Who’s Eligible for Overtime?

Alexander Foxx, Associate Member, University of Cincinnati Law Review

 The Department of Labor exempts an employee in a “bona fide administrative capacity” from overtime compensation.[1] An exempt employee (1) is paid more than $455 per week, (2) is in a management or business operations role, and (3) exercises discretion and independent judgment in the role. [2] Courts are split in their interpretations of requirements (2) and (3). The issue for the federal circuit courts is whether bank underwriters qualify for overtime exemption.[3]

Currently, the Ninth and Second Circuits support an interpretation of overtime rules that entitles underwriters to overtime.[4] The Sixth Circuit favors an interpretation that underwriters are not entitled to overtime. The Sixth Circuit’s view, while troubling public policy, is the legally proper view.

While the circuits do not extend their rulings beyond the underwriters, their holdings serve as a signal for how overtime of similar job positions—namely, office jobs with little corporate power, but considered administrative positions—may be evaluated. This could impact a large portion of the economy. For example, franchise managers could be impacted.  Regardless of these considerations, I maintain that the Sixth Circuit’s view is the legally correct view and that underwriters are exempt from overtime.

The Sixth Circuit Approach

In Lutz v. Huntington Bancshares, Inc. the Sixth Circuit determined that underwriters were bona fide administrative employees and were exempt from overtime pay.[5] The court found the nature of the work that underwriters performed was critical to the overtime determination. A role that is fundamentally a management position will likely qualify for overtime exemption; a clerical or manual role, however, may entitle employees to overtime.[6] With this in mind, the Sixth Circuit opened its decision with a description of the underwriter position.[7]

The Sixth Circuit ruled the second prong of the overtime rule was fulfilled. The Court maintained that bank guidelines allow underwriters significant autonomy and that underwriters are bona fide administrative employees exempt from overtime under the second prong of the Department of Labor rule. The Court noted that underwriters use “judgement and experience” in granting loan modifications and interpreting loan applications objectively.[8] This view underpins the Court’s conclusion that underwriters “assist in the running and servicing of the Bank’s business by making decisions about when Huntington should take on certain kinds of credit risk,” fulfilling the second prong of the Department of Labor’s exemption requirement.[9] The Court differentiated the administrative nature of underwriters by distancing them from production-centered positions—positions which are typically overtime eligible.[10] The Court noted that the underwriters do not sell a product, but perform analyses similar to financial analysts, who are exempt from overtime compensation.[11] Given these factors, the Court concluded the second prong of the labor department rule was satisfied.

The Sixth Circuit then determined the third prong of the Department of Labor rule was satisfied because underwriters are permitted to exercise a large amount of judgment in their position. The Court observed that the bank guidelines imposed on underwriters allows for significant discretion in determining the approval of a loan application.[12] Given the discretion allowed by the guidelines, underwriters must “exercise independent judgment” in their position.[13]

The Sixth Circuit determined that underwriters were (1) administrative employees and (2) exercised professional judgment and discretion.[14] Therefore underwriters fulfilled the second and third prongs of the Department of Labor rule and exempted from overtime pay.

The Ninth and Second Circuits

In Davis v. J.P. Morgan Chase & Co. the Second Circuit differed from the Sixth Circuit, concluding that the second and third prongs were not satisfied because underwriters had little autonomy and managerial authority. The Second Circuit maintained that the guidelines promulgated by the bank provided a narrow route “in order to produce a yes or no decision” regarding the loan application.[15] This language indicated that the Second Circuit viewed bank guidelines as authoritative rules that bound the independent judgement of underwriters and subjected them to the production standards of the bank. The Second Circuit maintained that underwriter positions were not administrative positions, but production positions.[16] The Court noted that it is the primary duty of underwriters to “sell loan products under the detailed directions of the Credit Guide.”[17] Viewing underwriters as producers who (1) did not exercise independent judgement and (2) did not contribute to management decisions, the Second Circuit found that the overtime exemption requirements had not been met; neither the second or third prongs of the rule were fulfilled.[18]

The opinion of the Ninth Circuit in McKeen-Chaplin v. Provident Sav. Bank (the most recent of the three cases) closely paralleled the decision of the Second Circuit. The Ninth Circuit further expounded upon the difference between production and administrative roles. Administrative positions guide the “overall course or policies”[19] of the business, while production roles are concerned with the “day-to-day” operations of necessary business tasks.[20] Only administrative roles qualified for overtime exemption under the Department of Labor rule. In examining the nature of the underwriter position, the Ninth Circuit noted that underwriters are narrowly confined to the risk profile assigned to them by the bank and therefore are not administrators who exercise independent judgment.[21]

The Sixth Circuit Decision is Legally Proper, but Troubling Policy

The Sixth Circuit correctly classifies underwriters as overtime exempt employees. The position of underwriter is a role necessary to the management of bank business operations and therefore meets the second prong of the Department of Labor’s rule. Underwriters are instrumental to the revenues of lending institutions. Without underwriters, borrowers cannot be examined properly, and if borrowers cannot be examined properly, loans will likely default at a much higher rate. In short, underwriters make sure that loans are only given to people who will pay the loan back with interest. Given that underwriters are an essential part of the business operations of a bank, but do not work directly in a “production”[22] role[23] (this role falls to the loan originator)[24], it is a natural conclusion that they guide the business and operations of the bank. Opposition may argue that underwriters are a “production” role and thereby entitled to overtime under the McKeen decision—analogous to a factory line worker.[25] This view ignores the fact that underwriters do not produce loans—this task falls to the loan originator,[26] an individual who works in a different capacity (and usually a different office or city) than the underwriter. The position of underwriter is an administrative position that satisfies the second prong of the Department of Labor Rule.

The position of underwriter also completes the third prong of the Department of Labor’s rule. The third prong requires an exempt employee to demonstrate discretion or independent judgment in his or her role. Underwriters are evaluating the ability of individuals to pay back loans, which, at base, is a determination of an individual’s trustworthiness. An evaluation of trustworthiness cannot be undertaken without independent judgment. The opposition may argue that the guidelines provided to underwriters eliminate this judgment. This view ignores that underwriters are granted wide discretion within these policies and may be granted exceptions to these policies.[27] Underwriters therefore satisfy the third prong of the Department of Labor’s rule.

Despite the fact that underwriters do not seem to be eligible for overtime under the Department of Labor rule, the Sixth Circuit’s ruling raises troubling public policy questions. Namely, poor compensation of valuable employees should not be encouraged. If an employee is working over 40 hours per week in an “administrative” position, the employee is likely performing valuable tasks for the business. It would seem appropriate that such employees are compensated at a level that would make the potential benefits of litigation seem small. In short, it would seem prudent if the banks paid their underwriters more so the employees do not feel pressured to sue.

The Sixth Circuit seems to concur that underwriters are an important piece of the lending process and that they exercise professional judgment on a regular basis. As such, it is troubling that such valuable employees feel the need to bring suit against their employer for more compensation. Compensation in the labor market should be addressed by an efficient market—the supply of a certain skillset will demand equivalent compensation. Efficient markets seem to fail in the case of underwriters. Underwriters are clearly valuable and necessary employees that perform a task that is not automatable. However, given this litigation, underwriters feel as though their compensation is not adequate for their skillset. This may indicate a market that is out of equilibrium.[28] While legally proper, a legal decision that supports the under-payment of employees and an inefficient market is troubling.

If employees feel they are adequately compensated for their skillset they will not feel the need to bring suit against their employer for overtime compensation. If the underwriters had been paid a salary that they considered fair, they likely would not have felt the need to bring suit—the cost of litigation would not have been outweighed by the marginal pay increase. Employees that feel fairly treated and fairly may sue their employer less—a court decision is unnecessary to reach this conclusion.

Conclusion

The circuit split regarding overtime pay has no resolution on the horizon, especially given recent political developments.[29] It is troubling that the legal status of overtime pay—an instrumental compensation component of the labor market—is so fluid. A ruling from the Supreme Court would not be remiss.

While the split persists, the Sixth Circuit decision should be viewed as the legally proper conclusion. The Sixth Circuit correctly recognizes underwriters as instrumental business administrators who exercise substantial professional discretion. However, if companies endeavor to compensate employees at a market rate this may moot overtime litigation and the Department of Labor rule and create the desired market equilibrium.

[1] 29 C.F.R. § 541.200(a).

[2] See Lutz v. Huntington Bancshares, Inc., 815 F.3d 988, 992 (6th Cir. 2016) citing 29 C.F.R. § 541.200(a).

[3] Lutz at 990; Davis v. J.P. Morgan Chase & Co., 587 F.3d 529, 530 (2d Cir. 2009); McKeen-Chaplin v. Provident Sav. Bank, 862 F.3d 847, 849 (9th Cir. 2017)

[4] An underwriter is an employee of a lending institution that determines if a loan should be granted to a prospective borrower.

[5] Lutz at 990.

[6] 29 C.F.R. § 541.200(a).

[7] Lutz at 990-991. Underwriters receive loan applications from loan originators (for example, the branch banker that fills out a residential mortgage application with a customer). Upon receipt, underwriters evaluate the application for accuracy and determine if the loan will be approved. In determining loan approval, underwriters are subject to the guidelines of their bank. These guidelines outline lending procedures and risk profiles and, in large part, determine whether the underwriter can approve the loan.

[8] See id.

[9] Id at 990.

[10] Id.

[11] Id at 995.

[12] Id at 997.

[13] Id.

[14] Id at 998.

[15] Davis v. J.P. Morgan Chase & Co., 587 F.3d 529, 534 (2d Cir. 2009).

[16] Id. at 535.

[17] Id. at 534.

[18] Id. at 537.

[19] McKeen-Chaplin v. Provident Sav. Bank, 862 F.3d 847, 851 (9th Cir. 2017) citing Bothell v. Phase Metrics, Inc., 299 F.3d 1120, 1125 (9th Cir. 2002) quoting Bratt v. Cty. of L.A., 912 F.2d 1066, 1070 (9th Cir. 1990).

[20] Id.

[21] McKeen at 852.

[22] Production: “often attributive :something not specially designed or customized and usually mass-produced.” Production, Merriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/production.

[23] Id.

[24] Lutz at 990.

[25] McKeen at 852.

[26] Lutz at 990.

[27] Lutz at 991.

[28] That labor markets may not always be in equilibrium is not a new hypothesis to economists. One explanation that is posited, and could apply here, is “sticky wages.” This means that wages to not adjust in sync with labor shortages and surpluses. See Sticky Wages, Renee Haltom, Federal Reserve Bank of Richmond, https://www.richmondfed.org/publications/research/econ_focus/2013/q1/q1, accessed September 26, 2017.

