Digital Commons Network^™

The Real Student-Loan Scandal: Undue Hardship Discharge Litigation, Rafael I. Pardo, Michelle R. Lacey

Scholarship@WashULaw

For a debtor to obtain a discharge of educational debt in bankruptcy, an adversary proceeding between the debtor and the creditor must be initiated, and the debtor must establish that repayment of the debt would impose an undue hardship. This empirical study documents and analyzes trial-level outcomes of such proceedings. An original data set has been compiled of all terminated undue hardship discharge proceedings in the U.S. Bankruptcy Court for the Western District of Washington that were commenced during the five-year period beginning on January 1, 2002 and ending on December 31, 2006. The study seeks to provide an account …

Failing To Answer Whether Bankruptcy Reform Failed: A Critique Of The First Report From The 2007 Consumer Bankruptcy Project, Rafael I. Pardo

Scholarship@WashULaw

Over the past quarter century, our knowledge of individuals who seek relief through the consumer bankruptcy system has been derived largely from the information that has been collected and analyzed by the Consumer Bankruptcy Project. The most recent iteration of the Consumer Bankruptcy Project, the 2007 Consumer Bankruptcy Project (the 2007 CBP), extends well beyond prior iterations by drawing a nationwide random sample of bankruptcy filings. The first report published in connection with the 2007 CBP (the First Report or Report) seeks to evaluate the success of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) in sorting …

An Empirical Investigation Into Appellate Structure And The Perceived Quality Of Appellate Review, Rafael I. Pardo, Jonathan Remy Nash

Scholarship@WashULaw

Commentators have theorized that several factors may improve the process, and thus perhaps the accuracy, of appellate review: (1) review by a panel of judges, (2) subject-matter expertise in the area of the appeal, (3) other law-finding ability, (4) adherence to traditional notions of appellate hierarchy, and (5) the judicial independence of appellate judges. The considerable discussion that has expounded upon these theories has occurred in a vacuum of abstract generalization. This Paper adds a new dimension by presenting results from an empirical study of bankruptcy appellate opinions issued over a three-year period. The federal bankruptcy appellate structure provides certain …

The Paradox Of Financial Services Regulation: Preserving Client Expectations Of Loyalty In An Industry Rife With Conflicts Of Interest, Andrew F. Tuch

Scholarship@WashULaw

This paper considers the implications of Australian Securities and Investments Commission v. Citigroup [2007] FCA 963, a landmark decision of the Federal Court of Australia. The case highlights an apparent paradox in financial services regulation: at the same time as allowing, or even fostering, the development of financial services conglomerates, regulation in multiple jurisdictions preserves potentially incompatible general law obligations that arise from client expectations of loyalty. The paradox is most evident in the context of the modern investment bank.

The paper discusses the dynamic nature of investment banks, their organizational structure, the types of conflicts they typically face and …

Illness And Inability To Repay: The Role Of Debtor Health In The Discharge Of Educational Debt, Rafael I. Pardo

Scholarship@WashULaw

For a debtor to obtain a discharge of student loans in bankruptcy, the debtor must establish that their repayment would impose an undue hardship. This Article presents the results of an empirical study of bankruptcy court doctrine over a ten-year period that involved undue hardship discharge proceedings where the court reported information on the debtor's health status, monthly household income, and monthly household expenses. The data show that a medical condition increased a debtor's odds of being granted a discharge by 140% but that household income and expense levels did not have a statistically significant association with legal outcome. These …

The Utility Of Opacity In Judicial Selection, Rafael I. Pardo

Scholarship@WashULaw

Does too much transparency in the selection of judges undermine the independence of the judiciary? This Essay seeks to provide insight into answering this question by focusing on the opaque process by which federal bankruptcy judges are selected. Part I begins with an account that anchors the concepts of judicial independence and judicial accountability to the concept of judicial quality. It proceeds to situate within this account the selection process, suggesting that the process can function as a form of judicial accountability, albeit one that diminishes judicial quality in those instances where the process becomes politicized. A brief discussion follows …

