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This book aims to resolve a puzzle: how can two systems of competition law and policy, whose enforcement and judicial institutions employ similar concepts and legal language, reach very different results on a number of current, significant antitrust issues? The most important provisions of the Sherman Act and the competition sections of the Treaty Founding the European Union are striking similar, but a combination of differences in social values, political institutions, and legal precedent retard close convergence. The work explores the main contested areas of contemporary antitrust: mergers, price discrimination, predatory pricing, exclusive supply, conditional rebating, and intellectual property in the context of dynamic competition. In each area we focus on how the prevalent antitrust analyses differ between the EU and the U.S., the policy ramifications of these differences, and how the analyses used by the enforcement authorities or the courts in each of these areas relate to those in other areas. The book also tracks several substantive themes that appear across the chapters, such as pricing incentives and constraints, welfare effects, and whether competition tends to be viewed as an efficiency generating process or as rivalry. We conclude with forecasts and suggestions about how greater compatibility if not convergence might ultimately be attained.

We live in an era defined by corporate greed and malfeasance—one in which unprecedented accounting frauds and failures of compliance run rampant. In order to calm investor fears, revive perceptions of legitimacy in markets, and demonstrate the resolve of state and federal regulators, a host of reforms, high-profile investigations, and symbolic prosecutions have been conducted in response. But are they enough? This book argues that even with recent legal reforms, corporate criminal law continues to be ineffective. As evidence, this book considers the failure of courts and legislatures to fashion liability rules that fairly attribute blame for organizations. It analyzes the games that corporations play to deflect criminal responsibility. And it also demonstrates how the exchange of cooperation for prosecutorial leniency and amnesty belies true law enforcement. But none of these factors trump the fact that there is no single constituency or interest group that strongly and consistently advocates the importance and priority of corporate criminal liability. In the absence of a new standard of corporate liability, the power of regulators to keep corporate abuses in check will remain insufficient.

Enormous changes are occurring in our capital markets as shareholder activists become increasingly prominent, institutional investors gain power, and capital markets intermediaries such as proxy advisory firms play increasingly important roles. Corporations, and their boards of directors, are also increasingly uncertain how to respond to these new dynamics and adhere to predefined fiduciary duties to stockholders. The uncertainty has led to schizophrenic responses,, including the increasing use of dual-class stock and wholesale corporate governance changes of uncertain validity designed to fight off or placate certain shareholder groups. We believe that these enormous changes merit a review of corporate law to examine needed adjustments for these revolutionary times. For example, much of the case law governing corporate conduct was created in another time–the 1980s–and designed to meet another disruptive force–hostile takeovers. Is it time to reexamine this case law and create new laws for possibly different threats? Alternatively, statutory laws such as the rules governing appraisal rights seem ripe for a complete review in the wake of appraisal arbitrage. In this book, we bring together many of the leading scholars of Delaware corporate law to examine these issues. The fourteen chapters, and a judicial overview by Delaware Chief Justice Leo E. String Jr., cast light on the current tensions in Delaware law and how Delaware’s courts and legislature should address them.

For much of the twentieth century, industrialized nations addressed social problems, such as workers' compensation benefits and social welfare programs, in terms of spreading risk. But in recent years a new approach has emerged: using risk both as a way to conceive of and address social problems and as an incentive to reduce individual claims on collective resources. This book explores this new approach from a variety of perspectives. The first part of the book focuses on the interplay between risk and insurance in various historical and social contexts. The second part examines how risk is used to govern fields outside the realm of insurance, from extreme sports to policing, mental health institutions, and international law. Offering an original approach to risk, insurance, and responsibility, this book demonstrates that risk has moved well beyond its origins in the insurance trade to become a central organizing principle of social and cultural life.

Shareholder litigation and class action suits play a key role in protecting investors and regulating big businesses. But Directors' and Officers' liability insurance shields corporations and their managers from the financial consequences of many illegal acts, as evidenced by the recent Enron scandal and many of last year's corporate financial meltdowns. This book demonstrates how corporations use insurance to avoid responsibility for corporate misconduct, dangerously undermining the impact of securities laws, arguing that this need not be the case. Opening up the formerly closed world of corporate insurance, people from every part of the industry were interviewed in order to show the different instances where insurance companies could step in and play a constructive role in strengthening corporate governance—yet currently do not.

When used in conjunction with corporations, the term “public” is misleading. Anyone can purchase shares of stock, but public corporations themselves are uninhibited by a sense of societal obligation or strict public oversight. In fact, managers of most large firms are prohibited by law from taking into account the interests of the public in decision making, if doing so hurts shareholders. But this has not always been the case, as until the beginning of the twentieth century, public corporations were deemed to have important civic responsibilities. This book hopes to return corporate law to a system in which the public has a greater say in how firms are governed. It argues that the laws controlling firms should be much more protective of the public interest and of the corporations' various stakeholders, such as employees. Only when the law of corporations is evaluated as a branch of public law—as with constitutional law or environmental law—will it be clear what types of changes can be made in corporate governance to improve the common good. The book proposes changes in corporate governance that would enable corporations to meet the progressive goal of creating wealth for society as a whole rather than merely for shareholders and executives.

Recent high-profile corporate scandals—such as those involving Enron in the United States, Yukos in Russia, and Livedoor in Japan—demonstrate challenges to legal regulation of business practices in capitalist economies. Setting forth a new analytic framework for understanding these problems, this book examines such contemporary corporate governance crises in six countries, to shed light on the interaction of legal systems and economic change. It debunks the simplistic view of law's instrumental function for financial market development and economic growth. Using comparative case studies that address the United States, China, Germany, Japan, Korea, and Russia, the book argues that a disparate blend of legal and non-legal mechanisms have supported economic growth around the world. It shows that law and markets evolve together in a “rolling relationship,” and legal systems, including those of the most successful economies, therefore differ significantly in their organizational characteristics.

