Mirror of Justice

A blog dedicated to the development of Catholic legal theory.

Friday, October 21, 2016

Lyman Johnson on corporate legal theory

At the Washington & Lee symposium honoring his work, Lyman Johnson offered a luncheon keynote reflecting on what he found when he entered the world of corporate law teaching thirty years ago. Corporate law was experiencing enormous upheaval, particularly via the hostile corporate takeover movement.  This movement received the support of the Chicago law-and-economics school, a reductionist interpretation that drained the corporate institution of its humanity and left it as a nexus of contracts.  This view did not account for real harms to employees, local communities, and others.  The Delaware judiciary, unlike federal actors, could not avoid weighing in, and the judges used traditional tools (including fiduciary duties) to stabilize the corporate landscape.  Lyman has spent much of his career explaining, teaching, and criticizing these materials.

His scholarship is premised on the belief that people everywhere crave meaningful work as a key element of human flourishing.  In his remarks, he highlighted ongoing themes of his scholarship, including corporate purpose and the relationship of religious faith to corporate law.  He believes that a pluralistic approach to corporate purpose is preferable to the economically reductionist view of shareholder wealth maximization.  He has helped point out that shareholder wealth maximization is not legally required.  Directors must enhance monetary goals for the purpose of benefiting shareholders, but that is not maximization. We should favor a diverse business ecosystem over a business monoculture.  This debate remains crucial, as reflected by a Wells Fargo employee's recent lament that the company's culture was "soul crushing."

Lyman wondered why criticism of corporations comes primarily from the left.  Conservatives (of which he is one) should care deeply about corporate culture and the elevation of profit over other considerations.  At the corporate theory level, people are regarded simplistically as individuals, not as fully formed persons who can behave sacrificially, not just selfishly.  There is a profound dissonance between what we expect of ourselves in life generally and what is demanded in business.  The belief in a shareholder wealth maximization norm has a prescriptive and pedagogical function, shaping corporate culture in powerful ways as rampant self-aggrandizement is rewarded.

The dominant corporate law paradigm does not pay much attention to the corporate body in favor of focusing only on shareholders and directors.  He believes we need to reclaim the corporation itself as a subject of study for corporate law.  Like other groups, corporations can have commitments that are not equivalent to the commitments of its individual members.  The corporation should be respected as a distinct person.  It would be helpful to have a rule requiring the corporation to state its purpose clearly, providing an understanding to all stakeholders of its corporate identity.

He closed by underscoring the value of collaboration in our work, praising the contributions of his friend and frequent coauthor, David Millon.

October 21, 2016 in Vischer, Rob | Permalink

Corporate Governance and Purpose at Washington & Lee

Today I'm at Washington & Lee for a corporate law symposium in tribute to the scholarship of David Millon and (my St. Thomas colleague) Lyman Johnson.   Both Lyman and David have together expanded our understanding of corporate purpose and social responsibility, and Lyman especially has done tremendous work exploring the religious dimension of corporate law (a subject I'll explore this afternoon).  The opening panel addresses theoretical perspectives on the corporation.

Matt Bodie (St. Louis U Law) kicked things off by recounting how Lyman and David have created a countervailing ethos to the dominant shareholder primacy theory, focusing more on norms than on straight law.  They keep posing the question, what norms should be operative when we think about the corporation?  Matt wants us to move beyond norms and think about real shifts in power within the corporation, giving employees some of the traditional rights of corporate governance.  Shareholder primary is based on more than a norm -- it's a function of power given that shareholders have voting rights, so a stakeholder theory grounded in norms rather than power won't go very far.  Neither labor law nor contract are mechanisms by which employees will participate meaningfully in corporate governance -- e.g., voting rights, board participation. He also suggests that employers should owe certain fiduciary duties to employees.

Eric Orts (Wharton) expressed gratitude for Lyman and David serving as champions of humanism in the corporate law field and alerting us to the dangers of adhering to a single outlook (economics).  He explained how David's work helped bring attention to the wealth distribution effects of corporate law -- we cannot focus solely on its wealth maximization effects.  David has also argued that limited liability acts as a kind of subsidy to corporations, which raises questions about the corporation's contributions to society.

