Volume 2014, Number 1
Energy law is substantively complex and deeply fragmented. Each energy sector—including fuel extraction and pipelines, electricity generation and transmission, and transportation—has its own legal regime and federalism approach. Confusion often exists at moments of crisis about how much authority federal, state, and local regulators have in these areas. The complexity and fragmentation of energy law are particularly problematic because the energy system faces major transitions due to emerging technology, more unpredictable and extreme weather events, and public pressure for cleaner energy. Regulators struggle to: (1) manage the risks of hydraulic fracturing and deepwater drilling, which are increasingly common in light of dwindling conventional oil and gas reserves; (2) upgrade our aging electricity grid; and (3) integrate renewable energy sources onto that grid and into electricity markets.
This Article develops a novel theory of energy governance and uses it to assess how institutional innovation can help meet critical modern energy challenges. Building from our prior work arguing for a dynamic approach to energy federalism, this Article focuses on the potential of institutions that are “hybrid” by virtue of including public and private actors from several governance levels and enabling important interactions among them. Grounding its approach in interdisciplinary governance theory, it argues that these institutions have characteristics that could address structural barriers to substantive progress in energy law, such as inadequate, divided regulatory authority, and the complexities of including key private actors in energy decision making. After introducing its new conceptual model, this Article examines several hybrid institutions with substantial regional components that are working to address the three core substantive energy challenges identified here. It analyzes their progress in meeting these challenges and how their hybrid governance approach is assisting them in doing so.
The law of foreign sovereign immunity changed dramatically over the course of the 20th century. The United States abandoned the doctrine of absolute immunity and opened its courts to lawsuits by private claimants against foreign governments. It also pursued a range of other policies designed to shift such disputes into litigation or arbitration (and thus relieve political actors of pressure to intervene on behalf of disappointed creditors). This Article uses a unique data set of sovereign bonds to explore how international financial contracts responded to these legal and policy initiatives.
The Article makes three novel empirical and analytical contributions. The first two relate to the law of sovereign immunity and to the role of legal enforcement in the sovereign debt markets. First, al-
though the decision to abandon the absolute immunity rule was a major legal and policy shift, this article demonstrates that investors dismissed their new enforcement rights as irrelevant to the prospect of repayment. Second, the ongoing Eurozone debt crisis has prompted fears that private investors will use litigation to prevent debt restructurings necessary to revive European economies. This Article shows that such fears may be overblown and, in the process, informs the broader empirical and theoretical debate about the role of legal enforcement in the sovereign debt markets.
Finally, the Article exposes a gap in contract theory as it pertains to boilerplate contracts such as sovereign bonds. Boilerplate presents a puzzle of intense interest to contracts scholars. It is drafted to serve the interests of sophisticated, well-resourced players, yet it often remains static in the face of new risks. To explain this inertia, contract theory posits that major shifts in boilerplate financial contracts require a financial crisis or other exogenous shock that substantially alters investors’ risk perceptions. This Article, however, demonstrates that the Foreign Sovereign Immunities Act of 1976 prompted a major shift in contracting practices despite investors’ continued indifference to legal enforcement and argues that contract theory must recognize that a wider range of forces may prompt boilerplate to change.
Misrepresentation: The Restatement’s Second Mistake
Stephanie R. Hoffer | 2014 U. Ill. L. Rev. 115
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The contract defenses of mistake and misrepresentation can be used to unravel deals as big as a corporate merger and as small as the sale of a used car. These two defenses, while conceptually distinct in theory, contain a significant amount of overlap in practice, causing courts to conflate the two legal standards. A misrepresentation of one party, when believed, results in a mistaken belief of the other, and both defenses address fundamental flaws in bargaining that throw the contracting parties’ consent into question. The coextensiveness of the defenses suggests that, absent an overriding normative justification, the legal test and remedy should be the same for each. Such a normative justification exists only in the case of fraudulent misrepresentation which, unlike mistake or nonfraudulent misrepresentation, involves the intentional infliction of a dignitary harm. In such cases, punishment and deterrence are appropriate normative goals but neither are addressed by currently prevailing common law. Providing a single test for cases of misrepresentation and mistake with recourse to punitive damages in cases of fraud would harmonize the defenses with their normative underpinnings and eliminate inefficient redundancies in the common law.
