Just a quick warning—Armando Lara-Millán’s Redistributing the Poor: Jails, Hospitals, and the Crisis of Law and Fiscal Austerity is a depressing read, particularly, for those of us who have, at some time in our poverty law careers, litigated class actions. It’s not as if we did not know, when, for example, negotiating compliance benchmarks for institutional defendants (jails, public housing agencies, welfare departments, public hospitals…), either that the purpose of those benchmarks could be easily evaded or that our lawsuit might result in pulling resources away from another need. But knowing this abstractly, and earnestly planning against it, is one thing and reading a book that exquisitely describes how legal pressure often does little more than redistribute pain, is an entirely another.
Lara-Millán is a sociologist. In Redistributing the Poor, he challenges fundamental narratives at the heart of a significant branch of socio-legal scholarship. He suggests that the overarching recent U.S. historical narrative that many of us assume is true–that we are seeing the results of “overinvestment in criminal justice and underinvestment in public health”—fundamentally misunderstands the way the United States governs the poor. “In short, the idea of redistributing the poor draws attention to how states agencies circulate people between different institutional spaces in such a way that generates revenue for some agencies, cuts costs for others, and projects illusions that services have been legally rendered.” (P. vii.)
Millán conducted his fieldwork in two locations–the intake section of a jail and the waiting room of a public hospital. He watched as staff in these spaces sorted human beings into formal and informal administrative categories – gang member, person in need of mental healthcare, level 3, level 4, real criminals, welfare seekers, drug seekers, and more. In addition, he dug deep into local archival material – giving us access to the day-to-day bureaucratic decision-making and budgetary constraints that led to the human sorting he observed. The book is deeply-researched, provocative, and persuasive, and I imagine it will shake the waters of settled ideas in Lara-Millán’s field. For legal scholars who read and write in those socio-legal spaces, it is essential reading.
But for this jot I want to focus, through a description of just one example, and on what Lara-Millán teaches us about the ways in which, in an age of fiscal austerity, administrative compliance with legal mandates can result in little more than the disappearance and reallocation of suffering.
I’ll begin with one thing Lara-Millán observed while watching staff process human beings from arrest into the jail’s many housing categories. From the perspective of those who are responsible for this task, one of the biggest threats comes from those who either “shut down” becoming non-responsive to orders or “act up” during the process by “yelling, cursing, screaming, fighting, getting out of line, disobeying staff direction, refusing to cooperate, and otherwise causing a commotion during the processing.” (P. 49.) These incidents disrupt the smooth flow of intake. To solve this problem, deputies call on nursing staff who administer “psychotropic drugs, pain medication, and mixes of sedatives ….to ensure the machine-like flow of the intake process.” (P. 49.) The results were two-fold. Efficiency was enhanced, and the targeted inmates received a “medical mark” in their files, making it more likely, at least in the short term, that they would be processed in medical housing in the jail.
Lara-Millán makes three separate and persuasive arguments to explain what he observed. First he argues that this “solution” was an administrative resolution of two unrelated progressive legal pressures; second that austerity meant fundamentally that, despite legal pressure, the jail did not and would not have enough space in medical housing to meet the real need, and third that to resolve these competing pressures, the administration invested what little resources they had not primarily into avoiding violence and providing care but instead into feigning legal compliance.
The progressive legal pressures at play, brought about by a series of federal investigations and civil rights litigation, targeted two separate harms: excessive force incidents and the failure to provide mental health care. The administration of medication and subsequent medical marking became a way to solve both problems. It lowered the rates of excessive force and demonstrated the provision of care. On the face of it, legal compliance is achieved. But that left administrators with an additional problem. There simply were not enough medical spaces in the jail to actually meet the demand for mental health services. Those processed in at intake had to be processed out, to make space for others who disrupt the administration of the jail. As we watch administrators solve that problem, what becomes clear is that the emphasis is not really on the provision of care. Instead, administrators place emphasis on feigning compliance through the processing of inmates into and out of the medical category. As Lara-Millán discovers, as the jails came under increasing pressure to meet mental health needs, it received significant funding for that purpose, funding that was pulled, by the way, from community mental health. But these resources did not really go to meeting therapeutic needs. Instead, “the newly hired personal [sic] for medical and mental healthcare were almost entirely made up of security and processing personnel not therapeutic personnel.” (P. 83.) These processing personnel “were tasked with continuously upgrading and downgrading inmates between the limited medical spaces and general population spaces of the jail” (P. 84), thus resolving the issue of the limited space. In the end administrative emphasis is focused not so much on the progressive goals—avoiding harm and providing care—but on administering categories that redistribute both human beings and the harms they suffer.
This example, and the many others in the book, raise profound questions about the efficacy of progressive legal reform. Lara-Millán’s task is not to solve this problem, but that hardly relieves the pressure on those who do pursue legal reform to wrestle with its implications. And that, of course, is just one reason why everyone interested in poverty law should read this book.
Hana E. Brown, Who Is an Indian Child: Institutional Context, Tribal Sovereignty, and Race-Making in Fragmented States
, 85 Am. Soc. Review
776 (2020), available at SAGE
The Indian Child Welfare Act (ICWA) is under attack, and legal scholars (including me) have written much about it. But being lawyers, we typically focus on judicial decisions, and within that set, on decisions with precedential impact. That makes sociologist Hana Brown’s Who Is an Indian Child: Institutional Context, Tribal Sovereignty, and Race-Making in Fragmented States a welcome intervention. By examining the different ways that social workers, state courts, and federal judges apply ICWA’s “Indian child” definition, Brown provides valuable insights not just on ICWA, but on race-making generally and the importance of institutional context in translating law into practice.
