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Unspeakable Objections: Recovering from the Tricks and Traps of Rule 30(c)(2)
No full textThe boundary between a proper “working” objection and an improper “speaking” objection under Federal Rule of Civil Procedure 30(c)(2) turns out to be less discernible and more mysterious than we might like. It’s certainly less plain than some lawyers believe and some judges have suggested. We all need a better understanding of how and why the business of making objections at depositions can get complicated under the terms of this rule
Medtronic and the Interminable Problem of Transfer Pricing Litigation
No full textOn September 3 the Eighth Circuit issued its decision in Medtronic II, rejecting both the unspecified method that the Tax Court applied in its 2022 decision and the comparable uncontrolled transaction method preferred by the taxpayer, and remanding the case to the Tax Court for the second time. The decision means that a final determination of Medtronic’s tax liability for the 2005 and 2006 tax years will be delayed once again, and a Medtronic III decision might be appealed again, which could take several more years. The original Medtronic decision was rendered by the Tax Court in 2016 and reversed on appeal in 2018. Overall, it is likely that this case will take over 20 years to resolve. Clearly, the taxpayer has the resources to pursue such protracted transfer pricing litigation. But does the IRS
Inventing Birthright: The Nineteenth-Century Fabrication of jus soli and jus sanguinis
No full textFormal membership in a state has been an essential political status for well over a century. It is typically gained at birth, either jus soli or jus sanguinis. Jus soli assigns nationality by birth in a nation\u27s territory; jus sanguinis assigns children their parents’ nationality. This article provides an alternative intellectual history of the modern dominance of these principles for attributing nationality. Contrary to prior scholarship, soli and sanguinis were not restatements of existing principles. The soli/sanguinis binary was a nineteenth-century invention. Old-regime European empires attributed membership in the community under one or another single natural law principle. Parentage and birthplace were mostly evidence of conformity. In the early nineteenth century, officials in multiple jurisdictions began prioritizing positive law above natural law and transformed parentage and birthplace into competing principles for assigning nationality. This movement crystallized in 1860 when Charles Demolombe introduced jus soli and jus sanguinis to nationality law as competing, ostensibly ancient legal traditions. The framework spread quickly because it was a useful way to assign nationality despite states’ conflicting approaches to political membership. Yet, as its role in United States v. Wong Kim Ark (1898) helps illustrate, the invented tradition has also obscured our understanding of more complex historical dynamics
Minor v. Happersett and the Repudiation of Universal Suffrage
No full textNearly 150 years ago, Minor v. Happersett rejected a constitutional challenge to a Missouri law that excluded women from the electorate. Ratification of the Nineteenth Amendment forty-five years later is often said to have “overturned” Minor. In fact, the Amendment did no such thing. Minor held that voting is not among the privileges of citizenship protected by the Fourteenth Amendment. The Nineteenth Amendment says nothing to the contrary, and instead bars laws and practices that deny or abridge the right to vote “on account of sex.” Minor remains good law today.
It was not happenstance that the Nineteenth Amendment failed to overrule Minor. It was never intended to do so. The expansion of the male-only electorate following ratification of the Fourteenth and Fifteenth Amendments changed the meaning of women’s disenfranchisement. What advocates of women’s suffrage had previously seen as a harm experienced by all women based on their collective exclusion from the male-only electorate morphed for many into a distinct injury inflicted on specific women by the inclusion of specific men in the electorate. The universalist claim to inclusion based on equal citizenship—the argument Virginia Minor pressed—was relegated to the periphery, and, for many advocates, abandoned entirely. In its place, a zero-sum project emerged and gained traction, and it demanded the enfranchisement of some women, and the exclusion of others—along with a host of men—who lacked what were deemed necessary credentials for membership in the electorate.
This Article describes and contrasts the theory of political participation Virginia Minor advanced and the Supreme Court rejected in 1875 with the one it will argue propelled ratification of the Nineteenth Amendment in 1920. It offers an explanation for why leading advocates of the Amendment did not push to overrule Minor and, indeed, all but repudiated the vision of the right to vote that Virginia Minor espoused. Finally, the Article explores why the Nineteenth Amendment’s preservation of Minor, far from a technical oversight, matters.
