The Mercurial Efficiency of Markets

This morning the Supreme Court decided Halliburton v. Erica P. John Fund, Inc. (The SCOTUSblog page for the case is here.) In short, the Court reaffirmed the so-called fraud-on-the-market presumption in securities fraud cases. I’ll give a brief summary of the law, but I’d like to make a small point about conservative hypocrisy on the usefulness of markets. Halliburton presents an interesting about-face for many conservatives. To protect business interests, the usually pro-market voices on the right argued that we should not trust markets to accurately and efficiently allocate resources. That’s not the tune those voices normally sing. Continue reading

Does Article I, Section 12 of the Washington Constitution Apply to Classes of Corporations?

Earlier today, the International Franchise Association filed a lawsuit against Seattle’s $15 minimum wage, claiming that the ordinance unfairly discriminated against franchisees as a class. Part of the claim (perhaps the strongest part) is based on Article I, Section 12 of the Washington State Constitution, which reads in its entirety:

No law shall be passed granting to any citizen, class of citizens, or corporation other than municipal, privileges or immunities which upon the same terms shall not equally belong to all citizens, or corporations.

The IFA claims that the minimum wage ordinance violates Art. I, Sec. 12 because it treats one class of corporations (franchisees) differently than other corporations.

But why do “classes” of corporations receive any protection under the Washington Constitution? The text of the provision specifically talks about granting privileges to “any citizen” (the singular), any “class of citizens” (the plural), or any “corporation” (the singular). There is no language regarding “classes” of corporations.

Under the usual rules regarding the interpretation of constitutional texts, the singular “corporation” next to the specific inclusion of classes of non-corporate citizens would compel the conclusion that classes of corporations are not protected by the provision.

I did a bit of quick research this afternoon through Washington Supreme Court cases, and none of them seem to directly address this question—though they do apply the provision to classes of corporations. It seems like IFA’s complaint has some basis in Washington’s case law, but I wonder if it has any basis in Washington’s Constitution?

Preliminary Thoughts on the Int’l Franchise Ass’n Challenge to Seattle’s $15 Minimum Wage

Just this afternoon the International Franchise Association filed a complaint in federal court challenging Seattle City Ordinance No. 124490—the $15 minimum wage ordinance. Because the plaintiffs are seeking a preliminary injunction, and because the claims are not fact-based and are therefore ripe for resolution on a motion to dismiss, I imagine the court will have the opportunity to resolve the legal challenges relatively quickly. But that’s no reason not to start speculating now!

IFA’s claim is relatively simple: The Ordinance sets up two separate timelines—one for “big” businesses and one for “small” businesses. The big businesses have to ramp up to $15 more quickly than do the the small businesses. So far, so good. The problem, from IFA’s point of view, is that in determining whether a franchisee’s business is small or big, the Ordinance counts not only the employees of the franchisee, but all the employees of all franchisees in the entire national network. IFA thinks that is unfair for a variety of reasons.

And on some level, perhaps the distinction is “unfair” in some sense of the word. If I’m a franchisee who owns a Subway sandwich shop with ten employees, why should I have to pay my workers more than Biff’s sandwich shop next door (with 100 employees!) just because I’ve opted for a franchise business model and Biff has opted for a more independent model? That’s not fair!

But generalized grievances about unfairness don’t sustain lawsuits. So how does IFA make this a federal case? It asserts eight (eight!) separate violations, some more interesting than others. At first glance, I don’t think any of the claims are likely to survive a motion to dismiss. I’ll take a quick crack at each cause of action after the jump: Continue reading

An E-Mail from Chief Judge Easy Rider

The Chief Judge of the Court of Appeals for the Ninth Circuit is nothing if not a character. Here is the email I just received announcing the CA9′s new oral argument video program, which is about to get underway:

Subject:    Today at 2pm
From:       The Easy Rider [alex@kozinski.com]
To:            Friends of the 9th ‎[alex@kozinski.com]‎
Date:        Monday, December 09, 2013 12:46 PM

Here’s the link for our first-ever streamed oral argument.

http://goo.gl/vd1Uov

This case is Haskell v. Harris and the issue is whether the state may take DNA samples of individuals arrested for felonies.

We want to give our video feed a stress test, so I hope you’ll be able to watch.

If you can’t watch today’s video, we have other streamed en bancs later in the week. The link is here

http://goo.gl/SN4pPq

If you have any comments or suggestions–about the video, NOT the substance of the cases–I would love to hear them.

Ciao.  AK

And that’s it. The “Ciao,” the “To:” line, the simple plain-language email. Good stuff. Also, I’m quite pleased to be included among the “Friends of the 9th!”

Law Reviews, Peer Review, and Cheese Knives

According to Professor Christopher Zorn of Empirical Legal Studies, law reviews are “terrible.” And he presents a list of grievances. I’ll get to those, and I’ve already discussed some of the recent “State of the Law Reviews” discussion here and here. But before the grievances, a more fundamental point: Professor Zorn doesn’t make clear his understanding of the purpose of law reviews so it’s impossible to judge whether law reviews are “terrible” or “great” at satisfying that purpose. You can’t call a cheese knife “terrible” just because you have a hard time cutting steak with it.

Let’s say the purposes of law reviews are to (1) get a bunch of ideas out into the universe, with a reliance on post-publication evaluation and sorting, (2) provide information that is useful to the bench, the bar, and scholars in some ratio, (3) have an article’s sourcing and arguments thoroughly checked by student editors, who effectively serve as volunteer student research assistants, and (4) give law students the opportunity to work closely with professors on current scholarship. On those fronts, I would say the law reviews are doing a decent job. But here are Five Reasons Law Reviews Are Terrible, according to Professor Zorn, with my comments: Continue reading

A Sur-Reply to the Replies to My Response to Adam Liptak’s NYT Article on Law Reviews

Yes, that title is supposed to be a joke.

Anyway, a few additional thoughts in response to folks who commented on my initial post defending law reviews from the students’ perspective.

Even with Student Editors, There Should Still Be Peer Review!

Lots of folks have pointed out that peer review would be a useful supplement to student editors. I didn’t mention this in the original post, because others had already discussed it elsewhere, but peer review does happen in legal scholarship. There are, of course, plenty of peer-reviewed journals. But even in the context of student-edited journals, Matt Bodie and Will Baude note that much of legal scholarship’s peer-reviewing happens after publication, when scholars, courts, and practitioners can evaluate a piece, ignore it, cite it, engage with it, criticize it, etc. What’s the problem with that?

Also, there is actually a good amount of pre-publication peer review. People complain about star footnotes—that little footnote after an author’s name thanking all the famous professors and friends who provided comments and edits on previous drafts. Sure, some of that might be an attempt at status-by-affiliation. But it’s also peer review! I’ve yet to see a star footnote that reads: “So, uh… nobody else in the field has read this yet. I just sort of read a bunch of cases and articles and these are my thoughts. I hope they’re not terribly obvious or wrong-headed.”

Blogs Are Better than Law Reviews!

Sure! Blogs are great! Continue reading