To be covered by ICWA, a child must be an Indian child as the statute defines it. The definition rests on tribal citizenship: a child must be either enrolled in a tribe, or be eligible for enrollment and have a biological parent who is enrolled. 25 U.S.C. § 1903(4). But social workers and courts have applied the definition through a racial lens and excluded children from coverage because they were not racially Indian enough. Exclusion denies children, families, and tribes ICWA’s protections for family preservation and tribal sovereignty.
Brown’s examination reveals two key insights. First, although all three institutions often apply racial rather than citizenship-based definitions of Indian child, they have defined racial Indian-ness in different ways and for different reasons. Second, although Brown does not discount the role of racial ideology in this “race-making,” ideology did not explain the differences she found between the institutions. Instead, Brown identifies three other differences that shaped the Indian child determination: first, evidentiary standards, second, record-keeping requirements; and third, incentive structures.
The section on state caseworkers will be most interesting for legal scholars. Although such caseworkers are the frontline ICWA agents and the most influential institution in determining whether and how ICWA is implemented, studying their work poses challenges. First, access to records is limited to protect privacy. Even if records were available, deciphering who—out of the millions of children involved in child welfare cases each year—should have been identified as an Indian child but wasn’t is a nigh impossible task. Instead of taking it on, Brown analyzed and coded child welfare agencies’ annual reports and strategic plans, fifty assessments of ICWA implementation between 1979 and 2015, and extensive documents produced by the 2013 Child Welfare Truth and Reconciliation Commission, as a joint project between the State of Maine and five Wabanaki tribes.
This examination reveals that rather than inquire into tribal citizenship, caseworkers often followed a phenotypic definition of Indian-ness in determining whether ICWA applied. If a child “looked” Indian (e.g., had brown skin, dark straight hair, and dark eyes) they would inquire into tribal enrollment. If they did not, they would not. (Caseworkers and observers often raised the example of the blond-haired, blue-eyed child, but many other phenotypic combinations might not look Indian to outsiders.) This kind of assessment likely resulted in wrongful classification of many children. The Maine-Wabanaki Commission found that half of ICWA-eligible children were misclassified, while another study found that the San Francisco child welfare agency missed at least 200 ICWA-eligible children between 2002 and 2012.
Although the caseworker definition of Indian-ness emerges from the popular conflation of race and phenotype, it became dominant because of the institutional in which context caseworkers operate. First, as to evidentiary standards, social workers must make numerous decisions with relatively few bright line rules. Significant weight is placed on their judgment and expertise, and the need to act rapidly to protect children’s welfare leaves little room for extensive oversight of these decisions. This discretionary evidentiary standard, Brown argues, encourages the kind of “common sense” determination of Indian-ness according to appearance.
Second, caseworkers were not usually required to keep records of how or why they determine a child is or is not Indian. Until the early 2000s, only six states required caseworkers to even note whether the child qualified for ICWA. Even those generally required only a yes or no answer, creating no obstacle to decisions based on appearance.
Third, Brown found, the incentives facing social workers counsel against inquiring into ICWA eligibility. Determining tribal enrollment and complying with ICWA require additional time and paperwork from overburdened caseworkers. What is more, federal law incentivizes keeping children within the state system and placing them outside the home of origin, results that ICWA may prevent. The 1997 Adoption and Safe Families Act (ASFA) promotes adoption of children from the child welfare system, providing states with $4,000 to $6,000 for each adopted child, upwards of $20 million a year. Observers identified this incentive structure as one reason why South Dakota, with physical and sexual abuse rates lower than the national average, removed children from their homes at three times the national rate. Relying on a racial rather than citizenship-based definition of Indian status expedited South Dakota’s removals for Indian children.
Brown also tracks the impact of shifting incentives for caseworkers. Lobbying by Alaska Native leaders, for example, led to an Alaska Tribal Child Welfare Compact that creates incentives to transfer cases to tribal child welfare systems to free up money and time for other cases. San Francisco also altered incentives by doing monthly checks that require caseworkers to do extra paperwork if they do not initially identify tribal children appropriately.
Brown found that while state court judges also distorted the Indian child definition, they employed a different form of race-making. Rather than rely on what they thought Indians should look like, they turned to cultural essentialism, relying on what they thought Indians should live like. Under what is known as the existing Indian family exception, many courts decided that the statute was not intended to apply to children who were not part of what they saw as an Indian family. Courts refused to apply ICWA because children had not lived on reservations, were not conversational in indigenous languages, or attended Christian churches rather than following Indigenous religious practices. As anyone familiar with federal Indian policy knows, these qualities describe many tribal citizens today, in part because of concerted efforts to move Native people off reservations and quash Native languages and religions.
There are some weaknesses to this section. The methodology Brown used yielded mostly cases from states that adopted the existing Indian family exception, and misses many cases from the larger number of states that rejected it. But the analysis still yields helpful insights. As to evidentiary standards and record-keeping, judicial obligations to issue public, written decisions justified under existing statutes and precedent discouraged the simple reliance on phenotype employed by some caseworkers.
The discussion of state court incentives is the most interesting. Because ICWA may require transfer of cases to tribal courts, the desire maintain judicial authority incentivizes judges to find that ICWA does not apply. But this same effect may encourage courts to find that ICWA does apply in order to lighten heavy dockets. The Maine-Wabanaki Truth and Reconciliation Commission, for example, found that judges were generally not resistant to transferring cases to tribal court. Brown also reports that tribal advocacy with states has changed the incentives. This advocacy has led to adoption of 39 tribal-state agreements and 37 state statutes regarding implementation of ICWA, most clearly rejecting the existing Indian family exception. The relationships built through this advocacy have also shifted state judge beliefs that tribal jurisdiction should be resisted because tribal courts are incompetent or unjust.
