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The Carbon-Neutral Individual

Michael P. Vandenbergh, Anne C. Steinemann

Reducing the risk of catastrophic climate change will require leveling off greenhouse gas emissions over the short term and reducing emissions by an estimated 60–80% over the long term. To achieve these reductions, we argue that policymakers and regulators should focus not only on factories and other industrial sources of emissions but also on individuals. We construct a model that demonstrates that individuals contribute roughly one-third of carbon dioxide emissions in the United States. This one-third share accounts for roughly 8% of the world’s total, more than the total emissions of any other country except China, and more than several continents. We contend that it is desirable, if not imperative, that governments address emissions from individual behavior. This task will be difficult because individual behaviors, including idling cars and wasting electricity, are resistant to change, even when the change is rational. Mindful of the costs, we propose measures that have a high likelihood of success. We draw on norms theory and empirical studies to demonstrate how legal reforms can tie the widely held abstract norm of personal responsibility to the emerging concrete norm of carbon neutrality. We suggest that these legal reforms could push carbon neutrality past a tipping point, directly influencing many carbon-emitting individual behaviors and building the public support necessary for policymakers to address the remaining sources.

Asymmetrical Regulation: Risk, Preemption, and the Floor/Ceiling Distinction

William W. Buzbee

If the federal government has constitutional power to address a social ill, and hence has power under the Supremacy Clause to preempt state, local, and common law regimes, is there a principled rationale for distinguishing federal standards that set a federal floor or ceiling? At first blush, the two appear to be mere flip sides of the same federal power: The choice of a floor reflects a goal of minimizing risk, while ceilings reflect concern with excessively stringent regulation.

This Article argues, however, that these two regulatory choices are fundamentally different in their institutional implications. Floors embrace additional and more stringent state and common law action, while ceilings are better labeled a “unitary federal choice” due to how they preclude any other regulatory choice by state regulators and also eliminate the possibility of the different actors, incentives, and modalities of information elicitation and proof that common law settings provide. Advocates of free markets respond that this is precisely the idea—regulatory certainty is enhanced with a unitary federal choice, allowing manufacturers to plan with confident knowledge of the regulatory terrain, unbuffeted by an array of uncoordinated actors.

Debate over floors versus ceilings was, until recently, largely hypothetical, due to the rarity of federal imposition of ceilings. During the past year, however, in settings ranging from product approvals to regulation of risks posed by chemical plants to possible climate change legislation regarding greenhouse gases, legislators and regulators have embraced the broad, preemptive impact of unitary federal choice preemption. The federal action regarding such risks would be the final regulatory choice. But under what theory of regulation and legislation can one be confident that placing all decisionmaking power in one institution at one time will lead to appropriate standard setting? In fact, advocates of risk regulation, “experimentalist regulation” scholars, and skeptics about the likelihood of public-regarding regulation all call for attention to pervasive risks of regulatory failure. Agency and legislative inertia, information uncertainties and asymmetries, outdated information and actions, regulatory capture, and a host of other common regulatory risks create a substantial chance of poor or outdated regulatory choice.

Considering these pervasive risks of regulatory failure, the principled distinctions between floor and ceiling preemption become apparent. Vesting all decisionmaking power in one institution can freeze regulatory developments. Unitary federal choice preemption is an institutional arrangement that threatens to produce poorly tailored regulation and public choice distortions of the political process, whether it is before the legislature or a federal agency. Floor preemption, in contrast, constitutes a partial displacement of state choice in setting a minimum level of protection, but leaves room for other actors and additional regulatory action. Floors anticipate and benefit from the institutional diversity they permit. This Article closes by showing how the institutional diversity engendered by retaining multiple layers of law and regulatory actors creates conditions conducive to reassessment and adjustment of rigid or outdated regulation.

Deterring Fraud: Mandatory Disclosure and the FDA Drug Approval Process

Liora Sukhatme

The valuation of a pharmaceutical company often depends on its ability to bring a drug to market, making information about the likelihood of Food and Drug Administration (FDA) approval critical to investors and a highly sensitive issue for the company. Since the FDA drug approval process is not public, investors must rely on company disclosures to evaluate the likelihood of FDA approval. Currently, the FDA will not disclose the content of action letters sent to sponsor companies, giving company executives dangerous discretion over whether to disclose the information and how to present it. This discretion, coupled with a lack of oversight over the content of the disclosures, has resulted in several recent cases of fraud among pharmaceutical companies. As a way to curb such company discretion and prevent future fraud, this Note proposes mandatory public disclosure of action letters sent by the FDA to sponsor companies.

