Donald G. Gifford
Edward M. Robertson Research Professor of Law
University of Maryland Carey School of Law
William L. Reynolds
Jacob A. France Professor of Judicial Process
University of Maryland Carey School of Law
Andrew M. Murad
Associate
Arent Fox LLP
Abstract
This Article uses the Supreme Court’s 2011 decision in Bruesewitz v. Wyeth to examine the textualist or “plain meaning” approach to statutory interpretation. For more than a quarter-century, Justice Scalia has successfully promoted textualism, usually associated with conservatism, among his colleagues. In Bruesewitz, Scalia, writing for the majority, and his liberal colleague Justice Sotomayer, in dissent, both employed textualism to determine if the plaintiffs, whose child was allegedly harmed by a vaccine, could pursue common law tort claims or whether their remedies were limited to those available under the no-fault compensation system established by the National Childhood Vaccine Injury Act. Despite these Justices’ common approach to statutory interpretation, they reached diametrically opposite conclusions in opinions that dissected the statutory language and quarreled over the meaning of “even though” and “if” clauses. In contrast, Justice Breyer employed a purposive or “purposes and objectives” approach to statutory interpretation. Rather than obsessing over the meaning of each and every phrase, Breyer looked at Congress’s goals in passing the Act. He recognized that Scalia’s conclusion was correct, not because of the supposedly “plain” meaning of specific language, but because this interpretation was the only one that enabled the alternative compensation system to function as Congress envisioned. Other scholars have analyzed Bruesewitz as a preemption case, but despite statutory interpretation’s inherently decisive role in express preemption cases, this is the first Article to highlight Bruesewitz as an illustration of the emptiness of textualism.
Richard A. Booth
Martin G. McGuinn Chair in Business Law & Professor of Law
Villanova University School of Law
Abstract
Most legal scholars agree that securities fraud class actions do little to compensate investors. Most investors are well diversified and, thus, are just as likely to sell an overpriced stock as to buy one. Moreover, since the defendant company ultimately pays in a successful class action, holders effectively pay buyers. Although this circularity is widely recognized, few have noted that because of the anticipated payout, the prospect of a class action causes stock price to decline by more than it otherwise would, thus generating additional (feedback) loss for both buyers and holders. In this Article, I describe a method by which one can measure the net effect of class actions on fund investors who are both buyers and holders of a fraud-affected stock. Since an index fund almost always holds more shares than it buys during the fraud period, an index fund almost always loses more than it gains. Thus, class actions systematically penalize rational index fund investors for the benefit of irrational and undiversified stock-picking investors. Accordingly, index funds should oppose class actions as contrary to the best interest of investors. To be sure, one possible problem is that in the absence of the deterrent effect of class actions, there might be more securities fraud. The answer is that whenever there is a meritorious class claim, the corporation itself will also have a claim–against the individual wrongdoers–for any increase in cost of capital resulting from reputational harm and any direct expenses relating to enforcement proceedings. In a class action, these elements of loss are imbedded in the price decrease that occurs when the fraud is discovered. But these losses are in fact suffered by the corporation and should be the subject of a derivative action for the benefit of the corporation–and thus all of the stockholders–not a class action for the benefit only of those who bought during the fraud period. Although the corporation claim may be smaller than the class claim in the aggregate, it is likely to be quite substantial from the point of view of individual wrongdoers and, thus, to constitute a significant deterrent to fraud. Happily, the rules of civil procedure provide a clear fix for the problem. First, the law is clear that a claim that can be handled as a derivative claim must be handled as a derivative claim and that a derivative claim must be resolved first before any class claim may be addressed. Second, no class action may proceed unless the court certifies it as a proper class action. And no action may be so certified if there is any other equally good way to litigate the issues (as by means of a derivative action). But someone has to make the argument. It is puzzling that no one has done so, especially because derivative actions eliminate feedback losses and serve to restore stock price. There are several possible explanations. One is that insurance does not cover derivative claims as it does class claims. Another is that attorney fees are likely to be higher in class actions than in derivative actions. These factors may incline plaintiffs’ lawyers to favor class actions even though investors would be better served by derivative actions. On the other hand, until now, no one has quantified the costs and benefits of class actions for real world investors. As shown here, index funds almost always lose more than they gain and, thus, should oppose class actions in favor of derivative actions. Indeed, index funds owe a duty to their investors to do so.
