University of Colorado on the topic of his next paper, "Judicial Review and the Quest to Keep Copyright Pure," which will be published in the Journal of Telecommunications and High Technology Law.
As a member of the editorial board, Robert M. O'Neil is co-editor of the current issue of the ABA's Human Rights (Journal of the Section of Individual Rights and Responsibilities), devoted to Federalism. O'Neil also joined the Board of the National Coalition Against Censorship, based in New York. On January 16, at the National Press Club, his Center and the Center for National Security Law co-sponsored a major national conference on "The Media and the War for the Fourth Freedom: Covering the War on Terror." O'Neil and John Norton Moore served as co-hosts. O'Neil also spoke at Montpelier on James Madison's birthday, March 16, in a yearly tribute honoring Madison. O'Neil is also serving on the ABA Working Group on Judicial Campaign Standards, a subgroup of the Committee on Judicial Independence.
Robert E. Scott has been invited to deliver the Cecil A. Wright Memorial Lecture at the University of Toronto Law School. The Wright Lecture is one of the highlights of the academic year. Dean Cecil A. Wright was the founder of the modern Faculty of Law at the University of Toronto, and considered by many to be the father of modern legal education in Canada. The lecture which bears his name is intended to be a lasting memorial to the contribution he made, and is the University of Toronto Faculty's most significant public lecture. The lecture will be published in the University of Toronto Law Journal.
Scott was also invited by the General Board of the Faculties at the University of Cambridge to serve as the Arthur Goodhart Visiting Professor of Legal Science for the 2006-2007 academic year. This Chair was established by a generous benefaction to celebrate the 80th birthday of the late Arthur Lehman Goodhart, K.B.E., LL.D, Litt.D., D.C.L., Q.C., F.B.A., formerly Honorary Fellow of Trinity Hall and Trinity College.
In April, Paul B. Stephan III is delivering one of the principal papers at an American Enterprise Institute conference on Antitrust Policy: Competition and Cooperation. The title of the paper is "Competitive Competition Law? An Essay Against International Cooperation." On December 14, 2002 he presented a paper, "A Becoming Modesty: U.S. Litigation in the Mirror of International Law," at a meeting of the International Law in U.S. Courts Interest Group of the American Society of International Law held at Fordham Law School. In November he organized a conference with Sam Estreicher of NYU Law School on "International Law: Where Are the Limits?" His paper was "Courts, the Constitution, and Customary International Law: The Intellectual Origins of the Restatement (Third) of the Foreign Relations Law of the United States."
In early January, George Triantis was a Distinguished Visiting Professor at the Faculty of Law of the University of Toronto, where he taught an intensive course on corporate reorganizations. The class discussed the opportunities for and obstacles to reorganization, both inside and outside bankruptcy, and examined selected aspects of recent high-profile Chapter 11 cases.
Triantis made several presentations at other law schools over the past four months. He presented "Evidence Arbitrage" (a paper co-authored with Chris Sanchirico) at Harvard Law School in November. This paper is part of a larger project investigating how the parties' anticipation of the resolution of future disputes affects the contract terms. Triantis also presented another paper, "Organizations as Internal Capital Markets," at several law schools: Berkeley in December, Columbia in February, and Stanford in early March. The paper explores the conditions under which corporate and nonprofit managers should have the discretion to move capital between different projects, and the legal organizations that impede or facilitate such flexibility. In this light, it examines managerial discretion over assets in corporations, trusts, and collateral.
In early February, Triantis participated in a conference on Control Transactions at the University of Pennsylvania Law School. He discussed a paper given at that conference (co-authored by Jennifer Arlen (NYU) and Eric Talley (USC)) which analyzes mechanisms that constrain shareholder choice in control transactions.
G. Edward White is scheduled to give the Quinlan Lecture at Oklahoma City University School of Law on March 27. The title of the lecture is, "Alger Hiss in Prison." White also wrote an article, "The Constitutional Journey of Marbury v. Madison," for the Federal Courts panel of the AALS meeting in January.
