Yearly Archives: 2018
May 3, 2018 Brian FarkasArbitration
Moderation isn’t always sexy. The spotlight usually favors powerful progressives and committed conservatives. Politically aligned scholarship makes for pithier titles, punchier abstracts, and perhaps wider readership from likeminded academics and policymakers. Voices from the center are easily drowned out by the rattling din on the ideological edges.
Stephen Ware’s The Centrist Case for Enforcing Adhesive Arbitration Agreements is a welcome exception. This readable exposition of the politics of arbitration law makes the case that the best cure for arbitration’s ailments is found at the political center. This article is Ware’s third in a three-part series on this topic. Jurisprudence on both the left and the right, he argues, leaves doctrinally incoherent or incomplete solutions.
Many areas of law have well-trodden ideological battlegrounds with obvious liberal and conservative ‘sides.’ Arbitration isn’t so simple. Red and blue states alike have attempted to regulate arbitration, passing legislation to make certain categories of disputes non-arbitrable (e.g., insurance contracts) and requiring procedural safeguards (e.g., arbitrator conflict disclosures). Such statutes are frequently challenged as violating the Federal Arbitration Act of 1925 (“FAA”), which makes agreements to arbitrate “valid, irrevocable, and enforceable[.]” One might expect the conservative majority of the Supreme Court to resoundingly favor states’ rights over the federal statute’s intrusion. Not so. With the notable exception of Justice Clarence Thomas, whose position is arguably the most ideologically consistent, both conservative and liberal justices uphold the FAA’s supremacy, allowing it to preempt state regulatory laws. Since the 1980s, and particularly over the past decade, the Court has offered a dramatically enhanced interpretation of the FAA’s strength – one that enforces agreements to arbitrate even when they are contained in contracts of adhesion, even when they conflict with state law, and even when they effectively allow businesses to use arbitration clauses as a shield against class action liability.
To make ideological sense of the situation, Ware spends time “mapping” various policy positions onto the traditional “left-right” axis. The farthest left position, dubbed the Very Progressive Position, “would require the highest level of consent” for an arbitration agreement to be enforceable. Advocates of this position contend that only post-dispute consent to arbitrate should be valid; both parties must reaffirm their desire to arbitrate rather than litigate after the emergence of the dispute, allowing time for the parties to consult with counsel. The Very Progressive Position acknowledges a reality that courts generally do not: “Most individuals manifesting assent to pre-dispute arbitration agreements likely do not read the document’s arbitration clause, let alone understand it and reflect on it, and they are extremely unlikely to have discussed it with counsel or negotiated it with the other party.”
A so-called Moderately Progressive Position “would enforce pre-dispute arbitration agreements when those agreements are not adhesive.” For example, if two businesses freely negotiate a contract with a pre-dispute arbitration clause, that should be enforceable. But if a consumer buys a widget with an arbitration clause contained in the terms and conditions, the clause should be voidable.
On the right side of the spectrum, a Moderately Conservative Position would prevent courts from hearing defenses to enforcement of an arbitration agreement, “but would subject arbitration agreements to otherwise-applicable legal limits relating to appealing legally-erroneous decisions and to class actions.” Under this paradigm, arbitration agreements and awards would be somewhat easier to escape or vacate.
The Very Conservative Position – which Ware argues is reflected by current law – “effectively converts some adhesive arbitration agreements into exculpatory clauses and enforces them in circumstances in which comparable non-arbitration agreements would be unenforceable.” Arbitration agreements in contracts of adhesion are enforceable, including those that waive individuals’ class action remedies. Vacating an award, even for clear error of law, is extremely difficult.
This leaves us with Ware’s Centrist Position. The basic principle underlying his vision is conformity – the notion that “arbitration law should largely conform to non-arbitration law.” Adhesive arbitration agreements should be just as enforceable as any other adhesion contract. Ware would maintain the relatively low level of consent required by current law for most contracts of adhesion, where those pesky terms and conditions really do articulate the parties’ deal.
Yet the Centrist Position would not allow arbitration agreements to be more enforceable than other types of adhesion contracts. Current law, Ware argues, does just that. For example, current law largely prevents courts from hearing defenses to arbitration agreements through the so-called separability doctrine, which permits arbitrators themselves to rule on their jurisdiction. Current law also exempts arbitration agreements from most class action regulation, to the great dismay of many scholars and consumer advocates. And current law also enforces awards that are legally erroneous. Ware argues that the currently-in-vogue Very Conservative Position thus “violates the principle that adhesive arbitration agreements should be as enforceable as other adhesion contracts, not more or less so.”
