2022-2023 Advances in Research

The faculty at the University of Pennsylvania Carey Law School dedicate themselves to producing research and scholarship that illuminates the most pressing issues facing society today. From net neutrality, artificial intelligence, and climate change to cutting-edge research on corporate governance, privacy law, and achieving racial, social, and economic justice, and more, our professors discover and share pathbreaking insights that push the legal academy forward and reshape real-world policy.

Our faculty members are interdisciplinary thinkers who bridge the gap between the law and myriad connected fields by collaborating extensively with scholars from institutions around the country and throughout the world. Their work exemplifies diverse methodologies and perspectives, revealing the wide range of modes of thought and areas of academic inquiry that thrive here at the Law School.

In this issue of Advances in Research, we offer a snapshot of some of the most noteworthy research and scholarship conducted by our faculty over the past year. The featured faculty members include both longstanding experts in their fields and promising scholars at the beginning of their careers. We hope you enjoy this edition.

Ted Ruger Dean and Bernard G. Segal Professor of Law

Sincerely,

ONLINE PRIVACY ANTI-RACISM

ANITA L. ALLEN Henry R. Silverman Professor of Law and Professor of Philosophy

In “Dismantling the ‘Black Opticon’: Privacy, Race Equity, and Online Data-Protection Reform,” published in the Yale Law Journal Forum, Allen introduces a critical analysis of the particularized vulnerabilities African Americans experience through online surveillance, exclusion, and exploitation. Allen terms this intersecting pattern “the Black Opticon.”

In her African American Online Equity Agenda (AAOEA), Allen set sets forth a “specific set of policymaking imperatives . . . to inform legal and institutional initiatives toward ending African Americans’ heightened vulnerability to a discriminatory digital society violative of privacy, social equality, and civil rights” and uses this framework to analyze three potential legislative solutions. Ultimately, her work delineates the urgent need for explicitly antiracist data protection policies that better serve African Americans.

African Americans Disparate Online Vulnerability

African Americans face disparate online vulnerability in three distinct categories: discriminatory oversurveillance, discriminatory exclusion, and discriminatory predation.

Allen examines how location-analytics software exposes African Americans to disproportionate risks of privacy invasion. In 2016, several major online platforms faced harsh criticism for providing user data to Geofeedia, a software company that used social media posts and facial-recognition technology to analyze and collect a history of individuals’ locations, which it then marketed to law enforcement. After African American Freddie Gray was killed while in police custody, police in the majority-Black community of Sandtown-Winchester used data purchased from Geofeedia to find and arrest individuals who participated in ensuing Black Lives Matter protests.

“Location tracking, the related use of facial-recognition tools, and targeted surveillance of groups and protestors exercising their fundamental rights and freedoms are paramount data-privacy practices disproportionally impacting African Americans,” Allen writes.

Discriminatory exclusion involves “targeting Black people for exclusion from beneficial opportunities on the basis of race” by collecting information that, when analyzed, identifies a person as African American.

When Dr. LaTanya Sweeney, an African American Harvard professor and former Chief Technology Officer at the Federal Trade Commission (FTC), searched “LaTanya Sweeney,” Google returned an advertisement for InstaCheckmate.com that read “LaTanya Sweeney Arrested?” Sweeney contrasted this with her search for the more ethnically ambiguous “Tanya Smith,” which did not return the same arrest advertisement. From this, Allen writes that “biased machine learning can lead search engines to presume that names that ‘sound Black’ belong to those whom others should suspect and pay to investigate.”

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ANITA L. ALLEN

“Existing civil-rights laws and doctrines are not yet applied on a consistent basis to combat the serious discrimination and inequality compounded by the digital economy.”

In addition to identifying users as African American, online platforms have leveraged this information to systematically exclude African Americans from viewing certain advertisements. These discriminatory practices prevent African Americans from participating in vital sectors of the market, including but certainly not limited to education, employment, housing, and loan procurement.

On the other side of discriminatory exclusion is discriminatory predation, or the targeted advertisement to African Americans of products meant to “induce purchases and contracts through con jobs, scams, lies, and trickery.”

“Discriminatory predation makes consumer goods such as automobiles and for-profit education available, but at excessively high costs,” Allen writes. “Predation includes selling and marketing products that do not work, extending payday loans with exploitative terms, selling products such as magazines that are never delivered, and presenting illusory money-making schemes to populations desperate for ways to earn a better living.”

An African American Online Equity Agenda

Allen employs her AAOEA to evaluate whether a new state law in Virginia, new privacy protection resources of the (FTC), or a proposed new federal privacy agency would adequately serve the online privacy interests of African Americans.

Though some activists have been successful in calling for industry-led self-governance, data privacy is embodied within several legal regimes, including data-privacy, antitrust, intellectual property, constitutional, civil rights, and human rights.

“At this critical time of exploding technology and racial conflict,” Allen writes, “I believe that policy making should be explicitly antiracist.”

The AAOEA centers on five points of guidance for anti-racist law and policy making, which Allen unpacks in turn:

• Racial inequality nonexacerbation

• Racial impact neutrality

• Race-based discriminatory oversurveillance elimination

• Race-based discriminatory exclusion reduction

• Race-based discriminatory fraud, deceit, and exploitation reduction

Assessing Enacted State Law: Virginia Consumer Data Protection Act (2021)

While the Virginia Consumer Data Protection Act (2021) (VCDP) includes antidiscrimination provisions, it fails to “explicitly reference the interests of African Americans or antiracism as a legislative goal” and relies on insecure enforcement mechanisms.

Significantly, the law excludes massive sectors that crucially affect the day-to-day lives of African Americans. As Allen writes, “[t]he rationale for exempting all nonprofits regardless of size — as well as commonwealth governmental entities, including the police, jails, and prisons — is unclear,” though likely relates to the desire to make the unanimously-passed legislation “uncontentious.” Additionally, the law does not protect photographs and related data from being used by Virginia law enforcement, which is of particular concern to African Americans, who tend to be disproportionately impacted by the criminal justice system.

Moreover, though the law prohibits collecting personal data in violation of antidiscrimination laws, it is unclear that these measures will have a pragmatic effect in protecting African Americans’ data. Notedly, the VCDP permits targeted advertising so long as consumers have the right to “opt out.” Allen argues that placing the onus of “opting out” on the consumer is problematic, as it relies on the assumption that consumers are aware they may be being targeted based on their data — and possibly their race. Lastly, any enforcement of the VCDP falls at the discretion of the State Attorney General, with no right of private action, thus effectively subjecting the law to political bias and fluctuation.

New Resources for the Federal Trade Commission

Three factors may signal advancement in the FTC’s historically sparse track record of pursing enforcement actions related to online discrimination: continued diverse leadership, funding for a privacy bureau, and an express commitment to addressing problems faced by communities of color.

In 2021, President Joe Biden appointed Alvaro Bedoya, an immigrant from Peru and naturalized U.S. citizen, to serve as the Commissioner of the FTC. Thus far, Bedoya “has demonstrated an understanding of the problem of racial-minority-targeting surveillance.” Further, the U.S. House Committee on Energy and Commerce recently voted to create and operate a bureau within the FTC dedicated to fighting unfair practices and enforcing Congressional laws related to privacy, data security, and related matters. This proposal could potentially bolster existing race conscious antidiscrimination practices.

A Proposed Federal Data-Protection Agency

The Data Protection Act (DPA) of 2021 introduced by Senators Kirsten Gillibrand and Sherrod Smith in June of 2021 is “striking for its deep responsiveness to calls for equitable platform privacy governance.”

Among its components, the bill would create an autonomous Federal Data Protection Agency (FDPA) that would engage in policymaking, research, law enforcement, and protection against discrimination. The FDPA would include a Civil Rights Office to “regulate high-risk data practices and the collection, processing, and sharing of personal data,” which Allen notes fits squarely into the aims of the AAOEA.

Though the DPA is “not likely to move through Congress soon or intact,” the bill sets a “high bar for future legislative-reform proposals” and “signals a new era, laying out a dynamic framework for an agency with unprecedented authority to pursue equity in the context of data protection.”

In conclusion, according to Allen, without updated governance to reflect recent decades’ profound advances in technology, online platforms can reproduce racist social structures through their design –thereby amplifying discrimination, hate, and white supremacy.

“[T]he Black Opticon is a useful, novel rubric for characterizing the several ways African Americans and their data are subject to pernicious forms of discriminatory attention by racializing technology online,” Allen writes. “These reform agendas have a grave purpose, as grave as the purposes that motivated the twentieth-century civilrights movements.”

STEPHEN B. BURBANK David Berger Professor for the Administration of Justice, Emeritus

CLASS CERTIFICATION in the U.S. COURTS OF APPEALS

“Mindful that there were few Supreme Court class certification decisions in our earlier studies, and that they may not provide an accurate picture of class action jurisprudence (let alone class action activity) over time, we launched a project to fill a larger part of the empirical vacuum.”

In their new paper, “Class Certification in the U.S. Courts of Appeals: A Longitudinal Study,” published in Law & Contemporary Problems, Burbank and Sean Farhang of the University of California, Berkeley, continue their prior work tracing the counterrevolution against private enforcement of federal law, led first by the Reagan administration and then by conservative activists, business groups, and the Republican party.

In this groundbreaking study, the authors fill more of the empirical vacuum regarding class actions in the federal courts by analyzing and testing both prior empirical scholarship and commonly asserted claims, finding significant variation over time in appeal outcomes and greater ideological polarity among judges.

“Mindful that there were few Supreme Court class certification decisions in our earlier studies, and that they may not provide an accurate picture of class action jurisprudence (let alone class action activity) over time, we launched a project to fill a larger part of the empirical vacuum,” they write.

The Existing Literature: Data and Claims

The authors begin with a literature review that identifies the scholarship and common assumptions surrounding Rule 23(f), the Class Action Fairness Act of 2005 (CAFA), and final-judgment appeals involving Rule 23(b)(3). They note that most systematically collected data have focused on Rule 23(f), which went into effect in 1998, with much speculation on its influence.

“Many predicted at the time it was being debated, and asserted after it was promulgated . . . that it would (or did) disproportionately benefit defendants,” they write of the challenges to the rule’s facially neutral classification. “Although the published studies of experience under Rule 23(f) vary in many respects, until recently they appeared largely to confirm such predictions and assertions.”

Regarding CAFA, they discuss a study conducted shortly after its enactment by the Federal Judicial Center that found “a dramatic increase in the number of diversity class actions filed as original proceedings in the federal courts in the post-CAFA period.” The authors write that “perhaps assuming that this documented increase would translate into a similar increase in the courts of appeals, a number of scholars have claimed that the volume of class certification appeals increased after CAFA.” However, they do not find any empirical data to support this.

To conclude their literature review, they note that most existing studies “ignore final-judgment appeals, perhaps regarding them as trivial in number.” Yet, as final-judgment appeals constitute roughly half of all appeals between 2002 and 2017, they write that “their absence from existing studies significantly limits the inferences that can be drawn from them.”

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Longitudinal Patterns in Certification Decisions

The authors created a comprehensive data set of 1,344 published and unpublished class certification decisions in the United States Courts of Appeals. The published decisions include all published panel decisions addressing whether a class should be certified from 1966 (when the modern Rule 23 became effective) through 2017. The unpublished panel decisions are collected from 2002 through 2017.

They find that both published and unpublished decisions grew sharply following Rule23(f), with interlocutory appeals constituting “14% of published decisions prior to 2000 and 57% of them from 2000–2017” and about 30% of non-published decisions from 2002–2017. Yet, while interlocutory appeals account for the greatest amount of growth, final-judgment interlocutory appeals were roughly balanced during the 2002–2017 period.

The authors find a similar spike in the number of decisions in cases seeking certification of state claims only after CAFA was passed in 2005. Since they could not reliably code claims in federal court under CAFA, they instead review cases seeking certification of state claims only. They discover that prior to CAFA’s passage in 2005, the majority of published decisions on certification were in cases seeking certification of federal claims only, while cases seeking certification of state claims only grew threefold following 2005. Additionally, “in published and unpublished decisions in 2002–2017, certification decisions on state law-only classes grew more strongly, increasing fivefold and becoming as frequent as certification decisions on classes asserting only federal claims,” they write.

The authors then examine “whether the growth in availability of interlocutory review had a disproportionate impact on the proportion of appeals addressing (b)(2) versus (b)(3) classes.” It has been claimed that final-judgment appeals in (b)(3) were rare based on the assumption that, until Rule 23(f), parties would opt to settle instead of pursue further litigation if a district court certification decision involved damages classes under (b)(3). “If this dynamic were at play,” they write, “we would expect to see that (b)(3) classes are more likely to appear in appeals under interlocutory versus final-judgment review.”

Instead, the authors find that final-judgment appeals of certification decisions with respect to (b)(3) classes accounted for 33% of the decisions, with defendants bringing 40% of those appeals. “This casts doubt on the notion that parties are rarely willing to litigate through to final judgment once a district court has certified or declined to certify a [damages] class,” they write.

The authors further probe interlocutory appeals in relation to the decisions in Wal-Mart Stores v. Dukes and Comcast v. Behrend Noting that “prior to Wal-Mart, interlocutory appeals were far more frequently used to reverse grants of certification than to reverse denials,” they find the trend reverses after Wal-Mart, “and by 2017 reversal rates were comparable for grants and denials of certification by district courts.” They find a similar trend for final-judgment appeals.

Lastly, the authors explore the probability of a pro-certification outcome in cases with Democratic- versus Republican-majority panels for decisions published from 1970–2017. The gap between such panels narrowed from the mid-1970s to late 1990s, but then widened around the same time Rule 23(f) went into effect. They find that this widening gap corresponds with their previous research, which concluded that, since the mid- to late-1990s, “there was a growing focus in the Republican Party on restricting opportunities and incentives for private civil actions in general, and class actions in particular,” “Supreme Court justices became more polarized along ideological lines in their voting on Rule 23 issues,” Republican legislators introduced more anti-class action bills, and conservative activists boosted efforts to curtail class actions.

Yet, surprisingly, the gap between Democratic- versus Republican-majority panels began to close somewhat from 2011 to 2017, “when in the posture of making law, both Democratic- and Republican- majority panels were at their highest probability of procertification outcomes in the forty-eight years covered by the data.” They add that this occurred during an era when “both Wal-Mart and Comcast were governing law.” Still, even while both parties grew more pro-certification, Democratic- and Republican-majority panels remained polarized.

The authors conclude by writing that, “this temporal pattern of polarization is similar to what we found in earlier work on the Supreme Court in private enforcement cases in general, and in Federal Rules cases in particular. In the statistical models, we observe that party has a larger effect in interlocutory appeals (the gap between Democratic and Republican-majority panels is larger). Thus, the growing number of interlocutory appeals under Rule 23(f) in the 2000s contributed to the polarization we document. In this sense, one consequence of Rule 23(f) was to inject more ideology into class certification on the U.S. Courts of Appeals.”

STEPHEN B. BURBANK

ALGORITHM vs. ALGORITHM

CARY COGLIANESE

Edward B. Shils Professor of Law and Professor of Political Science and Director of the Penn Program on Regulation

In “Algorithm vs. Algorithm,” recently published in the Duke Law Journal, Coglianese and Alicia Lai L’21 tackle a key choice increasingly confronting governmental decision-makers: when to automate administrative tasks. They frame this choice as fundamentally one between the use of digital algorithms — such as artificial intelligence (AI) and machine learning — versus the continued reliance on the existing algorithms that constitute human decision-making.

Humans “operate via algorithms too,” write Coglianese and Lai, and these are reflected in status quo governmental processes — including existing administrative procedures.

In this pathbreaking article, Coglianese and Lai offer a framework for determining when government should choose digital algorithms over human ones. Although they caution that “public officials should proceed with care on a case-by-case basis,” they also argue that decision-making about AI ought to be predicated on the acknowledgement “that government is already driven by algorithms of arguably greater complexity and potential for abuse: the algorithms implicit in human decision-making.”

Human algorithms are susceptible to many the same problems as digital algorithms, they write, and “will in some cases prove far more problematic than their digital counterparts.” Digital algorithms can “improve governmental performance by facilitating outcomes that are more accurate, timely, and consistent,” they argue.

Limitations of Human Algorithms

Coglianese and Lai review the range of physical, biological, and cognitive limitations that afflict human-decision-making. These include issues with memory, fatigue, aging, impulse control, and perceptual inaccuracies.

Human bias in various forms can also “lead to systematic errors in information processing and failures of administrative government,” write Coglianese and Lai. While training programs and other attempts at “debiasing” humans may counteract some of these problems, it is not always possible to remove errors and biases completely from human decision-making, they note.

Some of the examples they provide of biases embedded in human “algorithms” include:

• The availability heuristic: that is, “the human tendency to treat examples which most easily come to mind as the most important information or the most frequent occurrences”;

• Confirmation bias: or, “the tendency to search for and favor information that confirms existing beliefs, while simultaneously ignoring or devaluing information that contradicts them”;

• Anchoring effects: by which decisions can be skewed by how questions are framed or selective information is provided;

• System neglect: which often occurs when individuals make decisions in isolation “with insufficient regard to the systemic context”;

• Present bias: or the undue discounting of the future, which can also be related to loss aversion;

• Susceptibility to overpersuasion: which occurs when people are “persuaded by superficial, even irrelevant” appeals; and

• Racial and gender discrimination: which can manifest either as explicit animus or implicit but deeply ingrained biases.

