Volume 65, Number 6 – March 2016

Articles

In Defense of the Equal Sovereignty Principle
Thomas B. Colby
PDF

The Supreme Court of the United States based its landmark decision in Shelby County v. Holder on the proposition that the Constitution contains “a fundamental principle of equal sovereignty among the States.” For the central holding of a blockbuster constitutional case, that assertion was surprisingly unsupported. The Court simply declared it to be true and made little effort to substantiate it. That naked conclusion prompted savage criticism not only from the left, but also from the right. The consensus critical reaction was epitomized by Judge Richard Posner’s remark that “the court’s invocation of ‘equal sovereignty’ is an indispensable prop of the decision. But . . . there is no doctrine of equal sovereignty. The opinion rests on air.” Critics also worried that, because there are countless federal laws that can be said to treat the states disparately, the Court’s brand-new equal sovereignty principle is, as Justice Ginsburg put it in her strident dissent, “capable of much mischief.” This Article contends that the critics of Shelby County are only half right—and that the Shelby County majority, despite its cursory analysis, is half right too. The critics are correct that the Court seemingly pulled the equal sovereignty principle out of thin air—that it played a little too fast and loose with precedent and failed to wrestle adequately with constitutional text, structure, and history. Nonetheless, this Article concludes—after performing the thorough examination of the traditional sources of constitutional law that was missing from the ipse dixit of Shelby County—that there is indeed a deep principle of equal sovereignty that runs through the Constitution. In James Madison’s words, the Constitution contemplates “a government of a federal nature, consisting of many coequal sovereigns.” Properly understood, however, the equal sovereignty principle is not a guarantee of state equality in all respects. It guarantees only equal sovereignty—that is, equal capacity for self-government—which makes it more fundamental, but also less expansive, than critics have feared.

Bureaucratic Administration: Experimentation and Immigration Law
Joseph Landau
PDF

In debates about executive branch authority and policy innovation, scholars have focused on two overarching relationships—horizontal tension between the president and Congress and the vertical interplay of federal and state authority. However, these debates have overlooked the role of frontline bureaucratic officials in advancing the laws they administer. This Article looks to immigration law—in which lower-level federal officers exercise discretion delegated down throughout federal agencies—to identify how bottom-up agency influences can inform categorical, across-the-board executive branch policy.

In this Article, I argue that decisions by frontline officers can and should be better harnessed to pair local laboratories of executive experimentation with opportunities for interchange throughout various levels of the administrative bureaucracy. Notwithstanding the predominant (and often accurate) view that on-the-ground enforcers resist innovation, many frontline immigration officers have demonstrated willingness, and an ability, to put their discretion toward creative ends.

By exploring the interplay between bottom-up and top-down policymaking, this Article provides a useful counterweight to a number of conventional theories regarding presidential administration, offering insights into debates about agency design and administrative constitutionalism. The relationship between on-the-ground enforcement and across-the-board executive action can also lend greater legitimacy to the Obama administration’s deferred action programs—both in the federal courts and the court of public opinion.

Notes

Of Truth, Pragmatism, and Sour Grapes: The Second Circuit’s Decision in SEC v. Citigroup Global Markets
Theodore D. Edwards
PDF

In his 2001 letter to Berkshire Hathaway shareholders Warren Buffett stated, “[Y]ou only find out who is swimming naked when the tide goes out.” In the fall of 2008, the tide went out when Lehman Brothers collapsed and credit markets froze. Left exposed were the shoddy—and sometimes fraudulent—practices of participants in the theretofore esoteric industry of structured finance. Since then, the Securities and Exchange Commission (SEC) has extracted billions of dollars in settlements from the industry. A frequent enforcement tool of the SEC has been the consent judgment, a hybrid settlement that contains injunctive elements.

This Note examines the role of the SEC in relation to Article III courts, specifically in the context of consent judgments. Drawing on the rich history of equitable practice and the doctrine of the separation of powers, this Note argues that SEC v. Citigroup Global Markets was wrongly decided in that it excessively curtails the role of district courts in determining the propriety of equitable relief. The opinion not only contradicts longstanding precedent, but also goes too far in ceding a core function of the judiciary to the SEC. This Note shows that, as a result, the decision serves to undermine fundamental goals of the securities laws.

Ghana and the Ideal of the Citizen-Shareholder: A Corporate-Law Response to the Resource Curse
James G. Simpson
PDF

This Note assesses Ghana’s legal regime for managing revenues from its newfound petroleum reserves as a means of combatting the resource curse—the well-documented political and economic phenomenon wherein resource-rich countries experience greater levels of corruption and poor governance and weaker democracy and economic growth than resource-poor nations. The Ghanaian regime fails to provide systemic protections against the resource curse by (1) supplying insufficient economic development and poverty relief, (2) lacking incentives and mechanisms for overseeing and holding accountable the powers responsible for managing petroleum revenues, and (3) providing insufficient channels for spreading the economic benefits of extraction beyond the petroleum sector. This Note undertakes a comparative study of a representative group of petroleum revenue-management regimes—those of Alaska, Norway, Indonesia, and Trinidad and Tobago—in search of an effective regime that might be transplanted to Ghana. Finding that none of these regimes are adequately applicable to Ghana’s economic, social, or political context, this Note goes on to propose a novel regime for petroleum revenue management in Ghana, drawing on principles of U.S. corporate law.

