Volume 2013Masthead PDF
Discrimination Statutes, The Common Law, and Proximate Cause
Sandra F. Sperino | 2013 U. Ill. L. Rev. 1
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The Supreme Court recently interpreted causal language in the Uniformed Services Employment and Reemployment Rights Act (USERRA) to include the common-law concept of proximate cause. This Article anticipates that courts will incorporate proximate cause more broadly into the primary federal discrimination statutes and argues that courts should not interpret the statutes in this way. The Article demonstrates the theoretical and practical difficulties of importing proximate cause principles into employment discrimination law.
The Article demonstrates how only weak textual, intent, or purpose-based arguments support courts’ use of proximate cause in Title VII. Many of these arguments are premised on the idea that the federal discrimination statutes are torts. This Article challenges this assumption and argues that describing a cause of action as a tort does not provide any meaningful guidance about whether to import proximate cause. Proximate cause is a notoriously flexible and theoretically inconsistent concept. Proximate cause has no independent descriptive power and is highly dependent on the underlying tort to which it is attached. Employment discrimination claims do not fit within any traditional tort and therefore do not align well with traditional articulations of proximate cause.
When courts import proximate cause, they are not simply importing a concept from the common law, but rather are engaging in an unguided policy choice—a choice that will allow courts to further limit the reach of federal discrimination law. Importantly, the federal discrimination statutes already contain express limits on liability that eliminate or severely constrain the space available for courts to import and define proximate cause
Facts, Formalism, and the Brandeis Brief: The Origins of a Myth
Noga Morag-Levine | 2013 U. Ill. L. Rev. 59
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The Brandeis Brief has long been central to historical accounts of the struggle and ultimate triumph of progressive jurisprudence over legal formalism. Yet this familiar storyline is difficult to reconcile with the historical record on two counts. The first is its incompatibility with the presence of extra-legal evidence in cases and briefs well predating that of Brandeis. The second is the fact that, contrary to the prevailing account, conservatives were not the vanguard of opposition to such extra-legal evidence. In practice, it was progressive defenders of social legislation who long sought to exclude proof regarding the alleged health and other benefits of legislation from judicial review.
This Article offers an alternative reading of the origins of the Brandeis Brief and of its relation to the constitutional conflicts of the Lochner era. It argues that in marshalling the medical and social evidence on the dangers of long work hours, progressives implicitly capitulated on the most divisive issue in nineteenth-century police power debates: the authority of courts to distinguish true public health measures from “mere pretext.”
This Article locates the origins of the scientific tradition on which the Brandeis Brief drew in early nineteenth-century British efforts to frame labor laws as health interventions to overcome barriers to interference with market relations. In turn, this strategy led to the emergence, first in Britain and later in the United States, of a conservative claim equating common-law constitutionalism with the requirement that courts be made guardians against laws passed under the false pretext of public health. It was in response to this line of argument that American progressives, towards the end of the nineteenth century, came to insist that courts owed legislators deference regarding the existence of health justifications for legislation ranging from restrictions on the marketing of margarine to work-hour limits. Lochner’s ultimate rejection of this presumption forced progressives to shoulder the burden of proof and gave rise to the Brandeis Brief.
Credit Bidding, Security, and The Obsolescence of Chapter 11
Charles J. Tabb | 2013 U. Ill. L. Rev. 103
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Chapter 11 was a monumental achievement when it was enacted as part of the Bankruptcy Code in 1978. Reflecting the financial world of the times, chapter 11 and related provisions effected a carefully calibrated balance between the rights and powers of competing stakeholders. A core component of that delicate balance was to protect the right of secured creditors to “credit bid” if their collateral was being sold, whether during the pendency of the case or in a cramdown reorganization plan. Some high-profile recent cases denied secured creditors the right to credit bid in a sale under a cram-down plan, concluding that alternative protection may be afforded through invocation of the “indubitable equivalent” option. The Supreme Court, however, upheld the secured creditor’s right to credit bid in a plan sale in Gateway Hotel, LLC v. Amalgamated Bank RadLAX. The Court decided RadLAX on very narrow statutory grounds.
After a detailed examination of the nature of secured credit and the historical evolution of the treatment of secured claims in bankruptcy, this Article first explains why, on the statute as written in 1978, Congress intended for secured creditors to have the right to credit bid in a sale under a cram-down plan and did not intend for that right to be supplanted by an alternative indubitable equivalent treatment. In RadLAX, the Supreme Court agreed. The Article then demonstrates, however, how the financial world for which the 1978 Code was written has fundamentally changed, with the rise of dominant secured creditors. That change has upset the balance of power, rendering the Code’s scheme obsolete as regards secured creditors in this context.
The Article then asks what can and should be done, either judicially or legislatively, to address the problem of chapter 11’s obsolescence. As a matter of statutory interpretation, a “faithful” Court should be bound to uphold the secured creditor’s right to credit bid, as the Supreme Court did in RadLAX, although a dynamic interpretation might counsel otherwise. Legislatively, the time has come to amend the Bankruptcy Code to reverse the default rule on credit bidding; suggested Code amendments are offered. Contrary to the virtually unanimous body of scholarly opinion, the Article argues that credit bidding should not presumptively be required. Instead, a secured creditor should be permitted to credit bid only if it makes a specific showing of “cause” to the court, demonstrating how denial of that right would prejudice the secured creditor in the particular case.
Can't Buy Me Love: Monetary Versus In-Kind Remedies
Daphna Lewinsohn-Zamir | 2013 U. Ill. L. Rev. 151
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The choice of appropriate remedies is a major concern in all legal spheres, yet little has been done to determine which remedies people actually prefer. Scholarly debates on this issue are typically based on theoretical arguments and intuitions rather than experimental or empirical data. It is often assumed that people are indifferent between in-kind and monetary remedies of equal pecuniary value. Consequently, some scholars have argued, for instance, that people ordinarily view a contractual obligation as an option to either perform in kind or pay expectation damages.
This Article challenges the conventional wisdom that monetary remedies are usually a satisfactory substitute for in-kind redress. It presents new experiments that examine the choices laypersons and experienced businesspeople make between remedies and entitlements. The findings establish that members of both groups strongly prefer in-kind entitlements and remedies over monetary ones. For example, they would rather be given the very thing to which they were entitled than receive a monetary substitute, however accurately calculated. It is therefore possible that damages routinely fail to provide adequate compensation, even when they pertain to fungible, easily quantifiable assets.
Since promoting individuals’ welfare is a major concern for legal policy making, ignoring the preference for in-kind redress may lead to both inefficiency and unfairness. The Article offers various normative implications of the experimental findings, through the dis-cussion of such in-kind remedies as specific performance of contractual obligations, injunctions for wrongful interference with property, compensation in development rights for takings of land, and apologies in defamation cases.
The Contradictory Messages of Rehnquist-Roberts Era Speech Law: Liberty and Justice for Some
David Kairys | 2013 U. Ill. L. Rev. 195
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The Supreme Court under Chief Justices Rehnquist and Roberts has been characterized as pro-free speech, based in part on the Court’s protection of money as a form of speech in the campaign finance context. Parsing the tangle of free speech decisions for themes and patterns, this Essay highlights inconsistencies in the Court’s decisions on free speech issues. Looking beyond the familiar First Amendment rhetoric of self-expression, empowerment of the people, and triumphal American democracy, this Essay reveals stark differences between the Court’s treatment of modes of speech available to people of ordinary means, and modes available to corporations and the wealthy. The Court’s curtailment of rights related to the former, and expansion of rights related to the latter, skews, corrupts, and undermines the democratic process.
