ProfessorBainbridge.com

What to do about chatty woke judges?

Over the weekend Associate Justice Sonia Sotomayor issued a dissent in which she basically accused her 5 more conservative justices of being biased in favor of the Trump administration:

... the Court’s recent behavior on stay applications has benefited one litigant over all others. This Court often permits executions—where the risk of irreparable harm is the loss of life—to proceed, justifying many of those decisions on purported failures “to raise any potentially meritorious claims in a timely manner.” ... Yet the Court’s concerns over quick decisions wither when prodded by the Government in far less compelling circumstances— where the Government itself chose to wait to seek relief, and where its claimed harm is continuation of a 20-year status quo in one State. I fear that this disparity in treatment erodes the fair and balanced decisionmaking process that this Court must strive to protect.

This comes on top, of course, of RBG's routine anti-Trump/Republican political pronouncements. 

Closer to home, the LA Times gave voice to a bunch of 9th Circuit judges who are outraged that Trump has appointed conservatives to their liberal bastion, albeit most of them were either not so outraged as to allow their names to be revealed (or perhaps too lacking in courage), as Josh Blackman points out:

[Article author Maura] Dolan noted that "some" of the judges "declined to discuss their colleagues or inner deliberations." That "some" should have been "all." Why would any judges discuss their "colleagues" or opine on "internal deliberations"?

Alas, some judges "refused to be quoted by name, saying they were not authorized to speak about what goes on behind the scenes." In other words they spoke on background, not for attribution. Judges cannot speak on background. Ever. Generally, when a source says, "I am not authorized to speak publicly," that statement suggests that, given the proper authorization, she could speak publicly. But judges can never speak publicly about internal deliberations. No authorization can be given by any superior authority. Shame on those judges who spoke on background to the press.

 

Changes in the Delaware Judiciary

From Bloomberg: Two new chancery court appointees bringing the total to eight. Collin J. Seitz, Jr., replaces our friend Leo Strine as Chief Justice. 

States extending or suspending statutes of limitation for priest abuse scandals again

Crux reports:

At the end of another long day trying to sign up new clients accusing the Roman Catholic Church of sexual abuse, lawyer Adam Slater gazes out the window of his high-rise Manhattan office at one of the great symbols of the Church, St. Patrick’s Cathedral.

“I wonder how much that’s worth?” he muses.

Across the country, attorneys like Slater are scrambling to file a new wave of lawsuits alleging sexual abuse by clergy, thanks to rules enacted in 15 states that extend or suspend the statute of limitations to allow claims stretching back decades. Associated Press reporting found the deluge of suits could surpass anything the nation’s clergy sexual abuse crisis has seen before, with potentially more than 5,000 new cases and payouts topping $4 billion.

I have been a consistent advocate of Church reforms intended to prevent sexual abuse by priests and other church officials. See my article Enhanced Accountability: The Catholic Church’s Unfinished Business, 53 University of San Francisco Law Review 165 (2019); available at SSRN: https://ssrn.com/abstract=3421795.

But I am also a strong advocate of statutes of limitation. It's important to remember that the Church has gotten its act together. Ninety-nine percent of newly reported cases occurred before 2000. So we're talking about decades-old cases. And there's a lot of good reasons why we generally don't allow cases to be brought decades after they allegedly occurred. See my memorandum against SB 131, which I wrote the last time California decided to throw the whole concept of fundamental fairness under the bus:

By extending the period within which suits may be brought indefinitely, and thus raising the specter of litigation based on decades-old events, SB 131 is completely antithetical to the proposition that litigation should be based on “reasonably fresh evidence.”  ...

SB 131 breaks faith with assurances given by the Legislature 10 years ago when it enacted SB 1779 (Burton), a one-time, one-year lifting of the statute of limitations for all of 2003 that allowed any victim of sexual abuse — regardless of how long ago it occurred — a second chance to file a lawsuit. SB 131 thus would revive claims for an unprecedented third time. ...

SB 131 is further flawed by its fundamental unfairness. SB 131 covers incidents of abuse that may have taken place in private schools, not public schools, so the 92 percent of California children who attend public schools aren’t covered. This discriminates against both public school children and operators of private schools. Why do public schools and teachers get a free ride, while their students get no relief and their private school counterparts face potentially staggering liability?

The financial impact cannot be ignored. As I pointed out in my law review article, The Bishop's Alter Ego: Enterprise Liability and the Catholic Priest Sex Abuse Scandal,(9) unlimited liability exposure for the Catholic Church will "impede, if not destroy, the ability of these ministries to serve the needs of their congregants. Indeed, the mere threat of liability might do so: 'Both church and society will suffer if the continuation of ministries prompted by compassion — ministries often involving risks — is stopped short by the nervous calculation of legal liabilities.'” (10)

As such, SB 131’s elimination of statutes of limitation raises serious concerns about the ability of religious organizations to freely exercise their religion, and thus has very serious implications for the free exercise rights that are supposed to be protected by the First Amendment.

The usual suspects--the trial lawyers, their front groups masquerading as victim representation advocates, and their anti-Church academic enablers will scream that I am being insensitive. While victims of decades-old cases deserve our sympathy, I am not sure we should bankrupt the Church to enrich trial lawyers bringing cases that are often suspect:

The problem is particularly acute in the area of childhood sex abuse litigation, where so-called “recovered memories” are often at issue. As courts have recognized, the length of time between the alleged event and the recovery of the purported memory is highly relevant to the credibility of that memory, with longer time periods being associated with reduced credibility. In addition, courts have recognized that “the presence or absence of objective, verifiable corroborative evidence of the event” is critical in assessing the credibility of a recovered memory. All too many of the cases authorized by SB 131 [and these new bills] likely will be so old that the defense may be unable to obtain evidence to challenge the credibility of purported recovered memories.

 

Chancellor William Allen, RIP

The Delaware Judiciary has announced "the passing on Sunday of retired Chancellor William T. Allen, a giant of the corporate bar, academia, and the Delaware Bench." 

