The Deregulation of Private Capital and the Decline of the Public Company

Elisabeth de Fontenay

Volume 68, Issue 3, 445-502

From its inception, the federal securities law regime created and enforced a major divide between public and private capital raising. Firms that chose to “go public” took on substantial disclosure burdens, but in exchange were given the exclusive right to raise capital from the general public. Over time, however, the disclosure quid pro quo has been subverted: Public companies are still asked to disclose, yet capital is flooding into private companies with regulators’ blessing.

This Article provides a critique of the new public-private divide centered on its information effects. While regulators may have hoped for both the private and public equity markets to thrive, they may instead be hastening the latter’s decline. Public companies benefit significantly less from mandatory disclosure than they did just three decades ago, because raising large amounts of capital no longer requires going and remaining public. Meanwhile, private companies are thriving in part by freeriding on the information contained in public company stock prices and disclosure. This pattern is unlikely to be sustainable. Public companies have little incentive to subsidize their private company competitors in the race for capitaland we are already witnessing a sharp decline in initial public offerings and stock exchange listings. With fewer and fewer public companies left to produce the information on which private companies depend, the outlook is uncertain for both sides of the securities-law divide.

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“Strangers in a Strange Land”: Chinese Companies in the American Tax System

Ji Li

Volume 68, Issue 3, 503-540

Foreign direct investment (“FDI”) from emerging economies generally exhibits two distinct characteristics: (1) most of the investors thrive in poor regulatory environments, and (2) the visible hand of the state exerts a powerful influence. Due to these two features, emerging market FDI poses novel questions to tax law scholars and U.S. policymakers. For instance, will the investors import noncompliance practices? Or will they adapt to the complex and stringent regulatory regime of the host country? To answer these questions, this Article presents the first empirical study of Chinese multinational companies operating in the U.S. tax system. Despite wide gaps between the two countries in terms of tax administration and compliance, Chinese investors in the United States generally appear to have adapted to U.S. tax law. In terms of tax audits and disputes with the Internal Revenue Service (“IRS”), this study finds preliminary evidence that distinguishes between the investments of state-owned companies and those of privately owned companies. Overall, the findings contribute to several important policy and theoretical debates and have significant, practical implications.

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Law in Hiding: Market Principles in the Global Legal Order

Odette Lienau

Volume 68, Issue 3, 541-608

Standing in the background of the global legal order are a range of what might be called “market principles” or “market givens”collective presentations or beliefs about how markets workwhich are treated as objective descriptions at a particular time and place. This Article argues that such market givens should be understood as a kind of “law in hiding,” shaping the policy space available to states and other actors and affecting global legal developments in important but unrecognized ways. Drawing on examples from global financial law, rules on capital mobility, and sovereign debt practices, I demonstrate how market principles can provide the real substantive content for conventionally recognized law, effectively counter official law, and act as powerful rules in the absence of clear legal standards. I further consider why “law” is a suitable categorization for these market principles, adopting a broad definition that derives from and pushes forward recent international legal scholarship. I contend that deliberately incorporating market principles into our understanding of the global legal order would be not only theoretically plausible but also productive, especially by expanding the field of legal work and activism and by raising important questions about lawmaking mechanisms, accountability, and norm coherence. I also suggest that market principles have thus far escaped attention from lawyers in part because of tendencies and assumptions in multiple variants of international legal scholarship itself.

In highlighting how market principles play a role in the global legal order, I do not intend to grant them the legitimacy or presumptive obedience sometimes associated with the label “law.” Indeed, my motivation draws in part from a concern with the capacity of these market principles to effectively undermine policy options that may lead to better outcomes. My goal, instead, is to place them as squarely as possible at the center of legal analysis and critiqueand therefore to level the playing field between these market principles and other types of principles and values we may care about.

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Migration Emergencies

Jaya Ramji-Nogales

Volume 68, Issue 3, 609-656

Migration emergencies are a commonplace feature in contemporary headlines. Pundits offer a variety of causes provoking these emergencies. Some highlight the deadly risks of these journeys for the migrants. Many more express alarm at the potential threats these mass influxes pose to their destination countries. But few question whether these migrant flows are, as commonly portrayed, unexpected and unpredictable. This Article asks whether these migration emergencies are surprising events or the logical and foreseeable outcomes of the structural failures of the global migration system. In particular, it interrogates the architecture of international migration law, arguing that the current framework is unsustainable in today’s globalized world.

