Showing papers in "Hastings Law Journal in 1999"

Economic and Political Consequences of the 1996 Telecommunications Act

Abstract: The 1996 Telecommunications Act seems to be encouraging competition in key segments of the telephone and cable television industries. Stock price data suggest that the wave of "megamergers" in telecommunications-probably an unanticipated result of the Telecommunications Act-is associated with consumer benefits. Improvements in competitiveness are modest by some standards but impressive when judged against the results of other legislation with the announced goal of increasing market rivalry (e.g., the 1984 and 1992 Cable Acts). Federal policymakers also seem to be reaping benefits from the Telecommunications Act, in that its mandate for extensive rulemaking by the FCC in the transition to competition is associated with increases in political contributions to federal policymakers from telecommunications firms and executives. That is an intended consequence of the act's major reform: removing policy jurisdiction from Judge Harold Green's divestiture oversight and placing it in the hands of the FCC, a regulatory agency answerable to Congress.

Pigeonholing Illness: Medical Diagnosis as a Legal Construct

Abstract: Disease definitions and clinical judgments routinely affect coverage and reimbursement decisions by health insurers, the licensing determinations of regulatory agencies charged with reviewing new therapeutic technologies, evidentiary and substantive rulings by the judiciary in personal injury lawsuits and criminal trials, eligibility decisions in disability programs, and the resolution of claims before workers' compensation tribunals. This reliance on the definition and identification of disease by the medical profession fails to appreciate the extent to which our conceptions of illness are socially constructed rather than based on value-neutral scientific data and the application of technical expertise. Just as social forces shape medical practice, legal institutions have influenced nosology and diagnosis, but the nature and consequences of their effects on the definition and identification of disease have gone largely unnoticed. By virtue of their often uncritical reliance on clinical judgments, agencies and courts have to some extent distorted and even corrupted medical practice, interfering with the primarily therapeutic purposes underlying diagnostic decisionmaking by asking physicians, psychiatrists, and clinical researchers to provide answers to difficult legal and political questions. To the extent that medical professionals make diagnostic judgments to serve non-therapeutic purposes, they may work against promoting the best interests of their patients and society.