In January, George K. Yin presented a paper to a tax policy workshop at the University of Michigan Law School. The title of the paper is "Estimating the Effective Tax Rates of the S&P 500." Yin said that recent corporate governance scandals and continuing concern about corporate tax shelters have renewed interest in the amount of taxes paid by public corporations on the profits they report to their investors. His paper uses financial statement information to ascertain the average or effective tax rates (ETRs) from 1995 to 2000 of the corporations included on the S&P 500 stock index. "During this period, there was little change in either the tax or accounting rules applicable to public companies," said Yin. "Despite this, I find that the ETRs of the sampled corporations fell almost steadily throughout the six-year period from 28.85% in 1995 to 24.20% in 2000, a 16 percent decline. Eight of the ten industry sectors separately classified by the paper experienced declines."
Yin said a principal reason for the decline was the different tax and accounting treatment of stock options. In general, the compensation element of stock options reduces taxable income but not reported book profits. When the ETRs of the sample were recalculated after conforming the tax and accounting treatment of stock options, however, there continued to be a decline over the six-year period, but not as dramatic. Book and taxable income changed more or less consistently with one another from 1995 to 1998, but began to grow apart in 1999 and 2000. Yin employed various tests to determine whether the decline might be connected to international tax sheltering opportunities, as some have alleged, but was unable to identify any link.
Also in January, Yin participated in a tax policy panel at the ABA Tax Section meetings in San Antonio, TX. The topic was corporate integration proposals including the Administration's recommendation to change the taxation of dividends. Yin previously participated in an ALI integration project and published a couple of papers on the subject. Also participating on the panel was the current Deputy Assistant Secretary for Tax Policy at the Department of Treasury, a law professor at UCLA, and some members from the private sector.
Continuing her research into the structural limits imposed on government by the U.S. Constitution, Professor Lillian BeVier is now probing the state action doctrine in a paper she is writing with Professor John Harrison. The state action doctrine holds that only governmental actors and not private ones are constrained by the Constitution. Recently, a number of constitutional scholars have argued that, since the government provides the mechanism by which private actors can enforce private choices, enforcement of private agreements constitutes state action and the choices themselves should be subject to constitutional review.
"John and I will argue that there are real differences between state and private actors, and between private law and public law," says BeVier. "Given these differences, a case can be made that the reach of the Constitution should be limited to particular kinds of governmental actions. In other words, despite the fact that they are backed by state power, most actions in the private sector are rightly regarded as beyond the Constitution's purview."
Since she is known for her originalist scholarship, Washington and Lee University School of Law has invited her to debate with W&L Professor Ronald Krotoszynski on the subject of the Supreme Court's feminism jurisprudence in terms of originalist thought. The debate will take place in March.
BeVier, who spent the fall semester at NYU as a Visiting Professor of copyright and trademark law, is also preparing a paper, "Intellectual Property and Free Expression: On a Collision Course?" which will consider how-and whether-the first amendment applies to intellectual property law. She will present the paper at a conference on Freedom of Expression in April at the Social Philosophy and Policy Center at Bowling Green State University.
Finally, President George W. Bush has nominated BeVier to be a Director of the Legal Services Corporation. Her nomination is pending. The Senate is expected to hold hearings and vote to confirm sometime in late winter or early fall.
In a bid to make lawyers involved in executing corporate transactions more accountable for addressing client fraud, legal ethicists and corporate law specialists have joined in support of a "noisy withdrawal" rule recently proposed by the Securities and Exchange Commission. The rule would require corporate lawyers faced with evidence of a material violation of law to report this evidence up the corporate ladder, and ultimately, in the absence of an adequate response from corporate officers and the board or relevant board committee, to withdraw from the representation, notify the SEC of the withdrawal, and disaffirm any materially false or misleading documents that the lawyers helped prepare.
Professor George M. Cohen, who teaches legal ethics and is a co-author of a forthcoming new edition of the prominent casebook, The Law and Ethics of Lawyering, worked with his co-authors Susan P. Koniak of Boston University and Roger Cramton of Cornell University, to respond to the SEC's draft rules. Their 45-page analysis of the new reporting requirements has been endorsed in principle by 48 other legal academics from around the country, including the Law School's Richard Balnave.
