If a corporate insider breaches a confidence to his employer by passing along nonpublic information to a family member, who then uses it to profit in the stock market, can it be inferred that the insider must have received some sort of personal benefit in exchange for that tip? That’s the issue in United States v. Salman, a once‐in‐a‐decade insider trading case that the Supreme Court will hear in its 2016 Term. If the issue sounds narrow, that’s because it is. In part, however, this narrowness is the result of how the case has been framed thus far. All parties involved, including the Court, seem to assume that one must prove a personal benefit in order to establish liability when insider trading involves a tip. That was true once. But the Court’s own insider trading jurisprudence has moved beyond the logic of that requirement. The Court would do well to acknowledge this fact, thereby bringing much needed clarity to a notoriously messy and unpredictable area of law.
The Supreme Court waited until the last day of its October 2015 Term to issue an opinion in McDonnell v. United States. One can almost imagine the chagrinned Justices not wanting to stick around for the reaction of an increasingly cynical public: money buys votes and money buys action; government of the people, by the people, and for the people is no more. Indeed, the case ends with an unusual sort of elegy: “There is no doubt that this case is distasteful; it may be worse than that. But . . . .”
Could it be that the Court, still battered by two decisions that many continue to feel were more baldly political than most, was embarrassed by this latest decision? Probably not. The Chief Justice wrote the McDonnell decision on behalf of a unanimous Court. The indicia of raw politics from those earlier cases are absent. No doubt, the behavior at issue in McDonnell is shameful, but the shame rests with lax state regulations and those enticed by lucre, not with the Court.
Predictably, the decision has been received with some degree of panic. Corruption is never popular, and the ruling will make it more difficult to prosecute. But claims that federal corruption laws are dead are overstated. This Essay examines the McDonnell opinion in light of corruption law generally and identifies avenues by which corruption can, and will continue to be, prosecuted. Indeed, while McDonnell narrows the path, it also adds some clarity to the difficult nexus between free speech, free elections, representative government, and bribery.
The Supreme Court is home to nine Justices. Over the past one hundred and fifty years, there has been no variation in this number, except due to vacancies caused by death or retirement. Therefore, people have had little reason to believe that there is any flexibility in this arrangement. But nothing in the Constitution fixes the Supreme Court at this size. In fact, the size was set to seven Justices in 1866. It was placed at ten in 1863. Thus, the number of seats can be quite malleable. It was not until 1869 that Congress set the size to the nine seats that we are accustomed to today.
During the recent Supreme Court vacancy—caused by the death of Justice Antonin Scalia—and the ensuing unwillingness of the Senate to hold confirmation hearings, the issue of the Supreme Court’s size, and the duties (if any) of the other branches of the federal government to maintain its size, have come under intense scrutiny. The role of partisan politics in the Senate’s seemingly intransigent position not to hold confirmation hearings during the remainder of President Obama’s presidency exacerbates this public debate.
This Essay seeks to reframe the current debate from whether or not the Senate should be obligated to hold confirmation hearings without delay to why immediate confirmation hearings are so important for some and such an anathema to others. It does so by looking at how a Supreme Court of nine helps the Court fulfill its constitutional duties while also considering how nine Justices may actually thwart the Court’s objectives. This Essay proceeds by examining how ideological polarization among the Justices, and not the Court’s size, is the source of current (and past) tension. It also examines how the orientation and effect of the current polarization are antithetical to a well–functioning Supreme Court.
Two years ago, in Johnson v. United States, the Supreme Court held that the so‐called “residual clause” of the Armed Career Criminal Act (ACCA) is unconstitutionally vague. Last spring, the Court made this rule retroactive in Welch v. United States. Then in June, the Court granted certiorari in Beckles v. United States to resolve two questions that have split lower courts in the wake of Johnson and Welch: (1) whether an identically worded “residual clause” in a U.S. Sentencing Guideline—known as the career offender Guideline—is unconstitutionally void for vagueness; and (2) if so, whether the rule invalidating the Guideline’s residual clause applies retroactively. The questions on which the Court granted certiorari in Beckles turn on how similar the ACCA and the Sentencing Guidelines are. Both the ACCA and the Sentencing Guidelines impose additional punishment on defendants with previous convictions for violent felonies, and both the ACCA and the Sentencing Guidelines define “violent felonies” to include any crime that “involves conduct that presents a serious potential risk of physical injury to another.” Those thirteen words are called the “residual clause,” in both the ACCA and the Sentencing Guidelines, and courts have interpreted this identical language the same way.
