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November 30, 2017

Some Thoughts on California's Fiscal Constitution

by Darien Shanske

[Cross-posted from SCOCAblog.]

The California Supreme Court currently has at least two cases relating to California's fiscal constitution on its current docket;[1] two were decided this summer.[2] The phrase "fiscal constitution" is a term of art that designates all the many provisions of the constitution that dictate how governments can raise and spend money. The fiscal constitution of the federal government is very sparse. The fiscal constitution of the state of California is enormously lengthy and complicated. Many of its provisions date to 1879 and are contained in the thirty-six sections of Article XIII, but also see the twenty-three sections of Article XVI. Proposition 13-the proposition that limited property taxes and made numerous other changes-added Article XIIIA. Proposition 4, passed in 1979 in order to advance the "spirit of Proposition 13," added Article XIIIB. Proposition 218, passed by the voters in 1996 and also seeking to backstop Prop 13, added Articles XIIIC and XIIID. Proposition 26, passed by the voters in 2010, and also meant to backstop Proposition 13, amended Articles XIIIA and XIIIC.

Given the volume, complexity and relative recentness of some of these propositions, it is certain that the California Supreme Court will grapple with many more cases involving California's fiscal constitution. These cases are enormously consequential, as they directly implicate how California and its local governments can fund not only basic governmental services, but also price the use of natural resources, such as water. Despite the importance of the topic, there has not been much scholarly attention devoted to how to interpret state fiscal constitutions (and, yes, other states do have law similar to those in California, though none so far as I know has a set of overlapping laws quite so challenging). A lot has been written about whether the provisions are wise policy and/or achieve their goals, but these valuable normative and empirical discussions are of little use when it comes to giving direction to courts grappling with what the provisions before them mean.

This neglect would perhaps be justified if there were no broader perspective to be taken on these provisions. It could be that each court in each state is on its own to do the best job it can given using a combination of the usual exegetical tools-some mixture of text, history, and purpose. In an article forthcoming in the Rutgers University Law Review, I argue that such an ad hoc approach is not justified.[3] In the rest of this post, I will briefly summarize my argument and add some specific reasons why California's fiscal constitution should be approached in the manner I sketch out.

The specific issue I consider is the distinction between taxes and fees. The fiscal constitutions of California, like that of many states, limit the ability of governments to raise taxes. These same constitutions typically do not impose similar limits on the ability of governments to impose a fee, say a building permit fee. But what if a locality chose to levy a gigantic building permit fee and used the proceeds to fund general services? Such a fee would-and should-be considered a "hidden tax" and thus subject to the same limitations as ordinary taxes.

But how high is too high when it comes to fees? In many cases-say fees for water use-the fees must be set high enough to fund major capital expenditures or there will not be a water system to provide water. And do we think higher fees for excessive use of water should be construed to be a constitutional problem? This seems indicated by these provisions because the marginal cost of the additional water is no higher for an excessive user. Yet if tiered pricing meant to encourage conservation is a problem, then there might not be any water left in the water system. What about basic service for poorer users at a discount; does not the provision of such a service mean that other ratepayers are paying too much? But if poorer users would not use the service at all if charged market rates, why might it not be perfectly rational to charge them less if the marginal cost of the additional services was very low? Do we think that airplane passengers who pay full price are subsidizing a customer who pays less for an empty seat on a plane that is about to leave?

Courts are not well situated to answer these questions, but in some states[4]-not yet California[5]-the courts seem to have taken the position that the constitutional distinction between taxes and fees leaves them no choice but to undertake searching substantive review of the fees set by state and local governments. But there is another-better-way, namely for courts primarily to engage in procedural review of the ratemaking process. Such review has real teeth and is well within judicial competence. Most importantly, as I argue, requiring such review is actually a better interpretation of these fiscal provisions.

In general, procedural review is a better interpretation of the provisions of state fiscal constitutions because such review was the norm of the preexisting common law of public finance. In fact, modern administrative law, with its emphasis on procedural review, largely grew out of a critical response to the U.S. Supreme Court's undertaking substantive review of rates set by an expert agency.

Courts properly presume that preexisting common law was known to the proponents of a proposition; courts also presume that terms that had a meaning under the preexisting common law retain that meaning when they become codified unless there is some explicit evidence to the contrary. These presumptions-canons-are proper because assuming knowledge of the preexisting law is consistent with the rule of law value of predictability.

California's fiscal constitution is particularly amenable to a procedural interpretation for several reasons. First, the California courts regularly apply the relevant canons of interpretation, such as that proponents are presumed to have knowledge of the law.[6] Second, the key provisions of California's fiscal constitution explicitly embrace whole phrases of the preexisting common law.[7] Third, California's fiscal constitution manifests a great deal of explicit concern with following proper procedures.[8] This includes shifting the burden of proof to the government.[9]

To be sure, it could be that California's fiscal constitution imposes lengthy procedures, a burden shift, and heightened substantive review. But there is no explicit evidence of such and thus I argue that the application of appropriate canons and analytic superiority should move the court to a procedural interpretation.

As the cases come down, I plan to check back in and offer some assessments of where we are and where we might go.

[1] City of San Buenaventura v. United Water Conservation Dist., (2015)185 Cal. Rptr. 3d 207, review granted and opinion superseded June 24, 2015; Citizens for Fair REU Rates v. City of Redding, (2015) 233 Cal. App. 4th 402, review granted and opinion superseded Apr. 29, 2015.

[2] California Cannabis Coalition v. City of Upland, (2017) 3 Cal. 5th 924; Jacks v. City of Santa Barbara, (2017) 3 Cal. 5th 248.

[3] Shanske, Darien, Interpreting State Fiscal Constitutions: A Modest Proposal (June 19, 2017). Rutgers L. Rev., forthcoming. Available at SSRN: https://ssrn.com/abstract=2989313.

[4] Yes I am looking at you Michigan and Missouri. See Zweig v. Metro. St. Louis Sewer Dist., (2013) 412 S.W.3d 223; Bolt v. City of Lansing, (1998) 587 N.W.2d 264.

[5] More or less. See Silicon Valley Taxpayers Ass'n, Inc. v. Santa Clara Cty. Open Space Auth., (2008) 187 P.3d 37 (imposing a de novo standard of review).

[6] In re Harris, (1989) 775 P.2d 1057, 1060 (en banc) ("[T]he voters who enact [an initiative] may be deemed to be aware of the judicial construction of the law that served as its source.").

[7] See the emphasis on "reasonableness" in Cal. Const. art. XIIIC § 1(e).

[8] See e.g., Cal. Const., art. XIIID, § 6.

[9] See, e.g., Cal. Const., art. XIIIC, § 1(e) (flush language).

 

November 30, 2017

New Casebook by Hing, Chacón, and Johnson: Immigration Law and Social Justice

[Cross-posted from Immigration Prof Blog.]

We are happy to announce the publication of our new casebook: Immigration Law and Social Justice, published by Wolters Kluwer, Aspen Publishers.

We are presenting this casebook on immigration law and policy from a social justice perspective. We believe that most law students interested in taking a course on immigration law have a social justice/public interest motivation. We think you are interested in representing immigrants facing deportation or who may fear deportation to their home country for social, economic, or political reasons. You also likely have a strong interest in the public policy debate over immigration visa reform, enforcement, or legalization because of the injustices you sense in current policies. Many instructors who teach immigration law (regular faculty members and adjunct professors) also come from a pro-immigrant perspective that regards the practice of immigration law squarely within social justice/public interest practice. We hope this casebook provides materials and a format that will enhance the classroom experience for students and instructors who approach the topic from that perspective.

The content and organization (outlined in the table of contents) is broad and contains new topics such as detention, public interest/rebellious lawyering theories, lessons for public interest lawyers, and background on migration, globalization, criminalization, and racialization of immigration law. Our goal is to inspire our public interest students, while providing a solid way to analyze immigration law through a political and social lens and the foundation to practice effectively. Our pedagogy combines standard cases, but also stories of the lives of immigrants, transcripts, training manuals, academic articles, news articles, and other tools that social justice lawyers use. Our rationale in editing cases is to hone in on the parts of the cases that are necessary for an understanding of the court's rationale and some aspects of important dissenting opinions.