A court in doubt about an IP statute’s scope can err in two ways. It can wrongly narrow the IP right’s reach, or wrongly broaden it. The latter error, however, is worse: A wrongly broadened IP statute effectively creates new property and thereby diminishes the public domain and others’ freedom of action. To correct erroneous broadening, unlike erroneous narrowing, the legislature must thus eliminate a now-established property right. And that is very hard to do. Courts cannot, of course, avoid making at least some mistakes. Courts can, however, prefer the mistakes that are easier, not harder, for the legislature to correct. This Essay explores this error-cost-based approach to IP statutes. The time is ripe for more effective interbranch dialogue on IP law, for the America Invents Act of 2011—comprising some of the most significant changes to patent law since the 1952 Patent Act—came fully into force in March 2013.
Poverty and Civil Rights: A Behavioral Economics Perspective
Eldar Shafir | 2014 U. Ill. L. Rev. 205
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The International Bill of Human Rights recognizes a universal entitlement to “the continuous improvement of living conditions.” A dignified existence is a common concern of modern civilization and of the social sciences. But the mindset that emerges when we have too little creates challenges that often impede the improvement of living conditions. Poverty is a shortage not merely of financial resources but of cognitive resources as well. When people are preoccupied with budgetary concerns, they have fewer mental resources to devote to other things. For the more wealthy, everyday budgetary considerations represent manageable intrusions. The wealthy have slack in their budget and can manage unexpected expenses with relative ease. The poor, on the other hand, have little slack: unexpected expenses require giving up essentials, like rent payments or utility bills, and making frequent and difficult tradeoffs. The frequent challenges and heightened stakes eat up comparatively more of the poor’s mental resources, leaving less mind for other problems.
This Article employs a suitcase metaphor for people’s budgeting. The wealthy have a “big suitcase” which allows them to pack modest items casually. The poor have a “small suitcase” which must be packed intently and with great care. The packer of a small suitcase must carefully consider the size of each new item, and what can be removed each time they want to put something in.
The Article describes the results of empirical research done by the author and his colleagues into decision making under conditions of plenty and of scarcity. Among the topics examined in the studies are the impact of easier versus more imposing financial challenges on cognitive capacity, the psychology of borrowing, and the potential impact of financial concerns on other, nonfinancial behaviors.
Scarcity impacts a person not only directly, as wants or needs go unfulfilled, but also indirectly, as we struggle to make do with less. Persistent financial concerns impose a cognitive load on a limited bandwidth, which can impinge on other aspects of life, and can create poverty traps. The solution for alleviating the problem cannot be to reduce the already modest needs of the poor, nor to try to increase our inherently limited bandwidth. When the suitcase cannot be enlarged through higher wages or wealth transfers, the next option is to facilitate packing. By creating a more reliable, stable, and forgiving context, which the wealthy already enjoy, the everyday management of life under scarcity can be made easier, some bandwidth liberated, and costly mistakes and their menacing consequences reduced. This approach may bring us closer to the delivery of the universal entitlement to “the continuous improvement of living conditions.”
Leaving Feedback: An Analysis of eBay, Online Auctions, and Personal Jurisdiction
Dawson J. Price | 2014 U. Ill. L. Rev. 231
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The Internet has revolutionized the way that Americans conduct business. In the last decade, online transactions have grown in volume and importance, and Internet marketplaces have become mega centers for e commerce. Courts and commentators have labored to apply personal jurisdiction analyses to online buyers and sellers generally, but personal jurisdiction in the context of online auctions has created additional confusion and inconsistencies. As technology has become more sophisticated, Internet auction websites like eBay have created numerous customization tools to make their services more appealing to a wide range of sellers—from one-time sellers, to small businesses just starting to create an internet presence, to businesses that revolve entirely around eBay’s services. The depth of customization offered to sellers has been overlooked by courts in personal jurisdiction inquiries and this, in turn, has created surprising inconsistencies in personal jurisdiction determinations between seller activity on personal e commerce websites and seller activity on online auction websites. This Note discusses the mechanics of eBay listings and their implications for personal jurisdiction determinations. Specifically, does it make sense for courts applying the Zippo test to personal websites to avoid an interactivity analysis for transactions that occur over eBay? This Note further suggests that the nearly limitless options for customization available to sellers require a fact intensive, case-by-case analysis of personal jurisdiction that avoids broad conclusions about the mechanics of eBay auctions. Among other things, courts should consider the restrictions sellers place on their listings, the listing activity itself (such as whether the seller rejected bids, communicated with buyers, and the extent and content of those communications), and the use of outside media or other sites by which sellers might maximize their online presence. The level of control that online auction sellers enjoy undermines current judicial understanding of the online auction process, and by focusing on the tools that sellers actually use to sell their items, courts will be able to reach more consistent and equitable results in personal jurisdiction challenges.