"That's a huge response from the legal academy and it cuts across all political and academic ideologies," Cohen said of the support their recommendations got as they circulated the comments for review to colleagues at many law schools. "I've never seen such a positive response from a group this large with such diverse backgrounds. This is a real mix and that's unusual. The fact that they all gave their general agreement is remarkable."
When Congress, following Enron's collapse, passed the Sarbanes-Oxley Act to impose greater accountability structures on publicly held companies, it included a provision requiring the SEC to propose new professional conduct standards for attorneys. The SEC drafted proposed rules, and solicited responses to its proposals. Law faculty, anticipating resistance to the proposals coming from the American Bar Association and other lawyer groups, spoke up.
"We wanted to weigh in because we can come at the problem from a disinterested perspective. The ABA has suggested that we don't understand the issues, but the fact is, we do understand them quite well," Cohen said. After Enron imploded, the lawyers who blessed its fraudulent schemes "managed to fly below the public radar," Cohen said. "But that is changing. Until investors see accountability structures on the legal profession strengthened, they won't know if they can believe in corporate financial statements."
"We're basically backing the direction the SEC is trying to go, especially in the 'noisy withdrawal' provision. That's key and we strongly support it," Cohen said. "'Noisy withdrawal' gives the lawyers the threat leverage that may on rare occasions be needed to induce compliance," Cohen said. "Moreover, the noisy withdrawal concept is nothing new. The ethics rules of almost every state already permit it, and an ABA ethics opinion says it may be required in some cases to avoid assisting in the fraud."
A second point the academics make is that the standards that trigger a lawyer's duty to report should be objective, and not overly restrictive. In particular, they argue that the SEC's rules should not use subjective standards, such as a lawyer's "belief," and that the rules should not undermine the "evidence of a material violation" trigger by turning it into a mere "violation" trigger.
"Lawyers are really good at wiggling out when there is a way to evade responsibility," he said. "A lawyer could easily convince himself that he did not actually know some fact, or that something was not an actual violation. We are saying if they are confronted with evidence that a prudent and competent attorney would conclude is credible, that triggers the duty to report."
For the time being the academics are forbearing criticizing the proposal to encourage the creation of new Qualified Legal Compliance Committees within the corporation to review evidence of possible illegal acts. Reporting to such committees would satisfy the lawyer's reporting obligations and eliminate the need for a noisy withdrawal. "The Qualified Legal Compliance Committees could provide a big loophole, but we aren't fighting them for now. They could work, because they would have their own reporting obligations to the SEC."
The ABA has been lobbying against the new rules, arguing that the SEC is overstepping its authority and that it is the prerogative of the states to regulate lawyers. But state bar counsel commonly don't go after lawyers at large firms who assist in corporate fraud because they would be outgunned by the resources of those law firms, Cohen said. Furthermore, other federal agencies, such as the Internal Revenue Service and the U.S. Patent Office, already have rules regulating lawyers.
A program designed to get greater compliance from mentally ill patients whom the courts instruct to get community-based treatment for their conditions has received an additional $1.3 million per year for the next three years from the John D. and Catherine T. MacArthur Foundation. Phase II plans of the Research Network on Mandated Community Treatment will measure which forms of leverage over patients best gets their cooperation in maintaining their treatment plans, according to network director John Monahan, a psychologist and professor at the Law School.
"Mandated mental health treatment is the single most contested human rights issue in mental health law and policy today," Monahan said. Forty states have laws authorizing outpatient treatment for patients with mental disorders but the public was essentially unaware of them until New York passed "Kendra's Law" after a woman was fatally pushed under a subway train by a man with a history of untreated mental illness, he said. California's version of this statute, called "Laura's Law" after a victim in that state, went into effect on January 1, 2003.
Leverage over patients includes Social Security benefits and subsidized housing controlled by social service agencies, the terms of probation for those with criminal records and the prospect of leniency from mental health courts. Additionally, 15 states have enacted laws that allow patients to make psychiatric advance directives that describe the treatment they want should they later find themselves incapable of making such decisions.