We know that most of you come to the course already inspired to do good, socially-inspired work. Much of what has evolved within the world of U.S. immigration law and policy will disappoint and leave you upset. But hopefully, we have asked the right questions and pointed in particular directions that can help us takes some steps forward in achieving justice for immigrants, refugees, and their families.

You can download a detailed outline of the book's contents and the introductory chapter here.

The book can be ordered here.

Thank you.

Bill Ong Hing, Professor of Law and Migration Studies, University of San Francisco
Jennifer M. Chacón, Professor of Law, University of California, Irvine
Kevin R. Johnson, Dean and Mabie-Apallas Professor of Public Interest Law and
Chicana/o Studies, University of California, Davis

 

November 29, 2017

When More than Half of Law Graduates Fail the California Bar Exam

Raquel Aldana, Associate Vice Chancellor for Academic Diversity and Professor of Law, UC Davis

[Cross-posted from the UC Davis Equity and Inclusion Blog.]

Days before Thanksgiving, on November 17, the California State Bar announced the July 2017 bar exam results. At a pass rate of 49%, the outcome was only slightly better than a year earlier when results were an abysmal 43%. Since California is the largest state in terms of licensing lawyers, next to New York, the effects of California's bar exam are quite substantial. In simple numbers, while 4236 law graduates passed the July 2017 California bar exam, a greater number of 4309 did not. These results are indefensible and the cost on the individual test takers and the legal profession as a whole unjustified.

When would-be lawyers fail the California bar exam, their lives are upended. Many lose their jobs or face delays of months or years to start their professional lives as lawyers. This result might make sense if the California bar exam actually did a good job of excluding incompetent lawyers from the profession. Unfortunately, especially in California, the bar exam largely fails in this important task. Every year when I learn the identity of many former students who do not pass the California bar exam I grow in my resolve to question the exam's validity to measure minimal competency to practice law. Among the students who fail are always more than a handful of incredibly talented young professionals who would make great lawyers and are already exceptional advocates. I have hired some as my research assistants with excellent results.  Others have earned high grades for exceptional research and writing in legal memoranda or papers for seminars or for the highly competent representation of clients as part of service learning or legal clinics. It is also false that many of these young people did not study enough for the test or are somehow deficient in their skills as lawyers.

Critiques of the bar exam's failings abound and are not new. For years, legal educators have lamented the test's deep flaws for how it tests and for what it fails to measure. For example, with the exception of the performance test,[1] the California bar exam relies on test takers memorizing thousands of distorted rules and having to produce answers as a series of multiple choices or in rushed essays. This should never be the way lawyers practice law. Most law today is codified and legal analysis requires nuanced textual interpretation, in addition to careful case law research to analyze and apply precedent. The best legal writing requires careful editing and time. The test also fails to assess most of the important skills that are essential to effective lawyering such as fact-finding, problem-solving, listening, and the ability to collaborate with other legal professionals.[2] The bar exam further fails to keep pace with a rapidly changing profession with emerging technologies and diverse client needs. And yet, the bar exam often dictates too much how law schools teach law to their students. Unfortunately, especially today when law schools face significant decreases in enrollment and scrutiny for the success of their students on the bar exam,[3] many sacrifice not only innovation in the curriculum but methods to teach sound or critical legal analysis in favor of rote memorization to emphasize helping their students pass the bar exam. This state of affairs of legal education is not new. As early as 1992, the McCrate Report,[4] published by the ABA Section of Legal Education and Admissions to the Bar, lamented the undue influence that the bar exam has on the structure of curriculum and teaching methods on U.S. legal education. 

In California, the pernicious harms on individuals and legal education are worse given the exam's notoriously high cut score. On October 18, 2017, the Court refused to lower the California Bar examination's cut score of 1440, opting to remain the second-toughest graded bar in the country after Delaware.[5]  This decision was both puzzling and disappointing. Just three months earlier, the California Supreme Court stripped the Committee of Bar Examiners of its authority to decide the minimum score needed to pass the state's examination. Many perceived this decision as suggesting that the Court was finally ready to set a more reasonable grading standard. Indeed, for the July 2016 exam, had the California bar exam been graded like the New York State bar (which has a score of 1390), 1789 more lawyers would have been licensed lawyers in California.[6]  Instead, the California Supreme Court sent a message to law schools to consider whether curricula and teaching techniques might account for the recent decline in the bar exam.[7] This conclusion is both out of touch with what has actually been occurring in the law school classroom for years and it perpetuates unfairness by relying on a cut score that is higher than that adopted by forty-eight states in the nation without justification. 

Quite unfortunately, the California Supreme Court's October 18 decision will also unnecessarily retard diversifying the legal profession in one of the most diverse states in the nation. Law is the least diverse profession in the nation[8] and this trend is not changing.[9] Eighty-eight percent of lawyers are white.[10] Latinos/as, who are 18% of the population nationwide and 39% in California, comprise only about 4% of all U.S. lawyers.[11] They are also only 1.8% of all law firm partners and occupy only 4.5% of all federal and state judicial positions.[12] Black lawyers are not faring much better. Only 4.8% of lawyers in the U.S. are black[13] while only 1.8% of partners in law firms.[14] For their part, Asian Americans comprise the fastest growing minority group in the bar but are not found in the top ranks of the profession. Today, there are more than 50,000 Asian U.S. lawyers and another 7,000 are studying law. Yet, for example, while they make up 6% of the U.S. population, Asians make up only 3% of federal judges and 2% of state judges, while only 3 out of 94 U.S. attorneys are Asian.[15]

There are multiple reasons that explain the lack of diversity in the legal profession but the bar exam, particularly the high cut score in California, plays a role. Nationwide, the median cut score for the bar exam is 1350 and each cut score above this median threshold has a dramatic effect on the diversity of the profession. The California State Bar's Final Report to the Court showed that reducing the cut score on the July 2016 bar exam from 1440 to 1350 would have increased the number of African American applicants passing the exam from 104 to 222 (or by 113%), Latino/a applicants from 379 to 664 (or by 75%) and Asian applicants from 676 to 1066 (or by 58%). In contrast, the same change in cut score would have increased the number of White applicants passing the bar from 2,019 to 2,874 (or by 42%).[16

There are alternatives to the bar examination that we ought to consider seriously.  New Hampshire, for example, has such an alternative licensing model. Its University of New Hampshire School of Law allows second- and third-year students to participate in a kind of apprenticeship where they learn basics like taking depositions. Those accepted to the Daniel Webster Scholar Honors Program create portfolios of their written work and record their oral performances, which are reviewed by state bar examiners after each semester. Those who pass the review can skip the bar exam and go directly into practice.  Other individual states, including New York, are also weighing alternatives. At a minimum, the California Supreme Court should reconsider its decision to retain the 1440 cut score. This would not address the examination's flaws and it may not affect its influence on legal education. It will, however, at a minimum, increase the diversity of the profession. California has not been served well by an unusually high bar exam cut score. The time is ripe to do the right thing.

[1] Performance test questions are designed to test an applicant's ability to understand and apply a select number of legal authorities in the context of a factual problem.

[2] Marjorie M. Shultz and Sheldon Zedek, 26 Lawyering Effectiveness Factors, https://alumni.ggu.edu/Document.Doc?id=92 .

[3] Law School Admission Collapse Continues, Financial Times, Nov. 20, 2016 https://www.ft.com/content/4ddb437e-9ace-11e6-8f9b-70e3cabccfae/

[4] Legal Education and Professional Development-An Educational Continuum, Report of the Task Force on Law Schools and the Profession: Narrowing the Gap (July 2992), https://www.americanbar.org/content/dam/aba/publications/misc/legal_education/2013_legal_education_and_professional_development_maccrate_report).authcheckdam.pdf .

[5] In re California Bar Exam (2017), https://newsroom.courts.ca.gov/news/supreme-court-issues-letter-relating-to-in-re-california-bar-exam .

[6] David L. Faigman, The California Bar Exam Flunks too Many Law School Graduates, L.A. Times, March 21, 2017, http://www.latimes.com/opinion/op-ed/la-oe-faigman-california-bar-exam-cut-score-20170321-story.html .

