Volume 163

Essays

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.

This Essay examines what I call “post‐parodies” in apparel. This emerging genre of do‐it‐yourself fashion is characterized by the appropriation and modification of third‐party trademarks—not for the sake of dismissively mocking or zealously glorifying luxury fashion, but rather to engage in more complex forms of expression. I examine the cultural circumstances and psychological factors giving rise to post‐parodic fashion, and conclude that the sensibility causing its proliferation is grounded in ambivalence.

Unfortunately, current doctrine governing trademark “parodies” cannot begin to make sense of post‐parodic goods; among other shortcomings, that doctrine suffers from crude analytical tools and a cramped view of “worthy” expression. I argue that trademark law—at least, if it hopes to determine post‐parodies' lawfulness in a meaningful way—is asking the wrong questions, and that existing “parody” doctrine should be supplanted by a more thoughtful and nuanced framework.

Since its decision more than thirty years ago in Illinois v. Gates, the Supreme Court has emphasized that the Fourth Amendment's suspicion requirements—the probable cause required to arrest and search, the reasonable suspicion needed to stop and frisk—are totality‐of‐the‐circumstances tests. Gates overturned Supreme Court precedent that had held for nearly two decades that a tip did not give rise to probable cause absent evidence that the informant both (1) was honest and (2) had a reliable basis for her information. Rejecting this “rigid” two‐part test, the Gates Court stressed that probable cause is a “fluid,” “practical, common‐sense” concept that is “not readily, or even usefully, reduced to a neat set of legal rules.”

The Court has used similar language to explain the totality‐of‐the‐circumstances analysis applied when measuring the lower quantum of proof necessary to create reasonable suspicion. With the exception of one outlier—Illinois v. Wardlow, which articulated the sweeping rule that “[h]eadlong flight” in a “high crime area” constitutes reasonable suspicion—the Court has repeatedly recited the common‐sense, totality‐of‐the‐circumstances mantra when defining both probable cause and reasonable suspicion.

In two recent opinions, however, the Court has strayed from this path, leaning towards reliance on bright‐line rules to define probable cause and reasonable suspicion. Perhaps not surprisingly, these deviations have come in cases where a totality‐of‐the‐circumstances approach is more likely to favor criminal defendants. And both times, the tests that have emerged from the Court's rulings have tended to oversimplify by exaggerating the reliability of the information used by the police. This essay examines the jurisprudential climate that produced these opinions and their potential repercussions.

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.

In Yates v. United States, the Supreme Court will decide whether tossing undersized fish overboard can be prosecuted under the Sarbanes–Oxley Act of 2002, a law aimed at preventing massive frauds of the sort that led to the collapse of Enron and sent shock waves throughout the economy. Although the legal issue is narrow, the case has far‐reaching significance. The Yates prosecution is a case study in the dangers posed by “overcriminalization”: the existence of multitudinous, often overlapping criminal laws that are so poorly defined that they sweep within their ambit conduct far afield from their intended target.

The Supreme Court should set an example in Yates of how courts should counteract overcriminalization through nuanced statutory construction. In particular, courts should resist the allure of specious “plain meaning” arguments and, in the many cases of textual ambiguity, exercise informed judicial discretion in light of the myriad potential dangers of expansive interpretations of criminal statutes. Unless the Court leads by example, prosecutors will continue to exploit poorly defined federal crimes to produce miscarriages of justice such as those that occurred in Yates.

Do new regulations apply to pending cases? The question is simple, but the short answer is a lawyer's favorite: “It depends.” It depends on the organic statute, it depends on the regulation, and, unfortunately, it may even depend on the federal court of appeals that happens to decide the case. This Essay looks at this issue by examining the effect of the Department of Labor's 2013 amendments to regulations governing claims under the Black Lung Benefits Act. This Essay explains why the new regulations are applicable to pending cases, even if the Department of Labor already issued its final decision on a claim and a party already petitioned a court to review that decision.