Alan Palmiter (Wake Forest Law) presented his paper, "Corporate Governance as Moral Judgment."  Science tells us that we have no idea how we make moral judgments; such judgments are not based on rationality.  As Lyman and David have encouraged, socially responsible investment and boards' focus on sustainability are increasing, but changes are likely not induced by rational arguments.  We make moral judgments instinctively and emotionally, then our reasoning is motivated by those judgments.  As Jonathan Heidt argues, intuitions come first, strategic reasoning second. So how do we shift corporate focus?  Perhaps by shifting perceptions of risk, adding moral vectors (e.g., caring or sacred), and introducing moral modelers.

Leo Strine (Chief Justice, Delaware Supreme Court), citing Berle and Orwell, noted that, if we want the world to be what we want it to be, we have to be clear-eyed about what it is. He objects to Hobby Lobby and Citizens United as bad corporate law decisions that do not do anything to alter the existing concentration of power with equity holders. He respects the consciences of Hobby Lobby's owners, but not to the extent that they should be empowered to override the publicly mandated benefit packages of their employees. He encourages us to think about power.  When we cite companies like Hobby Lobby and Cracker Barrel, we're still supporting the maximization of the interests of equity holders -- we're not broadening traditional corporate law to consider other stakeholders.  The money that is in the system makes it very difficult to address important externalities through regulation. If we want to change the world of corporate law, we need to do more than raise the consciousness of independent directors; we need to push for real solutions.  E.g., he's a fan of statutes creating benefit corporations. 

October 21, 2016 in Vischer, Rob | Permalink

Saturday, October 15, 2016

Why Dems should worry about the state of the GOP

Michael Gerson's op-ed on the "pathetic" state of the GOP is spot-on.  I won't attempt an excerpt - you should read the whole thing.  The GOP's collapse as a principled, idea-driven party this election cycle should be cause for concern to liberals, not just conservatives.  Our political culture is so much more focused on winning than on governance, though, that it seems many on the left will continue to see the sorry state of the opposition as cause for glee rather than deep concern.

Our country needs a strong center-right party, and I am hopeful that one will emerge from the ruins. But we have to be candid in acknowledging the ruins before building again. I'm not making a point about the candidates' relative merits (though I have my own views on that topic as well). My point is that the country is better off with a strong center-right party that champions the ideals, priorities, and virtues that have been associated with the GOP over the past few decades. Even those who are on the left should recognize that we're stronger as a nation with an opposition party that pushes back with a different but principled perspective. If the GOP nominee would have been a person who upheld that tradition, Hillary would not be coasting to victory right now. Political parties are important counterweights that make the opposition's ideas better, align ultimate policy more closely with public opinion, and help avoid overreach in governance. That's obviously not happening this year.  And there really isn't any comparison between the candidates on this front: Hillary is nowhere close to my first choice, but she hasn't played the same type of corrosive role in upending the Dems' traditional positions and priorities that Trump has within the GOP.  Trump seems incapable of carrying on an idea-driven conversation for more than 30 seconds, and that will result in a Clinton administration implementing ideas that have faced little or no reasoned opposition on the national stage.  That's bad news for her presidency and for the country. 

October 15, 2016 in Vischer, Rob | Permalink

Friday, September 30, 2016

Religiously Affiliated Law Schools: New Scholarship

The third RALS panel is focused on new scholarship and includes presentations from Bruce Ledewitz (Duquesne), James Duane (Regent), Judith Reisman (Liberty), Stacy Scaldo (Florida Coastal), and Tom Folsom (Regent).

Prof. Ledewitz spoke about the role of law schools in renewing American democracy, particularly the tone of our democracy.  The state of crisis demands attention from law schools, but law schools focus instead on marketing themselves in a market of declining demand.  The source of our democratic crisis is spiritual - we are living with the consequences of a materialistic technocratic culture that fosters nihilism. He recommends serious study of Lonergan's cosmopolis. Could the study of law be something that is high and holy?  If not, why not?

Prof. Duane presented a paper titled, "The Day the Supreme Court Almost Outlawed Religious Discrimination in Jury Selection."  He explored the Davis v. Minnesota case, in which a prosecutor stated openly that he was striking a juror based on religion.  The Supreme Court, in deciding another jury selection case at the time, included religion on the list of prohibited grounds in draft opinions.  Justice Souter asked Justice Blackmun to take it off the list, believing that another case regarding religion would be coming to the Court.

Prof. Reisman spoke about transgender fluidity, recounting the history of Kinsey's research and the Model Penal Code.