This book analyzes the effects of regulation and deregulation on Latin American labor markets and presents empirically grounded studies of the costs of regulation. Numerous labor regulations that have been introduced or reformed in Latin America in the past thirty years have had important economic consequences. The book documents the behavior of firms attempting to stay in business and be competitive while facing the high costs of complying with these labor laws. They challenge the prevailing view that labor market regulations affect only the distribution of labor incomes and have little or no impact on efficiency or the performance of labor markets. Using new micro-evidence, this book shows that labor regulations reduce labor market turnover rates and flexibility, promote inequality, and discriminate against marginal workers. Along with in-depth studies of Colombia, Peru, Brazil, Argentina, Chile, Uruguay, Jamaica, and Trinidad, this book provides comparative analysis of Latin American economies against a range of European countries and the United States.

The traditional definition of torts involves bizarre, idiosyncratic events where a single plaintiff with a physical impairment sues the specific defendant he believes to have wrongfully caused that malady. Yet public attention has focused increasingly on mass personal-injury lawsuits over asbestos, cigarettes, guns, the diet drug fen-phen, breast implants, and, most recently, Vioxx. This book attempts to analyze the lawyer's role in this world of high-stakes, multibillion-dollar litigation. These mass settlements, the book argues, have transformed the legal system so acutely that rival teams of lawyers operate as sophisticated governing powers rather than as litigators. This book's solution is the replacement of the existing tort system with a private administrative framework to address both current and future claims.

In 1998, the United States Department of Justice and state antitrust agencies charged that Microsoft was monopolizing the market for personal computer operating systems. More than ten years later, the case is still the defining antitrust litigation of our era. This book contributes to the debate over the future of antitrust policy by examining the implications of the litigation from the perspective of consumer welfare. The authors trace the development of the case from its conceptual origins through the trial and the key decisions on both liability and remedies. They argue that, at critical points, the legal system failed consumers by overrating government's ability to influence outcomes in a dynamic market.

This book brings a missing and critical dimension to the ongoing debates over financial stability policy. Its core argument is that the problem of financial instability is mostly a problem of monetary system design. This argument departs sharply from today’s prevailing view, in which financial instability is generally seen to be an inherent feature of financial capitalism. The book offers a concrete and workable blueprint for a modernized system of money and banking. The proposal is not radical; on the contrary, it is fairly conservative. It could be accomplished through a series of incremental changes to the current system. The book argues that recent financial regulatory reforms—in the United States and, by extension, abroad—have been mostly on the wrong track. Those reforms are an unreliable safeguard against future “shadow banking” panics and other types of financial crises. The book suggests that a revamp of the monetary framework could pave the way for a dramatic reduction in the scope and complexity of modern financial stability regulation.

Over the past two decades, the United States has seen a dramatic increase in the number and magnitude of punitive damages verdicts rendered by juries in civil trials. In cases involving accidents, civil rights, and the environment, multimillion-dollar punitive awards have been a subject of intense controversy. But how do juries actually make decisions about punitive damages? To find out, this book presents the results of controlled experiments with more than 600 mock juries involving the responses of more than 8,000 jury-eligible citizens. Although juries tended to agree in their moral judgments about the defendant's conduct, they rendered erratic and unpredictable dollar awards. The experiments also showed that instead of moderating juror verdicts, the process of jury deliberation produced a striking “severity shift” toward ever-higher awards. Jurors also tended to ignore instructions from the judges; were influenced by whatever amount the plaintiff happened to request; showed “hindsight bias,” believing that what happened should have been foreseen; and penalized corporations that had based their decisions on careful cost-benefit analyses. While judges made many of the same errors, they performed better in some areas, suggesting that judges (or other specialists) may be better equipped than juries to decide punitive damages.

We often hear—with particular frequency during recent Supreme Court nomination hearings—that justices should not create constitutional rights, but should instead enforce the rights that the Constitution enshrines. This book sets out to convince readers that such arguments fundamentally misconceive both the work that justices do and the character of the American Constitution in whose name they do it. It matters who sits on the Supreme Court, the author argues, precisely because justices do create individual constitutional rights. Traversing a range of Supreme Court decisions that established crucial precedents about racial discrimination, the death penalty, and sexual freedom, he contends that the rights we enjoy are neither more nor less than what the justices choose to make of them.

The 1998 out-of-court settlements of litigation by the states against the cigarette industry totaled $243 billion, making it the largest payoff ever in the U.S. civil justice system. Two key questions drove the lawsuits and the attendant settlement: Do smokers understand the risks of smoking? And does smoking impose net financial costs on the states? This book provides unexpected answers to these questions, drawing on a large range of data on several topics central to the smoking policy debate. Based on surveys of smokers in the United States and Spain, for instance, it demonstrates that smokers actually overestimate the dangers of smoking, indicating that they are well aware of the risks involved in their choice to smoke. And while smoking does increase medical costs to the states, the book finds that these costs are more than financially balanced by the premature mortality of smokers, which reduces their demands on state pension and health programs, so that, on average, smoking either pays for itself or generates revenues for the states. The book's assessment of the tobacco lawsuits also includes policy recommendations that could frame these debates in a more productive way, such as the suggestion that the FDA should develop a rating system for tobacco products based on their relative safety, thus providing an incentive for tobacco manufacturers to compete among themselves to produce safer cigarettes. This hard look at the facts of smoking and its costs runs against conventional thinking. But it is also necessary for an informed and realistic debate about the legal, financial, and social consequences of the tobacco lawsuits.