Ware’s Centrist Position advocates fairly radical departures from current law. He would repeal the separability doctrine, allowing courts to hear arguments against the enforceability of arbitration agreements. He would also treat arbitral class waivers like non-arbitral class waivers, returning to the days when courts wouldn’t enforce adhesion contracts that eliminate the right to participate in a class action. Finally, Ware would allow courts to vacate arbitrators’ legally-erroneous decisions on certain claims. Through these shifts, the Centrist Position would blend contractual freedom with oversight, permitting arbitration to “differ from litigation on discovery, evidence, and identity of the adjudicator, but not differ in such a harsh way as to be unconscionable.”
Like any good centrist, Ware goes too far and not far enough. Progressives won’t like that he explicitly rejects the oft-made argument that individuals “fare worse in arbitration [against corporations] than they do in litigation,” citing ample data to argue that this claim is unfounded. He similarly rejects the notion that contracts of adhesion are inherently unfair, finding that they are rightly embedded into traditional common law and our modern economy. Meanwhile, conservatives won’t like that Ware would allow courts to hear defenses to arbitrability. Nor will they like that he would eliminate class arbitration waivers, despite the Supreme Court’s repeated assurances in recent years that these waivers are valid. Finally, politics aside, members of the judiciary may not like that Ware’s proposals could invite significant waves of motion practice. The Centrist Position would undoubtedly open arbitration to greater judicial review (oversight to some, meddling to others).
Still, there’s something comforting about a moderate proposal that leaves everyone unsatisfied. As in many areas of policy, the extremes look less appealing on closer inspection. Surely contracts of adhesion will remain enforceable under traditional common law contractual principles. And surely arbitration cannot be a Wild West, largely immune from judicial and statutory oversight. But we can’t find a sensible center until we understand what is ‘left’ and what is ‘right.’ Our policy conversations need orientation. Thankfully, Professor Ware has now installed some helpful political signage.
Cite as: Brian Farkas,
Arbitration in Moderation, JOTWELL
(May 3, 2018) (reviewing Stephen J. Ware,
The Centrist Case for Enforcing Adhesive Arbitration Agreements, 23
Harv. Neg. L. Rev. 29 (2018)),
https://lex.jotwell.com/arbitration-in-moderation/.
Apr 18, 2018 Felix MormannEnergy Law
Shelley Welton,
Clean Electrification, 88
U. Colo. L. Rev. 571 (2017), available at
SSRN.
Climate change has made the timely decarbonization of the electric grid a top priority for policymakers in the United States and across the globe. In the absence of a meaningful price on carbon, net metering, tax credits, and other incentive programs dominate the low-carbon policy landscape. Critics of clean energy incentives have long argued that government should not engage in the business of picking winners and losers among competing technologies. With her thoughtful article, Clean Electrification, Professor Shelley Welton reminds us that public policy support for a low-carbon energy economy has disparate impacts not only on technologies but also on ratepayers, utilities, and other stakeholders.
U.S. policymakers increasingly seek to enlist ratepayers in the war on carbon, harnessing technology innovation to turn previously passive electricity customers into active partners in grid decarbonization efforts. This vision of a “participatory grid” rests on smart appliances, rooftop solar, energy storage, and other technologies capable of empowering ratepayers to more actively manage their energy consumption, generation, and other grid interactions. Access to these technologies and, hence, to the benefits of active grid participation, however, comes at considerable cost raising concerns over the vision’s implications for distributional equity, as evidenced by “solar fairness” debates across the country.
Professor Welton acknowledges and unpacks the various equity concerns surrounding the participatory grid, shedding light on the different stakeholders and their perspectives. In one of my favorite sections, she compares and contrasts the “distinct but overlapping equities” of climate law and energy law. Welton hones in on the disproportionately harsh impact of global warming, sea level rise, and other manifestations of our changing climate on lower-income households. Against this background, she makes a persuasive argument that, whatever the inequities of a decarbonized participatory grid, they do not justify a business-as-usual scenario as climate change itself will bring about far more serious inequities if left unmitigated.
Professor Welton’s article places the current equity debate into historic context, tracing energy law’s preoccupation with balancing equity and efficiency from the beginnings of public utility law all the way to present-day restructuring efforts. From this historical analysis, Welton distills “widespread access to affordable power” as energy law’s overarching distributive tenet. Nowhere is this commitment more apparent than in the Tennessee Valley Authority Act, the Rural Electrification Act, and other New Deal efforts to electrify rural America.