“Our nation lost one of the finest jurists of the last fifty years yesterday,” said Delaware Supreme Court Chief Justice Leo E. Strine, Jr. “Chancellor Allen set a standard of excellence that made Delaware stand out in the eyes of all sophisticated observers. Bill Allen, the person, set a standard as a husband, father, friend, and caring professor to which we should all aspire. For me personally, he was a mentor, source of wisdom, and an inspiration. Everyone in Delaware owes him a debt of gratitude for what he did for our state, and our Judiciary’s hearts are with his wife and children, as they endure the loss of this special man.” ...

Chancellor Allen’s decisions, often produced under extreme time pressure, were known for their lucid and lively writing style and incisive analysis. His rulings also showed a deep concern for the integrity of the law, the need for those with power to use it with fidelity to those they represented, and for their understanding of scholarship relevant to the matters before the Court. For that reason, Chancellor Allen was considered to be one of the finest corporate law judges of the era and, even more broadly, as one of the finest judges of his generation on any court. ...

Chancellor Allen wrote hundreds of opinions related to corporate law during his time on the bench. Among the most notable were his iconic rulings in two corporate law cases. In Caremark, the Chancellor addressed the duty of corporate directors to monitor corporate legal compliance and called on corporate boards to recognize the duty of Delaware corporations to obey the law and act ethically toward society and the corporation’s stakeholders. And in the Blasius case, Chancellor Allen articulated a stringent standard of judicial review to make sure that corporate elections are conducted with scrupulous fairness and integrity.

As I have observed: "To paraphrase a television commercial of my youth, when Chancellor Allen speaks, people listen." Stephen M. Bainbridge, The Board of Directors As Nexus of Contracts, 88 Iowa L. Rev. 1, 33 (2002).

I only had the privilege of meeting him on one occasion. But I admired his skill and wisdom greatly, even on those rare times I disagreed with him.

 

The core problem with the Facebook settlement is the lack of individual accountability

Marshall L. Miller and Jeohn Salone Favors of Wachtell, Lipton, Rosen & Katz offer a generally favorable assessment of the settlement between Facebook and the FTC:

... the FTC filed a complaint alleging that Facebook “subverted users’ privacy choices to serve its own business interests,” through false promises regarding users’ ability to control privacy settings, misrepresentations regarding the sharing of users’ personal data with third parties, and deceptive practices as to the collection and use of users’ telephone numbers. These actions violated the terms of the 2012 consent decree, which barred Facebook from making deceptive privacy claims and required a reasonable program to protect user privacy.

The monetary penalty of $5 billion dwarfs all prior fines in this area, including the FTC’s $100 million penalty in 2016, as well as the largest international data privacy penalty to date, a £183 million finerecently imposed by U.K. authorities. Meanwhile, the remedial order imposes expansive compliance obligations and vigorous accountability and reporting requirements, including the establishment of a board privacy committee made up of independent directors, designation of compliance officers accountable to that committee, a third-party compliance assessor with enhanced authority and independence, heightened privacy requirements for sensitive applications and activities, and quarterly privacy certifications to the FTC, including from the CEO. Given the order’s 20-year duration, the FTC will exert influence over Facebook’s privacy practices—and, at least by extension, the tech industry—for decades to come.

But aspects of the resolution have prompted backlash from the dissenting commissioners and critics in Congress. For example, the settlement order applies only to Facebook as a company and releases claims against individual officers, though media reports had suggested the agency was considering holding executives personally responsible for the company’s privacy failures. And in the view of the dissenting commissioners, the settlement does not impose sufficiently meaningful limits on Facebook’s practices related to the collection, use, and sharing of customer data.

Personally, I view the $5 billion fine as a slap on the wrist. In the First Quarter of 2018 alone, Facebook's net income was $4.988 billion. It's a cost of doing business for Zuckerberg. 

But it is the lack of individual accountability that troubles me. My view on entity versus individual liability were very much shaped by  Jennifer H. Arlen & William J. Carney, Vicarious Liability for Fraud on Securities Markets: Theory and Evidence, 1992 U. Ill. L. Rev. 691 (1992).

Jennifer and Bill persuasively argued that:

Imposing liability on the firm results in a large wealth transfer from one group of innocent investors to another similar group. Because this transfer neither deters fraud nor spreads losses, it performs no useful social function. The authors conclude that a rule of agent liability, supplemented with criminal enforcement, is preferable.

They focus on securities cases involving fraud on the market, finding that the wrongdoing in such cases "typically is committed by corporate officers, apparently without consent of the board of directors or major shareholders." (695) Despite that limited focus, the argument has always struck me as having more general application.

Hence, for example, in Institutional versus individual liability; Should we burn Penn State down?, I wrote that:

There is an argument for imposing civil liability on corporations and other institutions (i.e., legal persons) where their agents commit torts or breach contracts. A major function of civil liability, after all, is compensation of victims of malfeasance and misfeasance. The legal person will often have far deeper pockets than any of the natural persons amongst its stakeholders. Having one defendant rather than many, moreover, reduces tertiary costs for both parties and society. (Note, BTW, that because compensation is a key goal of civil liability, burning the place down would seem counterproductive.)

Having said that, however, I'm not completely convinced. In the first place, most major corporate misconduct implicates senior corporate officials, such that a regime of personal--rather than corporate--liability would provide them with incentives to cause the corporate entity to insure against the risk of such losses, which satisfies the goal of compensation.

More important, however, the role of compensation as a justification for corporate liability is more compliucated than one might think. In an important article, Vicarious Liability for Fraud on Securities Markets: Theory and Evidence, 1992 U. Ill. L. Rev. 691, Jennifer Arlen and William Carney, tackled this question with regard to corporate liability for securities frauds committed by agents of the firm. As they demonstrate, when a corporation pays a large fine the resulting balance sheet effect is to reduce assets on the left side. On the right hand side, liabilities remain constant. To offset the decline in net assets, accordingly, shareholder equity must fall. As a result, the effect of civil monetary liability is to replace "one group of innocent victims with another: those who were shareholders when the fraud was revealed. Moreover, enterprise liability does not even effect a one-to-one transfer between innocent victims: a large percentage of the plaintiffs' recovery goes to their lawyers. Finally, enterprise liability may injure innocent people in addition to shareholders. For example, employees are injured if enterprise liability sends a firm into bankruptcy or causes it to lay off employees." Id. at 719.