Layovers and Cargo Ships: The Prohibition of Internet Gambling and a Proposed System of Regulation

Ryan S. Landes

Since its emergence in the 1990s, Internet gambling has grown into a $12-billion-per-year industry. In October 2006 Congress passed the Security and Accountability for Every Port Act, which includes a provision that prohibits domestic financial institutions from moving funds to and from online casinos, all of which are located overseas. While the new law has certainly caused a major stir in the Internet gambling community, users and overseas companies are continuing to find new ways to circumvent it. In this Note, the author first gives an overview of the gambling industry and the problems it poses to gamblers and communities. The author then reviews the tactics Congress attempted to use over the last decade in fighting Internet gambling—criminalizing the operation of a gambling website, criminalizing individual gambling, and criminalizing funds transfers to and from casinos—and explains why each method fails to address, and often exacerbates, the very problems the legislation seeks to resolve. The author then proposes a new method of regulation and explores how that system could significantly reduce the problems of Internet gambling.

Against Preemption: How Federalism Can Improve the National Legislative Process

Roderick M. Hills, Jr.

How easily should courts infer that federal statutes preempt state law? An ongoing debate exists on the question in Congress and among scholars and judges. One side calls for judges to protect federalism by adopting a rule of statutory construction that would bar preemption absent a clear statement of preemptive intent. Opponents argue against such a “clear statement” rule by arguing that state control over preemptable topics is often presumptively inefficient, because common law juries lack expertise and because states are prone to imposing external costs on their neighbors.

This Article sidesteps these debates over preemption and instead argues that, quite apart from whether state law is itself efficient, an anti-preemption rule of statutory construction has benefits for the national lawmaking process. Because of the size and heterogeneity of the population that it governs, Congress has institutional tendencies to avoid politically sensitive issues, deferring them to bureaucratic resolution and instead concentrating on constituency service. Nonfederal politicians can disrupt this tendency to ignore or suppress political controversy by enacting state laws that regulate business interests, thus provoking those interests to seek federal legislation that will preempt the state legislation. In effect, state politicians place issues on Congress’s agenda by enacting state legislation. Because business groups tend to have more consistent incentives to seek preemption than anti-preemption interests have to oppose preemption, controversial regulatory issues are more likely to end up on Congress’s agenda if business groups bear the burden of seeking preemption. Moreover, the interests opposing preemption tend to use publicity rather than internal congressional procedures to promote their ends. Therefore, by adopting an anti-preemption rule of construction, the courts would tend to promote a more highly visible, vigorous style of public debate in Congress.

Is Private Securities Litigation Essential for the Development of China’s Stock Markets?

Marlon A. Layton

In recent years, financial economists have authored an influential series of articles that link strong minority shareholder protection—exemplified by private enforcement of securities regulations—to greater financial market development. Their findings, which suggest that transition economies seeking larger financial markets should reform their legal institutions so as to strengthen private enforcement, have practically become conventional wisdom, and provide support for those who argue that China needs to improve investors’ ability to sue listed companies in order to encourage growth in its financial markets. This Note argues, however, that in China’s current legal and political environment, various obstacles preclude private enforcement from playing a significant role in market regulation. A more viable strategy would be to strengthen public enforcement. It is more likely to be effective in China’s current environment, will improve investor protection, and has been shown to have positive effects on market development.

In recent years, financial economists have authored an influential series of articles that link strong minority shareholder protection—exemplified by private enforcement of securities regulations—to greater financial market development. Their findings, which suggest that transition economies seeking larger financial markets should reform their legal institutions so as to strengthen private enforcement, have practically become conventional wisdom, and provide support for those who argue that China needs to improve investors’ ability to sue listed companies in order to encourage growth in its financial markets. This Note argues, however, that in China’s current legal and political environment, various obstacles preclude private enforcement from playing a significant role in market regulation. A more viable strategy would be to strengthen public enforcement. It is more likely to be effective in China’s current environment, will improve investor protection, and has been shown to have positive effects on market development.