The discussion on federal courts will be most familiar to legal readers, and focuses mostly on high-profile cases such as Adoptive Couple v. Baby Girl, 570 U.S. 637 (2013), and the trial court decision in Brackeen v. Zinke, 338 F. Supp. 3d 514 (N.D. Tex. 2018), rev’d sub nom. Brackeen v. Bernhardt, 937 F.3d 406 (5th Cir. 2019), aff’d in part and rev’d in part, Brackeen v. Haaland, 994 F.3d 249 (5th Cir. 2021) (en banc). More novel is the discussion of the different incentives facing state and federal courts in these cases. Federal court judges do not implement ICWA, so the cases before them generally question the statute generally, and federal judges are relatively isolated from external pressures. For these reasons, Brown finds, their race-making is more explicitly tinged with ideological perspectives.
Altogether the piece is a fascinating study of the different ways and places that race is defined and assigned, along with the factors beyond ideology that influence whether and how laws are implemented. Legal scholars in many fields will find lessons within it for their own work.
Cite as: Bethany Berger, Institutions, “Indian-ness,” and ICWA Implementation
(September 17, 2021) (reviewing Hana E. Brown, Who Is an Indian Child: Institutional Context, Tribal Sovereignty, and Race-Making in Fragmented States
, 85 Am. Soc. Review
776 (2020), available at SAGE), https://lex.jotwell.com/institutions-indian-ness-and-icwa-implementation/
In Global Southerners in the North, Ama Ruth Francis offers a new theoretical angle on the long-standing and crucial question of how to mobilize popular opinion and legal power on behalf of migrants who lack political voice. Her contribution decenters the state as the key actor in international law, and suggests instead that scholars concentrate on individuals and sub-state spaces. Focusing on climate change migration, Francis suggests that the way to address the severe power asymmetries between those responsible for and those most impacted by the changing climate is to reconceptualize the Global South to include all people and spaces rendered expendable by racial capitalism. She builds on the Third World Approaches to International Law (TWAIL) literature to argue that international law should be theorized as a shared commitment that can be furthered by political agents – in other words, that states are not the only actors capable of creating international law.
Francis begins her analysis by noting that the Global South is not a monolithic bloc; there are vast differences across and within states. For example, among the BRICS nations (Brazil, Russia, India, China, and South Africa), China is a major emitter even though it remains part of the Global South. Moreover, within states in the Global North and the Global South, racial capitalism creates significant gulfs between rich and poor that underlie disparities in both emissions and community resilience in the face of climate change. She describes the TWAIL literature on international environmental law that discusses the history of colonial expansion and domination linked to environmental degradation, and explains how this project of global economic inequality was justified and continues to be bolstered by international law.
Francis underlines the importance of this groundwork, but suggests that the Global South should be defined by material conditions rather than geographic terms, a move that encompasses individuals and sub-state spaces. Drawing from Balakrishnan Rajagopal’s framing of the Global South as a contestation of power formations, she suggests that we can think of the Global South as deterritorialized political practice that creates space for counterhegemonic discourse. Francis describes these Global Souths in the north as racial capitalism’s externalities, highlighting the glaring expendability of some individuals and spaces in the climate change context, and noting how those distinctions are drawn on racial grounds.
Though Francis is perhaps more sanguine than I am about the promise of international human rights law, and in particular of the Teitiota decision, she demonstrates ably the ways in which climate migration highlights the limits of that body of law. Despite obligations to protect individuals’ human rights regardless of immigration status, we see expendability drawn along racial lines. Francis explains that human rights law is incapable of enforcing the rights of climate migrants because such a step would require calling out Global North responsibility for climate change.
To bridge that gap, Francis suggests a transnational alliance of Global Southerners as political agents with the capacity to shift international law. Drawing from Harold Koh’s transnational legal process theory, she explains that “international law is constituted through a dynamic interplay between domestic and international legal norms, and those domestic norms are created through domestic political processes.” Francis argues that Global Southerners in the North can leverage rights discourse to begin to shift international legal norms through domestic legal processes. I would add that they might even start to frame climate justice measures as duties, perhaps drawing on the right to solidarity. Francis suggests measures to operationalize the theory, including climate action in domestic courts, transnational advocacy efforts, and drafting domestic legislation. In other words, rather than invoking international law in domestic courts, she makes the case for transnational coordination of domestic climate efforts as a means of reforming international legal standards over time.
Francis offers an interesting and creative route forward for climate migrants seeking redress under international law. This article strikes me as a promising first step in a broader research agenda. A follow-on article, for example, could engage in more detail with both the idea of Souths and Southerners in the Global North as well as Norths and Northerners in the Global South. It could also expand on the operational component: if the Global North is defined as the defense of global capitalism and economic inequality, how do we identify the actors opposed to that approach and what steps can be taken to mobilize a unified political voice amongst them? Perhaps most importantly for this readership, Francis offers a role for scholars in identifying, describing, and uplifting the role of social movements in shaping not just legal discourse but also international law and policy.
Madison Condon, Externalities and the Common Owner
, 95 Wash. L. Rev
. 1 (2020), available at SSRN
At Chevron’s 2020 annual meeting, a majority of voting shareholders approved a resolution urging the oil giant to bring its lobbying efforts in line with the Paris Climate Agreement’s goal of limiting global warming to two degrees Celsius. What seemed like a pipe dream not long ago has become a fixture on Wall Street. Climate activism has emerged as a dominant theme at shareholder meetings in the energy sector and beyond, with some resolutions receiving nearly sixty percent of votes. In her excellent article, Externalities and the Common Owner, Professor Madison Condon draws on modern portfolio theory to offer an intriguing explanation for the changing tide in shareholder climate activism.
