Remedies

The Liability of Judges for Wrongful Imprisonment

by

By Samuel Beswick, Assistant Professor of Law, Peter A. Allard School of Law, The University of British Columbia. Last month, the United States Sixth Circuit Court of Appeals and the Federal Court of Australia each gave judgments on lawsuits against sitting judges for abusing their contempt-of-court power. The US case arose after an Ohio Municipal … Read more

Gold, Goldberg, Kelly, Sherwin & Smith – The Oxford Handbook of the New Private Law

by

Post by Andrew Gold, John Goldberg, Daniel Kelly, Emily Sherwin, and Henry Smith We have some good news – The Oxford Handbook of the New Private Law has just been published (Oxford; Amazon)!  The Handbook offers exciting developments in scholarship dedicated to the study of private law in general, and to the New Private Law … Read more

Retroactive Rights of Action

by

By Samuel Beswick, Assistant Professor, Peter A. Allard School of Law, The University of British Columbia I recently suggested on Balkinization that a storm seems to be brewing concerning the place of non-retroactivity doctrine (also called the doctrine of “prospective overruling”) in federal law. Non-retroactivity doctrine attempts to define the temporal scope of novel judgments … Read more

Oxford Studies in Private Law Theory (Miller & Oberdiek eds.) — Call for Papers

by

Oxford University Press is pleased to announce the launch of Oxford Studies in Private Law Theory, edited by Paul Miller (Notre Dame) and John Oberdiek (Rutgers), and to issue a call for papers for the first volume.  Oxford Studies in Private Law Theory is a series of biennial volumes showcasing the best article-length work across private law … Read more

AALS Section on Remedies – Call for Papers [Updated]

by

Post by Erik Hovenkamp. The AALS Section on Remedies will host a program entitled, “Intellectual Property Remedies at the Supreme Court and Worldwide,” to be held on January 4 at this year’s Annual Meeting in New Orleans (Jan. 2-6). The Call for Papers is below. AALS Remedies Section – Call for Papers UPDATE: The deadline … Read more

In Trust We Trust — Yonathan Arbel

by

Post by Yonathan Arbel

The recent leak of the Panama Papers exposed the public to the magnitude of assets held in offshore accounts. These accounts are often associated with motives such as tax evasion and asset shielding from creditors, although they may be more legitimate motives to locating one’s assets offshore, such as privacy or preference for the rules of a specific legal system.  The estimates of how much is stowed offshore vary significantly, from one to five trillion dollars, an interval so large that it mostly reveals our ignorance. We simply know too little about these accounts, their motives, structures, and value—which, from the viewpoint of those who designed these trusts, is a feature, not a bug.  The most comprehensive work to date on the topic is that of Professors Sitkoff and Schanzenbach, who studied U.S. institutional trustees. However, these trustees are not likely representative of offshore trusts, and so, our understanding of offshore trusts is still foggy.

In a new intriguing paper, forthcoming in the Hastings Law Journal, Adam Hofri-Winogradow is providing us with a glimpse into the clandestine world of onshore and offshore trusts.  Hofri used a combined qualitative methodology of surveying and interviewing providers of trust services. Overall, he surveyed 409 providers of trust services and interviewed 25. Of his many findings, I will highlight just a few.

Read more

Apologies as Tort Reform — Yonathan Arbel

by

Post by Yonathan Arbel

When we wrong others, there is often an expectation—perhaps a moral duty—that we apologize. By apologizing, the wrongdoer asserts ownership of the wrong and acknowledges the wrongness of the act and the moral standing of the victim. It is also said that apologies can help restore the social order disrupted by the wrong.

In recent decades, many scholars have suggested that there should be a place in the law for apologies. And so the idea of ‘apology laws’ – laws that promote and protect the use of apologies – was born. These laws, now found in 36 states, are meant to encourage wrongdoers to apologize without fear of legal repercussions, and they typically apply in private law settings, such as torts and medical malpractice. A paradigmatic example is a doctor who makes a mistake during surgery but, in the absence of a ‘safe harbor’, would be reluctant to apologize for fear that admitting the mistake would foster litigation and count as an admission of liability.  An apology law that makes apologies inadmissible as evidence of fault at trial, as most do, promises to overcome this barrier.