Juror Questioning of Witnesses in Criminal Trials: The “Jury’s Still Out” in Illinois
Kristen L. Sweat | 2014 U. Ill. L. Rev. 271
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Over the last couple of centuries, the American jury has devolved from an active interrogator to a passive observer. Various reform movements have attempted to restore the jury’s active role. Most recently, Illinois passed Illinois Supreme Court Rule 243. This rule allows members of the jury to ask witnesses questions. The hope is that by allowing jurors to ask questions, they will become more engaged and more deeply comprehend what is occurring in the trial. Additionally, it will make for a more informed jury, raising the chances that a fair verdict is returned.
Rule 243, however, only applies in civil trials. Jurors cannot ask questions of witnesses in criminal trials. This Note argues that Rule 243 should expand to allow jurors to ask witnesses questions in criminal trials. In criminal trials, the most basic American interests of freedom and justice are at stake. Allowing jurors to ask questions of witnesses is paramount to preserving these interests.
This Note begins by looking at the history of juror questioning in America, as well as in Illinois, specifically the events leading up to the passage of Rule 243. Additionally, it presents the approaches of other jurisdictions to juror questioning. There are three types of approaches: (1) express prohibition of jury questions; (2) no express prohibition but lack of implementation of the practice; (3) allowance of jury questions within specific guidelines.
While there are noted benefits and drawbacks to allowing jurors to ask questions of witnesses, this Note argues that the interests of justice are best served by allowing these questions in both civil and criminal trials. It concludes by proposing a rule similarly worded to Rule 243 but including guidelines particular to criminal trials.
Prior Restraint and the Police: The First Amendment Right to Disseminate Recordings of Police Behavior
Jacqueline G. Waldman | 2014 U. Ill. L. Rev. 311
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Freedom of speech under the First Amendment once again is in jeopardy—this time, in the form of unconstitutional prior restraints on personal video recordings. In the age of smartphones and media-sharing services like YouTube and Facebook, video recording and uploading or distributing has become a natural—and even expected—form of communication. It is commonplace that people record trivial, everyday moments, and, it remains routine for people to record noteworthy events or occurrences. In a certain sense, countless media users and sharers around the country have become the functional equivalents of journalists reporting and commenting on all aspects of life and society. Thus, in the wake of a growing public disillusionment regarding law enforcement and the criminal justice system, people have begun video recording police behavior as the officers are acting in the public discharge.
Such videography has not existed without pushback from law enforcement. In response to these civilian-made video recordings, many police officers confiscate the video recording devices and/or destroy the files containing the recordings. This type of police interference has brought with it a storm of controversy. The debate centers on whether personal video recording of police conduct is “speech” that qualifies for First Amendment protection, and if so, whether confiscating and/or destroying the videos before their dissemination amounts to an unconstitutional prior restraint on speech—the most serious incursion of one’s First Amendment speech freedom.
This Note ultimately argues that destroying an individual’s video recording before the individual has the chance to disseminate it does indeed impose an unconstitutional prior restraint on speech. In arriving at this conclusion, this Note analyzes: (1) whether video recordings of police constitute speech, (2) whether the state can offer independent justifications for the restraint on speech, and (3) whether any exceptions articulated in prior restraint jurisprudence justify the destruction of the recordings. In addition to its recommendation that police officers’ confiscation and/or destruction of civilian-made videos be formally declared a prior restraint, this Note offers two suggestions to prevent the restraint from occurring: (1) require police to obtain warrants before seizing or destroying civilian-made video recordings, and (2) install a supervisory level of review to help curtail this form of prior restraint on speech.