[29]  Reuters, U.S. Judge Strikes Down Obama Administration Overtime Pay Rule, New York Times, https://www.nytimes.com/reuters/2017/08/31/us/31reuters-usa-overtime.html.

 

 

 

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Cracked and Packed No More? A New Breed of Political Gerrymandering Litigation

Patrick Reagan, Associate Member, University of Cincinnati Law Review

Rather than run competitive re-election campaigns, some legislators have opted to have their victory drawn for them. Political gerrymandering decides elections before a single vote is cast and prevents people from having equal opportunities to exercise their constitutional right to freedom of political association. When legislators gerrymander, they either split voters of one party among multiple districts so they won’t constitute a majority, or concentrate them into a few districts where they constitute a supermajority—commonly known as “cracking” and “packing”, respectively.[1] Legislators did not just stand idly by while this became a problem—they created the problem. [2] With Gill v. Whitford, the Supreme Court should reaffirm Davis v. Bandemer and clarify Vieth v. Jubelirer by unequivocally holding that political gerrymandering claims are justiciable.

Davis and Vieth: ABrief Survey of Political Gerrymandering Jurisprudence

             In 1986, Davis v. Bandemer  held that political gerrymandering cases were justiciable.[3] In Davis, the plaintiffs claimed that their votes were diluted by new district lines drawn by the Indiana legislature after the 1980 census, in violation of the Equal Protection Clause of the Fourteenth Amendment.[4]. The plaintiffs pointed to the 1982 election where Democratic candidates for the Indiana House received 51.9% of the popular vote statewide, yet only 43 of the 100 seats to be filled.[5] The most surprising results occurred in Marion County, where Indianapolis is situated, and in Allen County, where Fort Wayne is located. Both counties were divided into multi-member House districts. Democratic candidates drew 46.6% of the vote in these districts in 1982, but only 3 of the 21 Democratic candidates were elected.[6]

            In holding political gerrymandering claims as justiciable, the Court stated that it has “consistently adjudicated equal protection claims in the legislative districting context regarding inequalities in population between districts.”[7] It further held that Davis survived a Baker v. Carr analysis,[8] and referenced the “one person, one vote” principle of Reynolds v. Sims.[9] To further support the court’s holding of justiciability, Justice White surveyed the Court’s racial gerrymandering jurisprudence[10] and wrote specifically that “[i]n the multimember district cases, we have also repeatedly stated that districting that would ‘operate to minimize or cancel out the voting strength of racial or political elements of the voting population’ would raise a constitutional question.”[11] He then pointed to Gaffney v. Cummings [12] which  “upheld against an equal protection political gerrymandering challenge a . . . scheme that was formulated in a bipartisan effort to try to provide political representation . . . proportional to the strength of political parties in the State.”[13] In Justice White’s view, Gaffney was the exact kind of political gerrymandering claim that was at issue in Davis, just without the explicit holding that such claims are justiciable.[14] He also wrote that holding political gerrymandering claims as non-justiciable political questions would transform the Baker v. Carr factors into an “ad hoc litmus test” of the Court’s reactions to whether a claim is desirable and warrants judicial intervention.[15] Thus, the heart of the underlying claim in Davis was that “each political group in a State should have the same chance to elect representatives of its choice as any other political group.”[16]

            The Davis court never agreed on a set standard by which political gerrymandering claims could be evaluated. The standard eventually applied in the lower courts[17]—that a plaintiff in a political gerrymandering case needed to prove “intentional discrimination against an identifiable political group and an actual discriminatory effect on that group”[18]—was only articulated in a separate plurality opinion by Justice White.[19]

The Court reversed course eighteen years later in Vieth v. Jubelirer. In Vieth, a plurality held that political gerrymandering claims were not justiciable.[20] Justice Scalia’s plurality opinion rested on three central conclusions: (1) political gerrymandering has been around for a long time;[21] (2) Article I, § 4 of the Constitution gives Congress the power to alter state legislative maps;[22] and, (3) political gerrymandering claims are a political question.[23] The driving reason behind this plurality opinion, however, was the standard adopted by the lower courts mentioned above. To Justice Scalia, it had a record of “puzzlement and consternation,”[24] and “[e]ighteen years of judicial effort with virtually nothing to show for it justif[ied] [the Court] in revisiting the question whether the standard promised by Bandemer exists.”[25] Because of the lack of a concrete standard, the appellants in Vieth suggested a new standard: that a plaintiff “must ‘show that the mapmakers acted with a predominant intent to achieve partisan advantage,’ which can be shown ‘by direct evidence or by circumstantial evidence that other neutral and legitimate redistricting criteria were subordinated to the goal of achieving partisan advantage.’”[26] Justice Scalia rejected this standard as too vague and un-manageable.[27] Justice Kennedy joined the judgment of the Court but stated that he “would still reject the plurality’s conclusions as to nonjusticiability.[28] He argued that even though “no such standard has emerged in this case should not be taken to prove that none will emerge in the future.”[29]

Whitford, the First Amendment, and an Opportunity for the Supreme Court

            Twelve years after Vieth, and thirty years after Davis, Whitford v. Gill was decided. The plaintiffs were Democratic voters in Wisconsin who brought the challenge after the 2012 and 2014 elections, in which Republicans received 48.6% and 52% of the statewide popular vote yet won 60 and 63 of 99 legislative seats, respectively, under the map drawn after the 2010 census. The district court agreed that the map infringed on the plaintiff’s First Amendment right to freedom of association and Fourteenth Amendment right to equal protection.[30]

Gill is different from Davis and Vieth in two main ways. First, the underlying claim contains both First Amendment and Equal Protection arguments. Specifically, the plaintiffs argue that by disadvantaging voters based on their political affiliation, Wisconsin violated their First Amendment right to freedom of political association.[31] Equal protection is also a powerful claim, but has a checkered history with political gerrymandering cases, as demonstrated by Davis and Vieth. The First Amendment provides a stronger basis for holding political gerrymandering claims as justiciable, because the Court has held for over four decades that the freedom of political association is a constitutionally-protected right.[32] Part of political association is working to elect candidates sharing one’s beliefs; thus, gerrymandering a map to disfavor certain political groups places a heavy burden on the First Amendment right of political association. That in and of itself makes the First Amendment argument more logical, because legislators are suppressing the ability of a group to express its views and exercise its freedom of association. While there isn’t a Supreme Court case setting a level of scrutiny for burdens on political association, the Seventh Circuit has previously held that strict scrutiny should apply.[33] If, however, the Gill Court goes so far as to hold that political gerrymandering suppresses political speech, strict scrutiny will apply.[34]

The second way Gill is different is in the standard[35] proposed by the plaintiffs for the Court to apply to political gerrymandering claims. The plaintiffs propose using a mathematical formula called the Efficiency Gap (EG). The EG has the potential to give the Court a judicially-manageable standard for political gerrymandering claims. To briefly state, it measures which party is better at converting its votes to legislative seats. If a party’s advantage is outside of an accepted range, that indicates the map might be gerrymandered.[36]

This proposed formula represents a potential solution to the issues faced by both the Davis court and the Vieth court. Baker v. Carr also requires a judicially-manageable standard for a case to avoid being deemed a non-justiciable political question.[37] The EG formula is a smart way to evaluate these claims, because it uses an unbiased, scientific method. Determining whether legislators gerrymandered a map logically requires sensitive inquiries into the factual background of a map’s construction and legislators’ intent. Judges interpret facts differently, and without an objective standard to evaluate these claims, any conclusions that they draw could be problematic.

In his Vieth concurrence, Justice Kennedy kept the door open for a judicially-manageable standard to emerge. If the Court holds that these claims are justiciable, expect a new wave of political gerrymandering claims to appear on dockets across the country—especially if the Court adopts the EG standard. Maps across the country that previously could not be proven to be racially discriminatory, for instance, could be successfully challenged based on the allegation that they are politically discriminatory. The role of legislators in drawing electoral maps will be heavily scrutinized, as the EG provides the clearest way of measuring gerrymandering. The blind eye the Court has turned to gerrymandering due to the lack of a standard by which to evaluate claims has allowed this practice to become a national problem. Legislators have broad authority to make laws, but they should not be permitted to abuse the power with which they are entrusted to gerrymander themselves to victory.[38] That makes the EG an even more attractive formula by which these claims should be evaluated, because math helps courts avoid highly subjective and sensitive factual inquiries that currently render these claims nonjusticiable.

Conclusion

For the Court to hold in Gill v. Whitford that political gerrymandering claims are nonjusticiable—thus removing the possibility of judicial review of political gerrymandering—would be like putting the fox in charge of the henhouse Legislators, armed with sharp consultants, reams of maps, and Excel tricks and gimmicks would have no incentive to draw fair districts if they knew there would be no judicial review for political gerrymandering, just as it is today. No one’s vote should be diluted just because of their political beliefs. reaffirm voters’ First Amendment right of political association by adopting the EG formula in Gill v. Whitford to unequivocally hold that political gerrymandering claims are justiciable.

 

[1] A particularly illustrative example of cracking and packing is illustrated in the following article. Emily Bazalon, The New Front in the Gerrymandering Wars: Democracy vs. Math, The New York Times (Aug. 29, 2017), https://www.nytimes.com/2017/08/29/magazine/the-new-front-in-the-gerrymandering-wars-democracy-vs-math.html?mcubz=3&_r=0.

[2] The Washington Post catalogued some of the most gerrymandered districts in the country. Christopher Ingraham, America’s most gerrymandered congressional districts, The Washington Post (May 15, 2014), https://www.washingtonpost.com/news/wonk/wp/2014/05/15/americas-most-gerrymandered-congressional-districts/?utm_term=.4cb8154dfc90.

[3] Davis v. Bandemer, 478 U.S. 109, 110 (1986) (holding that the Court was “not persuaded that there are no judicially discernible and manageable standards by which political gerrymander[ing] cases are to be decided.”).

[4] Id. The map included fifty single-member districts for the Indiana Senate, and 7 triple-member, 9 double-member, and 61 single-member districts for the Indiana House; Id. at 109.

[5] Id.

[6] Id.

[7] Id. at 118.

[8] Id. at 122-123.

[9] 377 U.S. 533 (1964).

[10] Racial gerrymandering has a better-developed body of case law. See, e.g., Thornburg v. Gingles, 478 U.S. 30 (1986); Cooper v. Harris, 137 S. Ct. 1455 (2017).

