A central but generally neglected objective of federal regulation of pension and welfare benefit plans was to improve overall economic efficiency by providing workers with accessible and reliable information on which to base their career and financial planning. Simple dissemination of plan terms and financial data (full disclosure) cannot achieve that objective because few workers are equipped with the skills needed to evaluate the costs and benefits of complex retirement saving or health care programs. For that reason ERISA, the Employee Retirement Income Security Act of 1974, requires curated disclosure of plan-related information: it must be presented a format that is both understandable to the average plan participant and sufficiently complete to empower workers to make best use of the program. The length and complexity of most employee benefit plans creates tension between understandability and completeness, calling for tradeoffs to achieve optimal disclosure. As implemented ERISA’s understandability standard has been jettisoned by plan sponsors seeking protection from liability for failing to tell workers enough. Required plan summaries became unreadable, but plan sponsors could get away with that, both because there was no administrative or judicial enforcement of the understandability standard, and because they could tout the advantages of their benefit plans to workers by means of unregulated informal communications. The demise of understandability is only half the story. Federal courts also degraded the reliability of mandatory disclosures by finding that the obligation to provide reasonably accurate and complete information is enforceable only in a suit for appropriate equitable relief. In consequence, disclosure defects are often presented as estoppel claims, which triggers search for individual detrimental reliance, and translates into widespread under-enforcement of the reliability standard. This article explores the policy dimension of ERISA disclosure law and chronicles the decay of the equilibrium Congress envisioned. From the perspective of workers it is a saga of disappointment, disillusionment, and defeat. The new balance serves the interests of federal courts (reduced caseload) and some employers (increased flexibility), but likely contributes to the increasing standardization of employee benefit plans, decreasing their utility as instruments of workforce management. Far worse, it abandons ERISA’s goal of improved economic performance through better-informed career and financial planning. Yet those costs are not immutable: employers’ liability exposure could be recalibrated by regulation to revive understandability and approach optimal disclosure.
{"title":"Unbelievable: ERISA's Broken Promise [ver. 4.0; August 2021]","authors":"Peter J. Wiedenbeck","doi":"10.2139/ssrn.3900735","DOIUrl":"https://doi.org/10.2139/ssrn.3900735","url":null,"abstract":"A central but generally neglected objective of federal regulation of pension and welfare benefit plans was to improve overall economic efficiency by providing workers with accessible and reliable information on which to base their career and financial planning. Simple dissemination of plan terms and financial data (full disclosure) cannot achieve that objective because few workers are equipped with the skills needed to evaluate the costs and benefits of complex retirement saving or health care programs. For that reason ERISA, the Employee Retirement Income Security Act of 1974, requires curated disclosure of plan-related information: it must be presented a format that is both understandable to the average plan participant and sufficiently complete to empower workers to make best use of the program. The length and complexity of most employee benefit plans creates tension between understandability and completeness, calling for tradeoffs to achieve optimal disclosure. As implemented ERISA’s understandability standard has been jettisoned by plan sponsors seeking protection from liability for failing to tell workers enough. Required plan summaries became unreadable, but plan sponsors could get away with that, both because there was no administrative or judicial enforcement of the understandability standard, and because they could tout the advantages of their benefit plans to workers by means of unregulated informal communications. The demise of understandability is only half the story. Federal courts also degraded the reliability of mandatory disclosures by finding that the obligation to provide reasonably accurate and complete information is enforceable only in a suit for appropriate equitable relief. In consequence, disclosure defects are often presented as estoppel claims, which triggers search for individual detrimental reliance, and translates into widespread under-enforcement of the reliability standard. This article explores the policy dimension of ERISA disclosure law and chronicles the decay of the equilibrium Congress envisioned. From the perspective of workers it is a saga of disappointment, disillusionment, and defeat. The new balance serves the interests of federal courts (reduced caseload) and some employers (increased flexibility), but likely contributes to the increasing standardization of employee benefit plans, decreasing their utility as instruments of workforce management. Far worse, it abandons ERISA’s goal of improved economic performance through better-informed career and financial planning. Yet those costs are not immutable: employers’ liability exposure could be recalibrated by regulation to revive understandability and approach optimal disclosure.","PeriodicalId":344149,"journal":{"name":"Washington University in St. Louis School of Law Legal Studies Research Paper Series","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125174370","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Courts assessing compensatory damages awards often lack adequate information to determine the value of a victim’s loss. A central reason for this problem, which the literature has thus far overlooked, is that courts face a dilemma when applying their standard information-forcing tool to the context of damages. Specifically, the standard method by which courts obtain information