NewYorkUniversity
LawReview

Topics

Administrative Law

Results

Arbitration as Delegation

David Horton

Hundreds of millions of consumer and employment contracts include arbitration clauses, class arbitration waivers, and other terms that modify the rules of litigation. These provisions ride the wake of the Supreme Court’s expansive interpretation of the Federal Arbitration Act (FAA). For decades, scholars have criticized the Court’s arbitration jurisprudence for distorting Congress’s intent and tilting the scales of justice in favor of powerful corporations. This Article claims that the Court’s reading of the FAA suffers from a deeper, more fundamental flaw: It has transformed the statute into a private delegation of legislative power. The nondelegation doctrine forbids Congress from allowing private actors to make law unless they do so through a process that internalizes the wishes of affected parties or that is subject to meaningful state oversight. The FAA as construed by the Court violates this rule. First, companies have invoked the statute to create a parallel system of civil procedure for consumer and employment cases. This river of privately made law not only washes away Congress’s procedural rulemaking efforts but dilutes the potency of substantive rights. Second, although businesses ostensibly impose these rules through the mechanism of contracting—a process normally rooted in mutual consent—the Court’s arbitration case law deviates from traditional contract principles. It funnels consumers and employees into arbitration even when they truthfully claim that they did not agree to arbitrate. Third, despite the fact that the FAA as enacted mandates robust judicial review of privately made procedural rules, the Court has all but abolished this safeguard. This Article concludes that the Court should recognize that the FAA as interpreted raises grave private delegation issues and should thus limit the statute.

Tax Deregulation

Steven A. Dean

Deregulation has played both the hero and the villain in recent years. This Article evaluates the impact of deregulation on what may be the single most economically important regulatory regime: the income tax. In order to accomplish this goal, it applies the concepts of fiscal arbitrage and compliance spirals to three deregulatory tax reforms. Compliance spirals describe an enforcement dynamic in which the regulator encourages compliance through a system of rewards for cooperation and punishment for noncooperation. Fiscal arbitrage describes policy measures that exploit cognitive biases and other anomalies to deliver political benefits by using minimal political capital. The combination of these two concepts creates a tool for tax authorities to evaluate deregulatory tax provisions for likely costs and benefits. On balance, this Article finds that tax deregulation is likely to be harmful.

The Government as Shareholder and Political Risk: Procedural Protections in the Bailout

Matthew R. Shahabian

In the wake of the fall of Lehman Brothers and the surrounding financial instability, Congress passed the Emergency Economic Stabilization Act of 2008, giving the Treasury Department unprecedented power to intervene directly in the financial markets and the economy at large. Though the original intention of the bill was for Treasury to purchase “toxic” assets from financial institutions in order to bring immediate relief to the financial sector, the Treasury Department instead purchased equity from such institutions and became the largest shareholder of corporations like Citigroup, A.I.G., and Bank of America. As a shareholder, the government possessed great informal influence over corporate policy—influence that it did not hesitate to exercise. This influence, paired with the lack of judicial review in the bailout bill, created a new kind of political risk for investors uncertain of whether the government would use its shareholder position to advance its own political goals. This Note analyzes and evaluates this political risk created by government control and explains why neither administrative law nor corporate law constrained the government as shareholder in the financial crisis following Lehman’s failure. Given that the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act fails to address what the government should do in the event of a future financial crisis, this Note suggests a clearer outline for the government’s role in corporate management when it acts as a shareholder and argues for judicialreview to provide procedural protections to shareholders, thereby reducing political risk.

Chevron’s Regrets: The Persistent Vitality of the Nondelegation Doctrine

Michael C. Pollack

Since the Chevron decision in 1984, courts have extended to administrative agencies a high level of deference when those agencies reasonably interpret ambiguous statutes, reasoning that agencies have more technical expertise and public accountability than courts. However, when the agency’s interpretation implicates a significant policy choice, courts do not always defer. At times, they rely on principles of nondelegation to rule against the agency interpretation and require that choices bemade by Congress instead.

Chevron makes no explicit exception for significant policy choices, but in cases like MCI v. AT&T and FDA v. Brown & Williamson, the Supreme Court has manipulated
the application of the Chevron test to find statutory clarity and preclude deference to agencies for exactly this reason. Led by litigants who highlighted the separation of powers implications of the agency’s interpretations, the Court has suggested both that the principles of nondelegation remain a constitutional constraint and that alluding to them, even without resort to some canon of interpretation, is a viable litigation strategy.

This Note exposes and defends the persistent, if unspoken, role played by the principles of nondelegation in the jurisprudence of the administrative state in an era of Chevron deference. It draws a strategic and doctrinal framework from which to challenge agencies’ statutory interpretations and presents a live circuit split involving the authority of the Food and Drug Administration to criminalize certain failures to maintain research records that is a ripe opportunity for applying that framework.

Adapting to 287(g) Enforcement: Rethinking Suppression and Termination Doctrines in Removal Proceedings in Light of State and Local Enforcement of Immigration Law

Carmen Gloria Iguina

Two legal doctrines govern the suppression of evidence and termination of removal proceedings following constitutional or regulatory violations in immigration enforcement. The Lopez-Mendoza doctrine governs suppression of evidence obtained in violation of constitutional rights. The Accardi doctrine governs suppression of evidence and termination of removal proceedings following violations of regulatory rights. However, the expanding involvement of state and local law enforcement agencies in immigration enforcement, particularly through 287(g) agreements, calls into question the applicability of these two doctrines. This Note analyzes the Lopez-Mendoza and Accardi doctrines in light of the new enforcement context presented by 287(g) agreements; it concludes that reexamination of the Lopez-Mendoza doctrine is required and that full application of the Accardi doctrine is warranted in the 287(g) context.

