Showing papers in "Washington Law Review in 2009"

Code, Crash, and Open Source: The Outsourcing of Financial Regulation to Risk Models and the Global Financial Crisis

Abstract: The widespread use of computer-based risk models in the financial industry during the last two decades enabled the marketing of more complex financial products to consumers, the growth of securitization and derivatives, and the development of sophisticated risk-management strategies by financial institutions. Over this same period, regulators increasingly delegated or outsourced vast responsibility for regulating risk in both consumer finance and financial markets to these privately owned industry models. Proprietary risk models of financial institutions thus came to serve as a "new financial code" that regulated transfers of risk among consumers, financial institutions, and investors. The spectacular failure of financial-industry risk models in the current worldwide financial crisis underscores the dangers of regulatory outsourcing to the new financial code. This Article explains how financial institutions used the "new financial code" to shift, spread, and price financial risk using the template of the stages of securitization of consumer-credit products, hedging through credit default swaps, and overall portfolio management. This Article then examines several explanations for the failures of risk models, which contributed to the current crisis, including flaws in the design of risk models and agency costs associated with those models. It also outlines several lessons for regulatory outsourcing from the current crisis, including the following: * Bank regulators should scrap those provisions of Basel II that allow certain banks to set their own capital requirements according to their internal risk models; * Regulators should promote "open source" in code (or the models) used to market financial products to consumers, price securitizations and derivatives, and manage financial-institution risk; and * The failure of risk models used to price securitizations and derivatives reveals some of the comparative advantages of equity securities in spreading risk. INTRODUCTION The revolution in quantitative finance that occurred over the last two decades produced models that enabled the rapid growth of securitization and derivatives.1 This Article demonstrates that financial regulators delegated or outsourced to these computer-based risk models the responsibility of regulating a wide range of risk transfers in the economy - from consumer finance to global financial markets. These risk models failed spectacularly in the global financial crisis that started in the subprime mortgage market, and this outsourcing of regulation exacerbated the crisis. To understand the crisis, the failure of risk models, and the dangers of regulatory outsourcing, it is helpful to sketch out the system by which mortgages are connected to asset-backed securities, derivatives, and financial risk to global financial institutions.2 Securitization uses the future payment streams from mortgages and other credit products to create securities that are sold to investors. These investors not only acquire the right to these payment streams, but also assume a portion of the financial risk that borrowers will not make payment on the underlying mortgages when due; securitization thus carves up the risk associated with mortgages and other securitized assets into slices, which are then spread among investors.3 Those investors could then use credit derivatives and other derivatives to offload parts of this risk to counterparties in exchange for paying premiums to those counterparties.4 Securitization and derivatives created a system for transferring risk and spreading it among those investors who could theoretically bear risk most efficiently.5 Each part of this risk-transfer system was enabled by private, computer-based industry risk models that were built using innovations in quantitative finance. These models include the following: * Data-mining and credit-scoring software used by financial institutions to market mortgages, loans and other financial products to individual consumers (this marketing includes not only setting the price of those products to match the risk of individual borrowers, but also creating complex features in those products that can be tailored for certain categories of consumers);6 * Pricing models used by financial institutions to structure and price the securitization of those consumer financial products;7 * Models used by credit-rating agencies to assign ratings to the asset-backed securities issued in securitizations;8 * Models used to price those derivatives that further hedge the risks of asset-backed securities;9 and * Models used by financial institutions to manage their investment portfolios and set their overall risk-management policies. …

The prosecutor as minister of justice: preaching to the unconverted from the post-conviction pulpit

