112 Yale L.J. 1717 (2003)

Why do we care about the Framers of the Constitution? After all, they lived long ago, in a world that was different in countless ways from ours. Why does it matter what their views were, for any reasons other than purely historical ones? And if we don't care about the Framers, why do we care about their handiwork, the Constitution itself? It was the product of the Framers' times and the Framers' sensibilities. What possible reason can we have for allowing its provisions to rule us today? Even if the Founding generation was exceptionally visionary and enlightened, we would not allow ourselves to be ruled by even the most extraordinary group of people if they lived in another country halfway across the world today. Why do we allow ourselves to be ruled by the decisions of people who lived in a time that was, in every relevant respect, much further away than that?

These might seem to be the most academic of questions. No one seriously disputes that the Constitution is supreme law, and nearly everyone acknowledges that the views of the Framers matter to some degree. Academic or not, though, these questions are important because throughout constitutional law, the role of text and original understandings remains uncertain. Until we have tried to answer the most fundamental skeptical question--why do we care at all about the Framers?--we will not know what role the text and the original understandings should play.

The role of the text and the original understandings may be as much in dispute today as it has ever been. In some areas--federalism, the right to keep and bear arms under the Second Amendment, the Eighth Amendment's protection against cruel and unusual punishment, the Religion Clauses of the First Amendment--there is a concerted effort underway, by advocates and sometimes by judges and Justices, to make constitutional law conform more closely to what are said to be the dictates of the text and the original understandings. To what extent should the original understandings govern the interpretation of those provisions, or of the Free Speech Clause of the First Amendment, or the Fourth Amendment, or the Self-Incrimination or Just Compensation Clauses of the Fifth Amendment, or the Due Process and Equal Protection Clauses of the Fourteenth Amendment, or the structural provisions of the original Constitution? Critics have powerfully attacked the notion that constitutional interpretation can rely exclusively on the text and the original understandings; but as long as the text and original understandings play some role in constitutional interpretation--as essentially everyone agrees they must--these issues about the role of text and original understandings will remain with us, and we will have to address the fundamental question of why the Framers matter at all.

There is no agreed-upon answer to that question. It has been asked before: It was Thomas Jefferson's question at the time of the Founding. "[T]he earth belongs to the living, and not to the dead," he wrote to James Madison from Paris in 1789; so how can any constitution purport to bind later generations? Jefferson was not alone in raising the question at that time--he was not even the most extreme skeptic--but his formulation was the most memorable.

The problem is that Jeffersonian skepticism is very difficult to rebut, on one level, but wholly unpersuasive on another. It is, in fact, hard for anyone who believes in self-government to come up with an explanation for why long-ago generations should have such a decided effect on our law today, whether they are the generation of the Founding, or the Civil War, or any other. But at the same time, Jeffersonian skepticism about the Constitution seems out of touch with the reality of our political and legal culture, or even our culture more generally. Many people revere the Constitution. Many Americans consider themselves connected, in some important way, to earlier generations. American law today seems like a chapter in a multigenerational project, and its multigenerational character is part of the reason it is valued. To many people, allegiance to the Constitution and a certain kind of respect for the Founding, and for crucial episodes in our history, are central to what it means to be an American. All of those attitudes are deeply incompatible with Jefferson's kind of skepticism, and as long as those attitudes remain widespread, Jefferson's skepticism will always seem to many to be a little like a debating point--clever and hard to answer, but somehow deeply wrong.

In this Essay, I want to address these issues in a way that responds to Jefferson--that gives a reason for paying attention to the Constitution that ought to satisfy even a Jeffersonian skeptic--but that also accommodates more deeply held views about the Constitution and American traditions, rather than dismissing those views as mysticism or ancestor worship in the way that Jefferson's skepticism seems to dismiss them. The first part of the answer to Jefferson is confession and avoidance: To a large extent, American constitutional law has developed in a way that is independent of the views of the Founding generation. Much of American constitutional law consists of precedents that have evolved in a common-law-like way, with a life and a logic of their own. But it would be a mistake to say that American constitutional law consists entirely of precedents and is independent of the text and the Framers. The text, unquestionably, and the original understandings, to a lesser degree, continue to play a significant role. We cannot escape Jefferson's question by saying that we have left the Framers behind.