This short Essay considers how significant the differences between the ACCA and the Guidelines are, and how important the Sentencing Commission should be to Beckles’s resolution of the retroactivity question. Some of the differences between the ACCA and the Guidelines also may be relevant to whether the career offender Guideline’s residual clause, like the ACCA’s residual clause, is unconstitutional. But this Essay focuses on whether the differences between the ACCA and the Guidelines matter to the second question the Court is poised to address in Beckles—namely whether a rule invalidating the Guideline’s residual clause applies retroactively, rather than whether the Guideline’s residual clause should be invalidated.
In 2016, voters in Berkeley, California, overwhelmingly favored lowering the voting age for school board elections to sixteen. San Francisco came close to passing a similar measure, Proposition F, which would have lowered the voting age to sixteen for all local elections. Unofficial results indicate it lost by approximately 52%–48%. This close outcome suggests that advocates may continue to push the measure in the future, with a fairly strong chance of success once voters are better educated about its merits. Lowering the voting age is by no means a radical idea. The Maryland municipalities of Takoma Park and Hyattsville recently lowered the voting age to sixteen for their own elections. Turnout among sixteen– and seventeen‐year‐olds has been relatively robust, strengthening the democratic process in these cities. Moreover, several countries, including Brazil, Argentina, and Scotland, allow sixteen‐year‐olds to vote.
This Essay outlines the various policy arguments in favor of lowering the voting age to sixteen. Part I presents a very brief history of the voting age in U.S. elections. It notes that setting the voting age at eighteen is, in many ways, a historical accident, so lowering the voting age for local elections does not cut against historical norms. Part II explains that there are no constitutional barriers to local jurisdictions lowering the voting age for their own elections. Part III highlights the benefits to democracy and representation that lowering the voting age will engender. Turning eighteen represents a tumultuous time for most young adults as they leave home either to enter the workforce or go off to college. Sixteen, by contrast, is a period of relative stability when young people are invested in their communities and are learning about civic engagement in school. Lowering the voting age can, therefore, create a habit of voting and increase overall turnout in later years. Finally, Part IV presents psychological studies demonstrating that, by age sixteen, individuals possess the cognitive capabilities required to perform an act that takes forethought and deliberation like voting. That is, sixteen‐year‐olds are as good as, say, forty‐year‐olds at making the deliberative decisions necessary for democratic participation. Part IV also refutes the claim that lowering the voting age will “create” additional votes for parents, as prior experience shows that young people do not simply follow their parents in the voting booth.
In sum, lowering the voting age is a sound mechanism to improve our elections. It brings additional, competent individuals with a stake in electoral outcomes into the democratic process and guarantees them a voice.
In the current political environment, reform advocates should focus their energies particularly on local measures that will increase voter participation—as that is where they are likely to succeed. These local successes can breed statewide reforms once people see the rules working well in local elections.
The modern law of Article III standing in federal courts constitutes an enduring conundrum. It rests on “an idea, which is more than an intuition but less than a rigorous and explicit theory, about the constitutional and prudential limits to the powers of an unelected, unrepresentative judiciary in our kind of government.” Over the years, efforts to capture that idea in doctrine have spawned cycles of refinement and reformulation. But as Justice Harlan observed in dissent at the beginning of the last cycle of reform, the process often threatens to “reduce constitutional standing to a word game played by secret rules.” In 1970, the Court unveiled a new touchstone for standing—the “injury in fact” requirement. Over the next four and a half decades—under the Burger, Rehnquist, and Roberts Courts—“injury in fact” became the “bedrock” Article III prerequisite for a party invoking the power of federal courts. Over one hundred Supreme Court cases turned on the presence or absence of “injury in fact,” festooning the bedrock with adjectives: adequate “injury in fact” was to be “personal and tangible,” “concrete and particularized,” “actual or imminent,” and/or “distinct and palpable.”
