Digital Commons Network^™

Noontime Dumping: Why States Have Broad Discretion To Regulate Onboard Treatments Of Ballast Water, Kyle H. Landis-Marinello

Michigan Law Review

Ballast water discharges from shipping vessels are responsible for spreading numerous forms of aquatic invasive species, a form of biological pollution that leads to billions of dollars in annual costs. In the wake of inaction from the federal government and inaction from the shipping industry, several Great Lakes states are currently considering legislation to address the problem. Michigan has already passed a law to prevent ballast water introductions of invasive species. As states begin to regulate ballast water discharges from oceangoing vessels, such laws will likely face challenges based on the constitutional principles of the Dormant Commerce Clause and the …

Reading Too Much Into Reeder-Simco?, Jeremy M. Suhr

Michigan Law Review

This Note argues that a careful analysis of the Supreme Court's opinion in Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc. demonstrates that, despite the expansive dicta appearing in part IV of that opinion, the Court did not intend to reshape the course of its Robinson-Patman Act jurisprudence in any significant way. The Court's opinion operated well within the confines of established Robinson-Patman Act doctrine, even if its searching review of the evidence presented at trial represented a rare foray into the arena of factual error correction. After Reeder-Simco, however, many commentators emphasized the dicta in part IV …

Vol. 58, No. 3, September 25, 2007, University Of Michigan Law School

Res Gestae

•Rear Admiral Houck '85 Speaks at Law School •Don't be a Slave to the Curve •Elections to be Held for LSSS 1L Reps and Junior Board of Governors Rep •An Open Letter from BLSA •Six Tips to Contributing to a Cleaner Environment •Environmental Law at UM •Save Yourself •The Grade Curves •Bar Night Pics •Between the Briefs •Primus Enters The Pantheon

Vol. 58, No. 2, September 11, 2007, University Of Michigan Law School

Res Gestae

•Student Groups Struggle to Find Space in the Law Quad •Too Law Open? •LSSS Presidential Welcome •Meet the Class of '10 •Prof. Primus' Bid for Immortality •Perspective •Crossword Puzzle

Business Income (Article 7 Oecd Mc), Reuven S. Avi-Yonah, Kimberly A. Clausing

Law & Economics Working Papers Archive: 2003-2009

The 2006 OECD Report on attribution of profits to permanent establishments states that its recommendation “was not constrained by either the original intent or by the historical practice and interpretation of Article 7.” Moreover, the Report recommends a redrafting of both the Article itself and the Commentary. Given this, it seems appropriate to begin by asking: If we were working on a clean slate, what would be the best way to tax MNEs at source in the light of 21st century business practices?

The beginning point has to be that a modern MNE does not operate as if its constituent …

The Rise And Fall Of Arm's Length: A Study In The Evolution Of U.S. International Taxation, Reuven S. Avi-Yonah

Law & Economics Working Papers Archive: 2003-2009

A revised and updated version of the 1995 article (Va. Tax Review) on the evolution of US transfer pricing rules.

Vol. 58, No. 1, August 27, 2007, University Of Michigan Law School

Res Gestae

•Nuggets of Wisdom from OCIs Past •How to Succeed at OCI Without Really Trying •Learn How to Find a Firm Job and Be Happy •Prof. Schneider on OCI and Your Future as a Lawyer •Expert Advice •Questions Imponderable and Strange •No Other Warranties, Expressed or Implied •10 Things Not to Do as a Summer Associate •Crossword •The OCI Drinking Game!

All In The Family As A Single Shareholder Of An S Corporation, Douglas A. Kahn, Jeffrey H. Kahn, Terrence G. Perris

Articles

Subject to a few exceptions, a corporation that has elected to be taxed under subchapter S of chapter 1 of subtitle A of title 26 of the United States tax code is not taxed on its net income. Instead, the income, deductions, credits, and other tax items of an S corporation pass through to its shareholders on a pro rata basis. To qualify for subchapter S treatment, an electing corporation must satisfy the requirements that are set forth in section 1361, one of which is that the corporation can have no more than 100 shareholders. One aspect of that requirement …

A Proposal To Adopt Formulary Apportionment For Corporate Income Taxation: The Hamilton Project, Reuven S. Avi-Yonah, Kimberly Clausing

