Global financial markets are in the midst of a transformative movement. The creation of Bitcoin and Facebook’s proposed distribution of Diem mark a watershed moment in the evolution of the financial markets ecosystem. Purportedly, peer-to-peer distributed digital ledger technology eliminates legacy financial market intermediaries such as investment banks, depository banks, exchanges, clearinghouses, and broker-dealers. Yet careful examination reveals that cryptocurrency issuers and the firms that offer secondary market cryptocurrency trading services have not quite lived up to their promise. Notwithstanding cryptoenthusiasts’ calls for disintermediation, evidence reveals that platforms that facilitate cryptocurrency trading frequently employ the long-adopted intermediation practices of their traditional counterparts. In fact, when emerging technologies fail, cryptocoin and token trading platforms partner with and rely on traditional financial services firms. As a result, these platforms face many of the risk-management threats that have plagued conventional financial institutions as well as a host of underexplored threats. Automated or algorithmic trading strategies, accelerated high frequency trading tactics, and sophisticated Ocean’s Eleven-style cyberheists leave crypto investors vulnerable to predatory practices. Early responses to fraud, misconduct, and manipulation emphasize intervention when originators first distribute cryptocurrencies— the initial coin offerings. This Article rejects the dominant regulatory narrative that prioritizes oversight of primary market transactions. Instead, this Article proposes that regulators introduce formal registration obligations for cryptocurrency intermediaries —the exchange platforms that provide a marketplace for secondary market trading. This approach recognizes the dynamic nature of cryptocurrency secondary market actors seeking to achieve disintermediation yet balances the potential benefits of trading intermediaries with normative regulatory goals—protecting investors from fraud, theft, misconduct, and manipulation; enforcing accountability; preserving market integrity; and addressing enterprise and systemic risk management concerns
Section 230 of the Communications Decency Act (CDA) immunizes “interactive computer services” from most claims arising out of third-party content posted on the service. Passed in 1996, section 230 is a vital law for allowing free expression online, but it is ill-suited for addressing some of the harms that arise in the modern platform-based economy. This Article proposes to redefine section 230 immunity for sharing economy platforms and online marketplaces by tying internet platform immunity to the economic relationship between the platform and the third party. It primarily focuses on one key flaw of section 230: its binary classification of online actors as either “interactive computer services” (who are immune under the statute) or “information content providers” (who are not immune). This binary classification, while perhaps adequate for the internet that existed in 1996, fails to account for the full range of economic activities in which modern platforms now engage. This Article argues that courts applying section 230 should incorporate joint enterprise liability theory to better define the contours of platform immunity. A platform should lose immunity when there exists a common business purpose, specific pecuniary interest, and shared right of control in the underlying transaction giving rise to liability. Sharing economy platforms, such as Airbnb and Uber, and online marketplaces, such as Amazon, are primary examples of platforms that may function as joint enterprises. By using joint enterprise theory to redefine platform immunity, this Article seeks to promote greater fairness to tort victims while otherwise retaining section 230’s core free expression purpose.
Recent work of fiduciary theory has provided conceptual synthesis requisite to understanding core fiduciary principles and the structure of fiduciary liability. However, normative questions have received only sporadic attention. What values animate fiduciary law? How does, or ought, fiduciary law prove responsive to them? Where in other areas of private law theory – notably, tort theory – pioneering scholars went directly at normative questions like these, fiduciary theory has been exceptional for the reticence shown toward them. The reticence is sensible. Fiduciary principles are the product of equity’s most extended and convoluted program of supplementing surrounding law. They span several distinct forms of relationship arising in markedly different settings. In this article, I develop a framework for analysis of the morality of fiduciary law. The framework accomplishes four things. First, it situates questions about the morality of fiduciary law within the context of the general jurisprudential literature on the nature of law and its normativity. Second, it explains the sense in which fiduciary law is normatively complex by virtue of being structurally biplanar, with general equitable principles (duty-imposing rules) overlain upon legal and equitable principles (including, notably, power-conferring rules) that define and enable legal forms of relationship characterized as fiduciary in equity. Third, it distinguishes the general morality of fiduciary duties from the special morality of fiduciary relationship types. Fourth, and finally, it provides an overview of loci of value in fiduciary relationships, canvassing considerations of general and special morality that give salience to the interests of parties, third parties and the public in rules that enable and constrain the performance of fiduciary mandates.
