Volume 166, Issue 6 
May 2018
Articles

Our Principled Constitution

Mitchell N. Berman

Suppose that we disagree about a matter of constitutional law. Say that one of us contends, and the other denies, that transgender persons have constitutional rights to be treated in accord with their gender identity. It appears that we disagree about “what the law is.” And, most probably, we disagree about what the law is on this matter because we disagree about what generally makes it the case that our constitutional law is this rather than that.

Constitutional theory should provide guidance. Theorists should try to explain what gives our constitutional rules the contents that they have, or what makes true constitutional propositions true; they should aim to provide what I will call a “constitutive theory” of constitutional law. It is obvious that we do not all share a constitutive theory. It is less obvious, and strikingly underappreciated, that we have precious few candidates to choose from. Few of our many prescriptive theories regarding how judges should exercise the power of judicial review have straightforward constitutive implications.

This Article presents an original constitutive theory of American constitutional law (and of law generally), founded on the familiar distinction between two types of constitutional norms: “principles” and “rules.” It argues: first, that rules are determined by the interaction of principles, in a manner that can be loosely modeled as force addition; and second, that the principles are “grounded” in mental states, speech‐acts, and behaviors of persons who make up the constitutional community, much as rules of fashion or of billiards are grounded in behaviors of persons who make up their normative communities. In short: social facts determine constitutional principles, and constitutional principles determine constitutional rules. I call the account “principled positivism.” It is positivist, pluralist, and dynamic.

Principled positivism maintains that we can come to know our constitutional rules by discerning the contents, contours, and weights of our constitutional principles. Accordingly, the Article offers a preliminary and partial inventory of our constitutional principles—principles concerning the legal significance of what the enacted text says and what its authors intended; principles about the force of judicial precedents and of extra‐judicial practices; principles of popular sovereignty, the distribution of governing power, and the demands of liberty and equality. It then puts the principles to work, illustrating how they operate in diverse constitutional controversies, from same‐sex marriage to the scope of Congress’s commerce power.


Taxing the Gig Economy

Kathleen DeLaney Thomas

Due to advances in technology like mobile applications and online platforms, millions of American workers now earn income through “gig” work, which allows them the flexibility to set their own hours and choose which jobs to take. To the surprise of many gig workers, the tax law considers them to be “business owners,” which subjects them to onerous recordkeeping and filing requirements, along with the obligation to pay quarterly estimated taxes. This Article proposes two reforms that would drastically reduce tax compliance burdens for this new generation of small business owners, while simultaneously enhancing the government’s ability to collect tax revenue.

First, Congress should create a “non‐employee withholding” regime that would allow online platform companies such as Uber to withhold taxes for their workers without being classified as employers. Second, this Article proposes a “standard business deduction” for gig workers, which would eliminate the need to track and report business expenses. Although this Article focuses on the gig economy as an illustration of how the workplace has evolved in recent years, the proposals could apply more broadly to taxation of small, individually run businesses. In an era when the use of cash is on the decline and information can be shared rapidly at little cost, it is time for policymakers to institute a more modern tax enforcement regime for small businesses.


Settling the Staggered Board Debate

Yakov Amihud, Markus Schmid & Steven Davidoff Solomon

We address the heated debate over the staggered board. One theory claims that a staggered board facilitates entrenchment of inefficient management and thus harms corporate value. Consequently, some institutional investors and shareholder‐rights advocates have argued for the elimination of the staggered board. The opposite theory is that staggered boards are value‐enhancing since they enable the board to focus on long‐term goals. Both theories are supported by prior and conflicting studies and theoretical law review articles. We show that neither theory has empirical support and, on average, a staggered board has no significant effect on firm value. Prior studies did not include important explanatory variables in their analysis or account for the changing nature of the firm over time. When we control for variables affecting both value and the incidence of a staggered board in a sample of up to 2961 firms from 1990 to 2013 we find the effect of a staggered board on firm value becomes statistically insignificant. Notably, we find that the adoption of a staggered board, its retention, and its removal are not random and exogenous but rather endogenous, being related to firm characteristics and performance. The effect of a staggered board is idiosyncratic; for some firms it increases value, while for other firms it is value‐destroying. Our results suggest caution about legal solutions that advocate wholesale adoption or repeal of the staggered board and instead point to an individualized firm approach.


