Articles

Through a series of reforms over the last two decades, the Age Discrimination in Employment Act (ADEA) has become the most far-reaching of the antidiscrimination statutes. In this Article, Professor Issacharoff and Ms. Harris provide a critical reexamination of both the ADEA itself and, more generally, the use of antidiscrimination law to address the problem of aging in employment. The authors distinguish the disadvantages that older employees face from classic claims of employment discrimination, noting the inapplicability of the antidiscrimination model underlying the ADEA to some of the problems associated with aging in employment. The authors then turn to the development of the ADEA and its amendments, examining the role of regulatory capture in the expansion of ADEA protections. They conclude that the broad use of antidiscrimination law to address the problem of aging in employment without accounting for the differences between classic claims of discrimination and the particular problems faced by older employees has resulted in a dramatic and unjustified shift in wealth toward older Americans. Accordingly, they propose a series of reforms designed to address both the specific problems faced by older employees and the reallocation of wealth imposed by recent ADEA amendments.

Corporations have historically been held to a standard of strict vicarious liability for the wrongdoing of their employees. However, several areas of federal and state law have shifted to new duty-based schemes that mitigate liability for companies that have implemented compliance programs or reported wrongdoing to the government. Some states even grant privilege to environmental audit reports.

Professors Arlen and Kraakman compare the norm of vicarious liability with various types of duty-based liability regimes, analyzing the benefits and costs of each approach. They conclude that social welfare is maximized by a mixed regime that includes elements of both strict and duty-based liability. The authors find that the mixed liability regime with the widest application is a composite regime, which imposes high penalties subject to mitigation for firms that engage in compliance activities. Under this regime, firms that satisfy all enforcement duties would nonetheless face substantial residual liability equal to the harm caused by wrongdoing divided by its probability of detection. They then examine the existing composite liability regimes embodied in the United States Sentencing Guidelines for corporate defendants and the evidentiary privileges that many states have adopted for companies’ environmental audit reports. They conclude that both current approaches are flawed, as they do not adequately create proper incentives for companies to monitor, investigate, and report employee wrongdoing.

In its 1996 decision, Seminole Tribe v. Florida, the Supreme Court, reversing itself, held that Congress lacks Article I power to abrogate states’ Eleventh Amendment immunity from suit in federal court. In exploring the decision’s ramifications, Professor Jackson contends that it may foreshadow more pervasive, and more troubling, shifts in the balance of power between state and federal governments, and among the federal, judicial,  legislative, and executive branches. In particular, the Court’s dubious reasoning in Seminole Tribe may have severe repercussions on the federal courts’ ability to enjoin state officials from violating federal Iaw in the future. The availability of such equitable relief, under the so-called Ex parte Young doctrine, has long been accepted as a necessary counterbalance to the states’ Eleventh Amendment immunity from federal jurisdiction. While the new restrictions on Congress’s power would seem to make the availability of such relief more important than before, Professor Jackson examines how the Court’s unfortunate analysis in Seminole Tribe may presage a substantial limitation of the Ex parte Young doctrine in the federal courts. Professor Jackson concludes by articulating the dangers that such a course might pose to federal courts’ role in maintaining the rule of law and the supremacy of federal law.

Modern scholarship on corporate bankruptcy works from the premise that investors are willing to expend resources identifying and saving insolvent firms that can continue efficiently. In this Article, Professor Adler argues that this premise may be faulty, at least for multiple-creditor firms. Viewed properly, from an ex ante perspective, investors may wish to design initial capital structures that will produce few insolvent but viable firms. Consequently, in a world of unimpeded contractual choice investors might forgo any collective insolvency process directed primarily at the preservation of going concerns. Professor Adler argues, accordingly, that corporate bankruptcy law and proposals for its replacement may be ill-advised for largefirms, not because these firms could efficiently continue post insolvency without bankruptcy reorganization or some substitute, but because it may be appropriate that these firms not continue. In the process of making this argument, Professor Adler offers new interpretations of three puzzling phenomena: asset-based finance; the failure of investors to contractually avoid the seemingly expensive American bankruptcy reorganization process; and common equity’s residual interest in a firm that fails to pay dividends on preferred stock.

The use of affirmative action policies in school admissions has been a continuing source of controversy. In the wake of Hopwood, it is unclear if their continued use will even be possible. In an effort to inform the debate, Professor Wightman has engaged in a comprehensive empirical analysis to examine the impact of abandoning considerations of race and ethnicity in the law school admission process. Using data obtained from students who applied to law schools in 1990-1991 and from Fall 1991 first-year law students, she examined the likely effects of an admission policy that relied exclusively on LSAT scores and undergraduate grade-point averages. Countering arguments that affirmative action policies merely reallocate minority students among schools, Professor Wightman’s study indicates that such a “numbers only” policy would result in a sharp increase in the number of minority applicants who would be denied access to a legal education, not just at the schools to which they applied, but to any of the law schools included in the study. In striking contrast to the decline in admission rates, Professor Wightman found no significant differences in the graduation rates and bar passage rates between those minority students who would have been accepted to law schools and those who would not. Thus a “numbers only” policy would deny a legal education to many minority applicants who were fully capable of the rigors of legal education and of entering the legal profession. Professor Wightman also examined whether any of several factors, such as socioeconomic status, could serve as an effective proxy for race and ethnicity in order to achieve a diverse student body. None of the factors she studied indicated satisfactory results. In short, Professor Wightman’s study shows that affirmative action policies are likely a necessary prerequisite to maintaining a diverse yet capable law school student body.

