Volume 155

Responses

Professor Chemerinsky's interesting article shows--sometimes expressly, more often indirectly--why periodization is one of the recurrent issues in historiography. His article blends an evaluation of Chief Justice Rehnquist's contributions to constitutional law with a more extended discussion of the changes in constitutional law that occurred during William Rehnquist's tenure as Chief Justice. In this comment I want to focus primarily on the second theme, though with some attention to the first.

The federalism arena is worth close attention, as it is often thought that the Rehnquist Court radically altered the law in this arena. While it is true that Rehnquist was part of an alteration in the state/federal balance during his tenure at the Court, it is harder to sustain an argument that a radical shift took place, or that a unifying vision can explain the federalism shift that did occur.

Just five years ago—in the pages of this law review—Reva Siegel wrote an essay characterizing her focus on social movements as part of a “small but rapidly growing body of constitutional theory written in law schools that examines the life of the Constitution outside the courts.” Today such a statement would be only half correct: the body of literature about the public's role in constitutional interpretation may still be growing, but it is hardly small. The frame and focus of constitutional theory have changed in the past five years, in part because of the work of Balkin and Siegel themselves, along with other prominent constitutional law scholars. These scholars, and newer entrants to the field, have collectively described, and often normatively advanced, a theory of constitutional change that rests in large part with “the People themselves.” A study of the role of the elected institutions in government and the broader public in creating and shaping constitutional change is a central feature of much new scholarship.

In previous writings, Professors Balkin and Siegel (the authors), both together and separately, have made major contributions to the scholarly literatures on constitutional doctrine and on social movement activism. Their recent essay, Principles, Practices, and Social Movements, attempts to bridge the two fields at a high level of abstraction, albeit with useful examples. The bridge is an elegant structure, but not without flaws. It is a valuable project that will provide a point of departure for future scholars who may wish to cross the same divide.

Connectedness is actually a quandary. Often assumed to be a better state of affairs than being disconnected, the state of connectedness, upon closer examination, is not necessarily voluntary or desirable. Indeed, when E. M. Forster chose “Only connect . . .” as an epigraph to his novel Howards End, he surely wasn't thinking—it is safe to say—of the kind of connectedness among polities that Professor Wayne Logan describes in his rich, measured, and illuminating article. This should come as no surprise. Forster was exalting the weightless energy of passionate encounter. Logan's research, by contrast, reveals the potential gloominess of connectedness.

This essay responds to Daniel Solove's recent article, A Taxonomy of Privacy. I have read many of Daniel Solove's privacy-related writings, and he has made many important scholarly contributions to the field. As with his previous works about privacy and the law, it is an interesting and substantive piece of work. Where it falls short, in my estimation, is in failing to label and categorize the very real harms of privacy invasions in an adequately compelling manner. Most commentators agree that compromising a person's privacy will chill certain behaviors and change others, but a powerful list of the reasons why this is a negative phenomenon that the law should seek to prevent is not a significant attribute of Solove's taxonomy. That omission left this reader a little concerned about the ultimate usefulness of the privacy framework that Solove has developed. To phrase it colloquially, in this author's view, the Solove taxonomy of privacy suffers from too much doctrine, and not enough dead bodies. It frames privacy harms in dry, analytical terms that fail to sufficiently identify and animate the compelling ways that privacy violations can negatively impact the lives of living, breathing human beings beyond simply provoking feelings of unease.

Exactly one week before Chief Justice Warren E. Burger's retirement was publicly announced (the White House knew in advance of his plan), the Supreme Court gave President Reagan and his aides a reminder of what could be at stake in the selection of his successor. More than anything else in its domestic aspirations, the Reagan Administration wanted a more conservative Court, especially to raise the chances for overruling Roe v. Wade—that despised legacy of the Burger Court. On June 11, 1986, the Court reaffirmed the right to seek an abortion, but this time it was only by the narrowest of margins—5 to 4. That had never happened before. As important as the vote itself was the fact that four Justices, the dissenters, made it clear they were ready to reconsider Roe; thus, a single vote seemed to hold Roe in place.