Coglianese and Lai show how these individual human tendencies that negatively affect governmental decision-making.

They also note that, when it comes to making group decisions within organizational settings — as frequently occurs within government — humans succumb to a variety of well-documented collective dysfunctionalities, such as groupthink and free-riding, among others. These problems also too often impair governmental decisions, Coglianese and Lai explain.

The Promise of Digital Algorithms

Coglianese and Lai extol the potential advantages of using digital algorithms in governmental processes by noting their importance to “nearly every major advance in science and technology” in recent years.

Machine-learning algorithms, they write, are often grouped into two categories: “supervised learning,” which are provided with labeled data, and “unsupervised learning,” which can learn without labeled data. While humans are necessary to establish AI processes, machinelearning algorithms otherwise can operate autonomously. They “largely design their own predictive models based on existing data, finding patterns in the data that can be used to generate predictions that are quite accurate,” write Coglianese and Lai.

Machine-learning algorithms have become increasingly attractive in both the private and public sector because of benefits that “might even be characterized as inherent to digital algorithms” — accuracy, consistency, speed, and productivity.

Coglianese and Lai are quick to point out that this does not mean that machine-learning algorithms will always be better than human algorithms. They argue that the choice is always a comparative one: that is, one of a digital algorithm versus a human one.

They note the strengths of each type of algorithm. Digital algorithms can provide consistency and speed, while the human mind

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“is well-suited to making reflexive, reactionary decisions in response to sensory inputs.”

Coglianese and Lai discuss a growing body of research that has “compared machine-learning algorithms’ performance with status quo results and found improved performance in a variety of distinctively public sector tasks.”

Despite these results, worries persist about the use of machinelearning algorithms, especially about the possibility that they can be “too opaque and prone to bias.” Coglianese and Lai note that existing systems dependent on human algorithms, though, “do not necessarily compare favorably to machine learning” on these grounds.

“When it comes to bias, the issue again is not whether machinelearning algorithms can escape bias altogether, but rather whether they can perform better than humans,” they write.

Deciding to Deploy Digital Algorithms

In their article, Coglianese and Lai warn against human errors that can occur in designing and operating digital algorithms. They suggest that the necessary human element in the design and establishment of computerized systems may be digital algorithms’ biggest weakness. Still, they argue that digital algorithms can promise to make fewer mistakes overall — “if they are used with care.”

“The key is for humans to engage in smart decision-making about when and how to deploy digital algorithms,” write Coglianese and Lai.

To aid government officials in deciding between digital and human algorithms, Coglianese and Lai present three approaches for balancing different, often competing values involved in these decisions:

• Due process balancing: As articulated by the Supreme Court in Mathews v. Eldridge, this approach “seeks to balance the government’s interests affected by a particular procedure . . . with the degree of improved accuracy the procedure would deliver and the private interests at stake”;

• Benefit-cost analysis: Under this approach, “machine learning would be justified . . . when it can deliver net benefits (i.e., benefits minus costs) that are greater than those under the status quo”;

• Multicriteria decision analysis: A variation of the first two, this last approach requires running through “a checklist of criteria against which both the human-based status quo and the digital alternative should be judged.”

Coglianese and Lai land on multicriteria decision analysis as the best and most practical approach for structuring administrative decisions about automation — and then they explain that the key question turns to which criteria should be used in coming to such a decision.

They acknowledge that the precise criteria to rely upon will vary according to each particular use case, but they explain that generally two types of criteria should be considered when deciding to digitize a governmental process. Specifically, these criteria are those related to the preconditions for the successful use of digital algorithms and the validation of improved outcomes from digital automation.

Coglianese and Lai write that, in addition to the need for adequate human expertise and computer technology, three main preconditions “can be thought of as a necessary, even if not sufficient, condition for a potential shift from a human- to machine-based process”: (1) goal clarity and precision, (2) data availability, and (3) external validity.

“Taking these three preconditional factors together,” they write, “machine-learning systems will realistically only amount to a plausible substitute for human judgment for tasks where the objective can be defined with precision, tasks that are repeated over a large number of instances (such that large quantities of data can be complied), and tasks where data collection and algorithm training and retraining can keep pace with relevant changing patterns in the world.”

On how to validate whether machine learning in fact improves outcomes, Coglianese and Lai identify three general types of impacts that should be tested: (1) goal performance, (2) impacts on those directly affected by an automated system, and (3) impacts on the broader public.

Coglianese and Lai emphasize the importance of agency officials carefully thinking through their decisions to digitize. Failing to do so “can have real and even tragic consequences for the public” as well as open the agencies up to public controversy and litigation.

The article concludes by offering readers three principal strategies for making sound decisions about putting digital algorithms into place: planning, public participation, and procurement provisions.

Coglianese and Lai conclude that “agency officials should take appropriate caution when making decisions about digital algorithms — especially because these decisions can be affected by the same foibles and limitations that can affect any human decision.” They conclude that “officials should consider whether a potential use of a digital algorithm will satisfy the general preconditions for the success of such algorithms, and then they should seek to test whether such algorithms will indeed deliver improved outcomes.”

“Algorithm vs. Algorithm” is one of the latest of a series of articles that Coglianese has authored or coauthored on public sector use of artificial intelligence, including “Regulating by Robot: Administrative Decision-Making in the Machine-Learning Era,” “ Transparency and Algorithmic Governance,” “Administrative Law in the Automated State,” and “AI in Administration and Adjudication.” A more complete collection of his work on artificial intelligence can be found online within the Penn Carey Law scholarship repository.

“With sound planning and risk management, government agencies can make the most of what digital algorithms can deliver by way of improvements over existing human algorithms.”

CARY COGLIANESE

ESG PROMISES

on research by JILL E. FISCH Saul A. Fox Distinguished Professor of Business Law and Co-Director, Institute for Law and Economics

As the Environmental, Social, and Governance (ESG) movement movement continues to expand, Fisch has collaborated with co-authors Quinn Curtis (University of Virginia) and Adriana Z. Robertson (University of Toronto) to conduct a cutting-edge empirical analysis of ESG mutual fund behavior, presenting valuable data to regulators who are increasingly concerned with this sector. “Do ESG Mutual Funds Deliver on Their Promises?” was published in the Michigan Law Review.

The Rise of ESG Mutual Funds

Calls for corporations to be held accountable for the ways in which they contribute to climate change, racial and gender inequity, and supply chain human rights issues have contributed to the rise of the ESG movement.

Investments in mutual funds incorporating ESG criteria have grown significantly, prompting discussion on what it means for a fund to be designated as “ESG” as well as whether such ESG funds charge investors higher fees or deliver lower performance. A broad lack of clarity has raised many concerns, and regulators have signaled interest in enacting rules that would target ESG investment options, ostensibly to protect investors from risks such as greenwashing, inferior performance, and investor confusion.

Regulatory Pressure on ESG Funds

Both the Securities and Exchange Commission (SEC) and the Department of Labor (DOL) have taken initial steps toward more stringently regulating ESG investing.

The SEC has expressed concern that funds with names that signal “green” or “environmental” practices might potentially be giving investors a false impression of their sustainability. Accordingly, in 2020, the agency requested public comment regarding updates to its existing “Names Rule,” which sets standards for the use of certain words in funds’ names. Among the issues on which the SEC requested comments was the Names Rule’s application to ESG funds. Subsequently in May 2022, the SEC proposed amendments to the Names Rule that expand the scope of the 80% policy required by the rule. The SEC also proposed amendments to its regulation of investment companies and investment advisers concerning funds’ and advisers’ incorporation of ESG factors. Among other things, the proposal would create a distinctive taxonomy of funds based on their incorporation of ESG factors.

Participant-directed retirement accounts, such as 401(k)s, are among the largest holders of mutual funds and subject to complex regulations under the Employee Retirement Income Security Act (ERISA) and DOL. Under ERISA, employers must uphold

“[W]hen faced with a critique of ESG funds, regulators should ask first whether there is an empirical basis for singling out ESG funds or if the purported ESG issue is one that affects the entire fund market.”

JILL E. FISCH

fiduciary duties and act “solely in the interest” of plan holders when making investment decisions. In recent decades, the DOL has issued increasingly specific guidance regarding a fiduciary’s decision to incorporate ESG factors, guidance that has shifted in accordance with the political values of the administration. Most recently in 2020, the DOL adopted a rule that specifically prohibited fiduciary agents from sacrificing any potential return on investment for non-pecuniary purposes such as ESG. Subsequently the Biden administration announced its intention to not enforce the rule.

These regulatory initiatives have focused their attention on ESG mutual funds and are motivated by the perception that such funds offer distinctive investor protection concerns. This proposition can be empirically tested.

Empirical Analysis

The authors constructed several categories of ESG funds, based on funds’ use of names that suggested a focus on ESG criteria and a list of ESG funds compiled by Morningstar. The authors compared these “ESG” funds to the rest of the mutual fund industry on the basis of their respective holdings, voting practices, costs, and performances.

In evaluating the extent to which an ESG fund’s portfolio differs from that of a non-ESG fund, the authors incorporated ratings from four leading ESG rating providers to construct a fund portfolio’s “ESG tilt.”

The analysis revealed that ESG funds tended to have portfolios with higher ESG scores than non-ESG funds. In examining low scoring ESG funds under the four different ESG measures, the authors found that only two “failed” each of the four tests. Even then, the authors note that the funds’ prospectuses divulged that those funds were intended to be “impact funds,” making it “unsurprising” that the funds invested in companies with lower ESG scores, as the aim was to increase those companies’ approach to ESG criteria over time.

The authors also investigated whether ESG funds generally vote their proxies differently than non-ESG funds. Using data from the ISS’s Voting Analytics database, the authors compared the voting behavior of ESG funds with that of non-ESG funds. As with portfolio composition, the analysis revealed statistically significant differences.

“Although our results do not speak to the question of whether ESG funds vote against management or in favor of shareholder

proposals ‘enough,’ there is compelling evidence that they vote differently from their peers and that a typical ESG fund’s mission involves voting policies as well as stock selection,” the authors write.

Critics have voiced concerns over whether ESG investments incur greater costs or yield lower returns than non-ESG investments. The authors assessed cost in two ways, inquiring whether (1) fees charged by ESG funds are higher than comparable non-ESG funds, and (2) whether the returns ESG funds offer differ systematically from those of comparable non-ESG funds.

Results indicate that ESG funds do not generally cost investors more in fees, generate reduced returns, or provide inferior riskadjusted performance. Funds that merely “consider” ESG principles incur a more complicated analysis.

Implications for Regulatory Policy

The authors’ empirical analysis, although limited to a specific time period, reveals “no glaring evidence of problems in the ESG space.” ESG funds are genuinely different from non-ESG funds and, despite these differences, do not appear to provide investors with an inferior investment option. As a result, the authors argue against ESG-specific regulations, concluding that “[t]he ESG sector of the fund market does not seem to be functioning worse than other parts of the mutual fund industry.”

More significantly, the authors reason that a variety of the concerns flagged by commentators — about investor confusion, higher fees, and the lack of a clear relationship between a fund’s name and its investment strategy — apply to a range of mutual funds, including growth, value, and industry-specific funds. Considering the findings outlined in this article, the authors recommend that, “when faced with a critique of ESG funds, regulators should ask first whether there is an empirical basis for singling out ESG funds or if the purported ESG issue is one that affects the entire fund market.”

In closing, the authors underscore that the results of their empirical analysis “provide no justification for regulatory invention,” and, moreover, “reveal[] that ESG funds do not currently present distinctive concerns [relative to other funds] from either an investorprotection or a capital-markets perspective.”

THE RUNAWAY PRESIDENTIAL POWER OVER DIPLOMACY

by JEAN GALBRAITH Professor of Law

Galbraith breaks new ground in “ The Runaway Presidential Power over Diplomacy,” an article recently published in the Virginia Law Review. Especially in recent years, presidents have claimed an “exclusive” power over diplomacy as a justification for ignoring important congressional statutes — statutes that structure diplomatic engagement, ban appropriations for forms of international engagement, or require executive branch disclosure of diplomacy-related information. Although largely overlooked by scholars up to this point, these claims have led to a significant expansion of presidential power. Galbraith analyzes and critiques these claims, arguing for a more modest understanding of presidential power over diplomacy.

The President’s Claims to Exclusive Diplomatic Powers

Though the Department of Justice’s Office of Legal Counsel (OLC) considers the President’s “exclusive authority to conduct the Nation’s diplomatic relations with other States” to be a “well settled” matter of constitutional interpretation, Galbraith contends that such power is far from “exclusive.” She breaks down the overarching power of diplomacy into five interrelated powers, three of which include strong histories of Congressional involvement:

• The power to represent the United States abroad

• The power to recognize foreign nations

• The power to decide the content of communications

• The power to select and control agents of diplomacy

• The power to control access to diplomatic information

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In her analysis, Galbraith agrees that there is a strong argument for the power to represent the United States abroad to remain squarely with the executive branch. Moreover, in Zitovsky v. Kerry, the Supreme Court directly addresses and affirms that the President exclusively holds the power to recognize foreign nations. Nonetheless, that still leaves the extent of presidential exclusivity regarding the other three powers of diplomacy largely unsettled.

Historically, the judiciary has “only rarely” participated in the determination of diplomatic power —Zitovsky was not decided until 2015, and even then, Galbraith underscores that the Supreme Court only addressed a fraction of the overarching “bundle” of the powers of diplomacy.

“Without the courts, it is left to the political branches to sort out their respective powers. . . . [I]t creates a dynamic where the executive branch can always win if it really wants to,” Galbraith writes. “The executive branch is far better positioned than Congress both to articulate its legal positions and to implement them in practice.”

The executive branch’s advantage comes largely from its institutional capacities to assert and implement its powers. On the other hand, Congress’s capacity to “cast a powerful indirect shadow on the conduct of U.S. international engagement” arises from its abilities to enact legislation and make vital funding decisions that could complicate the executive branch’s claims to “exclusivity” in international issues.

Forgotten Constitutional Struggles for What Counts as Diplomacy

At the time the Framers drafted the Constitution, “diplomacy” was barely — if at all — a word in the English language. Reviewing the history of its use and application reveals notable fungibility that remains to this day. Significantly, contemporary OLC practices and documents tend to define “diplomacy” broadly.

“By defining diplomacy broadly for constitutional purposes,” Galbraith writes, “executive branch lawyers vastly enlarge the reach of the President’s assertedly exclusive powers over the content of U.S. international engagement, the agents who undertake it, and information related to it.”

In demonstrating that such a definition is “neither constitutionally predetermined nor conceptually mandated,” Galbraith sets forth four potential means of limiting the executive power of diplomacy, including:

• limiting the power to encompass negotiation rather than policy;

• limiting the power to only “political” rather than “technical” matters;

• tying the power to certain institutional actors within the executive branch; and

• limiting the power within the context of participation in international organizations.

Rethinking Constitutional Control Over International Engagement

In this section, Galbraith sets forth three doctrinal approaches to the distribution of the power of diplomacy: exclusive control to the executive branch; ultimate control to Congress; and an intermediate option, which she favors while acknowledging that such a path would still leave much unsettled.

An intermediate doctrinal approach to the power of diplomacy could include limitations in each of the four categories. Galbraith’s first suggestion is to narrow the concept of “diplomacy” to negotiation and not policymaking. She also suggests that diplomacy powers could be limited to only the President and those executive agencies that focus primarily on foreign affairs, thus “allowing Congress to control nondiplomatic agencies as they engage abroad similarly to how Congress can control them as a matter of domestic law.” Moreover, even in international contexts, Congress could mandate statutory reporting requirements as a tool for oversight much the same way as they do for domestic issues.

Importantly, Congress has several available strategy options to increase its involvement in diplomacy. Congress could emphasize its views on diplomatic powers; formalize its legal reasoning; invoke “soft power” strategies to raise the cost of diplomacy for the executive branch; and/or challenge the executive branch’s assumed “exclusive” powers in court. The final suggestion — involving the courts — carries both significant risk and opportunity for Congress, and Congress has several avenues to pursue a case, if it desired.

The thought leadership put forth in this paper is “important not only for its treatment of this fascinating and understudied issue but also for what it contributes to more general debates in constitutional theory and practice.”

Galbraith encourages future scholars to consider the multitude of different legal questions this scholarship both raises and helps to answer. For example, this research demonstrates the counterintuitive phenomenon that transparency can, at times, be used as a “tool of power rather than constraint,” pointing to the OLC’s practice of generating a record of low-stakes precedent to build “valuable legitimacy for major moves down the road.” Further, this research also serves as a useful scholarly reminder of the strong historical support of Congress’s legitimate claim to some portion of the power to engage in international affairs. Lastly, the work also underscores the complex intersection of administrative and foreign relations law — an increasingly relevant and impactful nexus of study.

In closing, Galbraith reaffirms that “[i]t is time for a better structural allocation of power.”

“Future administrations will need to decide whether they wish to make indefensibly broad claims of exclusive executive power or instead pivot towards a more nuanced stance,” she writes. “If the executive branch does not cede ground of its own accord, then Congress has tools at its disposal to bolster its constitutional authority over international engagement.”

“Both Congress’s traditional role in supervising agencies and the substance of these agencies’ work suggest that their international engagement should not necessarily partake of whatever exclusive powers the President holds over diplomacy and instead should be more subject to congressional control.”

