Capital Accounts: Bank Capital, Crises, and the Determinants of an Optimal Regulatory Approach

John Crawford

Volume 66, Issue 5, 1161-86

Suppose a woman named Kate wants to start a bank. She has $5 of her own and knows a creditworthy entrepreneur (Will) who needs a $100 loan for a new project. She also knows lots of people who would happily deposit their savings with her. Should regulators permit Kate’s bank to borrow (from depositors) the extra $95 she needs to lend to Will? Or should it require her to borrow less and put up more of her own money before extending the loan? How much does it matter to financial stability?

Two superb accounts of the 2007–2008 financial crisis and subsequent reform efforts provide very different answers to these questions. Gary Gorton’s Misunderstanding Financial Crises is part of an influential line of papers and books that has placed him on former Federal Reserve Chairman Ben Bernanke’s recommended syllabus for those seeking a deeper understanding of the crisis. The Bankers’ New Clothes, by Anat Admati and Martin Hellwig (“A&H”), has been praised by luminaries across the political spectrum, and lauded by an economics Nobelist as worthy of comparison with John Maynard Keynes’s General Theory. Gorton and A&H agree that the financial system remains dangerously vulnerable five years after the worst of the crisis in the United States, and that reform efforts such as the Dodd-Frank Act and the Basel III Accord do little to address the fundamental problem. Their diagnoses and prescriptions, however, differ markedly. . .

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I Hear America Suing: Music Copyright Infringement in the Era of Electronic Sound

Charles Cronin

Volume 66, Issue 5, 1187-1256

Twentieth-century developments in audio recording, copying, and broadcast technologies thoroughly altered not only how popular music is distributed and consumed, but also how it is created. By the 1960s, sound recording technologies had become so refined, ubiquitous, and economically accessible that they—and no longer music notation—had become the primary means by which popular songs were created and documented. Audio technologies democratized authorship of popular music, but also led to the gradual lessening of original primary musical parameters (melody in particular) in many popular genres. Paradoxically, despite this general diminishment in original musical expression, the number of music infringement claims has grown inexorably, decade by decade, since the 1960s. The bases of these claims have also grown remarkably attenuated, often involving nothing more than a similar sound or a common word or two shared by two songs.

The proliferation of music infringement claims since the 1950s can be attributed to the lingering influence of Arnstein v. Porter, a case that established the framework for adjudicating copyright infringement cases still used today. Arnstein has fostered ongoing judicial diffidence on the essential question of substantial similarity of copyrightable expression between the works in dispute, as well as widespread reluctance by courts to dismiss claims, or grant defendants summary judgment. This reluctance has led to the development of highly inconsistent case law precedent. In turn, this has provoked skittishness in the music industry that has resulted in establishing precautionary measures, creating higher barriers to entry. It has also led to the music industry’s resorting to financial settlement, even for highly speculative infringement claims which, ultimately, engenders more of such claims.

This Article traces developments in sound technology, popular music, and music copyright infringement litigation in the twentieth and twenty-first centuries. It argues that if courts were more cognizant of the deep changes in the creation and musical content of popular songs since the Tin Pan Alley era of the early twentieth century, they might more confidently dispose of most music copyright infringement claims today through dismissal or summary judgment.

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Constitutional Constraints on Punitive Damages: Clarity, Consistency, and the Outlier Dilemma

Laura J. Hines and N. William Hines

Volume 66, Issue 5, 1257-1316

Almost twenty years ago, the Supreme Court in BMW v. Gore invoked the Due Process Clause for the first time to invalidate a punitive damages award as excessive. Since then, the Court has issued a handful of decisions that further refine Gore’s tripartite guidepost framework. In this Article, we draw on a ten-year span of reported state and federal punitive damages decisions in an attempt to evaluate how lower courts have understood and implemented this constitutionalization of punitive damages law. Ours is not a normative analysis about whether the Court should or should not have federalized punitive damages. Rather, we examined a sample of cases to assess three of the Court’s punitive damages due process objectives.

First, the guideposts were intended to provide clear and predictable ex ante standards regarding the potential monetary consequences of misconduct. Second, the uniform guidepost standards sought to prevent arbitrary or disparate treatment of punitive damages among the states. Third, the guideposts were designed to curb what the Court perceived as erratically high punitive damages awards. We evaluated and coded each punitive damages case in our collection to test the efficacy of the guidepost analysis in accomplishing each of these goals. Our 507 case sample suggests a high degree of uniformity nationwide in the process by which courts conduct the review of punitive damages awards. Less clear, however, is whether that heightened level of judicial review significantly reduced the inconsistency or unpredictability of punitive damages awards overall.

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Marriage as Black Citizenship?

R.A. Lenhardt

Volume 66, Issue 5, 1317-64

The narrative of black marriage as citizenship enhancing has been pervasive in American history. As we mark the fiftieth anniversary of the Moynihan Report and prepare to celebrate the 150th anniversary of Thirteenth Amendment, this Article argues that this narrative is one that we should resist. The complete story of marriage is one that involves racial subordination and caste. Even as the Supreme Court stands to extend marriage rights to LGBT couples, the Article maintains that we should embrace nonmarriage as a legitimate frame for black loving relationships—gay or straight. Nonmarriage might do just as much, if not more, to advance black civil rights.

