Crises and Tax
Andrew Blair-Stanek

How can law best mitigate harm from crises like storms, epidemics, and financial meltdowns? This Article uses the law and economics framework of property rules and liability rules to analyze crisis responses across multiple areas of law, focusing particularly on the ways the Internal Revenue Service (IRS) battled the 2008–09 financial crisis.

Remarkably, the IRS’s responses to that crisis cost more than Congress’s higher-profile bank bailouts. Despite their costs, many of the IRS’s responses were underinclusive, causing preventable layoffs and foreclosures. This Article explains these failures and demonstrates that the optimal response to crises is to shift from harsh property rules to compensatory liability rules, temporarily. Arranging such a shift in advance further mitigates harm when crises arrive.

This analysis also provides new insights for the broader literature on property rules and liability rules. For example, arranging in advance for temporary moves to liability rules during crises can avoid windfalls, allow speedier relief, and encourage flexible private contracts. These lessons have practical applications in areas as far afield as how constitutional law and patent law respond to epidemics.


Competency, Counsel, and Criminal Defendants’ Inability To Participate
Sara R. Faber

Built into the foundation of the U.S. criminal justice system is the idea that defendants must be able to participate in the trials against them. The right not to stand trial unless competent is premised on the idea that it is fundamentally unfair for defendants to stand trial unless they are able to participate in their trial in at least some capacity. Likewise, the right to counsel is based on a conception of defendants controlling at least some decisions in their case. These rights express an ideal that is foundational to our criminal system: defendant participation must be protected.

Ultimately, though, the criminal system does not do a sufficient job of protecting that ideal throughout the criminal process. Instead, the criminal system is punctuated with procedural rules and constitutional standards that actually erode defendants’ ability to participate in the trials that affect their lives. In accordance with the ideal evident in the competency standard and the right to counsel, we should build a criminal justice system that allows for defendants to participate in meaningful and impactful ways.

This Note first seeks out the doctrines that reveal the underlying ideal of defendant participation, and then examines the procedural rules and constitutional standards that prevent the actualization of that ideal. Ultimately, it concludes that these rules and standards must be changed to preserve the ideal of defendant participation throughout the criminal process.

It has long been accepted that a person whose mental condition is such that he lacks the capacity to understand the nature and object of the proceedings against him, to consult with counsel, and to assist in preparing his defense may not be subjected to a trial.

The right to defend is given directly to the accused; for it is he who suffers the consequences if the defense fails. The counsel provision supplements this design. It speaks of the assistance of counsel, and an assistant, however expert, is still an assistant.

The True Lender Doctrine: Function over Form as a Reasonable Constraint on the Exportation of Interest Rates
John Hannon

The exportation doctrine permits national and state banks to export interest rates that are legal in one state where they operate to any other state, thereby shielding the banks from liability resulting from state usury claims. The doctrine has expanded over the last forty years to permit state and national banks to preempt a variety of state consumer-financial-protection laws. The doctrine’s high-water mark is the emergence of the “rent-a-charter” arrangement, a scheme in which a nonbank lender uses a bank as a mere conduit to originate loans that are not subject to state usury laws. This Note argues that, at minimum, nonbank entities should not be allowed the benefit of the doctrine by temporarily occupying banks for the sole purpose of originating loans that are immune from state financial consumer protection laws.

A series of courts have recently begun applying a more exacting standard to these arrangements. Under the “true lender” doctrine, courts disregard the form of the lending configuration in favor of a searching examination of its substance, considering a variety of factors designed to determine which entity is the actual, rather than nominal, lender. This Note argues that the true lender doctrine’s singular focus on substance over form, combined with judicial agility to examine each factual constellation and detect any obfuscating formalities implemented by rent-a-charter parties, is presently the most effective way to sensibly limit the reach of the exportation doctrine. And, to the degree that banks assume more substantive duties in the lending process and retain some measure of risk in seeking to comply with the doctrine, the results are broadly consistent with regulatory approaches that have been deployed in the wake of the financial crisis.