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Arbitration and Federal Reform: Recalibrating the Separation of Powers Between Congress and the Court
Get PDFIn 1925, Congress, to provide for the enforcement of certain arbitration agreements, enacted the Federal Arbitration Act (“FAA”) as a procedural law to be applicable only in federal courts. However, the United States Supreme Court, seemingly for the purpose of reducing federal courts’ caseloads, co-opted the FAA by disregarding Congress’s intent that the FAA be applicable only in federal courts. And in furtherance of its own Court-created “federal policy in favor of arbitration,” the Court created precedents that limit state regulation of arbitration agreements, including that states cannot exempt disputes from forced or mandatory arbitration agreements or otherwise regulate the enforcement of arbitration agreements in a manner that is inconsistent with the FAA. The Court’s precedents have left a regulatory gap where states cannot prevent some of the dangers that arbitration poses to litigants in many areas of the law, including in consumer and employment contracts. Recently, however, Congress has reentered the arbitration field to reassert its authority over arbitration. In 2022, it enacted the Ending Forced Arbitration of Sexual Abuse and Sexual Harassment Act to exclude these types of claims from forced or mandatory arbitration. This Article asserts that Congress, having reentered the field, should continue its reforms of the FAA to recalibrate the balance of power between the Court and Congress. This would include Congress clearly stating whether Section 2 of the FAA should be applicable only in federal courts; should not be applicable to adhesion arbitration agreements; and should not be applicable to federal statutory claims, as well as whether the lack of diversity in arbitrators should be one of the justifications for not enforcing predispute arbitration agreements. This Articles discusses these topics and offers suggestions on how Congress should resolve these issues
Prosecuting the Mob: Using RICO to Create a Domestic Extremism Statute
Get PDFIn 2021, Secretary of Homeland Security Alejandro Mayorkas asserted that “[d]omestic violent extremism is the greatest terrorist-related threat” facing the United States. Although domestic extremism is often characterized as a lone wolf threat, it is frequently spurred on by white supremacist and neo-Nazi organizations that use the internet to radicalize their members and then avoid accountability by hiding behind constitutional protections—a strategy called “leaderless resistance.” This strategy results in devastating consequences. While the number of hate groups and hate crimes in the United States have risen to record highs, constitutional protections prevent domestic extremist organizations from being treated the same as foreign terrorist organizations. In turn, those who support domestic extremist organizations are also largely precluded from prosecution for providing material support.
Enter the Racketeer Influenced and Corrupt Organizations Act (RICO). Despite its roots in countering the mafia and other organized crime groups, RICO has become a catch-all statute to prosecute criminal organizations of all types. The statute allows the government to encapsulate and address decentralized organizations whose members commit criminal offenses without explicit agreement or instruction. In essence, RICO allows the government to constitutionally criminalize organizational membership and involvement.
The organizations that lead the “leaderless” resistance must be held accountable. This Note asserts that Congress can use RICO’s model of organizational accountability to create a domestic extremism statute that enables the government to undermine these organizations by: (1) designating domestic extremist organizations; and (2) prosecuting their support networks. This statute would provide the government with an effective and constitutional method to deter the greatest current extremist threat to the United States
Pandemic as Transboundary Harm: Lessons from the \u3cem\u3eTrail Smelter Arbitration\u3c/em\u3e
Get PDFThe COVID-19 pandemic has caused incalculable harm around the world. The fact that this immense harm can be traced back to a localized outbreak in or near Wuhan, China, raises questions about the responsibility China might bear for the pandemic under public international law. Famously applied in the seminal Trail Smelter Arbitration (1938/1941), the Transboundary Harm Principle provides that no state can use or allow the use of its territory in a manner that causes significant harm in the territory of other states. This article does not intend to tap into the unseemly, xenophobic spirit that animates much of the rhetoric blaming China for the pandemic. Yet, if regulatory failure in China caused the pandemic, then those acts or omissions might qualify as a violation of the customary international law Transboundary Harm Principle. This Principle, which seeks to preserve states’ fundamental right to sovereignty while accommodating a spectrum of interstate or transboundary interaction, has become a foundational component of international environmental law. But at its core, the Transboundary Harm Principle establishes the risk of international law responsibility for harm caused by domestic regulatory failure. This article demonstrates the Principle’s application beyond environmental law and further applies it to the COVID-19 pandemic. The Trail Smelter Arbitration both articulated the relevant substantive law and also provided a model for fashioning an equitable remedy for violations of the Principle. That remedy accounts for harmed states’ contribution to the severity of the harm suffered. This framework—consisting of the Trail Smelter Arbitration’s substantive law and remedial procedure—confirms that the Transboundary Harm Principle is an appropriate international law solution to the question of China’s responsibility for the harm caused by COVID-19
Zooming In: Analyzing Annual Meeting Format Changes Amidst a Global Pandemic
Get PDFBeginning in March of 2020, public companies in the United States were forced to take unprecedented measures to observe corporate formalities while following the government-mandated health and safety measures resulting from the COVID-19 pandemic. Those measures made in-person activities and meetings either incredibly challenging or, in certain jurisdictions, illegal. Because “proxy season,” the time when public companies typically hold their annual meetings of stockholders, followed shortly after the mass implementation of COVID-19 lockdowns and quarantines, public companies that had historically held these meetings in-person were left scrambling to find an alternative means to meet. Nearly overnight, the pandemic caused an explosive transition from in-person annual meetings to virtual annual meetings. This article examines that trend, both qualitatively and quantitatively.