[7] Staci Saretzky, California Supreme Court Issues Decision on Bar Exam Cut Score, Oct. 18, 2017, https://abovethelaw.com/2017/10/california-supreme-court-issues-decision-on-bar-exam-cut-score/ ,

[8] Deborah L. Rdohe, Law is the Least Diverse Profession in the Nation. And Lawyers aren't Doing Enough to Change That, The Washington Post, May 27, 2015, https://www.washingtonpost.com/posteverything/wp/2015/05/27/law-is-the-least-diverse-profession-in-the-nation-and-lawyers-arent-doing-enough-to-change-that/?utm_term=.fca85228cef9 .

[9] Renwei Chung, Diversity in the Legal Profession has Flatlined Since the Great Recession: Who is to Blame? Jan. 6, 2017, https://abovethelaw.com/2017/01/diversity-in-the-legal-profession-has-flatlined-since-the-great-recession-who-is-to-blame/

[10] Rhode, supra note 8.

[11] Raul A. Reyes, Where are all the Latino Lawyers?: Hispanics Scarce in the Legal Profession, Oct. 13, 2017, NBC News, https://www.nbcnews.com/news/latino/where-are-all-latino-lawyers-hispanics-scarce-legal-profession-n809141 .

[12] Id.

[13] Yolanda Young, Why the US Needs Black Lawyers Even More than it Needs Black Police, The Guardian, May 11, 2015, https://www.theguardian.com/world/2015/may/11/why-the-us-needs-black-lawyers .

[14] Chung, supra note 9.

[15] Goodwin Liu, There are more Asian American Lawyers than Ever - but not in the Top Ranks, L.A. Times, July 23, 2017, http://www.latimes.com/opinion/op-ed/la-oe-liu-asian-american-lawyers-20170723-story.html .

[16] Joe Patrice, Law Schools Rip Bar Exam Score Recommendations, October 13, 2017, https://abovethelaw.com/2017/10/law-schools-rip-bar-exam-cut-score-recommendations/ .

 

November 13, 2017

Review of "Artistic License: The Philosophical Problems of Copyright and Appropriation"

By Brian Soucek

[Cross-posted from Notre Dame Philosophical Reviews]

 

*Book review by Brian Soucek of Darren Hudson Hick's Artistic License: The Philosophical Problems of Copyright and Appropriation

Darren Hudson Hick is a rarity: a sophisticated philosopher of art who understands and cares about the law. His new book has a lot to teach philosophers about how the law both protects authors' rights and limits them, often to protect others who want to sample, quote, adapt, or appropriate existing works within their own. Philosophers of art who care about artistic practice can learn, not only from Hick's rich and varied examples, but also from his account of one of the great forces shaping that practice. Hick's account of copyright is sometimes descriptive, sometimes revisionary, and thus has something to teach lawyers as well. But deciding exactly what lessons the law, with its own distinctive interests, should take away from an account like Hick's -- focused as it is on philosophical clarity and responsiveness to current artistic practice -- is itself a philosophically interesting question, and one I wish Hick's book went even further in answering.

 

Hick's central question -- Is it wrong for one work to copy another? -- requires him to consider five "interdependent metaphysical and ethical issues" within "the institutional, cultural, and legal framework of intellectual property" (48). They are:

 

(1) the nature of the works in question, (2) the relationship of the author to the work, (3) the rights of the author and how they arise from this relationship, (4) the relationship holding between the original work and the potentially infringing work, and (5) the rights of nonauthors -- if any -- with regard to a given work (48).

 

This, then, is the agenda for Hick's book, or at least most of it. Somewhat disconcertingly, the agenda-setting passage above doesn't appear until page 48. First comes an Introduction devoted to Hick's terrific cover image: commercial artist Mick Haggerty's mash-up of Mondrian and Mickey Mouse -- an example I would have loved Hick to reconsider at the end of the book as a test of his account of what appropriation is appropriate. The next two chapters are similarly introductory. Chapter 1 offers examples ranging from Shia LeBeouf to blues music, hip-hop culture to college plagiarism, to make a point that I doubt will surprise anyone willing to read a book-length study on copyright and appropriation: namely, that while artistic making has long been bound up with artistic taking, "remix culture" seems to have accelerated with modern technology. More interesting to me was Hick's observation that some takings are illegal but not immoral (think of a short sample of a drum break), while others -- like biologists' use of Henrietta Lacks' cells -- are immoral but not illegal. This sets up a broader discussion in Chapter 2 about the relationship among artistic practice, philosophy, and copyright law, which regulates and incentivizes certain artistic practices, and makes certain ontological and ethical conclusions. More on this soon.

 

The book's main line of thought begins in Chapter 3, and it goes, in outline, like this (with my comments in brackets):

 

 (1) an author of a work is one who has and exercises the power of selecting and arranging elements as constitutive of that work [see Chapter 3, which argues against those who find authorship and originality passé, and Chapter 4, Hick's own account of authorship];

 

 (2) this creative activity determines the nature of that work (in general, an authored work is a type instantiable in multiple tokens) [see most of Chapter 5];

 

 (3) this creative activity and the nature of the work give rise to the author's ownership of the authored work -- a natural right to determine the conditions under which that work can be copied [Chapter 6];

 

 (4) copying another author's work (where the properties of the new item are shared with and depend on those of the preexisting work) without permission constitutes prima facie infringement [see the end of Chapter 5]; and

 

 (5) though copyright is a natural right, it is not thus an absolute right, and what qualifies as a nonviolating use (copying) of an author's copyrighted work depends on some interest or right of the user outweighing the natural right of copyright [Chapters 7 and 8] (164-165).

 

I have, of course, just quoted -- which is to say copied -- this summary of Hick's argument from Hick's book itself. And according to the quoted argument, this constitutes a prima facie infringement. Perhaps my lawyers, or NDPR's, should be concerned. But wait! Hick's unexpectedly witty copyright notice at the start of the book gives permission "to reproduce brief quotations from the book for the purposes of critical articles and reviews. Beyond that," he notes, "things quickly become less clear. See chapter 7 . . .". (I would note that things only "become less clear" because Hick invokes standard U.S. copyright protections, rather than the sometimes more permissive ones he argues for in the book. He might, for example, have explicitly granted permission for any use that complies with his theory. This would have the added benefit of allowing Hick to test his theory out in court, should any infringement occur.)

 

Flipping to Chapter 7's discussion of fair use, we find Hick's central argument: the claim that copying an author's expression of an idea without permission is an infringement of his or her natural right to restrict that copying, but (adopting a distinction of Judith Jarvis Thomson's) it is not a wrongful violation of the author's right if the copying is necessary (or reasonably required) to express the ideas of the copyist. This is one of the two situations Hick describes in which copying is not wrongful and should be legally permitted; the other is appropriation art, which Hick would allow whenever the copied material is used to express a different idea from that of the original.

 

So, does my quotation above wrongfully violate Darren Hudson Hick's natural right as an author? Several of my chief comments about Hick's book are related to this question.

 

For starters, I don't quite know the answer. Or, rather, and reassuringly to NPDR's legal staff, I'm fairly confident about the law's answer, but I'm somewhat less sure about Hick's. U.S. law will almost certainly protect me because of the transformative nature of the use and its unlikely effect on Hick's book sales. My confidence here belies Hick's overstated claim that American "fair use doctrine offers effectively no predictive value, and (perhaps worse) sets no reliable precedents" (123). Hick's own test, by contrast, although promising "a principled schema that would offer predictive value to potential copyists" (137), raises questions: was a quotation as long as mine necessary? Was I just lazy? Should I have offered instead my own description of Hick's argument? (Copyright covers only Hick's expression of these ideas, not the ideas themselves.) On Hick's test, my need to copy, and thus its permissibility, seems to hinge on factors like whether I intend to criticize Hick's writing. (In fact, I don't; although the book's style varies from chapter to chapter -- "Can we talk for a minute about Shia LaBeouf?" (9) versus "if some item, W1, has the properties <a1, t1, p1> . . . " (93) -- Hick writes well in both voices.) Quotation would be more necessary if I were trying to give readers a sense of Hick's style, not just the outline of his argument.