Law & Economics Working Papers Archive: 2003-2009

The current system of taxing the income of multinational firms in the United States is flawed across multiple dimensions. The system provides an artificial tax incentive to earn income in low-tax countries, rewards aggressive tax planning, and is not compatible with any common metrics of efficiency. The U.S. system is also notoriously complex; observers are nearly unanimous in lamenting the heavy compliance burdens and the impracticality of coherent enforcement. Further, despite a corporate tax rate one standard deviation above that of other OECD countries, the U.S. corporate tax system raises relatively little revenue, due in part to the shifting of …

What Do Nonprofits Maximize? Hospital Service Provision And Market Ownership Mix, Jill R. Horwitz, Austin Nichols

Law & Economics Working Papers Archive: 2003-2009

Conflicting theories of the nonprofit firm have existed for several decades yet empirical research has not resolved these debates, partly because the theories are not easily testable but also because empirical research generally considers organizations in isolation rather than in markets. Here we examine three types of hospitals – nonprofit, for-profit, and government – and their spillover effects. We look at the effect of for-profit ownership share within markets in two ways, on the provision of medical services and on operating margins at the three types of hospitals. We find that nonprofit hospitals’ medical service provision systematically varies by market …

Walking The Beach To The Core Of Sovereignty: The Historic Basis For The Public Trust Doctrine Applied In Glass V. Goeckel, Robert Haskell Abrams

University of Michigan Journal of Law Reform

In 2004, a split panel of the Michigan Court of Appeals announced its conclusion that Michigan littoral owners of property owned to the water's very edge and could exclude members of the public from walking on the beach. In that instant almost 3300 miles of the Great Lakes foreshore became, in theory and in law, closed to public use. The case became the leading flash point of controversy between the vast public and ardent private property rights groups. A little more than one year later, the Michigan Supreme Court reversed that ruling as errant on public trust grounds and returned …

Optimal Tax Compliance And Penalties When The Law Is Uncertain, Kyle D. Logue

Articles

This article examines the optimal level of tax compliance and the optimal penalty for noncompliance in circumstances in which the substance of the tax law is uncertain - that is, when the precise application of the Internal Revenue Code to a particular situation is not clear. In such situations, a number of interesting questions arise. This article will consider two of them. First, as a normative matter, how certain should taxpayers be before they rely on a particular interpretation of a substantively uncertain tax rule? If a particular position is not clearly prohibited but neither is it clearly allowed, what …

Rewarding Outside Directors, Assaf Hamdani, Reinier Kraakman

Michigan Law Review

While they often rely on the threat of penalties to produce deterrence, legal systems rarely use the promise of rewards. In this Article, we consider the use of rewards to motivate director vigilance. Measures to enhance director liability are commonly perceived to be too costly. We, however demonstrate that properly designed reward regimes could match the behavioral incentives offered by negligence-based liability regimes but with significantly lower costs. We further argue that the market itself cannot implement such a regime in the form of equity compensation for directors. We conclude by providing preliminary sketches of two alternative reward regimes. While …

Sox And Whistleblowing, Terry Morehead Dworkin

Michigan Law Review

The language of the Sarbanes-Oxley Act ("SOX") leaves no doubt that Congress intended whistleblowing to be an integral part of its enforcement mechanisms. The Act attempts to encourage and protect whistleblowers in a variety of ways, including providing for anonymous whistleblowing, establishing criminal penalties for retaliation against whistleblowers, and clearly defining whistleblowing channels. Unfortunately, these provisions give the illusion of protection for whistleblowers without effectively providing it. There is increasing evidence that virtually no whistleblower who has suffered retaliation and pursued remedies under SOX has been successful. Additionally, social science research and studies of whistleblowing laws indicate that SOX is …

The Social Construction Of Sarbanes-Oxley, Donald C. Langevoort

Michigan Law Review

Part I will take a close look at the legitimacy of SOX by examining the two plausible stories of SOX's origins and considering the early post-SOX evidence on its costs and benefits. There is no clear-cut answer to the question of how much SOX benefits investors; both positive and critical positions are plausible. Costs have been far greater than expected, but more from SOX's implementation than from the legislative text. Before turning to how and why implementation has occurred that way-which to me is the central question of interpretation-Part II considers whether there is an alternative interpretation of SOX that …

