A Note from the Dean
Dear Alumni and Friends:
As we finished producing this issue of the Cornell Law Forum, we received the sad news that Jack G. Clarke, LL.B. ’52, had passed away. Jack, a deeply devoted Cornellian, was one of the most transformative and visionary figures in the history of Cornell Law School.
Jack’s love for the school inspired him to make extraordinary philanthropic investments here, naming centers and programs in international law and in business law, as well as several professorships and scholarships. But Jack’s support of the people at Cornell went beyond his financial support and reflected his own personal passion and respect for the academic enterprise and for the intellectual life of the Law School.
Coincidentally, we had already planned to focus this issue of the Forum on the tremendously successful Jack G. Clarke Institute for the Study and Practice of Business Law, which was created in 2007 following a $5 million gift from Jack. That gift remains “the largest single investment in business law in the history of the Law School” as former Dean Stewart J. Schwab noted in a Forum article at the time. It has been enhanced over the intervening years by numerous significant gifts from other Law School alumni who shared Jack’s vision for the Institute. We devote the bulk of this edition to exploring how that “investment” has grown over the past twelve years.
Through a series of articles, sidebars, and essays, organized under the theme “The Second Decade of the Clarke Business Law Institute,” this issue demonstrates how the Law School has become a business law powerhouse thanks to the visionary philanthropy of Clarke and his fellow alumni. Since 2007, we’ve gone from one untenured faculty member in business law to four tenured professors who are leaders in their fields and expanded from a smattering of business law courses to several dozen in the business law concentration.
With its exceptional faculty, innovative and cutting-edge programs and clinics, and dynamic and innovative curriculum, the CBLI has established its place among the preeminent programs in the nation. However, it is just one part of a much broader foundation of support that Jack has built at Cornell Law School over the past few decades.
No one has done more to cement Cornell Law School’s commitment to global engagement than Jack, who developed a passion for international law while at Cornell. During his career, he spent thirty-five years in international business law with Exxon Corporation, which took him to South America, Europe, Africa, and the Middle East. As a negotiator with representatives of oil-producing states, he found it enjoyable and instructive to learn about other cultures and he discovered it was essential to the successful practice of law on a global scale. Starting in 2000, Jack made a series of exceptional gifts that have funded the bulk of our international programs.
The entire Cornell Law School community mourns Jack Clarke’s passing, and celebrates his life’s many achievements and his steadfast dedication to Cornell. I will miss talking with Jack about what is happening in Myron Taylor Hall. Cornell Law School was never far from his heart. I hope the same can be true for all of us who have been fortunate enough to become part of this remarkable institution.
Eduardo M. Peñalver
Allan R. Tessler Dean and Professor of Law
As the presiding judge of the final round of the 2018 Cuccia Cup Moot Court Competition, Justice Sonia Sotomayor was the first sitting Supreme Court justice in over thirty years to participate in a moot court at Cornell Law School.
On October 18, 2018, Ben Van Meter ’20 was so nervous he couldn’t eat anything the entire day, except for half a Clif bar and a cup of coffee. After six weeks of preliminary arguments, he was about to present his case in the final round of the moot court competition. When the moment came to stand before the judges in the packed auditorium, Van Meter suddenly felt confident—until he was abruptly interrupted by U.S. Supreme Court Justice Sonia Sotomayor.
Her question: How do you expect a police officer just off the street to critically evaluate whether a suspect is intellectually disabled?
Professor Summers in the Law Library’s Gould Reading Room “I think I got to the second sentence of my introduction, and we were off to the races,” Van Meter says, noting that he and his partner, Morgan Anastasio ’20, had prepared for this scenario. “If you had to say two sentences to Justice Sotomayor and were then going to be hit by an opening question from her, what would they be?”
The presence of Justice Sotomayor at the final round of the Cuccia Cup Moot Court Competition last October raised the level of tension more than a few notches in the Elizabeth Storey Landis Auditorium for two teams of students who had the chance of a lifetime to argue before a U.S. Supreme Court justice. Not only were they presenting their case in front of Justice Sotomayor, but their argument was based, in part, on a majority opinion she had written for the Supreme Court in 2011.
In that case, J.D.B. v. North Carolina, which involved the confession of a thirteen-year-old boy to two home break-ins, during a police interrogation at school, Sotomayor concluded that a child’s age should be considered in a custody analysis under Miranda v. Arizona. The case before the moot court, Hector Zeroni v. State of Myrontana, went a step further, considering whether a defendant’s intellectual disability was a relevant factor in a Miranda custody analysis and whether the defendant’s confession had been voluntary.
Having a Supreme Court justice judge a moot court at Cornell Law School is a rare event. The last Supreme Court justice to preside over a competition was Sandra Day O’Connor, who had already retired when she judged the Cuccia Cup Moot Court Competition in 2007.
“There have been a number of Supreme Court justices who have judged moot court competitions in the past,” says Eduardo M. Peñalver, the Allan R. Tessler Dean and Professor of Law. “Obviously it’s something they enjoy doing. But it happens once a decade or every fifteen years at the Law School.”
The invitation to Justice Sotomayor to spend a day on campus was carefully orchestrated by Peñalver and Judge Richard C. Wesley ’74 of the U.S. Court of Appeals for the Second Circuit. At a dinner honoring the 125th anniversary of the Second Circuit in October 2016 in New York City, Judge Wesley, a close friend of Justice Sotomayor’s who chaired the event, arranged for her to sit between him and Peñalver.
“Between the two of us, that sealed the deal,” Peñalver says. “We had invited her every year since I became dean. She accepted the invitation when Judge Wesley got involved.”
Judge Wesley had become friends with Justice Sotomayor in 2003, when he joined her on the Second Circuit, and they heard cases together for the next six years. In his first year on the court, Judge Wesley remembers sitting with Judge Sotomayor half of the time during arguments, and he and his wife often met her for brunch in the West Village on weekends.
Their friendship continued over the years, despite their contrasting backgrounds—Judge Wesley lives in Livonia, New York, is a former Republican New York State Assemblyman, and was appointed to the appellate court by President George W. Bush, while Justice Sotomayor grew up in the Bronx, was appointed to the Supreme Court by President Barack Obama, and became the first Hispanic to serve on the Court.
“I don’t think our backgrounds really played much of a role in our friendship,” Judge Wesley says. “They played a role in who we are, but she’s a very thoughtful person. She was very much interested in my life and background, and I in hers.”
Although it took two years to find an opening on her calendar, both Judge Wesley and Peñalver persisted in encouraging Justice Sotomayor to visit Cornell because of her unique background and accomplishments, her interest in students, and the message she brings to young people.
“She has a significant sense of responsibility to the community from where she came and to young people, regardless of their ethnicity or national heritage,” Judge Wesley says. “Eduardo and I knew if we could get her to come, it would be a terrific experience for the students and the university, and it would be something a lot of young people would long remember.”
When she walked onto the stage at Bailey Hall shortly after arriving on campus that fall morning, Justice Sotomayor received a standing ovation from the crowd of 1,200 students, staff, and faculty members. During an informal conversation with Judge Wesley, the justice walked through the aisles of the auditorium, shaking hands with anyone she could reach and calling students to stand next to her as she answered questions they had submitted before the talk.
In her hourlong talk, Justice Sotomayor discussed her struggle after being diagnosed with diabetes at the age of seven, the influence reading had on her education, her love of the legal profession, and her life on the Supreme Court. Her message to the students was clear and forthright.
“The reason I’m here today and speak publicly is because I’m trying to engage every student in this room to remember that your most important job in life as a member of this community is to be involved in bettering it, to be a voice for change, to take action when you see things you don’t like, and to be civically involved in making this a better union,” she said.
“It won’t happen by anything the Supreme Court does alone. It won’t happen by any President or any Congress acting alone. It happens when we work together to make a perfect union. That’s what the law did for me.”
The talk, attended by an estimated 500 students from the Law School, ended with a discussion of how often she socializes with the other justices (she eats lunch with them about six times during each two-week period of hearing cases), her feelings about being in the media spotlight (she still isn’t used to it), and her embrace of optimism.
“I know how much pain there is in life,” she said. “The girl who was eight, who was taking injections and thought it was a pin needle—that girl is now sixty-four and knows there’s nothing easy about life. But it hasn’t taken away my innate optimism. I really do see the glass always half full, and I don’t let it overwhelm the goodness that I see in the world.”
Justice Sotomayor then headed to the Statler to eat lunch with students enrolled in Federal Appellate Practice, a course taught by Judge Wesley and John Blume, the Samuel F. Leibowitz Professor of Trial Techniques. The students asked her about the differences in serving as a district court and an appellate court judge, her experience at Yale Law School, and her summer internships.
One student in the class, Rahul Krishnan ’19, the chancellor of the student-run Moot Court Board, says Justice Sotomayor’s visit was one of the most memorable experiences he’s had at law school. “I think it was one of those times when I’m reminded of what it is to be at a place like Cornell,” he says. “Obviously Supreme Court justices are pretty generous with all the schools they visit, but to have it happen while I was here—it was one of the days I was just most impressed with what Cornell can do.”
The fifty-one-page case at the center of the Cuccia Cup competition was prepared last summer by three executive bench editors on the Moot Court Board. Krishnan, who helped advise the students, says they chose a case that involved a Miranda rights issue because they knew Justice Sotomayor had championed the expansion of protections under Miranda.
By September, forty-three teams of students had registered for the Cuccia Cup, which typically attracts about thirty competitors. After six preliminary rounds, two teams had moved ahead to compete in the finals: Van Meter and Anastasio for the petitioner, and Lauren Fairman ’20 and Corby Burger ’20 for the respondent.
