Category: Articles

Taxation and the Competitiveness of Sovereign Wealth Funds: Do Taxes Encourage Sovereign Wealth Funds to Invest in the United States? – Article by Michael S. Knoll

From Volume 82, Number 4 (May 2009)
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Sovereign wealth funds (“SWFs”) have been making headlines. In 2008, SWFs made major investments in Morgan Stanley, Citigroup, Blackstone, Carlyle, and Merrill Lynch, most of which sought large infusions of cash in the wake of the credit crunch. SWFs have also made substantial investments outside of financial services, but those investments have generally not been as large or as visible.

Investments by SWFs are highly controversial. Press reports talk of the United States selling off its assets and mortgaging its future. Less colorfully, critics argue that foreign governments are expanding their influence over U.S. economic and foreign policy. Commentators and policymakers are concerned that foreign governments might use their SWFs to advance their own national interests to the detriment of those of the United States. Among the potential actions most frequently mentioned are transfers of technology and explicit or implicit threats to divest if the United States pursues policies at odds with the investor’s interests. There is another side. Proponents emphasize the economic benefits of reducing the cost of capital by attracting foreign capital. Still other commentators point to various social and economic benefits from the greater economic integration that comes when foreign investors, including foreign governments, invest in the United States.

 

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The Emergent Logic of Health Care – Article by M. Gregg Bloche

From Volume 82, Number 3 (March 2009)
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The American health care system is on a glide path toward ruin. Medical spending is rising at an unsustainable rate: it is on track to reach 30 percent of gross domestic product (“GDP”) a quarter century from now and half of GDP within seventy-five years. The number of Americans without health insurance is approaching fifty million, and surging unemployment could push this figure much higher. Most of the care that patients receive is of unproven value, and up to one hundred thousand Americans die prematurely each year from medical mistakes. So it is for good reason that health reform has returned to the top of the nation’s political agenda. A decade and a half after the collapse of President Clinton’s health reform plan, Americans are again pressing for relief from soaring costs and telling pollsters and politicians that they want medical care for all. The main difference, this time, is that the problems have grown much worse.

 

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The Failure of Private Equity – Article by Steven M. Davidoff

From Volume 82, Number 3 (March 2009)
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The fall of 2007 heralded a tumultuous time in the U.S. capital markets. The implosion of the subprime mortgage market disrupted the economy and caused the credit markets to dry up and become increasingly illiquid. Almost overnight, credit became both more expensive and more difficult to obtain as financial institutions became unwilling to extend financing. The credit securitization market was particularly affected, leaving many financial institutions with pending and existing loans that they could only securitize and sell, if at all, at a large loss. Faced with these potentially large losses, financial institutions began to balk at funding preagreed private equity acquisitions. This sudden, unexpected turn of events and the general revaluation and decline in stock prices it wrought led private equity firms to reassess their pending acquisitions—acquisitions which had been agreed to in more stable times. The private equity firms’ reevaluations were often unkind. Throughout the fall and into 2008, private equity firms repeatedly attempted to terminate their contractual obligations to acquire companies.

 

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In Memoriam: A Tribute to Professor Charles H. Whitebread – Article by Rich Chacon, Erwin Chemerinsky, James B. Curtis, Susan Estrich, Michael J. Graetz, Louise LaMothe & Michael Sims

From Volume 82, Number 2 (January 2009)
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It is an honor to write about my friend Charles Whitebread. To me, Charlie was always larger than life. Living and working here in Los Angeles, I have had the opportunity to work with many people whose image has preceded them: professional athletes, musicians, actors . . . Charlie. However, once I got to know the person, invariably they could not live up to the image that preceded them—they were just people—with the exception of Charlie.

 

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Beyond the Prisoners’ Dilemma: Coordination, Game Theory, and Law – Article by Richard H. McAdams

From Volume 82, Number 2 (January 2009)
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In reviewing a game theory text almost twenty years ago, Ian Ayres complained that “countless” law review articles “rearticulate the Prisoner’s Dilemma, but few even proceed” to the simplest of other games. Several years later, in what is still the most significant book treatment of game theory for law, Douglas Baird, Robert Gertner, and Randal Picker began by lamenting how legal scholars had neglected game theory up to that point “other than to invoke a simple game such as the prisoner’s dilemma as a metaphor for a collective action problem.” All of these scholars asserted the great value of game theory to legal analysis and the hope that it would transform legal theory as it has transformed economic theory.

 

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The Extraterritorial Constitution After Boumediene v. Bush – Article by Gerald L. Neuman

From Volume 82, Number 2 (January 2009)
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The U.S. Supreme Court’s recent decision in Boumediene v. Bush elaborates a “functional approach” to the selective application of constitutional limitations to U.S. government action outside U.S. sovereign territory. This functional approach provides the best fit, both descriptively and normatively, to the Court’s modern case law. The decision repudiates the stance of the plurality in United States v. Verdugo-Urquidez, which sought to deny all constitutional rights to foreign nationals involuntarily subjected to U.S. action abroad.

Important ambiguities remain in the articulation of the functional approach. One major question is whether and when foreign nationals who are not in U.S. custody (unlike the Boumediene petitioners) are also potentially eligible for constitutional protection. Another concerns how coarsely or finely the categories of foreign locations are drawn when the functional analysis is applied.

 

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Is the Family at Odds with Equality? The Legal Implications of Equality for Children – Article by Anne L. Alstott

From Volume 82, Number 1 (November 2008)
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This Article revisits the liberal dilemma and suggests that one plausible version of liberalism can, at least in principle, combine wide diversity and freedom in family life with equal opportunity for children. But this conclusion arrives with two caveats. First, the theoretical compatibility of the family and equality of opportunity rests on three interpretations which remain contested even within liberal theory: the scope of parental autonomy, the meaning of equality of opportunity, and the functions ascribed to the liberal family. Second, the legal changes necessary to reconcile the family with equality would face practical and political difficulties. An egalitarian regime would require new redistributive programs and tax increases to fund them. A commitment to children’s equality would also require revision of constitutional and state law doctrines that prize parental authority and family economic self-sufficiency and disclaim positive obligations of the state toward children.

 

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How Courts Can Protect State Autonomy from Federal Administrative Encroachment – Article by Scott A. Keller

From Volume 82, Number 1 (November 2008)
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Unlike the federalism cases typical of the Rehnquist Court, modern federalism cases will not involve interpretation of the Commerce Clause or the Tenth Amendment, particularly after Gonzales v. Raich refused to expand the Commerce Clause to protect state autonomy. Instead, modern federalism cases will involve basic statutory construction. The Supreme Court has become increasingly interested in cases dealing with the intersection of federalism and statutory construction, deciding two such cases during the October 2007 Term and granting certiorari in two other cases for the 2008 Term.

Federalism concerns in statutory construction arise most frequently in administrative law, as modern federal agencies produce an enormous amount of laws. As a result, the hard questions about federalism now appear in administrative law cases. Courts and commentators are becoming wary of the ability of federal agencies to encroach on state autonomy, given the underenforced constitutional norms of federalism and the nondelegation doctrine.

 

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