The Demand for Fiduciary Services: Evidence from the Market in Private Donative Trusts

Adam Hofri-Winogradow

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.

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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.

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Regulation Through Deregulation: Sharing Economy Companies Gaining Legitimacy by Circumventing Traditional Frameworks

Diana Cao

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.

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International Data Transfers: The Effect of Divergent Cultural Views in Privacy Causes Déjà Vu

Alyssa Coley

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.

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The Right to Dignity in the United States

Michelle Freeman

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.

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“Let’s Play”: YouTube and Twitch’s Video Game Footage and a New Approach to Fair Use

Conrad Postel

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.

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