Sharp stock price declines, or crashes, occurring upon the release of negative corporate information often trigger shareholder litigation under Securities and Exchange Commission rule 10b-5.  The prevailing method for calculating damages in these cases assumes that the stock price immediately following the disclosure reflects the security\‘s \“true value.\” Plaintiffs use this value to calculate their losses during th entire period in which fraud allegedly inflated the share price. In this article, Professor Leva nd Mr. de Villiers argue that a \“crash price\” is an unreliable, doctrinally erroneous, and economically unsound measure of damages. They propose alternative methods of damage calculation that extract the crash component froma postdisclosure price and yield a more accurate and fairer estimate of a stock\‘s true value.

A victim of computer virus infection may bring legal action under a negligence theory against entities such as web site operators and other providers and distributors of infected software. Proof of specific negligence is simple in cases involving a familiar virus strain that could have been prevented inexpensively. In cases involving complex and novel strains, and where lapses in compliance with the non-durable component of anti-viral precautions leave no evidentiary trace, such direct proof may be impossible. This article develops a theory of circumstantial evidence, based on the the doctrine \“res ipsa loquitur\”, aimed at alleviating a virus victim\‘s burden of proof.  \“Res ipsa loquitur\” allows an inference of negligence based on the mere occurrence of an accident and the circumstances surrounding it, and does not require proof of specific negligence.  The analytical core of the article consists of two components. (i) A probabilistic analysis derives a mathematical formulation of the \“res ipsa\” conditions, and identifies the factors that make a strong \“res ipsa\” case.  (ii) An analysis based on on (a) the computer science of the structure, operation and detection of computer viruses, and (b) the law and economics of virus detection and elimination, establishes that a malfunction resulting from computer virus infection typically constitutes a strong \“res ipsa\” case. A general software malfunction, in contrast, presents a weak \“res ipsa\” case. The \“res ipsa\” inference of negligence is particularly strong in cases of infected mission-critical software, such as components of the national critical information infrastructure. A final section addresses aspects of damages, including a model of damages and analysis of the economic loss rule in a computer virus context.

This article presents a legal and policy analysis of issue preclusion in product liability litigation. The analysis shows that application of offensive collateral estoppel to preclude liability constitutes an abridgement of a fundamental right, and should therefore be subject to strict scrutiny. The major public policy interests of collateral estoppel to be weighed in a strict scrutiny calculus are decisional consistenct and judicial economy. In fact, offensive collateral estoppel has an ambiguouscausal connection with decisional consistency and may actually undermine it. Furthermore, analysis of constitutional jurisprudence shows that the fundamental right at issue may not be rationed or compromised to promote a purelyeconomic interest. Based on these considerations, the offensive use of collateral estoppel to preclude liability does not pass the strict scrutiny test of constitutionality.  Policy implications of this analysis include limitations on full faith and credit recognition and enforcement of product liability judgements across state lines.

Federal Rule of Civil Procedure42(b) allows the separation of a civil trial into two or more components when such a separation would promote convenience, fairness and economy. The separate components are then tried successively. When a case is separated into two components, such as the separate adjudication of liability and damages in a tort action, the procedure is referred to as \“bifurcation.\” This article presents an analysis of the legal and policy implications of trial bifurcation in product liability litigation. an analysis of the information integration and group compromise inherent in the jury decision, within the framework of applicable procedural rules, predicts that bifurcation will give an \“a priori\” lower likelihood of a liability verdict and higher expected damages conditional on a liability verdict, compared to a unitary trial of the same case. Furthermore, the (unconditional) expected damage award is greater for bifurcated trials than for unitary trials when evidence of liability is strong, while the converse is true for marginal cases. We show that these predictions are consistent with empirical evidence based on reported case decisions, as well as experimental studies with simulated juries. A final section discusses public welfare implications of policies that would ecourage increased use of trial bifurcation.

The accelerating trends of interconnectedness, complexity, and extensibility are aggravating the already-serious threat posed by malicious code. To combat malicious code, these authors argue for creating sound policy about software behavior and enforcing that policy through technological means.

This paper describes an implementation of UNIX on top of an object-oriented operating system. UNIX is implemented without modifying the underlying mechanisms provided by the base system. The resulting system runs dynamically-linked UNIX binaries and utilizes the services provided by the object-oriented system.

Because of the urgent security requirments in many existing general-purpose operating systems, the large investment committed to such systems, and the large number of protection errors embedded in them, the problem of finding such errors is one of major importance. This report presents an approach to this task, based on the premise that the effectiveness of error searches can be greatly increased by techniques that utilize \“patterns,\” i.e., formalized descriptions of error types. It gives a conceptual overview of the pattern-directed evaulation process and reports the authors\’ initial experience in formulating patterns from the analysis of protection errors previously detected in various systems, as well as in applying the pattern-directed technique. This study is part of a larger effort to provide securable operating systems in DoD environments.