Professor Ray Warner’s article Cross-Border Cooperation in the United States: A Retreat or Merely a Pause? appeared in a Festschrift delivered to leading international bankruptcy scholar Prof. Ian Fletcher in San Francisco on Friday. Prof. Fletcher is an Emeritus Professor of International Commercial Law at the University College of London and formerly was a Professor of Commercial Law and Head of the Insolvency Law Unit, Centre for Commercial Law Studies, Queen Mary and Westfield College, London University.
Professor Jeff Sovern’s article, Can Cost-Benefit Analysis Produce Better Consumer Protection? Or at Least Benefit Analysis? has been published at 4 UC Irvine Law Review 1241 (2014), as part of a symposium on cost-benefit analysis. Irvine, a relatively new law school, is ranked for the first time this year in the US News rankings, and came in at 30th. Here is the article’s abstract:
Cost-benefit analysis is often troubling to consumer advocates. But this article argues that in some circumstances it may help consumers. The article gives several examples of supposed consumer protections that have protected consumers poorly, if at all. It also argues that before adopting consumer protections, lawmakers should first attempt to determine whether the protections will work. The article suggests that because lawmakers are unlikely to adopt multiple solutions to the same problem, one cost of ineffective consumer protections is a kind of opportunity cost, in that ineffective consumer protections might appear to make unnecessary adoption of effective ones. Ironically, such an opportunity cost is unlikely to be taken account of in cost-benefit analysis. Among the protections that especially risk failing to benefit consumers are laws that require consumers to perform certain tasks, such as disclosure laws that presuppose consumers will pay attention to and act on the disclosures; if consumers instead generally ignore the disclosures, the consumer protection will be largely illusory. Accordingly, before adopting measures that depend on consumers to do something, lawmakers should try to verify that consumers will in fact undertake those actions. The article also makes some suggestions for ascertaining whether consumer protections will work — i.e., benefit consumers — and concludes with a brief critique of the proposed Independent Agency Regulatory Analysis Act.
The Consumer Financial Protection Bureau released a congressionally-mandated study of arbitration today and devoted two pages to discussing “Whimsy Little Contracts” with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements, by Professors Jeff Sovern, Elayne E. Greenberg, Paul F. Kirgis, together with Yuxiang Liu. The St. John’s Arbitration Study was also mentioned in an American Bar Association publication, 21 Dispute Resolution Magazine, No. 2 at 2 (2015). In scholarly publications, the article is being cited at a rate of more than once for every month it has been available, as indicated by the following list of citations:
- Ann M. Lipton, Manufactured Consent: The Problem of Arbitration Clauses in Corporate Charters and Bylaws, Georgetown Law Journal n. 64 (Forthcoming) .
- Eyal Zamir and Yuval Farkash, Standard Form Contracts: Empirical Studies, Normative Implications, and the Fragmentation of Legal Scholarship, JERUSALEM REVIEW OF LEGAL STUDIES n. 142 (Forthcoming).
- Christopher P. Guzelian, Required Resolution: Enforcing Contracts Without Courts n. 26, Chapman NEXUS Law Journal (Forthcoming, 2015
- Jill I. Gross, Justice Scalia’s Hat Trick and the Supreme Court’s Flawed Understanding of Twenty-First Century Arbitration nn. 54, 141
Professor Jay Facciolo has just published “Do I Have a Bridge for You: Fiduciary Duties and Financial Advice,” his latest article on securities regulation, in 17 University of Pennsylvania Journal of Business Law 101 (2014). The issue of whether broker-dealers should be held to a fiduciary standard as are investment advisers has generated a great deal of debate since 2010, when Dodd-Frank mandated that the SEC study the issue. Currently, the Department of Labor is considering proposing a new rule that would apply a theoretically strict fiduciary standard to financial professionals in the ERISA context. Professor Facciolo’s article argues that a fiduciary standard is no substitute for substantively regulating conflicts of interest in the provision of financial advice. Fiduciary standards fail to provide strong legal protections because of the contractual nature of such standards. In addition, standards are only as strong as the enforcement mechanisms available and, in financial advice, regulatory oversight has been ineffective and there are no robust private rights of action. Finally, disclosure, the standard fall back in securities regulation, has not worked well in creating limitations on conflicts that protect investors. In fact, some recent research has even suggested that disclosure of conflicts of interest may make investors trust their conflicted investment advisers more. After all, only a trust worthy individual would be willing to disclose something potentially negative about herself.
Associate Academic Dean Larry Cunningham’s article, Appellate Review of Unpreserved Questions in Criminal Cases: An Attempt To Define the “Interest of Justice,” was recently cited by the Supreme Court of Alaska in Moreno v. State, 2015 WL 404251 (Alaska 2015), a decision clarifying the scope of plain error review in criminal cases in that jurisdiction. The article was previously cited favorably by the Supreme Court of Mississippi in Wilson v. State, 96 So.3d 721 (Miss. 2012), which quoted from Cunningham’s article in support of its decision. The article was published in the Journal of Appellate Practice and Process at volume 11, page 285. It articulates a framework by which appellate courts can analyze legal issues that are raised for the first time on appeal.
