VOLUME 162, ISSUE 3 February 2014

Articles

Funding Terror

Shima Baradaran, Michael Findley, Daniel Nielson & Jason Sharman

The events of September 11, 2001, forever changed the political and legal responses to terrorism. After more than ten years, two wars, numerous targeted military strikes, and significantly increased surveil-lance, we have not stopped the growth of al-Qaeda and other terrorist organizations. The War on Terror has involved more than military operations. To stop terrorism, it is imperative to cut off its funding stream. To this end, a number of nations have created financial laws that prohibit the formation of anonymous companies and monitor suspicious bank transfers. Though these laws have been touted as evidence that we are winning the War on Terror, this Article questions their efficacy. In particular, this Article demonstrates how easy it is to form a terrorist finance network and to exploit the impotence of these international and domestic financial regulations. The Article presents findings from the largest global, randomized controlled trial on this issue to date. In our experiment, we acted as customers seeking to form anonymous shell companies in a variety of scenarios resulting in either greater risk or greater reward. On the whole, forming an anonymous shell company is as easy as ever, despite increased regulations follow-ing September 11. The results are disconcerting and demonstrate that we are far from a world that is safe from terror.

Constitutional Colorblindness and the Family

Katie Eyer

Family law has escaped the colorblindness revolution. During the same time frame that the Supreme Court has adopted increasingly stringent constitutional standards for even “benign” uses of race (including, most notably, affirmative action), the lower courts have continued to take a loose and permissive approach to many government uses of race in the family law context. Thus, courts have continued to regularly affirm (and to apply minimal constitutional scrutiny to) the use of race to determine foster care and adoptive placements, as well as the use of race as a factor in custody disputes between interracial parents.

This Article, drawing on heretofore unexplored historical sources, examines the Supreme Court’s role in the development of these divergent approaches to the use of race in the affirmative action and family law contexts. As those sources demonstrate, the Court has—over the last forty years—had numerous opportunities to address the growing divide. Nevertheless, the Court (and particularly some of its most ardent affirmative action detractors) has historically been reluctant to do so, at least in part because of a normative endorsement of the race-based practices at issue in the family law context. Thus, the Court has avoided cases involving the use of race in family law—and taken other steps to limit the reach of its doctrine in the family law arena—based on a perception that remaining uses of race in the family are fundamentally different, and at least in some contexts, benign.

This history has profound implications for the Court’s broader race law jurisprudence. The Supreme Court has—at least facially—rejected the possibility of a role for contextual or normative factors in its application of equal protection doctrine to race. Instead, the Court has demanded that race-based classifications—no matter what their intent or effects—be subjected to strict scrutiny. But the history of the Court’s approach to family law strongly suggests that the Court itself does in fact weigh such considerations in its approach to taking up and adjudicating race law claims. This Article suggests that there are serious process, legitimacy, and substantive concerns raised by such a divergence between the Court’s formal doctrine and its practice, and discusses alternatives for aligning the two more fully.

Why Do Retail Investors Make Costly Mistakes? An Experiment on Mutual Fund Choice

Jill E. Fisch & Tess Wilkinson-Ryan

Congress has recently acknowledged the need for a better understanding of investor behavior. In the Dodd–Frank Act, Congress instructed the SEC to conduct a study of investor financial literacy. The SEC’s study was conducted at the most superficial level, however, and provided limited insight into developing future regulatory policy. Although the SEC found investor mistakes and misconceptions, it did not seek to identify the reasons for these mistakes or to understand the underlying mechanisms driving investor choices.

This Article takes up where the SEC study left off. We report the results of an experiment designed to explore how investors use the information provided to them, and why they often ignore it. Using a simulated investment game in which participants were asked to allocate funds in a retirement account among ten mutual fund alternatives, we offer some insights into how individuals seek and assimilate information about a fund’s characteristics. In particular, our experiment offers a novel addition to the body of experimental evidence on investor decisionmaking by incorporating a technology that allows us to collect data on the specific information that investors choose to view.

