October 6, 2021

Room for Nature

[Cross-posted from Environmental Law Prof Blog]

By Karrigan Bork

Professors Ruhl and Craig paint a vision of a 4ºC world marked by “discontinuous and often unpredictable transformation.” Nature, from climate to ecosystems to species, is hard to predict in the best of times. It’s a wild beast in a 4ºC world. This means that we will have to give up our efforts to tightly control nature and instead give her room. Room in a real, physical sense, like space for species to migrate and for seas to rise and for rivers to roam; and room in a metaphorical sense, by not harvesting and managing and controlling and consuming right up to the edge of destruction.

The only certain thing in this uncertain 4ºC future is change: The weather in many locations will be marked by increased variability, higher temperatures, more extreme precipitation events, and changes in total precipitation. Sea levels will rise. Storms will be more intense. In short, climate change will make many of our current climate expectations obsolete. Moreover, a 4ºC world does not just present a new set of stable conditions that society can assume will continue into the future; continuing unpredictable shifts in climate are a hallmark of a 4ºC world.

This is especially challenging because core aspects of our society, from infrastructure to farming to insurance to conservation, have been designed with the assumption of relatively predictable climate. Infrastructure, for example, is often tailored very narrowly to meet a predicted climate range, and flood insurance programs require levee protection designed to withstand a 100-year flood event in most areas. But in a 4ºC world, levees will face storms that exceed those design standards much more frequently than once every hundred years. We’ve often left ourselves a narrow margin of safety in all kinds of systems, from infrastructure to agriculture to environmental protection. This approach leaves little room for error, and the predictable climate that enabled this approach is ending. We’re moving into a climate that is predictably unpredictable. Our current world of just-in-time delivery, thin margins, efficiency, precise timing, and long supply chains is not built for the uncertainties of a 4ºC future. This problem extends to the ways we currently manage ecosystems, approaches that leave little room for nature itself.

Professor Dave Owen describes the prevailing ecosystem management ethos as “allow[ing] resource consumption right up to perceived brinks of illegality and . . . provid[ing[ just enough protection to avoid legal violations, but no more.” Managing at the brink of illegality is part of a broader problem of trying to manage natural systems within carefully delineated boundaries, under tight control. Of course, we actively manage ecosystems to protect particular species or provide particular ecosystem goods and services. But in many cases, as Professor Owen describes, we try to do so with little room for error, giving ecosystems only enough to deliver what we seek. Examples include just-in-time delivery of habitat for migrating birds, the deployment of just-in-time water management for fish protection, the provision of just enough protection for species to avoid a jeopardy opinion under the Endangered Species Act, and limitations on protections for desirable species to small habitat areas on the assumption that managers can unfailingly provide the precise conditions the species require.

The inclination toward these approaches is entirely understandable. They present the irresistible promise of using science, technology, and engineering in real time to meet the needs of nature while putting as few constraints on human activities as possible. Who doesn’t want more with less? In so many ways, it fits with our cultural zeitgeist. Even under current conditions, though, this approach often falls apart in the face of uncertainty and the inherent challenges of predicting natural system responses. And when these kinds of efforts fail, they generally place the burden of failure on ecosystems and species; they are not safe-to-fail approaches.

In an uncertain 4ºC world, tight management to achieve a narrow range of ecosystem conditions will be both increasingly expensive and increasingly impossible. The nature or character of an ecosystem is determined based on physical characteristics of the ecosystem, like precipitation, soil characteristics, temperatures, and on species availability (what gets introduced to the ecosystem) and the interactions between the species that find their way into the ecosystem. Changing any of those aspects of an ecosystem can produce a cascade of changes throughout the whole of the ecosystem, altering ecosystem aspects such as the abundance and kinds of species present as well as physical conditions in the ecosystem.

Climate change is already producing widespread changes in ecosystem conditions. Predicting exactly how a particular ecosystem will react to these changes is very difficult, but scientists can nevertheless predict that change is very likely. For example, based on increasing temperatures alone, more than one in every three local species in the Americas will be different in ninety years. The ecosystems that will develop in a 4ºC world are unpredictable, with no analog in today’s ecosystems, and tightly managing those ecosystems to provide desired outcomes will be tremendously, well, uncertain.

Instead, managers must approach ecosystem management with humility, not an expectation of understanding and control. What, precisely, does managing with humility mean? I’m excited to flesh that out in future work, but as a baseline, humility counsels leaving time and space for nature. Physical space: Space for new wetlands. Space for rising seas. Space for shifting floodplains. Space for fire. Space for new species. Space and time for natural processes to develop and shift and adapt. And metaphorical space: relaxed expectations about our ability to control nature and predict the outcome of management actions, more conservative estimates of how species will respond to conservation efforts, more leeway in estimating water needs for nature, less belief in the power of science and engineering to replicate natural systems.

In some ways, leaving space for nature fits well with our 4ºC infrastructure challenges.  Reconciliation ecology, defined by its originator Michael L. Rosenzweig  as “the science of inventing, establishing and maintaining new habitats to conserve species diversity in places where people live, work and play,” provides ways to integrate human and natural systems needs. Thus, to use one example, perhaps “space for wetlands and floodplains” becomes building sea walls and levees set far enough back from coasts and rivers to provide both improved flood protection and space for nature. Moreover, we must also consider how to integrate the inevitable human migration with healthy ecosystems: as people migrate to more hospitable places, we must leave room for nature in the new developments. And, although perhaps it is more restoration than reconciliation, as we manage our retreat from places made unlivable by climate change, we must not salt the earth, but rather rewild the lands and waters we leave behind.

Some states have begun to embrace this approach in their climate adaptation plans. California, for example, lists “prioritize natural infrastructure solutions” as one of its seven overarching principles for climate change adaptation and highlights the importance of restoration and conservation of natural systems to successful adaptation. This is a good start. But more broadly, we must recognize that tight controls of all kinds will fail in a 4ºC future, that the ecosystems of the future will not be the ecosystems of the present, and that nature needs space if it is to continue supporting life in the ways we have come to expect.

October 1, 2021

Western Water Rights in a 4°C Future

[Cross-posted from Environmental Law Prof Blog]

By Kevin Lynch, Shi-Ling Hsu & Karrigan Bork

Western water rights reflect a short and stable climate history, but that period of stability is ending. Looming climate change of 4°C will produce not only higher temperatures, but decreased snowpack, shifts in runoff patterns, and the dramatic shrinkage of giant reservoirs. The climatic changes that have already traumatized the West will only intensify and cross even more dangerous thresholds, necessitating the deliberate adaptation of water rights systems.

Hydrology in a Changing Climate

A climate-changed future is inherently uncertain, but a general consensus predicts a dire future for water supply in the arid West.  Precipitation patterns are the biggest source of uncertainty due to the potential increase in extreme weather events.  This could both increase and decrease water supplies as larger snowstorms could dump more precipitation in some years, while other impacts on the snowpack would lead to declines.  However, higher temperatures in the summer and fall are expected to offset potential increases in snowpack in most years, leading to an overall trend of less water supply in a warming future.  The Colorado River, which supplies vital water to seven states and 23 tribal nations, may experience flow losses due to temperature increases by more than 20 percent midcentury and 35 percent by 2100.  Intra- and inter-annual variability will continue as a hallmark of western water systems. In the Colorado River basin, for example, the impacts of a changing climate are already apparent as the current megadrought fueled by climate change recently led to the first ever federal water shortage declaration.  Experts urge us to plan for even worse impacts to come.

Looking beyond the Colorado River basin, a 4°C world leads to large declines in snowpack in the western United States, perhaps in the range of a 40 percent decrease due to generally less precipitation and shifts from snow to rain.  The snowpack in the Sierra Nevada mountains recently hit its lowest point going back at least 500 years. Decreasing snowpack reduces water availability throughout hot, dry summers, resulting in significant seasonal water shortages.

Warmer temperatures and less frequent precipitation also mean that even normal snowpacks do not necessarily bring relief from droughts.  For example, Colorado’s 2021 snowpack was almost normal, but because soils in many western watersheds were unusually dry, most of the water went into the soils and not into streams, rivers, and reservoirs for human uses.  Another driver of drought in a warming world is the increase in evapotranspiration caused by higher temperatures as plants need more water and evaporation from rivers and reservoirs increases. These factors point towards a drying and warming future in the southwestern United States, particularly in the Colorado River basin.

Water Law Historically Adapted to Hydrology

The changes in the West’s hydrology are very likely to produce changes in water law, which has historically evolved in response to differing climactic conditions. Early U.S. water law decisions drew heavily on English water law, establishing a system based on riparian water rights. Riparian rights come from ownership of land that abuts a watercourse, and they are generally limited to reasonable use of the water on the riparian land. Riparian rights have many other limits; they do not allow storage or long distance transportation of water, for example, and they are not absolute, leading to some uncertainty about the quantity and reliability of water. These limitations meant that riparian rights were poorly suited to western hydrologic regimes where seasonal (and total) water availability patterns require storage and transportation of water to maximize the benefits of available water.

California developed a system of appropriative rights based on the use of water, not on land ownership. Appropriative rights allow water storage and transportation, and these advantages led all of the states west of the Mississippi to adopt some version of appropriative rights. Coastal states like California and Washington, and midwestern states like Kansas and Nebraska, tend to blend riparian and appropriative doctrines, while drier western states like Colorado embrace a purer appropriative rights approach that does not recognize riparian rights at all. Appropriative water rights systems give priority to the first user of the water, an approach often styled “first in time, first in right,” so that later users may not get their full allocation of water in dry years. Maintaining appropriative water rights requires constant vigilance; these rights can be lost through disuse or to other users who take the water. Water rights are tied to the land and to its use; transferring the right to someone else or changing the place or use of the water generally requires permission of a state level water agency.

