St. John's University Law Faculty Blog

Professor Vincent Di Lorenzo’s article, “Corporate Wrongdoing: Interactions of Legal Mandates and Corporate Culture”, will be published in the fall 2016 issue of the Review of Banking & Financial Law.  The Review is prepared under the auspices of the Graduate Program in Banking and Financial Law of Boston University School of Law. The following is an abstract of the article:  

In recent years enforcement officials have imposed billions of dollars in sanctions on all major U.S. financial institutions and many major financial institutions abroad. Similar sanctions have been imposed on nonfinancial institutions. The sanctions are the result of findings of recurrent violations of law as well as recidivism. Why have existing regulatory standards and enforcement policies led to repeated violations of law? Will the recent billion dollar sanctions deter future wrongdoing? This article explores these issues by examining the philosophy motivating regulatory policy and action in the U.S. and U.K. Financial regulators provide a case study. This article explores the interaction of two institutions that influence corporate actors: government and corporate culture. That interaction is examined through the lens of behavioral decision and complexity theory. The conclusions drawn are that regulators in the U.S. continue to be blind to cognitive influences on corporate behavior. By contrast, regulators in the U.K., have begun to recognize cognitive influences. Enforcement policy in the U.S. has similarly ignored the multiple influences on corporate behavior that interact and lead to nonlinear outcomes. The change, if any, in U.S. enforcement strategy is a greater emphasis on large penalties to deter future misconduct. This continues to reflect a linear, reductionist view of corporate behavior. In contrast, regulatory authorities in the U.K. are rethinking their enforcement strategy based, in part, on recognition of multiple influences on corporate decision making. In the U.S. this regulatory blindness seems likely to lead recurring issues of noncompliance.

Professor John Q. Barrett recently participated in the following:

· On July 16, he met students in Creighton University’s summer law school program, “From Nuremberg to The Hague,” in Krakow, Poland, and guided their visit to the Auschwitz-Birkenau memorial and museum.

· On July 18 & 19, he led discussions and lectured those students during classes in Nuremberg, Germany, and guided their visit to the former Nazi Party Rally Grounds there.

· On July 20, he gave a public lecture, “Obama, the Supreme Court and the Presidential Election,” at the Deutsch-Amerikanisches Institut Nürnberg.

· On September 7, he gave a lecture at the Philadelphia Bar Association, hosted by its Federal Courts Committee. The topic was U.S. Supreme Court Justice Robert H. Jackson’s 1947 hiring of Temple Law School student James M. Marsh to be Jackson’s law clerk. This is the subject of a chapter that Professor Barrett wrote in the recent book, OF COURTIERS AND KINGS: MORE STORIES OF SUPREME COURT LAW CLERKS AND THEIR JUSTICES (Todd C. Peppers & Clare Cushman, eds., University of Virginia Press, Dec. 2015) (click here for the chapter abstract).

· On September 12, he gave the plenary keynote lecture, “Justice Jackson and the Nuremberg Trial: Rule of Law Lessons in this 70th Anniversary Year,” at the Colorado Judicial Conference, held in Vail, Colorado.

· On September 16, he was the Constitution Day speaker, on the topic of Presidents and the Constitution, at the Franklin D. Roosevelt Presidential Library & Museum in Hyde Park, New York. This program included discussion of the new book, THE PRESIDENTS AND THE CONSTITUTION:  A LIVING HISTORY (Ken Gormley, ed., New York University Press, 2016), in which Professor Barrett wrote the chapter on President Hoover.

Professor Jeff Sovern’s article, Are Validation Notices Valid? An Empirical Evaluation of Consumer Understanding of Debt Collection Validation Notices, co-authored with AssociateProfessor of Psychology Kate Walton, will be published in the SMU Law Review.  SMU is currently ranked 45th in the US News law school rankings.

Here is the abstract:
A principal protection against the collection of consumer debts that are not actually owed is the Fair Debt Collection Practices Act’s validation notice, which obliges debt collectors demanding payment to notify consumers of their rights to dispute debts and request verification, among other things. This Article reports on the first public study of whether consumers understand the notices or what they take away from them. For nearly four decades, courts have decided whether validation notices satisfied the FDCPA without ever knowing when or if consumers understand the notices. This Article attempts to remedy that problem.

Collectors who prefer that consumers focus on the request for payment rather than a statement of consumer rights will find our results heartening. When we surveyed consumers by showing them a collection letter the Seventh Circuit had upheld against challenge, on most questions respondents did not show significantly better understanding of the validation notice in that letter than on an otherwise identical letter without any validation notice at all. More than half the court-approved letter respondents seemed confused by the notice’s phrasing about when the collector would assume the debt to be valid. About a quarter did not realize they could request verification of the debt, and nearly all who realized they could seek verification also thought that an oral request was sufficient even though both the statute and notice specify that a writing is required. More than a third of respondents thought that if they did not meet the thirty-day deadline specified in the validation notice for disputing the debt, they would have to pay the debt or could not defend against a suit to collect it even if they did not owe the debt. Under the standard the FTC uses for determining deception in surveys, the notice would be found deceptive.

Our results raise troubling questions about the effectiveness of current forms of validation notices, and therefore whether consumers being pursued by collectors for debts they do not owe are appropriately protected. The willingness of courts to approve validation notices that do not serve Congress’s goals creates the illusion of consumer protection without the reality.

Professor Eva Subotnik’s article, Artistic Control After Death (forthcoming in the Washington Law Review), has just been reviewed by Professor Jessica Silbey on Jotwell: The Journal ofThings We Like (Lots).

Professor Subotnik’s article addresses the topic of the postmortem enforceability of artistic instructions issued by authors before death, taking into account the interests of authors, their living successors, and the public.  Professor Silbey concludes her review by saying that “Subotnik’s contribution enriches these debates and should guide future policy in this area.”

You can read the review at http://ip.jotwell.com.

Professor Vincent Di Lorenzo presented a paper at the World Interdisciplinary Network for Institutional Research (WINIR) 2016 Conference held in Boston on September 2-5, 2016.  The theme of the conference was Institutions and Human Behavior.  Professor Di Lorenzo’s paper presented his research comparing the regulatory philosophy and enforcement record of financial regulators in the U.S. and the U.K.  Specifically, it examined the response of regulators to recurrent illegal behavior by mainstream financial institutions, and whether regulators have recognized and embraced the findings reflected in behavioral decision theory and complexity theory as applied to organizational behavior.