Mandated treatment is becoming increasingly common. In North Carolina one-third of those discharged from psychiatric hospitals are placed on outpatient treatments and in New York more than 2,500 people a year are evaluated for "outpatient commitment," according to Monahan. Between 300,000 and 450,000 criminal defendants with serious mental disorders are given probation every year and the number of states with mental health courts has grown to 33 from just one in 1997, he said. The goal of the network is to conduct empirical studies of how successfully the shift to outpatient treatments is working.
"It is not unusual for those with mental disorders to resist treatment. In the past, patients were confined and treated in mental hospitals. Now they are out in the community. It's becoming apparent that the legal framework used in a closed institutional context is not translating as well to less structured, open environments," Monahan said.
In 1979 the U.S. Supreme Court, in the case of Addington v. Texas, raised the standard of proof necessary for states to invoke inpatient treatment from a "preponderance of the evidence" to "clear and convincing evidence," stressing an individual's interest in not being involuntarily confined. "Civil commitment constitutes significant deprivation of liberty that requires due process protection," the court said.
"This has raised the question of whether states must meet the same standard for mandated outpatient treatments as they must for inpatient treatment, since no one is being 'confined' or deprived of their liberty in the community," Monahan said. "Currently used concepts are not answering this question. Rather than viewing outpatient commitments as a simple extension of commitment to a mental hospital, we believe that outpatient commitment should be seen as only one of a growing array of legal tools now being used to ensure treatment adherence in the community."
The network, whose 12 members also include Law School professor Richard Bonnie, will be examining avoidance of loss of money, loss of housing, jail or hospitalization as leverage. Information is also needed on the prevalence of mandated community programs, how they are being implemented, and how the results are being measured.
"The legal status of many forms of mandated treatment is currently uncertain," Monahan said. "As courts begin to address these issues, empirical research will play a decisive role in judicial deliberations. Furthermore, there are ethical questions. For example, patients may see the money they receive as theirs to decide how to spend, whereas others could see it as taxpayers' money to be used as the government chooses to."
The MacArthur Foundation funded Phase I of the Network in 2001. Monahan said results of current research will be reported by 2005.
|John Norton Moore speaking at the National Press Club during the "Conference on Media and the War on Terror."|
Professor John Norton Moore is proposing a new paradigm in international relations that offers policymakers an analytical tool for predicting the probability of war and shaping a range of foreign policy decisions. His paper, Beyond the Democratic Peace: Solving the War Puzzle, analyzes the prevailing theory on war avoidance, incorporates insights from game theory and "prospect theory," and arrives at an elegantly simple conclusion called "incentive theory." According to incentive theory, leaders of democracies cannot "externalize" the costs of war as readily as can authoritarian regimes, so they need less incentive to deter them from high risk, aggressive behavior. Major international wars, then, begin primarily as a result of a critical interaction between aggressive, non-democratic regimes and a low level of effective deterrence internationally.
According to Moore, empirical evidence shows that non-democratic regimes instigate the large majority of wars. First proposed by Immanuel Kant in 1795, this "democratic peace" reflects the fact that major international war "occurs at an extraordinarily low rate, if at all, among well-established democracies." But the democratic peace, according to Moore, "is by itself incomplete" because the same correlation exists "across a wide variety of human goals," including vibrant economies, clean environments, plentiful food, the rule of law, honest bureaucracies, and population growth. Further, the democratic peace doesn't offer any mechanism for understanding exactly why this correlation exists.
|"My abiding interest in putting all this data together came from asking what do we really know about the origin of wars and what is the real evidence supporting it."|
But according to Moore, incentive theory does. It says that fundamental differences between democratic and non-democratic governments produce unique incentives within each that have profound effects on their levels of aggressiveness. Identifying those incentives and weighing their value within the context of the government structureand how the regime's leaders perceive them within the prevailing international climatewill help policymakers act more coherently and likely lessen the risk of war.
"I think the new paradigm works," says Moore. "It's powerful and builds on the best empirical evidence out there. I was in a lucky spot running the U.S. Institute of Peace for its first five years. My abiding interest in putting all this data together came from asking what do we really know about the origin of wars and what is the real evidence supporting it."
