31 March 2015

Law School Market Dysfunction and What To Do About It According to Steven Harper

Some of my readers may be familiar with Steven Harper's book, "The Lawyer Bubble: A Profession in Crisis." If not, or if its price/length seemed daunting, then track down his article in the Winter 2015 issue of the American Bankruptcy Institute Law Review: Bankruptcy and Bad Behavior -- The Real Moral Hazard: Law Schools Exploiting Market Dysfunction. So far as I can determine, Harper's article is not yet available online. I will link to it when it becomes available. Until then, go to your local law library or download it if you have access to the WestLaw or LexisNexis databases.

Harper writes directly and to the point. His first part is a useful empirical analysis dividing American law schools into three sub-markets based on three criteria: (1) the success of their graduates in obtaining full-time, long-term jobs (FTLT)  that require a J.D., (2) the starting salaries of graduates who obtain such jobs, and (3) the geographic dispersion of graduates who find employment.

The twenty-four law schools that placed at least 60% of their graduates in FTLT JD-required jobs and placed at least 20% of those graduates in the 250 largest law firms in America make up the National Schools sub-market. The next sub-market--Regional Schools--were those that placed at least 55% of their grads in FTLT-JD jobs but with fewer than 20% with large firms. Last and least are the eight-nine (89!) law schools outside either of the first two sub-markets.

Graduates of what Harper characterizes as the "Problematic Submarket" have difficulty finding the sort of employment for which they have spent three years and many dollars. Indeed, "among the weakest competitors in this submarket are the thirty-four schools that placed fewer than 40% of graduates in FTLT-JD jobs"

So far, at least, there's no evidence of market dysfunction. Providers of any service can be always divided into three (or more) tiers. What Harper argues is dysfunctional is not that the job-related outcomes of some law school is better than others but that there has been no meaningful market-related response to this state of affairs:
An unimpeded market response to the collapsing demand for lawyers--a response that economist Joseph Schumpeter might have called "creative destruction"--would have required the weakest competitors in the Problematic Submarket to innovate dramatically, slash tuition, and/or close their doors.
Such has not been the case. But why not?

Harper assigns responsibility to three players. First, "students share some of the blame for the market's failure because they indulge their own confirmation bias. For too many, bad things happen only to someone else." Second, "the easy process of securing federally guaranteed loans encourages price insensitivity." Third, and the object of Harper's most barbed comments, are the Problematic Submarket law schools themselves, that is, "schools whose graduates experience the worst employment outcomes produce some of the highest levels of student debt."

As long as these law schools are playing with someone else's money (i.e., students' and the federal government's), there's no reason for reform. In other words, the market for legal education is not working.

Harper goes on to suggest reform centering around reducing availability of federal student loan funding to students who attend such schools. I won't reproduce the entirety of Harper's proposal here but suffice it to say that if graduates of a law school do not get FTLT-JD jobs at the rate of the Regional Submarket schools, that school's students would could not borrow the full cost of attendance. Students attending the Problematic Submarket schools would thus need to find resources other than federal loans and, to the extent that money came from private lenders, it would be dischargeable in bankruptcy.

I have repeatedly posted to the effect that federal student loans distort the market for higher education generally. Harper's proposals go some way toward restoring market competition for law schools

30 March 2015

A Long Time Coming: SEC and Crowdfunding

Two years ago I posted several times about the 2012 federal JOBS (Jumpstart Our Business Startups) Act. You can read those posts here and here. I was particularly interested in what the Act would do to reduce oversight by the Securities and Exchange Commission with respect to "crowdfunding," a means by which businesses and non-profit organizations can use the internet to appeal to many people for small investments. For more about crowdfunding, listen to my American Bankruptcy Institute podcast interviews with folks directly involved in it here and here.

Six months later, in October of 2013, I was pleased to post that at long last the SEC had promulgated rules by which to implement the various changes that Congress had legislated over a year earlier. Of course, those were preliminary rules subject to an opportunity for interested parties to object and suggest changes.

Finally, the objection period came to an end, the SEC made some changes, and at long last the rules have become final. Read all about it in the Washington Post here.

A couple of thoughts. First, credit should be given to the SEC for taking its time in crafting rules that, on the one hand, will allow business and others quickly to raise money for investment purposes and, on the other hand, to protect such potential investors from the fraudsters who inevitably will use the same rules for their purposes. As I argued here and here, compromise is not a dirty word and in the political (and economic) worlds there are regularly balances to be struck. Time will tell how well the SEC struck that balance but neither delay nor the certainty that fraud will occur means the final rules aren't the best that could have been made.