The appropriative rights and the blended appropriative/riparian rights approaches are both inherently based on historic hydrology and patterns of land use and ownership. This can make them a barrier to climate adaptation. For example, the first-in-time approach gives priority to the earliest water users, regardless of how well suited these uses are to a changing climate or changing societal needs.  Historical aspects of water rights thus sometimes allow lower value agricultural uses to take priority over domestic and industrial uses. Formally, water use is generally required to be reasonable and beneficial, but as a practical matter, courts and water boards rarely rein in inefficiency. Recent droughts have shown many existing uses of water to be even more anachronistic. Because most water in the West is already appropriated, in a drier, climate-changed future, a reordering of priorities seems necessary.

Consider California’s agricultural sector. Though productive and valuable, California's agricultural sector constitutes about 80 percent of the state's human water use while accounting for less than 3 percent of the State's GDP. The ag sector has become significantly more efficient in the last 30 years, using less total water to produce more agricultural value. Nevertheless, in some cases and in some years, California water currently used in agriculture would be more valuable as drinking water or as water to support ecosystems. Growing fewer almonds or making less milk and cheese will likely be necessary in a 4°C world. A successful water rights system should encourage and accommodate these shifts.

Further, use-it-or-lose-it requirements disincentivize water conservation or land use changes that could free up water for other users.  Riparian rights give strong rights to riparian landowners, a system that tends to maintain existing land uses and perpetuate distributive justice concerns. Use-based appropriative rights inherently value use over conservation or other "passive" uses, such as fish and wildlife habitat.

Finally, although existing water rights systems have succeeded in spurring economic development, they have done so at great environmental and social cost. The extensive, massive water diversions that have made California the most productive agricultural state in the United States also completely transformed the entire Central Valley and altered the ecology of much of the state, driving many native species to extinction.

Can Water Law Adapt to a Warmer Future?

How is the western United States to cope with a world that is warmer by as much as 4°C and chronically short of water? We suggest three steps, emphasizing that these represent just a few out of many constructive actions that might be taken to prepare for a much warmer, much drier American West.

New diversions must be evaluated under a conception of reasonableness that includes climate change. Western water law has always embedded notions of reasonableness and almost always been, at least formally if not in practice, predicated on some consideration of public interest. These terms have been either ill-defined or defined in a way that gives short shrift to considerations of conservation and passive uses. The phrase public interest has been infrequently deployed to protect passive or instream uses and has in some cases simply been ignored in water permit applications. Notions of reasonableness or beneficial use must take account of future scarcity of water and an increased need for conservation and domestic uses.

Existing reasonableness requirements must be enforced as a limit on current water rights. With climate change already well underway, many existing allocations of water are economically inefficient, with too little regard for non-agricultural uses. Because most water in the West is already allocated, current water uses must be re-examined and curtailed if they fail to meet a realistic reasonableness test that accounts for the drier, hotter realities of a climate-changed future.

States must actively secure water rights in preparation for severe and prolonged water shortages in the future. States must create new institutions to collect water rights as an effective stockpile against future scarcity, which may present more serious threats than the loss of crops or livestock. States must migrate some water and water rights into a governance mechanism that operates outside of traditional water law. A state-chartered trust instrument, such as a "Resources Trust," might be legislatively charged with gathering up water and water rights in order to act as a water supplier of last resort should the dire need arise. In hedging against severe and prolonged water shortages, such a Resources Trust might employ a range of legal instruments, such as options, to secure future supply.

- By Kevin Lynch, Shi-Ling Hsu & Karrigan Bork

Kevin Lynch is an Associate Professor of Law with Tenure at the Sturm College of Law.

Shi-Ling Hsu is the D'Alemberte Professor at Florida State University College of Law.

Karrigan Bork is an Acting Professor of Law at UC Davis School of Law.

 

September 29, 2021

IMMIGRATION, REFUGEE & CITIZENSHIP LAW eJOURNAL Vol. 22, No. 51

Edited by Kevin R. Johnson

Table of Contents

"Ruse and Rhetoric as the Populist’s Xenophobic Ploy"

-Ediberto Roman, Florida International University (FIU) - College of Law
-Ernesto Sagás

"Re-examining the Philosophical Underpinnings of the Melting Pot vs. Multiculturalism in the Current Immigration Debate in the United States"

-Daniel Woldeab, Metropolitan State University
-Robert M. Yawson, Quinnipiac University
-Irina Woldeab, Minnesota Department of Natural Resources

"The Effects of Bilateral Labor Agreements: Evidence from the Philippines"

-Adam Chilton, University of Chicago - Law School
-Bartosz Woda, University of Chicago - Law School

"Constitutional Validity of Assam Accord in Accordance with the Validity of Citizenship (Amendment) Act, 2019"

-Jayanta Boruah, North-Eastern Hill University (NEHU)

"The Call for the Progressive Prosecutor to End the Deportation Pipeline"

-Talia Peleg, City University of New York School of Law

"The End of Entry Fiction"

-Eunice Lee, University of Arizona - James E. Rogers College of Law

"Refouling Rohingyas: The Supreme Court of India's uneasy engagement with international law"

-Malcolm Katrak, Jindal Global Law School
-Shardool Kulkarni, Bombay High Court

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"Ruse and Rhetoric as the Populist’s Xenophobic Ploy" 
Florida International University Legal Studies Research Paper No. 21-12

EDIBERTO ROMAN, Florida International University (FIU) - College of Law
Email: romane@fiu.edu
ERNESTO SAGÁS
Email: Ernesto.Sagas@colostate.edu

Rhetoric can be a tool that builds strong communities and great empires, but it can also be weaponized in order to isolate, disenfranchise, and oppress. A thorough examination of rhetoric and its impacts in the United States introduces a unique reflection on the legacy of former President's Trump’s dialogue with a large segment of the American people and its connection to a broader fear of “the other” within the global community. The verbal onslaught indirectly and other times directly, expressed those immigrants as not of the same as the domestic-citizen “ingroup.” Consequently, we have borne witness to some of the most nonsensical attempts at immigration reform disguising the purest form of xenophobia. Unfortunately, the United States was not the lone place where rhetoric towards these outsiders fueled aggressive nationalistic response to a perceived threat. A five-country case study of the Americas highlights a critical consequence of these anti-immigrant attitudes and resulting policies. Specifically, the use of rhetoric in this fashion created an invaluable political pressure relief for conservative populist leaders: promoting a belief in the masses of a dedicated nationalist hero focused on ending the immigrant threat, but in reality only creating the figurative and not literal deportation of an indispensable labor force that are immigrants in these lands.

"Re-examining the Philosophical Underpinnings of the Melting Pot vs. Multiculturalism in the Current Immigration Debate in the United States" 
In: Harnessing Analytics for Enhancing Healthcare & Business. Proceedings of the 50th Northeast Decision Sciences Institute (NEDSI) Annual Meeting, Pgs. 264 - 285. Virtual Conference, March 26-27, 2021. DOI:10.31124/advance.14749101.v1

DANIEL WOLDEAB, Metropolitan State University
Email: daniel.woldeab@metrostate.edu
ROBERT M. YAWSON, Quinnipiac University
Email: robert.yawson@quinnipiac.edu
IRINA WOLDEAB, Minnesota Department of Natural Resources
Email: imwoldeab@gmail.com

Immigration to the United States is certainly not a new phenomenon, and it is therefore natural for immigration, culture and identity to be given due attention by the public and policy makers. However, current discussion of immigration, legal and illegal, and the philosophical underpinnings is ‘lost in translation’, not necessarily on ideological lines, but on political orientation. In this paper we reexamine the philosophical underpinnings of the melting pot versus multiculturalism as antecedents and precedents of current immigration debate and how the core issues are lost in translation. We take a brief look at immigrants and the economy to situate the current immigration debate. We then discuss the two philosophical approaches to immigration and how the understanding of the philosophical foundations can help streamline the current immigration debate.

"The Effects of Bilateral Labor Agreements: Evidence from the Philippines" 

ADAM CHILTON, University of Chicago - Law School
Email: adamchilton@uchicago.edu
BARTOSZ WODA, University of Chicago - Law School
Email: woda@uchicago.edu

Facilitating legal and safe international labor migration is arguably the most promising way to promote economic development. Due to data limitations, however, little is known about whether one of the primary legal tools that developing countries use to promote international labor migration — a kind of treaty known as a Bilateral Labor Agreement (“BLA”) — actually affect the flow of workers or the terms of those workers’ employment. We explore the effect of BLAs using administrative data from one of the world’s most prolific promoters of labor migration and signers of BLAs: the Philippines. We find no evidence that signing BLAs has increased either the international migration of Filipino workers or the return of remittances to the Philippines. This suggests that the negotiation of new BLAs may only have modest effects on promoting labor migration or improving the terms of migrant workers’ employment.

"Constitutional Validity of Assam Accord in Accordance with the Validity of Citizenship (Amendment) Act, 2019" 
Forthcoming, International Journal of Legal Science and Innovation, Volume 3 Issue 3, 117-127, ISSN: 2581-9453

JAYANTA BORUAH, North-Eastern Hill University (NEHU)
Email: jayanta.boruah94@gmail.com

Assam has always been facing the issue of illegal immigration since time immemorial. And this issue has always created huge tensions in establishing the law and order situation in the State. There are several examples of brutal incidents that are related to this issue like- the Nellie massacre in 1985, the Bodo-Muslim Conflict in 2012, and recently the protests against the Citizenship (Amendment) Act of 2019 (CAA) where again five Assamese people had to sacrifice their lives. In such a situation analysis of the existing Citizenship laws and their relevancy with the Assam Accord, which was signed after the brutal Nellie Massacre, becomes important for understanding the extent of conformity between the objectives of these laws and the demands of the local people from such laws. This Article has therefore focused on the Constitutional validity of the Assam Accord and the CAA of 2019 along with the conflict between the two and the impact of such laws on the issue of the Assamese people where the conclusion highlights the lacunas in both the legal documents along with the question that we as citizens of a democratic country must think for.