A Market Under(writing) the Weather: A Recommendation to Increase Insurer Capacity
Thomas Berghman | 2013 U. Ill. L. Rev. 221
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Property and homeowners’ insurance are difficult and expensive to procure for residents of catastrophe-prone states like Florida, several Gulf Coast states, and California. In the last two decades, many insurers have left these markets because there is not enough profit to be made. As a result, remaining insurers charge very high premiums, and state governments must get involved to ease markets (at great expense to taxpayers). In addition, the insurance industry’s capacity for loss is simply insufficient—if a large hurricane should hit Miami, for instance, insurers who provide coverage on buildings and homes in Miami will almost certainly become insolvent.
Two mechanisms exist to increase insurer capacity. First, reinsurance serves as insurance for insurance companies—an insurer who covers residential homes will buy insurance on its own policies. Reinsurance is insufficient, however, to supply the necessary capacity to cover low-probability, high-risk catastrophes (such as a Category 5 hurricane). The second mechanism is Alternative Risk Transfer, which increases capacity by securitizing risk. The main example in the Note is the catastrophe ("cat") bond. These bonds are constructed by insurers to increase capitalization. The insurer will put the premiums of certain policies in a Special Purpose Vehicle (SPV), an entity set up purely for the bond’s purposes. Investors (hedge funds, pension funds, banks, etc.) will buy bonds, the capital from which goes in the SPV. The SPV then invests the capital in lowrisk securities like treasury bonds and pays investors attractive returns. In return for these high returns, the cat bond contains a trigger which may result in investors losing some or all of their capital and interest. An example of a trigger is a Category 5 hurricane hitting Miami, or causing more than $15 billion in damages—should that happen, investors lose their capital and interest, which are used to pay losses on the insurer’s policies. In order to further incentivize investment in cat bonds, this Note recommends treating investors' returns on these bonds as tax-exempt.
The Note begins by providing a background of (1) the state of the catastrophe insurance industry and its inadequate capitalization, (2) insurer incentives, basic insurance principles, and tax treatment, (3) basic principles and tax treatment of the reinsurance industry, and (4) current proposals to increase capacity in the catastrophe insurance industry. The Note then analyzes (1) the capacity shortage problem, comparing the costs and benefits of reinsurance and alternative risk transfer, (2) the various federal policies purporting to address the increasing price of homeowner insurance premiums, and (3) several alternative risk transfer devices. The Note then discusses the advantages of the cat bond, such as the adaptability of bonds to numerous circumstances. Furthermore, the Note discusses the ability of cat bonds to supplement traditional reinsurance methods of increasing capacity. Lastly, the Note analyzes the benefits of treating cat bonds as tax-free.
Creative Expression and the Human Canvas: An Examination of Tattoos as a Copyrightable Art Form
David M. Cummings | 2013 U. Ill. L. Rev. 279
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In Warner Brothers’ 2011 film The Hangover: Part II, actor Ed Helms portrays Stu Price, a man who inadvertently gets a tribal tattoo on his face, reminding many moviegoers of boxer Mike Tyson’s infamous facial tattoo. Mr. Tyson’s tattoo artist sued Warner Brothers, claiming that the film’s public display of his work of visual art amounted to copyright infringement. While this particular case was settled out of court, it raises interesting questions regarding the applicability of copyright law to tattoos.
This Note addresses the issues introduced by this lawsuit. It begins by discussing the Copyright Act of 1976 and its potential impact on the rights of tattoo artists and their customers. It then proceeds to discuss the worthiness of tattoos as an art form subject to copyright protection. This Note also analyzes the unique human rights implications inherent in affording artists control over art that is permanently affixed to a person. It concludes with a recommendation that fits within the framework of current copyright law, while balancing the rights of the artist to retain control over her creation with the rights of the tattoo recipient to retain bodily autonomy.
Breaking the Cycle and Stepping Out of the "Revolving Door": Why the Pre-Adjudication Model is the Way Forward For Illinois Mental Health Courts
Caitlin T. Harrington | 2013 U. Ill. L. Rev. 319
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Traditional courts in the United States are ill-equipped to handle the increasing number of mentally ill defendants entering the criminal justice system. Taking a cue from drug courts, jurisdictions across the country have instituted a new type of problem-solving court: Mental Health Courts (MHCs). MHCs link defendants suffering from mental illness to treatment and supportive services as an alternative to incarceration, in the hopes of lowering recidivism rates and increasing public safety.
This Note examines the three adjudication models commonly employed by MHCs: the pre-adjudication model, the postadjudication model, and the combination model. In the preadjudication model, charges are held in abeyance until the defendant successfully completes treatment. In the post-adjudication model, the defendant is often required to plead guilty before entering treatment. In the combination model, the defendant is often convicted and sentenced to probation that includes treatment. Each of these models has strengths, weaknesses, and different outcomes for clients in those courts.
This Note discusses the three theories that form the founding principles of MHCs: therapeutic jurisprudence, restorative justice, and preventive law. It then examines each of the three MHC adjudication models and analyzes whether each model upholds these theories. The Note concludes that the pre-adjudication model best achieves the goals of the therapeutic jurisprudence, restorative justice, and preventive law principles and argues that current and new MHCs in Illinois should adopt this model.
Informing Consent: Voter Ignorance, Political Parties, and Election Law
Christopher J. Elmendorf & David Schleicher | 2013 U. Ill. L. Rev. 363
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This paper examines what law can do to enable an electorate comprised of mostly ignorant voters to obtain meaningful representation and to hold elected officials accountable for the government’s performance. Drawing on a half century of research by political scientists, we argue that political parties are both the key to good elections and a common cause of electoral dysfunction. Party labels can help rational, low-information voters by providing them with credible, low-cost, and easily understood signals of candidates’ ideology and policy preferences. But in federal systems, any number of forces may result in party cues that are poorly calibrated to the electorate and issue space of subnational governments. Further, the geographic clustering of partisan voters can lead to persistently dysfunctional elections at subnational levels, however well calibrated the major-party cues, because in these communities the aggregation of votes will not neutralize (as it otherwise would) the ballots cast by citizens whose party ties reflect their upbringing and social milieu more than their observations about what the government has done. To date, these problems have largely been the province of political science and sociology. We argue that they are problems of, and for, election law. Statutes and court decisions govern who selects a party’s candidates, what information appears on the ballot, and any number of other variables that affect the meaning and utility of party labels. Our analysis challenges the focus of decades of political science and legal scholarship, and sheds new light on important questions about party regulation, ballot design, the choice between partisan and nonpartisan elections, and the constitutional law of party rights.
Natural Law & Lawlessness: Modern Lessons from Pirates, Lepers, Eskimos, and Survivors
Paul H. Robinson | 2013 U. Ill. L. Rev. 433
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The natural experiments of history present an opportunity to test Hobbes’ view that government and law are the wellspring of social order. Groups have found themselves in a wide variety of situations in which no governmental law existed, from shipwrecks to gold mining camps to failed states. Yet, despite, the wide variety of situations, common patterns emerge among the groups in their responses to their often difficult circumstances. Rather than survival of the fittest, a more common reaction is social cooperation and a commitment to fairness and justice, although both can be subverted in certain predictable ways. These absent-law situations also illustrate the dependence of social order and cooperation on a group’s commitment to justice.
The insights from the absent-law situations have implication for several modern criminal justice issues, including the appropriate distributive principle for criminal liability and punishment, restorative justice programs, the movement to promote non-incarcerative sanctions, transitional justice and truth commissions, the limitations on use-of-force rules under international law, fairness procedures promoting the legitimacy of criminal adjudication, and crime-control policies for fighting organized crime and terrorism.
The revolving door between jobs in the public and private sector supposedly incentivizes government regulators to regulate on behalf of the industry interests for whom they will eventually work. It is a critical building block of the critique of government solutions to modern problems, and has, in the last two years, been the subject of one of the Obama administration’s first executive orders, made an appearance in financial regulatory reform legislation, and been blamed for the government’s failure to prevent the Gulf oil spill and quickly pass health care reform.