The central answer to Jefferson is that the text of the Constitution provides a common ground among people, and in that way it facilitates the resolution of disputes that might otherwise be intractable. Sometimes, in the familiar formulation, it is more important that things be settled than that they be settled right, and the provisions of the Constitution settle things. The Constitution tells us how long a President's term will be, how many senators each state will have, whether there are to be jury trials in criminal cases, and many other things. Even if the rules the Constitution prescribes are not the best possible rules, they serve the very valuable function of providing an answer so that we do not have to keep reopening those issues all the time.

These justifications, as I will explain, ought to satisfy even the most iconoclastic Jeffersonian skeptic. Equally important, they fit with our current practices of constitutional interpretation. The common law and common ground justifications make sense of the way we interpret the Constitution, including aspects of our practice of constitutional interpretation that otherwise seem quite problematic. The common law and common ground justifications should therefore be acceptable to anyone who finds our current constitutional order generally acceptable, even if that person wants to reject, la Jefferson, anything that might remotely look like ancestor worship.

But at the same time, the common law and common ground justifications do not require anyone to reject more reverential views of the Constitution and the Framers. People who believe, as some do, that the Framers were divinely inspired can accept the common law and common ground justifications; in fact, they have an especially strong reason for accepting those justifications. People who, less dramatically, see themselves as part of an ongoing American tradition that embraces earlier generations also have good reasons to accept those justifications. But people who want to debunk all of that--or who identify with other traditions, religious or ethnic traditions perhaps, that have nothing to do with the Framers--can also accept the common law and common ground justifications. The key idea here is Rawls's famous notion of the overlapping consensus. People who adhere to widely and fundamentally different belief systems, such as different religions, can nonetheless all embrace certain common principles, as can people who reject any religious belief system. That is the kind of justification that adherence to the Constitution and the original understandings requires, and the common law and common ground justifications can, I believe, provide it.

In Part II, I will describe Jefferson's argument, the answers that have customarily been given to it, why those answers are not fully adequate, and how the common law and common ground justifications might provide an answer. In Part III, I will elaborate on the suggestion that part of the answer to Jefferson is that constitutional law has developed in a common-law-like way that is, to a significant extent, independent of the text and the Framers' understandings. Then, in Part IV, I will describe the "common ground" justification for adhering to the text and original understandings on those limited but important occasions when we do so. In Part V, I will try to show how this "common ground" justification makes sense out of current practices that would otherwise be problematic, and I will discuss other implications of that justification for constitutional interpretation.

112 Yale L.J. 1829 (2003)

Why do corporate governance systems differ quite substantially around the world? The American model supervises managers through a board representing a diffuse mass of external shareholders whose rights are defended by a variety of institutional rules (such as those governing insider trading, antitrust, and an open market for corporate control) and by watchdog "reputational intermediaries" (such as accountants, securities analysts, and bond-rating agencies). The claims of employers, suppliers, and buyers are subordinated to shareholder rights. The German model, in contrast, supervises managers by concentrating ownership in blockholders, permitting insider relationships, allowing substantial horizontal coordination among producers, and accepting a variety of "stakeholder" claims on the firm besides those of the shareholders. Japan, as well as Sweden, Austria, and other continental European countries, resembles the German model to varying degrees, while the United Kingdom, Canada, Australia, Ireland, and New Zealand bear closer resemblance to the American system. Just why these differences exist has been the object of vigorous debate both in the legal academy and across many other fields.
 
Mark Roe's new book, Political Determinants of Corporate Governance, vigorously presents the "politics school," of which he is the pioneer and an important leader. Political forces, he argues, account for the difference in choice of corporate governance models among advanced industrial countries. Researchers ask: What are the "legal and institutional preconditions for strong securities markets"? Roe adds politics to the list and puts it in first place. Corporate governance arrangements inside the firm, Roe argues, interact deeply with a nation's politics. Political forces--party systems, political institutions, political orientations of governments and coalitions, ideologies, and interest groups--are the primary determinants of the degree of shareholder diffusion and the relationships among managers, owners, workers, and other stakeholders of the firm. Whatever the formal specifications of corporate law, politics shapes daily the calculations made by all players.
 
Roe argues that where social democracy is strong, shareholder rights are weak, and shareholder diffusion is low. Social democracy gives voice to claims on the firm in addition to those of the shareholders: employee job security, income distribution, regional or national development, social welfare and social stability, and nationalism, to name a few. To counter these competing claims, blockholders resist diffusion of shares in order to maintain leverage in the boardroom, and investors shy away from a system in which they lack protection or dominance.
 