Eighty years ago, the New Deal’s electrification campaign raised the standard of living for rural communities and expanded their access to radios, refrigeration, and other amenities of modern-day technologies. Now, Professor Welton urges her readers, it is time for a successor campaign, clean electrification, to broaden public access not only to the grid itself but, critically, to the emerging suite of participatory technologies required to maintain access to affordable power in a de-carbonizing world. Welton identifies several openings in public utility regulation for a clean electrification campaign, including the long-standing mandate to maintain “just and reasonable” electricity rates and questions over ownership and management of the rich data produced by an ever-smarter grid. In the balanced thinking that distinguishes her article throughout, Welton cautions that widespread grid participation may not be achieved in the near term unless public policy moves beyond its current individualistic notion of participation to embrace more collective forms, such as community solar programs and semi-autonomous micro grids.
With Clean Electrification, Professor Welton adds to the emerging literature on clean energy equity a careful historical analysis of equity’s deep roots in energy law as well as a compelling argument for a concerted effort by policymakers, utilities, and others to usher in a low-carbon, high-participation energy economy. At a time when pundits polarize political debates over the future of net metering and other clean energy policies, Welton presents herself as a welcome voice of reason.
Apr 5, 2018 Tom SimmonsElder Law
John H. Langbein,
Absorbing South Australia’s Wills Act Dispensing Power in the United States: Emulation, Resistance, Expansion, 38
Adelaide L. Rev. 1 (2017), available at
SSRN.
Yale’s Professor Emeritus John Langbein, who introduced the harmless error idea to will formality requirements a few decades back, returns to the place where it all began in Absorbing South Australia’s Wills Act Power in the United States: Emulation, Resistance, Expansion. It began, legislatively speaking, in South Australia. In 1975, South Australia’s State Parliament enacted a statute validating wills with formality defects so long as it was proved that the decedent intended the document to be her will. This “dispensing power” idea soon infected other common law nations, including the United States. Now, a new chapter is being written as a fresh trend emerges: making bequests via electronic technology.
Following a concise review of the common law world’s absorption of Australia’s innovation, sustained through legislative activity, case law, and scholarship, Langbein turns to “a completely unforeseen development – the enforcement of so-called digital or electronic wills.” (P. 1.) A harmless error in the execution of a will should not result in invalidation if there is convincing evidence that the decedent truly intended the document in question to constitute her will. A defect in the “line of sight” or “conscious presence” requirements for witness attestation, for example, ought not to invoke intestacy where other evidence convinces us that the decedent was trying to make a valid will. Today, we are beginning to see a new variety of technically deficient wills – paperless ones. Is the harmless error doctrine equipped to deal with digitized bequests? Or is a new framework for electronic wills necessary? Langbein deftly considers these important questions in this compulsively readable reprinting of a lecture he delivered in Australia in 2017.
The Uniform Law Commission recently created a drafting committee to respond to the phenomenon of digital testation. The Committee’s first drafting meeting memo neatly sums of the issue: Why not electronic wills? After all, “everything else is electronic.” Langbein concurs, noting that many individuals are so acclimated to digital forms of communication “that they seldom encounter sheets of paper in their daily lives.” (P. 9.)
Two variations of digital wills should be identified. In the first instance, an individual makes an electronic document with word processing software saved on a tablet, a phone, or a USB stick. In the second, a decedent has left either an audio or video recording of a testamentary plan; a DVD will. Although merely oral wills are invalid in most jurisdictions (and where they are recognized, they’re strictly limited to situations such as deathbed bequests), Langbein has collected a few cases holding DVD wills to be valid. True, a DVD disc might not be what we typically think of as a “document.” Yet it is a tangible form of the communication intentionally preserved so that its form survives its creation. And given the liberal construction given to remedial legislation such as harmless error statutes, a DVD could be treated as a kind of document.
With word processing wills, we’re on more familiar ground. Especially where the wording of the file strongly suggests testamentary intent (e.g., “This is my last will and testament”) and something akin to a signature can be located, the harmless error rule is comfortably stationed. Some states have legislatively endorsed electronic wills. In Nevada, testamentary bequests created and saved as an electronic record are valid. The statute, however, also imposes a new formality likely to foul up do-it-yourselfers: an “authentication characteristic” (which might be, for example, a retinal scan or fingerprint). Langbein notes: “It is particularly ironic that the dispensing power, which has opened the way to enforcing digital wills by excusing noncompliance with the traditional Wills Act formalities, is begetting new formalities.” (P. 11.) Harmless error begets digital wills which beget new formalities, which harmless error doctrine can excuse.
