Current Print Issue

Vol. 165, Issue 5

  April 2017

Featured Article

On Mandatory Labeling, with Special Reference to Genetically Modified Foods

Cass R. Sunstein
165 U. Pa. L. Rev. 1043 (2017)

As a result of movements for labeling food with genetically modified organisms (GMOs), Congress enacted a mandatory labeling requirement in 2016. These movements, and the legislation, raise recurring questions about mandatory product labels: whether there is a market failure, neoclassical or behavioral, that justifies them, and whether the benefits of such labels justify the costs. The first goal of this Article is to identify and to evaluate the four competing approaches that agencies now use to assess the costs and benefits of mandatory labeling in general. The second goal is to apply those approaches to the context of genetically modified (GM) food.

Assessment of the benefits of mandatory labels presents especially serious challenges. Agencies have (1) claimed that quantification is essentially impossible; (2) engaged in breakeven analysis; (3) projected various endpoints, such as health benefits or purely economic savings; and (4) relied on private willingness‐to‐pay for the relevant information. All of these approaches run into serious normative and empirical challenges. In principle, (4) is best, but in practice, (2) is sometimes both the most that can be expected and the least that can be demanded.

Many people favor labeling GM food on the ground that it poses serious risks to human health and the environment, but with certain qualifications, the prevailing scientific judgment is that it does no such thing. In the face of that judgment, some people respond that even in the absence of evidence of harm, people have “a right to know” about the contents of what they are eating. A simple response to this argument is that the benefits of such labels might well be lower than the costs. Consumers would obtain no health benefits from labels. To the extent that they would be willing to pay for them, the reason (for many though not all) is likely to be erroneous beliefs about health risks, and erroneous beliefs are not a sufficient justification for mandatory labels. Moreover, GMO labels might well lead people to think that the relevant foods are harmful and thus affirmatively mislead them.

Some people contend that GMOs pose risks to the environment (including biodiversity), to intelligible moral commitments, or to nonquantifiable values. Other people think that the key issue involves the need to take precautions in the face of scientific uncertainty: because there is a non‐zero risk that GM food will cause irreversible and catastrophic harm, it is appropriate to be precautionary, through labels or through more severe restrictions. The force of this response depends on the science: If there is a small or uncertain risk of serious harm, precautions may indeed be justified. If the risk is essentially zero, as many scientists have concluded, then precautions are difficult to defend. The discussion, though focused on GM foods, has implications for disclosure policies in general, which often raise difficult questions about hard‐to‐quantify benefits, the proper use of cost–benefit balancing in the face of uncertainty, and the appropriate role of precautionary thinking.

Featured Comment

Implicit Bias as Social-Framework Evidence in Employment Discrimination

Annika L. Jones
165 U. Pa. L. Rev. 1221 (2017)

The role of implicit bias as evidence in employment discrimination claims continues to evolve, as does research attempting to explain and quantify the concept of implicit bias. In Walmart Stores, Inc. v. Dukes, the Supreme Court curbed plaintiffs’ use of implicit bias as evidence in support of the commonality requirement of Rule 23. Post‐Dukes, plaintiffs have looked for creative ways to leverage scientific developments in implicit bias within the legal framework of employment discrimination law.

The most promising answer to the “Dukes problem” looks to implicit bias as substantive, rather than procedural, evidence. By repackaging implicit bias as social‐framework evidence, plaintiffs can persuasively contextualize for factfinders the ways in which differential treatment plays out in a workplace, even in the absence of overtly discriminatory attitudes or stereotypes. Whether courts will adapt to this use of implicit bias is increasingly important, as modern workplace discrimination is becoming more subtle and often is the result of unconscious biases.

Online Exclusives
 Last updated: April 20, 2017


Why Intra-Brand Dealer Competition Is Irrelevant to the Price Effects of Tesla's Vertical Integration

Daniel A. Crane
165 U. Pa. L. Rev. Online 179 (2017)

In recent years, Tesla Motors has been engaged in a state‐by‐state ground war for the right to distribute its all‐electric vehicles directly to consumers. The car dealers’ lobby, with the political backing of General Motors, has fiercely battled back, relying on decades‐old state dealer protection laws to argue that Tesla is legally bound to distribute through franchised dealers. Through a combination of favorable state legislative and judicial decisions, Tesla has won the right to distribute directly in many states, but remains categorically barred from direct distribution in important states like Michigan and Texas—and hence all direct distribution given its business model. While Tesla has taken the lead in fighting the issue, many other new entrants to the automobile market, such as Elio Motors, are closely watching the issue, hoping that Tesla’s success will free up access to the heavily regulated U.S. automobile market.

The dealer protection laws on which the dealers rely were explicitly instituted for the purpose of protecting them from exploitation by the Detroit Big Three (General Motors, Ford, and Chrysler), not for the purpose of protecting consumers. Today, however, many dealers are no longer mom‐and‐pop organizations but multi‐billion dollar enterprises and the automobile manufacturing market has become much more competitive than it was forty or fifty years ago. So the dealers have attempted to recast the state dealer protection laws as consumer protection laws, arguing that direct distribution is harmful to consumers.

