The doctrine treating federal preemption of state law has been plagued by uncertainty and confusion. Part of the problem is that courts purport to interpret congressional intent when often Congress has never considered the particular preemption question at issue. This Article suggests that courts deciding preemption cases should take seriously a commonly articulated rationale for the federalization of law: the need to coordinate applicable legal standards in order to facilitate a national market or to otherwise provide clear guidance to parties regarding the laws that apply to their conduct. In situations where federal law can serve a coordinating function but congressional intent regarding preemption is unclear, we propose that courts consider whether the states have effectively allocated sovereign authority among themselves through choice-of-law rules. Where states have achieved such "horizontal coordination," Congress often has little need to usurp the states' role as laboratories for experimenting with potentially diverse substantive laws. Our approach would help to promote a "healthy federalism" by encouraging courts to preserve the benefits of local and state sovereignty while simultaneously enabling federal statutes to coordinate U.S. law where necessary. To show how our approach might improve preemption decisions, we apply it to several areas in which the courts have struggled. Although our approach provides a conceptually obvious, and therefore elegant, solution to many preemption problems, to date it has been entirely unexplored.

Public lawmakers have inadequate and misaligned incentives to engage in legal innovation. Private lawmaking is offered as a potential solution to this problem. However, private lawmaking faces a dilemma: In order to be effective, the cost-reducing standard forms produced by private lawdrafters need to be publicly enacted. However, enactment as law eliminates the intellectual property rights that are essential to properly motivate the private lawdrafters to produce such forms. As a result, private lawdrafters will have inadequate and misaligned incentives to engage in legal innovation that would provide widespread benefits. Absent some mechanism to allow the private lawdrafter a way to appropriate the gains from his investment in cost reducing legal innovation, the promise of private lawmaking may be minimal.

American films have long presented a negative view of business. This article is the first comprehensive and in-depth analysis of filmmakers' attitude toward business. It shows that it is not business that filmmakers dislike, but rather the control of firms by profit-maximizing capitalists. The article argues that this dislike stems from filmmakers' resentment of capitalists' constraints on their artistic vision. Filmmakers' portrayal of business is significant because films have persuasive power that tips the political balance toward business regulation.

This white paper outlines some of the remaining state barriers and a few federal ones and how they prevent disruptive innovations by entrepreneurs and established firms alike that potentially could bring new and more efficient business models to the market. In the case of the legal sector, the barriers we identify not only adversely affect legal innovation, but also impede innovation in other sectors of the economy. Similarly, in health care, pharmaceuticals, K-12 education, the financing of growth businesses, and many consumer services, legal obstructions hinder innovation and the provision of efficient, affordable, high-quality services and products.

This Article shows how in-house lawyers' role has evolved to address the high cost of legal services and the traditional information asymmetry between lawyers and clients. The first stage of this evolution involved the expanding role of in-house counsel from intermediary between corporate executives and the corporation's outside law firm to the corporation's purchasing agent in a broader market for legal services. The second stage could see legal work distributed among employees with and without legal expertise throughout the corporation. The Article also shows how evolving legal information technology could facilitate corporations' full-fledged integration of legal information into business decisions. These developments have potential implications for the corporate and general markets for legal services and for legal education.

With contributions from some of the leading scholars in law and economics, this comprehensive book summarizes the state of economic research on litigation, procedure and evidence.

Our chapter concerns how legal process can lead to efficient policies for fostering innovation and growth. Future innovation will depend at least as much on how laws are made as on a priori analyses of the optimal content of those laws. Of particular importance is whether U.S. choice of law and choice of forum rules promote an efficient market for law. Our analysis supports three suggestions for improving the law to support growth. First, the rules governing the selection of the jurisdiction whose law governs productive activity can significantly affect growth and innovation. Second, any proposal aimed at increasing growth through a change in law or legal institutions should take account of the existence of multiple jurisdictions and parties’ ability to choose the jurisdiction whose law controls their transactions. Third, we suggest harnessing the power of jurisdictional competition among the states through a federal law enforcing contracting parties’ choice of law except to the extent states legislatively override the choice of law and regulate local transactions. We apply this analysis to several areas of the law that are critical to growth and innovation: non-competition clauses, business associations, the legal profession, internet law, insurance, property law, products liability, and franchise regulation.

This comment on the work of Professor Tamar Frankel builds on her encyclopedic discussion of the various types of duties that have been classified as "fiduciary." I argue for a more precise definition and more limited application of fiduciary duties which recognizes that their usefulness depends on their being limited and separated from other duties that apply in other settings. The fiduciary duty is appropriately construed as one of unselfishness, as distinguished from lesser duties of care, good faith and fair dealing, and to refrain from misappropriation. The fiduciary duty of unselfishness is appropriate only for a limited class of agency relationships in which the principal delegates open-ended power to the agent, and not for those who may exercise lesser power over the property of others, including co-investors, advisers, professionals, and those in confidential relationships. More broadly applying fiduciary duties could unnecessarily constrain parties from self-protection in contractual relationships, impose excessive litigation costs, provide an unsuitable basis for contracting, and impede developing fiduciary norms of behavior. This analysis of fiduciary duties helps address current issues, including those regarding the duties of brokers, dealers, and investment and mutual And advisers. In short, fencing fiduciary duties protects both fiduciary and non-fiduciary relationships and enables parties to contract for the precise level of protection that is appropriate to the services they are purchasing.