In a new paper, Tort Reform Through the Backdoor: A Critique of Law & Apologies, (Forthcoming S. Cal. L. Rev., 2017), Yotam Kaplan and I are challenging the predominant scholarly disposition favoring laws that create safe harbors for apologies. We argue that in commercial settings—involving insurance companies, large firms, hospitals, etc.—using the law to encourage apologies may undermine tort liability and undercut deterrence. This effect is not necessarily negative—many people believe that the tort system is out of control—but it does mean apology laws are de-facto tort reform. That many states that normally oppose tort reform adopted apology laws was the result of clever marketing and concentrated lobbying efforts by tort reformers who co-opted the legal discourse on apologies to their own ends. Perhaps most notably, Barack Obama and Hillary Clinton—neither of whom is a card-carrying tort reformer—advocated actively for apology laws in an article in The New England Journal of Medicine.

Read more

Private Law and Asset Shielding — Yonathan Arbel

by

Post by Yonathan Arbel,  postdoctoral fellow in private law, Harvard Law School (job market candidate)

One of the central questions in the New Private Law is how ‘down-to-earth’ should legal analysis be? Regardless of one’s substantive view on this debate, there is one area in which we have been insufficiently realistic: private law enforcement. There is a real gap in our understanding of how legal norms are executed by sheriffs, bailiffs, and private ordering. Understanding the limits of doctrine and law could be informative for both economic and justice-based views of the law, as well as to views that look at the law from the internal point of view.

My scholarship focuses on questions concerning the enforcement of private legal norms. In Shielding of Assets and Lending Contracts (Forthcoming, Int’l Rev. L. Econ.) I consider the problem of asset shielding. Most judgments, if not voluntarily implemented, depend on enforcement through the seizure of the judgment-debtor’s assets. The problem is that ownership is too malleable and enforcement is too constrained, so there are many ways in which people can hide, shield, or protect their assets (transfer of money to an exotic offshore trust, bankruptcy planning, sham transfer to one’s relatives, hiding money under the mattress, etc.). Some of these techniques are more complicated than others, and some people will have moral reservations about deploying certain kinds of shielding techniques, or self-interested concerns about the effects of shielding on their credit scores, but overall, there is a real temptation here – especially since criminal enforcement against those who shield is quite rare. Given this temptation, it is puzzling why people do not shield assets more often. More generally, because avoiding judgments through asset shielding undermines many private legal obligations, it is important to have an account of when people would choose to meet their obligations and, if they decide to shield, the magnitude of assets that would be shielded.

Read more

SIOE 2016 — Dan Kelly

by

Post by Dan Kelly

 

The Society for Institutional and Organizational Economics (SIOE) (formerly, the International Society for New Institutional Economics (ISNIE)) is hosting its 20th Annual Conference this week, June 15-17, at Sciences Po in Paris, France.  The conference website includes details on this year’s program and links to abstracts and papers.

Read more

The Second Circuit Polices the Contract-Tort Boundary — Greg Klass

by

Post by Greg Klass

On Monday the Second Circuit released its decision in US ex rel. O’Donnell v. Countrywide Home Loans. This is a major case—in terms of dollar amounts (the trial court had assessed a $1.27 billion penalty against Countrywide), for understanding the law’s ability to deal with the wrongs that caused the subprime mortgage crisis, and with respect to the legal question of where to draw the line between contracts and torts. There’s much more going on in the case than I can summarize here. But here are some initial thoughts on it. Some of them also appear in Dan Fisher’s excellent piece in Forbes.

The legal framework is a little complex, but the basic thrust of the decision is that there was no evidence that Countrywide ever made a false representation to Freddie Mac and Fannie Mae about the quality of the mortgages it was selling. The initial contract of sale promised to deliver “investment quality mortgages,” but that was just a promise. There was no evidence that at the time Countrywide made it the company intended to do anything else—that it committed promissory fraud. It is clear that Countrywide subsequently intentionally breached that promise by delivering lots and lots mortgages that it knew were crap. (If you haven’t seen or read The Big Short, you might be shocked by Judge Rakoff’s post-verdict summary of the bullshit Countrywide trafficked in.) But, according to the Second Circuit, there was no evidence that it ever made any additional representations—after the initial contract to sell—as to the quality of those mortgages. No lie, no fraud.