The analytical route to this result varies by circuit. This Essay explains why the factor‐based retroactivity test used by most circuits better addresses fundamental due process concerns and is more administrable than the D.C. Circuit's approach, which turns on whether a circuit split predates the new regulations. This Essay both provides a clear answer about whether the 2013 amendments to the black lung regulations apply to pending cases and suggests how courts should handle retroactivity questions for regulations more broadly.

On November 12, 2014, the U.S. Supreme Court heard oral argument in Comptroller of the Treasury v. Wynne. The case, which has already been called the Court's most important state tax case in decades, asks how the dormant Commerce Clause restrains state taxation of individual income. Because Wynne lacks the usual indicia of “certworthiness,” the case raises the possibility that the Court will reshape the constitutional balance between the states' sovereign interest in collecting taxes and the national interest in maintaining an open economy.

The challenge for the Court, whose dormant Commerce Clause rulings have attracted intense criticism, is to delineate clear limits on state taxation that promote a national market economy without unduly restricting the states' taxing authority. In earlier writings, we developed a framework to resolve tax discrimination cases in a consistent and intuitive manner that provides states with broad flexibility while maintaining an open interstate market. In this Essay, we apply that framework to Wynne to demonstrate how Maryland's current system violates the dormant Commerce Clause. We also describe how our approach addresses Maryland's arguments and resolves many issues that seemed to trouble the Justices at oral argument.

The rest of this Essay proceeds as follows. After providing the factual and legal background of the case, we show that the contested Maryland income tax regime fails the Court's long-standing internal consistency test and so would be struck down were the Court to apply that test. We then respond to Maryland's three major arguments why the Court should not apply the internal consistency test. Drawing on our earlier work, we first show that Maryland's principal claim, that its tax law does not discourage cross-border commerce because residents are taxed at the same rate on in-state and out-of-state income, whereas non-residents are taxed at a lower rate on in-state income and not at all on out-of-state income, is not dispositive. Maryland's argument should not prevail because economic analysis shows that the comparison of tax rates that Maryland offers is too simplistic to reveal whether the Maryland tax system discourages cross-border commerce. Second, Maryland claims that any interference with the Wynnes' cross-border commerce stems from the interaction of different states' tax systems rather than Maryland's tax regime alone. This claim is wrong, and we show that Maryland's tax system would burden interstate commerce even if no other state imposed taxes. Third, we show that Maryland's claim that a decision for the taxpayer would allow residents with out-of-state income to free-ride on Maryland's public services is overstated because the internal consistency test provides states with wide flexibility to tax.

The arguments in Wynne largely followed the outline above, with an important exception. The taxpayer argued that the dormant Commerce Clause requires Maryland to eliminate double taxation of their interstate commerce for the simple reason that Maryland is their state of residence. But the Court's dormant Commerce Clause doctrine does not clearly support the interpretation that the state of residence must eliminate double taxation. Nor is such an interpretation needed for the Wynnes to win their case. Rather than requiring elimination of double taxation, the dormant Commerce Clause prohibits states from discriminating against interstate commerce. We show that Maryland discriminates against interstate taxation, and this discrimination would persist even if no other states imposed taxes. It is, therefore, independent of any double taxation that arises under the Maryland tax, and it is also independent of any action other states take. Double taxation is not the focus of the dormant Commerce Clause, and avoiding double taxation is not the same as not discouraging cross-border commerce. As we show, a state can discourage cross-border commerce even though there is no double taxation, and double taxation can occur without discouraging cross-border commerce.

Responses

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.

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.

In their ambitious Article, Shyam Balganesh and Gideon Parchomovsky seek to make sense of the Supreme Court's recent copyright jurisprudence. The authors articulate an “equity of the statute” that allows courts “to extend or restrict the otherwise clear words of a statute to give effect to the statute's ‘ratio or purpose.’” They also find, in some tension, that copyright law is indeterminate, as “a close reading of the [Copyright Act] reveals hardly any guidance” on how to apply it.