Even in today's international climate, where fanaticism and erratic behavior seem the norm, Moore maintains that incentive theory still works. "There aren't principally mad men starting wars. That's a myth. Saddam Hussein is not at all crazy. Kim Il Song was not crazy. They are ruthless and profoundly evil people, but they are not crazy. They understand their own self-interest and can respond to incentives."
World Unites Against Terror
Since 9/11, Moore sees dramatic change in how the west will now respond to terrorist aggression. "Over the last twenty-five to forty years we've been going through a particularly serious outbreak of terrorism and the western democracies have been very weak in response," he says. "That has changed since 9/11. From the terrorists' twisted standpoint, 9/11 was a great tactical victory. In fact, it was a horrible, strategic miscalculation. What it did was awaken the whole world and turn it against them."
And Moore doesn't buy the popular belief that we are at greater risk of terrorist attack since 9/11. "It is just the opposite," he says. "We are much, much better protected today. We have far greater security after 9/11 than we had before. The entire world has now joined together to go after terrorists using law enforcement and national security and regular military forces."
Moore joined the Law School faculty in 1966 and is an authority in the fields of international law, national security law, and the law of the sea. In 1985, President Reagan nominated him to chair the board of directors of the United States Institute of Peace, a post he held until 1991. "My work on incentive theory goes back to my effort in setting up and running the Institute," says Moore. He will be presenting his paper during the spring at a workshop at the U. S. Institute of Peace in Washington, D.C.
Yin to Lead Staff of Congress's Joint Committee on Taxation
George K. Yin, a noted authority on taxation and the Howard W. Smith Professor of Law at the University of Virginia, has been named Chief of Staff of the U.S. Congress's Joint Committee on Taxation, one of the most influential tax positions in the country. The ten-member Joint Committee is composed of the five senior members of the House Ways and Means Committee and the five senior members of the Senate Finance Committee. The Joint Committee's nonpartisan staff assists in every aspect of Congress's consideration of new tax legislation and oversight of existing tax laws.
"I'm very excited about this opportunity and look forward to the challenge," said Yin, who will begin working full-time on the Hill when the current semester ends. He will head a 70-person staff, including roughly 50 lawyers and economists. "One reason I took the job is because of the tremendous reputation of the staff," he said. "It is a real honor and privilege to work with them and lead them."
Yin said he was first approached with feelers just prior to the start of the semester and indicated that he was committed to teaching until May. The leaders of the Committee, Rep. William Thomas (R-Calif.) and Sen. Charles Grassley (R-Iowa), understood Yin's need to fulfill his academic obligations. "The staff is nonpartisan, and I think that made my academic background plus Hill experience attractive to them."
Yin served as tax counsel to the Senate Finance Committee from 1983 until 1986, when he joined the law faculty at the University of Florida. He came to UVA in 1994. He has been an advisor to the U.S. Department of the Treasury, the Joint Committee on Taxation, the National Committee on Restructuring the Internal Revenue Service, and the Select Revenue Measures Subcommittee of the U.S. House Committee on Ways and Means. From 1994 to 1999, he was reporter to the American Law Institute's federal tax project on the taxation of private business enterprises. He has testified before Congress on the tax policy aspects of mergers and acquisitions and on the design of the earned income tax credit program. At UVA he has taught Corporate Tax, Partnership Tax, Federal Income Tax, and International Taxation, and his scholarship has encompassed diverse topics such as corporate tax integration, the earned income tax credit, consumption taxes, partnership taxation, and corporate tax shelters.
Yin will be on leave from the University during his time in D.C., although his commitment to the committee is open-ended. Yin said he took the job primarily because he believes in public service. "It is also shaping up as a very important time in the tax area, with the Bush Administration proposals and continuing concern about tax shelters as evidenced by the recent Enron report."
Yin and his wife will move to Northern
Virginia but they will not sell their home in Charlottesville.
"Certainly our hope is to return to UVA," he said. "Dean
Jeffries and the law faculty have been wonderfully supportive
throughout this experience. We are very grateful and will deeply
miss the community here while we're away."