Beyond the case for which Justice Sotomayor wrote the majority opinion, Hector Zeroni v. State of Myrontana was also based on a case that has been adapted into the Netflix series Making a Murderer. Changing several details from the original case, Brendan Dassey v. Michael A. Dittmann, the moot court case focused on the conviction of seventeen-year-old Hector Zeroni, who was intellectually disabled and who had confessed to helping his uncle murder a woman and mutilate her corpse.
The respondents, Fairman and Burger, argued that the logic of Justice Sotomayor’s opinion in J.D.B. v. North Carolina should not be extended to a custodial analysis in the case because they said police officers cannot be expected to know whether a suspect has an intellectual disability. For Fairman, researching Justice Sotomayor’s opinion, preparing the case, and then arguing in front of her was an experience she says she’ll never forget.
“It’s hard for me to put into words, because it’s something I’ll definitely remember forever,” Fairman says. “It just kind of reinforced how much I do enjoy oral advocacy, even though I didn’t really do this before coming to Cornell.”
Burger, who won the Langfan Family First-Year Moot Court Competition last year, was overwhelmed by the statement Justice Sotomayor made just before she announced the panel’s verdict, when she told the crowd that she would hire any of the four student finalists as her lawyer.
“That was my proudest moment in the whole tournament—to hear Justice Sotomayor say that the quality of the tournament was so good that she would hire anyone of us as her lawyer,” Burger says.
On the petitioner side, Van Meter and Anastasio argued that intellectual disability and age share many of the same characteristics, and both should be considered in a custodial analysis under Miranda. They also proposed a four-part standard that would allow police to determine whether a suspect has an intellectual disability.
While Justice Sotomayor has a reputation as a tough questioner, Van Meter recalls being struck by the way she asked her questions. “What I found fascinating about being questioned by her is she is not someone who is going to ask you an arcane legal question just to see what you do,” he says. “She will ask you these very commonsense points that go directly to the heart of your argument.”
What also made the competition memorable for the students was the presence of many of their parents in the audience. “Even if I have the opportunity to argue in front of the Supreme Court for real twenty years from now, you don’t get to share that with your families and friends the way we could here,” says Anastasio, whose parents and stepdad—Steve Greenapple ’84—all watched the competition.
After announcing that Fairman and Burger had won the competition, Justice Sotomayor joined the students for dinner at the Statler, along with the other judges on the panel: Hon. Richard C. Wesley; Hon. Steven M. Colloton, U.S. Court of Appeals for the Eighth Circuit; Hon. Peter W. Hall ’77, U.S. Court of Appeals for the Second Circuit; and Hon. Amy J. St. Eve ’90, U.S. Court of Appeals for the Seventh Circuit.
Also attending the dinner were Frank and Michael Cuccias, the grandson and great-grandson of the late Francis P. Cuccia, LL.B. 1912, whose endowed gift funds the finalists’ prizes in the competition.
Peñalver says the impact of Justice Sotomayor’s visit extended beyond the Law School to the entire Cornell community. “There’s an educational benefit of having a Supreme Court justice come and having the entire community see they’re just people like us,” he says. “It brings that branch of government to the community in a way that’s not part of our daily routines.”
From humble beginnings twelve years ago, the Jack G. Clarke Institute for the Study and Practice of Business Law has grown into one of the nation’s preeminent business law programs.
Late in the first decade of this new century, Cornell Law School had a dilemma on its hands.
Then, as now, most Cornell Law School graduates were going to work for big firms. But while Cornell was producing outstanding business lawyers, the Law School didn’t have enough business law faculty or the infrastructure to match.
Working with the Law School’s lone permanent business and financial law professor at the time,Robert C. Hockett, and a number of dedicated alumni, Stewart J. Schwab, then the Allan R. Tessler Dean and Professor of Law, set about changing that. From its founding in 2007, the Jack G. Clarke Institute for the Study and Practice of Business Law fundamentally changed the landscape of business and financial law education and research at Cornell.
The Clarke Business Law Institute (CBLI) is now well into its second decade of shining a light on the business side of the legal profession. It has contributed endowed professorships and influential research, clinics and seminars, and prominent speakers and academic conferences to the Law School, making Cornell a powerhouse in the business law world.
“When I arrived at Cornell Law School as a junior faculty member, before the creation of the Clarke Business Law Institute, the Law School had one untenured faculty member in the business law area,” recalled Eduardo M. Peñalver, the current Allan R. Tessler Dean and Professor of Law. “We now have four tenured business law faculty who are recognized leaders in their respective fields. We have gone from a handful of courses in the business law concentration to dozens.”
Generous financial support from the Law School’s alumni network has allowed the CBLI to hire an impressive collection of permanent faculty to join Hockett, who currently holds the post of Edward Cornell Professor of Law. The CBLI’s first hire, in 2009, was Charles K. Whitehead, the Myron C. Taylor Alumni Professor of Business Law and founding director of the Law, Technology and Entrepreneurship Program at Cornell Tech. Over the following years, he was joined by Saule Omarova, the Marc and Beth Goldberg Professor of Business Law; Celia Bigoness, Associate Clinical Professor of Law; and the late Lynn Stout, Distinguished Professor of Corporate and Business Law.
The locus of talent and resources that the CBLI represents has enabled Cornell to draw talented business law specialists to Ithaca despite its distance from corporate hubs like New York City. “It’s not just the resources,” Whitehead said. “Of course, it’s important that the Clarke Business Law Institute has funding, and it means you can do great things. But the real value is the evidence through creation of the CBLI of a strong commitment by faculty and alumni to really build and sustain something in the business law area. For me, that was the compelling reason to come to Cornell.”
“The promise of the institute was not just ‘We will give you resources’,” Whitehead added. “There was now a focal point to build a robust business law curriculum.”
New York Times, the Financial Times, and even Jon Stewart’s The Daily Show. Omarova’s arrival at Cornell significantly expanded the scope and public impact of the CBLI. “Having such a strong institutional base for conducting research and engaging in policy entrepreneurship was one of the most exciting things about Cornell for me,” said Omarova.
That focus embraces not only traditional corporate law subjects, but also financial institutions and markets. This emphasis was reflected in, among other things, the hiring of Omarova in 2013, one of the legal academy’s premier banking and derivatives law scholars, whose work on financial conglomerates and big banks’ involvement in commodity markets had drawn the attention of U.S. senators, the
The CBLI’s creation was anchored on a founding gift of $5 million from Jack Clarke, LL.B. ’52, one of the greatest benefactors in the Law School’s history.
Schwab, now the Jonathan and Ruby Zhu Professor of Law, had a close relationship with Clarke built on everything from tennis games to travels through East Asia together. Clarke was highly engaged with the Law School’s faculty and alumni network, and Schwab remembers the development of the CBLI as filled with back-and-forth exchanges. “Among Jack’s many, many talents, he was a terrific listener and could ask the just-right question that put things in perspective,” Schwab said. “He was not the type to go around with long lectures or dictates things, but he did observe and read and listen to a lot of people connected with the school.” Clarke remained involved with the Institute over the course of its life. Whitehead remembered meeting with Clarke numerous times and being asked about his work. “His was not an idle request to ‘send me your papers’ where they end up on the bottom of a bird cage,” Whitehead said. “I mean, he was thoughtful and he really engaged. It was always a pleasure.”
The CBLI came of age in the shadow of the 2008 financial crisis, which gave new urgency to the study of business and financial law. Hockett recalled multiple students crowding in to audit his financial institutions course after the add/drop period that autumn, just to understand the then-daily dramas on Wall Street and in Washington. But, Hockett said, the reckoning provoked by the crisis also validated a decision he and Schwab made at the Institute’s founding: the CBLI would capitalize on Cornell Law School’s unique strengths, like the egalitarian, public-minded ethos fostered by Cornell’s land-grant heritage and the collaborative spirit promoted by Ithaca’s small-town setting, rather than trying to compete with big-city business law powerhouses only on their own turf.
“We can and do educate top-quality practicing lawyers in the corporate realm with the best of them,” Hockett said. “But even though we’re very good at doing that, we’re also good at something else that I don’t think Columbia and NYU can equal us at, and that is bringing that public interest perspective into the teaching of business and financial law right from the get-go as an important and critical part of the institutional mission and curriculum. We teach the students not only how to navigate the law on behalf of their private-sector clients, but also how to think critically about the law and steadily improve it for the public at large.”
The CBLI has developed into three distinct programs in recent years as faculty members have pursued their research agendas. The Clarke Program on the Law and Regulation of Financial Institutions and Markets, codirected by Hockett and Omarova, is dedicated to understanding the roles of banks and other financial institutions and the laws governing their activities and market environments. Whitehead directs the Clarke Program on Law, Finance, and Transactions, which examines business and other economic relations from a law finance perspective, including how financial markets are structured and governed. And, finally, the Clarke Program on Corporations and Society was founded by Stout to study the nature of corporations and how they can play a positive role in society. Stout’s work is continued by Sergio Alberto Gramitto Ricci, visiting assistant professor of law, who serves as the program’s assistant director.
This summer, Dan Awrey will become the newest addition to the CBLI, joining the faculty of Cornell Law School after previously holding the post of professor of financial regulation at the University of Oxford and teaching at Cornell Law School in fall 2018 as the Marc and Beth Goldberg Distinguished Visiting Professor of Law. Awrey, an expert in the regulation of banks, investment funds, derivatives markets, and financial market infrastructure, is already a frequent collaborator with Hockett and Omarova, and his arrival will facilitate closer cooperation on research, as well as allowing the Law School to offer a fuller complement of courses in areas like international financial regulation, derivatives regulation, and business organizations, which the three professors have in common.