A General Framework for Competitive Analysis in Wireless Telecommunications

Abstract: The Telecommunications Act of 1996 sets forth extensive provisions to unbundle the local telecommunications network to encourage the development of a competitive market for local telephone. It would seem to have been an unstated premise of those statutory provisions and the Federal Communications Commission (FCC) rules interpreting them that the task of unbundling is one that should take place in a technological vacuum. Although the Telecommunications Act of 1996 ostensibly removed artificial regulatory distinctions based on the particular technology employed to produce a communications service, the administrative rulemakings and federal court litigation that have dominated the first three years of experience under the new statute have focused on the traditional wireline access network and have seemingly ignored the fact that, over the same period, wireless telecommunications has rapidly matured as a substitute for wireline access. If regulators were to acknowledge that development, the entire exercise of wireline unbundling could become irrelevant. Wireless local telephony already provides a substitute for wireline access. It is therefore highly pertinent for a symposium on interconnection, such as this one, to consider the FCC's policies that artificially constrain the market structure for wireless telecommunications services. The Supreme Court's 1999 decision in AT&T Corp. v. Iowa Utilities Board, reversed the FCC's unbundling rules for incumbent local exchange carriers to the extent that the agency failed to establish a reasonable standard for determining whether it is necessary to unbundle a particular element and whether the failure to unbundle that element would impair and entrant's ability to compete in the provision of local telecommunications services. In this Article, we propose a general framework for evaluating competition in wireless telecommunications. Although our analysis has immediate ramifications for wireless telecommunications policies-such as spectrum caps and mergers of wireless carriers-the same analysis can shed light on the question of whether, or for how long, it is necessary to mandate the unbundling of even the copper loop, which constitutes the element of the wireline network that is considered the least susceptible to duplication by competitors. If wireless is indeed an access substitute for wireline copper loops, and if wireless thus permits the competitive supply of bundled services that are satisfactory substitutes in consumers' minds for the typical bundle of services that consumers have until now demanded in conjunction with standard wireline access, then Congress, the FCC, the state public utilities commission, and the courts must ask: Is the great experiment of mandatory unbundling of telecommunications networks worth the candle? That consequential question emerges from the analysis that we employ to study a seemingly narrower issue of wireless telecommunications policy. By regulation, the FCC has limited to 45MHz the amount of commercial mobile radio services (CMRS) spectrum that may be licensed to a single entity within a particular geographic area. As the Commission stated in its 1998 notice of proposed rulemaking (NPRM) concerning possible relaxation of the spectrum cap, a single entity may acquire attributable interests in the licenses of broadband Personal Communications Service (PCS), cellular, and Specialized Mobile Radio (SMR) services that cumulatively do not exceed 45 MHz of spectrum within the same geographic area. We formulate, in this Article, a decision rule that would assist the Commission in deciding whether or not to retain the spectrum cap and, thereafter, in evaluating competition in wireless telecommunications generally. We employ decision-theoretic analysis to determine whether the expected costs of retaining the 45 MHz spectrum cap exceed the expected costs of removing it. The expected costs of removing the spectrum cap are negligible. The probability of either monopolization by a single firm or collusive pricing by a group of nationwide pricing plans and because capacity is a function of both spectrum and equipment. In contrast, the expected costs of retaining the spectrum cap are substantial as wireless services evolve from mobile voice to fixed voice and data applications. The probability that a single carrier would use more than 45MHz is nontrivial, because the growth in demand due to consumers' desire for bundled service offerings and the invasion of wireless carriers into fixed communications markets will together severely burden existing networks. In short, a cost-benefit analysis demonstrates that the spectrum cap should be abolished because the expected costs of retaining the spectrum cap vastly exceed the expected costs of removing it. The application of decision-theoretic analysis to the issue of spectrum cap policy can easily be generalized to deal with a broad range of competitive policy issues in the wireless industry. We restate the decision rule in terms that can be applied to numerous wireless policy issues. For example, regulators may have to decide whether newly merged firms should be forced to divest themselves of wireless properties in overlap territories. The issue of divestiture is treated in similar fashion to the spectrum cap analysis. Not surprisingly, many of the same factors that influence the spectrum cap analysis resurface in the merger analysis. In Part I of this Article, we explain our decision-theoretic rule for determining whether the spectrum cap should be retained. In Part II, we estimate the expected costs of removing the cap and describe the magnitude of those costs in qualitative terms. In Part III, we present the same analysis with respect to the expected costs of retaining the cap. In Part IV, we compare the expected costs of retaining and removing the spectrum cap. In Part V, we demonstrated the general applicability of our decision-theoretic approach to competitive policy in the wireless communications industry. We conclude by noting how the increasing substitutability of wireless and wireline services is blurring the definitions of relevant market in the telecommunications industry-a development that has direct implications for whether, and how much, to mandate unbundling of the incumbent wireline network.

"If Property Rights Were Treated Like Human Rights, They Could Never Get away with This": Blacklisting and Due Process in U.S. Economic Sanctions Programs