In recent years, concerned shareholders have garnered majority approval for resolutions calling for corporate emission reduction targets, better disclosure of climate risk, and suspension of lobbying against carbon regulation, among other climate action – often against the vocal opposition of the company’s own board. This surge in shareholder support for climate-related proposals is likely the product of a multitude of factors, including the growing sense of urgency surrounding global climate change. Professor Condon makes a compelling case that a key driver of shareholders’ newfound love for climate activism may be a paradigm shift in the approach of institutional investors to corporate governance.
Along the way, Professor Condon incisively slaughters not one, but two sacred cows of the corporate governance literature. First up, the general assumption that rational shareholders will exercise their governance rights to maximize the firm’s value. Condon persuasively lays out the inherent conflict (at least in the near term) between the corporate objective of profit maximization and a shareholder-driven commitment to voluntary emission reductions, even more so when such a commitment is to be adopted by carbon majors like Shell, Total, or Chevron. The second bovine casualty of the article’s sharp analysis is the widely held belief that broadly diversified institutional investors are “rationally reticent” to invest their time and effort in corporate governance. After all, portfolio diversification tends to produce relatively small stakes in individual companies so the significant costs of shareholder engagement would translate to only small returns to the diversified investors’ portion of ownership. And yet, recent proxy seasons offer ample evidence of climate activism by pension funds, insurance companies, mutual funds, and other institutional investors bullying big oil and other carbon majors into climate action. So what gives?
The answer flows indirectly from Einer Elhauge’s observation that the proliferation of institutional investment has reduced market competition as key companies are increasingly owned by the same large shareholders. Since 1950, the share of institutional ownership in U.S. equities has grown from little over 5% to nearly 80%. Today, there is a more than 90% chance that any two competing firms in a given industry share at least one large shareholder that holds a stake of five percent or more in both companies – a more than fivefold increase compared to 1994. As Elhauge and others hone in on the anti-competitive effects of such “horizontal shareholding,” Professor Condon adds a novel climate dimension to the discourse.
Externalities and the Common Owner crafts a compelling argument that BlackRock, CalPers, Vanguard, and other “universal owners” have a strong financial incentive to advance corporate governance that will “mitigate climate change risks and damages to their economy-mirroring portfolios.” These broadly diversified institutional investors are willing to accept the negative short-term impacts of climate activism on the bottom line of individual firms if their engagement helps reduce systemic climate risk sufficiently to avert, or at least mitigate, damage to their other portfolio holdings. To illustrate this paradigm shift from the traditionally firm-centric to a portfolio-maximizing shareholder governance strategy, Professor Condon cites to several investor declarations revealing a growing emphasis on portfolio returns. She also offers an intuitive back-of-the-envelope calculation comparing costs and benefits using William Nordhaus’s acclaimed Dynamic Integrated Climate Economy Model. Based on Condon’s math, a broadly diversified investor like BlackRock with significant stakes in Exxon and Chevron might lose over $6 billion by supporting shareholder resolutions that force a 40% reduction in the two companies’ greenhouse gas emissions. But these losses would be more than compensated by the nearly $10 billion in damages from climate change that the emission reductions would avert from the rest of BlackRock’s portfolio.
Having laid out the economics of institutional investors’ externality-internalizing strategy of portfolio maximization, Professor Condon surveys the various avenues for influencing corporate officers, from shareholder proposals and board elections to informal communication and compensation. Next, she explores how sacrificing individual firm profits and value in the interest of portfolio returns may violate fiduciary duties owed by both firm managers and investment managers. Against this background, Professor Condon translates her observations and argument into a convincing amendment of the traditional narrative of institutional investors’ rational reticence to exercise their corporate governance rights.
The final section of Externalities and the Common Owner explores some of the broader normative issues presented by the portfolio-maximizing strategy of diversified institutional investors. Professor Condon ponders whether the net welfare gains from climate and other pollution reduction benefits will be enough to outweigh the negative welfare impacts from reduced competition and monopsony pricing in labor markets. A separate line of inquiry explores challenges related to the democratic legitimacy and accountability of a small group of heavyweight investors privatizing the kind of environmental governance choices traditionally left to governments and their elected officials. The author concludes that “[t]he net welfare effects of common ownership require further study, but intuition suggests this behavior is not aligned with aggregate social welfare.” (P. 79.)
Whether your scholarly interests lie in corporate governance, climate policy, or anywhere in between, Externalities and the Common Owner is a must-read. Professor Condon provides a deeply thought-provoking account of the evolving role of institutional investors in the war on carbon, while charting an intriguing agenda for future research on the benefits and drawbacks of portfolio maximization approaches to shareholder engagement.
In Legislating Supported Decision-Making, Professor Nina Kohn tackles the deficiencies of the supported decision-making paradigm, beginning with its definition, which varies tremendously depending on who you ask. She defines it as “an umbrella term for processes by which an individual who might otherwise be unable to make his or her own decisions becomes able to do so through support from other people.” (P. 4.) Supported decision-making (or SDM) represents a fundamental shift in the fields of elder law and disability rights. It is an extension of the people-centered approach. SDM promoters claim that it enhances the dignity of individuals with cognitive limitations by permitting decisions to be made with them—rather than for them.
States can and should use SDM in many contexts. Individuals under a guardianship ought to be empowered to participate in decisions about their lives, their healthcare, their financial affairs, and so on. SDM can thereby permit more limited guardianships. Moreover, for higher functioning individuals, SDM can provide an alternative to a guardianship proceeding altogether. Because SDM is less restrictive alternative, it should be preferred to a guardianship whenever feasible.