Comments

Completely Exhausted: Evaluating the Impact of Woodford v. Ngo on Prisoner Litigation in Federal Courts

Elana M. Stern

On June 22, 2006, the Supreme Court decided an unglamorous administrative exhaustion case involving the ability of prisoners to bring civil lawsuits in federal court. The case, Woodford v. Ngo, split the Court 6‐3 with Justice Alito writing for the majority. The decision itself hinges on a close reading of the term “exhaustion” and its requirements under administrative law and the 1996 Prison Litigation Reform Act (PLRA). The Woodford majority held that, in light of the PLRA, a prisoner must “properly exhaust[]” administrative remedies before filing a claim in federal court; failure to follow this procedural requirement results in dismissal of an improperly exhausted claim. “Proper exhaustion,” as defined by the Court, requires prisoners not only to go through administrative proceedings and seek the remedies “that meet federal standards,” but also to pursue “all ‘available’ [administrative] remedies” to their procedural conclusion.

Thus, on its face, Woodford appears to make filing claims in federal court even more difficult for prisoners by strictly interpreting the relevant statutory language. However, the goal of this Comment is to demonstrate that Woodford has had no such effect. Ten years after the Supreme Court’s decision, prisoners’ filings of unexhausted claims in federal court have actually increased. Prisoner litigants likely do not have adequate knowledge of the procedural prerequisites to filing a civil claim in federal court. To resolve the ongoing disconnect between the law relevant to prisoner filings and filings in reality, this Comment proposes bridging the existing knowledge gap that may be partially responsible for improperly or unexhausted claims brought by prisoners in federal court. Including an informational cover sheet on prisoner pro se civil complaint forms that gives potential claimants an overview of the exhaustion requirement may at least give prisoners pause before writing out their claims and filing a suit that would be dismissed on procedural grounds.

Without making the relevant law salient to those it directly affects, Woodford’s deterrent impact on improperly exhausted prisoner civil claims may remain minimal. As a result, prisoners will likely continue to file improperly exhausted civil claims in federal court, which require courts’ time and resources to dismiss, even via order (in lieu of a full opinion). For prisoners, an ongoing knowledge gap in this context will mean running up against the PLRA’s three strikes rule, additional filing fees, and perhaps due to procedural failings, losing the ability to bring a substantively meritorious claim.


The Illusory Coverage Doctrine: A Critical Review

Ian Weiss

How should a court handle a liability insurance policy sold to a tavern that purports to cover general commercial liability, yet contains an exclusion for liability “arising out of or in connection with the manufacturing, selling, distributing, serving or furnishing of any alcoholic beverages”? How about a liability insurance policy sold to DISH Network that contains an exclusion for liability “arising out of the ownership, operation or use of any satellite”? Or how about one that purports to cover a business for its liability arising out of “discrimination,” yet contains exclusions for discrimination that either violates a statute, is done knowingly or intentionally, is directed towards prospective, current, or wrongfully terminated employees, or is “committed on the basis of race, creed, color, sex, age or national origin”?

In all three of those cases, the policyholders argued that it would be unfair for the court to enforce the exclusions in their policies as they were written. Those exclusions, the policyholders argued, wiped out so much of the coverage that otherwise would have existed under the policies’ insuring clauses that the coverage would be practically worthless. Thus, the courts were asked to analyze those policies under the doctrine known as the Illusory Coverage Doctrine (ICD). The ICD is implicated when an insurance policy is written in such a way that could give the policyholder the “illusion” that the policy covers risks that are not actually covered. The ICD is somewhat obscure, and no precise formulation of the doctrine has yet achieved predominance among American jurisdictions.

This Comment will discuss the status of the ICD in American insurance law, especially liability insurance law, and will also offer my own views as to how the doctrine can be best understood and refined.


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