"The Call for the Progressive Prosecutor to End the Deportation Pipeline" 
Georgetown Immigration Law Journal, Forthcoming

TALIA PELEG, City University of New York School of Law
Email: talia.peleg@law.cuny.edu

“Progressive prosecutors” seek to redefine the role of the prosecutor and question the purpose of the criminal legal system, ushering in the need to reexamine the scope and substance of their duties toward all, but particularly immigrant defendants, seeing as they suffer outsized punishment for most criminal offenses. Ten years ago, Padilla v. Kentucky broke ground in finally recognizing that defense counsel is constitutionally obligated to advise immigrants of the clear risks of deportation associated with a plea. Nevertheless, immigrants ensnared in the criminal legal system have since faced deportation at ever-increasing rates. Given the entwinement of immigration and criminal law, organizers and scholars have recognized that local prosecutors serve as gatekeepers to the federal criminal removal system. Yet, prosecutors around the country wildly differ in their treatment of immigrant defendants, at times ignoring or misusing this gatekeeping role.

In the last decade, new prosecutorial goals — ensuring fairness and equity, promoting community integrity, tackling disproportionate treatment of Black and brown communities in policing and incarceration, addressing root causes of crime — have gained increasing popularity, by some. Decriminalization and decarceration have been tools utilized to meet these goals. The specific goals strived for by self-described progressive prosecutors require an examination of their treatment of non-citizens given the prosecutor’s outsized role in determining immigration consequences and application of an immigrant’s rights lens to current practices. Their policies toward immigrant defendants to date have been tepid and at times, harmful.

Yet, careful study reveals “progressive prosecutors” have expansive obligations to immigrant defendants — rooted in the progressive prosecution movement’s own rhetoric about the appropriate role of the prosecutor and the underlying purposes of the criminal legal system, prosecutorial ethical and professional standards, and Supreme Court jurisprudence. The progressive prosecutor’s duty is simple — to utilize their powers to avoid the double punishment of criminal sentence and deportation. This means ensuring that policy choices that purport to support communities of color and poor communities do not neglect immigrant defendants, thereby creating disproportionate consequences for this population.

Due to the immigration consequences that might flow from any contact with the criminal legal system, progressive prosecutors need not only look at their role in plea negotiations, but beyond. A progressive prosecutor’s work then is to first, understand her role as gatekeeper to the federal deportation machine and second, act to stop feeding it. This Article proposes a series of guidelines and policy recommendations prosecutors can institute toward these ends, including institutional changes as well as the adoption of specific practices that consider immigration consequences at all stages of criminal proceedings – arrest, conviction, sentencing and beyond. This might include the creation of an immigrant integrity unit to audit and revamp all areas of practice to establish policies like the expanded use of declination, the encouragement of pre-arrest diversion and a prohibition on information sharing with ICE.

“Progressive federalism” suggests that by taking these kinds of actions, progressive prosecutors will move closer to securing proportionate outcomes for immigrants in the criminal legal system. While federal immigration reform remains stymied, adoption of a robust immigration agenda by the local prosecutor will simultaneously begin to disentangle the criminal and immigration systems and influence immigration enforcement policy on a national level.

"The End of Entry Fiction" 
North Carolina Law Review, Vol. 99, pp. 565-642, 2021

EUNICE LEE, University of Arizona - James E. Rogers College of Law
Email: eunicelee@arizona.edu

Although “entry fiction” emerged in immigration and constitutional law over a century ago, the doctrine has yet to account for present-day carceral and technological realities. Under entry fiction, “arriving” immigrants stopped at the border are deemed “unentered” and “not here” for constitutional due process purposes, even in detention centers deep within the United States. As a result, the Department of Homeland Security (“DHS”) uses its sole discretion to detain tens of thousands of arriving asylum seekers in its facilities without a bond hearing. Despite significant modern changes in immigration statutes and due process jurisprudence, the Supreme Court recently suggested, but did not decide, that individuals subject to entry fiction may continue to lack constitutional due process protections against detention. Both courts and the government have invoked sovereign power as the doctrine’s justification, asserting that detention is necessary to effect exclusion (removal) of individuals and that entry fiction appropriately protects the government’s power to detain.

While many scholars over the decades have offered trenchant critiques of the doctrine, no recent treatment evaluates entry fiction as legal fiction. This Article fills that gap, tracing entry fiction’s origins in law and jurisprudence to consider its operation in the present-day context. I engage in a close rereading of Chinese Exclusion- and McCarthy-era cases to uncover functionalist and humanitarian underpinnings of entry fiction, including an intention to minimize hardship to immigrants. I then reevaluate entry fiction in the present day. In particular, this Article explores DHS’s indiscriminate use of immigration detention and its breathtaking expansion of surveillance technology. Today, DHS both operates a mass detention regime and engages in ever-increasing surveillance, including real-time tracking of immigrants that allows deportation without physical detention. These current realities decouple entry fiction from sovereign purpose—rendering detention unnecessary for the sovereign power of exclusion—and engender decidedly antihumanitarian practices. I conclude that courts must put entry fiction to rest as a vestige of the past and recognize the constitutional due process rights of all persons who are present and here in U.S. immigration detention centers.

"Refouling Rohingyas: The Supreme Court of India's uneasy engagement with international law" 
Journal of Liberty and International Affairs | Vol. 7, No. 2, 2021

MALCOLM KATRAK, Jindal Global Law School
Email: mkatrak@jgu.edu.in
SHARDOOL KULKARNI, Bombay High Court
Email: kulkarnishardool@yahoo.co.in

The complex relationship between international and municipal law has been the bone of significant scholarly contention. In the Indian context, despite a formal commitment to dualism, courts have effected an interpretive shift towards monism by espousing incorporation of international law. The case of Mohammad Salimullah v. Union of India, which involves the issue of deportation of Rohingya refugees from India, represents a challenge in this regard owing to the lack of clarity as to India’s obligations under the principle of non-refoulment. The paper uses the Supreme Court’s recent interim order in the said case as a case study to examine India’s engagement with international law. It argues that the order inadequately examines the role of international law in constitutional interpretation and has the unfortunate effect of ‘refouling’ Rohingyas by sending them back to a state where they face imminent persecution.

 

September 13, 2021

What Trump Can Teach Us About Con Law Ep. 56: 'Shadow Docket'

[Cross-posted from What Trump Can Teach Us About Con Law]

By Elizabeth Joh

On the topic of legal procedure and how it relates to the Supreme Court's so-called "shadow docket" and the Texas abortion law. Listen to Episode 56 of the What Trump Can Teach Us About Con Law podcast.

August 27, 2021

IMMIGRATION, REFUGEE & CITIZENSHIP LAW eJOURNAL Vol. 22, No. 47

Edited by Kevin R. Johnson

Table of Contents

"A Masterclass in Evading the Rule of Law: The Saga of Scott Morrison and Temporary Protection Visas"

-Joyce Chia, Independent
-Savitri Taylor, La Trobe University - School of Law

"Migration Policy-making in Africa: Determinants and Implications for Cooperation with Europe"

-Mehari Taddele Maru, European University Institute - Migration Policy Centre

"Unpacking the Rise in Crimmigration Cases at the Supreme Court"

-Philip Torrey, Harvard Law School

"Judicial Deference and Agency Competence"

-Mary Hoopes, Berkeley Judicial Institute

"TOW Environmental Migrants in the International Refuge Law and Human Rights: An Assessment of Protection Gaps and Migrants’ Legal Protection"

-Muhammad Bilawal Khaskheli, Zhejiang University
-Ayalew Abate Bishaw, Zhejiang University
-Jonathan Gesell Mapa, Zhejiang University
-Carlos Alves Gomes Dos Santos, Zhejiang University

-------------------------------

"A Masterclass in Evading the Rule of Law: The Saga of Scott Morrison and Temporary Protection Visas"  
University of New South Wales Law Journal, Vol. 44, No. 3, 2021

JOYCE CHIA, Independent
Email: joycekwc@icloud.com
SAVITRI TAYLOR, La Trobe University - School of Law
Email: s.taylor@latrobe.edu.au

For over a year, the Minister for Immigration successfully avoided granting permanent protection to refugees who came by boat. His newly elected government had promised to re-introduce a temporary protection regime, but came to power without the numbers to pass necessary legislation. In order to achieve his policy objective, the Minister chose to engage in a variety of legally dubious tactics to forestall and delay granting permanent protection, as required by the law. In doing so, the Minister navigated skilfully through the holes in Australia’s institutional frameworks designed to protect the rule of law and Australia’s constitutional arrangements. The saga of Scott Morrison and temporary protection visas is therefore a telling story about the fragility of the rule of law in Australia and demonstrates how a determined executive can upend the constitutional order.

