NewYorkUniversity
LawReview

Notes

2024

Dangers, Duties, and Deterrence: A Critique of State Sovereign Immunity Statutes

Daniel J. Kenny

Sovereign immunity statutes set the boundaries of liability for tortious conduct by state government actors. Legislatures can shield state entities and agents from liability for a wide range of tortious conduct. They can even—as some states have—waive immunity to the extent of liability insurance coverage. These restrictive statutory immunity schemes can facilitate discretion and prevent the overdeterrence of helpful conduct. But by preventing state courts from hearing certain claims of tortious conduct, such schemes effectively leave injured plaintiffs in the lurch and future misconduct undeterred. This Note argues that legislatures should allow courts more leeway to set the standard of care for state government tortfeasors. Stripping courts of their capacity to adjudicate cases of garden-variety misconduct by government actors is misguided. By applying the “public duty doctrine”—a default rule that the government owes no general duty of care in tort to the public at large—courts can negotiate the interests that animate restrictive sovereign immunity statutes. This court-centered approach would fill gaps in civil damages liability under federal constitutional law that otherwise leave government negligence unremedied and undeterred. Moreover, it would let courts adapt the common law to define the scope of the government’s duties to the public.

The Jurisdiction-Limiting MFN Clause

Kara S. Smith

Most-favored-nation (MFN) provisions have formed the center of a jurisdictional dispute that has plagued international arbitration for the past two decades. Since the Maffezini decision in 2000, holding that MFN clauses can be used to import jurisdictional provisions, the international arbitral system has seen a long succession of inconsistent and irreconcilable arbitral decisions, some following Maffezini’s approach and others rejecting it. The result is a jurisdictional crisis in international arbitration that has consumed opposing parties’ time and money, undermined the international arbitral system’s legitimacy, and called into question the very reasons for the system’s existence.

However, a glimmer of hope has emerged: A new variety of MFN clauses has begun to appear that explicitly specify that they do not apply to procedural issues. Despite their potential to solve one of international arbitration’s most intractable problems, these jurisdiction-limiting MFN clauses have largely escaped serious analysis. This Note fills this gap in scholarship by providing the first academic analysis focused exclusively on these new jurisdiction-limiting provisions, analyzing the trend towards the increased use of these provisions, the form the provisions take, their reception in arbitrated cases, and the implications that these provisions carry.

Taxing “Borrow” in “Buy/Borrow/Die”

Colin J. Heath

The United States federal income tax contains a flaw: Because it reaches capital gains only after a “realization” event, it permits owners of highly appreciated assets to defer their tax liability by holding them and refusing to sell. Worse yet, easily available debt allows those owners to consume from their “unrealized” gains while continuing to defer tax. As Professor Edward McCaffery identified in 2012, consumption and deferral through secured borrowing, coupled with the stepped-up basis death benefit from section 1014 of the Internal Revenue Code, create an opportunity for individuals to avoid lifetime income tax and net estate tax. This strategy, known as “buy/borrow/ die,” contributes to consumption inequality and, by extension, America’s growing wealth inequality.

In the tax literature, buy/borrow/die has served as a helpful hook for supporters of wealth taxes, mark-to-market income taxes, and the repeal of section 1014’s stepped-up basis provision. But these three solutions merit some pragmatic concern, on the grounds that they are (to varying degrees) possibly unconstitutional, likely to be repealed, or publicly unpopular. Recognizing those practical obstacles should steer policymakers toward an incremental second-best solution: treating borrowing against appreciated collateral as a realization event. Embracing a “realization at borrowing” policy would reduce the availability of buy/borrow/die as a tax reduction strategy while sidestepping the hurdles that other proposed solutions must clear.

Invigorating Corporate Democracy: Rethinking “Control” Under the Williams Act

Jack Hipkins

In the summer of 2021, a small, previously unknown hedge fund named Engine No. 1 did the unthinkable. Despite owning less than 0.0016% of the company’s stock, Engine No. 1 elected three independent directors to the board of ExxonMobil on a platform of lowering Exxon’s greenhouse gas emissions and investing in renewable energy. Engine No. 1’s successful proxy battle at the country’s largest oil and gas company came after years of efforts by some of its largest shareholders to push the company in this direction, and it succeeded only because of the support of these large institutional shareholders. This case study highlights the powerful role that activist campaigns play in corporate democracy: Motivated by the prospect of outsized returns, hedge funds like Engine No. 1 are among the few players capable of mounting effective challenges to incumbent management at publicly traded companies. Although commentators have written about this dynamic, no scholarship has yet focused on the significant second-order effects that hedge fund activism can have on issues like climate change.