Last Term, in Spokeo, Inc. v. Robins, a short‐handed Court endeavored to bring order to the adjectives. The case generated more than three‐dozen amicus briefs from the defense bar, the business establishment, and the technology sector arrayed against those from academics, public interest advocates, and consumer protection organizations. In resolving the arguments, Justice Alito’s majority opinion distinguished between the requirement of “particularized” injury and the requirement of “concrete” injury and established the proposition that a plaintiff might demonstrate “injury in fact” that is “concrete” but “intangible.” The opacity of these categories refreshes Justice Harlan’s worry about “word game[s] played by secret rules.” In what follows, we seek to parse the rules of Spokeo so that, even if fuzzy, they are a bit less secret. We derive from the cryptic language of Spokeo a six‐stage process (complete with flowchart) that represents the Court’s current equilibrium. We put each step in the context of standing precedent, and demonstrate that while Spokeo added structure to the injury in fact doctrine, each stage of the analysis adds play in the joints, leaving future courts and litigants substantial room for maneuver
The Fast Food Forward movement has swelled into one of the largest protests by low‐wage workers in U.S. history, animating efforts at all levels of government to raise and enforce workplace standards. One such strategy is to hold fast food franchisors accountable as joint employers of their franchisees’ employees. In what may be a watershed moment, New York Attorney General Eric Schneiderman (NYAG) recently filed suit against Domino’s Pizza, the franchisor, for wage‐and‐hour‐law violations in its franchisees’ stores across New York State.
Fast food store employees report widespread wage‐and‐hour law violations, and the NYAG’s Domino’s lawsuit appears to confirm this trend within one of the largest fast food brands in the United States. The NYAG’s suit is similar to successful nonfranchisor–franchisee wage‐and‐hour litigation, where courts have assigned liability to lead firms because their subcontractors’ employees economically depend on them. But courts presented with similar evidence in the franchisor–franchisee context have been reluctant to consider franchisors to be joint employers.6 What accounts for this difference?
The purpose of this Essay is to provide one answer to this question. This Essay argues that the franchise relationship is often misunderstood by the judiciary as an arms‐length relationship when, in fact, it is frequently characterized by ongoing dependence. This is an important misapprehension because dependence lies at the heart of how courts evaluate franchisor liability under wage‐and‐hour and franchise laws. It leads many courts to assume that the franchise agreement reflects an independent relationship between franchisors and franchisees and to disregard the supervisory controls that franchisors write into franchise agreements as routine quality standards.
The difference in judicial interpretations of the franchise relationship relative to other contracting arrangements suggests that improving fast food franchise store compliance with wage‐and‐hour law requires a reexamination of the franchise relationship. The Essay explores the regulation of franchising under wage‐and‐hour law and franchise law, finding that both legal regimes create perverse incentives for franchisees to violate wage‐and‐hour law. This Essay argues that improving wage‐and‐hour law compliance in franchise stores will require a reconfiguration of the franchise relationship to incentivize franchisor monitoring of franchisee pay practices, notwithstanding the franchisor’s joint‐employer status. franchisor monitoring of franchisee pay practices, notwithstanding the franchisor’s joint‐employer status.
In a recent Supreme Court decision, State Farm v. Rigsby, a homeowner’s house was damaged by Hurricane Katrina. The homeowner possessed homeowners insurance with State Farm and a flood insurance policy that was administered by State Farm on behalf of the federal government. The claims adjusters assigned by State Farm to handle the homeowner’s claim allegedly were instructed by State Farm to misclassify wind damage as flood damage in order to shift State Farm’s own liability for the loss to the federal government. The claims handlers filed a lawsuit against State Farm under the False Claims Act (FCA), which imposes civil liability on any entity who “knowingly presents . . . a false or fraudulent claim for payment or approval” to the federal government. A jury entered a verdict against State Farm in the amount of almost $3.7 million, which included a treble damages award and attorneys’ fees.
Although the case likely will be remembered by most people for the Supreme Court’s consideration of the purpose of the FCA’s requirement that complaints be filed under seal and whether the dismissal of a complaint is an appropriate sanction when a claimant leaks information regarding the complaint that is under seal, the case also should be remembered for turning the spotlight on the concurrent causation conundrum associated with certain insurance claims, particularly hurricane claims where both water and wind cause the losses. The concurrent causation conundrum arises when a loss is caused by both a covered risk of loss and an excluded risk. Although the Supreme Court did not resolve the concurrent causation conundrum in State Farm v. Rigsby, this essay offers two potential solutions to the problem. One, eliminate the flood exclusion in homeowners insurance policies. Two, broadly apply the “ensuing loss” exception to exclusions contained in property insurance policies.
Although State of Washington v. Trump has generated enormous attention, the Ninth Circuit, the parties, and legal commentators have largely overlooked a noteworthy facet of the case: appellate jurisdiction. Ordinarily, temporary restraining orders (“TROs”) are not appealable. The Ninth Circuit, however, construed the district court’s self‐styled TRO as a preliminary injunction, which permitted it to exercise jurisdiction and reach the merits.