As usual, Frederick Schauer raises profound issues in his insightful essay, On the Supposed Jury-Dependence of Evidence Law. Schauer is surely right that judges are not always as smart as they think they are, that judges are subject to many common cognitive deficiencies (including many of the same deficits as juries), and that judges, like other mortals, often overestimate their abilities to overcome their limitations. These observations strongly support Schauer’s conclusion that judges should be restricted by at least some rules of evidence, even when they hear cases without juries. These points are both timely and important, because of recent trends in courts away from jury trials and among theorists against exclusionary evidence rules and towards free proof.

That the law of evidence is the child of the jury system is not only oft-repeated but also, as a historical matter, probably true. As James Thayer put it in his 1898 treatise, “the greatest and most remarkable offshoot of the jury was that body of excluding rules which chiefly constitute the English ‘Law of Evidence.’” To be sure, historians disagree about the relative importance of the jury system, the adversarial process, the rise of lawyers, and the nature of the judicial role in bringing about our modern law of evidence, but there is little disagreement that the existence of a lay fact finder is one of the key ingredients in that murky stew.

Professor Wachter has done something quite extraordinary in the long-running scholarly debate over the causes of union decline: he has said something new. Wachter contends that the “corporatist” regime inaugurated in the early New Deal served as the necessary incubator for union growth in the 1930s and 1940s, and that unionization has inexorably declined with the gradual dismantling of the complementary institutions and the restraints on competition that made up that corporatist regime. That is because unions’ goal of “taking wages out of competition,” as well as union wage gains, fit with a corporatist commitment to “fair” rather than “free” competition, but are unsustainable in a free market in which cost-based competition is inevitable.

Identifying muddles, messes, and even incoherencies in the Supreme Court’s decisions on federal jurisdiction is regrettably easy. Rescuing even part of the doctrine from the mire is not. For that reason and others, Gil Seinfeld’s The Puzzle of Complete Preemption merits considerable praise. Professor Seinfeld does an admirable job not only of diagnosing the Court’s rather odd and undertheorized doctrine of “complete preemption,” but also of proposing a way to place the doctrine on firmer conceptual footing by shaping it around the fundamental goal of uniformity in the interpretation of federal law. The result is certainly a better justified account of complete preemption than can be found in the Court’s cases.

From way down in the dirty depths, where those of us who collect empirical data dwell unobserved and largely ignored by most legal academics, it is refreshing to hear a call for “more data” from legal scholars such as Fred Schauer. In asking whether it makes sense to follow the existing trend of discarding much of evidence law when judges—rather than juries—are the fact-finders at trial, he notes that the empirical literature involving judges’ reasoning is sparse and the literature comparing judges with jurors is even sparser. In order to determine whether judges are better than jurors at weighting evidence and fact-finding, as many appear to believe, he wishes for more and more focused research.

In a thoroughly argued article, Adler and Sanchirico defend the view that egalitarianism is concerned not merely with the equalization of expected well-being (the ex ante approach) but also with the expected equalization of actual well-being (the ex post approach). The ex post approach that they defend dictates that when the policymaker faces uncertainty, she ought to care not merely about the equality of the prospects of well-being or maximization of the prospects of overall well-being, but also about the prospects of equality ex post. Under ex post egalitarianism, policies with uncertain outcomes ought to be judged (also) on the basis of the expected ex post equality that they generate; the more egalitarian the expected outcomes, the better the policy.

Welfarism is widely employed and debated not only among philosophers, political scientists, and economists, but also increasingly among legal scholars. However, not all legal scholars fully appreciate this approach to social choice. For example, welfarism is commonly, but wrongly, equated with utilitarianism. Recent contributions bylegal scholars—in particular, Kaplow and Shavell—considerably advanced the understanding of welfarism.

Professor Rosenbury’s splendid article makes an important contribution to the field of family law by drawing our attention to the places in which “childrearing” occurs outside the traditional arenas of school and home. Family law scholarship typically recognizes a dyadic system of childrearing where authority is shared between parents and the state. Older children might exercise some independent authority in certain areas, but, for the most part, they remain under the control of their parents and the state until they reach the age of majority. In her article, Professor Rosenbury adds a third sphere of childrearing to this existing system: the realm “between home and school,” exemplified by “playgrounds, parks, child care centers, churches, community gyms, sporting fields, dance studios, music rooms, after-school clubs, and cyberspace.”

