Law Commons^™

The Dividend Puzzle Redux, Reuven S. Avi-Yonah

Articles

The news that Meta will for the first time pay a dividend to its shareholders has prompted discussion of whether dividends will make a comeback as a major component of investor returns for high-flying corporations. Before this latest development, the largest U.S. companies (that is, the digital giants) tended to engage in stock buybacks and did not usually pay dividends.

Corporate Taxpayers And Frivolous Arguments, Part 1, Reuven S. Avi-Yonah

Articles

In two recent cases, corporate taxpayers have made legal arguments that seem on their face to be frivolous.

The first example, as Robert Goulder explains in his excellent recent column, is the argument made by Liberty Global (LGI) involving the source of the gain on the sale of a foreign subsidiary. LGI sold the shares of a Japanese subsidiary for a gain of $3.25 billion, of which $438 million was dividend income under section 1248. The issue was the source of the remaining $2.8 billion gain. LGI argued that it should be foreign source despite the explicit source rule for …

Try Again: The Problems Of Befit, Reuven S. Avi-Yonah

Articles

In September 2023, the European Commission proposed the directive Business in Europe: Framework for Income Taxation (BEFIT) for corporate income taxation of large groups (COM(2023) 532 final (Sept. 12, 2023)). This is the latest iteration of the EU’s effort to harmonize corporate taxation within the single market. But like its predecessor the Common Consolidated Corporate Tax Base, BEFIT suffers from flaws that undermine its stated goals. The EU can do better, especially given that pillar 1 of the base erosion and profit-shifting’s project 2.0 shows the way forward.

Locating Liability For Medical Ai, W. Nicholson Price Ii, I. Glenn Cohen

Articles

When medical AI systems fail, who should be responsible, and how? We argue that various features of medical AI complicate the application of existing tort doctrines and render them ineffective at creating incentives for the safe and effective use of medical AI. In addition to complexity and opacity, the problem of contextual bias, where medical AI systems vary substantially in performance from place to place, hampers traditional doctrines. We suggest instead the application of enterprise liability to hospitals—making them broadly liable for negligent injuries occurring within the hospital system—with an important caveat: hospitals must have access to the information needed …

The Right To Remove In Agency Adjudication, Christopher J. Walker, David Zaring

Articles

In SEC v. Jarkesy, the Supreme Court will decide the constitutional future of agency adjudication, especially in the context of agency enforcement actions and the imposition of civil penalties. If the Court agrees with the Fifth Circuit on any of its three independent reasons for unconstitutionality, agency enforcement and adjudication schemes across the federal regulatory state will be severely disrupted, in ways that are detrimental to both the regulator and the regulated. In this Essay, we propose a path forward: In certain circumstances, the regulated party should have a right to remove an enforcement action from an in-house agency adjudication …

Effects From Moore: Does The Corporate Tax Require Realization?, Reuven S. Avi-Yonah

Articles

This paper explores the history of the corporate tax as an excise versus income tax and explains potential effects from the Moore and Altria cases.

Preparing Future Lawyers To Draft Contracts And Communicate With Clients In The Era Of Generative Ai, Kristen Wolff

Articles

Thank you all for coming today. This is, I think, a really important topic. Important enough that the conference has decided to have two talks on the same topic, and Mark will be presenting on this in the next session, too. I plan on attending because I don’t think you can get enough perspectives on it right now. And hearing this information, I had to attend several talks myself before I really digested it and understood what this was all about. So, I hope that I can give you a little bit of that today. My name is Kristen Wolff. …

The Radical Challenge To The Antitrust Order, Daniel A. Crane

Articles

The U.S. antitrust order is undergoing a radical challenge along three key dimensions. First, the challengers seek to denaturalize markets and replace a commitment to competition with an anti-domination norm. Second, the challengers seek to dramatically alter institutional arrangements, with Congressional legislation and agency rulemaking replacing antitrust's longstanding commitment to judicial common law incrementalism. Finally, the challengers would replace the antitrust order's preferred juridical approach-open-ended rule of reason analysiswith a return to bright-line prohibitory rules and a related demotion of economists as decision-makers. Each of these challenges entails significant consequences, many of them unintended, counter-productive, or perverse. Contrary to the …

The American Antimonopoly Tradition: Origins, Contradictions, Transformations, Daniel A. Crane

Articles

Proponents of antitrust reform argue for the rediscovery of an American antimonopoly tradition that predated the Sherman Act by centuries and suggests the reimagination of a more robust contemporary policy against concentrated economic power. But historically there have been a number of distinct and often contradictory strands of American antimonopoly. The American colanists inherited a weak, recent, and largely invented antimonopoly common law tradition focused on exclusive grants of privilege from the crown. In the nineteenth century, antimonopoly became a generative and ubiquitous concept in state legislatures and courts, but one with multiple, inconsistent meanings that evolved in the decades …

