Law and Economic Exploitation in an Anti-Classification Age

Does our legal system permit the economic exploitation of extreme vulnerability? Focusing on predatory housing loans—a thriving business at the dawn of the twenty-first century—this Article argues that the answer in most cases is yes. Under an individualistic neoliberal paradigm, borrowers are held liable for their contracts, even if they were targeted with predatory practices. Further, borrowers’ attempts to resort to antidiscrimination law, and frame their exploitation as “reverse redlining,” have offered no real answer. An important yet undertheorized explanation for this problem is the impact of the Supreme Court’s anti-classification jurisprudence on lower courts. In an anti-classification age, even outside of the constitutional arena, courts are reluctant to accept race-based arguments. As a result, colorblind analysis of predatory lending permits economic exploitation to thrive. This Article proposes a unique solution to this deadlock: embedding the analysis of individual borrowers in the context of their neighborhood, a move that neither denies nor relies on their race. Drawing on a variety of disciplines, including psychology, sociology, and public health, this Article explains how residing in distressed neighborhoods—the most embattled neighborhoods of our country—creates conditions especially fertile for exploitation. Based on this interdisciplinary analysis, this Article suggests an alternative legal framework which would circumvent the anti-classification problem. The new framework is tailored around the idea of individual dignity, which includes the right to freedom from economic exploitation. To protect such right it is suggested to utilize contract law and particularly the doctrine of unconscionability—which is highly apposite for a contextual analysis of predatory agreements. More broadly this Article argues that one of the important lessons to be learned from the tragic subprime crisis is how urgent it is to find an appropriate legal response to market exploitation of vulnerable individuals. Notably, the contractual framework suggested in this Article for predatory housing loans is useful for handling other exploitative loans, such as pay-day loans and auto-title loans. Further, the proposed framework is valuable beyond the contexts of lending and distressed neighborhoods, to address other forms of economic exploitation perpetuated by contract. Given persistent weakness in our economy, establishing an anti-exploitation norm in the market seems more important than eve

Guilt-Free Markets? Unconscionability, Conscience, and Emotions

Despite record-level economic inequalities and a vast growth in market exploitation, courts remain surprisingly reluctant to exercise their power to invalidate the resulting predatory contracts. There is no doubt that courts are authorized to invalidate predatory contracts based on their unconscionability. There is, however, an ongoing debate regarding the desirability of utilizing this judicial power in a capitalist society. This Article enters the discussion from a unique angle: it focuses less on the bottom line of jurisprudence and more on the law’s expressive power—the fact that the law’s impact extends beyond its ability to sanction or reward behaviors. Specifically, the Article argues that the way in which courts frame and discuss both market misbehaviors and the harms they cause may have an immense impact on other peoples’ behaviors, a potential that is currently unrecognized. Judicial reviews that reach the public domain have the power to encourage or discourage future wrongful behaviors and, more broadly, to influence the social and ethical norms governing the market. This Article begins with a fundamental premise that receives far too little consideration in traditional, economic, and even behavioral legal analyses: that emotions play a leading role in shaping moral judgments and altering actions. Considering the impact of law in the domain of the emotions is key to understanding how unconscionability-based messages may curb exploitative behavior by fostering self-restraint. Drawing on studies in psychology and the neurosciences, the Article first explains how the operation of human conscience depends on two emotions—guilt and empathy. Next, it juxtaposes the discourse of two recent cases, both involving wrongful market behaviors, to demonstrate courts’ ability to either evoke or suppress these emotions. Generalizing those examples, the Article then proposes three viable strategies that courts can use to enhance the operation of the emotions most necessary for self-restraint: a framework that welcomes, rather than ostracizes the moral emotions; a rhetoric that clarifies the pertinent social norms; and a content that thoughtfully portrays the harm caused to the exploited party. Notably, the Article’s conclusion is different from existing approaches to unconscionability. Instead of joining those who recommend more or less use of the unconscionability principle by the judiciary, the Article emphasizes the content of judicial decisions. With an understanding of the emotions that shape human behavior, courts can better direct their expressive powers. They can successfully evoke the emotions that facilitate conscience-based self-restraint of market actors. In this way the legal system can help people internalize a norm against market exploitation, thereby fostering a more ethical market environment. Importantly, using the law to support individuals’ conscience may eventually decrease the need for future interventions in the market’s operation