This maneuver was curious. Despite the minimal treatment the issue received, appellate jurisdiction was a close question, doctrinally. Several factors—the abbreviated proceeding below, the minimal legal analysis in the district court’s order, and the court’s subsequent scheduling order—provided grounds to concluded that the district court’s order was, in fact, a TRO. This conclusion is strengthened by the ability to distinguish the cases cited by the Ninth Circuit on the issue.
Put differently, the panel could plausibly have dismissed the appeal on jurisdictional grounds (thus leaving in place the district court’s TRO), which would have yielded the same functional result as its actual opinion, i.e., the continued unenforceability of the President’s Immigration Order. What, then, explains the choice to reach the merits when a jurisdictional ruling would have achieved the same legal effect? We theorize that the panel’s decision represents an expression of judicial self‐defense against perceived threats to the authority and legitimacy of the courts. By affirming the district court’s substantive ruling in a unanimous, per curiam opinion, the Ninth Circuit sent a message of judicial strength and unanimity at a time when the relationship between the executive and judicial branches is tense.
Winner of the University of Pennsylvania Law Review’s Second Annual Public Interest Essay Competition:
Partisan gerrymandering decreases the electoral accountability and responsiveness of legislative bodies and contributes to the polarization of American politics. When drawing the lines of new electoral district maps, legislators from the majority party have a strong interest, both collectively and individually, in manipulating the location and composition of these districts so as to entrench and extend their control over legislative bodies. This is in conflict with the public’s interest in electoral accountability and representative government. Moreover, allowing individual legislators to vote on matters that directly affect their own prospects for reelection—often determinatively—creates a clear conflict of interest with their legal and ethical responsibilities as public servants.
This Essay examines legislative control over redistricting through the lens of conflicts of interest law and suggests a novel legal framework for addressing partisan gerrymandering. Part I starts by giving a brief overview of the history and legal landscape surrounding partisan gerrymandering before moving on to a discussion of the problem of legislative control over redistricting. Part II assesses the applicability of state conflicts of interest laws and constitutional provisions to the practice of legislative control over redistricting. Finally, Part III takes a close look at the Virginia General Assembly Conflicts of Interest Act and analyzes what a legal challenge under this statute might entail, including an assessment of potential remedies.
Over the past decade or so, there has been a proliferation of online‐only law review–law journal supplements (or “companions”). This has been a welcome trend; the articles tend to be shorter, the editing and publishing process tends to be quicker, and authors now have more opportunities for publication—particularly at the highest levels.
The name given to such journals is another matter. Uninspired is probably the kindest thing that can be said. Most are obvious (University of Pennsylvania Law Review Online? Yes, we know). Some seem a little self‐absorbed (Michigan Law Review First Impressions? How . . . thoughtful). Dead languages—ironically enough—are surprisingly popular. (Penn State Law Review Penn Statim? Say what?). Something needs to be done. The people in charge of these journals obviously need help.
Enter this Essay, the purpose of which is to provide some ready‐to‐use names for online law review supplements. These names are divided into two categories, depending on the preference of the journal. The first category consists of a list of terms to simply add to the name of the main journal. The second category consists of stand‐alone names for those desiring a cleaner break from the past.
Texas A&M, the public university for which I work, assesses its colleges and departments based partly on scholarly impact and using quantitative metrics. As part of my administrative duties, the law school’s dean has assigned me the task of identifying scholarly impact metrics for use in assessing the performance of our law faculty collectively and individually. This Essay discusses the major issues that arise in measuring the impact of legal scholarship. It explains important scholarly impact metrics, including the Leiter score and Google Scholar h‐index, and the major sources of information regarding scholarly impact, including Google Scholar, Westlaw, HeinOnline, SSRN, and bepress.
I intend for this Essay to serve as a guide for law deans and legal scholars interested in measuring the impact of legal scholarship. In addition, university administrators should find it helpful for comparing the impact of their own law faculty’s scholarship with the scholarship of law faculties at other universities. The primary obstacle to such comparisons is a dearth of publicly available information. To that end, the Essay recommends that each law school create a Google Scholar profile for its faculty and explains the procedure for doing so. By acting on this recommendation, administrators would dramatically improve our ability to assess the impact of legal scholarship. Moreover, a ranking of faculties by Google Scholar citation count would provide a much‐needed supplement to existing rankings schemes, including ranking schools based on U.S. News peer reputation score.
Part I of the Essay discusses citations, Part II discusses downloads, and Part III makes the case for widespread use of Google Scholar profiles.
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.