"Migration Policy-making in Africa: Determinants and Implications for Cooperation with Europe"                                                                                                                                                                            Robert Schuman Centre for Advanced Studies Research Paper No. 2021/54

MEHARI TADDELE MARU, European University Institute - Migration Policy Centre

Email: Mehari.Maru@eui.eu

This paper focuses on African policy positions on migration to Europe and towards cooperation on migration with the EU and its Member States. It draws on existing research to discuss the key features and drivers of migration policies in Africa. Paying attention to both commonalities and variations across different national economic and political contexts, the paper discusses seven inter-related factors that inform, influence and determine the policy approaches of African countries: (i) the common view that migration and development are intrinsically linked; (ii) the political regime type and domestic politics (both of which can influence governments’ responsiveness to human rights issues, public demands related to bilateral agreements on migration both from within the country and outside); (iii) the financial gains to be made from cooperation with the EU in the form of development aid as well as remittances; (iv) diplomacy, geographic proximity and routes to Europe; (v) policy and capability limitations of current migration governance structures; (vi) lobbying by migration facilitators and, in some cases, corruption; and (vii) the pan-African agenda of integration, especially on the mobility of persons. Considering the dynamics of past and existing Africa-Europe agreements, I argue that the power asymmetry (financial and diplomatic) between Europe and Africa has distorted the priorities of Africa and created pressure to implement policies that give precedence to Europe’s interests over those of African countries and migrants. The paper further discusses the implications of these dynamics in the Africa-Europe migration partnership, including the challenges and opportunities for more effective cooperation in the future.

"Unpacking the Rise in Crimmigration Cases at the Supreme Court"                                                                                                                                                                                                                         New York University Review of Law & Social Change, The Harbinger

PHILIP TORREY, Harvard Law School
Email: ptorrey@law.harvard.edu

Why has the Supreme Court recently granted more writs of certiorari in cases concerning the complex legal test known as the categorical analysis than it has in the last ten years? As background for the uninitiated, the categorical analysis is a tool used by adjudicators to determine when immigration consequences or federal sentencing enhancements are triggered by prior convictions. It is an often misunderstood—and consequently misapplied—analysis that has befuddled adjudicators for decades. The Supreme Court has decided to reaffirm and refine the legal test in several cases over the last few terms. The Court will have the opportunity to do so again this term in two cases, Pereida v. Barr and Shular v. United States. This Article examines several factors that may elucidate why the Court has recently taken a growing interest in the categorical analysis.

"Judicial Deference and Agency Competence"  
Berkeley Journal of International Law (BJIL), Forthcoming

MARY HOOPES, Berkeley Judicial Institute
Email: mhoopes@berkeley.edu

While there is consensus among practitioners and scholars alike that immigration adjudication is in a state of crisis, very few studies have examined the role that federal courts play in reviewing this system. This Article focuses on asylum appeals at the federal appellate level, and constructs an original database of cases across five circuits over seven years. It reveals that the Courts of Appeals have created a wide variety of court-fashioned rules that serve to either expand or constrict the scope of judicial review, with important implications for the likelihood of remand. In these data, having one’s asylum appeal heard in the Seventh or Ninth Circuits was associated with a significantly higher likelihood of remand than in the First, Tenth, or Eleventh Circuits. This variation does not merely reflect a difference in the types of cases across circuits. Rather, a qualitative analysis reveals very different approaches to reviewing the agency’s decision-making. Across these five circuits, the Seventh and Ninth Circuits have adopted a much more searching level of review that arguably reflects a distrust of the agency’s competence.

As this analysis demonstrates, the elasticity of the appellate review model permits this wide variation, as courts applying a nearly identical standard of review are reaching starkly different results. I argue that the more expansive approach to review is normatively beneficial, as we ought to have an appellate review model that permits courts to be responsive to evidence of an agency in crisis. This is particularly compelling in the context of asylum seekers, as their lack of political power has enabled both a long history of politicization of the adjudication process and a disregard for quality assurance initiatives within the agency. Since larger changes aimed at addressing the underlying flaws at the agency level are unlikely to be forthcoming soon, federal courts may be the only institutions equipped to meaningfully address problems within asylum adjudication.

"TOW Environmental Migrants in the International Refuge Law and Human Rights: An Assessment of Protection Gaps and Migrants’ Legal Protection"  
ScienceRise: Juridical Science, (3 (13), 52–59. doi:10.15587/2523-4153.2020.213985

MUHAMMAD BILAWAL KHASKHELI, Zhejiang University
Email: Bilawal_kamber@yahoo.com
AYALEW ABATE BISHAW, Zhejiang University
Email: tsionayelam@yahoo.com
JONATHAN GESELL MAPA, Zhejiang University
Email: mapajona@yahoo.fr
CARLOS ALVES GOMES DOS SANTOS, Zhejiang University
Email: carlosatos25@hotmail.com

The concept and the rights of environmental refugees have attracted national, international governance and scholars’ attention. I have tried to analyse through a descriptive and explanatory approach the current trend of environmental refugees’ legal protection and its limitations and achievements. The objective of this research work is first to review legal scholars’ work relating to environmental refugees to show the current trends relating to environmental refugees’ protection. Second, to analyse the existing legal framework to show, whether it adequately has governed the issue of environmental refugees’ rights and identify the gaps. Third, it explains the ways forward, discussing the international refugee law (the 1951 refugee convention and the 1969 OAU refugee convention), the international environmental law, international law on Stateless persons, the international human right law and the system of temporary protected status. Environmental refugees could be referred otherwise as environmental migrants, environmentally displaced persons, climate refugees, climate change refugees, environmental refugees and ecological refugees. The legal concepts shaping that definition include concepts such as well-founded fear, persecution, crossing international border, exclusion from refugee status (undeserving cases), and cessation of refugee status. The UN High Commissioner for Refugees states that 36 million people were displaced by natural disasters in 2009, and about 20 million of those were forced to move for climate change-related issues. According to other estimates, there could be as many as 150 million by 2050. In accordance with the estimates of UN Environment Programme, by 2060 there could be 50 million environmental refugees in Africa alone.

August 27, 2021

Handbook on Corporate Governance in India

[Cross-posted from the Oxford Business Law Blog]

By Afra Afsharipour and Manali Paranjpe

Corporate governance reforms in India have undergone a significant overhaul since the late 1990s. In 2000, the Securities and Exchange Board of India (SEBI) introduced the first set of comprehensive corporate governance reforms via Clause 49 of the listing agreement of stock exchanges. Over the next decade, after much debate, voluntary guidelines and lessons learnt through the Satyam scandal in 2009, the Companies Act, 1956 was repealed and replaced by a new set of laws under the Companies Act, 2013. The passage of the 2013 Act was followed by new rules thereunder as well as separate SEBI administered regulations for listed companies.

Since the release of the previous edition of our Handbook on Corporate Governance in India, the country has witnessed significant regulatory changes with continuous refinement of corporate governance standards. Notably, in October 2017, the SEBI formed the Committee on Corporate Governance headed by Uday Kotak (the Kotak Committee) to undertake a comprehensive review of extant corporate governance norms in India. The committee considered several aspects of corporate governance, including corporate purpose and stakeholder interests, and focused on the business realities of Indian corporations, including the dominance of controlling-stockholders. The SEBI’s amended listing regulations reflect many of the recommendations of the Kotak Committee. More recently, in early 2021, the corporate social responsibility (CSR) framework in India has also been significantly amended.

Our Handbook on Corporate Governance in India: 2021 Edition provides a comprehensive study of corporate governance in India. The introductory chapters trace the development of India’s corporate governance regime and examine the nature of ownership and control at Indian companies. Concentrated ownership, often referred to as promoter control, is widespread in corporate India. While concentrated ownership may benefit the corporation and its stakeholders by providing, inter alia, commitment to the performance and growth of the company, it may also lead to exploitation of power. This edition of the Handbook analyzes ownership and control in corporate India through case studies that explore recent challenges faced by Infosys Ltd. and Tata Sons Ltd., two of India’s largest firms. Concentrated ownership and the use of complex group company structures also create the potential for abusive related party transactions that erode value for minority shareholders. With several amendments since passage of the 2013 Act, India’s substantive legal framework for regulating related party transactions has now converged toward international standards. 

The subsequent chapters of the Handbook delve into the extant corporate governance regime for listed companies, highlighting the key regulatory changes. In the chapter on directors’ duties and board practices, we look into the changing board composition at listed Indian companies. The Handbook presents data indicating the direct correlation between company and board size, for example, certain large companies having as many as ten directors on their boards.

The chapter also highlights how board dynamics have changed at listed Indian companies over the years with women directors and independent directors being onboarded. For example, the Handbook notes that for listed companies in certain sectors (healthcare and information technology), 53 to 55 percent of the board is independent, and that all of the NIFTY 500 companies have one woman director on their boards as mandated by SEBI.

The Handbook addresses the duties and responsibilities of Indian boards and explains director liabilities under Indian law. The Handbook takes a broad perspective on corporate governance, addressing interactions between boards and shareholders, as well as minority and controlling shareholders. Given the growing focus on corporate social responsibility, the Handbook examines the key regulatory changes and debates in India and provides a detailed review of the development of sustainability and responsible business practice norms in India.

The Handbook covers legal duties and their enforcement, as well as ethics and risk management issues. India has strengthened its statutory framework governing ethics through reforms such as recent amendments to the Prevention of Corruption Act, 1988, the SEBI’s insider trading regulations and the introduction of the National Guidelines on Responsible Business Conduct. The Handbook’s case study of ethical challenges faced by ICICI Bank illustrates the necessary framework for regulating ethical conduct at companies. 

Effective corporate governance includes a robust framework for risk management, including board oversight of risk management systems. While the 2013 Act sets forth a limited risk management framework, the SEBI listing regulations include a risk management mandate for listed companies. Accordingly, a company may put in place Enterprise Risk Management (ERM) systems to identify, analyze and evaluate risks, as well as to address cognitive biases in the corporate culture that undermine risk assessment. The Handbook’s case study of the IL&FS Ltd. crisis explicates the shortcomings of ineffective risk management systems. 

Several chapters address the current legal framework related to board committees—the nomination and remuneration committee (NRC), the audit committee and the corporate social responsibility committee. While SEBI has recently reviewed its mandate on the composition of the nomination and remuneration committee, the Handbook notes that for NIFTY 500 companies, on an average, 80 percent of the directors on the NRC are independent.

