More tribute to Larry Ribstein from Don Bodreaux. I wish I could’ve taken a class with Larry. Maybe I would’ve actually taken a corporate law class.
More tribute to Larry Ribstein from Don Bodreaux. I wish I could’ve taken a class with Larry. Maybe I would’ve actually taken a corporate law class.
He was a faculty mainstay in the task of developing the new curriculum and the new approach which we were all gambling on. I suspect that he never would have left Mason (even for a chair and far more money) had he not felt that we had accomplished what we set out to do there. He was crucial to the success that law school has enjoyed.
Some more praise of Larry Ribstein from Henry Manne, the Dean who made GMU what it is.
I’ve spent the better part of today (other than getting some Chinese food, as is tradition) thinking about the state of legal research, and where I can fit in.
So at the most abstract level, what I want to accomplish is to amass a single database that contains every single item on every single docket in every single federal and state court. Not just opinions, but the briefs as well. The purpose of amassing this data set would be to permit some to-be-determined algorithm to sort through the opinions, understand them, index them (automatically), and create basis on which to make informed predictions–by knowing what courts have done, it can know what courts will do. Plus, it will determine what makes good arguments.
There are two primary obstacles. Well really many more than two–most entrepreneurial ventures fail, but people still try anyway (I guess I’m one of them) but I’ll focus on two here). First, is technology. I don’t think technology is close enough today to accomplish what I want to do.
The second obstacle (and probably the more insurmountable one) is acquiring the data. All of the information I need for the federal courts resides in PACER. (Information for the Supreme Court is available at the Supreme Court Database, but the cool stuff is in the lower courts). As you know (I’m sure), PACER charges $0.08 a page (this rate will increase to $0.10 a page in April of 2012). They also don’t offer some sort of API or easy-to-access public interface to download this information.
WEXIS no doubt has some kind of proprietary means of accessing this information, which is likely very complicated and labor-intensive. Some other services–such as Justia, FindLaw (owned by West), Fastcase, FreeLawReporter.org (Run by CALI), Cornell LII, Google Scholar, and others–offer access to opinions for free, but they don’t offer an easy way to bulk-import the information.
The primary repository for publicly available opinions is Law.Resource.org, organized by Carl Malamud, with bulk access available to all federal reported cases.
For 2011 and 2012, Resources.org is offering a service, RECOP, courtesy of Fastcase, that indexes all opinions from courts every week. This will be excellent bulk data for these two years. This gets opinions, but not briefs and dockets.
And of course, RECAP run by at the Center for Information Technology Policy at Princeton has that cool plugin for Firefox (where is the Chrome plugin???) that lets you automagically store all PACER docs you purchase. There search feature is rudimentary, and I’m sure their database is so spotty and incomplete.
CourtListener.com, developed by Michael Lissner pulls all opinions off the circuit court websites daily. It’s a smart, back-door way of acquiring the data. Also, this only gets opinions, not dockets.
Malamud’s efforts of getting the federal courts to open up have been heroic, but unsuccessful, even with some big names behind it (Balkin, Lemley, Lessig, Wu, Ohm, and others). It strikes me if these luminaries, backed with big money from donors (Google among others) weren’t able to get the courts to open up, I won’t. So not even going to try. I’ll take a different route.
In any event, I see this process as consisting of several phases.
In the near-term,the first phase is to get a team in place. I have been very fortunate, and am quite grateful, that so many people have taken an interest in me and my work. I hope that a number of these individuals would care to join me on this ride.
The second phase is to work with what we got. Between Resources.org, Recap, and CourtListener, there is a wealth of data. I would be interested in amassing it all together in one place, to try to get a sense oh how complete the set is.
The third phase would be to get it online. This data would be publicly available, sorted by docket number. It could be drilled down in the same manner PACER would work. At this stage, it would be nothing more than a watered-down version of Justia or Find Law. I would run this as a Harlan Institute project. All free, no ads. Perhaps find a better way to navigate through the cases (Justia and FindLaw are not particularly user-friendly), but the search feature, at first, will no doubt be weak. Offering some cool graphical tools like the LegalLanguageExplorer could be a way to differentiate it, but it’s just important to get something up at a low cost. Also, displaying all stuff in HTML format, rather than PDF would be good. Some SEO-style URLS would be good (for example www.harlaninstitute.org/law/PAWD/GIBSON/CV/3-11-240/22/Memorandum-And-Opinion/). Features like following a case or court or judge through RSS & Twitter would be relatively easy to manage.
All of the above tasks can be accomplished at a relatively low price. The tech would use Amazon Web Services EC2, so it could ramp up quickly as we get more data.