In October 2023, the Securities and Exchange Commission (SEC) adopted a new rule to shorten the Schedule 13D filing window under the Williams Act from ten days to five. Although justified as necessary given the technological advances that have occurred since the Act’s passage in 1968, shortening the filing window makes it more difficult for activists to engage in campaigns at publicly traded companies, thereby diminishing the power of the only actors within the world of corporate democracy capable of pushing management to respond to shareholder preferences and tipping the balance of power towards management. Thankfully, the Commission is not without options to address this difficulty. This Note proposes that the SEC create a new filing—Schedule 13I—which would permit activists who are not seeking control, but merely influence over corporate policy, the full ten-day filing window. Doing so is well within the Commission’s statutory authority. Indeed, given the dramatic shifts in the corporate governance landscape that have occurred since the passage of the Williams Act, and the fact that the Act was explicitly envisioned as favoring neither management nor activists, creating this new filing Schedule would help regain the balance which Congress so carefully set when it passed the Act, thus achieving a regulatory structure more in line with its purpose. At a time when the functioning of corporate democracy implicates both value-creation and the satisfaction of shareholder preferences on the defining issues of our era, the Commission must consider changes to invigorate corporate democracy.

A Student’s First Amendment Right to Receive Information in the Age of Anti-CRT and “Don’t Say Gay” Laws

Thomas M. Cassaro

Over the last few years, numerous states and school boards have passed laws aimed at limiting curricula related to diverse communities. Anti-Critical Race Theory and “Don’t Say Gay” laws have threatened to restrict the teaching of race and LGBTQ issues in K-12 schools. These laws are troubling from a policy standpoint because inclusive curricula ensure that students receive a proper education and are taught in a supportive school environment. They are also likely an infringement upon a student’s First Amendment right to receive information, first recognized in Board of Education v. Pico, and, as such, courts have begun to entertain constitutional claims against curricular restrictions. However, there is no binding precedent on this issue, and the circuits are split as to what standard they should use when addressing these challenges.

This Note argues that courts should follow the approach developed by the Ninth Circuit in Arce v. Douglas. Courts should extend Pico beyond its library context to hold that students have a First Amendment right to receive information in the curriculum they are taught. In evaluating whether a curriculum decision violates this right, courts should apply the standard laid out in Hazelwood School District v. Kuhlmeier: Courts should first require that state and local educational bodies justify that their curriculum restriction decisions were motivated by a “legitimate pedagogical concern” and courts should then inquire if such restrictions are “reasonably related” to that concern. This standard properly respects the deference states and localities are due in educational matters, while protecting students’ constitutional free speech rights. The standard also follows basic requirements of constitutional law: requiring justifications, reasonableness in those justifications, and proper process.

PAYGO for Criminal Sentencing: Political Incentives and Process Reform

James W. Ganas

The American criminal justice system is exceptional, characterized by uniquely high sentences and uniquely large numbers of incarcerated individuals. This regime is perpetuated by a political system that fetishizes Americans’ short-term pushes for increased punitiveness when crime rates increase. Drawing on political process and representation reinforcement theories, this Note argues for a novel statutory solution that would help place a brake on retributive short-term preferences, while prioritizing criminal statutes that would challenge mass incarceration. This Note posits that by adopting state budgetary laws that mirror PAYGO budgetary rules and statutes, state legislatures can control the spiraling costs of administering local prison systems without jeopardizing legislators’ political futures. Criminal sentencing PAYGO, like Minnesota’s famous sentencing guidelines, would force policymakers to view criminal sentencing as a complete system, requiring tradeoffs and compromises. Through criminal sentencing PAYGO, states and their citizens can realize democratic and criminal justice administrative gains.

