Prof. Eric Talley comments on the antitrust case against Comcast-Time Warner Cable, which has brought to light issues surrounding monopsonies: single, dominant buyers that create imbalances in price purchasing power. Because monopsonists exert considerable influence as dominant buyers, sellers are adversely affected and undermined. According to Talley, Comcast-Time Warner Cable’s defense will likely center around suppliers’ (like Netflix’s) extensive market power, and the cable companies’ ability to translate the merger into more bargaining power for its consumers.
Chhattisgarh's public distribution system (PDS) reforms have been lauded as a model for the National Food Security Act, and as one that other states can emulate. However, one-third of PDS rice consumption growth in Chhattisgarh took place before 2004, despite major reforms implemented by the Raman Singh government. Prof. Prasad Krishnamurthy's findings suggest that sustained reforms can improve PDS access.
With deep sorrow we share the news that our colleague, Prof. Suzanne Scotchmer, passed away on January 30. She joined the Berkeley faculty in 1986 and, despite many offers from other universities, Suzanne remained a devoted and deeply distinguished member of the Berkeley faculty for almost her entire professional life. Suzanne was a brilliant, internationally-renowned economist who made significant contributions to basic as well as applied theory in the areas of game theory, club theory, and patent law and incentives for R&D. She wrote more than 20 books, served as a consultant to the Department of Justice on antitrust, was a fellow of the Econometrics Society, and was highly sought after as a lecturer and speaker at universities across the globe. Read more>
Berkeley Business Law Journal has recently published a new Journal (Volume 10.2). This issue includes articles from practitioners and educators, including:
"Is Self-Regulation the Answer?" - Ian Peck, Kirkland & Ellis; "Charitable Insolvency and Corporate Governance" - Reid Weisbord, Rutgers School of Law; "The Law of Corporate Purpose" - David Yosifon, Santa Clara Law
Download the Journal here.
BCLBE received a cy près award to fund the launch of its Financial Literacy Education and Research Institute. The Institute will research, create, and implement consumer financial education programs that address the complex array of social, psychological, and economic factors that have historically limited efforts to improve consumer financial literacy. The diverse skills of the Berkeley Law faculty and the school's close affiliation with the East Bay Community Law Center uniquely position the Institute for success. Read more>
In his new article in the Journal of Legal Studies, "Rules, Standards, and Complexity in the Cost Benefit Analysis of Capital Regulation", Prof. Prasad Krishnamurthy examines the extent to which cost-benefit analysis can contribute to resolving issues in the regulation of bank capital requirements. He discusses the current regulatory framework and the rationale behind minimum capital requirements, and the perceived failure of those rules to adequately account for risks that resulted in the addition of risk-weighted requirements under the Dodd Frank Act. Krishnamurthy argues that a proper cost-benefit analysis would have exposed some of the possible consequences of risk-based requirements, and perhaps have led to the adoption of simpler rules that would maintain systemic stability. The full paper is available here.
A great opportunity for Berkeley Law and Haas students to participate in a joint venture financing, structuring and drafting competition. The competition entails students being given a complex joint venture financing and structuring hypothetical case and being required to prepare a memo that responds to very specific questions that, to answer, requires the students to explore and understand the strategic, control and economic consequences of different joint venture structuring options. Details and sign-up information (first-come, first served) are here.
Michael Halloran, partner at Pillsbury law firm, has received the 2013 award of the State Bar of California Business Law Section’s Lifetime Achievement. Mr. Halloran is a nationally-recognized authority on corporate and securities law.
California has embarked on an aggressive path to reduce greenhouse gases through curbing the energy consumption of buildings. In September 2013, the CPUC issued a landmark rule allowing state public ratepayer funds to help finance energy efficiency improvements by building owners. One of the most innovative financing mechanisms authorized is a version of On-Bill Repayment financing (OBR) for single-family homeowners, allowing repayment of a private financial institution energy efficiency loan via the utility bill. To help California decision-makers, BCLBE Senior Fellow Lori Bamberger assembled the very first publicly detailed OBR Single-Family Financing Program Chart that compares operating decisions made in Oregon/Washington, New York, Kansas City, and South Carolina.