This is a story about the legal construction of crisis. Several literatures offer compelling insights into the construction of migration crises, but fail to explore the crucial role of international migration law. Scholars of forced migration view the legal framework as an inadequate response to crises but not as a root cause. Others have highlighted the role that crises play in the development of international law, demonstrating how crises impact law, but failing to examine how law helps to construct those crises.

This Article begins to unpack the role of international migration law in constructing migration “crises.” International migration law, because it is codified in written instruments and nearly impossible to alter, entrenches sociocultural frames that might otherwise be substantially more flexible. International law has constructed a deeply path-dependent approach to international migration that not only obscures systemic inequality but also consumes alternate conceptions of morality. In response to this critique, this Article suggests a new approach to global migration law that aims to govern migrant flows more effectively. In short, it aims to establish international migration law as a separate subfield of international law rather than the afterthought that it currently represents.

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Making It Up: Lessons for Equal Protection Doctrine from the Use and Abuse of Hypothesized Purposes in the Marriage Equality Litigation

Steve Sanders

Volume 68, Issue 3, 657-710

To survive rational basis scrutiny under the Equal Protection Clause, a law must serve a governmental purpose which is at least legitimate. It is well established that legitimate purposes can sometimes be found through speculation and conjecturethat is, they may be hypothesizedin order to avoid the difficulties of identifying actual purpose or the specter of courts second-guessing legislative judgments. But hypothesized purposes can be abused, and such abuse was rampant in the states’ defenses of their bans on same-sex marriage, bans which were ultimately invalidated in Obergefell v. Hodges.

This Article draws on the federal marriage litigation as a lens for thinking critically about hypothesized purposes. It suggests several lessons about hypothesized purposes that should guide courts in the future. In particular, I discuss (1) the differences between hypothesized purposes, which are grounded in facts and concerns that were conceivably before a legislature, and post-hoc rationalizations, which I define as pretexts that have been manufactured to satisfy rational basis scrutiny but which could not plausibly have been a legislative purpose; (2) how courts should approach hypothesized purposes when there is evidence that a law was impelled by animus; and (3) why hypothesized purposes are inappropriate and should receive skeptical scrutiny when they are offered in support of measures enacted through direct democracy.

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The Modern Legal Status of Frozen Embryos

Alyssa Yoshida

Volume 68, Issue 3, 711-730

With the help of modern technology, people today have more flexibility than ever before in the realm of family planning and conceiving children. An increasing amount of
couples are opting to go through in vitro fertilization to create and then freeze embryos for use at a later date. However, problems arise when these people no longer want to have children together.

Our courts are still grappling with the issue of what happens to these embryos in the event of separation, and various theories of the legal status of an embryo have emerged in response, to try to shed light on the complex arguments for each side. This Note argues that the unique class occupied by the frozen embryothat of not quite person and not quite propertyshould be embraced. This Note further proposes a new statutory scheme that would provide courts with a straightforward framework to guide their analysis in separation or divorce proceedings.

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Patriarchy, Not Hierarchy: Rethinking the Effect of Cultural Attitudes in Acquaintance Rape Cases

Eric R. Carpenter

Volume 68, Issue 2, 225-258

Do certain people view acquaintance rape cases in ways that favor the man? The answer to that question is important. If certain people do, and those people form a disproportionately large percentage of the people in the institutions that process these cases, then those institutions may process these cases in ways that favor the man. In 2010, Dan Kahan published Culture, Cognition, and Consent, a study on how people evaluate a dorm room rape scenario. He found that those who endorsed a stratified, hierarchical social order were more likely to find that the man should not be found guilty of rape.