Second, the need for capital in our economic system is clear and increasing the ability of firms to raise capital and, more importantly, increasing the number of active investors, is important to the long-term health of that system. The rise of the phenomenon of "social enterprise," championed by former colleague Haskell Murray, is another leg in the chair of returning capitalism to its original ends.

La Traviata at the Carpenter Theater

For a joint birthday weekend the extended family plus one took in the Virginia Opera's production of Giuseppe Verdi's La Traviata. I can hardly hold myself out as a critic of opera but I thought the production was wonderful. (If it helps, my Italian son-in-law Attilio concurred.) 

The vocal performances, especially of soprano Celcia Violetta (I'm not making that up) Lopez and baritone Malcolm MacKenzie were particularly noteworthy, and the staging, albeit traditional, was also innovative and interesting without being distracting.

One aspect of La Traviata that I enjoyed was Verdi's addition of a father-son relationship as a significant part of the plot. You can't go wrong with a story of doomed lovers, one of whom must die at the end, but inclusion of the conflict between Alfredo and Georgio Germont and its positive resolution was an added bonus.

La Traviata is coming to Virginia Beach on April 11 and 12 and I highly recommend it to those who love opera and those who want to give opera a try.

26 March 2015

The End of the State As We Know It?

I have been reading more articles, primarily from European writers, about the end of the the modern "state" where the state is understood as a totalizing political-legal regime with a monopoly on the legitimate use of coercive force. Such an understanding of the state is of relatively recent vintage (most would place it in the 17th century) but is increasingly bedeviled by, on the one hand, the internal opposition of those who find themselves increasingly on the "outs" when it comes to the legal side of life and, and the other hand, by external "co-option" by cosmopolitan concentrations of capital.

I've addressed the significance of the rise of the modern state at the margins of contract law in The Puritan Revolution and the Law of Contracts (download here). I've sort-of posted a few times about the post-modern state herehere, and here.

All of this is but an introduction to an article by Italian legal scholar Mariano Croce, Secularization, Legal Pluralism, and the Question of Relationship-Recognition Regimes (download here). Croce begins by demonstrating my first point: "the rise of the secular state in the modern era as the successful attempt of the governments of central states to do away with the age-old condition of legal pluralism that had hallmarked the political life of medieval and early-modern Europe."

Croce goes on to describe the internal breakdown of the modern consensus of the state as a result of a resurgence in religious practices. In other words, contrary to the monolithic source of legal and practical social norms in the modern state, religious groups prescribe contrary standards of "lawful" behavior. His case in point is same-sex marriage.

Unlike most modern and post-modern writers, Croce does not inveigh against the growing seriousness of religious practices and the threat they present to the modern state. As he puts it,
Although the present, multicultural setting of Western countries cannot be said to be giving life to an actual neo-medieval condition of legal pluralism, the coexistence of multiple normative bodies, I will insist, is likely to prompt a far-reaching revision of the monist structure of liberal legal orders.
Croce indeed holds out hope that the result of a plurality of legal regimes would allow "individuals [to] act as direct and active producers of multiple legal options and models that best meet their needs and requirements."

Pluralist that I am (see my Principled Pluralism and Contract Remedies here), I must admit that I am not as sanguine about the future as Croce. First, the modern state is not about to retreat from its current monopoly on coercive power. I'm afraid it will take as violent an upheaval as the so-called Wars of Religion to get the state to release its firm grasp on power. And, until it does, most groups will fight for control of that power rather than seeking to establish a variety of plural regimes.

Second, Croce does not address the behind-the-scenes but nonetheless real power of multi-national business organizations. Such powerful non-state actors have grown accustomed to using the seemingly democratic levers of power to have their own ways in many states. To the extent that a plurality of legal systems would undercut the uniformity of commercial power, we can expect such actors to press for continuing state monopolies over those systems.

Nonetheless, I commend Croce's analysis to my readers' attention.

25 March 2015

Ted Cruz Can't Be President?!

No simple-minded birther controversy here but a well-reasoned article looking at a frequently-forgotten Founding-era resource, Emmerich Vattel and his 1758 book, The Law of Nations. Download and read Regent law student John Jones's piece, Natural Born Shenanigans: How the Birther Movement Exacerbated Confusion Over the Constitution's Natural Born Citizen Requirement.

