Bright-line Rule Research Articles

Safe Harbors from Fair Cross Section Challenges? The Practical Limitations of Measuring Representation in the Jury Pool

The US Constitution guarantees criminal defendants the right to an impartial jury selected from a jury pool that reflects the demographic composition of the geographic community served by the court. Yet there is little consensus in case law from state and federal courts about the most appropriate method of measuring demographic representation or the degree of underrepresentation that would violate the Fair Cross Section requirement. Although the US Supreme Court recently addressed these issues for the first time since Duren v. Missouri, its opinion in Berghuis v. Smith did little to settle the questions. In the present paper, the authors use demographic information from the US Census Bureau and information about jury operations in state courts from the National Center for State Courts to estimate the potential impact of competing proposals about how to measure demographic representation at different threshold levels of constitutional tolerance. The authors find that a bright-line rule using either of the two most common measures of representation (absolute disparity and comparative disparity) given the demographic composition of counties in the US and the size of the jury pool in most courts would create “safe harbors” in which the courts in a majority of jurisdictions across the country would become effectively immune from fair cross section challenges.

Some regulatory lessons to be drawn from the financial crisis

The article briefly outlines how the two major structural causes of the financial crisis have been a massive underestimation of the negative externalities potentially arising from malfunctioning of financial markets, and the policy decision to assign the production of an eminently public good, financial stability, to private parties. Both ideas have been a tenet of the so-called Greenspan doctrine. The crisis also shows that all regulators tend to be captured in the end, and thus any new legislation should contain bright-line rules, that might look inefficient when assessed with reference to the market they regulate, but are socially efficient, because it would be politically costly to alter them. Criminal sanctions, which after all are a social form of regulation, should also be strengthened.

Government Regulation, Enforcement, and Economic Consequences in a Transition Economy: Empirical Evidence from Chinese Listed Companies Implementing the Split Share Structure Reform

AbstractIn a changing transition economy, Chinese government regulations that adopt the relatively simple bright line rule formula are enforceable in practice. Taking the early reform-oriented policies of the China Securities Regulatory Commission (CSRC) as an example, we find that the CSRC did not consider local enthusiasm for reform when allocating IPO resources because of the high enforcement costs involved. We also find that CSRC listed company regulations were enforced due to the lower costs involved in verifying regulatory violations, and that listed companies that completed the reform process were given priority in public refinancing. We present empirical evidence supporting the theoretical basis for the hypotheses outlined above. We also conclude that companies that completed the reform process in 2005 were of significantly higher quality and that the SEO regulation did not affect stock market efficiency. These findings enhance our understanding of the efficiency of government regulation in a transition economy.

Justice Stevens, Habeas Jurisdiction, and the War on Terror

The Bush Administration chose Guantanamo as a detention site in the belief that the military base was immune from federal habeas jurisdiction, leading to a protracted dispute between the Executive Branch, the Supreme Court, and Congress. Justice Stevens played an important role in this struggle over federal jurisdiction, writing two critical majority opinions and an important dissent about habeas jurisdiction. His two majority opinions were countered by fervent dissents by Justice Scalia. Examining these clashes is well worthwhile because of the importance of the legal issues, but also because of the light they may shed on the different analytic approaches of these two influential Justices. This paper gives particular attention to a seemingly arcane and technical battle over the retroactivity of jurisdiction-stripping statutes. Not unusually, where Justice Scalia saw a bright-line rule, which he accused the Court of wantonly trammeling, Justice Stevens instead saw a more pragmatic standard. A close examination of precedent supports Justice Stevens's view and rebuts Justice Scalia's accusation of lawlessness. Rather, it was Justice Stevens's majority opinion that was the more faithful to the rule of law.

Fragile Merchandise: A Comparative Analysis of the Privacy Rights for Public Figures

Over a century after Warren and Brandeis first presented the right to U.S. jurists for their consideration, privacy has become a central player in U.S. law. But nations around the world, in particular the common and civil law nations of Europe that share similar legal cultures with the United States, are grappling with how best to strike a balance between the competing rights of privacy and freedom of expression - both of which are critical to the functioning of democratic society. Existing literature has not fully drawn from this reservoir of international experience to inform the debate about U.S. privacy rights. This Article addresses this omission by using comparative case studies from the United States, the United Kingdom, France, and Germany to analyze areas of convergence and divergence in privacy rights. The focus of each case study will be the right of privacy afforded to figures, particularly those at the cusp of the classic definition, i.e., involuntary or temporary figures. Though some semblance of a bright-line rule has evolved for voluntary figures, involuntary figures in the United States are accorded spotty protection varying by jurisdiction. Lacking guiding Supreme Court precedent, this has led to divergent practice especially regarding the definition of public interest, which is fundamental to defining the limits of freedom of expression. Thus, this Article draws from the comparative analysis to build a proposal for a clarifying definition of the interest that helps delineate privacy rights, as well as arguing for the adoption of a graduated structure of privacy protections for figures along the lines of the German and European Court of Human Rights models.