Securities Underwriters In Public Capital Markets: The Existence, Parameters And Consequences Of The Fiduciary Obligation To Avoid Conflicts, Andrew F. Tuch

Scholarship@WashULaw

This article considers whether an investment bank, when acting as underwriter of a public securities offering, owes the issuing company the fiduciary obligation to avoid conflicts of interest. The question has not arisen for final judicial determination and has been overlooked by scholars and regulators. The highly lucrative and visible nature of underwriting work creates powerful incentives for investment banks to accept instructions in the face of this duty. At the same time, the web of loyalties that these institutions owe, by virtue of their broad and diverse range of products and services, creates intractable practical difficulties for compliance with …

Lower Court Discretion, Pauline Kim

Scholarship@WashULaw

Empirical scholars typically model the judicial hierarchy in terms of a principal-agent relationship in which the Supreme Court, the principal, sets policy and the lower federal courts, as agents, must implement that policy faithfully. The law is a signal - the means by which the Court communicates its preferences. This article argues instead for recognizing the law as an independent normative force. Empirical scholars fail to take seriously the role of law because they reject as implausible formalistic accounts of its operation. This article advances a more nuanced account of how law shapes the decision-making environment, one that focuses on …

Eliminating The Judicial Function In Consumer Bankruptcy, Rafael I. Pardo

Scholarship@WashULaw

The centerpiece of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has been the means test, a formulaic statutory directive pursuant to which courts are to presume abuse of the bankruptcy system by Chapter 7 debtors who have an ability to repay past debts with future income. This Essay provides a new insight into means testing by arguing that, more than anything else, it has brought about a significant change in the institutional design of bankruptcy courts: namely, the increased blurring of administrative and judicial functions. The Essay concludes that this development should be cause for concern as …

Obligations Of Financial Advisers In Change-Of-Control Transactions: Fiduciary And Other Questions, Andrew F. Tuch

Scholarship@WashULaw

Outside the United States, financial regulators have recently focused their attention on whether a financial adviser to a party in a change-of-control transaction (such as a takeover) is obliged to avoid being in positions of conflict with the interests of that party. Because financial advisers in these transactions are typically investment banks, the integrated structure of which may make conflicts of interest inevitable, such an obligation is likely to pose difficult challenges for the investment banking industry. The question is complicated by two apparently inconsistent standards being applied: the fiduciary obligation to avoid conflicts and the statutory obligation in many …

Contemporary Challenges In Takeovers: Avoiding Conflicts, Preserving Confidences And Taming The Commercial Imperative, Andrew F. Tuch

Scholarship@WashULaw

This article discusses contemporary legal, commercial, ethical and other issues that arise in the context of corporate takeover transactions. Due to their complexity and the numerous parties - including deal advisers - they involve, the loyalties of company directors and advisers are frequently tangled, creating legion opportunities for conflicted interests and breached confidences. At the same time, the high status of advising on takeovers and the financial lure they provide produce powerful incentives that inevitably inform the application of legal principles to these issues. The article adopts a hypothetical case study approach to focus on the challenges confronting these parties …

Collective And Individual Approaches To Protecting Employee Privacy: The Experience With Workplace Drug Testing, Pauline Kim

Scholarship@WashULaw

This contribution to a symposium on workplace privacy asks what difference it makes to think about workers' rights under a collective as opposed to an individual rights model in a particular context: that of protecting employee privacy. More specifically, it undertakes an examination of the range of disputes between employers and employees over workplace drug testing in the late 1980's and the 1990's, focusing on the differences between cases brought with union involvement and those brought by individual workers acting alone. In doing so, it asks how collective forms of disputing about drug testing differed from individual approaches, and whether …

The Adventure(S) Of Blackness In Western Culture: An Epistolary Exchange On Old And New Identity Wars, Adrienne D. Davis, Robert S. Chang

Women, Gender & Sexuality Studies Research

Through a series of letters, Professors Robert Chang and Adrienne Davis examine the politics of positionality in law and literary criticism. They use the scholarly debates and conversations around critical race theory and feminist legal theory as a starting point to formulate some thoughts about Critical Race Feminism ("CRF") and its future. The authors use the epistolary form as a literary device to allow them to collaborate on this project while maintaining their own voices. Thus, the letters are not dated.