Just what does "natural-born citizen" mean? Born anywhere in the world to American citizens? Of course. Born in America to non-citizens? Seems so. But might there be more to the constitutional phrase than the obvious? And would the Framers of the Constitution have intended to convey the "more"?

As for the latter question, Jones asserts a strong conclusion:
Contrary to the popular impulse toward a historically uninformed view of the term ″natural born citizen,″ a cursory reading of Vattel coupled with an understanding of its significance to the Framers suggests that the requirement is not a novel term invented by the Framers, but rather a term of art with a fixed meaning which would have been known to scholars and statesmen of the day. Indeed, this understanding seems to comport with what one would expect of a group of learned men convening to lay out a framework for government--the Framers did not invent terms when invention was improper. They used accepted, established terms to convey meanings in ways that would not be subject to later arbitrary revision.
Yes, Virginia, there may be more to "natural-born citizen" than meets most eyes (including Paul Clements), but I won't spoil your reading by telling you what Vattel included in his understanding of the expression or how, of all people, Chester Arthur fits into this peculiar picture. You'll simply have to read Jones's piece for yourself and draw your own conclusions.

24 March 2015

How Far Stare Decisis? Today at SCOTUS

The United States Supreme Court heard oral arguments in Bank of America v. Caulkett and the companion case of Bank of America v. Todelo-Cardona this morning. Both cases present an important issue of bankruptcy law: Can a Chapter 7 debtor strip off wholly unsecured second mortgages under section 506(d) of the Bankruptcy Code? I say yes and am one of the signers of an amicus brief that makes that argument at some length. You can read that brief here.

Of greater interest to more people may be the series of questions posed by Justice Scalia beginning on page 11 of the transcript that you can read by going here. Twenty-five years ago Justice Scalia had dissented in a case in which a Chapter 13 debtor was prohibited from doing what the Chapter 7 debtors seek to do in the cases argued today. Moreover, Justice Scalia continues to believe the majority in that earlier case was wrong. Thus, he asks counsel for the petitioner bank why he should not limit the earlier case to its facts and assert the contrary in today's cases.

In other words, Justice Scalia was asking a jurisprudential question: To what extent are members of a court bound by an earlier decision with which they disagree? Are judges bound by precedent they believe to be incorrect? This question--the nature of the principal of stare decisis--is a normative one and cannot be answered by looking to the law or even the express terms of the United States Constitution.

Unfortunately, rather than turning to first principles that I discussed here and here, the Court focused on the pragmatic concern of reliance. To what extent, several members of the Court asked, had lenders relied on the earlier decision in "pricing" loans like the ones at issue in the current cases? Even if it was incorrect, the justices wondered aloud, would it be fair to contemporary lenders to change the rules midstream?

Counsel of the bank seemed unprepared for this question and got around to a cogent response only with the help of Chief Justice Roberts. By way of contrast, counsel for the petitioner-debtors pounced on an empirical study in another amicus brief that purported to demonstrate that there was no material effects in similar situations. (You can read that brief here and form your own opinion.)

The Court seemed unimpressed by the empirical data and so went back to what it knows best, asking debtors' counsel to explain why, if x were the case twenty-five years ago, it shouldn't remain the case today, even if the decision twenty-five years ago was wrong? Or, more to the point, why the debtors were not arguing that the Court today should simply admit it was wrong twenty-five years ago and get matters back on track?

I don't know if the Court was serious about overruling its earlier case or if was merely trolling counsel for the debtors. I believe, however, that the Court lost the opportunity to delve more deeply into the nature and effect of stare decisis. In any event, I'm hoping that the Court will affirm the decision below and I would be delighted to see it go further and set matters straight.

23 March 2015

Human Rights or Rule of Law? Stern Observations and Suggestions for East Africa

If I have ever as wholeheartedly commended a piece of scholarship as I do colleague Craig Stern's piece, Human Rights or the Rule of Law -- The Choice for East Africa? (download here), I cannot recall it. In short, Stern identifies two important insights--"rights" are inviolable and concept of the rule of law is not interchangeable with rule by law--and applies them to the legal and political realities of Anglophone East Africa. For what it's worth, based on my observations, the legal/political reality of India is much the same.