The case for corporate criminal liability is even weaker. The principal functions of criminal liability are retribution and deterrence. As I have argued elsewhere in the context of corporate reparations:

A corporation is not a moral actor. Edward, First Baron Thurlow, put it best: "Did you ever expect a corporation to have a conscience, when it has no soul to be damned, and nobody to be kicked?" The corporation is simply a nexus of contracts between factors of production. As such, there is no moral basis for applying retributive justice to a corporation - there is nothing there to be punished.

So who do we punish when we force the corporation to pay reparations? Since the payment comes out of the corporation's treasury, it reduces the value of the residual claim on the corporation's assets and earnings. In other words, the shareholders pay. Not the directors and officers who actually committed the alleged wrongdoing (who in most of these cases are long dead anyway), but modern shareholders who did nothing wrong. Retributive justice is legitimate only where the actor to be punished has committed acts to which moral blameworthiness can be assigned. Even if you assume the corporation is still benefiting from alleged wrongdoing that happened decades or even centuries ago, which seems implausible, the modern shareholders are mere holders in due course. It is therefore difficult to see a moral basis punishing them. They have done nothing for which they are blameworthy.

As always in corporate accountability, both efficiency and morality require that punishment be directed solely at those who actually commit wrongdoing. In this context, it would be the directors, officers, or controlling shareholders who actually enslaved people. Since they're long dead, there is nobody left who properly can be punished.

That conclusion was influenced in part by the Arlen and Carney paper, which argues for imposing liability on the corporation's agents:

... we find that there is little reason to believe that enterprise liability is the superior rule from the standpoint of deterrence, and there are many reasons to suspect the contrary. The deterrent effect of the available monetary sanctions under agent liability probably exceeds the deterrent effect of enterprise liability because a civil judgment against an agent hurts his reputation more than does a sanction imposed by the firm in private. Moreover, the threat that sanctions will be imposed appears to be greater under agent liability. Agent liability places the responsibility of sanctioning wrongful agents with the victims, who have no reason not to proceed against them and have every reason to proceed. Enterprise liability, by contrast, places the responsibility of proceeding against the wrongful agents with the firm, and thus with the very agents (and their close associates) most likely to have committed fraud. Moreover, agent liability in effect enlists insurance companies as corporate monitors and disciplinarians, thereby eliminating the agency costs associated with firm managers monitoring and disciplining each other. Furthermore, the judgment proof problem under agent liability can be completely eliminated if, in addition to civil liability, the government imposes sufficient nonmonetary criminal penalties on agents, such as imprisonment.

Although they are discussing civil liability, their comments on deterrence seem equally applicable to the criminal law.

Interestingly, today's WSJ has an op-ed by Eamonn Butler that speaks to these issues and comes down basically in the place that I do:

Where fines are levied, it is generally on corporations rather than individuals, which means that shareholders and customers (and indeed taxpayers) end up paying instead of those actually responsible. Network Rail, Britain's rail infrastructure provider, was fined £3 million last year for safety failings over the Potters Bar disaster in which seven people were killed, and another £4 million in April for the Grayrigg crash that killed one person and seriously injured 28 others. It will be passengers who stump up that £7 million, not rail executives.

In May this year, Abbott Laboratories agreed to a $1.6 billion corporate fine over its marketing of antiseizure drug Depakote. In July, GlaxoSmithKline settled for $3 billion for the marketing of antidepressants and failing to report safety data on a diabetes drug. Johnson & Johnson could pay $2.2 billion over its promotion of antipsychotic drug Risperdal. Chunky fines, totalling 32%, 37% and 23% of these firms' current income—but no individuals have been charged.

Instead of de facto taxing the corporation's shareholders, he argues for individual liability:

Regulation is not best delivered by constantly peering over the shoulders of traders at huge bureaucratic cost. It is served by setting clear, broad rules, and by punishing those who break them.

Precisely.

With respect to many Big tech cases the case for individual liability is strengthened because of their dual class capital structure. At Facebook, for example, there are two classes of stock: one with the ordinary one vote per share and one with 10 votes per share. The supervening stock is held almost exclusively by Zuckerberg, giving him effective voting control despite owning a small percentage of the firm's equity.

As long time readers know, my take on dual class stock is you made your bed, now you must lie in it. Dual class stock has known agency cost consequences. Investors who buy dual class stock should discount the price they are willing to pay to adjust for that risk. Going forward, the cost is baked into the price.

But while I would not regulate dual class stock, the fact that Zuckerberg has used it to entrench himself in power surely strengthens the argument that if you punish Facebook you must punish Zuckerberg. Personally and punitively.

New SSRN Posting--"Bob Cochran on Law and Lawyering--A Catholic Perspective"

Available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3421790

Abstract

This essay is a contribution to a festschrift honoring Pepperdine law professor Robert Cochran. In addition to his many other professional accomplishments, Professor Cochran is a leading figure in the study of Law and Christianity.

One strain of Law and Christianity scholarship focuses on normative critiques of substantive legal issues based on Christian theology. In other words, it seeks to make the civil law more moral; i.e., to conform Man’s Law to God’s Law. A second strain seeks to help lawyers deal with the difficulties inherent in being a Christian and a lawyer. As Cochran has put it, one might ask “whether there is a connection between religious faith and what ordinary lawyers do in ordinary law offices on ordinary Wednesday afternoons.”

Cochran’s work has intersected both possibilities. In Part I of this Article, I tackle his analysis of the extent to which we should strive to harmonize God’s and Man’s Law. In Part II, I turn to Cochran’s analysis of the Christian lawyer’s vocation. In both parts, I come at his work from the perspective of a Roman Catholic called upon to give religious assent to both Christian scripture and, where I differ from Cochran, the Church’s Magisterium.

Keywords: law, jurisprudence, law and religion

Delaware Supreme Court spanks Carole Shorenstein Hays and her lawyer Brian T. Frawley

Theatrical producer Hays was a defendant in a suit before the Delaware courts. The Supreme Court's recent decision in that case includes an amazing addendum in which it quotes at length from a deposition Hays gave in the case. The deposition has to be read to get a true sense of just how bizarre Hays' conduct was, but suffice it to quote the Court's description of her "ridiculous and problematic responses to questions." The court also takes to task Hay's lawyer, "Brian T. Frawley, a partner with Sullivan & Cromwell LLP," who "took the lead in defending Hays’s deposition" and "made no attempt to put an end to Hays’s flagrantly evasive, nonresponsive, and flippant answers." This, despite the Court's observation that, "An attorney representing a client who engages in such behavior during the course of a deposition cannot simply be a spectator and do nothing."