To test this theory, Roe first correlates the degree of shareholder concentration with various indicators of social democratic power, such as partisan composition of governments, employee protection in labor law, and income equality. He finds strong evidence that weak labor correlates with strong diffusion. He then provides qualitative process-tracings (country case studies of the historical evolution of governance patterns) that show how strong labor power inhibits diffusion, and examines the impact of other economic variables--the degree of economic competition and monopoly power--on the degree of shareholder diffusion.
 
Finally, Roe uses his political argument to confront directly a very influential alternative interpretation--the Quality of Corporate Law (QCL) argument, developed by Rafael La Porta, Florencio López-de-Silanes, Andrei Shleifer, and Robert Vishny (LLS&V). Countries with similar levels of QCL, Roe observes, differ in the degree of shareholder diffusion. Therefore, other variables must be in play. The critical one is politics. He demonstrates that for his sample of countries, the political account correlates more strongly than QCL with shareholder diffusion. Advanced industrial countries with high QCL vary considerably in the degree of shareholder diffusion; thus, something else must be at work. That something is the degree of social democratic influence. Roe tests LLS&V's impressive data collection with his own substantial data on political variables, and concludes, in my view convincingly, that politics does better than QCL. QCL can matter, Roe argues, when politics enables it to matter--that is, when property rights are assured, when enforcement and independent judges are allowed to work, and when the political balance in society gives it a place. Even then, the consequences for corporate governance of any given set of laws are driven by politics. Roe's is the only account in the law-and-economics tradition that makes politics explicitly central to an explanation of corporate governance in a comparative and international perspective. For him, political forces not only define the law--they also determine how the law actually operates.
 
In stressing politics, Roe directly challenges other leading interpretations that stress the primacy, and autonomy, of economics, law, and private processes of reputational bonding. Roe's book provides an important opportunity to examine the status of politics in the conflicting interpretations of corporate governance. No one really doubts that politics has something to do with corporate governance, but theorists vary considerably in the status they give to politics in a causal model. Roe is unique among major authors in seeing politics as continuous, ongoing, and primary. For other theorists, politics operates in the distant past, or indirectly, or barely at all.
 
Specifically, Roe's book allows us to examine a contest between his political theory and LLS&V's version of QCL. Although the essays contained in Political Determinants of Corporate Governance are not intended to confront QCL directly--Roe's concern with politics, dating back to the late 1980s, precedes the LLS&V publications that emerged in the late 1990s--they in fact do so. In LLS&V's argumentation, the difference between governance systems arises from the effects of common- versus civil-law legal traditions; politics exists only in the initial choice of legal system in a given jurisdiction. LLS&V then focus on the consequence of this initial act upon the development of corporate governance systems and shareholder diffusion. Yet what a country does with its legal tradition and system turns on politics: the rules that determine the extent of economic competition within and between countries; the laws and decrees that structure banking, corporate finance, and the securities industry; the rules that shape the markets for capital and labor; and the degree of state involvement in the economy. LLS&V make allusions to politics in their analyses of QCL, referring to rule of law, judicial efficiency, and corruption. But politics has no distinct causal status in their argument and, after the initial choice of systems, no longer plays a role in shaping the actual content or use of law.
 
Roe's political theory and the QCL theory are themselves criticisms of an important literature in economics that argues that the efficacy of the market makes regulation unnecessary and renders variation among governance forms unimportant or nonexistent. Competition in product and capital markets forces firms to adopt "rules, including corporate governance mechanisms," that minimize costs in the drive to efficiency. In situations of vigorous competition, the remaining details of corporate governance are irrelevant. The logic of risk diversification will lead to shareholder diffusion. Securities regulation is unnecessary and possibly harmful. An open world economy will lead to convergence. Observed variance in systems among countries would reflect differences in economic competition, shaped by objective characteristics such as size or factor endowments. The empirical critique of this approach, made by Roe and LLS&V, notes that despite increasing international competition, the Berle-Means separation of owners from managers by no means has become universal, and thus other forces must be at work.
 
