Current Print Issue

Vol. 163, Issue 1

  December 2014

Featured Article

The Constitutional Standing of Corporations

Brandon L. Garrett
163 U. Pa. L. Rev. 95 (2014).

Are corporations “persons” with constitutional rights? The Supreme Court has famously avoided analysis of the question, while recognizing that corporations may litigate rights under the Due Process Clause, Equal Protection Clause, First Amendment, Fourth Amendment, Sixth Amendment, and Seventh Amendment, but not, for example, the Self-Incrimination Clause of the Fifth Amendment. What theory explains why corporations may litigate some constitutional rights and not others? In this Article, I argue that the doctrine of Article III standing supplies an underlying general theory by requiring a judge to ask: does the organization suffer a concrete constitutional injury to its legal interests? Such analysis has implications for the interpretation of a range of contested constitutional questions. For example, Article III analysis helps us to understand why corporate standing is not appropriate if corporate rights threaten to conflict with claims brought by individuals, while in contrast, associations and nonprofits may more readily derivatively assert the third-party rights of members. By ignoring Article III constraints, and finding that a for-profit corporation could itself assert a statutory injury to the religious beliefs of its owners, the Supreme Court’s recent Hobby Lobby opinion threatens to erase the longstanding differences between owners and corporations, parties and third-parties, and for-profit corporations versus other types of entities. Only if Article III doctrine is faithfully applied can organizational standing to litigate constitutional rights effectively develop protections for individuals and organizations alike.

Featured Comment

The Duryodhana Dilemma: United States v. A 10th Century Cambodian Sandstone Sculpture and a Proposed Code of Ethics-Based Response to Repatriation Requests for Auction Houses

Lauren Henderson
163 U. Pa. L. Rev. 249 (2014).

On March 24, 2011, Sotheby’s New York unexpectedly removed its showcase lot, the Duryodhana, from its Indian & Southeast Asian auction scheduled to occur that same day. This last-minute adjustment occurred in response to a letter received hours earlier from the Secretary General of Cambodia’s National Commission for the United Nations Educational, Scientific and Cultural Organization (UNESCO), who alleged that the sculpture had been illegally removed from Cambodia and asked that Sotheby’s delete the lot from the auction. One year after Sotheby’s voluntarily pulled the lot, the United States government filed a civil forfeiture action in the United States District Court for the Southern District of New York, United States v. A 10th Century Cambodian Sandstone Sculpture. By filing this action, the U.S. government aimed to take title to the Khmer sculpture and return it to Cambodia.

United States v. A 10th Century Cambodian Sandstone Sculpture is just one example of the repatriation requests from foreign countries that auction houses in the United States face each year. Some scholars report that countries such as Cambodia have been mounting more repatriation requests in recent years. Auction houses confronted with these repatriation requests must struggle through the ambiguities and deficiencies in the current law when deciding how to respond. As an alternative to the available legal response to repatriation requests, I propose that auction houses should develop a uniform code of ethics to guide their efforts in replying to these requests. Auction houses should look to the International Council of Museums’ (ICOM) Code of Ethics for Museums as a model for fashioning their own code of ethics. If all major auction houses voluntarily agree to adopt a uniform code of ethics, there would be fewer repatriation requests and less uncertainty surrounding compliance with the current complex web of laws and regulations that differ from country to country.

In Part I, I describe the background of the Duryodhana, including how the sculpture fits within the Cambodian cultural framework and Cambodian perceptions of property and ownership. I also summarize the litigation and recent settlement surrounding the sculpture, noting the parties’ principal contested points that remain unresolved. In Part II, I outline the current legal response for addressing repatriation claims, including its deficiencies. In Part III, I propose that auction houses look to museums for guidance in order to remedy the unsettled and unsatisfactory state of this legal struc- ture. By adopting a uniform code of ethics modeled after the ICOM Code of Ethics for Museums, auction houses will be better situated to avoid repatriation claims. Finally, I conclude by suggesting specific provisions that auction houses might adopt as a starting point for developing a uniform code of ethics.

Online Exclusives
 Last updated: December 3, 2014


New Regulations and Pending Cases

Evan Barret Smith
163 U. Pa. L. Rev. Online 159 (2014).