But the revolving door’s explanatory power is remarkably overstated, especially when the subject is law enforcement. Most government officials have plenty of reasons to do a good job; it may even enhance their private sector earning potential, to say nothing of their more immediate futures in the public sector. The revolving door may also foster citizen participation in government. A study of the careers of a tranche of elite Manhattan prosecutors does not reveal any evidence of those who leave doing the bidding of those they regulate while in public service.
Moreover, as a legal matter, eliminating the revolving door would raise serious legal and even constitutional questions. The revolving door has become an overused shorthand for—at its worst—a toxic cynicism about government. It is time to reject it.
The decade since 9/11 has seen three phases in the government’s approach to the legal aspects of detainee policy in the “war on terrorism.” First, the Bush administration attempted to create a “law-free zone” in which it could deal with suspected terrorists free of legal restraint or interference by the other branches of government. After every rebuff by the Supreme Court the Administration responded by seeking the “least law alternative” and to that end invented new forms of adjudication: military commissions as substitutes for criminal trials, summary military tribunals to authorize indefinite detention without charge, and short-cut alternatives to traditional habeas procedures.
In the second phase, the Obama administration made significant progress toward its stated goal of returning to the rule of law in the national security arena—in particular, by announcing the closure of Guantanamo, the end of the military commission system, and a commitment to using the federal courts to prosecute terrorists.
The third phase began roughly with the return of the House of Representatives to Republican control in the 2010 elections. Congress employed its appropriations power to limit and then to foreclose the President’s ability to transfer detainees from Guantánamo, thus making it impossible to close the controversial detention center or to prosecute detainees held there in federal court, and forcing military commissions to resume. Thus, a decade that began with the executive branch’s assertion of sole and unconstrained power ended, ironically, with Congress asserting its power to countermand the executive branch’s decision to change its policies.
During the same period, the D.C. Circuit issued a series of decisions that effectively reversed the Supreme Court’s habeas decisions of 2004 and 2008. The Supreme Court’s failure to review these decisions has left detainees with essentially no meaningful opportunity to win release.
This article concludes by reflecting on these developments, the Obama administration’s often surprisingly effective responses, and where detainee policy is likely to go next.
Prostitution and The Right to Privacy: A Comparative Analysis of Current Law in the United States and Canada
Dannia Altemimei | 2013 U. Ill. L. Rev. 625
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The constitutional right to privacy is a cornerstone element to both the United States Constitution and the Canadian Charter of Rights and Freedoms, but a divergence in interpretation of the right to privacy in the United States and Canada has caused differing approaches toward dealing with prostitution laws in each country. The United States currently imposes a traditional moral standard, criminalizing those who engage in prostitution and rejecting right to privacy arguments. Contrastingly, Canada follows a regulation approach toward dealing with prostitution laws, and a trend toward less state regulation has emerged due to judicial and legislative action accepting constitutional right to privacy arguments. This Note presents a comparative analysis of federal constitutional regulations on prostitution in both the United States and Canada, including how the right to privacy has been used to challenge current prostitution laws and the differing responses of various courts to such challenges in Canada and the United States. Ultimately, this Note argues that the United States should take a similar approach to Canada, recommending that the United States follow international constitutional precedent toward the decriminalization of prostitution and draw a public-versus-private distinction within prostitution laws to effectively extend the constitutional right to privacy to private acts of prostitution.
This is A Remix: Remixing Music Copyright to Better Protect Mashup Artists
Kerri Eble | 2013 U. Ill. L. Rev. 661
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Modern copyright law has strayed from its original purpose as set out in the Constitution, and is ill-equipped to protect and foster new forms of artistic expression. Since the last major amendment to the Copyright Act, new art forms have arisen, particularly “mashup music.” This type of music combines elements of other artists’ songs with other sounds to create a new artistic work. Under modern copyright law, various courts treat this type of music inconsistently, creating uncertainty among mashup artists and stifling this new artistic expression. In addition, copyright law as applied to music unduly favors primary artists, sacrificing the Constitutional Copyright Clause’s focus on preserving the public domain.
This Note discusses the history of mashup music and its increasing popularity in the United States, as well as the relevant history of copyright law. This Note then discusses current safe harbors that exist under copyright law for secondary artists, and analyzes why mashups do not fit within these safe harbors. This Note concludes by recommending that the fair use exception be expanded to protect mashup artists by adding a safe harbor for “recontextualized” or “redesigned” artworks.
If It’s Broke, Fix It: Federal Regulation of Electrical Interstate Transmission Lines
Elena P. Vekilov | 2013 U. Ill. L. Rev. 695
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The current electrical transmission line regulatory system is broken,
preventing the nation from expanding the electricity grid to keep
up with growing energy consumption. The current regulatory scheme
reserves to the states siting authority over where new lines are constructed,
which often hinders project development because interstate
lines are not seen as good for the state’s own citizens. Natural gas
does not suffer the same infirmity, because it has been under federal
control since the Natural Gas Act of 1938. This Note traces the history
of the regulation of the two energy delivery systems—beginning
with local control over local utilities early in their development—to
today’s complex interstate systems. Then this Note analyzes three
possible regulatory approaches: (1) state control; (2) an intermediate
solution that retains state power to regulate line siting from each
state’s internal energy sources to its internal load centers, but allocates
to the federal government the power to construct interstate lines from
plentiful energy sources to distant load centers; and (3) a federal system
mirroring the system for siting natural gas pipelines. Finally, this
Note concludes that only a federal regulatory system modeled on the
natural gas pipeline regulations is adequate to keep up with growing
Officers' Fiduciary Duties and the Nature of Corporate Organs
Amitai Aviram | 2013 U. Ill. L. Rev. 763
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The nature of officers’ fiduciary duties (and in particular whether the Business Judgment Rule applies to officers) is the subject of heated scholarly debate and conflicting case law. This Article analyzes the question using a neglected conceptual tool: the corporate organ.
Corporate organs are bodies that act on behalf of the corporation but are not subject to its control and thus are not governed by agency law (the board of directors is the prototypical organ). This Article argues that corporate organs differ from, and complement, the other type of corporate actor (corporate agents) in the allocation of discretion whether to approve acts that are in the fiduciary duty penumbra. For agents, this oversight function is given to the beneficiary (the principal); for organs, it is given to judges.
The nature of an officer’s fiduciary duties depends on whether oversight by the beneficiary, or by judges, would maximize accountability. The answer differs between officers, so in contrast to the arguments of both sides of the debate, officers should not be uniformly classified as agents or organs. Such classification is best left to private ordering. Extant law allows for such private ordering but provides officers with an incentive to maintain an ambiguous status. This Article suggests tweaks to the law that would incentivize officers to self-select their status as organs or agents.
In 2010, the U.S. Supreme Court held in Citi-zens United v. FEC that restrictions on corporate political speech were unconstitutional because of the First Amendment rights granted corporations as a result of their status as “persons” under the law. Following this decision, debate has been rekindled among legal scholars about the meaning of “corporate personhood.” This debate is not new. Over the past two centuries, scholars have considered what corporate personhood means and entails. This debate has resulted in numerous theories about corporate personhood that have come into and out of favor over the years, including the “artificial person” theory, the “contractual” theory, the “real entity” theory, and the “new contractual” theory.
This Article revisits that debate by examining the various functions of corporate personhood including four functions I have identified in previous work: (1) providing continuity and a clear line of succession in property and contract, (2) providing an “identifiable persona” to serve as a central actor in carrying out the business activity, (3) providing a mechanism for separating pools of assets belonging to the corporation from those belonging to the individuals participating in the enterprise, and (4) providing a framework for self-governance of certain business or commercial activity. In this Article, I focus on the historical evolution of the corporate form, and specifically on how and why corporations have tended to develop clearly identifiable corporate personas. This corporate persona function is highly important to today’s corporations and, because of this function, corporations can become more than simply the sum of their parts. This Article suggests that scholars should keep the corporate persona function in mind in evaluating corporate personhood theories, and return to a theory that sees corporations as more than a bundle of contracts.