Ken Taymor recently co-authored a paper titled “Biosimilars And The European Experience: Implications For The United States.” Biosimilars, biotech medicines that can be marketed after their brand name counterparts lose patent protection, could help bend the health care cost curve. Although biosimilars have been available since 2006 within the European Union and are expected to save $15–$44 billion by 2020, the US FDA has yet to finalize the regulatory processes for their approval in the United States. The authors look to the European experience with biosimilars to inform how the US biosimilars market will develop once the FDA acts. Read more>
BCLBE was awarded a grant by the US Department of State to undertake a “Survey of Russian Law Obstacles to Innovation in Russia” in collaboration with the Higher School of Economics in Russia, one of that country’s largest National Research Universities. The joint project will survey Russian entrepreneurs, venture capital firms, university academics and others involved in innovation, research and development, to identify obstacles and lack of incentives in the current Russian Federation legislation that regulates innovation. Read more>
Private banks have been accused of deceiving consumers and investors, taking on excessive risks, and leaving taxpayers to foot the bill. The recent financial crisis and its aftermath have led some observers to ask whether we would be better off with a mix of public and private banks. Prof. Prasad Krishnamurthy discusses whether the Bank of North Dakota, a state-owned bank, could be taken as a model, and what the risks and implications the lending industry could face. Krishnamurthy believes that state-owned or public banks could play a useful role in stabilizing overall lending and mitigating some of the boom and bust cycle in credit markets. (Daily Journal, November 7, 2013 - registration required)
Prof. Stavros Gadinis weighs in on the legal crackdown in Wall Street's mortgage practices and the eventual pioneering use of the law Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). (NYT, October 30, 2013)
On November 8, Prof. Eric Talley hosted a group of students from Alternatives in Action High School, a college- and career-oriented charter school serving primarily students of color, non-English speakers, and those struggling with poverty. Talley gave an overview of legal careers, college admissions, and law school, and gave them a taste of the experience by engaging the students in a mock contracts class on a recent case filed by music producer Quincy Jones against the estate of Michael Jackson.
The recent government shutdown proved how vital it is for the US to reform its budgetary processes. Currently, budgeting differs from almost every other area of federal policy. When Congress and the President cannot agree on other kinds of legislation, existing law remains in effect. But with budget-making, there is no automatic default policy in the absence of congressional action, causing the government to stop functioning. In an Op-Ed piece for the LA Times, Prof. David Gamage and co-author David Louk propose ways to prevent government shutdowns, explaining that if lawmakers fail to agree on a budget, the previous year's spending plan should carry over until a new one is passed. Read more>
On October 19, Profs. Robert Bartlett, Eric Talley and Prasad Krishnamurthy participated in the University of Chicago’s Sloan Conference on Benefit-Cost Analysis of Financial Regulation. The conference explored whether government agencies like the SEC and CFTC should be required to comply with a benefit-cost analysis when they issue financial regulations and, if so, how that benefit-cost analysis should be conducted. Participants contributed their insights into how valuations of the benefits and costs associated with financial regulation can be calculated, or whether they can. Agenda>
The 2012 LIBOR scandal may prove to be one of the most significant events associated with the global financial crisis. In an attempt to inflate profits and appear creditworthy, banks misreported the interest rate they paid when borrowing from other banks. The scandal played out over two “phases”: (1) the distortion of LIBOR reports because of banks’ derivatives positions, and (2) the under-reporting of the cost of debt to avoid external scrutiny by regulators and watchdogs wary of banks’ credit risks. In, “Financial Regulation and the World’s Most Important Number: LIBOR Reporting Behavior during the Credit Crisis,” Prof. Eric Talley focuses on the second phase. He asserts that regulators’ and watchdogs’ reactions - and thus banks’ incentives to misreport - are most significant during episodes of economic crisis/uncertainty. Talley supports his thesis with theanalysis of daily LIBOR reports from 2006-2010. During this time, the data show that participating banks’ reported credit spreads relative to US treasury yields appear to "shrink" (not grow) during moments of heightened economic uncertainty.
On October 26, Profs. Robert Bartlett and Justin McCrary presented their paper “Shall We Haggle in Pennies at the Speed of Light or in Nickels in the Dark?" at the Empirical Legal Studies Conference in Philadelphia. Bartlett and McCrary demonstrated how recent proposals to modify the penny-based system of stock trading may have simultaneous and opposite effects on the incidence of high frequency trading and the trading of undisplayed, or "dark", liquidity. Agenda>
Prof. Robert Bartlett spoke on KCBS Radio about what he calls a "huge legal change" in securities law. Companies are now able to raise equity money without taking the IPO route. Listen to the interview>
Prof. Aaron Edlin recently released a new research paper titled "Activating Actavis," which provides an in-depth analysis of the Supreme Court's recent decision in FTC v. Actavis. You can download the paper here.