One of the CBLI’s main missions is academic outreach, and spreading the theories and perspectives developed by CBLI faculty beyond East Hill ends up creating a virtuous cycle with the Institute behind that work. “We in a sense are strengthening and advertising the Cornell brand, and that has enormous network effects,” Omarova said. “Every time any one of us speaks in front of a political audience, appears on national TV, publishes some kind of a groundbreaking piece, or organizes a big conference that generates new ideas, it has a huge effect on the perception of Cornell Law School as an institution where a lot of important new ideas are being developed.”
Recent conferences sponsored by CBLI programs have spanned topics from financial regulation to concepts of legal and corporate personhood, with more in the works on such hot and varied issues as the changing role of central banking, new technologies in finance, and the centennial of John Maynard Keynes’s The Economic Consequences of the Peace. CBLI scholars’ writing is also highly influential. Whitehead’s recent scholarship has focused on the disconnect between change in the financial markets and existing financial regulation, including instances when law’s treatment of economically similar transactions has turned on differences of form, not substance; additionally, he became the newest co-author of the country’s leading securities regulation casebook, with colleagues from Columbia and Georgetown. Omarova is currently working on a series of cutting-edge articles analyzing the potential impact of crypto-technology, big data, and machine learning—known under the general heading of financial technology, or “fintech”—on financial systemic stability and economic growth, while Hockett has been opening new lines of research into the law of money and payment systems. He also notes that his and Omarova’s franchise view of finance—which sees the money and capital markets system as one in which publicly licensed private financial institutions disseminate the monetized full faith and credit of the United States throughout the financial system—is increasingly being discussed as a “Cornell school of finance,” much as the work of Emeritus Professor Gregory Alexander, Professor Laura Underkuffler, and Dean Peñalver has come to be known as a “Cornell school of property.”
Omarova and Hockett have frequently brought their expertise to Capitol Hill, testifying before and advising legislators and regulators on financial policy matters. Omarova testified before the Senate Banking Committee in September 2018 at a hearing on fintech and consumer data protection—her fourth appearance before Senate committees in as many years. “As a result of this work, I’m keeping in regular contact with senators and legislative advisers,” she said. “It’s an ongoing enterprise, because they frequently need help with respect to understanding certain policy issues relating to the banking world and financial institutions law, and so they would call me.” Hockett, meanwhile, has been assisting Representative Alexandria Ocasio-Cortez on her ambitious Green New Deal plan, and helped draft four statutes for Senators Bernie Sanders and Elizabeth Warren this past autumn. Hockett and Omarova also do regular advising work for the Federal Reserve, the Treasury, and the Financial Stability Oversight Council, both of them having previously worked at the Fed and Treasury, respectively.
Omarova notes that the CBLI plays a crucial role in enabling this kind of pro bono work for the public sector. “The program has provided immense logistical support and enabled me to link my scholarship to the actual policy making, and to put my expertise and my knowledge to use,” she said.
On the private side, Whitehead has been called in to assist when issues arise among financial market participants. Last year, he was unanimously elected for a third time by Wall Street’s largest buy- and sell-side derivatives firms to a three-judge panel to adjudicate a multibillion dollar dispute, this time over the effect of the Sears bankruptcy on credit derivatives.
The CBLI lost an important public intellectual with Stout’s death from cancer in April 2018. When she came to Cornell in 2012, the Institute gained an internationally recognized scholar of corporate and securities law, as well as a legendarily forceful personality. Stout was perhaps best known for her book, The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public, which punctured the notion that corporations are legally required to prioritize the interests of their shareholders above all else. “Because of her tireless work as an organizer, as a policy entrepreneur, as a writer of popular books, she created so many feedback channels between the CBLI and all of these outside audiences that were extremely relevant to the Institute’s success, especially with respect to corporate governance,” said Omarova. “Wherever I went, everyone knew of Lynn and her work. They were telling me, ‘You guys are building up a really exciting and strong group of scholars on business and finance.’ I felt immediately that I was a beneficiary of all that work that Lynn put into the CBLI.”
Gramitto and Stout were close collaborators, as well as friends—he recalled their shared boxing coach referring to her as “the indomitable Lynn Stout,” and that moniker applied outside the ring as well. “She was extremely committed to getting corporate law right and to debunking misunderstandings, and also to explaining what is the positive role that corporations can play for everybody if corporations are used correctly,” said Gramitto. “First understood correctly and then used correctly.” Stout and Gramitto’s final work together, a book for popular audiences entitled Citizen Capitalism: How a Universal Fund Can Provide Influence and Income to All, hit the shelves in January, making the case for fighting income inequality through the creation of a fund of stocks donated by corporations and wealthy philanthropists that provides every citizen with a dividend and an opportunity to participate in corporate governance.
Whitehead is currently gearing up for an ambitious new project in Ukraine. Working in conjunction with two of Ukraine’s top universities, Taras Shevchenko National University of Kyiv and Kharkiv Polytechnic Institute, Whitehead is planning to open a series of business incubators aimed at nothing less than altering the Ukrainian economic landscape. “Ukraine is suffering
from lots of problems: outdated laws, corruption, weak enforcement, the whole bit,” said Whitehead. “The view historically has always been—and this is true with Ukraine, but not just Ukraine—that if you can change the laws, the markets will follow. There is truth to that, but I’ve always thought there was a compelling opposite story. You also need markets to promote the creation and enforcement of new regulation. That regulation follows because market participants demand consistency and discipline in order to invest and for the marketplace to grow.”
“These incubators offer one way to create a new economy in Ukraine and to bring in foreign capital, but they’re also intended as drivers for change in regulation and how laws are enforced,” said Whitehead. “Market discipline will reinforce the rule of law.”
This public-facing work done by professors can trickle down to students in unexpected ways. “We’re typically much more fresh about the law that we’re teaching when we’re actually helping to write the laws,” quipped Hockett. Lessons about bank regulation, corporate governance, and stock buybacks come to life, Hockett says, when he can draw on his recent work with Senator Warren on the Territorial Relief and Accountable Capitalism Acts and with Senator Sanders on the Too Big to Fail, Too Big to Exist and Stop WALMART Acts in discussing such subjects in the classroom.
The CBLI also benefits students’ education in more hands-on ways. In 2010, Whitehead founded the Transactional Lawyering Competition, which brings Law School alumni back to Ithaca every year to judge mock negotiations between teams of students representing buyers or sellers in a hypothetical transaction. Over the course of the weekend-long competition, which is now run by Bigoness, the judges give participants feedback on how to sharpen their dealmaking skills (and, frequently, express astonishment on how good the students already are). Whitehead also launched the Law School’s Deals Seminars, in which top practitioners, including many alumni, teach students subjects like mergers and acquisitions, derivatives, and international trade as capstone classes that let students discover the thought processes behind structuring a deal.
“We have been incredibly innovative through the CBLI in giving students an opportunity to go beyond sitting in the classroom and learning the theory of business law and actually stepping into the shoes of practicing lawyers,” Bigoness said. “Whenever we speak to hiring partners at big law firms in New York or D.C. or San Francisco, they all say that’s exactly what they want their first-year associates to have had. They want them to have had a chance to draft a contract. They want them to have had a chance to work on a promissory note for a loan. A chance to actually talk to a client and figure out how to speak to a client who is not a lawyer.”
One of the CBLI’s newest highlights is the Entrepreneurship Law Clinic, which since its founding by Bigoness this past fall has put Cornell Law students to work on behalf of Ithaca small businesses and entrepreneurs. The Law School’s first transactional clinic, it extends the opportunities for hands-on learning that litigation-oriented students have long enjoyed to students interested in business law, while simultaneously creating greater economic opportunities in the local economy. “Working with small start-up companies is actually really fun because they do everything under the sun business law–related,” Bigoness said. “They do entity formation, they do hiring, they do corporate governance, immigration work, employment, intellectual property, commercial contract. It’s a really nice way to get the students an incredibly broad diversity of work.”
The Entrepreneurship Law Clinic has been an extraordinary success, with long waiting lists for both students and clients. With the help of a 3L enrolled in the Pro Bono Scholars Program, the clinic was able to expand its client list farther into central and upstate New York in the spring semester. In the future, Bigoness is hoping both to grow the clinic’s operations close to campus and to expand down to Cornell Tech in New York City.
Ultimately, the Clarke Business Law Institute makes good on its promise that Cornell Law School’s mission to produce “lawyers in the best sense” need not conflict with a focus on business law. “What we try to teach our students is that being good business lawyers requires a lot more than learning any particular transactional tricks,” Omarova said. “It requires widening your intellectual horizons, caring about the effects of business decisions on the broader society, and not being afraid to fight for justice and prosperity for all.”
Whitehead agreed wholeheartedly. “The Law School is housed in Myron Taylor Hall, and Myron Taylor was the chairman and CEO of U.S. Steel, among his many accomplishments” he said. “The ground-level library is dedicated to Arthur Dean, a famous Cornell Law grad who almost 100 years ago was one of the original authors of the Securities Act of 1933.”
“Cornell at its core is a law school that speaks to social issues and speaks to inequities and social justice but also has its roots in the business world. And the two are not separated.”
