A Message from the Editor-in-Chief
Lesley Rae Hamilton
Volume 67, Issue 1
It is a dynamic time for the legal profession. Law firms, big and small, are innovating the way they run their businesses and deliver their services, resulting in positive changes for both clients and attorneys. On the one hand, firms are increasingly placing emphasis on delivering value to clients at a faster rate and for lower fees than ever before through adjustments to the types of services they offer and the manner in which they deliver them. Lawyers, also, are benefitting as legal employers increasingly offer innovative approaches to schedule flexibility, discretionary billing rates, and attorney entrepreneurialism to appeal to the large market of viable legal candidates discontented with the traditional big firm model.
On the Hastings Law Journal, we too continually fine-tune and innovate how we engage with authors and legal scholarship, support and mentor our membership, and contribute to the San Francisco and UC Hastings community to maximize the value delivered by our organization. . . .
Disruptive Innovation: New Models of Legal Practice
Joan C. Williams, Aaron Platt, and Jessica Lee
Volume 67, Issue 1, 1-84
For decades, lawyers have been complaining that they hate working at law firms, and clients have expressed increasing frustration with high legal fees. But complaining is as far as either group went, until recently.
This is perhaps the first attempt at a comprehensive review of a wide variety of new business organizations that have arisen in recent years to remedy the market’s failure to deliver business organizations responsive to the complaints of either lawyers or of clients.
The “New Models of Legal Practice” described here typically offer a new value proposition for lawyers and clients. For lawyers, New Models offer better work-life balance and more control over other aspects of their work lives—in exchange for which lawyers typically shoulder more risk, giving up a guaranteed salary, to be paid instead only for the hours they work. For clients, New Models typically drive down legal fees by sharply diminishing overhead through elimination of expensive real estate and the high cost of training new lawyers, and (again) dispensing with guaranteed salaries.
This Article identifies distinct kinds of New Models being put in place by legal entrepreneurs; Secondment Firms, Law and Business Advice Companies, Law Firm Accordion Companies, Virtual Law Firms and Companies, Innovative Law Firms and Companies, and even Big Law’s entry into New Models. The Article provides useful insight for clients, lawyers dissatisfied with law firms or considering entrepreneurship, and large law firms looking to better respond to the transformation now taking place in the legal sector.
Resurrecting Health Care Rate Regulation
Erin C. Fuse Brown
Volume 67, Issue 1, 85-142
Our excess health care spending in the United States is driven largely by our high health care prices. Our prices are so high because they are undisciplined by market forces, in a health care system rife with market failures, which include information asymmetries, noncompetitive levels of provider market concentration, moral hazard created by health insurance, multiple principal-agent relationships with misaligned incentives, and externalities from unwarranted price variation and discrimination. These health care market failures invite a regulatory solution. An array of legal and policy solutions are typically advanced to control our health care prices and spending, including: (1) market solutions that focus on transparency and consumerism to discipline health care prices; (2) antitrust enforcement to promote competition in the provider market; (3) consumer protections that protect individual uninsured or underinsured patients from unfair prices; (4) health care payment and delivery reforms that alter financial incentives of health care providers to reduce overutilization and improve efficiency; and (5) regulation of provider payment rates. The literature on these health care policy approaches reflects the fragmentation of the U.S. health care system, typically considering each approach in isolation, and it is difficult to make sense of an a la carte menu of approaches. This Article sets forth an analytic framework to simultaneously and comprehensively evaluate all the policy solutions to discipline health care prices by measuring each solution for its ability to address the health care market failures. Applying this policy-against-market-failure analysis leads to the following conclusion: only one solution—rate regulation—is capable of addressing the widespread and growing provider monopoly problem. More politically popular market approaches such as price transparency and payment and delivery reforms can correct the market failures from information asymmetries and principal-agent problems, but because they do not address the market power of providers, they will be ineffective to control health care prices and spending without accompanying rate regulation. It is time to resurrect rate regulation and place it squarely in the center of any policy strategy to control health care prices and spending.
Overcoming the Public-Private Divide in Privacy Analogies
Volume 67, Issue 1, 143-94
When a photographer takes unauthorized aerial photographs of a company’s plant, the legal framework under which courts evaluate the case, as well as its likely outcome, depends on whether the photographer was hired by a private actor or the government. If a competitor hired the photographer, the aerial photography may constitute improper trade secret misappropriation. If, however, the government hired the photographer, the aerial photography would not violate the Fourth Amendment. This dichotomy illustrates a public-private divide in which privacy violations by the government are treated differently from privacy violations by the private sector. Despite this divide, some courts have analogized from the Fourth Amendment to the trade secret context, while the Supreme Court has rejected such an analogy in the opposite direction.
A similar but reverse phenomenon occurs in the workplace privacy context. Traditionally, whether an employee whose privacy has been invaded by an employer is likely to prevail in court depends in part on whether the employer is in the public or private sector. The longstanding wisdom is that public-sector employees receive stronger workplace privacy protections than similarly situated private-sector employees as a result of Fourth Amendment protections. Nonetheless, unlike the trade secret context, Supreme Court precedent suggests that private-sector analogies are appropriate in evaluating public workplace privacy cases.
