Volume 2010, No. 5



Breaking Bucks in Money Market Funds

By William A. Birdthistle

This Article argues that the Securities and Exchange Commission’s first and most significant response to the economic crisis increases rather than decreases the likelihood of future failures in money market funds and the broader capital markets. In newly promulgated regulations addressing the “breaking of the buck” in the $3 trillion money market—a debacle at the fulcrum of the 2008 financial meltdown—the SEC endorses practices that obfuscate rather than illuminate the capital markets, including fixed pricing for money market funds, potentially riskier portfolio requirements, and the continued use of discredited ratings agencies. These policies, premised implicitly upon doubt in the ability of markets to process information effectively, obscure the true perils of money market funds. Rather than swaddling investment risks in misleading regulatory padding, the SEC should illuminate the possible menace of these funds. This Article offers transparent solutions to alleviate moral hazard and systemic risk in the broader market and to end the regulatory subsidy of these specific investments.

Nonattainder as a Liberty Interest

By Aaron H. Caplan

Existing constitutional doctrine does not deal well with government blacklists, such as the highly publicized federal No Fly List. Prior blacklisting cases have been inconsistent in approach and result. The most commonly used theories ask whether blacklists impose a deprivation of liberty without due process, but there is no consensus as to what kind of liberty is at stake. The problem arises in part from an unduly constricted conception of liberty as protecting the things that people want to do (call them privileges), without considering that it also implicates ways that people do not want to be treated (call them immunities).

This Article proposes that the constitutional immunity from bills of attainder—that is, the rule against singling out persons for punishment without trial—should be recognized as a due process liberty interest. This proposal has two major benefits. First, it provides a legal remedy currently unavailable to persons on government blacklists. Second, it offers coherence across lines of cases that have not previously been considered together. In particular, the proposal rationalizes the much criticized “stigma-plus” doctrine, which is best understood as a false start toward the protection of nonattainder as a liberty interest.


Cell “Block” Silence: Why Contraband Cellular Telephone Use in Prisons Warrants Federal Legislation to Allow Jamming Technology

By Erin Fitzgerald

Inmate use of contraband cellular telephones in correctional facilities has led to increased prison violence, witness intimidation, and, in at least one case, murder. This Article examines the growing use of contraband cell phones in correctional facilities, and available options to stop this widespread problem. This Article also examines federal communications law controlling this issue. Because the Communications Act of 1934 currently prohibits its use, prison officials are prevented from employing jamming technology, and market incentive to innovate in this field is lacking.

Congressional action is necessary to allow state and local law enforcement a narrow exception under the law. Additional testing, improved technology, and careful implementation would address concerns regarding possible wireless interference caused by prison jamming. The current legislative proposal, as passed by the U.S. Senate, imposes a heavier regulatory burden on potential applicant agencies than is favored by jamming proponents. However, the bill provides a starting point from which to encourage innovation and responsible implementation, and tackle the threat that contraband cell phone use poses to our justice system.

Serving a “Public Function”: Why Regional Cap-and-Trade Programs Should Survive a Dormant Commerce Clause Challenge

By Lawrence Fogel

Cap-and-trade regulation of greenhouse gas (GHG) emissions is at the center of fierce Congressional debate. While Congress debates, the true activity has taken place at the local level. Nearly half the states have entered into regional cap-and-trade compacts to curb GHG emissions within their states, and one of them is already active. To be viable and reach an aggregate reduction in GHG emissions, these compacts will have to enact laws designed to prevent unregulated power from “leaking” into the region. Some scholars have contended that such “leakage” laws would discriminate against interstate commerce and violate the dormant Commerce Clause. The next forum for the cap-and-trade debate, consequently, may soon be the courts.

This Comment argues that leakage laws should survive a dormant Commerce Clause challenge. This argument is based on an emerging exception to the dormant Commerce Clause commonly referred to as the public-function exemption. The scope of this doctrine is uncertain, but reveals a growing deference to regulation by local governments. States serve an important experimental role in addressing pressing issues like climate change, especially when the federal government has yet to act. This role fits within the public-function exemption as long as the economic burdens of leakage laws fall upon in-state businesses and citizens. In addition, the exemption is cabined by the requirement that the law benefit a public facility. Leakage laws are consistent with this principle because the regulated entities represent public-private partnerships; they are part of a state-controlled regulatory program designed to promote the public welfare. This is a significant realization because public-private partnerships are an innovative tool commonly used by local governments to address many of the challenges they face. The Court’s development of the public-function exemption, therefore, may not only have implications for regional cap-and-trade programs, but also, more broadly, a state’s capacity to provide for its citizens’ health, safety, and welfare.