The letters pay particular attention to various border crossings: male attempts to engage in feminist literary criticism, white attempts …

Investment Banking: Immediate Challenges And Future Directions, Andrew F. Tuch

Scholarship@WashULaw

This article discusses the organizational nature of the integrated (or full-service) investment bank, the incidence of conflicts of interest in the financial services industry and the role and effectiveness of information barriers such as Chinese walls as an arrangement for managing conflicts. The paper also describes the growing importance to investment banks of proprietary trading and principal investing, the conflicts of interest that they can produce, and the recent responses of financial regulators to these developments.

The paper was presented at a discussion forum involving senior investment bankers, lawyers and scholars in August 2006, organized against the backdrop of litigation …

Disclosure As A Strategy In The Patent Race, Scott Baker, Claudio Mezzetti

Scholarship@WashULaw

Research firms disclose a surprisingly large amount of information to the patent office through “targeted” disclosures, that is, disclosures intended to make the patent office aware of potentially patentable information. Conventional wisdom holds that these disclosures are made for defensive purposes; the disclosing firm does not itself plan to pursue patents related to the disclosed information, so the firm discloses to create prior art that might stop rivals from patenting. But firms have an incentive to disclose even if they intend to pursue patent protection. The reason is that, by making it more difficult to patent, disclosure extends the patent …

Investment Banks As Fiduciaries: Implications For Conflicts Of Interest, Andrew F. Tuch

Scholarship@WashULaw

Investment banks play an intermediary role in the financial system that is integral to its efficient operation. A core, and highly visible, part of their work involves providing financial advisory services to institutional clients on transactions that have strategic importance, such as mergers and acquisitions. As these services are but one aspect of the broad and diverse range of financial services that investment banks typically provide, challenges such as conflicts of interest inevitably arise. Somewhat anomalously, the question of whether these firms owe fiduciary duties to their clients when providing financial advisory services has received little regulatory, judicial or scholarly …

Undue Hardship In The Bankruptcy Courts: An Empirical Assessment Of The Discharge Of Educational Debt, Rafael I. Pardo, Michelle R. Lacey

Scholarship@WashULaw

The discharge in bankruptcy embodies the policy that relief should be granted to an individual who has ceased to be economically productive by virtue of burdensome debt obligations (the fresh start policy). Once the debtor has been deemed eligible for discharge, forgiveness of debt is automatic, accomplished through legislative rule and its judicial enforcement. With regard to the discharge of educational debt, however, Congress has devolved the exercise of debt relief to courts. An obligation to repay such debt will be discharged if a debtor establishes that undue hardship would be suffered in the absence of its discharge. A court …

The Political Delinquent: Crime, Deviance, And Resistance In Black America, Trevor George Gardner

Scholarship@WashULaw

This Article is largely an argument that the pervasive sense of cultural resistance in the African American community must be considered by criminal theorists as, at least, a partial explanation of “criminality” within the African American community. Woven into the fabric of African American culture is a vital oppositional element. This element, spoken of in many circles as “oppositional culture” constitutes a bold and calculated rejection of destructive mainstream values that have perpetuated social inequalities and power imbalances. African American resistance culture is captured by novelist John Edgar Wideman in his account of his brother ’s criminal lifestyle and the …

On Proof Of Preferential Effect, Rafael I. Pardo

Scholarship@WashULaw

This Article presents a comprehensive analysis of the manner in which the trustee of a debtor's estate may satisfy his burden of proof to demonstrate the preferential effect of a prebankruptcy transfer from a debtor to a creditor. The proposed framework, if adhered to by courts, will create a uniformity that gives preference law its proper reach and thereby reinforces its primary goal: equal treatment of similarly situated creditors (the equality principle). After examining the historical developments that have made a trustee's evidentiary burden administratively less complex, the Article discusses the Ninth Circuit's decision in Batlan v. TransAmerica Commercial Finance …