One is left to wonder whether Hays is really the very odd person the deposition makes her out to be or whether this is just some crazy litigation she came up with and, if the latter, whether her lawyer was a party to that strategy.

The Delaware Court of Chancery held that Hays "willfully gave nonsensical and nonresponsive answers," which the Court held "constitutes bad faith litigation tactics." The Court therefore awarded the plaintiff "attorneys' fees and costs incurred in connection with taking Carole's deposition." CSH Theatres, L.L.C. v. Nederlander of San Francisco Associates, CV 9380-VCMR, 2018 WL 3646817, at *31 (Del. Ch. July 31, 2018), reconsideration denied, (Del. Ch. 2018), and aff'd in part, rev'd in part sub nom. In re Shorenstein Hays-Nederlander Theatres LLC Appeals, 596, 2018, 2019 WL 2531162 (Del. June 20, 2019)

I just hope there's a video of that deposition floating around somewhere. 

CST and the Law Seminar: Notes and Questions on Centesimus Annus and the Law

Our seminar on Catholic Social Thought and the Law began by reading Pope Leo XIII’s 1891 encyclical Rerum Novarum(notes here).

In 1991, Saint Pope John Paul II (JPII) issued Centesimus Annus(literally “hundredth year”) to commemorate the centennial of Rerum Novarum.

This week we tackled Centesimus Annus.

Context

The historical context of Centesimus Annus is quite significant. It was promulgated by the first non-Italian Pope in over 400 years. It was written by a Pole who had lived under both Nazism and Communism and, moreover, who was widely regarded as having been influentialin inspiring the revolutions of 1989 that brought down the Berlin Wall and restored democracy to eastern Europe. As Centesimus Annus was being written, moreover, the Soviet Union—the first and long most important Communist state—was crumbling and, it briefly seemed, evolving towards a liberal democratic state. Democratic capitalism seemed to be triumphant. The concerns about issues such as socialism and class struggle that had preoccupied Leo XIII thus seemed to have gone by the wayside.

Accordingly, JPII invites the reader not only to reflect on the meaning and legacy of Rerum Novarum but also to consider “the ‘new things’ which surround us and in which we find ourselves caught up, very different from the ‘new things’ which characterized the final decade of the last century.” (3)

JPII begins by describing a process by which labor had been commodified, which began with the Industrial Revolution and accelerated throughout the 19^thCentury. By 1891, this process had produced an endemic conflict between capital and labor, which in turn had inspired such developments as revolutionary socialism.

Interestingly for us as lawyers, JPII several times emphasizes the failure of the law to mediate the conflict between capital and labor:

“… the prevailing political theory of the time sought to promote total economic freedom by appropriate laws, or, conversely, by a deliberate lack of any intervention.” (§ 4)

“Pope [Leo XIII] and the Church with him were confronted, as was the civil community, by a society which was torn by a conflict all the more harsh and inhumane because it knew no rule or regulation.” (§ 5)

Recurring Themes

Given that Centesimus Annus was intended to provide a cohesive summation of the century-long development of CST, we see a number of themes that have recurred throughout the course.  It will be useful to reflect on how these themes have evolved and, as a result of that evolution, how Centesimus Annus both restates but also revises the positions staked out in Rerum Novarum.

1. The Church’s right and duty to speak to social conditions. In this regard, consider especially § 43. If the Church has “no models to present,” what is the function of the social teaching?
   1. Note also the discussion in § 54 of the relationship between the Church’s social mission and its spiritual mission.
   2. I liked one of my student’s answers to this question: “the Church’s job is advocate for the rights of humans—most specifically the dignity of all endowed by God—and to hold out the teaching of Christ as law which must be followed by the governments of the world in whatever more particularized form they take.”
2. The Church’s “theory of the State.” How does JPII’s theory of the state differ from that of Leo XIII? What type of government does Leo XIII appear to believe is best? What types does JPII seem to think is best?
   1. In § 47, JPII raises a concern that democracies “seem at times to have lost the ability to make decisions aimed at the common good.” Is that true of American democracy today and, if so, how do we regain the ability to do so?
   2. Sadly, I think one of my students speaks for many: “Frankly I have as of late been feeling apathetic and untrusting of both sides of the aisle, pretty much all forms of media, and anything I can’t verify with my own eyes. (Which is very little).”
3. The importance of human dignity, especially with respect to workers.
   1. One of my students asked; “Is the argument because we look like God and his son embodied a human then we must have dignity?”
      1. Let’s define what we mean by human dignity. I think the Compendium § 133 captures it:
         1. “In no case, therefore, is the human person to be manipulated for ends that are foreign to his own development”
         2. “The person cannot be a means for carrying out economic, social or political projects”
      2. Kant’s second formulation of the categorical imperative also speaks to this point:
         1. “Act in such a way that you treat humanity, whether in your own person or in the person of any other, never merely as a means to an end, but always at the same time as an end.”
      3. CST teaches that humanity is “the only creature willed by God for itself.” Humans have been endowed with unique human capacities. “These capacities are, in turn, typically understood to be exercised by acting morally, that is, to act in line with a morality that concerns what one does to oneself, to other humans, or to God.” (Cite)
   2. If human dignity is not something with which we are endowed by a Creator, what is the source and basis of it?
4. The right of private property.
5. Human rights more broadly. What is striking about the discussion (§§ 6-9) is the relative weighting given property rights versus the rights of workers.
6. The importance of work and the temptations of wealth. But note how the Church’s understanding of wealth and work evolved from the essentially agrarian vision that underlies Rerum Novarum to the industrialized vision that informs Centesimus Annus. (E.g., §§ 31-32)

CST, Capitalism, Socialism, and Culture

The morality of capitalism has been a recurring theme in CST. Michael Novak connects the historical context of Centesimus Annus to that debate by observing that:

By section 42, the Holy Father considers the consequences of that collapse and asks, “After the collapse of socialism, should we recommend capitalism to the bishops of the rest of the world?” Here again, the Holy Father says, “That depends on what you mean by capitalism,” and he makes a very astute separation between the political, the economic, and the moral/cultural components of the free society. He offers a unified vision of how the three relate to one another. He then proceeds to make a cultural critique of the existing order, and reveals an ecology of the free society–a moral ecology–which I think opens up the battle ground of the future.

