Volume 160, Issue 1 
December 2011
Articles

Constraining Certiorari Using Administrative Law Principles

Kathryn A. Watts

The U.S. Supreme Court—thanks to various statutes passed by Congress beginning in 1891 and culminating in 1988—currently enjoys nearly unfettered discretion to set its docket using the writ of certiorari. Over the past few decades, concerns have mounted that the Court has been taking the wrong mix of cases, hearing too few cases, and relying too heavily on law clerks in the certiorari process. Scholars, in turn, have proposed fairly sweeping reforms, such as the creation of a certiorari division to handle certiorari petitions. This Article argues that before the Court’s discretion to set its own agenda is taken away, another area of the law—one that already has thought long and hard about how to constrain delegated discretion—should be consulted: administrative law. Although certiorari and administrative law certainly differ, both involve congressional delegations of discretion to a less accountable body and therefore both raise concerns of accountability, transparency, and reasoned decisionmaking. Accordingly, in considering certiorari reform, it makes sense to borrow from some of administrative law’s well-developed lessons about how delegated discretion can be controlled. Specifically, after consulting the nondelegation doctrine, reason-giving requirements, public participation mechanisms, and oversight principles found in administrative law, this Article concludes that vote-disclosure requirements and increased public participation stand as promising ways of checking the Court’s currently unconstrained discretion.


The Political Economy of Fraud on the Market

William W. Bratton & Michael L. Wachter

The fraud-on-the-market class action no longer enjoys much academic support. The justifications traditionally advanced by its defenders—compensation for out-of-pocket loss and deterrence of fraud—are thought to have failed due to the action’s real world dependence on enterprise liability and issuer-funded settlements. The compensation justification collapses when considered from the point of view of different types of shareholders. Well-diversified shareholders’ receipts and payments of damages balance over time and amount to a wash before payment of litigation costs. The shareholders arguably in need of compensation—fundamental value investors who rely on published reports—are undercompensated due to pro rata distribution of settlement proceeds to all class members. The deterrence justification fails when enterprise liability is compared to alternative modes of enforcement, such as actions against individual perpetrators, which deter fraud more effectively. If, as the consensus view now has it, fraud on the market makes no policy sense, then its abolition would seem to be the next logical step. Yet most observers continue to accept the action on the same ground cited by the Supreme Court when it first implied a private right of action under the Securities and Exchange Act of 1934 in 1964’s J.I. Case v. Borak: a private enforcement supplement is needed in view of inadequate Securities and Exchange Commission (SEC) resources. In other words, even a private-enforcement supplement that makes no sense is better than no private-enforcement supplement at all.

This Article questions this backstop policy conclusion by highlighting the sticking points retarding movement toward fraud on the market’s abolition and mapping a plausible route to a superior enforcement outcome. We recommend that private plaintiffs be required to meet an actual-reliance standard. We look to the SEC, rather than to Congress or to the courts, to initiate the change be- cause the SEC is the lawmaking institution most responsible for the unsatisfactory status quo and best equipped to propose corrective action. Because an actual reliance requirement would substantially diminish the flow of private litigation, we also suggest a compensating increase in public-enforcement capability. More specifically, the SEC Division of Enforcement needs enough funding to redirect its efforts away from the enterprise and toward culpable individuals.


The Jurisprudence of Dignity

Leslie Meltzer Henry

Few words play a more central role in modern constitutional law without appearing in the Constitution than “dignity.” The term appears in more than nine hundred Supreme Court opinions, but despite its popularity, dignity is a concept in disarray. Its meanings and functions are commonly presupposed but rarely articulated. The result is a cacophony of uses so confusing that some critics argue the word ought to be abandoned altogether.

This Article fills a void in the literature by offering the first empirical study of Supreme Court opinions that invoke dignity and then proposing a typology of dignity based on an analysis of how the term is used in those opinions. The study reveals three important findings. First, the Court’s reliance on dignity is increasing, and the Roberts Court is accelerating that trend. Second, in contrast to its past use, dignity is now as likely to be invoked by the more conservative Justices on the Court as by their more liberal counterparts. Finally, the study demonstrates that dignity is not one concept, as other scholars have theorized, but rather five related concepts.

The typology refers to these conceptions of dignity as institutional status as dignity, equality as dignity, liberty as dignity, personal integrity as dignity, and collective virtue as dignity. This Article traces each type of dignity to its epistemic origins and describes the substantive dignitary interests each protects. Importantly, the typology offers more than a clarification of the conceptual chaos surrounding dignity. It provides tools to track the Court’s use of different types of dignity over time. This permits us to detect doctrinally transformative moments, in such areas as state sovereign immunity and abortion jurisprudence, that arise from shifting conceptions of dignity.