Now, for the long-term, we would have to start on the business model, modelled something after Google’s. I see the product as two-tiered. The primary goal is to amass as much information as possible and make it publicly available. For the more premium stuff (which only law firms could possibly want), you charge. The investing for the latter would help fund the former, and build up good will.
With this kind of funding, we start working on getting more data. I read somewhere that the courts have erected a veritable tower-of-babel to keep people out, outside of WestLaw and Lexis and a few others. I imagine it would be very expensive, and I would have to learn from the industry leaders how to get in. FastCase seems to have a way in, and offered data to Resource.Org. Perhaps Ed Walters could be a help. Perhaps we could work with RECAP to index their stuff smarter. Having a complete repository, open-sourced, is the key.
A data-driven model is totally different from what WEXIS (and even the new entrant Bloomberg) offers. We won’t have research librarians. We won’t h ave people poring over the cases analyzing them. Algorithms trained to understand and index cases will do it automagically (I said long-term, didin’t I?)
If we have the data, and can future-crunch it, we would do some cool stuff.
Now for some of the fascinating metrics we could calculate:
The coolest part would be what I call assisted-decision-making. One of the virtues of analyzing briefs and opinions is that you can determine what constitutes good advocacy.
For each jurisdiction/court/judge, we can determine what kinds of arguments, suits, parties, litigation tacticcs, etc. are successful/unsuccessful. Figure out this information at any stage of the litigation–when a client proposes a case; if a complaint is filed against your client; before MTD; before MSJ; before trial; etc. This is the kind of intelligence which people can only assemble anecdotally. And attitudinal models can only determine these matters, roughly, at a very late stage in the game. Now, the wisdom of the crowds–so to speak, as it is really data, and not crowdsourcing–can provide you with the answers you need.
Ideally, legal research would transform from what we know today–searching for key words and hoping the cases westlaw or lexis give you are relevant an on point-to being guided to the answer you need, in much the same way that Siri guides you to the right answer. I have blogged about such a tool that I call Harlan here, here, and here (and generally here).
The timing of this post is particularly poignant because of the tragic, and sudden passing of Larry Ribstein. Larry inspired me like few others. Many of the ideas I discuss in this post would never have come to fruition without Larry’s brilliant work. I was hoping to ask him to get involved with these projects. There were so many touching tributes–this one from Andrew Morriss is one of my favorites: “I suspect he’s already been named Associate Archangel for Research in heaven and doubled scholarly output there.” I hope Larry, from above, can continue to work with us, and guide us in the way only he could.
Much more to come. Stay tuned.
Roberta Romano has an article titled Regulating in the Dark that talks about financial regulations following financial crises.
Foundational financial legislation is typically adopted in the midst or aftermath of financial crises, when an informed understanding of the causes of the crisis is not yet available. Moreover, financial institutions operate in a dynamic environment of considerable uncertainty, such that legislation enacted even under the best of circumstances can have perverse unintended consequences, and regulatory requirements correct for an initial set of conditions can become inappropriate as economic and technological circumstances change. Furthermore, the stickiness of the status quo in the U.S. political system renders it difficult to revise legislation, even though there may be a consensus to do so. This essay contends that the best means of responding to this dismal state of affairs is to include, as a matter of course, in crisis-driven financial legislation and its implementing regulation two key procedural mechanisms: (1) a requirement of automatic subsequent review and reconsideration of the legislative and regulatory decisions at some future point in time; and (2) regulatory exemptive or waiver powers, that encourage, where feasible, small scale experimentation, as well as flexibility in implementation. Both procedural devices will better inform and calibrate the regulatory apparatus, and could thereby mitigate, at least on the margin, the unintended errors which will invariably accompany financial legislation and rulemaking originating in a crisis. Given the centrality of financial institutions and markets to economic growth and societal well-being, it is exceedingly important for legislators acting in a financial crisis with the best of intentions, to not make matters worse.
From the article:
simple, but telling, comparison of a commonly-used measure of legislative complexity, a statute’s published length, conveys what Congress has wrought. The Sarbanes-Oxley Act of 2002 is 66 pages long and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is an astounding 848 pages, whereas, the 20th Century foundational federal banking legislation, the Federal Reserve Act and the Glass-Steagall Act, are 24 and 37 pages, respectively (Perry 2010).1
Can you say fatal conceit and black swan?