Do new regulations apply to pending cases? The question is simple, but the short answer is a lawyer’s favorite: “It depends.” It depends on the organic statute, it depends on the regulation, and, unfortunately, it may even depend on the federal court of appeals that happens to decide the case. This Essay looks at this issue by examining the effect of the Department of Labor’s 2013 amendments to regulations governing claims under the Black Lung Benefits Act. This Essay explains why the new regulations are applicable to pending cases, even if the Department of Labor already issued its final decision on a claim and a party already petitioned a court to review that decision.

The analytical route to this result varies by circuit. This Essay explains why the factor-based retroactivity test used by most circuits better addresses fundamental due process concerns and is more administrable than the D.C. Circuit’s approach, which turns on whether a circuit split predates the new regulations. This Essay both provides a clear answer about whether the 2013 amendments to the black lung regulations apply to pending cases and suggests how courts should handle retroactivity questions for regulations more broadly.

Case Note

Distinguishing Bildisco in Municipal Bankruptcy: Why the Business Judgment Standard Should Apply to CBA Rejection in Chapter 9

Evan Sherwood
163 U. Pa. L. Rev. Online 123 (2014).

Courts and scholars analyzing Chapter 9 of the Bankruptcy Code have been erroneously applying the Supreme Court’s opinion in NLRB v. Bildisco & Bildisco, asserting that this opinion sets the legal standards by which a bankrupt city may reject its union contracts. This Case Note takes a different view and argues that the traditional business judgment standard rather than Bildisco should govern a bankrupt city’s rejection of labor contracts

Cities have made national headlines in recent years by filing for bankruptcy, and one of the biggest issues in this wave of municipal bankruptcies is labor debt. By filing a petition under Chapter 9 of the Bankruptcy Code (Code), cities may use 11 U.S.C. § 365(a) to reject labor contracts with public sector employees, subject to the “approval” of a bankruptcy court. The Code, however, does not establish what approval standard a bankruptcy court should apply. Courts that have addressed this issue hold that the appropriate rejection standard is Bildisco, a 1984 Supreme Court opinion that dealt with the rejection of private sector labor contracts in Chapter 11 cases. Commentators generally agree that this approach is correct. To the extent that commentators disagree with this approach, they argue that state law should provide the standard for rejecting labor contracts. This Case Note disagrees with all of these courts and commentators, arguing instead for the traditional business judgment standard.

In Part I, this Case Note examines the background of the Bildisco rejection standard and its erroneous application in Chapter 9 cases. Arguing that the Bildisco standard is not controlling in a Chapter 9 case, Part II explains why it is limited to labor contracts regulated by federal labor law and subject to rejection in Chapter 11 cases. In Part III, this Case Note analyzes Chapter 9 of the Bankruptcy Code and shows why the business judgment standard should control collective bargaining agreement (CBA) rejection.


If Professions Are Just "Cartels By Another Name," What Should We Do About It?

David A. Hyman & Shirley Svorny
163 U. Pa. L. Rev. Online 101 (2014).

The state action doctrine has been a significant impediment in the campaign against anticompetitive conduct by provider-dominated state licensing boards. In Cartels by Another Name: Should Licensed Occupations Face Antitrust Scrutiny?, Professors Edlin and Haw argue that state licensing boards operate as a “massive exception” to the Sherman Act’s ban on cartels, and that the Supreme Court should use a pending case (North Carolina State Board of Dental Examiners v. FTC) to “hold boards composed of competitors to the strictest version of its test for state action immunity, regardless of how the board’s members are appointed.” They also propose the application of a modified rule of reason when deciding similar cases on the merits.

Professors Hyman and Svorny suggest three modifications to Edlin and Haw’s proposal. These modifications aim to limit occupational licensing’s anticompetitive tendencies and licensing boards’ anticompetitive behavior. First, in reviewing the decisions of licensing boards, courts should presume that states were not actively supervising the boards, absent compelling evidence to the contrary. Second, defendant–licensing boards should be required to present persuasive evidence of actual harm that their proposed licensing restrictions or restraints will prevent and should be required to show that private market and non-regulatory forces (including brand names, private certification, credentialing, and liability) are insufficient to ensure that occupations maintain a requisite level of quality. Finally, Professors Hyman and Svorny argue that legislators should take steps to roll back existing licensing regimes.