[11] Davis, 478 U.S. at 119 (quoting Fortson v. Dorsey, 379 U.S. 433 (1965)).

[12] Gaffney v. Cummings, 412 U.S. 735 (1973). This might be helpful for the appellees in Gill v. Whitford.

[13] Davis, 478 U.S. at 119.

[14] Id. Justice White then went on to cite numerous cases where the Court summarily affirmed or dismissed for want of a substantial federal question cases involving political gerrymandering. Furthermore, because those cases were all summarily decided, that did not preclude the Court’s consideration of Davis. Id. at 121.

[15] Id. at 126.

[16] Id.

[17] Vieth v. Jubelirer, 541 U.S. 267, 268 (2004).

[18] Davis, 478 U.S. at 127 (citing Mobile v. Bolden, 446 U.S. 55, 67-68 (1980)).

[19] Id.

[20] Vieth v. Jubelirer, 541 U.S. 267, 268 (2004).

[21] Id. at 274 (“[p]olitical gerrymanders are not new to the American scene). Justice Scalia then traces their colonial and early modern history.

[22] Id. at 275.

[23] See Id. at 277-279.

[24] Id. at 282.

[25] Id. at 281.

[26] Id. at 284.

[27] Id. at 288. (“[e]ven if the standard were relevant, however, it is not judicially manageable.”).

[28] Id. at 311 (Kennedy, J. concurring).

[29] Id. Justice Scalia called this a “never-say-never approach.” Id. at 303.

[30] Whitford v. Gill, 218 F. Supp. 3d 837, 930 (W.D. Wis. 2016).

[31] Whitford, 218 F. Supp 3d at 883-884 (“[w]e conclude, therefore, that the First Amendment and the Equal Protection clause prohibit a redistricting scheme which (1) is intended to place a severe impediment on the effectiveness of the votes of individual citizens on the basis of their political affiliation, (2) has that effect, and (3) cannot be justified on other, legitimate legislative grounds.”).

[32] Cousins v. Wigoda, 419 U.S. 477, 487 (1975) (“’[t]he right to associate with the political party of one’s choice is an integral part of . . . basic constitutional freedom.’”) (quoting Krusper v. Pontikes, 414 U.S. 51, 56-57 (1973); Williams v. Rhodes, 393 U.S. 23, 30-31 (1968) (“this freedom [political association] protected against federal encroachment by the First Amendment is entitled under the Fourteenth Amendment to the same protection from infringement by the States.”).

[33] Wren v. Jones, 635 F.2d 1277, 1285 (7th Cir. 1980). The court relied on Branti v. Finkel, 445 U.S. 507 (1980), and Elrod v. Burns, 427 U.S. 347 (976), in which the Court applied a high level of scrutiny when government employees were discharged for their political beliefs.

[34] Citizens United v. Federal Election Comm’n, 558 U.S. 310, 340 (2010).

[35] Id. at 854-855. ((1) intent to gerrymander for partisan advantage; (2) partisan effect, which can be proven by showing the efficiency gap (EG)—based on a mathematical formula—between the parties exceeded an acceptable interval (proposed to be 7%); and (3) a duty of the defendants to rebut the presumption of unconstitutionality created by the first two elements by showing that the partisan gerrymander was necessary.)

[36] Id. The formula first requires one to calculate how many votes are cast for a party in excess of the number needed to win (which measures packing); then it requires one to calculate how many votes are cast by a party for a losing candidate (which measures cracking).[36] Each party’s respective number of wasted votes is then divided by the total number of votes cast in the election, and it is the relative comparison of those two numbers that determines the EG.[36] An EG of zero would mean both parties are wasting equal numbers of votes, and an EG in favor of one party or the other means that party wasted votes at a lower rate than the other party.[36] Thus, an EG in favor of Party A means that party was more efficient at translating its votes into legislative seats. Wisconsin’s EG under this new map was 11.69% in favor of Republicans, which contradicted what should happen in elections held under a fairly-drawn map. Id.

[37] Baker, 369 U.S. at 217.

[38] See Robert Draper, The League of Dangerous Mapmakers, The Atlantic (October 2012), https://www.theatlantic.com/magazine/archive/2012/10/the-league-of/309084/. This in-depth analysis shows just how out of control gerrymandering has become.

UNITED STATES V. FOKKER SERVICES BV: EXECUTIVE POWER OVER DPAS SHOULD BE CHECKED

Author: Alexander Spaulding, Associate Member, University of Cincinnati Law Review

Today, due to the risk of unwarranted collateral damage to innocent employees, large corporations are too big to jail. After the Arthur Anderson case in 2002, where Enron’s accounting firm was criminally prosecuted, thousands of innocent employees lost their jobs.[1] In response, the Department of Justice (DOJ) has significantly increased its use of deferred prosecution agreements (DPAs) in cases in which corporations are criminally charged.[2] In a DPA, the prosecutor requires the corporation to fulfill certain punitive and rehabilitative obligations, such as paying fines and implementing new company policy. In return, the charges against the corporation are dropped.[3] Since prosecution is under the arm of the Executive branch, DPAs are largely free of any judicial scrutiny. In most cases, to the chagrin of some district court judges, the judiciary acts as a “rubber stamp” for DPAs. In 2015, when an Article III judge challenged this notion in United States v. Fokker Services BV[4], the DC Circuit upheld “the Executive’s long-settled primacy over charging,” by ruling that courts are not permitted to reject a DPA based on a finding that it is inadequate.[5] While DPAs serve a commendable protectionist purpose, Fokker goes too far in limiting the judiciary’s role in reviewing their terms. Prosecutors may now operate under the assumption that their DPAs will always be rubber stamped, even if a judge were to find them “grossly disproportionate” in light of the conduct, as was the case in Fokker.[6]

Fokker Services B.V.

Fokker Services B.V. is a Dutch aerospace company.[7] From 2005 to 2010, the company exported aircraft parts, technology, and services to multiple branches of the Iranian military, along with Sudan and Myanmar.[8] Furthermore, Fokker deliberately worked to evade US sanctions by performing various illegal methods to obscure their practices, such as deleting references to Iran and falsifying documents and records.[9] The company’s president and senior management were aware of both the laws and the illegal practices.[10] In 2014, the DOJ and Fokker agreed to an eighteen-month DPA, after which the company would receive amnesty.[11] The DPA required Fokker to pay a total of $21 million in fines, fully cooperate with the government, and implement a compliance policy.[12]

The District Court

The DOJ brought the DPA to the district court along with a motion to exclude the eighteen-month period under the Speedy Trial Act, which requires trials to begin within seventy days of filing charges.[13] The parties argued that the judge’s purview was “limited to reviewing the proposed exclusion of time pursuant to the Speedy Trial Act.”[14] However, Judge Richard J. Leon both denied the motion and rejected the DPA on the grounds that it was not in the public interest.[15] Judge Leon took specific objection to: (1) the company was fined no more than what it had illegally earned; (2) there was no independent monitoring established; and (3) no individuals were independently prosecuted or fired.[16] Judge Leon explained that the DPA was too lenient and therefore “did not constitute an appropriate exercise of prosecutorial discretion.”[17]

The Appeal

The parties appealed to the D.C Circuit on the grounds that the District Court should have granted the motion to exclude time, and should not have rejected the DPA.[18] The D.C Circuit vacated the District Court’s order, explaining that the Speedy Trial Act “confers no authority in a court to withhold exclusion of time pursuant to a DPA based on concerns that the government should bring different charges or should charge different defendants.”[19] The court further explained that the judiciary lacks the authority to second guess the Executive’s primacy in criminal charging, therefore, the District Court had overstepped by “rejecting the DPA based primarily on concerns about the prosecution’s charging choices.”[20] Furthermore, the D.C. circuit explained that the judiciary lacks the competence to review the government’s choices in a DPA, because its provisions manifest the government’s prosecutorial considerations which are “ill-suited for substantial judicial oversight.”[21] Thus, the court remanded with an order to exclude the eighteen months.[22]

Implications

On one hand, the Circuit Court’s ruling in Fokker gives strong guidance on the judiciary’s limited to non-existent role in evaluating and rejecting DPAs, which will allow corporations and federal prosecutors to negotiate comfortably in a predictable regime. However, the precedent set by the Fokker court only exacerbates a problem that legal scholars already lamented—that prosecutors hold an excessive amount of power in the realm of corporate criminal justice.[23] Now, when a DPA crosses a judge’s desk, he is to rubber stamp it, regardless of its contents.

This unchecked authority enjoyed by the Executive threatens the protections of the separation of powers. Under the constitution, the authority to make the law, enforce the law, and review the law are separated among the branches of government. However, after Fokker, the Executive has the power to do all three through the use of DPAs. Without judicial incursion, the prosecutors have the ability to both create and interpret the laws. The DOJ has the ability to require companies to follow codes of its own choosing, effectively creating new laws for corporations to follow.[24] Furthermore, the DOJ has the authority to interpret both the laws and the offenses, as the laws essentially become whatever the prosecutors say they are, because the prosecutors ultimately control the private agreements.[25]

Criticism

Ultimately, the Fokker court went too far in limiting the judicial role in reviewing DPAs. Judge Leon was correct to ask whether the agreement was in the public interest, and correct to rule that it was not. Under this DPA, there were essentially no punitive or deterrent measures. The company was only required to pay back the money it had made illegally, there was no monitor imposed upon them to ensure that they followed the laws in the future, and not a single employee was prosecuted or even lost their job. As Judge Leon described, this punishment was “anemic,”[26] and it did little to ensure that other corporations would not engage in similar behavior, nor that the interests of justice were served. Fokker was selling parts and services to the military of a US enemy, and the Circuit Court defended the prosecution’s supreme right to form an insufficient deal.

Moreover, even if the Circuit Court had wanted to uphold the DPA in this case, they could have done so with less broad language. The Circuit Court should have explained how Judge Leon overstepped his discretion, and provided the criteria by which this discretion was analyzed. Instead, the court stated in a blanket manner that the judiciary should not interfere with the prosecutor’s agreements.

Conclusion

The Circuit Court’s ruling was overbroad. While there are many reasons that judicial review should be limited in the context of DPAs, such as Executive deference, prosecutorial efficiency, and trust that corporate criminal deals will be upheld, the judiciary should not be rendered mute on the issue. Not only are there significant implications regarding the separation of powers, but unjust agreements can be rubber stamped—as was the case in Fokker. In most cases, the judiciary should defer to the prosecutor anyway, so in the rare case, like Fokker, where the judge rejects a DPA, the rejection should not be per se invalid. The courts would do a great service by outlining the parameters of an agreement that is outside of the public interest, rather than rejecting any judicial review.