TAKING DISABILITY PUBLIC

on research by

JASMINE E. HARRIS Professor of Law

In “ Taking Disability Public,” published in the University of Pennsylvania Law Review, Harris argues that strong privacy norms underwrite disability antidiscrimination law and policy. Preferences for protecting access to information about disability as a means of preventing disability discrimination, however, may actually prevent societal engagement with disability as a complex, socio-political identity and increase costs of compliance.

Disability as Private Conventionally, the prevailing associations with “privacy” are those of individual dignity and autonomy. Because legal doctrines and policies tend to conceptualize privacy as an individual concern, rather than a public interest problem, decisions to make disclosures and redress violations often remain with the individual. Both the rise of the public welfare system and state interest in its regulation have encouraged disability’s conceptual placement within the “private” sphere. Relatedly, the “medical model” of disability presumes a person is disabled by their own body, instead of by a lack of accessible public infrastructure, further emphasizing disability as an individual concern. Moreover, contemporary trends of the “optimized” workplace hinge on the idea of an “ideal worker” who performs the job in accordance with specific methods. This is challenging for employees who need accommodations to perform the same work in accordance with their individualized abilities. Further, because increased professionalization of human resources departments have afforded employees and their supervisors little discretion in making adjustments to accommodate for varying needs, employees with disabilities are often deterred from seeking and obtaining reasonable accommodations.

The Logic of Privacy

In describing why greater privacy could function as a prophylaxis for contemporary discrimination, disability antidiscrimination scholars put forth several theories.

Privacy law can be appealing in the context of antidiscrimination because it allows individuals to make their own decisions about self-determination and self-care, is easier to enforce than complicated disclosure regulations, and preemptively protects individuals. Moreover, privacy law can insulate people with less visible disabilities from disability discrimination that often manifests in harmful public scrutiny and prejudice. Additionally, maintaining disability privacy may help a person avoid algorithmic discrimination, which has grown in recent years as lawmakers have begun to use artificial intelligence to detect a person’s disability status and use it to monitor them and potentially exclude them from employment or enjoyment of public services and accommodations, believing that their disability creates a risk for society.

Further, contemporary antidiscrimination laws are highly imperfect and may not offer as much post hoc protection or meaningful remedies for post hoc discrimination that flows from disclosure of information about disability. Discrimination can be difficult to prove under laws that require proof of intent and causation. Privacy law, on the other hand, operates on a fairly straightforward factual inquiry of whether a defendant attempted to obtain protected information or had a duty to protect confidential information and failed to do so. Thus, for someone seeking a remedy for disability discrimination, privacy laws may offer blanket protection against inadvertent secondary disclosures of disability information.

Privacy Norms as Antidiscrimination Law

In the context of disability, different areas of the law “nudge” privacy by explicitly requiring secrecy, accepting the negative valence of disability as a “fact,” and by emphasizing the law’s role in remedying harmful disclosure.

Many disability adjudications happen in informal settings with little or no public access, for the purported reasons of preventing embarrassment and stigma. In many of these non-public proceedings, it is not even required for the person with the disability to be present, and official records are not available to review on legal databases or through public requests.

Across several scenarios, education law discourages disclosure of disability information beyond a strict “need to know” basis.

“[O]ften, schools use privacy laws as a sword to enforce social norms of disability as deficient and stigmatizing, or, paternalistically, in the best interests of young people to protect them against longterm risks associated with these social norms,” Harris writes.

In the context of disability, tort law is used to protect against and remedy the harm that comes from an unintended disclosure of a “private” fact, such as one’s disability status. This paradigm reinforces the idea that one’s disability is inherently negative information. Harris uses LGBTQ+ history to draw parallels between tort law’s treatment of LGBTQ+ identities as legally private facts and broader social oppression.

The Costs of Privacy

Our collective overvaluing of privacy has made it impossible to accurately measure societal disability — especially disability that is not “visible.” This has led to many misconceptions about disability, including false notions about its prevalence and homogeneity.

Particularly in the employment context, privacy in the context of disability often hurt people with disabilities and prevent them from securing work because employers fear potential liability. For example, empirical studies have shown that when job applicants choose to leave resume gaps unexplained, employers tend to be less likely to hire them on account of the ambiguity — so, although people with disabilities are not legally obligated to disclose their disability to their employer, non-disclosure often comes with significant risks.

Additionally, for a person with a disability who seeks benefits such as workplace accommodations, the ADA creates a “‘double bind,’” requiring the person to demonstrate both that they are qualified to

perform essential functions of a job and that they are “substantially” impaired. Not only does this exacerbate the binary understanding of disability as being either unreal or vastly incapacitating, but it also encourages employees with less visible disabilities to attempt to self-accommodate or “pass” as non-disabled to avoid getting stuck between the law’s conflicting requirements.

The Value of Publicity

“Outside of disability law, several privacy law scholars have moved away from a narrow framing of privacy as purely an individual right to self-determination by recognizing public interests at stake in the production and circulation of information,” Harris writes. “These discussions among scholars can help us better understand why some degree of privacy must exist in the context of disability identity and status but, perhaps most relevant to the disability space, why privacy is not absolute nor simply a matter of individual choice.”

Privacy, some scholars argue, functions not only as a private right but also as a public good, as it is difficult for any individual to have privacy without all individuals having a similar minimum level of privacy. In all, Harris argues that privacy discussions in the context of disability must be contextual and nuanced.

On the other side of privacy, publicity values offer crucial opportunities to reform social norms around disability. Embracing disability as a public issue can help to create a more inclusive society wherein people with disabilities can occupy the sociopolitical identity of having a disability without shouldering the burden of that identity on a solely individual basis.

Harris sets out a series of recommendations as to how to make disability more visible, beginning first with the need to collect more data on the impact that contemporary disability laws and policies have on society. Moreover, social science indicates that the workplace and higher education are the most impactful places wherein people with less visible disabilities can “come out,” thus suggesting that targeting publicity efforts in those two environments may offer the greatest opportunities to change social norms. Finally, Harris suggests alterations to threshold questions that categorize people as “disabled,” stronger discrimination protections for those who choose to disclose their disabilities, and procedural shifts in the burden of proof and persuasion in disability litigation.

“Taking disability public requires a nuanced approach that surfaces the values and risks associated with legal designs that privilege privacy.”

JASMINE E. HARRIS

THE FUTURE of AMERICA’S HEALTH INSURANCE

on research by ALLISON K. HOFFMAN Professor of Law and Deputy Dean

Hoffman’s “How A Pandemic Plus Recession Foretell the Post-JobBased Horizon of Health Insurance,” published in the DePaul Law Review, describes problems that arise with a U.S. health insurance system overwhelmingly comprised of job-based coverage. The COVID-19 pandemic highlighted these problems, when hundreds of thousands of people lost their jobs — and, in turn, health insurance — during a health emergency. Hoffman predicts that recent events could herald in significant shifts in the way the U.S. organizes and regulates health insurance.

The History and Present State of Job-Based Health Insurance

About half of all Americans are covered by employer-sponsored health insurance (ESI), which has been the dominant source of U.S. health care coverage since the twentieth century.

Even prior to the COVID-19 pandemic, job-based health insurance accessibility and affordability were declining. Not only were fewer employers offering health insurance to their employees, but among those that did, the cost to both employers and employees continued to rise.

First, the number of people working in non-traditional arrangements, such as 1099 or “gig” work, has increased in recent years. Though measuring this data poses challenges, much of this work tends to be structured in ways that does not obligate the employer to provide benefits, such as health benefits.

More critically, many employers, including large corporations, increasingly express frustration at healthcare’s rising costs and their diminishing power to negotiate for prices. Recent data from a survey conducted by a nonprofit organization that represents some of the largest employers and the Kaiser Family Foundation show that employers heavily favor greater healthcare regulation, such as stronger antitrust measures, more price transparency, government price caps, and even perhaps Medicare expansion.

What COVID Revealed About Having Health Insurance Tied to Work

“Because of the high costs and stakes of COVID-19 care, the federal government and states scrambled to try to keep people insured even as they lost jobs and to provide access to testing and some medical care even if not insured,” Hoffman writes. “The patchwork of policies enacted to pursue these goals perfectly captures the overly complicated healthcare financing system in the United States.”

While several pieces of legislation focused on ensuring that COVID-19 testing and vaccinations remained free regardless of insurance coverage status, COVID-19 treatment was less regulated.

About two to three million people became uninsured between March and September 2020. Though this is a high number, it is only a fraction of the number of people who became unemployed during this timeframe, in part because of efforts by policymakers and companies to keep people insured. For example, legislation and voluntary efforts by employers allowed some employees to retain their health insurance during a temporary or permanent job loss. Others who lost jobs were able to enroll in Medicaid or plans through the Affordable Care Act marketplaces. For those who remained uninsured, the costs of COVID could be overwhelming (the average charge for someone hospitalized with COVID-19 was by one estimate $43,986 and for ICU patients using mechanical ventilators, $198,394).

The initial policy response included the Trump Administration’s extension of the use of COBRA, which enables people to retain health benefits after losing a job, and Congress’s passage of the Families First Act, which discouraged States from restricting Medicaid enrollment requirements and provided $64 million to the Indian Health Service. The Biden Administration added to these efforts by making it easier for people to sign up for ACA marketplace plans, though a special enrollment period increased subsidies to buy coverage.

The Future Horizon of Health Insurance

These pre-pandemic and pandemic experiences have illuminated the benefits of moving away from job-based health insurance. Even more, employees may prefer to disentangle work from healthcare to prevent their employer from accessing private healthcare information, and employers may prefer to divorce healthcare from work to avoid tension with employees regarding what types of claims plans cover. Additionally, separating healthcare from employment may also grant individuals greater flexibility in pursuing entrepreneurial and other non-traditional career paths.

Admittedly, the transition away from job-based health insurance will be challenging in large part because of the lack of political support for any one solution.

Proposals for the Post-Job-Based Horizon of Health Insurance

1. Remove the ACA Firewall Between Group and Nongroup

Coverage

One solution experts suggest is removing the ACA “firewall” that encourages people to enroll in their employer’s plan rather than an individual plan under the ACA. Hoffman writes that this solution would especially assist low-income people who qualify for higher subsidies.

2. Voucherization of Health Insurance

Individual Coverage Health Reimbursement Accounts (ICHRAs), which allow employers to make pre-tax contributions to individual coverage plans for employees, offer another alternative. Small companies and companies with sicker workforces can use ICHRAs to avoid shouldering too much risk; however, plans individuals obtain using ICHRAs may not be as good as job-based health plans.

3. Medicare for All

A Medicare for All (MFA) plan would involve moving everyone to public Medicare coverage, creating one streamlined, single-payer system. Hoffman writes that “many experts have estimated that this plan, which would leave no one uninsured or underinsured, would result in little or no growth in national healthcare spending.” To combat risks associated with the inevitable disruption to America’s finance systems, advocates have suggested longer “phase-in” transition periods. Yet, this option is politically the most challenging.

“[T]he goal is a policy that simultaneously offers an alternative to employer plans in the short term and builds a foundation for a more equitable and efficient health insurance system in the long term,” Hoffman writes.

Not only would this solution lessen employers’ stressful involvement in the healthcare business while still providing their employees with health benefits, but it could also save employers money. The co-authors describe that such a plan would be voluntary — employers could elect whether it was beneficial to participate. Moreover, it would be possible to integrate employer contributions and ACA-style subsidies in a way that might expand coverage to people who could not previously afford their share of the cost of their employer plans or who are less often offered coverage through such plans, such as part-time or gig workers.

Importantly, premiums paid by employers and employees would help finance the employer public option, rendering it more broadly politically palatable than MFA. Further, this proposal may even fit into Byrd Rule limitations, meaning it could pass the Senate in a budget reconciliation bill.

Overall, COVID-19 did not create, but did expose, a myriad of flaws intrinsic within America’s current health care financing system. Hoffman urges policymakers to think deeply about the need for reform.

4.

A Public Option for Employer Health Plans

Finally, Hoffman worked with scholars Howell Jackson and Amy Monahan to develop a new proposal for an “employer public option” that would allow employers to enroll all members of their health plans to a Medicare-based public option.

“This system no longer serves many people well during the best of times, and even less so during a public health crisis,” Hoffman writes. “With these shortcomings in such clear relief, it is an ideal time to begin to invest in policies that can foster a more secure, less complicated, and more equitable post-pandemic horizon of health insurance.”

“[I]t is an ideal time to begin to invest in policies that can foster a more secure, less complicated, and more equitable post-pandemic horizon of health insurance.”

ALLISON K. HOFFMAN

LONGER TRIPS TO COURT CAUSE EVICTIONS

“Controlling for census tract characteristics and residence type, we find that excess commuting time increases default rates.”

on research by

DAVID HOFFMAN William A. Schnader Professor of Law and Deputy Dean

In the first controlled study of eviction rates across time in a large urban center, Hoffman and colleague Anton Strezhnev of the University of Chicago found that Philadelphia tenants who live further away from the city’s courthouse and rely on mass public transit are more likely to fail to show up, leading to eviction by default. In “Longer Trips to Court Cause Evictions,” Hoffman and Strezhnev report their findings that excess commuting time increases default rates.

The study reviewed nearly 235,000 evictions filed against approximately 300,000 Philadelphians from 2005 through 2021. Using datasets obtained through the non-profit Philadelphia Legal Assistance (PLA), the Pew Charitable Trusts, and elsewhere, Hoffman and Strezhnev found that 40% of tenants in eviction proceedings during that period lost due to default.

Like many cities across the nation, Philadelphia continues to suffer from an ongoing eviction crisis; Hoffman and Strezhnev write that because commuting time is plausibly unrelated to other causes of eviction, policymakers may consider it as an instrument to better identify how eviction causes downstream social problems and prevents disadvantaged people from flourishing.

Preliminary Considerations and Findings

Hoffman and Strezhnev found it “surprising that although policymakers describe defaults as a part of the eviction crisis [in Philadelphia], we lack information about their incidence across jurisdictions.” Accordingly, the authors set out to explore questions such as “How many defaults are there, really? Do they lead to evictions? Who fails to show up, and why? And given the shock of Zoom justice wrought by COVID-19 in eviction court, did making justice remotely accessible matter to outcomes?”

According to the calculations of Hoffman and Strezhnev, for every 10 minutes in additional commuting time, tenants are between .65 and 1.4 percentage points more likely to default. A one-hour increase in commuting time has a 3.9 to 8.6 percentage point average effect on the probability of tenant default. Were all tenants to be able to get to their hearing in 10 minutes or less, Philadelphia would have eliminated approximately 4,000 to 9,000 such evictions due to default during that time.

“Controlling for census tract characteristics and residence type,” write Hoffman and Strezhnev, “we find that excess commuting time increases default rates. This effect holds when comparing properties owned by the same landlord, when controlling for direct distance to the courthouse, and even when controlling for commuting time measured during the weekend.”

In contrast, when tenants were offered Zoom or virtual hearings during the COVID-19 pandemic, the commuting time effect disappeared. The result is also absent for tenants in public housing, whose eviction processes are laxer and are not built around defaulting those who show up to court late.

Moreover, Hoffman and Strezhnev also found that “petitions to reopen defaults are rarely filed and infrequently granted.”

Materials and Methods

From PLA, the authors obtained 339,172 eviction documents involving residential properties from January 2005 through July 2021. Hoffman and Strezhnev filtered the dataset to include only properties from which they could “unambiguously parse and address number and street name from the text of the listed address and obtain, from Google Maps API, a correctly matching address with a latitude and longitude.”

For demographic covariates of concern — namely, the socioeconomic characteristics of different Philadelphia neighborhoods — the authors gathered median income and median contract rent from the 2015 American Community Survey; they used 2010 census block-level data for racial demographics.

Landlord data presented a unique problem that required a creative solution. “Because the docket often only lists the filing LLC as the plaintiff, and since individual landlords may own multiple properties through different LLCs, we would be unable to identify common landlords across eviction proceedings without additional data.” Accordingly, to obtain landlord data, Hoffman and Strezhnev used a novel database of Philadelphia landlords obtained through an agreement with the Pew Charitable Trust to match roughly 55,000 landlords to 136,000 rental properties.

The authors’ primary independent variable of interest was, of course, the commuting time to the Municipal Courthouse. For this determination, they queried the Google Maps Distance Matrix API to determine the estimated distance and travel time between each building in the dataset and the Philadelphia Municipal Courthouse. They measured the time and distance to the courthouse using public transit on a weekday (when hearings are scheduled) and on the weekend.

Upon extracting the outcome of the proceedings from the docket, Hoffman and Strezhnev landed on a dataset of 223,840 eviction proceedings across 61,104 unique buildings and 283,812 unique named defendants. The plurality of judgments were in favor of the landlord and nearly all were defaults, with the second most common outcome a settlement between the parties, and the third most common withdrawal of the case by the landlord.

In non-public housing (non-PHA) cases, default rates varied over time and space with the earliest period of 2005 to 2010 having the highest rate of 40%. The data showed a steady decline in that

number over time, though, which coincided with the imposition of new landlord regulations that increased the costs of filing frivolous evictions. In public housing cases, default judgments accounted for about 20 to 25% of evictions and showed no similar pattern of decline. “Because those evictions are so distinctive,” wrote Hoffman and Strezhnev, “for our primary analysis, we focus on non-PHA cases.”

In addition to the main text, the authors provide an impressive amount of supplementary information that includes discussions and analyses of data pre-processing, sensitivity analysis, the frequency of reopening default judgments, weekday vs. weekend commuting times, effects of commuting time on judgments by agreement and complaint withdrawals, absence of seasonality in treatment effects, and regression tables for the main text results.