Another interpretation of diffusion, developed by Brian Cheffins and John Coffee, argues for the private capacity of markets to develop mechanisms of reputation without state intervention, thus implicitly without politics. John Coffee groups Roe with LLS&V and Lucian Bebchuk as sharing the view that "[o]wnership and control cannot easily [be] separate[d] when managerial agency costs are high." Although they disagree "about the causes of high agency costs--i.e., weak legal standards versus political pressures that cause firms sometimes to subordinate the interests of shareholders--they implicitly concur that the emergence of deep, liquid markets requires that the agency cost problem first be adequately resolved by state action." In disagreement, Coffee quite persuasively argues that the Berle-Means model emerged from the behavior of private actors in the United States--bankers such as J.P. Morgan seeking to reassure foreign investors and the leaders of the New York Stock Exchange seeking to attract a particular kind of listing--and out of a particular situation in which state authority was absent. The legal protections came afterward, as shareholders created a constituency seeking the aid of state authority. It is not the law that causes corporate governance, but the reverse. I read Coffee as agreeing that there was a managerial agency problem--investors sought protections--but believing that state regulation was not required to solve it.
 
Coffee rejects Roe's version of a political account, but politics does appear in his analyses in two ways. First, the shareholders lobby for regulation after diffusion has occurred, working through politics to generate QCL. Second, politics is central to Coffee's key variable--the presence or absence of state involvement in economic life--in shaping whether the private mechanisms of investor assurance develop.
 
Arguments using norms and culture generally discount politics. Amir Licht makes an argument stressing culture, path dependence, and norms, while Coffee and Roe have both explored the role of norms in shaping behavior, holding law constant. It is not clear what these arguments make of politics: Does politics shape norms by altering the law and its enforcement in what is acceptable convention, or do norms shape politics and the law? Analyses of social movements and of corporate networks by sociologists and legal scholars explore linkages to politics and public policy.
 
Another important body of literature on corporate governance examines competition among securities regulation and markets. The disagreement between Roberta Romano and Bebchuk on convergence for or against shareholders turns substantially on assumptions about the utility function of politicians: Do they actually seek to attract incorporation, or are they responding to other political calculi, pressures, and interests? That literature recognizes that politics matters, but does not appear to have a substantive theory of politics. The issues about the consequences of U.S. federalism reappear in analyses of the potential for "functional convergence" in international competition among securities markets.
 
Roe's political theory of corporate governance directly confronts these alternative explanations. Whereas his first book explores the U.S. case, the new book combines, integrates, and extends into a comprehensive statement a series of articles, stretching back a decade, that sets the American experience in a comparative framework with other advanced industrial democracies.
 
Roe's argument has become the foundation of the "political theory" of corporate law. Articles that refer to political explanations generally refer to Roe. His particular account is quite powerful, and he has advanced our understanding in developing it. The chapter on what constitutes a political interpretation, however, is by no means closed: There is not one political interpretation, but several. In this regard, Roe opens wider the door for exploration of political influences on corporate law and behavior.
 
A careful reading of Roe's book helps us to evaluate the status of politics in interpretations of corporate governance and to examine the different meanings that can be given to political explanations. There are, thus, two steps to such a discussion. First, how does politics compare to other arguments? Second, which among several political arguments is the most convincing? Roe's admirable account is, in my view, very powerful, indeed superior, in taking the first step: Politics dominates explanations about corporate governance. In taking the second step, however, Roe's position, while still strong, is neither completely convincing nor exhaustive of the political forces at work.
 
Roe's political account is incomplete. He does not consider two significant alternative political analyses. The first is an alternative political preferences and interest group model. Roe stresses the relative power of left versus right, and labor versus capital. But he does not consider issues and interest groups--stressed by Raghuram Rajan and Luigi Zingales --that cut across the class divide, such as industrial sectors, agriculture, religion, and constitutional disputes. The second alternative political model looks at political institutions: Divergence in outcomes reflects differences not in preferences but in the mechanisms of preference aggregation, such as electoral laws, federalism, legislative-executive relations, and party systems. Corporate governance outcomes may reflect, as Marco Pagano and Paolo Volpin argue, the degree to which institutions favor specific coalition formation.
 
Roe simplifies for the purpose of research. His argument is parsimonious. His account of specific country cases, as opposed to the statistical tests, is quite nuanced, subtle, complex, and astute. In fact, in his work I can find passages that demonstrate his complete awareness of most of my objections. He does not, however, consider how these nuances could be integrated into alternative political variables that need examination on their own terms.
 
As a political scientist, my criticisms focus on the political account. This seems appropriate, as politics is the center of his argument. A law professor or economist might pay more attention to Roe's presentation of those arguments. I choose only to summarize his interpretations of the legal and economic issues, and instead focus my comments on his particular version of the political argument.
 
Part I of this Review lays out Roe's political argument and his empirical test of it. Part II explores the contest between Roe's political argument and LLS&V's QCL. Part III situates Roe's political argument in relationship to other political interpretations. Part IV probes the implications of Roe's argument for public policy issues. Part V categorizes the various meanings given to politics in arguments about corporate governance.