 

Perhaps, though, I am framing the question in the wrong way. Maybe we should look not to my (i.e., the user's) intentions, but to the secondary work itself -- here, this review -- in determining what amount of copying is necessary. Hick has surprisingly little to say about the theory of interpretation that copyright law should adopt in deciding whether a work's copied material was needed, or, in appropriation art, whether the secondary work expresses a distinct idea from the original. This is an area where a philosopher of art, like Hick, could really enlighten courts and legal scholars who have sometimes struggled to understand and choose among intentionalism, formalism, or other interpretive approaches.[1]

 

These recurring mentions of appropriation art underscore the fact that Hick's book, from its title onward, is very much a book about art. This is hardly surprising: Hick is a philosopher of art, after all. But notice that the passage quoted at length above is in no way limited to artists and artworks. Its talk of "authors" and "works" applies equally to decidedly non-artistic works like this review, to computer software, to boat hulls, and, as the Supreme Court recently told us, to the chevrons on cheerleaders' uniforms. Hick's attention to this distinction leads to one of my favorite moments in his argument.

 

In Chapter Five, Hick develops, in careful, compelling detail, his ontology of authored works. His account allows us to distinguish multiple works from multiple instantiations of one authored work, and new works that infringe from those that do not. To summarize part of a longer argument: one authored work is distinguished from another if "it has different composite elements or . . . its composite elements have distinct causal bases" (99). If it has the same elements and causal bases, it doesn't matter that that they express different ideas. This isn't true of artworks, however; Hick follows Arthur Danto in suggesting that these have their meaning, or "aboutness," essentially. The result: a piece of appropriation art (say, a Sherrie Levine photograph of a Walker Evans photograph) may be a new artwork, even though it is not a new authored work.

 

Hick's interesting ontological conclusion leads to a question for the law: should copyright follow artistic practice and allow for perceptibly indiscernible, causally connected (rather than fortuitously similar) artworks? Hick's proposal, in Chapter 8, is that appropriation artworks like Levine's should be allowed as fair use if they express "some idea distinct from that of the original" (159). But this fair use allowance should not bring with it the right to make other copies, or to license further derivative works (158).

 

Here is a place where Hick's focus on art really matters. His account of appropriation art is revisionary, and end-driven: he seems to assume that appropriation artists like Levine and Richard Prince should be legally permitted to do what they do; copyright law should be revised to make that so. Because appropriation art has become "one of the most fascinating -- and most influential -- movements in contemporary art" (160), Hick wants the law to "seek to find a way of accommodating" it. But why? Surely appropriation art is no more fascinating or influential than fashion design, though the latter goes largely unprotected under U.S. copyright law. Many things we value -- graffiti, civil disobedience -- are not just unprotected, but forbidden by the law. For some of these, their illegality is part of their power. Hick's focus on art, surely a small minority of the copyrighted material in the world, perhaps skews his view on what practices it is especially important for copyright to accommodate.

 

This brings me, finally, to Hick's claim that authors have a natural right in their original works. Hick rejects the theory of intellectual property enshrined in the U.S. Constitution: an instrumental theory which justifies copyright as an incentive for creative activity that expands the marketplace of ideas. Copyright protections are neither necessary nor sufficient for achieving that end, Hick argues: Homer didn't need it, and Shakespeare would have been hindered by it. Copyright's effectiveness as an incentive to creativity is ultimately an empirical question (106) -- though note, here again, that the empirics should take account of not just art, but many other creations as well. And while copyright's exclusion of fashion is often defended because incentives are less needed there -- copied fashions lead to obsolescence, which spurs new design[2] -- Hick's natural rights argument on behalf of authors should apply fully to fashion design and many other kinds of making as well. I wonder how revisionist Hick is ultimately willing for his theory to be.

 

This is the question that kept coming back as I read Hick's book: his admirable attempts to make copyright law more coherent, and more firmly grounded, necessarily create tension with the law as it currently exists. That's to be expected. The law lacks philosophy's focus: its interests are often multiple, and sometimes conflicting. Consider, for example, the practical suggestions that Hick offers in the book's Afterword. Recognizing that his revisionary account of fair use for appropriation art might "open the door to widespread piracy," Hick suggests limiting it to appropriation artworks that sell for twice the price of the original, with a requirement that half the sales price goes to the original's creator. If all we cared about were the natural rights of the (original) author, this might work. But Hick's proposal would have a horribly disparate impact on appropriation artists: it would apply when famous artists like Richard Prince take from no-name creators, but not the other way around. To quote two legal scholars, it offers "fair use for the rich and fabulous."[3]Compared to current copyright law, Hick's theory may be more consistent and, perhaps, more predictable, but that is partly because he sidesteps, in this book at least, the distributional and egalitarian interests that I, for one, want copyright law to serve.

 

Back to my initial question, then: what should the law take from Hick's philosophically rich account of copyright? This depends, I think, on whether and when his conceptual analysis is taking account of the interests of philosophy, or of the artworld, or of the law. Admittedly, these interests will often overlap: as Hick notes (34), philosophers have increasingly aimed at an ontology of art that responds to actual artistic practice -- which is to say, one that incorporates the interests of artists. Similarly, Hick's arguments about why fair use (and, I would add, substantial similarity) cannot hinge solely on artworks' appearance (160) is an example of philosophy bringing conceptual clarity to the law on the law's own terms: the claim is that looking beyond appearances serves the very interests copyright law is meant to advance. (Of course, what those interests should be is always up for dispute.) But, just as the interests of graffiti artists are often in tension with those of property law, those of appropriation artists might not be consonant with those of copyright law. What is needed is an argument for why copyright law, by its own lights, should seek to accommodate the Sherrie Levines and Richard Princes as well as much less known appropriation artists.

 

This is a provocative, generative book. My comments here are less criticisms than invitations for further work, especially further thinking on the relationship between philosophy of art, artistic practice, non-artistic creative practice, and the categories and values that the law adopts in protecting those practices (or not). Reading this book, however, assures me that Darren Hudson Hick is one of the scholars whose further thoughts on these issues I would most like to hear.

 

 

[1] See, e.g., Amy Adler, Fair Use and the Future of Art, 91 N.Y.U. L. Rev. 559 (2016); Robert Kirk Walker and Ben Depoorter, Unavoidable Aesthetic Judgments in Copyright Law: A Community of Practice Standard, 109 Nw. U. L. Rev. 343 (2015); Alfred C. Yen, Copyright Opinions and Aesthetic Theory, 71 S. Cal. L. Rev. 247 (1998). Professor Adler describes how courts employed three different interpretive approaches in one case: Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013), which is also one of Hick's primary examples. For my own views on these issues, see Brian Soucek, Aesthetic Judgment in Law, 69 Ala. L. Rev. ___ (forthcoming 2017).

 

[2] See Kal Raustiala and Christopher Sprigman, The Piracy and Paradox: Innovation and Intellectual Property in Fashion Design, 92 Va. L. Rev. 1687 (2006).

 

[3] Andrew Gilden and Timothy Greene, Fair Use for the Rich and Fabulous?, 80 U. Chi. L. Rev. Dialogue 88 (2013).

November 11, 2017

How U.S. and UK Deal Structures Protect Minority Shareholders

By Afra Afsharipour

[Cross-posted from The CLS Blue Sky Blog]

Takeover transactions are often the most significant activity affecting corporations and their shareholders. Accordingly, there are intense debates about the value and impact of takeovers and the extent to which law should regulate such transactions. One area of focus for takeover regulation has been the potential impact of takeovers on minority shareholders. The focus on minority shareholders is not surprising as research suggests that laws which protect minority shareholders are associated with stronger financial markets.

 

In a recent book chapter, I focus on how deal structures affect the protection of minority shareholders in two common law jurisdictions, the U.S. and the UK. I discuss the three most-commonly used methods of effecting a takeover in these jurisdictions—tender offers, schemes of arrangement, and triangular mergers—and assesses both the theoretical and empirical literature on their impact on minority shareholders. In each jurisdiction, lawmakers, regulators and courts have attempted to design rules to address harm to minority shareholders under various deal structures. These rules often result in different rights for shareholders of bidders and targets, and vary among transaction structures, even when economically similar transactions are undertaken. While the UK takeover regime focuses on ex ante regulation, the U.S. system uses some ex ante regulation but places significant emphasis on ex post policing through the courts.

