Current Print Issue

Vol. 162, Issue 6

  May 2014

Featured Article

Structural Corporate Degradation Due to Too-Big-to-Fail Finance

Mark J. Roe
162 U. Pa. L. Rev. 1419 (2014)

Corporate governance incentives at too-big-to-fail financial firms deserve systematic examination. For industrial conglomerates that have grown too large to be efficient, internal and external corporate structural pressures push to resize the firm. External activists press the firm to restructure to raise its stock market value. Inside the firm, boards and managers see that the too-big firm can be more efficient and more profitable if restructured via spinoffs and sales. But a major corrective for industrial firm overexpansion fails to constrain large, too-big-to-fail financial firms when (1) the funding boost that the firm captures by being too-big-to-fail sufficiently lowers the firm’s financing costs and (2) a resized firm or the spun-off entities would lose that funding benefit. Propositions (1) and (2) have both been true and, consequently, a major retardant to industrial firm overexpansion has gone missing for large financial firms. The effect resembles that of a corporate poison pill, but one that disrupts the actions of both outsiders and insiders.

Featured Comment

May Contain: Allergen Labeling Regulations

Sarah Besnoff
162 U. Pa. L. Rev. 1465 (2014).

Nausea; hives; swelling of eyes, nose, and throat; lung failure; and possibly death—these are the symptoms food allergy sufferers can endure if they consume their respective food allergen. Food allergies affect between 2%-9% of the U.S. population. Each year, roughly 30,000 individuals require emergency room treatment, and roughly 150 individuals die from allergic reactions to food.

Even minimal exposure to an allergen can cause an allergic reaction in some individuals. Currently, there is no known cure. Despite some recent successes in medical trials of alternative treatments, the primary option for those suffering from food allergies is still complete avoidance of the allergens themselves.

To avoid allergens successfully, food allergy sufferers must be able to trust information provided by food producers and manufacturers. The average individual does not produce his or her own food; instead, nearly everyone purchases food from grocery stores, farmers’ markets, and other commercial suppliers and rely on food labels to determine whether a product is safe for consumption. For food allergy sufferers, the ingredient labels on these packaged foods are lifelines to ensure their safety.

In an effort to protect food allergy sufferers, Congress passed the Food Allergen Labeling and Consumer Protection Act (FALCPA) in 2004. The Act required, for the first time, producers of commercial food products to indicate on a label whether the product contained any of the eight major allergens.

The food allergy community heralded the creation of this legislation. However, the Act left one important concern for food allergy sufferers untouched: advisory label warnings. An advisory label warning is an addition to a food product’s ingredient label that alerts consumers to the possibility of contamination, or “cross-contact,” with an allergen. Some food allergy sufferers can have allergic reactions to very small amounts of allergens, including food products that were only in cross-contact with allergens.

Online Exclusives
 Last updated: June 16, 2014


Distinguishing Immigration Violations from Criminal Violations: A Discussion Raised by Justice Sonia Sotomayor

Brian L. Owsley
163 U. Pa. L. Rev. Online 1 (2014).

In February 2014, United States Supreme Court Justice Sonia Sotomayor was interviewed at Yale Law School. During the course of a wide-ranging discussion, Justice Sotomayor explained that “her use of the term ‘undocumented immigrants’ rather than the traditional illegal alien” label stemmed from her analysis of “the issue as a regulatory problem” and that she found it insulting to label immigrants as criminals. This discussion would have gone largely unnoticed but for the fact that Fox News contributor and radio commentator Laura Ingraham took Justice Sotomayor to task, “suggesting that she has to choose between her ‘immigrant family background’ or the Constitution.” Indeed, Ms. Ingraham further argued that there is no rule of law in the United States if someone like Justice Sotomayor can pick and choose whether or not to follow certain laws.

Of course, Ms. Ingraham’s criticisms seemed to ignore the fact that Justice Sotomayor is an American citizen of Puerto Rican descent. So not only was she born in the United States, but as the child of Puerto Rican parents, she would also receive automatic American citizenship—a fact that has been true since 1917. One hopes that Ms. Ingraham is aware that people of Puerto Rican descent, including those born on the island, are American citizens. However, what is clear is that she does not appreciate the subtleties underlying immigration status and federal criminal statutes.

Arguably, people who cross into the United States through the Arizona desert or the Rio Grande violate federal criminal law because of their failure to go through immigration inspections. However, unless they were previously removed or deported from the United States, they are likely subject only to petty offense charges that carry a maximum potential penalty of six months incarceration—charges which definitely are not felony charges. As a United States Magistrate Judge for the United States District Court for the Southern District of Texas, I routinely took pleas and sentenced defendants for such charges.

I do not presume to explain Justice Sotomayor’s thoughts on the issue. Moreover, she clearly does not need me to defend her. Still, I appreciate the distinction she was trying to make. After serving for eight years as a United States Magistrate Judge in Corpus Christi, Texas, I am all too familiar with the misnomer, applied to people here in the United States without legal immigrant status, which suggests they are criminals. However, the issue is much more subtle than that. Not only are federal criminal statutes regarding improper entry nuanced, but there also exist multiple ways to enter the United States without legal status while not violating a criminal statute. This essay explores these distinctions, and highlights the need for precision when discussing immigration status.


Reconciling Equal Protection Law in the Public and in the Family: The Role of Racial Politics

Dorothy E. Roberts
162 U. Pa. L. Rev. Online 283 (2014).