Getting The Word Out About Fraud: A Theoretical Analysis Of Whistleblowing And Insider Trading, Jonathan Macey

Michigan Law Review

The purpose of this Article is to show that corporate whistleblowing is not analytically or functionally distinguishable from insider trading when such trading is based on "whistleblower information," that is, the information a whistleblower might disclose to the authorities. In certain contexts, both insider trading and whistleblowing, if incentivized, would reduce the incidence of corporate pathologies such as fraud and corruption. In light of this analysis, it is peculiar that whistleblowing is encouraged and protected, while insider trading on whistleblower information is not only discouraged but criminalized. Often, insider trading will be far more effective than whistleblowing at bringing fraud …

Now, Later, Or Never: Applying Asymmetric Discount Rates In Nuisance Remedies And Federal Regulations, Yang Wang

Michigan Law Review

Part I of this Note reviews recent literature on the need for asymmetric discount rates in cost-benefit analysis. It observes that even though scholars disagree on the precise value of the appropriate discount rate, many agree that future costs and benefits must be discounted at different rates. Part II then constructs a simple model, consisting of two activities competing for the same resource, and analyzes the consequences of asymmetric discounting under this model. This Part proposes that, to maximize the joint social utility, the resource should be time divided between the competing activities rather than permanently allocated to one or …

Significant Developments In Veterans Law (2004-2006) And What They Reveal About The U.S. Court Of Appeals For Veterans Claims And The U.S. Court Of Appeals For The Federal Circuit, Michael P. Allen

University of Michigan Journal of Law Reform

Nearly twenty years ago, Congress for the first time created a system for judicial review of decisions denying veterans benefits. Specifically, Congress created an Article I Court: the United States Court of Appeals for Veterans Claims. Veterans dissatisfied with actions of the Department of Veterans Affairs regarding benefits could appeal to the Veterans Court. The United States Court of Appeals for the Federal Circuit provided appellate oversight of the Veterans Court. There simply is nothing like the Veterans Court elsewhere in American law. Yet, despite its uniqueness, there has been little scholarly attention to this institution.

This Article begins to …

Standing Alone: Conformity, Coercion, And The Protection Of The Holdout Juror, Jason D. Reichelt

University of Michigan Journal of Law Reform

The holdout juror in felony criminal trials is a product of the near-universal decision rule in federal and state courts of a unanimous verdict. In recent years, courts have increasingly inquired into a jury's deliberations when a holdout juror has been identified amid allegations of misconduct. This Article helps bridge the considerable gap between cognitive psychology and legal scholarship, analyzing the thought processes of the holdout juror through the application of empirical evidence and psychological modeling, to conclude that the improved protection of the holdout juror is a necessary and critical component to the preservation of a defendant's right to …

Ratification Of Reapportionment Plans Drawn By Redistricting Commissions, Poonam Kumar

University of Michigan Journal of Law Reform

Partisan gerrymandering is a danger that threatens the foundations of the American democratic structure. This Note argues that partisan gerrymandering must be eliminated in order to foster political competition and ensure government accountability. Without a judicial solution, redistricting commissions present a viable option to help cure the ills of partisan gerrymandering. This Note argues that automatic and mandatory state supreme court judicial review must be the process by which the redistricting plans drawn by these commissions are ratified. Automatic judicial review permits redistricting to remain a legislative task while giving the judiciary a quintessential judicial task. In addition, this Note …

Furman'S Mythical Mandate, Scott W. Howe

University of Michigan Journal of Law Reform

This Article argues for the rescue and reform of Supreme Court doctrine regulating capital sentencing trials under the Eighth Amendment. Many legal commentators, both liberal and conservative, including several members of the Supreme Court, have concluded that the Court's regulation of capital sentencing trials is a disaster. The repeated criticisms rest on a commonly accepted view about a principal goal of capital sentencing regulation. The prevailing account, fueled by the rhetoric of the Justices, stems from the notion that Furman v. Georgia, 408 U.S. 208 (1972), revealed a mandate of consistency in the use of the death penalty that …

Protecting Fair Use With Fogerty: Toward A New Dual Standard, John A. Fonstad

University of Michigan Journal of Law Reform

Copyright law exists to promote the progress of art and science. It achieves this by balancing limited grants of rights to authors against public access to works. However, copyright holders have upset this balance and tilted the law in their favor One cause of this phenomenon is that the benefit of public access to works is diffused throughout the entire public while the benefit of rights in works is concentrated in the copyright holder. This problem is especially prevalent in the context of litigation where copyright holders (plaintiffs) often stand to gain more through victory than copyright users (defendants). As …