However, Kohn argues, SDM has fallen short of its aim of providing an alternative to guardianship in several respects. Indeed, SDM agreements may even erode autonomy by limiting the rights of individuals with cognitive limitations to revoke the agreements. In addition, SDM legislation typically treats SDM supporters as non-fiduciaries while providing few if any remedies or rights for the supported individual—while creating “new legal rights for the supporters” (P. 21) (emphasis in original) and third parties.
Kohn’s indictment of SDM implementation is compelling. She notes the convergence of political interests underlying the widespread support for SDM legislation – legislation which, by authorizing SDM agreements, gives them an official imprimatur. She then proceeds to critique the existing ’ shortcomings. Finally, she frames five coherent and straightforward proposals to remedy those failings. I’ll highlight three of them.
First, Kohn proposes, state guardianship statutes ought to “be amended to explicitly prohibit the use of guardianship where supported decision-making would meet the individual’s needs.”(P. 39.) This approach is embedded in the Uniform Guardianship, Conservatorship, and Other Protective Arrangements Act (or UGCOPAA) approved by the Uniform Laws Commission in 2017, but so far, is enacted in only two states.
Second, Kohn explains: “Despite the common rhetoric used to promote them, [most existing guardianship] statutes do not provide individuals with a right to use supported decision-making.” (P. 18.) Kohn’s point rests on a reality of the legal landscape: The majority of individuals under a guardianship retain a host of rights, including the right to contract. Thus, no enabling statute is required to permit the exercise of this right. Formal legal status (i.e., legislation) is redundant. SDM-enabling legislation can suggest that individuals with cognitive limitations lack the power to make decisions for themselves unless a formal SDM contract appointing a supporter is in place. As a result, legislation which expressly authorizes individuals under guardianships to utilize SDM can actually have the effect of diminishing their autonomy and authority over their own lives.
Thus, Kohn’s second proposal is to promote SDM agreements through the dissemination of forms without any enabling legislation. Stakeholders, state agencies, and non-governmental advocates can simply encourage SDM agreements. A useful form, for example, would identify the parties (the supported party and his or her supporter), address compensation, impose duties, describe the decisions with which the supporter will assist, identify the type of assistance to be provided (e.g., with identifying different options; with evaluating them, etc.), and clarify the overlap between multiple supporters. The form should also – contrary to some examples of SDM legislation – permit the supported person to revoke the agreement at will.
Third, Kohn advances the idea of constructing a public system for supporters, designed along the lines of public guardianship programs. Supporters could be trained and any individuals with disabilities who lack a network of trusted family members could use staff from publicly funded programs for their SDM agreements. Indeed, Kohn suggests, doing so might already be required by federal law pursuant to the mandates of Title II of the Americans with Disabilities Act (ADA). She notes, “Arguably, when a public entity provides decision-making support to individuals with disabilities only if those individuals are subject to guardianship, the entity violates the ADA by not offering a less restrictive alternative.” (P. 45-46.)
Kohn’s article is a rousing call to action accompanied by a comprehensive battle plan. It should be required reading for disability rights advocates, elder law attorneys, and state legislators everywhere. It is practical, meaningful, and important scholarship.
When I picture immigration enforcement, my mind’s eye sees walls bisecting dusty hills, “POLICE” slashed across ICE uniforms, sheriffs with immigrant detainers, and the bright painted bricks and silvery wire of detention facilities. I don’t see money.
At least, I didn’t. Then I read Shayak Sarkar’s Capital Controls as Migrant Controls. Now, like a Sixth Sense, when I picture immigration control, I see money. I see it everywhere, walking around. Capital Controls will shift your perspective on the relationship between how we control capital and how capital is a tool of immigration control.
I am a sucker for legal history, and Capital Controls delivers. The article narrates the arc of financial regulation theory—from “financial liberalization,” advocating for the removal of capital controls to expand development, to a 180-degree-Keynesian turn toward stronger financial borders to prevent flows of foreign capital from exacerbating domestic financial problems. Financial borders were also promoted as a way to address national security concerns. The narrative arc alights on the current state of affairs in which capital controls have largely fallen to the wayside over the last few decades. Now, scholars of finance, political science, and law critique the asymmetry between human and capital movement, as with Nobel Laureate Gary Becker advocating for lifting border controls to match more closely the movements of goods, services, and capital.
Immigration scholars have expended many pixels examining how the law of immigration admissions and welfare have drawn lines between citizen haves and noncitizen have-nots. Sarkar adds a wholly new dimension, exploring “the law’s disparate treatment of migrant wealth and the institutions responsible for creating and enforcing such laws.” As he points out, “ordinary people crossing borders …. accumulate capital, whether that crossing occurs lawfully or unlawfully.” That is, noncitizens are no different from citizens in moving money from one place to another in order to live, provide for family, work, and operate in a society organized around capital. Much of that money flows across borders.
Controlling the particular ways that migrants move money, says Sarkar, constitutes a form of migration control. Capital controls distinguish migrants from citizens “by regulating a migrant’s access to their own money.” The article examines three forms of capital controls acting as migrant controls. The first is the popcorning of federal and state proposals to tax remittances that noncitizens use to transfer money earned in the United States to their country of origin. Oklahoma is the only state thus far to have passed actual legislation; other proposals would base taxation on either the cross-border destination of the capital or the immigration status of the sender, or both. Most seek to constrict or prevent the cross-border entry of undocumented noncitizens.
Second, the U.S. government conditions an undocumented immigrant’s receipt of earned Social Security benefits on leaving the United States. As Sarkar points out, these provisions press for expelling migrants themselves. They “create a Faustian bargain: relinquish your adopted homeland or relinquish your capital.” This condition operates as a form of migrant control, but also imposes a collateral consequence on the United States of expelling the capital from the country.