This shift toward a consumer protection justification has met a significant roadblock: major pro‐consumer organizations, including the Federal Trade Commission, Consumer Federation of America, Consumer Action, and Consumers for Auto Reliability and Safety have taken the opposite view, arguing that direct distribution by manufacturers is good for consumer choice, price competition, and innovation, and that dealer protection laws are for the sole benefit of the car dealers. To boot, a strange coalition of bedfellows, including free market, environmentalist, pro‐technology, pro‐consumer, and pro‐competition organizations—including such unusual allies as the Sierra Club and the Koch Brothers—have come out in favor of direct distribution. Against this backdrop, the dealers’ consumer protection arguments seem increasingly self‐serving and illogical.

Nonetheless, the dealership lobby persists in arguing that forbidding consumers from choosing to buy directly from a manufacturer is pro‐consumer. Recently, the National Automobile Dealers Association (NADA) has begun to advance this argument more formally in economic policy papers it has commissioned for release by the Phoenix Center for Advanced Legal & Economic Public Policy Studies, a Washington think tank. In short, NADA and the Phoenix Center argue that empirical evidence shows that consumer prices fall when intra‐brand dealer competition intensifies. It follows, argues the Phoenix Center, that the elimination of inter‐brand dealer competition altogether through manufacturer vertical integration would lead to higher prices to consumers. According to NADA and the Phoenix Center, this evidence supports state legislation prohibiting direct sales.

That argument is specious, and this essay rebuts it.


How the U.S. Sentencing Commission Considers Retroactivity

Kathleen Cooper Grilli
165 U. Pa. L. Rev. Online 113 (2017)

In a recent Essay, Professor Litman and Mr. Beasley provide a detailed discussion of how they believe the U.S. Sentencing Commission’s data and recent actions relating to the career offender Guideline do and do not matter to the Supreme Court’s consideration of the issues set forth in Beckles v. United States. First, in support of retroactive application, the authors argue that lower court decisions invalidating the Guideline’s residual clause have “uniformly” resulted in “less severe sentences.” Second, the authors contend that the Supreme Court should give little weight to the Commission’s decision not to make retroactive its removal of the “residual clause” from the career offender Guideline. The authors support this contention with their misconception that the “Sentencing Commission opted not to investigate the possibility of making is amendment retroactive at all . . . .”

This Response does not wade into the legal issues raised in the various briefs in Beckles, or respond to the authors’ arguments regarding the import of a small number of resentencings; it instead seeks to provide greater clarity on the Commission’s process for deciding whether to make amendment guidelines retroactive.

Case Note

Of Laundering and Legal Fees: The Implications of United States v. Blair for Criminal Defense Attorneys who Accept Potentially Tainted Funds

Philip J. Griffin
164 U. Pa. L. Rev. Online 179 (2016).

“In the common understanding, money laundering occurs when money derived from criminal activity is placed into a legitimate business in an effort to cleanse the money of criminal taint.” 18 U.S.C. § 1957, however, prohibits a much broader range of conduct. Any person who “knowingly engages” in a monetary transaction involving over $10,000 of “criminally derived property” can be charged with money laundering under § 1957.

Because § 1957 eliminates the requirement found in other money laundering statutes that the government prove an attempt to commit a crime or to conceal the proceeds of a crime, § 1957 “applies to the most open,

above‐board transaction,” such as a criminal defense attorney receiving payment for representation. In response to pressure from commentators, Congress passed an amendment two years after § 1957’s enactment defining the term “monetary transaction” so as to exclude “any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution.”

The statutory safe harbor found in § 1957(f)(1) has successfully immunized defense attorneys from money laundering prosecutions. However, United States v. Blair raised concerns among the criminal defense bar because of its holding that an attorney‐defendant was not entitled to protection under § 1957(f)(1). In Blair, an attorney‐defendant was convicted of violating § 1957 for using $20,000 in drug proceeds to purchase two $10,000 bank checks to retain attorneys for associates of his client. Noting that Sixth Amendment rights are personal to the accused and that Blair used “someone else’s money” to hire counsel for others, the Fourth Circuit held that his actions fell “far beyond the scope of the Sixth Amendment” and were not protected by the safe harbor. In his strongly‐worded dissent, Chief Judge Traxler criticized the court for “nullif[ying] the § 1957(f)(1) exemption and creat[ing] a circuit split.”

This Case Note discusses the implications of Blair for the criminal defense attorney who accepts potentially tainted funds and proposes a solution to ameliorate its unintended consequences. First, Part I provides relevant background information by discussing the money laundering statutory framework, the criticisms leveled at the framework as it was written, the Congressional response to that criticism, and § 1957(f)(1)’s application up until Blair. Next, Part II describes the Blair decision in detail and examines its implications. Part III then proposes a novel solution to the problems it created. Finally, the Case Note concludes with a brief word of practical advice for the criminal defense bar.