THE CONSTITUTIVE DIMENSIONS OF TORT: PROMOTING PRIVATE SOLUTIONS TO RISK-MANAGEMENT PROBLEMS
James A. Henderson, Jr.
This Article builds on the premise that our legal system is an instrumental enterprise aimed at solving social coordination problems. Tort law, the special focus here, consists of a core of civil regulations that impose public solutions to coordination problems relating to the creation and management of risk. This Article examines the regulative dimensions of tort from a problem-solving perspective that the author and others have begun to develop. Along with its regulative core, tort includes important constitutive dimensions; for example, within limits, persons may contract out of governmentally imposed tort regulations. In those instances, courts allow externally derived contractual arrangements to override tort. This Article explores tort’s constitutive dimensions by examining the hitherto underappreciated extent to which tort law relies internally on private ordering to solve coordination problems. These internal constitutive dimensions of tort cover a much broader spectrum than does the contracting-out phenomenon. In these broader contexts, the tort system does not merely passively defer to contractual overrides but also actively delegates to private actors the power to define the norms imposed by tort law.
CONSTITUTIONAL VALUE JUDGMENTS AND INTERPRETIVE THEORY CHOICE
Near the turn of the last century, a legal reporter asked the eminent constitutional scholar Laurence Tribe to recommend the “best book on judicial review in the last twenty years.” His response was straightforward, though perhaps unexpected to those outside of constitutional theory circles: “There are two, and they’re both by the same author.” That author was Philip Bobbitt, and the books were Constitutional Fate and its somewhat belated sequel, Constitutional Interpretation. The central insight that distinguishes these books from the daunting mass of scholarly writing on the subject is Bobbitt’s unique account of what legitimates judicial oversight of legislative enactments, both generally and in particular interpretive applications. Taking his lead from the later work of Ludwig Wittgenstein, Bobbitt argued that constitutional law—indeed, the Constitution itself— is, like all language, a practice: “Law is something we do,” he wrote in the latter book, “not something we have as a consequence of something we do.” And, as with all language, what legitimates a given utterance or activity—what gives it “meaning” in the world—is how it functions within the rules of a particular communicative practice. Thus, the Constitution can have no meaning if not embedded in a shared practice of interpretation, and what legitimates a particular act of interpretation is the form or grammar of the argument it rests upon. With this insight in place, Bobbitt set about describing the accepted grammar of American constitutional argument.
PENALTY DEFAULT RULES IN INSURANCE LAW
A default rule tells a court how to fill a gap in a contract. A penalty default rule tells a court to fill the gap in a way that is undesirable to at least one of the parties. The threat of a penalty default rule is meant to induce parties to reveal information, to each other or the courts, by contracting around the penalty. Since the concept was first introduced by Ian Ayres & Robert Gertner in Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules, 99 YALE L.J. 87 (1990), major scholars have argued over which rules, if any, might qualify.
EMBRACING THE QUEEN OF HEARTS: DEFERENCE TO RETROACTIVE TAX RULES
James M. Puckett
The Supreme Court’s decision in Mayo Foundation for Medical Education and Research v. United States underscored the importance of a uniform approach to judicial review of administrative action; accordingly, the Court clarified that tax administration is generally subject to the same review as other kinds of administrative action by other federal agencies. Tax guidance from the IRS and Treasury Department serves an important role in clarifying the tax law so that taxpayers may report their tax liability accurately and plan their affairs. Meanwhile, aggressive attempts by a relatively small number of taxpayers to avoid tax liability by exploiting arguable ambiguities in the tax law present a perennial challenge for tax administration. In either case, as long as statutory and regulatory ambiguities exist, some surprises in the form of retroactive resolutions of uncertain tax positions are inevitable; the issue is who decides? Because of the Internal Revenue Code’s unusual grant of retroactive rulemaking power to the Treasury Department, tax administration cannot simply be collapsed with all other administrative action into a uniform framework of judicial review. This Article attempts to shed light on judicial review of more typical prospective tax guidance in part by drawing from the special case of retroactive tax guidance. This Article also argues that the general approach to judicial review of administrative action, as infused by the Code’s express grants of retroactive rulemaking power, affords the IRS and Treasury flexibility to make policy retroactively through rulemaking and receive deference from the courts. Moreover, though some constitutional limitations on retroactivity exist, the retroactive administrative clarification of an ambiguity should not be unconstitutional. Finally, this Article briefly assesses strengths and weaknesses of the current regime and the principal alternatives.
ADDRESSING CORPORATE SHORT-TERMISM THROUGH LOYALTY SHARES
P. Alexander Quimby
The classic concept of patient investing and long-term corporate governance has largely disappeared. Dispersed investors with long-term investment horizons have been replaced by concentrated institutional investors, which trade and control corporations solely for the shortterm. This new model of investment and corporate governance (deemed “short-termism”) has a negative impact on society as a whole and has been blamed for recent financial crises and a lack of investment in research and development.
Although others have addressed short-termism, their efforts generally avoid providing actual solutions to the problem. This Note fills that void: it provides a model for promoting long-term investment and corporate governance, while not eliminating the benefits conferred by short-term trading. This goal can be accomplished by making a “loyalty shares” provision available to public corporations. By adopting a loyalty shares provision, the gains generated from the sale of that corporation’s stock would be subject to a periodically reduced capital gains tax rate over time, while the voting rights attached to that stock would be periodically enhanced over time. Adoption of the provision would entice more shareholders to invest for the long-term, while also increasing these long-term shareholders’ control over the corporation. Mindful of the experiences of European and Canadian companies that use other types of control-enhancing mechanisms, this proposal contains several features which avoid the pitfalls inherent in an uncapped system of enhanced voting rights.
CREATING A SAFE HARBOR FOR FLORIDA’S CHILDREN: AN OVERVIEW OF FLORIDA’S LEGISLATIVE EVOLUTION IN DOMESTICMINOR SEX TRAFFICKING
While the sex trafficking of minors is most commonly associated with children who are trafficked into America from other countries, in reality, thousands of minors are trafficked and sexually exploited domestically throughout rural and urban America. Due to the rise of user-post classified advertising websites, the solicitation of minors for sexual services over the Internet has become increasingly common. As a result, Domestic Minor Sex Trafficking (DMST) has rapidly progressed into a national epidemic, and its victims are in desperate need of state-specific legislation and services. Because the Internet has become a conduit for sexually exploiting minors, DMST can happen anywhere in America and can no longer go unacknowledged.