112 Yale L.J. 1911 (2003)

How far have America and her courts come since World War II? Even in the wake of September 11th, it seemed they would not again endorse racial intolerance on the level of wholesale internments. This Comment argues, however, that Dasrath v. Continental Airlines, Inc. indicates there has been limited progress since the internment camps and the Supreme Court's validation of those internments in Korematsu v. United States.
 
In Part I, this Comment briefly discusses the months that followed 9/11, noting particularly this country's desire to avoid repeating history. In Part II, this Comment asserts that, notwithstanding the observations of Part I, Korematsu has been reborn. Part II finds Dasrath closely mirrors Korematsu's powerful and peculiar rhetoric, and it concludes that Dasrath accordingly embodies Korematsu. Part III discusses Dasrath's ramifications. It demonstrates that Korematsu was the Court's concession to America's existing anti-Asian and anti-asian American racism. As a reincarnation of Korematsu, Dasrath is a tool for cloaking existing anti-Arab and anti-arab American sentiment in legal legitimacy. Finally, in Part IV, this Comment concludes that Dasrath's insidious purpose indicates America and her courts remain willing to sanction some racist sentiment. While Korematsu has been long reviled, the tolerance for racism manifested in that case continues.
 
I September 11, 2001, was compared, almost immediately, to December 7, 1941. The ensuing debate over the Bush Administration's domestic response to 9/11 similarly included comparisons to the Roosevelt Administration's response to Pearl Harbor.
 
Caution against repeating World War II's race-based internments accompanied those comparisons. Many also feared the courts would resurrect the sort of judicial deference that gave legal legitimacy to the internments--i.e., the courts would "repeat" Korematsu v. United States.
 
These concerns were not overstated. After September 11th, some called for ethnic profiling, insisting that the Constitution permitted it. Others cited Korematsu as favorable precedent. Indeed, even before 9/11, a few commentators still argued that Korematsu had life, though by the 1980s most scholars considered the case functionally dead letter,
 
As the Administration and the courts acted, however, it seemed that, while possibly open to criticism, the response to 9/11 would not sink to race-based internments or Korematsu-like opinions. Following the attacks, our leaders were careful to "acknowledg[e] and celebrat[e] our racial and religious diversity." One year after 9/11, the courts appeared not to be deferring to the executive branch's wartime policies. Scholars who warned of Korematsu-type deference conceded that, while judicial deference today might resemble the deference in Korematsu, the sort of outright racism seen in Korematsu would not withstand modern equal protection review. One commentator--a Columbia University professor-- even referred to Korematsu as an "obscure" Supreme Court case.
 
September 11th did not immediately result in the sort of publicly sanctioned racism that, after Pearl Harbor, had led to Time and Life "how-to" guides for distinguishing, on the basis of physical characteristics alone, between our "friends," the Chinese, and our "enemies," the "Japs." In his September 20, 2001, address to Congress, President Bush asserted several times that America would not profile, saying once, "The enemy of America is not our many Muslim friends; it is not our many Arab friends." America would not repeat the past.
 

 

112 Yale L.J. 1927 (2003)

One need not accept Hobbes's vision of international relations as a perpetual "condition of warre" to recognize that the rule of law does not always govern international affairs. The inevitable tension between foreign policy objectives and rule-of-law values in U.S. foreign affairs law has important implications for treaties, which play dual roles in the American constitutional system: Internationally, treaties represent sensitive political agreements with foreign nations having important implications for U.S. foreign policy. Domestically, treaties enacted pursuant to Article II become "Supreme law" on par with federal legislation. Thus, when interpreting treaties, domestic courts have sought to reconcile these two functions by defending the judicial prerogative to "say what the law is" while simultaneously affording executive treaty interpretations "'great weight.'"

A recent article by Professor Curtis Bradley defends judicial deference to executive treaty interpretation by analogizing this practice to the Supreme Court's two-part test for deference to administrative agency interpretations established in Chevron U.S.A., Inc. v. Natural Resources Defense Council. Accepting that some judicial deference in this realm may be both appropriate and desirable, this Comment nevertheless challenges Chevron's adaptability to judicial treaty interpretation in light of prevailing constitutional and customary international law. In place of Bradley's Chevron paradigm, this Comment offers an alternative analogy from administrative law--Skidmore deference--as a superior paradigm for conceptualizing judicial deference to executive treaty interpretation.