Professor Michael Perino had a column in Friday, December 12th’s New York Times titled, “The Gift of Inside Information,” which discusses and criticizes a recent decision of the United States Court of Appeals for the Second Circuit. A bit:
Insider trading is perhaps our most symbolic white-collar crime. Our ban on the practice expresses our deep social commitment to equality of opportunity; it embodies that peculiarly American revulsion for any special privileges that might be thought to accrue to the wealthy or to the political and social elite. As Preet Bharara, the United States attorney who spearheaded the most recent spate of prosecutions, explained, insider trading tells everybody “that everything is rigged and only people who have a billion dollars and have access to and are best friends with people who are on the boards of directors of major companies … can make a true buck.”
Allowing executives to give away information to whomever they choose so long as they get nothing in return simply makes no sense.
The American Banker ran Professor Jeff Sovern’s op-ed, Arbitration Clauses Trap Consumers with Fine Print, on the St. John’s Arbitration Study. Professor Sovern collaborated on the study with Professors Elayne Greenberg and Paul Kirgis, and the director of St. John’s Institutional Assessment, Yuxiang Liu. The full study can be found here.
Cleveland Plain Dealer consumer affairs columnist Sheryl Harris reported on the St. John’s arbitration study in her column, Arbitration – what you don’t know about fine print can hurt you: Plain Dealing. Here is an excerpt:
Well, lawyers at St. John’s University Law School recently conducted [a study] and found that even when [consumers] know there’s an arbitration clause in a contract, they often don’t understand what it really means — even when they think they do know.
Researchers showed consumers a standard credit card contract with a binding arbitration clause and then asked them a series of questions.
- Most people didn’t realize there was an arbitration clause in the contract.
- Of the 40-odd percent who spotted the clause, almost two-thirds believed – wrongly – that if the disputed amount was too big for small claims court, they could still go to common pleas or federal court.
- Less than 9 percent both spotted the arbitration clause and correctly said it would prevent all consumers from going to [a] court [other than a small claims court] to resolve a dispute.
Remarkably, 87 percent of the 303 people who swore they’d never agreed to a contract that contained an arbitration clause were flat-out wrong
How did researchers know? They asked people if they did business with AT&T Mobility, Sprint, Verizon, PayPal or Skype – companies whose contracts routinely require consumers to agree up front that if they ever have an issue with the company, they can only resolve it through binding arbitration.
“We don’t know about the remaining 13 percent,” says law prof Jeff Sovern, one of the authors of the study. Sovern says the number of people who had unwittingly agreed to mandatory arbitration is likely higher because researchers asked consumers about contracts with those five companies, not about every company they did business with.
DiLorenzo’s Papers Published in New York Law Journal and Accepted World Congress of the International Society for the Philosophy of Law and Social Philosophy
Professor Vincent DiLorenzo’s article, “Congress Exempts Condominiums from the Interstate Land Sales Act,” was published in the New York Law Journal on November 12, 2014. The article examines the provisions of the Interstate Land Sales Act that allow purchasers to revoke contracts for the sale of condominiums when developers (a) have not complied with the registration and disclosure requirements of the Act, or (b) have not complied with the contractual requirements contained in the Act, including limits on available remedies for breach. HR 2600, passed in September and signed by the President, exempts condominiums from the registration and disclosure requirements of the Act. However, it is not clear if Congress intended to exempt condominium developers from the Act’s contractual requirements. This article explores that ambiguity in the statute and the courts’ interpretation of the scope of earlier exemptions that arguably extended to the Act’s contractual requirements.
In addition, Di Lorenzo’s paper, “Reason, Cognition and Emotion: A Study of Regulatory Standards and Enforcement Policy,” was accepted and will be presented at the World Congress of the International Society for the Philosophy of Law and Social Philosophy.
Professor John Q. Barrett, assisted by Barbara Gellis Traub, former Head of Reference & Instructional Services at St. John’s Rittenberg Law Library, helped draft and edit biographical information on the 154 Federal Judges who have served on the United States District Court for the Southern District of New York and its predecessor, the U.S. District Court for the District of New York, from 1789 to the present. The Court was the nation’s first federal court and thus is nicknamed the “Mother Court.”
The judicial biographical entries are part of voluminous historical information that was distributed on thumb drives to guests at the Court’s 225th anniversary special session on November 4, 2014. This information soon will be available on the Court’s website.
The Court’s 225th anniversary will be celebrated throughout the next year, including in a series of public events and programs.
U.S. District Judges Deborah A. Batts and P. Kevin Castel ’75, Co-Chairs of the Southern District’s 225th anniversary celebration, recruited Barrett and Traub to assist with the biographies project.