This Article not only argues that corporations must be encouraged to enhance the level of communication between shareholders and the board, but also maintains that the benefits of increased engagement are significant enough that we should consider developing standards for incentivizing, if not mandating, more robust board-shareholder engagement for corporations that fail to respond to such encouragement. In the last several years, shareholders not only have gained increased authority over corporate elections and governance matters, but also have demonstrated a willingness to use that authority to challenge, and even reject, management policies and practices. Shareholders also have begun to demand increased communication with the corporation in general, and the board in particular. This Article argues that corporations should be strongly encouraged, if not compelled, to meet that demand. While acknowledging the potential pitfalls associated with increased board-shareholder engagement, this Article further argues that many of those pitfalls have been overstated, or can be minimized. Moreover, in light of shareholders’ enhanced influence over corporate affairs, the costs associated with enhanced engagement may be outweighed by the benefits. While it is not a panacea, increased board-shareholder engagement has the potential to dramatically increase the corporation’s ability to promote understanding of its policies and programs, and otherwise avoid the negative repercussions of shareholder activism. Thus, this Article endorses proposals that encourage corporations to increase board-shareholder dialogue with two caveats. First, given the menu of communicative options and the various judgment calls that must be made when im-plementing particular options, deference should be given to corporations and the board with respect to which option or options to adopt. Second, the benefits of board-shareholder engagement are important enough that we should consider proposals that would more effectively incentivize and even mandate such engagement for those corporations that refuse to answer the calls to increase their dialogue with shareholders.
Reconsidering Board Oversight Duties After the Financial Crisis
Claire A. Hill & Brett H. McDonnell | 2013 U. Ill. L. Rev. 859
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The financial crisis has yielded significant losses for shareholders, and for the greater so-ciety. Shareholder suits arguing that boards should have been more active monitors have failed. We argue here for an expansion of board monitoring duties. The crisis suggests that corporations may sometimes abuse the privilege of limited liability. Boards should be charged with monitoring for risks arising from corporations’ operations and procedures (including their compensation practices) that might significantly harm both shareholders and society at large.
Macroprudential Regulation: a Sustainable Approach to Regulating Financial Markets
Kristin N. Johnson | 2013 U. Ill. L. Rev. 881
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Following the financial crisis that began in 2007, Congress and regulators acted to address perceived gaps in the regulation of corporate boards, including boards of large, complex finan-cial institutions. With the goal of improving the stability of global financial markets, regulators have adopted reforms intended to enhance the role of boards, particularly those of financial institutions, as gatekeepers and systemic risk monitors. Arguing that the culture of financial institutions may lead board to govern these businesses less effectively than boards in non-financial sectors, this Article challenges assumptions that conventional regulatory or cor-porate governance mechanisms will conclusively address systemic risk concerns in the financial sector.
The Danger of Difference: Tensions in Directors’ Views of Corporate Board Diversity
Kimberly D. Krawiec, John M. Conley & Lissa L. Broome | 2013 U. Ill. L. Rev. 919
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This Article describes the results from fifty-seven interviews with corporate directors and a limited number of other persons (including in-stitutional investors, search firm personnel, and the like) regarding their views on corporate board diversity. It highlights numerous tensions in these views. Most directors, for instance, proclaim that diverse boards are good, but very few directors can articulate their reasons for this belief. Some directors have suggested that diverse boards work better than non-diverse boards, but gave relatively few concrete examples of specific instances where a female or minority board member made a special contribution related to that director’s race or gender. Many directors noted the importance of collegiality and getting along in the boardroom, while simultaneously extolling the advantages of different perspectives in avoiding groupthink. Although all acknowledged the importance of fitting in, few considered whether this impeded the role of “outsiders” providing a diverse perspective. This Article also explores directors’ thoughts on why progress in improving board diversity has been so slow if most agree that diversity is an important goal.
Business and Human Rights: What’s the Board Got To Do With It?
Jena Martin | 2013 U. Ill. L. Rev. 959
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Corporate scandals related to human rights issues have illustrated the hefty cost associated with ignoring humanitarian issues while conducting business. For example, the Royal Dutch Petroleum Company (Shell) has spent tens of millions of dollars related to the Nigerian government’s execution of the “Ogoni 9,” which was preceded by a tense relationship between the corporation and Ogoni people of Nigeria. In addition, in India, the Vedanta corporation lost substantial market capitalization following a trial related to its mountain mining activities for its effects on the people of the region. Despite the moral duty that may have compelled action in these examples, it is also clear that a corporation’s (particularly a transnational corporation’s) decision to develop a framework for proactive corporate responsibility is also good business. Assuming the accuracy of this conclusion, this Article questions what role the board of directors should have in formulating this framework in light of the Alien Tort Claims Act and the United Nations’ Guiding Principles on corporate responsibility and human rights. This Article admits that the board of directors will face great challenges when incorporating human rights issues into a company’s corporate governance. However, given the central role courts are placing on the board of directors, it would be wise to rise to the challenge and make sure that human rights are a key part of their function.
The Evolution of the Modern Corporation: Corporate Governance Reform in Context
Charles R.T. O’Kelley | 2013 U. Ill. L. Rev. 1001
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This Article traces the evolution of the modern corporation from the American Civil War to the present. I begin with a focus on the period from 1865 to the Great Depression. This was the era of the Great Tycoon, the time of the second industrial revolution and the transformation of America’s economy from small proprietorships and partnerships to the forerunner of the modern corporation. I then detail the transformational crisis of the Great Depression and Adolf Berle’s central role in shaping America’s changed understanding of the proper relationship between government and the modern corporation. It was Berle, both as a scholar and key advisor to Franklin Roosevelt, who recast America’s history so that the New Deal seemed a natural extension of individualism. The following Part details the period encompassing the New Deal and the Second World War. It is this period in which the United States develops into a modern, Keynesian social democracy. It is this period when the United States, in partnership with the modern corporation, assumes the mantle of world hegemon. I then examine the modern corporation during the heyday of American hegemony and the so-called “golden age of American capitalism;” the period runs roughly from 1950 to 1973 and is characterized by the Galbraithian Corporation, with power devolved to the technocracy of the firm. I conclude with tentative intuitions as to the nature of the modern corporation and the CEO in recent times. The tentativeness of this final section is purposive. We are too close in time to the “present” to agree on what has transpired, much less what is about to transpire. Thus, my effort is to provide a common backdrop for understanding the slightly more distant past, in hopes that conversation about the near present and near future will be more fruitful.
The board of directors is the theoretical fulcrum of the corporate form: statutes task the board with managing the corporation. Yet in the twentieth century, CEOs and other executives came to dominate the real-world control of the corpo-ration. In light of this transformation, in the 1970s Melvin E. Eisenberg proposed reconceiving the board as an independent monitor. Eisenberg’s monitoring board is now the dominant regulatory model of the board. Recently two different visions of the board of directors have emerged. Stephen Bainbridge’s “director primacy” model calls directors “Platonic guardians,” and Margaret Blair and Lynn Stout’s “team production model” characterizes them as “mediating hierarchs.” Each of these models involves different conceptions of the board, but both theories presume that boards should play a central role in corporate governance.
The reality of today’s public corporate board, however, is one of limited information, constrained time, and uncertain ability. The reforms of the past three decades have left us with supermajority independent boards—boards, that is, composed mostly of outsiders. There is no guarantee that the directors populating these boards have any knowledge of the corporation in general or of the particulars of the business they serve. With one exception (the financial expert), they need not have advanced degrees or a minimum level of experience in business or management. The only quality they must have is independence, defined as a lack of ties to the corporation. This chief strength of the board is also a weakness, because it means that most members of the board rely on the CEO for knowledge of the corporation and its business.
