Volume 86, No. 3, Spring 2014

Articles

PREDICTING A HEART ATTACK: THE FUNDAMENTAL OPACITY OF EXTREME LIQUIDITY RISK

After 150 years of business, Lehman Brothers ran out of cash and credit and filed for bankruptcy on September 15, 2008. As a publicly traded company, Lehman had filed all the reports required by U.S. securities law. But the hundreds of pages of words and numbers provided no timely warning of lurking liquidity death. The risks of triparty repurchase financing and the endgame Lehman would have to play if a self-magnifying credit drain hit were, as it turned out, inherently opaque. Disclosure, the traditional securities law “fix,” was destined to fail in this case, raising the question of whether it might fail in others as well.

THE BROKEN PROMISES OF AN ALL-VOLUNTEER MILITARY

In the predawn hours of March 11, 2012, Staff Sergeant Robert Bales snuck out of his American military post in Kandahar, Afghanistan, and allegedly murdered seventeen civilians and injured six others in two nearby villages in Panjwai district. After Bales purportedly shot or stabbed his victims, he piled their bodies and burned them . Bales pleaded guilty to these crimes in June 2013, which spared him the death penalty, and he was sentenced to life in prison without parole. How did this former high school football star, model soldier, and once-admired husband and father come to commit some of the most atrocious war crimes in United States history? Although there are many likely explanations for Bales’s alleged behavior, one cannot help but to make a connection between the awful rampage of March 11, 2012, and the impact of almost thirteen years of war on the all-volunteer military.

ZONING ADULT BUSINESSES: EVALUATING THE SECONDARY EFFECTS DOCTRINE

To date the Supreme Court has endorsed two approaches that municipalities may adopt when attempting to handle the problem of zoning adult businesses in communities that are opposed to the expression of that manner of free speech. In Young v. American Mini Theatres, 427 U.S. 50 (1976), the Court upheld portions of a Detroit “Anti–Skid Row Ordinance” that required that certain adult establishments not be permitted within 1,000 feet of another regulated establishment. This approach—which this Article calls “cracking” for shorthand—was deemed a permissible zoning regulation despite the incidental burdens it placed on speech, in part because the Court was willing to find that the government’s interest in regulating the negative “secondary effects” that accompanied such establishments was a “legitimate government objective.” A decade later, the Court also upheld a similar zoning ordinance in Renton v. Playtime Theatres, Inc., 475 U.S. 41 (1986), also on the grounds that such regulation of “secondary effects” was a permissible justification for burdening speech. However, the solution proposed in the ordinance at issue in Renton was markedly different than that offered in American Mini Theatres: it promoted concentrating the establishments in one zoned area rather than dispersing them—“packing” the establishments for short. This Article is the first to evaluate the relative effectiveness and desirability of the “cracking” versus “packing” approach from a law and economics perspective. To do so, this Article evaluates which approaches were in practice adopted by communities on the ground in the years since the Supreme Court advanced the secondary effects doctrine and explores the benefits and drawbacks of each approach from an efficiency standpoint. This Article suggests that cities are being disingenuous in explaining their motivations for overwhelmingly adopting the “cracking” approach.

Comments

THE POTENTIAL POWER OF FEDERAL CHILD PORNOGRAPHY SENTENCING DISPARITIES

Congress and some of the judiciary are divided on child pornography sentencing. Since the late 1980s, Congress has consistently increased sentences and penalties for child pornography offenders. Some federal judges disagree with this congressional policy and have departed downward from child pornography sentences in response. Significant sentencing disparities have developed among similarly situated offenders, and the question is what effect these disparities will have on the child pornography Guidelines and the entire sentencing system. . . . Some federal judges have relied on Kimbrough as authority to depart downward in child pornography cases. They feel that the child pornography Guidelines, like the 100-to-1 ratio, are the result of uninformed congressional legislation rather than empirical evidence, causing unreasonable outcomes in many cases. Given the parallels between the crack cocaine and child pornography Guidelines, similar legislative reform of the child pornography Guidelines seems possible. After examining the differences between crack cocaine and child pornography sentencing, however, this Comment concludes that Congress is more likely to revert to its historical response to sentencing disparities of constraining judicial discretion in sentencing.

UNTANGLING THE COLLISION BETWEEN THE MCCARRAN-FERGUSON ACT AND THE RECOGNITION OF INTERNATIONAL ARBITRAL AWARDS: RECONCILING THE SECOND, FOURTH, AND FIFTH CIRCUITS’ APPROACHES

As the globalization of economies and finance has taken hold, international arbitration clauses have become more and more common in contracts between multinational corporations. However, in the realm of insurance contracts, the enforceability of international arbitration provisions implicates a very complicated conflict between treaty law, state law, and federal statutory law. One particular source of complication is the McCarran-Ferguson Act, which gives state insurance laws preemption power over federal laws that indirectly affect state insurance regimes. Although the Supreme Court has generally articulated a broad interpretation of the McCarran-Ferguson Act, the scope of the McCarran-Ferguson Act’s preemption power is unclear in the context of treaties—specifically, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention or Convention). The New York Convention is a treaty subscribed to by the United States in the Federal Arbitration Act (FAA) that mandates the enforceability of foreign arbitral awards made for or against interested U.S. parties. . . . Given the trend in case law established by the Second, Fifth, and Fourth Circuits, and the common reasoning used to support this trend, this Comment seeks to clarify the complicated legal doctrines surrounding the conflict between the McCarran-Ferguson Act and the New York Convention. Furthermore, because more circuits will likely encounter this same issue, this Comment proffers an analytical framework that is both consistent with the trend in case law and the language and purpose of the McCarran-Ferguson Act.

FAIR USE ANALYSIS IN DMCA TAKEDOWN NOTICES: NECESSARY OR NOXIOUS?

A mother uploads a video of her toddler dancing to a video hosting site with a popular song playing in the background. Prior to the passage of the Digital Millennium Copyright Act (DMCA), the owner of the song playing in the background could initiate an infringement action against either the hosting site or the woman who uploaded the video. Subsequent to the passage of the DMCA, the copyright holder could send the hosting site a notice saying that the content was infringing, and the site would have to take down the content or be liable for copyright infringement. But what does such a takedown notice require? How thoroughly must a copyright holder examine the alleged infringement before sending a notice? Lenz v. Universal Music Corp. held that the copyright owner had to perform a fair use analysis before sending a notice or he could be held liable for misrepresentation. This Comment discusses this fair use analysis requirement in the context of the purpose of the DMCA and the effect of such a requirement on copyright holders’ abilities to respond rapidly to instances of infringement on the Internet.