Finally, the authors replicated their findings using a dataset of over 800,000 evictions from Harris County, Texas. They used data accessed through the Eviction Lab and “found results extremely similar to Philadelphia, despite the radically different jurisdictions.” Since mass transit is largely unavailable in that location, the authors focused on the relationship between driving time (to the local justice of the peace office) and the likelihood of eviction. They found that a 10-minute increase in driving time resulted in an increase in the likelihood of default by 3%. Even when comparing evictions taking place in the same building, in the same month, but which are assigned to different courthouses, defaults are more likely in the courthouse that is further away.

In conclusion, Hoffman and Strezhnev find that their results “indicate that policymakers should consider the distributive effects of rules which forfeit legal rights conditional on showing up to the courthouse at a particular time.” They suggest that alternatives “from remote hearings, to easy rescheduling, to no-excuse reopening” are not only available but would also “reduce the incidence of this pathologic practice.”

Turning to the legal academy, the authors encourage scholars to consider whether other legal proceedings are similarly impacted by transit. “Essentially, we highlight the role of physical place in producing access to justice. And our results may offer a novel and better identified tool to study the downstream effects of evictions.”

DAVID HOFFMAN

THE INVENTION of ANTITRUST

In “ The Invention of Antitrust,” published in the Southern California Law Review, antitrust expert Hovenkamp offers a thorough analysis of the shifting economic, political, and judicial tides from the late nineteenth century to the middle of the twentieth century that formed the foundation of antitrust law as we know it today. He makes the case that Progressive Era reformers pushed approaches to market intervention to the left, even as boundaries and structures were still being defined, leading to an extended neoliberal correction that emerged in the reaction to the New Deal.

In the first three decades of the twentieth century, policymakers “invented antitrust law,” Hovenkamp writes. “In fact, after decades of experimentation we are reclaiming much of it.”

The Sherman Antitrust Act of 1890 and the Clayton Antitrust Act of 1914 were accompanied by a Progressive antitrust movement that was “both political and economic,” reflecting growing concerns about industrialization, the labor movement, consumer power, and the evolution of distribution in an era of technological advancement. In this turbulent economic environment, marginalist economics and industrial organization theory offered competition analysts new tools to assess the marketplace.

Hovenkamp refutes the notion that the Progressives were focused only on size in their antitrust efforts and ignored the opportunities it created. United States Supreme Court Justice Louis Brandeis, for example, was an advocate for scientific management and its beneficial effect on pricing. The response to the growth of trusts was, instead, based in concern that exclusionary practices would be a vehicle for achieving and sustaining higher prices and cementing market dominance.

The Chicago Conference on Trusts

The emerging trust problem was addressed at the Chicago Conference on Trusts in 1899, “an exceptional window into the contemporary mindset,” Hovenkamp writes. Its attendees, which included politicians, economists, lawyers, social scientists, business and labor leaders, insurers, and even clergy, represented every interest group with a stake in policy regarding trusts. Opinions about the treatment of trusts naturally varied widely, but “the strongest consensus around a single view was that the trusts should be controlled by changes in corporate law.”

Following the conference, Hovenkamp writes, “Progressives began to focus more narrowly on the antitrust laws and the discipline of economics as the preferred tool for dealing with the trusts.” Political and moral rhetoric has always been present in the conversation around antitrust, as the conference laid clear, but it failed to serve as a policymaking guide.

Marginalist Economics and Market Revisionism

As Hovenkamp emphasizes, “one cannot understand the set of tools that the Progressive antitrust policy makers deployed without understanding their underlying economics.” And by the 1930s, nearly all economists were marginalists, an “undervalued” movement in the history of antitrust. Marginalism offered a forward-looking perspective on value, placing it in the willingness to pay for the next, or “marginal,” unit of something. This served as a break from the classical view of value as being present in a good or the labor used to make it.

“Today antitrust policy sits between the aggressiveness of the Roosevelt Court on one side, which often condemned competitively harmless practices, and the decaying remnants of the Chicago School on the other.”

on research by

HERBERT HOVENKAMP James G. Dinan University Professor

Marginalist analysis presented new ways to quantify supply and demand, expanded the use of mathematics in economics, and undermined the classical view of markets as inherently competitive.

“As a result, marginalism began to make a broad and unprecedented case for selective state intervention in the economy,” Hovenkamp writes.

The shift toward understanding markets as a “created human institution,” rather than simply a product of nature, “was perhaps Progressive economics’ most important contribution.” The markets were increasingly viewed as a reflection of state policy and judged accordingly, and concerns about market coercion grew. Progressive law school professor Robert Hale gave voice to trepidation about the way markets could limit freedom, writing that prevailing economic systems were “permeated with coercive restrictions of individual freedom, and with restrictions, moreover, out of conformity with any formula of ‘equal opportunity.’” This view filtered into public law as well as into competition law, where it influenced a more aggressive approach to vertical mergers.

The development of partial equilibrium analysis, which Cambridge University professor Alfred Marshall borrowed from the science of fluid mechanics, allowed analysts to group firms producing similar products into discrete markets, making the analysis of market behavior “both tractable and useful.”

The focus on individual industries took over the field of business economics and shaped approaches to antitrust policy. Increasingly, regulation was seen as a “corrective for market failure” — those instances when ordinary market forces are insufficient in keeping an industry operating “tolerably well.” Over time, encouraged by the Great Depression, regulation expanded beyond this narrow framework to question whether markets can be trusted to remain efficient and egalitarian at all.

Among the reasons for doubt, Progressives identified pricing discrimination as one of the evils brought about by the trusts, and “most of the economic foundations for our understanding of price discrimination developed during the Progressive Era as an outgrowth of marginal analysis,” Hovenkamp writes.

Potential competition, which had been a “crucial” element in early antitrust analysis as a deterrent to monopoly pricing, “was natural and ordinarily to be expected,” the common Progressive position went. But under closer inspection, policymakers began to worry that “dominant firms could devise practices that would prevent or limit its operation.”

Working with all of these factors in mind, economists John Bates Clark and his son John Maurice Clark formed arguments that helped develop the basic model for antitrust that still holds today, requiring

a showing of “both monopoly power and anticompetitive practices,” Hovenkamp writes. Over time, issues of potential competition evolved into the modern doctrine of “barriers to entry” — “natural or fabricated obstacles” that stood in the way of competition, a term the Supreme Court first used in U.S. v. American Tobacco Co

Over time, as doubts grew about potential competition and its efficacy, assessing the number and power of a company’s actual competitors became more important. By the 1940s and 1950s, “relevant market” analysis was central to questions of market power in a rising tide of judicial decisions.

Another great shift was taking place through the first half of the twentieth century, as conduct-focused antitrust analysis — or wrongful acts, as the 1911 Standard Oil Co. v. U.S. decision placed at the center of its Sherman Act review — ceded ground to concerns of market structure and its effect on the monopoly problem. While Progressive Era cases “often read like tort cases,” Hovenkamp writes, the structuralist revolution “completely flipped that script,” making evidence of bad conduct “almost but not quite irrelevant” in assessing a case.

The Emergence of Vertical Competition Policy

Hovenkamp’s research further tracks the final element of the Progressive contribution to antitrust law: They were the first to examine vertical practices and integration as threats to competition, leaving behind a contribution to the law of vertical integration and restraints that was “formative but also modest.” The Progressives focused on the relationship between vertical integration and “realistic threats to monopoly,” steering antitrust law to the left and condemning practices where, Hovenkamp writes, “harm to competition was never seriously threatened.” By the early 1930s, “the law of vertical practices had developed to a place not all that different from where it is today, save for the treatment of resale price maintenance.”

In assessing the Progressives’ full contribution to antitrust law, Hovenkamp writes that their skepticism about the “benign qualities of markets” led to a more aggressive enforcement environment. As theories of imperfect and monopolistic competition developed, “antitrust policy began to veer left, often past all reasonable boundaries, condemning efficient practices where the creation of monopoly was virtually impossible.”

Today, imperfect competition models have a clear place in the economic literature with well-established empirical power. Despite decades of change in antitrust law, Hovenkamp concludes, “the Progressive response — aggressive in its own time but quite moderate today — has proven to be surprisingly durable.”

HERBERT HOVENKAMP

NOWHERE TO RUN TO,

NOWHERE TO HIDE

on research by

PRAVEEN KOSURI Practice Professor of Law and Deputy Dean for Clinical Education

During an average semester, overseeing an entrepreneurship legal clinic requires patience, strategy, and creativity; amidst the COVID-19 pandemic and major racial reckoning of 2020, monitoring students’ work, meeting clients’ rapidly evolving needs, and maintaining personal wellness had never been more challenging. In a deeply thoughtful joint essay, Kosuri and co-author Lynnise E. Pantin, respective directors of the University of Pennsylvania Carey Law School’s Entrepreneurship Legal Clinic (ELC) and Columbia Law School’s Entrepreneurship and Community Development Clinic (ECDC), reflect on their work navigating a year that put disproportionate and extraordinary pressure on the small businesses their clinics serve. “Nowhere to Run to, Nowhere to Hide” was published in a special issue of the Clinical Law Review dedicated to reflections from 2020.

What Happens When the World Stops?

Many Black- and brown-owned businesses were operating at small profit margins even before stay-at-home orders dissolved customers and revenues for indefinite stretches. Some businesses were able to pivot to online sales and carry-out service, but those that necessitated close physical proximity — like hair and nail salons — had no way to adapt.

The pandemic brought a wave of employee layoffs as businesses struggled to survive. Generally, urban areas tended to be more affected by this than rural areas, and the gap between Black and white unemployment spiked.

In mid-April 2020, the first round of the Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus checks arrived. The Act enabled unemployed workers to file for Pandemic Unemployment Assistance (PUA) and provided $300/week payments through the end of July 2020. When many schools across the country opted for a virtual start to the 2020-2021 school year, parents who did not have the option to work remotely faced difficult choices.

Further, the pandemic put both landlords and tenants in a complicated bind. Without customers, businesses did not have revenue to pay their rent. Since many commercial leases tend to encompass long durations and include rent escalation and acceleration clauses, many small business owners were in jeopardy of losing their personal assets over non-payment. Across the country, municipalities, including both Philadelphia and New York, instated emergency eviction moratoriums and other related relief measures.

The CARES Act

The Paycheck Protection Program (PPP) authorized under the CARES Act, provided forgivable loans to businesses that kept employees on their payrolls.

The lending program, administered by Small Business Administration (SBA), began on April 3, 2020 and ran out of funds in a matter of weeks, prompting Congress to authorize an additional $310 billion funds for dispersal. Certain borrowers who were eligible for the First Draw PPP loans were eligible for Second Draw PPP loans, which opened in January of 2021 and effectively ended in May 2021 when the program ran out of funds.

The goal of the forgivable, revenue-replacement PPP loan program was to assist small businesses in meeting their short-term needs and retain workers on their payroll. Data revealed that the majority of PPP loans assisted the “smallest of businesses;” nonetheless, female and minority owners were disproportionately left out of relief efforts. Upon taking office, President Biden instated new rules that would make businesses who employed only themselves eligible for more money — a move meant to assist women and minorities, who were more likely to run one-person businesses. Nonetheless, research showed that PPP loans did not support businesses in locations that were hardest hit by the pandemic, such as New York.

“Initial evidence suggests that PPP assistance failed to meet the immense need of minority-owned small businesses in underserved communities struggled to access the available loans in early stages of the program,” the authors write.

Though there are several possible reasons for these disparities, the bottom line is that small business owners faced disproportionate financial hardship during the pandemic.

The George Floyd Protests and the 2020 Election

After Minneapolis police officer Derek Chauvin killed George Floyd, communities nationwide expressed outrage at the continued pattern of violence perpetrated by white police officers against Black men. In some instances, the outrage manifested into looting and vandalism.

The 52nd Street Corridor in Philadelphia, where 90% of store owners are immigrants or people of color, was one neighborhood in which looting and vandalism took place. Along this and many other corridors that experienced widespread looting, police were not present to protect the businesses, but instead created boundaries to curtail the destruction to certain geographic areas of the city. In New York, Mayor Bill de Blasio instated a citywide curfew throughout the first week of June but ultimately, an estimated 450 businesses across the city were vandalized. In response, de Blasio’s office enacted several small business support programs, including a grant fund specifically for those impacted by looting.

In November 2020, the election of Joe Biden and Kamala Harris signaled optimism to many; still, the ensuing attack on the U.S. Capitol building by a group hoping to prevent the transfer of power brought more violence, vandalism, and uncertainty.

Clinic Impact

Needless to say, COVID-19 and the George Floyd protests had incalculable effect on the students, faculty, curriculum, and clients of both ELC and ECDC.

In March 2020, both law schools quickly migrated to remote teaching. Students’ lives were greatly disrupted; many had to navigate sudden problems concerning housing, internet connection, private workspaces, personal health, family care, and more. Throughout the spring and fall semesters, wellbeing check-ins exposed a myriad of anxieties that stretched far beyond those of a typical clinic student.

Both authors separately recount their experiences through the pandemic, giving a face to the personal struggles that added to the already steep challenge of teaching during an inordinately complicated year; caring for family members, adapting to work-from-home orders, and having difficult conversations about systemic racism represented only a few of the immense burdens faculty carried on top of their duties as clinic directors.

Penn Carey Law and Columbia Law both successfully transferred their seminar curriculums to Zoom and strived to double their efforts to provide clients with the support they needed to stay afloat during evolving pandemic challenges. This involved developing guidance on shutdown order compliance, lease clauses, and insurance, as well as assisting in applications for financial relief programs, such as those rolled out under the CARES Act.

“The longer lasting pedagogical change from the summer of 2020 is the direct result of the George Floyd protests, not COVID-19,” the authors write. “It spurred many institutions and leaders to reexamine long-standing social and structural racism as it exists in every facet of American society. Since much of that systemic racism and inequality is baked into our legal systems and statutes, it is no surprise that law schools would take a closer look at their curricula to see how they can alter their education of tomorrow’s lawyers.”

Transactional clinics are deeply impacted by and intertwined with issues of racial and social justice. In the wake of the George Floyd protests, both law schools incorporated explicit pedagogical conversations about systemic racial and inequality into their curriculums.

Finally, in both clinics, clients displayed ample creativity and resiliency throughout the events of 2020.

“Our clients are the communities we describe,” the authors write. “They have lived through unchartered times and challenges no one ever anticipated. In their actions, we find inspiration.”

“The longer lasting pedagogical change from the summer of 2020 is the direct result of the George Floyd protests, not COVID-19.”

PRAVEEN KOSURI

EQUAL PROTECTION and ABORTION

on research

by

SERENA MAYERI Professor of Law and History

Along with co-authors Reva Siegel (Yale Law) and Melissa Murray (New York University Law), Mayeri submitted a Brief as Amici Curiae in Support of the Respondents in the case recently heard and decided by the Supreme Court of the United States (SCOTUS), Dobbs v. Jackson Women’s Health Organization. Based on the brief, Mayeri, Siegel, and Murray also co-authored “Equal Protection in Dobbs and Beyond: How States Protect Life Inside and Outside of the Abortion Context,” forthcoming in the Columbia Journal of Gender and Law next year.

HN 1510 Violates the Equal Protection Clause

The Supreme Court has long recognized that a woman’s ability and right to participate equally in society necessitates their autonomy over their reproductive lives. State actions dependent on sex-role stereotypes are unconstitutional under the Equal Protection Clause.

The Court has held, in cases such as United States v. Virginia (1996) and Nevada v. Hibbs (2003) that certain actions regulating pregnancy fall within the bounds of impermissible sex-role stereotypes and are thus subject to heightened scrutiny. Accordingly, because HB 1510 “is designed to deprive women, and not men, of their right to make choices about whether or not to have children,” Mississippi must satisfy heightened scrutiny by demonstrating that the state has an “an ‘exceedingly persuasive’ justification for its choice of means that does not rely on ‘overbroad generalizations’ about the differences between sexes.”

In Virginia, the Court “examines the law’s historical context and the State’s decision-making in a larger policy context to ascertain whether the State’s sex-based classification is being used ‘to create or perpetuate the legal, social, and economic inferiority of women.’” Under the Virginia standard, HB 1510 fails heightened scrutiny. Not

only do Mississippi’s legislative findings reflect outdated sex-based stereotypes about women’s roles in the family, but the State also failed to pursue other “less discriminatory means of reducing abortion and supporting those who seek to raise children.”

Mississippi’s Justifications for HB 1510 are Inextricably Intertwined with Outdated Stereotypes About Women

The nineteenth-century anti-abortion campaign relied on claims regarding a woman’s pre-ordained societal role as a wife and mother that the Court has since recognized as constitutionally suspect. Antiabortion physicians, led by Dr. Horatio Storer, asserted that a woman’s avoidance of this role would “necessarily cause derangement, disaster, or ruin.” Moreover, Storer and others believed that abortions would “insidiously undermine[]” a woman’s reproductive health, permanently rendering them infertile and bringing about other uterine ailments. These issues, as well as others, were all explained as “a ‘direct result of this interference with nature’s laws.’”

Mississippi relies on outdated conclusions about women’s inability to make autonomous decisions about their bodies and lives, entirely omitting any discussion of the physical, mental, and emotional risks associated with pregnancy, forced birth, and childrearing.

