Volume 163, Issue 1 
December 2014
Articles

Old Statutes, New Problems

Jody Freeman & David B. Spence

Congress is more ideologically polarized now than at any time in the modern regulatory era, which makes legislation ever harder to pass. One of the consequences of this congressional dysfunction is a reduced probability that Congress will update regulatory legislation in response to significant new economic, scientific, or technological developments. This predicament, we argue here, has important implications for the federal agencies charged with implementing statutes over time and for courts adjudicating challenges to agency statutory implementation.

We explain how federal agencies coping with new regulatory challenges often encounter problems of “fit” with older statutes, which require them to make delicate legal and political judgments in the face of congressional silence. And we show how, following the Goldilocks principle, agencies seek to get this process just right by balancing the perceived need for regulatory innovation with a concern about potential overreach.

Agencies, we claim, do not simply “go for broke” when wrestling with problems of fit. Instead they proceed strategically, cognizant of the preferences of their political overseers and the risk of being overturned in the courts. Sometimes agencies interpret their enabling legislation so as to expand their jurisdiction; other times, agencies manage problems of fit by intentionally shrinking their jurisdiction, proceeding incrementally, and engaging in deliberate restraint. Our examples show that agencies can be persistent, flexible, bold, cautious, expert, political, and, above all, strategic. The examples also suggest that even—and perhaps especially—when adapting old statutes to new problems, agencies are surprisingly accountable, not just to the President, but also to Congress, the courts, and the public.


The Constitutional Standing of Corporations

Brandon L. Garrett

Are corporations “persons” with constitutional rights? The Supreme Court has famously avoided analysis of the question, while recognizing that corporations may litigate rights under the Due Process Clause, Equal Protection Clause, First Amendment, Fourth Amendment, Sixth Amendment, and Seventh Amendment, but not, for example, the Self-Incrimination Clause of the Fifth Amendment. What theory explains why corporations may litigate some constitutional rights and not others? In this Article, I argue that the doctrine of Article III standing supplies an underlying general theory by requiring a judge to ask: does the organization suffer a concrete constitutional injury to its legal interests? Such analysis has implications for the interpretation of a range of contested constitutional questions. For example, Article III analysis helps us to understand why corporate standing is not appropriate if corporate rights threaten to conflict with claims brought by individuals, while in contrast, associations and nonprofits may more readily derivatively assert the third-party rights of members. By ignoring Article III constraints, and finding that a for-profit corporation could itself assert a statutory injury to the religious beliefs of its owners, the Supreme Court’s recent Hobby Lobby opinion threatens to erase the longstanding differences between owners and corporations, parties and third-parties, and for-profit corporations versus other types of entities. Only if Article III doctrine is faithfully applied can organizational standing to litigate constitutional rights effectively develop protections for individuals and organizations alike.


Dodd-Frank Orderly Liquidation Authority: Too Big for the Constitution?

Thomas W. Merrill & Margaret L. Merrill

The Dodd–Frank Act, enacted in the wake of the U.S. financial crisis of 2007 to 2009, is the federal government’s attempt to address a number of systemic issues perceived to be at the root of the financial meltdown. Title II of the Act goes to the heart of this effort by creating a new specialized insolvency regime for the orderly liquidation of systemically significant nonbank financial companies. This regime, largely modeled after the FDIC’s process for shutting down insolvent federally insured banks, theoretically provides a substitute for bankruptcy and bailouts by giving the executive branch authority to take control of and liquidate nonbank financial companies that are deemed to be too big to fail.

Unfortunately, in the government’s haste to create a viable resolution process, it overlooked a number of fundamental constitutional benchmarks–including due process, Article III, and First Amendment requirements–rendering Title II susceptible to future judicial invalidation. Of particular concern is the statute’s procedure for appointing the government as receiver of the financial firm, which requires a secret, ex ante judicial proceeding in which an Article III judge is permitted to review only two of the seven orderly liquidation prerequisites–and given just twenty-four hours to do so. The very broad discretion bestowed on the executive branch to decide whether to subject a financial firm to orderly liquidation also creates a potential conflict with the uniformity requirement of the Constitution’s Bankruptcy Clause. And finally, there are cognizable Fifth Amendment takings concerns implicated by the expansive powers that Title II affords to the government as receiver.

Given that issues of standing make the success of any anticipatory challenge questionable at best, Title II’s constitutional vulnerabilities will likely remain dormant until the government actually avails itself of its orderly liquidation authority. This is quite troublesome given that such a constitutional challenge would likely further exacerbate the financial havoc that Title II is intended to mitigate. The good news is that this disastrous eventuality can be avoided with a few simple amendments–foremost by providing for plenary judicial review after rather than before the orderly liquidation receiver is appointed.