Last, post-9-11 legislation compels banks and similar institutions (also known as “insured depository institutions”) to “identify” their customers, but without saying much about how. Inspired by the employment eligibility requirements of the Immigration Reform and Control Act, the law largely leaves it to banks to figure out how to comply with the identity verification requirements. The law provides few guidelines and no determinative list of acceptable documentation of the sort that is a feature of the employment verification system (itself a flawed and much-critiqued enforcement system). These identity requirements have resulted in suspended accounts due to uncertainty about a noncitizen customer’s identification. They have also created a division based on citizenship status between those with access to the relative security of a bank and those who cannot access such services or perceive them as a part of the immigration enforcement infrastructure.
These financial controls act to regulate both migrants and migration. They screen out those whom governmental or private institutions deem undesirable, burdening movement into or within the United States and pushing outward migration of those deemed undesirable. By drawing distinctions based on citizenship status, they also communicate that noncitizens occupy a less favored tier on the membership scale in the community to which they have moved.
What I like (lots) about this article, beyond pulling the scales from my eyes about the significance of capital regulation as a means of migration control, is that it applies a seemingly orthogonal area—the law and policy of finance—to immigration law. It also contributes in a new way to the substantial literature on the private and subfederal enforcement of immigration law. The collage in my mind’s eye of immigration enforcement was mostly composed of images of federal agencies employing brute-force methodologies for controlling the movement of people through a crimmigration and securitization framework. Sarkar takes us into the liminal world of financial controls populated not with ICE and the Customs and Border Patrol but rather with private institutions such as banks, state and local regulators, and financial and welfare agencies like the Social Security Administration and the IRS.
Since the summer of 2020, Americans have been having more explicit discussions about racial hierarchy in the United States and the role of law enforcement in maintaining such hierarchy. Kevin Johnson’s forthcoming essay, Bringing Racial Justice to Immigration Law, brings that conversation to immigration law. Johnson argues that Congress, but ultimately the Supreme Court, needs to explicitly address the racial animus that has motivated the structure of immigration law in the United States. Through an examination of immigration history, the emergence of a robust immigrant rights movement, and the significant backlash from the Trump Administration, Johnson demonstrates that a positive agenda for immigration reform is required in order for the country to move towards a more just immigration system, rather than simply reverting to the pre-Trump immigration system, which was not a model for justice.
Johnson’s essay begins by mapping the racially discriminatory foundations of immigration law and the minimal role that courts have played in acknowledging and remedying such discrimination. The essay then discusses the emergence of the robust immigrant rights movement despite the fact that non-citizens are not eligible to vote. A response to the growth of the immigrant rights movement was a backlash by the Trump Administration. The next section of the essay explores the efforts undertaken by the Trump Administration to “maintain and reinforce the racial caste quality of the immigration system.” (P. 3.) The essay ends with an appreciation for the immigrant rights movement, and the claim that the goals sought by the movement will only be “meaningful, lasting, and truly transformative” if the Supreme Court jurisprudence shifts to require robust constitutional review of immigration laws and “allows the courts to serve as a check on racial animus.” (P. 3.)
Bringing Racial Justice to Immigration Law is a timely and important piece because it draws attention to the role of racial animus in the structure of U.S. immigration law. Scholars often recount the xenophobic concerns that have motivated the country’s immigration law, but it is rarely referred to as feature of the system. Rather it is examined as a bug. Johnson’s piece requires readers to rethink that analysis.
Acknowledging the structural challenges within U.S. immigration law leads Johnson to highlight two important features of a positive immigrant rights agenda. The first is legislative reform because at present it is “likely the only way to attempt to bring greater racial justice for immigrants.” (P. 11.) Congress could enact the DREAM Act, comprehensive immigration reform, and reform the immigration bureaucracy. These would bring about important changes that would positively impact the lives of millions of individuals. However, Johnson explains that these types of reforms will be vulnerable to the goals and perspectives of the next political majority because courts exercise such minimal review of substantive immigration law.
Therefore the second claim is that the Supreme Court must require “constitutional review of the immigration laws and allow the courts to serve as a check on racial animus.” (P. 3.) As Johnson details in his essay, the Supreme Court established an extremely deferential standard of review for immigration cases in the 1800s that limits the courts from reviewing substantive challenges to immigration laws, particularly in the area of Equal Protection challenges. Therefore the political branches can, and have, enacted immigration restrictions rooted in racial animus and the courts have failed to acknowledge the racial animus or strike down the laws or policies. As Johnson explains, “[t]he immigration laws’ immunity from constitutional review encourage Congress to act on its worst instincts and prevent a dialogue between the judicial, legislative, and executive branches about the constitutional constraints on immigration law and policy.” (Pp. 12-13.) Meaningful change within immigration law will require substantive changes to the law, but also significant changes in the role of the courts as a check on the political branches.
As Congress considers the various immigration bills before it, it is important to remember that “[w]ithout constitutional constraints, the nation can expect repeated episodes of anti-immigrant sentiment fueled by racial animus, with the Trump presidency simply making the most recent and extreme one.” (P. 13.)
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Once upon a time, litigators faced a clear choice among competing dispute resolution procedures. You could litigate. You could arbitrate. Or you could mediate. Early generations of dispute resolution scholars imagined these processes as being wholly distinct. Frank Sander, during the famed 1976 Pound Conference, envisioned a “multi-door courthouse” where disputes could be neatly grouped—with the ease of a Harry Potter-esque sorting hat—into the most appropriate resolution mechanism.
