April 17, 2015
Professor Lazaro commented on the Department of Labor’s proposed rule to extend a fiduciary standard to those providing investment advice to clients on retirement accounts in an article in On Wall Street, Tougher Rules But Flexible Comp Under New Fiduciary Proposal. The article, written by Andrew Welsch and Suleman Din, states:
Critics should remember that the DOL had initially come out with a fiduciary standard proposal in 2010, then pulled it and spent the next five years seeking additional comment and revising rules, said Christine Lazaro, director of the Securities Arbitration Clinic at St. John’s University School of Law.
“It’s not like they’ve moved forward quickly or haphazardly, or without considering viewpoints that they needed to,” Lazaro said. “They’ve moved forward carefully and I think thoughtfully in the process.”
The DoL proposal will be filed in the Federal register and will again be open for public comment, she added. “So there will be another opportunity for anyone to voice their concerns. The fact that they are moving forward faster than the SEC on a fiduciary standard doesn’t mean they haven’t given full consideration of viewpoints that they should be considering.”
Lazaro found little in the proposal for the industry to be alarmed about.
“It does seem like the general business models will be permitted,” Lazaro noted. “There really isn’t any need to panic. The major concerns raised by the industry regarding commissions and revenue sharing, these would be permitted to continue, so long as the advice given is in the best interest of the investor.”
“There are plenty of situations where advisors are already held to fiduciary duty, such as under state common law standards. It’s not like strict standards haven’t been tested and brokers haven’t been held to these standards already. It’s not a foreign concept when it comes to brokers.”
April 17, 2015
I have a new article up titled, Free Exercise By Moonlight. Here’s the abstract:
How is the current condition of religious free exercise, and religious accommodation in specific, best understood? What is the relationship of the two most important free exercise cases of the past half-century, Employment Division v. Smith and Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC? This essay explores four possible answers to these questions.
1. Smith and Hosanna-Tabor are the twin suns of religious accommodation under the Constitution. They are distinctively powerful approaches.
2. Hosanna-Tabor’s approach to constitutional free exercise is now more powerful than Smith’s. Smith has been eclipsed.
3. Hosanna-Tabor has shown itself to be feeble. It has been eclipsed by Smith.
4. Smith augured the waning of religious accommodation, which proceeds apace. Hosanna-Tabor does little to change that.
In describing these possibilities, the essay considers the cases themselves, various doctrinal developments (focusing on subsequent Supreme Court cases as well as lower court decisions interpreting Hosanna-Tabor), and the broader political and social context in which claims for religious accommodation are now received. It concludes that though each possibility has persuasive points (perhaps with the exception of the second), the last is most accurate.
Smith’s approach to free exercise continues to control for constitutional purposes and is, for more general political purposes, more entrenched than ever. Its admonition about fabulously remote threats of anarchy in a world where each “conscience is a law unto itself” has ironically become more apt as a warning against the multiplying number of secular interests argued to be legally cognizable than against religious accommodation run amok. There is no clearer manifestation of these developments than the recent emergence of theories maintaining that new dignitary and other third party harms resulting from religious accommodation ought to defeat religious freedom claims. These theories reflect the swollen ambit of state authority and defend surprising understandings of the limits of religious accommodation — understandings that pose grave threats to the American political tradition of providing generous religious exemptions from general laws. The ministerial exception simply represents the refracted glow of constitutional protection in the gathering gloom. It is free exercise by moonlight.
April 15, 2015
Professor Michael Perino’s co-authored article on securities class action fee-setting (linked below), which will be published in the Columbia Law Review, was cited in this Reuters story by Alison Frankel. A bit from the beginning:
A couple of weeks ago, I wrote about a fee opinion by U.S. District Judge Lewis Kaplan of Manhattan, who decided that a request by class counsel for 13 percent of a $346 million settlement with underwriters of IndyMac mortgage-backed securities was just too much. Even though the 13 percent request was in line with the fee deal plaintiffs’ firms had negotiated in advance of the litigation with the lead plaintiff, a public pension fund, Kaplan cut the fee award to 8 percent, based on his own experience with securities class actions and skepticism about the hours reported by class counsel.
That example is a paradigm of the problems with the current system of awarding fees in securities class actions, at least as those problems have been pinpointed in an upcoming Columbia Law Review article by law professors Lynn Baker and Charles Silver of the University of Texas and Michael Perino of St. John’s University. In “Is the Price Right: An Empirical Study of Fee-Setting in Securities Class Actions,” the professors dipped into the dockets of 434 settlements announced between 2007 and 2012, looking at (among other things) how pre-set fee agreements with counsel factored into lead plaintiff selections; how fee requests and awards varied by the volume of cases handled by different jurisdictions and even individual judges; and why judges in about 15 percent of the settlements cut the requested fees.