By reasoning that its actions are in the best interest of the “maternal patient,” Mississippi invokes the same sex-role stereotypes as the nineteenth-century physicians, who assumed that a woman’s “natural” place in society was to be a mother and any deviation from that role would cause harm. Under HB 1510, the decision as to whether a woman should become a mother belongs to the State, not to the woman. Mississippi’s abortion ban relies on unconstitutionally “overbroad generalizations about the different talents, capacities, or preferences of males and females.”

Failure to Explore Less Discriminatory Means

Under Virginia, a state must demonstrate that its sex-discriminatory means of pursing its goal is “‘substantially related to the achievement of’ important government ends, by advancing an ‘exceedingly persuasive justification’ that does not rely on sex-role stereotypes.”

HB 1510 fails to uphold its purported aim of protecting women and instead exposes them to greater harm. Overall, the Mississippi maternal death rate of 33.2 deaths per every 100,000 live births is “alarmingly high,” and statistics for Black women in Mississippi are even worse, averaging between 51.9 to 61.4 deaths per 100,000 live births. A woman is 14 times more likely to die from pregnancy or childbirth than from abortion. Considering these factors, forcing a woman to give birth against her will cannot reasonably be seen to protect her health.

Moreover, Mississippi consistently rejected alternative and lessburdensome policy options that the State could have pursued to attain its goal of protecting the health of women and families.

First, Mississippi could have provided access to regular health care and checkups — something that research has shown to reduce maternal deaths by up to 60%. Nonetheless, Mississippi has turned away available federal funds and refused to expand Medicaid coverage under the Affordable Care Act (ACA), thus “compromising health care access for under-resourced Mississippians.”

Second, Mississippi could have provided financial assistance to low-income women, as a lack of financial resources is one of the most common reasons women provide for desiring to end a pregnancy. Temporary Assistance to Needy Families (TANF) enables states to channel federal funds to low-income residents with children.

Mississippi spends a small sliver of its TANF funds on directly assisting families and maintains a “family cap” policy that limits TANF benefits for additional children born into families already receiving public assistance. Mississippi also has turned away federal funds to subsidize childcare for low-income parents, despite a long waiting list for care. Mississippi’s lack of support for low-income families is particularly harmful considering that many women seek abortions for “fear that having another child will compromise their ability to provide for the children they already have.”

Third, Mississippi continues to promote abstinence-only sex education even though information about and access to contraception lowers rates of unplanned pregnancies. Though the State had the option of “using federal monies to implement comprehensive sex education at no cost,” it chose to fund “a ‘Teen Pregnancy Prevention Summit’ featuring pamphlets discouraging the use of contraceptives because they supposedly harm girls’ ‘physical[,] emotional and spiritual well-being.’” Mississippi has some of the highest rates of teen pregnancies and STDs in the country, but it has chosen not to take actions that teach young people how to prevent them, instead opting to enact HB 1510, which “coerce[s] women into giving birth under dangerous, demeaning conditions.”

Modern Abortion Access vs. Eugenic Historical Context

Some anti-abortion advocates and judges have sought to link abortion to eugenics. These efforts “ignore the fundamental differences between a state-sponsored program of eugenic regulation designed to control the demographic character of the community and a law protecting an individual’s decision to terminate a pregnancy,” the co-authors write. “In the former, decisional authority rests with the state. In the latter, the state protects the authority of an individual to make reproductive decisions consistent with her individual beliefs and circumstances.”

Twentieth-century eugenic policies did not focus on abortion but rather on strategies such as sterilization to curtail pregnancies among the “feebleminded,” “habitual criminals,” and interracial couples. By mid-century, sterilization abuse largely targeted lowincome communities of color; yet, when abortion opponents discuss the “eugenic potential” of abortion, they largely ignore the structural obstacles that people of color face — such as financial, employment, or educational disparities — when making decisions about reproductive health.

HB 1510 does not, as Mississippi claims, protect its residents’ health, but instead upholds antiquated sex-role stereotypes that the Supreme Court has long-held unconstitutional under the Equal Protection Clause.

“At the heart of both the Due Process Clause and the Equal Protection Clause is the individual’s right to be free from state imposition of traditional gender roles,” the co-authors write. “HB 1510 denies that fundamental constitutional guarantee.”

“[E]quality claims have the potential to enable new intersectional forms of coalition and to transform the conversation about the meaning of our values and our practices, inside and outside the abortion context.”

SERENA MAYERI

SANDRA MAYSON Professor of Law

PRETRIAL DETENTION and the VALUE OF LIBERTY

In “Pretrial Detention and the Value of Liberty,” published in the Virginia Law Review, Mayson and Megan T. Stevenson of the University of Virginia School of Law break new ground in confronting “the question of what degree of risk justifies pretrial detention if one takes the consequentialist approach of current law seriously.” The authors note that there is “nothing approaching a consensus answer to this question,” particularly since it “requires an explicit tradeoff between liberty and security, values that are infrequently measured and difficult to compare.”

The authors survey existing law and present a conceptual framework — “a straightforward consequentialist one” based on doctrine that “establishes a simple cost-benefit framework” — for answering the question and propose “a novel empirical method for estimating the relative personal cost of incarceration and crime victimization,” which they call “relative harm valuation” (RHV). The results of the survey, which asks respondents to choose between being the victim of specific crimes or being incarcerated for varying time periods, show that the “stated consequentialist rationale for pretrial detention cannot begin to justify our current detention rates.”

What Degree of Risk Justifies Detention?

Mayson and Stevenson begin with an overview of pretrial preventive detention, which is based in the constitutional principle — as interpreted by the Supreme Court — that such detention is authorized “when the government’s interest in security outweighs the individual’s interest in liberty.” Determining what degree of risk justifies detention, however, is challenging because of “the difficulty of valuing the intangible harms in the balance,” write Mayson and Stevenson.

The authors discuss United States v. Salerno, which “appeared to authorize pretrial preventive detention on pure cost-benefit — or consequentialist — grounds,” but left open a crucial question: “How dangerous must a person be to justify the state in locking her up for the greater good?”

Mayson and Stevenson note that the Bail Reform Act of 1984 also implements a cost-benefit framework for preventive detention in federal statutory law, although in practice it has led to high detention rates “without rigorous cost-benefit analysis.” State and local laws governing pretrial detention similarly provide minimal guidance about what degree of risk justifies detention.

“To the authors’ knowledge, no statute or court has articulated a risk standard that anchors a numerical probability to a defined time period,” write Mayson and Stevenson.

The authors make clear that the goal of the article is not to endorse the current cost-benefit framework for pretrial detention but rather to operate within it. The costs of detention fall not only on the person deprived of liberty but also on their loved ones, as well as on taxpayers who foot

the bill for incarceration. The primary benefit of detention is to prevent future crime, with the primary beneficiary being the person who would otherwise be a victim.

“The point at which detention averts greater harm than it inflicts is a function of (1) the costs of detention, (2) the number and nature of crimes that detention will avert, and (3) the costs of those crimes,” write Mayson and Stevenson.

The authors note that previous cost-benefit analyses “although valiant, rely heavily on the dubious translation of intangible costs — liberty deprivation and criminal victimization — into monetary terms.” Such an approach, they write, introduces both “unnecessary noise” and bias.

Relative Harm Valuation

Mayson and Stevenson deploy RHV, which “aims to estimate the relative harm of incarceration versus crime victimization while avoiding some of the distortions that plague traditional cost-benefit and contingent-valuation methods.” They call their method “intentionally simple, and it echoes John Rawls’ famous notion that the principles of justice are those that a rational person would choose behind a ‘veil of ignorance’ as to her own traits and position in society.”

RHV presumes that the cost of crime to the victim and the cost of detention to the detainee are the “two costs in the preventive detention calculus that swamp all the others.” The authors’ survey method asks respondents to compare these two central harms directly against one another.

The survey results reveal that respondents find incarceration to be “an incredibly harmful experience” with most choosing to be crime victims over even short periods of incarceration. Regarding specific crimes, “[t]he median respondent says that a single day in jail is as costly as a burglary, that three days are as costly as a robbery, and that a month in jail is as costly as an aggravated assault.” These results were quite similar across race, gender, and socioeconomic class as well as for those who have and have not had personal experiences with incarceration or crime victimization.

“The severity of the harm that incarceration inflicts (according to our median respondent) means that preventive detention can only be justified on consequentialist grounds if there is a very high risk that the person would otherwise commit serious crime,” write Mayson and Stevenson.

The Discrepancy Between Theory and Practice

This extremely high risk-threshold raises two primary questions according to Mayson and Stevenson.

“The first is when, if ever, we can identify risk that is grave enough to warrant detention under the survey-derived standard,” they write. “The second is whether our basic premise

— that the consequentialist analysis must not discount the welfare of arrestees relative to crime victims — might be misguided.”

Mayson and Stevenson consider whether actuarial pretrial risk assessment tools might be capable of identifying individuals who pose a sufficient risk to warrant detention and finds the prognosis “not promising.” They then address the omissions of murder, rape, and domestic violence from their analysis as they wouldn’t expect the RHV survey method to function well for such crimes.

“It is not meaningful to ask how long someone would stay in jail to avoid being murdered; most everyone would agree to a lifetime,” they write.

That said, the authors note that their methodology could be used even for such crimes “if one were willing to make an assumption about how the harms of these crimes compare to the ones analyzed here.” The specific circumstances of a given case may also permit a court to identify those who present a substantial enough risk to justify preventive detention.

“Given the high risk-threshold for preventive detention and the limits of our predictive abilities, pretrial detention on the basis of dangerousness should be rare,” write Mayson and Stevenson. “But it is not.”

Each day in the United States, nearly half a million individuals are detained pretrial — an astonishing number that is understated as it is a snapshot at a single moment in time; over the course of a year, more than 10 million individuals cycle through U.S. jails. While the reasons cited for pretrial detention vary, the authors hypothesize that “pretrial detention rates are high — and will remain high in the absence of constraints — in large part because judges, lawmakers, and ordinary citizens discount the well-being of potential detainees relative to the well-being of potential crime victims.”

The authors urge caution in this practice as “the current scale of pretrial incarceration suggests that the retributive impulse has been running without check in an environment in which it should be, at most, an occasional and suspect guest.”

Mayson and Stevenson’s survey results suggest that the current system is “inflicting pretrial punishment, and they counsel a rethinking of pretrial law and policy.”

“The state’s authority to deprive a person of freedom on the basis of potential future harm is one of its most fearsome powers,” conclude Mayson and Stevenson. “Unless we are willing to confront the difficult tradeoffs that preventive detention requires, we risk the possibility that vague consequentialist reasoning will serve to cloak other, and uglier, forces.”

“Unless we are willing to confront the difficult tradeoffs that preventive detention requires, we risk the possibility that vague consequentialist reasoning will serve to cloak other, and uglier, forces.”

on research by SHAUN OSSEI-OWUSU LPS’08

Presidential

Professor of Law

VELVET ROPE

“[P]ublic accommodations are important sites for inclusion into society. The relative paucity of work in this area highlights the limited vocabulary legal scholarship has for thinking about law, recreation, and leisure.”

In “ Velvet Rope Discrimination,” published in the Virginia Law Review, Ossei-Owusu pioneers the legal analysis of race, gender, and sex discrimination that social scientists have demonstrated to be pervasive in bars, nightclubs, and restaurants across the country. While tactics such as dress codes and gender-based pricing schemes have been litigated for decades, legal academics have devoted relatively little scholarly attention to the practices’ civil rights implications.

Regulatory Framework

Throughout the twentieth century, courts wrestled with whether bars, restaurants, and dance halls counted as “public accommodations” for the purposes of civil rights laws. The first half of the century yielded a patchwork of different decisions and statutory approaches in the context of race; in the context of gender, social norms determined much of the country’s discrimination patterns.

In 1964, Title II of the Civil Rights Act explicitly prohibited discrimination on the grounds of race, color, religion, or national origin in the “goods, services, facilities, privileges, advantages, and accommodations of any place of public accommodation.”

The Flowering of Velvet Rope Discrimination

Notably, Title II did not prohibit gender-based discrimination. As women gained more economic power, the trend of gender-based pricing began to emerge at discotheques and nightclubs. During “ladies’ nights,” establishments sought to attract more women by offering them free or discounted admission, food, and drinks.

“More often than not, these public accommodations’ economic rationales were based on the heteronormative assumption that inducing women into these establishments would lead to increased presence by men, who would cross-subsidize the discounts,” Ossei-Owusu writes.

Courts were divided over the legality of gender-based pricing. Some saw no issue, reasoning that offering discounts to women did not equate to discouraging men, and thus no discrimination could have taken place; others noted that sex-based classification was constitutionally suspect and struck down “ladies’ night” practices as discriminatory against men.

Following the passing of the Civil Rights Act, bars and nightclubs employed a host of schemes to discriminate against racial minorities. Racial minorities were commonly denied entry, overcharged, required to show excessive identification, or told there was a “private party” using the facilities. In particular, the enforcement of “dress codes” emerged as a highly administrable means of discrimination, empowering nightclub personnel to cite “improper attire” as the reason they turned racial minorities away at the door.

Contemporary Velvet Rope Discrimination

Opinions surrounding contemporary velvet rope discrimination are complex. In some instances, velvet rope discrimination mirrors what Angela Onwuachi-Willig calls “volunteer discrimination,” or, when protected groups agree to perform in accordance with voluntary policies. Ladies’ night makes going out less expensive for women; dress codes allow racial minorities to “perform middle-class identity and prevents them from being stereotyped as part of the riff-raff that public accommodations owners

often seek to exclude.” Nonetheless, other scholars emphasize the downsides of complying with harmful social norms and coerced assimilation.

While some dress codes are vaguely constructed, others specifically ban white t-shirts, doo-rags, baggy clothing, construction boots, excessive jewelry, and high-top sneakers — items that legal scholars, sociologists, and even the Department of Justice have recognized as being overwhelmingly donned by racial minorities.

Establishments have defended their dress codes with varying explanations. Some claim they have dress codes to create a “classy environment”; yet, this excuses falls flat considering the diversity of professionals who may reject traditional notions of “appropriate” attire. Further, other establishments have claimed that bans on “excessive matching” enhance security by keeping gang members at bay — an excuse that Ossei-Owusu writes, “rest[s] on outdated ideas about gang fashion and ignore[s] the fact that gang members could simply conform to the dress code to ensure entry and still be socially disruptive.”

“Dress codes are simply too ripe for abuse,” Ossei-Owusu writes. “Though they are sometimes about taste and cultural capital, dress codes often smuggle discrimination through sartorial requirements.” Most state anti-discrimination laws do not have business-necessity carve-outs allowing public accommodations to argue that genderbased pricing structures are legitimate because they ultimately lead to increases in revenue.

Moreover, some legal scholars have attempted to distinguish “hostile” from “benevolent” discrimination. Though ladies’ night pricing appears to benefit women, its purpose is to uphold patriarchal norms that ultimately diminish women’s agency. For example, in order to benefit from gender-based pricing, a woman must perform her femininity in a way that is deemed acceptable. Second, ladies’ nights tend to shape the behavior of men in nightclubs — the reason public accommodations host these nights is to incentivize women to patronize their club, which in turn entices men to show up, who will supplement the discounts women are enjoying by purchasing more drinks, often as status symbols, to impress women.

“[A] chorus of scholars has shown that men move through the world with a general sense of entitlement,” Ossei-Owusu writes. “They perceive themselves as having entitlement in the home, at work, in school, in public space, in the digital world, and to women’s bodies. . . . In these spaces, which are specifically structured as sexual — from the pricing to the personnel — men may assume that women’s reduced costs constitute barter for their own regularly-priced payments and infer entitlement to women’s bodies.”

Ossei-Owusu suggests that courts must invalidate genderbased pricing in public accommodations, not by relying on anticlassification theories, but rather on anti-subordination principles, as gender-based pricing effectively reinforces sexism and sex stereotypes.

Both regulatory bodies and law schools have a role to play in strengthening civil rights law in the context of public accommodations, he writes. First, regulatory bodies must prioritize velvet rope discrimination. Not only would this help to create a more equitable social world for racial minorities, women, and members of the LGBTQ+ community, but fining wealthy nightclubs could be an impactful revenue generator for regulatory bodies. Further, OsseiOwusu argues, law schools should assist in this fight by focusing clinics on public accommodation discrimination and training students to assist local governments to better understand and address these pervasive social injustices.

Historically, civil rights discussions have centered on activities such as voting, education, criminal justice, housing, and employment; nonetheless, this article’s focus on public accommodations provides vital context on the significance that civil rights have in the social sphere.

“[P]ublic accommodations are important sites for inclusion into society. The relative paucity of work in this area highlights the limited vocabulary legal scholarship has for thinking about law, recreation, and leisure,” Ossei-Owusu writes. “[William A. Schnader Professor of Law, Emeritus] Regina Austin puts it best: it is difficult to imagine a conception of good life that does not entail a fair measure of leisure — much of which occurs in public accommodations.”

SHAUN OSSEI-OWUSU LPS’08

THIRD PARTY

MORAL HAZARD

GIDEON PARCHOMOVSKY

Robert G. Fuller, Jr. Professor of Law

The problem of moral hazard — as defined as the transfer of risk from the policyholder to the insurer — has long absorbed scholars’ attention when studying insurance law and economics, but few have considered the consequences of third party moral hazard. In their forthcoming paper, “ Third Party Moral Hazard and the Problem of Insurance Externalities,” to be published in the Journal of Legal Studies, Gideon Parchomovsky and Peter Siegelman of the University of Connecticut Law School break new ground by developing and characterizing this phenomenon.