Rather, the nub of the regulatory problem derives from the fact that financial firms operate in a dynamic environment in which there are many unknowns and unknowables and state of the art knowledge quickly obsolesces. In such a context, even the most informed regulatory response – which Congress’s reaction in the recent crises was not – will be prone to error, and is likely to produce backward-looking regulation that takes aim at yesterday’s perceived problem, rather than tomorrow’s, for regulators necessarily operate under considerable uncertainty and at a lag behind private actors. But using market actors’ superior knowledge to inform regulation is not necessarily an effective solution, as indicated by the utter failure in the recent crisis of Basel
II, which relied on banks’ internal risk ratings to measure capital requirements. This only further highlights the fluid, fast-moving, and uncertain environment in which financial institutions operate – even firms’ state of the art risk management techniques proved inadequate in the confluence of events that produced the global financial crisis.
In order to understand financial regulation undertaken in a crisis, we need to take account, as Frank Knight (1965:270) put it, of “human nature as we know it.” Human nature in this context is that legislators will find it impossible to not respond to a financial crisis by “doing something,” that is, by ratchetting up regulation, instead of waiting until a consensus understanding of what has occurred can be secured and a targeted solution then crafted, despite the considerable informational advantage from such an approach, which would, no doubt, improve the quality of decisionmaking.
This is somewhat similar to my thinking about repeal provisions for black swan laws:
This essay contends that the best means of responding to the typical pattern of financial regulation – legislating in a crisis atmosphere under conditions of substantial uncertainty followed by status quo stickiness – is for Congress and regulators to include as a matter of course in financial legislation and regulation enacted in the midst or aftermath of a financial crisis, procedural mechanisms that require automatic subsequent review and reconsideration of those
decisions, along with regulatory exemptive or waiver powers that create flexibility in implementation and encourage, where possible, small scale, discrete experimentation to better inform and calibrate the regulatory apparatus. Such an approach, in my judgment, could mitigate, at least at the margin, errors which invariably accompany financial legislation and rulemaking originating in a crisis atmosphere. Given the fragility of financial institutions and markets, and their centrality to economic growth and societal well-being, this is an area in which it is exceedingly important for legislators acting in a crisis with the best of intentions, to not make matters worse.
Ribstein blogs:
It’s worth noting that Henry Butler and I, in our book about SOX (at 96-97, footnotes omitted), also suggested “sunset” provisions as an antidote to crisis-driven regulation:
[S]ignificant new financial and governance regulation like SOX that displaces and supplements prior regulatory approaches should be subject to periodic review and sunset provisions. Although Congress, of course, can always undertake such reviews, prior experience indicates that it will not. Legislation is a one-way regulatory ratchet. It arises when the conditions for reform are ripe for a regulatory panic. The conditions for a “deregulatory panic” are less likely to develop. Firms learn to live with the extra costs and may not be willing or able to bear the costs of lobbying for repeal, at least in the absence of a regulatory cataclysm. Thus, it is not surprising that SOX sponsor Michael Oxley, despite recognizing that SOX was “excessive” in some respects, and admitting that it had been rushed through Congress, suggested that Congress would not be revisiting the issue, even as to the seriously affected small companies. He said, “If I had another crack at it I would have provided a bit more flexibility for small- and medium-sized companies.” In other words, Congress normally does not have “another crack” at regulation. A sunset or review mechanism would change that.
Perhaps Congress can learn some lessons from itself. The USA Patriot Act was passed less than one year before SOX and, like SOX, was passed by an overwhelming majority. Unlike SOX, the USA Patriot Act includes sunset provisions for some of its most controversial provisions. The Patriot Act’s sunset provision forced Congress and the president to reevaluate and debate those provisions, in an atmosphere far removed from the immediate post-9/11 panic. American investors would benefit from a sober reevaluation of SOX. Perhaps the courts will provide that opportunity. For future regulatory panics, Congress would do well to remember the lessons of the Patriot Act.
Update: Leiter links to excerpts from Coffee’s paper:
Professor Romano has her loyal allies.[1] Together, they comprise what might be called the “Tea Party Caucus” of corporate and securities law professors, and their key themes are: (1) Congress should not legislate after a market crash, because the result will be a “Bubble Law” that crudely overregulates,[2] (2) state laws are superior to federal law in regulating corporate governance, because the states are restrained by the competitive pressure of the market for corporate charters; and (3) federal securities law should limit itself to disclosure (at most) and not attempt substantive regulation of corporate governance.[3] The underlying theory here comes very close to asserting that democracy is bad for corporate efficiency, and thus legislative inertia should be encouraged.
