Monday, April 14, 2014

New Article: Against Confidentiality

Codes of legal ethics vary state by state, but most draw heavily from the ABA's Model Rules of Professional Conduct.  The ABA has revised Rule 1.6 (duty of confidentiality) in recent years, adding or clarifying exceptions, and states have been adopting these revisions very gradually, leading to many splits between states about when a lawyer can, or must, divulge confidential client information.  I have a new article on SSRN criticizing the confidentiality rules from a variety of angles: Against Confidentiality.  Feedback is welcome!  Here is the abstract:
Confidentiality rules form an important part of the ethical codes for lawyers, as a modern, expansive extension of the traditional attorney-client privilege doctrine.  The legal academy, judiciary, and practitioners generally agree on the conventional wisdom that strict confidentiality rules are necessary to foster client-lawyer communication, thereby providing lawyers with information they need for effective representation.  Yet this premise is demonstrably false – clients withhold information or lie to their lawyers despite the confidentiality rules, and the rules are mostly redundant with other ethical rules, evidentiary doctrines, and effective market mechanisms for protecting client privacy interests.  At the same time, the confidentiality rules impose significant social costs – direct externalities, lemons effects, and even serious harm to third parties.  This Article argues that the lawyer confidentiality rules are ripe for repeal, revision, or rejection in the form of civil disobedience in certain cases.  Using analytical tools from economics, including the Coase Theorem, this Article goes beyond previous piecemeal criticisms of the rules to provide an extensive analysis of the social costs – and illusory benefits – of the ethical rules that compel lawyers to conceal client secrets.  The rules undermine public trust in the legal system, and overall transparency and cooperation in society.  In extreme instances, the rules facilitate wrongful convictions of innocent third parties and other serious harms.  In relation to the other ethical rules, the confidentiality rules are generally in tension with, or redundant of, other rules designed to protect clients and third parties.  The Article concludes with specific normative proposals for revising the rules, or challenging the existing rules as a way to force reforms. 

Wednesday, August 29, 2012

Fincham on The Parthenon Dispute

My STCL colleague Derek Fincham has a new article on SSRN entitled The Parthenon Sculptures and Cultural Justice, which I recommend to my readers - it's a very interesting subject.  Here is the abstract:
From government and philosophy to art drama and culture, the ancient Athenians, as most everyone knows, gave future generations so much. Yet the pinnacle of their artistic achievement, the Parthenon, remains a damaged and incomplete work of art. 2012 marks the two-hundredth anniversary of the last removal of works of art from the Parthenon. That taking was ordered by an English diplomat known to history as Lord Elgin, and it reminds us that cultures create lasting monuments. But not equally.  Cultures which remove the artistic achievements of other nations have increasingly been confronted with uncomfortable questions about how these objects were acquired. Nations of origin are increasingly deciding to press claims for repatriation of works taken long ago. They proceed through history mindful of the irresistible genius of their forebears have created and are unwilling to cease their calls for return.  The majority of the surviving sculptures from the Parthenon in Greece now are currently on display in the British Museum in London. The Greek government and cultural heritage advocates, have been asking for reunification of these sculptures in the New Acropolis Museum in Athens. Greece has offered a number of concessions, but the British Museum and the British Government have repeatedly refused to seriously discuss reunification.

Mounting pressure on the British Museum, and the inescapable fact that the Parthenon was an ancient unified work of art both mean that the Parthenon marbles will either eventually be returned to Greece or subject to an endless repatriation debate. Here I offer a series of principles which the Greeks and the British Museum can take to jointly create a just return. Because the way the British Museum and Greece resolve this argument will have much to say for the future of the management of our collective cultural heritage.

Ann Romney and Arianna Huffington: Separated at Birth?

So, am I the only one who thinks Ann Romney and Arianna Huffington look alike? I'm not sure I could tell them apart if they were standing next to each other and used the same shade of hair color...

Monday, August 27, 2012

Another Reason I like the Law Review System Better than Peer Review

I keep hearing other law profs say that the peer review system is vastly superior to the law review system for academic articles, and I always wonder if they really know much about the problems with peer review academic is another reason why I like the law review system better: 

  The article is about scientific journals rejecting papers due to excessive citations to articles in rival journals. The rejection is apparently for the crass, strategic purpose of preventing rival journals from getting more citations and thereby climbing in the rankings of "scholarly impact" lists.

Wednesday, August 22, 2012

NEW ARTICLE DRAFT - Codification & Legislative Transaction Costs

My writing project this summer is now taking shape as a draft manuscript, and is available for download on SSRN.  I would really appreciate current or former students, colleagues, and friends downloading it and giving me feedback on it, as I plan to spend the Fall revising it and then submit it to journals in February.  The title/link is Codification and Transaction Costs, and here is the tentative abstract:
The consensus view in the academic literature has been that rules present lower transaction costs – in the form of information costs – for the courts and citizenry, when compared to standards. Rules are more specific and detailed, so there is less uncertainty and less need for sophisticated interpretation. At the same time, the prevailing wisdom holds, specific rules impose higher enactment costs for legislatures. Systematic codification, which became of universal feature of American statutes in the twentieth century, seems to invert this relationship, lowering transaction costs for legislatures; for the citizenry, codification increases legal information costs as a result of the proliferation of statutes, which is a consequence of the lower transaction costs for rulemakers (i.e., legislators and regulatory agencies). Even though an individual statute may be clearer and more precise in a codified system, the sheer number of rules, and the quantity of details (their aggregate volume) present information costs that outweigh the benefits of the greater precision. On the legislative side, lower enactment costs resulting from codification make it easier for special interest groups to obtain their desired legislation; codification also facilitates legislative borrowing, which diminishes the “laboratories of democracy” phenomenon. For the courts, codification has impacted the way judges interpret statutes, focusing more on the meaning of individual words than on the overall policy goals of enactment. We have misconceived the benefits and costs of codification, overlooked the real tradeoffs involved, and have sometimes obtained the exact opposite of the result that legal reforms intended.

