March 9, 2015
Associate Academic Dean (and criminal law professor) Larry Cunningham was quoted in
this Associated Press story about the federal government’s report on racial profiling in Ferguson, Missouri’s police department and the decision of the Ferguson Police Department Chief not to resign.
March 3, 2015
Professor Michael Perino’s new article, Is the Price Right? An Empirical Study of Fee-Setting in Securities Class Actions (co-authored with Professors Lynn A. Baker and Charles Silver of the University of Texas School of Law) was accepted for publication by the Columbia Law Review. Here is the abstract:
Every year, fee awards enable millions of people to obtain access to justice and strengthen the deterrent effect of the law by motivating lawyers to handle class actions. But the process by which judges decide how much to pay lawyers remains a black box. Settlements go in one side; fee awards come out the other. The inputs and outputs have been studied, but the actual operation of the fee-setting mechanism has not. Consequently, it is difficult to know why judges award the amounts they do or whether they size fee awards correctly.
Both numerically and in terms of dollars recovered, securities cases dominate the federal courts’ class action docket. We therefore undertook to peer into the fee-setting black box by studying in detail all of the 434 securities class actions that settled in federal district courts from 2007 through 2012. We examined the actual court filings in each case to create an original, comprehensive dataset of information on all points at which federal judges are likely to consider issues relating to fees. These data enable us to paint a picture of the fee-setting process that is unusually detailed and nuanced and that falsifies many common beliefs.
Among our major findings are that: (1) federal judges often deviate from the path Congress laid out in the Private Securities Litigation Reform Act (PSLRA), which requires lead plaintiffs to set the terms of class counsel’s retention and federal judges to serve as backstops against abuses; (2) fees tend to be lower in federal districts that see a high volume of securities class actions than in districts that handle these cases less often; (3) fee cuts are significantly more likely among judges that see a high volume of securities class actions than among low volume judges; (4) the well-known “decrease-increase” rule, according to which fee percentages decline as settlements become larger, operates mainly in high-volume districts; and (5) judges appear to cut fees randomly, that is, on the basis of their own predilections rather than the merits of fee requests. Finally, we learn that so-called “lodestar cross-checks,” which require judges to consider the “time and labor expended by counsel” and other factors to ensure against excessive fees, accomplish nothing. Actual fee awards reflect something closer to a pure “percentage of the fund” approach.
In sum, we found little evidence that the actions currently taken by the courts in securities class actions move class counsel’s fees closer to the “right price.” We therefore propose a set of procedural reforms which courts could easily adopt that would make fee-setting in securities class actions more transparent, more compatible with the normative goals of the PSLRA, and more predictable. The reforms would encourage lawyers to invest optimally in class actions, with salutary effects for investors seeking compensation and the integrity of the financial markets.
March 3, 2015
Anita S. Krishnakumar
Professor Krishnakumar presented her paper, Dueling Canons, at a faculty colloquium at Seton Hall Law School on Tuesday, February 24th. The paper examines, empirically, the extent to which majority and dissenting opinions employ the same canons/tools of statutory construction to reach opposing outcomes in the same cases during the first five terms of the Roberts Court.
February 25, 2015
Professor Christopher Borgen was interviewed yesterday by the BBC on the situation in the Ukraine, Russian President Vladimir Putin, and international law. The audio of the interview is here and the relevant segment begins at about the 19.15 minute mark.
February 23, 2015
Professor Ettie Ward was recently elected to the Executive Board and Secretary of the Sports Law Section of the AALS. Professor Ward was also elected to the Executive Boards of both the Civil Procedure and Litigation Sections.
February 20, 2015
Professor Nina Crimm and Professor Laurence H. Winer (Arizona State University, Sandra Day O’Connor College of Law) have written a post on their recently published book, God, Schools, and Government Funding: First Amendment Conundrums (Ashgate, 2015). The post was noted on SCOTUSblog’s Wednesday round-up.
February 19, 2015
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.
February 19, 2015
G. Ray Warner
Professor Ray Warner’s article “Rejoice in New York’s Revised UCC, But Beware of Traps” was published in the February 18th issue of Law360.
February 10, 2015
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.
February 9, 2015
Professor Mark Movsesian was quoted in the Deseret News on the subject of the paucity of
religious objections to vaccination and the inapplicability of the Supreme Court’s recent decision in Burwell v. Hobby Lobby Stores to the current controversy concerning the measles outbreak.