The United States Constitution’s citizenship rule, which grants citizenship to, among others, the American-born children of illegal aliens, has come under attack. Professor Eisgruber defends the Constitution’s birthplace rule against calls for its amendment and against arguments in favor of a parentage rule. He proposes the Responsiveness Principle as a competitor to a consent or reliance theory to provide the normative justification for a rule of citizenship. Under this principle, a government should be responsive to the interests of all those over whom it exerts general jurisdiction. Professor Eisgruber argues that the current birthplacerule is the best way to implement the Responsiveness Principle because it makes it likely that those subject to the laws will have an effective voice in determining their content. He also cautions that an amendment modifying the birthplacerule would likely affect the interpretation of other constitutional provisions by compromising the Constitution’s commitment to political justice.

Given the importance of private enforcement of federal civil rights laws, Congress and the courts have attempted to encourage plaintiffs’ attorneys to accept meritorious civil rights cases through fee shifting and risk multipliers. Recently, however, the Supreme Court has essentially prohibited the use of risk multipliers, thus undercompensating attorneys for the risk of losing civil rights actions and discouraging the filing of such cases. In this Article, Professor Huang develops a new options-based theory of calculating attorney’s fees. Professor Huang argues that a lawsuit consists of a sequence of options to continue with the case rather than a once-and-for-all irreversible commitment thus allowing an attorney to assess the plaintiffs probability of prevailing at trial at different stages in a lawsuit. His proposal is for courts to recognize this option feature of lawsuits and adjust the risk multiplier accordingly. Consequently, the size of the risk multiplier would more accurately reflect the risk of losing, thus providing attorneys with better incentives to bring meritorious civil rights actions. In developing his theory, Professor Huang surveys the history and caselaw on risk multipliers, applies a simple options approach to lawsuits, and discusses the effect of an options-based approach on attorneys’ incentives to bring and settle civil rights actions. A mathematical Appendix formally models Professor Huang’s options-based approach.

In this Article, Professor Golove responds to Professor Tribe on the latter’s own terms by offering a serious textual and structural analysis of the Treaty Clause that supports its nonexclusivity. Professor Golove shows that the constitutional text is in fact indeterminate and that, contrary to Professor Tribe’s claims, textualism cannot render a singularly persuasive construction of the Treaty Clause. By analyzing each of Professor Tribe’s arguments, Professor Golove shows that equally strong formal arguments can be constructed in favor of the nonexclusive reading. Professor Golove thus seeks to demonstrate by illustration that textualism is just as open to manipulation as the interpretive methodologies that Professor Tribe decries and, given the pervasive ambiguities in the text, is generally incapable of yielding unique, objective resolutions to constitutional disputes, even those over concrete provisions of the text. Only by systematically ignoring these equally plausible formalist counterarguments was Professor Tribe able to reach his favored reading of the Treaty Clause. In the final analysis, Professor Tribe’s article reflects free-formism in its most paradoxical form: free-form formalism.

In 1988, hundreds of federal district judges were suddenly confronted with the need to render a decision on the constitutionality of the Sentencing Reform Act and the newly promulgated criminal Sentencing Guidelines. Never before has a question of such importance and involving such significant issues of constitutional law mandated the immediate and simultaneous attention of such a large segment of the federal trial bench. Accordingly, this event provides an archetypal model for exploring the influence of social background, ideology, judicial role and institution, and other factors on judicial decisionmaking. Based upon a unique set of written decisions involving an identical legal problem, the authors have produced an unprecedented empirical study of judicial reasoning in action. By exploiting this treasure trove of data, the authors have looked deeper into the judicial mind and observed the emergence of influences upon the manner in which a judge examined the constitutional issues, adopted a constitutional theory, and engaged in legal reasoning.

Perhaps no concept in tax law is so well established, and yet so widely criticized, as realization, the rule that defers tax on appreciated property until it is sold. In this Article, Professor Schizer offers a new justification for realization: It is a subsidy for savings. The recent reduction in the capital gains tax rate suggests that Congress wants such a subsidy, the author observes. He then argues that realization has a significant advantage as a subsidy. It is credible, in that taxpayers expect it to strive long enough for them to collect it This is important, Professor Schizer then argues, because realization offers taxpayers no benefit when an investment is made. It offers only the government’s word-a promise, in essence-that unrealized appreciation will not be taxed. The author then demonstrates that even though the government remains free to renege on this promise taxpayers will not expect this for reasons rooted in history, administrability, and politics. Taxpayers thus will have more confidence in realization than in another “promise” subsidy, a low capital gains rate. Notwithstanding this advantage, the author then points out, realization has unique disadvantages, such as the tendency to lock investors into particular investments, and also shares efficiency and equity concerns common to all savings subsidies.