Whether copyright law is clear or indeterminate, the authors conclude that “the Court's stated objective [i]s to bring the substantive content of copyright doctrine in line with its own conception of copyright's principal values and ideals.” The authors contend that the “equity of the statute” allows the Court to effectuate copyright's “primary purpose,” which is to balance the “utilitarian ideal of encouraging creativity” with “the public's need for access.”

The authors lament that “constant technological change” has “required copyright law to update the applicability of its core goals and ideals to new situations” but that “[t]he formal content of its statutory directives has routinely proven to be outdated, and legislative reforms have often proven to be an inadequate means of redress.” They are heartened, however, that the Court “has effectively determined the equity of the copyright statute's substantive content,” which has “protect[ed] the normative integrity of our copyright system.” Finally, the authors find that the Court applies “adjectival equity” in “preserv[ing]” its “flexibility for the future.”

In this response, I offer three critiques of the Article. First, the notion of an “equity of the statute” designed to promote copyright's incentives/access paradigm does not provide the most persuasive explanation of the cases. Second, the authors' “adjectival equity” cases are not best explained by preserving judicial flexibility. Third, two of the three cases involving technology do not present a “successful ‘updat[ing]’” of copyright doctrine.

Theoretical inquiries into the nature and functions of legal doctrine typically focus on adjudication. These inquiries explore, for example, whether and the extent to which doctrine constrains decisionmaking, as well as when and how often it dictates unique outcomes. Relatedly, they also explore the extent to which legal reasoning is “autonomous”—that is, whether doctrine guides decisionmaking and dictates outcomes without reliance on nonlegal normative sources. In his insightful article, Professor Alex Stein picks up the other end of the theoretical stick and discusses the extent to which doctrine on the law of evidence should guide and constrain the practice of theorizing about evidence.

In his characteristically deep and bracing style, Stein argues that evidence doctrine places significant constraints on evidence theory. He then goes on to chastise a number of prominent scholars (Louis Kaplow, Amos Tversky and Daniel Kahneman, and Ronald Dworkin) for failing to adhere to these constraints. I am sympathetic to several aspects of Stein's analysis, although in some cases for different reasons than those he articulates. Rather than focus on areas of overlapping agreement, however, this Response aims to situate Stein's arguments within the domain of evidence theory more generally, and then to raise some doubts about one of the principles he articulates. My hope is that providing this wider lens will clarify and illuminate not only Stein's specific claims, but also the general relationship between evidence law and evidence theory. Perhaps this treatment will even shed light on some of the broader questions raised in the University of Pennsylvania Law Review's symposium on legal doctrine.

Part I of this Response discusses evidence theory. Part II explicates Stein's methodology. Part III questions Stein's case‐specificity principle.

What did legal realism bring to the conflict of laws? Why was the realist critique of the received wisdom so successful? And why, despite that success, is the realist movement in conflict of laws—and, indeed, the whole American choice of law revolution—seen as a failure?

In this Response, I suggest some brief answers to those questions. Realism, I suggest, is more successful than its critics think—though its project remains unfinished. A better understanding of realism's contributions can show us what work remains in the realist project.

A colleague of mine has a simple piece of advice for any student planning to write on a private law topic: for clear analysis of the doctrinal issues, find an American law review article published before 1920. This pre‐realist scholarship shares an important feature with much of the research currently undertaken in common law jurisdictions beyond the United States: the concepts used by the courts are taken seriously, and an attempt is made to see if those concepts form part of a coherent system. However, such contemporary research does not stubbornly proceed as if the realist revolution had never occurred. Instead, it is possible to adopt a “new doctrinalist” approach by accepting some important points made in realist critiques and using those insights to inform a careful inquiry into the nature and operation of legal concepts. This brief response considers some of the key features that might be possessed by such a “new doctrinalist” account of property law.

In locating a particular approach on a doctrinal–realist spectrum, it is useful to consider the relative importance of means as opposed to ends, concepts as opposed to contexts, and rights as opposed to value. Those three pairs will be considered here in relation to the nature and operation of legal property rights; of equitable property rights; and of choses in action.