Further, except companies in the financials and materials sectors, all NIFTY 500 companies have an independent NRC chairperson.

Given the rise of institutional and other non-controlling shareholders, the Handbook provides an analysis of shareholder participation, activism, and rights under Indian law. The Handbook’s final chapter includes an analysis of the institutional framework and mechanisms for enforcement of corporate governance norms in India. The 2013 Act and the SEBI listing regulations provide several mechanisms by which shareholders may monitor companies as well as enforce their rights. Activism by institutional investors also plays an important role in developing corporate governance standards. Regulatory measures such as the introduction of proxy advisers, facilities for e-voting, and the introduction of class actions can enable non-promoter shareholders to assert their rights. Stewardship codes can encourage institutional investors to focus on companies’ long-term goals and actively monitor public companies on material matters. Collectively, under the 2013 Act, the SEBI listing regulations, and the Insolvency and Bankruptcy Code, several regulatory bodies have been entrusted with the functions of overseeing the enforcement of corporate governance norms in India. Class action suits, newly introduced under the 2013 Act, allow the National Company Law Tribunal wide powers to grant relief to aggrieved shareholders. 

The analysis in the Handbook demonstrates that corporate governance in India continues to evolve as Indian boards face increasingly complex risks, such as the COVID-19 pandemic, and an expanded regulatory environment. To achieve effective governance, boards must strike a balance between the company’s purpose and operations, while following the highest standards of business ethics and a complex regulatory regime. Through this Handbook, we have highlighted issues that in our view need to be deliberated upon to mitigate future challenges to effective corporate governance.

Afra Afsharipour is Senior Associate Dean for Academic Affairs and Professor of Law at University of California, Davis School of Law.

Manali Paranjpe is Research Associate with The Conference Board in India.

August 23, 2021

Comparative Corporate Governance

[Cross-posted from the Columbia Law School Blue Sky Blog]

By Afra Afsharipour and Martin Gelter

With the increasing internationalization of law and legal scholarship, comparative corporate governance has seen a burgeoning volume of research from a practical, theoretical, and empirical perspective. Practically speaking, both internationally and within individual countries, most corporate governance research deals with the interaction between board members, officers, and shareholders, primarily in large, publicly traded corporations. Much of the literature is preoccupied with reducing conflicts of interest between shareholders and management and consequently minimizing agency cost, vindicating the narrow finance perspective. Given the predominance of controlling shareholders around the globe, the literature increasingly focuses on conflicts between controlling and minority shareholders. In a comparative or international context, research also often considers all groups whose interests are affected by corporate activities and who have some degree of influence on corporations, such as creditors and employees.

In an introductory chapter to Comparative Corporate Governance, we frame the book within a broad perspective on corporate governance and cover legal duties and their enforcement, as well as the balance of powers generated by the institutional setup. Nevertheless, the interests of other “stakeholders” are very much present.

Fundamental Issues in Comparative Corporate Governance

We begin with an overview of the intellectual history of comparative corporate law and governance. During the past three decades, the volume of comparative law scholarship has grown, and the methods have shifted from the traditional functionalism represented by venerable treatises toward greater methodological variation. Maribel Sáez and María Gutiérrez put the different currents in the literature into a historical perspective. They suggest that this field has been rebranded repeatedly, moving from “comparative corporate law” through “comparative corporate governance” to “law and finance” and finally to the “theory and empirics of comparative corporate law.” Corporate law scholarship started with the doctrinal “Continental European” approach to law, but subsequently developed into a truly international field, often adopting English as its lingua franca. Comparative corporate governance then infused economic thinking into the field. Lastly, “law and finance” added a causal and empirical perspective.

In corporate law, an economic perspective dominates, and the field was further invigorated by a law and finance perspective. Not surprisingly, comparative scholarship often takes an economic view and emphasizes the incentives set by law and the interest groups whose economic interests have shaped the law across jurisdictions. Accordingly, contributions in the book address the difficult question of methodology. Vikramaditya Khanna’s chapter surveys the law and finance literature and its implications for economic development. He tackles the question of causation – does strong investor protection facilitate economic growth and developed capital markets, or do interest groups with a stake in the market lobby for strong corporate law? He suggests that “there is good evidence for a growth to law causation story and some evidence for a law to growth causation story.”

Christopher Bruner’s chapter tackles the difficult question of comparative methodology. He contrasts functionalism with contextualism, which emphasizes jurisdictional differences. Contextualists often assume a high degree of difference that cannot be eliminated because of the difficulties involved in legal transplantation. However, contextualism often fails to provide a theory for differences. Choice of method is thus typically a function of the intended audience, placing a premium on methodological self-awareness and careful calibration of one’s claims.

Other chapters give specific examples for the core debates. An example is the widely discussed, but controversial topic of convergence in corporate governance. Martin Gelter’s chapter looks at the role of interest groups, specifically the accounting industry, and suggests that it has promoted or inhibited convergence depending on the national context and its respective local incentives. Li-Wen Lin’s chapter examines the convergence debate through the lens of the legal regime on executive compensation in six jurisdictions, including the United States, the United Kingdom, Germany, Japan, India, and China. The chapter shows that, not only have the legal rules restricting the board’s power over executive pay begun to diverge in Western countries, but also directors’ power over executive pay has varied widely when one assesses the legal regime in leading Asian jurisdictions.

Corporate Purpose and Sustainability

In recent years, the debate about the proper role of the corporation in law and society has often been described as the “corporate purpose” or as the “shareholder-stakeholder” debate, but its ancient roots go back over a century. Writing in 1917, German industrialist and politician Walther Rathenau expressed deep concern about the role of short-term shareholders who expected firms to produce returns at the expense of long-term development and the public interest. The Berle-Dodd debate of 1931 in the U.S. prefigured many of the arguments of subsequent decades, serving as a template for recurring corporate purpose debates to this day. The “corporate purpose” debate has again gained traction in recent years. Two chapters tackle the debate about corporate purpose from very different perspectives.

Barnali Choudhury and Martin Petrin  survey discussions on both corporate purpose and short-termism. While directors have the freedom to consider interests besides those of shareholders, as a matter of practice, most firms continue to focus on a narrow corporate purpose. They argue that this narrow vision is conducive to short-termist corporate activities and suggest several possible reforms to allow U.S. and UK firms to advance from a shareholder ideology to a broader perspective. Cynthia Williams’ chapter reviews developments relating to CSR and ESG. Williams argues that institutional investors are emphasizing ESG partly because of younger investors’ increasing interest in topics such as climate change and economic inequality, and also because the connection between companies’ better management of ESG issues and better financial performance is becoming well-established. Internationally, there is the possibility that countries with less developed social welfare systems may require a greater degree of voluntary CSR to maintain the legitimacy of the corporate governance system. Ownership structures and the predominant types of investors appear to have an impact on sustainability outcomes as well.

The Board of Directors and Its Duties

The book then turns to substantive topics in corporate governance, starting with the central players in internal corporate governance in most jurisdictions: the board of directors. National legislation provides important differences in the structure of the board, with the U.S. one-tier model and the German two-tier structure often seen as exemplars. Jean du Plessis’s chapter provides a broad survey of different types of board structures used around the world. The chapter then explores the nuances of board composition rules in various jurisdictions, including the UK, Germany, the Netherlands, China, and Japan. Despite practical differences, for publicly traded corporations in most jurisdictions, the ultimate management power is embedded in the board of directors, increasingly dominated by independent directors. Furthermore, the board of the modern public company typically is vested with a monitoring or oversight role. Klaus Hopt and Patrick Leyens argue that rather than settling on a particular board model, the law should allow corporations flexibility in the choice of a board model. They stress that focusing on the specific governance strategies available in a variety of situations, such as takeovers or related party transactions, demonstrates that boards can address the types of agency problems that arise in corporate governance in similar ways, regardless of the choice of board model. The board as an institution may also be used to hold the corporation accountable to non-shareholders, particularly employee stakeholders. It is only with employee-codetermination as a governance strategy that one needs a two-tier board model. Darren Rosenblum’s chapter tackles the issue of representation on the board, focusing on gender diversity. The chapter addresses the types of intervention models used in different jurisdictions, from the hard statutory mandates of Norway to the soft quotas and disclosure mandates in some common law jurisdictions, including the UK and Canada. Policy interventions face several challenges as diversity continues to play a prominent role in corporate governance debates.

Several chapters in the book address issues that go to the heart of board responsibilities. Marco Corradi and Geneviève Helleringer examine the duty of loyalty from a comparative perspective, including both self-dealing transactions under both common law (namely the U.S. and UK) and civil law regimes (focusing on continental Europe), as well as corporate opportunity rules. They note the tensions between the evolution of the law governing self-dealing transactions at the European level as well as the generally less advanced development of corporate opportunity rules in civil law jurisdictions.

Carsten Gerner-Beuerle examines the diffusion and convergence of the duty of care and the business judgment rule. After demonstrating how both are similarly formulated across common law and European civil law countries, the chapter compares the application of the Delaware business judgment rule with its German counterpart to show that even similarly formulated rules differ in actual operation because of underlying local norms and narratives. Virginia Harper Ho’s chapter analyzes risk oversight and risk management as core elements of the board’s monitoring role. Across jurisdictions, fiduciary duties are used to hold boards accountable for carrying out their monitoring role. Increasingly complex risk management and oversight responsibilities are now derived from and affected by multiple sources, including other regulatory regimes, market actors, and institutions, that have expanded risk regulation.

