Recent UW Law Faculty Scholarship: The Right to Amend State Constitutions; State Constitutional Rights and Democratic Proportionality; Legal Responses to Techlaw Uncertainties; The Rise of Private Equity Continuation Funds

Here is the latest faculty scholarship appearing in the University of Wisconsin Law School Legal Studies Research Papers series found on SSRN.

This Essay explores the people’s right to amend state constitutions, particularly in states that recognize the constitutional initiative. Together with other democratic rights that appear in state constitutions but not the federal charter, the right to amend recognizes popular sovereignty as an active commitment. Today, that right is under attack. Across the country, state legislatures are imposing signature requirements for popular initiatives that would make the ballot-qualification process nearly impossible; introducing supermajority approval requirements; and adopting deadlines, mandatory reviews, and wording requirements for popular initiatives that do not apply to amendments the legislature itself proposes. After describing the right to amend and canvassing current threats, the Essay considers practical and theoretical implications. It argues that democratic proportionality review can help courts distinguish valid regulation of the initiative process from subversion of it. And it explores the distinctive constitutional architecture to which popular amendment contributes.

State constitutional law is in the spotlight. As federal courts retrench on abortion, democracy, and more, state constitutions are defining rights across the nation. Despite intermittent calls for greater attention to state constitutional theory, neither scholars nor courts have provided a comprehensive account of state constitutional rights or a coherent framework for their adjudication. Instead, many state courts import federal interpretive practices, tiers of scrutiny, and rhetoric about the judicial role. The result is a growing jurisprudence filled with claims about the nature of rights, courts, and legislatures that bear no relationship to state constitutions or institutions.

This Article seeks to begin a new conversation about state constitutional adjudication. We first show how in myriad defining ways, state constitutions differ from the U.S. Constitution: they protect many more rights; temper rights with attention to communal welfare; include positive rights that identify government action as necessary to liberty; and emphasize rights required to sustain democracy. These distinctive founding documents, prizing individual and collective self-determination alike, require their own implementation frameworks—not federal mimicry.

Although state constitutions differ markedly from their federal counterpart, they share features with constitutions around the world that courts adjudicate using proportionality review. Perhaps unsurprisingly, practices associated with proportionality already appear in some state decisions. These decisions read constitutions in more holistic than clause-bound ways, meaningfully analyze the government’s actual reasons for its actions, and balance competing interests, paying special attention to core self-determination rights. Synthesizing and building on these practices, we argue for “democratic proportionality review” as a state-centered approach to adjudication. Such review tailors proportionality’s decisional framework to state constitutions committed to popular, majoritarian self-government, and it recognizes state courts themselves as democratically embedded actors, not countermajoritarian interlopers. After explaining how democratic proportionality review should proceed, we sketch some implications for contemporary debates about abortion, voting, and more.

  • Legal Responses to Techlaw Uncertainties in Research Handbook on Law and Technology (Bartosz Brożek, Olia Kanevskaia & Przemyslaw Palka, eds.) (Edward Elgar, Forthcoming) by BJ ARD, UW Law School, and Rebecca Crootof, University of Richmond School of Law

By creating new items, empowering new actors, and enabling new activities or rendering them newly easy, technological development upends legal assumptions and raises a host of questions. How do legal systems resolve them? This chapter reviews the two main approaches to resolving techlaw uncertainties. The first is looking back and using analogy to stretch existing law to new situations; the second is looking forward and crafting new laws or reassessing the regulatory regime.

This Article provides the first comprehensive examination of an emerging practice within the private equity sector—continuation funds. Continuation funds break from the traditional private equity model by allowing sponsors to hold on to assets beyond the typical fund term and, instead of selling the assets to third parties, sell them to their own newly established fund. Lauded by the private equity industry as providing “optionality” to investors, by allowing them to cash out or roll over, continuation funds have grown to represent a major segment of investment activity in the United States. Despite their surging popularity among private equity sponsors, they are subject to unusual investor resistance, and, puzzlingly, most existing investors in the original funds decline the option to roll over their stakes into a continuation fund, even though it is run by the same private equity firm with which they have cultivated relationships for years.

This Article addresses this puzzle and makes three contributions to the literature. First, we highlight the labyrinth of concerns that cast a shadow on the growing prevalence of continuation funds. Specifically, we show why the “house always wins” is a major part of private equity managers’ incentives and explore the web of conflicts of interest between sponsors and investors and among investors themselves. Second, employing in-depth interviews with market participants from both sides of the aisle––investors and sponsors¬––we examine the practical dynamics of continuation funds, exploring the cautionary tale they present to the conventional deference of law and economic theory to private contracting among sophisticated parties. Third, we present two alternative viewpoints regarding continuation funds: the market outcome view and the market failure view, and against this backdrop, we offer several policy recommendations that are particularly timely in light of the SEC’s recently adopted rules addressing the issue.

For the full text of these works and additional scholarship from UW Law faculty and staff, visit the University of Wisconsin Law School Legal Studies Research Paper Series on SSRN. A free email subscription is available at the top right of the page.