Two Takes On Administrative Change From The Roberts Court, Daniel Deacon, Leah Litman

Articles

In Loper Bright Enterprises v. Raimondo, the Supreme Court finally did what many long hoped (or feared) it would do: overrule Chevron v. Natural Resources Defense Council. Chevron instructed courts to defer to an agency’s interpretation of an ambiguous statutory provision, provided the interpretation was reasonable. Chevron, according to Justice Kagan, had “served as a cornerstone of administrative law” and “the warp and woof of modern government, supporting regulatory efforts of all kinds—to name a few, keeping air and water clean, food and drugs safe, and financial markets honest.” Not surprisingly, statutes governing such matters contain quite a number of …

Infrastructure Finance For The Public Good: How Asset Recycling Can Untangle The New York Mta's $50 Billion Debt Load, Lev Breydo

Journal of Law and Mobility

Systematic infrastructure underinvestment – a $2.6 trillion ‘gap’ – and accelerating climate change have become facts of life in the United States. Though typically attributed to politics, this Article posits the circumstances as a market disequilibrium rooted in an interplay between unique dimensions of infrastructure and distinctive features of the U.S. approach. Legislative action, including the Infrastructure Investment and Jobs Act, is insufficient to overcome these long-standing challenges.

Based on a broad, global study of effective approaches to infrastructure finance, as well as a multi-disciplinary analysis of the economics, engineering and finance literature, this Article proposes addressing the U.S. infrastructure …

What Is The Best Candidate For A Post-Moore Constitutional Challenge?, Reuven S. Avi-Yonah

Articles

On December 5, 2023, the Supreme Court heard oral arguments in Moore, the case challenging the constitutionality of the mandatory repatriation tax enacted in 2017 (section 965). Most of the justices' questions focused on the potential collateral consequences from requiring realization as a constitutional matter, and the majority seemed inclined to avoid the constitutional issue by focusing on the fact that the income in Moore was realized and that section 965 simply followed a long list of precedents by attributing this corporate income to shareholders in a closely held corporation.

The Origins Of The Legal Imagination, James Boyd White

Articles

I want to say at the outset that I feel honored beyond imagining at this celebration of the fiftieth anniversary of my book, and all the more because it is you who have set this up—so many beloved friends over the years and others who will surely become friends. I thank you deeply.

As I wondered about what I might say this morning, I thought perhaps you would be interested in where this truly odd book, with its 986 pages of readings and questions, came from.

Is Treasury Bound By The Arm's-Length Standard?, Reuven S. Avi-Yonah

Articles

In December 2023 Abbott Laboratories petitioned the Tax Court to reverse $417 million in section 482 deficiencies. The petition addresses many issues, but as Tax Notes contributing editor Ryan Finley pointed out in his excellent recent article, the most important one relates to the issue of whether stock-based compensation should be included in the pool of costs covered by a costsharing arrangement. This is the same issue that taxpayers have litigated repeatedly, with the most recent case, Altera, resulting in an IRS victory in the Ninth Circuit. If Abbott wins, the case is appealable to the Seventh Circuit, potentially setting …

Forfeiture By Wrongdoing In Domestic Homicide Cases: Where Are We Now?, Caren Myers Morrison

University of Michigan Journal of Law Reform

One of the few common law exceptions to the rule that every criminal defendant enjoys the right to “be confronted with the witnesses against him” is if the defendant has deliberately caused a witness’s unavailability. That a defendant could forfeit his confrontation rights through his own wrongdoing developed from the equitable concept that “no man shall profit from his wrong.” When the Supreme Court narrowed the common law doctrine of forfeiture by wrongdoing in Giles v. California, it seemed like it had dealt a serious blow to the prosecution of domestic homicide cases. Rather than being able to introduce …

Confrontation, The Legacy Of Crawford, And Important Unanswered Questions, Paul F. Rothstein, Ronald J. Coleman

University of Michigan Journal of Law Reform

The right to confront has a long history. In the United States, the Confrontation Clause provides: “In all criminal prosecutions, the accused shall enjoy the right… to be confronted with the witnesses against him[.]” One of the most troublesome areas of Confrontation Clause jurisprudence has been the Clause’s application to “hearsay statements offered against a criminal defendant pursuant to a hearsay exception or exemption[.]” The Supreme Court’s confrontation analysis in this situation once hinged on the statement’s reliability, with the traditional hearsay rule and its exceptions and exemptions as a guide. But in Crawford v. Washington, the Court considered …