Abstract: This Article explores how the "minister of justice" theory of the American prosecutor has translated into practice in the post-conviction arena. Specifically, this vague theory, when coupled with a dearth of ethical rules and judicial guidance, has not gained traction in the post-conviction sphere, and few concrete principles exist to govern prosecutorial behavior after the conviction of a criminal defendant. This Article argues for a fuller realization of the minister-of-justice ideal for prosecutors in the post-conviction process where the factual innocence of a criminal defendant is in question. To truly effectuate the minister-of-justice goal, prosecutors should take a more active part in rectifying wrongful convictions by considering the formation of internal post-conviction "innocence units" geared toward ferreting out potential wrongful convictions and assisting in presenting them to courts. INTRODUCTION One of my law students recently had a job interview with a prosecutor's office. The interview seemed to be progressing nicely, in the student's estimation, until he was asked whether his previous experiences in the law had provided him with a chance to "taste blood." Silence reigned until the interviewer followed up by explaining his wish to hire only trial lawyers who had already tasted blood and liked it. This anecdote once again alerted me to the troubling disconnect between the "minister of justice" ideal of the American prosecutor and the on-thestreets reality of prosecutorial behavior. The image of the prosecutor as carnivorous aggressor in the adversarial den of the criminal courts is alive and well, not necessarily in such blatant form as the infamous "Two-Ton Contest" in Illinois - in which prosecutors vied to handle cases involving the heaviest criminal defendants in the hopes of becoming the first to convict four thousand pounds of flesh1 - but rather in numerous, more subtle ways. That is, the institutional and societal acceptance of the view that the prosecutor's primary goal is "to convict" lingers, even in the face of evidence that wrongful convictions occur with disturbing regularity in the United States. This notion of the American prosecutor as principally concerned with garnering and maintaining convictions not only contributes to the conviction of the innocent, but also makes it vastly harder for the wrongfully convicted to achieve freedom, a daunting undertaking even under perfect circumstances. After a defendant has been convicted, it becomes increasingly difficult to critically examine the underlying legitimacy of that result. Appellate courts are limited in the issues that they may consider during the direct appeal of criminal convictions, and generally entertain only those topics presented to the judge at trial.2 The task of evaluating claims of factual innocence therefore typically falls into the realm of the collateral post-conviction process, such as writs of habeas corpus or coram nobis, or their statutory analogues.3 States are notoriously suspicious of post-conviction innocence claims based on newly discovered evidence,4 and the procedures in this area usually reflect this distrust by featuring stringent statutes of limitations, onerous burdens of proof, and deferential standards of appellate review.5 A key variable, then, in the ability of a criminal defendant to have a chance for success on a post-conviction claim of innocence often lies in the nature of the prosecutor's response; prosecutorial openness to the possibility of the defendant's innocence may go a long way toward convincing the judge of the merits of that claim, if only to the extent of granting an evidentiary hearing.6 This Article argues for a fuller realization of the minister-of-justice ideal for prosecutors in the post-conviction process where the factual innocence of a criminal defendant is in question, and builds upon a previous piece that I wrote regarding the phenomenon of prosecutorial resistance to innocence claims. …

Rape, Feminism, and the War on Crime

Abstract: Over the past several years, feminism has been increasingly associated with crime control and the incarceration of men. In apparent lock step with the movement of the American penal system, feminists have advocated a host of reforms to strengthen state power to punish gender-based crimes. In the rape context, this effort has produced mixed results. Sexual assault laws that adopt prevailing views of criminality and victimhood, such as predator laws, enjoy great popularity. However, reforms that target the difficulties of date rape prosecutions and seek to counter gender norms, such as rape shield and affirmative consent laws, are controversial, sporadically-implemented, and empirically unsuccessful. After decades of using criminal law as the primary vehicle to address sexualized violence, the time is ripe for feminists to reassess continued involvement in rape reform. This Article cautions feminists to weigh carefully any purported benefits of reform against the considerable philosophical and practical costs of criminalization strategies before making further investments of time, resources, and intellect in rape reform. In advancing this caution, the Article systematically catalogues the existing intra-feminist critiques of rape reform and discusses reasons why these critiques have proven relatively ineffective at reversing the punitive course of reform. The Article then crafts a separate philosophical critique of proprosecution approaches by exposing the tension between the basic tenets of feminism and those animating the modern American penal state. Finally, it discusses why purported cultural and utilitarian benefits from rape reform cannot outweigh the destructive effect criminalization efforts have on feminist discourse and the feminist message. The Article concludes that feminists should begin the complicated process of disentangling feminism's important stance against sexual coercion from a criminal justice system currently reflective of hierarchy and unable to produce social justice. INTRODUCTION Over the past several years, feminism has become increasingly identified with crime control and the prosecution of men who commit offenses against women. Some feminist scholars have begun to express grave concern that "a punitive, retribution-driven agenda" now constitutes "the most publicly accessible face of the women's movement."1 Twenty-six years ago, feminist scholar Catharine MacKinnon exposed the theoretical incongruity between feminism and the "liberal"2 protection of women's rights through police power.3 She observed, "The liberal state coercively and authoritatively constitutes the social order in the interest of men as a gender, through its legitimizing norms, relation to society, and substantive policies."4 Despite MacKinnon's insistence that only radically social, as opposed to liberal, strategies adequately address rape, most feminists took her basic message5 as a call to legal arms against rapists.6 The United States is one of the most punitive nations on earth.7 Fear of crime constitutes a meaningful part of Americans' everyday lives and exerts significant influence on how Americans live.8 As the United States became more and more punitive, feminists hopped on the bandwagon by vigorously advocating reforms to strengthen the operation of criminal law to combat gendered crimes. Today, many associate feminism more with efforts to expand the penal laws of rape and domestic violence than with calls for equal pay and abortion rights.9 The zealous, well-groomed female prosecutor who throws the book at "sicko" sex offenders has replaced the 1970s bra-burner as the icon of women's empowerment.10 Indeed, many regard criminal law reform as one of feminism's greatest successes.11 Feminists' feelings of victory are certainly understandable, given the widespread implementation of rape and domestic violence reforms and the massive shift in mindset on gendered crimes during the late twentieth century. …

