The Demand for Fiduciary Services: Evidence from the Market in Private Donative Trusts
Volume 68, Issue 5, 931-1006
Recent revelations on the use of fiduciary services raise concerns regarding their use for tax and creditor avoidance. Yet given the secrecy shrouding much of the fiduciary industry, we do not know which fiduciary services are used for such purposes, and to what extent. Shining a light on a particularly obscure part of the industry, this Article presents and analyzes the results of the first-ever global survey of professional service providers to private donative trusts, having obtained 409 usable responses from professionals in 82 jurisdictions, amplified by twenty-five interviews conducted with professional trust service providers in five jurisdictions. I report new data on four controversial features of current trust practice: (1) perpetual and extreme long-term trusts; (2) trust terms exonerating trustees from liability to beneficiaries; (3) tools rendering beneficiaries’ entitlements inaccessible to their creditors; and (4) the control of trusts by their creators.
I find that trusts drafted to subsist for more than a century are fairly common, especially offshore, but many such trusts are not in fact likely to survive that long. Trustee exculpatory terms are now standard in donative trusts serviced by professionals, with most settlors neither demanding nor receiving any quid pro quo for their inclusion. Anti-creditor techniques protecting beneficiaries’ entitlements are even more ubiquitous than trustee exculpatory terms, particularly in trusts serviced by U.S.-resident providers. Many protected beneficiaries are not less able than the average person to take care of their financial affairs. Finally, express reservation of powers by trust settlors is a majority phenomenon in the United States, but a minority one elsewhere. The actual control of trusts by their settlors is likewise far more common in the United States than elsewhere. I conclude the Article with recommendations for law reform that makes trusts likelier to benefit their beneficiaries and less likely to avoid duties owed to creditors and the state.
Minority Mens Rea: Racial Bias and Criminal Mental States
Francis X. Shen
Volume 68, Issue 5, 1007-1084
The American criminal justice system relies upon jurors to regularly decode the mental states of criminal defendants. These determinations are often of black and Hispanic defendants, making “minority mens rea” a centerpiece of the justice process. This Article presents an empirical investigation of how jury eligible subjects decode minority mens rea. In a study involving over 1200 subjects, the Article explores whether subjects assign fictional protagonists named Jamal and Lakisha more culpable mental states than they assign to protagonists named John and Emily. The results show that, at least on this particular experimental task, racial bias does not affect the assessment of minority mens rea. An implication is that some decisionmaking contexts and tasks may dampen the effects of racial biases. The Article thus argues that we should continue to examine distinct legal decisionmaking tasks in order to better understand how biases do (and do not) affect outcomes in the criminal justice system.
Regulation Through Deregulation: Sharing Economy Companies Gaining Legitimacy by Circumventing Traditional Frameworks
Volume 68, Issue 5, 1085-1110
The “sharing economy” is a term describing organized economic activity that may supplant the traditional corporate-centered model and encourages peer-to-peer transactions. It is a system of sharing underused assets or services, for free or for a fee, directly from individuals, bypassing traditional “middle men.” The sharing economy provides much of its services through on-demand platform, such as mobile apps, and matches customer needs with providers to immediately deliver these goods and services.
Does the “sharing economy” share its risk with its consumers? Should the sharing economy be regulated? What effect does the lack of regulation have on its consumers, and would implementation of more regulations change those effects?
This Note uses home-sharing and ridesharing companies in San Francisco as case studies to explore these questions. By comparing the hotel and the taxi industries’ regulations with the emerging regulatory frameworks surrounding Airbnb and Uber, this Note argues that these companies have been left to “self-regulate.” Self-regulation has not proven to be effective, and as a result, the health and safety of consumers has been put in jeopardy. This Note argues that the regulatory regimes in place prior to the rise of the “sharing economy” should be revisited and appropriately restructured for these newly emerged business models.
International Data Transfers: The Effect of Divergent Cultural Views in Privacy Causes Déjà Vu
Volume 68, Issue 5, 1111-1134
Whether operating globally or simply integrating services on the Internet, many business functions inevitably subject companies to a web of complicated international regulatory and legal requirements. For example, collecting customer information worldwide, working with suppliers abroad, or operating a foreign subsidiary each trigger an obligation to protect the personal data of the individuals involved with those transactions adequately, and in accordance with various jurisdictional specific. Because thousands of American companies are affected by Europe’s strict requirements, the Department of Commerce, along with the European Commission, implemented the International Safe Harbor agreement (“Safe Harbor”) to assist companies in complying with European data protection laws.
An interesting turn of events ignited significant discourse about whether the Safe Harbor provided satisfactory protection for European data transferred to the United States. One European national’s challenge of the Safe Harbor provision led the European Court of Justice to review its adequacy, ultimately leading to the data transfer mechanism’s invalidation. Soon thereafter, a new framework, the U.S.-E.U. Privacy Shield (“Privacy Shield”) replaced the Safe Harbor. However, this new replacement mechanism has drawn equally harsh criticism.
