Kamakahi v. ASRM: The Egg Donor Price Fixing Litigation

In April 2011, Lindsay Kamakahi caused an international stir by suing the American Society for Reproductive Medicine (ASRM), the Society for Assisted Reproductive Technology (SART), SART-member fertility clinics, and a number of egg donor agencies on behalf of herself and other oocyte donors. The suit challenged the ASRM-SART oocyte donor compensation guidelines, which limit payments to egg donors to $5,000 ($10,000 under special circumstances), as an illegal price-fixing agreement in violation of United States antitrust laws. Ensuing discussion of the case has touched on familiar debates surrounding coercion, commodification, and exploitation. It has also revealed many misconceptions about oocyte donation, the allegations in the case, and antitrust law’s application to the ASRM-SART oocyte donor compensation guidelines. Regardless of outcome, the suit is an important one that could signal a change in public attitudes about the propriety of mixing money with motherhood. It should — and will — be closely watched

Fairness, Efficiency and Insider Trading: Deconstructing the Coin of the Realm in the Information Age

Whether and how the federal securities laws should restrict insider trading is one of the most hotly debated topics in the securities law literature. Paradoxically, both the theoretical analysis and the legal rules concerning insider trading remain extraordinarily vague and ill-formed. What is the special character of insider trading that leads to this apparently irresolvable puzzle? In this Article, I argue that there is, in fact, nothing special about insider trading that creates this dilemma, but rather there is something special about the nature of information itself. Accordingly, this theoretical dilemma is not limited to insider trading regulation, but rather pervades all areas of intellectual property law. In this Article, I situate insider trading regulation within the larger body of intellectual property law by discussing three potential allocations of the property right in valuable inside information. First, inside information could be treated as a public resource, meaning that a person in possession of inside information could not legally exploit that advantage for personal profit. Such a regime would forbid some or all insider trading by forcing the disclosure to the marketplace of inside information prior to trading. I argue that regulators should reject this alternative because, despite it\u27s proponents\u27 tendency to justify the rule in terms of fairness, this proposal is unlikely to foster fairness in any meaningful way. Alternatively, the property right in valuable inside information could belong to issuers, as the producers of such information. I argue that regulators should reject this alternative because, despite its proponents? tendency to frame their arguments in terms of promoting informational efficiency, a legal regime treating inside information as the property of the issuer is unlikely to further that goal. In fact, such proposals assume an affirmative answer to a question that is fiercely debated in other areas of intellectual property law: does creating a property right in information producers incentivize additional production to the extent necessary to offset the social costs of excluding others from use of the information? Finally, the property right in valuable inside information could reside with outsider traders (traders who possess inside information, but are neither insiders nor constructive insiders of the issuer). I argue that regulators should pursue this alternative because, although there is no need to encourage issuers to create valuable inside information, the need to encourage the dissemination of such information to the marketplace has been recognized for many years. Accordingly, I propose in this Article a system of federal securities regulation that would permit trading by corporate outsiders who did not receive their information in a tip from an insider or constructive insider. Such a system, I argue, provides the hope of filling in the gaps left by the current disclose or abstain system, by encouraging the reflection of material information in stock market price without disclosure of the actual inside information. At the same time, this proposal avoids the perverse incentives and negative impacts on market efficiency attendant in a system that permits insider trading by corporate employees

The Return of the Rogue

The “rogue trader”—a famed figure of the 1990s—recently has returned to prominence due largely to two phenomena. First, recent U.S. mortgage market volatility spilled over into stock, commodity, and derivative markets worldwide, causing large financial institution losses and revealing previously hidden unauthorized positions. Second, the rogue trader has gained importance as banks around the world have focused more attention on operational risk in response to regulatory changes prompted by the Basel II Capital Accord. This Article contends that of the many regulatory options available to the Basel Committee for addressing operational risk it arguably chose the worst: an enforced selfregulatory regime unlikely to substantially alter financial institutions’ ability to successfully manage operational risk. That regime also poses the danger of high costs, a false sense of security, and perverse incentives. Particularly with respect to the low-frequency, high-impact events—including rogue trading—that may be the greatest threat to bank stability and soundness, attempts at enforced self-regulation are unlikely to significantly reduce operational risk, because those financial institutions with the highest operational risk are the least likely to credibly assess that risk and set aside adequate capital under a regime of enforced self-regulation

Sunny Samaritans and Egomaniacs: Price-Fixing in the Gamete Market

Krawiec compares the egg market to sperm market to illustrate the extent to which public-interest rhetoric enables private wealth transfers in the egg market. She also illuminates why such rhetoric is so effective, playing on deeply held societal norms. In addition, she provides an overview of the oocyte business, highlighting issues relating to recruitment, compensation, controversy, retrieval, and risk. She does the same for the sperm business. Furthermore, she discusses the anticompetitive behavior in the egg market and argues that the horizontal price-fixing embodied in the American Society for Reproductive Medicine\u27s pricing guidelines violates the Sherman Act. Lastly, she concludes that market forces, rather than collusive industry agreement, must be allowed to determine the proper mix of altruism and monetary payment that ultimately constitutes total egg donor compensation

A Woman’s Worth

This Article examines three traditionally “taboo trades”: (1) the sale of sex, (2) compensated egg donation, and (3) commercial surrogacy. The Article purposely invokes examples in which the compensated provision of goods or services (primarily or exclusively by women) is legal, but in which commodification is only partially achieved or is constrained in some way. I argue that incomplete commodification disadvantages female providers in these instances, by constraining their agency, earning power, or status. Moreover, anticommodification and coercion rhetoric is sometimes invoked in these settings by interest groups who, at best, have little interest in female empowerment and, at worst, have economic or political interests at odds with it

Organizational Misconduct: Beyond the Principal-Agent Model

This article demonstrates that, at least since the adoption of the Organizational Sentencing Guidelines in 1991, the United States legal regime has been moving away from a system of strict vicarious liability toward a system of duty-based organizational liability. Under this system, organizational liability for agent misconduct is dependant on whether or not the organization has exercised due care to avoid the harm in question, rather than under traditional agency principles of respondeat superior. Courts and agencies typically evaluate the level of care exercised by the organization by inquiring whether the organization had in place internal compliance structures ostensibly designed to detect and discourage such conduct. I argue, however, that any internal compliance-based organizational liability regime is likely to fail because courts and agencies lack sufficient information about the effectiveness of such structures. As a result, an internal compliance-based liability system encourages the implementation of largely cosmetic internal compliance structures that reduce legal liability without reducing the incidence of organizational misconduct. Furthermore, a review of the empirical literature on the effectiveness of internal compliance structures suggests that many organizations have adopted precisely this cosmetic approach to internal compliance. This leads to two potential problems: first, an underdeterrence of organizational misconduct and, second, a proliferation of costly but ineffective internal compliance structures