This Symposium presents an imagined conflict and then a puzzle. The conflict dates back to the 1930s, when American Legal Realism challenged the (old) doctrinalism, a creaky relic of a bygone era. For decades, the two schools clashed over the importance of doctrine in determining the outcome of legal disputes. One side insisted that doctrine is essential. The other countered that rules are indeterminate and decide few cases. Along the way, interdisciplinary scholarship joined the fray, on the side of Realism. Yet, doctrinalism proved a stubborn adversary. It remains unvanquished. To the contrary, a “New Doctrinalism” has taken the place of the old. Doctrinalism's persistence is the mystery the symposium contributors hope to solve.

In Professor Tess Wilkinson‐Ryan's contribution, Intuitive Formalism in Contract, she describes the continuing “doctrinalism” of consumer contract law and the failure of legal rules to adapt to “our changing contractual culture.” Based on her own empirical investigations into the psychology of consumer contracting, she concludes that consumers think contract law is highly formalistic. Moreover, consumers seem to make contractual decisions based on their formalist intuitions. Although Wilkinson‐Ryan cannot yet pinpoint the source of consumers' legal instincts, they likely derive from the “consumer experience with contract law.” She observes that a consumer “discerning a law of contracts from a sample comprised almost entirely of boilerplate would come quickly to the conclusion that contract law is highly formal.”

This Response draws on Professor Wilkinson‐Ryan's essay, as well as other interdisciplinary scholarship, to assess whether interdisciplinary ideas really pose a threat to contract “doctrinalism,” as the Symposium organizers suggest. The Response argues against that premise, finding that interdisciplinary scholars take doctrine seriously. Doctrine often matters in the stories they tell, just not, perhaps, in the way that doctrinalists would predict. This research finds doctrine's influence to be deep and broad, casting a shadow that reaches far beyond the judicial resolution of disputes. The Response concludes with a brief reflection on the policy implications of contract doctrine's long shadow.

Several different, if related, questions are swirling about in this fascinating and wide‐ranging symposium. One question asks whether “law” is “autonomous.” A second inquires into the “determinacy” of “legal doctrine.” Yet a third concerns whether there are ever legally correct answers to legal questions. I take this third question to be equivalent to asking whether legal propositions are truth‐apt and, if so, whether any are true.

If I read him correctly, this third question is the focus of Professor Leo Katz's characteristically inventive and thought‐provoking contribution, Nine Takes on Indeterminacy, with Special Emphasis on the Criminal Law. What Professor Katz calls “the skeptical thesis” is the contention that no legal propositions are true. It is the contention, in other words, that statements of the form “the law prohibits φing” and “it is legally permissible to ψ” are never true. Professor Katz does not affirm the skeptical thesis. Rather, by drawing on a well‐known article on the criminal law authored nearly thirty‐five years ago by Mark Kelman, and offering nine “perspectives” of his own, Professor Katz aims to show that there are good grounds both to affirm and to deny global legal skepticism.

I believe that global legal skepticism is false, which is to say that some statements of the form “the law prohibits φing” are true. I cannot offer, in this very limited space, affirmative arguments against global legal skepticism. Instead, I explain why none of Professor Katz's nine perspectives provides the support for global legal skepticism—what I will henceforth often call “skepticism,” for short—that he claims.

Imagine a benighted student of the law, devoted to attaining a secure professional qualification by learning the rules and passing the exams, who has never read or heard anything about Legal Realism, that is, who has missed out entirely on twentieth century American jurisprudence. Such a Rip Van Winkle of the law, perhaps not so very rare in British law schools, would quickly learn what was at stake in the Legal Realist revolution by reading Professor Edward Rock's fine essay on corporate law doctrine. In this comment I will summarize my outsider's understanding of what Professor Rock has taught us regarding the Realists' conceptions of legal doctrine and judgment, and then offer an English counterpoint. I will show how English lawyers evade the realist embrace of policy by projecting law inter‐temporally—that is, allowing the law to inhabit two successive times and allowing one time state to affect the other—in order to yield legal results, and ultimately effect change in the legal system itself. I will then assess Rock's juxtaposition of the Delaware courts' realist approach and the “traditionalist” or formalist techniques of leading English commercial judges when dealing with some of the more difficult areas of corporate doctrine. This proves to be an interesting laboratory for the hypothesis that inter‐temporality can be an effective approach to the determination of complex corporate or civil cases, and is a viable alternative to policy analysis.