This Note seeks to understand the disapproval of the two regulatory frameworks governing overseas data transfers, and begins by undertaking a brief analysis of the social forces shaping the vastly different regulatory approaches to privacy protection that exist in the United States and the European Union. The Author suggest that such disapproval stems from different cultural notions in the United States and Europe about privacy that are deeply rooted in those nations’ respective histories. The result? Déjà vu for the European Court of Justice as they prepare for another challenge to the validity of the existing international data transfer framework less than one year after its adoption and the date it took effect.
The Right to Dignity in the United States
Volume 68, Issue 5, 1135-1168
Under the law, “dignity” is a principle that is often invoked, but ill-defined. The most recent and prominent example of this was the U.S. Supreme Court’s decision in Obergefell v. Hodges. There, the Court created a right to “dignity,” but failed to articulate what a right to dignity meant, or how far it reached.
This Note attempts to provide a definition to the right created by the Supreme Court. To that end, this Note traces federal jurisprudence in order to determine what types of rights are considered to make up one’s “dignity.” This Note then examines the states’ use of “dignity” within their respective constitutions to determine whether further insight into dignity’s meaning can be found there.
“Let’s Play”: YouTube and Twitch’s Video Game Footage and a New Approach to Fair Use
Volume 68, Issue 5, 1169-1192
Some of the most watched user-created videos on the Internet are recordings of individuals playing video games. These are commonly referred to as “Let’s Play” videos. The revenue that these videos can generate on YouTube and Twitch TV has created a multi-billion dollar industry. Unfortunately, this burgeoning industry utilizes copyright protected works. Some video game companies assert that “Let’s Play” videos infringe upon their copyright protection. The “Let’s Play” community claims that their videos fall within the fair use defense to copyright infringement claims.
This Note analyzes how a court would apply the fair use defense to “Let’s Play” videos. My analysis finds that precedential case law is unfavorable to “Let’s Play” videos, and that a court would most likely find that none of the four factors involved in the fair use defense analysis support protecting “Let’s Play” videos. This Note goes on to suggest that a compulsory license would be the best solution to balance the interests between the “Let’s Play” community and video game companies in this context.
California Constitutional Law: Popular Sovereignty
David A. Carrillo
Volume 68, Issue 4, 731-776
In 1911, the California Constitution was amended to divide the state’s legislative power by reserving to the electorate the powers of initiative, referendum, and recall. Most of the thinking to date on popular sovereignty in California, and about the initiative power particularly, has focused on either a specific application of direct democracy, or on its broad practical effects on the state. No authority has attempted to define the fundamental nature of popular sovereignty in California, nor to craft a complete doctrinal solution for resolving challenges to direct democracy acts. Those tasks are the purpose of this Article.
The Article considers two questions: First, how to classify the electorate’s powers in the California state government, and second, how to balance those powers against those of the other branches of the state government when they come into conflict. Answering these questions is important because the courts regularly face the difficult prospect of striking down an electorate act, which is necessarily supported by a majority of the voters. Doing so without the best possible rationale risks delegitimizing a decision against the electorate, and weakens the judiciary’s greatest power: its perceived impartiality. Yet no answer to either question can be found in the cases or commentary.
To answer those questions, this Article defines the powers of the people and the electorate, proposes that the electorate be classified as a legislative branch when using its legislative powers, and that the existing separation of powers analysis be adapted to include the electorate. The courts have developed an analysis that applies to one recurring problem in this area: categorizing electorate acts as revisions or amendments to the California Constitution. But that is not the only type of problem that the electorate can create with its legislative power; indeed, the separation of powers problem created by interbranch conflict is both distinct and more serious. Lacking a means to account for the electorate’s power, courts adjudicating structural questions or conflicts between the electorate and the other branches of government have struggled to resolve those cases with the only available tool: the revision–amendment analysis. This Article proposes a solution to that problem.
Big Data and the Americans with Disabilities Act
Volume 68, Issue 4, 777-794
While big data offers society many potential benefits, it also comes with serious risks. This Article focuses on the concern that big data will lead to increased employment discrimination. It develops the novel argument that the Americans with Disabilities Act (“ADA”) should be amended in response to the proliferation of big data in order to protect individuals who might be categorized as likely to develop physical or mental impairments in the future.
Employers can obtain medical data about employees not only through the traditional means of medical examinations and inquiries, but also through the nontraditional mechanisms of social media, wellness programs, and data brokers. Information about workers’ habits, behaviors, or attributes that is derived from big data can be used to create profiles of undesirable employees. It can also be used to exclude healthy and qualified individuals whom employers regard as vulnerable to future medical problems. The ADA, which now protects only individuals with current or past disabilities and those who are perceived as having existing impairments, can no longer ignore the discrimination threats posed by predictive health data. This Article analyzes these risks and proposes a detailed statutory response to them.