What is that unified vision?

In § 12, JPII opines that:

… the fundamental error of socialism is anthropological in nature. Socialism considers the individual person simply as an element, a molecule within the social organism, so that the good of the individual is completely subordinated to the functioning of the socio-economic mechanism. Socialism likewise maintains that the good of the individual can be realized without reference to his free choice, to the unique and exclusive responsibility which he exercises in the face of good or evil. Man is thus reduced to a series of social relationships, and the concept of the person as the autonomous subject of moral decision disappears, the very subject whose decisions build the social order. From this mistaken conception of the person there arise both a distortion of law, which defines the sphere of the exercise of freedom, and an opposition to private property. A person who is deprived of something he can call "his own", and of the possibility of earning a living through his own initiative, comes to depend on the social machine and on those who control it. This makes it much more difficult for him to recognize his dignity as a person, and hinders progress towards the building up of an authentic human community.

How might US democratic socialists such as Bernie Sanders or Alexandria Ocasio-Cortez respond to that critique?

JPII also observes (§ 14):

Quadragesimo anno… stated that "if the class struggle abstains from enmities and mutual hatred, it gradually changes into an honest discussion of differences founded on a desire for justice".

Can CST contribute to changing American politics into “an honest discussion of differences founded on a desire for justice"?

Subsidiarity and Solidarity

JPII posits that the state must simultaneously embrace the principles of subsidiarity and solidarity. (E.g., §§ 15-16) How do those principles relate to law and policy?

Legal Applications

Corporate Social Responsibility

Compare and contrast this famous passage from Dodge v. Ford Motor Co., 170 N.W. 668, 684 (Mich. 1919):

A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the nondistribution of profits among stockholders in order to devote them to other purposes.

with § 35 of Centesimus Annus:

The Church acknowledges the legitimate role of profit as an indication that a business is functioning well. When a firm makes a profit, this means that productive factors have been properly employed and corresponding human needs have been duly satisfied. But profitability is not the only indicator of a firm's condition. It is possible for the financial accounts to be in order, and yet for the people — who make up the firm's most valuable asset — to be humiliated and their dignity offended. Besides being morally inadmissible, this will eventually have negative repercussions on the firm's economic efficiency. In fact, the purpose of a business firm is not simply to make a profit, but is to be found in its very existence as a community of persons who in various ways are endeavoring to satisfy their basic needs, and who form a particular group at the service of the whole of society. Profit is a regulator of the life of a business, but it is not the only one; other human and moral factors must also be considered which, in the long term, are at least equally important for the life of a business.

Can these views be reconciled?

Blue Laws

In McGowan v. Maryland, 366 U.S. 420 (1961), the U.S. Supreme Court upheld “the constitutional validity of Maryland criminal statutes, commonly known as Sunday Closing Laws or Sunday Blue Laws.” The Court explained that:

Starting in 1650, the Plymouth Colony proscribed servile work, unnecessary travelling, sports, and the sale of alcoholic beverages on the Lord's day and enacted laws concerning church attendance. The Massachusetts Bay Colony and the Connecticut and New Haven Colonies enacted similar prohibitions, some even earlier in the seventeenth century. The religious orientation of the colonial statutes was equally apparent. …

But, despite the strongly religious origin of these laws, beginning before the eighteenth century, nonreligious arguments for Sunday closing began to be heard more distinctly and the statutes began to lose some of their totally religious flavor. …

The proponents of Sunday closing legislation are no longer exclusively representatives of religious interests. Recent New Jersey Sunday legislation was supported by labor groups and trade associations …; modern English Sunday legislation was promoted by the National Federation of Grocers and supported by the National Chamber of Trade, the Drapers' Chamber of Trade, and the National Union of Shop Assistants. …

Throughout this century and longer, both the federal and state governments have oriented their activities very largely toward improvement of the health, safety, recreation and general well-being of our citizens. Numerous laws affecting public health, safety factors in industry, laws affecting hours and conditions of labor of women and children, week-end diversion at parks and beaches, and cultural activities of various kinds, now point the way toward the good life for all. Sunday Closing Laws, like those before us, have become part and parcel of this great governmental concern wholly apart from their original purposes or connotations. The present purpose and effect of most of them is to provide a uniform day of rest for all citizens; the fact that this day is Sunday, a day of particular significance for the dominant Christian sects, does not bar the State from achieving its secular goals. To say that the States cannot prescribe Sunday as a day of rest for these purposes solely because centuries ago such laws had their genesis in religion would give a constitutional interpretation of hostility to the public welfare rather than one of mere separation of church and State.

Businesses and consumers have criticized blue laws as infringements on their economic rights. Likewise, certain religious groups that observe a different Sabbath than Sunday have objected to blue laws as an infringement on their religious rights.

Using JPII’s analysis of workers’ rights as a basis, discuss whether workers should have a statutory right to at least one day a week of rest. Should we include law firm associates among the workers having such a right? That may seem like a facetious question, but take a moment to consider seriously whether the discussion of work at, for example, § 32 speaks to what your impending careers as lawyers. 

The Preferential Option for the Poor

What is the preferential option for the poor? (§ 11) What role does JPII assign the state in promoting it? How does JPII think the state should empower the poor? To what extent does the right of property (see Part IV) limit the state’s ability to advance the preferential option for the poor?

Consider the relevance of the preferential option and the right to property to current legal debates such as tax policy.

Slate magazine reports that:

One of Sen. Elizabeth Warren’s first proposals upon joining the 2020 presidential field was a wealth tax. Warren would impose an annual tax of 2 percent on family assets in excess of $50 million, which would increase to 3 percent for assets above $1 billion. Overall, this tax would hit 75,000 families in the country, who make up 0.01 percent of the population but hold 10 percent of the nation’s wealth.