Because of the strong moral rhetoric and robust equitable remedies available in fiduciary law, it is not surprising to find lawyers and legal scholars seeking to expand the reach of fiduciary law principles into new relationships and new areas of law. However, expansion often does not work very well because of the demanding and pervasive nature of fiduciary duties. Thus, jurists often turn to the business judgment rule and its policy of underenforcement of fiduciary duties as a way to fit fiduciary law principles into other areas of law. The problem with this approach is that it is based on a deficient understanding of the corporate law model. The business judgment rule is not an arbitrary abstention policy but rather a prudential policy decision that advances the beneficiaries’ interests in the unique context of the business setting. Because its theoretical underpinnings tend to be absent from other relationships, the business judgment rule cannot serve as a model for indiscriminate expansion of fiduciary areas of law. For the same reasons, any policy of deferential review of fiduciary duties would have to be based on other considerations.
Dissatisfaction with drug prices has prompted a flurry of recent legislation and academic research. But while pharmaceutical policy often regards fair pricing as a goal, the concept of fairness itself frequently goes undefined. Legal scholarship—even work ostensibly focused on fairness—has not defined and defended an account of fair pricing. Recent legislative proposals passed by the House and proposed by Sens. Ron Wyden and Chuck Grassley have similarly avoided a determinate position on fairness. This Article explains and defends an account of what makes a price for a drug fair that identifies fair price with social value, argues for implementing fair pricing through a price ceiling grounded in social value, and examines how the proposed price ceiling could overcome legal and political obstacles. By focusing on fairness, this Article pursues a goal that complements, rather than duplicates, recent legal scholarship on pharmaceutical pricing. This Article makes three contributions. First, it identifies, makes explicit, and categorizes the most prominent conceptions of fairness in drug pricing. Second, it advances an account of fair pricing that centers on a drug’s value to society. Third, it proposes that fair pricing be implemented via a price ceiling that ensures that the price of a drug does not exceed its value to society, and explains how this price-ceiling approach would address a variety of legal and political obstacles. In Part I, the Article categorizes conceptions of fair pricing. It first considers procedural fairness, and critically evaluates the view that any price reached in a procedurally fair negotiation is substantively fair. It then reviews four comparators used for assessing substantive fairness: (a) the cost of developing the drug, (b) the drug’s affordability to patients, (c) the drug’s customary price, and (d) the drug’s social value. Part I concludes that social value should be used to identify when a price is unfair, although the other factors can indicate procedural unfairness or serve to justify other policies, such as subsidized insurance. Part II then takes on the task of defining social value. It explains how cost-effectiveness analysis could be used to define social value, and argues that cost-effectiveness analysis should be modified to incorporate factors other than overall costs and health benefits, such as fairness to patients with preexisting disabilities and reduction of health disparities, but should not be modified to provide greater incentives to treat rare diseases or diseases lacking other treatments. Part III turns to implementation, arguing that fair pricing can best be achieved through a price ceiling that tracks social value. It explains how such a price ceiling could incentivize the production of socially valuable treatments, and describes the legal, ethical, and political advantages of price ceilings over other options such as reimbursement ceilings. In particular, the availability of treatments whose price exceeds the reimbursement ceiling will lead to administrators enforcing the reimbursement ceiling being blamed when patients die or suffer illness. In contrast, while price ceilings may discourage the development of costly drugs, they do not require families or payers to say no to identifiable patients who could benefit from existing treatments. Price ceilings also avoid the legal limitations that private and public insurers face when they attempt to deny coverage for expensive treatments. Part IV identifies potential legal obstacles to the implementation of a price ceiling and explains how to avoid them. Some, like preemption and the Dormant Commerce Clause, apply only to state-level efforts. Others, such as the Takings Clause and a potential revival of Lochner-era freedom of contract, also apply to federal initiatives.
Paternalism, Tolerance & Acceptance: Modeling the Evolution of Equal Protection in the Constitutional Canon proposes a legal taxonomy through which we can model changes in interpretations and applications of anti-discrimination principles to best understand the evolution of equal-protection doctrine. The goal for doing so is two-fold. First, through a careful exegesis of a wide range of equal-protection cases from the past sesquicentury, the analysis provides a positive theory to chart how respect for minority rights can progress within a given doctrinal space. Second, the analysis provides an unabashedly normative assessment of how closely a given legal regime comes to accepting and celebrating the inherent dignitary interests of marginalized groups and the extent to which its jurisprudence begins to subvert subordination practices. Consequently, the Article attempts to trace both how far we have come and to criticize the potential shortcomings of the extant body of jurisprudence from the Supreme Court on issues related to equality. In advancing this evolutionary model of civil-rights jurisprudence, the Article charts the key characteristics of the three stages in the development of equal protection under the law: paternalism, tolerance and acceptance. In the process, the Article scrutinizes and reassesses some of the most canonical decisions in the civil-right firmament and considers how these purported hallmarks of progressive jurisprudence — from Justice Harlan’s prescient dissent in Plessy v. Ferguson and the Supreme Court’s rare moment of post-Reconstruction racial awakening in Strauder v. West Virginia to Mendez v. Westminster and Brown v. Board, right through the modern-day sexual-orientation triumvirate of Lawrence v. Texas, Windsor v. United States and Obergefell v. Hodges — fell short in critical ways. In the end, the goal of this Article and the model it presents is to encourage a more robust and fulsome notion of equal protection — one that is proactive rather than reactive; one that affirmatively renounces, rather than stays silent on, supremacist ideologies; and one that uses the legal machinery of the state to accept and celebrate the inalienable rights and worth of individuals who are members of targeted groups.