How ART Exceptionalism Exposes the Pretense of Fetal Personhood

Deborah J. Leffell

Assisted reproductive technology (ART), which encompasses fertility treatments in which eggs or embryos are handled, is a frontier of family law and reproductive justice, and developments in abortion jurisprudence may shape its borders. Abortion restrictions and other laws regulating pregnant people are often framed with rhetoric emphasizing fetal personhood or fetal rights. Now that abortion is legally unshielded from criminalization, the consequences of Dobbs will reach, as did fetal-personhood laws before, even those who are not seeking abortions. As commentators have observed, this collateral damage threatens to touch potential parents seeking to use ART. Yet so far, the most abortion-restrictive states tend to carve out protections for ART from their laws regarding fetuses. This Note argues that states touting fetal personhood protect ART users—while persecuting people who partake in a multitude of other types of conduct thought to harm fetuses—because ART furthers the creation of white, affluent families that suit these states’ normative values. Fetal personhood, then, is a tool for social control. Advocates of reproductive freedom should surface this truth in efforts to stave off the proliferation of fetal-personhood laws at the state and federal levels.

Presidential Power Over Defense Contracts: How an Existing Statute Authorizes the Executive Branch to Recoup Profits from Defense Contractors

Tucker Ring

The United States pays half-a-trillion dollars to defense contractors every year. Although the U.S. military could not operate without profitable contractors, excessively profitable contracts reduce manufacturing output and can imperil soldier safety. Stretching back to the founding, there is a long history of the executive branch compelling ex post modifications of military contracts to a lower price than the parties agreed to at signing. Sometimes authorized by Congress (but not always), this executive practice of “downward revisions” has fallen into disuse. Nevertheless, at least one statute might authorize this practice today: Public Law 85-804. Commonly understood to provide higher payments to defense contractors, this Note argues that Public Law 85-804 should be interpreted in light of its text and history to authorize downward revisions to excessively profitable defense contracts. Such an interpretation could save soldiers’ lives and lower defense costs during today’s challenging fiscal and geopolitical times.

2023

Admitting Evidence of Climate Change Under Daubert: Climate Experts as Reliable, Hyper-Qualified Technicians

Edmund H.S. Brose

Climate change is here. Anthropogenic warming is currently increasing temperatures, the devastation of storms, and the incidence of droughts. If humanity continues on its current path, the next fifty years will see millions die due to extreme weather events, along with a drastic increase in the number of climate refugees seeking haven. In the face of this crisis, government inaction at all levels has fueled the flames. Private actors and state and municipal governments have stepped into the breach, bringing suits against polluters for the harms to their localities and citizens. The challenge that this Note seeks to address is how to take these dire predictions of the future, and damages of the present, and translate them into workable, reliable legal evidence that can be used in a court of law. While most courts have declined to allow suits to proceed on threshold questions, they will soon have to deal with scientific evidence of climate change as these suits grow more numerous and the plaintiffs more resourceful.

This Note serves as a plea to judges to approach climate modeling methods in the same way they approach comparable types of evidence. Under Federal Rule of Evidence 702, climate science should be admissible as sufficiently reliable, by a preponderance of the evidence. Climate science exists somewhere between pure science and specialized expert knowledge, due to the subjective nature of the discipline. While climate science may not be seen as sufficiently “scientific,” if climate scientists are considered a group of experts, the discipline should easily pass muster under lower court interpretations of the Supreme Court’s Kumho Tire decision. By comparing climate science to criminal forensic methods, the case for admissibility becomes obvious. Thus, if judges take their roles seriously as neutral, consistent referees of justice, the admissibility of climate science should not be a serious hurdle for plaintiffs.

Originalism and the Problem of General Law

Giancarlo F. Carozza

In the early days of our Republic, federal judges explicitly relied on general law—an unwritten set of gap-filling principles—to drive their decisions. This practice ceased after Erie Railroad Co. v. Tompkins, in which the Supreme Court formally abandoned the concept of general law. But the current Supreme Court, with its emphasis on originalism, has revived general law by interpreting several constitutional provisions as codifying the general law of the Founders. To determine the content of the Founders’ general law, it conducts an inchoate version of the general law analyses of the past: It surveys a large corpus of legal and historical sources from multiple jurisdictions, none of which are authoritative, and from them distills a general principle which provides the rule of decision in the case at hand. The Court’s sub-silentio adoption of the general law analytic method is troubling for originalists and non-originalists alike.

This Note has three basic aims, all of which are novel contributions. First, it delineates the precise methodology used by seventeenth- and eighteenth-century judges to determine the content of the general law. Second, through careful study of Second Amendment and Confrontation Clause jurisprudence, it recognizes the deep similarities between the historical and modern originalist general law analytic processes. And third, it outlines the practical difficulties and internal tensions that arise from the Court’s originalist revival of general law.