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Washington and Lee Law Review - Print Edition

Tribute

by Doug Ammar, David Carson, Kelly Faglioni, John Fishwick, Mark H. Grunewald, Stephen Halpin, Brandon Hasbrouck, Brant Hellwig, Lyman Johnson, Bill Johnston, Rick Kirgis, Brian Murchison, Joan M. Shaughnessy, and Howard Wall

A tribute to Professor Samuel W. Calhoun, who served on the faculty of the Washington and Lee University School of Law from 1978 to 2020. Calhoun became Professor of Law, Emeritus in 2020.

Article

by Steven J. Cleveland

In the 2019 decision Rucho v. Common Cause, the U.S. Supreme Court concluded that federal challenges to partisan gerrymandering—a practice yielding election results that “reasonably seem unjust”—were non-justiciable. If partisan gerrymandering claims are not federally justiciable, and if that conclusion emboldens politicians, how else might incumbents manipulate election mechanics to preserve their political advantage? This Article explores one possibility that was briefly mentioned by the Rucho majority: the strategic advancement or delay of the date of a federal election. The strategic shift of election day is not simply a theoretical problem. Foreign politicians have strategically altered their election days for partisan advantage, U.S. states have delayed elections to fill vacant seats in the Senate, and members of the U.S. Congress have repeatedly proposed changing the date of federal elections.

Because the U.S. Constitution empowers federal legislators to establish the date of a federal election, just as the Rucho Court emphasized that our charter empowers state legislators to establish federal districts, a court may conclude that any challenge to a shift in the date of an election is non-justiciable. This Article addresses charter provisions not pertinent to partisan gerrymandering that limit legislative discretion regarding a shift in the date of a federal election. Moreover, this Article expands on a growing body of scholarship that recognizes federal legislators as fiduciaries and that imports principles of corporate law to analyze issues of federal election law. Given the foundational importance of the shareholder franchise to corporate law, courts closely scrutinize decisions by directors that impede shareholders’ effective franchise, such as a shift in the date that shareholders elect directors. Those corporate law principles should inform a court’s analysis of any challenge to a shift in the date of a federal election.https://scholarlycommons.law.wlu.edu/cgi/viewcontent.cgi?article=4700&context=wlulr

Article

by Eldar Haber

Bystanderism is becoming largely digital. If being subjected to perilous situations was once reserved almost solely for the physical world, individuals now might witness those in peril digitally from afar via online livestreams. New technological developments in the field of artificial intelligence (AI) might also expand bystanderism to new fields, whereby machines—not just humans—are gradually positioned to better compute their surroundings, thus potentially being capable of reaching a high statistical probability that a perilous situation is currently taking place in their vicinity. This current and future expansion of bystanderism into the digital world forms a rather new type of digital bystander that might challenge the legal and social meaning of bad Samaritan laws—legal duties to act on the behalf of others in a perilous situation by reporting the events or aiding those in the perilous situation, when the burden or risk of such aid is low. With the rise in the availability of livestreaming crimes on social media platforms, and the rise in AI capabilities, the current legal framework that governs bad Samaritans might become inappropriate in regulating social behavior and personal safety, which in turn might shift to the almost sole prerogative of platform governance—transforming online users and platforms into becoming the new digital Samaritans.

Article

by Michael A. Perino

In popular rhetoric, insider trading cases are about leveling the playing field between elite market participants and ordinary investors. Academic critiques vary. Some depict an untethered insider trading doctrine that enforcers use to expand their power and enhance their discretion. Others see enforcers beset with agency cost problems who bring predominantly simple, easily resolved cases to create the veneer of vigorous enforcement. The debate has, to this point, been based mostly on anecdote and conjecture rather than empirical evidence. This Article addresses that gap by collecting extensive data on 465 individual defendants in civil, criminal, and administrative actions to assess how enforcers operationalize insider trading doctrine. The cases enforcement authorities bring are shaped by a complex and cross-cutting set of institutional and individual incentives, cognitive biases, legal requirements, the history of failed enforcement efforts, and the way in which the agency and the self-regulatory organizations deploy their investigatory resources. SEC enforcement is dominated by small stakes, opportunistic trading by mid-level employees and their friends and family, most often involving M&A transactions. Those cases settle quickly, half within thirty days of filing. Criminal enforcement is generally reserved for more serious cases, measured by, among other things, the type of defendant, the size of the insider trading network, and the profits earned. In both settings, there is little evidence that enforcers are systematically stretching the boundaries of insider trading doctrine.