During election season, politicians and political campaigns often use pop culture or iconic works, such as viral memes or popular songs, to help convey their political messages — often without authorization from the copyright owners of these works. As politics and politicians become ever more divisive, these unauthorized political uses of copyrighted works can be particularly objectionable to copyright owners. In addition to offending their political or moral inclinations, artists and copyright owners frequently claim that these political uses infringe their copyrights. Politicians and campaigns argue that their right to use copyrighted works for political purposes is protected by the First Amendment, and that such political uses are presumptively fair use. This Article examines unauthorized political uses of copyrighted works under copyright law’s fair use doctrine to demonstrate that, in fact, both sides are correct. Through a series of case studies, this Article identifies a pattern in political fair use decisions: In disputes arising from the unauthorized political uses of copyrighted works, courts appear to implicitly modify their analyses and balancing of the fair use factors under Section 107 of the Copyright Act in order to both accommodate the import of political speech and to respect copyright owners’ dignity and rights to control use of their expressive works. Under the courts’ political fair use analysis, one determination — the nature of the original copyrighted work — seems to exert an outsized influence on the determination of all four fair use factors, permitting certain unauthorized political uses of copyrighted works to appear presumptively fair. This contradicts the Supreme Court’s guidance to courts on not subjecting copyright to independent First Amendment review nor to expand copyright’s fair use doctrine in infringement cases involving political or public figures. It also disregards certain copyright owners’ right to control use of their work, but permits other copyright owners the right to curtail infringing behavior that causes no market harm. This Article highlights these concerns and explores the normative implications of political fair use on litigation certainty and predictability, incentives to create political expressive works, and the balance between respecting creators’ dignity and rights to control use of their expressive works with guaranteeing free and open discussion of politicians and political candidates.
Airbnb’s structure, design, and algorithm create a website architecture that allows user discrimination to prevent minority hosts from realizing the same economic benefits from short-term rental platforms as white hosts, a phenomenon this Article refers to as ‘redliking.’ For hosts with an extra couch, spare room, or unused home, Airbnb provides an opportunity to create new income streams and increase wealth. Airbnb encourages prospective guests to view host photographs and personal information when considering potential accommodations, thereby inviting bias, both implicit and overt, to permeate transactions. This bias has financial consequences. Empirical research on host earning rates found that white hosts earn significantly more than their minority counterparts, even when controlling for location, size, and amenities. Airbnb’s algorithm augments the effects and propensity of individual user bias, creating a system wherein race neutral variables serve as proxies for discrimination. Contemporary redliking parallels historic inequality related to housing wealth. In the early twentieth century, redlining maps were used to justify withholding investments from Black communities. Today, redliking continues the practice of directing wealth to white communities, reinforces systemic real property barriers by depriving minority hosts of important revenue streams, and exacerbates the racial wealth gap. This Article examines the liability of websites like Airbnb for discrimination experienced by minority short-term rental hosts. The ability of anti-discrimination laws originally enacted to abolish redlining and protect minority consumers to combat redliking is complicated by the fact that sites like Airbnb serve multiple purposes; while guests use the platform to identify and book lodging, hosts use the site to advertise available accommodations. Looking to judicial interpretation of online speech and platform operator liability, this Article proposes two approaches – a general function test and a fragmented function test – to determine website liability for discrimination against short-term rental hosts. Noting the limitations of the existing anti-discrimination legal framework, this Article argues that eradicating redliking requires incorporating lessons on platform design from behavioral economics as well as eliminating opportunities for website algorithms to amplify and operationalize user discrimination.
Perceived failures by the UN Security Council have been characterized as a ‘betrayal of trust’, which threatens to impact in turn on the strength of the Council’s authority. In certain legal cultures, fiduciary law has been recognized as an effective legal mechanism to underwrite trust in the exercise of authority. This Article considers the potential value in applying the fiduciary construct to the Security Council setting as a way to consolidate trust. In doing so, it is necessary to unpack two different conceptions of the fiduciary construct: the precept of law (derived from domestic private law) and the precept of authority (sometimes described as public fiduciary theory). Interpreting the former precept as applicable to private interests and the latter to the public interest, this article recognizes both precepts as applicable to relationships in which there is a legal expectation that that those exercising control over another’s interests will not exploit (duty of loyalty) or squander (duty of care) those interests. The central question is whether the UN Security Council can be said to exist in such a fiduciary relationship, either with private persons or with some iteration of the global public. By reference to recent controversies, including privatization of public assets in Kosovo, sexual exploitation and abuse by UN peacekeepers, Security Council vetoes in the face of atrocity and due process failures in sanctions decision-making, this article examines the extent to which the fiduciary construct can play a useful role in reinforcing trust in the Security Council setting.