Saule Omarova Testifies before Senate Banking Committee
by Owen Lubozynski
Recent advances in computing power, data analytics, cryptography, and machine learning have made financial technology, or “fintech,” a hot topic in the financial sector, for both actors and regulators. On September 18, following a July report on the subject by the U.S. Treasury Department, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing on fintech and its implications.
Among the experts testifying before the committee was Professor Saule T. Omarova, director of the Clarke Program on the Law and Regulation of Financial Institutions and Markets at Cornell.
Speaking after representatives from Consumer Financial Data Rights, Fidelity Wealth Technologies, and the Mercatus Center at George Mason University, Omarova observed that it was symbolic to be holding the hearing almost exactly on the tenth anniversary of the failure of Lehman Brothers, which triggered a global financial crisis. “For many years before the crisis, you and your colleagues probably sat through many hearings just like this one, listening to many confident and articulate gentlemen with impeccable industry credentials tell you that you should not let outdated regulation stifle innovation,” she told the senators.
“Today, the same rhetoric of financial innovation and consumer choice that brought us the financial crisis of 2008 returns to center stage in the policy debate over fintech. … Once again, new technologies promise to make the system more efficient, resilient, and democratic; to expand consumer choices; and to give low-income Americans access to financial services.”
Omarova argued that the Treasury Department’s recommendations could undermine a core principle of the U.S. banking system: the separation of banking and commerce. Allowing banks to engage intimately with commercial enterprises, she warned, creates the potential for excessive concentration of financial and market power, opening the door to “conglomerates that will control the flow of both money and information and effectively take control of our lives, not only as economic actors but also as citizens.”
“The American republic of George Washington and Thomas Jefferson was never meant to become a dystopian company town of this kind,” Omarova concluded. “As you deliberate on fintech as a public policy matter, I urge you to stand on guard and not let this become even a remote possibility.”
Dan Awrey to Bolster Business Law Program
In January, Dean Peñalver announced that Dan Awrey, professor of financial regulation at the University of Oxford, will be joining Cornell Law School in fall 2019 as the latest faculty addition to the Clarke Business Law Institute. Awrey had been the Marc and Beth Goldberg Distinguished Visiting Professor of Law for the fall 2018 term.
“Dan’s presence will both strengthen our intellectual community and further solidify Cornell’s reputation as a business law powerhouse,” said Peñalver.
“Cornell Law School is home to some of the best business law scholars in the world, supported by the Clarke Business Law Institute,” said Awrey. “I’m really looking forward to joining this distinguished group and contributing to their sustained excellence in business law teaching, scholarship, and service.”
Awrey’s work has included undertaking research and providing advice at the request of organizations including the Bank for International Settlements, HM Treasury, UK Financial Conduct Authority, Commonwealth Secretariat, and European Securities and Markets Authority. He is also a founding co-managing editor of the Journal of Financial Regulation published by Oxford University Press. Before entering academia, he served as legal counsel to a global investment management firm and, prior to that, as an associate practicing corporate finance and securities law with a major Canadian law firm.
“I’m looking forward to working with Professors Bob Hockett and Saule Omarova on advancing a longer-term research agenda exploring the changing roles of central banks within domestic and international financial systems, and what the implications of this are likely to be from an operational, structural, and political economy perspective.”
He adds, “As a Canadian who has spent the last ten years in the UK, I’m also looking forward to the changing seasons and, hopefully, some snow.”
The Law School Helps Launch Institute for Women’s Entrepreneurship
by Susan Kelley, Cornell Chronicle
In just four years, Khadijah King of Bay Shore, New York, founded a company, identified a target market, attracted loyal customers, and generated a profit.
She wanted to expand her business, Inside Kinks, her line of products for natural hair, but she didn’t have any formal business education. “I was kind of winging it,” she said.
That all changed when she began taking a free, twelve-week online business certificate program last fall through the Bank of America Institute for Women’s Entrepreneurship at Cornell. Launched in April 2018, the Institute is a collaboration among Cornell Law School, Cornell University, and Bank of America.
Through the program she learned how to effectively negotiate with partners and potential employees and construct contracts. “I knew I needed that before, but I didn’t understand the extent of it,” she said.
She also learned how to price her products and services and describe them so her customers understood their value.
King was one of 600 entrepreneurs who participated in the pilot of the certificate program. Now officially launched, the program offers entrepreneurs—especially women—the skills, knowledge, and resources to build their own businesses. Sponsored by Bank of America through a four-year grant, the Institute is housed at Cornell Law School; the program is taught by female faculty from across the Ithaca campus and delivered by eCornell.
“I was delighted to teach the law portion of the curriculum,” said Celia Bigoness, associate clinical professor of law. “My goal in the course was to show students that the law, if used right, can actually foster and support business development. The course was intended to give those students a legal toolkit to help them achieve their goals. It has been incredibly rewarding and inspiring to see how students are already using the tools they gained from the course to help grow and protect their businesses.”
The program’s six two-week courses cover customer discovery, the legal building blocks of a business, assessing and obtaining financial resources, growth leadership for women entrepreneurs, product development and digital marketing, and communication, negotiation, and persuasiveness.
“We are trying to thread a needle by providing quality online instruction that is both free to users but also provides group discussion and individual feedback,” said Stewart Schwab, faculty director of the Cornell Center for Women, Justice, Economy, and Technology, which developed and oversees the Institute. “The enthusiastic response to the pilot suggests this model works. Because it is free and high quality, we cannot enroll everyone who is interested in the program, but over the next four years we will instruct thousands of entrepreneurs on the fundamentals of making their businesses flourish.”
Despite the Institute’s name, 90 percent of the program is gender-neutral and can benefit any entrepreneur. “As one would expect, the content presented in the legal and funding courses is more technical and straightforward, while material on negotiation and communication explores more specific considerations related to gender,” said program director Kirsten Barker.
The Institute initially planned to educate 5,000 entrepreneurs over four years. But the overwhelming demand for the pilot prompted them to increase the number of students to 10,000 over the same period.
“Our female faculty knocked it out of the park, and eCornell is a great partner,” she said. “Our students were engaged, and we had a diverse group.” Pilot participants were 56 percent African American, 10 percent Hispanic, and 7 percent Asian, Barker said.
“What is exciting to me is that, through an online environment, the Institute is now offering something women—from across the U.S. and the world—have been looking for: a supportive and private place to brainstorm solutions for challenges and share strategies for success,” said Deborah Streeter, the Institute’s faculty director and the Bruce F. Failing Sr. Professor of Personal Enterprise and Small Business Management in the Dyson School.
Not quite a year old, the Law School’s first transactional legal clinic is generating excitement and long waiting lists for students and clients.
Across the country, law school clinic offerings have traditionally focused on litigation, despite the large number of students who will go into transactional work after graduation. Thanks to a new clinic, established in the fall of 2018, Cornell Law School students now have an opportunity to gain substantial, real-world transactional experience, building skills many law school grads develop only after beginning their careers.
Celia Bigoness, associate clinical professor of law, who has joined the Cornell Law School faculty after seven years as a corporate lawyer.
The Entrepreneurship Law Clinic provides free legal services to Ithaca-area entrepreneurs and start-ups that are not yet ready or able to engage paid legal counsel—a diverse slate of clients who are confronting a variety of business challenges. Students who complete one term of the clinic may apply to continue their work at a more advanced level in subsequent terms. Directing the clinic is
Contributing to Growth
“As I thought about what types of work a transactional law clinic could do, I came face-to-face with the incredibly exciting, dynamic entrepreneurship initiatives in and around Cornell,” says Bigoness. “It became clear that there are tremendously talented people working to help Cornell commercialize its research and contribute to upstate economic growth, and the clinic was a compelling opportunity to bring the many talents of Cornell Law students to this important work.”
The clinic currently represents sixteen clients, working in industries including clean energy, technology, food and beverages, horticulture, engineering, and professional services, with owners including veterans, women, minorities, and immigrants. Among these clients is Antithesis, maker of the Grabanzos snacks that have begun appearing around Ithaca. Another is Dish Truck, which aims to reduce the environmental impact of plastic plates and cutlery by providing reusable dishes for catered events.
There are currently fourteen students in the clinic, eight of whom began in the fall semester. Going forward, Bigoness hopes to expand the program, in order to cater to the tremendous interest it has generated. Adding more students would also allow her to grow the clinic’s community engagement work through such offerings as workshops and office hours.
Bigoness has seen significant skills growth in clinic participants. “Before joining the clinic, many students had never spoken to a client in any circumstance, and very few had any experience with business owners,” she observes. “In law school, students learn to communicate to other lawyers and judges, but very few classes teach students how to communicate to clients, who may have no legal background (and perhaps very little interest in the law). An added challenge is that many of our clients are creating businesses based on advanced research in areas as diverse as electrical engineering, agriculture, and computer science. So the law students needed to learn how to intimately understand their clients’ industries and businesses so that they could become high-quality legal advisers, which requires being a legal adviser and a business adviser. They’ve done a remarkable job educating themselves about industries about which many of them had no prior knowledge, and I think they’ve also had a lot of fun in the process.”
She adds, “I watch my students now, and I see them doing things that I did (and that I often did wrong) as a first-, second-, or third-year associate at my law firm. So when they start practicing, they’ll have enormous advantages over many other young lawyers. They’ll also have a much better sense of what they actually enjoy about practicing law, allowing them to exercise a bit more agency over their early careers than they would if they hadn’t had this crucial exposure during law school.”
“The Entrepreneurship Law Clinic gives me the chance to work closely with a hugely talented group of aspiring young lawyers on a daily basis,” remarks Bigoness. “My students bring energy, fresh ideas, and excitement to work every day. I know that the clinic has made the students better lawyers. But many law students are understandably nervous about the demands of law practice, and I believe the clinic has showed the students how fun, energizing, and rewarding their careers can be if they find work that they truly love doing.”