Defining third party moral hazard as “the influence of insurance on the loss-creation or claiming behavior of non-parties to the insurance contract,” the authors demonstrate “that third party moral hazard is both widespread and significant” before identifying causes and consequences and suggesting potential solutions.

Third Party Moral Hazard in Action

To begin, Parchomovsky and Siegelman review existing empirical data to confirm the gravity of third party moral hazard. In doing so, they point to a significant number of documented cases falling within liability, automotive, health, and even kidnapping insurance. They write that the cases they identify “span a range of insurance contexts and offer abundant evidence that the phenomenon is worthy of attention.”

For example, the authors find that, “[e]ven though no-fault [auto insurance] operates as first-party insurance, it offers substantial opportunities for third party moral hazard.” Noting that data is difficult to obtain and verify, they instead comb through the abundance of anecdotal evidence to detail a number of well-organized schemes. These range from an MRI facility in Michigan that was encouraged by a lawyer to “exaggerate the severity of injuries detected in MRI scans of patients,” to medical fraud mills in New York that staged car accidents to collect insurance payouts.

“Estimates of the magnitude of third party moral hazard in no-fault insurance vary substantially,” write Parchomovsky and Siegelman. “A widely-cited insurance industry report put no-fault fraud losses in New York at $230-$240 million in 2009 . . . almost all of which is probably third party moral hazard.”

The authors explain that due to its overreliance on insurance, the healthcare industry is especially prone to third party moral hazard. For-profit drug rehab centers, for example, offer financial incentives to brokers to recruit addicts whose treatment can be billed to their insurer.

“Their business model is to bring in patients for ‘treatment’ that is completely ineffective, precisely so as to generate a relapse and readmission shortly thereafter,” write Parchomovsky and Siegelman. “The availability of generous insurance payments has helped create an entire industry of phony rehabilitation programs whose purpose is precisely not to cure addiction, but rather to maintain it as a source of ongoing revenue.”

Less common, at least in the United States, is kidnapping insurance. Previous studies have shown that the number of kidnappings in an area will increase when the expected ransom increases.

“The question of interest to us is whether the presence of insurance enhances victims’ willingness or ability to pay ransoms,” write Parchomovsky and Siegelman. “If so, the availability of insurance would likely cause more kidnaps.”

“We . . . need to begin thinking about insurance in a broader general equilibrium framework that encompasses actors beyond just the insurer and policyholder.”

on research by

GIDEON PARCHOMOVSKY

This appears quite likely as countries including Venezuela, Colombia, and Italy have all banned kidnap insurance due to a belief that it provokes would-be kidnappers. “And anecdotal evidence suggests that kidnaps fell in the aftermath of such bans, although the causal link is unclear,” the authors write.

The Mechanisms of Third Party Moral Hazard

After detailing these and other examples of third party moral hazard, Parchomovsky and Siegelman then produce four possible causes for why it prevails. The first, which the authors refer to as “deep pockets,” is the most straightforward explanation.

“[I]nsurers are much wealthier than policyholders, making them more attractive targets for ripping-off, simply because they can cover larger losses,” they write.

“Depersonalization” is another mechanism promoting third party moral hazard. Since insurance companies are not human and are understood by many to exist for the sole purpose of paying out claims, a third party might “feel less inhibited when dealing with an insurer than with an individual who has to come up with the funds from her own bank account,” write Parchomovsky and Siegelman.

The authors also point to “poorer detection” or “worse bargaining,” which infers that an insurance company is less able — and less motivated — to sniff out fraud than an individual.

“If insurers are subject to treble damages for wrongly failing to pay a claim,” write Parchomovsky and Siegelman, “they will at the margin be induced to pay some questionable claims that an individual paying out of his or her own funds would have been willing to contest.” However, the opposite can also be true as processing a high volume of claims can make an agency better suited to spot patterns of fraud. “And it is likely that there are economies of scale in fraud-detection that insurers are better-placed to take advantage of than are individual payors,” they add.

Finally, the authors identify “spillovers from ordinary moral hazard,” as the fourth possible cause of third party moral hazard. This occurs when a third party assumes the insured will be less cautious due to traditional moral hazard.

“If thieves know that most jewelers have [generous] coverage,” write Parchomovsky and Siegelman, “they may be more likely to commit robberies, since they expect that first party moral hazard on the part of jewelers will make theft easier.”

Policy and Welfare Implications

The authors acknowledge that insurers successfully employ tools to confront moral hazard, “[b]ut these mechanisms are inoperative or ineffective when applied to third party moral hazard.” Techniques such as deductibles, exclusions, underwriting, and experience rating “are of little use in constraining the loss-causing behavior of third parties,” they write. Meanwhile, loss control, ex post auditing, and monitoring can work in some contexts, “but they pose significant problems for public policy that are unique to third party moral hazard.” For example, training policyholders to avoid excessive MRI usage is unreasonable, as is expecting insurers to monitor third parties as they might policyholders.

Instead, Parchomovsky and Siegelman propose new solutions. For third party moral hazards that are independent crimes, such as fraudulent car accident schemes, they suggest enhanced law enforcement.

“State intervention does risk crowding-out some private enforcement efforts,” they write. “But because governmental actors do not face the same profit motives that insurers do, public enforcement can complement private efforts.” They also suggest incentivizing insurers to share information across firms to better combat fraud trends and standardize the technology they use for record-keeping.

Lastly, the authors propose insurance qui tam suits, which would offer a bounty to any plaintiff attempting to recover a loss on behalf of someone else. For example, a doctor at a medical fraud mill would receive a percentage of whatever is recovered on behalf of the insurer if they pursued litigation against their co-conspirators.

“While qui tam liability is not without controversy, the evidence in health care and elsewhere suggests that it has been effective,” write Parchomovsky and Siegelman. “Our proposal would extend this mechanism to private insurers and to other areas of insurance.”

The takeaway, they conclude, is that “these insurance externalities are difficult to manage with the contractual tools that insurers have long used to control standard moral hazard problems. We thus need to begin thinking about insurance in a broader general equilibrium framework that encompasses actors beyond just the insurer and policyholder.”

The CORPORATE GOVERNANCE Machine

on research by ELIZABETH POLLMAN Professor of Law

In “ The Corporate Governance Machine,” published in the Columbia Law Review, Pollman and Dorothy S. Lund of the USC Gould School of Law provide an original account of the complex system of law, institutions, and culture that make up the U.S. system of corporate governance for public corporations. Their account generates insights about the past, present, and future of corporate governance.

The Concurrent Rise of Corporate Governance and Shareholder Primacy

The authors begin by tracing the historical and intellectual underpinnings of the term “corporate governance” and charting its rise alongside shareholder primacy. As they explain, legal historians tend to pinpoint the 1920s and 1930s as the foundational era for early corporate governance debates, when influential thinkers such as Adolf Berle and Gardiner Means oriented corporate law and theory around the issue of the separation of shareholder ownership and managerial control, but without elevating the importance of shareholders in the balance. In the mid-twentieth century, “managerial capitalism” reached its zenith, and it was in this period that the term “corporate governance” first arose in the context of business ethics and for the purpose of furthering a theory of corporations consistent with the ideals of a democratic society.

In the 1970s the tide started to turn, and, for different reasons, both the political left and right embraced the idea that corporate managerial power must be constrained by checks and balances. Some argued that giant corporations needed to be tamed to serve the public interest, while others bemoaned weak corporate boards and poor shareholder returns. Academics started to inject the economic concept of agency costs into scholarly discourse about corporations and quickly a normative gloss was added that “good” corporate governance should serve shareholder interests.

Through the Deal Decade of the 1980s, pursuing shareholder value or wealth maximization became regularly identified as the core corporate objective and ingrained in general understanding of corporate governance. And, in the decades that followed, with the rise of investing through intermediaries, the potential for shareholder influence increased as stock ownership became increasingly concentrated in mutual funds and other institutions. While the term “corporate governance” initially arose in discourse about constraining corporate power for the benefit of the public or democratic ideals, it subsequently developed to embody a particular view of the internal workings of the corporation, with shareholders paramount and directors and managers serving as their agents.

The Corporate Governance Machine

After setting out these historical and intellectual foundations, Pollman and Lund argue that three crucial components of the corporate governance machine — law, institutions, and culture — orient the system of contemporary corporate governance towards shareholders.

First, the authors outline the ways in which the multi-faceted legal regime of Delaware, Congress, the Securities and Exchange Commission (SEC), and the Department of Labor (DOL) have maintained

ELIZABETH POLLMAN

a shareholder-oriented equilibrium. Second, institutional investors, investor associations, industry associations, proxy advisors, stock exchanges, stock indices, and ratings agencies also reinforce the shareholder primacy viewpoint through their influential viewpoints and actions. Third, and potentially most significant, is culture. Professional education, media, and politics have amplified the prevailing normative belief that corporate governance should primarily serve shareholder interests.

For the authors, culture is notably the “most in flux,” as more scholars and professionals have begun to call for changes that move away from shareholder primacy. These proposals have been observed in the media and increasingly echoed in political proposals. It is uncertain, however, whether culture alone could drive a paradigm shift.

“[W]e suspect that the complementary institutional components that enshrine shareholderism will hamper a shift to a new paradigm if cultural forces alone are at play,” write Pollman and Lund. “Instead, we suspect that a shift in culture would need to drive concrete legal and institutional changes and alter multiple components of the machine if a paradigm shift were to manifest.”

Building on this account of the relevant legal, institutional, and cultural components, the authors use three examples to illustrate how the corporate governance machine functions to shape corporate activity and policymaking.

First, legal and extralegal institutional standards converge to effectively homogenize public company boards of directors consistent with a monitoring model.

“After ideas incubated in academia led to an evolving cultural understanding of corporate governance, major institutional players — including the SEC, the stock exchanges, and influential proxy advisors — adopted rules that brought the monitoring model into the mainstream,” write Pollman and Lund. “By force of these developments, all U.S. public company corporate boards have a significant percentage of independent directors and view their role as safeguarding the interests of the corporation and its shareholders.” The authors observe that this shift in public board composition occurred despite a lack of consensus or conclusive empirical evidence that director independence yields better board decision making and oversight.

Further, debate about corporate social responsibility (CSR) that for decades had been focused on social obligations started to shift to discussion of the Environmental, Social, and Governance (ESG) movement in the early 2000s. A multitude of entities and market players have embraced the idea of value-enhancing ESG and effectively propelled it into the mainstream — a phenomenon that the authors observe “reveals how the corporate governance machine took a concept that was unlinked from shareholders, and through law, institutions, and culture, reshaped it, and in so doing, allowed it to thrive.”

Finally, the authors turn to benefit corporations — a wholly new twenty-first-century form of business organization specifically for organizations that aim to pursue profits and a social purpose — to illustrate how the corporate governance machine “forced alternative

conceptions of corporate purpose into an entirely separate form of incorporation.” Despite the alternative that a benefit corporation offers the corporate landscape, its existence ultimately reinforces the directional focus of corporate governance on shareholder interests.

Implications and Future Paths

The implications of the reigning system of U.S. corporate governance are broad; not only does it affect regulatory trends, but it also impacts public and private corporate structures, activities of public companies, and corporate governance innovation.

Denoting how the corporate governance machine shapes the development of corporate regulation in a predictable shareholderist direction, the authors explain that even advocates for corporate governance reform couch their ideas in pervasive language of shareholder primacy. For example, advocates who urge the SEC to require ESG disclosures emphasize the information’s materiality to investors — something Pollman and Lund determine to be “a wise strategic move in our existing system that prioritizes investor interests.”

Further, they write that “the corporate governance machine pushes many firms toward one-size-fits-all governance solutions” which are “are often embodied in corporate governance codes adopted by industry groups, as well as the voting guidelines adopted by proxy advisors and major institutional investors.” Companies that elect not to follow industry “best practices” guidelines incur pushback, and the corporate governance machine “constrains value-enhancing experimentation in governance when that innovation threatens shareholder rights.”

Notedly, many private companies follow uniquely tailored processes in their own operation prior to going public, at which point they tend to reorganize themselves to align with principles promulgated by the corporate governance machine. Considering this, the authors surmise that its “influence should be viewed as not only contributing to the trend of companies staying private longer and pushing for dual-class structures but also shaping the activity of those in the public realm.”

Finally, the corporate governance machine unquestionably impacts the future of corporate governance by pushing stakeholder models to fit their reforms into existing infrastructure. Acknowledging that a shareholder-dominated system of corporate governance is far from inevitable, the authors underscore the myriad interconnected ways in which the system perpetuates this orientation.

“As shareholder primacy has evolved from a rule to a system, it has generated a reinforcing momentum,” write Pollman and Lund. “In particular, the institutional framework that encompasses the corporate governance machine substantially increases the costs associated with moving to a new paradigm. As such, stakeholderism is unlikely to dethrone shareholder primacy; however, it may gain ground by shaping the meaning of shareholder primacy to encompass stakeholder interests.”

“[W]e suspect that a shift in culture would need to drive concrete legal and institutional changes and alter multiple components of the machine if a paradigm shift were to manifest.”

Navigating the Identity Thicket

young designer whose former employer claims to own her name and associated social media accounts, and one brought against the CocaCola company by the heirs of a long-dead juice maker for using his name on a product line that the company purchased, claiming the use violated postmortem publicity rights.

by JENNIFER E. ROTHMAN Nicholas F. Gallicchio Professor of Law

In “Navigating the Identity Thicket: Trademark’s Lost Theory of Personality, the Right of Publicity, and Preemption,” published in the Harvard Law Review, Rothman explores the problems created by overlapping and conflicting rights in a person’s identity – what she calls an “identity thicket” — and proposes an analytical framework for addressing the issue.

“Current jurisprudence provides little to no guidance on the most basic questions surrounding this thicket,” writes Rothman. “It is unclear what right to use a person’s identity, if any, flows from the transfer of marks that incorporate indicia of that person’s identity. Nor is it clear whether such transfers can empower a successor company to bar a person from using their own identity, and if so, when.”

The Identity Thicket

Rothman explains that “[b]oth trademark and unfair competition laws and state right of publicity laws protect against unauthorized uses of a person’s identity.” Increasingly, though, these rights “are working at odds with one another and can point in different directions with regard to who controls a person’s name, likeness, and broader indicia of identity.” This entanglement of conflicting rights rooted in a person’s identity is what Rothman terms the “identity thicket.”

“The increasing discord between right of publicity and trademark claimants and among identity-holders, publicity-holders, and markholders is a result of a variety of factors,” writes Rothman, “including the exponential rise in right of publicity claims, combined with an expansion in the right’s scope since the 1980s . . . and an everincreasing awareness of the availability of such claims.” Rothman also notes that trademark law itself has expanded to allow liability for “confusion as to sponsorship and affiliation (rather than solely on the basis of source confusion), a highly relevant expansion when it comes to protecting rights rooted in a person’s identity.” Other broader societal changes have also played a role, such as the increase in the “value and importance of rights over one’s identity . . . with the rise of social media influencers and the ability to harness even an ordinary person’s identity to market to their circle of online friends. There is also an increasing awareness that individuals can register their own names and images as marks for their personal services, including endorsement services.”

Rothman considers several cases that illustrate how muddled the situation has become, such as one brought against a famous fashion designer who sold his eponymous fashion line and then wanted to continue to work in the field, another brought against a

Rothman suggests that the best way through “this thicket of rights is to begin with the objectives of trademark and unfair competition law.” “Because the most commonly asserted of these laws are federal, as codified in the Lanham Act,” Rothman employs preemption analysis to guide an approach to mediate the conflict with state publicity laws. “Under such an approach, the Lanham Act should preempt right of publicity claims that “stand[] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Making such a determination, requires engaging with the purposes and objectives served by federal trademark and unfair competition law.

Personality Theory of Trademark Law

Although “today’s dominant account of trademark law is market based and focuses on the interests of both markholders and consumers,” Rothman demonstrates that these laws “also seek to protect the personality of individuals, often (but not always) the founders of businesses. This lost facet and objective of trademark and unfair competition law — far from being consigned to the dustbin of history — is still alive, and is particularly vital to illuminate (and shore up) as individuals increasingly seek trademark protection for their own names and likenesses in the context of their own personal services. This inquiry is also essential given the increasing clash between state right of publicity laws directed at protecting a person’s identity and federal trademark law.”

Rothman observes that scholars have largely overlooked this personality-based aspect of trademark law, and in the article she turns to reclaiming this lost strand of the law. Rothman demonstrates that “personality-based interests have long been a part of trademark law, and that they remain relevant today . . . particularly in the pockets of trademark and unfair competition laws that are most likely to intersect with the right of publicity.” She traces trademark law’s longstanding protection of individual autonomy and dignity to antiquity when artisans marked their goods with their own names and insignias. Rothman also notes that the “personality-based aspects of trademark law derived in part from an understanding of self-ownership that flowered in the late nineteenth and early twentieth centuries.” This understanding of the self and the interest in protecting identity also led to the adoption of the right of privacy at the end of the nineteenth century – which developed into today’s right of publicity and reflects a convergence of unfair competition and privacy laws in the pocket of cases sitting at the heart of the identity thicket.

