Current Print Issue

Vol. 162, Issue 7

  June 2014


Featured Article

Keynote Address: "The Just, Speedy, and Inexpensive Determination of Every Action?"

By
Harold Hongju Koh
162 U. Pa. L. Rev. 1525 (2014).

On this seventy-fifth birthday of the Federal Rules of Civil Procedure, it is worth noting that the Rules are that rare public document that contains within its text the very metric for measuring its own success. Contrast, for example, the U.S. Constitution, which aims “to . . . secure the Blessings of Liberty to ourselves and our posterity”—an outcome not easily measured. But the Federal Rules say simply—in a phrase I first heard on my first day studying civil procedure—that they shall be construed and administered to achieve “the just, speedy, and inexpensive determination of every action.”

I have puzzled over this phrase during more than thirty years of teaching procedure: I spent twenty representing human rights plaintiffs, ten years in the U.S. Government, usually representing defendants or amici in international and foreign relations disputes, and five years as a law school dean, considering how the legal academy should teach both procedure and globalization.

This anniversary raises three questions: First, after seventy-five years of these Rules, have the Rules satisfied their own standard? Second, if they have not, why not? And third, what does the future hold for the Rules, particularly as they face the challenge of globalization?


Featured Comment

May Contain: Allergen Labeling Regulations

By
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: October 29, 2014


Case Note

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

By
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.


Response

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

By
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.


Essay

Form 1023-EZ and the Streamlined Process for the Federal Income Tax Exemption: Is the IRS Slashing Red Tape or Opening Pandora's Box?

By
Manoj Viswanathan
163 U. Pa. L. Rev. Online 89 (2014).

On July 1, 2014, the Internal Revenue Service (IRS) released Form 1023-EZ, a streamlined version of the application required of all organizations seeking federal tax-exempt status under section 501(c) of the Internal Revenue Code. By stripping away familiar elements like the narrative of specific activities, financial projections, and provision of organizing documents, Form 1023-EZ requires dramatically less time to complete and represents a radical change to a decades-old process. It is expected that approximately seventy percent of the 80,000 organizations annually applying for tax-exempt status will be eligible to use Form 1023-EZ. The IRS expects that Form 1023-EZ will more efficiently provide determinations to applicants, preserve accuracy, and enable the IRS to focus on back-end compliance. Yet several commentators, including, perhaps counterintuitively, representatives of large consortiums of nonprofits, have decried Form 1023-EZ as an IRS misstep. This piece explores why this tension exists and provides evidence that concerns over the 1023-EZ are largely misplaced.