Volume 166, Issue 2 
January 2018
Articles

Pandora’s Digital Box: The Promise and Perils of Digital Wallets

Adam J. Levitin

Digital wallets, such as ApplePay and Google Pay, are smart payment devices that can integrate payments with two‐way, realtime communications of any type of data. Integration of payments with realtime communications holds out tremendous promise for consumers and merchants alike: the combination, in a single, convenient platform, of search functions, advertising, payment, shipping, customer service, and loyalty programs. Such an integrated retail platform offers consumers a faster and easier way to transact, and offers brick‐and‐mortar retailers an eCommerce‐type ability to identify, attract, and retain customers. At the same time, however, digital wallets present materially different risks for both consumers and merchants than traditional plastic card payments precisely because of their smart nature.

For consumers, digital wallets can trigger an unfavorable shift in the applicable legal regime governing the transactions, increase fraud risk, create confusion regarding error resolution, expose consumers to non–FDIC‐insured accounts, and substantially erode transactional privacy. These risks are often not salient to consumers, who thus cannot distinguish between different digital wallets on the basis of risk. Consumers’ inability to protect against these risks points to a need for regulatory intervention by the Consumer Financial Protection Bureau to ensure minimum standards for digital wallets.

For merchants, digital wallets can divest valuable customer information used for antifraud, advertising, loyalty, and customer service purposes. Digital wallets can also facilitate poaching of customers by competitors, impair merchants’ customer relationship management, deprive merchants of influence over consumers’ payment choice and routing, increase fraud risk, subject merchants to patent infringement liability, and ultimately increase the costs of accepting payments. Merchants are constrained in their ability to refuse or condition payments from digital wallets based on the risks presented because of merchant rules promulgated by credit card networks. These rules raise antitrust concerns because they foreclose entry to those digital wallets that offer merchants the most attractive valuation proposition: wallets that do not use the credit card networks for payments.


Our Regionalism

Jessica Bulman-Pozen

This Article provides an account of Our Regionalism to supplement the many accounts of Our Federalism. After describing the legal forms regions assume in the United States—through interstate cooperation, organization of federal administrative agencies, and hybrid state–federal efforts—it explores how regions have shaped American governance across the twentieth and early twenty‐first centuries.

In the years leading up to the New Deal, commentators invoked regions to resist centralization, arguing that state coordination could forestall expansion of the federal government. But regions were soon deployed to a different end, as the federal government relied on regional administration to develop its bureaucracy. Incorporating regional accommodations and regional organization into new programs allowed the federal government to expand its role in domestic policymaking. As interstate regionalism yielded to federal regionalism, the administrative state was propelled forward by a strategy that had arisen to resist it. Even as regions facilitated the expansion of the New Deal administrative state, however, the regional organization and argument that underpinned this development left room for state influence within federal programs and for new projects of multistate and joint state–federal governance. The century’s next regional moment brought this potential to the fore, with regions brokering the resurgence of the states in Great Society programs.

In the early twenty‐first century, new regional undertakings have been celebrated as fluid, nonhierarchical networks. Although the network metaphor has been exhausted, this characterization anticipates the emergence of “regionalism without regions”: collaborations among multiple state and federal actors that need not involve contiguous areas. Just as regional improvisation has responded to governance challenges of past decades, this nascent development responds to today’s polarized partisanship. It betokens both the revival and the transformation of the political sectionalism that has always informed American regionalism, even as it slipped behind an administrative veneer for much of the twentieth century.


Copyright as Market Prospect

Shyamkrishna Balganesh

For many decades now, copyright jurisprudence and scholarship have looked to the common law of torts—principally trespass and negligence—in order to understand copyright’s structure of entitlement and liability. This focus on property—and harm‐based torts—has altogether ignored an area of tort law with significant import for our understanding of copyright law: tortious interference with a prospective economic advantage. This Article develops an understanding of copyright law using tortious interference with a prospect as a homology. Tortious interference with a prospect allows a plaintiff to recover when a defendant’s volitional actions interfere with a potential economic benefit that was likely to accrue to the plaintiff prior to the defendant’s intervention. Premised on the idea of a probabilistic harm and driven by instrumental considerations, the tort works by treating a possible market benefit as the basis of an interest that is worthy of protection against specific behavior. As a supposed incentive for creativity, copyright law operates in ways that are strikingly similar to tortious interference with a prospect. Much like tortious interference with a prospect, it functions by first identifying a zone of probabilistic market benefits, and then protecting that zone against specific volitional interferences through a framework of liability. This Article unpacks the strong analytical and normative parallels between the two, and argues that their similarity sheds new and important light on several persistent puzzles within current copyright jurisprudence.


Comments

FDA Regulation of 3D‐Printed Organs and Associated Ethical Challenges

Elizabeth Kelly

The implications of pervasive implementation of 3D printing with biological material, also known as “bioprinting,” are vast. They present never‐before‐seen hurdles, which are particularly complicated due to the vulnerability of the patients, who often need new organs to survive, involved. In this Comment, I limit the scope of this inquiry to the most immediate challenges of embracing 3D‐printed organs in our health care market: potential statutory roadblocks, regulatory concerns over manufactured organs, and ethical challenges of which we must remain aware. I submit one path by which 3D‐printed organs can fit in our current legal and regulatory framework. I also define who should be charged with regulating them and propose how future regulators should do so. Finally, I raise additional concerns of 3D‐printed organs that will require deeper analysis as more information becomes available, including the myriad ethical challenges presented by this new technology.

The U.S. Food and Drug Administration (FDA) is the appropriate body to regulate 3D‐printed organs because a manufactured organ must be treated differently than a human organ, which can be transplanted as “simply” part of the practice of medicine. It remains to be seen how the FDA will gather sufficient data to satisfy premarket approval requirements, determine who gets access and when, and how to govern the marketing of 3D‐printed organs because the output is individualized. But the process by which the organs are created can be scaled dramatically. In so doing, those in charge must also confront unique, multifaceted ethical challenges.


Anti‐SLAPP Statutes and the Federal Rules: Why Preemption Analysis Shows they Should Apply in Federal Diversity Suits

William James Seidleck

In an effort to protect the exercise of free speech, many states have enacted “anti‐SLAPP” statutes—which provide special motions making the dismissal of meritless defamation claims quick and easy. In doing so, these state statutes help protect speakers against abusive litigation meant to deter speech. However, because these statutes use procedure to protect what states view as important rights, their operation in federal diversity cases raises vexing Rules Enabling Act questions. Some federal circuit courts have taken the view that the substantive ends of anti‐SLAPP statutes mean that their protections should apply in federal court. But other federal circuit opinions argue that the Federal Rules of Civil Procedure provide a closed universe of dispositive motions, precluding the availability of anti‐SLAPP motions to federal defendants.

To address the anti‐SLAPP problem, this Comment advocates adopting a proposal of looking at Rules Enabling Act questions as akin to preemption analysis. In other words, deciding whether the Federal Rules prevent the operation of a state provision in federal court means asking if the state provision conflicts with federal policy. Here, state anti‐SLAPP statutes are not designed to promote the efficiency of federal litigation—the purpose served by Rules 12(b)(6) and 56 motions. Instead, anti‐SLAPP motions provide specific protections against strike suits in certain, state‐created causes of action. Likewise, anti‐SLAPP statutes do not transgress broader federal policies. And failure to apply anti‐SLAPP statutes in federal court would raise troubling federalism concerns. Thus, anti‐SLAPP statutes should apply in federal diversity proceedings.


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