[1] See Stephen M. Bainbridge, THE COMPLETE GUIDE TO SARBANES-OXLEY: UNDERSTANDING HOW SARBANES-OXLEY AFFECTS YOUR BUSINESS (2006); Henry N. Butler & Larry E. Ribstein, THE SARBANES-OXLEY DEBACLE: WHAT WE’VE LEARNED; HOW TO FIX IT (2006); Stephen N. Bainbridge, Sarbanes-Oxley: Legislating in Haste, Repenting in Leisure, 2 Corp. Governance L. Rev. 69 (2006); Larry E. Ribstein, Sarbox: The Road to Nirvana, 2004 Mich. St. L. Rev. 279 (2004); Larry E. Ribstein, Bubble Laws, 40 Hous. L. Rev. 77 (2003-2004); Larry E. Ribstein, International Implications of Sarbanes-Oxley: Raising the Rent on U.S. Law, 3 J. Corp. L. Stud. 299 (2003); Larry E. Ribstein, Markets v. Regulatory Responses to Corporate Fraud: A Critique of the Sarbanes-Oxley Act of 2002, 28 J. Corp. L. (2002-2003); Larry E. Ribstein, Sarbanes-Oxley After Three Years, 2005 N.Z.L. Rev. 365 (2005).
Although these authors do not tire of criticizing SOX, they have not convinced others. Reviewing the same economic evidence, Professor John C. Coates finds it harder to balance the costs and benefits of SOX and generally takes a more balanced position. John C. Coates, The Goals and Promises of the Sarbanes-Oxley Act, 21 J. Econ. Perspectives 91 (2007). Viewing SOX in a less economic light, Professor Donald Langevoort sees SOX as reflecting a shift by Congress from an exclusively contractarian perspective to a more trust-based conception of the corporation. See Donald Langevoort, The Social Construction of Sarbanes-Oxley, 105 Mich. L. Rev. 1817, 1828-1833 (2007).
[2] Both Professors Bainbridge and Ribstein regularly use the term “Bubble Law” to refer to federal legislation adopted in the wake of a crash that tends to displace state corporate law. See Ribstein, Bubble Laws, supra note 13, and Bainbridge, Dodd-Frank: Quack Corporate Governance Round II, 95 Minn. L. Rev. 1779 (2011).
[3] Professor Romano has argued that the federal securities laws had historically avoided substantive regulation of corporate behavior, staying safely “within a disclosure regime.” See Roberta Romano, Does the Sarbanes-Oxley Act Have a Future?, 26 Yale J. on Reg. 229, 231 (2009). The distinctive failure of SOX in her view “is its break with the historic federal regulatory approach of requiring disclosure and leaving substantive governance rules to the states’ corporation codes.” Id. at 232. This is a dubious historical generalization. Although the Securities Act of 1933 and the Securities Exchange Act of 1934 do utilize disclosure as their preferred tool, the federal securities laws have frequently regulated substantive corporate conduct and governance. At the time, the most controversial federal securities statute of the 1930s was the Public Utility Holding Company Act of 1935, which imposed a “death sentence” on public utility pyramids and holding company structures – clearly an example of aggressive substantive regulation. See J. Seligman, supra note 2, at 122-23 (describing the Public Utility Holding Company Act as “the most radical reform measure of the Roosevelt Administration”). Similarly, the Investment Company Act of 1940 regulates the board structure of investment companies; initially, it required a minimum 40% of each investment company’s board be composed of disinterested directors (Id. at 228-229), and it also compels them to hold a diversified portfolio and not sell securities “short” – again substantive regulation. More recently, the Foreign Corrupt Practices Act required stronger internal controls over financial reporting (as Professor Romano acknowledges). See Romano, supra, at 231. Thus, SOX was hardly a break with a past in which the federal securities laws only required full disclosure.
Larry RIbstein lights up the ABA’s decision not to permit non-lawyer ownership of law firms.
More important is what the ABA move would do about the cost of legal services: nothing. The non-lawyer ownership ban has been enacted and maintained by and for lawyers as a way of banning lower-cost provision of legal advice. Under current rules, many middle class consumers have no reliable reasonably priced way of getting basic legal advice. The UK rule permitting law practice by alternative business structures was promoted by consumers. It lets consumers buy legal services from the same businesses (e.g., Tesco) whose brands they trust for many other products and services. It is a way of bridging the huge current divide between supply and demand for legal services by ordinary non-corporate consumers.
In any event, as discussed in my Death of Big Law and my and Kobayashi’s Law’s Information Revolution, big changes are coming to legal services as a result of significant technological developments and global competition. The responsible position by the profession would be to try to manage these developments in ways that protect consumers, as in the UK and Australia.