Comments

The Divided States of America: Reinterpreting Title VII’s National Origin Provision to Account for Subnational Discrimination Within the United States

Jacqueline Grace Diaz

From the marginalization of Native Americans to the bitter rivalry between the North and the South, discrimination within the United States is not a new phenomenon. For centuries, Americans have discriminated against one another because they come from different parts of the country. Northerners have been derogatorily referred to as “Yankees,” Southerners as “rednecks,” Appalachians as “hillbillies,” Californians as “hippies” and “Valley girls,” and Native Americans as “red skins.” Such discrimination has had particularly adverse consequences in the employment context due to the assumptions employers draw from these regional identities.

Despite the prevalence of regional animus in the United States, employment discrimination based on regional origin is currently not actionable under Title VII’s national origin provision. Rather, most courts have interpreted Title VII’s national origin provision narrowly, requiring employees to point to a sovereign country of origin in order to make out a national origin discrimination claim. The problem with this country-focused conception of national origin is that it presupposes that nations are homogeneous when, in reality, nations—especially large ones like the United States—are composed of divergent subgroups.

This Comment critiques the assumption underlying Title VII’s national origin provision—that nations are homogenous—by detailing the various forms of employment discrimination that occur within the United States. It then analyzes existing case law and notes that although courts have gradually begun to expand the scope of national origin to encompass some forms sub-national discrimination, they have only recognized such claims where employees can trace their national origin to sub-national groups in foreign countries, such as Acadians, Creoles, and Serbians as part of the former Yugoslavia. However, courts have refused to allow employees to trace their national origin to sub-national groups within the United States.

This Comment concludes by arguing that Title VII’s national origin provision should be taken one step further to include regional discrimination within the United States. This interpretation would permit Title VII to protect against the employment discrimination that occurs among individuals sharing the same American origin, while keeping national origin within geographically circumscribed limits. This Comment invites further discussion regarding the policy implications of this approach.

Putting Plea Bargaining on the Record

Joel Mallord

More than a decade ago, Rolando Stockton rejected a plea bargain that came with a ten-year prison sentence, opting instead to take his chances at trial. The trial went badly. After being found guilty on several drug and firearm charges, Stockton received a forty-year prison sentence. From an objective point of view, Stockton should have taken the deal; rejecting it cost him thirty years of freedom. In postconviction proceedings, Stockton proffered a reason for his poor judgment: his lawyer failed to disclose to him the maximum sentence he faced at trial and the advantages of the ten-year deal. In spite of his admittedly hazy memory of the events, the lawyer disagreed, claiming he told Stockton that the plea deal was a “good offer.” Without clear evidence, the reviewing court sided with Stockton’s lawyer. On that finding, Stockton lost his claim, and he is still serving his initial sentence today.

Under the recent Supreme Court decisions in Lafler v. Cooper and Missouri v. Frye, defense counsel has a duty to inform and reasonably advise clients about plea offers from the prosecution, so that defendants do not forego favorable plea bargains due to the ineffective assistance of their counsel. Yet the story above demonstrates a fundamental problem with these new duties: the lack of a record of the plea bargaining process makes them unenforceable. Without such a record, the defendants, who bear the burden of proof in Sixth Amendment ineffective assistance of counsel claims, have no evidence to support claims of defective advice. Their hopes thus rest on the cooperation of the very lawyers they accuse of being ineffective. When combined with the other difficulties inherent in establish-ing an ineffective assistance of counsel claim, this problem renders the new right toothless.

In this Comment, I propose that the criminal defense bar adopt a practice of recording the plea bargaining process in order to better protect defendants’ Sixth Amendment rights. I begin in Part I with a brief background of Sixth Amendment right-to-counsel jurisprudence, the plea bargaining process, and the evolution of the Supreme Court’s views on these topics.