is through a burden of proof. In the context of assessing damages, this means a rule requiring plaintiffs to prove the value of a loss with precision. But courts will often face a situation where it is clear that the plaintiff has suffered a loss, but where the plaintiff cannot prove the exact amount of the loss. A court that strictly enforces the burden of proof would award zero damages in such a case, producing a harsh result. But a court that avoids this result by instead awarding its best guess at the correct amount — effectively forgiving the inadequacy of plaintiff’s proof — then undermines future incentives for plaintiffs to produce rigorous evidence.The result of this dilemma is that courts oscillate between strict and forgiving approaches, causing much confusion. Explaining the dilemma helps alleviate the confusion and points to a solution. In principle, courts should require a party to produce damages evidence if, and only if, the party is the lower cost provider of that evidence, and the benefit of having the evidence outweighs the cost of collecting it. The messy legal standards for calculating damages in various fields can be understood as clumsy attempts by courts to arrive at this unifying principle. Interpreting the vague and messy doctrine in light of this “cheaper cost-effective producer” principle thus helps make damages law more coherent.
{"title":"The Information-Forcing Dilemma in Damages Law","authors":"Tun-Jen Chiang","doi":"10.2139/ssrn.2829179","DOIUrl":"https://doi.org/10.2139/ssrn.2829179","url":null,"abstract":"Courts assessing compensatory damages awards often lack adequate information to determine the value of a victim’s loss. A central reason for this problem, which the literature has thus far overlooked, is that courts face a dilemma when applying their standard information-forcing tool to the context of damages. Specifically, the standard method by which courts obtain information is through a burden of proof. In the context of assessing damages, this means a rule requiring plaintiffs to prove the value of a loss with precision. But courts will often face a situation where it is clear that the plaintiff has suffered a loss, but where the plaintiff cannot prove the exact amount of the loss. A court that strictly enforces the burden of proof would award zero damages in such a case, producing a harsh result. But a court that avoids this result by instead awarding its best guess at the correct amount — effectively forgiving the inadequacy of plaintiff’s proof — then undermines future incentives for plaintiffs to produce rigorous evidence.The result of this dilemma is that courts oscillate between strict and forgiving approaches, causing much confusion. Explaining the dilemma helps alleviate the confusion and points to a solution. In principle, courts should require a party to produce damages evidence if, and only if, the party is the lower cost provider of that evidence, and the benefit of having the evidence outweighs the cost of collecting it. The messy legal standards for calculating damages in various fields can be understood as clumsy attempts by courts to arrive at this unifying principle. Interpreting the vague and messy doctrine in light of this “cheaper cost-effective producer” principle thus helps make damages law more coherent.","PeriodicalId":344149,"journal":{"name":"Washington University in St. Louis School of Law Legal Studies Research Paper Series","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-08-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133338788","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Future generations will look back at the first decade of the twenty-first century as a pivotal time when a huge economic barrier was erected to encumber the path to a legal career. The symbolic announcement of this barrier rang out when annual tuition crossed the $50,000 threshold, now exceeded at a dozen or so law schools. Including fees and living expenses, it costs well in excess of $200,000 to obtain a law degree at most of the nation’s highly regarded law schools and at a number of non-elite ones as well. Law schools thus impose a formidable entry fee on anyone who wishes to follow what, until recently, has long served as a means of upward mobility and access to power in American society. The pricing structure of legal education has profound class implications. High tuition will inhibit people from middle-class and poor families more than it will deter the offspring of the rich with ample resources. Law school scholarship policies, for reasons I will explain, in effect channel students with financial means to higher ranked law schools, reaping better opportunities, while sending students without money to lower law schools. A growing proportion of elite legal positions will be held by people from wealthy backgrounds as a result. For students who rely on borrowing to finance their legal education, the heavy debt they carry will dictate the types of jobs they seek and constrain the career they go on to have. Liberal law professors often express concerns about class in American society — championing access to the legal profession and the provision of legal services for underserved communities. Yet as law school tuition rose to its current extraordinary heights, progressive law professors did nothing to resist it. This Article explores what happened and why. This is offered in the spirit of critical legal studies — as a critical self-examination of the failure of leftist law professors. The Crits were highly critical of complacent liberal academics of their day, arguing that they had a hand in perpetuating an unjust legal system; here I charge liberal legal academia — including the Crits — with perpetuating the profoundly warped and harmful economics of legal education. What follows will offend many of my fellow liberals. It may even lose me some friends. Liberal law professors must see past their anger to reflect on whether there is a core truth to my arguments, to take personal responsibility for what has happened, and to engage in collective action to do something to alter the economics of our operation. If not, the current economic barrier to a legal career may become permanent.