Muscular Procedure: Conditional Deference In The Executive Detention Cases

Abstract: The executive detention cases of the past several years demonstrate a rare but critical assertion of procedural law where the political branches fail to legislate or to properly implement substantive law. This is "muscular procedure" - the invocation of a procedural device to condition deference on political branch integrity. Courts have affected the law of national security in profound ways by requiring the political branches to adhere to a judicially imposed standard of transparency and deliberation. Courts have resolved the merits of individual enemy combatant challenges by rejecting executive branch decisions based on absolute secrecy, innuendo, tentativeness, or multiple levels of hearsay, while affirming executive determinations that satisfy minimal standards of reliability. More broadly, courts have used procedural rules to smoke out and put in check Congress's lack of oversight of the executive branch and the President's inadequate interpretation and implementation of authorizing legislation. Although the prevailing descriptive and normative frameworks advocate either blind deference to the collective expertise of the political branches or judicial resolution of large, complex and highly fractious substantive questions, courts have instead put procedure to muscular uses - focusing on the means of coordinate branch decisionmaking, while still allowing the political branches to define me content of the substantive law. This theory of judicial review, which is grounded in the judiciary's comparatively greater expertise in procedure, has implications beyond the national security context. INTRODUCTION The executive detention cases of the past several years have prompted renewed debate over the proper scope of judicial deference to the executive branch's claimed need to limit individual liberties during times of crisis. Some theorists argue that courts should resolve large policy questions raised by individual challenges to assertions of executive power.1 Others believe that courts should decide as little as possible, asking only whether executive action is grounded within statutory authority.2 However, a number of the post-9/11 national security decisions have accomplished a great deal without following either approach. In these cases, the Supreme Court and a number of lower courts have put procedural devices to surprisingly "muscular" uses. The decisions illustrate a rare but critical assertion of procedural law where the political branches fail to legislate or properly implement substantive law. This is "muscular procedure" - the invocation of a procedural rule to condition deference on coordinate branch integrity. The cases provide a framework for understanding the role of judicial review in the post-9/11 executive detention decisions, with implications for other fields of law as well.3 Many commentators have criticized the Supreme Court's executive detention decisions as "merely" procedural rulings, pointing out that the Court has generally addressed itself to questions about adjective law or the ground rules of litigation: whether the Court has jurisdiction; whether detainees can access the courts; and whether the government is required to provide discovery, and if so, how much.4 Far fewer decisions have resolved substantive questions such as the scope of executive power and the content of individual liberty - that is, whom the Executive can hold and for how long, and the specific constitutional protections that apply. But regardless of whether a particular decision turns on "process" or "substance" - an age-old distinction that resists clear definition5 - courts have affected the law of national security in profound ways by explicitly requiring the political branches to adhere to a judicially imposed standard of transparency and deliberation. In individual cases, rulings about seemingly mundane procedural issues such as discovery and evidentiary standards have accelerated the release of enemy combatant detainees who were held at Guantanamo Bay years after being cleared of any wrongdoing. …

Urbanites versus Rural Rights: Contest of Local Government Land-Use Regulations under Washington Preemption Statute 82.02.020