Reforming Judicial Review of Bioequivalence Determinations

Christopher J. Kochevar

This Note discusses the regulatory regime developed by the Food and Drug Administration (FDA) to ensure generic drug quality through premarket approval. The Hatch-Waxman Act effectively created the contemporary generic drug industry in 1984, and today, this industry saves the United States billions of dollars in medical costs. The legal-scientific concept of “bioequivalence” is central to the Hatch-Waxman regime, and its meaning has developed through statutory, regulatory, an advisory pathways in Congress and at the FDA. In this Note, I argue that the FDA’s current approach to promulgating standards for bioequivalence—largely based on guidance documents—threatens the agency’s ability to sustain comprehensive and authoritative regulation in the future. Guidance documents and petition responses are not subject to public input according to the standards of the Administrative Procedure Act (APA), and may create confusion among regulated entities and trouble for consumers. Nevertheless, courts repeatedly have deferred to the FDA’s choice of policymaking form and have found challenges under the APA to be nonjusticiable for lack of standing and ripeness. I argue that this deference should be attenuated and justiciability should be restored, not because generic drugs approved under the current regime are demonstrably dangerous to patients, but because systematic foreclosure of public input and judicial oversight is an unsustainable regulatory approach.

Beyond the Crisis: Dodd-Frank and Private Equity

Joseph A. Tillman

The history of the U.S. financial markets is peppered with economic crises. A few scholars have argued that in the wake of these events, the combination of widespread media attention and a flurry of congressional action has led to the hurried creation of sweeping remedial legislation. Indeed, these scholars maintain that in seeking to put out the flames of panic and financial instability, such regulations have often been mismatched to the problems they intended to address. My Note enters the fore and argues that the Volcker Rule and the amendments to the Investment Advisers Act of 1940, promulgated in response to the Financial Crisis of 2008 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, are examples of financial market regulation that go beyond the concerns that led to their enactment. Specifically, this Note explores these regulations as they apply to private equity (PE) funds and contends that they each bring the PE industry within the purview of regulatory scrutiny in a way that may have negative implications for our economic recovery. While the need to be forward-looking remains present in any legislative scheme, this Note takes the position that we are currently facing uncertain economic times that require a response more closely tied to the conduct that led to the Crisis.

Safe Harbor Startups: Liability Rulemaking Under the DMCA

Brian Leary

This Note presents two arguments. First, the Digital Millennium Copyright Act’s (DMCA) liability safe harbors are inapposite for private cloud services. Private cloud services are increasingly common offerings where consumers upload content, such as music, movies, or books, to personal cloud storage space, then download or stream that content to a multitude of devices. Although granting safe harbor immunity from secondary liability for user infringement would further the DMCA’s policy to promote technological innovation, doing so would completely ignore the DMCA’s other policy—to protect copyright. Currently, the DMCA protects copyright through its notice-and-takedown procedures, but these provisions depend on the ability of copyright holders to monitor users’ public actions—an impossibility on private cloud services. Second, the private cloud services problem is symptomatic of a larger problem in the DMCA: Its regulatory-like detail and specificity undermine its application to new technologies. The solution to both problems is an administrative one: Delegate rulemaking power to narrowly define safe harbor qualification when new technologies, like private cloud services, are valuable but also both ripe for infringement and unaddressed by the DMCA.

Statutes

The Honorable Robert A. Katzmann

Madison Lecture

In his James Madison Lecture, Judge Robert A. Katzmann argues that federal courts have much to learn from Congress and agencies about how statutes should be interpreted. In the voluminous discussion of how courts should construe statutes, there has generally been little consideration given to an appreciation of how Congress actually functions; how Congress signals its meaning; and what Congress expects of those interpreting its laws. In examining that lawmaking process, Judge Katzmann looks to how legislators signal their legislative meaning to the first inter- preters of statutes—agencies—and to how agencies regard Congress’s work product in interpreting and executing the law. He contends that Congress intends that its work be understood through its institutional processes and reliable legisla- tive history. In our constitutional system in which Congress is charged with enacting laws, the methods by which Congress makes its purposes known—through text and reliable accompanying materials—should be respected, lest the integrity of legislation be undermined. Agencies well appreciate and are responsive to Congress’s perspective that such materials are essential to construing statutes. By understanding statutory interpretation as an enterprise involving other institutions, we can better address the question of how courts ought to interpret statutes. Against that background, Judge Katzmann examines two approaches to the judicial inter- pretation of statutes—purposivism and textualism—and concludes with a discus- sion of practical ways in which Congress may better signal its meaning and how courts may better inform Congress of the problems courts identify in the statutes they review.

The Canon at the Water’s Edge

Thomas B. Bennett

What motivates substantive presumptions about how to interpret statutes? Are they like statistical heuristics that aim to predict Congress’s most likely behavior, or are they meant to protect certain underenforced values against inadvertent legislative encroachment? These two rationales, fact-based and value-based, are the extremes of a continuum. This Note uses the presumption against extraterritoriality to demonstrate this continuum and how a presumption can shift along it. The presumption operates to diminish the likelihood that a federal statute will be read to extend beyond the borders of the United States. The presumption has been remarkably stable for decades despite watershed changes in the principles—customary international law and conflict of laws—that once supported it. As the presumption’s normative justifications have diminished, a new justification has grown in importance. Today, the presumption is often justified as a stand-in for how Congress typically legislates. This Note argues that this change makes the presumption less defensible but even harder to overcome in individual cases.

1 5 6 7 8 9 11