A few observations:

Read more

Property and “The Right to Include” — Dan Kelly

by

Post by Dan Kelly

Donald Kochan (Chapman) recently published an essay, “Property as a Vehicle of Inclusion To Promote Human Sociability,” in JOTWELL—The Journal of Things We Like (Lots).  The essay reviews my article on The Right to Include.  In that article, I attempt to highlight the fact that private property allows owners not only to exclude but also to include others.  Inclusion may occur informally, contractually, or through a range of property forms, from easements and leases to common-interest communities and trusts.  While there are benefits from including others in property (think of Airbnb), there are also costs and potential pitfalls of inclusion—coordination difficulties, strategic behavior, and conflicts over use.  For this reason, I argue, the law enables owners to select from a variety of forms that provide different types of anti-opportunism devices, including mandatory rules, fiduciary duties, and supracompensatory remedies.  Ultimately, I contend that “ownership can be inclusive, rather than exclusive; it can facilitate cooperation, not just result in conflict; and it frequently promotes human sociability, not atomistic individualism.”

Read more

Specific Performance in Action – Yonathan Arbel

by

Post by Yonathan Arbel

Greg Klass’ recent post (as well as recent essay) raised the issue of efficient breach. Deeply embedded in the debate on efficient breach is the choice of remedies between specific performance and expectation damages. If courts award money damages, then this—in the view of opponents of the efficient breach theory—enables promisors to “buy” their way out of promises. Instead, the argument goes, awarding specific performance would give promisees “what they were promised”.  Contrary to their approach, specific performance is reserved under U.S. law only to (arguably) exceptional circumstances involving unique goods and land.

In my work, I try to show that enforcement matters. Parties do not negotiate or behave in the shadow of the law, I argue, but in the shadow of the sheriff. And conventional theory has tended to downplay and sometimes completely overlook the role of enforcement. Thinking through the lens of enforcement on private law provides new insight on old questions and the question of choice of remedies is no exception.

Looking from this perspective, I conducted a qualitative empirical analysis looking into the motivations of people suing for specific performance and the real-life outcomes of these lawsuits: are judgments implemented? Do people negotiate around them? To what extent do the motivations of litigants differ from their lawyers?

Read more

Efficient Breach? — Greg Klass

by

Post by Greg Klass

I just read Robert Scott’s 2015 Boden Lecture at Marquette Law School, “Contract Design and the Shading Problem.” For anyone interested in what’s happening in the economic, instrumental and empirical analysis of business-to-business contracts, this is a great place to start.

There is a lot of interesting stuff in this piece, but here I want to mention only Scott’s argument that we’ve all been paying too much attention to the theory of efficient breach. This is a remarkable claim from the scholar who, together with Charles Goetz on 1977, coined the term “efficient breach,” and did as much as anyone to promote the theory early on. Scott now considers it unsatisfactory for an empirical reason: the theory does not describe most breaches. Rather than one party deciding it is in its interest to breach and pay damages, most breach of contract cases involve disputes—sincere or opportunistic—as to what the contract requires. The breach did not increase the size of the pie, but resulted from disagreement about how the pie was supposed to be divided. Theories that emphasize efficient breach therefore ignore what parties, at the time of contracting, really care about: avoiding disagreement in the gray zone, or what Scott calls “shading.” Scott concludes that, “while we meant well, Goetz and I are probably primarily responsible for leading a generation of scholars down the wrong garden path.”

Read more

First Do No Harm: The DIRECTV v. Imburgia Decision — Greg Klass

by

Post by Greg Klass

Yesterday the Supreme Court released its decision in DIRECTV v. Imburgia. DIRECTV won. If Amy Imburgia wants to sue DIRECTV under its 2007 contract, she will have to go to bilateral arbitration. Once again: no class action. I think this is the wrong outcome in this case, for reasons I articulated here, here and here, and for many of the reasons Justice Ginsburg gave in her dissent. That said, Breyer wrote a majority opinion that should make critics of the Court’s recent arbitration decisions happy.

