NewYorkUniversity
LawReview

Notes

2018

Why Bankruptcy “Related to” Jurisdiction Should Not Reach Mass Tort Nondebtor Codefendants

Lori J. Forlano

Consider the following scenario: Companies X, Y, and Z all manufacture and distribute the same defective product. The product causes injuries; a mass tort litigation ensues. Company X files a petition for relief under chapter 11 of the United States Bankruptcy Code, which freezes all suits against it. Suits against Companies Y and Z are not stayed, and these companies are eager to find a way to delay suits against them, even if they cannot halt them altogether. If Companies Y and Z can argue successfully that the suits against them are “related to” the debtor’s bankruptcy, they may be able to transfer these suits to the district court where the bankruptcy case of debtor Company X is pending, unless that court abstains from hearing the case. This Note argues that the district court hearing the Company X bankruptcy petition should not assert “related to” jurisdiction over proceedings by tort plaintiffs against Companies Y and Z, the nondebtor codefendants. Exploring this jurisdictional question is not simply an intellectual exercise. Such issues have figured prominently in at least two mass tort litigations, the A. H. Robins “Dalkon Shield” bankruptcy and, more recently, the Dow Corning breast implant litigation. Both the Fourth Circuit in the Robins bankruptcy and the Sixth Circuit in the Dow Corning bankruptcy found that tort claims against nondebtor codefendants were “related to” the bankruptcy case of the debtor corporation. Part I of this Note will examine the history and present statutory bases of bankruptcy court jurisdiction, including “related to” jurisdiction. Part II will discuss the ambiguities of the various judicial standards for “related to” jurisdiction, including the Sixth Circuit’s assertion of “related to” jurisdiction in the Dow Corning mass tort litigation. Part III will illustrate why an expansive reading of “related to” as applied to nondebtor codefendants creates problems for mass tort plaintiffs and for our state and federal judiciaries. Such a reading of the relevant statutory language allows nondebtor codefendants to delay the trial of mass tort cases, making it harder for plaintiffs to continue litigating. Expanded “related to” jurisdiction also infringes on states’ rights and exemplifies why bankruptcy jurisdiction should be interpreted narrowly out of respect for Article II of the Constitution.

Banking on TDRs: The Government’s Role as Banker of Transferable Development Rights

Sarah J. Stevenson

This Note examines government operated TDR banks and their capacity to overcome obstacles hindering otherwise successful TDR programs. Many commentators have addressed TDR banks in the context of TDR programs in general; this Note provides the first comprehensive analysis of TDR banks, examining the legitimacy of the banks themselves and, ultimately, their role in successful TDR programs. As the number of localities turning to TDR programs and banks increases, it is likely that challenges to their use will also increase. It is hoped that this Note will prove useful to localities as they establish their own TDR banks, and that the analysis contained in Part III will help them avoid legal and financial difficulties that may interfere with the effective preservation of valuable public goods.

Charter Schools, Equal Protection, and the New School Reform Movement

Kevin S. Huffman

The sudden influx of charter school legislation in the public school landscape and limited state oversight of charter school administration foreshadow further legal challenges. This Note will examine potential federal and state equal protection challenges to charter schools. The Note then suggests both legislative safeguards and individual school designs that may insulate charter schools from such legal challenges while helping to ensure that these schools serve as part of a fair and effective school reform movement.

The Uneasy Doctrinal Compromise of the Misappropriation Theory of Insider Trading Liability

M. Breen Haire

This Note examines the nature of the doctrinal compromise that the misappropriation theory represents. It focuses on the uneasy relationship among the three doctrinal models and argues that, in fact, the misappropriation theory marks a fundamental departure from the Supreme Court’s more sensible fiduciary duty analysis, and differs in no meaningful way from an equal access regime of insider trading liability. Since the wrongful activity to which the misappropriation theory attaches liability is so distantly related to the securities trading at issue, any claim that it retains the fiduciary duty framework is simply implausible. Like the equal access model, the theory stretches applicable statutory provisions beyond recognition and cannot be reconciled with the Supreme Court’s past interpretation of these provisions.