Comments

Subsidizing Fat: How the 2012 Farm Bill Can Address America’s Obesity Epidemic

Julie Foster

On a bus in West Philadelphia, a woman feeds her baby an artificial orange beverage from his bottle. The drink costs much less than baby formula, partly because it is mostly comprised of corn—the largest beneficiary of U.S. agricultural subsidies. Currently the least expensive food available is also the most caloric and the least nutritious: a dollar’s worth of cookies or potato chips yields 1200 calories, while a dollar’s worth of carrots yields only 250 calories. A savvy shopper seeking to satiate her family will naturally seek out these more caloric but less nutritious items. The sticker price is a small fraction of the true cost of highly processed foods, which contain excessive amounts of sodium, fat, and calories that contribute to an estimated $147 billion in annual healthcare costs. Moreover, these products are artificially cheap because their production is subsidized with tens of billions in taxpayer funds each year. Federal agricultural subsidies have provided Americans with high-calorie, low-nutrient processed foods that are less expensive and more readily available than whole grains and produce. Until very recently, poverty was associated with emaciated faces and rail-thin limbs, but today malnutrition persists despite an abundance of cheap calories. Our nation is in the midst of an obesity epidemic that is not only a question of weight, but also implicates serious health conditions caused by poor nutrition such as heart disease, diabetes, and some types of cancers. The next generation of Americans may be the first in history to have a shorter lifespan than its parents.

The national obesity epidemic is a multifaceted crisis with many factors that go beyond the scope of this Comment. Similarly, the 2008 Farm Bill is omnibus legislation spread across more than a dozen titles in the United States Code, spanning everything from food stamps and school lunches to environmental conservation and agricultural research. This Comment evaluates how programs intended to support farm prices and income influence producers and consumers. Commodity production is at the core of the obesity epidemic because highly processed foods and meats are mostly comprised of subsidized corn, soy, and cereal grains.14 While domestic production and food price are not the only factors contributing to the problem, this Comment questions the value of using the third-largest federal benefits program to reduce the cost of commodities that contribute to $147 billion in annual obesity-related health costs. The issue of obesity has been well addressed by social scientists and natural scientists, by writers and food advocates. Yet legal scholarship on agriculture has focused entirely on environmental or international trade issues without addressing how federal legislation impacts what farmers decide to plant and what people choose to eat. This Comment recommends legislative action for the 2012 Farm Bill to make fruits, vegetables, and whole grains comparatively less expensive than unhealthy processed foods and meats.


Exempt Executives? Dollar General Store Managers’ Embattled Quest for Overtime Pay Under the Fair Labor Standards Act

Drew Frederick

Beginning in the early 1980s, and continuing for nearly three decades, federal circuit courts unanimously found retail store managers exempt from overtime pay under the Fair Labor Standards Act of 1938 (FLSA). The overwhelming consensus even within the Department of Labor (DOL) itself—the body responsible for promulgating and enforcing the overtime regulations—was that supervisors in charge of a free-standing store were highly likely to fall within the exempt category of the statute. However, in 2008 the Eleventh Circuit broke the unanimity by upholding a thirty-six million dollar jury verdict against Family Dollar for misclassifying its store managers as exempt executives. While the extent to which the Eleventh Circuit’s decision will affect retail store managers’ status under the FLSA remains unclear, it has undoubtedly resuscitated managers’ hopes that they can prevail on overtime claims by providing them with circuit precedent on which to stand.

As the Eleventh Circuit’s decision in Morgan v. Family Dollar Stores, Inc., pointedly illustrates, the financial repercussions for large retailers of misclassifying employees can be immense. Tens of millions of dollars hinge on complex judicial determinations of whether retail supervisors are exempt executives and therefore not owed overtime pay. Getting this determination right has serious implications not only for businesses but also for workers who stand to lose substantial wages to which they are statutorily entitled.

To a large extent, the DOL has already performed the interest balancing between employers and employees through notice-and-comment rulemaking, with judges determining only the remainder through case-by-case applications of the white collar exemptions. The regulations that have emerged from the administrative decisionmaking process purportedly strike a compromise between the competing interests of employers and employees. This Comment argues that the current regulations governing the executive exemption, as well as the circuit case law that has developed around them, unduly favor the employer and pose a nearly insurmountable obstacle to overtime claims, at least in the context of low-salaried retail supervisors.


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