In addition, the book covers directors’ duties in times of change, specifically in the context of mergers and acquisitions (M&A). Afra Afsharipour argues that, with respect to friendly takeovers, the U.S. and UK approach corporate governance concerns and the balance of power between the board of directors and shareholders in increasingly divergent ways. The UK restrains director power in friendly M&A deals, including recent rules that constrain the power of directors to negotiate deal protection mechanisms. Delaware law provides wide latitude to directors to negotiate and design M&A deals and, due to recent changes to Delaware jurisprudence, provides little opportunity for shareholders to check management conflicts through litigation. According to Andrew Tuch’s chapter, management buyouts (MBOs) raise the quintessential type of conflicts in M&A transactions because they involve the board or officers of the target firm acting as owners of the buyer. While the UK’s no-conflict rule is often viewed as more severe than the U.S. fairness rule in regulating MBOs, in practice the rules operate in ways more similar than they seem at first glance. The chapter thus asserts that both the US and UK may not effectively prevent fiduciary misconduct early in the MBO deal process.

The Increasingly Complex Taxonomy of Shareholders

Much of corporate governance concerns itself with balancing conflicts and power between shareholders and managers, as well as among between controlling and non-controlling shareholders. Shareholders are not a monolithic group, ranging from the state, hedge funds, and institutional investors to family groups and individuals. Turning to the dramatic increase in institutional investors around the globe, Assaf Hamdani and Sharon Hannes analyze the governance implications of this rise against the background of the growing influence of activist hedge funds. In widely held companies, institutional investors can determine the outcome of shareholder votes, including director elections. Nevertheless, country-specific regulations, political sentiments and social norms affect the extent to which institutional investors will actually wield their power. By contrast, in jurisdictions with predominantly controlled companies, institutional investors’ ability to influence governance remains limited, but institutional investors are gaining power in countries, such as Israel, that are experiencing a shift from concentrated to dispersed ownership.

Minority shareholders are not homogeneous, both within and across jurisdictions, in their makeup, goals, and actions. Umakanth Varottil argues that the expanding schism among heterogenous types of minority shareholders creates agency problems, allowing one type of minority shareholder to affect the interests of others. The chapter analyzes the goals and actions of two types of institutional investors – activist hedge funds and passive funds – to show the potential conflicts among these shareholders. Legal tools, such as fiduciary duties and stewardship responsibilities, can address such conflicts.

The past two decades have experienced significant changes in capital market structures around the world, resulting in a reassessment of shareholder power and participation in corporate governance, and debates about the degree to which the law can and should provide shareholders with a voice and facilitate greater shareholder protection. Sofie Cools analyzes the transformation of shareholder power by comparing the use of shareholder proposals by shareholders of U.S. public companies with the relative lack of such proposals in Europe. Focusing on Delaware, France, Germany, Belgium, and the Netherlands, she argues that private ordering through shareholder proposals in U.S. companies is closing the gap in substantive shareholder power that has existed between the U.S. and Europe. The chapter also casts doubt on empirical comparisons of the frequency of shareholder proposals in the U.S. and Europe by highlighting how differences in ownership structures and the goals of shareholder proposals in the U.S. complicate such comparisons.

Gaia Balp and Marco Ventoruzzo focus on the rules governing the duties of controlling shareholders to minority shareholders in the U.S., Germany, and Italy. Despite differences in laws and enforcement mechanisms, the principles are functionally quite similar. Duties applying in situations such as related party transactions, sale of a control stakes, and access to privileged information are in the end similar because loyalty underpins the standards and rules for controllers’ conduct. Sang Yop Kang contrasts controlling shareholder power in corporate groups with single corporations operating various business lines. Differences arise in risk-sharing (cash-flow stabilization), control/voting leverage, and tunneling. Controllers may be more inclined to establish corporate groups than single corporations with different business lines (although controllers’ preference for the corporate-group form is not always absolute).

Enforcement of Corporate Law

Directors’ and shareholders’ duties would be irrelevant in practice if they were not enforceable. Not surprisingly, there are big international differences in this regard. The U.S. is often thought to be the country where corporate and securities laws are most vigorously enforced. This is in part due to an entrepreneurial plaintiffs’ bar, whose existence is owed largely to the American rule in civil procedure (where each party pays its own cost) and the possibility of contingency fees, which induce plaintiffs’ attorneys to bring class actions as well as derivative suits. Alan Koh and Samantha Tang’s chapter explores private litigation in corporate law. It provides a detailed taxonomy of the various types of lawsuits and their functions in the Anglo-Commonwealth jurisdictions (UK, Australia, Singapore, Hong Kong, New Zealand), the U.S., Germany, and Japan. The chapter considers key factors furthering and limiting such suits, including cost structure, length of the litigation, and possible outcomes. Besides derivative litigation, which involves remedies from which the company itself benefits, the chapter looks closely at direct suits, which have received less attention in the literature. The taxonomy encompasses monetary and non-monetary remedies and looks at oppression and withdrawal, appraisal rights, and injunctions, as well as litigation challenging the validity of shareholder decisions. Besides the U.S., there are jurisdictions where litigation has become common, such as in Japan in the area of derivative litigation, as well as in Canada, Australia ,and Israel in securities law. In all cases, cost rules have become favorable to lawsuits.

The other aspect of enforcement is the public side, i.e., enforcement by securities regulators, which relies largely on financial endowment and qualified staff. Pierre-Henri Conac’s chapter looks specifically at the enforcement of corporate governance rules, including corporate governance codes. His chapter encompasses both private shareholder litigation as well as enforcement by regulators and stock exchanges, focusing mainly on European jurisdictions, the United States, and Brazil. The chapter argues that private enforcement should be the main legal method of enforcement, but that public regulation should serve as a stopgap that remedies the deficiencies of the private model.

Conclusion

The literature shows that the comparative picture remains more complex than as portrayed by the original “law and finance” debate. This is particularly true given growing concerns around the globe with issues of sustainability and corporate purpose. However, we also can see increasing convergence in some areas, such as directors’ and shareholders’ duties as well as the enforcement of corporate law. Convergence is not universal, as the example of accounting shows. The continuing evolution of corporate governance debates means that a comparative approach to corporate governance will long prove to be insightful in understanding and analyzing corporate law generally.

This post comes from Afra Afsharipour, a professor and senior associate dean for academic affairs at UC Davis School of Law, and Martin Gelter, a professor at Fordham University School of Law and Research Member of the European Corporate Governance Institute. It is based on their introductory chapter to “Comparative Corporate Governance,” available here.

August 23, 2021

Mexico v. Smith & Wesson: Does U.S. Immunity for Gun Manufacturers Apply Extraterritorially?

[Cross posted from Just Security]

By William S. Dodge and Ingrid Wuerth

Earlier this month, Mexico sued six U.S. gun manufacturers, one foreign manufacturer, and a Boston-area wholesaler in federal court in Massachusetts. According to the complaint, the defendants design, market, and sell guns in ways they know will arm Mexican drug cartels. Although Mexico has strict gun laws and prohibits the importation of guns without a permit, it is estimated that more than half a million guns flow from the United States into Mexico each year. During the first five months of 2020, statistics show that nearly half the guns recovered from crime scenes in Mexico were made by the defendant manufacturers. Most of Mexico’s claims are tort claims, including negligence, public nuisance, and defective design, but Mexico also alleges that the defendants have been unjustly enriched and have violated unfair business practices statutes in Connecticut and Massachusetts.

In 2005, Congress acted to immunize gun manufacturers and dealers from liability based on the criminal use of guns. The Protection of Lawful Commerce in Arms Act (PLCAA), 15 U.S.C. §§ 7901-7903, prohibits bringing in state or federal court any “qualified civil liability action.” That term is defined as a civil action by any person against a gun manufacturer or seller for damages or other relief “resulting from the criminal or unlawful misuse of a qualified product by the person or a third party,” but Congress also created several exceptions including certain actions based on violations of federal or state law. The complaint asserts that PLCAA does not apply “because it bars certain claims against gun manufacturers and distributors only when the injury occurred in the U.S. and the criminal’s misuse of the gun was unlawful under U.S. domestic law” (¶23). Although other experts have suggested that the suit is almost certainly barred by PLCAA, we disagree. The plaintiffs have a strong argument that PLCAA does not prohibit some of their claims, including those brought under Mexican law.

The Presumption Against Extraterritoriality

To determine the geographic scope of federal statutes, courts apply a rule of statutory interpretation known as the presumption against extraterritoriality. The current version of the presumption proceeds in two steps: (1) a “clear indication” step and (2) a “focus” step. At step one, the court looks for a “clear indication” of the provision’s geographic scope. If Congress has clearly indicated when it wants a provision to apply, the court will, sensibly, follow Congress’s direction. But if there is no clear indication of the provision’s geographic scope, the court moves to step two and determines the “focus” of the provision. The focus might be conduct Congress wishes to prohibit, effects it wishes to prevent, or transactions it wishes to protect. If the focus of the provision occurs in the United States and (as the Supreme Court recently held) if conduct relevant to the provision’s focus occurs in the United States, then applying the provision is considered “domestic” and permissible. Otherwise, applying the statute is considered “extraterritorial” and impermissible.

An example not involving PLCAA shows how the presumption works at both steps. In RJR Nabisco, Inc. v. European Community, the European Community sued U.S. cigarette manufacturers under the Racketeer Influenced and Corrupt Organizations Act (RICO), alleging that RJR had engaged in money laundering for organized crime groups in Europe. RICO criminalizes patterns of racketeering activity in connection with an enterprise. Racketeering activity includes certain offenses under federal and state law that are known as predicate acts. Although RICO itself says nothing about its geographic scope, several of RICO’s predicate acts (including money laundering) apply extraterritorially. At step one of the presumption analysis, the Supreme Court found that RICO’s reference to these other statutes was a clear indication that its criminal provisions apply extraterritorially to the same extent as the predicate acts alleged in the particular case. The Court said that “an express statement of extraterritoriality is not essential” and that a clear indication of geographic scope could be found in the “context” of the provision. Because the Court found a clear indication of geographic scope at step one, it refused to proceed to step two. RJR argued that RICO’s focus was on the enterprise affected by the racketeering activity, so that RICO only applied to U.S. enterprises, but the Court found that argument irrelevant. Because “there is a clear indication at step one that RICO applies extraterritorially,” the Court said, “we . . . do not proceed to the ‘focus’ step.”