Abstract: In Citizens' Alliance for Property Rights v. Sims,' the Court of Appeals of Washington held that King County clearing and grading regulations - recently enacted pursuant to the Washington State Growth Management Act - constitute an unlawful "tax, fee, or charge" on the development of land, thereby violating a Washington excise tax preemption statute. The court ruled that the clearing limitations do not qualify under the statutory exception for mitigation of development impacts since they are not calculated on a site-by-site basis. This Note argues that the ruling greatly expands the scope of this statutory limitation on local land-use regulation, compromises Growth Management Act policies, and misconstrues prior case law. If upheld, the decision's approach will significantly constrain municipal authority to protect environmental quality through land-use regulations. INTRODUCTION Development restrictions implemented pursuant to the Washington State Growth Management Act (GMA) have caused tension between landowners, developers, and government2 since the state legislature enacted the GMA in 1990.3 In King County, Washington, the conflict also divides urban and rural interests. Approximately 1 .9 million people live in King County;4 and while nearly one-third of that population lives in Seattle,5 over 1500 of the county's 2000 square miles are zoned for rural, forest, and agricultural uses.6 Nearly 1 50,000 people live in these unincorporated rural areas.7 In 2004, the King County Council considered a controversial clearing and grading ordinance that would prohibit rural landowners from clearing some types of vegetation - generally, trees and brush - from fifty or sixty-five percent of their land.8 Advocates argued that the limits were necessary to prevent further erosion and flooding, and to keep chemicals from running into rivers and streams.9 Rural residents, who took the position that the proposed clearing and grading restrictions would unfairly limit what they could do with their land, fought the ordinance throughout the public-comment process,10 including at the October 25, 2004 King County Council meeting at which the members cast their votes." The ordinance passed by a 7-6 vote divided along partisan lines, with Democrats, who largely represented urban areas,12 voting in favor of its enactment.13 Although the county had revised the ordinance based on public feedback, the ordinance as enacted was not a satisfactory compromise for the rural opposition. Citizens' Alliance for Property Rights, a political action committee comprising property owners potentially impacted by the county's proposed clearing and grading restrictions, sued King County. It argued that the ordinance ran afoul of the state constitution and amounted to a tax prohibited by state law.14 The Washington State Court of Appeals held that the clearing and grading ordinance was an unlawful "tax, fee, or charge" because it did not require individually determined clearing and grading restrictions based on site-specific evaluations of each plot of land.15 The court did not reach the constitutional issues.16 The decision could seriously undermine the ability of local governments to plan for responsible land use. If counties have to conduct site-specific evaluations, it will be more costly and time-consuming to create the comprehensive land-use plans the GMA requires. This Note argues that the court of appeals erred in calling the land-use regulations an unlawful "tax, fee, or charge." Part I gives an overview of the GMA. Part II introduces constitutional and statutory protections available to Washington landowners and developers, and Part III describes key cases interpreting some of these protections. Part IV introduces the King County ordinance, reviews the environmental concerns that spurred the ordinance, and discusses the rural response to the clearing restrictions. Part V describes Citizens ' Alliance for Property Rights v. …

The legacy of solem v. bartlett: how courts have used demographics to bypass congress and erode the basic principles of indian law