Article

by Scott J. Shackelford, Angie Raymond, Abbey Stemler, and Cyanne Loyle

Amidst the regular drumbeat of reports about Russian attempts to undermine U.S. democratic institutions from Twitter bots to cyber-attacks on Congressional candidates, it is easy to forget that the problem of election security is not isolated to the United States and extends far beyond safeguarding insecure voting machines. Consider Australia, which has long been grappling with repeated Chinese attempts to interfere with its political system. Yet Australia has taken a distinct approach in how it has sought to protect its democratic institutions, including reclassifying its political parties as “critical infrastructure,” a step that the U.S. government has yet to take despite repeated breaches at both the Democratic and Republican National Committees.

This Article analyzes the Australian approach to protecting its democratic institutions from Chinese influence operations and compares it to the U.S. response to Russian efforts. It then moves on to discuss how other cyber powers, including the European Union, have taken on the fight against digital repression and disinformation, and then compares these practices to the particular vulnerabilities of Small Pacific Island Nations. Such a comparative study is vital to help build resilience, and trust, in democratic systems on both sides of the Pacific. We argue that a multifaceted approach is needed to build more resilient and sustainable democratic systems. This should encompass both targeted reforms focusing on election infrastructure security—such as requiring paper ballots and risk-limiting audits—with deeper structural interventions to limit the spread of misinformation and combat digital repression.

Article

by Gregory H. Shill

The fiduciary duty of loyalty bars CEOs and other executives from managing companies for personal gain. In the modern public corporation, this restriction is reinforced by a pair of institutions: the independent board of directors and the business judgment rule. In isolation, each structure arguably promotes manager fidelity to shareholder interests—but together, they enable manager prioritization. This marks a particularly striking turn for the independent board. Its origin story and raison d’être lie in protecting shareholders from opportunism by managers, but it functions as a shield for managers instead.

Numerous defects in the design and practice of the independent board inhibit its ability to curb managerial excess. Nowhere is this more evident than in the context of transactions that enrich the CEO. When executive compensation and similar matters are approved by independent directors, they take on a new quality: they become insulated by the business judgment rule. This rule is commonly justified as giving legal effect to the comparative advantage of businesspeople in their domain—in determining the price of a product, for example—and it immunizes such decisions from court challenge. But independent directors can opt to extend the rule’s protection beyond this narrow class of duty of care cases to domains that squarely implicate the duty of loyalty. The result is a shield for conflicts of interest that defeats the major objective of the independent board and important goals of corporate law more generally.

This Article proposes to eliminate the independent board’s paradoxical shield quality by ending business judgment protection for claims implicating the duty of loyalty. Judges would apply the familiar entire fairness standard instead. The clearest rationale for this reform comes from the logic of the rule itself: comparative advantage. Judges, not businesspeople, are best situated to adjudicate conflicts of interest. More broadly, the Article’s analysis suggests that the pro-shareholder reputation of the independent board is overstated and may have inadvertently fostered a sense of complacency around board power.

Note

by Emily K. Dalessio

In its 2019 decision in Rucho v. Common Cause, the Supreme Court closed the doors of the federal courts to litigants claiming a violation of their constitutional rights based on partisan gerrymandering. In Rucho, the Court held that partisan gerrymandering presents a political question that falls outside the jurisdiction of the federal courts. However, the Supreme Court did not address an insidious consequence of this ruling: namely, that map-drawers may use partisan rationales to obscure what is otherwise an unconstitutional racial gerrymander. This Note uses North Carolina as an example of a state with a long history of gerrymandering—both racial and partisan. Over the course of the last quarter century, the Supreme Court has repeatedly struck down North Carolina’s redistricting efforts as the product of racial gerrymandering. Nonetheless, when the State changed its strategy, arguing that it based its redistricting efforts on partisan goals, the Supreme Court in Rucho ultimately declined to review the constitutionality of the map, allowing it to stand. This leaves voters potentially unable to challenge redistricting where, as is the case in North Carolina, race and political behavior are closely aligned and the map-drawers claim that the map was designed to secure partisan advantage, even if racial demographics were central to their considerations. In effect, Rucho creates a “magic words” test that incentivizes map-drawers to sanitize the legislative record of references to race, in favor of references to partisanship, in order to insulate redistricting plans from federal judicial review.