If Kahan is right, radical change may be necessary. The institutions responsible for handling sexual assault complaintslaw enforcement, the military, and university and college administrationsare stratified and hierarchical, and are likely over-populated by people who are attracted to hierarchical institutions and who hold hierarchical worldviews. These institutions may need to be overhauledor even replaced. However, the study has a serious methodological flaw: It uses the Hierarchy-Egalitarianism Scale to measure those hierarchical worldviews, and as this Article demonstrates, this scale has reliability and validity issues.

This Article then applies a different methodology to the underlying data and shows that patriarchy, not hierarchy, explains the differences in guilt perceptions. This more accurate understanding of Kahan’s data carries important policy implications. Rather than radical change, targeted training that addresses inaccurate rape beliefs may be enough to ensure accurate processing of these cases.

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How the Constitution Became Christian

Jared A. Goldstein

Volume 68, Issue 2, 259-308

Movements dedicated to making the United States a “Christian nation” have been a recurrent feature in American politics for more than 150 years. Over that time, however, the relationship between Christian nationalism and the Constitution has undergone a dramatic change. Nineteenth century Christian nationalists denounced the Constitution as a godless document unworthy of a Christian nation and fought for an amendment to express the nation’s Christian faith. In contrast, the contemporary Christian Right that coalesced in the 1970s lauds the Constitution as the highest expression of the nation’s Christian identity.

This Article asks how the Constitution becamefor many Americans, at leastChristian. The answer lies in America’s constitutional culture, which channels conflicts over national identity into constitutional disputes. The Constitution is conventionally portrayed as the embodiment of what it means to be American, but it is more accurate to describe the Constitution as the battleground over which disputes over national identity are fought.

This Article illustrates the dynamics that transform conflicts over national identity into constitutional conflicts by examining three movements in the longstanding debate over whether the United States should be understood to be a Christian nation: the nineteenth century Christian Amendment movement, mid-twentieth century Judeo-Christian nationalism, and the New Christian Right that began in the 1970s and 1980s. Although these movements differ in significant ways, they follow a similar pattern. In each case, members of the dominant religious group mobilized in response to perceived threats to their statusfrom Catholics, immigrants, communists, and secular humanists. In each episode, members of the mobilized movement believed Christian devotion to be part of America’s essence and therefore considered threats to Christian dominance as attacks on America itself. And in each case, the movement attempted to preserve the nation’s supposed Christian identity by making constitutional demands, either to amend the Constitution to proclaim the nation’s Christian devotion or to interpret the Constitution to be Christian.

Through this recurring patternin which a threat to group status is understood in nationalist terms and motivates a movement that makes constitutional demandsfights about what it means to be American become fights over the meaning of the Constitution. Rather than embodying what it means to be American, the Constitution provides a seemingly neutral and patriotic language for making claims of national inclusion and exclusion, for asserting that some people and some values are authentically American, while others are dangerously foreign and must be rejected.

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Smart Cities, Big Data, and the Resilience of Privacy

Janine S. Hiller and Jordan M. Blanke

Volume 68, Issue 2, 309-56

Smart Cities are designed to ubiquitously collect information about people, places, and activities and to use that data to provide more efficient services and to build resilience against disasters. Projects like the Rockefeller Foundation-funded “100 Resilient Cities” are exploring how big data can be used to design and strengthen resilience in cities around the world. Large technology companies are helping to design and secure components of the Internet of Everything, which is part of a smart city structure. Relationships between governments and citizens, as well as between individuals and businesses, will see substantial changes due to this rapidly expanding collection and use of potentially intimate information. In this dynamic environment, it is difficult to protect privacy under traditional principles that did not anticipate a sensor-connected, surveillance-laden, data-driven world of the smart city. Slow moving court cases and inflexible fair information privacy practices may be insufficient to limit and/or guide smart city implementation that respects individual privacy. Cities need a methodology that will enable a discussion of how law, regulation, and social norms can respond to the dynamic disruption that a smart city poses to the fundamental nature of privacy.

This Article proposes that resilience theory can be a useful lens for this analysis. Resilience theory has multidisciplinary roots in engineering, biology, ecology, and sociology, and is generally understood as a way to understand how systems react to extreme pressureswhether they decline and die, or whether they adapt and thrive. The theory is used to describe multiple aspects of systems and organisms, from the ability of a building to withstand an earthquake to the ability of an organism not only to survive, but to also evolve into a different and possible better state. This Article views privacy as a system and examines it through the resiliency lens, framing the question of how privacy can adapt and survive in a smart city.