Abstract: Only Congress has authority to change a reservation's boundaries, so when disputes arise over whether land is part of a reservation, courts turn to congressional intent. The challenge is that in many cases, Congress expressed its intent to diminish or disestablish a reservation as long as one hundred years ago through a series of "surplus land acts."' To help courts with their task, the Supreme Court in Solem v. Bartlet? laid out a three-tiered analysis. This Comment examines how courts have applied modern demographics - part of Solem's third and least probative tier - and demonstrates that they have consistently and primarily used the factor to support finding reservation diminishment. Furthermore, in 2005, the Supreme Court in City ofSherrill v. Oneida Indian Nation* applied Solem's justifications for considering demographics to questions of tribal tax immunity and the legal doctrines of laches, acquiescence, and impossibility,4 laying the groundwork for expansive use of demographics in other areas of Indian law. This Comment argues that courts should stop applying modern demographics to questions of reservation diminishment because doing so has led to outcomes that conflict with congressional Indian policy and undermine core canons of construction that have long governed the relationship between Indian tribes and federal courts. INTRODUCTION The reservation status of a specific piece of land has significant meaning for the people who live there. If a court determines Congress diminished (shrunk) or disestablished (terminated) a reservation, tribal members may suddenly find themselves answering to a different set of laws or having to move to maintain their tribal benefits.5 At stake in diminishment and disestablishment cases is the existence of the reservation itself. Jurisdiction issues, taxation authority, mineral rights, and cultural identities hinge on the outcomes. Whether a piece of land has reservation status significantly impacts how tribal, state, and federal governments operate, and how people on that land - Indian and nonIndian alike - live. Diminishment cases generally involve the interpretation of surplus land acts, some of which diminished reservations and some of which did not.6 The starting point for analysis is straightforward: only Congress can diminish a reservation. Because of this, courts must determine-using traditional Indian law canons of construction - whether Congress intended the surplus land act in question to shrink or terminate a reservation's boundaries, or whether Congress intended to leave the reservation intact.7 The problem is that surplus land acts are things of the past - the far distant past. Most took effect about one hundred years ago. With Solem v. Bariletti the Supreme Court sought to give courts some guidance.9 The case created a weighted three-tiered analysis to apply in questions of diminishment.10 In addition to an act's text and the historical circumstances surrounding an act's passage, Solem gave courts permission to examine what happened after an act took effect, including changes in populations as reflected by modern demographics - specifically the ratio of Indians to non-Indians living in a given area - for one additional clue as to whether Congress intended that area to remain a reservation." While the Solem Court urged caution when considering demographics, courts have unhesitatingly embraced the factor and used it to support finding after finding against Indian interests. In fact, commentators have noted that demographics predict a diminishment case's outcome more accurately than any other factor.12 This Comment argues that courts should abandon the use of demographics because it has led to results that contradict the Indian law canons of construction and Congress's clear modern preference for tribal self-government. Part I offers an overview of the history of tribal sovereignty and the relationship between Indian nations and Congress, while Part II introduces a product of that history: the Indian law canons of construction, which require federal courts to wait for clear direction from Congress before abrogating Indian tribal powers. …

Depoliticizing Judicial Review of Agency Rulemaking

Abstract: Administrative law doctrines for reviewing agency rulemaking, such as the Supreme Court's dicta in Motor Vehicle Manufacturers Ass 'n v. State Farm Mutual Automobile Insurance Co.1 and the D. C. Circuit's hard look doctrine, give judges significant discretion to invalidate agency rules. Many commentators recognize that this discretion politicizes judicial review of agency rulemaking, as judges appointed by a president of one political party are more likely to invalidate agency rules promulgated under the presidential administration of a different political party. Unelected judges, though, should not be able to use indeterminate administrative law doctrines to invalidate agency rules on the basis that they disagree with the policy decisions of a presidential administration. This Article argues that the Supreme Court's recent decision in FCC v. Fox Television Stations, Inc.2 implicitly eliminated State Farm's dicta and the D.C. Circuit's hard look doctrine. In place of these paternalistic doctrines, courts should establish a doctrine for reviewing agency rulemaking that examines only the agency's purpose in regulating and the means used by the agency to achieve that purpose - instead of giving courts leeway to impose additional procedures on agencies and to nitpick rulemaking records. Constitutional doctrines for reviewing legislation already focus on a government actor's purpose and means, so these doctrines should also be used for reviewing agency rules, which are legislative-like pronouncements that are binding with the force of law. Ultimately, this Article proposes that courts should review agency rulemaking under the standard for reviewing legislation known as "rational basis with bite." Rational basis with bite would require the agency, at the time it promulgates a rule, to articulate its actual statutory purpose in promulgating the rule and explain how the rule is rationally related to that purpose. Not only would rational basis with bite significantly limit the ability of judges to invalidate agency rules based on policy disagreements, but the standard fits well with the Supreme Court's precedents on APA arbitrary and capricious review. INTRODUCTION The Obama Administration's largest impact on federal policy may very well come from institutions that are not usually on the public's radar screen: administrative agencies. Federal agencies create a substantial majority of the country's new laws,3 and "[t]here is going to be a huge amount of action in the regulatory arena after years of deregulation under President Bush."4 Weeks into office, President Obama directed the Environmental Protection Agency (EPA) to reconsider two Bush Administration decisions: (1) preventing states from setting auto emission and fuel efficiency standards that are more stringent than federal standards,5 and (2) adopting less stringent controls on mercury pollution from power plants.6 Similarly, as soon as President Obama took office, the Food and Drug Administration (FDA) approved "the world's first test in people of a therapy derived from human embryonic stem cells" - a clinical trial that had been rejected by the Bush Administration.7 Moreover, the Obama Administration's Interior Department reversed the Bush Administration's plan to allow offshore oil drilling.8 Some also believe that the Federal Communications Commission (FCC) under the Obama Administration could reinstitute the controversial "fairness doctrine."9 The Bush Administration anticipated that the Obama Administration would overhaul the country's administrative regulations, so in the final months of President Bush's tenure, his Administration took a series of administrative actions to deregulate various consumer and environmental industries.10 Most would assume that the administrative actions of an outgoing president could be overturned by an incoming presidential administration that wants to reverse course on federal regulatory policy. …