Lawyers traditionally have conveyed legal expertise in the form of advice tailored to the needs of individual clients. This business model is reinforced by licensing and ethical rules designed to ensure lawyers' competence and loyalty to clients' interests. The traditional professional model is being challenged by an alternative model based on the sale of legal information in impersonal product and capital markets. In this new world, legal information engineers would to some extent replace legal practitioners. This article provides a theoretical intellectual property framework for the regulatory decisions that must be made as the two models collide. We show that traditional professional regulation inhibits full development of the new business model by limiting intellectual property protection for legal information. This regulation assumes that consumers get legal information in one-to-one relationships with lawyers where they have little ability to evaluate the advice they are receiving. However, a fully developed legal information market could substitute for some of the protection consumers now receive from licensing and ethical rules without the current model's costs of restricting the supply and raising the costs of legal services. We apply our analysis to some actual and potential markets in legal information.

Significant questions have been raised concerning the efficiency of criminalizing agency costs and the problems of excessive prosecution of crimes committed by corporate agents. This paper provides a new perspective on these questions by analyzing them from the perspective of agency cost theory. It shows that there are close analogies between the agency costs associated with prosecutors in corporate crime cases and those of the agents being prosecuted. The important difference between the two contexts is that prosecutors are not subject to many of the standard mechanisms for dealing with corporate agency costs. An implication of this analysis is that society must decide if prosecuting corporate agents is worth incurring the agency costs of prosecutors.

Berle & Means' view that managers rather than shareholders control our largest corporations finds important expression in William Cary's famous article arguing that managers have led shareholders on a to the whose finish line is Delaware. These views, in turn, support supplanting state corporation law with federal regulation of corporate governance. Concerns about a race to the bottom lately focus on Nevada, which seeks to be Delaware's first real competitor for out-of-state firms in the national incorporation market. Evidence suggests that Nevada's strategy is to raise tax revenues by offering a significantly laxer corporate law than Delaware. We examine Nevada's strategy and evidence concerning Nevada incorporation and show that there is an alternative explanation of Nevada law which poses much less cause for concern. Specifically, we argue that Nevada corporation law may actually reduce some firms' total agency costs by reducing the costs of judicial monitoring. This analysis has implications as to the need for federal regulation of corporate governance. * Professor of Law, George Mason University School of Law, and Mildred Van Voorhis Jones Chair, University of Illinois College of Law. Prepared for the Berle III Conference, Seattle University School of Law, January 13, 2011.

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Law practice and legal education are facing fundamental changes. Many assume that these changes will force law schools to give up on theory and focus more on training students for the practice of law. However, this Essay shows that the future may be more uncertain and complex. The only thing that is certain is that law schools may face, for the first time, the need to provide the type of education the market demands rather than serving lawyers' and law professors' preferences. Legal educators must respond to these demands by serving not just the existing U.S. market for legal services but also a global market for legal information. This may call for training in some, but not all, of the theories and disciplines that have been developing in law schools.

Most of the work on jurisdictional competition for business associations has focused on publicly held corporations and the factors that have led to Delaware’s dominant position in attracting out of state firms. Is there an analogous jurisdictional competition to attract formations by closely held firms? Limited liability companies (LLCs) offer a good opportunity to examine this question. Most LLC statutes have been adopted and changed rapidly during the past 20 years. Unlike general and limited partnerships, which have been shaped by uniform laws, LLC statutes vary significantly, and states have devoted a lot of effort to drafting their individual statues. This variation provides an opportunity to test the statutory provisions and other factors that influence LLC’s choice of where to organize. We find little evidence that firms choose to form outside their home state in order to take advantage of variations in statutory provisions. Instead, we find evidence that large LLCs, like large corporations, tend to form in Delaware, and that they do so for the many of the same reasons – that is, for the quality of Delaware’s legal system.

The Supreme Court's decision in Citizens United did not end the controversy over regulating corporate speech. Although the Court broadly subjected regulation of corporate speech to the First Amendment, it did not wholly preclude regulation of corporate governance processes that produce corporate speech. The Court's opinion therefore shifted debate concerning corporate speech from corporations' external distortion of the political process to their internal distortion of shareholders' self-expression. This paper shows that regulation of the corporate governance process that produces speech faces significant obstacles under the First Amendment. These include the limited efficacy of regulation of corporate governance, regulation's potential for protecting the expressive rights of some shareholders by suppressing others, and the uncertain implications of this rationale for types of speech other than that involved in Citizens United. These problems with the corporate governance rationale for regulating corporate speech suggest that protection of shareholders' expressive rights may be trumped by society's interest in hearing corporate speech and the First Amendment's central goal of preventing government censorship.