[1] See Corporate Crime Reporter, Arthur Andersen Corporate Criminal Liability and the Rise of Deferred and Non Prosecution Agreements, https://www.corporatecrimereporter.com/news/200/arthur-andersen-corporate-criminal-liability-and-the-rise-of-deferred-and-non-prosecution-agreements/.

[2] See Brandon L. Garrett, Too Big to Jail: How Prosecutors Compromise with Corporations 41, 44, 55 (2014).

[3] Id. at 5.

[4] 818 F.3d 733 (D.C. Cir. 2016).

[5] Id. at 743.

[6] 79 F.Supp.3d 160, 167 (2015).

[7] Id. at 161.

[8] Id. at 162

[9] Id.

[10] Id.

[11] Id.

[12] Id.

[13] 18 U.S.C. §§ 3152–3156, 3161–3174 (2012).

[14] DOJ Supplemental Memorandum at 2, United States v. Fokker Servs. B.V., No. 14-CR-121 (RJL) (D.D.C. July 18, 2014), ECF No. 11.

[15] United States v. Fokker Servs. B.V., 79 F. Supp. 3d 160, 166 (D.D.C. 2015).

[16] Id.

[17] Id.

[18]  United States v. Fokker Services B.V., No. 15-3016, 2016 WL 1319266, at *1 (D.C. Cir. Apr. 5, 2016).

[19] Id. at 4.

[20] Id.

[21] Id at 9.

[22] Id. at 7.

[23] See Richard A. Epstein, The Deferred Prosecution Racket, Wall Street J. (Nov. 28, 2006). https://www.wsj.com/articles/SB116468395737834160.

[24]  See, e.g., Jennifer Arlen, Prosecuting Beyond the Rule of Law: Corporate Mandates Imposed Through Deferred Prosecution Agreements, 8 J. Legal Analysis 191, 192 (2016).

[25] Mike Koehler, Measuring the Impact of Non-Prosecution and Deferred Prosecution Agreements on Foreign Corrupt Practices Act Enforcement, 49 UC Davis L. Rev. 497, 505 (2015).

[26] Fokker Servs., 79 F. Supp. 3d at 167.

The Right To Breast-Feed

Author: Melanie Cheek, University of Cincinnati Law Review, Associate Member

Women who choose to breast-feed often make the choice to do so despite social and economic barriers. Although the benefits of breast-feeding have been widely promoted,[1] there are gaps in laws and policies supporting a woman’s decision to breast-feed. This approach seems counterintuitive to the supposed governmental interest in supporting women who choose to breast-feed. Indeed, American policies seem lightyears behind countries such as Canada, where public breast-feeding is not only a woman’s rights issue, but a public health issue.[2] Although there have been advancements in the promotion of women’s right to breast-feed, there are still issues within existing laws and policies that need to be addressed by federal and state legislators, and the judiciary.

Public Brest-feeding Rights in Ohio

Although Ohio has some of the most progressive breast-feeding rights and protective laws in the country, only a little more than a decade ago, Ohio allowed open discrimination toward breast-feeding women. The laws that exist today were legislative responses to two separate court decisions that threatened to undercut federal progress made on women’s breast-feeding rights and protections.[3]

In 1999, three women sued Wal-Mart Stores Inc. after the three women were interrupted while breast-feeding their children and asked to either leave the premises or finish breast-feeding in the public restroom of the store.[4]  The women alleged that by doing so, Wal-Mart violated the public accommodations[5] provision of the Ohio Civil Rights Act,[6]  which prohibits sex discrimination by places of public accommodations.[7] Wal-Mart did not deny the factual allegations that such incidents took place.[8] Instead, Wal-Mart crafted its argument based on a statutory interpretation of Ohio’s public accommodation statute that would allow places of public accommodations to limit or even prohibit breast-feeding activities on their premises.[9]

Surprisingly, the district court[10] agreed with Wal-Mart’s argument, holding that restrictions on breast-feeding did not constitute discrimination based on sex under Ohio’s public accommodations statute.[11] Unbeknownst to the Plaintiffs when they filed suit, the battle was lost before it even began, resulting in the grant of Wal-Mart’s motion for summary judgment. The district court insisted upon evidence in which members of the male sex who breast-feed were treated differently by Wal-Mart while engaging in the same activities on the store’s premises.[12] Without such evidence, the district court reasoned, Plaintiffs could not show that they were discriminated against because of their sex.[13] To the district court, the incidents were simply illustrations of poor treatment toward the Plaintiffs, rather than discrimination.[14] Ultimately, Defendant Wal-Mart, although a place of public accommodation, had the right to limit breast-feeding activities on its premises.[15]

When the Plaintiffs appealed the case to the Sixth Circuit, the Sixth Circuit affirmed the district court’s decision.[16] Although the Sixth Circuit reviewed the case under Ohio state law, the Court looked to a federal framework to analyze claims of sex discrimination, and relied on the comparability analysis from the 1976 Supreme Court Case General Electric v. Gilbert.[17] In Gilbert, a pregnant employee brought a sex discrimination suit under Title VII against her employer, General Electric, alleging that the company’s disability benefits offered its employees a disability plan for non-occupational sicknesses and accidents, yet discriminated against women by not providing coverage for disability that result from pregnancy.[18] Ultimately, the Supreme Court held that General Electric’s disability plan did not violate Title VII, even though the plan excluded coverage for pregnancy related medical costs, because there was no benefit the plan provided for men, a comparative group, that it did not also provide women.[19] The fact that Gilbert was a federal case that dealt with sex discrimination in the workplace, and not the public accommodations context, makes the Sixth Circuit’s decision to use the Gilbert framework for their analysis of sex discrimination under a state public accommodations statute even more curious.

In its analysis of the trial court’s decision in Derungs, the Sixth Circuit looked to Ohio case law which analyzed discrimination cases based on the evidence of subclasses receiving better treatment than other subclasses.[20] The court reviewed several cases, including a barbershop that was found to discriminate against its white and black customers,[21] and a trailer park operator who ordered a tenant to leave the lot after learning that she associated with black people.[22] All the cases the Sixth Circuit reviewed involved discriminatory incidents that could conceivably produce evidence of an alternate subclass being treated differently than the Plaintiffs in those cases were treated. In contrast, the Plaintiffs in Derungs faced discrimination by engaging in behavior that biology itself restricts to only the female sex, and excludes the alternate subclass of the male sex entirely.[23] Due to this, the Sixth Circuit’s decision to compare Derungs to discrimination cases where evidence of an alternate class receiving better treatment is entirely plausible is contentious.

Although the types of discrimination in the cases the Sixth Circuit reviewed differed from the discrimination alleged in Derungs on a biological level, the Circuit inevitably affirmed the district court’s decision.[24] The rationale was that Plaintiffs’ case was a “sex plus” case, where the alleged discrimination was not only based on sex, but on sex considered in conjunction with a second characteristic.[25] Since Plaintiffs could not provide evidence of a subclass of men who were treated differently by Wal-Mart when engaged in breast-feeding, the Circuit held that there was no showing that Wal-Mart had engaged in sex based discrimination.[26]

Ohio’s Breast-feeding Statute

In 2005, after the Sixth Circuits disappointing decision in Derungs, the Ohio legislator amended the Ohio Revised Code (ORC) to include a breast-feeding statute that explicitly and affirmatively provided for a woman’s right to breast-feed in places of public accommodations in Ohio.[27] However carving out an affirmative right to breast-feed in the ORC did not invalidate the Sixth Circuit’s reasoning in its decision.[28] Unfortunately, the analysis behind the Derungs decision is still good law, and has been cited to following the amendment.[29]

The fact that Derungs is still good law is notable, specifically because Congress responded to the Supreme Court’s decision in Gilbert by amending Title VII through the Pregnancy Discrimination Act.[30] Just as the Ohio legislator did in response to Derungs, following the Gilbert decision, Congress amended Title VII to include plain English protection for women against pregnancy-based sex discrimination.[31] Unfortunately, just as Congress’s amendment to Title VII did not prohibit the Sixth Circuit from employing Gilbert’s outdated framework, there is nothing to prevent other jurisdictions from looking to Derungs. The Ohio amendment also differs from Congress’s reaction to Gilbert in that Congress reacted by amending the very definition of sex discrimination under Title VII. On the other hand, the Ohio legislators merely amended the ORC to include an affirmative breast-feeding right under a general provision, and left the Ohio Civil Rights Act unchanged.

The fact that the analysis behind Derungs is still good law, and the fact that the Ohio amendment was made under a general provision, makes amendment a small, albeit important, step in overcoming the indifferent attitude that governments and the judiciary have toward women’s breast-feeding rights.

Equity to Produce Fairness


            The Equal Protection clause that birthed civil rights laws dictates that all people be treated equally under the law.[32] Courts undoubtedly struggle with the application of equality when it comes to the differences that typically exist between the male and female sex. However, overly rigid frameworks result in legal loopholes where sex discrimination can thrive. Strict interpretations of equal protection that do not recognize such differences dictate sex discrimination, undermining the very purpose of laws that prohibit sex discrimination.

The district court and the Sixth Circuit’s hairsplitting reasoning in Derungs that discrimination resulting from the female population’s distinctive ability to become pregnant is not sex discrimination, is disappointing. Pregnancy and the effects of pregnancy, such as lactation, are conditions that are confined strictly to the female sex.[33] Those who become pregnant and lactate can do so solely because of their sex.[34]

However, the Supreme Court in Gilbert, and the district court and Sixth Circuit in Derungs, chose to dismiss this distinction in favor of a strict interpretation and application of equal treatment

In the pursuit of strict interpretations of equal protection standards, courts have come up with unrealistic and impracticable standards of comparisons. A policy that disproportionally impacts only one sex in grossly negative ways should not be glossed over as gender-neutral policies that satisfy equality. Courts must become comfortable with the notion that there can be instances where the existence of a policy could be inconsequential to one group but could produce extreme hardships and burdens for another if it did not exist. Anti-discrimination protection for breast-feeding women is one such instance where the rights of the male sex are entirely unaffected by existence of laws and policies that protect pregnancy. As such, the analysis in such instances should not be whether laws and policies affect both sexes equally, but whether such laws and policies have a disparate impact on only one sex. By doing so, courts will find that many policies that seem fair on the surface are not gender-neutral after all.[35]

Conclusion

Denying that pregnancy-based discrimination is sex discrimination is a dangerous proposition. Courts are understandably unsure how to approach the differences between the male and female sex. However, previous decisions such as Gilbert and Derungs unapologetically blanket the issue of sex discrimination faced by millions of women. Ironically, insisting that equal treatment and differences in how sexes are discriminated against are mutually exclusive is what impedes the equitable application of anti-discrimination statutes. The biological differences between the female and male sex calls for certain kinds of differences in the laws that protect the interests and liberties of each sex. This fact is something courts must become comfortable with if the promotion of equality and anti-discrimination is truly a goal.