Now Sixteen Could Get You Life: Stautory Rape, Meaningful Consent, and the Implications for Federal Sentence Enhancement

Lewis Bossing

Part I of this Note will look at the “crime of violence” definition used in various federal sentence enhancement statutes and at the two approaches the federal courts have taken to deciding whether statutory rape convictions constitute “crimes of violence.” Part II will deconstruct the term “crime of violence” in this context by examining how law and society have come to understand the “violence” of sexual assault and how conceptions of adolescents’ ability to consent to a variety of social interactions have changed. Part III will develop a model for courts to use in identifying adolescent “consent” and apply this model to the facts of some of the cases treating this issue. This Note will argue that statutory rape should not be considered a per se “crime of violence.” Rather, in fairness to defendants facing enhanced sentences, and in recognition of the sexual autonomy of adolescents, courts should evaluate the presence or absence of meaningful consent when making many “crime of violence” determinations in statutory rape cases.

No Longer Your Piece of the Rock: The Silent Reorganization of Mutual Life Insurance Firms

Gregory N. Racz

Ever since Ben Franklin started a mutual insurance company, policyholders generally have enjoyed a basic level of ownership rights. Within the past few years, however, and with little debate, many states have passed mutual holding company laws. The new laws make it easier for mutuals to convert to stock companies and sell stock to the public, but in the process they radically alter policyholders’ rights. Industry proponents praise the new laws as tickets to financial strength. Critics demonize the laws as a corporate shell game that will strip policyholders of long-standing protections and work a wealth transfer from policyholders to managers. Some opponents of the new laws even argue that the laws may be unconstitutional. Despite these concerns, more and more states are bowing to industry lobbying and are considering passing such laws.

Should the Exemption from the Robinson-Patman Act Apply to Pharmaceutical Purchases by Nonprofit HMOs?

Aimee M.W. Pollak

This Note criticizes the conclusion reached in Prescription Drugs and argues that the interpretation of section 13c offered by the court misconstrued the statute, inappropriately expanding both the group of purchasers and the products to which the statute should apply. This Note also criticizes previous interpretations of the statute, arguing that courts subtly have changed and updated the statute with each successive reading. Finally, this Note argues that the misinterpretation of section 13c is simply one example of a broader problem—the lack of an interpretative theory to guide the reading of obsolete statutes. In response, this Note proposes a novel theory of interpretation: the changed circumstances theory.

Choose or Lose: Embracing Theories of Choice in Gay Rights Litigation Strategies

Jonathan Pickhardt

The decision of gay rights litigators to adopt choice-denying constitutional arguments reflects both the exigencies of litigating after Bowers and the broader social acceptance of the belief that gay people do not choose to be gay. However, choice-denying arguments have proven ineffective in the legal realm. In addition, they threaten to undermine the broader gay rights movement by implicitly suggesting that being gay is undesirable, by leading gay rights advocates to make claims that are untenable and short sighted, and by misrepresenting segments of the gay community.

Curing “Constitutional Amnesia”: Criminal Procedure Under State Constitutions

Nina Morrison

Part I of this Note summarizes the Supreme Court’s decisions in five cases and locates them within the emergence of state constitutional law generally. In Parts II, III, and IV, this Note analyzes the state court opinions that have diverged from these federal cases, and considers them in light of state judges’ other reflections on New Federalism. Specifically, it identifies three common principles that undergird state court rulings in these areas. Part II highlights the courts’ desire to preserve established rules of criminal procedure—ones that were overruled or modified by the U.S. Supreme Court, yet had been applied and relied upon previously within each state. Part III discusses the state courts’ preference for clarity in legal standards, and their concern that untested federal rules might unduly burden the lower state courts’ work. This Note thus rebuts critics’ charges that New Federalism is an inherently “activist” endeavor, since both a desire to preserve established rules and a preference for clarity are principles rooted in “conservative” values of reliance, stability, and effective law enforcement.

The Defense of Marriage Act: Congress’s Use of Narrative in the Debate over Same-Sex Marriage

Charles J. Butler

This Note addresses that question by examining Congress’s use of narratives in the debates over DOMA. Narratives are stories circulated within communities and institutions that both shape and reveal society’s attitudes toward issues, particularly polemic questions. In enacting DOMA, members of Congress used narratives to respond to what they perceived and portrayed as a menace posed by same-sex marriage. Because stories about gays and lesbians in relationships resembling heterosexual marriage have been gaining widespread attention in recent years, anxieties regarding homosexuality and traditional marriage notions have sharpened in certain segments of society, creating a breach in the prevailing social order. Members of Congress used narratives to mend this breach. In deliberations over DOMA, they related stories about gays and lesbians that countered the increasingly common story of same-sex marriage; by reinforcing apprehensions surrounding gays and lesbians and reasserting the familiar heterosexual version of the marriage narrative, Congress attempted to quell the threat posed by stories of same-sex marriage.