The centrality of independence to modern boards requires us to rethink their essential role. I do so here by articulating and defending a “conflict primacy” model of the public company board. In my view, expecting a group dominated by outsiders to oversee and vote on substantive managerial decisions about the corporation—about the proper approach to labor disputes, when to expand the corporation, how to expend corporate resources—simply does not make sense. What does make sense is for the board to police situations in which the self-interest of the corporation’s day-to-day managers impedes their ability to function effectively. The board’s central role, then, should concern monitoring CEO performance and pay (including the removal power and succession planning), overseeing the audit function, and dealing with takeovers and derivative suits. In such areas of conflict of interest the board’s lack of ties to management becomes a strength, and so it is on these subjects that the board should focus. Perhaps controversially, the conflict primacy model would reduce the role of CEOs on the board, demoting them to nonvoting, ex officio status. Reconstituted in this manner as a more fully independent body, the board of directors would have a clear but circumscribed mandate that comports with its modern character. Part-timers are not well situated to second-guess executives, but are well equipped to manage conflicts of interest.
This Article illuminates a fundamentally mis-understood mismatch between corporate theory and the actual practice of boards of directors. In-creasing attention has been paid to whether one person should serve as both CEO and board chair-person and the connection this has to corporate performance. The growing significance of the de-bate over board leadership structure is evident in recent regulatory trends: passage of legislation like the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 focuses on increasing disclosure requirements for companies that maintain CEO/Chairperson duality. The assumption underlying the legislation is that an independent chairperson will facilitate board independence, which will in turn lead to better detection of managerial corruption or incompetence.
This Article proposes a new analytical paradigm that suggests such standard, structurally oriented approaches to board reform without an effective process are not enough to improve board governance. The available evidence shows that separating the CEO and chairperson does little to eliminate or mitigate corporate failure. Instead, this Article suggests a reorientation away from board structure toward the processes by which boards actually make decisions and oversee managers. Effective board decision making and oversight requires that board members have informational autonomy. Board members currently lack the ability to get their own information about their companies’ operations, placing them at the mercy of the CEO and the management team she controls. In order to act as a consistently effective check on CEO authority, board members need access to information-gathering channels that are not controlled by the CEO.
The conventional approach, focused as it is on board structure, provides limited insight into the information problem. This Article attacks the problem head-on. In doing so, it departs substantially from previous regulatory approaches, and proposes several methods to help boards achieve informational autonomy through solutions drawn from the Process-Oriented Approach.
The Corporate Immune System: Governance from the Inside Out
Omari Scott Simmons | 2013 U. Ill. L. Rev. 1131
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The “Corporate Immune System” (CIS) is an outgrowth of an evolutionary trend reflecting firms’ adaptation to challenges including growing corporate complexity, threats to corporate value, and political compromise. Similar to biological immune systems, corporations have adopted a range of internal mechanisms to ward off threats. The CIS performs an internal regulatory function that lowers monitoring costs for government regulators through internal mechanisms such as a monitoring board, compliance and risk management systems, compensation, and an enhanced chief legal officer (CLO) role. It complements external corporate governance strategies: shareholder empowerment, markets, litigation, gatekeepers, and top-down public regulation. Today’s corporate boards are much more informed, organized, skilled, and ac-countable than their historical antecedents. Although far from perfect, they continue to evolve and improve. The CIS, recognizing the potential of collaborative inside-out reforms in the corporate arena is, on balance, a promising development. But this trend also raises concerns that merit further discussion.
Jurisdiction Over Corporate Officers and the Incoherence of Implied Consent
Verity Winship | 2013 U. Ill. L. Rev. 1171
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Corporate officers of most large corporations in the United States have little contact with the state of incorporation—usually Delaware—beyond the bare fact of being a corporate officer. Ju-risdiction in that state’s courts thus depends on whether the position alone provides constitution-ally significant minimum contacts with the state. This Article argues that statutorily implied con-sent is an incoherent basis for personal juris-diction over corporate officers and is the first to identify and analyze Delaware’s widespread use of implied consent statutes for corporate and noncorporate business entities. Not only is con-sent ultimately irrelevant, but jurisdiction over nonresident corporate officers based only on their corporate position is of uneasy constitutionality. This Article evaluates a solution to this problem: a movement from implied to express consent.
The Article also contributes to two current debates in corporate law. Courts and commentators have recently turned their attention to corporate officers, but they have ignored a necessary first step in the analysis, which this Article provides. Without personal jurisdiction over officers, state courts cannot even begin to develop the law about their duties or protections. Moreover, the Article fills a gap in the debate over how Delaware can keep its corporate law cases in its courts. It argues that implied consent statutes are designed to ensure that Delaware business law is adjudicated in Delaware, and that the constitutional due process limits analyzed here are an important obstacle to Delaware’s attempts to bundle its corporate law and forum.
Leed Locally: How Local Governments Can Effectively Mandate Green Building Standards
Anthony DeLaPaz | 2013 U. Ill. L. Rev. 1211
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Leadership in Energy and Environmental Design (LEED) standards are third-party benchmark as-sessment tools that promote sustainable design and construction principles that are applicable to all building types. In an effort to reduce adverse environmental impacts associated with conventional construction practices, several municipalities in the United States have moved toward requiring LEED standard compliance for new buildings. Questions have arisen, however, regarding the effectiveness of LEED standards, as well as the appropriateness of allowing local governments to mandate such standards.
This Note examines how several municipalities have chosen to implement green building codes, and how LEED mandated codes compare to similar programs that promote sustainable design, including the Green Globe System and the Energy Star rating system. This Note analyzes the effectiveness of local governments that mandate LEED certification for their buildings, as well as whether state or federal control would be a preferable level of governance. Ultimately, this Note recommends that local municipalities should create different standards for public and private building development that would incorporate the LEED Green Rating System, thus maximizing the effectiveness of the initiatives, while preventing some of the increased cost associated with such programs.
Making Sausage No One Wants to Eat: Options for Restructuring Illinois's Pension Debt
Scott Metzger | 2013 U. Ill. L. Rev. 1251
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The State of Illinois currently owes nearly $100 billion in unfunded public pension liabilities, and it is projected that nearly twenty percent of the State’s spending in the current fiscal year will go to pension obligations. While the funding shortfalls are primarily attributable to decades of the General Assembly’s irresponsibility, the cause of the problem is secondary. Illinois’s public pension systems as currently structured are unsustainable.
This Note analyzes three proposals for restructuring Illinois’s pension debt and offers a recommendation for the best method of approaching the problem. First, the Note examines proposals to amend the federal bankruptcy code to allow states to file bankruptcy and concludes that the costs of state bankruptcy outweigh the benefits. Second, it analyzes the political solutions available under current Illinois law and explains the potential constitutional barriers to reform. Third, it presents a novel approach that involves establishing a State Public Pension Funding Commission to work out state pension debts. The Commission, created at the federal level, would be able to navigate state and federal constitutional difficulties while preventing the State’s default or a federal bailout. Ultimately, this Note recommends a combination of state legislative reform—including increasing the retirement age and decreasing cost-of-living adjustments—and implementation of a federal public pension funding commission to take over if state reforms are not enacted or are unsuccessful.
The Real Shariah Risk: Why The United States Cannot Afford to Miss the Islamic Finance Moment
Todd J. Schmid | 2013 U. Ill. L. Rev. 1293
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In the wake of the recent financial crisis in the United States, there has been a call for greater accountability and transparency in the financial industry. The resulting regulatory initiatives have profoundly impacted numerous facets of global finance, including Islamic financial models in the United States. Islamic finance, which is largely uncharted territory for many domestic practitioners and policy makers, is a promising mode of finance that the United States should not overlook. This Note examines the current regulatory hurdles that are limiting integration of Islamic financial products into the conventional financial system. Ultimately, this Note argues that financial regulations in the United States may best manage “Shariah risk” through the implementation of internal Shariah systems and controls that are audited or rated by external players. The Note further argues that Islamic finance must be understood in the context of economic globalization and not as the mere traditional application of Islamic law to financial principles.
