Volume 156, Issue 5 
May 2008

Punishing the Innocent

Josh Bowers

Scholars highlight an "innocence problem" as one of plea bargaining's chief failures. Their concerns, however, are misguided. In fact, many innocent defendants are better off in a world with plea bargaining than one without it. Plea bargaining is not the cause of wrongful punishment. Rather, inaccurate guilty pleas are merely symptomatic of errors at the points of arrest, charge, or trial. Much of the worry over an innocence problem proceeds from misperceptions over (1) the characteristics of typical innocent defendants; (2) the types of cases they generally face; and (3) the level of due process they ordinarily desire. In reality, most innocent defendants are recidivists, because institutional biases select for the arrest and charge of these repeat players. And most cases are petty. In these low-stakes cases, recidivist innocent defendants face high pretrial process costs (particularly if the defendants are detained). But innocent defendants also enjoy low plea prices because prosecutors do not try to maximize sentence length in low-stakes cases. Moreover, defendants possess certain underappreciated bargaining advantages in these cases. In the end, the costs of proceeding to trial often swamp the costs of pleading to lenient bargains. Put differently, many recidivist innocent defendants are punished by process and released by pleas. Thus, plea bargaining is no source of wrongful punishment; rather, it may be a normative good that cuts erroneous punishment short. Accordingly, the system must provide innocent defendants access to plea bargaining. Cur-rent vehicles for rational choice pleas-like no-contest pleas and equivocal pleas-are not up to the task. Instead, the system should reconceive of false pleas as legal fictions and require defense lawyers to advise and assist innocent defendants who wish to enter into plea bargains and mouth dishonest on-the-record words of guilt.

Relational Tax Planning Under Risk-Based Rules

Alex Raskolnikov

Risk-based rules are the tax system's primary response to aggressive tax planning. They usually grant benefits only to those taxpayers who accept risk of changes in market prices (market risk) or business opportunities (business risk). Attempts to circumvent these rules by hedging, contractual safeguards, and diversification are well understood. The same cannot be said about a very different type of tax planning. Instead of reducing risk directly, some taxpayers change the nature of risk. They enter into informal, legally unenforceable agreements with contractual counterparties that are designed to eliminate market or business risk entirely. The new uncertainty these tax planners inevitably accept, however, is the risk that the counterparties will violate the implicit agreements and betray taxpayers' trust (counterparty risk). A deliberate substitution of counterparty risk for market or business risk is what this Article calls relational tax planning. The Article offers an economic analysis of different risks and considers two responses to the relational tax planning problem. The analysis suggests that from a welfarist perspective, business risk is a superior deterrent compared to both market and counterparty risks. Counterparty risk is the most complex of the three. In addition to producing risk-bearing losses like all other risks, it leads to reduced transaction costs in future exchanges between relational tax planners, but only if they manage to overcome bargaining obstacles caused by opportunism and asymmetric information. These insights suggest two very different responses. A sweeping reform will allow—and even encourage—taxpayers to engage in relational tax planning, but it will also ensure that counterparty risk they incur is sufficiently high. If only incremental improvements are pursued, courts should increase their scrutiny of relational tax planning involving extensive dyadic business relationships and interactions based on social norms.

Excluding Religion

Nelson Tebbe

Tebbe’s Article considers whether the government may single out religious actors and entities for exclusion from its support programs. The problem of selective exclusion has recently sparked interest in lower courts and in informal discussions among scholars, but the literature has not kept pace. Excluding Religion argues that the government generally ought to be able to select religious actors and entities for omission from support without offending the Constitution. At the same time, the Article carefully circumscribes that power by delineating several limits. It concludes by drawing out some implications for the question of whether and how a constitutional democracy ought to be able to influence private choices concerning matters of conscience.


Indigenous Peoples' Courts: Egalitarian Juridical Pluralism, Self-Determination, and the United Nations Declaration on the Rights of Indigenous Peoples

Christopher J. Fromherz

Assessing the Proper Relationship Between the Alien Tort Statute and the Torture Victim Protection Act

Philip Mariani

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