Stern begin the human rights part of his piece by looking to the modern human rights movement. Beginning with the 1946 Universal Declaration of Human Rights, he observes that the post-WW II expression of human rights includes many "positive" rights such as rights to education, housing, and health care. The unchecked (and seemingly uncheckable) growth of such rights contrasts sharply with the relatively few "negative" rights enshrined in Enlightenment-era statements such as the English Bill of Rights, the American Declaration of Independence, and the French Declaration of the Rights of Man. These documents, reflecting a modern twist on the notion of rights developed in the Medieval and early-modern Christian West, were directed against State interference with individuals and, to a lesser extent, associations. They were not directed at allocation of State resources in favor of social goods.

I labored over this point in my lengthy series of posts drawn from Nick Wolterstorff's book, Justice: Rights and Wrongs. In other words, negative rights are trump cards that can be played against State action. Rights thus understood are not claims that the State do anything for me except ensure our rights are protected.

Stern deftly demonstrates the topsy-like growth of positive rights in subsequent United Nations conventions and post-colonial constitutions.  What's the big deal, one might ask? If a few rights are good, aren't more better?

The problem with treating, say, a "right to adequate housing" as a right becomes clear when we consider its implementation. Even under the best of circumstances, the economies of East Africa cannot implement such a positive right. The failure generally to turn positive rights into reality goes on to undercut the notion of rights as a whole. In other words, if, notwithstanding a nation's constitution, pragmatically there is no right to a decent home, then, pragmatically, there will be less political commitment to constitutional negative rights like freedom of speech. Everything--trump cards and regular playing cards--is up for grabs in the hurly-burly of political compromise.

The necessary politicization of unobtainable positive rights eventually undercuts the fundamental negative rights. Indeed, this is precisely the point I made in my piece, Looking for Bedrock: Accounting for Human Rights in Classical Liberalism, Modern Secularism, and the Christian Tradition (download here).

Stern goes on to advance his thesis by considering the reallity of what legal comparatists call the "penetration of law." To what extent does "law" actually effect the lives of citizens? In other words, how great is the gap between law on the books and law in action? Unsurprisingly, the greater the gap, the greater the public mistrust of a polity's legal system and with that goes trust in the very concept of the rule of law. Corrupt law makers and corrupt law enforcers undermine public confidence in law as a means of justice and retreat to personal and ethnic supra-legal enforcement of self-defined rights becomes increasingly understandable.

Stern's piece is an even-handed and thoughtful critique of East Africa's contemporary rights-saturated reality. The notion of rights must be kept analytically distinct from the notion of social goods for with the collapse of the former into the latter peoples everywhere run a risk of losing both.

22 March 2015

A Brief Postscript on the Place of the Dead

Years ago I wrote positively about worshiping at St. Helen's Bishopsgate in London. What we found distinctively meaningful was worshiping with the living and the dead whose crypts occupied spaces below and around the rest of us. In other words, a tangible expression of the Creed's affirmation of our belief in "the communion of the saints."

For comments along a similar line you can read Peter Leithart's post "The Disappearing Body" here. Drawing from a book by Candi Cann, Leithart directs his criticism toward the Western Christian practice of embalming the remains of the deceased:
Embalmment in the last [nineteenth] century was not for the preservation of the body and its ultimate resurrection but rather for the avoidance of the natural process of decay after death. In this way, embalmment was not, as it might first seem, a way of bringing us closer to the dead, but actually a way of further estranging us from them. The dead, as they are, are not presentable and acceptable company; they must first be sewn shut, stuffed, drained, transfused, and made up before we deem them acceptable.
By choosing not to embalm their dead, Jews (and Muslims) better recognize the twin virtues of an honest recognition of the un-natural reality of death as well as an appropriate respect for the dead. The American "Disney-fication" of death serves neither.

20 March 2015

Whinging Law Deans

A short piece in the New York Times, which you can read here, features an attack on the place of the bar exam as a means of evaluating the qualifications of law school graduates to practice law. Prominent among the complainants are some law school deans. Why, after decades of silence about the place of the bar exam as a gate-keeper to practicing law, are the deans suddenly speaking up? The answer is simple:
Many law school deans, bristling from criticism that they are replenishing their ranks with less academically qualified students as the number of law school applicants has fallen sharply, began to openly question the mechanics of the bar exam.
In other words, as the lack of success of their graduates (in the shrinking market for law students) in passing the bar exam becomes apparent, law deans are blaming the test, not themselves. They remind me of car manufacturers who blame car buyers when their cars don't meet fuel mileage standards. "Don't blame us if folks are buying too many gas guzzlers," they say.