Reverse Monitoring: On The Hidden Role Of Employee Stock-Based Compensation, Sharon Hannes

Michigan Law Review

This Article develops a new understanding of equity-based compensation schemes, such as employee stock option plans. Current literature views such schemes as a measure aimed at motivating the recipient employees to work harder for the firm. Under that view, this method of remuneration either complements or substitutes for other measures used to monitor the performance of the recipient employees. In contrast, this Article proposes that recipient employees be viewed as potential monitors of other employees and that stock options (or similar types of compensation) motivate them to fulfill this task. This view has many applications and can shed light on …

Should Patent Infringement Require Proof Of Copying?, Mark A. Lemley

Michigan Law Review

Patent infringement is a strict liability offense. Patent law gives patent owners not just the right to prevent others from copying their ideas, but the power to control the use of their idea--even by those who independently develop a technology with no knowledge of the patent or the patentee. This is a power that exists nowhere else in intellectual property (IP) or real property law, but it is a one that patentees have had, with rare exceptions, since the inception of the Republic. In an important paper in the Michigan Law Review, Samson Vermont seeks to change this, arguing …

Proximate Cause In Constitutional Torts: Holding Interrogators Liable For Fifth Amendment Violations At Trial, Joel Flaxman

Michigan Law Review

This Note argues for the approach taken by the Sixth Circuit in McKinley: a proper understanding of the Fifth Amendment requires holding that an officer who coerces a confession that is used at trial to convict a defendant in violation of the right against self-incrimination should face liability for the harm of conviction and imprisonment. Part I examines how the Supreme Court and the circuits have applied the concept of common law proximate causation to constitutional torts and argues that lower courts are wrong to blindly adopt common law rules without reference to the constitutional rights at stake. It …

One Stop, No Stop, Two Stop, Terry Stop: Reasonable Suspicion And Pseudoephedrine Purchases By Suspected Methamphetamine Manufacturers, Andrew C. Goetz

Michigan Law Review

This Note attempts to inject some clarity into courts' reasonable suspicion calculus for cold medicine purchases. It argues that the key factor in analyzing such purchases is whether the purchaser or purchasers appear to be circumventing pseudoephedrine purchasing restrictions in order to obtain inordinately large quantities of pseudoephedrine. Part I provides a general background on the domestic manufacture of methamphetamine in small, clandestine laboratories. Part II then examines the interplay between outward innocence and reasonable suspicion under the Supreme Court's Fourth Amendment jurisprudence. Finally, Part III establishes a framework for identifying purchasing strategies that methamphetamine manufacturers commonly use to circumvent …

Vol. 57, No. 12, April 3, 2007, University Of Michigan Law School

Res Gestae

•Truly Moot? First Round Delays, Lack of Transparency Mar Competition •Law School Facilities •Law School Rock Band •Ask Sandra D. •Interview with Prof. Simpson •Moot Court Finals •The Law Library

Special Section: The Breadth And Reach Of The Law, University Of Michigan Law School

Law Quadrangle (formerly Law Quad Notes)

In rich realization of Oliver Wendell Holmes Jr.’s view of law as “a path to the world,” Michigan Law’s conferences and symposia use law as the key to open doors to subjects ranging from child advocacy to intelligence gathering and the state of our democracy.

Briefs, University Of Michigan Law School

Law Quadrangle (formerly Law Quad Notes)

• Campbell Moot Court final decision
• MLK Day speaker: Injustice must be confronted
• Microsoft VP: Governments lead international decision making

Campaign Report, University Of Michigan Law School

Law Quadrangle (formerly Law Quad Notes)

I am pleased to introduce Campaign Report, a new section of Law Quadrangle Notes that will keep you informed of the progress of the Law School’s current fundraising initiative, “Building On: The Campaign for the University of Michigan Law School.”

On these pages you will find news of recent gifts, as well as stories about alumni and friends who are helping to ensure the success of our campaign through their gifts. I want to take this opportunity to extend my deepest appreciation to all who have invested in Michigan Law through their support of “Building On.”

-Todd M. Baily