Proponents of third-party litigation funding argue that it is socially beneficial, helping parties bring meritorious litigation that otherwise would not be possible, due in part to the ability of the plaintiff to share risk with funders. But the reality of how some third-party funding contracts are structured belies this theory. Many such contracts include "waterfall" clauses whereby funders get paid back first upon successful case resolution. This leaves most of the risk on the plaintiff, the party usually least equipped to bear it. This is at odds with the prescription of standard economic theory, which suggests that the residual claimant should be the party best able to manage risk, in this case, the litigation funders. We introduce a simple, numerical model that captures this intuition and shows why "equity" contracts would be preferred by risk-averse plaintiffs. Moral hazard, adverse selection and funder agency costs likely all play a role in why waterfall contracts are used. We suggest three simple changes to funding arrangements that could ameliorate this situation. Counterintuitively, giving lenders greater power by allowing them to have input into settlement negotiations could lead to different contractual setups that shift the risk more to the litigation funders.
The law governing ultra vires review seeking injunctive relief to challenge statutory violations by federal agencies is a mess. Although administrative law generally limits judicial review to final actions, a substantial body of caselaw holds that this type of ultra vires review can reach interlocutory actions, vastly expanding judicial reach. Although administrative law now insists that federal courts must exercise independent judgment when reviewing agency statutory interpretations, caselaw limits this type of ultra vires review to correcting only the most spectacular statutory violations. In addition, caselaw ignores or garbles the problem of determining which types of plaintiffs qualify to invoke a cause of action for ultra vires review. Ultra vires review for injunctive relief to challenge statutory violations would make more sense if courts thought about it the same way they did back in 1946 when the Administrative Procedure Act was enacted. Under the well-understood framework of that time, a plaintiff could seek injunctive relief to redress a "legal wrong" caused by a "final" agency action in a suit in which the court could exercise independent judgment over issues of law. Students of administrative law will find this framework familiar because Congress basically codified it in the APA. By the transitive postulate, this Article's proposal boils down to the idea that ultra vires review should work much like APA review did back in 1946. The confusion that burdens ultra vires review would largely disappear if courts remembered this basic equivalence.
This article offers a framing of the United States Constitution as a pro-defense document. The Constitution was designed in significant part to constrain government power while conferring rights upon persons accused of crimes. The framers enshrined the nation’s founding document with protections for individuals in the criminal law arena. Moreover, the architects of the Reconstruction Amendments intended to make the pro-defense Constitution applicable to the states, thereby protecting criminal defendants at all levels from the arbitrary power of the government. However, the current administration of criminal law in America is decidedly anti-defense and, consequently, in conflict with the text, history, and spirit of the Constitution. This article compares what the Constitution’s original framers and Reconstruction’s architects intended with what passes as criminal law practice today, exposing disturbing similarities between the criminal law realities of post-medieval England and the present. It examines how criminal law practice warped from what was intended to what it has become, recognizing the role that race played in warping the pro-defense Constitution. It addresses a law review article that argues for limiting the applicability of pro-defense features of the Constitution to the federal government. Finally, it concludes with a call for activists and defense attorneys to adopt the narrative of the pro-defense Constitution in their advocacy for reform and positive change.
