Volume 75, Number 6

December 2000

Corporate Governance Lessons from Russian Enterprise Fiascoes

Merrit B. Fox, Michael A. Heller

Louis & Myrtle Research Professor of Business and Law and Alene & Allen F. Smith Professor of Law, University of Michigan and Professor of Law, University of Michigan, respectively.

This Article draws on a rich array of deviant behavior in Russian enterprises to craft lessons for corporate governance theory. First, Professors Fox and Heller define corporate governance by looking to the economic functions of the firm. Based on this definition, they develop a typology that comprehensively shows all the channels through which bad corporate governance can inflict damage on a country’s real economy. Second, they explain the causes of Russian enterprise fiascoes by looking to the particular initial conditions prevailing at privatization-untenable firm boundaries and insider allocation of firm shares-and the bargaining dynamics that have followed. This focus offers a new perspective for a comparative corporate governance literature derived from United States, Western European, and Japanese models. The analytic tools created in this Article can inform pressing debates across contemporary corporate law, ranging from the theory of the close corporation to the viability of “stakeholder” proposals.

The Public’s Vicinage Right: A Constitutional Argument

Steven A. Engel

Law Clerk to Judge Alex Kozinski of the United States Court of Appeals for the Ninth Circuit. A.B., 1996, Harvard College; M.Phil., 1997, Cambridge University; J.D., 2000, Yale University.

Again and again in notorious criminal trials, courts neglect significant public interests by transferring the trial out of the community in which the crime was committed. The acquittal of the officers who shot Amidou Diallo reflects but the latest of a number of high-profile verdicts in which the change of venue undermined the verdict’s legitimacy, particularly within the community victimized by the crime. American law always has presumed that jurors must be drawn from within the victimized community in order to permit the jury to fulfill its representative and adjudicative functions. Local jurors stamp the community’s judgment on the verdict, permit the trial to serve as an outlet for community concern, and interpret ambiguous statutory terms in light of the common sense of the community. These essential jury functions were understood by the Founders, yet they wholly are absent from the prevailing law governing change of venue motions. In this Article, Steven Engel argues that the public enjoys a constitutional right to adjudicate criminal trials locally. He first examines a series of cases in the 1980s where the Supreme Court recognized that the public enjoys a right of access to criminal proceedings premised on the tradition of public access, the public interest in publicity, and the link between the right and established constitutional values. He then suggests that the public’s “vicinage right” grows from the same soil as does the public’s right of access, has long-standing roots in our legal tradition, continues to serve important public policies, and is implicit in other constitutional doctrines protecting the jury right. Engel concludes that recognizing such a public right would encourage courts to explore alternatives to transfers that would preserve the defendant’s right to an impartial jury without damaging the community interests implicit in the trial by jury.

The Heuristics of Intellectual Due Process: A Primer for Triers of Science

Erica Beecher-Monas

Assistant Professor of Law, University of Arkansas at Little Rock. B.A., 1976, M.S., 1978, J.D.,1988, University of Miami; LLM., 1995, Columbia University.

Scientific evidence is an inescapable facet of modern litigation. The Supreme Court, beginning with the seminal case of Daubert v. Merrell Dow Pharmaceuticals, Inc., and continuing with General Electric Co. v. Joiner and Kumho Tire Co. v. Carmichael, has instructed federal judges to evaluate the scientific validity of such evidence in determining the evidence’s admissibility. In this Article, Professor Erica Beecher-Monas argues that many judges ignore the science component of their “gatekeeping” duties, focusing instead on rules of convenience that have little scientific justification. As a result, she demonstrates that judges reject even scientifically uncontroversial evidence that would have little trouble finding admissibility under the pre-Daubert “general consensus” standard and admit evidence that is scientifically baseless. Such faulty analysis of scientific evidence deprives litigants of intellectual due process from judges and undercuts the proper functioning and credibility of the judicial system. Beecher-Monas contends that understanding certain basic principles underlying all fields of science will enable judges to make better admissibility decisions. Based on the language of science and criteria scientists use to assess validity, as well as the Supreme Court’s requirements in Daubert, Joiner, and Kumho Tire, Beecher-Monas proposes a five-step framework for sound analysis of scientific evidence Size then demonstrates the usefulness of the heuristic in two cases where applying the heuristic would have changed the outcome dramatically. The framework proposed in this Article will allow triers of science to make scientifically justifiable admissibility assessments, and in so doing will give litigants in cases involving scientific evidence the intellectual due process they deserve.


Antitrust and Regulatory Federalism: Races Up, Down, and Sideways

Eleanor M. Fox

Walter J. Derenberg Professor of Trade Regulation, New York University School of Law. B.A., 1956, Vassar College; LL.B., 1961, New York University.

In this Essay, Professor Eleanor Fox analyzes regulatory competition and regulatory federalism with respect to competition law. In considering whether some degree of higher-than-national-level regulation is wise Fox observes possible races to the bottom and the top, as well as the race to be the model for the world. She then analyzes regulatory disregard: the tendency of national systems and their actors to disregard their neighbors and to disregard the problem of excessively overlapping regulatory systems. Professor Fox concludes that there is a modest and marginal race to the bottom; that there is also a race to the top; that there is little competition as such among competition regimes to attract investment, but there is competition between the United States and the European Union to export competition law models to the rest of the world; and that in view of nationalistic races and regulatory disregard, there is a case for the internationalization of certain specific procedures and principles.


RCRA in the Workplace: Using Environmental Law to Combat Dangerous Conditions in Sweatshops

Ariela Migdal

In this Note, Ariela Migdal considers the role of environmental law in the workplace. She argues that the protections environmental law provides against unsafe environmental conditions extend to unsafe conditions on the job. In particular the Resource Conservation and Recovery Act (RCRA) affords citizens broad protection against endangerment caused by solid waste. Migdal considers whether
RCRA’s citizen suit provision could be used to combat dangerous conditions in American garment sweatshops. She examines the factors that have prevented traditional labor laws from addressing these dangerous conditions, applies RCRA’s provision to the case of the garment industry, and concludes that the language and case law of RCRA accommodate its application to some of the dangers present in the sweatshop environment.

Civil Challenges to the Use of Low-Bid Contracts for Indigent Defense

Margaret H. Lemos

In recent years, increasing attention has been directed to the problem of adequate representation for indigent criminal defendants. While overwhelming caseloads and inadequate funding plague indigent defense systems of all types, there is a growing consensus in the legal community that low-bid contract systems-under which the state or locality’s indigent defense work is assigned to the attorney willing to accept the lowest fee-pose particularly serious obstacles to effective representation. In this Note, Margaret Lemos argues that the problems typical of indigent defense programs in general-and low-bid contract systems in particular-can and should be addressed through ยง 1983 civil actions alleging that systemic defects in the state or locality’s chosen method for providing indigent defense services constitute a violation of indigent defendants’ constitutional right to effective assistance of counsel. Lemos concludes that, by addressing the causes of ineffective assistance, such an approach can achieve positive change in a way that case-by-case adjudication of postconviction claims of ineffective assistance cannot.


Seventy-Fifth Anniversary Retrospective: Most Influential Articles

N.Y.U. Law Review Editorial Board

The Editors of the New York University Law Review look back at the first three-quarters of a century of the publication. In light of their commitment to publishing timely and influential scholarship, they have endeavored to highlight those articles that have had the greatest impact on academia, practitioners, the judiciary, and the world beyond. The selection process looked to how often an article has been cited and also considered factors such as its age and extralegal appeal.