Many of the leading members of the legal academy gathered for the Lynn Stout Memorial Conference to recall and reflect on one of the central contributions made in corporate legal theory during the past quarter century.
When friends and colleagues recall Lynn Stout, who died in April 2018 following a battle with cancer, invariably they describe her as “a force of nature,” someone whose brilliant intellect, passion, and energy made her unstoppable and unforgettable. When she joined the Law School in 2012 as the Distinguished Professor of Corporate and Business Law, Stout was already a renowned scholar, teacher, and mentor. In the following six years, she helped transform the Clarke Business Law Institute into one of the nation’s preeminent business law programs, while cementing her legacy as a visionary and pioneering figure in corporate law and governance.
On February 1, the Law School convened a conference at the Cornell Club in New York City to celebrate and advance Lynn Stout’s contributions to the legal academy. Organized by her colleague Saule Omarova, the Lynn Stout Memorial Conference attracted many of the top corporate law scholars from around the country, who gathered to present new, unpublished research that was inspired by, or responded to, Stout’s scholarship.
“The energy was quite wonderful. It was definitely a celebratory event, of course with a distinct kind of pain at the loss of Lynn,” said Omarova, director of the Clarke Program on the Law and Regulation of Financial Institutions and Markets. “It was a great mix of substantive engagement and discussion of the ideas and how some of these issues can be explored further and carried forward.”
After an overwhelming response to her first call for panelists, Omarova said she had to adjust the plenary schedule to make more room. Indeed, the final conference included twenty-six speakers, including several of Stout’s colleagues from the Law School and luminaries such as Margaret Blair of Vanderbilt University School of Law, Cynthia Williams of Osgoode Hall Law School, York University, and William Bratton of the University of Pennsylvania Law School.
“The conference exhibited the full range of Lynn’s prodigious energy and intellectual engagements,” noted Williams, the Osler Chair in Business Law at York University. “At the same time, almost everyone who spoke remembered Lynn as an important mentor, celebrated her love of life, and recognized that our field has lost a star.”
“There was manifest sadness, for Lynn is no longer with us,” said Bratton, the Nicholas F. Gallicchio Professor of Law and Co-Director of the Institute for Law and Economics at Penn. “But there was also tremendous energy and forward motion as the participants variously focused on the points that matter most in Lynn’s legacy and projected their bearing on future events.”
The first part of the conference was organized into three panels that reflected the three distinct lines of research that Stout’s scholarship inspired: citizen capitalism, corporate law and governance, and markets and prosociality.
The first panel was devoted to Stout’s last scholarly project, the book Citizen Capitalism, which she coauthored with Tamara Belinfanti and Sergio Gramitto. The book, which had its official launch the evening before the conference, proposes a visionary plan to give Americans more influence over corporations while earning supplemental income. The panel featured a debate of sorts over the feasibility of the bold proposal between Stout’s Cornell Law School colleagues Robert Hockett, the Edward Cornell Professor of Law, and Gramitto, visiting assistant professor of law and assistant director of the Clarke Program on Corporations and Society. Hockett, a renowned scholar and expert in finance law, has his own book coming out later this year (Yale University Press) about how to make a greater proportion of the population owners of capital.
“These two proposals had a lot in common,” said Nelson Tebbe, professor of law at Cornell and moderator of the panel. “They were both trying to use legal mechanisms to combat stratification of America along class lines, which is worsening. The difference was that Lynn’s proposal is purely private, relying on private corporations to set up a fund that would benefit the public generally, whereas Bob’s approach has a role for private action but also includes significant government redistribution.”
The second panel was devoted primarily to Stout’s work on “cultivating conscience,” through which she proposed how to instill more prosocial attitudes and behaviors in the corporate sector and financial markets. Among the six panelists were economist Margaret Blair, coauthor with Stout of the celebrated team production theory of corporate governance, and Stout’s colleague Diogo Magalhaes, visiting fellow at Cornell Law School.
Magalhaes summarized the panel by noting that Stout’s breakthrough ideas not only have prompted her peers to reconsider many of the established paradigms within corporate governance, but have also “inspired a new generation of ‘converted’ corporate scholars who see endless applications of her governance models—to enact good, to configure existing relationships, and to carry out intergenerational projects more efficiently.”
The third panel considered how Stout’s pioneering theories regarding prosociality—especially her groundbreaking 2012 book debunking the myth of “shareholder value maximization”—have weathered the test of time, how they account for recent behaviors that triggered speculation and the financial crisis, and how these theories can actually answer the economic, financial, and regulatory challenges we face.
“It was clear that people are still very much engaging with the ideas that Lynn was advocating for, and are carrying forward her mission of promoting the prosocial, other-regarding forces in the business world,” said Omarova. “I think that came through very clearly in these presentations.”
Jack Coffee of Columbia Law School, Edward Rock of New York University School of Law, and Jonathan Macey of Yale Law School. The first panel focused on key trends in, and key challenges facing, the academic community in this field and the place of Stout’s intellectual legacy. The last panel investigated the long-term impact of her history of activism and mentorship.
The afternoon portion of the conference was devoted to two plenary discussions among some of the most recognized names in corporate law scholarship, including
Robert Hockett was impressed at the number of panelists who talked about the avenues of research that Lynn had opened up for them or the inspiration that Lynn had provided. “What was interesting was that Lynn figured prominently in all of it, every contribution,” said Hockett. “It really does put a capstone on her career because it’s kind of the ultimate vindication in a sense. It shows to the world—as if there were any uncertainty about this—just how important a figure she was and how important Cornell Law was thanks to her presence. It speaks volumes about the graciousness of the many great people in our field that they all came and celebrated her, even those who had been in academic conflict with her on various hot issues.”
“What struck me about the conference,” said Tebbe, “was the seamless way it wove together tributes to Lynn and the remarkable work that she did over the span of her tragically short career with really thoughtful, rigorous, groundbreaking academic work. I think it’s a difficult thing to manage to do both of those things well, and the conference I thought really did.”
Three months after the conference, the Law School received further confirmation of Lynn Stout’s standing among her peers: an article she had co-written had been selected as one of the Top 10 Corporate and Securities Articles of 2018 in an annual poll conducted by the journal Corporate Practice Commentator.
Professor Whitehead explores how changes in the capital markets require a change in how we think about regulation, which in turn may call for the use of new technology such as blockchain.
Some readers may recall the story of Theseus, the mythical king of Athens. Theseus is best known for slaying the Minotaur, a half man, half bull who devoured children sent to Crete in tribute to King Minos. According to the historian Plutarch, Theseus’s boat remained in Athens’ harbor as a memorial for centuries after his return. To keep the boat seaworthy, caretakers replaced old planks, sails, and ropes with new ones as the originals wore away. Little by little, new materials were substituted for old. Over the years, it became unclear how many of the boat’s original components remained, prompting Plutarch to ask, was the boat in Athens’ harbor still Theseus’s boat? Centuries later, Thomas Hobbes added a further wrinkle to the question. He wondered what would happen if components from the first boat were stored as they were replaced, and later used to build a second boat. In that case, which boat—the first or the second—would be Theseus’s?
From Boats to Securities
Theseus’s story helps frame change in today’s capital markets. The U.S. securities laws were drafted in the 1930s when most securities were stocks, bonds, notes, or convertible bonds. Derivatives and more complex instruments were less common. Managing portfolio risk through diversification was in its infancy.
But trading has evolved since the 1930s. We see that change in new risk management techniques and tools, including derivatives that enable the discrete transfer of risks that comprise an interest in common stock rather than the transfer of bundled risk through a sale of the stock itself. In that respect, we can think of a share of stock as a package of risks, some that an issuer or investor can manage and others they are less capable of managing. For example, airlines can manage operational risk partly through how well they train their pilots and staff, but they cannot directly control the cost of aviation fuel, even though market fluctuations affect profitability and share price. Until recently, an investor would need to assess all the risks as a bundle—those the airline can manage and those it cannot—to decide how much to pay for the airline’s stock. She might manage some part of the risk through holding a diversified portfolio.
Today, she can more discretely adjust her portfolio’s risks by using more-targeted risk transfer instruments. Energy derivatives, for example, can be used to manage exposure to changes in oil price. An investor can transfer the oil risk of her investment to someone else, and retain the remaining risks (and returns) related to that stock.
New risk management techniques also enable today’s institutional investors to manage trading activity based on aggregate, portfolio-level risk. In order to increase returns, an equity trader is more likely to manage the risk of her entire portfolio, not the stand-alone returns of an individual stock or stocks. In other words, while individual stock performance remains important, she will be less concerned with whether the stock she trades is IBM or Microsoft, and more with its effect on her overall risk-taking.
Stated differently, institutional investors today are less focused on the merits of any one security—the “boat” in Plutarch’s story—and more interested in managing the risks comprising that security—the “planks.” Owners can transfer risk in discrete slices to counterparties who can diversify or transfer away risks they choose to forgo, arguably at a lower cost than investing in the security itself. That drop in cost suggests that change in the capital markets—a shift away from broad-based risk instruments (like stock) toward more discrete means of holding and transferring risk (like an energy derivative)—is likely to stay. Rather than buying and selling boats, traders increasingly buy and sell the planks comprising those boats. The question then is whether, as a U.S. securities law matter, the two should be treated the same.