[1] CENTERS FOR DISEASE CONTROL AND PRESENTATION. (stating that one of the most highly effective preventive measures a mother can take to protect the health of her infant is to breast-feed), at https://www.cdc.gov/breastfeeding/promotion/index.htm (last visited Mar. 10, 2017).

[2] Patricia Spurles, A Qualitative study of Attitudes toward Public Breastfeeding Among Young Canadian Men and Women, 2 J Hum. Lact. 131-37 (2011).

[3] Heather M. Kolinksy, Respecting Working Mothers With Infant Children: The Need For Increased Federal Intervention to Develop, Protect, & Support a Breastfeeding Culture in the United States 17 Duke J. of Gender L. & Pol’y 333, 361 n.224 (2010).

[4] Derungs v. Wal-Mart Stores Inc., 141 F. Supp. 2d 885, 886 (S.D. Ohio 2001).

[5] Places of public accommodations include any inn, restaurant, eating house, barbershop, public conveyance by air, land, or water, theater, store, other place for the sale of merchandise, or any other place of public accommodation or amusement of which the accommodations, advantages, facilities, or privileges are available to the public. Ohio Rev. Code Ann. § 4112.01 (Page, Lexis Advance through file 178 (HB 532)).

[6] Ohio Rev. Code Ann. § 4112.02 (Page, Lexis Advance through file 178 (HB 532)).

[7] Derungs, 141 F. Supp. 2d at 888.

[8] Id. at 886.

[9] Id.

[10] The suit was removed to federal court after Wal-Mart filed a notice for removal based on diversity jurisdiction.

[11] Derungs, 141 F. Supp. 2d at 894.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Derungs v. Wal-Mart Stores, Inc., 374 F.3d 428, 437 (6th Cir. 2004).

[17] The comparability analysis evaluates discrimination by looking to evidence of members of a comparable group receiving better treatment. See Gen. Elec. Co. v. Gilbert, 429 U.S. 125, 127-30 (1976).

[18] Gen. Elec. Co. v. Gilbert, 429 U.S. at 126.

[19] Id. at 130.

[20] Derungs v. Wal-Mart Stores, Inc., 374 F.3d at 433.

[21] See Gegner v. Graham, 1 Ohio App. 2d 442, 205 N.E.2d 69 (1964).

[22] See Ohio Civil Rights Com. v. Lysyj, N.E.2d 3, 7 (1974).

[23] Benjamin B. Wolman, Adolescence: Biological and Psychological Perspectives 74 (1998).

[24] Derungs v. Wal-Mart Stores, Inc., 374 F.3d.

[25] Id. at 432.

[26] Derungs v. Wal-Mart Stores, Inc., 374 F.3d at 437.

[27] Ohio Rev. Code Ann. § 3781.55 (Page, Lexis Advance through file 178 (HB 532)).

[28] The Ohio legislator did not amend § 4112.02. Instead the legislator created a new breast-feeding statute, separate from the statute that was analyzed in Derungs.

[29] See Philipsen v. Univ. of Mich. Bd. of Regents, No. 06-CV-11977-DT, 2007 U.S. Dist. LEXIS 25898 (E.D. Mich. Mar. 22, 2007).

[30] Deborah A. Widiss, Gilbert Redux: The Interaction of the Pregnancy Discrimination Act and the Amended Americans with Disabilities Act, 46 UC Davis Law Review 961, 963 (2013) (stating that Congress disagreed with the Court’s decision in Gilbert and quickly superseded the decision by enacting the Pregnancy Discrimination Act).

[31] Pub. L. No. 95-555, 92 Stat. 2076 (1978).

[32] U.S. Const. amend. XIV, § 1.

[33] Benjamin B. Wolman, Adolescence: Biological and Psychological Perspectives 74 (1998).

[34] Recognition of this distinctions between the sexes is aligned with the Seventh Circuit’s decision in Hivley v. Ivy Tech, where the court held that “[d]iscrimination on the basis of sexual orientation is a form of sex discrimination.” Hively v. Ivy Tech Cmty. Coll. of Ind., 853 F.3d 339, 341 (7th Cir. 2017). The court rejected the notion that the test for sex discrimination was whether a member of the opposite sex would face discrimination in the same way, and instead held that “the essence of the claim is that the plaintiff would not be suffering the adverse action had his or her sex, race, color, national origin, or religion been different.” Id. However, the Sixth Circuit very recently rejected the Hivley court’s reasoning as having no authoritative precedent in the Sixth Circuit.  See Grimsley v. Am. Showa, Inc., No. 3:17-cv-24, 2017 U.S. Dist. LEXIS 133350, at *10 (S.D. Ohio Aug. 21, 2017).

[35] Gen. Elec. Co. v. Gilbert, 429 U.S. 147-60. (Brennan, J., dissenting that the Court should have analyzed General Electric’s disability policy considering the company’s history of downgrading the role of women in the workforce, and its policy was clearly not gender-neutral).

Undue Burdens: Legislation with an Unconstitutional Purpose

Author: Kalisa Mora, Associate Member, University of Cincinnati Law Review

On January 21, 2017, two and a half million people gathered across the world to stand, speak, and march for the rights of women.[1] These women were advocating for many rights, among them, reproductive freedom. But another, much less public, march began in November and continues still today.[2] Since the election of President Donald Trump, women across the United States have been visiting their gynecologists or Planned Parenthood to request long-term contraceptive solutions.[3] Triggered by an administration that is hostile to abortion rights[4] and the Affordable Care Act,[5] fear for the loss of control of their reproductive rights has driven the recent choices of many women across the country. Unfortunately, while women are taking necessary precautions to refrain from getting pregnant, the Trump administration’s rhetoric surrounding abortion has emboldened states.[6] Many of these states have proposed and enacted bills that place undue burdens on the right of a woman to choose to have an abortion.[7] Some are even so blatantly contrary to past Supreme Court cases that the motivation behind these bills is concerning. The bulk of this article will discuss the Supreme Court precedent on abortion and how these proposed and enacted state bills are unconstitutional.

SCOTUS History on the Right to an Abortion

On January 22, 1973, the Supreme Court handed down the monumental decision Roe v. Wade. Roe recognized that the constitutional right to privacy extends to a woman’s right to make her own personal medical decisions, specifically the decision to have an abortion without undue interference.[8] This right is not absolute and must be balanced against the states’ interests in regulating abortions to protect the health of the mother and the potential for life.[9] As such, the Court noted that the state’s interests become sufficiently compelling at a certain point in the pregnancy to allow regulations to be put in place to govern the abortion decision.[10]

Almost twenty years later, the Supreme Court revisited the right to abort in Planned Parenthood v. Casey.[11] Reaffirming the central holding in Roe, the Court reminded the states that there are limits to on interference with “a person’s most basic decisions about family and parenthood, as well as bodily integrity.”[12] Casey established a new test to evaluate state regulations on the right to have an abortion. This standard prohibits regulations that impose an “undue burden” on a woman’s right to seek an abortion. The Court noted that only where a regulation has a purpose or effect of placing substantial obstacle in the path of the woman “does the . . . [s]tate reach into the heart of the liberty protected by the Due Process Clause.”[13]

At issue in Casey were five provisions of the Pennsylvania Abortion Control Act of 1982.[14] These provisions required, among other things, that a married woman seeking an abortion must sign a statement indicating that she has notified her husband.[15] Alternatively, the provision allowed the married woman, in lieu of notifying her husband, to sign a statement certifying that: (1) her husband is not the man who impregnated her; (2) her husband could not be located; (3) the pregnancy is the result of spousal sexual assault that she has reported; or (4) the woman believes that notifying her husband will cause him or someone else to inflict bodily injury upon her.[16] If a physician performed the abortion without one of these two written statements, the doctor’s license would be revoked and they would be liable to the husband for damages.[17]

Finding the other four provisions not unduly burdensome on the woman’s right to seek an abortion, the Court only struck down the spousal notification requirement. Looking to an earlier case, the Court reaffirmed its holding that “the State cannot delegate to a spouse a veto power which the state itself is absolutely and totally prohibited from exercising during the first trimester of pregnancy.”[18] The Court held that the spousal notification requirement was “tantamount to [a] veto” and was unconstitutional.[19] The Court did not ignore the husband’s interest in the life of his child, but simply recognized that empowering the husband with authority over his wife, similar to a parent over a child, was problematic, especially for a woman who reasonably feared the consequences of notifying her husband that she was pregnant.[20] This holding has remained untouched since 1992 and its relevancy has not diminished.

State Legislation

In the middle of an extremely publicized national election, local politics went under the radar. Many states took this opportunity to enact legislation that not only poses a risk to the health and safety of women, but is plainly unconstitutional in light of Planned Parenthood v. Casey and Whole Women’s Health v. Hellerstedt.[21]

On January 9, 2017, Oklahoma State Representative Justin Humphrey introduced a bill, HB 1441, that was approved by the state House Public Health Committee on February 14, 2017.[22] House Bill 1441 demands that “[n]o abortion shall be performed in this state without the written informed consent of the father of the baby.”[23] The bill requires a woman to provide the identity of the father of the baby to her physician when seeking to abort her pregnancy.[24] It further states that if the person so identified as the father contests his paternity, he may demand that a test be performed to verify his paternity of the child.[25] The bill does include exceptions for a pregnancy that is the result of rape, incest, or in cases where the physician determines that carrying the baby places the woman’s life in danger.[26] If approved by both houses of the Oklahoma legislature, the bill would take effect on November 1, 2017.[27]

However, the threat is not restricted to Oklahoma. At least fourteen other states introduced anti-abortion legislation in January 2017.[28] Many states continue to push for bills reflecting the “personhood” movement, based on the belief that life begins at conception.[29] Other states, such as Arizona and Missouri, enacted regulations on healthcare facilities, known as “Targeted Restrictions on Abortion Providers” or TRAP laws.[30] These regulations purport to make abortions safer, but as shown in Whole Women’s Health v. Hellerstedt, there is little to no evidence that the regulations are needed.[31] Additionally, a new Arkansas law grants a woman’s family members or healthcare provider a private right of action against an abortion provider to stop an abortion.[32] These laws cannot withstand constitutional scrutiny as they place substantial obstacles in the way of a woman’s right to seek an abortion.