Rothman highlights that “from the early days of AngloAmerican trademark and unfair competition law, a number of unique rules for personal marks existed.” Rothman defines personal marks as those composed in whole or in part of a natural person’s portrait, name, or other indicia. The unique rules for personal marks “were rooted in two distinct personality-based interests — the protection

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of a person’s autonomy and right to control uses of one’s own identity, and the protection of a person’s dignity, in particular one’s reputation in the community.” Using “another’s identity in trade encompassed the same market-based harms of uses of anyone’s mark (no matter the kind) to pass off one’s goods as those of another,” but Rothman notes that “in the context of personal marks, these additional personalitybased justifications for trademark law played a more robust role.”

Rothman illuminates this personality-based aspect of trademark law through four doctrinal principles that treat marks differently when they are rooted in a person’s identity, and do so in ways that further interests in a person’s autonomy and dignity, sometimes at the expense of trademark’s market-based objectives. Even though the reasons behind these doctrines have become obscured through the mists of time, the doctrines persist in current law, and Rothman contends deserve shoring up, rather than dismantling. These doctrines include:

(1) the “natural right” to use one’s own name in trade;

(2) the prohibition on using another’s identity as a mark or to suggest endorsement of products or services without their permission;

(3) limits on the transferability of one’s own name or other selfidentifying marks; and

(4) the inability to abandon a personal mark.

Rothman demonstrates through caselaw spanning centuries how entrenched a personality theory of trademarks is in our current jurisprudence. She argues that such a theory not only remains relevant but is of “increasing importance as we see a rise in the use of personal marks and selfmarks, and their conflict with other rights held by identity-holders, including the right of publicity.”

What Trademark’s Personality Means for Trademark Law

Rothman’s analysis lends a host of insights not only for navigating the identity thicket, but also for trademark jurisprudence more broadly. Recognizing a “personality-based understanding of trademark law provides renewed support for limits on the transferability not only of publicity rights but also of some personal marks when they are inseparable from the underlying person.” It “also shores up trademark’s negative spaces,” by providing “yet another example of a well-developed carve-out from trademark enforcement” motivated by furthering “the provision of truthful information” and supporting competition, even sometimes in the face of consumer confusion.

Rothman’s development of a “theory of trademark law that includes consideration of personality rights” also provides an explanation for trademark’s current expansionist impulse that some have suggested stems from improper borrowing from state right of publicity laws.

Rothman suggests that this “aspect of trademark law appears to be (at least in part) internally (rather than externally) based.” She contends that understanding this origin allows for a sound basis to limit such expansions “to instances in which the claims are rooted in (and asserted by) a natural person” and in which personality-based interests may justify greater protection.

Trademark Preemption and What Trademark’s Personality Means for the Identity Thicket

Using the “more robust understanding of trademark law’s objectives, including its personality-based aspects,” that she has developed, Rothman then employs a “trademark preemption” analysis to determine when state publicity laws should yield to federal trademark and unfair competition law. She suggests that the “preemption analysis routinely employed in other areas of IP law could direct the resolution of these conflicts” between the right of publicity and the federal Lanham Act. Rothman contends that an understanding of trademark law that incorporates its “personality-based interests as well as market-based ones, provides a robust and normatively appealing approach to mediating” the conflicts between markholders and identity-holders.

Rothman writes that “the trademark regime should take precedence over conflicting state-based publicity rights,” but should do so in a way that gives “due respect to both the market-based and personality-based injuries that flow from the unauthorized use of a person’s identity.” As part of this inquiry, Rothman considers the interests furthered by state right of publicity laws and concludes that “when the right of publicity complements trademark law,” it should not be preempted, but “when state publicity rights significantly interfere with the rights of markholders,” such laws should be preempted. Rothman suggests that right of publicity claims that are really trademark claims “in disguise, asserted by a party who lacks (or sold or lost) the relevant trademarks,” should be preempted, as should instances in which state right of publicity claims are based solely on a markholder’s exercise of otherwise lawful uses of its marks. Publicity laws should also be preempted when they disrupt the objectives of trademark law — including its protections for “personality, consumers, and fair competition, and the latitude it provides for free speech.”

Rothman emphasizes that trademark law itself limits the ways that markholders can restrict identity-holders from using their own names and likenesses. This means that if a trademark holder is also a publicity-holder, it still cannot unfairly limit what an identityholder can do with their own identity. It also means that the right of publicity and trademark law may work in harmony rather than opposition when a right of publicity claim seeks to protect the personality interests of an identity-holder.

“Much as trademark law cannot be employed as a ‘mutant copyright law,’” Rothman writes, “the right of publicity cannot function as a mutant form of trademark law that restricts what trademark law permits. Trademark preemption provides an avenue out of this thicket, but only if trademark law’s respect for personality is recognized. In the absence of this understanding, trademark preemption would unacceptably threaten individual autonomy and dignity. People should not have to change their names or abandon their own identity and vocation simply because they have transferred their company and trademarks. And trademark law properly understood — taking into account its personality-based aspects — does not ask them to do so — in fact it specifically protects against such outcomes.”

“Properly understood, trademark law and the right of publicity can work in tandem to protect a person’s commercial and personality-based interests without unduly restricting fair competition and free speech.”

LOST DIS ABILITY HISTORY of the

‘NEW FEDERALISM’

M. TANI L’07, GR’11 Seaman Family University Professor

In “ The Pennhurst Doctrines and the Lost Disability History of the ‘New Federalism,’” published in the California Law Review, Tani reveals the complicated and intertwined history of disability law and contemporary federalism doctrine. At the center of the article is a famous lawsuit over the conditions at Pennsylvania’s Pennhurst State School and Hospital (Pennhurst), an institution where individuals with disabilities endured abuse, neglect, and, according to lawyers, an alienation of their legal rights. Tani notes that although the Pennhurst litigation is well known among people interested in disability rights deinstitutionalization, there is less appreciation for the case’s immense effects on the balance of power between the U.S. Congress and the states. Similarly, although many legal scholars have heard of the Supreme Court’s pronouncements about the Pennhurst litigation, few have appreciated the significance of disability to the important legal doctrines that the case enabled the Court to develop.

In Tani’s words, the effect of Pennhurst and its progeny was to create a role for federal courts “that was at once more assertive and more modest” than their previous role.

“The decisions impelled courts to become more assertive in their oversight of Congress, which critics perceived as making extravagant equality guarantees without pausing to count the costs,” but more modest in their dealings with state governments, “particularly when it came to enforcing rights in ways that spent and allocated state resources.”

The Road to Halderman v. Pennhurst State School & Hospital

Pennhurst was founded about 30 miles outside of Philadelphia in 1908. Over the course of several decades, as Pennhurst’s resident population grew, it became apparent that all was not well inside the institution. Suspicious deaths sometimes made it into the local newspaper, as did accounts of serious injuries and illnesses.

As better-off families began to have more relatives in Pennhurst and similar institutions, advocacy networks grew, but conditions for

residents seemed to only get worse. By the mid-1960s, Pennhurst was often the subject of local newspaper stories, which detailed overcrowding, understaffing, mistreatment of residents, and “living nightmare” conditions. Advocacy groups such as the Pennsylvania Association for Retarded Children (PARC) eventually began to strategize as to how to bring about state and federal intervention.

In 1972, with assistance from the well-known public interest attorney Thomas Gilhool, PARC secured a landmark settlement guaranteeing the rights of children with disabilities in Pennsylvania to equal access to education. This provided a partial escape route for children languishing in Pennhurst and similar institutions. But the lawsuit that is most associated with the Pennhurst name began two years later, when attorney David Ferleger filed a complaint in federal court on behalf of Pennhurst resident Terri Lee Halderman and others. Shocking in its detail, the complaint alleged a litany of abusive and neglectful practices, resulting in not only horrific injuries but also lost opportunities for rehabilitation and education. PARC joined the lawsuit shortly thereafter, and in 1976, Ferleger and Gilhool filed an Amended Complaint asking the court to order Pennhurst’s closure.

The resulting trial court decision is still remembered as a great victory for disability rights. The Honorable Raymond Broderick held that the plaintiffs’ constitutional and statutory rights had been violated by the inhumane conditions at Pennhurst. Further, he found that the plaintiffs’ “right to habilitation” simply could not be met “in an institution such as Pennhurst.” He ordered the state to “provide suitable community living arrangements” for the approximately 1,200 persons residing at Pennhurst, as well for as all those on the waiting list.

Pennhurst Meets the “New Federalism”

On appeal, the Pennhurst case took on new meanings. Unusually, this litigation made it to the Supreme Court twice, in 1981 and 1984, and on both occasions produced important pronouncements about the allocation of power in a federalist system.

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KAREN

KAREN M. TANI L’07, GR’11

In the early 1980s, the Supreme Court was in the early years of what scholars would later call a federalism “revolution.” Most commonly associated with the leadership of Chief Justice William Rehnquist (1986-2005), the Court’s “new federalism” jurisprudence dialed back the power that previous Supreme Court decisions had accorded to Congress and reinvigorated doctrines that showed solicitude for the states. The Pennhurst case proved to be a crucial vehicle for advancing this vision.

The Supreme Court’s first decision in Pennhurst turned on whether an intermediate appellate court, the Third Circuit, had correctly interpreted the Developmentally Disabled Assistance and Bill of Rights Act of 1975 (DD Act). Like many federal statutes from this era, the DD Act essentially used the promise of federal funds to incentivize states to partner with Congress in pursuit of a shared goal, in this case caring for people with developmental disabilities. The DD Act also included a “bill of rights” outlining the treatment, services, and habilitation to which people with developmental disabilities were entitled. In affirming the district court’s opinion, the Third Circuit had chosen to base its decision on this statutory “bill of rights” rather than the U.S. Constitution.

The Supreme Court took issue with the notion that when Pennsylvania accepted federal funds under the DD Act, it exposed itself to the kind of liability that the lower courts had articulated. By a 5-4 vote, the Court ordered the Third Circuit to consider whether there was some alternative basis for upholding the district court’s decision. But even more important, the Court articulated a broader principle for how federal courts should interpret this type of statute. Writing for the majority, Justice Rehnquist declared that legislation enacted under the Spending Power was in the “nature of a contract”; if particular terms of the bargain were insufficiently clear to the states at the time they accepted federal money, it was not fair to hold the states to those terms down the line.

On remand, the Third Circuit once again affirmed the district court’s decision, but this time based its affirmance on an interpretation of Pennsylvania’s Mental Health and Mental Retardation Act. The defendants again sought Supreme Court review — this time with the support of 24 other states and jurisdictions — and in doing so gave the Court an opportunity to elaborate on another area of doctrine that was central to modern federalism: the Eleventh Amendment.

The resulting Supreme Court decision, in 1984, held that the Eleventh Amendment prohibited federal courts from entertaining state law claims against state defendants, even though federal courts had routinely entertained such claims before. The decision also tethered

the Eleventh Amendment even more closely to what Justice Powell called “the fundamental principle of sovereign immunity.” The change in direction was an “unprecedented about-face,” wrote Justice Stevens in dissent, but one that clearly appealed to the majority of the Court.

Legacies

The legacies of the two Pennhurst decisions are significant. The first Pennhurst decision articulated a rule of statutory interpretation now known simply as the “clear statement rule.” Courts have applied this rule to many statutes, ranging from important civil rights laws to the Affordable Care Act (ACA). It was the basis for the Supreme Court’s decision to strike down the “Medicaid expansion” provision of the ACA. And it is often raised by state defendants who contend that they should not be financially accountable for violations of Spending Clause statutes.

The second Pennhurst decision, meanwhile, proved to be an important building block in the Court’s state sovereign immunity jurisprudence. To conservative justices, this line of cases was vital to protecting the states’ role in the federal system and to placing some checks on aggressive uses of congressional power. To critics, it dramatically limited citizens’ ability to hold states accountable for violating their rights.

Restoring Disability Context

The Pennhurst litigation has lessons that go beyond doctrine, however. Through careful analyses of the language that the justices used when discussing the case, Tani identifies particular assumptions about disability and disability rights, such as the assumption that the rights of disabled citizens are necessarily costly and that their claims to equality are unreasonable or extreme. Citing other Supreme Court cases involving disabled plaintiffs, Tani asks whether the disability context allowed the justices to articulate views about states’ sovereignty and dignity that “might have felt unseemly or inappropriate in a different (non-disability) equality context.”

“[I]deas about certain disabilities and the difficulty of preventing or accommodating them may have eased the path,” Tani hypothesizes, “the path toward a vision of government that accepts powerful central-state intervention in some arenas but circumscribes the federal government’s ability to assure inclusion and protection in others. Neatly reversing the presumptions of the Reconstruction Amendments, those promise now often depend on states and their subsidiaries,

for better or for worse.”

“As scholars continue to think through the relationship between federalism, inter-branch dynamics, and the elusive promise of equality, I hope that the concepts of ability and disability infuse that work — alongside such better-recognized concepts as race, gender, sexuality, national origin, and economic status.”

PANDEMIC GOVERNANCE

research by YANBAI ANDREA WANG Assistant Professor of Law

In “Pandemic Governance,” published in the Boston College Law Review, Wang and Justin Weinstein-Tull of the Arizona State University College of Law explore the chaos of the first months of the COVID-19 pandemic and contend that the incoherent response from the U.S. government reflected well-worn but scattered governmental structures. They further argue that “understanding these underlying dynamics is crucial for ensuring that, when the next pandemic hits, we can respond in a way that encourages effective pandemic management.”

Pandemic Theory and Policy

To begin, the authors demonstrate that prior to the COVID-19 pandemic, a gap already existed “between the serious demands that pandemics place on governments and the pandemic-related policies that we possess.” By reviewing the significant amount of academic research on pandemics and crisis management, as well as the various federal, state, and local policies already in place prior to 2020 to respond to public health crises, Wang and Weinstein-Tull show that the existing policies lacked sufficient coordination mechanisms and clear lines of command to meet the needs of crisis management.

Noting that the United States has not experienced a pandemic of COVID-19’s scale for over a century, they explain that the country lacked an effective blueprint for responding to a widespread infectious outbreak on a national level. This, in turn, created fertile ground for the growth of ad-hoc governance, which then intensified the lack of coordination for responding to the pandemic. “This absence of a clear template for action formed the backdrop against which COVID-19 arose,” write Wang and Weinstein-Tull.

According to crisis theory, an effective pandemic response requires all levels of government to work in tandem to monitor infection rates and hospital capacity, implement testing and protective measures, and develop drugs and vaccines. Yet the authors observe that this is inherently a challenge for America’s system of government. “Because the U.S. Constitution disperses power between state and federal authorities,” they write, pandemic policies “exist at all levels of government.”

Intergovernmental Behaviors

The authors then gather pandemic-related governance decisions taken in select jurisdictions from January 2020 to July 2020 to identify four predominant intergovernmental relationships that emerged in the absence of a coordinated national response. They conceptualize these behaviors by defining them as active or passive and generative of conflict or coordination. They refer to passive conflict as undermining, such as when different governmental actors destabilize each other’s actions. Abdication, on the other hand, is passive conflict that occurs when governments failed to act when legally required to do so or despite being the only level of government that could comprehensively address

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YANBAI ANDREA WANG

a problem. Abdication leaves gaps for other actors, such as businesses or local authorities that are poorly positioned to direct a response, to fill. On the other end of the spectrum is active coordination, which manifests as collaboration: governments intentionally working together either vertically or horizontally to harmonize their policies and support one another. Finally, passive coordination manifests as bandwagoning: instead of acting proactively, governments delay and follow the initiatives of others.

In the early days of the pandemic, undermining took place at all levels of the government. Local governments undermined their states’ authority and states undermined the federal government. “Upward undermining allowed lower-level governments (local and state) to publicly register disapproval with higher-level governments (state and federal) and push for policy change,” write Wang and Weinstein-Tull. In the opposite direction, federal and state governments undermined downward. “During the first reopen phase of the pandemic in April 2020, for example, President Trump and his administration undermined the reopen schedule that certain states had set,” write Wang and Weinstein-Tull. “Rather than promote harmony with the CDC’s response guidelines, these [undermining tactics] seemed intended to politically harm three Democratic governors who had been critical of the president.” There was also horizontal undermining, which happens when the federal government undermines itself.

Abdication occurred when the national government failed to enact public health laws or issue comprehensive guidelines, provide adequate testing and medical resources, or address pandemic-related inequality. The result was vastly uneven impacts across the country. “African Americans, Latinos, and Native Americans have become infected with and died from COVID-19 at higher rates than white people,” they write. “The sectors of the economy that the pandemic has hit hardest are those that disproportionately employ women: restaurants, retail

businesses, health care, and state and local governments. . . . Women of color experienced not just the diminished health outcomes associated with communities of color broadly, but also the economic pressures the pandemic imposed on women.”

The authors point out that conflict is a feature of the federal system. “The founders believed this kind of conflict would prevent any single political actor from becoming too powerful, and thus protect individual freedom against governmental overreach,” write Wang and Weinstein-Tull. Layering and overlap of governmental responsibilities also allow for intergovernmental substitution. But undermining and abdication “impose[] costs, especially during a deadly pandemic . . . . [b]ecause nearly any governmental action during an outbreak requires some cooperation with other governments.” When conflictual interactions arise from political gaming or serve to distract, they serve no function at all, or worse.

However, just as conflict is a feature of America’s decentralized government system, so is coordination. “Without an existing blueprint for a coordinated governance response, two forms of impromptu coordination emerged,” the authors write. The first — collaboration — happened when physically adjacent or politically similar governments worked horizontally to share information, supplies, and policies. Meanwhile, as some authorities began to act together, others passively followed by bandwagoning. In March 2020, several jurisdictions announced identical emergency shelter-in-place orders despite varying levels of infection rates. “Bandwagoning was particularly striking when it occurred across jurisdictions experiencing different stages of the outbreak,” write Wang and Weinstein-Tull, “[s]uggesting that it was less about putting in place an appropriate response to the pandemic than it was about joining an emerging crowd and gaining political cover.”

