When investment banks advise on merger and acquisition (M&A) transactions, are they fiduciaries of their clients, gatekeepers for investors, or simply arm’s-length counterparties with no other-regarding duties? Scholars have generally treated M&A advisors as arm’s-length counterparties, putting faith in the power of contract law and market constraints to discipline errant bank behavior. In this Article, Professor Andrew Tuch counters that view, arguing that investment banks are rightly characterized as fiduciaries of their M&A clients and thus required to loyally serve client interests. He also develops an analytical framework for assessing the liability rules that will most effectively deter disloyalty on the part of investment banks toward their M&A clients.
The Dodd-Frank Wall Street Reform Act allowed the Securities and Exchange Commission (SEC) to bring almost any claim that it can file in federal court to its own administrative law judges (ALJs). In this Article, Professor David Zaring evaluates the SEC’s new ALJ policy both qualitatively and quantitatively, offering an in-depth perspective on how formal adjudication—the term for the sort of adjudication over which ALJs preside—works today. It argues that the suits challenging the SEC’s administrative proceedings are without merit; agencies have almost absolute discretion as to whom and how they prosecute, and administrative proceedings, which have a long history, do not threaten the Constitution. The controversy illuminates instead dueling traditions in the increasingly intertwined doctrines of corporate and administrative law: the corporate bar expects its judges to do equity; agencies and their adjudicators are more inclined to privilege procedural regularity.
In this Book Review, Professor Herbert Hovenkamp reviews Richard S. Markovits’s new two-volume work, Economics and the Interpretation and Application of U.S. and E.U. Antitrust Law.
The market for corporate debt has reached $8.2 trillion, a staggering 50% increase since the financial crisis. Yet regulators, and the laws they enforce, have not kept pace. In particular, the Trust Indenture Act of 1939 is particularly anachronistic with respect to out-of-court restructurings (or workouts): If a bond issuer wants to privately restructure its obligations, it must obtain the consent of each individual bondholder. There is no simple mechanism for troubled corporate issuers to negotiate with bondholders as a class: § 316(b) bars collective action. In this Note, Harold Groendyke argues that § 316(b) frustrates workouts and pushes issuers into potentially needless bankruptcies and that Congress should finally amend § 316(b) of the Trust Indenture Act to allow for recapitalizations through collective action.
In this Note, Jacy Selcoe considers how the lack of liability protection for volunteer medical providers impedes volunteering, and how healthcare providers might imitate volunteer protections use in the legal industry to increase volunteerism. First, she dissects the current volunteer healthcare liability regime, then looks at how the legal community protects its volunteers through a uniform professional standard of malpractice insurance. Finally, she argues that streamlining volunteer healthcare liability to imitate the simplified, insurance-based model used to provide protection for volunteer legal services will allow governments the flexibility to incentivize volunteerism among healthcare providers, while giving practitioners and organizations the predictability and protection necessary to meet the public’s need.
Many legal rules are designed to address the imperfections of real-world institutions. Rules of justiciability and deference, statutes setting administrative deadlines, multinational treaties that protect foreign nationals—all are designed, at least to a degree, to minimize and correct the limitations of courts, agencies, and self-interested states at making the decisions the law requires of them.
But these and countless other efforts at institutional design are subject to a subtle yet pervasive problem. Rules intended to reallocate or restructure institutional authority typically cannot be made without further decisions of their own—to fill in details, to develop supporting structures, or to apply rules in individual cases. There is no assurance that an institution will be capable of making those decisions any more competently than it makes those decisions that the design is intended to improve. And the risk—indeed, the inevitability— that institutions will often make such decisions poorly has in practice undermined or negated the effectiveness of many proposed institutional reforms.
This Article explores this critical but underrecognized characteristic of institutional design, which it calls “incompleteness.” It details a number of real-world and academic designs in which incompleteness has generated significant or fatal problems that might have been avoided if this feature had been identified at the outset. It describes the unique problems presented by delegating institutional decisions to downstream actors, from circularity to imperfect veils of ignorance to entrenchment to system effects. And it develops the rudiments of a toolkit that might be used to engage in more complete and effective institutional design in the future.
One possible reason as to why consumers are willing to trade away their privacy is because they are unaware of the amount of privacy being lost. But even if consumers were made aware of the loss, they would still engage in privacy-sacrificing behaviors. Behavioral economists have proven that people will both underestimate their risk of harm and prefer a short-term gain to a long-term risk. These two theories help to explain why consumers are willing to trade away their privacy by purchasing IoT devices and should therefore be considered when legislators and policymakers begin regulating the Internet of Things.
Although Daubert and Kumho Tire provide some guidance regarding how judges should evaluate expert testimony for reliability, they leave too much to the discretion of the judge. Under the present system, the reliability determination remains highly dependent on the judge’s own views of what is methodologically important—an opinion that may be no more qualified than the opinion of the common juror. Consequently, Marta Chlistunoff argues that Daubert and other procedural tools currently available to judges alone fail to adequately test the reliability of expert testimony because they do not direct judges’ focus to an expert’s methodology—or at least not the correct aspects of that methodology—and fail to ensure that the judge has adequate information to accurately assess reliability. This Note instead contends that the legal community should adopt a mandatory disclosure list—a “methodology questionnaire”—which would highlight potential areas of concern and subjectivity in the subject expert’s methodology. This methodology questionnaire would serve to supplement mechanisms currently in place and to maximize the likelihood that judges and juries would be able to scrutinize expert testimony without being unduly swayed by the “expert” label or by the complicated nature of the testimony at issue.
“Blight” is the label used by U.S. law to describe property that is considered to be dilapidated or injurious to public health. In much of the U.S., it is easier to use eminent domain to condemn a property if it is deemed “blighted.” This Note examines the negative effects that condemning such properties can have on residents of “blighted” areas and proposes some changes to the law that would better protect these residents from the costs associated with condemnation.
In this Note, William Mason analyzes the economic effects of the Trademark Trial and Appeal Board’s decision to revoke federal trademark protection from the Washington Redskins and questions whether those effects are sufficient to force a change to the team’s name. He argues that the protections and incentives provided by the NFL and collective bargaining will significantly damper any economic effect the Board’s decision may have, and instead suggests alternative areas where social and economic pressure may prove more successful.
The Texas Law Review is proud to announce its volume 94 membership! Congratulations to all our new members, and welcome to TLR! The Masthead is now available for download.
The Texas Law Review is proud and excited to announce the Editorial Board for Volume 94. The members of Volume 93 are happy to pass the torch to such a fantastic group of people. View the Volume 94 Editorial board Masthead.
The Texas Law Review would like to congratulate two of its Volume 92 alumni for achieving the top two scores on the July 2014 Texas Bar Exam. Jamie Yarbrough, who served as the Research Editor on Volume 92′s editorial board, had the top score followed closely by Michael Kelso, an Articles Editor on Volume 92′s editorial board. Mr. Yarbrough is currently working as an associate for Baker Botts in Houston while Mr. Kelso is clerking for Judge Carolyn King of the Fifth Circuit Court of Appeals.
The Texas Law Review is proud to announce its volume 93 membership! Congratulations to all our new members, and welcome to TLR! The Masthead is now available for download.