The Life and Legacy of Professor Calvin R. Massey: A Select Annotated Bibliography
Volume 68, Issue 4, 795-816
Professor Calvin R. Massey served on the faculty of the University of California, Hastings College of the Law from 1987 until 2012. From 2012 until his death in 2015, he served as the inaugural Daniel Webster Distinguished Professor of Law on the faculty of the University of New Hampshire School of Law. A noted constitutional law and property scholar, Professor Massey wrote two textbooks, published dozens of articles, and gave countless presentations over the course of his three decades in legal academia. While his scholarly interests were many and varied, he might be best known for his writings on the Ninth Amendment and unenumerated rights, a subject about which he wrote four law review articles and a monograph.
What follows is an annotated bibliography that attempts to collect and describe Professor Massey’s body of work. This bibliography begins with a short biography. Next, Professor Massey’s works are listed and annotated according to the category in which they fall: books; articles, essays, and book reviews; or audio and video recordings. Finally this Article concludes with a brief reflection on the significance of the recorded knowledge Professor Massey left behind.
This bibliography is select because juvenilia, supplements, study aids, superseded works, and unrecorded public appearances have been excluded. While the Author attempted to take a descriptive approach to annotating the works found in this Article, there are instances in which the Author’s enthusiasm may have driven him into the realm of evaluation.
Grasping Fatherhood in Abortion and Adoption
Malinda L. Seymore
Volume 68, Issue 4, 817-868
Biology makes a mother, but it does not make a father. While a mother is a legal parent by reason of her biological relationship with her child, a father is not a legal parent unless he takes affirmative steps to grasp fatherhood. Being married to the mother at the time of conception or at the time of birth is one of those affirmative steps. But if he is not married to the mother, he must do far more before he will be legally recognized as a father. Biology is often presented as a sufficient reason for this dichotomyit is easy to identify the mother of each child. But aside from the biological, there are historical, social, and political reasons for recognizing mothers as legal parents while disregarding legal parenthood for nonmarital fathers.
This Article seeks to unpack the distinctions drawn between biological mothers and biological fathers in decisions about abortion and adoption placement. Both decisions are given to the sole discretion of the mother under current law, while such unilateral decisionmaking seems to make sense only in the context of abortion. Once a child is born, and a decision is being made about whether to parent the child or to place the child for adoption, there is less justification for excluding the biological father. This Article explores notions of fatherhood and how fatherhood has changed in society to show how the legal standards have lagged behind those societal changes. The Article concludes with a proposal on how courts should address birth fathers’ rights in adoption to provide greater protection for those rights.
Daddy or Donor? Uncertainty in California Law in the Wake of Jason P. v. Danielle S.
Amy Leah Holtz
Volume 68, Issue 4, 869-908
The era of technology has provided a proliferation of new scientific and technological methods designed to assist individuals and couples to successfully conceive children when they otherwise would not be able to: collectively known as “assisted reproduction technology” (“ART”). ART undoubtedly provides significant benefits, but at the same time opens the door to a new realm of legal disputes. Particularly, various forms of ART involve a third-partysuch as a sperm donor or a surrogatewhich raises the question of who will be treated as a legal parent of the child so conceived. The use of third-parties in ART has confounded traditional notions of parent-child relationships by involving individuals who have a biological relationship with the child, but may or may not intend to act as a legal parent. This Note focuses on parentage disputes between unmarried individuals who conceive children through the use of third-party assisted ART.
Specifically, this Note provides a critique of a 2014 case in which a California court established paternity rights for a sperm donor who undisputedly did not intend to father at the time of conception, but attempted to assert parental rights over the vehement objections of the child’s mother after the child was born. This Note argues that the court’s decision was legally incorrect and left California law in a state of confusion resulting in public policy consequences. This Note proposes that California resolve this confusion by adopting an intent-based approach to parentage decisions in the ART context. Such an approach would provide certainty in application of the law that is essential in making informed decisions about whether to engage in third-party assisted ART.
The Reality of International Commercial Arbitration in California
Volume 68, Issue 4, 909-930
California is one of the largest economies in the world. It is home to many of the most successful companies in all sectors, especially health and technology. In recent years arbitration agreements, which have already been around for almost 100 years, have become boilerplate in most agreements with large California-headquartered companies. The United States Supreme Court continues to issue decisions in support of arbitration, most recently in DIRECTV, Inc. v. Imburgia. The courts in California, however, have counterintuitively stayed on the side of consumers by repeatedly denying enforcement of arbitration clauses, which forces their companies to go to more friendly jurisdictions, such as New York.
This Note looks at the history of the Federal Arbitration Act and major U.S. Supreme Court opinions in support of arbitration. That federal support will then be compared to California courts’ hesitance to support arbitration and the resulting disagreements between the Supreme Court and California courts. New York law is used to illustrate what an “arbitration-friendly” jurisdiction looks like and what changes California would need to make in order to make it easier for companies to locate their arbitration proceedings in California.