There’s no denying that the Department of Justice’s response to the financial crisis of 2008 was underwhelming. Despite seemingly widespread fraud in the market for mortgage‐backed securities, the Department secured only one conviction of a Wall Street executive. The near‐total absence of prosecutions proved publicly embarrassing—and politically costly—to the Department. As criminal statutes of limitation expired, major media outlet after major media outlet published exposes on Wall Street leaders’ apparent immunity from prosecution.
Against this backdrop, the Department understood that it would need to strike back, and in a big way. Enter the “Yates Memo” in September 2015. Henceforth, Deputy Attorney General Sally Yates announced, corporate crime prosecutors would focus on securing accountability—in the form of criminal prosecutions—for culpable individuals within business organizations. Yates paired the Memo’s release with a public relations campaign. In a speech at the New York University School of Law, she described the Memo as “a substantial shift from our prior practice.” Responding to criticism of the Department’s post‐financial crisis performance, Yates told the New York Times that, “The public needs to have confidence that there is one system of justice and it applies equally regardless of whether that crime occurs on a street corner or in a boardroom.”
This Essay proceeds in three parts. Part I places the Yates Memo in context. Part II then sets forth the legal case that the Memo’s threshold requirement likely violates the legislative rule doctrine of administrative law. Part III turns from the doctrinal to the normative, explaining why the legislative rule objection to the Yates Memo serves a useful social purpose. This Essay concludes by considering the broader implications of the Yates Memo’s likely unlawfulness.
Before I begin, an important caveat is in order. This Essay contains no critique of the policy underlying the Yates Memo. The Yates Memo may possess the right strategies to combat corporate crime, or critics may be right that its requirements will prove to be counterproductive or unfair. Such questions lay beyond the Essay’s scope. My claim is narrower, but more fundamental. If the Department of Justice is going to pursue a threshold disclosure requirement for corporate criminal investigations, it should abide by the APA.
Third‐party funding increasingly is a feature of litigation in the United States. One of the issues raised by third‐party litigation funding is whether outside funders will positively or negatively impact the American judicial system. In particular, some commentators have observed that third‐party funding arrangements have the potential to create conflicts of interest between attorneys and their clients due to the control that outside funders may attempt to exert over litigation. This Comment addresses how those conflict‐of‐interest concerns impact discovery rules in the class action context. It ultimately concludes that because there is a potential for third‐party funders to impair class counsel’s adequate representation of absent class members, a class relying on third‐party funding should be required to disclose the arrangement to the court for in camera review.
This Comment begins with an overview of third‐party litigation funding in the United States and the rules of discovery regarding a class’s financial resources during the class certification phase of litigation. Next, it describes the debate over whether third‐party funding will positively or negatively affect class counsel’s ability to adequately represent the interests of absent class members. It also explains that because the empirical data on the issue is scarce, courts should develop discovery rules to help ensure that they will learn when and how third‐party funders are supporting the litigants before them. Finally, after considering alternative potential discovery rules, this Comment concludes that requiring disclosure of third‐party funding arrangements to the court for in camera review is the means most likely to balance the interests of class action plaintiffs and defendants, while simultaneously assisting the court in assessing the adequacy of representation under Rule 23.
The public/private distinction was “slain” in 1982. That year, at the Symposium of the University of Pennsylvania Law Review, Professor Duncan Kennedy set forth his six Stages of the Decline of the Public/Private Distinction, outlining the sequence by which liberal categorizations descend “from robust good health to utter decrepitude.” The article is available here.
Professor Kennedy’s famed article concerned the history of legal thought over the course of the twentieth century. He described that history as one of “decline”—not just of the public/private distinction, but of numerous other distinctions said to “constitute the liberal way of thinking about the social world.” He pronounced on the lifecycle of these ideas and the way in which they—and the public/private distinction in particular—had become unjustifiable in legal thought. It was “[h]ard cases with large stakes” that were the first sign of trouble, precipitating compromise until distinctions all but collapsed, only to be reanimated as “continua” or pro/con “balancing” formulae6 until they became something “we can’t believe in . . . any more.”
In this Essay, I put to one side legal history and turn attention to the process of decline itself. For it is not only legal distinctions that are problematic. There are, indeed, many errant categorizations that fit the story of decline. My target is the so‐called fish/mammal distinction. “Fish,” it will be shown, is an indistinct category. But if it nonetheless remains acceptable for people (and biologists) to speak in terms of fish, might it be okay for people (and lawyers) to speak in terms of private law?
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.
“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.