Thoughts on the Ethical Culture of a Prosecutor's Office

Abstract: INTRODUCTION I am truly honored to be asked to speak at this event, particularly an event held in honor of Norm Maleng. I want to talk about maintaining an ethical culture in a prosecutor's office and give you a perspective on the things that have struck me after being an Assistant U.S. Attorney for about thirteen years - approaching seven years this fall as a U.S. Attorney, so about twenty years as a prosecutor. Some of the things I will say are obvious but worth repeating because we have to bear them in mind. Some are slightly subtle but worth pointing out. I want to talk about prosecutorial ethics in general, and also explain the importance of an ethical culture in a prosecutor's office and discuss why we focus on the culture rather than the individuals. It is not a topic we discuss often, which is remarkable if you consider the impact of what goes on in prosecutor's offices. Everyone in this room knows it, but every once in a while you have to step back and think about the awesome power that a prosecutor has, for good or for bad.1 We need to have that power to do our jobs, but we should recognize how powerful the position is and recognize the risks that accompany it. Across the country, at both the federal and state level, there are an awful lot of prosecutors who have the power to seek the death of a defendant based upon a crime he or she committed. There are few types of power greater than having a role in seeking to take someone's life. Short of that, many prosecutors have the power to seek life imprisonment without parole. For many people, that is a fate about as bad as death - to be locked up in a jail cell and never see the light of day for the rest of your life. Even if the sentence is thirty days in jail, or sixty days in jail, or two years in jail, for the people who spend that time in prison - hopefully guilty, but guilty or not - that is a significant deprivation of their liberty. Even for people who do not go to jail, their reputations can be tarnished by an indictment or a conviction, or merely by being investigated. Corporations can go out of business, not just by being indicted, but also for the fact that they are being investigated. This can affect corporations that may have earned it by their conduct, and can also affect employees who had nothing to do with the wrongdoing.2 In many cases, witnesses who have done nothing wrong have their lives turned upside down merely because they had to testify in court against a friend, a colleague, or a loved one; had to walk into court as part of their obligation to share the truth; or had to expose personal secrets that they would otherwise not choose to share. When you think about a prosecutor's power and how it can affect people in very drastic ways whether they are convicted, charged, called as witnesses, or simply mentioned - you have to think about how much of that power is exercised behind closed doors. On the optimistic side, I have often said that I think the general public would be impressed with the places I have worked and the people I have worked with. I think they would be impressed to see what happens behind closed doors when prosecutors discuss the facts and merits of a case, the reasons why we should or should not prosecute, and the reasons why we should or should not seek tougher penalties. But power, even when it is necessary, poses the risk that people will abuse it - either by negligence, recklessness, or worse - and power exercised behind closed doors poses an even greater risk. The fact is that more of a prosecutor's important work takes place behind closed doors than in public. We prosecutors should be wary of how we choose to exercise that power when a relatively great amount of it is exercised in the dark. When you think about that - and I hope I am starting to scare you you recognize that the risks are not just for the individual, and the risks are very serious. There is nothing worse than the notion of someone going to jail who should not. …

