Category: Administrative Law

1

Rurality and “Government Retreat”

The New York Times ran a story yesterday, dateline Roseburg, Oregon (population 21,000), headlined “Where Anti-Tax Fervor Means All Government Will Cease.”  This is not exactly breaking “news.”  This story has been around in some form, with varying degrees of urgency, for about five years.  See earlier installments here, here and here.  The gist of it is that many rural counties in the West which rely on federal funding streams (e.g., PILT, Secure Rural Schools and Community Self Determination Act monies, covered by stories herehere and here), have seen those monies taper off and in some cases dry up.

I want to be clear before going further that the federal funding streams these counties rely on are not giveaways, at least by my assessment.  They are intended to replace, in some small measure, tax dollars the counties cannot generate because property taxes cannot be levied on federal lands, which comprise vast portions of the West.  (The existence of such extensive public lands is also associated with other controversies, of course; read more here and here).  The existence of public lands may also have an impact on other ways local governments might choose to plump up their public coffers (read more here and here), and the existence of these lands limits the ways in which locals can earn a living, as in the timber industry or in ranching.

As a result of these funding cuts, many nonmetropolitan counties–those least likely to have other funding sources (taxes on robust business enterprises, for example)–are  cutting critical services.  Most news reports to date have focused on cuts to law enforcement, which has cultivated some “informal justice”/citizens “militias” type activity.  But this NYTimes story focuses on cuts to other services.  Highlighted in the story and illustrated by a photo is the fact that Douglas County–at 5,134 square miles, more than 2.5 times the size of Delaware and nearly as large as Connecticut–is about to close the last of the 11 library branches it previously boasted.  The one in Roseburg, the county seat, will be the last to go.  Kirk Johnson, NY Times reporter based out west, reports that Douglas County residents recently voted down a ballot measure that “would have added about $6/month to the tax bill on a median-priced home,” a measure that would have saved the libraries from crisis and closure.

I could digress here into a long discussion about how critically important libraries are for all sorts of reasons, not least these days that–in my suburb and many other California locales–they accommodate many homeless people during the day, providing them a lifeline (the Internet) to identifying and getting services.  I know that my family and I use our neighborhood library on a weekly basis, even though I have ready access to a fabulous academic library.  A 2013 story about the particular benefits of libraries in rural communities is here, and broadband is a big part of the story.   A more recent library story out of rural northern California about the power of books in children’s lives is here.

But Johnson makes the point that libraries are not the only thing on the chopping block in Douglas County.  The failed library initiative is like many others in Douglas and neighboring counties (e.g., Curry and Josephine) that voters have rejected in the last decade.  Another very sobering illustration of the southwest Oregon situation is the fact that Curry County has only one full-time employee in the elections division of its clerk’s office and therefore may have difficulty holding an election this fall.  (I’ve documented here and here similar phenomena in my home county in Arkansas, another place heavily reliant on PILT because of the presence of public lands set aside as Ozark National Forest and Buffalo National River).

There is so much I could say about this particular rural trend to shrink government, sometimes to an extreme degree.  But I just want to make a few points in regard to theoretical legal geography regarding how spatiality and law are co-constitutive.   I have argued as a related matter that rural society and rural spatiality are co-constituting, as reflected in a less robust presence of law, legal actors, and other institutions and agents of the state in rural places.  I framed it as “space tames law tames space” in a frustrating feedback loop:  it is expensive for the state to do its work when the area to be governed is vast and when residents emotionally and intellectually resist vesting power (including via tax dollars)  in the state.  I would characterize this feedback loop as disabling, though I understand some rural residents of a more libertarian bent would see it as enabling–enabling the individual, that is, fostering self-sufficiency.

My argument about the relative “lawlessness” of rural and remote places has not been uncontroversial.  Lots of folks see small towns as the epitome of order and law-abiding-ness and have pushed back against my argument.  Yet it seems that my point is very well illustrated by this detail from Johnson’s article, which he offers as an illustration of “government retreat”:

It looks like the house on Hubbard Creek Road in Curry County, where owners went for more than 10 years without paying any property taxes at all because the county assessor’s office couldn’t field enough workers to go out and inspect. The house, nestled in the woods with a tidy blue roof and skylights, dodged more than $8,500 in property taxes that would have gone to support the schools, fire district and sheriff, because government had gotten too small to even ask. So things fall even further, with cuts to agencies that actually bring in revenue prompting further cuts down the line.

So there you have it:  a community envisages itself as not needing law, regulation and the state, so it underfunds government to such an extent that the state can no longer support itself and perform (m)any government functions.  This, in turn, further fuels the imaginary–and reality–of an anemic and unhelpful state.  The state is thus discredited, thereby further undermining the state’s ability to justify the raising of revenue or to do, well, much of anything.

