Georgetown University Law Center

About: Georgetown University Law Center is a based out in . It is known for research contribution in the topics: Supreme court & Global health. The organization has 585 authors who have published 2488 publications receiving 36650 citations. The organization is also known as: Georgetown Law & GULC.

Bankruptcy's Lorelei: The Dangerous Allure of Financial Institution Bankruptcy

Abstract: The idea of a bankruptcy procedure for large, systemically important financial institutions exercises an irresistible draw for some policymakers and academics. Financial institution bankruptcy promises to be a transparent, law- based process in which resolution of failed financial institutions is navigated in the courts. Financial institutions bankruptcy presents itself as the antithesis of an arbitrary and discretionary bailout regime. It promises to eliminate the moral hazard of too-big-to-fail by ensuring that creditors will incur losses, rather than being bailed out. Financial institutions bankruptcy holds out the possibility of market discipline instead of an extensive bureaucratic regulatory system. This Essay argues that financial institution bankruptcy is a dangerous siren song that lures with false promises. Instead of instilling market discipline and avoiding the favoritism of bailouts, financial institution bankruptcy is likely to simply result in bailouts in bankruptcy garb. It would encourage bank deregulation without the elimination of moral hazard that produces financial crises. A successful bankruptcy is not possible for a large financial institution absent massive financing for operations while in bankruptcy, and that financing can only reliably be obtained on short notice and in distressed credit markets from one source: the United States government. Government financing of a bankruptcy will inevitably come with strings attached, including favorable treatment for certain creditor groups, resulting in bankruptcies that resemble those of Chrysler and General Motors, which are much decried by proponents of financial institution bankruptcy as having been disguised bailouts. The central flaw with the idea of financial institutions bankruptcy is that it fails to address the political nature of systemic risk. What makes a financial crisis systemically important is whether its social costs are politically acceptable. When they are not, bailouts will occur in some form; crisis containment inevitably trumps rule of law. Resolution of systemic risk is a political question, and its weight will warp the judicial process. Financial institutions bankruptcy will merely produce bailouts in the guise of bankruptcy while undermining judicial legitimacy and the rule of law.

The Cost of Securities Fraud

Abstract: Under the dominant account, fraudulent financial reporting by public firms harms the firms’ shareholders and, more generally, capital markets. This Article contends that the account is incomplete. In addition to undermining investor confidence, misreporting distorts economic decision-making by all firms, both those committing fraud and those not. False information impairs risk assessment by those who provide human or financial capital to fraudulent firms, the firms’ suppliers and customers, and misdirects capital and labor to subpar projects. Efforts to hide fraud and avoid detection further distort fraudulent firms’ business decisions, as well as decisions by their rivals, who mimic or respond to what appears to be a profitable business strategy. If fraud is caught, managers externalize part of the cost of litigation and enforcement to employees, creditors, suppliers, and the government as the insurer of last resort. Mounting empirical evidence suggests that harm to non-shareholders dwarfs that suffered by defrauded shareholders. Moreover, unlike investors, who can limit their exposure to securities fraud by diversifying their holdings and demanding a fraud discount, other market participants cannot easily self-insure. The Article supplies both theoretical and empirical support for the assertion that defrauded investors are not the only victims of accounting fraud. In conclusion, the Article outlines and assesses some alternative fraud deterrence and compensation mechanisms.

Admin Law's Federalism: Preemption, Delegation, and Agencies at the Edge of Federal Power

Abstract: This Article critiques existing and nascent rules limiting federal agency authority in the name of federalism. Those rules presently bind agencies even more tightly than Congress. For instance, while Congress can regulate to the limits of its commerce power with a sufficiently clear statement of its intent to do so, absent clear congressional authorization an agency cannot, no matter how clear the language of the agency's regulation. Similarly, where Congress can preempt state law, albeit only where its intent to do so is clear, some commentators have read recent decisions to hold that agencies cannot, except upon Congress's clear authorization. A number of leading commentators have hailed this combination of rules on the grounds that congressional control over questions of federalism is to be preferred to agency decision making. Congress, they claim, is more deliberative than the Executive, more transparent to the public, and more accountable. Additionally, given the relative ease of enacting regulations rather than statutes, those who favor Congress fear that lower barriers to federal expansion in the Executive would lead to run-away federal power. Our argument here is that both these sets of claims are, at best, accurate only occasionally. We attempt to show that in many instances agencies are, or with wise doctrines of judicial review can be made to be, more democratic and deliberative than Congress. While regulating will almost always be easier than legislating, in many instances the need for additional speed bumps under the wheels of the Executive is negligible, or downright counter-productive. Thus, we argue for a more nuanced set of rules that would permit agencies in many instances to preempt or regulate without the need for express congressional approval.

Discretion and Discrimination Reconsidered: A Response to the New Criminal Justice Scholars

Abstract: A new trend in criminal justice scholarship argues that constitutional restrictions on police discretion, necessary to protect minorities in the civil rights era, have outlived their usefulness, and now actually hamper the protection of minority interests. The rise in interest in "quality-of-life" policing, among other things, has led to a positive reevaluation of police discretion, and has a consequent critique of judicial doctrines that are said to restrict such discretion. This article takes on this new school of criminal justice scholarship. It argues that its proponents have made five mistakes. First, they have misdiagnosed the problem, because in fact constitutional doctrine already gives the police a wide range of unregulated discretion. Second, they underestimate the extent to which race discrimination remains a pervasive problem in criminal justice. Third, the new scholars have mistaken a specific concern for race discrimination as the doctrine's general purpose, and in so doing ignore the dangers of discrimination within minority communities. Fourth, the new scholars fail to acknowledge the significant difference between official abuse and private criminal victimization, which explains the very different reactions to, for example, the recent New York police killing of Amadou Diallo and any number of private murders of black men there. Finally, and most fundamentally, the new scholars fail adequately to account for the important role that controls on discretion play in maintaining the criminal law's legitimacy.

The Vertical Separation of Powers

Abstract: Standard understandings of the separation of powers begin with the concept of function The author argues that function alone cannot predict important changes in structural incentives and thus serves as a poor proxy for assessing real risks to governmental structure To illustrate this point, the article returns to proposals considered at the Constitutional Convention and considers difficult contemporary cases such as Morrison v Olson, Clinton v Jones, and the Supreme Court's more recent federalism decisions In each instance, function appears to steer us wrong because it fails to understand separation of powers questions as ones of structural incentive and political relationship In order to move away from function as the sole proxy for structural risk, the article suggests a "vertical" approach toward separation of powers questions That approach reconceives departmental power less as the power to perform a set of tasks fitting a particular constitutional description (eg, adjudication, execution, legislation) than as a set of constitutionally created political relationships between the people and those who govern them Put another way, the separation of powers becomes less a search for transcendental descriptions of the departments than a means of considering how shifting structure affects liberty -- how structural incentives may incline governmental actors to act toward the people in ways that risk the electoral powers of both majorities and minorities