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Penn Law Professors Talk with Federal Judges about Legal Education, Privacy Rights and Corporate Governance

May 11, 2009

Legal education is entering a time of ferment and innovation, laws should recognize a right to privacy in public places, and the government’s intervention in the economy raises challenging questions for corporate law, three Penn Law professors told the Third Circuit Judicial Conference during its meeting in Philadelphia, May 4-6.

“Telling the faculty we should reform the curriculum used to be a little bit like the president going to Congress saying, ‘We need Social Security reform,’” said Dean Michael A. Fitts. Curriculum reform has moved from being “the third rail” of legal education to Priority One at many top law schools, Fitts told the judges, practitioners and scholars in attendance.
 
At Penn Law, for example, students are encouraged to take up to four courses at one of Penn’s other professional or graduate schools; the first-year curriculum includes offerings in international, comparative and administrative law and an expanded focus on legal writing, in addition to the traditional Socratic courses on common law; and the second and third years emphasize interdisciplinary study and professional skills building.
 
Today’s graduating lawyers must be knowledgeable in their clients’ business in addition to knowing the law – be problem solvers, not just issue spotters – Fitts said. He described a negotiations class co-taught by Penn Law and the Wharton School, in which the law and business students negotiate with each other at the end of the semester.
 
“The Wharton students always make a million dollars, or they go bankrupt; the law students never hit it big, but they never go bust,” Fitts said to laughter. “When I would tell that story three years ago, people would say that it was good for law students to learn how business students approached risk. Now, they tend to see it the other way around.” [Coverage of Fitts’ talk by the Legal Intelligencer can be found here.]
 
Professor Anita L. Allen asked the judges to guard against governmental invasion of privacy rights as we implement necessary security enhancements to counter terroristic threats.  Allen explained that, recognizing that privacy rights cannot be absolute, she asks a senior Manhattan district attorney, Peter Casolaro, to lecture students in her privacy law classes about the importance  to modern law enforcement of surveillance cameras and access to telephone records and computers.
 
But, “we actually do have privacy interests in public places,” she said, criticizing New York City’s plans to monitor all public spaces in mid-town Manhattan and the financial district with hundreds of video cameras, license plate scanners and other technology.  From Plato’s fable about the abuses of a shepherd who could make himself invisible to Supreme Court Justice Louis Brandies’ definition of privacy as involving “inviolate personality” and the 1967 ruling in Katz v. U.S. that said “a man committing a crime on a telephone in a booth on a public street” had a reasonable expectation that his conversation would be private, leading thinkers have found room for personal privacy in public spaces, she said.
 
“We have moral interest in not being watched and listened to unaccountably,” Allen concluded.

 

Professor Edward B. Rock, co-director of the Institute for Law and Economics, said that “at every aspect of the standard corporate law framework, you see serious questions” raised by the government’s bailout of the financial sector and its involvement in automobile bankruptcy.
 
A $375 billion equity infusion by the government into more than 500 companies gives the government an equity interest, and sometimes controlling interest, in those companies. But while corporate law requires shareholders to act in their own interests and those of the company, the government pursues what it believes to be society’s interest, Rock said.
 
For example, 90 percent of the creditors who went along with the Chrysler bankruptcy were part of the federal bailout, Rock added.   “The government told them, ‘For the national good, you guys should accept some pain,’ so they acquiesced and took a smaller return on what they were owed than what other creditors are likely to get.
 
“That’s not acting in interests of their company or shareholders, but is acting in the interests of another company, a company that is also in the controlling shareholders’ portfolio. Typically,” Rock pointed out, “that leads to lawsuits over breaching fiduciary responsibility.”