In addition to criminalizing patterns of racketeering activity, RICO provides a private right of action for “[a]ny person injured in his business or property.” Applying the presumption against extraterritoriality separately to this provision, the Supreme Court found no clear indication of geographic scope at step one. Proceeding to step two, the Court concluded that the focus of the private right of action was on injuries to business or property and, because the European Community had not alleged any such injuries in the United States, RICO’s private right of action did not apply.

The Presumption and PLCAA

PLCAA, like RICO, has no express statement about its geographic scope. But it does refer to other laws. Specifically, PLCAA bars civil actions for damages or other relief “resulting from the criminal or unlawful misuse of a qualified product by the person [bringing the action] or a third party” (emphasis added).

Looking at the “context” of PLCAA, as the Supreme Court has instructed, it seems clear that “criminal or unlawful” refers to U.S. federal and state law and not to foreign law. First, in Congress’s definition of the civil actions that are prohibited, one finds a series of exceptions, two of which refer explicitly to federal and state law. Section 7903(5)(A)(i) permits actions against persons convicted of transferring guns knowing that they will be used in violent crimes or drug crimes in violation of the federal statute “or a comparable or identical State felony law,” whereas Section 7903(5)(A)(iii) permits actions against manufacturers or sellers of guns who “knowingly violated a State or Federal statute applicable to the sale or marketing of the product.” If Congress intended PLCAA to apply to the misuse of guns that is criminal or unlawful under foreign law, it seems likely that Congress would have drafted these exceptions to refer to foreign law as well.

The conclusion that “criminal or unlawful” refers only to federal and state law finds confirmation in Congress’s codified findings and purposes. Congress’s findings begin by referring twice to the Second Amendment right to bear arms. 15 U.S.C. § 7901(a)(1) & (2). Congress also notes that guns “are heavily regulated by Federal, State, and local laws,” id. § 7301(a)(4), with no mention of foreign laws. Congress specifically identifies the civil actions with which it is concerned as those “commenced or contemplated by the Federal Government, States, municipalities, and private interest groups and others are based on theories without foundation in hundreds of years of the common law and jurisprudence of the United States.” Id. § 7901(a)(7). There is no mention of suits by foreign governments or theories of liability based on foreign law.

Lest there be any doubt about Congress’s purposes, PLCAA expressly provides that it is intended “[t]o preserve a citizen’s access to a supply of firearms and ammunition for all lawful purposes, including hunting, self-defense, collecting, and competitive or recreational shooting.” 15 U.S.C. § 7901(b)(2) (emphasis added). The statute’s goal of ensuring that U.S. citizens have adequate access to firearms clarifies the references to “foreign commerce” in the findings and purposes. Section 7901(a)(5) refers, for example to businesses “in the United States” that are engaged in “foreign commerce” through the “importation” of firearms. Indeed, the findings and purposes explicitly refer five times to importers or the importation of guns, but never once to exporters or exportation. The failure to refer to “exportation” might seem like mere oversight, but it is entirely in keeping with Congress’s focus on the Second Amendment rights of U.S. citizens—Congress was simply not concerned with keeping guns in the hands of Mexican citizens in Mexico.

The Supreme Court faced a similar interpretive question in Small v. United States. A federal statute made it unlawful for a person “who has been convicted in any court of, a crime punishable by imprisonment for a term exceeding one year” to possess a firearm. 18 U.S.C. § 922(g)(1). The Court held that “any court” referred only to courts in the United States. It began with the “commonsense notion that Congress generally legislates with domestic concerns in mind,” an understanding the Supreme Court has repeatedly relied on in determining the geographic scope of federal statutes. The Court found confirmation in the statute’s exceptions and other references to federal and state laws, similar to the references in PLCAA discussed above. In fact, the argument for applying PLCAA only domestically seems stronger than the argument in Small because the statute at issue in that case did not contain the extensive findings and purposes that confirm PLCAA’s concern with domestic conditions.

As in RJR Nabisco, PLCAA’s context provides a clear indication of its scope, specifically that PLCAA applies only to actions based on the misuse of a gun that is criminal or illegal under federal or state law. Under the Supreme Court’s two-step framework for the presumption against extraterritoriality discussed above, if there is a clear indication of a statute’s scope at step one, then a court must apply the statute as Congress has indicated without going on to step two.

PLCAA’s clear indication of scope distinguishes PLCAA from Section 230 of the Communications Decency Act, which has been held by some courts to provide immunity from certain extraterritorial claims. Section 230 provides that interactive computer service providers, like Facebook and Google, shall not be treated as the publisher of information provided by someone else. The Second and Ninth Circuits have held that Section 230 immunizes such providers against liability for claims under the federal Anti-Terrorism Act arising outside the United States. Gonzalez v. Google LLC, 2 F.4th 871, 888 (9th Cir. 2021); Force v. Facebook, Inc., 934 F.3d 53, 72-74 (2d Cir. 2019). In both cases, the court reasoned that the “focus” of Section 230 was on limiting liability, which necessarily occurred in the United States. The gun manufacturers and other defendants in Mexico’s suit may be expected to make a similar argument. But in the Section 230 cases, the courts examined the focus of that provision only because there was no clear indication of scope at step one of the analysis. With PLCAA, by contrast, the court should never reach the second, “focus” step because there is a clear indication of PLCAA’s scope—PLCAA applies only to actions based on the misuse of guns that is criminal or unlawful under federal or state law.

What Claims Can Mexico Bring?

PLCAA would appear to be no bar to tort or restitution claims under Mexican law. Most of Mexico’s claims based on U.S. law, by contrast, would appear to be foreclosed by PLCAA. Most, but not all.

It is possible that some of Mexico’s claims under U.S. state law might fit within the one of PLCAA’s exceptions. Mexico has brought a claim for defective design (¶¶ 520-22), and PLCAA has an exception for defects in design or manufacture, 15 U.S.C. § 7903(5)(A)(v), although it is not clear that Mexico’s allegations fit the contours of the exception. Mexico has also brought a claim for negligence per se (¶¶ 523-526), and PLCAA has an exception for such claims, although the exception is limited to actions against sellers. 15 U.S.C. § 7903(5)(A)(ii). And Mexico has brought claims for violations of the unfair business practices statutes in Connecticut and Massachusetts (¶¶ 542-556), which might fit within PLCAA’s exception for actions against gun manufacturers or sellers who “knowingly violated a State or Federal statute applicable to the sale or marketing of the product.” 15 U.S.C. § 7903(5)(A)(iii).

If both Mexican law and U.S. state law are applicable to the same claim, a federal court in Massachusetts would have to apply Massachusetts choice-of-law rules to decide which law to apply. In tort cases, Massachusetts generally applies the law of the place of the injury, which would be Mexican law. So, it seems that Mexico’s suit, with perhaps a few exceptions, will require the federal court to apply Mexican law.

Why Isn’t This Case in Mexico?

The Mexican government is suing under Mexican law for injury sustained by Mexican citizens in Mexico in a case involving Mexico’s laws governing firearms. Mexico might seem like the best—or perhaps the only—appropriate forum for the litigation. The defendants are U.S. corporations, however, and, as noted above, nothing in U.S. or international law prevents foreign plaintiffs (including foreign governments) from suing U.S. defendants in U.S. courts, even for harm that occurred abroad.

Indeed, the Mexican government may not have been able to sue in Mexico at all—Mexican  courts might lack personal jurisdiction over the defendants. We are not experts on Mexican civil procedure, but most civil law countries rely on domicile as the primary basis for personal jurisdiction. There are, however, additional bases for personal jurisdiction even in civil law countries, sometimes including the place where the injury occurs in a tort action. But our (admittedly cursory) review of an unofficial translation of Código Federal de Procedimientos Civiles [CFPC], art. 24, Diario Oficial de la Federación [DOF] 24-02-1943, últimas reformas DOF 08-06-2021 (Mex.), did not suggest that Mexican law permits jurisdiction on that basis.

Even assuming that the suit could have been brought in Mexico, the government may have chosen to sue in the United States out of a concern that U.S. courts would not recognize a Mexican judgment, perhaps because a U.S. court would not have personal jurisdiction over Mexican defendants under comparable facts. See Restatement (Fourth) of U.S. Foreign Relations Law § 483(b) and Comment e. We both think that there is no constitutional bar to the exercise of jurisdiction over Mexican defendants by U.S. federal courts under comparable facts, but the Fifth Amendment-based due process limitations on personal jurisdiction have not been addressed by the Supreme Court and are somewhat unclear.

Alternatively, the Mexican government may have sued in the United States because the suit is based upon the unlawful use of firearm by criminal gangs, and perhaps Mexican judges would be intimidated or afraid to rule against the gun manufacturers.

Whatever reason the Mexican government had for suing in the United States, the case might still wind up in Mexico if the defendants move to dismiss for forum non conveniens—district courts may dismiss the case if there is an adequate foreign forum and if private and public interest factors favor that forum. Mexico is likely to be deemed an adequate forum, as other cases have held, and the Mexican government would probably not want to argue that its judicial system is so compromised as to be inadequate. Some of the private and public factors would also favor dismissal: the harm occurred in Mexico, Mexican law applies to the claims that survive PLCCA, some witnesses and evidence are located in Mexico, and the general deference afforded to the plaintiff’s choice of forum is reduced for foreign plaintiffs.