Benjamin Zipursky's Reasonableness In and Out of Negligence Law is a characteristically thoughtful, sensible, and learned discussion of the idea of reasonableness in and out of negligence law. As he rightly observes, his views are very similar to my own. Except in one respect. For Professor Zipursky, the Hand Formula is the Lord Voldemort of negligence law. It looms over the law of negligence, but it must not be named. Indeed, it must be killed, or at least banished. We part ways on this point and I confess to finding Professor Zipursky's vendetta perplexing. Trying to write the Hand Formula out of negligence law at this late date is tantamount to repudiating one hundred years of tort law and theory. This revisionary theorizing is as unnecessary as it is quixotic. The Hand Formula is not only too deeply embedded in negligence law to uproot; it is also unobjectionable. Indeed, the Hand Formula is one of modern negligence law's more important achievements. It frees the concept of due care from a disturbing identification with customary practice and ties due care more closely to the idea of justified conduct. By doing so, it gives negligence law an important critical dimension.

The Hand Formula draws its deep appeal from two sources. First, as Landes and Posner observe, it has the feel and smell of an exercise in making explicit what had long been implicit in negligence cases. Second, it strikes us as a cogent distillation of considerations that are plainly relevant to determining whether due care has been exercised. When we ask if a defendant should have acted as she did—or should instead have exercised more care—it is eminently sensible to inquire into the magnitude and probability of the harm that the defendant risked and the burden of avoiding that harm. Economic and philosophical theories of negligence are eager to claim the Hand Formula as their own because it is both a central construct of negligence law and independently attractive. If there were no Hand Formula, we would have to invent it. To be sure, the economic theory of the Hand Formula is a different matter. Professor Zipursky and I both think that it is deeply flawed. The economic interpretation, however, is not the Hand Formula itself. It goes well beyond the Hand Formula in important and questionable ways. The economic interpretation of the Hand Formula imposes a debatable theory of social choice on a conceptual tool. In so doing the economic interpretation makes claims about the commensurability of harms and the cost of their avoidance that Hand himself explicitly rejected.

Melissa Murray's Family Law's Doctrines provides a fascinating case study of legal parentage cases involving assisted reproductive technology, where judges applied relatively new laws to even newer circumstances never contemplated by the laws' drafters. The Uniform Parentage Act (UPA) was a modernizing statute intended to resolve legal questions generated by new societal developments: namely, the rise of nonmarital heterosexual relationships producing children, and the use of artificial insemination within heterosexual marital relationships.

In the decades after its adoption in California, the UPA confronted a brave new world. Two developments further transformed the reality of family life: assisted reproductive technologies such as in vitro fertilization (IVF) and gestational surrogacy, and same‐sex relationships producing children. By the law's thirtieth anniversary, California—the perennial leader in family law reform—had once again taken the lead, this time by recognizing the parental rights and obligations of lesbian partners.

Compared with states that were more reluctant to move beyond traditional legal definitions of parentage, California appeared enlightened, modern, and progressive. In many ways, it was. Other states relied on rigid, formalistic definitions of parentage primarily dependent upon marriage—and failing that, biology. California courts instead used functional and biological definitions of family to extend parental rights and obligations to individuals who were unmarried or not genetically related to their children.