Vox reports that:

In an interview that aired Sunday on 60 Minutes, America’s most widely covered new House member Alexandria Ocasio-Cortez (D-NY) floated the idea of a top marginal income tax rate as high as 70 percent as part of a plan to finance a “Green New Deal” that would aim to drastically curb America’s carbon dioxide emissions.

You are legislative counsel to a Catholic member of Congress. She asks for your advice as to whether CST as articulated by JPII suggests that she should support or oppose these proposals.

War

JPII write in § 52:

I myself, on the occasion of the recent tragic war in the Persian Gulf, repeated the cry: "Never again war!". No, never again war, which destroys the lives of innocent people, teaches how to kill, throws into upheaval even the lives of those who do the killing and leaves behind a trail of resentment and hatred, thus making it all the more difficult to find a just solution of the very problems which provoked the war.

Which calls to my mind this scene from Gandhi. How do you think JPII would answer the question of whether you can stop someone like Hitler without resorting to state violence?

"The Most Ridiculous Lawsuits of 2018"

From the US Chamber of Commerce:

A lawsuit targeting California coffee houses for not including warning labels on their products tops the U.S. Chamber Institute for Legal Reform’s (ILR) list of the Top 10 Most Ridiculous Lawsuits of 2018. This year’s list features lawsuits by a rude French waiter and over cheese on a McDonald’s hamburger. ILR released a highlight videorunning down each lawsuit on the list.

“These individual lawsuits may be good for a laugh, but the collective impact of excessive litigation on society is no joke,” said ILR President Lisa A. Rickard. “Our tort system costs every U.S. household more than $3,300 each year, on average.”

The Top 10 Most Ridiculous Lawsuits of 2018 from FacesOfLawsuitAbuse.org are:

1. 1. Lawsuits Over Coffee? Lawsuit About Warning Labels Brewing in California (Los Angeles, California)
   2. Kind Snack Bars Sued for Putting Vitamin C in Bars (Brooklyn, New York)
   3. Woman Wants More Junior Mints, and Files Class Action to Get Them (Chicago, Illinois)
   4. Man Sues to Change His Age—for Online Dating Apps (The Netherlands)
   5. Waiter Fired for Being Rude Claims He’s Just French, Files Discrimination Lawsuit(Vancouver, Canada)
   6. Man Gets $5 Million for Ant Bites (Hamilton County, Florida)
   7. Trial Lawyers Draft Up Ridiculous Lawsuit Over Kona Brewing Labels (San Jose, California)
   8. Customers Sue McDonald’s Over Unwanted Cheese (Fort Lauderdale, Florida)
   9. Woman Sues Canada Dry Ginger Ale for not Containing Real Ginger (Buffalo, New York)
   10. Man Suing StarKist Tuna Over a Health Logo (Syracuse, New York)

Fiduciary Government

Sung Hui Kim, my friend and UCLAW Colleague writes:

Is the state a fiduciary?  For a growing number of scholars, the answer is yes. In fact, the idea that the state is a fiduciary to its citizens has a long pedigree – ultimately reaching back to the ancient Greeks, and including Hobbes and Locke among its proponents.  Public fiduciary theory is now experiencing a resurgence, with applications that range from international law, to insider trading by members of Congress, to election law and gerrymandering.  A new edited volume of essays, “Fiduciary Government” (Cambridge University Press 2018, 342 pages, $145)explores the implications of the notion that the state is a fiduciary and develops new acounts of how fiduciary principles apply to representation; to officials and judges; to problems of legitimacy and political obligation; to positive rights; to the state itself; and to the history of ideas. The resulting volume should be of great interest to political theorists and public law scholars, to private fiduciary law scholars, and to students seeking an introduction to this new and increasingly relevant area of study. This volume should also be of interest to skeptics of the notion of fiduciary government, as it presents important critiques of fiduciary political theory. 

Review the Title Page, Table of Contents, List of Contributors and Introduction here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3292645

More legal hurdles for outsourcing the board

Regular readers will recall that Todd henderson and my book Outsourcing the Board: How Board Service Providers Can Improve Corporate Governance asks "why does the law require governance to be delivered through individual board members? While tracing the development of boards from quasi-political bodies through the current 'monitoring' role, we find the reasons for this requirement to be wanting. Instead, we propose that corporations be permitted to hire other business associations - known as 'Board Service Providers' or BSPs - to provide governance services. Just as corporations hire law firms, accounting firms, and consulting firms, so too should they be permitted to hire governance firms, a small change that will dramatically increase board accountability and enable governance to be delivered more efficiently.

As we recognize, there are a number of existing legal barriers that would have to be overcome. Keith Paul Bishop just flagged a few more. (A link to our book would have been nice.)

Wrestling with Gaudium et spes' treatment of private property and of theft in cases of extreme necessity

I am still reading Gaudium et spes in preparation for my next Catholic Social Thought and the Law Seminar and came across something I found rather interesting.

Recall Leo XIII’s strong defense of private property in Rerum Novarum. Now consider this rather astonishing statement from GS:

If one is in extreme necessity, he has the right to procure for himself what he needs out of the riches of others. (69)

To be sure, GS goes on to give a (rather weak) defense of private property:

Private property or some ownership of external goods confers on everyone a sphere wholly necessary for the autonomy of the person and the family, and it should be regarded as an extension of human freedom. Lastly, since it adds incentives for carrying on one's function and charge, it constitutes one of the conditions for civil liberties. (71)

But surely it stretches the Catholic “both and” to the breaking point to simultaneously defend private property and seemingly endorse theft.

Perhaps we should read the former statement not as an endorsement of theft, but as a recognition of the necessity defense. As one legal scholar observes of the defense of necessity in American law:

The applicability of the necessity defense depends entirely on the nature of the offense committed and the circumstances that occasioned its commission. One who committed trespass or theft because she otherwise would have suffered the effects of hunger or exposure can argue, at least in theory, that her conduct was justified under the defense of necessity. By contrast, one who committed rape or murder or assault as a result of her impoverishment would almost invariably be unable to establish a defense of necessity, because her action (1) would not be effective in abating the danger she sought to avoid, and (2) even if it was (say, if she killed V to get the loaf of bread he was holding), the harm caused by the criminal act would be no less serious than that sought to be avoided.

