The other night at the Cardozo School of Law, a group of distinguished legal minds got together to settle a dispute over a loan default. The lender wasn’t Citibank or Countrywide—it was Shylock, from Shakespeare’s “The Merchant of Venice.” His last trial, English majors may recall, didn’t go so well. (He was publicly humiliated, and was forced to convert from Judaism to Christianity; the authorities handed over his estate and half his money to his enemies.) Modern audiences tend to view his treatment at the hands of the Venetian court as unfair—the scholar and critic A. David Moody wrote that “it seems to involve a reversal of the right order of things”—and so Richard Weisberg, a professor of law and literature at Cardozo (“Poethics,” “When Lawyers Write”), decided to give him an appeal.

“Lawyers were one of the first groups, along with theatre directors, to see Shylock’s position,” Weisberg, who takes a pro-Shylock reading of the play, said last week. “Shylock really has the best lines—there isn’t a lot of argument about that—but in the nineteenth century a prominent German legal philosopher, Rudolf von Jhering, was among the first to argue that he actually had the better legal case.” This was an exhibition hearing (Weisberg arranged a similar one for Melville’s Billy Budd in 2006), but the legal lineup was extremely legit. Hearing the case: the First Amendment expert Floyd Abrams; Jed S. Rakoff, a federal district judge in New York; Justice Dianne T. Renwick, of the Appellate Division of the New York State Supreme Court; the federal appeals-court judge Richard Posner; the Columbia literature professor Julie Peters; Bernhard Schlink, the law professor and novelist; and Anthony Julius, best known as Princess Diana’s divorce lawyer.

The appeal was held in the Cardozo moot courtroom, before a sold-out crowd that seemed to be equal parts lawyers and Shakespeare nuts. Actors did a CliffsNotes version of the play, focussing on the trial scene. Quick refresher: Renaissance Venice, a different era in Judeo-Christian relations. Shylock, a Jewish moneylender, lends three thousand ducats to the Christian merchant Antonio, so that Antonio’s friend can use it to woo the wealthy Portia. Shylock, who hates Antonio, demands a “pound of flesh” as collateral. Some things go wrong, and everyone ends up in court, where Portia, disguised as a doctor of law, gets Antonio off the hook and gets Shylock charged with attempted murder. The staging was contemporary: Antonio wore a suit; Shylock carried a briefcase.

After a short reception—sushi, wine, California wraps—the seven judges took the bench to hear arguments from lawyers for Shylock and Antonio. They were dressed as if for brunch (sweaters, turtlenecks), and a few jotted down notes. Michael Braff, a partner at Kaye Scholer, argued, on Shylock’s behalf, that his client should get his money back, plus interest. (He did not press for “specific performance”—the pound of flesh that Shylock had been shouting about in the play. “After four hundred years, my client has had time to reconsider,” Braff said.) Daniel Kornstein, a partner at Kornstein Veisz Wexler & Pollard, represented Antonio, and he attacked the validity of the pound-of-flesh agreement. He brandished a detailed brief that he had written, which compared the agreement to “a tainted C.D.O.” and Shylock to a predatory lender.

“If it please the court,” Kornstein said, “this is a case about an illegal contract.”

“What’s illegal about it?” Judge Rakoff interrupted. “As you well know, there is a virtual obesity epidemic in this country, and to remove a pound of flesh is wholly to the public good.”

“Not by a knife wielded by your sworn enemy,” Kornstein said. He brought up Shylock’s ulterior motives—“the deep hatred” he had for Antonio.

“What does that have to do with anything?” Floyd Abrams asked. “Why should we even consider that in deciding whether to enforce the contract?”

“It adds color,” Kornstein said. He went back to the pound of flesh. “The contract, on its face, contains a clause that is such a penalty that no civilized society—not even Venice, New York, here—would enforce it.”

A woman in the audience called out, “They would in Venice, California.”

To skip, “Law & Order” style, to the rulings: the judges were split, but they came out, five to two, in Shylock’s favor. Schlink, Rakoff, Abrams, Peters, and Renwick said that he deserved to be repaid his three thousand ducats, though they differed on the question of interest. (Schlink, on the pound of flesh: “It was Antonio’s obligation to deliver,” but “our public policy forbids enforcing a contract in a way that enforcement leads to one party’s death.”) Posner and Julius voted to let Antonio keep the money.

Portia, admired by many readers for her “quality of mercy” speech, was reprimanded by the judges for impersonating a doctor of law. “The trial was a travesty,” Abrams said, of Shakespeare’s litigation scene. “Beautiful sometimes, funny sometimes, and ugly sometimes, but that judgment is not something that we sitting here today can enforce.” Posner said, “I’m particularly critical of Antonio’s conduct. His failure to insure his cargoes was completely irresponsible.” Renwick said that the whole thing made her think of the rickety deals that got us into the current financial mess—“the dangers of going into a contract with someone who has covert ideas and interests”—and suggested that all the parties were at fault. Posner agreed: “This is one of those cases in which we’ve just heard very fine lawyers argue the cases, but the litigants are all disreputable people. This is often true, particularly in the twenty-first century.” ♦