{"title":"The Failure of Crits and Leftist Law Professors to Defend Progressive Causes","authors":"B. Tamanaha","doi":"10.2139/SSRN.2256725","DOIUrl":"https://doi.org/10.2139/SSRN.2256725","url":null,"abstract":"Future generations will look back at the first decade of the twenty-first century as a pivotal time when a huge economic barrier was erected to encumber the path to a legal career. The symbolic announcement of this barrier rang out when annual tuition crossed the $50,000 threshold, now exceeded at a dozen or so law schools. Including fees and living expenses, it costs well in excess of $200,000 to obtain a law degree at most of the nation’s highly regarded law schools and at a number of non-elite ones as well. Law schools thus impose a formidable entry fee on anyone who wishes to follow what, until recently, has long served as a means of upward mobility and access to power in American society. The pricing structure of legal education has profound class implications. High tuition will inhibit people from middle-class and poor families more than it will deter the offspring of the rich with ample resources. Law school scholarship policies, for reasons I will explain, in effect channel students with financial means to higher ranked law schools, reaping better opportunities, while sending students without money to lower law schools. A growing proportion of elite legal positions will be held by people from wealthy backgrounds as a result. For students who rely on borrowing to finance their legal education, the heavy debt they carry will dictate the types of jobs they seek and constrain the career they go on to have. Liberal law professors often express concerns about class in American society — championing access to the legal profession and the provision of legal services for underserved communities. Yet as law school tuition rose to its current extraordinary heights, progressive law professors did nothing to resist it. This Article explores what happened and why. This is offered in the spirit of critical legal studies — as a critical self-examination of the failure of leftist law professors. The Crits were highly critical of complacent liberal academics of their day, arguing that they had a hand in perpetuating an unjust legal system; here I charge liberal legal academia — including the Crits — with perpetuating the profoundly warped and harmful economics of legal education. What follows will offend many of my fellow liberals. It may even lose me some friends. Liberal law professors must see past their anger to reflect on whether there is a core truth to my arguments, to take personal responsibility for what has happened, and to engage in collective action to do something to alter the economics of our operation. If not, the current economic barrier to a legal career may become permanent.","PeriodicalId":344149,"journal":{"name":"Washington University in St. Louis School of Law Legal Studies Research Paper Series","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128986329","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A large share of the more than $5.5 trillion in private pension plan assets is held in certain types of indirect investment vehicles. If those vehicles file their own annual return with the Department of Labor they are called "direct filing entities" (or DFEs), and pension plans that invest in them are excused from providing detailed information concerning the assets, liabilities, and investment performance of the DFEs. Consequently, the publicly-available summary financial information reported by pension plans investing through one or more DFEs is seriously incomplete: while a plan must identify the categorical nature of its direct investments (for example, as common or preferred stock, corporate or government debt, real estate, etc.), indirect investments through a DFE are reported only as interests in the DFE, without regard to the underlying nature of the DFE‘s assets and liabilities. Matching the DFE‘s return with the returns filed by plans that invest through the DFE is theoretically possible, but it is technically difficult and has not been comprehensively achieved.This study undertakes the task of linking returns filed by large private pension plans and DFEs in 2008. After explaining the types of DFEs, summary statistics on the extent of pension plan investment through DFEs and the composition of DFE portfolios are reported. The process employed to link the holdings of each DFE to its investor plans is described, followed by description and analysis of the results. Important differences in the asset allocations of pension plans of various types are revealed, and the portfolio compositions of plans that do and do not invest through DFEs are compared. Because 35 percent of plans that invest in a DFE are found to file internally inconsistent returns which preclude successful linking of DFE financial information to the investor plan, the plan characteristics associated with such deficient filings are investigated. Although the composition of DFE portfolios is currently invisible to plan participants and the general public, we find little evidence that DFEs have been systematically exploited to obscure the identity of pension plan investments. Finally, the results of this study are reviewed in light of the purposes of pension plan financial disclosure. Even if routine, accurate, and comprehensive matching of DFE financial information with investor plans were available, ERISA‘s text and policies support the regulatory formulation of a far more detailed digital disclosure regime.