Read more

North American Workshop on Private Law Theory — Eric Claeys

by

Post by Eric Claeys, George Mason University

Before we get too far into November, some friend of this blog should say a word about the third North American Workshop on Private Law Theory.  (“NAWPLT”). NAWPLT is an annual workshop organized by Henry Smith, John Goldberg, Andrew Gold, Steve Smith and Paul Miller (McGill), and Dennis Klimchuk (Western Ontario).  The NAWPLT organizers usually select eight or nine papers, diversified to cover each of the four major fields of private law: tort, contract, property, and restitution-plus-remedies.  The papers are also diversified to show off a wide range of methodologies—analytical methods, different traditions of normative philosophy, and on occasion conceptually-respectful economic analysis.   I always enjoy going because NAWPLT is refreshing for me.  As an American scholar, most of the private law scholarship I encounter at conferences tends to be reform-oriented or economic in focus.  At NAWPLT, I get reminded that, in some parts of the English-speaking scholarly community, analytical and philosophical methods are taken seriously and applied well to private law.  

Read more

A School’s Duty of Care to its Students: Munn v. Hotchkiss School — Goldberg & Zipursky

by

Post by John C. P. Goldberg & Benjamin C. Zipursky

Having participated in intensive debates among tort scholars over the place of duty in negligence law, we were especially interested to see the Second Circuit’s recent decision in Munn v. Hotchkiss School, No. 14–2410–cv., 2015 WL 4604288 (2nd Cir. Aug. 3, 2015).  (Thanks to the Volokh Conspiracy and How Appealing for bringing the case to our attention.)  

Facts and Outcome in the Federal Courts. 

Fifteen-year old Cara Munn was bitten by a tick while hiking on a forested mountain in China during a summer trip organized by Hotchkiss, her New England prep school. The tick transmitted encephalitis, which in turn caused Cara serious neurological damage, leaving her permanently unable to speak. Cara and her parents sued Hotchkiss in federal district court, arguing that the school was negligent under Connecticut law for failing to warn them that the trip might bring her into contact with disease-bearing insects, and in failing to take steps to ensure that Cara took protective measures such as using insect repellant, wearing proper clothes while walking in forested areas, and checking for ticks. A jury awarded them $10 million in economic damages and $31.5 million in noneconomic damages.

Hotchkiss appealed. A unanimous decision by a very able Second Circuit panel comprised of Judges Walker, Lynch, and Lohier neither affirmed nor reversed. Instead, in an opinion by Judge Walker, it certified two issues to the Supreme Court of Connecticut:  (1) whether public policy supports the imposition of a duty of care in such circumstances, and (2) whether the damages award was excessive.

Read more

Can Tort Damages Discriminate? – Anthony Sebok

by

Post by Anthony Sebok

On July 30, 2015, federal district court Judge Jack Weinstein refused to allow a jury to take the race of a plaintiff into account when calculating future earnings loss.  The case, G.M.M. v. Kimpson (discussed here: http://www.nytimes.com/2015/07/30/nyregion/award-in-lead-paint-lawsuit-cant-be-tied-to-ethnicity-judge-rules.html), was a lead paint poisoning case and the plaintiff was a four year-old boy.  The defense put on the stand a forensic economist intended to base his testimony, on part, statistical assumptions about the academic achievement and earnings potential of Hispanics, as a group.  Judge Weinstein flatly refused to allow any testimony based on ethnic group characteristics.

Read more

The Hidden Equitable Langdell – Henry Smith

by

langdellPost by Henry Smith

As Shyam mentioned in his post of May 8th, Christopher Columbus Langdell is widely taken to be the archformalist of the nineteenth century and Exhibit A of a deplorable “Classical Legal Thought” with its would-be deductive “science” of law. Recently, commentators such as Tony Sebok and Brian Tamanaha have argued that the formalist era was not as formalist is it appeared. Mostly the controversies over this revisionism swirl around realist-sounding pronouncements of courts and commentators of the common law in the late nineteenth and early twentieth centuries.

Read more

Private Law Consortium, Day 2 part a — Yonathan Arbel

by

Post by Yonathan A. Arbel

Continuing Janet Freilich‘s post covering the first day of the consortium, here follows my take on the second day, which was also very successful. I will divide my summary to two separate posts, so wait for updates… In this post I cover the contributions of John Goldberg, Stephen Smith, and Robert Caso and Guilia Dore.

Read more

Private Law Consortium, Day 1

by

Post by Janet Freilich

 

On July 6-7, McGill University’s Faculty of Law and Center for Intellectual Property Policy hosted the Third Annual Private Law Consortium, organized by David Lametti. Participants at the Consortium came from Bar-Ilan University, Harvard University, McGill University, the University of Oslo, the University of Pennsylvania, and the University of Trento. The Consortium spanned a wide variety of private law topics, including property, torts, contracts, and intellectual property.