Prof. Eric Talley joins the BARBRI Legal Education Advisory Board. BARBRI formed the board to help the company analyze legal education trends and to identify potential solutions for industry challenges. Press release>
Berkeley Business Law Journal has been ranked the nation's top law journal in the discipline of commercial law by ExpressO, one of the top law review submissions companies. The 2013-2014 Submissions Guide has just been released, and can be viewed here. Congratulations to the students of BBLJ!
This year, 30 LL.M. recipients received a Certificate in Business Law from Berkeley Law, the only premier US law school that offers an LL.M. degree over two summers. The flexible curriculum includes business law, intellectual property, and core US law courses. The program is designed
for lawyers educated outside the US who want a renowned Berkeley Law
degree, but can’t leave professional commitments for an entire year. Graduates of this program become part of an exclusive network of lawyers from around the globe. Watch a video about the program.
Prof. David Gamage writes that key reforms are needed to prevent the Affordable Care Act from hurting low- and moderate-income workers. If not, he says businesses may shift some full-time workers to part-time and cut their salaries to circumvent the employer mandates.
The SEC passed a series of rules that would allow for easier and more accessible funding for startups. Prof. Robert Bartlett weighs in, saying that more platforms will emerge "that provide verification services for investors looking to invest in crowd-funded/angel deals." Read more>
In a recently-published LA Daily Journal article, Prof. Eric Talley weighs in on how the job market has changed over the years. Talley claims that the market is most promising for entering lawyers who have developed an appropriate skill set and who are less in need of rudimentary training while on the job.
Prof. Dwight Jaffee testified in Congress that the private market should relieve government-sponsored enterprises Fannie Mae and Freddie Mac of their role in guaranteeing against mortgage borrower defaults.
On June 4th, Prof. Robert Bartlett presented on the JOBS Act at the Graduate School of International Corporate Strategy at Hitotsubashi University in Tokyo, Japan.
Drawing on the diverse skills of the Berkeley Law faculty, BCLBE plans to create a Financial Literacy Education and Research Institute (FLER). The Institute will research, create, and implement consumer financial education programs that address the complex array of social, psychological, and economic factors that have historically limited efforts to improve consumer financial literacy.
Prof. Alan Auerbach writes about corporate tax law
and how it should be updated. He concludes, "US should tax corporate earnings based on where products are sold, not where firm is based." (NYT)
Prof. Aaron Edlin recently posted “The Role of Switching Costs in Antitrust Analysis: A Comparison of Microsoft and Google.” This analysis, co-authored by Robert Harris, addresses the common perception that Google’s current market position and conduct is comparable to Microsoft’s prior to the antitrust action brought against it by the Department of Justice in 1998.
After five years as general counsel of Facebook, Ted Ullyot is stepping down in July. "The timing of when someone leaves a job is almost never accidental," says Prof. Eric Talley. Ullyot's successor will have many legal issues to address, especially in regards to information privacy, Talley adds.
On May 15, Prof. Eric Talley was a panelist on ‘Regulatory Enforcement and the Judiciary,’ which examined the litigation engendered by the global financial crisis. The keynote was delivered by Judge Jed Rakoff, an outspoken critic of the use of settlements to resolve litigation against major financial institutions, arguing that they risk privileging the ‘facade of enforcement.’ The roundtable was hosted by the University of New South Wales.
Robert Bartlett's article, “Making Banks Transparent” (65 Vand. L. Rev. 293-386), has been included in this year’s list of the Ten Best Corporate and Securities Articles. The list is selected by an annual poll of corporate and securities law academics from a field of more than 550 articles published and indexed in legal journals during 2012. Bartlett argues that basic credit risk modeling combined with mandatory bank disclosures would help prevent another round of severe banking crises.
April 24, 2013. Justin McCrary will discuss the economics of safety and policing at Councilmember Schaaf’s Safe Oakland Speaker Series. McCrary will share findings from his recent study, “The Effect of Police on Crime: New Evidence from U.S. Cities, 1960-2010,” including a cost-benefits analysis of policing.