Michael Z. Green
Professor of Law
Texas Wesleyan University School of Law
Abstract
Recent attorney-client privilege cases offer a modern understanding of reasonable expectations of employee privacy in the digital age. Employees have increasingly made electronic mail communications to their attorneys via employer-provided computers or other digital devices with an expectation of privacy and confidentiality. Historically, courts have summarily dispensed with these matters by finding that an employer’s policy establishing clear ownership of any communications made through employer-provided devices eliminates any employee expectation of privacy in the communications and waives any viable privacy challenges to employer review of those communications. Nevertheless, within the last couple of years, several cases involving employee assertions of attorney-client privilege protection in emails sent on employer-provided devices suggest new thoughts about reasonable workplace privacy expectations.
As employees must communicate through employer-provided digital devices day and night, these attorney-client privilege cases help expose the fallacy of assuming employees cannot reasonably expect that emails will remain private if employer policies mandate that the communications are not private. These new cases and related ethics opinions about privileged email offer a modern lens through which one may now view employee privacy expectations under a new paradigm that replaces the façade of assuming employees have no expectation of privacy due to employer policies.
Digital age expectations regarding employee use of smart cellular phones, portable laptops, and other employer-provided devices to make communications beyond standard work hours leave little expectation or opportunity for employees to reasonably communicate privately and confidentially by any other means than through these employer-provided devices. As a result, this Article asserts that employer efforts to mine their devices for employee emails after disputes ensue comprises a form of electronic dumpster diving that should not be tolerated by courts, legislatures, or attorney ethics committees.
Scott R. Grubman
Assistant United States Attorney
Abstract
In Gilbert v. United States, a majority of the Eleventh Circuit Court of Appeals held that the savings clause contained in Section 2255 of the Antiterrorism and Effective Death Penalty Act does not authorize a federal prisoner to bring in a habeas petition a claim, which would otherwise be barred by the AEDPA’s ban on second or successive motions, that the sentencing guidelines were misapplied in a way that resulted in a longer sentence not exceeding the statutory maximum. The majority focused on finality interests, and worried that allowing a prisoner to avoid the AEDPA’s ban on second or successive motions would lead to abuse and delay. Some, including the Gilbert dissenters, have expressed concerns that denying a prisoner relief where a retroactively applicable subsequent change in the law renders that prisoner’s sentence incorrect or invalid could result in constitutional violations. This Article attempts to get past the rhetoric from both sides of the debate and proposes a middle ground approach that would pacify both the administrative and constitutional concerns that have been raised.
Wayne M. Gazur
Professor of Law
University of Colorado Law School
Abstract
With little fanfare, the 2008 amendments to the Uniform Probate Code (UPC) adopted the reformation of wills, as well as other kindred donative instruments, on account of mistake. This Essay focuses on the reformation of wills and the impact that this little-heralded provision may carry.
While the introduction of reformation to the UPC is largely an improvement, it raises a number of concerns. This Essay proposes that reformation of wills is not only doctrinally distinct from the interpretation of simply ambiguous wills, but also is a more troubling measure that has the potential to create more, possibly unfounded, will contests. Further, while the closely related doctrine governing the interpretation of ambiguous wills needs to be clarified and made uniform by the UPC, the new reformation measure fails to accomplish that.
The Essay first briefly discusses the plain meaning rule and its role in addressing ambiguities in instruments and their reformation. It then discusses the origins and operation of the new UPC reformation rule, weighs the impact of that change in the overall context of the UPC, and proposes a clarification to address the longstanding, but unevenly applied, doctrine of ambiguity. The Essay further proposes clear limits on the role of juries in reformation proceedings. It concludes by recommending safeguards that might be desirable for some testators to avoid unforeseen complications from reformation.
Richard T. Karcher
Professor of Law
Florida Coastal School of Law
Abstract
This Essay addresses the difficulty of proving financial harm that results when a head coach departs during the contract term and the school thereby abruptly loses a valuable asset, that being a successful and stabile athletic program. Due to the unique and specialized nature of head coaches’ services and the industry they work in, ordinary measures for assessing damage based on substitute performance and transaction costs are insufficient. The author offers a theory of measuring a school’s damages within the construct of a lost income-producing asset valuation, using a methodology based on liquidated damage amounts in comparable coaches’ contracts.