But as Professor Murray argues, California's retreat from the formalistic application of categorical distinctions based on marital status did not uproot the bedrock values underlying family law doctrine. In fact, the turn toward biology, intent, and functionality offered courts new tools to maintain the primacy of conjugal relationships as the site of reproduction and childrearing, and, most crucially, to reinforce the privatization of dependency within the two‐parent family. The functional turn, Murray writes, did not undermine traditional doctrine; rather it furthered many of the same ends. And, notably, formal categories such as marriage—and biology—did not disappear; they simply ceased to be the exclusive determinants of legal parentage. In this way, the California courts' liberal interpretation of the UPA's provisions in the face of unanticipated factual circumstances arguably served the statute's purpose quite faithfully. After all, the UPA was drafted and promoted by Harry Krause, whose primary motivation was to ensure that all children, regardless of their parents' marital status, had the opportunity to know—and, most importantly, be supported by—their fathers.

This continuity in the midst of change raises a question: should we understand the reform of legal parentage as an instance of “preservation through transformation,” to borrow Reva Siegel's term? Preservation through transformation occurs when progressive reform efforts indirectly reinforce, rather than disrupt, status hierarchies by motivating modernizing alterations to the rhetorical and substantive rationales for unjust legal regimes. For instance, equal protection doctrines attack overtly invidious racial classifications but embrace the principle of colorblindness, thereby maintaining racial inequality on more palatable terms. Another classic example is the rise of facially gender‐neutral sexual and domestic violence laws that obscure the hugely disproportionate impact of state enforcement failures on women. Arguably, the biological, intentional, and functional definitions of parentage dress up traditional notions of what makes a family legitimate in a progressive guise. Nonmarital partners and non‐biological parents are no longer excluded from the legal definition of family, but the traditional marital family remains the gold standard against which all else is measured. Or does this characterization go too far? Do the doctrinal developments Professor Murray describes augur a more profound change, or at least one with a more ambiguous political valence? I am inclined to think so, but perhaps only time will tell.

Case Notes

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.

Government‐mandated disclosures and warnings aimed at promoting public health are ubiquitous. Alcoholic beverage labels bear government warnings against alcohol consumption during pregnancy. Both prescription and over‐the‐counter drugs must comply with extensive Food and Drug Administration (FDA) labeling requirements. Automobiles carry mandatory safety rating labels. Cigarette packages have included warnings about the dangers of smoking since 1965. Even chain restaurants must now follow the federal nutrition labeling requirements that have applied to food packaging for two decades. Warnings and disclosure requirements are likely to become even more widespread given President Obama's 2011 executive order encouraging administrative agencies to use these “[f]lexible [a]pproaches” wherever “relevant, feasible, . . . consistent with regulatory objectives, and . . . permitted by law.”

Despite their widespread use as a regulatory tool, government‐mandated warnings and disclosures are not immune from legal challenge. In the 2012 case of R.J. Reynolds Tobacco Co. v. FDA, the U.S. Court of Appeals for the D.C. Circuit invalidated FDA's graphic cigarette warnings on First Amendment grounds. The tobacco manufacturers' challenge forced the D.C. Circuit to wade into unchartered waters. Although there is a long line of Supreme Court cases addressing First Amendment challenges to commercial speech restrictions (e.g., advertising bans), the Court has heard only two challenges to commercial speech disclosure requirements, neither involving government‐mandated warnings. Further, while the Court has been clear that it reviews commercial speech restrictions under the Central Hudson intermediate scrutiny test, it has applied a standard akin to rational basis review when examining purely factual disclosure requirements targeting consumer deception, without explaining in what other circumstances rational basis review would apply. Thus, faced with a novel question of law, the R.J. Reynolds court concluded that the graphic cigarette warning requirements did not merit rational basis review protection, because (1) they did not seek to cure consumer deception and (2) they were not purely factual and uncontroversial warnings, but rather “admonitions: ‘[D]on’t buy or use this product.'” After deciding that Central Hudson intermediate scrutiny was the correct standard of review, the court held the warnings unconstitutional because FDA failed to produce sufficient evidence—indeed, “failed to present any data”—that the warnings would directly and materially advance its goal of reducing smoking rates. Although most commentators expected the case to go to the Supreme Court, FDA instead withdrew the proposed images and said it would issue revised graphic warnings.