Judicial Responses to Bright Line Rules in Social Security: In Search of Principle

This article considers judicial responses to the use of ‘bright line’ rules in social security law. It analyses, within the framework of judicial deference, the receptiveness of the judiciary to an argument by the executive that a rule is justified as being administratively convenient to operate. The article questions the proposition that the judiciary is at its most deferential when complex issues of socio‐economic policy or resource allocation are raised in the context of social security law. A contrast is drawn between cases involving an issue of statutory interpretation and those applying a proportionality test. The article tests the presumption that a difference in approach should be discernable in these two situations. It concludes by criticising the courts for failing to articulate clearly the values at stake and by arguing for the need for greater transparency and a broader public debate concerning the use of bright line rules.

Suggestions for the DOL, the Treasury, ERISA Plan Sponsors, Plan Administrators, and Representatives of Plan Participants or Potential Beneficiaries after Kennedy v. Plan Administrator of DuPont Savings and Investment Plan

In Kennedy v. Savings and Investment Plan DuPont Plan), 2009 U.S. LEXIS 869 (January 26, 2009) the Supreme Court appeared to proclaim a rule that plan documents determine ERISA plan distributions. However, the Court blurred the bright-line rules applicable to (1) benefit entitlements, (2) the alienation of pension benefits, (3) plan benefit distributions, and (4) qualified domestic relations orders. The basis for much of this blurring would vanish if the U. S. Department of Labor (the DOL), and the U. S. Treasury (the Treasury) affirmed their pre-Kennedy approach to many of these issues. Employee benefit practices may be improved if the DOL, the Treasury, plan sponsors, plan administrators, and representatives of plan participants and potential plan beneficiaries follow the suggestions set forth.

Economic Reasoning and Judicial Review

This article considers the use of the economics in the law in the context of the US Supreme Court, of which the author is one of the Justices. It focuses on three cases where he has dissented, the first considering whether the Environmental Protection Agency may consider economic costs, the second whether a bright line rule or a rule of reason should apply to resale price maintenance and the third on whether copyright protection should be extended by a further 20 years.

Institutes of Higher Education, Safety Swords, and Privacy Shields: Reconciling FERPA and the Common Law

In light of the Virginia Tech shootings, this Note argues that both FERPA and the common law contain internal tensions regarding safety and privacy that neither Congress nor the courts have adequately reconciled, and that important discrepancies regarding information sharing exist between IHEs' practices, the common law's demands, and FERPA's limitations. Part I provides background on FERPA and argues that FERPA's emergency exception is too narrow and confusing, so that IHEs default to the nondisclosure option rather than disclosing information to third parties, such as parents, when students threaten to harm themselves or others. At the same time, FERPA's tax dependent exception operates as an overly broad bright-line rule that, coupled with FERPA's lax enforcement mechanism, fails to adequately protect the privacy of students' education records. Thus, FERPA's emergency exception fails to ensure safety, while the tax dependent exception eviscerates the statute's privacy protection. Part II points out that, at the common law, courts have traditionally relied upon three competing strands of tort doctrines, each of which emphasizes either safety or privacy to the exclusion of the other. Thus, while the strand of premises liability uses safety as a sword and emphasizes foreseeability, the no strand of custodial relations and in loco parentis uses privacy as a liability shield. In the past, as the common law shifted from using safety as a sword to using privacy as a shield, FERPA responded. For example, as societal attitudes and the common law changed regarding alcohol use, Congress created a tailored exception allowing IHEs to notify parents when students violate laws or policies regarding the possession or use of controlled substances. Currently, another such shift is occurring, and courts are beginning to develop a concept of duty-based-on-the-facts as part of the special relationship between IHEs and students. As IHEs adopt public health models to address mental health issues on campuses, courts are using the safety sword to impose a duty on IHEs to use reasonable care to prevent foreseeable acts of harm to and by students, including suicide. However, FERPA has yet to respond to these increasing demands that the common law places on IHEs to share and disclose information about students' mental health. Part III proposes ways to resolve the tensions within the common law and FERPA regarding safety and privacy, as well as ways to align the duties the common law imposes on IHEs with the limits on disclosure that FERPA requires of IHEs. In reference to the common law, this Note argues that courts should create a coherent foreseeability framework specific to the mental health and IHE context, acknowledging the limits of foreseeability-especially for college and university personnel who are not mental health professionals-while balancing safety and privacy concerns. Part III also argues that Congress should amend FERPA to appropriately balance safety and privacy, specifically by broadening and clarifying FERPA's emergency exception while eliminating the tax dependent exception. Meanwhile, as these tensions within and between the common law and FERPA are resolved, the U.S. Department of Education should make several changes regarding the guidance it provides. This Note does not predict how future litigation related to the Virginia Tech shootings might proceed, attempt to assess fault, or argue that such tragic events are preventable. Rather, it highlights doctrinal and statutory developments that might impact where courts draw the line between safety and privacy within the context of questions related to the Virginia Tech shootings. In exploring these questions, this Note suggests how safety and privacy, as well as the common law and FERPA, might be reconciled, thereby charting a clearer course going forward. Note: This article first appeared in substantially similar form in 35 J.C. & U.L. 145 (2008).