Comments

The Duryodhana Dilemma: United States v. A 10th Century Cambodian Sandstone Sculpture and a Proposed Code of Ethics-Based Response to Repatriation Requests for Auction Houses

Lauren Henderson

On March 24, 2011, Sotheby’s New York unexpectedly removed its showcase lot, the Duryodhana, from its Indian & Southeast Asian auction scheduled to occur that same day. This last-minute adjustment occurred in response to a letter received hours earlier from the Secretary General of Cambodia’s National Commission for the United Nations Educational, Scientific and Cultural Organization (UNESCO), who alleged that the sculpture had been illegally removed from Cambodia and asked that Sotheby’s delete the lot from the auction. One year after Sotheby’s voluntarily pulled the lot, the United States government filed a civil forfeiture action in the United States District Court for the Southern District of New York, United States v. A 10th Century Cambodian Sandstone Sculpture. By filing this action, the U.S. government aimed to take title to the Khmer sculpture and return it to Cambodia.

United States v. A 10th Century Cambodian Sandstone Sculpture is just one example of the repatriation requests from foreign countries that auction houses in the United States face each year. Some scholars report that countries such as Cambodia have been mounting more repatriation requests in recent years. Auction houses confronted with these repatriation requests must struggle through the ambiguities and deficiencies in the current law when deciding how to respond. As an alternative to the available legal response to repatriation requests, I propose that auction houses should develop a uniform code of ethics to guide their efforts in replying to these requests. Auction houses should look to the International Council of Museums’ (ICOM) Code of Ethics for Museums as a model for fashioning their own code of ethics. If all major auction houses voluntarily agree to adopt a uniform code of ethics, there would be fewer repatriation requests and less uncertainty surrounding compliance with the current complex web of laws and regulations that differ from country to country.

In Part I, I describe the background of the Duryodhana, including how the sculpture fits within the Cambodian cultural framework and Cambodian perceptions of property and ownership. I also summarize the litigation and recent settlement surrounding the sculpture, noting the parties’ principal contested points that remain unresolved. In Part II, I outline the current legal response for addressing repatriation claims, including its deficiencies. In Part III, I propose that auction houses look to museums for guidance in order to remedy the unsettled and unsatisfactory state of this legal struc- ture. By adopting a uniform code of ethics modeled after the ICOM Code of Ethics for Museums, auction houses will be better situated to avoid repatriation claims. Finally, I conclude by suggesting specific provisions that auction houses might adopt as a starting point for developing a uniform code of ethics.


Pro Se Paternalism: The Contractual, Practical, and Behavioral Cases for Automatic Reversal

Justin Rand

Johnnie Cochran, Robert Shapiro, and F. Lee Bailey all became famous as criminal defense attorneys. Television dramas depicting the high-stakes world of criminal trials, focusing on charismatic lawyers winning difficult cases, continue to captivate audiences around the country. Outside of the bright lights of Hollywood, however, the protagonists of these courtroom dramas often play little role at trial. Instead, when faced with the complexities and uncertainty of criminal trials, an increasingly large number of defendants choose to forgo the assistance of a lawyer. While defendants’ reasons for representing themselves are as varied as the charges levied against them, doing so consistently creates headaches for all parties involved. And where a pro se defendant’s behavior at trial raises questions about his competence, these headaches can quickly become more serious.

This Comment examines the situation in which a pro se defendant’s behavior raises questions about his own competence during trial. Is this defendant, otherwise proceeding pro se, required to have the assistance of counsel at his own competency hearing? Every federal court of appeals to consider this question has answered in the affirmative and has held that failing to provide such assistance is constitutional error. However, the courts of appeals are split in deciding the proper remedy for this error. This Comment argues that by examining the different remedies courts have used from contractual, practical, and behavioral perspectives, granting an automatic reversal emerges as the best option available. When the lights go out and the television cameras are gone, a bit of pro se paternalism may preserve the liberty and save the lives of defendants facing trial on their own.

In Part I, this Comment explains the origin of the right to counsel under the Sixth Amendment. After tracing the right’s history and rationale, the concept of a “critical stage”—a stage of a criminal proceeding in which the guarantees of the Sixth Amendment are implicated—is examined more closely. In Part II, this Comment discusses whether a defendant’s competency hearing should be characterized as a “critical stage.” After explaining that every court of appeals to consider the question has answered it in the affirmative, the Comment turns to the issue of the appropriate remedy for the deprivation of counsel at a competency hearing. Part III examines the current circuit split over the proper remedy for a competency-stage deprivation and uses two courts of appeals cases to demonstrate the different remedy decisions courts have made. Part IV provides affirmative justifications for choosing automatic reversal to remedy competency-stage deprivations. Finally, Part V acknowledges and responds to potential criticisms of automatic reversals in the competency hearing context.


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