American Federalism: Punching Holes in the Myth

Abstract: AMERICAN FEDERALISM: PUNCHING HOLES IN THE MYTH Book Review ofSAFEGUARDING FEDERALISM: HOW STATES PROTECT THEIR INTERESTS IN NATIONAL POLICYMAKING By John D. Nugent. Norman, Oklahoma: University of Oklahoma Press, 2009. Pp. 344. $45.00. Political myths are persistent, and the myth of American federalism' s supposed twentieth-century decline is a tale that persists despite empirical evidence to the contrary. A new book by Connecticut College's John Nugent punches a few more holes in the myth, but it is yet to be seen whether the widely accepted version of this nation's modern federalism will be altered. The myth is typically as follows: In 1787, the states agreed to a convention to repair the failed Articles of Confederation, but instead that convocation proposed an entirely new constitution - one creating a limited but robust national government with a powerful executive, improved taxing authority, and strong control over specified areas like foreign affairs, war, commerce among the states, the post office, currency, and navigation. But the states were left with governing the rest of Americans' day-to-day lives. States controlled the laws relating to public order, property, contracts, and domestic life, and they provided public services such as roads and transport, public records, and most courts. According to what became known as the "dual sovereignty" doctrine of federalism, state and federal activities were thus neatly split for 150 years; the national government remained sovereign within its sphere of enumerated powers, and the sovereign state governments, closer to home, dutifully provided most public services. The Supreme Court policed this neat division until the late 1930s, when the Court buckled under pressure from President Franklin Roosevelt and a New Deal Congress, allowing a massive expansion of the national government into areas previously off-limits: economic activities within the states, labor relations, workplace safety, market regulation, agricultural production, welfare, social services, and public works.1 The role of the states supposedly withered. Beginning with World War II, followed by the civil rights era and President Johnson's Great Society, even more programs and powers shifted to the nowdominant federal government. This centralization and growth would have continued unabated but for President Ronald Reagan's cutbacks coupled with Chief Justice Rehnquist' s efforts to return to dual sovereignty's distinct separation of powers between the national government and the states. This is the history of federalism as widely understood by most legal academics and by educated Americans in general - both liberals and conservatives alike. One reason this view is so persistent is, as Nugent points out,2 because the political parties have a common stake in this misconception. Republicans want the public to believe they can rescue the country from a national government that is much too big and powerful, while Democrats would like voters to feel that the federal government (led by their party) can cure virtually all social and economic ills. Further, a truly national press developed in the twentieth century, featuring stories about the national government that were inherently "bigger" and could sell more papers across the country. As the Washington Post's Richard Cohen has written, "[f]ew journalists have become nationally famous, not to mention rich, covering state or local governments."3 During the past fifty years, a handful of academics have methodically punched holes in the standard tale of modern American federalism. Their careful research has received only modest attention, and accordingly has had only a modest impact on the myth. In 1962, Temple University Professor Daniel Elazar published detective work revealing that in the early nineteenth century, the states constantly begged for federal help to finance public works projects such as the Dismal Swamp Canal, highways across the Appalachians, and canals to open the west for development. …

The Cost of Doing Business: Corporate Vicarious Criminal Liability for the Negligent Discharge of Oil under the Clean Water Act

Abstract: In response to massive oil spills that damaged America's waters, devastated local economies, killed wildlife, and cost taxpayers millions in clean-up costs, Congress passed the Oil Pollution Act of 1990. The Act amended the Federal Water Pollution Control Act to allow for criminal prosecution of negligent oil discharges. This Comment argues that although the plain language of the Federal Water Pollution Control Act's negligent discharge provision is silent regarding corporate vicarious criminal liability, courts should give full effect to Congress's intent-to protect the health and safety of the public and the environment and to stop corporations from accepting oils spills as just another cost of doing business-and construe the negligent discharge provision to allow for vicarious liability. Doing so will not violate the due process rights of corporations because they are on notice of the stringent regulations surrounding oil pollution. Moreover, corporations are in the best position to prevent and deter negligent employee behavior that leads to oils spills in the first place. INTRODUCTION A thick layer of fog covered the San Francisco Bay area1 on November 7, 2007(2) when a bay pilot, Captain John Cota, boarded the Cosco Busan, a container ship operated by Fleet Management, Limited (Fleet).3 Cota and Fleet allegedly failed to prepare and review a passage plan prior to departure4 and guided the vessel out of the bay in visibility of less than a quarter mile.5 According to the third superseding indictment, the ship proceeded too quickly, and Cota and Fleet, in addition to making other navigational errors, failed to use the vessel's radar and electronic chart system properly.6 As a result, they "failed to navigate an allision free course,"7 and the vessel allided with a tower of the San Francisco-Oakland Bay Bridge,8 splitting open fuel tanks and spilling more than 50,000 gallons of diesel fuel and oil into the bay.9 The spill killed thousands of birds10 and left forty miles of beaches and shore contaminated. ' ' The National Transportation Safety Board estimated the cost of clean up at $70 million, ship repairs at $2.1 million and bridge repairs at $1.5 million.12 As a result of the spill, both Cota and Fleet were charged with negligent discharge of oil into navigable waters of the United States under the Federal Water Pollution Control Act, commonly known as the Clean Water Act (CWA).13 In prosecuting Fleet, the U.S. Government has relied on the civil negligence standard - failure to take due care applicable under the CWA negligent discharge provision in order to incorporate the agency principle of negligent supervision.14 Trial is scheduled for September 2009. 15 Fleet originally faced a maximum $200,000 fine for its CWA violations or twice the gross gain or loss caused by the violations under the Alternative Fines Act.16 Now, after a third superseding indictment alleging "approximately $20 million in pecuniary losses," Fleet faces a $40 million fine.17 Although the Government proceeded under a direct liability theory against Fleet, courts should also recognize a respondeat superior theory, which would hold corporations vicariously criminally liable for negligent oil discharges by their employees. The negligent discharge provision does not explicitly call for vicarious liability. However, the legislative intent behind the Oil Pollution Act of 1990 (OPA 9O),18 which amended the CWA, and the public welfare nature of the legislation support such an interpretation.19 Allowing prosecution under vicarious criminal liability would mean that when employees, such as crew members, are found guilty of negligent discharge of oil under the CWA, corporations, such as ship management corporations, vessel owners, and demise charterers, could also be subject to liability.20 Part I of this Comment briefly describes the CWA negligent discharge provision and examines the legislative history of the provision, as amended by OPA 90, including its public welfare nature and Congress's interest in holding corporations liable for oil spills. …