Parent Civil Unions: Rethinking the Nature of Family
Michele Goodwin & Naomi Duke | 2013 U. Ill. L. Rev. 1337
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This Article explains why federal and state commitments to align transitions from foster care services with the two-parent, often heterosexual model undermines primary goals of child welfare services, including providing permanent, stable placements for abandoned, neglected, and abused children. Compelling empirical research demonstrates why the two-parent model may be overinclusive. This Article takes a different approach challenging the normative constructions of family and showing why the two-parent nuclear family model might be underinclusive. It considers the legal, economic, and social conundrums of child welfare services, unpacking the tragic outcomes and failures of the foster care system, which sets as its goal the two-parent family model. This Article combines a rigorous economic critique of the bureaucratic inertia in child welfare generally with a nuanced study of child welfare outcomes, exposing high incarceration rates, teen pregnancy, homelessness, and poverty. Despite these outcomes and significant economic waste in the foster care system, legal scholars offer very little by way of theory or prescription. Parental Civil Unions makes several important economic claims: the foster care funding structure bears little relationship to quality or outcomes, foster care promotes perverse economic incentives and rent-seeking behavior, and foster care funding is rooted in historic rather than programmatic ideology. The Article offers a nuanced proposal to transition foster children from child welfare services to permanent family placement through the legalization of Parental Civil Unions (PCU) or “baby cooperatives.”
In 1998, Congress extended the term of copyright protection, giving existing copyrighted works an additional twenty years of protection. The practical result was to freeze copyright’s public domain for a period of twenty years. This freeze is about to come to an end. Unless Congress extends the copyright term again, copyrighted works will once again pass into the public domain in 2019, after a twenty-year hiatus. This Article takes a close critical look at the issues that will arise when this happens. It argues that the unique nature of the works passing into the public domain post-2018, along with dramatic cultural, economic, and technological changes in the past ten years, mean that our experience with this “new public domain” will differ fundamentally—and in ways not yet fully appreciated—from our experience with the old public domain. These developments hold out the possibility that the public domain will, in the future, play a far more vital and important role in our cultural landscape. At the same time, this Article highlights a number of legal issues that may keep the new public domain from fulfilling this promise. Owners of expiring copyrights will attempt to use doctrines in trademark and copyright law to limit the free use of these works even after they have passed into the public domain. This Article concludes by arguing that in order to ensure that the new public domain lives up to its promise, courts must develop a more robust and theoretically-grounded understanding of the preemptive scope of copyright’s public domain.
What does “liberty of conscience” mean? Religious liberty? Freedom of strong conviction? Freedom of thought? Since the Founding Era, Americans have used liberty of conscience to paper over disputes about the proper scope of religious, moral, and philosophical liberty. This Article explores the relationship between conscience and religion in history, political theory, and theology, and proposes a conception of conscience that supports a liberty of conscience distinct from religious liberty. In doing so, it offers a theoretical basis for distinguishing between conscience and religion in First Amendment scholarship and related fields. Conscience is best understood, for purposes of legal theory, as a universal faculty that issues moral commands and judgments. This conception overlaps with religion but is not concentric with it. On one hand, conscience may be informed by religious beliefs (or by nonreligious beliefs). On the other, religious beliefs and practices may be entirely independent of conscience. Protecting fidelity to conscience, whether religious or nonreligious, promotes integrity and undermines the government’s pretensions to moral totalitarianism. This conception of conscience is coherent enough to support a legal right and valuable enough to deserve one.
Can human behavior be predicted? A broad variety of governmental initiatives are using computerized processes to try. Vast datasets of personal information enhance the ability to engage in these ventures and the appetite to push them forward. Governments have a distinct interest in automated individualized predictions to foresee unlawful actions. Novel technological tools, especially data-mining applications, are making governmental predictions possible. The growing use of predictive practices is generating serious concerns regarding the lack of transparency. Although echoed across the policy, legal, and academic debate, the nature of transparency, in this context, is unclear. Transparency flows from different, even competing, rationales, as well as very different legal and philosophical backgrounds. This Article sets forth a unique and comprehensive conceptual framework for understanding the role transparency must play as a regulatory concept in the crucial and innovative realm of automated predictive modeling.
Part II begins by briefly describing the predictive modeling process while focusing on initiatives carried out in the context of federal income tax collection and law enforcement. It then draws out the process’s fundamental elements, while distinguishing between the role of technology and humans. Recognizing these elements is crucial for understanding the importance and challenges of transparency. Part III moves to address the flow of information the prediction process generates. In doing so, it addresses various strategies to achieve transparency in this process—some addressed by law, while others are ignored. In doing so, the Article introduces a helpful taxonomy that will be relied upon throughout the analysis. It also establishes the need for an overall theoretical analysis and policy blueprint for transparency in prediction.
Part IV shifts to a theoretical analysis seeking the sources of calls for transparency. Here, the analysis addresses transparency as a tool to enhance government efficiency, facilitate crowdsourcing, and promote both privacy and autonomy. Part V turns to examine counterarguments which call for limiting transparency. It explains how disclosure can undermine government policy and authority, as well as generate problematic stereotypes. After mapping out the justifications and counterclaims, Part VI moves to provide an innovative and unique policy framework for achieving transparency. It concludes, in Part VII, by explaining which concerns and risks of the predictive modeling process transparency cannot mitigate, and calling for other regulatory responses.
Negotiations for the Home: A Balanced Approach to Good Faith in Foreclosure Mediation
Hannah Costigan-Cowles | 2013 U. Ill. L. Rev. 1571
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The high foreclosure rate for residential properties in the United States has caused millions of Americans to be cast out of their homes and investors to incur massive financial losses. With the foreclosure crisis continuing and foreclosure filings expected to increase, all levels of government continue to search for a solution that will address the problems faced by affected parties. One popular method adopted by courts and legislatures at the state and local level has been to use foreclosure mediation programs. At a minimum, these programs provide for some contact between a servicer and a borrower before resorting to a foreclosure sale. Developers of mediation programs, however, have struggled to create a system that encourages meaningful participation and provides parties with a reasonable chance for beneficial outcomes. This Note presents an anal-ysis of the use of foreclosure mediation programs by various jurisdictions and the praise and crit-icism of the programs, including the advantages and disadvantages of good faith participation re-quirements within such programs. Ultimately, this Note recommends that foreclosure mediation programs require good faith participation using objective standards and impose sanctions for failure to comply with those standards.
Justification for Juries: A Comparative Perspective on Models of Jury Composition
Jane E. Dudzinski | 2013 U. Ill. L. Rev. 1615
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This Note compares the American jury model, where a group of citizens deliberates, with the European model, where citizens and judges deliberate together. It weighs the benefits and detriments of each model and concludes that the American jury model is superior because it works better in practice. It demonstrates that all-citizen juries are competent—they deliver verdicts with which judges agree, handle complex cases, do not demonstrate bias toward or against certain parties, and determine damages reliably. In addition, serving on a jury of one’s peers has been linked to increased civic participation, and juries have the power of nullification. In contrast, the European model seems like a good idea in theory but does not work well in practice because judges tend to dominate deliberations, which renders citizen participation meaningless.
This Note also addresses one of the disadvantages of the American jury model—the widespread negative public perception of juries, which results, in part, from verdicts that appear not to make sense. Examples include the McDonald’s coffee spill case, the acquittal of O.J. Simpson, and, most recently, the acquittal of Casey Anthony. To combat this negative public image, this Note recommends borrowing a feature of many European jury systems called “verdict justification,” wherein a jury is required to answer a series of questions or provide a brief rationale for its verdict. This Note argues that this modification to the American jury system could improve a jury’s accountability to the public as well as help lawyers and parties better understand a jury’s decision.