Which came first, the chicken or the egg?  the state’s inability to be effective?  or the perception that it would necessarily be ineffective and a consequent decision not to fund it, thereby rendering it (more?) ineffective, unhelpful, and inefficient?

As for when a community goes too far in its retreat from public institutions…well, the defeat of the library tax crossed that line for some.  Johnson quotes a Douglas County resident, 54-year-old Terry Bean, a construction manager who supported the library tax, though he had opposed other local taxes.  In explaining his position he invoked another concept associated with rural livelihoods:  community.

There is conservative, said Bean, flicking a cigarette butt into the bed of his pickup truck, and then there is community. And people got them confused.

The library, he said, was something a person could use — for computers, if not for books — even if that person didn’t have a dime, and he still respects that.

And that, in turn, brings me back to my earlier point:  doesn’t everyone reap communitarian benefits from the public library?  even the richest of folks who may never darken its doors.

Post-Neoliberal Higher Education Policy

The Obama Administration made at least two major contributions to higher education policy. It cracked down on some for-profit colleges, taking on a consumer protection role largely missing from the Bush years. Donald Trump is unlikely to continue that initiative, and may roll it back.

Obama also encouraged income-based repayment (IBR) of student loans. It appears that “the repayment plan proposed by candidate Trump is not too far from the current repayment plans already in existence”–but few know exactly how the policy will play out once a new set of think tankers and lobbyists take over the Department of Education (DOE).

I surveyed higher education finance policy in 2015, in a piece for the Atlantic. I felt at the time that the Sanders plan was by far the best, and that Clinton’s plan could lead incrementally to a better higher ed landscape. However, over the summer I co-authored a longer article on the foundations of higher ed policy with Luke Herrine, Legal Coordinator of the Debt Collective. Herrine does both scholarly and advocacy work. In a project organizing for-profit college students to obtain debt discharges, he saw some of the worst bureaucratic failures of the current DOE.

The same concerns I’ve expressed about health policy also dog education policy. Extreme complexity and baroque targeting of aid make it hard to sustain political support. Just as private insurers have done as much to undermine as to implement the ACA, the servicers at the core of DOE’s student loan management have serially failed the students they are supposed to help.
Read More

0

UCLA Law Review Vol. 63, Issue 5

Volume 63, Issue 5 (June 2016)
Articles

How Governments Pay: Lawsuits, Budgets, and Police Reform Joanna C. Schwartz 1144
Second-Order Participation in Administrative Law Miriam Seifter 1300
The Freedom of Speech and Bad Purposes Eugene Volokh 1366

 

Comments

Evolving Jurisdiction Under the Federal Power Act: Promoting Clean Energy Policy Giovanni S. Saarman González 1422
Election Speech and Collateral Censorship at the Slightest Whiff of Legal Trouble Samuel S. Sadeghi 1472
0

UCLA Law Review Vol. 63, Issue 1

Volume 63, Issue 1 (January 2016)
Articles

Navigating Paroline‘s Wake Isra Bhatty 2
Regional Federal Administration Dave Owen 58
Exhausting Patents Wentong Zheng 122

 

Comments

Post-Deportation Remedy and Windsor‘s Promise Kate Shoemaker 168
Forget Congress: Reforming Campaign Finance Through Mutually Assured Destruction Nick Warshaw 208
0

FOIA Requests for Tax Returns

Donald Trump’s refusal thus far to release his tax returns raises an interesting issue.  Tax returns are not subject to the Freedom of Information Act (FOIA). I can’t just ask the IRS to give me his returns and get them. While this makes sense as a general matter given the privacy concerns involved, I wonder whether the custom of having high public officials release their returns should be codified by making their returns subject to FOIA.

For an ordinary citizen, tax returns should be private unless they are required for a criminal investigation or are subject to a valid subpoena in a civil case.  Presidential candidates (at least the two major party nominees) have voluntarily released their returns for a long time, though I don’t know for how long.  It seems to me that the public’s right to know in this instance overrides a candidate’s privacy interest. We might find out, for instance, that Trump did not pay any federal income tax last year.  I’d like to know if he did, and I think that I have a right to know.  Political pressure may compel him to act, but should that be the only way of obtaining that information?

0

The 5 Things Every Privacy Lawyer Needs to Know about the FTC: An Interview with Chris Hoofnagle

The Federal Trade Commission (FTC) has become the leading federal agency to regulate privacy and data security. The scope of its power is vast – it covers the majority of commercial activity – and it has been enforcing these issues for decades. An FTC civil investigative demand (CID) will send shivers down the spine of even the largest of companies, as the FTC requires a 20-year period of assessments to settle the score.