Volume 67, Issue 1, 195-258
Technological advances in recent decades have enabled an unprecedented level of surveillance by the government and permitted law enforcement to gather, store, and retrieve in real time enormous amounts of data. After nearly a century of limited record-making and enhanced confidentiality regarding juveniles, these data collection practices have quickly expanded to include youth. This Article uncovers the vast extent of modern data collection and distribution about juveniles by the criminal justice system from juvenile sex offender registration and their inclusion in gang and DNA databases, to schools turned into mandated law enforcement informants, to police and courts increasingly sharing juvenile records with employers, public housing authorities, colleges, and the general public.
The expansion of this modern culture of “dataveillance” to youth has profound implications. It not only harms individual youth in permanent and stigmatizing ways, it reshapes the very meaning of childhood, breaching its protected space and contradicting the special understandings that dominate the regulation of youth. It also distorts perceptions of juveniles in ways that have lasting policy consequences. Moreover, this distortion is visited especially heavily on minority youth and constitutes an engine of racial bias and punitive reforms in its own right.
Putting the developmental characteristics of youth, and childhood, at the center of the analysis, this Article reveals the incoherence and destructiveness of databasing delinquency. Mindful of the public safety benefits and inevitability of law enforcement information gathering, it calls for reforms that would limit the amount of information gathered, stored, and shared about juveniles. These reforms would add appropriate restraints to law enforcement data collection so that public safety gains from databasing do not come at the expense of juvenile privacy, juveniles’ life chances, or childhood itself.
The Problem of Reverse Payments in the Pharmaceutical Industry Following Actavis
Volume 67, Issue 1, 259-92
Reverse payments are payments that are made as a component of a patent infringement settlement, between a brand-name pharmaceutical company to a competitor who is attempting to market a generic version of the patented brand-name drug. The patentee not only drops its patent infringement suit against the generic manufacturer, but also compensates this alleged infringer. Reverse payment settlements raise antitrust concerns because they suggest that the generic manufacturer could have proved the brand-name’s patent either invalid or non-infringed, and thus entered the marketplace to provide consumers with lower priced generic drugs, if they had continued with the litigation. This also insinuates that the motive behind the payment was to persuade the generic manufacturer to delay marketing its lower priced drug, and therefore prolong the brand-name company’s monopoly. By settling with the generic manufacturer, the brand-name company is able to continue selling its pharmaceutical at a monopoly-set price, at the expense of consumers who are forced to pay higher costs for their medications.
In FTC v. Actavis, Inc., the Supreme Court held that reverse payment settlements sometimes violate antitrust laws, and that each settlement should be reviewed on a case-by-case basis, under the antitrust rule of reason standard, to determine if it is illegal. Under the rule of reason, courts must weigh the procompetitive and anticompetitive effects of the settlement to determine whether the payment is reasonable. The Supreme Court, however, declined to provide a framework for the rule of reason analysis of reverse payment settlements, leaving it to the lower courts to establish.
Following this decision, district courts have diverged greatly in their application of Actavis to the reverse payment settlements before them. Some courts believe Actavis directs antitrust scrutiny only to settlements involving monetary payment, while others believe the holding also applies to noncash settlements. This Note argues that Actavis antitrust scrutiny should be applied not only to monetary settlements, but also to nonmonetary settlements, because reverse payments can bring a risk of significant anticompetitive effects regardless of the particular form of the transfer of value. Additionally, this Note proposes a model of analysis to apply when determining whether the terms of a nonmonetary settlement violate antitrust law.
Whaling in Circles: The Makahs, the International Whaling Commission, and Aboriginal Subsistence Whaling
Volume 67, Issue 1, 293-322
In Anderson v. Evans, the Ninth Circuit held that the International Whaling Commission (“IWC”) Schedule’s approval of a quota to hunt whales for the Native American Makah Tribe (“Makahs”) violated the Marine Mammal Protection Act. The implications of this holding were troubling: despite the U.S. government and the IWC approving, on domestic and international levels, the Makahs’ whaling proposal in the 1990s, the Makahs were still unable to hunt whales legally. The Makahs’ right to whale stemmed from the 1855 Neah Bay Treaty, an agreement between the Makahs and the U.S. government in which the government promised the Makahs the right to whale. However, the enactment of a domestic law called the Whaling Convention Act in 1949 superseded the treaty, rendering it void.
Yet, enforcement of these domestic and international approvals presents problems. First, allowing the Makahs to resume whaling risks setting a dangerous precedent that will trigger a “domino effect,” causing other countries to resume whaling as well. Further, the international community might perceive the IWC’s approval of the Makahs’ whaling as favoritism to the United States. Such a perception might lead to further fragmentation of the global community regarding whaling. Accordingly, this Note suggests that the moratorium on whaling be lifted for specific whale stocks because oftentimes, a complete ban results in unnecessary and avoidable violations of the law. Further, this Note suggests that other countries be allowed to whale under science-based IWC regulations to achieve international consensus and yield better compliance.