Over the past couple decades, these once-discrete processes have become more muddled. This is particularly true for complex commercial and international disputes. Processes converge and exist parallel to one another across jurisdictions. Parties may litigate the scope of an arbitration clause or the enforceability of an award. They may mediate one branch of a dispute while arbitrating another. They may also mix and match aspects of each procedure with blended processes like “med-arb” or “arb-med.”
Domestic and international court systems have both responded to, and shaped, this complicated reality. Pamela Bookman is among the clearest analysts of these trends in judicial innovation. Her new piece, Arbitral Courts, analyzes exactly what its title suggests: public courts that adopt many of the features of private arbitration. Oxymoron? Maybe. New reality? Definitely.
Bookman begins by observing that arbitration is traditionally considered to be a private dispute resolution mechanism meant to replace courts for disputing parties. The conventional wisdom has been that “courts and arbitration stay in their lanes.” But that thinking has shifted. Specialized domestic and international courts have begun to adopt qualities of private arbitration, responding to parties’ desire for confidentiality, speed, procedural flexibility, and subject matter expertise. Arbitral courts “shift and blur traditional boundaries between public and private adjudication [and] reveal the power of procedural innovation and forum shopping as forces of institutional change[.]”
Bookman offers numerous examples of these arbitral courts, ranging from Delaware, to Singapore, to Dubai. Consider the Cayman Islands Financial Services Division of the Grand Court (“FSD”), created in 2009, which has jurisdiction for business-related disputes where the amount in controversy exceeds $1.2 million. The FSD’s judges include four full-time judges with some specific background in business law, and three part-time judges, including attorneys for international law firms. Its procedural rules are designed by “an elite group of lawyers” who understand the needs of the transnational companies that choose to incorporate in the Cayman Islands. The FSD also has a fairly liberal policy on sealing its dockets (generally between one-third and half of all cases), meaning that disputes can be largely adjudicated in private.
Or consider the Netherlands Commercial Court, which opened its doors in January 2019. That court hears “trials” in panels of three judges (plus a law clerk) using procedural rules substantially similar to the International Bar Association Rules on the Taking of Evidence in International Arbitration. These Rules permit party-driven customization of evidence and process, as well as confidentiality—features associated with private arbitration rather than public adjudication. Moreover, the Netherlands Commercial Court charges significant fees compared to a normal litigation (€ 15,000), essentially creating a specialized court for clients able to pay top-dollar.
Or finally, consider an attempt at innovation in Delaware. Delaware’s Court of Chancery is the most significant court in the United States for corporate disputes. The Court’s judges, known as chancellors, are widely considered to be the leading experts in this area of law. In 2009, Delaware’s legislature enacted a program whereby parties could pay heightened fees to arbitrate, rather than litigate, their disputes before a chancellor. The proceeding and award would be confidential, even though the arbitrator was a sitting judicial officer. (While it’s common for retired judges to serve as arbitrators for-hire, such conduct is typically prohibited of sitting judges under ethics rules). The Delaware scheme was challenged by an open government group, and in 2013, the U.S. Court of Appeals for the Third Circuit held that it violated the right of qualified public access guaranteed by the First Amendment. But nevertheless, the program attracted the attention of court systems designers around the country.
What do these various examples share? A mixing and matching of attributes associated with public litigation and private arbitration. Publicly-funded judicial officers, rendering decisions in confidential proceedings, using rules designed by corporate attorneys, with procedures that can be tailored to individual cases based on the parties’ consent.
Bookman goes beyond describing these various courts, offering potential opportunities and areas for concern. One of the article’s central observations—and warnings—is the complicated nature of arbitral courts’ legitimacy. Normally, courts get their legitimacy from the state, while arbitrators get their legitimacy from the parties’ bilateral contract. Arbitral courts are a hybrid; their legitimacy comes from both the parties’ consent to their jurisdiction, and the state’s establishment of their structure. Bookman warns that this duality carries an inherent tension. Parties’ desire for arbitration-like confidentiality, for example, hampers the ability of these courts to develop public and predictable precedent. Over time, such secrecy could lessen the arbitral courts’ legitimacy in the eyes of litigants and taxpayers.
Arbitral Courts fits nicely into a sub-genre of procedure scholarship that examines not just the workings of discrete dispute resolution mechanisms, but their confluence. For example, it pairs nicely with Hiro Aragaki’s The Metaphysics of Arbitration, Thomas Stipanowich’s Arbitration: The ‘New Litigation’, or Jackie Nolan-Haley’s Mediation: The ‘New Arbitration.’ These scholars recognize that ADR procedures are becoming harder to differentiate from “regular” civil procedure, especially for transnational disputes.
“Alternative” dispute resolution is often relegated to the elective corners of law school curricula. But the reality on the ground, from the perspective of international litigators, is that ADR is inextricably interwoven into civil procedure. From the moment a client’s dispute arises—or even earlier, when a contract is drafted—lawyers must understand the potential mechanisms for resolution. For several years, Bookman’s scholarship has explored how court systems, far from remaining static, have responded to competition from private ADR. In this way, she is an intellectual heir to Frank Sander himself, albeit with a more international flair. Undoubtedly, court systems at home and abroad will continue to mix, match, and muddle dispute resolution processes in the years ahead. This article will provide these innovators with ideas and models—as well as some nagging notes of caution.
Jeanne L. Schroeder, Taking Misappropriation Seriously: State Common Law Disgorgement Actions for Insider Trading
(Feb. 11, 2021) Cardozo Legal Stud. Rsch. Paper No. 625, available at SSRN
The disgorgement remedy strips a defendant of unjust profits. Disgorgement is gaining prominence as a civil remedy across a varied body of substantive laws, including intellectual property, contracts, fiduciary duties, as well as in government enforcement litigation to battle fraud and corruption. Disgorgement’s provenance ties to restitution and the equitable accounting for profits remedy. Even as memory of its equitable history fades, modern and novel applications of disgorgement flourish. Disgorgement relies on restitutionary principles because its primary goal is to undo unjust gain. It also deters opportunism and disincentivizes misconduct.
