Brian D. Feinstein

Brian Feinstein (Forthcoming), Presidential Administration and the Accountability Illusion, Duke Law Journal.

Brian Feinstein and Daniel Hemel (Forthcoming), The Market Value of Partisan Balance, Northwestern University Law Review.

Abstract: For the past century, Delaware’s Constitution has provided that no more than a bare majority of judges on the state’s courts may hail from the same political party. Some scholars and jurists theorize that Delaware’s commitment to a politically balanced judiciary increases the state’s attractiveness to out-of-state corporations and adds value to Delaware-chartered firms. These claims echo a larger literature in law and the social sciences positing that ideological diversity improves decisional quality. Recently, a series of federal court decisions in the case of Adams v. Carney put these claims to the test. In December 2017, a federal district court held that Delaware’s partisan balance regime violates the First Amendment’s freedom-of-association guarantee because it discriminates among judicial candidates based on party affiliation. In December 2020, the U.S. Supreme Court vacated the lower court decision and restored Delaware’s scheme. The Adams litigation—which generated a series of exogenous shocks to Delaware’s legal regime—enables assessment of the value of partisan balance. If a politically balanced judiciary truly does add value to Delaware-chartered corporations, then the share prices of Delaware firms should have declined in the wake of the December 2017 district court decision and should have risen in response to the December 2020 Supreme Court ruling.   This study is the first to examine how equity markets responded to key decisions in the Adams litigation. Applying a range of model specifications, we find that Delaware firms experienced negative abnormal returns on the date of the district court decision and positive abnormal returns on the date of the Supreme Court’s ruling. These findings—supplemented by results from other key dates in the Adams litigation—are broadly consistent with the theory that a politically balanced judiciary adds value to Delaware-chartered firms.   We conclude by considering the implications of our results for two larger debates in legal scholarship: the debate over partisan balance requirements for federal courts and the debate over Delaware’s dominance in the interstate market for corporate charters. As for the former, our results provide the first revealed-preference evidence that relevant stakeholders assign positive value to partisan balance requirements for adjudicative bodies—a finding that potentially bolsters the arguments of scholars and politicians who want to extend similar requirements to U.S. Supreme Court justices. As for the latter, our results suggest that Delaware’s commitment to a politically balanced judiciary accounts for a nontrivial component of the so-called “Delaware effect”—the share-price boost observed in some studies for firms that reincorporate in the state. In the interjurisdictional market for corporate charters, Delaware’s judicial partisan balance requirements give the state a potentially significant competitive advantage vis-à-vis rivals that lack similar provisions.

Brian Feinstein and Jennifer Nou (2023), Strategic Subdelegation, Journal of Empirical Legal Studies, 20 (), pp. 746-817.

Brian Feinstein and David Zaring (2023), Disappearing Commissioners, Iowa Law Review.

Brian Feinstein (2023), Congress Is An It: A New View of Legislative History, Emory Law Journal.

Brian Feinstein (2023), Legitimizing Agencies, University of Chicago Law Review.

Brian Feinstein and Jennifer Nou (2022), Submerged Independent Agencies, University of Pennsylvania Law Review.

Brian Feinstein, William Heaston, Guilherme Siqueira de Carvalho (2022), In-Group Favoritism as Legal Strategy: Evidence from FCPA Settlements, American Business Law Journal.

Abstract: Anti-corruption laws aim to bolster public integrity by punishing attempts to illegitimately curry favor with government decision-makers. These laws, however, can generate integrity risks of their own. This Article examines one such risk: that firms subject to scrutiny under the Foreign Corrupt Practices Act (FCPA) may attempt to influence prosecutors by exploiting shared political leanings or related socio-cultural ties. Drawing on social psychology, we theorize that FCPA defendants retain defense attorneys that are ideologically aligned with Justice Department officials. This behavior is consistent with a strategy of marshaling affective polarization—i.e., the psychological tendency for individuals to view more favorably those that share their political beliefs—to defendants’ advantage. Alternatively, it may reflect defendants’ related belief that they benefit from retaining counsel that share social or cultural ties with prosecutors, where these ties happen to aligned with political orientation. Under either explanation, the strategy of hiring aligned counsel may be particularly auspicious in FCPA matters, in which prosecutors engage in subjective, trust-based assessments of defendants’ self-investigatory efforts, typically with minimal judicial oversight. We test this theory by matching attorneys listed on court filings for all FCPA matters over eighteen years with a database of individuals’ political views based on their patterns of political donations. This analysis reveals that defendants tend to hire more liberal attorneys during Democratic administrations and more conservative attorneys during Republican presidencies. They also are more likely to hire liberal attorneys when Justice Department prosecutors lean left and conservative ones when prosecutors lean right. These findings are consistent with our theory that FCPA defendants select counsel based on perceived benefits of their alignment with government officials. That possibility is noteworthy given the importance of shielding anti-corruption enforcement from even the perception of improper influence. In light of these findings, we offer policy prescriptions aimed at increasing transparency and judicial oversight of FCPA matters to mitigate integrity risks.

Brian Feinstein and Abby Wood (2022), Divided Agencies, Southern California Law Review.

Brian Feinstein (2022), Identity-Conscious Administrative Law: Lessons from Financial Regulators, George Washington Law Review.