Volume 73, Number 2

May 1998

Functions of Trust Law: A Comparative Legal and Economic Analysis

Henry Hansmann, Ugo Mattei

In this Article, Professors Henry Hansmann and Ugo Mattei analyze the functions served by the law of trusts and ask, first, whether the basic tools of contract and agency law could fulfill the same functions and, second, whether trust law provides benefits that are not provided by the law of corporations. The authors’ analysis is motivated in part by the increasing interest in the trust, a familiar feature of common-law jurisdictions, in a number of civil law countries, and in part by the important role that trusts, for example pension and mutual finds, have come to play in capital markets. The authors conclude that the important contribution of trust law lies not in its well-recognized role of ordering, via default rules of contract, the relationships among parties to the trust; rather, the principal benefit of trust law lies in its ordering of relationships between these parties and third parties with whom they deal, relationships that cannot be rearranged easily by contract. Particularly, trust law allows the parties to the trust to partition off a discrete set of assets for separate treatment in relationships formed with creditors. The essential role of the trust, therefore, is to perform a property law-like, rather than a contract law-like, function. Moreover, the trust provides flexibility in organizational structure unavailable under even the more liberal business corporation statutes. The authors close by noting the convergence of trust and corporate law and questioning whether the roles performed by the two organizational types could just as well be served by a single legal form.

The History of the Countermajoritarian Difficulty, Part One: The Road to Judicial Supremacy

Barry Friedman

The apparent tension between judicial review and the democratic process—what Alexander Bickel dubbed the “countermajoritarian difficulty”—has been the focal point of modern constitutional scholarship. At the same time, however, scholars have rarely examined the origins of the countermajoritarian difficulty. In this Article—the first of a three-part series—Professor Friedman undertakes such an examination. Although countermajoritarian criticism of the Supreme Court has surfaced to some extent throughout our nation’s history, Professor Friedman’s historical analysis identifies four factors that tend to presage the prominence of such criticism at any given time. By studying criticism of the Court during Jeffersonian Democracy, the Age of Jackson, and in the wake of the Dred Scott decision, he argues that an essential, but often overlooked, factor is the extent to which the Court’s decisions are regarded as binding—not only upon the parties to the case at bar, but upon future litigants and the other branches of the state and national government as well. Thus, Professor Friedman contends, when the Court is acting during a time of perceived (and actual) judicial supremacy, countermajoritarian criticism will flourish. In the latter two Articles in this series, Professor Friedman will address the responses of the political branches to the emergence of judicial supremacy and the eventual rise of the “countermajoritarian difficulty” as the central problem of constitutional scholarship.


Dangerous Children and the Regulated Family: The Shifting Focus of Parental Responsibility Laws

Paul W. Schmidt

This Note argues that the appearance of postmodern penological trends in the juvenile justice context results in two problems: an attack on the autonomy of the family and a shift to a more sinister view of children. This Note specifically examines parental responsibility laws, measures that hold parents criminally responsible for the acts of their children. These laws show a new readiness to attribute juvenile misconduct to improper parenting and to hold parents strictly liable for their children’s acts, both in furtherance of protecting society from the danger presented by juveniles. In so doing, these laws embody the postmodern trends mentioned above.

Buying Time for Survivors of Domestic Violence: A Proposal for Implementing an Exception to Welfare Time Limits

Jennifer M. Mason

With the passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Personal Responsibility Act), states have unprecedented discretion in fashioning their social welfare programs. The Personal Responsibility Act eliminated the Aid to Families with Dependent Children (AFDC) program and replaced it with block grants for states to use in designing their own assistance programs. States therefore have a substantial opportunity to impact the lives of America’s poorest families. The Act, however, imposes some restrictions on the states as a condition for receiving the money. Particularly notable is the Act’s prohibition on state provision of benefits to any family that includes an adult who has received assistance for sixty months over her lifetime. The Personal Responsibility Act also contains guidelines that are merely discretionary on the part of the states. This Note discusses two such options, both exceptions to the sixty-month rule. First, the Act allows a state to exempt a family from the sixty-month limitation “by reason of hardship or if the family includes an individual who has been battered or subjected to extreme cruelty.” Second, the Act allows a state to waive time limits where the family includes an individual who has been victimized by or is at risk of domestic violence.

The Struggle Against Hate Crime: Movement at a Crossroads

Terry A. Maroney

This Note argues that such an extraordinary amount of police, legislative, judicial, scholarly, and community activity around hate crime in such a short period of time—less than two decades—is the result of an emerging social movement against hate crime. If, indeed, “times have changed,” such change is attributable to the rise and societal impact of a social movement dedicated to hate crime victims. This Note further argues that this anti-hate-crime movement has been rapidly assimilated into the institutions of criminal justice, with the result that anti-hate-crime measures now reflect the culture and priorities of those institutions and therefore inadequately alter those institutions’ treatment of hate crime and its victims.

The Due Process Right to Opt Out of Class Actions

Steven T. O. Cottreau

After providing a brief background on class action litigation in Part I, this Note then examines in Part II the first due process issue: opt out fights when a state court lacks adjudicatory jurisdiction to bind the class. This Note argues that the due process requirement of minimum contacts should apply to absent class members in all mandatory class actions. For nonresident class members lacking minimum contacts with the forum, the right to opt out should be required to establish the state court’s jurisdiction to render a binding in personam judgment. The Supreme Court in Shutts so held in a state court class action seeking monetary relief, and this Note argues that the holding in Shutts should extend to all state court class actions, including those seeking nonmonetary relief. In those cases where a single adjudication of a controversy is desirable and no state has adjudicatory jurisdiction to bind the entire class in a mandatory action, the controversy will have to be resolved in multiple actions unless a federal solution exists.