Crawford And The Common Law Criminal Trial, Robert K. Kry

University of Michigan Journal of Law Reform

Three weeks after the Supreme Court decided Crawford v. Washington, Justice Scalia delivered the keynote address at the annual meeting of the American Society of International Law. Justice Scalia expounded on his views of when United States courts should and should not rely on foreign law. He urged that courts interpreting a treaty should look to how foreign courts construe the same instrument, on the reasonable assumption that treaty partners would want to strive for a consistent interpretation. By contrast, he took a dim view of relying on modern foreign law to interpret the U.S. Constitution, as the Court …

Crawford And Criminal Justice, William Ortman

University of Michigan Journal of Law Reform

This essay reflects on whether Crawford v. Washington, now in its third decade of life, matters to criminal justice. For all the talk of Crawford as “revolutionary,” that is, has it made any real difference to the world of crime and punishment? I’ve confronted the question before. In a 2021 essay, I argued that Crawford probably has modest real-world effects. Crawford articulated a right that criminal defendants can exercise only at trial. In an adjudicatory system bereft of trials, trial rights don’t count for much. They impact plea outcomes only when they confer bargaining power sufficient to offset prosecutors’ …

Constructing Confrontation: Between Constitutional And Evidence Theory, Michael S. Pardo

University of Michigan Journal of Law Reform

The United States Supreme Court’s decision in Crawford v. Washington was significant as a matter of both constitutional and evidence law. From a constitutional perspective, the opinion was significant because of its “original public meaning” approach to interpreting the text of the Sixth Amendment’s Confrontation Clause. From an evidentiary perspective, the opinion was significant in recognizing a doctrinal rule that potentially excludes evidence in criminal trials that would otherwise be admissible under the Federal Rules of Evidence as well as State evidence laws. This Essay explores Crawford and the subsequent Confrontation Clause cases from these distinct perspectives—illuminated by constitutional and …

"Yes, You're About To Meet Your Maker, But Did You Really See That Guy?": The Common Law And The Crawford Dying Declaration Exception, David A. Moran

University of Michigan Journal of Law Reform

I had the privilege of getting to see the creation of the Crawford v. Washington revolution up close. Less than two months after I argued my first case before the Court, it granted Jeffrey Fisher’s petition for writ of certiorari in Crawford. Richard Friedman, who had taught me Evidence when I was a student at Michigan a decade earlier and who is rightfully credited as the intellectual architect of the Crawford revolution, asked me in the fall of 2003 to help moot Jeff, who was also a Michigan alumnus. I went to Washington to hang out with Jeff and Rich …

Intentional Parenthood, Contingent Fetal Personhood, And The Right To Reproductive Self-Determination, Laura Hermer

University of Michigan Journal of Law Reform

This Article argues that intent should govern legal parenthood, regardless of the method of conception, the person’s biological or genetic relationship to the resulting embryo/fetus, or the person’s gender. This proposition is not new. This Article adds to scholarly discourse by extending the concept: Intent should not just determine parenthood, but also fetal rights. When a pregnant person establishes their procreational intent (or lack thereof) prior to birth, then both the existence (or lack thereof) of legal protections for the embryo/fetus and the gestator’s rights and duties (or lack thereof) should flow from this intent. Non-gestating gamete contributors would do …

Don’T Forget To Like, Follow, And Regulate: An Argument For The Expansion Of Protections For Child Social Media Influencers, Caroline Waldo

University of Michigan Journal of Law Reform

Child social media influencers, colloquially known as “kidfluencers,” have skyrocketed to fame alongside the growth of social media. However, traditional child labor laws do not consider online influencing “work” or these kids to be “child performers.” Thus, these children do not receive any form of legal protection for their presence online, leaving them open to exploitation and severe harms. This Note explores the lack of protection provided to kidfluencers, ultimately proposing a new federal labor law to expand child actor protections to kidfluencers. Part I of this Note provides a brief history of the landscape by reviewing landmark Supreme Court …

Why Medical Error Is Killing You (And Everyone Else), Phoebe Jean-Pierre

University of Michigan Journal of Law Reform

In 2000, the infamous report To Err is Human rocked society with its focus on the pervasive danger of medical error. More than two decades later, medical error rates remain high and pose a consistent danger to patients. Today, medical error ranks as the fourth leading cause of death behind heart disease, cancer, and COVID-19. Medical error reflects the vulnerabilities of the healthcare process and may be diagnostic in nature. A large concern in responding to medical error is an overemphasis on blame and the idea that good physicians do not make mistakes. Our perspective on how to address medical …