 

First focusing on the U.S., I address the two most commonly-used deal structures for takeovers of U.S. public companies—a one-step triangular merger and a two-step transaction involving a tender offer followed by a merger. Target shareholders are provided with a say under both structures, either through a vote or through the decision to sell their shares. In addition, several aspects of the securities laws and tender offer rules, for example the best price rule or extensive disclosure rules for tender offers, were specifically designed to lessen the likelihood of abuse of minority target shareholders.

 

In the U.S., the courts also play an important policing role in regulating the parties’ behavior in takeovers. Target minority shareholders regularly seek redress for any harm through the courts, either through ex post fiduciary duty litigation or appraisal litigation. U.S. law, however, does little to address harm to bidder shareholders. Management can structure takeovers to exclude bidder shareholders from any decision-making role in acquisitions. Moreover, bidder shareholders cannot meaningfully seek any redress through the courts.

 

An acquisition of a UK public company takes place through the acquisition of shares in the target by the bidder either through an offer (similar to a U.S. tender offer) or through the nearest UK analogue to a U.S.-style merger, a “scheme of arrangement.” While the economic substance of these transactions is similar in the U.S. and UK, the steps that must be followed and the methods of minority shareholder protection are quite different. Unlike the U.S., where hostile takeover activity is difficult, the UK is much more non-protectionist and holds shareholder primacy as a core value. Several of the rules implementing the principles of the UK takeover regime, including the mandatory bid rule and the sell-out rule, are designed to protect minority shareholders.

 

Over the past decade, schemes of arrangement have become a commonly used acquisition structure in friendly transactions in the UK. UK law treats schemes quite differently from takeover bids. In a scheme, a significant majority of the shareholders of each class can bind the minority, including any dissident shareholders, so long as the scheme is subsequently sanctioned by the court. Some have argued that minority protection in the scheme context should be greater than that in the traditional bid/takeover context since in a scheme even dissenting shareholders are forced to sell once the scheme has been approved. Nevertheless, there is a strong argument that protection for minority shareholders is built into the structure of the scheme itself – namely the 75 percent majority requirement for shareholder approval, the court’s sanction, and the opportunity for full exit rights.

 

Two other major differences exist among deal structures prevalent in the U.S. and the UK. The UK listing rules expressly contemplate a vote for bidder shareholders in substantial acquisitions. Furthermore, unlike the U.S., where courts play an important role in protecting minority shareholders, courts in the UK do not play a decisive role in most transactions, even in schemes which they formally must approve. The appraisal remedy is not available in the UK, and there is little chance of corporate directors being sued in connection with a takeover.

 

The chapter then surveys the empirical literature on takeovers to assess whether differences in legal rules governing different deal structures translate into a quantifiable impact on minority shareholders. The answers to this question are somewhat unclear and need further empirical enquiry to determine which of the tools used in the U.S. and UK regimes better protect minority shareholders. Nevertheless, a few insights are suggested by the empirical research. First, despite the differences in each jurisdiction’s regime, target shareholders gain in takeover transactions in both jurisdictions, and in the U.S. these gains are higher in tender offers than in mergers. Second, research suggests that the UK’s takeover rules better protect bidder shareholders in large transactions than does U.S. regulation, which largely deprives bidder shareholders of a role in acquisition transactions. Finally, the research on U.S. transactions suggests that different legal treatment of economically similar acquisition structures may make a difference to minority shareholders.

 

The comparisons and literature review raise several research questions. The empirical inquiry into UK takeover transactions is quite sparse. For example, no studies empirically explore whether minority shareholders in the UK gain more or less from schemes of arrangement than from takeover bids. Also, do bidder shareholders in the UK gain or lose more in schemes or takeover bids? The empirical inquiry exploring the differences in regulatory approaches in the U.S. and UK is also sparse. For example, it may be useful to further examine which of the tools used in the U.S. and UK regimes better protect minority shareholders. There is also a need for more literature on costs of the regulatory framework imposed by both jurisdictions and whether such regulations can be translated to other countries, as well as a need for further exploration into the institutions needed to implement these regulatory structures. Further inquiry into these issues can help lawmakers determine what features of takeover regulation could be best used by other jurisdictions contemplating takeover regulations.

 

This post is based on my most recent book chapter, “Deal Structure and Minority Shareholders,” available here.


November 2, 2017

California Dreaming? The Integration of Immigrants into American Society

By Kevin R. Johnson

[Cross-posted from Boom California]

Immigrants, including undocumented immigrants, are unquestionably members of our communities across the United States. Currently, roughly eleven million undocumented immigrants live and work in this country.[1] Employers demand their labor, and immigrants want the work. Nonetheless, the people of United States have long been ambivalent about immigrants. Even in California, now viewed as a pro-immigrant bastion, more attention historically was given to reduce the immigrant population rather than to facilitate the integration of immigrants into American social life.

Consider one stunning example. California voters in 1994 by a 2-1 margin passed an immigration milestone, Proposition 187,[2] known by its supporters as the “Save our State” initiative. The initiative would have banned undocumented students from public schools, required police to report undocumented immigrants to federal authorities, and denied undocumented immigrants access to nearly every state public benefit programs. The California legislature subsequently passed a series of laws of the same ilk, including a particularly noxious one that prohibited the issuance of driver’s licenses to undocumented immigrants (even though there was no evidence of any safety or security problems with the state’s long history of licensing—and safety-testing—undocumented drivers).

With its widely publicized Proposition 187, California unfortunately proved to be a trendsetter for the nation. Following the initiative’s lead, Congress’ 1996 welfare reform legislation stripped many legal immigrants of federal public benefits.[3] More than a decade later, a number of other states, including Alabama, Arizona, Georgia, and South Carolina, passed tough immigration enforcement laws that were, in important respects, similar to Proposition 187.[4]

As Bob Dylan famously said: the times, they are a changing’. Indeed, we are witnessing nothing less than a sea change in state and local policy directed at immigrants in the United States and California again is at the forefront. However, the current trajectory in sub-federal immigration policy—pro-immigrant integration, not pro-immigration enforcement—is dramatically different than it was in the heyday of Proposition 187. Ironically enough, the nation has President Donald Trump, an immigration hawk like no other, to thank.

California’s Changed Responses to Immigrants

Responding to Trump: California Seeks to Promote Immigrant Integration

As promised in the 2016 campaign, President Trump from his first days in office pursued aggressive immigration enforcement measures, ranging from executive orders banning travel from predominantly Muslim nations to mass deportations to announcing steps toward building a wall along the U.S./Mexico border and threats of even greater enforcement efforts. Those steps provoked an immediate and inspired response from many state and local governments—and especially from California. Governor Jerry Brown, Attorney General Xavier Becerra, and Senate President pro Tem Kevin de Leon, led the opposition to the Trump administration’s call for ever-greater immigration enforcement. The resistance has been fueled in no small part by the growing awareness among California lawmakers of the need for increased legal protections for immigrants, among the state’s most vulnerable residents, from the Trump immigration onslaught. The reaction is rooted in notions of fundamental fairness and the firm belief that the aggressive immigration enforcement agenda embraced by the Trump administration threatens to tear families apart, harm communities, and sow widespread human misery, all in the name of “enforcing the law.”

Abandoning the punitive approach toward immigrants exemplified by Proposition 187, California for more than a decade has been at the forefront of taking steps to more fully integrate undocumented immigrant residents into the social fabric. Consider just a few contemporary examples. In 2001, the California legislature passed Assembly Bill (AB) 540, a path-breaking law that allows undocumented immigrants to pay in-state fees at California community colleges and universities.[5] This law, which represents a meaningful step toward greater educational access for all residents, commenced a trend among the states. Several years later, the legislature went further and passed the California DREAM Act, which made undocumented college students eligible for state scholarships to help them pay for their education.[6]

Not limiting its efforts to higher education, the California legislature took a number of other steps to promote the integration of the state’s immigrant population. Seeking to facilitate the trust of immigrants in local police officers (who, in turn, need the cooperation of immigrants, and all members of the community, to most effectively protect the public safety), the legislature in 2013 passed the TRUST Act,[7] which restricts state and local cooperation with federal immigration enforcement authorities. Among other things, it prohibits the detention of immigrants longer than required by law so that federal officers can, if they so desire, take the noncitizens into custody. The TRUST Act represented a response to the U.S. government’s hyper-aggressive Secure Communities program,[8] which greatly expanded the criminal justice removal pipeline for immigrants who had minor (as well serious) brushes with the law and directly resulted in the deportation of hundreds of thousands of people a year. In addition, after considerable debate and years of grassroots activism, the California legislature restored driver’s license eligibility for undocumented immigrants,[9] a significant practical step toward allowing undocumented immigrants to participate more fully in economic and social life, reducing fears of removal due to something as mundane and ordinary as operating a motor vehicle. Showing just how far the state had come from the dark days of Proposition 187, the California Supreme Court in 2014 ruled that a California law allowed undocumented immigrants to be licensed to practice law.[10]