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Trade Secret Precautions, Possession, and Notice

Deepa Varadarajan

Volume 68, Issue 2, 357-96

To obtain trade secret protection, a firm must take reasonable secrecy precautions (“RSP”) to guard the confidentiality of claimed information. The RSP requirement has long puzzled courts and scholars. In other areas of property and intellectual property law, such self-help is not a prerequisite for legal rights. Landowners, for example, do not have to fence their property as a condition of ownership. Requiring claimants to take secrecy precautions also seems to contradict trade secret law’s underlying rationales of promoting innovation and information sharing. Existing scholarship fails to provide a convincing justification for the requirement or explain how it advances the policy concerns animating trade secret law

This Article demonstrates that traditional property law’s “possession” doctrine can provide a useful lens for understanding the RSP requirement. In property law, affirmative acts of possession lead to ownership because they notify a relevant audience about claims to property. Drawing insights from possession doctrine, this Article argues that the primary purpose of the RSP requirement should be to notify a relevant audience (employees and other business partners) about the existence and boundaries of claimed trade secrets and thus reduce information costs for that audience. Requiring trade secret owners to provide clearer ex ante notice promotes follow-on innovation and employee mobility, concerns that are important to trade secret law. Accordingly, this Article suggests areas of reform in courts’ RSP analysis to enhance the requirement’s notice function.

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Correcting Computer Vision: The Case for Real Eyes After Lenz

M. Jake Feaver

Volume 68, Issue 2, 397-418

The internet brought plentiful opportunities for sharing content between individuals. However, along with those opportunities, the potential for abuse and intellectual property infringement increased steadily. When Congress passed the Digital Millennium Copyright Act it attempted to provide protection for the service providers that served as the foundation for the internet’s prosperity and for the content producers who grew its fruits. In accordance with this Act, service providers and copyright enforcers built algorithms to determine when content was infringing and when it was not.

The recent Ninth Circuit decision in Lenz v. Universal Music Corp. established that a copyright holder must “consider fair use” before they can request that content be taken down by a service provider. This Note discusses how an algorithm might “consider fair use” in accordance with Lenz, and argues that in the marginal cases where the likeness is too close to call, human review of potential infringements will nevertheless be necessary to comply with the Digital Millennium Copyright Act.

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Changing Tides for Captive Marine Mammals: What the Future Holds for Captive Care Requirements

Isabella Langone

Volume 68, Issue 2, 419-44

When the marine mammal entertainment industry emerged in the 1960s, companies like SeaWorld captured orcas and dolphins from the wild and put the animals on display to bring joy and entertainment to the masses. In 1972, Congress enacted the Marine Mammal Protection Act, which prohibited the capture of marine mammals from the wild. In response to this legislation, SeaWorld and other parks implemented breeding programs to maintain their mammal collection without having to capture wild animals. Conservationists and animal rights activists have protested this practice for decades, but only recently has the larger public engaged in widespread disapproval of marine mammal captivity. In recent years, massive public protest erupted over the conditions in which captive marine mammals, particularly orcas, live. The public rallied alongside conservationists and animal rights activists with unprecedented and unexpected fervor, calling for change in the marine mammal entertainment industry, or even its end altogether.

SeaWorld responded to public demand, announcing on March 17, 2016, that it would immediately stop its orca breeding program. Conservationists, animal rights activists, and the public celebrated this monumental step, but questions still remain as to what should be done to improve the lives of the remaining captive marine mammals. There is debate over whether SeaWorld should be compelled to release its captive animals into open-sea sanctuaries, or if it should be allowed to keep its animals in captivity for the remainder of their lives. While there are valid arguments on both sides of this debate, it seems that at least for the time being, marine mammal captivity is here to stay. This Note therefore examines the legal mechanisms that govern the captive care of marine mammals and how the law might be applied in novel ways to ensure more stringent captive care requirements for marine mammals.

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