To the extent that R.J. Reynolds could be read as holding that only commercial speech mandates that are both purely factual and designed to correct consumer deception receive rational basis review, it was overruled by the 2014 en banc decision of the D.C. Circuit, American Meat Institute v. USDA. Aligning the court's position with that of other circuits, the D.C. Circuit held in American Meat Institute that Zauderer v. Office of Disciplinary Counsel, the first Supreme Court case to apply rational basis review to a government‐mandated disclosure requirement, extended “beyond problems of deception”—and thus applied to the U.S. Department of Agriculture (USDA) country‐of‐origin disclosures at issue in the case.

Given that the D.C. Circuit is responsible for reviewing many federal agency regulations, American Meat Institute marks a significant victory for regulators. A contrary holding—one limiting the protection of Zauderer rational basis review to compelled speech aimed at curing deception—would have threatened to unsettle the current regulatory regime, and would have particularly threatened mandates aimed at promoting public health. These disclosure requirements often do not target potentially deceptive commercial speech, and they rarely are supported by the level of evidence R.J. Reynolds deemed necessary to satisfy Central Hudson intermediate scrutiny. (These evidentiary difficulties arise in part because many public health problems are complex and cannot be eradicated by a disclosure requirement alone.) While R.J. Reynolds raised important questions about the effectiveness of disclosure requirements, the First Amendment should not be an insurmountable obstacle when the commercial speaker's constitutionally protected interest is, as the Court has said, “minimal” and the government interest is substantial.

Although American Meat Institute lessened the blow R.J. Reynolds dealt to regulators, both decisions left open important questions about the First Amendment treatment of government‐mandated warnings that are neither “purely factual and uncontroversial” disclosures nor overt government‐sanctioned opinions, and about whether graphic cigarette warnings belong in this middle ground. R.J. Reynolds only addressed the constitutionality of the nine warnings before it, and left unanswered whether another graphic warning depicting the negative health consequences of smoking could be constitutional. But, in characterizing FDA's graphic warnings as “a much different animal” than the mandated statements to which the Supreme Court has previously applied rational basis review, and in viewing them as “intended to evoke an emotional response, or, at most, shock the viewer into retaining the information in the text warning,” R.J. Reynolds strongly implied that no graphic cigarette warning could ever receive rational basis review protection. Not only did the court seem to demand Central Hudson intermediate scrutiny review for all government‐mandated graphic warnings, it created an overly burdensome intermediate scrutiny test by misapplying the Administrative Procedure Act's (APA) “substantial evidence” standard to its First Amendment analysis, and by failing to look beyond the Court's abstract statements about Central Hudson to its application of the test.

Part I of this Note outlines the Supreme Court's commercial speech jurisprudence. It explains the Court's differential treatment of commercial speech restrictions and compelled commercial speech, and it outlines the open question of whether Zauderer, and its accompanying rational basis review protection, is limited to mandates aimed at correcting deception. Part II discusses the various interpretations of Zauderer advanced by circuit courts. It defends the broader interpretation of Zauderer adopted by the First Circuit, Second Circuit, and, most recently, the D.C. Circuit in American Meat Institute, and it criticizes the narrow interpretation articulated in R.J. Reynolds. Part II likewise outlines the doctrinal support and policy justifications for a broader interpretation of Zauderer, with particular focus on the importance of recognizing the government's interest in promoting public health as worthy of rational basis review. Part III then looks at how FDA could issue revised graphic cigarette warnings that would pass constitutional muster. It examines the type of graphic cigarette warnings that could potentially merit review under the Zauderer standard, argues that R.J. Reynolds misapplied the Central Hudson intermediate scrutiny standard, suggests a better view of Central Hudson as applied to graphic cigarette warnings, and describes post‐Reynolds scientific research supporting the effectiveness of graphic warnings.