Revising The Indian Plenary Power Doctrine, M. Henry Ishitani, Alexandra Fay

Michigan Journal of Race and Law

The federal Indian law doctrine of Congressional plenary power is long overdue for an overhaul. Since its troubling nineteenth-century origins in Kagama v. United States (1886), plenary power has justified invasive Congressional interventions and undermined Tribal sovereignty. The doctrine's legal basis remains a constitutional conundrum. This Article considers the Court's recent engagement with plenary power in Haaland v. Brackeen (2023). It argues that the Brackeen opinions may signal judicial readiness to reevaluate the doctrine. The Article takes ahold of Justice Gorsuch's critical assessment and runs with it, ultimately proposing a method for cleaning up this destructive and constitutionally dubious line …

Valuing Social Data, Amanda Parsons, Salome Viljoen

Articles

Social data production—accumulating, processing, and using large volumes of data about people—is a unique form of value creation that characterizes the digital economy. Social data production also presents critical challenges for the legal regimes that encounter it. This Article provides scholars and policymakers with the tools to comprehend this new form of value creation through two descriptive contributions. First, it presents a theoretical account of social data, a mode of production that is cultivated and exploited for two distinct (albeit related) forms of value: prediction value and exchange value. Second, it creates and defends a taxonomy of three “scripts” that …

Tying Law For The Digital Age, Daniel A. Crane

Articles

Tying arrangements, a central concern of antitrust policy since the early days of the Sherman and Clayton Acts, have come into renewed focus with re-spect to the practices of dominant technology companies. Unfortunately, tying law’s doctrinal structure is a self-contradictory and incoherent wreck. A con-ventional view holds that this mess is due to errant Supreme Court precedents, never fully corrected, that expressed hostility to tying based on faulty economic understanding. That is only part of the story. Examination of tying law’s origins and development shows that tying doctrine was built on a now-dated paradigm of what constitutes a tying arrangement. …

Use Of Artificial Intelligence In Drug Development, Louise C. Druedahl, Nicholson Price, Timo Minssen, Dipl Jur, Ameet Sarpatwari

Articles

Considerable focus has been placed on the health care applications of artificial intelligence (AI). Already, machine learning, a subset of AI that involves “the use of data and algorithms to imitate the way that humans learn” has been used to predict diseases, while AI-powered smartphone apps have been developed to promote mental health and weight loss. Owing in part to such successes, the market for AI in health care has been forecasted to increase more than 1000% between 2022 and 2029, from $13.8 billion to $164.1 billion. One area of substantial promise is drug development, which is poised to benefit …

Protecting The Sovereign's Money Monopoly, Gary B. Gorton, Jeffery Zhang

Articles

Sovereign states have held a monopoly over the production of circulating money for well over a century. Governments, not private entities, issue circulating money. The advent of stablecoins—privately issued digital money that can circulate—raises the question of the sovereign’s money monopoly from the grave. Should private money circulate alongside sovereign money in the twenty-first century? We argue against coexistence to preserve financial stability and monetary sovereignty.

Through the lens of economic theory, we explore the coexistence question by revisiting the original debates that led to the sovereign’s money monopoly in England, the United States, Canada, and Sweden. In each case, …

The Macroprudential Myth, Jeremy C. Kress, Jeffery Yufeng Zhang

Articles

According to conventional wisdom, the 2008 fnancial crisis fundamen- tally changed how policymakers approach fnancial regulation. Before the crisis, regulators sought to prevent individual fnancial institutions from collapsing, but this “microprudential” strategy proved inadequate to stop the market-wide meltdown. In response, policymakers purportedly turned to a new “macroprudential” approach that prioritizes the stability of the fnancial system as a whole instead of individual institutions in isolation. Regulators in the United States and abroad enthusiastically embraced macroprudential policy, implementing stress tests, capital buffers, liquidity requirements, and other supposed macroprudential tools. As the United States’ top bank regulator declared in 2015, “[W]e …

A Law At War With Itself: Character Evidence And The Doctrine Of Chances, Len Niehoff, Shannon Hickey

Articles

Certain legal principles have raging within them a kind of civil war. Important but abstract policy concerns pull the doctrine in one direction; common sense and practical experience pull it in another. Casualties ensue.

Perhaps no body of legal doctrine better exemplifies this sort of internal conflict than the general ban on character evidence, as embodied in Federal Rule of Evidence 404(a)(1). That rule states: “Evidence of a person’s character or character trait is not admissible to prove that on a particular occasion the person acted in accordance with that character or trait.” The rule has deep roots in the …