We cannot know whether recognition of voting as a privilege of citizenship back in Minor would have disrupted the vast array of race-based vote suppression tactics so many supporters of the Nineteenth Amendment pledged to preserve and promote. It is nevertheless evident that the arguments and commitments that would have been needed to press for and ultimately ratify an amendment that recognized voting to be a substantive privilege of citizenship required acknowledgement of an equality among citizens that was incompatible with the core arguments that so many Nineteenth Amendment supporters advanced in support of the measure.
As I argue elsewhere, the arguments these advocates pressed best explain why the Amendment did not have the transformative impact on American law and society that many contemporary scholars argue should have followed ratification. We can only speculate what would have happened had the Nineteenth Amendment’s most vocal proponents chosen instead to vindicate Virginia Minor’s claim and work to constitutionalize the principles of equal citizenship she had endorsed. What we know, however, is what they actually said and did, and the events that followed
Is Confidential Supervisory Information Material to Investors? Evaluating the Conflict between Banking and Securities Law
No full textA central goal of modern US securities law is the transparency of corporate information through mandatory public disclosures. This goal is in tension with a central goal of banking law, namely, the practice of preserving opacity of the information exchanged between banks and bank supervisors to ensure the safety and soundness of individual banks and the entire banking system. That informational opacity in banking known as confidential supervisory information (CSI) applies equally to all banks, whether or not they sell securities subject to public disclosure requirements. The disclosure of CSI is prohibited by law and practice, with dire consequences for those who violate these prohibitions. How significant is this tension between securities and banking laws? If CSI is always immaterial to investors-the unofficial or de facto position of bank regulators supported by some previous studies of the subject-then the conflict is easy to resolve, but raises questions about what, exactly, the process of bank supervision accomplishes. If some CSI is in fact material to investors, then the failure by companies and insiders to disclose it may violate federal securities law. Using a dataset of unexpected CSI leaks at publicly traded bank holding companies, we empirically assess the materiality of certain CSI to market investors. We find abnormal returns with significant magnitude on days that CSI is unexpectedly leaked. Our findings, therefore, establish that at least some CSI is material to public investors, raising implications for disclosure compliance, insider trading, and regulatory accountability. We also document that unexpected leaks generate significant changes in implied credit default spreads in a direction that is mostly consistent with the documented abnormal returns. The results shed new light on the tradeoffs between opacity and disclosure policies for banking organizations
Repealing Reorgs
No full textUnder the Supreme Court\u27s opinion in Moore, it is likely that realization is essential for defining income as a constitutional matter. Therefore, when a transaction involves realization, it should presumptively be taxable unless there are very good reason for nonrecognition of gain. Given this reality, there are good reasons for Congress to consider repealing tax-free reorganizations and the other nonrecognition rules of the corporate tax, primarily for non-tax reasons. Acquisitive A, B, and C reorganizations and acquisitive section 351 transactions typically are used for large public corporations to acquire startups, which encourages monopolies. Triangular mergers raise corporate governance concerns because they generally do not allow shareholders of the acquirer to vote on the merger. Divisive D reorganizations and section 355 spin-oKs also raise corporate governance issues when combined with mergers, as well as undermining the classical system of corporate/shareholder taxation that Congress has preferred since 1935. E reorganizations encourage substituting debt for equity, raising bankruptcy risks. F reorganizations facilitate a race to the bottom and raise corporate governance concerns. G reorganizations facilitate bankruptcies which are already subsidized by other sections of the code
Are We Trapped by Realization?