In response to the Trump administration’s strident immigration enforcement agenda, the California legislature is active about taking steps to restrict state and local cooperation with federal immigration enforcement. Indeed, the legislature sought nothing less than to declare California to be a “sanctuary state,” a bill (SB 54) that Governor Jerry Brown signed 5 October 2017, which takes effect January 2018.[11]

Other state and local efforts to facilitate the integration of immigrants into civil society, which are wholly consistent with federal law, might include, but are not limited to the following:

  1. Pursuing additional policies that encourage the cooperation of immigrants with criminal law enforcement authorities;
  2. Ensuring adequate access to English-as-second-language programs so that immigrants are better able to acquire English language skills and better assimilate into U.S. society;
  3. Providing that immigrants, including undocumented immigrants, are generally eligible for state and local licenses necessary to engage in certain professions and occupations (from building contractors to hair dressers) and more fully participate in the American economy; and
  4. Making noncitizens eligible for public benefits programs that are part of the economic safety net for other residents.

Recent years have seen the emergence of tensions between the federal, state, and local governments about immigration enforcement and immigration policy. While state and local governments increasingly seek to protect their immigrant residents, President Trump has disparaged many of those state and local efforts as “sanctuary” policies that undermine the enforcement of U.S. immigration law. His administration has gone so far as to threaten to eliminate federal funding to “sanctuary cities.”

We should not forget that state and local governments play important roles in ensuring the inclusion of all residents, including immigrants. Such efforts include steps by state and local governments to promote immigrant integration. State and local measures that move us toward a society in which immigrants are full members of the community, not marginalized peoples living in the shadows, deserve support and encouragement. The Trump administration unfortunately attacks, disparages, and derides those laws and policies.

Why California’s Immigration Turnaround?—The Response to Proposition 187

One might wonder on the issue of immigration policy from 1994 to 2017 what explains the stark political turnaround in California. The short answer is that Proposition 187 changed everything.

First of all, passage of the anti-immigrant milestone spurred a generation of engaged political activism. In Proposition 187’s wake, naturalization rates for immigrants spiked and hundreds of thousands of immigrants became newly-minted U.S. citizens (and part of the electorate). In turn, increasing numbers of Latina/o citizens voted, including recently naturalized ones. Not surprisingly, the number of Latina/o elected to the California legislature grew significantly and Republican legislators slowly but surely dwindled in numbers. The legislature’s racial and political composition changed with the election of increasing numbers of Latina/os and Democrats came to dominate the legislature. In fact, California Pete Wilson, who won re-election largely due to his ardent support for Proposition 187, was later effectively exiled, as it were, from California politics, having forever alienated the growing Latina/o electorate.

When all was said and done Proposition 187 dramatically changed the trajectory of California law and policy toward immigrants, as well as the state’s entire political landscape. One can only wonder whether President Trump’s immigration enforcement priorities might ultimately result in a similar political reaction on a national scale.

Providing Counsel to Immigrants Facing Removal

The specter of greatly increased removal efforts by the Trump administration has provoked great fear in immigrant communities. The “Trump effect” has led states and local governments to adopt laws and policies that protect immigrant members of communities and promote their integration. Some state and local governments have looked to provide the most fundamental protection for immigrants resisting removal—ensuring access to legal representation.

Having campaigned on a platform that included tough immigration enforcement, Donald Trump did not surprise most Americans when soon after his inauguration he announced aggressive immigration enforcement measures, including four executive orders on immigration in his first three months in office. States have taken a number of measures intended to moderate the adverse impacts of those tough policies. More are under consideration, including proposals to provide greater access to counsel to immigrants facing removal from the United States.

Unlike the Fifth Amendment’s guarantee of counsel to criminal defendants, the U.S immigration laws fail to ensure that immigrants, legal and undocumented, have an attorney in removal proceedings, which are classified as civil in nature.[12] Similar to the movement in the twentieth century to ensure that indigent criminal defendants are provided with attorneys, an organized movement has emerged to ensure legal representation for all immigrants facing removal from the United States.

Guaranteed representation for immigrants facing removal is only fair. As the Supreme Court has emphasized, a deportation hearing can “result in the loss of all that makes life worth living.”[13] That alone suggests the great need for guaranteed representation for immigrants facing deportation. Moreover, the nature of the U.S. immigration laws, which are rivaled for complexity only by the Internal Revenue Code, makes an attorney essential. In addition, the vast majority of immigrants, due to language and culture differences, cannot reasonably be expected to fully comprehend the many nuances, legal and otherwise, of the removal process.

The bottom line is that, absent legal representation, an immigrant facing removal faces nearly insurmountable odds in staving off deportation. Not surprisingly, the available evidence in fact demonstrates that represented immigrants successfully resist removal at much higher rates than unrepresented immigrants.[14]

Scholars for years have argued for guaranteeing counsel to immigrants facing removal from the United States.[15] In direct response to the Trump administration’s tough immigration stances, state and local governments in growing numbers are beginning to allocate funds for attorneys to represent immigrants facing removal.[16] For example, the California budget approved in 2017 provides $15 million to help secure counsel for immigrants facing deportation.[17]

One Model: The University of California’s Immigrant Legal Services Center

For several years running, the Obama administration set records by removing some 400,000 immigrants a year. Young undocumented immigrants were among the immigrants caught in the crossfire.

To begin addressing pressing immigrant student needs, the University of California (UC) in 2015 created a form of student services never before seen in higher education.[18] In establishing the UC Undocumented Legal Services Center (later renamed the UC Immigrant Legal Services Center),[19] the University demonstrated how it can serve all students—including immigrants—and the greater community of the state of California.

Created by UC President Janet Napolitano, former Secretary of the Department of Homeland Security who was responsible for enforcement of the U.S. immigration laws, the Immigrant Legal Services Center serves the unique legal needs of undocumented students and their parents. Housed at the UC Davis School of Law, home of a well-established Immigration Law Clinic[20] as well as a group of influential immigration law scholars, the Center provides legal services to undocumented students and their families on the UC campuses at Irvine, Merced, Los Angeles, Riverside, San Diego, San Francisco, Santa Barbara, and Santa Cruz. (The only other UC campus, UC Berkeley, has its own legal assistance program for immigrants.)

One critically important feature of the center’s representation warrants explanation. The idea behind extending services to the parents of undocumented UC students involves a well-researched common sense phenomenon: students are in a significantly better position to succeed academically if they do not fear that their parents are at risk of removal.

The Center has plenty of potential clients, with more coming in with every new entering class. Several hundred undocumented students are enrolled at each of the campuses of the University of California system. Many of them are from Mexico or Central America. However, the University has undocumented students literally from around the world, including Asia, Africa, and Europe.

The efforts of the UC Immigrant Legal Services Center immeasurably benefit undocumented students and their families. Many of the students are eligible for relief under the U.S. immigration laws that stabilize their daily lives and, as a result, help to improve their academic success.

At the time that the Center was founded, attorneys expected to focus on assisting students with applications for relief under the Obama administration’s Deferred Action for Childhood Arrivals program, which was originally created in 2012 and dismantled by President Trump in 2017.[21] However, the legal work proved to be much more varied than initially anticipated. Some students and their family members are eligible for immigrant visas as well as citizenship. They need legal help to identify the potential ways of regularizing their immigration status and to navigate the complex, and often lengthy, bureaucratic process. Many students understandably want to regularize their immigration status so they are able to come and go from the United States and thus can participate in study abroad programs just like many other college students do. Some students are eligible for various forms of relief from removal under the U.S. immigration laws but need legal assistance to identify and collect the information necessary to make their case.