To many, the FTC remains opaque and somewhat enigmatic. The reason, ironically, might not be because there is too little information about the FTC but because there is so much. The FTC has been around for 100 years!

In a landmark new book, Professor Chris Hoofnagle of Berkeley Law School synthesizes an enormous volume of information about the FTC and sheds tremendous light on the FTC’s privacy activities. His book is called Federal Trade Commission Privacy Law and Policy (Cambridge University Press, Feb. 2016).

This is a book that all privacy and cybersecurity lawyers should have on their shelves. The book is the most comprehensive scholarly discussion of the FTC’s activities in these areas, and it also delves deep in the FTC’s history and activities in other areas to provide much-needed context to understand how it functions and reasons in privacy and security cases.

Read More

1

The Ultimate Unifying Approach to Complying with All Laws and Regulations

Professor Woodrow Hartzog and I have just published our new article, The Ultimate Unifying Approach to Complying with All Laws and Regulations19 Green Bag 2d 223 (2016)  Our article took years of research and analysis, intensive writing, countless drafts, and endless laboring over every word. But we hope we achieved a monumental breakthrough in the law.  Here’s the abstract:

There are countless laws and regulations that must be complied with, and the task of figuring out what to do to satisfy all of them seems nearly impossible. In this article, Professors Daniel Solove and Woodrow Hartzog develop a unified approach to doing so. This approach (patent pending) was developed over the course of several decades of extensive analysis of every relevant law and regulation.

 

0

University of Toronto Law Journal – Volume 66, Number 1, Winter 2016

utlj-logo

University of Toronto Law Journal – Volume 66, Number 1, Winter 2016
Public Law for the Twenty-First Century – special symposium issue

ARTICLES
Introduction: Public law for the twenty-first century
David Dyzenhaus

Polycentricity and queue jumping in public law remedies: A two-track response
Kent Roach

Public law and ordinary legal method: Revisiting Dicey’s approach to droit administratif
Mark D Walters

The lure and the limits of dialogue
Aileen Kavanagh

Adjudicating constitutional rights in administrative law
Tom Hickman

Full text of the University of Toronto Law Journal is available online at UTLJ Online, Project Muse, JSTOR, HeinOnline, Westlaw, Westlaw-CARSWELL, LexisNexis and Quicklaw.

0

B Corps for Bankers

Claire Hill and Richard Painter’s new Better Bankers, Better Banks aims to find a way forward by looking backward – and by casting a few sidelong glances as well. It is valuable for what it has to say about the view in all directions.

Begin from where we are – the point from which Hill and Painter would like to see forward movement. Where we are now is a world in which, even seven years out from the crash of ’08, banking scandal is near boring in its ubiquity. From Libor in 2012 to Euribor, forex, commodity and precious metal cornering thereafter, the story of financial markets of late seems an unending parade of horribles.

How do we get out of this seeming cesspool? Here is where Hill and Painter look backward and sideways.

First let’s look back. Time was when ‘bankers’ – Hill and Painter employ the term broadly to cover all folk who hold ‘other folks’ money’ – invested not only our money, but their money too. By organizing as general partnerships whose partners were jointly and severally liable for losses, they kept, as the current idiom has it, ‘skin in the game.’ This of course aligned their interests with client and institutional interests – to some extent, anyway. (Names like ‘Jay Gould’ should remind us that ‘some extent’ wasn’t the ‘full extent.’) And so there were limits on how much by way of other folks’ money the bankers were likely to fritter away.

Now let’s look sideways. There appears to be growing consensus, in the face of such scandals as those just rehearsed, that our regulatory and law enforcement regimes’ penchant for penalizing banks rather than bankers just isn’t cutting it. Compared to the gains to be had from wrongful behavior unlikely to be caught, even five or twelve billion dollar settlements between banks and their regulators are chump change. Oughtn’t we, then, focus our efforts upon the human agents through whom the banks act? After all, five billion – or five years in jail – are more likely to pinch if you’re human.

Hill and Painter like what they see in both directions. They find limitations, however, in how effective the enforcement of finance-regulatory provisions can be. These, they believe, are just too easy to game – a fact that might partly account for regulators’ going after the banks rather than the bankers in the first place. Why not, then, take yet another sidelong glance in another direction – that of contemporary moves to simulate better regulation through private ordering? Are there not means, for example, of appealing to socially responsible investors by committing to operate as a socially responsible business – e.g., as a ‘B Corp’ or ‘Benefit Corp’?