{"title":"Invisible Pension Investments","authors":"Peter J. Wiedenbeck, R. Hinkle, Andrew D. Martin","doi":"10.2139/SSRN.2079298","DOIUrl":"https://doi.org/10.2139/SSRN.2079298","url":null,"abstract":"A large share of the more than $5.5 trillion in private pension plan assets is held in certain types of indirect investment vehicles. If those vehicles file their own annual return with the Department of Labor they are called \"direct filing entities\" (or DFEs), and pension plans that invest in them are excused from providing detailed information concerning the assets, liabilities, and investment performance of the DFEs. Consequently, the publicly-available summary financial information reported by pension plans investing through one or more DFEs is seriously incomplete: while a plan must identify the categorical nature of its direct investments (for example, as common or preferred stock, corporate or government debt, real estate, etc.), indirect investments through a DFE are reported only as interests in the DFE, without regard to the underlying nature of the DFE‘s assets and liabilities. Matching the DFE‘s return with the returns filed by plans that invest through the DFE is theoretically possible, but it is technically difficult and has not been comprehensively achieved.This study undertakes the task of linking returns filed by large private pension plans and DFEs in 2008. After explaining the types of DFEs, summary statistics on the extent of pension plan investment through DFEs and the composition of DFE portfolios are reported. The process employed to link the holdings of each DFE to its investor plans is described, followed by description and analysis of the results. Important differences in the asset allocations of pension plans of various types are revealed, and the portfolio compositions of plans that do and do not invest through DFEs are compared. Because 35 percent of plans that invest in a DFE are found to file internally inconsistent returns which preclude successful linking of DFE financial information to the investor plan, the plan characteristics associated with such deficient filings are investigated. Although the composition of DFE portfolios is currently invisible to plan participants and the general public, we find little evidence that DFEs have been systematically exploited to obscure the identity of pension plan investments. Finally, the results of this study are reviewed in light of the purposes of pension plan financial disclosure. Even if routine, accurate, and comprehensive matching of DFE financial information with investor plans were available, ERISA‘s text and policies support the regulatory formulation of a far more detailed digital disclosure regime.","PeriodicalId":344149,"journal":{"name":"Washington University in St. Louis School of Law Legal Studies Research Paper Series","volume":"51 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122877835","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2012-02-09DOI: 10.4337/9781784719463.00025
J. Contreras
Almost every product sold today must conform to standards, whether relating to its design, manufacture, operation, testing, safety, sale or disposal, and sometimes to many of these at once. At their root, standards are no more than written requirements or design features of a product, service or other activity. They can be breathtakingly detailed or disarmingly general, ranging from thousands of pages in length to just a few sentences. Standards are set by a wide range of bodies, from governmental agencies to industry consortia to multinational treaty organizations. Some standards are adopted into local, state or federal legislation and attain the force of law, others remain voluntary, yet are adopted by entire industries. This chapter provides a brief overview of the standards development landscape as it pertains to climate change technologies, also sometimes referred to as "clean tech", "green tech" and sustainability technologies, as well as the critical intellectual property issues that affect standards setting today.