Read more

A Frolic Of His Own — Anthony J. Sebok

by

Post by Anthony J. Sebok

As I noted in my last post, some common law jurisdictions are still guided by an anachronistic hostility to the sale of lawsuits to strangers.  But some, like Wisconsin, are much more liberal.  For a proponent of the free alienability of litigation, liberal regimes pose a special challenge, which has to do with limits.  When should the sale of lawsuits be limited?  How should the rules governing limitations be designed?

Recently Judge Richard Posner decided a case where he found, under Wisconsin law, a reason to set aside the sale of a lawsuit.  The facts led him to quote Karl Marx and William Gaddis, and the case, Carhart v. Carhart-Halaska Int’l, LLC, 2015 U.S. App. LEXIS 9497 (7th Cir., June 8, 2015), is worth reading for Posner’s sly commentary on what appears to be at first just another example of lawyering that is, as the British say, too clever by half.

Read more

Private Law is Happening — John Goldberg

by

Post by: John Goldberg

Kudos to NPL blogger Daniel Markovits for assembling and hosting last week an excellent two-day conference at Yale Law School as the capstone to his Spring ’15 Private Law Seminar. (It is surely a good sign for the field that Harvard and Yale now both have established programs on private law.) 

Here was the line-up of panelists and readings, which encompassed an appropriately diverse yet overlapping set of topics and methodologies, and gave rise to excellent discussions.

Read more

“Taking Turns”: Common Solution, Unusual Remedy — Dan Kelly

by

Post by Dan Kelly

To facilitate coordination and mitigate conflicts, a common solution in everyday life is the idea of taking turns.  If two siblings or children are fighting over a toy (say, a ball or doll), a parent or teacher may suggest taking turns.  If drivers are exiting a crowded parking lot after work, church, or a ballgame, the implicit norm is to take turns.  Yet, this strategy of taking turns has received relatively little attention in law and the social sciences.

In “Taking Turns” (forthcoming Florida State University Law Review), Ronen Perry (Haifa) and Tal Z. Zarsky (Haifa) examine turn taking from both a fairness and efficiency perspective.  Their lead example is from a trusts and estates case, In re McDowell, 345 N.Y.S. 2d 828 (Sur. Ct. N.Y. 1973):

Two siblings jointly inherit their late father’s rocking chair. The chair has principally sentimental and no real economic value; it cannot be physically divided between them, and selling it to distribute the proceeds will compensate neither for the sentimental loss. What, then, should become of the disputed property? In a self-confessed “strange” decision in the McDowell case, the Surrogate’s Court of New York ordered that the two siblings take possession of the chair alternately for six-month periods; and that when one passed away, the other would obtain exclusive possession.

Are there other examples of turn taking in law and legal institutions, particularly private law?  Given the prevalence of turn taking as an informal solution to coordination problems, why does the formal law not embrace taking turns more frequently when it comes to remedies? 

Read more

The Acrobatics of Usury — Yonathan Arbel

by

Post By Yonathan Arbel

Perhaps one of the most plastic of all private law rules is the prohibition on usury. Judges and religious scholars have been pirouetting around this issue more-or-less gracefully for thousands of years. A recent interesting case in this regard is Bisno v. Kahn, 225 Cal. App. 4th 1087, 170 Cal. Rptr. 3d 709 (2014).  This case raises a question that is rarely asked: can a judgment-creditor charge any amount in exchange for delaying the execution of a judgment?

Read more

Naked Came the Assignment — Anthony J. Sebok

by

Post by Anthony J. Sebok

Here is a simple question: why should it matter who brings a valid claim in private law?  Standing, of course, is an important mechanism that insures that courts spend their time only on cases that matter to someone, especially in public law.  But what if the party who was the victim of a genuine harm chooses to assign that claim to a stranger, in order (let’s assume) to let them bring it to the courts.  Why not let that happen?

It is commonly assumed that almost all legal rights are freely assignable:  contract rights, property rights, and even certain causes in action for damages.  But the law in both the United States and England is grappling with how far to take the principle of fee assignability when it comes to “naked” assignments – that is, the assignment of causes of action for the redress of a wrong, not the collection of a debt or the performance of a contract.

Read more