Owning Boats, Shorting Planks
Congress included flexible definitions of “security” and “sale” in the U.S. securities laws, and so in many cases, both boats and planks are subject to the same regulation. But not always. Changes in law, such as the Commodity Futures Modernization Act of 2000, excluded some planks from regulation. That disparity in treatment may have been one cause of the 2008 financial crisis, partly addressed by amendments in the Dodd-Frank Act.
Differences, nevertheless, remain. Let me illustrate. In the diagram below, A is a public company whose outstanding shares trade freely on the Stock Exchange, and B is a hedge fund that invests in common stock. In (1), A privately issues “restricted” shares to B, meaning (among other things) that the U.S. securities laws restrict B’s resale of those shares on the Stock Exchange. B wishes to minimize the portfolio risk of holding restricted A shares. Knowing those A shares are restricted, in (2), B instead short sells freely tradable A shares on the Stock Exchange, and then in (3), it borrows freely tradable A shares from custodian C to settle its sale. Matching the sale of the freely tradable A shares with the restricted A shares permits B to lock in a profit—the difference in price between the A shares it sold short and the less-liquid restricted A shares it holds. In (4), A registers the restricted A shares with the SEC, making them publicly tradable. B then uses those shares to repay C for the freely tradable A shares it borrowed.
How should the two sales—A to B and B to Exchange—be treated under the Securities Act of 1933? A majority of courts that considered the issue treated A to B and B to Exchange as the sale of two different “boats.” The first transaction was A’s sale of restricted stock to B (arrow 1), and the second was B’s sale of freely tradable A stock on the Stock Exchange (arrows 2–4). Under the courts’ reasoning, since restricted A shares—the first boat—continued to be held by B, B’s short sale of separate, freely tradable A shares—the second boat—did not violate the 1933 Act.
How might Plutarch guide us? The story of Theseus’s boat tells us that, to identify the “real” boat, we need to trace the planks. B’s sale of shares on the Stock Exchange transferred the economic risk (the planks) of the restricted A shares (the first boat) to the general public. B would not have agreed to A to B unless B to Exchange was possible. The two together recreated the economic substance of what would have occurred if B had directly sold restricted A shares on the Stock Exchange—in essence, making B to Exchange a second boat formed with the first boat’s planks. From that perspective, A to B and B to Exchange should be treated as if B directly sold restricted A shares on the Stock Exchange. Such a sale would have violated the 1933 Act.
What should guide the regulators and the courts—the boats or the planks? Differences in how we regulate transactions that are substantively the same can result in arbitrage opportunities that distort regulation’s effects. On that basis, one could conclude that a majority of the courts that considered the 1933 Act’s treatment of A to B and B to Exchange “got it wrong.” By contrast, tying regulation to tangible instruments has the benefit of clarity. Different parties who buy, sell, or hold instruments have a clearer understanding of what requirements apply to each step. Uncertainty is likely to chill useful innovation that depends to some degree on the ability of market participants to assess the costs and benefits of new products and strategies. The key, then, is to strike a balance that anticipates concerns over arbitrage before they arise, as well as to provide some level of certainty to market participants.
New Markets and Newer Technologies
Here we reach the practical limits of Plutarch’s analysis. With Theseus’s boat, one could trace each plank back to the original boat. The problem, in today’s capital markets, is that tracing planks—tying a transfer of risk to a decision to assume risk, and vice versa—may not always be possible. In addition, since risk-taking is often managed at the portfolio level, it may be difficult to tie any one transfer of risk to a particular instrument. So, for the time being, even if boats and planks are regulated in the same way, regulation’s practical reach may fall short of today’s trading and risk management strategies.
One solution may be found in new technologies: in particular, blockchain technology, coupled with smart contracts. A “blockchain” is a public ledger of transactions, including the transfer of items of value—for example, money, title, and interests in common stock—that is verified by participants in an open, Internet network without the need for a trusted, third-party intermediary. “Smart contracts” are computer programs that evidence the parties’ agreement and enforce and execute the settlement of that agreement. Contractual terms are translated into code and then embedded in computer hardware or software that can self-enforce those terms.
Together, a blockchain and smart contracts can provide one means to evidence the components of a traditional security. Recall that the risks of a share of stock can be transferred individually or as a bundle. If bundled, the transferor (say, an investor) can then agree (say, by using a derivative) to transfer some of the risk to a third party. The problem is that the transferor may not know exactly what risks, or what levels of risk, comprise a particular stock. As a result, the terms of transfer may not match the risk she actually bears; that mismatch is referred to as “basis risk.” The transferor may continue to be exposed to risk, or she may become subject to new risk.
Now assume, rather than issuing stock, an issuer sells a bundle of risks (and returns) in a basket of separate, blockchain-based smart contracts that together constitute the substance of what is evidenced by common stock. By doing this, the investor can more easily transfer risk—each now covered by its own smart contract—to lower-cost counterparties without incurring basis risk. With an airline stock, for example, the “oil price” risk can be reflected in a discrete smart contract that an investor can resell to someone who is better able to manage it. In other words, with new technology, a trader can more easily choose to bear only those risks that she expects will maximize her portfolio returns, and efficiently transfer the others (without basis risk) to someone else. Likewise, because a security can now be separated into its components, regulators and others can more accurately trace the source of any risk that is transferred. The risk that B incurred in A to B can more easily be matched to the risk it transferred in B to Exchange.
In short, as the capital markets have evolved, so has the ability to manage risk. Trading strategies have matured. A principal problem is that risk management and trading have moved ahead of how we regulate the capital markets. In a world of planks, regulation tied to boats must begin to be updated. But, practically speaking, doing so will need to be supported by new technology that enables regulation to more closely mirror the capital markets of today. Blockchain and smart contracts may be one means to provide that solution.
Professor Hockett discusses the franchise view of finance that he and Professor Saule Omarova have developed, in which they propose modeling the modern financial system as a public-private franchise agreement.
It is common to hear claims that finance is about “credit-intermediation,” a matter of channeling scarce capital from virtuous savers to needful end-users. The picture behind this assertion is that of a gargantuan go-between—the financial system as Big Broker in the Sky. But modern financial systems are much more about credit-generation than -intermediation. And this changes everything where optimal institutional design and supervision are concerned.
You can spot the credit-generative function of modern finance by examining even a garden-variety bank loan transaction. The bank doesn’t lend you the pre-accumulated funds of depositors. It opens—or credits—your deposit itself with new credit-money: credit made money by Federal Reserve recognition of payments made out of your newly opened or credited account. To reduce all to a slogan, “Loans make deposits” more than “Deposits make loans.”
Professor Saule Omarova and I argue that contemporary financial systems are best modeled as public-private franchise arrangements. The franchisor is the sovereign public, acting primarily through its treasury or finance ministry and its central bank or monetary authority. The franchised good is the monetized full faith and credit of the sovereign—its money. And the franchisees are those private sector institutions—mainly now banks and “shadow banks”—that the public licenses to dispense the franchised good.
Like any good franchisor, a public acting through its treasury, central bank, and other financial regulators, acts to maintain the quality of the good that its franchisees distribute. In modern financial systems, the quality in question has been understood primarily in terms of over-issuance (i.e., inflation—“too much money chasing too few goods.”)
In this sense, the treasury, central bank, and other financial regulators’ task has been understood in what I call modulatory terms. The primary objective has been to prevent consumer and, in some enlightened jurisdictions, asset price inflations and hyperinflations. What I call allocative decisions, by contrast, have been thought best left to the market, on the putative ground that the public’s “picking winners and losers” is apt to be politically arbitrary rather than fiscally and financially “sound.”
Two conceptual errors, one of them partly corrected since 2009, seem to me often to have occluded orthodox understandings of this division of finance-regulatory labor. Both hampered the quality-control efficacy of many treasuries, central banks, and monetary authorities in the pre-2008 period.
The first error was the tendency to think of inflation as a disease of consumer goods and services markets but not commodity or financial asset markets. Hence, pundits, politicians, and even some central bankers until recently crowed of a “great moderation” featuring thirty years of “low inflation,” even as asset and many commodity prices rocketed to spellbinding heights. The 2008 crash was one consequence.
The second error was to take the financial system’s modulatory and allocative challenges to be mutually orthogonal. Theorists and policy-makers seem to have thought that the former could be fully handled with leverage-regulatory, liquidity-regulatory, tax, and traditional monetary policy instruments even while leaving credit-allocative functions almost entirely to privately owned franchisee institutions. People thought, talked, and acted, in other words, as if the appropriate quantity of credit economy-wide could be determined independently of all desired uses of credit—a misconception that comes naturally to those who think of credit-money as something exogenously given and “intermediated” rather than endogenously generated and disseminated.
Now the first error—that of thinking inflation a matter of goods and services but not asset markets—has come to be more or less widely recognized since the crash of ’08, its remedy taking the form of a “macroprudential turn” on the part of treasuries, central banks, and coordinate financial regulators. Public officials now seem to recognize that a financial system is more than the sum of its parts. They accordingly look also to its structure—the debt/credit relations among parties—in regulating it. I call this “regulation as modulation,” and central bank recognition of its importance since 2009 has been a major theoretical advance.
The second error I mentioned, by contrast, seems to have remained largely overlooked, and this oversight all but ensures that the “major theoretical advance” remains but a modest practical advance for the time being. The fact is that without affirmative public effort to channel finance capital more decisively to the “real” sectors of the economy, spontaneous glutting toward the financial sectors is all but inevitable. That renders our regulators’ credit-modulatory task all but impossible to achieve. Good modulation, in short, requires good allocation. We won’t reliably get our credit aggregates right, in other words, unless and until we get our credit uses and distribution right.