The Quest for Justice for All (Including Immigrants)

As with the efforts to provide legal representation, state and local governments must focus on how to best address the needs of all residents, including immigrants, and strive to ensure that immigrants are treated as full members of society. One important way to do so is provide attorneys to represent immigrants facing removal from the United States. As has been discussed, state and local governments are making efforts to do so. California has been at the forefront of the movement but the state of New York and many cities, including Austin, Baltimore, Chicago, New York City, and Washington D.C., as well as Sacramento, Los Angeles, and San Francisco, have already taken steps to assisting immigrant residents secure representation.

Through measures to help ensure counsel for all immigrants facing deportation, we see public support for a more procedurally fair and legitimate system—and one consistent with the ideal of “justice for all.” Through providing legal representation and taking other measures to protect immigrant residents, state and local governments are pursuing their proper role of facilitating the integration of immigrants into civil society. In the past, popular immigration enforcement laws, such as Proposition 187 and Arizona’s infamous SB 1070 that the Supreme Court invalidated in large part,[22] which made state and local police central to immigrant enforcement, had the opposite effect. Far from promoting immigrant integration, these laws have de-stabilized immigrant communities and marginalized, not integrated, significant numbers of state and local residents.

Lawyers unquestionably can help to protect the rights of immigrants. Other state and local immigrant integration measures can as well. In pursuing such measures, California hopefully can provide guidance to the nation and encourage other state and local governments to pursue immigrant integration strategies.

In the long run, however, state and local governments can only do so much to reduce the harsh impacts of the U.S. immigration laws on immigrants. Fundamental change to those laws is necessary to bring full justice to immigrants. To that end, Congress at some point must overhaul the antiquated Immigration and Nationality Act of 1952, which was forged at the height of the Cold War and is not well-suited to addressing the nation’s 21st century immigration needs. In such comprehensive reform efforts, the labor needs of the United States and the precarious status of undocumented immigrants living here will need to be addressed.

 

Notes

[1] Jeffrey S. Passel and D’Vera Cohn, “Overall Number of U.S. Unauthorized Immigrants Holds Steady Since 2009,” Pew Research Center, 20 September 2016, available at http://www.pewhispanic.org/2016/09/20/overall-number-of-u-s-unauthorized-immigrants-holds-steady-since-2009/.

[2] California Proposition 187, Illegal Aliens Ineligible for Public Benefits (1994), Ballotpedia, available at https://ballotpedia.org/California_Proposition_187,Illegal_Aliens_Ineligible_for_Public_Benefits(1994).

[3] Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. No. 104-193, 110 Stat. 2105.

[4] The immigration enforcement laws of these other states suffered the same fate as Proposition 187: the courts struck them down. See, for example Arizona v. United States, 567 U.S. 387 (2012); United States v. South Carolina, 720 F.3d 518 (4th Cir. 2013); United States v. Alabama, 691 F.3d 1269 (11th Cir. 2012); Georgia Latino Alliance v. Human Rights v. Deal, 691 F.3d 1250 (11th Cir. 2012).

[5] California Assembly Bill 540, Cal. Legis. 2000-01 (codified at Cal. Ed. Code § 68130.5).

[6] California Assembly Bills 130, 131, Cal. Legis. 2010-11.

[7] California Assembly Bill 4, 2013 Cal. Stat 4650 (codified at Cal. Gov’t Code §§ 7282-7282.5).

[8] Due to state and local resistance to the impacts of Secure Communities, President Obama discontinued that program in November 2014; President Trump, however, reactivated it in January 2017. U.S. Immigration and Customs Enforcement, Secure Communities, available http://www.ice.gov/secure-communities.

[9] AB-60 Driver’s License in California, DMV.ORG, available at https://perma.cc/U9VN-9JMR.

[10] In re Garcia, 58 Cal. 4th 440 (2014).

[11] Jasmine Ulloa, “California becomes ‘sanctuary state’ in rebuke of Trump immigration policy,” Los Angeles Times, 5 October 2017, http://www.latimes.com/politics/la-pol-ca-brown-california-sanctuary-state-bill-20171005-story.html.

[12] Immigration and Nationality Act § 292, 8 U.S.C. § 1362 (providing that noncitizens can be represented in removal proceedings “at no expense to the Government”).

[13] Bridges v. Wixon, 326 U.S. 135, 147 (1945) (citation omitted) (emphasis added).

[14] Ingrid V. Eagly and Steven Shafer, “A National Study of Access to Counsel in Immigration Court,” University of Pennsylvania Law Review 164 (2015): 1.

[15] See, for example, Kevin R. Johnson, “An Immigration Gideon for Lawful Permanent Residents,” Yale Law Journal 122 (2013): 2394; Mark Nofieri, “Cascading Constitutional Deprivation: The Right to Be Appointed Counsel for Mandatorily Detained Immigrants Pending Removal Proceedings,” Michigan Journal of Race and Law 18 (2012): 63

[16] Jennifer M. Chacón, “Privatized Immigration Enforcement,” Harvard Civil Rights-Civil Liberties Law Review 52 (2017): 1, 6 (noting that “some states and localities with large numbers of noncitizen residents have begun to provide funding for immigrant representation”).

[17] Katy Murphy, “California Budget Deal Includes Deportation Defense Fund for Undocumented Immigrants,” San Jose Mercury, 16 June 2017, http://www.mercurynews.com/2017/06/16/california-budget-deal-includes-deportation-defense-for-undocumented-immigrants/.

[18] Kevin R. Johnson, “New UC Center Serves a Most Vulnerable Student Population: A New Trend in Higher Education?” Hispanic Outlook in Higher Education, 14 December 2015, p. 24.

[19] UC Immigrant Legal Services Center, available at https://law.ucdavis.edu/ucimm/.

[20] For a discussion of the creation of the clinic and its pedagogical and social justice goals, see Kevin R. Johnson and Amagda Pérez, “Clinical Legal Education and the U.C. Davis Immigration Law Clinic: Putting Theory into Practice and Practice into Theory,” SMU Law Review 51(1998): 1423.

[21] U.S. Citizenship and Immigration Services, Consideration of Deferred Action for Childhood Arrivals (DACA), available at https://www.usic.gov/humanitarian/consideration-deferred-action-childhood-arrivals-daca.

[22] Arizona v. United States, 567 U.S. 387 (2012).

November 2, 2017

The Original Meaning of the Alien Tort Statute

By William Dodge

[Cross-posted from Just Security]

At oral argument in Jesner v. Arab Bank, Supreme Court Justice Neil Gorsuch raised a theory about the about the original meaning of the Alien Tort Statute (ATS), a provision of the First Judiciary Act of 1789 that gave the district courts cognizance “of all causes where an alien sues for a tort only in violation of the law of nations or a treaty of the United States.” Relying on the work of Professors Anthony Bellia and Bradford Clark, Justice Gorsuch suggested that the ATS was originally intended to grant jurisdiction only when the defendant was a U.S. citizen. In a post on Lawfare, Bellia and Clark try to explain why Justice Gorsuch is right. Here, I try to explain why Bellia and Clark are wrong.

The Supreme Court has examined the history of the ATS before. In Sosa v. Alvarez-Machain, relying on the amicus brief of professors of federal jurisdiction and legal history that I wrote, the Court traced the origins of the ATS to a 1781 resolution of the Continental Congress recommending that the states punish offenses against the law of nations and authorize suits for damages by the injured parties. The Court noted that the issue was given fresh urgency by the 1784 Marbois incident, in which a French adventurer assaulted the Secretary of the French Legation in Philadelphia, François Barbé-Marbois. The Court concluded that Congress passed the ATS to cover the three offenses against the law of nations that Blackstone had listed in his Commentaries on the Laws of England—offences against ambassadors, violations of safe-conducts, and piracy. Finally, the Court held that ATS claims based on modern international law should be limited to norms as generally accepted and as specifically defined as those eighteenth century paradigms. 