Abstract: Economic sanctions have proliferated in the last half of the twentieth century, and become the "first choice" of U.S. policymakers seeking tools to address many complex international issues. A key feature of these various sanctions programs is the use of a blacklist, to bring third party agents, controlled entities, and corporate cloaks operating elsewhere within the ambit of the sanctions aimed at a particular country or destination. These blacklists have now grown to include several thousand individuals and entities. However, despite the growing importance of economic sanctions, and their accompanying blacklists, these programs are still managed by a relatively small office within the Treasury Department, the Office of Foreign Assets Control (OFAC). Using the example of the IPT Company, Inc., a small but long established U.S. based corporation with foreign ownership, and the economic sanctions program targeted at the Federal Republic of Yugoslavia, this Article examines the processes used by OFAC to establish, impose, and implement such sanctions on a particular destination, and the closely related process of blacklisting particular parties associated with the sanctioned destination. It explores the unique, adversarial, relationship with the public which characterized much of OFAC's operations until recent years, and the impact that attitude has had on the promulgation, notice, distribution, and enforcement of OFAC's regulations. After considering the important, but limited, role individual case by case challenges have played in improving these processes, the Article concludes by suggesting that new legislation is required to remedy ongoing deficiencies in OFAC's implementation of its programs. Accordingly, it concludes by urging that the pending Sanctions Reform Act be expanded to provide detailed guidance on how sanctions should be implemented, in a manner similar to the way the U.S. Congress has both directed and overseen the operation of the export control system with the Export Administration Act.

Modes of Regulatory Enforcement and the Problem of Administrative Discretion

Abstract: In addition to regulating different substantive areas, administrative agencies differ in the enforcement systems they use to implement regulatory regimes. Professor Bhagwat identifies a crucial distinction between ex ante enforcement regimes, which authorize agencies to review approve or disapprove of regulated conduct before it occurs, and ex post regimes, which limit agencies to prosecuting and penalizing regulatory violations after they have occurred. The nature of an agency's enforcement power can have an enormous impact on the practical scope of its substantive lawmaking power and its discretionary authority. Ex ante authority appears in a variety of guises, including licensing schemes, preclearance or preapproval requirements, certification requirements. Their common feature is that ex ante enforcement regimes place the burden of inertia, delay, and inaction on regulated entities, by prohibiting them from engaging in desired activity until after agency approval is obtained, or agency disapproval is successfully challenged in the courts (ex post regimes, by contrast, leave the burden of inertia on agencies). The practical consequence of this is that ex ante enforcement powers greatly increase the substantive lawmaking power, as well as the discretionary authority of both agencies as a whole and individual agency personnel, by shielding regulatory decisions from both internal agency and judicial supervision. Because of this, Professor Bhagwat argues, Congress should be extremely cautious about granting agencies ex ante authority, especially in substantive areas where agency discretion can threaten important social interests. On the other hand, there are also potential benefits from ex ante regulatory authority, primarily in terms of preventing irremediable social harms, and reducing investigatory and remedial burdens on agencies. In light of these considerations, the balance of the article identifies specific factors relevant to evaluating the wisdom of granting ex ante enforcement authority to an agency, and then applies to resulting framework to evaluate a number of existing regulatory regimes.

Engalla v. Permanente Medical Group, Inc.: Can Arbitration Clauses in Employment Contracts Survive a "Fairness" Analysis?

Abstract: Stuart L. Bass, What the Courts Say About Mandatory Arbitration, DISPUTE RESOLUTION J., Nov. 1999, at 24. Russell Evans, Note, Engalla v. Permanente Medical Group, Inc.: Can Arbitration Clauses in Employment Contracts Survive a \"Fairness\" Analysis?, 50 HASTINGS L.J. 635 (1999). L. Anthony George, Controlling Legal Costs in Labor Arbitration, COLO. LAW., June 1999, at 75. Michelle R. Mitchell, Book Review, Arbitration Agreements: When Do Employers Waive Their Rights?, 14 BYU J. PUB. L. 83 (1999). Morton H. Orenstein, Mandatory Arbitration: Alive and Well or Withering on the Vine?, DISPUTE RESOLUTION J., Aug. 1999, at 57.