Personal jurisdiction turns up here, too, however. Mexico is not a true alternative forum if it lacks personal jurisdiction over the defendants. If defendants move to dismiss for forum non conveniens, a court would likely grant the motion only on the condition that the defendants stipulate to personal jurisdiction in Mexico. Consent is a proper basis for personal jurisdiction in Mexico (and in the United States), so a stipulation would resolve the personal jurisdiction issue in Mexico and probably render the judgment of a Mexican court enforceable in the United States. Texaco famously moved to dismiss an environmental case in favor of Ecuador as an alternative forum, won that motion, and then lost the case in Ecuador and had a $9.5 billion judgment entered against it. The judgment against Chevron (which had purchased Texaco) was not enforced because it was procured by fraud. Still, a forum non conveniens motion carries substantial risks for the defendants, and the stakes are high whether the case ends up in U.S. or Mexican courts.

About the Author(s)

William S. Dodge

William S. Dodge is Martin Luther King, Jr. Professor of Law and John D. Ayer Chair in Business Law at the University of California, Davis, School of Law. He served as Counselor on International Law to the Legal Adviser at the U.S. Department of State from 2011 to 2012 and as Co-Reporter for the American Law Institute’s Restatement (Fourth) of Foreign Relations Law from 2012 to 2018.

Ingrid Wuerth

Ingrid Wuerth (@WuerthIngrid) holds the Helen Strong Curry Chair in International Law at Vanderbilt Law School where she directs the Branstetter Litigation and Dispute Resolution Program. From 2012-2018 she served as Co-Reporter for the American Law Institute’s Restatement (Fourth) of Foreign Relations Law. She is a contributing editor at Lawfare.

August 9, 2021

Race, History, Guilt and the Olympics: Real-World Experience in the Classroom

[Cross-posted from The Hill]

By Alan Brownstein

If one looks behind some of the criticism directed at the teaching of Critical Race Theory, it appears that there is a particular objection to the idea that white students should be taught that they bear guilt or responsibility for past and/or present racism in our society.

As a professor of constitutional law, I do not teach Critical Race Theory. Still, when I teach about the Equal Protection Clause, the issue of guilt and responsibility is unavoidable. My focus is not on white normative accountability — It is on American guilt and responsibility. And in beginning the discussion, I find it useful to talk at least initially about the Olympics.

My first question to students is whether they ever experience pride for some achievement they had no role in bringing about. I offer the success of USA athletes at the Olympic games as an example. Most students agree that they experience considerable pride in the effort and success of USA Olympic athletes even though they had nothing to do with these results. It seems entirely natural and reasonable for Americans to take pride in the achievements of other Americans.

My second question is this: If it is reasonable and acceptable to experience pride when individual Americans or our country does something praiseworthy, is it also reasonable and acceptable to experience shame or guilt when individual Americans or our country engages in shameful or blameworthy conduct?

A follow-up question extends the issue beyond pride or blame: I ask whether students have received significant benefits as a result of their living in the United States? Did students directly bear the costs incurred by earlier generations in providing the political freedoms and material advantages the students enjoy today? Most students agree that they are the blessed beneficiaries of the work and courage of their forebears. The follow-up is whether it is fair and just to expect the students to pay the debts incurred by prior generations to provide the political and material goods the students experience and value today.

In its simplest terms, we would find it entirely reasonable to expect Americans today to pay the principal and interest on bonds the government sold to finance the construction of public bridges and dams.

But not all debts are so easily identified or quantified.

Still, we can ask and open the issue for discussion whether current generations may be reasonably expected to take into account the harms America has inflicted on minorities, such as Blacks and Native Americans, in deciding public policy issues today. This accountability is not based on the students’ race, but rather on their national identity. This is American accountability, applicable to our society because we are — and are privileged to be — Americans.

The classroom discussion will move on to evaluate American decisions relating to race and the treatment of racial minorities. Typically, these issues are less controversial. While there may be debate about particular events or policies, there is usually a strong consensus that, historically, American conduct toward racial minorities has been blameworthy. The hard question raised by my earlier inquiries is what that realization of blameworthiness means for public policy and constitutional law decisions today.

Of course, not everyone will agree with the analogies suggested above between pride and shame or benefits and debts. There is a difference, though, between raising a difficult issue for students to confront and demanding that everyone agree to a particular response.

Nor do I think that presenting these issues in the way I have described isolates or stigmatizes more conservative students — at least that has not been my experience.

Several years ago, I was privileged to be invited to visit and teach Constitutional Law for a semester at the law school at Brigham Young University (BYU). BYU law students are smart, thoughtful, religious, and generally conservative. They did not find the way I conducted the discussion of equal protection issues to be insulting or indoctrination. Indeed, one of the most rewarding teaching evaluations I have ever received was written by a student in that class. As a religious school, BYU asks students to evaluate whether a professor’s class was spiritually strengthening. Because I am Jewish and the overwhelming majority of BYU students are Mormons, I was not sure what to expect from students in response to this question on the evaluation.

One student’s response described my presentation on equal protection issues this way: “His sincerity in fairly articulating the constitutional interests of racial minorities, women and LGBT individuals was a supreme example of what we would deem Christ-like. Seeing his reverence toward these issues and the real-world consequences for those most affected by them was more powerful than any explicit discussion of religion in the lectures could have been.”

I doubt I deserve such high praise. But I am confident that the anonymous student who wrote this evaluation was neither insulted nor indoctrinated by my teaching.

August 5, 2021

Forget ICE. Tax Law is Becoming the New Border Patrol

[Cross-posted from the San Francisco Chronicle]

By Shayak Sarkar

In the coming months, parents will receive hundreds of dollars as the Internal Revenue Service begins paying out the Advance Child Tax Credit, providing financial support to families and combating child poverty. Yet one significant group will be left out: parents of undocumented and certain non-citizen children.

The tax code excludes these parents because of immigration status, even though many have spent years in the United States dutifully paying state and federal income taxes along with property and sales taxes.

Using tax law to patrol the border is not new. In the 19th century, several states enacted constitutionally unsound tax laws to target migrants. New York raised a tax on oceanic migrants for “hospital moneys.” Massachusetts supplemented its foreign passenger tax by requiring a bond of $1,000 for any newly arrived “lunatic, idiot, maimed, aged, or infirm person.”

The Supreme Court found the taxes unconstitutional, explaining that whether foreigners will “be compelled to pay a tax, before they will be permitted to put their feet ashore” is exclusively a federal question. Even after this decision, California imposed special taxes on Chinese migrants until the state supreme court intervened.

Migrant taxes have largely evolved from explicit fees at entry ports to punitive federal tax provisions that cast immigrants financially adrift.

Although federal tax law allows and requires people without Social Security numbers to file taxes using an Individual Tax Identification Number, those filers are excluded from many tax credits. Consider that the CARES Act conditioned COVID-era stimulus payments on not only the recipients’ Social Security numbers, but also their loved ones’. The law initially excluded even citizen spouses from receiving the payment, if they filed jointly with a non-citizen without a Social Security number. Meanwhile, citizen children of parents without Social Security numbers were likewise left aside.

These exclusions echoed immigration-status restrictions in the federal Earned Income Tax Credit (EITC) and Child Tax Credit — two provisions upon which working-class and poor families depend. They also evoke the IRS’s direct collaboration with the Department of Homeland Security in violent workplace raids. (An IRS investigation into a Tennessee meatpacker’s tax compliance ended with allegations of armed state and federal officers violating workers’ civil rights with machine guns, racial slurs and mass detentions.)

Americans appear skeptical of tax-based immigration enforcement, which also treads on uncertain legal ground. In a poll from last year, there was more support than opposition to extending pandemic payments to “those who pay U.S. taxes,” even as support for other punitive enforcement measures prevailed.

Recent lawsuits challenged the CARES Act’s exclusion of citizen relatives of undocumented workers. In R.V. v. Yellen, citizen plaintiffs alleged that the denial of emergency tax relief to otherwise-eligible children for their parents’ lack of a social security number violated equal protection. In another case, lead plaintiff Ivania Amador and her three children possessed Social Security Numbers while her husband did not. She argued that denials based on their spouses’ undocumented status violated their marriage-based due process and equal protection rights, as well as their First Amendment speech and associational rights. Tax law’s policing of borders may unconstitutionally cross the boundaries of familial integrity.

As the federal government financially casts undocumented immigrants aside, some individual states are starting to offer lifelines. New York recently created an Excluded Workers Fund to provide financial relief to noncitizens excluded from unemployment insurance and federal programs. States including California and Oregon, meanwhile, have extended their state-level EITCs to undocumented immigrants, potentially including employment considered illegal under federal law. These financial and tax laws generate thorny questions about where state authority ends and federal power dominates.

Federalism limits states and cities’ abilities to directly regulate immigration. Yet despite these limitations, states still possess unique tax powers, particularly to promote residents’ health and safety across immigration statuses. Cities and states are choosing to foster inclusion to balance the weaponization of federal tax law against immigrants. While the Supreme Court may ultimately weigh in again on limits to state and local action, for now, states and localities should feel legally comfortable pursuing a range of immigrant-inclusive financial and tax policies.

Federally, effective methods exist to deal with tax noncompliance beyond cooperation with immigration enforcement. In 2017, the Treasury Inspector General suggested a more “focused strategy” on employers and payroll service providers to reduce tax noncompliance. Unlike using tax law to deport migrants, focusing on employers could raise needed revenue and comply with the Supreme Court’s employer-focused interpretation of immigration enforcement statutes. In contrast, cooperation between tax and immigration authorities could inhibit undocumented immigrants’ tax compliance, for fear that information sharing could lead to deportation.

Policing poor immigrants through tax law weakens the borders between immigration and tax law meant to protect citizens and noncitizens alike. Respecting those borders is as important as respecting territorial ones.