If a framework specifically designed for digital wills is appropriate, one of the more difficult issues to resolve will be revocation formalities. In traditional wills land, a will may be revoked either by a later will or by a physical act of revocation performed on the instrument itself, such as tearing or burning. The first category of revocations can be easily implemented with digital wills, but what of physical acts of revocation? “Suppose,” Langbein posits, “that the testator who has drafted a computer will erases it, but a software expert is able to recover from the text from the hard drive?” (P. 11.)
Professor Langbein’s article tracks the problems of these computer wills. He confesses, “I would be quite content if this intrusion into the accustomed patterns of testation were not happening.” (P. 11.) The frequency with which individuals attempt to make a testamentary disposition with digital technology will only increase, however. E-bequests will continue. Harmless error doctrine can – and is – handling some cases, but as the frequency increases, legislation specifically crafted for E-bequests will be inevitable.
Cite as: Tom Simmons,
Dispensing (With) Electronic Wills, JOTWELL
(April 5, 2018) (reviewing John H. Langbein,
Absorbing South Australia’s Wills Act Dispensing Power in the United States: Emulation, Resistance, Expansion, 38
Adelaide L. Rev. 1 (2017), available at SSRN),
https://lex.jotwell.com/dispensing-with-electronic-wills/.
Mar 14, 2018 Eric BiberEnvironmental Law
Zachary Liscow and Quentin Karpilow,
Innovation Snowballing and Climate Law, 95
Wash. U. L. Rev. 385 (2017), available at
SSRN.
Innovation is a critical component of environmental progress. The dramatic reductions in emissions per-mile-travelled from automobiles over the past forty years stem from major breakthroughs like the catalytic converter. Our efforts to switch from fossil-fuel-based energy and reduce greenhouse gas emissions will depend on many different kinds of technological innovation. The dramatic price drops in both wind and solar energy, for instance, are in significant part the result of the development of new technologies.
How can environmental law facilitate the development of new technology to address the challenges of climate change and other environmental problems? The predominant position of economists has been that legal tools that force economic actors to address the full costs of their actions, including the externalities that are the basis of many environmental problems, is the appropriate approach to spur innovation. A carbon tax (or a tradable permit system which requires polluters to purchase their permits) will create incentives for firms and individuals to come up with new technologies that will reduce environmental problems. Liscow and Karpilow’s article challenges this dominant paradigm, drawing on recent significant economics research.
Yet policymakers have stubbornly ignored this advice from economists. For instance, in the 2009 stimulus bill instead of levying a carbon tax the Obama Administration put billions of dollars into subsidies and tax credits to support research, development, and deployment of new renewable energy technologies. Is this just a case of elected officials and policymakers ignoring the wisdom of economists, or is there something more going on here?
Recent research in economics has indicated that there may be something more going on. Led by Daron Acemoglu at MIT, a number of economists have concluded that in order to advance real technological progress to address environmental problems, market-based mechanisms like carbon taxes or tradable permit systems have to be paired with other policy tools, such as subsidies for research and development. The reason is that innovation is path dependent – what we research now, and what technologies we develop now, depends in large part on what research has occurred in the past.
Zachary Liscow and Quentin Karpilow spin out the possible implications of this research (what they call “innovation snowballing”) for legal efforts to address climate change. As they make clear, the implications extend far beyond the most basic question of whether subsidies in the context of research and development are a good policy choice. As it turns out, we might reconsider a range of policy and legal questions based on this research – for instance, even if we don’t use market-based mechanisms, we might nonetheless adjust the kinds of regulatory tools we use to react to climate change. In addition, there are a number of difficult questions about what kinds of research and development we might subsidize, as well as when, and how. For instance, Liscow and Karpilow point out that we might want to focus our subsidy efforts on renewable energy technologies that are unlikely to have positive spillovers for the development of fossil-fuel technology as well. Biomass energy builds on (and can support further research in) related fossil-fuel combustion technologies, so we might not wish to provide significant support for it, as opposed to support for solar energy research, which has little or no overlap with fossil fuel technology.