Reforming the Taxation and Regulation of Mutual Funds: A Comparative Legal and Economic Analysis

Most Americans invest through mutual funds. An analysis of laws governing mutual funds shows that U.S. mutual funds are taxed less favorably and regulated more extensively than direct investments or other collective investments, including alternatives available only to the wealthy. The structure of U.S. regulation—of 70-year old prescriptive bright-line rules subject to SEC exemptions—makes success of U.S. mutual funds dependent on the resources, responsiveness, and flexibility of the SEC. The legal framework for mutual funds in the E.U. is generally as or more restrictive and inflexible than U.S. law, but competitive pressures force European supervisors to be more flexible in adopting and implementing regulations, and E.U. regulators have greater resources and are more responsive than the SEC. The paper discusses mutual fund legal reforms, including proposals to eliminate unjustified disparities in the treatment of mutual funds and their substitutes and to improve regulatory flexibility and resources.

Appropriability, First Sale & Exhaustion

The paper offers a new perspective on the first sale/patent exhaustion doctrine and, in doing so, challenges current critiques of the doctrine. Most fundamentally, the paper challenges the first sale doctrine's perception as a quasi-antitrust rule. Instead, the paper traces the development of the first sale doctrine as a bright-line rule demarcating the scope of IP rights and reflecting core IP rationales - most notably, the rationale of appropriability as the basis of property rights. The paper follows this historic account with an analysis of the potential doctrinal implications of the demise of the doctrine, and ends with an economic and competitive analysis of typical IP-related post-sale restrictions. Ultimately, the paper concludes that the doctrine, when properly construed, is both justified and well founded in property rationales.

Possession is Nine Tenths of the Law: But Who Really Owns a Church's Property in the Wake of a Religious Split within a Hierarchical Church?

Courts across the country face a perplexing legal issue regarding the ownership of church property. In the wake of the ordination of an openly gay bishop in 2003, local congregations have broken away from the Protestant Episcopal Church in the United States of America, leading to contentious property disputes over both the real and personal property of the churches. The problem that arises in adjudicating this legal issue is the sparse continuity in court decisions addressing property ownership in the wake of a religious divorce. With limited guidelines articulated by the Supreme Court, the states are free to craft their own arsenal for handling church property disputes. Virginia provides a perfect starting point for crafting a bright-line rule that all states should eventually follow, considering the existence of a post- Civil War statute meant to handle such religious property disputes.Beginning in December 2006, fifteen traditionalist Virginia Episcopal parishes voted to break away from the Episcopal Diocese of Virginia and the Episcopal Church of the United States. The decision to disaffiliate with the Diocese and Episcopal Church stemmed from a disagreement over the Episcopal Church's position on homosexuality, representing what the Diocese considered a deeper affront to the teachings of the Christian faith. The parishes voted to affiliate themselves with the Convocation of Anglicans in North America. As a result of the separation, the local parishes and the Episcopal Church, along with the Diocese, have both claimed ownership of the real and personal property presently occupied and held by the parishes' trustees.In order to settle the present dispute among the eleven Virginia Episcopal parishes, as well as any future disputes among congregations and the hierarchical church to which they belonged, this Note proposes that courts within the Commonwealth of Virginia should adopt a bright-line rule for interpreting Virginia Code section 57-9. Specifically, as used in section 57-9 should mean a factional separation within the hierarchical church between the national church and an aggregate of congregations, determined on a macro level. Such an approach will be beneficial for the judicial system because it will enable courts to resolve church property disputes expeditiously by addressing the sole question of whether a division existed within the church.