Unavoidably and Unequivocally Unconstitutional

In Planned Parenthood v. Casey, the Supreme Court prohibited a measure that required a married woman to notify her spouse before an abortion could be performed. The Court emphasized the husband’s interests and concern for his child, but ruled that this concern could not act as a veto against the woman’s decision. Oklahoma HB 1441 is directly contrary to this holding, and even attempts to expand on the unconstitutional Pennsylvania provision. This bill forces every woman to notify and obtain informed consent from any father, not just in the case of a marriage. It is unavoidably unconstitutional as it places an undue burden on the woman’s abortion right. The bill’s sponsor, in an interview with The Oklahoman, noted “[m]y bill would stop an abortion if a father does not agree to the abortion.” This bill gives the father a veto power over the woman and her body. This is unequivocally unconstitutional.

Furthermore, the bill places an undue burden on the woman by stalling the abortion for a paternity test. After eight weeks into a pregnancy, the procedure is extremely invasive into the woman’s body. To allow a man to force a woman to undergo this procedure is an undue burden on her right to have an abortion.

Ignorant to the Ripple Effect

As states continue to enact legislation to effectively prohibit women from seeking abortions, it is worth noting that many seem willfully blind to the effects that their actions have on the health and safety of these women and their families. Several states in the United States have enacted “trigger laws” in hopes and in preparation for the overturning of Roe v. Wade. These laws would completely ban abortion in their states and take immediate effect. Many of these states already lack an abortion provider in 90-100% of their counties.[33] One of the states’ reasoning for enacting regulation after regulation on abortion is the state’s concern for the health and safety of the mother. Yet, statistics show that illegal and heavily regulated abortion only leads to unsafe and extremely dangerous abortions.

Additionally, some of these states are hostile to a child once it is born. Today, half of abortions sought are by women below the federal poverty level.[34] The “Family Cap” was introduced in the early 1990s and denies a child welfare assistance if, when the mother was pregnant or gave birth, she was receiving benefits from the state or federal government. In a bill summary for HB 1441, Representative Humphrey noted that the bill would have no fiscal impact on the state. Notably, this statement remains true because Oklahoma is one of the many states that still has a family cap. States, such as Oklahoma, effectively force a woman to have a child and then turn a blind eye to the child once it is born into a family that cannot adequately support it. Policies that allow for such a result cannot truly have the health and safety of the families in mind.

Conclusion

States are becoming increasingly bold when it comes to regulations on a woman’s right to an abortion. Some are writing language so contrary to constitutional precedent that the motivation behind the bills raise grave concerns. With a Presidential administration that expressed deep disdain for Roe v. Wade, attention to local politics is urgent. After a wave of phone calls, faxes, and letters in light of the cabinet nominees, it is now time to turn to state governments. When HB 1441 makes it to the House and Senate floors in Oklahoma, activists must compel their friends, family, and colleagues to raise their voices for the rights of women. As new legislation arises and the Supreme Court gains a ninth member, it seems the march for women’s rights has only begun.

[1] Heidi Przybyla & Fredreka Schouten, At 2.6 Million Strong, Women’s Marches Crush Expectations, USA Today (2017), http://www.usatoday.com/story/news/politics/2017/01/21/womens-march-aims-start-movement-trump-inauguration/96864158/.

[2] Lisa Bonos, The IUD Rush: Why Women are Seeking out Birth Control that can Outlast a Presidency, The Washington Post (2017), https://www.washingtonpost.com/news/soloish/wp/2017/02/07/why-women-are-seeking-out-birth-control-that-can-outlast-a-presidency/?utm_term=.01063b4c3bde.

[3] Id.

[4] Rebecca Harrington & Sonam Sheth, Here’s Where Trump Stands on Abortion and Other Women’s Health Issues, Business Insider (2016), http://www.businessinsider.com/donald-trump-abortion-womens-health-platforms-positions-2016-11.

[5] Bonos, supra note 2.

[6] Julie Zauzmer & Sarah Bailey, March for Life: Pence Speaks as Thousands Assemble at Washington Monument, The Washington Post (2017), https://www.washingtonpost.com/local/march-for-life-thousands-assemble-at-washington-monument/2017/01/27/7d880d52-e40a-11e6-ba11-63c4b4fb5a63_story.html?utm_term=.0373a8f99da4.

[7] Lisa Ryan, A New Arkansas Law Could Allow Fathers to Sue to Block Abortions, The Cut (2017), http://nymag.com/thecut/2017/02/spouses-can-block-abortions-under-new-arkansas-law.html; see also Sandhya Somashekhar & Amy Wang, Lawmaker Who Called Pregnant Women a ‘Host’ Pushes Bill Requiring Fathers to Approve Abortion, The Washington Post (2017), https://www.washingtonpost.com/news/post-nation/wp/2017/02/14/oklahoma-bill-would-require-father-of-fetus-to-approve-abortion/?utm_term=.de5ac2623d6a.

[8] Roe v. Wade, 410 U.S. 113 (1973).

[9] Id. at 154.

[10] Id.

[11] Planned Parenthood v. Casey, 505 U.S. 833 (1992).

[12] Id. at 849.

[13] Id. at 874.

[14] Id. at 833.

[15] Casey, 505 U.S. at 833.

[16] Id. at 887.

[17] Id. at 887-88.

[18] Planned Parenthood of Cent. Missouri v. Danforth, 428 U.S. 52, 69 (1976).

[19] Casey, 505 U.S. at 897.

[20] Id. at 898.

[21] 579 U.S. __ (2016).

[22] Public health and safety; prohibiting abortion to be performed without consent of the father; effective date, H.B. 1441, 56th. Cong. (2017).

[23] Id. at § 1(A).

[24] H.B. 1441 at § 2(B).

[25] Id.

[26] H.B. 1441 at § 1(D).

[27] H.B. 1441 at § 2.

[28] Olivia Becker, At Least 46 Anti-Abortion Bills are Already in Front of State Legislators, VICE News (2017) https://news.vice.com/story/at-least-46-anti-abortion-bills-are-already-in-front-of-state-legislatures-in-2017.

[29] Id.

[30] Id.

[31] 579 U.S. __ (2016) (holding that there was no evidence to support the assertion these regulations would make abortions safer, but instead placed substantial burdens on a woman’s ability to choose to have an abortion).

[32] Abortion—Unborn Child Protection from Dismemberment, 2017 Arkansas Laws Act 45 (H.B. 1032) (allowing a woman’s husband, her parents, or her healthcare provider to seek an injunction to stop the abortion).

[33] Abortion Clinics: Percentage of Counties Without a Known Clinic, Guttmacher Institute (2016), https://data.guttmacher.org/states/map?topics=58&dataset=data.

[34] Abortion Patients are Disproportionately Poor and Low Income, Guttmacher Institute (2016), https://www.guttmacher.org/infographic/2016/abortion-patients-are-disproportionately-poor-and-low-income.

Copyrights? Bring It On

Author: Meg Franklin, Associate Member, University of Cincinnati Law Review

In a 2000 film called Bring It On, a high school cheerleading squad captained by Kirsten Dunst was accused of stealing cheer routines.[1] Seventeen years later, the spotlight is again on cheerleading. Yet, instead of copied cheer routines, The Supreme Court is concerned with allegedly copied cheerleading uniform designs.[2]

In Star Athletica v. Varsity Brands, the Supreme Court recently granted certiorari to end disagreement among lower courts over the “separability” test in copyright law.[3] Since a bedrock principle of copyright law is that only expression can be copyrighted, this test directs courts to separate the expressive elements from the utilitarian elements of an article in determining .[4] After refining this test, Supreme Court ruled the designs on cheerleading uniforms were eligible for copyright protection.[5] This result was noteworthy because many courts and the United States Copyright Office have copyrights for clothing designs.[6] Clothing designs were deemed inseparable from the usefulness of the clothing.[7]  Some commentators may interpret this holding as a message to fashion designers and designers of other useful articles to “bring it on” and enforce their copyrights. However, time will tell whether the fast-paced fashion industry will use litigation to protect their original designs.

Copyrights for Useful Articles

The Court’s decision in Star Athletica v. Varsity Brands— whether Varsity Brands held a valid copyright—was dependent on whether the designs on the cheerleading uniforms could be classified as copyrightable subject matter.[8] In a copyright infringement case, a threshold issue is whether a valid copyright exists, because some articles are not deemed copyrightable subject matter.[9] Under the Copyright Act of 1976,[10] copyrightable subject matter is limited to original works fixed in any tangible medium of expression such as a “pictorial, graphic, or sculptural work.”[11] Thus, a tenet of copyright law is that a copyright protects expression but not ideas.[12] In Baker v. Selden, the Court elaborated that a copyright protects an author’s original expression but not the utilitarian ends to which expression may be put.[13] Congress later codified this holding in §102(b) of the Copyright Act.[14] Yet, the difficultly in determining the boundary between the “original expression” and the “utilitarian ends” has produced a body of law regarding “useful articles.”[15]

Useful articles are not copyrightable subject matter,[16]“to qualify as a pictorial, graphic, or sculptural work on its own, the feature cannot itself be a useful article.”[17] In the leading case of Mazer v. Stein[18], the Court held that the statuette of a dancer was copyrightable even though it was used as the base of a lamp.[19] There, the lamp itself was a useful object, but the design of the stand could be protected under copyright because its design could be “conceptually” separated. Congress later codified this holding in § 101 and § 113(a) of the Copyright Act of 1976.[20] Under § 101, “the design of a useful article” can be copyrightable “only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.”[21] The requirement to identify design “separately from” utility in § 101 has led to the development of the “separability test.”