The underlying reason for this is that modern macro-economies not only feature endogenous credit-generation, but also are beset by multiple coordination and collective action challenges, many of them what I call “recursive collective action problems,” in the financial and “real” sectors alike. And these challenges, even though readily cognizable as classic market failures of the kind familiar even to economic orthodoxy, routinely go unremarked and overlooked by orthodox and heterodox economists alike.
A collective action problem, of course, stems from a situation in which multiple acts that are individually rational can aggregate into outcomes that are collectively irrational. Bums’ rushes, “prisoners’ dilemmas,” and Rousseauvian “stag hunts” are familiar examples. Less familiar are what I call recursive collective action problems, in which collectively irrational decision-outputs feed back into individual decision functions iteratively, with each iteration compounding the dysfunction of the previous collectively irrational output. Arms races are of this form, as are consumer price inflations, recessions, and debt-deflations (a.k.a. “depressions”), asset price bubbles, asset “fire sales,” and of course bank runs.
While these phenomena are familiar enough, their common structure often seems to go overlooked. More overlooked still is how pervasive tragedies of this sort are where not only financial, but also macroeconomic phenomena more broadly are concerned.
It can be individually rational, for example, for investors to bet on and thereby exacerbate short-term price movements in secondary financial or tertiary derivatives markets rather than invest long-term through primary markets in the “real” economy, absent any collective commitment regularly to renovate public infrastructure, limit destabilizing wealth and income inequality, and maintain robust aggregate demand and associated macroeconomic health on a continuous basis. For without such a backdrop, which no private agent is authorized or able to provide, there is little reason to think you can consistently profit more by mass-producing for humble per-unit remuneration than by gambling for potentially high per-gamble yield.
You might accordingly spend your extra money engaging in short-swing trades in the financial markets rather than invest “patient capital” in, say, a manufacturing firm. In an economy suffering long-term weaknesses in consumer demand, that is an individually rational decision to make. Yet if all of us with surplus “invest” in this manner, industry hollows-out further, wage and salary incomes decline all the more, and the anemic consumer-demand problem steadily worsens. What, then, to do?
Solution of collective action problems requires well-targeted exercises of collective agency—the things sovereigns and franchisors do. Most of my work through the Clarke Business Law Institute’s Program on the Study and Regulation of Financial Institutions and Markets, much of it in collaboration with Professor Omarova, some of it with Senior Fellows Dan Alpert or Paul McCulley, and much of it solo, is devoted both (a) to elaborating and substantiating the foregoing claims, and (b) to designing means of addressing the problems that those claims all highlight. The latter accordingly are means of, among other things, bringing the public back into credit-allocation in ways that facilitate effective credit-modulation, without arbitrarily ‘picking winners and losers’ in our financial system and macro-economy.
In theory, most of the means that I have in mind could be adopted by central banks or other monetary authorities. It would have been easy and probably uncontroversial, for example, for the Fed to have shorted commodities from 2010 into 2014 as I proposed in 2011, as a means of mitigating the hardships that Quantitative Easing caused lower-income Americans who saw speculators use cheap money to bid fuel and foodstuff prices up. It could also have purchased mortgage debt early, as I and others urged even in 2007 and 2008, to head-off the debt-deflation of 2009 onward. As a more general matter, however, U.S. institutional history and path-dependence alike suggest that a new public instrumentality, operationally situated between the Fed and the Treasury, probably would be the simplest way to put at least some forms of allocation proactively at the service of modulation.
Professor Omarova and I call one such institution, that we have designed and now advocate, a National Investment Authority (‘NIA’), which, as the foregoing should suggest, is more than a mere investment- or infrastructure-bank. Unlike more familiar public-private partnership arrangements, which place public capital under private management, our NIA places both public and private capital under public management, offering rates of return to patient capital that privately owned institutions simply can’t manage in a macro-environment rife with collective action and coordination challenges of the kind that I noted above. It thereby renders patience itself individually rational again, thus enabling more capital to flow toward anti-inflationary productive instead of bubble-blowing speculative outlets.
Our NIA would optimally bridge fiscal and monetary policy, in a division of labor apportioning more “purely” political allocative questions to the Treasury, more “technical” modulatory questions to the Fed, and more neutral allocative questions, sounding in solutions to coordination and collective action problems, to the new institution. In so doing, it would also restore to the United States a macro-oriented, market-failure-correcting institution that it hasn’t seen since the First and Second Banks of the United States championed by Treasury Secretaries Alexander Hamilton and Albert Gallatin, and the Reconstruction Finance Corporation championed by Presidents Herbert Hoover and, in expanded form, Franklin Roosevelt.
These institutions, as much as if not more than any other, were what launched the U.S.’s industrial takeoff of the 19th century and its post-’29-crash recovery and war mobilizations of the 20th century. As we now look ahead to a Green New Deal, the need for a revived form of public investment authority looks more acute than ever. And so already several Senators and House Members are studying Professor Omarova’s and my NIA.
Combined with our forthcoming work—some joint, some several—on “fintech,” what I call “Rousseauvian Money,” and a “Citizens’ Fed,” Professor Omarova’s and my full bodies of work sketch a renewed and repurposed financial system that takes both the “real” economy and the underlying public franchise nature of modern finance more seriously, keeps the public more fully in charge, and channels our primary financial resource—our monetized full faith and credit—more carefully toward productive instead of speculative uses. And we, like our program colleagues Dan Alpert, Paul McCulley, Doctoral Fellow Rohan Grey – and, soon, Dan Awrey—have only just begun.
In more than thirty years of teaching at Cornell Law School, Cynthia R. Farina has become a nationally known expert in administrative law, an area she never expected to be her focus. She’s pioneered a twenty-first-century approach to governmental rulemaking online, coauthored the most influential casebook in her field, published dozens of articles, and advised national and local agencies on how to make government policy making more accessible to ordinary citizens. As first a public member and then a lifetime fellow of the Administrative Conference of the United States (ACUS), she helped craft recommendations to Congress and the administration on improving government processes. Now, with her last semester of teaching behind her, she’s retiring.
“Cynthia is one of those rare scholars whose work is as influential outside the academy as it is inside,” says Eduardo M. Peñalver, the Allan R. Tessler Dean and Professor of Law. “It’s an achievement that most of us aspire to, but few of us ever attain—and I think she’s succeeded because she’s constantly learning.”
After earning her J.D. from Boston University in 1980, Farina clerked for Chief Judge Raymond J. Pettine of the U.S. District Court for the District of Rhode Island, and then for Chief Judge Spottswood W. Robinson III of the U.S. Court of Appeals for the District of Columbia Circuit. Next, Farina spent three years as an associate at Foley, Hoag & Eliot in Boston before arriving at Cornell in June 1985, encouraged by the late Robert Kent, whose federal courts class at Boston University had inspired her to teach law.
“I loved practice and I loved my firm, but I could see that coming to Cornell was a real opportunity to do something I wanted to do eventually,” says Farina, the William G. McRoberts Research Professor in Administration of the Law, Emerita. “I was naive about how hard it would be—the transition was much harder than I anticipated. Even though I was used to male-dominated environments, coming to a place where there were only two female faculty members, and not being from an Ivy League school, it was a long time before I began to feel comfortable.”
Farina wanted to teach constitutional law and civil procedure; instead, she was assigned administrative law and uniform commercial code. Within those first few years, she surprised herself by finding a place in administrative law, starting with the relationship between Congress and the president and building her reputation by writing about due process, separation of powers, and the ways government agencies perform their mission. Over time, as her work became better known, Farina found support from scholars around the country and, through the American Bar Association’s Administrative Law Section, from government lawyers and private practitioners in administrative law.
Her work as reporter on government ethics reform for the American Bar Association’s (ABA’s) Special Committee on Government Standards (1991–1993) led to positions in the ABA’s Project on the Administrative Procedure Act (2001–2002) and the ABA’s European Union Project (2005–2008), which concentrated on privacy and transparency.
Then in 2005, acting on advice from the Legal Information Institute’s Thomas R. Bruce, Farina began a partnership with Claire Cardie, a professor in Cornell’s Department of Computer Science, that led to the Cornell e-Rulemaking Initiative (CeRI).
“That was really a magical turning point for me,” says Farina. “Claire already had an international reputation in natural language processing, and she wanted to study ways to automate analysis of public comments in the rulemaking process. It was a path I never could have planned, but we hit it off really well, and it started a collaboration where we were the principal researchers in a series of National Science Foundation grants that resulted in CeRI.”
For the next twelve years, CeRI brought together researchers from communications, computing and information science, law, and the Scheinman Institute on Conflict Resolution. The scope of work was enormously ambitious: to open the rulemaking process to a broader range of participants, using the internet to increase transparency, facilitate communication, and strengthen civic participation.
“Cynthia brought her area of law into dialogue with the rapidly changing technological landscape all around us,” says Peñalver. “Her work on e-rulemaking is perhaps the most emblematic of this. Her creation of CeRI built bridges between Cornell Law School and the computer science strength of Cornell University, bridges that continue to enrich the life of the Law School.”
Following the end of CeRI, Farina has continued to work with agencies on improving public participation, both through ACUS and as a lifetime fellow in the ABA’s Administrative Law Section. But after thirty-three unexpected years in academia, she’s no longer thinking in semesters and is ready to spend more time at home.
“What surprises me about my career is how often opportunities opened up that took me down pathways I really enjoyed and found professionally satisfying,” says Farina. “Much of my career was very fortuitous—I never set out thinking that I would end up in administrative law, and certainly not anything with such a heavy technological spin as e-rulemaking.