Prof. Scaldo spoke about "seditious acts of faith," exploring the Supreme Court's cases on the HHS mandate.

Tom Folsom proposed a unifying set of non-theocratic principles that might make religiously affiliated law schools more relevant in the legal education conversation.  He suggested that we work to specify a common morality for a neo-tech, neo-global era, "Designing Law for Human Good," in the form of a Restatement.  

September 30, 2016 in Vischer, Rob | Permalink

Religiously Affiliated Law Schools: Potential Accreditation Issues after Obergefell

The second panel at RALS features Bill Piatt (St. Mary's), Rena Linevaldsen (Liberty), Johnny Rex Buckles (Houston), Hon. Stuart Adams (Utah Senate), and Robin Wilson (Illinois).

Prof. Piatt spoke about his struggles to have a Christian Legal Perspectives CLE program approved by the Texas state bar. The CLE board denied approval on the ground that the programs pertained to individual moral or religious responsibilities, rather than the duties of an attorney.  Bill and his colleagues filed a formal challenge, and many rallied to their cause.  The state bar agreed to grant credit for training on moral and religious topics in the context of legal ethics training, but these challenges will continue.

Prof. Linevaldsen discussed ABA Standard 205 (non-discrimination and equality of opportunity) in light of Obergefell.  She emphasized the need for schools to articulate a strong religious mission in terms that will justify honor code policies. The student experience must be tied to the mission.  Imposition of non-discrimination norms must be shown to impair the mission-centered community.  Standard 205 provides a safe harbor for law schools that is coextensive with First Amendment protections.

Prof. Buckles spoke about the public policy doctrine and the Bob Jones case, arguing that religious institutions should maintain their tax-exempt status despite Obergefell. Even if 501(c)(3)'s restraint of Free Exercise rights is constitutional, it should not be applied in these cases -- the public policy doctrine should be applied narrowly.  There is nothing that attributes a lack of dignity to a person excluded from a faith community on the basis of holding a contrary faith perspective. 

Sen. Adams and Prof. Wilson spoke about the Utah compromise on religious liberty and LGBT rights.  The Supreme Court decided a case between litigants, but the Court does not have the responsibility or ability to decide what that decision means for everyone else.  We will need to help state legislatures reach prudent compromises on this issue, as Utah has done.  Fairness for all means that firing a judge who won't perform same-sex marriages is wrong, and firing an employee for being gay is also wrong.  They addressed the need to recognize gradations of the contexts in which religious liberty interests are implicated -- e.g., discrimination in the use of church property is not the same as discrimination by large commercial corporations, with different degrees of concern represented by the cases in between.

September 30, 2016 in Vischer, Rob | Permalink

Religiously Affiliated Law Schools: Ethical Formation in Law School

I'm at Regent Law School today for the RALS conference.  The opening panel features Neil Hamilton (St. Thomas), Benjamin Madison (Regent), and David Grenardo (St. Mary's).  The topic is ethical formation in law school.

Neil presented data regarding the ethical professional identity competencies that students need, discussing the shift to competency-based legal education.  Of the 55 law schools posting learning outcomes on their websites (as required by the ABA), 42 have adopted an ethical professional identity learning outcome that goes beyond what is required by ABA Standard 302(c).  Two foundational professional identity learning outcomes: 1) proactive professional development toward excellence; 2) an internalized deep responsibility to clients and the legal system.  The key is not that law schools agree on learning outcomes; the key is that law faculty engage students in light of chosen learning outcomes.  The research shows that we need to take into account that students are at different stages of development, provide repeated opportunities for student reflection, build into the student's existing narrative by linking future growth to their past experience and current goals, and remember that the process of experience / feedback / reflection is a very effective impetus for growth. 

Ben asked if there is a paradox between ethics and happiness.  Research shows that lawyers who live by intrinsic values -- integrity, compassion, respect, unselfishness, commitment to service -- display greater contentment and health.  Law schools can influence this process by encouraging knowledge of self, knowledge of God, and an attitude of reflectiveness and willingness to grow.

David presented the results of his survey on the use of prayer in law school classrooms.  Of the students at religiously affiliated law schools who responded, 78% liked the fact that their professor prayed at the beginning of class.  Students used words such as "calm, refreshes, tranquility, peace, serenity" to describe the effect of prayer on them.  Other students commented on classroom prayer bringing a sense of unity, regardless of the faith traditions represented in the room.