In practice, even a starving or homeless person charged with theft or trespass will have a hard time establishing a necessity defense if the prosecution can show that: (1) she would not have suffered any serious injury if she had not committed the crime; (2) there were legal alternatives available to her, such as attending a soup kitchen or homeless shelter; or (3) she somehow bore responsibility for the impoverished situation in which she found herself. Presumably as a result of these stringent requirements, reported cases in which a defendant charged with theft or trespass was acquitted by virtue of the necessity defense are virtually nonexistent, at least in modern times.

Still, the defense exists in theory ….[1]

On the other hand, Judge Frank Easterbrook has cautioned:

Allowing a defense of necessity creates a risk that people may act precipitately, before the necessity is genuine. Thus if the law allows a starving mountaineer to break into a remote cabin as a last resort to obtain food--if, in other words, necessity is a defense to a charge of theft--it creates a risk that wanderers will break doors whenever they become hungry, even though starvation is far in the future.[2]

That risk is “addressed by the rule that the evil must be imminent and the means, well, necessary; the departure from the legal norm must be (as with self-defense) the very least that will avert the evil.”

I assume that the point the authors of GS were trying to make is that necessity can be seen as a moral justification for something—theft—that would otherwise be wrongful. As the Catechism explains:

The seventh commandment forbids theft, that is, usurping another's property against the reasonable will of the owner. There is no theft if consent can be presumed or if refusal is contrary to reason and the universal destination of goods. This is the case in obvious and urgent necessity when the only way to provide for immediate, essential needs (food, shelter, clothing ...) is to put at one's disposal and use the property of others. (2408)

In other words, extreme necessity wholly justifies taking another’s property to such an extent that the taking is no longer theft.

How often does the Multistate Bar Essay Exam Test Business Associations Topics?

I ran across this Barbri chart while looking up corporate opportunities:

I cover everything but proxies in the basic Business Associations class. Proxies get bumped into Advanced Corporation Law.

CST & The Law Seminar: Notes on Pope John XXIII's Encyclical Pacem in Terris

This session we read two encyclicals by Pope John XXIII:  Mater et Magistra (Mother and Teacher) and Pacem in Terris (Peace on Earth). In this post, I focus on the latter.

Major Themes

1. The rights of the individual
2. The relationship between authority and individual conscience
3. World peace and disarmament
4. The common good

The Rights of Man

Human rights are natural rights, which are universal and inviolable. (PT ¶ 9)

In part I of the encyclical, Pope John lists a set of those rights in considerable detail. They include:

1. Life
2. A worthy standard of living
3. Respect for the person
4. Education and training
5. Freedom of religion
   1. Although Pope John treats freedom of religion as a basic Christian precept, many would argue that his papacy marks a major shift at least in emphasis. In particular, some claim that” against centuries of Catholic thought and practice asserting the primacy of truth over conscience in religious matters, John simply asserted, without laying out detailed arguments, that civil authorities have an obligation to protect the freedom of their citizens to worship and practice religion as they see fit in their own conscientious belief.”
   2. For an interesting analysis of these questions, written shortly after Pacem in Terris, see John Courtney Murray’s 1963 essay On Religious Liberty.
6. Family
7. To pursue priestly vocations
8. Safe and moral working conditions
9. The right to unionize
10. The right to emigrate and immigrate
11. The right to participate in public affairs
12. Protection of one’s rights from arbitrary oppression

Notice that the Pope’s outline of basic human rights includes both negative rights and positive rights. (I have elsewhere expressed a certain skepticism about positive rights, but that discussion is for another time.)

Unlike many accounts of human rights, Pope John explicitly links those rights to corresponding duties:

Thus, for example, the right to live involves the duty to preserve one's life; the right to a decent standard of living, the duty to live in a becoming fashion; the right to be free to seek out the truth, the duty to devote oneself to an ever deeper and wider search for it. (PT ¶ 29)

Human dignity thus encompasses both the right to “act freely” and the duty to do so “responsibly.” (PT ¶ 34)

Pope John concludes the first part of the encyclical with a number of observations about the state of the world as it then was:

1. “… a progressive improvement in the economic and social condition of working men. They began by claiming their rights principally in the economic and social spheres, and then proceeded to lay claim to their political rights as well. Finally, they have turned their attention to acquiring the more cultural benefits of society.” (PT ¶ 40)
2. “… the part that women are now playing in political life is everywhere evident. ... Women are gaining an increasing awareness of their natural dignity. Far from being content with a purely passive role or allowing themselves to be regarded as a kind of instrument, they are demanding both in domestic and in public life the rights and duties which belong to them as human persons.” (PT ¶ 41)
3. “Since all peoples have either attained political independence or are on the way to attaining it, soon no nation will rule over another and none will be subject to an alien power.” (PT ¶ 42) This seems to clearly be an affirmative reference to the process of decolonization that was underway at that time.
4. A growing acceptance of human equality and, in particular, disapproval of racial discrimination.

The Individual and the State

Part II of Pacem in Terris accepts the legitimacy of the state but insists that the state derives its authority from God. (PT ¶ 45)

We must … reject the view that the will of the individual or the group is the primary and only source of a citizen's rights and duties, and of the binding force of political constitutions and the government's authority. (PT ¶ 78)

Which raises the questions: What happens when a state embraces secularism as a key ordering principle? What happens when the majority of citizens reject religion and embrace secularism?

As with Mater et Magistra, Pacem in Terris embraces the “both/and” of subsidiarity and solidarity. Individuals and “intermediate groups” are rightfully free but they also have a duty to contribute to the common welfare. (PT ¶ 53) We see this again in Part IV of the encyclical, which deals with international relations, where Pope John wrote:

The same principle of subsidiarity which governs the relations between public authorities and individuals, families and intermediate societies in a single State, must also apply to the relations between the public authority of the world community and the public authorities of each political community. (PT ¶ 140)

For those of us who are lawyers, the three paragraphs (¶¶ 70-72) dealing with the social role of the law are especially pertinent (if a tad cryptic):

There can be no doubt that a State juridical system which conforms to the principles of justice and rightness, and corresponds to the degree of civic maturity evinced by the State in question, is highly conducive to the attainment of the common good.

And yet social life is so complex, varied and active in this modern age, that even a juridical system which has been established with great prudence and foresight often seems inadequate to the need.