The Inspector General criticized the lack of public education about the IRS’s plans to garnish tax refunds for taxpayers who don’t purchase health insurance under the new Federal Affordable Care Act beginning in 2014. David Gamage weighs in.
April 16, 2013. Prof. Robert Bartlett participated in The JOBS Act: First Year Report Card. This roundtable, hosted by Nixon Peabody in San Francisco, discussed key points such as the effectiveness of the JOBS Act from legal, accounting, and investor perspectives. Bartlett's presentation is here.
April 11, 2013. Berkeley Law Chris Hammond '15 and Will Schildknecht '15 won the 2013 Halloum Negotiation Competition. The competition pairs teams to negotiate hypothetical M&A, financing, and technology licensing transactions. Teams are scored on their preparation, strategy and the outcome. The winners outlasted 48 other competitors to take home the championship and accompanying iPad minis. A big thank you to Skadden and Gibson Dunn, which sponsored the two week long competition.
The America Invents Act of 2011 (AIA) made extensive changes to U.S. patent law. Perhaps the most significant change goes into effect March 16, 2013 when the US changes from the current "first-to-invent" system to the more widely followed "first-to-file" (i.e., first-inventor-to-file) system. Eric Talley discusses the implications for the historic shift in US patent law on KPCC.org. Listen>
Thomas Brown, lecturer at UC Berkeley Law School and partner at Paul Hastings, has submitted a paper to the California State Assembly Banking and Finance Committee. The paper discusses the California Money Transmission Act and its effect on innovation in the payments industry. This includes background on the role that California has played in incubating new technologies for value exchange, the regulatory framework that governs the payment industry, issues that have arisen since the CMTA was last amended, and concludes with some thoughts about possible modifications to the CMTA that would address these issues.
Eric Talley recently joined a panel discussion on AirTalk (KPCC.org) on the implications for corporate governance of shareholder activism. This comes as Apple, PNC Financial Services Group and gun manufactures are each under pressure from activist investors. The panel examines the strategies of all the stakeholders and the history of investor activism. How do shareholder rights coexist or conflict with corporate interests? Should corporate governance be “shareholder-centric” or “board-centric?” Do these new tactics improve the bottom line? Listen to Talley's take.
Regarding tax fraud and identity theft in the Bay Area, David Gamage notes that it is "a risk of the technology age." Read more>
Energy Efficiency Retrofits for U.S. Housing: Removing the Bottlenecks, co-authored by Dwight Jaffee, Nancy Wallace, Ashok Bardhan, and Cynthia Kroll, evaluates the alternative mechanisms that could expedite energy efficiency retrofits for US housing. The paper considers the bottlenecks that hamper energy-saving investments for the residential sector, evaluates the state of the art with respect to scoring and assessment tools for energy saving investments and the On-Bill and PACE programs to facilitate secured loans, and it concludes with a series of proposals to overcome the bottlenecks. Read more>
Berkeley Law Negotiation Team Wins Top Award at Ninth Circuit Bankruptcy Competition. Third-year Berkeley Law students Yulia Buyanin, Cristiana Blauth Oliveira, and Charles Rogerson won top writing honors at the American College of Bankruptcy’s inaugural Ninth Circuit Negotiation Competition. Coached by attorney Suzzanne Uhland, they competed in mock negotiations involving a winery’s debt restructuring. The Berkeley Center for Law, Business and the Economy sponsored the team. The competition was held on the USC campus in Los Angeles, and involved 12 teams from major Western law schools as well as a panel of bankruptcy judges. The event had two components: the preparation of a written term sheet, and a live mock negotiation, both of which pertained to a debt restructuring for a financially distressed winery. The Berkeley Law team's hard work and preparation were amply rewarded, garnering them First Place in the written component of the competition ("Best Term Sheet"). Congrats to Yulia, Cristiana, and Charles. Particular thanks and congratulations go out to Suzzanne Uhland (O'Melveny & Myers), who was invaluable as the team's coach, working with them and challenging them throughout the process.
January 16, 2013. The Oakland Tribune. Prasad Krishnamurthy calls on Feds to restructure underwater mortgages by writing off debt in exchange for equity. Read more>
Stavros Gadinis’ latest article, “From Independence to Politics in Financial Regulation,” is forthcoming in the California Law Review. Gadinis’ work focuses on the intersections between finance and government regulation. This paper takes a global look at how governments reformed their “independent” financial regulatory agencies by making them more politically accountable after the 2007-08 financial crisis. Read more>