September 30, 2016 in Vischer, Rob | Permalink

Friday, August 19, 2016

Civil friendship and the 2016 election

Yesterday I read a Christian leader's commentary on the presidential election, but I had to stop when I came to his assertion that candidate X is "wrong on 100% of the issues" that matter to Christians.  This all-or-nothing take on candidates is hardly new ground for campaign strategists, but I'm struck by how deeply it has infiltrated the society at large, including Christians attempting to analyze the election through the lens of their faith.

The Compendium of the Social Doctrine of the Church addresses "civil friendship" as part of its teaching on the political community. (Para. 390)  The Church emphasizes the importance of civil friendship as "the most genuine actualization of the principle of fraternity, which is inseparable from that of freedom and equality," and entails "inner acceptance of the needs of others."   It is not part of the sphere of rights, which "is that of safeguarded interests, external respect, the protection of material goods and their distribution according to established rules."

In the current presidential campaign, we are focused, as we should be, primarily on how each candidate will impact the sphere of rights.  Nevertheless, the divisive and apocalyptic rhetoric of this political season cannot be easily separated from the viability of civil friendship in our country.  When each candidate is EVIL! EVIL! EVIL!, each candidate's supporters can only be understood as unable or unwilling to recognize or reject said evil. 

Does the rhetoric we deploy in an effort to ensure that Trump (or Clinton) is not President make it more difficult to cultivate the civil friendship that is more central to society's flourishing than a particular President's impact on the sphere of rights?  Relatedly, does this rhetoric make it more difficult to foster a culture of political cooperation that will be necessary come January when President Trump (or Clinton) will be tasked with leading the country?  Put differently, should the way we speak of the candidates aim toward our responsibilities as citizens come November 9, not simply our priorities as voters on November 8?

I'm not sure what this would look like, but I know we're not seeing much of it.  A few tentative thoughts on how we can better convey the respect and empathy on which civil friendship and responsible citizenship depend:

1) We should strive to praise the laudable traits and policy positions of the candidate we oppose, even as we criticize the traits and policy positions we abhor.

2) We should strive to be specific and substantive in our critiques of the candidate we oppose.

3) We should talk less about the candidates themselves, and more about the underlying issues that motivate our fellow citizens to support one candidate or the other.  (And yes, this year especially, for many Americans, Trump himself is a major motivation to support Clinton, and vice versa; but there are deeper concerns at play here too.)

Christians have strong opinions about the outcome of this election, as we should.  But we also have to ask ourselves, do we want to contribute to the likelihood that our country will flourish through the bonds of civil friendship and collaborative governance even if the candidate we have designated as EVIL! EVIL! EVIL! prevails?  If so, how should that change the nature and tone of our current political engagement? 

August 19, 2016 in Vischer, Rob | Permalink

Friday, August 12, 2016

Can Christians please stop relying on candidate scorecards?

Among the many, many downsides of the 2016 presidential election, one potential upside is the overdue demise of the candidate scorecard that has been popular in Christian circles since at least the early 1990s when Pat Robertson's Christian Coalition promoted them heavily.  The 2016 election brings their flaws into stark relief:

1) It is impossible to distill a candidate's character into a scorecard format.  Both candidates this year present character questions that are central to voters' evaluation of their candidacies to a degree that we have not seen in recent elections.  To imply, as the Family Research Council scorecard does, for example, that a Christian's choice should boil down to a list of questions such as, "Do you support or oppose the federal funding of embryo-destructive stem cell research?" misses the elephant in the room.

 2) Even when it comes to the issues themselves, a scorecard is often unhelpfully simplistic. Both Bill Clinton (1992) and Hillary Clinton (2016) support a constitutional right to abortion, but are there meaningful differences between the two on this issue that should matter to Christians?  How much should Donald Trump's support of religious liberty matter if he understands the primary threat today as the inability of pastors to endorse candidates?  Should a Christian ever be content to know whether a candidate "supports or opposes the repeal of Obamacare" without knowing what the candidate would offer in its place?

3) Scorecards do not capture the depth of commitment reflected in a candidate's past statements and actions.  It's easy to check a box.  It's much harder to expend the political capital necessary to push change on an issue, as we've seen with candidates on both sides of the aisle regarding issues that matter to Christians.