“I’m extremely proud of the work CeRI did, because we created an area of inquiry that supported both theoretical work and on-the-ground, practical work that hadn’t existed before,” she continues. “I’m proud of having been asked to join Gellhorn and Byse’s Administrative Law, which was the first time there was a woman on an administrative law casebook. I’m proud of spearheading Women on the Walls, a collaboration of women faculty, students, and alumnae that placed the portraits of dozens of inspirational women in law school halls. And I’m proud that I taught administrative law to so many students who came in expecting it wouldn’t have much applicability to their professional lives, and who left recognizing how much administrative government matters in any area you practice. I think that makes them better lawyers—and, perhaps even more important, better citizens.”
As the fall 2018 semester drew to a close, members of the Cornell Law School community gathered to celebrate the retirement of Gregory S. Alexander, the A. Robert Noll Professor of Law. An internationally renowned expert in property law and theory, Alexander has taught at the Law School since 1985.
Eduardo M. Peñalver, the Allan R. Tessler Dean and Professor of Law, opened by observing, “Over his more than forty years in the legal academy, Greg has established himself as one of the most important and influential property theorists of the past fifty years, not to mention, the best-dressed. As he prepares to hang up his bow tie and head to northern California … I think it’s fair to say that Greg’s career accomplishments speak for themselves.”
Peñalver noted some highlights, including Alexander’s books Commodity and Propriety, which won the Association of American Publishers’ 1997 Best Book of the Year in Law award, and Property and Human Flourishing (2018). He also recounted the time that Alexander fell off a ladder while hanging Christmas lights and broke his back, but still managed to complete his final grades on time, lying supine as his wife held his students’ papers above him. “So to all my colleagues on the faculty,” Peñalver said, “if you need an extension on your grades, the answer is no.”
He concluded, “For me, Greg’s been a model of mentorship, and sponsorship, and collegiality, and friendship. … I know that my gratitude is shared by every other member of the faculty and by countless generations of Cornell students.”
Kevin M. Clermont, the Robert D. Ziff Professor of Law, who was on the Law School faculty when Alexander was hired, had prepared for the event by “excavating” Alexander’s appointment package, which featured “one student report that, quote, ‘his oral sentences are full and complete in a way one would write’ (how true), [while] another student concluded, ‘He is free from sarcasm’ (how untrue).” “In other words,” said Clermont, “whether the students knew what they were talking about or not, they loved him.”
Clermont also shared photos and memories from his decades of friendship with Alexander, and spoke of the idyllic life Alexander cultivated in Ithaca with “his delightful wife, Kim,” “his talented son, Ted,” and “his spectacular daughter, Dr. Beth.” Clermont recalled the time Alexander and Beth performed a song-and-dance routine about property law to the tune of “Supercalifragilisticexpialidocious” at the Barristers’ Ball.
Clermont claimed that he “socialized” Alexander after the latter arrived from Georgia “dressed like Jed Clampett.” Three decades later, following Alexander’s nine major, prize-winning books, sixty-one articles and counting, and habit of appearing on the short list for most-cited property scholars, Clermont called his friend “a bespoke professor: custom-made for this job.”
Robert A. Hillman, the Edwin H. Woodruff Professor of Law, has been a friend and colleague of Alexander’s for more than thirty-three years. He remarked on what a fantastic and popular teacher Alexander has been, noting that students would flock to his property class even when assigned to a different section.
Hillman did, however, have some bones to pick. “Few can keep up with Greg’s accomplishments,” he complained. “For example, I occasionally have backaches from too much tennis and basketball over the years. Greg recently fell off a ladder, as has been mentioned, and broke his back, just to outdo me.”
He also pointed out Alexander’s tendency to make fun of him in class, most recently targeting his informal dress sense. “What Greg doesn’t know,” confessed Hillman, “is that when I was teaching at Iowa, early in my career, I received an award from the students specifically about my wardrobe. It was called the Tan Pants Award and was for frequency of wearing tan pants.”
He remarked, “I only hope that [Greg and Kim] will come back for lots of visits. Or, Greg, if you invite me to California, I promise to wear outfits that will amuse you.”
The event concluded with a “rebuttal” from Alexander himself, who remarked that teaching at Cornell was an experience he didn’t even believe possible when he was in law school. He recalled some moments of doubt over the years, as when, during his 1L year, he thought he was going to flunk out.
Then there was his rocky first year as an instructor, at the University of Georgia School of Law, where one student evaluation suggested, “Take this short guy out and shoot him.” During his work that summer, with seemingly nothing to lose, Alexander decided to just have fun. The experience convinced him to keep teaching.
Alexander also recognized the many mentors and collaborators with whom he had worked during his career, including, at Cornell Law School, former dean Peter Martin and professors Ernie Roberts, Emily Sherwin, Laura Underkuffler, and Gerald Torres, as well as Peñalver, whose hiring Alexander championed and whose arrival was “the beginning … of a beautiful friendship.” He observed that Cornell has become a center for “the strongest group of property theorists in the world.”
“This is a very special place,” Alexander said. “It’s not just an elite law school; it’s a very special place.… It doesn’t just stay that way. It takes work to keep it that way.”
He added, “I’ll miss you all terribly. Thank you for giving me the opportunity of living a dream and being your colleague.”
Robert S. Summers, who grew up milking cows on his family’s farm in Oregon and went on to co-write the most widely cited treatise on U.S. commercial transaction laws and help draft laws governing Russia, Egypt, and Rwanda, died March 1 in New Canaan, Connecticut. Summers, Cornell Law School’s William G. McRoberts Research Professor Emeritus in Administration of the Law, was eighty-five.
The Uniform Commercial Code (West Publishing Co.), written with James J. White in 1972 and now in its sixth edition. The four volumes make up the most widely cited treatise on the rules that govern the sale of goods and other commercial transactions across the country.
A Cornell faculty member for forty-two years, Summers was best known as the coauthor of “It is the bible for lawyers and students interested in the area,” said Robert Hillman ’72, Summers’s former student and now the E.H. Woodruff Professor of Law.
Summers joined the Cornell Law School faculty in 1969. During his career, he produced fifty-five books and more than 100 articles, including influential works on legal realism, statutory interpretation, and form and substance in the law.
“It is impossible to exaggerate Bob’s impact on Cornell Law School. His memorable presence touched the lives of countless students and colleagues,” said Eduardo M. Peñalver, the Allan R. Tessler Dean and Professor of Law, whose office was next to Summers’s when Peñalver was a junior faculty member. “Even then, in the last few years of his extremely distinguished career,
Bob was larger than life. He loved Cornell deeply, and he was passionately devoted to our students and to the craft of teaching.”
Summers is also known for helping draft the laws that govern several countries. In 1993 the Russian government called on him to help draft its civil code. He later served as adviser to the Drafting Commission for the Egyptian Civil Code (1998-1999) and as principal drafter for the Code of Contract Law for Rwanda (2006-2010).
Summers collaborated with Hillman to write a major text in contract law, Contract and Related Obligation: Theory, Doctrine and Practice (West Publishing Co., 1987), now in its sixth edition. “No one worked harder than Bob, who had unlimited energy and zeal for each project he entertained,” said Hillman.
His contributions extended beyond scholarship. Among the most important, Hillman said, was co-founding in 1969 the Council on Legal Education Opportunity, a national organization dedicated to increasing the representation of minority and low-income students in law schools.
“That was one of the largest, most satisfying public service activities I have ever been privileged to engage in in my life,” Summers said when he retired in 2010. “It was extremely inspiring.”
In his own classes, he was known for his dedication to the Socratic method of teaching: instilling principles and concepts through rigorous questioning and argument, rather than “ladling [information] out on a spoon,” as he said.
“Generations of Cornell alumni know that Bob loved the Socratic method and was a demanding and, at first, frightening teacher,” Hillman said. “By the end of the semester, students realized that Bob’s style was in their great interest … and that he was a dedicated teacher who cared greatly about the success of his students.”
Summers was born September 19, 1933, on his family’s farm in Halfway, Oregon. As a child, he would walk 300 yards from his home to the Lone Fir Country Schoolhouse. Among his class of twenty-four students, he was valedictorian and won the annual Oregon State Future Farmers of America High School Public Speaking Contest.
While a student at the University of Oregon, Eugene, he drove a school bus to defray the cost of college. After graduating in 1955, he studied as a Fulbright scholar at the University of Southampton. In 1959, he earned his LL.B. degree from Harvard University, having studied under two leading scholars in jurisprudence, Herbert Hart of Oxford University, and Lon L. Fuller. In 1960, after practicing law for two years, he joined the faculty of the University of Oregon School of Law, where he taught for eight years.
“Bob was a renowned authority in two legal fields that most find quite distinct: contract and commercial law, and also jurisprudence and legal philosophy,” said Stewart Schwab, the Jonathan and Ruby Zhu Professor of Law and former dean. “He had an international reputation in both areas, and had dozens of close professional friends and colleagues in America, Europe, and elsewhere.” Summers also cared deeply for the well-being of Cornell Law School, Hillman said.
“When architects planning the first new addition to Myron Taylor Hall suggested that faculty offices would have to be underground, Bob ably led the insurrection that convinced the architects that the faculty would have none of that,” Hillman said. “I’m grateful each time I look out the window of my office in Myron Taylor Hall. I’m sure others feel the same way.” He is survived by his wife, Dorothy, of New Canaan, Connecticut, five children, and fourteen grandchildren.