New Semester...

This semester I am teaching Administrative Law and the Law & Economics Seminar at my institution (South Texas College of Law) - two courses I really enjoy.  I'm a little disappointed that the enrollment is so high - I have 81 students in Administrative Law, and I'm fairly certain there are not that many students interested in the subject (lack of interest from a large portion of the students makes teaching the course more difficult). I've noticed an inverse correlation of class discussion to the size of the class - we had active class discussions  last summer in my Administrative Law course, which had about 15 students, but so far this semester (two weeks in) most of the students sit in stone silence while I prattle on about the nondelegation doctrine and such.

I am also teaching Administrative Law at the University of Houston Law Center, but classes don't start there until next week.

For students wanting to find me in my office this semester, Tuesdays and Thursdays are the best days, especially late mornings and early afternoons.  Mondays and Wednesdays are less predictable - I don't have classes on those days, so I often write in my office at home instead of my office at school.

Wednesday, May 23, 2012

Arizona’s Corporate-Run Agency Gives Taxpayer Subsidies to Other Corporations but Little Information to the Public

New from the website In the Public Interest: Arizona’s Corporate-Run Agency Gives Taxpayer Subsidies to Other Corporations but Little Information to the Public. Arizona replaced its Dept of Commerce last year with a public-private partnership called the Arizona Commerce Authority (ACA). The ACA's board includes mostly private businessmen, not government employees. Its funding comes partly from taxpayer dollars, and partly from private donations given by local corporations.  Here's an excerpt:

But this isn't just any agency. Its task is to try boosting the state economy by handing out taxpayer-financed subsidies to individual companies of its choosing. A new report by Arizona Public Interest Research Group Education Fund tallies up over $41 million in subsidies so far dispensed by 13 subsidy programs at the ACA. The annual amount could reach over $150 million next year, plus other publicly-financed loans and technical assistance. Arizona residents foot the bill for these goodies through their taxes and through cutbacks to other programs. Arizona's subsidy programs have multiplied in recent years despite serious budget shortfalls. Two years ago, lawmakers were so desperate that they sold off legislative and administrative buildings for short-term cash and rented them back...
....According to Arizona PIRG's report, only two of the 13 incentive programs even track how many jobs or other benefits they generate -- and none disclose that information publicly. For all its business-savvy rhetoric, the ACA can't demonstrate performance if it doesn't track results. Only one program publicly discloses what companies promise to deliver for their subsidies. Worse still, only 4 of the 13 programs even disclose which companies received subsidies or how much. And when companies that receive subsidies fail to deliver on promised economic development benefits, the ACA can reclaim taxpayer subsidies for only one program, and there is no way for the public to see if this ever happens.  

The article expresses concern mostly over the potential here for graft (or at least conflicts of interest) and the diversion of public funds from other state programs.  These are valid concerns, but are likely to resonate as basically political/partisan complaints - i.e., "Hey, public funding is flowing to those special interests over there (corporate, conservative), instead of my favorite special interest groups (the poor, minorities, unions, schools, etc)."  I understand that liberals take it as a tenet of faith or a universal truth that public funding should go toward helping the unfortunate rather than profitable businesses.  But conservatives will answer that the businesses do a better job of improving the local economic climate by creating jobs and spending money on local suppliers and distributors.  And never shall the two hear each other.

I have additional concerns beyond those mentioned in the article.  Even from a conservative, free-market perspective, government subsidies for businesses distort markets, foster monopolies, undermine competition, and reduce efficiency.  The same complaints that business advocates make about the welfare system apply to government programs to help businesses - the vicious cycle of dependence, the lack of incentive to work hard or face difficult choices, the inevitable favoritism (some businesses get taxpayer subsidies, others miss out, and those that do have an unfair advantage over competitors who might otherwise win in a free marketplace).  It has a chilling effect on market-driven innovation, improvements in efficiency, or "creative destruction." The subsidies can cause inflation as the local market prices correct for the infusion of unearned money. The inherent risks in entrepreneurship get externalized onto taxpayers rather than internalized by those who hope to reap the profits if they get lucky.  The conflict-of-interest problem is not just that the businessmen will engage in whitewashed embezzlement, diverting funds to their own businesses or friend's businesses (or to their suppliers, in hopes of getting discounted inputs).  The problem is also that other firms - firms that might be more efficient, providing better goods and services at lower cost - face higher entry barriers when the existing holders of market share are bolstered by government handouts.  In other words, I see little difference in the morality of handouts for poor individuals/families and handouts for businesses.  There is a spiritual virtue in helping the poor, of course, but also a virtue in helping those who are hard-working and who have made sacrifices to become successful.  The problem for me is the unintended consequences of government subsidies for entities that are supposed to compete and succeed in a free market.