4) The scorecard approach prioritizes stand-alone issues over coherent governance.  Support deficit reduction? Great.  Support increased infrastructure spending? Super.  Support protection for Social Security?  Fine.  Now tell me how you're going to make all of it work together.  Being the President is complicated, requiring difficult trade-offs.  Christians have been too focused on a candidate's stance on particular issues, as opposed to more comprehensive (and admittedly messier) questions of how the pieces will fit together. 

5) The lineup of "Christian" issues that has populated scorecards since their introduction is increasingly narrow and short-sighted relative to the worldviews represented by the candidates and their platforms.  If this election represents a realignment, Christian voters are not being well served by the premise of scorecards -- that we can simply tally up the checked boxes on a few issues that we have cared about over many election cycles.

Issues matter (and I wish they mattered more in the current campaign) but they need to be analyzed in the context of the candidate's character, worldview, and track record.  We need more nuance, not less, and scorecards feed our culture's seemingly limitless appetite for easy, quick and categorical judgment.  When the 2016 election is mercifully behind us, I hope that scorecards are too.

August 12, 2016 in Vischer, Rob | Permalink

Wednesday, July 27, 2016

Character matters (especially for new lawyers)

Yesterday the Institute for the Advancement of the American Legal System released the results of a multi-year study in which 24,000 attorneys from all 50 states participated. One key conclusion is that new lawyers need not only IQ and EQ, but also “a high ‘character quotient.’ Integrity, work ethic, grit, and common sense are just a few of the necessary characteristics.” From the report:

[According to the lawyers surveyed, new law school grads] need to have a blend of legal skills and professional competencies, and, notably, they require character. In fact, 76% of characteristics (things like integrity, work ethic, common sense, and resilience) were identified by half or more of respondents as necessary right out of law school, while just 46% of professional competencies (like arriving on time, listening attentively, and teamwork) were identified by half or more as similarly necessary. Legal skills (like legal research, issue spotting, and legal analysis) were identified by half or more of respondents as necessary right out of law school to an even lesser degree than either characteristics or professional competencies. Specifically, fewer than half of the legal skills we asked about—just 40%—were identified as necessary right out of law school. This is not to suggest that legal skills were viewed as unnecessary by respondents. In total, 98% of the legal skills we asked about were identified as necessary, but they were identified as foundations that could be acquired over time and that were not necessary as the new graduate entered his or her career.

As Catholic law schools work to articulate how a school's Catholic identity can and should matter to students faced with a difficult job market, these insights are key.  Other law schools can build character too, of course, but if we've been taking seriously the relevance of whole-person education, meaningful community, mentoring, and moral formation to our Catholic legal education project, we should have a significant advantage. 

July 27, 2016 in Vischer, Rob | Permalink

Monday, July 25, 2016

Dualism & Doctrine

In light of arguments by Robby George and others that we are in a neo-Gnostic age, Dov Fox and Alex Stein have posted a fascinating new paper, Dualism and Doctrine. Here's the abstract:

What kinds of harm among those that tortfeasors inflict are worthy of compensation? Which forms of self-incriminating evidence are privileged against government compulsion? What sorts of facts constitute a criminal defendant’s intent? Existing law pins the answer to all these questions on whether the injury, facts, or evidence at stake are “mental” or “physical.” This key assumption that operations of the mind are meaningfully distinct from those of the body animates fundamental rules in our law.

A tort victim cannot recover for mental harm on its own because the law presumes that he is able to unfeel any suffering arising from his mind, by contrast to his bodily injuries over which he exercises no control. The Fifth Amendment forbids the government from forcing a suspect to reveal self-incriminating thoughts as a purportedly more egregious form of compulsion than is compelling no less incriminating evidence that comes from his body. Criminal law treats intentionality as a function of a defendant’s thoughts altogether separate from the bodily movements that they drive into action.

This essay critically examines the entrenchment of mind-body dualism in the Supreme Court doctrines of harm, compulsion, and intentionality. It uses novel insights from neuroscience, psychology, and psychiatry to expose dualism as empirically flawed and conceptually bankrupt. We demonstrate how the fiction of dualism distorts the law and why the most plausible reasons for dualism’s persistence cannot save it. We introduce an integrationist model of human action and experience that spells out the conditions under which to uproot dualism’s pernicious influence within our legal system.


July 25, 2016 in Vischer, Rob | Permalink