More specifically, this article presents the results of primary research that quantifies the prevalence of virtual annual meetings before, during and (depending on one’s view of the current state of affairs) after the height of the COVID-19 pandemic. The results are offered using a series of different metrics to provide a comprehensive picture regarding the sudden transition and theorizes a new normal in one of the most important investor-relations tools available to public companies
Federalizing \u3cem\u3eCaremark\u3c/em\u3e
Get PDFWhen corporations misbehave, the normal government response is to saddle the industry with more federal oversight requirements. But reactive policies fail to curb corporate misconduct and can incentivize corporations to ignore or break the law due to the ever-increasing cost of compliance. Even though shareholders have to foot the bill when the corporations get caught ignoring or breaking the law, it is extremely difficult for shareholder plaintiffs with genuinely meritorious claims to recover for damages because, under Caremark’s requirements, it is nigh-impossible to demonstrate the bad faith necessary to survive a motion to dismiss using conventionally available information; of the seventeen Caremark claims that have been brought in Delaware since the case was decided, only five have survived a motion to dismiss.
Therefore, this Article proposes “federalizing Caremark.” That is, the Delaware Court of Chancery, being the extremely influential metonymy of American corporate law that it is, should formally recognize and adopt the holdings common to the five successful cases. All of those cases were able to show the officers exhibited per se bad faith by leveraging agency-developed information regarding red flags that were ignored, breaches of the duty of oversight, and knowing violations of the law for profit. If Delaware courts chose to effectively federalize Caremark, then the per se bad faith standard would enable shareholder derivative suits to survive the dreaded motion to dismiss and possibly even win as a matter of law upon a motion for summary judgment. Federalizing Caremark would also more effectively prevent corporate misbehavior than would continually increasing oversight and regulatory requirements because it merely utilizes mechanisms already in place (i.e., agencies, regulations, shareholder claims, state courts).
Corporate law scholarship rarely acknowledges its intersection with administrative law. In doing so, however, this Article establishes a bright line administrative remedy to the overwhelmingly steep hurdle shareholders face in derivative litigation
Severe Mental Illness and the Death Penalty: A Menu of Legislative Options
Get PDFIn 2003, the American Bar Association established a Task Force on Mental Disability and the Death Penalty to further specify and implement the Supreme Court’s ruling banning execution of persons with intellectual disability and to consider an analogous ban against imposing the death penalty on defendants with severe mental disorders. The Task Force established formal links with the American Psychological Association, the American Psychiatric Association, and the National Alliance on Mental Illness and the final report was approved by the ABA and the participating organizations in 2005 and 2006. This brief article focuses primarily on diminished responsibility at the time of the offense, summarizing the reasons why an exclusion for severe mental illness is needed and reviewing the key drafting issues that can be expected to arise in defining the clinical criteria for exclusion. A key question is whether state trial judges and judges appointed to state appellate courts embrace their constitutionally grounded duties to assure sparing and humane administration of the death penalty. Assiduous efforts to prevent execution of prisoners with severe mental illness is a necessary element of that judicial assignment
Tax Reporting as Regulation of Digital Financial Markets
Get PDFFTX’s recent collapse highlights the overall instability that blockchain assets and digital financial markets face. While the use of blockchain technology and crypto assets is widely prevalent, the associated market is still largely unregulated, and the future of digital asset regulation is also unclear. The lack of clarity and regulation has led to public distrust and has called for more dedicated regulation of digital assets. Among those regulatory efforts, tax policy plays an important role. This Essay introduces comprehensive regulatory frameworks for blockchain-based assets that have been introduced globally and domestically, and it shows that tax reporting is the key element of those regulatory frameworks.