Part I explores marriage’s role in racial subordination by looking at the experiences of African Americans, as well as Native Americans, Puerto Ricans, and Asian Americans. Drawing on institutional structure analyses, it then considers how legal marriage has “married” Blacks to second-class citizenship. Part II explores the current place of marriage in African America. It argues that, while the regulation of black loving relationships today differs dramatically from what we saw in earlier times, family law often has a punitive effect on such American families. Part III contemplates the benefits of adopting a focus on nonmarriage. It contends that meeting black families where they are holds the most potential for progress in addressing the structural barriers to success faced by those families. The Article ends with a “call to action” for legal scholars and others concerned about black families and citizenship. It maps a broad agenda for exploring in earnest the potential that supporting and valuing the existing networks, arrangements, and norms regarding gender and caretaking in African America has for promoting black citizenship and equality in the twenty-first century.

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Revoking Rights

Craig J. Konnoth

Volume 66, Issue 5, 1365-1442

In important areas of law, such as the vested rights doctrine, and in several important cases—including those involving the continued validity of same-sex marriages and the Affordable Care Act—courts have scrutinized the revocation of rights once granted more closely than the failure to provide the rights in the first place. This project claims that in so doing, courts seek to preserve important constitutional interests. On the one hand, based on our understanding of rights possession, rights revocation implicates autonomy interests of the rights holder to a greater degree than a failure to afford rights at the outset. On the other hand, the institution revoking rights is more likely to exhibit impermissible behavior when taking away rather than failing to provide the right.

This is the first of two articles, and tackles the first of the project’s claims. It examines the autonomy interests of the rights holder that are implicated in rights revocation. It relies on philosophical understandings of ownership, backed by empirical research, to argue that our identities and indeed, our ability to think of ourselves as separate beings apart from the collective, are partially based on what we possess at a given point in time. The rights we possess both allow us to do things that aid in our flourishing and allow us to conceive of ourselves as individuals. Important legal concepts, such as the vested rights doctrine, among others, rely on this understanding of rights.

However, the notion of rights, possession, and revocation are all constructed and subject to contestation. Courts and other institutional actors often face adversaries making (conflicting) rights claims. They must determine when a change in rights allocation is a rights revocation or a restoration of the status quo ante. In taking sides, courts and legislatures adopt rights revocation/restoration frames, claiming that the winners have rights that are being restored, and that losers never had rights to begin with, or that their rights existed temporarily subject to correction. In so doing, institutional actors also shore up their own legitimacy, often at the cost of each other. This dynamic provides an insight, not just into the work that rights do in constructing individuals, but also in developing institutional legitimacy. It shows how institutions themselves exploit rights claims in order to—consciously or not—further their own agendas.

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Consumption by Destination: The Practical Aspects of Adopting the Destination Principle

Gerald A. Byrnes

Volume 66, Issue 5, 1443-62

Corporate tax reform has been a “hot button” tax issue for numerous years now. The complex and inefficient double taxation model has proven to be particularly ill equipped to properly tax large multinational entities. One popular idea to solve these concerns is to switch to a consumption tax. However, there are still questions about how to model said tax, particularly in the international context: should a country tax be based on where products are destined for, or on where they originate? This Note focuses on the practical appeal of preferring the destination principle to the origin principle, should the United States adopt a corporate consumption tax. The practical benefits include aligning with international standards, facilitating corporate tax compliance in moving to the new system, preventing base erosion, and addressing complex tax issues such as the treatment of intellectual property across international lines.

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Keeping the News Domestic: Why a Toxic Environment for the American Press and Ready Access to Foreign Media Organizations Like WikiLeaks Compel the Rapid Adoption of a Federal Reporters’ Privilege

Ryan C. Stevens

Volume 66, Issue 5, 1463-84

In 2008, the U.S. Department of Justice subpoenaed James Risen, a Pulitzer Prize winning New York Times journalist, to testify against one of his confidential sources in a criminal proceeding against that source. After Risen fought the subpoena and it expired in 2009, the Justice Department renewed it in 2010. The saga that followed brought a mass of media attention to the debate over the idea of a testimonial privilege for news reporters. While debates over the reporters’ privilege have raged since the Supreme Court first denied the privilege in 1972, this Note examines the overlooked effect that WikiLeaks has on this decades old argument, and proposes a solution to the problem.

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Disabled but Unqualified: The Essential Functions Requirement as a Proxy for the Ideal Worker Norm

Michael Edward Olsen, Jr.

Volume 66, Issue 5, 1485-1524

Over the course of nearly two decades, courts have narrowed the employment protections of the Americans with Disabilities Act of 1990 by interpreting the term “disabled” so narrowly that virtually no person qualified for the Act’s protections. Moreover, if a person was sufficiently “disabled,” they were often so severely disabled that they could not work at all; thus, they were not “qualified individuals” who could perform the essential functions of the job.

In response, Congress passed the Americans with Disabilities Act Amendments Act of 2008 to give broad coverage to persons with disabilities. Courts have followed this mandate by interpreting the term “disabled” broadly; however, courts still find that persons are not “qualified” because they cannot perform the essential functions of their position. This Note shows that courts frequently give deference to employers in the “essential functions” inquiry. Moreover, courts import normative assumptions about how jobs should be performed into the essential functions inquiry, contrary to congressional intent. As a consequence, courts infrequently reach the reasonable accommodation process—where the court asks whether the employer can accommodate an employee’s limitations without imposing an undue hardship on the employer.

This Note suggests several remedies. First, Congress could clarify that courts are not required to defer to an employer’s job description and, relatedly, courts could give greater weight to the actual job duties performed by an employee. Finally, Congress could explicitly delegate substantive rulemaking authority to the EEOC, as it did with the term “disabled.”

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