Volume 65, Number 6 – March 2016

Articles

In Defense of the Equal Sovereignty Principle
Thomas B. Colby
PDF

The Supreme Court of the United States based its landmark decision in Shelby County v. Holder on the proposition that the Constitution contains “a fundamental principle of equal sovereignty among the States.” For the central holding of a blockbuster constitutional case, that assertion was surprisingly unsupported. The Court simply declared it to be true and made little effort to substantiate it. That naked conclusion prompted savage criticism not only from the left, but also from the right. The consensus critical reaction was epitomized by Judge Richard Posner’s remark that “the court’s invocation of ‘equal sovereignty’ is an indispensable prop of the decision. But . . . there is no doctrine of equal sovereignty. The opinion rests on air.” Critics also worried that, because there are countless federal laws that can be said to treat the states disparately, the Court’s brand-new equal sovereignty principle is, as Justice Ginsburg put it in her strident dissent, “capable of much mischief.” This Article contends that the critics of Shelby County are only half right—and that the Shelby County majority, despite its cursory analysis, is half right too. The critics are correct that the Court seemingly pulled the equal sovereignty principle out of thin air—that it played a little too fast and loose with precedent and failed to wrestle adequately with constitutional text, structure, and history. Nonetheless, this Article concludes—after performing the thorough examination of the traditional sources of constitutional law that was missing from the ipse dixit of Shelby County—that there is indeed a deep principle of equal sovereignty that runs through the Constitution. In James Madison’s words, the Constitution contemplates “a government of a federal nature, consisting of many coequal sovereigns.” Properly understood, however, the equal sovereignty principle is not a guarantee of state equality in all respects. It guarantees only equal sovereignty—that is, equal capacity for self-government—which makes it more fundamental, but also less expansive, than critics have feared.

Bureaucratic Administration: Experimentation and Immigration Law
Joseph Landau
PDF

In debates about executive branch authority and policy innovation, scholars have focused on two overarching relationships—horizontal tension between the president and Congress and the vertical interplay of federal and state authority. However, these debates have overlooked the role of frontline bureaucratic officials in advancing the laws they administer. This Article looks to immigration law—in which lower-level federal officers exercise discretion delegated down throughout federal agencies—to identify how bottom-up agency influences can inform categorical, across-the-board executive branch policy.

In this Article, I argue that decisions by frontline officers can and should be better harnessed to pair local laboratories of executive experimentation with opportunities for interchange throughout various levels of the administrative bureaucracy. Notwithstanding the predominant (and often accurate) view that on-the-ground enforcers resist innovation, many frontline immigration officers have demonstrated willingness, and an ability, to put their discretion toward creative ends.

By exploring the interplay between bottom-up and top-down policymaking, this Article provides a useful counterweight to a number of conventional theories regarding presidential administration, offering insights into debates about agency design and administrative constitutionalism. The relationship between on-the-ground enforcement and across-the-board executive action can also lend greater legitimacy to the Obama administration’s deferred action programs—both in the federal courts and the court of public opinion.

Notes

Of Truth, Pragmatism, and Sour Grapes: The Second Circuit’s Decision in SEC v. Citigroup Global Markets
Theodore D. Edwards
PDF

In his 2001 letter to Berkshire Hathaway shareholders Warren Buffett stated, “[Y]ou only find out who is swimming naked when the tide goes out.” In the fall of 2008, the tide went out when Lehman Brothers collapsed and credit markets froze. Left exposed were the shoddy—and sometimes fraudulent—practices of participants in the theretofore esoteric industry of structured finance. Since then, the Securities and Exchange Commission (SEC) has extracted billions of dollars in settlements from the industry. A frequent enforcement tool of the SEC has been the consent judgment, a hybrid settlement that contains injunctive elements.

This Note examines the role of the SEC in relation to Article III courts, specifically in the context of consent judgments. Drawing on the rich history of equitable practice and the doctrine of the separation of powers, this Note argues that SEC v. Citigroup Global Markets was wrongly decided in that it excessively curtails the role of district courts in determining the propriety of equitable relief. The opinion not only contradicts longstanding precedent, but also goes too far in ceding a core function of the judiciary to the SEC. This Note shows that, as a result, the decision serves to undermine fundamental goals of the securities laws.

Ghana and the Ideal of the Citizen-Shareholder: A Corporate-Law Response to the Resource Curse
James G. Simpson
PDF

This Note assesses Ghana’s legal regime for managing revenues from its newfound petroleum reserves as a means of combatting the resource curse—the well-documented political and economic phenomenon wherein resource-rich countries experience greater levels of corruption and poor governance and weaker democracy and economic growth than resource-poor nations. The Ghanaian regime fails to provide systemic protections against the resource curse by (1) supplying insufficient economic development and poverty relief, (2) lacking incentives and mechanisms for overseeing and holding accountable the powers responsible for managing petroleum revenues, and (3) providing insufficient channels for spreading the economic benefits of extraction beyond the petroleum sector. This Note undertakes a comparative study of a representative group of petroleum revenue-management regimes—those of Alaska, Norway, Indonesia, and Trinidad and Tobago—in search of an effective regime that might be transplanted to Ghana. Finding that none of these regimes are adequately applicable to Ghana’s economic, social, or political context, this Note goes on to propose a novel regime for petroleum revenue management in Ghana, drawing on principles of U.S. corporate law.