University of California Hastings College of the Law
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Forced Pooling: The Unconstitutional Taking of Private Property
No full textOur society’s continued addiction to fossil fuels poses an existential threat to our future. The scientific consensus clearly tells us that we must stop burning fossil fuels as fast as possible. This poses a huge political challenge, as many people make a lot of money from the fossil fuel industry, and they resist change. But an overlooked legal doctrine shows that we are not even going after the lowest hanging fruit. Oil and gas rights are often privately held in the United States. Some owners of those rights would be happy to leave their oil and gas safely in the ground. But most states have laws which allow for “forced pooling” of oil and gas rights, allowing operators to extract even the minerals of non-consenting landowners. Halting the extraction of oil and gas owned by those set on profiting from it will be challenging enough. Surely, we can start by not forcing private property owners to extract oil and gas against their will.
There is a ready legal solution to the problem posed by forced pooling in the Takings Clause. Recent cases such as Horne and Cedar Point have clarified two kinds of government actions that per se violate the Takings Clause. If government regulations, even longstanding ones, physically take control of personal property such as raisins (or oil and gas), that is automatically a taking. And if government laws take away the right to exclude and thus authorize invasion of private property by others, that is also a per se taking. Both of these precedents would apply where forced pooling laws allow oil and gas companies to invade private property and physically remove the oil and gas found there.
Changes in the oil and gas industry also justify a change in the legal regime of forced pooling. Forced pooling was designed to address problems caused by the rule of capture, which applies to migratory resources such as water, wildlife, and historically to oil and gas. Modern technology in the oil and gas industry, including horizontal drilling and fracking, instead has enabled the extraction of nonmigratory oil and gas, to which the rule of capture logically does not apply.
These changes in both the law and the oil and gas industry justify a reexamination of forced pooling on constitutional takings grounds. Perhaps surprisingly, the strong property rights approach taken by the Supreme Court in recent cases can actually be used to protect progressive property owners who wish to leave their oil and gas safely in the ground
What Practitioners Can Do for Law Students and What Law Students Can Do for Practitioners
No full textPrivacy Mismanagement: Privacy Harms, Digital Market Monopolies, and Antitrust Law
No full textPrivacy self-management fails to protect consumer privacy. In the advent of the Internet, individuals had the option to tailor how their personal data was used throughout digital markets. However, since the digital markets are dominated by a few large conglomerates, namely Meta and Google, consumers have little choice to determine how they will use the internet in the face of the blatantly decreasing quality of privacy protection. The lack of adequate privacy protections in the digital markets harms consumers and erodes democratic institutions. Given the societal ramifications of consolidated digital markets on consumers, antitrust laws are the appropriate mechanism to remedy privacy harms and rebuild the guardrails of privacy protections, and the Federal Trade Commission should aggressively enforce these laws. Antitrust and privacy litigation should work in tandem to protect consumers who have had their personal information stolen and misappropriated, and to rebuild trust in democratic institutions
When Debt Gets a Makeover, Taxes Follow
No full textThe taxation of debt modifications is a complex and crucial area of tax law, significantly impacting both corporate finance and the broader economy. This article explores the complex legal and economic implications of modifying debt instruments, focusing on the key provisions of the Internal Revenue Code (IRC) and covers the foundational principle of “realization,” which governs the recognition of income, gain, or loss when a debt modification is deemed significant under Treasury Regulation § 1.1001-3. The article delves into the tax consequences for both debtors and creditors, highlighting the potential for Cancellation of Debt Income and the challenges of managing gain or loss recognition. The discussion further examines the interplay between debt modifications and other IRC provisions, including the limitations imposed by IRC Section 163(j) on interest deductions and the restrictions under IRC Section 382 following ownership changes. The complexities introduced by the lack of updated guidance under IRC Section 385, which distinguishes debt from equity, are also addressed, underscoring the uncertainty faced by taxpayers in navigating these regulations. In addition to the statutory analysis, the article places the discussion within the broader economic context, considering the impact of rising global debt levels and economic instability. The role of tax policy in either facilitating or hindering debt restructuring efforts is critically assessed, with a focus on the need for clear and adaptable regulatory frameworks. Ultimately, this article argues that the current tax treatment of debt modifications, while necessary for maintaining tax revenue, must be carefully balanced against the economic realities faced by distressed businesses. The article concludes with a call for ongoing legislative and regulatory refinement to ensure that tax law supports both legal certainty and economic resilience