Are carrots better than sticks? Yes, is the assumption underlying pay-for-performance as a means of corporate governance. The economic theory behind pay-for-performance is that managers will maximize a firm’s value if their interests are aligned with those of the owners. The implementation of performance-based pay schemes, however, often leaves much to be desired, and psychological research suggests incentive compensation can even have detrimental effects on performance.

Incentive pay analyses have generally focused on normal business operations. There has been little written about the unique problems posed by bankruptcy, where ownership often shifts and the debtor operates under court and creditor supervision. Most proposals for improving corporate governance in bankruptcy advocate fine-tuning various creditor and shareholder constituencies’ roles in the reorganization process. There has been little consideration of management incentives in bankruptcy. Yair Listokin’s article is thus an important attempt to apply the insights of corporate finance and refocus the corporate governance debate in bankruptcy from the sticks of traditional corporate governance—monitoring by directors, creditors, the United States Trustee, and the court—to the carrots of incentive compensation.

In Paying for Performance in Bankruptcy, Yair Listokin invites us to rethink the role of executive compensation in bankruptcy. The key intuition behind his article is to apply the core insights from the executive compensation literature that exist in general corporate law to the problem of executive compensation in bankruptcy. Those studying corporate governance have argued for years that some form of equity compensation would serve to align the incentives of managers with those of shareholders. Even critics of current pay practices embrace the notion of equity compensation; they find fault instead with the way it has been implemented. Listokin draws on the economic arguments in support of equity compensation to suggest that, inside of bankruptcy, managers should be paid with the debt of the company. Compensating managers with such an instrument, he argues, will align the managerial interests with those of the unsecured creditors, and this alignment would do a decent job of encouraging managers to take socially efficient actions. It is not perfect, but, according to Listokin, it is better than the practices that we typically see today. Thus, Listokin would provide unsecured creditors, acting through the creditors committee, with the option of paying those who run the corporation with debt.

Few business law subjects get jaws flapping like executive compensation. When we see Michael Ovitz and Robert Nardelli receive millions of dollars—for doing a bad job—we have to wonder whether our system’s incentives might be askew. Indeed, some of our best recent business law scholarship wrestles with the difficult questions posed by executive compensation, which, to paraphrase Bebchuk and Fried, reduce to this: How do we link pay to performance?

Yair Listokin has invited us to map this discussion onto the question of executive compensation in Chapter 11 reorganization. It is a welcome invitation, because there is doubtless value in thinking carefully and creatively about improving incentives for those in control of a debtor in possession (DIP) in reorganization under Chapter 11. Large corporate debtors are, like all large (and small) corporations, ultimately run by human beings. Being fallible, greedy, and complex, one easily could imagine that the people who manage Chapter 11 debtors might engage in the same sort of agency arbitrage that we see between the managers of large publicly held corporations and those corporations’ widely dispersed shareholders. Although management agency costs are well studied outside of bankruptcy, they have gone largely unnoticed in bankruptcy scholarship in recent years. That Listokin wishes to “reorient the scholarly debate in bankruptcy toward the problem of executive compensation” is good news.

In simple terms, Listokin believes that properly constructed incentive compensation packages would promote effective management and constrain agency problems in Chapter 11 reorganizations by empowering creditors’ committees to pay management with corporate debt. This would align the interests of management with those of the “true” residual claimants of the reorganizing debtor—the unsecured creditors. Listokin would thus give to the creditors’ committee the right effectively to assign to management a portion (a “vertical strip”) of the corporation’s debt as part of management’s compensation.

There is much about Listokin’s article that is valuable. He provides a rigorous economic analysis of some of the unexpected implications of incentive compensation in reorganization. He shines considerable light on a rather dim corner of bankruptcy and corporate governance. Perhaps more importantly, he sets the stage for further inquiry. But I also have doubts and concerns. I am persuaded neither that there is much of a problem, nor by the solution he proposes.

The recent lively exchange about the Electoral College among Professors Levinson, McGinnis, and Lowenstein cause my heart to leap. It deosn't quite show that this important subject is attracting widespread interest, but along with other recent developments it is at least suggestive of increased attention. I won't wade in on all the issues joing in the exchange, but one in particular seems to me to merit attention.

Debates

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