Liscow and Karpilow are not the only ones who have engaged with these questions. Other scholars (both inside and outside environmental law) have explored whether market-based mechanisms are the best tool to advance technological innovation in the environmental context. Examples are David Driesen’s work and Margaret Taylor’s article in the Proceedings of the National Academy of Sciences noting that cap-and-trade programs appear not to boost innovation significantly. If there is a weakness in the Liscow and Karpilow paper, it is that the authors could have engaged more with this prior research. And some of the extensions that Liscow and Karpilow address – for instance, whether innovation snowballing should lead us to think differently about government procurement programs or investment in infrastructure – could have fruitfully engaged with some of the relevant cutting edge work in environmental law, such as Sarah Light’s work on military contracting and environmental policy, or Alex Klass’s work on energy infrastructure.
But the strength of Liscow and Karpilow’s article is the depth with which they explore the follow-on questions that the original innovation snowballing research prompts. That strength makes this article well worth reading for anyone thinking about legal and policy design in the context of climate change.
Feb 19, 2018 Elizabeth AdelmanLibrarianship and Legal Technology
For those of us who are not engineers or programmers, magical results appear when we run searches in legal databases. However, we have little understanding of the machinations behind the ever-present e-wall. What kind of confidence can we have when the underlying structure of legal databases are hardwired with human biases? We must ask ourselves the question posed to then-Senator Obama and Senator McCain at a Town Hall Debate in 2008, “What don’t you know and how will you learn it?”
When I teach legal research, my students compare the same searches in different databases. One goal is to demonstrate that there are different results. But a more nuanced goal is to examine the results closely enough to provide insights into which databases might be more useful for updating, for case searching, for browsing statutes, and other research tasks. Susan Nevelow Mart’s study will elevate these discussions because of her focus on human-engineered algorithms and the inherent biases in the databases used for legal research. This study will also guide researchers to think more about search strategy and will help set more realistic expectations about search results.
Mart studied the impact of human judgment and bias at every step of the database search process. Her study explains how bias is hardwired into the human-engineered algorithm of each database. Add additional layers of human judgment and bias to the choice of database, to the date and time of the search, to the search terms, to the vendor’s classification scheme, and to the fact that searchers typically only browse the first 10 sometimes-relevant results. Mart introduces us to the concept of algorithmic accountability or “the term for disclosing prioritization, classification, association, and filtering.” Mart contends that algorithmic accountability, or understanding a bit more about the secret sauce in the inputs, will help researchers produce more accurate search results.
Mart’s research sought to test hypotheses about search algorithms by examining the results of the same searches in the same jurisdiction across six databases: Casetext, Fastcase, Google Scholar, Lexis Advance, Ravel, and Westlaw. When examining the relevance of the top 10 results, it is unsurprising that Lexis Advance and Westlaw lead in the relevancy rankings because they have the longest standing in the market. However, it is surprising that the top 10 results for those two vendors were relevant only 57% and 67% of the time, respectively.
Mart found that each of the six databases average 40% unique cases in the top 10 results. Mart also explores how many of the unique results are relevant in each database’s results. Again, it is unsurprising that Westlaw (at 33%) and Lexis Advance (at about 20%) lead in these two categories. It is surprising, however, that there are so many relevant cases that are unique results when the same search was performed in each database. And because we don’t know what is in the secret sauce, it is difficult to improve these outcomes.
There are a number of takeaways from Mart’s study. First, algorithmic variations lead to variations in the unique, and in the relevant, results returned from each database. Second, database vendors want us to have confidence in their products but it is still necessary to run the same search in more than one database to improve the chances of yielding the most comprehensive, relevant results. Third, while some of the newer legal databases yield less unique and less relevant results, they can bring advantages depending on the research topic, the time period, and other contextual details.
This well-researched and well-written article is required reading for every attorney who performs research on behalf of a client and for every professor who teaches legal research or uses legal databases. Because we often don’t know what we don’t know, Mart’s work pushes us to think more deeply about our search products and processes. Mart’s results provide an opportunity to narrow the gap in knowledge by learning a bit about what we don’t know. Learning from this scholarly yet accessible article brings the reader closer to understanding how to derive the optimal output even without knowing the ingredients in the secret sauce.
Cite as: Elizabeth Adelman,
What Don’t You Know and How Will You Learn It?, JOTWELL
(February 19, 2018) (reviewing Susan Nevelow Mart,
The Algorithm as a Human Artifact: Implications for Legal [Re]Search, 109
Law Libr. J. 387 (2017)),
https://lex.jotwell.com/dont-know-will-learn/.