But if not applied properly, the danger is that disgorgement may punish, which is explicitly not a goal of the law of unjust enrichment and restitution. The Securities and Exchange Commission (SEC) has faced, and continues to face, an array of criticisms for aggressive uses of its disgorgement remedy pursuant to statutory authorization. Such concerns led to several Supreme Court rulings requiring adjustments to the SEC’s approach to disgorgement—most recently in Kokesh v. SEC, 137 S. Ct. 1635 (2017) and Liu v. SEC, 140 S. Ct. 1936 (2020). Congress subsequently amended the remedy to solidify the SEC’s authority to seek disgorgement, though the clarification oddly appears to classify the statutory disgorgement remedy as legal rather than equitable. This congressional revision is housed in a massive piece of unrelated legislation, the 2021 National Defense Authorization Act (“NDAA”), which Congress passed over a presidential veto. A parallel expansion of disgorgement remedies by the Federal Trade Commission (FTC) faced increased judicial scrutiny and ultimately a rebuff by the Supreme Court in AMG v. FTC, No. 19-508 (April 22, 2021) (narrowly interpreting the statute’s injunction power as not encompassing FTC authority to seek equitable disgorgement), with congressional restoration of full disgorgement power anticipated.
Much is changing rapidly, and it is unclear how successful the SEC will be at navigating new strictures while advancing enforcement goals. To be clear, the landscape is complex. In a forthcoming article, Taking Misappropriation Seriously: State Common Law Disgorgement Actions for Insider Trading, Professor Jeanne Schroeder seeks a solution to the complexities. She advances private state common law actions for disgorgement as a cleaner way to remedy insider trading violations. The potential advantages of private state-based litigation with application of the disgorgement remedy are worth serious consideration. And the notion of parallel pursuit of state common law remedies may well be a wise approach for other governmental enforcement regimes.
To lend credence to this proposal, Professor Schroeder argues that a state common law disgorgement action would align with the Supreme Court’s “largely property-based theory of insider trading.” Regardless of the asserted narrative fit, Professor Schroeder offers six compelling reasons why an action at common law for restitution would avoid many of the complexities of federal insider trading enforcement actions. For example, the Supreme Court’s insider trading jurisprudence requires fraud, violation of a fiduciary duty, as well as misappropriation of information. Under state law, each of those elements provides an independent ground for private redress.
The common law of restitution therefore streamlines the inquiry to “the person to whom the duty is owed or the owner of the information who should have a cause of action.” In highlighting such improvements, Professor Schroeder provides a useful, thorough overview of federal and state insider trading jurisprudence. According to Professor Schroeder, state common law of restitution would simplify remedying insider trading wrongs. Specifically, a state disgorgement approach would eliminate the Supreme Court’s multi-factor standard for insider trading and provide much greater flexibility in proof thresholds. For restitution and disgorgement, state common law standards are less onerous than federal statutory requirements and the Supreme Court’s strictures. Still, federal law leaves space for concurrent jurisdiction and the continuation of common law efforts to disgorge improper gains.
Of course, to suggest that this alternative approach could replace the SEC’s enforcement regime would be extreme. Professor Schroeder wisely notes that her solution of private disgorgement actions should supplement SEC enforcement, not supplant it entirely. The SEC would remain responsible for a host of remedial efforts including injunctions, bars, suspensions, penalties, and more. Meanwhile, state courts could continue to develop the contours of the common law of restitution and the important remedy of disgorgement.
The force of Professor Schroeder’s approach is that it offers viable alternatives with much simpler proof requirements. Additional benefits may flow from a state common law restitution approach. Such benefits are not the focal point of the article but include the potential avoidance of Liu constraints. For example, a state law approach would obviate the mandate to present evidence of concerted wrongdoing in order to obtain joint and several disgorgement liability as well as the Supreme Court’s directive to return funds to victims, both of which present unique challenges in insider trading cases.
Still, it is worth considering whether the Supreme Court’s commands are wise policy. Though not bound by those strictures, state common law decisions would be free to engage in parallel tightening. But any such efforts can vary by state and would tie to the goals of restitution and unjust enrichment rather than the language of federal statutes. No matter what the underlying frame of the cause of action and remedy sought, courts must balance the law’s mission against concerns about overreach, plaintiff windfalls, and punitive results.
Professor Schroeder emphasizes a core restitution principle: that her approach will restore the private claimant to the status quo ante. In some of these cases though, courts should conduct more refined analysis to evaluate whether the application of restitution works if the property—material nonpublic information—is of less value when it is not traded than when it is. In some cases, the inside trader’s proceeds may not be “the fungible equivalent of personal property previously transferred to the other party,” because material nonpublic information that has not been traded upon does not (yet) have monetary value to the issuer. Still, as Professor Schroeder’s work demonstrates, meaningful and powerful remedies for wrongdoing such as insider trading are worthy state law aims. Thus, Professor Schroeder’s work will still resonate as the state common law continues to honor the goals of restitution while working in the shadows of federal statutes.
Professor Schroeder’s scholarship is vital in that it reminds readers to consider forgotten remedies and lesser worn paths. Federal enforcement should not be the sole vehicle to strip gain, deter wrongdoing, and benefit victims. If private litigants can effectively pursue remedies on the state level, the SEC may be able to direct its resources to more challenging or important targets. Not only might those paths be easier in the pursuit, but the seeker may also more likely reach the ultimate goal of disgorging the improper gain from insider trading.