“COVID-19 has changed us and killed us, but it has also presented an opportunity: it has allowed us to observe our governance responses at work.”

NEUTRALIZING THE ATMOSPHERE

SHELLEY WELTON Presidential Distinguished Professor of Law and Energy Policy

Heeding scientists’ conclusions that the world must reduce its overall atmospheric levels of greenhouse gases, corporations and state actors across the globe have begun pledging to achieve “net zero” carbon emissions. In “Neutralizing the Atmosphere,” published in the Yale Law Journal, Welton explains why these net zero pledges raise “underdiagnosed” normative risks and offers guidance on how to alleviate them as the world works together to implement meaningful, life-saving climate solutions.

The Rise of Net Zero

Welton begins by reviewing recent historical events contributing to the prevailing contemporary paradigm of the “net zero pledge,” which essentially translates to a carbon emission-producing entity’s promise to invest in technology and/or natural resources that remove a comparable amount of carbon from the atmosphere.

In the 1990s, Integrated Assessment Models illustrated how global carbon emissions can be counterbalanced by carbon “sinks” that bring overall atmospheric emissions levels down. Drawing on these models, the U.S. advocated for a global framework — eventually incorporated into the 1997 Kyoto Protocol — which included both sinks and offsets in its calculation of countries’ emissions reductions targets.

In the two-plus decades since, this balancing exercise has been translated into thousands of individual pledges from countries, states, cities, and companies, each of which promises to net out its own emissions. But the translation of this global goal into a program of atomized net zero pledges presents significant practical and political challenges.

The Accounting Risks

Experts have expressed many concerns related to “accounting risks” of net zero pledges, or in other words, “whether pledges on paper will translate into atmospheric emissions changes in practice.”

First, on greenwashing, Welton notes that because companies “are largely pledging within a legal void, unconstrained by binding reductions requirements, there is nothing beyond norms and public pressure to hold them to their word.” Without any formal legal mandates, companies are free not only to fail to meet their goals, but also to navigate around liability by choosing to claim responsibility for only a fraction of the emissions they contribute.

Second, entities manifest “a problematic degree of self-serving optimism in their net zero planning.” For example, some entities plan to delay near-term action based on the assumption that yet-to-beviable technologies will become available in the future. Others aim to continue to grow their emission-producing activities with the nearsighted plan that a continued reliance on offsets and sinks will be enough to ensure their actions are sustainable.

Lastly, net zero pledges incorrectly assume that all carbon is fungible, such that carbon removed from the atmosphere perfectly counterbalances carbon emitted into it. But this assumption is wrong for several reasons, including challenges in measuring “additionality” (whether an entity’s offsets would have occurred

on research by

SHELLEY WELTON

anyway); “permanence” (whether carbon removal is durable through time); and “leakage” (whether a carbon-removal project merely shifts emissions from one parcel of land to another). Each fungibility risk creates real complications in measuring the genuine impact of investments meant to offset a source’s emissions.

The Neutrality Mirage

Welton disputes the oft-repeated belief that, in emissions reductions, “a ton is a ton.”

Crucially, climate change and net zero emissions plans implicate significant social justice concerns. Welton underscores the need to move away from frameworks that attempt to treat emissions as “neutral,” explaining that source-by-source carbon neutrality “is a framing device; the end goal is to stabilize atmospheric emissions and collectively achieve a livable planet. Yet we have an overarching global framework, replicated in thousands of subjurisdictional and private pledges, that embraces atomized carbon neutrality as the central aim.”

Welton criticizes both the American regulatory cost-benefit analysis (CBA) and the net zero paradigm alike for their shared lack of mechanisms to ensure democracy and equity. Though the CBA “pretends to be neutral” it “actually vaunts an economic conception of the good. Moreover, CBA has frequently been strategically deployed as a deregulatory tool, only to be abandoned by its previous champions when its economics counsel in favor of regulation”; nonetheless, net zero’s failures supersede even the CBA, due to the paradigm’s failure to incorporate citizen preferences “at all.”

The Collective Achievement Challenge

To stem the climate crisis, not only must the world “neutralize” difficult-to-abate emissions, but it must also eliminate every emission that can be eliminated. Yet, under the current net zero pledge framework, individual emitters maintain autonomy over their individual strategies, and many are likely to over-rely on emission offsets instead of cutting their internal emissions.

A few standard-setting organizations are now requiring entities to “demonstrate that they are eliminating all emissions deemed feasible,” but in the absence of such guidance or mandate, it is unlikely that private entities voluntarily will choose reduction — especially when it is cheaper to neutralize rather than reduce emissions.

Moreover, several constraints will limit the amount of globally available carbon offsets. Among them are scientific concerns about

whether new technology can be developed quickly enough and political concerns about the collateral consequences of devoting significant land to offset measures such as afforestation.

Additionally, the Paris Agreement is vague about how voluntary carbon markets are calculated into the system of “Nationally Determined Contributions.” As a result, some countries may choose to cede “the cheapest, easiest cuts within their borders to other countries and companies — potentially making their own eventual pathways to net zero more expensive and complex than they otherwise would have been.”

Institutionalizing Net Zero: The Private and Public Role

In an ideal world, “governments would legislatively establish appropriate binding targets and accompanying policy goals (be those equity, labor, or innovation-focused) and would dictate the roles of various sectors in helping to achieve those targets through emissions reductions.” Absent this kind of overarching framework, however, governance of the net zero project will have to proceed more piecemeal.

A central question lies in how vital corporate action might be achieved without the risks presented by the highly-marketized net zero project. Instead of prioritizing private net zero accomplishment, Welton emphasizes the importance of considering the collective and proposes a multi-faceted solution wherein standard-setting organizations require pledges that focus on internal emissions reductions but not emissions netting, carbon removal, or offsets. She describes her suggested solution as a “reduce and support” strategy, in which private corporations would promise to establish and obtain an emissions reduction goal, declare any residual emissions, and contribute to a global fund at a level commensurate with unabateable emissions.

In addition, Welton calls for more attention to the institutional design of public net zero strategies, to ensure the administrative apparatus of net zero meaningfully incorporates “more collaboration, public guidance, and holistic thinking into the netting of carbon emissions wherever possible.” The rapid evolution of both politics and technology makes emissions regulation difficult; nonetheless, given the serious implications the emissions transition will have on both the economy social equity, “focusing on the public institutions that control net zero — and placing more of the program under public control — will be critical to the success and legitimacy of the project.”

“Disjunctive efforts toward net zero . . . threaten to undermine the legal, political, and physical foundations of the global project.”

CONTEMPORARY

FIRST AMENDMENT PROTECTIONS

In “ The First Amendment, Common Carriers, and Public Accommodations: Net Neutrality, Digital Platforms, and Privacy,” published in the Journal of Free Speech Law, Yoo contributes nuanced insight to ongoing conversations regarding what First Amendment freedoms common carriers and public accommodations enjoy. This jurisprudence significantly impacts contemporary issues of net neutrality, content moderation, and privacy.

What Constitutes Common Carriers and Public Accommodations?

Entities considered “common carriers” or “public accommodations” have historically been subject to greater limits on their right to exclude people under the First Amendment. Recent D.C. Circuit and Supreme Court opinions ask whether social media platforms may fall into one of these two categories — a determination that would carry substantial impacts on the ways information is shared online.

In Biden v. Knight First Amendment Institute, Justice Clarence Thomas outlines a list of considerations that courts have historically used to determine whether an entity is a “common carrier.” Among the considerations are whether an entity has market power, is affected with the public interest, is involved in the transportation or communications industry, has received countervailing benefits from the government, or is holding itself out as “providing service to all.” After considering each component in turn, Yoo concludes that “[h]olding out . . . appears to be the most widely accepted common law definition of common carriage that courts apply in the absence of a specific statutory condition. The problem is the ease with which it can be evaded.”

Similarly, one of the most common historical indications that an entity was a “public accommodation” was whether it held itself out as serving the public. Following the Civil War, many states began narrowing their understanding of a public accommodation to only those entities specifically enumerated in civil rights statutes. Modern statutes — most notably, the Civil Rights Act of 1964 and the Americans with Disabilities Act — define lists of which types of entities constitute public accommodations.

“As an initial matter, the fact that common carriers are one of two types of entities universally accepted as constituting public accommodations means that the latter concept is completely inclusive of the former,” Yoo writes. “The modern view holds that any expansion beyond the traditional categories of innkeepers and common carriers requires the enactment of positive law. This includes statutory definitions that explicitly refer to common carriage or ad hoc access regimes often dubbed quasi-common carriage.”

”[L]ittle is gained by simply declaring an actor to be a common carrier or public accommodations. . . . [T]he key is whether the actor asserts individualized business and editorial judgment over the content it carries. The mere attempt to attach a label without more accomplishes little.”

on research by

CHRISTOPHER S. YOO

John H. Chestnut Professor of Law, Communication, and Computer & Information Science and Founding Director of the Center for Technology, Innovation & Competition

CHRISTOPHER S. YOO

What First Amendment Protections Do Common Carriers and Public Accommodations Enjoy?

After determining whether an entity might be classified as a common carrier or public accommodation, the next step of the analysis is to establish the extent of First Amendment protection afforded.

The Supreme Court has never clearly addressed the First Amendment protection afforded to common carriers. Although many assert that the level is low, the Court’s decisions in Central Hudson Gas & Electric Corp. v. Public Service Commission and Sorrell v. IMS Health demonstrate that the First Amendment does protect common carriers’ commercial speech. This includes a common carriers’ ability to use data they collect.

Further, regarding “quasi-common carriers,” the D.C. Circuit has distinguished between the views the entity expresses and the views they merely allow to “pass through.” Additionally, entities that do not hold themselves out as serving the public indiscriminately might not be treated as “common carriers” for First Amendment purposes.

Crucially, common carriage regulation is determined on the basis of a firm’s activity, meaning that even if a firm partakes in several activities, each one will be evaluated separately to determine if it qualifies for common carriage analysis. In example, Yoo points to Circuit decisions protecting common carriers’ First Amendment right not to carry “dial-a-porn” services or to offer cable television programming.

“Together, the cases on quasi-common-carriers and noncommon-carriage services both support according strong First Amendment protection to services over which common carriers exercise editorial discretion,” Yoo writes. “These cases embrace the idea that common carriers have the First Amendment right to offer these services.”

Additionally, courts have indicated that the only time the government may mandate access to public accommodations is when doing so would neither interfere with an entity’s expressive activity nor force an entity to associate itself with a message with which it disagrees. Yoo underscores that in both Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston, Inc. and Boy Scouts of America v. Dale, state statutes that specifically declared the respondents to be

public accommodations “played no role in the constitutional analysis”; instead, what mattered was the effect on the respondents’ speech. What are the Implications for Net Neutrality, Digital Platforms, and Privacy?

Jurisprudence in this area carries heavy implications for several contemporary areas of policy and debate, most notedly net neutrality, social media platforms, and digital privacy.

Beginning first with net neutrality, Yoo writes that “ISPs have the First Amendment right to deploy specialized services that limit access or give preferential treatment to specific content for editorial or commercial reasons.” Because ISPs exercise discretion over the specialized services they offer, they must be considered outside the deferential standard applied to common carriers and thus be subject to heightened scrutiny.

Further, whether a digital platform is considered a “common carrier” depends on whether it holds itself out as serving all members of the public without making individualized business decisions.

“Absent a major change in business practices, social media companies exercise too much discretion over the content they host to be regarded as common carriers or public accommodations,” Yoo writes.

Finally, in ACA Connects – America’s Communications Ass’n v. Frey, a lower court applied the Supreme Court’s decision in Sorrell to recognize that the First Amendment protects ISPs’ ability to use consumer data for marketing purposes. Taken together with other decisions, this holding suggests that actors beyond ISPs may also enjoy significant constitutional rights in the data derived from their services, though as Yoo notes, “the exact contours of these rights remain unclear.”

In summation, Yoo emphasizes that both common carriage and public accommodations jurisprudence “tell[] an amazingly consistent story.” in both cases, “little is gained by simply declaring an actor to be a common carrier or public accommodations. . . . [T]he key is whether the actor asserts individualized business and editorial judgment over the content it carries. The mere attempt to attach a label without more accomplishes little.”

FEATURED SCHOLARS

ANITA L. ALLEN is the Henry R. Silverman Professor of Law and Professor of Philosophy. She is internationally renowned as an expert on philosophical dimensions of privacy and data protection law, ethics, bioethics, legal philosophy, women’s rights, and diversity in higher education.

STEPHEN B. BURBANK is the David Berger Professor for the Administration of Justice, Emeritus. He is the author of definitive works on federal court rulemaking, interjurisdictional preclusion, litigation sanctions, international civil litigation, litigation retrenchment, and judicial independence and accountability.

CARY COGLIANESE is the Edward B. Shils Professor of Law and Professor of Political Science and the Founder and Director of the Program on Regulation. He specializes in the study of administrative law and regulatory processes.

JILL E. FISCH is the Saul A. Fox Distinguished Professor of Business Law and Co-Director of the Institute for Law and Economics. She is an internationally known scholar whose work focuses on the intersection of business and law, including the role of regulation and litigation in the disciplinary power of capital markets.

JEAN GALBRAITH is a Professor of Law. Her research focuses on the structure of international legal institutions, especially treaty regimes, and the connections between these institutions and U.S. domestic law.

JASMINE E. HARRIS is a Professor of Law with expertise in disability law, antidiscrimination law, and evidence. Her work examines the relationship between law and equality with a focus on law’s capacity to advance social norms of inclusion in the context of disability.

ALLISON K. HOFFMAN is a Professor of Law and Deputy Dean. An expert on health care law and policy, she examines some of the most important legal and social issues of our time, including health insurance regulation, the Affordable Care Act, Medicare and retiree healthcare expenses, and long-term care.

DAVID HOFFMAN is the William A. Schnader Professor of Law and Deputy Dean. He is a widely cited scholar who focuses his research and teaching on contract law. His work is typically interdisciplinary, built through collaboration with co-authors from a variety of fields.

HERBERT HOVENKAMP is the James G. Dinan University Professor. He is a Fellow of the American Academy of Arts and Sciences, and in 2008 he won the Justice Department’s John Sherman Award for his lifetime contributions to antitrust law.

PRAVEEN KOSURI is a Practice Professor of Law, the Deputy Dean for Clinical Education, and the Director of the Entrepreneurship Legal Clinic (ELC). He applies an integrated, interdisciplinary approach to teaching students to solve problems and has marshaled the resources of the ELC to positively impact distressed communities, under-represented entrepreneurs, and social ventures that benefit society.

SERENA MAYERI is a Professor of Law and History. Her scholarship focuses on the historical impact of progressive and conservative social movements on legal and constitutional change. Mayeri is also a core faculty member in the Program on Gender, Sexuality, and Women’s Studies.

SANDRA MAYSON is a Professor of Law who researches and writes in the fields of criminal law, constitutional law, and legal theory with a focus on the role of preventive restraint in the criminal legal system. Her academic work draws on her experience as a trial lawyer at Orleans Public Defenders.

SHAUN OSSEI-OWUSU LPS’08 is a Presidential Assistant Professor of Law. He is an interdisciplinary legal scholar with expertise in legal history, criminal law and procedure, civil rights, and the legal profession. His work sits at the intersection of law, history, and sociology, and he also works on stratification in legal education and the legal profession.

GIDEON PARCHOMOVSKY is the Robert G. Fuller, Jr. Professor of Law. His work focuses on intellectual property, property law, and cyber law. He has written numerous articles for major law reviews on property and liability rules, insider trading, trademarks, domain names, and patents.

ELIZABETH POLLMAN is a Professor of Law and Co-Director of the Institute for Law and Economics. She is an expert in business law, and she teaches and writes in the areas of corporate law and governance, as well as on startups, venture capital, and entrepreneurship.

JENNIFER E. ROTHMAN is the Nicholas F. Gallicchio Professor of Law and holds a secondary appointment at the Annenberg School for Communication. Nationally recognized for her scholarship in the field of intellectual property law, she is the leading expert on the right of publicity and is frequently sought after to consult on legislation, high-profile litigation, and the development of creative projects.

KAREN TANI L’07, GR’11 is the Seaman Family University Professor. She is a scholar of U.S. legal history, with broad interest in social welfare law, administrative agencies, and the role of rights in the modern American state.

YANBAI ANDREA WANG is an Assistant Professor of Law who researches and teaches in the fields of civil procedure and transnational litigation, with a focus on the relationship between U.S. and Chinese courts. She empirically maps the topography of transnational litigation, investigates the role of China and the U.S. in the international legal order, and analyzes downstream impacts on private actors structuring their cross-border relations.

SHELLEY WELTON is the Presidential Distinguished Professor of Law and Energy Policy and holds an affiliation with the Kleinman Center for Energy Policy. Her legal research focuses on how climate change is transforming energy and environmental law.

CHRISTOPHER S. YOO is the John H. Chestnut Professor of Law, Communication, and Computer & Information Science and the Director of the Center for Technology, Innovation & Competition. He is one of the nation’s leading authorities on law and technology and is widely recognized as one of the most cited scholars in intellectual property law as well as administrative and regulatory law.

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