Torture v. the Basic Principles of the US Military

It has already been noted that the recent legal justifications for torture provided by Bush Administration officials contravene human rights law, international criminal law and international humanitarian law as expressed in treaties and customary rules. However, the author provides a legal and policy analysis informed by military law to demonstrate that the use of torture or ill-treatment of detainees also contravenes the stated policy of the US military and is inconsistent with the basic principles of lawful warfare. More importantly, torture and the ill-treatment of prisoners are both ineffective as an interrogation tool and also hamper military effectiveness by destroying discipline. These reasons, in addition to the obvious moral considerations, demonstrate why modern armies have consistently adhered to customary and treaty rules prohibiting torture and the ill-treatment of prisoners. The author concludes that the basic principles of warfare demand that this prohibition constitutes a bright-line rule that applies to all prisoners regardless of legal status.

Navigating the Safe Harbors: Two Bright Line Rules to Assist Courts in Applying the Stockbroker Defense and the Good Faith Defense

In the spring of 1996, Michael Berger formed an offshore investment company known as Manhattan Investment Fund Ltd. (“the Fund”). Berger employed a risky strategy of short-selling – an investment tactic that essentially bet on particular stocks dropping in value over a certain period of time. His strategy proved to be a disastrous miscalculation that eventually brought the Fund to financial ruin, leading to losses of nearly $300 million over the next four years and a chain of cover-ups and misdeeds that would leave Berger pleasing guilty to several criminal counts of securities fraud in the summer of 2000. Two of the chief questions left for courts in the wake of a collapse like Manhattan Investment Fund is how to equitably handle the rights of all the players involved, and perhaps more importantly, how to best divvy the remaining assets in according with those rights. As more and more hedge funds and other alternative investment companies are forced to declare insolvency, courts are increasingly being asked to answer this problematic question. The chief focus for the affected parties becomes not just how courts will interpret their rights but further, whether they can reliably depend on those rights to protect them during the bankruptcy process. This Note will focus on the rights and obligations of only one of the many parties implicated when a hedge fund dissolves – the prime broker. It explains the effects of safe harbors during the bankruptcy process for prime brokers and how these special protections operate ultimately to further Congress’s goals of providing stability, consistence, and clarity in the marketplace. Ultimately, this Note recommends two bright line rules courts should use when determining whether to grant parties a safe harbor under the stockbroker defense and the good faith defense, arguing that the application of these wills will provide courts with a pragmatic approach that will deliver consistent and reliable results.

Reforming the Taxation and Regulation of Mutual Funds: A Comparative Legal and Economic Analysis

Most Americans invest through mutual funds. An analysis of laws governing mutual funds shows that U.S. mutual funds are taxed less favorably and regulated more extensively than direct investments or other collective investments, including alternatives available only to the wealthy. The structure of U.S. regulation — of 70-year-old proscriptive bright-line rules subject to SEC exemptions — makes success of U.S. mutual funds dependent on the resources, responsiveness, and flexibility of the SEC. The legal framework for mutual funds in the E.U. is generally as or more restrictive and inflexible than U.S. law, but competitive pressures force European supervisors to be more flexible in adopting and implementing regulations, and E.U. regulators have greater resources and are more responsive than the SEC. The paper discusses mutual fund legal reforms, including proposals to eliminate unjustified disparities in the treatment of mutual funds and their substitutes and to improve regulatory flexibility and resources.