The Gift that Gives Too Much: Invalidating a Gifting Exception to the Absolute Priority Rule
Amy Timm | 2013 U. Ill. L. Rev. 1649
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In Chapter 11 reorganizations, there is a norm that all senior claimants must be paid in full before a junior claimant may be paid anything. This norm is known as the absolute priority rule, and is codified in the Bankruptcy Code as § 1129(b)(2)(B)(ii). Despite being denounced repeatedly by pre-Code common law and expressly legislated out of the Bankruptcy Code in the last century, there is a practice of senior creditors bypassing intermediate creditors in favor of lower ranked ones by “gifting” part of their distribution under the plan. Some view this practice as legitimate as a gifting exception to the absolute priority rule.
This Note argues that the practice of “gifting”—when it violates the absolute priority rule—violates the express statutory language of the Code, and circumvents the legislated priority distribution. In doing so, gifting defeats all of the fairness and orderliness that justify a uniform federal bankruptcy law to begin with.
Taking Up Space by Any Other Means: Coming to Terms with the Nonappropriation Article of the Outer Space Treaty
Timothy Justin Trapp | 2013 U. Ill. L. Rev. 1681
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Ever since man began travelling to space, we have been leaving debris behind us. Over the last 50 years of space travel, the amount of debris has been growing at a surprising rate. As of 2013, there were over 12,000 pieces of debris, consisting of expended booster rockets, spacecraft parts, and defunct satellites. This amount of debris poses a significant risk to future missions to space, as even a very small piece of debris can cause catastrophic damage to a functioning spacecraft. Under the current international legal regime governing space, however, addressing this problem is not straightforward. Ironically, it is exactly the open-access nature of space, guaranteed by the Outer Space treaty and other treaties, which threatens to hinder efforts to clean up space debris. If this problem is not addressed, we risk causing space to become unnavigable.
To ensure that space remains accessible to all, the Outer Space Treaty includes a nonappropriation article. This article makes it a violation of the treaty for any country to appropriate any aspect of space. Thus, to address the space debris problem, any proposed solution must not be undertaken by a single nation or group of nations, but rather must be international in character. The system proposed by this Note is a cap-and-trade system, which would incentivize individual nations to clean up space debris.
Part II of the Note discusses the nature of space debris and provides a background of the various international treaties governing space. Part III analyzes the requirements of these treaties and provides a framework for a solution to the space debris problem. Part IV recommends setting up an international regulatory agency to institute a cap-and-trade system. Finally, Part V concludes that such a system would be responsive to the requirements of the international space treaties, would further the Outer Space Treaty's goal of keeping space accessible for all mankind, and would provide incentives for countries to reduce the amount of space debris.
This Essay asks why sex equality is outside the constitutional canon. While race discrimination is a canonical concern of constitutional law, the story of America’s struggles over and against sex discrimination is not widely taken to be a central, organizing part of our constitutional tradition—a defining narrative that exemplifies and expresses the nation’s foundational values and commitments. I offer three potential explanations for the exclusion of sex equality from the constitutional canon. First, the Supreme Court’s jurisprudence developed in ways that suggested that sex discrimination was not a core constitutional problem and concern, especially when compared to race discrimination. Second, the Court’s sex discrimination case law has focused narrowly on state action that draws explicit distinctions between women and men. The Court has little interest in reviewing facially neutral laws, no matter their contribution to women’s unequal status, so the Court hears few sex discrimination suits anymore. This paucity of case law contributes to the sense that conflicts over sex equality are no longer central to constitutional law, if they ever were. Third, the story of women’s resistance to sex discrimination may be less prominent in American constitutional law because this story is less prominent in American popular culture, and vice versa. The Essay concludes by exploring why sex equality may ultimately become part of the constitutional canon. The Court’s reading of the Equal Protection Clause to prohibit sex discrimination has become much less controversial since the 1970s. Moreover, new analogies have emerged in constitutional law, which over time have pushed sex discrimination closer to the core of the Equal Protection Clause. Courts, lawmakers, advocates, and scholars seeking constitutional protection from sexual orientation discrimination now routinely analogize sexual orientation to sex. The frequency and prominence of these analogies, which presuppose that struggles against sex discrimination are already central to our nation’s understanding of equality and equal protection, may help move sex into the constitutional canon at last.
Levels of Generality, Constitutional Comedy, and Legal Design
Adam M. Samaha | 2013 U. Ill. L. Rev. 1733
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Many commentators write happy endings to their constitutional stories. This Article examines a few techniques for reaching preferred conclusions without falling outside the boundary of conventional constitutional argument. The investigation is oriented around the levels of generality by which sources of constitutional law are characterized. Level of generality characterizations apply to all sources of constitutional argument including constitutional clauses, originalist history, tradition, and judicial precedent. But there is more than one kind of “generality”—or at least more than one idea associated with that concept in the law literature. We can isolate three different dimensions of source characterization that recur in modern constitutional debates: (1) abstractness, (2) breadth, and (3) dynamism. Each dimension is conceptually distinct, practically important, and independently interesting. Potential manipulation of choices along these dimensions, however, may create credibility problems for constitutional advocates who promote one set of characterizations over others. The Article closes by suggesting that, happily, constitutional advocates advertise serious matters of legal design when they argue about the degree of abstractness, breadth, and dynamism in constitutional law. Regardless of how these characterization decisions are made, they help determine the character of the legal system for us all.
In his new book, Akhil Amar describes the “unwritten Constitution” as a set of values, customs, and beliefs that are crafted and revealed over time, and which inform the interpretation and application of the Constitution. Amar’s account centers on four key moments in United States history: the founding, Reconstruction, the New Deal, and the civil rights revolution of the 1960s, leaving relatively unexplored an essential period of existential, adolescent crisis: the early nineteenth century. Using a 1830 exchange between James Madison and Martin Van Buren as a case study, this Article discusses the significance of the period between 1815 and 1850 as an era of constitutional change.
In the Hindu tradition of guru-sisya, a sisya (student) must offer something to his guru (teacher). Professor Akhil Reed Amar has been a guru to me, both an esteemed teacher and a wise counselor. Since there can be no better tribute to a professor than to use the knowledge, tools, and skills he imparted as a basis for analyzing his work, in this Article I offer a short and vigorous critique of Professor Amar’s latest work, America’s Unwritten Constitution. I make four brief points. First, America’s Unwritten Constitution reflects the mellowing of Professor Amar. Second, the book’s arguments are in tension with his previous work. Third, I question the driving force behind Professor Amar’s arguments and ask whether modern Supreme Court doctrine is in the driver seat. Finally, I examine how it was possible for the Warren Court to get so much so right with such misguided reasoning.
America’s Unwritten Constitution is a prod to the profession to look for legal rules outside the Constitution’s text. This is a good thing, as outside the text there’s a vast amount of law—the everyday, nonconstitutional law, written and unwritten, that structures our government and society. Despite the book’s unorthodox framing, many of its claims can be reinterpreted in fully conventional legal terms, as the product of the text’s interaction with ordinary rules of law and language.
This very orthodoxy, though, may undermine Akhil Amar’s case that America truly has an “unwritten Constitution.” In seeking to harmonize the text with deep theories of political legitimacy and with daily practice in the courts, the book may venture further than our conventional legal sources can support. To put it another way, anything the “unwritten Constitution” can do, unwritten law can do better; and what unwritten law can’t do, probably shouldn’t be tried. Yet whether or not we accept the idea of an unwritten constitution, by refocusing attention on America’s rich tradition of unwritten law, Amar performs a great service to constitutional scholarship.
The Status of Unwritten Constitutional Conventions in the United States
Keith E. Whittington | 2013 U. Ill. L. Rev. 1847
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There has been a long historical difficulty in determining what ideas and documents have “constitutional status” within any given political system. This Article examines one feature of unwritten constitutions, the idea of constitutional conventions, by comparing the U.S. and British systems. Unwritten constitutional conventions have long been understood to be integral to the operation of Westminster parliamentary systems. The British legal scholar A.V. Dicey emphasized that “constitutional morality” supplemented legal rules in regulating the exercise of political power and limiting the discretion of government officials. U.S. fundamental law was thought to provide clarity and commitment in a way that was both distinct from and deeper than anything that might be found in the Westminster parliamentary system. The presence of a written constitution and judicially enforceable constitutional rules has sometimes been thought to render constitutional conventions superfluous. Such arguments, however, were misguided. British constitutionalism included more entrenched commitments than such a sharp distinction might suggest and U.S. constitutionalism relied more on unwritten practices than the text might imply. These unwritten constitutional conventions have been common over the course of U.S. history and have played an important role in defining the effective constitution of the polity. Constitutional law, however, always threatens to displace constitutional morality. Unwritten conventions are often regarded as in tension with the supremacy of the written text and the primacy of constitutional interpretation.
