Keynote Address: "The Just, Speedy, and Inexpensive Determination of Every Action?"
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?
May Contain: Allergen Labeling Regulations
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.
Form 1023-EZ and the Streamlined Process for the Federal Income Tax Exemption: Is the IRS Slashing Red Tape or Opening Pandora's Box?
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.
Tilting at Insider Trading Windmills
In Insider Trading via the Corporation, Professor Jesse M. Fried expresses his frustration that “when insiders are subject to strict trade-disclosure requirements and firms are not, insiders have a strong incentive to exploit the relatively lax trade-disclosure rules that apply to firms in order to engage in indirect insider trading.” Professor Fried divides insider trading into so-called “direct” and “indirect” styles. His Article does not concern the former—that is, the well-worn world of insiders trading their own shares. Instead, it examines a more circuitous brand—where corporate insiders maneuver the levers of the corporation to buy and sell shares at favorable prices and, in turn, boost the value of their own equity. Professor Fried views indirect insider trading as both costly to public investors and deleterious to the firm’s economic value. The Article also proposes to reduce these costs through the imposition of trade-disclosure rules which more closely mirror those applied to insiders themselves.
This short Response aims to lend new insight and perspective to this topic, the importance of which cannot be overstated given the demonstrable increase in the number of corporate buybacks in recent years. The Response proceeds in four parts. Part I simply recaps the Article, offering a synopsis of its main insights. Here, no improvement is sought. Instead, a summary and prioritization of the Article’s observations is the goal.
Part II asserts that the problem of insider trading via the corporation is overstated. As a foundational matter, incentive does not behavior make. More particularly, any personal benefit obtainable through indirect insider trading is significantly diluted, with an offender unlikely to hold a sufficiently sizeable portion of the firm to make such behavior as desirable as the Article suggests. Additionally, the Article fails to address meaningfully the full cost of any iniquitous behavior when measured by the professional, legal, and reputational risk to which it subjects an unmasked offender.
Part III focuses attention on the more benign (and more likely) rationale supporting firms’ stock issuance and repurchase choices. Regulatory and market distortions inspire corporate decisions surrounding open market repurchases (OMRs) and at the money sales (ATMs) of shares. In particular, the various accounting and corporate finance considerations described in this Part of the Response frequently encourage these transactions. Further, most often, decisions can be defended because they are in a firm’s interest, and therefore consistent with corporate insiders’ fiduciary duties. Regulation of corporate repurchases is also far more robust than the Article concedes. As this Part suggests, any firm employing a responsible model of corporate governance routinely considers many concerns beyond those mentioned by Professor Fried. The final section of the Response offers a brief conclusion, positing that Professor Fried’s analysis rests on the tenuous assumption that the corporation and its officers are somehow inherently prone to malevolent action and self-dealing.
Retroactivity, Strickland, and Alien Criminal Defendants: How the Chaidez Decision Raised More Questions Than It Answered
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
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.