Transportation Planning and the Prevention of Urban Sprawl

Michael M. Maya

In recent years, a number of states have passed comprehensive land use reform bills.1 Many of these statutes have appeared in response to the phenomenon of urban sprawl—a pattern of haphazard, automobile-dependent development on the fringes of existing cities. With rising personal incomes and persistent consumer demand for single-family homes on large lots in ethnically and physically homogeneous jurisdictions, urban sprawl has boomed. Fearful of the myriad costs of sprawl—which many commentators have chronicled—some states have acted to prevent it altogether. The most egregious costs of sprawl include the abandonment of urban centers, severe air and water pollution, and the loss of open green spaces. In economic terms, sprawl also vastly increases transportation costs for residents and workers who must travel greater distances to reach their homes, their jobs, and other destinations. Without statewide coordination, sprawl is difficult to prevent. For example, if one county prohibits the subdivision of its farmland into low-density residential lots, a neighboring county will not necessarily do the same. In fact, precisely because the restrictive county has stifled consumer demand, its neighbor may have greater incentives (in the form of spillover demand) to permit sprawling development. In addition, neither county is likely to be particularly well attuned to the negative effects of sprawl, which are often geographically and temporally dispersed and thus less salient for many local politicians. To combat these structural and political problems, some states have addressed sprawl as a matter of statewide, rather than local, concern.

An Administrative Law Approach to Reforming the State Secrets Privilege

Beth George

Many scholars assert that the common law state secrets privilege is abused by government officials who use it to cover up misconduct or prevent embarrassment. For the second time in two sessions, Congress is considering a bill that would require substantive judicial review of the privilege: If the government invokes the privilege, a judge would be required to review each document and determine whether its revelation would harm national security. This Note argues that judicial review alone is unlikely to reform the state secrets privilege effectively because it does not address the underlying incentives that encourage abuse of the privilege by the executive branch. A risk-adverse judiciary is unlikely to challenge assertions of grave harm to national security except in the most blatant cases of abuse. This Note builds the case that administrative law–based reforms will deter government abuse more effectively than judicial review alone by creating disincentives that discourage invocation of the privilege. By making invocation of the privilege more administratively burdensome and by putting the professional credibility of officials who may not benefit from its use on the line, the reforms proposed here would more effectively discourage overreaching in the state secrets privilege context.

National Security Preemption: The Case of Chemical Safety Regulation

Michael Jo

In 2006, the Department of Homeland Security (DHS) asserted federal preemption of state law governing the security of chemical facilities. The continuing controversy over chemical security preemption reveals one way in which executive power asserts itself in the national security context: the reclassification of seemingly domestic regulatory concerns as matters of national security and the consequent constriction of state regulatory authority. This Note analyzes the DHS’s chemical security regulations as a case study for the problem of national security preemption. It argues that the presumption of federal supremacy in foreign affairs can ratify conclusory and unsupported preemption claims because the national security interest mixes both foreign and domestic affairs, while the only doctrinal guidance for defining that interest comes from contested foreign affairs preemption doctrines. The Note proposes that, if strengthened, deference doctrines drawn from administrative law provide the best means of scrutinizing and limiting such claims of executive authority. Agency claims of preemption on the basis of national security should be subject to heightened scrutiny. Such scrutiny is more useful than the stalemated positions of the law and security debate for policing the state-federal divide in national security.

Adjudication by Fiat: The Need for Procedural Safeguards in Attorney General Review of Board of Immigration Appeals Decisions

Laura S. Trice

The Attorney General enjoys broad authority to certify to himself and review de novo decisions of the Board of Immigration Appeals (BIA). Though sparingly used, the certification power is controversial, in part because it permits the Attorney General to announce new rules and overturn longstanding precedent without meaningful process. Under current regulations, the Attorney General is not required to provide even basic procedural protections in certified cases, and he has issued decisions without giving the parties notice of the issues under review or an opportunity for briefing. This Note argues that review of BIA decisions without meaningful procedural safeguards implicates serious due process concerns, raises questions about the quality and accuracy of Attorney General decisions, and undermines the legitimacy and acceptability of immigration adjudication. To address these concerns, this Note proposes that the Attorney General promulgate regulations that require meaningful, adversarial participation by the parties and provide a transparent means of soliciting input from interested amici on issues of broad significance.