The Long-Awaited Separability Test

The House Report at the time of the codification of Mazer in § 101 and § 113(a) of the Copyright Act of 1976, suggested that separability may occur either “physically or conceptually.”[23] In response, courts diverged in their development of “physical separability” and “conceptual separability” tests.[24] Basically, physical separability exists when one could physically remove a design from the useful article without impeding the function of the article.[25] On the other hand, conceptual separability exists when one can imagine the design elements apart from the useful elements of the article.[26] However, courts have not applied these test consistently. In fact, before the Court granted certiorari in Varsity Brands, Judge McKeaugue ended his dissent with a plea to the Supreme Court or Congress: “It is apparent that either Congress or the Supreme Court (or both) must clarify copyright law with respect to garment design. The law in this area is a mess—and it has been for a long time. . . . until we get much-needed clarification, courts will continue to struggle and the business world will continue to be handicapped by the uncertainty of the law.”[28]

Fortunately for those frustrated with the former iterations of the separability test, Justice Thomas clarified with a textual interpretation of the Copyright Act.[29] The majority reasoned that based on the language of § 101, there is a “separate identification” requirement and an “independent-existence” requirement.[30] It was not difficult for the Court to “look at the useful article and spot some two- or three-dimensional element that appears to have pictorial, graphic, or sculptural qualities.”[31] The cheerleading uniform’s design with shapes, colors, and lines satisfied this “separate identification” requirement.[32]  Justice Thomas’s majority explained the independent existence requirement demanded “the feature must be able to exist as its own pictorial, graphic, or sculptural work as defined in §101 once it is imagined apart from the useful article.”[33]

This imagination test may seem reminiscent of the “conceptual separability” of past cases. Yet, the Court expressly rejected this prior interpretation of § 101 by explaining, “[b]ecause we reject the view that a useful article must remain after the artistic feature has been imaginatively separated from the article, we necessarily abandon the distinction between “physical” and “conceptual” separability, which some courts and commentators have adopted based on the Copyright Act’s legislative history.”[34] Instead, “[t]he ultimate separability question . . . is whether the feature for which copyright protection is claimed would have been eligible for copyright protection as a pictorial, graphic, or sculptural work had it originally been fixed in some tangible medium other than a useful article before being applied to a useful article.”[35] In applying this test to the cheerleading uniform designs, the Court found the uniforms met the threshold requirement of copyrightable subject matter.[36]

New Role for Copyright in Clothing and Fashion

Besides clearing up the confusion regarding the separability test, some commentators believe that Star Athletica v. Varsity Brands will pave the way for copyrights in many new areas.[37] The stark contrast between prior application of the law of useful articles and the pronouncement in Varsity Brands can be illustrated by the Copyright Office’s existing guidelines. For example, 924.3(A) of the Copyright Office’s Compendium states, “Clothing such as shirts, dresses, pants, coats, shoes, and outerwear are not eligible for copyright protection because they are considered useful articles. This is because clothing provides utilitarian functions, such as warmth, protection, and modesty. As a result, the U.S. Copyright Office will not register a claim in clothing or clothing designs.” [38] Contrast that guideline with the recent Ninth Circuit ruling which upheld willful copyright infringement on a fabric pattern.[39]

Although only time will tell, some predict this ruling will have the largest impact on clothing with longer shelf-lives such as the costume and wedding industry.[40] Due to the potential for long-term returns, these industries may justify the cost of litigation more easily than industries that have styles with shorter shelf-lives. Therefore, litigation may be impractical for companies designing clothes in faster-paced markets.[41]

Conclusion

The Court’s ruling in Star Athletica v. Varsity Brands changes the traditional understanding of copyrights in clothing designs. It provides much-needed clarification on the separability test for useful articles. Additionally, it could provide wider access to copyrights for useful articles, like clothing, not formally understood as copyrightable subject matter. Since the Copyright Office has explicitly disallowed copyrights for clothing, it is likely that new guidelines will be issued to reflect the holding in Star Athletic v. Varsity BrandsFor example, the Copyright Office will have to remove § 924.3(A) of its Compendium because clothing designs are copyrightable subject matter under Star Athletic v. Varsity Brands. Yet, only time will tell whether all areas of the clothing industry will take advantage of this new avenue to copyrightability.

[1] http://www.imdb.com/title/tt0204946/

[2] See, Star Athletica, L.L.C. v. Varsity Brands, Inc., No. 15-866, 2017 U.S. LEXIS 2026 (Mar. 22, 2017).

[3] Id.

[4] Infra, n.8.

[5] Star Athletica, L.L.C. v. Varsity Brands, Inc., No. 15-866, 2017 U.S. LEXIS 2026 (Mar. 22, 2017).

[6] See, infra, n. 37.

[7] Id.

[8] Id. at *10-11.

[9] 4 Nimmer on Copyright § 13.01 (2017).

[10] Congress’s authority to enact the Copyright Act is found in the United States Constitution: “The Congress shall have power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries[.]” U.S. Const. art. I, § 8, cl. 8.

[11] “Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories: [listing a non-exclusive list of eight copyrightable subject matter categories.]” 17 U.S.C. § 102(a).

[12] Baker v. Selden, 101 U.S. 99 (1879).

[13] Id.

[14] “In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” 17 U.S.C. § 102(b).

[15] Supra, n. 24.

[16] “[A] ‘useful article’ is an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information.” 17 U.S.C.S. § 101 (LexisNexis, Lexis Advance through PL 115-14, approved 3/27/17).

[17] Star Athletica, L.L.C. v. Varsity Brands, Inc., No. 15-866, 2017 U.S. LEXIS 2026, at *17 (Mar. 22, 2017). Also,

[18] 347 U.S. 201, 74 S. Ct. 460 (1954).

[19] Id.

[20] Star Athletica, L.L.C. v. Varsity Brands, Inc., No. 15-866, 2017 U.S. LEXIS 2026, at *12 (Mar. 22, 2017).

[21] 17 U.S.C.S. § 101 (LexisNexis, Lexis Advance through PL 115-14, approved 3/27/17).

[22] Star Athletica, L.L.C. v. Varsity Brands, Inc., No. 15-866, 2017 U.S. LEXIS 2026, at *18-19 (Mar. 22, 2017).

[23] H. R. Rep. No. 94-1476, p. 55 (1976).

[24] 1 Nimmer on Copyright § 2A.08.

[25] Id.

[26] Id.

[27] Id. See, also, ARTICLE: THE COPYRIGHT/PATENT BOUNDARY, 48 U. Rich. L. Rev. 611 (“The sheer number of tests applied by the courts and proposals suggested by scholars for the reform of copyright’s useful article doctrine is overwhelming.”)

[28] Varsity Brands, Inc. v. Star Athletica, LLC, 799 F.3d 468, 496-97 (6th Cir. 2015) (McKeague, J., dissenting; internal citations omitted).

[29] “The statute provides that a ‘pictorial, graphic, or sculptural featur[e]’ incorporated into the ‘design of a useful article’ is eligible for copyright protection if it (1) ‘can be identified separately from,’ and (2) is ‘capable of existing independently of, the utilitarian aspects of the article.’ Star Athletica, L.L.C. v. Varsity Brands, Inc., No. 15-866, 2017 U.S. LEXIS 2026, at *16 (Mar. 22, 2017).

[30] Id.

[31] Id.

[32] See, id.

[33] Id.

[34] Star Athletica, L.L.C. v. Varsity Brands, Inc., No. 15-866, 2017 U.S. LEXIS 2026, at *27 (Mar. 22, 2017).

[35] Id. at *18.

[36] Id. at *21. See, also, Star Athletica, L.L.C. v. Varsity Brands, Inc., No. 15-866, 2017 U.S. LEXIS 2026, at *21 n.1 (Mar. 22, 2017) (“We do not today hold that the surface decorations are copyrightable. We express no opinion on whether these works are sufficiently original to qualify for copyright protection, see Feist Publications, Inc. v. Rural Telephone Service Co., 499 U. S. 340, 358-359, 111 S. Ct. 1282, 113 L. Ed. 2d 358 (1991), or on whether any other prerequisite of a valid copyright has been satisfied.”)

[37] See, e.g., Sandra Aistars, Courthouse Steps: Fashionable Copyright Law in the U.S. Supreme Court – Podcast, The Federalist Society (April 5, 2017), http://www.fed-soc.org/multimedia/detail/courthouse-steps-fashionable-copyright-law-in-the-us-supreme-court-podcast.

[38] Compendium of U.S. Copyright Office Practices, 3rd Ed. (Dec. 22, 2014), https://www.copyright.gov/comp3/chap900/ch900-visual-art.pdf.

[39] Unicolors, Inc. v. Urban Outfitters, Inc. , 2017 BL 107988, 9th Cir., No. 15-55507, 4/3/17.

[40] Supra, n. 33.

[41] Id.

When Do I Get My Lawyer?

Author: Andrew Fernandez, Associate Member, University of Cincinnati Law Review

The Sixth Amendment is a fundamental right that ensures those accused of criminal offenses have sufficient legal counsel on decisions that will affect their life and liberty. Without this right, criminal defendants would be forced to navigate the confusing and seemingly harsh world of criminal law.[1] Without this protection, the government could manipulate criminal defendants into severe restrictions of their liberty without the guidance of someone advocating their interests. One significant component of this right is the point at which the right attaches. The Supreme Court has held the right to counsel attaches at a “critical stage” of a criminal proceeding.[2] Critical stages can be pre-trial proceedings if formal charges have been filed including post indictment plea negotiations, post indictment lineups, and post indictment interrogations.[3]

Circuit courts have inconsistently interpreted whether a critical stage test should be determined using a bright line test or if there should be a rebuttable presumption incorporated into the analysis. Five circuit courts follow the bright line rule approach; while, four other circuits allow for a rebuttable presumption to the standard that the right to counsel only attaches after formal charges are filed.[4] For example, the Sixth Circuit applied the bright line approach in holding a criminal defendant did not have a right to counsel at plea negotiations before formal charges were filed. [5] In contrast, the Seventh Circuit held this standard is merely a presumption the prosecution has crossed the threshold of factfinder to adversary. [6] However, the Supreme Court should alter its holdings in order to accommodate the Seventh Circuit approach because it best protects criminal defendants.

The Bright Line Approach

            In Turner, the Sixth Circuit applied the bright line approach holding the defendant in this case had no Sixth Amendment right to counsel during plea negotiations because no formal charges had been filed. [7] During Tennessee’s prosecution of the defendant for aggravated robbery, the defendant’s attorney and U.S. District Attorney’s Office discussed a potential plea offer for federal charges arising out of the same conduct.[8] The defendant originally declined to plead but later accepted a less favorable plea offer.[9] The defendant then sued to have his conviction struck down because of ineffective counsel during his plea negotiations.[10] The court determined even though the Supreme Court had never directly addressed whether a defendant had a right to counsel at plea-negotiations, it had consistently stated the right to counsel only applies when formal charges have been filed.[11]

Furthermore, the Sixth Circuit had previously held twice the right to counsel only applies when formal charges are brought against the defendant. [12] For example, in Moody[13], even though the Court felt the result was “a triumph of the letter over the spirit of the law”, the Sixth Circuit felt bound to follow Supreme Court precedent even though it thought this interpretation was inconsistent with the Framer’s intentions for the Sixth Amendment. [14] The Sixth Circuit held the defendant’s motion must be dismissed because it was undisputed by the parties no formal federal charges had been filed during the course of the plea negotiations.