A law of public office crystallized in Anglo-American law in the seventeenth and eighteenth centuries. This body of law—defined and enforced through a mix of oaths, statutes, criminal and civil case law, impeachments, and legislative investigations—imposed core duties on holders of public executive offices: officials needed to serve the public good, not their own private interests; were barred from acting ultra vires; could often be required to account to the public for their conduct in office; and needed to act with impartiality, honesty, and diligence. Officeholding came to be viewed as conditional, with officers removable for misdeeds. These substantive duties within the law of public office—even if not its enforcement structure—reflected something that looks similar to modern fiduciary duties of loyalty and care.In this Article, we extend the historical record describing this law of public office and make several new historical and theoretical claims. First, there are reasons to suspect that what we identify as the law of public office and what are now generally considered private fiduciary duties developed together and influenced each other. During the critical centuries we explore, the duties of officeholders such as trustees, executors, and corporate directors were developing alongside the duties of public officials such as tax collectors and government commissioners. Parliament and other actors repeatedly used the language of trust, trusteeship, guardianship, and account to define the law of public offices. Additionally, public law concerns about abuse of power and the need for honesty, fidelity, and altruism in service of others may have seeped from public law into private fiduciary law. Influential political theory about the monarchy and lesser magistrates also used trust and related legal language to set forth a fiduciary conception of public officeholding; the theoretical developments in political theory not only drew from legal concepts but also may have helped shape them. One Article cannot decisively establish whether the similarities in language, concepts, and timing were mere coincidence or rather evidence of some conscious codevelopment in the law of public offices and fiduciary law. Proving (or disproving) actual causal relationships will need to be the work of the future. We conclude with some potential implications for our research, should further work continue to confirm our findings here. In short, fiduciary political theorists should be less anxious about drawing from private law models, and private law fiduciary theorists might need to be less insistent on the purity of the private sphere. Our research agenda invites more mutual learning—both historically and for law and institutions today.
Many scholars of fiduciary law have focused—understandably—on whether the subject is a coherent field and not a piecemeal of assorted doctrinal detail. This Article looks to the future and to relationships between the formal domain of fiduciary law and other factors that shape conduct. This extra-legal domain includes intrinsic motivation as well as markets for professional services and forces like the operation of reputation. The Article demonstrates that looking across domains—from the legal to the extra-legal—casts in sharp relief the reasons why fiduciary law is distinctive. These stem from the specific qualities of relationships to which fiduciary law applies, as well as the mandatory nature of the distinctively fiduciary duty of loyalty that backstops parties who rely on the trustworthiness of others. The Article also engages with implications to be drawn from extensive behavioral research on intrinsic and extrinsic motivation. The Article argues that fiduciary law can operate to reinforce loyal conduct motivated by extra-legal factors, “crowding in” loyalty, not crowding it out. Elaborating further, the Article uses concrete examples to examine how factors beyond the law that shape conduct likely vary in significance along dimensions of variation among fiduciary relationships.
Recent years have seen an explosion of scholarship on “personalized law.” Commentators foresee a world in which regulators armed with big data and machine learning techniques determine the optimal legal rule for every regulated party, then instantaneously disseminate their decisions via smartphones and other “smart” devices. They envision a legal utopia in which every fact pattern is assigned society’s preferred legal treatment in real time. But regulation is a dynamic process; regulated parties react to law. They change their behavior to pursue their preferred outcomes—which often diverge from society’s—and they will continue to do so under personalized law: They will provide regulators with incomplete or inaccurate information. They will attempt to manipulate the algorithms underlying personalized laws by taking actions intended to disguise their true characteristics. Personalized law can also (unintentionally) encourage regulated parties to act in socially undesirable ways, a phenomenon known as moral hazard. Moreover, regulators seeking to combat these dynamics will face significant constraints. Regulators will have imperfect information, both because of privacy concerns and because regulated parties and intermediaries will muddle regulators’ data. They may lack the authority or the political will to respond to regulated parties’ behavior. The transparency requirements of a democratic society may hinder their ability to thwart gamesmanship. Concerns about unintended consequences may further lower regulators’ willingness to personalize law. Taken together, these dynamics will limit personalized law’s ability to optimally match facts to legal outcomes. Personalized law may be a step forward, but it will not produce the utopian outcomes that some envision.