Indeed there are, and though they do not discuss these new business forms, Hill and Painter valuably adapt, in effect, the idea behind them to financial firms. Herewith the authors’ novel suggestion to introduce a practice of what they call ‘Covenant Banking.’ The idea is for financial firms whose owners or managers are comfortable with the idea to undertake ‘skin in the game’ commitments on the part of their managers. Managers would voluntarily assume some liability for losses, thereby partly replicating the ancien regime of pre-corporate partnership banking. Investors could then choose between what kinds of institutions through which they invest – the more risk-averse perhaps working through covenant banks, the more risk-cavalier working through today’s more familiar casinoish firms.

It would be hard not to like this proposal. What’s not to like? Like recent proposals for Wall Street voluntarily to maintain ‘naughty lists‘ of bankers who have gotten themselves into trouble, it imposes nothing, yet offers something – the prospect of ‘better bankers,’ hence ‘better banks,’ for at least some investors. It simply expands the field of choice, and who in these times doesn’t like choice?

If I have any reservations about Hill and Painter’s proposal or their brief in its favor, they have to do with the prospect of some people’s possibly taking the authors to claim or to promise more than they actually intend.

To begin with, we should note that wrongs such as those alleged in connection with Libor, Euribor, forex, and commodity and precious metal cornering are not wrongs of excessive risk-taking. They are wrongs of sheer fraud and manipulation. It isn’t the case that ‘skin in the game’ on the part of the relevant fraudsters in these cases ‘would’ have helped; the ‘skin’ seems to have been at the core of the ‘game’ from the start, and was indeed part of the problem – the fraudsters profited precisely by illicitly betting their own money on what they controlled. Hill and Painter, then, should not be taken to be targeting this form of market abuse through their proposal.

A distinct but related point has to do with the lead-up, not to 2012 and after, but to 2008. It is still common to hear that year’s cataclysm blamed upon venal behavior or ‘excessive risk-taking’ by ‘bankers.’ And such behavior clearly occurred – it always does. But a very strong case can be made – I think I and others have made it – that the principal causes of 2008 were more radical than mere vice or recklessness on the part of some bankers. They are endemic to capitalism itself absent serious and sustained effort on the part of the polity to distribute capital’s returns – or capital itself – far more equitably than we’d managed before 1929 or between 1970 and 2008. ‘Better bankers’ would certainly be better than worse bankers; better still would be better distributions of that with which bankers bank.

Finally, there is a danger in underselling what proper law enforcement, adequately funded and staffed, can do where finance-regulation is concerned. When Wall Street contributes more to political campaigns than most other industries, when DOJ officials openly admit to having feared to prosecute bankers for fear of rattling markets, and when regulators like the CFTC and the SEC are chronically understaffed and underfunded, we should be skeptical of suggestions that ‘gameability’ of the rules is the sole – or even principal – reason for old fashioned law enforcement’s not having eradicated rulebreaking by financiers. Indeed, as Hill and Painter themselves note, a rule change at the NYSE in 1970 played a critical role in the move from partnership to incorporated form among Wall Street investment banks. If that is so, could a legal re-imposition of some variant of the old rule not itself make for ‘better bankers’?

None of these caveats should be taken as more than what they are – mere caveats. There is much, much to be learned from a reading of Hill and Painter, and much is quite plausibly promised by their Covenant Banking. And since, as before noted, their proposal is made in effect to the banks rather than the polity, it seems to be all upside, no down. Let, then, those bankers intrigued by the Hill/Painter proposal give it a go. One might even imagine some funds offering their services in A and B flavors, so to speak – in Covenant and Noncovenant forms. In such case consistently better performance by one kind over the other might in future foment a stampede to the winning kind, and with it a privately worked transformation.

From Territorial to Functional Governance

Susan Crawford is one of the leading global thinkers on digital infrastructure. Her brilliant book Captive Audience spearheaded a national debate on net neutrality. She helped convince the Federal Communications Commission to better regulate big internet service providers. And her latest intervention–on Uber–is a must-read. Crawford worries that Uber will rapidly monopolize urban ride services. It’s repeatedly tried to avoid regulation and taxes. And while it may offer a good deal to drivers and riders now, there is no guarantee it will in the future.

A noted critic of the sharing economy, Tom Slee, has backed up Crawford’s concerns, from an international perspective. “For a smallish city in Canada, what happens to accountability when faced with a massive American company with little interest in Canadian employment law or Canadian traditions?”, Slee asks, raising a very deep point about the nature of governance. What happens to a city when its government’s responsibilities are slowly disaggregated, functionally? Some citizens may want to see the effective governance of paid rides via Uber, of spare rooms via AirBnB, and so on. A full privatization of city governance awaits, from water to sidewalks.

If you’re concerned about that, you may find my recent piece on the sharing economy of interest. We’ll also be discussing this and similar issues at Northeastern’s conference “Tackling the Urban Core Puzzle.” Transitions from territorial to functional governance will be critical topics of legal scholarship in the coming decade.