Their overall conclusion is that in the vast majority of cases, fees are determined after the fact, based only on the size of settlement and the biases of the court. The professors argue that their findings show one of the goals of the Private Securities Litigation Reform Act of 1995 – to encourage lead plaintiffs to exercise oversight by negotiating fee arrangements with class counsel at the onset of a case – has not been met. They also concluded plaintiffs lawyers may be exploiting market inefficiencies by requesting higher fees from courts with a low volume of securities cases. And judges who slash fee requests without real analysis of benchmarks, they said, create uncertainty that, in the long run, hurts investors because it discourages class action lawyers from investing in cases.
April 15, 2015
Professor Eva Subotnik’s article, Copyright and the Living Dead?: An Estates Law View
of the Post-Mortem Term, will be published in the fall by the Harvard Journal of Law & Technology. Here is the abstract:
Is there any good reason why the term of copyright, which was once a scant fourteen years long, should now last decades beyond the death of the author? Proponents of copyright as a form of property have generally welcomed this expansion. By contrast, recent scholarship has cast doubt on the soundness of any post-mortem period of protection, citing anti-social behavior by well-known authors’ successors that threatens our cultural heritage. Absent from the literature thus far, however, has been a systematic study of how estates law principles, which govern the general succession of property, bear on the justifications for and scope of copyright’s post-mortem term. Undertaking that task, this article makes two principal points. First, estates law theories and doctrines provide discrete support—beyond what general property principles provide—for a post-mortem term that should be taken into account in any debate over copyright duration. Second, while there are costs associated with the post-mortem term, they should be viewed primarily through the prism not of dead-hand control but of suboptimal stewardship by the living. Together, these points begin to suggest changes that should be implemented, including the shortening of the post-mortem term and the instantiation of better stewardship practices among authors’ successors.
April 13, 2015
Professor David Gregory was a featured panelist and speaker at the Syracuse University and Le Moyne Labor and Religion conference, “Moral Vision From/For the Grassroots,” on April 10 and 11, 2015. He will moderate a featured panel, “Catholic Colleges and Universities, Collective Bargaining and NLRB Jurisdiction,” at the annual conference of the National Center for the study of collective bargaining in higher education and the professions, CUNY Graduate Center, on April 21, 2015.
His chapter on labor and employment law has been published in “A Clearer Lens: American Law from a Catholic Perspective.”
April 8, 2015
Professor Christine Lazaro’s article, “The Fragmented Regulation of Investment Advice: A Call for Harmonization,” co-authored with Benjamin P. Edwards, has been published in the Michigan Business and Entrepreneurial Law Review, 4 Mich. Bus. & Entrepreneurial L. Rev. 47.
April 8, 2015
On March 25, PIABA released a report, entitled “Major Investor Losses Due to Conflicted Advice: Brokerage Industry Advertising Creates the Illusion of a Fiduciary Duty” co-authored by Joseph C. Peiffer and Christine Lazaro. The report compares the image brokerage firms project to the public in their advertising and on their websites with the position firms take in arbitration when it is alleged that they have breached their fiduciary duties to customers. Concurrent with the issuance of the report, PIABA held a news event during which Joe Peiffer and Professor Lazaro presented the report, and a customer shared her experience with one of the firms cited in the report. Professor Lazaro was quoted regarding the report in several stories, including Andrew Welsch, “Latest Fiduciary Rule Battle Cry: ‘Broker Ads Mislead Investors’,” On Wall Street, and James Langton, “U.S. brokerage firms misleading investors about fiduciary role: PIABA,” Investment Executive. Following the issuance of the report, Professor Lazaro traveled to Washington D.C. with other members of PIABA and met with a number of agencies and congressional staffers to discuss the fiduciary duty standard and other investor protection issues.
April 3, 2015
The Pittsburgh Post-Gazette has published Professor Jeff Sovern’s op-ed, Consumers often sign contracts they don’t read or understand. The op-ed, which drew on research reported in the the article Professor Sovern wrote with Professors Elayne Greenberg and Paul Kirgis, as well as the University’s Director of Institutional Assessment, Yuxiang Liu, ‘Whimsy Little Contracts’ with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements, opens as follows:
Consumers often sign form contracts without reading them — if you don’t believe me, just drop by a car rental agency and watch what happens.
Consumers may have many reasons for not reading contracts, including that they are too long (the iTunes contract is 32 feet long when printed); that the contracts are incomprehensible (all that legalese); or that they can’t negotiate better terms.
March 31, 2015
G. Ray Warner
Prof. Ray Warner delivered the inaugural Hon. Frank W. Koger Lecture on Commercial and Bankruptcy Law at the University of Missouri – Kansas City School of Law. His lecture was titled “The World is Flat (Broke): Globalizing Bankruptcy Law.”
March 31, 2015
John Q. Barrett
On March 11, 2015, Professor John Q. Barrett participated in an international conference entitled “Legally Blind: Law, Ethics, and the Third Reich,” held at Boston College in Chestnut Hill, MA. Professor Barrett’s lecture, “Dawning, Developing Comprehension of Nazi Law-Breaking & Atrocities: Justice Robert H. Jackson on the Road to Nuremberg, 1940-1945,” will be published in a conference book. During the conference, he and other conferees also were interviewed for a documentary film that now is in production. For local press on the conference, click here and here.