Retiring the 'Deadliest Enemies' Model of Tribal-State Relations

State governments have long been described as the deadliest enemies of Indian people and Indian tribes, even with now-Chief Justice Roberts famously reversing the description in a 1997 Supreme Court brief to describe Indian tribes as the perpetrator - the dead[ly] enemies of states. The Constitutional common law rule resulting from this description prevents states from engaging with Indian tribes absent Congressional consent. But this view of tribal-state relations dates back to the first 100 years of American Constitutional jurisprudence and Indian affairs, when states and Indian tribes engaged in oft-horrific and genocidal violence. The deadliest enemies model of tribal-state relations has long passed and transformed into political and legal disputes. Outside of litigation, these disputes often are resolved via intergovernmental agreement. However, the bright-line rule resulting from the deadliest enemies model operates as a barrier to the development of peaceable tribal-state relationships. This short Essay argues for the retirement of the deadliest enemies model.

Instead of a Doctrine: Penn Central as the Supreme Court's Retreat from the Rule of Law

When the Supreme Court handed down its decision in Penn Central Transportation Co. v. City of New York, it had not decided a regulatory takings case in over half a century. Penn Central's tortured and opaque analysis did little to move takings jurisprudence beyond Justice Holmes' cryptic 1922 maxim, if regulation goes too far it will be recognized as a taking. The Court did little to elaborate on the meaning or weight of Penn Central's vague criteria - the nature of the government action, the economic impact of the regulation, or the owner's distinct investment-backed expectations - preferring instead to enunciate new bright line rules in Loretto v. Teleprompter Manhattan CATV Corp. and Lucas v. South Carolina Coastal Council. It even appeared to abandon Penn Central's terminology altogether in Agins v. City of Tiburon. But in the waning years of the Rehnquist Court, most of the newer formulations of takings doctrine were undermined, scaled back, or abandoned altogether in decisions like Tahoe-Sierra Preservation Council, v. Tahoe Regional Planning Agency and Lingle v. Chevron, USA, Inc. It now falls to the Roberts Court to go back three decades and begin fleshing out the meaning of Penn Central as the Court's polestar of regulatory takings law for the 21st century.

Impeaching Finnigan and Realigning the Corroboration Standard for Uninterested Single Witness Testimony with Precedent and Policy

Thomson3 3 and Finnigan4 were decided by different panels of Federal Circuit judges with one judge in common,5 only four and a half months apart. Both panels addressed whether an uninterested witness’s testimony must be corroborated, and both panels reached different outcomes. Although the latter of the two cases, Finnigan, attempted to reconcile the apparent inconsistencies, its craftsmanship suggests a veiled attempt to overrule Thomson,6 rather than distinguish it.7 Even though most courts have followed Finnigan8 instead of Thomson,9 Thomson deserves special attention--not only because it has not been overruled,10 but also because its holding is a natural extension of legal precedent and patent policy that may prove to be the more contoured rule to the issue at hand. Namely, whether an uninterested witness’s testimony submitted to prove patent invalidity must be corroborated with other evidence as a bright-line rule or whether courts should have the option to evaluate this testimony on a case-by-case basis. In other words, the issue discussed in the conflicting holdings of Thomson and Finnigan is whether a single witness’s testimony is ever sufficient to meet the evidentiary burden of clear and convincing evidence to prove patent invalidity.

Policy Brief on Corporate Governance in Ukraine

This paper summarizes policy implications arising from available research, in particular from our studies on corporate governance in Ukraine. Overall it is recommended to improve enforcement of existent CG rules. Perhaps not only through courts but also through reformulating vague standards into bright-line rules. It is urgent to implement those CG rules that would provide better protection for minority shareholders and eliminate (or minimize) financial tunneling, and that have no ambiguity in the society about their expediency. For example, it seems there is no doubt about expediency of such rules as cumulative voting, pre-emptive rights, appraisal rights, approval rights granted to the majority of minority shareholders or/and independent directors to mention a few.

Lawmaking in Small Jurisdictions

It is often argued that business laws in developing countries should generally be formulated as simple, bright-line rules. This argument is typically premised on the idea that the most significant difference between developing and developed countries lies in the competence of their lawmakers. This paper focuses on another difference: For the purposes of business law many (though not all) developing countries are relatively small, meaning that they witness a relatively small number of business disputes. Using an analytical framework originally developed in the legal literature concerning rules and standards it is shown that small jurisdictions should generally favour standards over rules and that those standards should not necessarily be particularly simple. Small jurisdictions should also find it relatively useful to transplant laws from other jurisdictions, especially large ones. These factors ought to be considered in the design and evaluation of legal institutions in many developing (and some developed) countries.