In short, the race to the bottom by some law schools to keep their doors open is coming home to roost but these whinging deans don't want the outside world to know it.

Nearly five years ago I posted my thoughts about the utility of the bar exam here, and they haven't changed. The bar exam doesn't measure who is truly competent to practice law but it does identify those who aren't. In other words, the bar exam is a measure of likely incompetency. Passing it doesn't insure that someone will be a good lawyer but if you can't pass it, you almost certainly won't.

19 March 2015

Family Christian Stores for Bankruptcy Geeks

Warning: This post contains comments on the intersection of two subjects dear to my professional and academic heart: the Uniform Commercial Code (UCC) Article 9 and the Bankruptcy Code.

While visiting with Sarah Zylstra of Christianity Today about the larger bankruptcy law issues in the Family Christian Stores bankruptcy, we got to talking about the consignment claims of a large number of book sellers. Many of the publishers of books sold in Family Christian Stores did not sell their books to FCS but instead consigned them to FCS for sale, and that they have the contracts to prove it. Yet in its bankruptcy, Family Christian Stores takes the position that it owns the books and that the seller-consignors are merely creditors.

How can this be?

Long, long ago when I was still practicing law I took a case to the Wisconsin Supreme Court that revolved around similar facts. There I represented the general creditors of American Fuel & Supply Co. (AFSCO) who remained unpaid after AFSCO's liquidation in bankruptcy. We were suing Amoco to recover the value of motor oil that it had warehoused in AFSCO's facility, which it had removed shortly after AFSCO filed bankruptcy. I argued that Amoco was a consignor to AFSCO but that it had failed to give public notice of its consignment and should therefore lose to the unsecured creditors who knew nothing of the consignment. Even though the entire audience (my briefing associate, wife, and son) assured me I had the better of it, the Wisconsin Supreme Court disagreed and I lost 7-0. You can read the court's opinion here.

Vindication of a sort came five years later when Article 9 of the UCC was substantially revised. With the changes in the law of consignments it is now clear that my earlier argument would fail. So what, you ask? To answer that question leads to two others: What is a consignment? And how does a consignment work in bankruptcy?

Consignment is an arrangement in which the owner of goods (the consignor) entrusts the goods to an agent or bailee (the consignee) for sale. When the consignee arranges a sale of the goods, title passes directly from the consignor to the buyer, bypassing the consignee. The consignee remits a portion of the sale proceeds to the consignor and keeps the balance as a fee. Unsold goods remain the property of the consignor.

Notably, a consignee like Family Christian Stores has independently owned and operated stores. Its customers--and more importantly, its creditors--may be completely unaware that each store doesn't own what it's selling. Thus, even though consignors Abington Press, Baker Book House, David C Cook, Intervaristy Press, and many others owned books that consignee FCS was selling, it may be the case that none of the creditors of FCS knew it didn't own what was on its shelves.

Here's where it gets interesting. Article 9 of the UCC (in effect in every state in the United States) requires most--but not quite all--consignors to give public notice of their ownership interest. In other words, out of a sense of fairness to others, consignors must file a one-page document with the state so everyone who cares can see if a chain like FCS owns its inventory. Failure to file this document (known as a UCC-1 financing statement) means most consignors will lose--not to the consignee, who knows what's going on--but to the creditors of the consignee who didn't.

One of the peculiar effects of Chapter 11 bankruptcy is to turn the pre-bankruptcy debtor, who operated the business for the benefit of its shareholders, into a trustee for the benefit of its creditors. In other words, even though the pre-bankruptcy FCS knew much of its inventory was consigned, its post-bankruptcy self knows no such thing because its creditors didn't know. Didn't know, that is, unless each of the consignors filed one of those one-page financing statements. Cheap insurance, eh?

Apparently only a few of the consignors to FCS filed a financing statement. I'm not sure why the rest didn't since it typically costs only $15-50 to do so. (Did I mention it was cheap insurance?)

There is, however, one exception to the need of a consignor to file to protect itself: a consignor doesn't need to file a financing statement to protect itself if a consignee like FCS is "generally known by its creditors to be substantially engaged in the selling the goods of others." In other words, if "everybody" knows that the books on the shelves of a Family Christian Stores location don't belong to it, then the consignors get to take back their stuff.