This Note suggests that the Supreme Court adopt a test to distinguish between racial and partisan gerrymandering using the approach the Court took in Flowers v. Mississippi—another 2019 decision. In Flowers, the Court placed great emphasis on Mississippi’s history of racial discrimination in jury selection in finding that the State had again violated the Equal Protection Clause in the case before it. Applying that logic to the issue of gerrymandering, this Note proposes a test that would presume that a challenged map from a state with a history of racial gerrymandering was a product of racial gerrymandering. The State would then face a high burden to rebut that presumption before the reviewing court could decide whether the case presents a political question under Rucho. The test this Note proposes would safeguard the right to vote, especially for Black and minority voters in states with histories of voter suppression and in so doing, ensure that the fundamentals of the democratic process are not subject to further erosion.

Note

by Corey J. Hauser

For decades the Supreme Court has balanced the tension between judicial efficiency and adherence to our constitutional system of separation of powers. As more cases were filed in federal courts, Congress increased the responsibilities and power given to magistrate judges. The result is magistrate judges wielding as much power as district judges. With post-conviction relief under § 2255, magistrate judges take on a whole new role— appellate judge—reviewing and potentially overturning sentences imposed by district judges.

This practice raises two concerns. First, did Congress intend to statutorily give magistrate judges this power? The prevailing interpretation is that § 2255 motions are civil, not criminal, proceedings able to be disposed of by magistrates. Still, at least one circuit court has disagreed, holding that § 2255 motions are criminal proceedings, incapable of magistrate disposition. Second, even if magistrate judges have statutory jurisdiction to decide § 2255 motions, does the practice violate separation of powers? When magistrate judges determine the validity of district judge-imposed sentences, non-Article III judges are given final say on whether an Article III judge sentenced an individual correctly.

This Note argues magistrate judge disposition of § 2255 motions is statutorily and constitutionally impermissible. It recommends that Congress limit magistrate judge power in § 2255 motions to issuing reports and recommendations, reviewed by district court judges. This recommendation achieves the twin aims of judicial efficiency and constitutionality, protecting the Judiciary, and the People, from intra-branch encroachment.

Tribute

by David Carson, Christine Greene, Mark Grunewald, Howard Highland, Brianne Kleinert, Brian C. Murchison, Debbie Price, Sheryl Salm, and Joan Shaughnessy

A tribute to Professor Mary Z. Natkin, who served on the faculty of the Washington and Lee University School of Law from 1987 to 2020. Professor Natkin is also an alumna of W&L Law, having graduated with the Class of 1985.

Article

by Benjamin P. Edwards

Investors, industry firms, and regulators all rely on vital public records to assess risk and evaluate securities industry personnel. Despite the information’s importance, an arbitration-facilitated expungement process now regularly deletes these public records. Often, these arbitrations recommend that public information be deleted without any true adversary ever providing any critical scrutiny to the requests. In essence, poorly informed arbitrators facilitate removing public information out of public databases. Interventions aimed at surfacing information may yield better informed decisions. Although similar problems have emerged in other contexts when adversarial systems break down, the expungement process to purge information about financial professionals provides a unique case study.

Multiple interventions may combine to more effectively surface information and generate better informed decisions. In quasi-ex parte proceedings, traditional attorney ethics rules must yield to a higher duty of candor. Yet adjudicators should not rely on duty alone. Adversarial scrutiny may emerge by designating an advocate to independently and critically engage in circumstances where no party has any real incentive to oppose an outcome. Ultimately, addressing adversarial failures may require a shift away from adversarial adjudication to a more regulatory framework.

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