Market Humiliation

For many people, the marketplace is too often a site of intense humiliation. This Article aims to assist legal practitioners, judges, lawmakers, and scholars in understanding what market humiliation is, how it operates, and what can be done to curtail it. This is a particularly timely—even urgent—task due to a pair of 2022 developments at the Supreme Court that carry an enhanced threat to dignified market participation. In one, Cummings v. Premier Rehab Keller, the Court denied damages for emotional harm from a deaf and legally blind woman who was refused suitable accommodation by a private medical provider. The other, 303 Creative v. Elenis, is still pending. However, the Court’s willingness to hear it signals the possibility of allowing businesses to refuse to serve LGBTQ clients. While conventional analyses would classify such incidents as discrimination, with victims’ relief mainly depending on the group to which they belong, this Article takes a novel approach. It studies what market assaults targeting people’s identities have in common—regardless of the identity attacked—revealing three features most relevant to devising an adequate and much-needed legal response. First, it shows that humiliating incidents in the marketplace start with a shared and blameworthy behavioral profile, which this Article delineates. Second, it explains how when such a behavioral pattern exists, the rise of the particular emotion of humiliation is highly predictable, making claims of emotional harm far more credible than currently treated. It also brings to law scientific data showing how uniquely intense and long-lasting this emotion is and how it spreads from individuals to communities, suggesting jurists should stop minimizing the emotional harm created by humiliating acts. Third, it clarifies that feeling humiliated carries consequences much more severe and provable than what is currently assumed due to treating humiliation solely as an emotion. Those outcomes include significant common health problems that sometimes can lead to death. In light of these findings, the Article proposes a solution called market citizenship—the idea that market participation must entail a unique set of rights and duties that should be defined and enforced by the state. It originally suggests doing so not only via expanded nondiscrimination laws but also through private law. People attacked in the marketplace due to their identity should have the right to full, uninterrupted, stable, and humiliation-free market citizenship. The businesses that humiliate them must have a corresponding duty—inherent in their market citizenship—to show them normal levels of respect

Considering Affective Consideration

Focusing on the interaction of law and emotions, this Article unfolds in three parts. Part I illuminates the connection between the affective background of donative promises and their modem unenforceability. It hypothesizes that rejecting promises that are not supported by consideration can be seen as an effort to distance law from any association with irrational decisionmaking and to disassociate it from emotional spheres. Part II seeks to correct the erroneous way affective giving has been perceived by law in the gifts context. The law must carefully analyze each relevant emotion concretely and separately, rather than treating emotion as an undifferentiated aggregate. This part is dedicated to an interdisciplinary investigation of the leading emotions that play a role in the context of gifts and altruistic behavior: empathy and gratitude. Part III integrates the knowledge gained in Part II with the normative question of the desirable rule for donative promises. It suggests that given the special function of empathy and gratitude in the gift setting, the main justifications for the enforcement of bargained-for promises support the enforcement of donative promises. Part III concludes with the suggestion that enforcement should not be dependent on the motives that led to promising and instead would depend on the intention of promisors to be legally bound by their promises. It is suggested that the freedom to make legally binding promises would be afforded to players in all spheres of life and less biased toward profit-seeking activities. The Article ends with a concrete suggestion to move from total refusal to enforce donative promises to a cautious willingness to enforce them consciously : only in cases of provable intention to create legally binding promises

Law in the Cultivation of Hope

In recent years scholars have begun to question the longstanding dichotomization of (legal) reason and the passions, and have offered significant understanding of the connection of law and the emotions. Much of this work, however, has been done within a fairly narrow ambit. This Article seeks to broaden this scholarship in two ways. First, it points to an unexplored relation between law and the emotions: the role of law in cultivating the emergence of emotions. And second, it moves beyond the negative emotions, and directs attention to positive emotions and their interplay with the law outside the criminal context. Following these two new directions, the Article focuses on the role of law in the cultivation of hope. It suggests a role for law that has not been explored before: facilitating the emergence of positive emotions, and thus empowering law’s beneficiaries. The Article first uncovers the structure of hope as an emotion, and identifies the necessary qualities for developing individual hopes: the ability to imagine new possibilities not encompassed by one’s present condition; a sense of agency sufficient to envision oneself pursuing distant objectives; and adequate resources that enable bringing such goals about. After characterizing individual hope, the Article turns to a less-discussed possibility: the active, external effort to cultivate hope in people whose deprivation prevents them from envisioning and pursuing alternative futures for themselves. A profile of a beneficial effort to cultivate hope in others is then developed, drawing on the narrative of the award-winning documentary film “Born into Brothels”. This original profile reflects five elements that are central to such an effort: communicating recognition and vision; introducing an activity that allows for individuation; providing resources; supporting agency; and fostering solidarity. However, given the systematic character of the social problems that give rise to despair, individual efforts at cultivation may not suffice and institutional interventions, including those secured by law, may be indispensable. This Part concludes by discussing the perils entailed in such an enterprise. Finally the Article applies its analysis to the cultivation of hope through law. It explores the example of Project Head Start, which was enacted as a core component of the War on Poverty. For decades the Project has served to engage poor children and their families in new opportunities for personal and collective growth. Remarkably, this study finds many of the characteristics of a successful cultivation of hope in certain features of the Project that are required or facilitated by law: the involvement of parents in the operation of the Project\u27s local centers, and the strong solidarity that has emerged among parents, and between parents and Project staff. It further illustrates how some of the predicted risks of cultivating hope have materialized in this context, while others have not. The Article concludes by calling for further investigation of the promising notion that, by drawing on its capacity to cultivate positive emotions, the law may play an empowering role in the lives of individuals and groups