Bellia and Clark’s theory of the ATS’s coverage is narrower than Sosa’s in some ways and broader in others. Their theory is narrower because it is limited to torts committed by U.S. citizens. As Bellia and Clark explain, the eighteenth-century law of nations “required the United States (like all nations) to redress acts of violence by its own citizens against citizens of foreign nations (with whom the United States was at peace) by imposing criminal punishment, extraditing the offender, or providing a civil remedy. Failure to redress such violence in one of these ways gave the offended nation just cause to retaliate against the United States, including through war.” Their theory is broader because it is not limited to the three paradigms that Blackstone identified but encompasses all “acts of violence by a citizen of one nation against the citizen of another.” Indeed, Bellia and Clark deny that the ATS was intended to reach offenses against ambassadors, violations of safe conducts, and piracy at all. Congress addressed these violations of the law of nations separately, and apparently exclusively, by making them criminal offenses in the Crimes Act of 1790. They write, “the ATS was not duplicative of other federal statutes.” Thus, if Justice Gorsuch really wants to follow Bellia and Clark, he would have to abandon the Sosa test for actionable norms, for it makes no sense to tie the ATS cause of action to eighteenth-century paradigms that the ATS was not supposed to cover. He would have to conclude instead that all acts of violence committed by U.S. defendants, natural persons and corporations alike, are torts in violation of the law of nations for which aliens may bring suit in federal court under the ATS.

There is no doubt that the founding generation was concerned about violations of the law of nations for which the United States might be held responsible by other nations. But the text and history of the ATS show that Congress’s concerns were not limited to violations committed by U.S. citizens. The text and history of the ATS also refute just about every other aspect of Bellia and Clark’s theory.

The 1781 Resolution

First, take the 1781 resolution of the Continental Congress that Sosa recognized as the forerunner of the ATS. (As Sarah Cleveland and I have noted, this resolution was also the forerunner of the Offenses Clause in the U.S. Constitution.) The resolution recommended that the states “provide expeditious, exemplary and adequate punishment” for “offences against the law of nations.” Contrary to Bellia and Clark’s theory, the resolution did not refer generally to all acts of violence by U.S. citizens against citizens of foreign nations but specifically listed violations of safe conducts, infractions of the immunities of ambassadors, and infractions of treaties to which the United States was party. This enumeration tracks Blackstone’s list of offenses against the law of nations, with the addition of treaties (which were commonly understood to be part of the law of nations) and the omission of piracy (which the Continental Congress already had authority to punish by itself under the Articles of Confederation).

Contrary to Bellia and Clark’s theory, the 1781 resolution also shows that the Continental Congress saw no inconsistency in providing a civil remedy on top of criminal punishments. The resolution further recommended that the states “authorise suits to be instituted for damages by the party injured.” It is this recommendation that the First Congress later implemented by passing the ATS.

The 1781 resolution does support Bellia and Clark’s theory in one respect. The report of the committee that prepared the resolution expressed concern about offenses against the law of nations “by a citizen of the United States.” But this limitation did not make it into the text of the ATS, and the Marbois incident explains why.

The Marbois Incident

Although the violence against Marbois in 1784 was not inflicted by a citizen of the United States, the French Ambassador considered it a “violation of the laws of Nations” and formally complained to the Continental Congress. Although the national government had no authority to redress this violation, the State of Pennsylvania did, and the assailant was tried and convicted for “an infraction of the law of Nations.”

Bellia and Clark argue that the First Congress addressed the Marbois incident in other ways, by giving the Supreme Court original jurisdiction over cases involving ambassadors and by making assaults on ambassadors a criminal offense. But the fact that a replay of the Marbois incident would have been covered by Section 13 of the Judiciary Act because it involved a foreign diplomat does not mean that such an incident would not also have been covered by Section 9 of the Judiciary Act because it involved a tort in violation of the law of nations. Jurisdictional grants often overlap. Nor does the fact that Congress provided criminal punishment for assaults on ambassadors and other public ministers show that Congress would not also have wanted to allow the injured minister to bring a civil suit in federal court (as Bellia and Clark appear to concede by invoking Section 13’s provision allowing civil suits).

In light of this history, it seems implausible that the First Congress would not have understood the ATS’s reference to “all causes where an alien sues for a tort only in violation of the law of nations or a treaty of the United States” to include a case like the Marbois incident. After all, Blackstone had listed infringement of the rights of ambassadors as an offense against the law of nations. The Continental Congress had done the same in 1781, urging the states to punish such violations and permit suits for damages. And when such an event had actually occurred in Philadelphia, both the French ambassador and the Pennsylvania court had condemned it as a violation of the law of nations, despite the fact that it had not been committed by a citizen of the United States.

The Text of the ATS

The text of the ATS also refutes Bellia and Clark’s theory—both their attempt to narrow the ATS to torts by U.S. citizens and their attempt to broaden it to all acts of violence. As originally enacted, the ATS gave the district courts cognizance “of all causes where an alien sues for a tort only in violation of the law of nations or a treaty of the United States.”

One will notice immediately that, while the ATS limits potential plaintiffs to aliens, it does not limit potential defendants to U.S. citizens. Bellia and Clark argue that “the ATS did not need to spell out that suits by an alien for ‘a tort only in violation of the law of nations’ meant a tort committed by a U.S. citizen.” This limitation would have been obvious, they assert, “[b]ecause the United States’ obligation under the law of nations was limited to redressing harms by U.S. citizens against aliens.” But if it was unnecessary to spell out that the defendant must be a U.S. citizen, it should have been equally unnecessary to spell out that the plaintiff must be an alien. Under their theory, both limitations would have been implicit in the concept of “a tort only in violation of the law of nations.” The fact that Congress imposed one limitation, and not the other, shows that the ATS is not limited to suits brought against U.S. citizens, and the Marbois incident explains why.

It is also telling that early courts did not read the ATS as limited to suits brought against U.S. citizens. Both Moxon v. The Fanny (1793) and Bolchos v. Darrel (1795) involved claims against foreign defendants. If the limitation to U.S. defendants was as obvious as Bellia and Clark suggest, it is odd that neither court mentioned it.

The text of the ATS also refutes Bellia and Clark’s argument that the ATS was intended to reach all acts of violence. Under their theory, the United States would violate the law of nations by failing to provide redress to an injured alien. But the text of the ATS describes the tort itself as being “in violation of the law of nations or a treaty of the United States.” In an earlier post, I relied on the word “committed,” which appears in the current codification of the ATS but not in the original statute. But the basic argument is the same. Under both the original text and the modern text, the ATS requires that the tort violate the law of nation, not that the failure to provide redress does. Blackstone had identified three offenses that would qualify: infringement of the rights of ambassadors, violations of safe-conducts, and piracy. The Continental Congress relied on this list in 1781 when it urged the states to punish offenses against the law of nations and permit suits for damages. There is no reason to think that the First Congress adopted a broader focus when it made good on the 1781 resolution by passing the ATS.

Article III

Bellia and Clark’s final argument is that suits between two aliens violate Article III because they exceed the limits of diversity jurisdiction. The modern answer to that concern is that ATS suits today arise under the federal-common-law cause of action recognized in Sosa. The original answer is that the law of nations was considered part of “the Laws of the United States” for purposes of Article III’s grant of “arising under” jurisdiction. For a full examination of the evidence on both sides, readers should consult Professor Curtis Bradley’s 2002 article and my response. Here, I will limit myself to just four points.

First, Article III’s reference to “Laws of the United States” is broader than Article VI’s reference to “Laws of the United States which shall be made in pursuance [of this Constitution].” The difference in text suggests that there is at least one category of laws that are “Law of the United States” but not made under the Constitution, and the law nations would seem to be the most likely candidate. Second, many of the plans and drafts at the Constitutional Convention on which the final Constitution was based provided for federal jurisdiction over cases arising under the law of nations. Third, during the ratification debates, a number of people read Article III as extending to cases arising under the law of nations. John Jay praised the breadth of Article III in Federalist No. 3, arguing that “[u]nder the national government, treaties and articles of treaties, as well as the law of nations, will always be expounded in one sense,” while William Grayson criticized it at the Virginia ratifying convention for covering “all cases depending on the law of nations.”

Finally, interpreting Article III’s “arising under” grant to include the law of nations will not open the floodgates to suits under international law. Article III is not self-executing. Congress must pass a statute to give lower federal courts jurisdiction. The general federal question statute is narrower than the Article III grant, and Sosa suggested in a footnote that the statutory grant should not be interpreted reach claims arising under the law of nations.

But interpreting Article III’s “arising under” grant to include the law of nations would allow ATS to cover cases between two aliens that involve torts in violation of the law of nations—cases like Marbois’s in the eighteenth century, and cases like Filartiga and Jesner today. That is plainly what Congress intended.