Moreover, the relations of citizens with each other, of citizens and intermediate groups with public authorities, and the relations between public authorities of the same State, are sometimes seen to be of so ambiguous and explosive a nature, that they are not susceptible of being regulated by any hard and fast system of laws.

In such cases, if the authorities want to preserve the State's juridical system intact—in itself and in its application to specific cases—and if they want to minister to the principal needs of society, adapt the laws to the conditions of modern life and seek solutions to new problems, then it is essential that they have a clear idea of the nature and limits of their own legitimate spheres of action. Their calmness, integrity, clear sightedness and perseverance must be such that they will recognize at once what is needed in a given situation, and act with promptness and efficiency.

Relations Between States

Part III turns to inter-state relations. At the outset, there is a clear rejection of the ideologies that underlay colonialism: “Truth calls for the elimination of every trace of racial discrimination, and the consequent recognition of the inviolable principle that all States are by nature equal in dignity. Each of them accordingly has the right to exist, to develop, and to possess the necessary means and accept a primary responsibility for its own development.” (PT ¶ 86) The following paragraphs tick off in detail why the various justifications invoked by colonialists have no grounding in morality or natural law.

The then-recent experience of World War II is obvious in several portions of this section, including:

1. Pope John’s insistence that international disputes “be settled in a truly human way, not by armed force nor by deceit or trickery.” (PT ¶ 93)
2. His insistence that “any attempt to check the vitality and growth of these ethnic minorities is a flagrant violation of justice; the more so if such perverse efforts are aimed at their very extinction,” which is a clear reference to the Holocaust and other genocidal programs during the war. (PT ¶ 95)
3. Relatedly, there is what I take to be a reference to (among other things) Zionism and the formation of the state of Israel, as the Pope mentions a “political trend (which since the nineteenth century has become widespread throughout the world and has gained in strength) as a result of which men of similar ethnic background are anxious for political autonomy and unification into a single nation.” (PT ¶ 94)
   1. There is also a “cautionary note” in which Pope John states that some “minority groups, in reaction, perhaps, to the enforced hardships of their present situation, or to historical circumstances, frequently tend to magnify unduly characteristics proper to their own people.” (PT ¶ 97)
   2. This is a somewhat odd passage. It seems unlikely to be directed specifically at Jews, as Pope John did so much to reconcile Catholics and Jews.
   3. In context, the passage seems to be cautioning against ethnocentrism whether it is practiced by majority or minority groups within a state. We are all part of the same human family.

Finally, Pope John takes note of the fundamental change effected by the development and use of nuclear weapons. (PT ¶¶ 126-29) Nuclear weapons should be banned, as should testing of those weapons. (PT ¶¶ 111-12) The potential for catastrophic destruction called into question the whole concept of just war.

The World Community

The fourth part of Pacem in Terrisdeals with the then-new United Nations and, more broadly, the world community. Pope John argues that no single nation can provide the common good universally, instead it must be joint effort of the entire world community. (PT ¶¶ 132-35)

Pastoral Exhortations

The closing part of Pacem in Terrisconsists of series of exhortations directed mainly at the laity. The Pope encourages participation in public life. (PT ¶ 146) In passing, one wonders what Pope John would have made of The Benedict Option?

Ecumenism was a principal concern of Pope John throughout his papacy, so it is not surprising that he devoted considerable attention to the relations between Catholics and non-Catholics in achieving social justice.

Why is the Delaware judiciary killing so many trees? The Delaware courts really need a page limit.

Am I the only one who thinks that Delaware judicial opinions have gotten way too long?

Vice Chancellor Travis Laster's recent opinion in Akorn, Inc. v. Fresenius Kabi AG, C.A. No. 2018-0300-JTL (Del. Ch. Oct. 1, 2018), is a whopping 246 pages long. People have written world renowned novels in less than 246 pages!

I blame Chief Justice Leo Strine, of course, who has admitted that "My opinions are too long." But why does the rest of the Delaware bench have to copy his lead?

Back in the day, Judge Richard Posner cogently recommended that judges avoid writing opinions that are “too long,” “are burdened with too many citations,” and “tend to ramble instead of clearly defining and discussing issues,” while also recommending that they use "good, plain words and sentences that communicate rather than befuddle.” Richard A. Posner, Judges' Writing Styles (And Do They Matter?), 62 U. Chi. L. Rev. 1421, 1422 (1995).

Even further back in the day, a Mississippi jurist put it even better:

The writer takes occasion (as deliberate dicta) to say that the law reports are being rapidly filled with valueless opinions, the printing of which is not only costly, but members of the bar find it a growing and tedious task to search the books to find out the rule in any given case. The facts of a case therefore should not be stated at length, unless absolutely necessary; nor should the opinion in any case be longer than that actually required to impart to the reader the exact question involved and decided.

It is to be hoped that useless and lengthy opinions by the courts, and voluminous and valueless briefs by the attorneys, which involve so much unnecessary work on the part of both the bench and bar, will become a thing of the past.

Wilson v. State, 113 So. 445, 445 (Miss. 1927). Sadly, we are still hoping for that happy outcome.

Finally, going even further back in the days of yore, we find a 1911 Yale Law Journal article expounding on what seems to be a perpetual problem:

As to the length of reported judicial opinions, what do duty or expediency demand? Are we burdened with too long statements and opinions and, if so, can they be shortened and how?

Senator Root of New York, who might be considered an authority, has practically answered these questions in a recent address, as its president, to the New York State Bar Association.

"The mass of judicial reports," he said, in part, "has grown so great that it begins to seem as if before long we shall have to burn our books like the Romans and begin anew. And indeed, where decisions can be found in support of every side of every proposition, authority is in a great measure destrdyed and we do begin anew in determining by the light of reason which authority shall be followed. I wish that our judges could realize officially what so many of them agree to personally--that restating settled law in new forms, however well it is done, complicates rather than simplifies the administration of the law, that the briefest of opinions usually answers the purpose of the particular case; and that the general interests of jurisprudence justify reasoned opinions only when some question of law is determined which has not been determined before by equal authority. On every side the increased complication of life calls for vigorous and determined effort to make the working of our governmental system more simple."

Senator Root has suggested the evil, generally recognized; and the remedy, brief opinions.

A message Delaware jurists ought to take to heart.