{"title":"Standards and Related Intellectual Property Issues for Climate Change Technology","authors":"J. Contreras","doi":"10.4337/9781784719463.00025","DOIUrl":"https://doi.org/10.4337/9781784719463.00025","url":null,"abstract":"Almost every product sold today must conform to standards, whether relating to its design, manufacture, operation, testing, safety, sale or disposal, and sometimes to many of these at once. At their root, standards are no more than written requirements or design features of a product, service or other activity. They can be breathtakingly detailed or disarmingly general, ranging from thousands of pages in length to just a few sentences. Standards are set by a wide range of bodies, from governmental agencies to industry consortia to multinational treaty organizations. Some standards are adopted into local, state or federal legislation and attain the force of law, others remain voluntary, yet are adopted by entire industries. This chapter provides a brief overview of the standards development landscape as it pertains to climate change technologies, also sometimes referred to as \"clean tech\", \"green tech\" and sustainability technologies, as well as the critical intellectual property issues that affect standards setting today.","PeriodicalId":344149,"journal":{"name":"Washington University in St. Louis School of Law Legal Studies Research Paper Series","volume":"568 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130076141","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Article both identifies and corrects a blind spot in the literature on optimal patent protection for improvements. Contemporary theories cannot explain why a set of easy cases - cases in which earlier inventors’ patent claims routinely do and should expand over time to encompass later-developed improvements - are easy cases. To explain these cases, patent theory must identify the inventions of earlier and later inventors in a different manner. Today, inventions are viewed simply as innovative things or sets of innovative things. This Article demonstrates that the locus of invention must be identified in a finer-grained manner: the inventions of the successive inventors in an improvement scenario must be identified as the particular properties of innovative things that make them innovative. Identifying innovative properties as the locus of invention has two principal benefits. First, it reduces the explanatory gap between the economic theory on patent protection for improvements and the uncontroversial reality of the contemporary patent regime. It reliably distinguishes the easy cases from the difficult ones, and it explains why the cases are either easy or difficult. Second, it allows the economic concepts of complements and substitutes to be brought to bear on the crafting of optimal claim scope - a task that these concepts have not previously been thought suitable to perform. The easy cases are cases in which the innovative properties of subsequent inventors are pure complements, and the difficult cases are cases in which the innovative properties of subsequent inventors are complement-substitute mixtures.
{"title":"Getting into the 'Spirit' of Innovative Things: Looking to Complementary and Substitute Properties to Shape Patent Protection for Improvements","authors":"K. Collins","doi":"10.15779/Z38VQ48","DOIUrl":"https://doi.org/10.15779/Z38VQ48","url":null,"abstract":"This Article both identifies and corrects a blind spot in the literature on optimal patent protection for improvements. Contemporary theories cannot explain why a set of easy cases - cases in which earlier inventors’ patent claims routinely do and should expand over time to encompass later-developed improvements - are easy cases. To explain these cases, patent theory must identify the inventions of earlier and later inventors in a different manner. Today, inventions are viewed simply as innovative things or sets of innovative things. This Article demonstrates that the locus of invention must be identified in a finer-grained manner: the inventions of the successive inventors in an improvement scenario must be identified as the particular properties of innovative things that make them innovative. Identifying innovative properties as the locus of invention has two principal benefits. First, it reduces the explanatory gap between the economic theory on patent protection for improvements and the uncontroversial reality of the contemporary patent regime. It reliably distinguishes the easy cases from the difficult ones, and it explains why the cases are either easy or difficult. Second, it allows the economic concepts of complements and substitutes to be brought to bear on the crafting of optimal claim scope - a task that these concepts have not previously been thought suitable to perform. The easy cases are cases in which the innovative properties of subsequent inventors are pure complements, and the difficult cases are cases in which the innovative properties of subsequent inventors are complement-substitute mixtures.","PeriodicalId":344149,"journal":{"name":"Washington University in St. Louis School of Law Legal Studies Research Paper Series","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116280512","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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