No full textIn this installment of Reflections With Reuven Avi-Yonah, Avi-Yonah examines the downsides of the realization requirement and potential solutions to them. In an excellent Tax Notes article, Steven Sheffrin recently mounted the most convincing defense of the realization requirement I have read. He explained that the case for taxing unrealized capital gains is based on the Haig- Simons definition of income. In this definition, income equals consumption plus savings when savings includes both realized and unrealized capital gains. If asset prices change because of changes in future cash flows, Haig-Simons income can provide an appropriate guide for designing tax policies
Rewriting Precedent: How International Adjudicators Influence Compliance
Get PDFInternational cooperation depends on adaptation to changing conditions. International dispute settlement bodies can play a key role in maintaining cooperation over time. Evidence suggests that when legal bodies successfully adapt the law through the reinterpretation of rules, they can promote state compliance. However, this process is incremental and may not happen quickly enough, which can lead to backlash against international courts. In this article, we analyze these dynamics at the World Trade Organization (“WTO”), the global institution regulating international trade. Relying on data and case studies, we show how the Appellate Body modified its interpretations to promote compliance. Because this cannot happen in every dispute, the WTO illustrates the tensions between consistency and adaptation legal institutions face
The Historical Evolution of Corporate Social Responsibility: A Foreword to the ELI Guidance
Get PDFThis issue includes the “ELI Report on Company Capital and Financial Accounting for Corporate Sustainability” and accompanying studies, including Anne Le Manh, https://doi.org/10.1515/ael-2021-0041, “Accounting Policies and Dividend Limitation: A European Comparison”, and country reports from Germany, Italy, France, Croatia, Japan, and the UK. The focus of the Report is on environmental, social and governance (ESG) considerations, which “concern broad matters pointing to the sustainable and responsible long-term relationship of companies with stakeholders, society and nature … In this context, an important and timely debate is ongoing as to how companies could and should be sustainable and responsible for the benefit of business and society at large. As a matter of fact, it is quite evident that only financially robust companies may be able to afford the pursuit of corporate sustainability over time and circumstances.
Reforming the Medical Expense Income Tax Deduction to Better Reflect Crip Time
Get PDFExtraordinary medical expenses— whether due to a one-time occurrence or a chronic condition— happen on their own time. These expenses, their causes, and their consequences (medical, personal, financial, or all of these) can rarely be neatly cabined into a single calendar year. Treatment requiring an expensive prescription medication or complex surgery not covered by insurance may address a condition that arose over years. That condition may have interfered with a taxpayer’s ability to work in prior years, the current year, and perhaps for years to come, even for the rest of the taxpayer’s earning life. The medical condition of a taxpayer’s family member can do the same. The disruptions caused by these events may be so radical as to transport the person, as it were, into “crip time,” an experience of time radically different than the norm. Or it may not. But regardless, the Internal Revenue Code as it currently operates does not even fairly reflect the economic reality, and it deprives many taxpayers who have large medical expenses of the full tax value of those expenditures. It discriminates even more acutely against those who have such expenses over many years, and it discriminates irrationally, on the basis of those expenses’ timing.
We all live in normative time. Or rather, we all live under it—under a regime structured by it—seemingly inescapably. Philosophers dating back at least to Immanuel Kant have reflected on the nature of time, as a necessary condition of apperception, seeking to account for how and why all our human experiences necessarily take place in time. But it has taken the work of some radical disability theorists, practitioners of self-described “crip theory,” to identify the concept of normative time, by distinguishing it from what some of them call “crip time.” It is normative time that regulates our industrialized world, and our academic world. It puts us on daily, weekly, monthly schedules, creates class times with strictly regulated starting and ending times, same for semesters, academic years, time to degree, time to tenure. . . . The tax year, too, is a paradigmatic example of “normative time”—fixed, regular, intersubjective, arbitrary, frequently unfair, justified, perhaps, by convenience— but whose?
When (and why) might departures from normative time be justified? The essence of this proposal is rejecting the so-called “ineluctab[ility] of the integrity of the taxable year”4—its normative dimension— in the service of greater substantive fairness and as a first effort to bring the provocative idea of “crip temporality” (also called “crip time”) into the tax Code. The first part of this proposal argues that this change can be justified on grounds of equity and economic reality before turning to justifications more deeply grounded in disability theory