And that's the argument the thirty-two (32!) consignors are making. Most of the creditors of FCS knew what was going on.

I didn't know that FCS was selling other people's books but I'm not a creditor, I'm not even a customer.

So, just how many of the creditors of FCS knew it was "substantially engaged in the selling of goods of others"? I have no idea but I suppose we all will know after the consignors and FCS get done litigating the matter, the costs of which will quickly hit six figures.

Did I mention that filing a financing statement was CHEAP insurance?

Those who want to know more about the intersection of the Article 9 of the UCC and bankruptcy might want to download and read my 2001 article, How Revised Article 9 Will Turn the Trustee's Strong Arm Into a Week Finger.

New and Improved: Download Early and Often!

Some months ago I posted links to my two most recent articles on municipal Chapter 9 bankruptcy. Both articles are now in print so I would like to direct any interested readers to the final, published (and citable) products.

The first (in order of writing although second in publication by a matter of days) is Who Pays the Price: The Necessity of Taxpayer Participation in Chapter 9, 24 Widener L. J. 81 (2015). Cribbing from my own abstract:
Even though taxpayers are not creditors and have no right to vote on a municipal plan of adjustment, bankruptcy courts should afford a presumption that they are parties in interest on the issue of feasibility of a plan. Without a party adverse to a plan settled by a city and its creditors, a bankruptcy court runs the risk confirming one that will ultimately fail because the ultimate stakeholders--a city's taxpayers--will not pay. In other words, while increased taxes and decreased municipal services are standard fare in recent Chapter 9 cases, with recognition as parties in interest, those who must pay more and receive less deserve a direct voice in the process.
In addition, an official committee of taxpayers whose professional expenses will be borne by the municipality should be appointed in sizable Chapter 9 cases. The cost of effective representation of collective taxpayer interests exceeds the benefit to any individual taxpayer. Such representation is a public good whose costs should be borne from the public fisc.
The second is Who Bears the Burden? The Place for Participation of Municipal Residents in Chapter 9, 37 Campbell L. Rev. 161 (2015). Again quoting myself:
Confirmation of a municipal Chapter 9 plan of adjustment should take the views of municipal residents into account on the issue of a plan’s feasibility. State constitutional and statutory resources must be consulted to determine the baseline of services that must be addressed to evaluate a plan’s feasibility.
The confirmation requirement of feasibility provides the substantive basis for standing of residents, while the relaxed requirements for an Article I tribunal provide the constitutional justification for it. The diffuse and non-pecuniary nature of the interests of residents in municipal services warrants the appointment of an official committee on their behalf. 
Both articles tend toward the technical in nature. Well, okay, both are technical. Yet each addresses an important point that the bankruptcy courts in the recent large Chapter 9 cases of Stockton and Detroit largely finessed: What is the place for important classes of stakeholders--taxpayers and residents-- who are not creditors of their bankrupt city? Justifying their presence in Chapter 9 cases is vital to the political legitimacy and long-term viability of the arduous and expensive municipal bankruptcy process.

18 March 2015

Ching vs. Goldberg: Contracts Scholars' Smack Down

Long ago I posted a short observation about colleague Kenny Ching's piece on that staple of Contracts classes throughout America, Jacob & Youngs v. Kent. In his full-length article, Justice and Harsh Results: Beyond Individualism and Collectivism in Contracts, Kenny concluded that the great Judge Cardozo had misrepresented New York precedent and the facts of the case when concluding that the builders had not materially breached their contract with home-owner Kent. You can download and read Kenny's article by going here.

Kenny has achieved something I've only dreamed of--a rebuttal article. And not only a rebuttal, but one by Victor Goldberg of Columbia Law School. Go here to download Goldberg's piece, Rethinking Jacob & Youngs v. Kent.

Goldberg takes Ching to task for misreading New York precedent. Since I have read none of the the many relevant cases, I am not prepared to express an opinion on whom has the better argument on that score.

Of more importance to me is the question of who should prevail on the facts of the case (at least as reported) and here I am prepared to accede to Goldberg's two-fold legal conclusion: (1) that the contract-law doctrine of material breach is a liability, not a property, rule, (2) the benefit of which can be lost if the breacher acts opportunistically. I'll leave to others the question of whether Goldberg properly applied this conclusion to the facts of Jacob & Youngs v. Kent.