In Constitutional Colorblindness and the Family, Katie Eyer brings to our attention an intriguing contradiction in the Supreme Court’s equal protection jurisprudence. Far from ending race-based family law rules with its 1967 decision, Loving v. Virginia, the Court has ignored lower courts’ decisions approving official uses of race in foster care, adoption, and custody decisions in the last half century. Thus, as Eyer observes, “during the same time that the Supreme Court has increasingly proclaimed the need to strictly scrutinize all government uses of race, family law has remained a bastion of racial permissiveness.”

Scholars who oppose race-matching in the family law context object to the lower courts’ failures to implement the colorblind mandate that the Supreme Court has set forth in its affirmative action decisions. Eyer adds that the Supreme Court itself has contravened its constitutional colorblindness narrative by deliberately failing to require strict scrutiny in family law decisionmaking. The Justices carefully crafted their opinion in Palmore v. Sidoti—a child custody case—to avoid constitutionally proscribing other official uses of race in child placement decisionmaking, especially in adoption cases. Furthermore, the Court has denied certiorari in family law cases where lower courts blatantly defied the principle of constitutional colorblindness. Although the Justices have yet to explicitly approve race-based rules in the family law context, their actions and archival Supreme Court documents reveal a sub rosa divergence from their expressed colorblind principles.

What explains this stark dichotomy between the Supreme Court’s equal protection jurisprudence in the affirmative action context and the family law context? I argue that, after examining the racial politics underlying decisions made by the Court’s race conservatives, their approaches to race in public and private realms are not as contradictory as they first appear.

Case Note

Retroactivity, Strickland, and Alien Criminal Defendants: How the Chaidez Decision Raised More Questions Than It Answered

Danielle R. Acker Susanj
162 U. Pa. L. Rev. Online 55 (2013)

When the United States Supreme Court decides to hear a case, it does not grant certiorari simply on the case itself—it chooses to answer a “question presented” by that case. So in Chaidez v. United States, the Court granted certiorari on the question “whether the principle articulated in Padilla [v. Kentucky] applies to persons whose convictions became final before its announcement.” But in answering that question, Chaidez left unanswered—and raised—even more questions.

In the 2010 landmark case Padilla v. Kentucky, the Court declared that defense lawyers must inform noncitizen criminal defendants of the removal consequences of pleading guilty. In the years that followed, federal and state courts grappled with—and ultimately split over—whether Padilla applied only to defendants whose cases were still on direct appeal, or also to those whose convictions were final before Padilla. The Supreme Court granted certiorari in Chaidez, and, in an opinion authored by Justice Kagan, upheld the Seventh Circuit’s ruling that Padilla established a “new rule” not available retroactively.

But the Court’s ruling did not address several of the difficult questions that come up in retroactivity analysis, particularly for any rule premised on Strickland v. Washington. It also left many questions open for alien petitioners who seek relief from their convictions. Part I of this Note discusses how the Court has traditionally handled the retroactive application of rules to habeas petitioners and how the issue arose after Padilla. It summarizes the Teague rule for retroactivity and the problem the Padilla decision posed for lower courts determining its retroactive application. Part II discusses the Chaidez decision and notes the various policy and practical concerns implicated (and ignored) in its retroactivity analysis. Part III notes the open questions that persist after Chaidez—particularly for petitioners whose lawyers affirmatively gave them wrong information at the time they pleaded guilty—and examines where the Court may be heading with its recent plea jurisprudence. Finally, Part III also questions how long Teague and Strickland can function together, as new norms in criminal procedure evolve, become prevailing, and ultimately gain recognition from courts.


Off-Label Drug Promotion and the First Amendment

Stephanie M. Greene & Lars Noah
162 U. Pa. L. Rev. Online 239 (2014).

Off-label promotion—pharmaceutical manufacturers’ marketing of FDA-approved drugs for unapproved uses—is considered a First Amendment right by some, a threat to the safety and effectiveness of pharmaceutical drugs by others. Although off-label prescription is legal and often beneficial, the Federal Food, Drug, and Cosmetic Act (FDCA) and corresponding FDA regulations effectively prohibit off-label promotion. The FDA can look to statements by pharmaceutical representatives as evidence of a drug’s intended use, thereby placing manufacturers that promote off-label in a Catch-22: the drug will be subject to the FDCA’s misbranding provisions if manufacturers add labeling instructions for that intended use, but also if they fail to add those instructions. To legally promote a new intended use, pharmaceutical companies must satisfy the FDA’s rigorous approval process. In United States v. Caronia, the Second Circuit Court of Appeals ruled that the FDCA could not be interpreted to prohibit truthful, off-label promotion.

Professors Stephanie Greene and Lars Noah debate the constitutionality of the FDA’s prohibitions in light of Caronia and the Supreme Court’s increased deference to commercial speakers’ First Amendment rights. Professor Greene argues that Caronia was wrongly decided because the court failed to scrutinize the nature of off-label promotion. Greene contends that the truthfulness of off-label information is “speculative, unknown, or inaccessible,” and that the FDA’s restrictions on off-label promotion serve two substantial interests: ensuring that both doctors and consumers receive accurate, scientifically based information, and assuring that drugs have been proven safe and effective. Professor Noah questions Greene’s assumption that promotion of off-label drug uses is presumptively untruthful or misleading. He argues that Supreme Court precedent cuts against Greene’s position, and that the FDA’s restrictions on off-label promotion are unconstitutionally broad because they prevent drug manufacturers from disseminating even truthful and nonmisleading information, and because the FDA could accomplish its goals through less-speech-restrictive means.