In late 2007, Ileana Sonnabend, a renowned gallerist and art‐scene mainstay, passed away, leaving behind a massive collection of art worth hundreds of millions of dollars. At the helm of two galleries in Paris and New York, Sonnabend worked for decades to promote and foster contemporary art and artists, and her galleries displayed the works of many well‐known artists, such as Roy Lichtenstein and Robert Rauschenberg. Among the artworks in Sonnabend's personal collection at her death was Rauschenberg's Canyon, a celebrated collage painting from the artist's Combine series. Rauschenberg created Canyon from an array of materials, including a stuffed American bald eagle. Canyon, already famous, gained notoriety when it came time to value Sonnabend's estate for federal estate tax purposes.

The legal restrictions of the Bald and Golden Eagle Protection Act (BGEPA) and the Migratory Bird Treaty Act (MBTA) banned the sale or other disposition of Canyon, and therefore those administering Sonnabend's estate listed a value of zero for the painting when assessing Sonnabend's significant property interests. To reach its determination of zero fair market value, the estate consulted three professional appraisals, all in concurrence. The Internal Revenue Service (IRS) rejected this position and instead estimated Canyon's fair market value at $65 million. The IRS then notified the estate of a $29.2 million tax liability deficiency on the painting, and because the Internal Revenue Code empowers the IRS to assign a penalty in the event that a taxpayer makes a “substantial valuation understatement,” it also imposed an $11.7 million penalty.

This Note assesses the IRS's valuation of Canyon as an application of fair market valuation principles in federal taxation. The Note begins with a background of relevant tax rules, followed by a discussion of prior case law dealing with illegal and other restricted property and artwork. In light of this context, the Note then criticizes the IRS's analysis in its valuation of Canyon: The IRS's position is problematic, and it demonstrates some of the unique difficulties with applying fair market valuation principles to artwork. Both the IRS's and the estate's conclusions are imperfect, but the $65 million valuation stands too many degrees removed from a realistic determination.

In 2013, Netflix became the first non-TV network to win an Emmy. Did this event signal the beginning of the end for the traditional cable television experience and the classic television networks? In an age of consumer cord-cutting, where streaming video accounts for fifty percent of peak Internet traffic and viewers want to choose which show they watch instead of which channel, the future of television is likely to come in the form of apps. Instead of a cable box, TVs would be plugged directly into an Internet connection. Instead of tuning into live channels, a TV's main interface would be a wide selection of apps. Consumers could select the Netflix app and choose from its range of TV shows and movies, or select the NBC app to access any content from that network.

This exciting future comes at the height of the debate over “net neutrality.” The phrase “net neutrality” refers to the general principle of equal treatment for all Internet content, or, as one oft-cited definition phrases it: “all like Internet content must be treated alike and move at the same speed over the network.” However, a number of disparate ideas fall under the net neutrality umbrella, and these ideas have very different economic implications for consumers and providers. This Case Note argues that some of the principles of net neutrality should be enforced, while others are more likely to hinder innovation and economic growth. I begin by differentiating the separate concepts of net neutrality.

The debate over net neutrality has recently grown more fervent. In Verizon v. FCC, the D.C. Circuit cast the future of net neutrality into question by vacating the Federal Communication Commission's (FCC) 2010 Open Internet Order on the grounds that the FCC had treated ISPs like common carriers. The FCC responded by adopting the 2015 Open Internet Order, which reclassified ISPs as common carriers and imposed a strict form of net neutrality. However, this Case Note argues that this strict version of net neutrality could result in the exact opposite of the outcome that the FCC seeks. Instead, a more nuanced version of net neutrality could better accomplish the Commission's goals and provide better results for consumers.

Debates

Set for oral argument on March 4, 2015, King v. Burwell brings to the Supreme Court yet another challenge to the Affordable Care Act (ACA). The King plaintiffs cite 26 U.S.C. § 36B to attack the validity of certain federal health insurance subsidies provided by the Internal Revenue Service (IRS) through the ACA. Specifically, because § 36B authorizes subsidies for low-income taxpayers who purchase health insurance from an “Exchange established by the State,” the plaintiffs allege that such subsidies are not valid on exchanges operated by the federal government where the states refused to operate a state-sponsored exchange. Given that the federal government operates exchanges in thirty-four states, the Supreme Court's ruling will potentially affect nearly ten million taxpayers nationwide.

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