The Colorblind Lottery, Pauline Kim

Scholarship@WashULaw

Although the Supreme Court upheld Michigan Law School's admissions policies in Grutter, the multiple opinions in that case revealed the deep divisions that remain over the legitimacy of race-conscious policies and the meaning of equal protection. At the heart of this division lies disagreement over the concept of colorblindness. For Justices Scalia and Thomas, as well as the advocacy groups that backed the plaintiffs in Grutter and Gratz, colorblindness is an absolute imperative, prohibiting race-conscious decision-making in all but the most dire situations. This insistence on formal colorblindness has lead to the conclusion in several recent court cases that race-conscious …

Gender Contests, Susan Frelich Appleton

Scholarship@WashULaw

This contribution for the “Law, Ethics, and Gender in Medicine” column in the Journal of Gender Specific Medicine interrogates the understanding of gender itself, at a time when transgender and intersex issues were just beginning to “come out” in both popular culture and case law. Against this background, the column explores the roles that physicians have played in such gender contests and considers how evolving medical attitudes can help achieve reform.

Bankruptcy Court Jurisdiction And Agency Action: Resolving The Nextwave Of Conflict, Rafael I. Pardo

Scholarship@WashULaw

This Comment criticizes a pair of decisions by the United States Court of Appeals for the Second Circuit, FCC v. NextWave Personal Communications, Inc. (In re NextWave Personal Communications, Inc.) and In re FCC, which held that a bankruptcy court lacks jurisdiction to determine whether the Federal Communications Commission is stayed from revoking a debtor's licenses. The Comment argues that the Second Circuit interpreted the bankruptcy court's jurisdiction too narrowly because it failed to distinguish properly between an agency's action as a creditor and as a regulator. It concludes that bankruptcy courts and courts of appeals have concurrent jurisdiction to …

Beyond The Limits Of Equity Jurisprudence: No-Fault Equitable Subordination, Rafael I. Pardo

Scholarship@WashULaw

In two 1996 decisions involving equitable subordination of claims in bankruptcy cases, United States v. Noland and United States v. Reorganized CF&I Fabricators of Utah, Inc., the Supreme Court did not answer the question of whether a bankruptcy court must find creditor misconduct before it equitably subordinates a creditor's claim. This Note argues that the Court should have established a bright-line rule that requires such a finding, using prepetition, nonpecuniary loss tax penalty claims of the IRS as a model. After showing that, as codified in the Bankruptcy Code, the doctrine of equitable subordination requires a finding of creditor misconduct, …

Identity Notes Part Ii: Redeeming The Body Politic, Adrienne D. Davis

Women, Gender & Sexuality Studies Research

These remarks were given in April 1996 at the First Annual LatCrit Conference, co-sponsored by California Western Law School and the Harvard Latino Law Review. ... Political corpus, body politic, body of law, corporate law, body of evidence, body of knowledge, the footnote. ... While the body of Christ has not been used explicitly to order secular American law and political theory, a multi-dimensional analysis of his body in Western political theory would have to include its use at a critical historic moment as an organizing metaphor for the racial order of the United States and the consolidation of the …

Hutchins, Adler, And The University Of Chicago: A Critical Juncture, Mary Ann Dzuback

Women, Gender & Sexuality Studies Research

As dean of Yale University's Law School, Robert Hutchins stressed social science theory and research as central to the university's work. Within a few years, as president of the University of Chicago, he abandoned the social sciences for philosophy and the great books. Hutchins's conversion seems ironic because it took place at an institution renowned for the work of its faculty in social science theory and research. This article is an attempt to make sense of Hutchins's shift in thinking at a critical juncture in his life and in the university's history