The Legality of Washington Shoreline Development Moratoria in the Wake of Biggers v. City of Bainbridge Island

Abstract: The Washington State Supreme Court struck down the temporary shoreline development moratorium at issue in Biggers v City of Bainbridge Island, 162 Wash 2d 683, 169 P3d 14 (2007); yet the court fragmented on the broader question of whether a local government has authority to adopt a moratorium on shoreline development during long-term land-use planning In light of upcoming deadlines for the state's local governments to revise their shoreline-management plans, constraints on local authority to adopt shoreline moratoria during the planning process take on heightened importance for hundreds of local governments The question highlights the tension between private property rights and government authority to regulate for the public welfare This Note argues that, when presented with a reasonable moratorium, Washington courts should deem persuasive the agreement of the Biggers' concurrence and dissent, which form a majority in favor of the legality of reasonable moratoria Biggers provides binding legal precedent pursuant to the narrowest-grounds rule for interpreting plurality decisions, holding only that an unreasonable shoreline moratorium contravenes Washington law Courts that adopt this position will remain in harmony with the state's long history of broad local police powers while continuing the traditional requirement that land-use ordinances be reasonable Public policy, particularly environmental imperatives, also favors upholding the reasonable shoreline moratorium This Note proposes substantive and procedural factors, applicable in future cases, that likely fulfill the reasonableness requirement in Biggers INTRODUCTION Puget Sound, a playground for oreas and home to an impressive number of species,1 also provides a beautiful place to live for a large and rapidly increasing human population2 In addition to being precious to local communities3 and one of the largest estuaries in the United States, Puget Sound is an ecosystem of global significance4 Today, it faces potentially devastating challenges5 One of the most serious threats comes from shoreline development Development that landowners believe will protect their shoreline property can harm shoreline habitat: "One-third of the entire Puget Sound marine shoreline is already 'armored' with rock, cement walls, bulkheads, and other hard structures that destroy areas where native plants grow, shorebirds hunt for food, forage fish lay eggs, and young salmon hide from predators on their way to the sea"6 Local governments' policies and regulations play a crucial role in preventing further habitat loss,7 and measures they take to protect this public interest can clash with asserted private property rights8 Biggers v City of Bainbridge Island* involved just such a conflict, as local property owners and builders took issue with a particular kind of ordinance: the temporary moratorium, which is a tool for long-term planning that has sparked disparate reactions from courts across the nation10 In Biggers, the Supreme Court of Washington sided with the property owners, ruling that the City of Bainbridge Island's moratorium was unlawful The court failed, however, to reach a consensus on the circumstances under which a local government has the authority to adopt a temporary moratorium on shoreline development Four justices argued that the Washington Constitution bars local governments from enacting shoreline moratoria under all circumstances;11 four justices agreed with the City that the authority exists under Washington law and that the City's temporary moratorium was reasonable;12 and one justice, in a concurring opinion ruling against the City, agreed with the dissent that local governments have the authority to enact reasonable moratoria but determined that the moratorium at issue was unreasonable and therefore unconstitutional13 The court's fragmentation makes it difficult to ascertain the holding and precedential value of the decision …