Furthermore, this Essay argues that tax reporting and transparency requirements can significantly stabilize the digital financial market and provide additional funding for much-needed regulatory programs through increased tax compliance. Tax reporting requirements have been effective tools in traditional financial markets. By replicating such policies in the digital financial market, the market would significantly improve. These requirements would help combat money laundering and tax evasion. Also, reporting requirements that target both financial institutions and taxpayers would increase tax compliance and lower administrative burdens. The requirements also have the potential to generate revenue, which can fund additional regulatory developments. For these reasons, tax reporting requirements could be an important tool whose utilization would bring much needed stability to digital assets and the market
Unfair by Default: Arbitration\u27s Reverse Default Judgment Problem
Get PDFIt is a foundational principle of civil law that a defendant who fails to respond to allegations is deemed to have admitted those allegations and can be subjected to default judgment liability. This threat of default judgment incentivizes defendants to respond to claims, thereby discouraging delay tactics and helping ensure cases are resolved efficiently on the merits.
In consumer and employment arbitration, though, the fairness and efficiency benefits of traditional default judgment are flipped, rewarding rather than punishing unresponsive defendants. This difference from civil litigation arises out of arbitration’s fee structures: if a defendant-company fails to pay its share of the fees required to initiate arbitration, which can exceed 200 to $400. A plaintiff unable or unwilling to pay the defendant’s fees will face dismissal of the arbitration claims and be left with the choice of going to court—the very thing arbitration is meant to avoid—or simply walking away. By ignoring claims, then, defendant-companies can stall the process, significantly increase the financial burden on plaintiffs, and improve their own odds of escaping liability.
This Article confronts arbitration’s problematic default rule, which I term the “Reverse Default Judgment Rule.” Drawing on historical research into the development of arbitration’s modern rules, the Article shows how the Reverse Default Judgment Rule came to be. It then reveals the potentially insurmountable financial and procedural roadblocks that the Rule puts in the path of individual employees and consumers seeking to vindicate their rights. The burdens created by the Reverse Default Judgment Rule significantly undermine arbitration’s supposed speed, informality, and fairness in resolving consumer and employment disputes.
But hope for reform has recently come from plaintiffs leveraging arbitration’s same fee structures to bring coordinated, simultaneous “mass arbitration” claims against defendant-companies. Faced with paying tens of millions in court-ordered arbitration fees and the possibility of defending thousands of individual arbitration hearings, companies have quickly settled while demanding that arbitration providers change their fees. By turning the tables on defendants, mass-arbitration plaintiffs have thus not only scored major legal victories, but have also opened a political window to remedy arbitration’s fee structures.
Understanding and confronting arbitration’s Reverse Default Judgment Rule will shed light on whether consumer and employment arbitration can adequately replace the courts or if it is undeserving of the privileged legal status and judicial favoritism it has received
The Right To Hope: A New Perspective Of The Right To Have Expectations, Opportunities And Plans
Get PDFHope has been considered to be an important and constitutive aspect of the human person, not only by philosophers of all backgrounds, but also by international and national courts of several countries especially in the last decade. As an existential aspect of each person, hope has multiple manifestations in private and public life. Up until now, authors and some cases have been discussing particular manifestations of the right to hope. While in the past these courts were more aware of the hopes raised in judicial litigation and ordinary life, now the inmates’ hope of being released is the major point of debate. This normative Article is devoted to study, not just particular manifestations, but the right to hope itself as a whole.
We believe that this more comprehensive scheme will allow us to better understand the right to hope, as well as many correlated doctrines that deal with ordinary hopes, such as the doctrines of legitimate expectations and loss of a chance.
For that purpose, after delimiting the essence of hope, with a subjective and objective dimension, we will analyze the possible legal justifications and scope of the right to hope, taking into account numerous American case law that explicitly mention the right to hope, international jurisprudence, the doctrine of renowned philosophers, and some theological arguments
Show Me the Money: How Bankruptcy Courts Could Become the Most Equitable Mass Tort Forum
Get PDFThe Texas Two-Step has emerged as a dangerous bankruptcy maneuver for companies to defend against mass tort liability. The process allows a company to allocate all of its tort liability to a newly created company which then files for bankruptcy. The Bankruptcy Code provides instantaneous benefits for that new company, which tort victims are left unable to proceed with their claims. This has resulted in an inequitable process, and outcomes, for those victims as seen by the recent Johnson & Johnson Texas Two-Step. While this process is unjust, it has raised an interesting question: could a bankruptcy court become the best place for these mass tort cases? This Note proposes that yes, bankruptcy courts could become the most equitable mass tort forum through a statutory expansion of 11 U.S.C. § 524(g). 11 U.S.C. § 524(g) was enacted to tackle the asbestos crisis and could be modified to enable an equitable and efficient forum for mass tort victims across industries