The Rebuttable Presumption Approach

            In Larkin, the Seventh Circuit applied the rebuttable presumption approach by holding a defendant could prove the government had crossed the divide from factfinder to adversary.[15] In this case, the convictions of the defendant for robbery were largely founded on the eyewitness testimony of bank employees.[16] The employees identified the defendants at a lineup six months before trial in addition to their in-court identification of the defendants.[17] The defendants argued the district court committed reversible error by not suppressing the testimony for a number of reasons including the fact that the government refused to grant the defendant’s request to furnish appointed counsel at the lineup.[18] The court first noted the right to counsel attaches at the beginning of adverse criminal proceedings.[19] Therefore, had the lineup occurred after the grand jury had indicted the defendant, refusal to provide counsel would have violated the Sixth Amendment and suppression of the evidence would have been necessary.[20] However, the lineup in this case occurred three months before the indictment so the right presumptively did not attach.[21] This presumption may be rebutted by a demonstration that even though formal charges had not been filed, the government had ceased to be a factfinder and was now an adversary.[22] The court held the defendants failed to show the government had crossed the line from factfinder to adversary and therefore ruled against the defendants.[23] The court did note that although the Constitution did not compel the government to grant the defendant’s request for appointed counsel, the government should make every effort to grant such requests at pre-indictment lineups.[24] In this way, justice is best served and  convictions are not tainted.[25]

The Supreme Court Should Follow the Seventh Circuit Approach

Because there is such a significant circuit split, it is likely the Supreme Court will rule on the split soon. When the Supreme Court chooses to rule on this split, it should follow the Seventh Circuit’s approach because this strikes the best balance between protecting the rights of criminal defendants and ensuring the government’s interest in fighting crime.

In Turner, the Sixth Circuit referred to its precedent in Moody to flesh out how its decision was rooted in the letter of the law as opposed to the spirit of the Sixth Amendment.[26] The Sixth Circuit in that case acknowledged the pretrial plea negotiations raised the certainty in many cases of the defendant waiving his trial rights in exchange for an imbalanced plea without the assistance of legal counsel.[27] Perhaps most importantly, by offering a plea deal, a prosecutor had committed himself to raising prosecution against the defendant.[28] Even in the Sixth Circuit opinion upholding the bright line approach, the court saw the wisdom in using some sort of presumption standard.

The presumption would best ensure the constitutional balance of the government’s fact finding function and the right of the defendant to an effective legal defense. The presumption the constitutional right does not attach ensures the government is still able to pursue its fact-finding function without being unnecessarily compromised by constitutional restraint. Having a rebuttable presumption also allows the court discretion to look at the facts of the case and determine whether the government crossed the line from factfinder to adversary. For example, as the Sixth Circuit noted it seemed clear the prosecution had crossed the line to adversary when it offered a plea deal.[29] Yet the government can get away with these offers to uneducated clients because they have not formally charged the defendant. This seems to make the Sixth Amendment protection ring hollow particularly when its purpose is to prevent criminal defendants from facing the rigors of prosecution without the assistance of legal counsel.

Some may argue the bright line approach has it merits because it fixes a certain standard that is easy to follow. To allow a rebuttable presumption under the standard could lead to uncertain outcomes in the legal system. Furthermore, the government would be hampered in its criminal investigations by not knowing when it has crossed the line from factfinder to adversary. However, adjusting the standard to a rebuttable one is not likely to lead to different results. As the Seventh Circuit showed in its holding in Larkin, it will still be difficult for defendants to show the government crossed the threshold from factfinder to adversary particularly in a non-plea setting.[30] Furthermore, utilizing a rebuttable presumption standard ensures a criminal defendant has the advice of legal counsel when the defendant faces the possibility of prosecution and incarceration. Therefore, changing the standard will likely not fundamentally change the prevailing norm that the Sixth Amendment does not demand a lawyer be present for most pre-trial proceedings before charges are formally filed.

Conclusion

            The Supreme Court should adopt the Seventh Circuit approach because it best balances the fact-finding needs of the government with the protections of the Sixth Amendment of criminal defendants. A rebuttable presumption standard will ensure a criminal defendant will have the advice of legal counsel when the government considers prosecuting the defendant as opposed to merely collecting information. This is critical in plea negotiations when the liberty of the defendant is at stake. Finally, applying the rebuttable presumption standard will not fundamentally change criminal procedure because defendants would have the burden of proving the nature of the fact-finding function has changed to adversarial. Therefore, the rebuttable presumption standard from the Seventh Circuit will best preserve the fundamental rights the Sixth Amendment offers to criminal defendants.

[1] United States v. Moody, 206 F.3d 609, 614-615 (6th Cir. 2000)

[2] Montejo v. Louisiana, 556 U.S. 778, 786 (2009).

[3] Turner v. United States, 848 F.3d 767, 770 (6th Cir. 2017).

[4] Id. at 771.

[5] Id. at 773.

[6] U.S. v. Larkin, 978 F.2d 964, 969 (7th Cir. 1992).

[7] Turner, 848 F.3d at 771.

[8] Id.

[9] Id.

[10] Id.

[11] Turner, 848 F.3d at 770.

[12] Id. at 771.

[13]  Id.

[14] See id.

[15] Larkin, 978 F.2d. 964, 969 (1992).

[16] Id. at 967.

[17] Id.

[18] Id.

[19] Id. at 969.

[20] Larkin, 978 F.2d at 969.

[21] Id.

[22] Id.

[23] Id.

[24] Id.

[25] Larkin, 978 F.2d at 970.

[26] Turner, 848 F.3d at 771.

[27] Id.

[28] Id.

[29] Id. at 773.

[30]Larkin, 978 F.2d at 969.

PROPOSED REGULATIONS TO CERTAIN LAPSING RIGHTS AND RESTRICTIONS UNDER INTERNAL REVENUE CODE §2704

Author: Ryan Kenny, Associate Member, University of Cincinnati Law Review

An important component of estate tax planning concerns the transfer of family business interest from one generation of business owners to the next. For small family-owned businesses in partnerships and close corporations, it can be important to keep control of the enterprise within the family.

However, transfers of business interests from family member to family member via an estate plan provided opportunities for taxpayers to circumvent the purpose of estate planning and tax laws in ways that were never intended. Wealthy families were able to prevent taxation of larger amounts of wealth with careful tax planning.

In 1990, Congress sought to close the estate freezing loopholes by enacting Internal Revenue Code (Code) §§2701 – 2704.[1] The purpose was to prevent the seemingly arbitrary valuations of interests transfers between holders of interests in entities to their family members. However, as tax planners, taxpayers, and state legislatures combined to affect the regulations of Code §2704 and the corresponding state law provisions contained therein, the provision, along with the other anti-freeze provisions, became “effectively toothless.”[

In response, the Internal Revenue Service issued proposed regulations to strengthen the regulations for lapsing liquidation rights to determine the value of transferred interests in partnerships for estate, gifts, and generation-skipping transfer (GST) tax purposes.[3] This analysis addresses the current regulations under Code §2704, and the proposed amendments. Continue reading

THE COMMERCE CLAUSE AND STATE TAXATION OF INACTIVITY

Author: Ryan Kenny, Associate Member, University of Cincinnati Law Review

In 2012, the United States Supreme Court heard National Federation of Independent Business et al. v. Sebelius, the landmark decision regarding the Affordable Care Act.[1] One of the primary issues in the case was the individual mandate requiring individuals to purchase health insurance, or face a fine.[2] While the Court upheld the fine as a legitimate exercise of Congress’s power to tax[3], the Court held that Congress could not mandate commercial activity, as this was outside the scope of the powers granted under the Commerce Clause of the United States Constitution[4]. The Court held that Congress could not compel “individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce.”[5]

This raises the issue of states’ ability to tax inactivity in a similar manner as the federal government.[6] One possible interpretation from Sebelius is that under the principles of federalism, there are no Commerce Clause limitations on the states in their power to tax inactivity, since the Commerce Clause does not grant Congress the power to regulate inactivity. Another interpretation is that even though the Commerce Clause may not permit Congress to compel commercial activity, state taxes that have the same objective may nevertheless have to satisfy the test of the Dormant Commerce Clause as outlined in case law. In order to prevent the type of protectionist policies for which the Commerce Clause was enacted, the Dormant Commerce Clause must have effect on states’ ability to tax inactivity.

Continue reading

Judicial Barriers: Why the Supreme Court Should Not Impose an Additional Requirement on Rule 24 Intervenors

Author: Kalisa Mora, Associate Member, University of Cincinnati Law Review

The Federal Rules of Civil Procedures were enacted to “secure the just, speedy, and inexpensive determination of every action and proceeding.”[1] Pursuant to these rules, the federal courts possess a duty to exercise authority in a way that all cases will be resolved fairly. Unfortunately, rules that are ambiguous or not clearly defined can be interpreted in many different ways by these courts, causing confusion and variations of legal standards. When this occurs, it is the duty of the Supreme Court to resolve these issues and allay any doubt about what rule, standard, or interpretation governs.

The Supreme Court recently granted certiorari in a land dispute case to answer the underlying question of what the proper standard is for a party moving to intervene in a case.[2] The District Court held that the moving party could not intervene because it lacked proper Article III standing under the United States Constitution.[3] However, the Second Circuit overturned the District Court’s decision, holding that “there is no need to impose the standing requirement upon a proposed intervenor where the existence of a case of controversy has been established in the underlying litigation.”[4] In so ruling, the Second Circuit joined six other circuits in interpreting the Federal Rules to not require Article III standing. However, three other circuit courts have consistently held that Article III standing is required and will deny a moving party the right to intervene if it cannot show it possesses standing. It is this type of unjust and unfair outcomes that the Federal Rules were enacted to prevent. Granting certiorari in Laroe Estates, Inc. v. Town of Chester, the Supreme Court will soon have a chance to remedy the confusion among the courts. Continue reading