Accounts of unwritten constitutional principles have tended to overlook unwritten principles of federalism. Using the tools that Akhil Amar provides in his book, America’s Unwritten Constitution, this Article seeks to correct that shortcoming. It begins the task of identifying the unwritten principles of federalism that developed historically and that shape our modern constitutional system. The Article does so by taking up an important historical case study: how, consistent with the Constitution’s federal design, were militiamen to be armed? The written Constitution assigns power to Congress to “provide for . . . arming . . .the Militia,” but what exactly this power meant in practice was unclear. Resolving the scope of this federal power—a power that could affect the lives of virtually every American citizen—generated widespread and passionate debates when, beginning in the first days of the Republic, efforts turned to ensuring that militiamen had the arms and equipment they needed to perform their national security role. These debates entailed the first significant national conversation about the meaning of American federalism that occurred after the drafting and ratification of the (written) Constitution. Unearthing this conversation enriches our understanding of federalism’s historical origins and its contemporary meaning. Several lessons emerge. While today federalism is often conceived as entailing divisions of authority, historically, federalism was highly dynamic: it involved overlapping federal and state jurisdiction and ongoing interactions between the states and the national government. A key component of our early federal system was the dependence of the federal government upon the states to put in place federal programs. This dependence gave the states authority to limit the reach of federal law, to decide which federal laws would apply at all, and to resist and curtail federal laws that were inconsistent with state policies. Today, courts play a key role in enforcing federalism limits on national power. Historically, the meaning of federalism developed in Congress and the federal executive branch, in the legislatures of the states and among their governors, and from the contributions of ordinary Americans. While questions of federalism are nowadays often discussed separately from issues of individual rights, historically, federalism and liberty were closely and inevitably intertwined: the language of federalism was often the language of individual rights, and vice-versa.
A recent episode highlights the importance of incorporating federalism into accounts of our unwritten Constitution. During the litigation over the Patient Protection and Affordable Care Act of 2010 that culminated in the Supreme Court’s 2012 decision in NFIB v. Sebelius, challengers to the federal individual health insurance mandate contended that never before had Congress required Americans to purchase something (in the case, an insurance policy). Supporters of the healthcare mandate responded that it was not unprecedented because in the Militia Act of May 8, 1792, Congress required militiamen to acquire their own arms and equipment. Neither side in the healthcare litigation had the story quite right, and this shared deficiency resulted from a common failure to understand the Militia Act in the context of the federalism principles this Article uncovers.
In his book, America’s Unwritten Constitution, Akhil Reed Amar contends that to properly engage the written Constitution, scholars and laymen alike must look to extratextual sources: among them America’s founding documents, institutional practices, and ethos, all of which constitute Amar’s “unwritten Constitution.” In this Article, I argue that contemporary originalist constitutional theory is consistent with reliance on extraconstitutional sources in certain circumstances. I establish a framework for revaluating the use of extratextual sources. That framework categorizes extratextual sources and explains their relevance to constitutional interpretation (the meaning of the text) and constitutional construction (elaboration of constitutional doctrine and decision of constitutional cases). I conclude by applying the framework to a question posed by Akhil Amar: Can vice presidents preside over their own trial upon impeachment? A negative answer to this question is consistent with an originalist constitutional theory that carefully cabins the use of extratextual sources in constitutional interpretation and construction.
Akil Amar’s new book discusses many different components of the “unwritten” constitution. This Article looks specifically at the most common use of that term—the practice of striking down state and federal laws on the grounds that they violate “fundamental rights” not directly mentioned in the Constitution. Although the Court’s favored approach to finding unenumerated rights—so-called “substantive due process”—is neither historically supportable nor jurisprudentially coherent, other sources of unenumerated rights are more promising. The Ninth Amendment would support a jurisprudence of natural rights based on equitable interpretation, and the Privileges or Immunities Clause might support a jurisprudence of broadly accepted traditional rights.
The Trouble with Treble Damages: Ditching Patent Law's Willful Infringement Doctrine and Enhanced Damages
Samuel Chase Means | 2013 U. Ill. L. Rev. 1999
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In a patent infringement lawsuit, a plaintiff often asserts a willful infringement claim and enhanced damages as a remedy. Under current U.S. patent laws, courts have the discretion to reject a claim for willful infringement and decline increasing damages, even if the jury returns a finding of willful infringement. This creates an unnecessary drain of resources on the court system and alleged infringers.
The enhanced damages provision in patent law is also often an unavailable remedy for plaintiffs even though plaintiffs almost always assert a willful infringement claim, often simply wasting courts’ and litigants’ financial resources. The enhanced damages provision also frustrates the purpose of the existence of patent laws, and patent owners actively avoid learning about new patents for fear that this knowledge will lead to allegations of willful infringement in the future. Finally, no other nation in the world has a remedy like the enhanced damages provision, and the existence of the remedy frustrates goals to harmonize global intellectual property laws.
This Note examines these issues presented by the enhanced damages provision. This Note analyzes alternatives for the enhanced damages remedy and considers whether abandoning the current law would appropriately deter patent infringement. Ultimately, this Note recommends that the entire enhanced damages provision and its associated willful infringement doctrine should be removed from the U.S. patent laws.
Uncounseled Tribal Court Convictions: The Sixth Amendment, Tribal Sovereignty, and the Indian Civil Rights Act
Katherine Robillard | 2013 U. Ill. L. Rev. 2047
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Tribal courts tasked with the prosecution of Native American defendants are not constrained by many Constitutional provisions, including the Sixth Amendment right to counsel in criminal proceedings. Currently, the Indian Civil Rights Act only requires representation in tribal court prosecutions of indigent defendants that may lead to incarceration of more than one year. State and federal courts require the opportunity of representation for all defendants in criminal proceedings. This discrepancy between the rights afforded in tribal courts and in state and federal courts lead to unique legal issues for Native American defendants indicted in federal court after being convicted without counsel in a tribal court.
Native Americans prosecuted under federal re-peat-offender statues could be exposed to harsher penalties based on prior uncounseled tribal con-victions. Thus, even if a Native American lacked representation in tribal court, those convictions might be used as predicate offenses for the purposes of federal repeat-offender laws. Different approaches to this issue are presented from the Eighth, Ninth, and Tenth Circuits. This Note ad-dresses the reasoning of each Circuit and offers a Recommendation that balances tribal sovereignty concerns, Sixth Amendment ramifications, and justice implications for both victims and defendants in the tribal court system.
Plumbing the Depths of Corporate Litigation: Reforming the Deepening Insolvency Theory
John Tully | 2013 U. Ill. L. Rev. 2087
Download PDF | Abstract
“Deepening insolvency” is a developing tort theory. Typically arising in bankruptcy proceedings, deepening insolvency claims are usually made by shareholders or creditors of the corporation against corporate directors, outside auditors, or lenders. This Note analyzes the widely differing approaches courts have taken to deepening insolvency. Some courts refuse to recognize deepening insolvency as a cause of action at all. Others admit deepening insolvency as a distinct tort, requiring a showing of either fraud or negligence on the part of the defendant. Finally, some courts recognize the theory as a measure of damages for existing tort claims. Ultimately, this Note recommends that the proper place for deepening insolvency claims in modern litigation is as a bar to the in pari delicto defense for defendants who have engaged in fraud.