From Watergate to Ken Starr: Potter Stewart's "Or of the Press" a Quarter Century Later

Abstract: Much has happened in the realm of the First Amendment, as well as in constitutional law and politics more generally, in the 25 years since Justice Stewart wrote “Or of the Press.” Today seems a particularly fitting time to take a close second look at Justice Stewart’s ideas, given the recently-concluded impeachment affair that sparked so many people to draw parallels to and distinctions from the Watergate affair that inspired Stewart’s reflections. And so, with memories of Bill Clinton, Ken Starr and Monica Lewinsky still quite fresh, I shall try in the next few paragraphs to sketch my own (admittedly tentative) thoughts on the two big points Justice Stewart advanced a quarter century ago that (1) the so-called Press Clause of the First Amendment was designed to serve a government-checking function, by facilitating systematic scrutiny and critic of the three branches of government to uncover and prevent abuse of government power; and (2) that because of this checking function, the Press Clause ought to be understood as a “structural” provision of the Constitution that gives the “organized press — the daily newspapers and other established news media" — some rights that the rest of us do not necessarily enjoy under the Speech Clause of the First Amendment.

Reading Justice Brennan: Is There a "Right" to Dissent?

Abstract: While there is a great deal of literature addressing the pros and cons of dissenting judicial opinions, no one has asked whether judges in a multi-judge court have a "right" to dissent. A "complete" right to dissent would include not just rights to (a) privately express one's disagreement to one's colleagues; and (b) have the fact that one does not join a majority opinion publically noted; but also (c) a right to have a written expression of one's dissenting rationale published in company with the majority's opinion. Justice Brennan delivered a wonderful "Defense of Dissents" in 1985 (Hastings Law Journal); not surprisingly, perhaps, so has Justice Scalia (Journal of Supreme Court History, 1994). This essay is introductory to a reprint of Justice Brennan's lecture, celebrating the Hastings Law Journal's 50th anniversay. The essay suggests that the constitutional foundation for a "right to dissent" may be found in the First Amendment (discussing "compelled silence" cases), as well as in the core meaning of the Article III terms "court" and "judge." More historical investigation needs to be done on the historical understanding of judges and their ability to issue dissents. Moreover, a "right to issue a dissenting opinion" does not necessarily imply a "right to defy precedent." The concepts are separable, perhaps properly so. Nevertheless, the constitutional claim for a right to dissent is not insubstantial. The essay includes a brief discussion of current judicial disciplinary charges that have been filed against a California appellate judge, Presiding Justice J. Anthony Kline, because he dissented from a majority judgment compelled (he conceded) by California precedent. Those charges should be dropped. (In August 1999 the charges against Justice Kline were in fact dropped with the Commission on Judicial Performance stating that judges "must be able to [dissent] free from fear of discipline for the free expression of their ideas.")

The Judicial Politics of White Collar Crime

Abstract: This article analyzes what I term the “white collar crime paradox:” In a substantial number of the U.S. Supreme Court’s leading white collar criminal cases, ranging from securities fraud to political corruption cases, the “liberal” justices have voted to affirm convictions, and the “conservative” justices to reverse them. Even more frequently, these cases have produced strange alliances among the liberals and conservatives, who rarely split into such groupings in non-white collar criminal cases. And it is not merely votes and alliances that change in white collar cases; judicial philosophies, attitudes, and rhetoric transmogrify into a veritable twilight zone of Supreme Court criminal law jurisprudence.The common or “traditional” view of the Court's white collar jurisprudence is it is essentially class-based and result-driven. This cynical perspective rests on the assumption that the justices alter their views on criminal justice matters according to subjective reactions to the defendant’s social status. This perspective, if accurate, is disturbing. It bespeaks both deep-seated hypocrisy and intellectual shallowness on the Court. It is my view that the real explanation for the strange voting patterns is, not surprisingly, far more complex than the common wisdom would allow. First, when analyzing the types of issues white collar cases raise, we see that concerns over statutory construction and federalism may skew the justices’ usual criminal case ideologies. Second, and more fundamentally, white collar criminal statutes often raise unique concerns over the nature of criminalization and punishment. It may be that the nature of white collar criminalization, and its current flaws, have more than any other factors contributed to the white collar crime paradox.