NewYorkUniversity
LawReview
Current Issue

Volume 85, Number 3

June 2010
Articles

Partial Unconstitutionality

Kevin C. Walsh

Courts often hold legislation unconstitutional, but nearly always only part of the statute offends. The problem of partial unconstitutionality is therefore pervasive and persistent. Yet the exclusive doctrinal tool for dealing with this problem—severability doctrine—is deeply flawed. To make matters worse, severability doctrine is purportedly necessary for any workable system of judicial review. The accepted view is that severance saves: A court faced with a partially unconstitutional law must sever and excise the unconstitutional provisions or applications so that the constitutional remainder can be enforced going forward. Absent severance and excision, a law must fall in its entirety. This excision-based understanding of judicial review is supposedly traceable to Marbury v. Madison. In fact, this attribution is anachronistic. Moreover, the prevailing view is wrong about the distinctive function
of modern severability doctrine, which is not to save, but to destroy. This Article retrieves the original approach to partial unconstitutionality and develops a proposal for implementing a version of that approach. The proposal, displacement without inferred fallback law, is simultaneously ambitious and modest. It is ambitious because it proposes a shift in the general framework for judicial review in every case; it is modest because the proposed shift would change case outcomes in only a small set of highly consequential cases.

Debunking the Purchaser Welfare Account of Section 2 of the Sherman Act: How Harvard Brought Us a Total Welfare Standard and Why We Should Keep it

Alan J. Meese

The last several years have seen a vigorous debate among antitrust scholars and practitioners about the appropriate standard for evaluating the conduct of monopolists under section 2 of the Sherman Act. While most of the debate over possible standards has focused on the empirical question of each standard’s economic utility, this Article undertakes a somewhat different task: It examines the normative benchmark that courts have actually chosen when adjudicating section 2 cases. This Article explores three possible benchmarks—producer welfare, purchaser welfare, and total welfare—and concludes that courts have opted for a total welfare normative approach to section 2 since the formative era of antitrust law. Moreover, this Article will show that the commitment to maximizing total social wealth is not a recent phenomenon associated with Robert Bork and the Chicago School of antitrust analysis. Instead, it was the Harvard School that led the charge for a total welfare approach to antitrust generally and under section 2 in particular. The normative consensus between Chicago and Harvard and parallel case law is by no means an accident; rather, it reflects a deeply rooted desire to protect practices—
particularly “competition on the merits”—that produce significant benefits in the form of enhanced resource allocation, without regard to the ultimate impact on purchasers in the monopolized market. Those who advocate repudiation of the longstanding scholarly and judicial consensus reflected in the total welfare approach to section 2 analysis bear the heavy burden of explaining why courts should, despite considerations of stare decisis, suddenly reverse themselves and adopt such a different approach for the very first time, over a century after passage of the Act.

Notes

The Trial of Alberto Fujimori: Navigating the Show Trial Dilemma in Pursuit of Transitional Justice

Christina T. Prusak

Alberto Fujimori is the first democratically elected leader to be tried and convicted of human rights violations in the domestic courts of his own country. As satisfaction with foregoing prosecution and granting amnesty in exchange for more peaceful democratic transition has fallen increasingly out of favor, Fujimori’s trial comes at an opportune time to reevaluate the role of criminal trials in national reconciliation and transitional justice. In this Note, I argue that Fujimori’s human rights trial demonstrates that head-of-state trials, particularly domestic ones, can valuably contribute to larger transitional justice projects, despite their inherent limitations and challenges. Situating my analysis within the transitional justice and show trial literature, I analyze both procedurally and substantively how effectively Fujimori’s human rights trial has navigated its “constitutive paradox,” or tension between strict adherence to the rule of law and the extrajudicial objective of delivering a coherent moral message, inherent in transitional criminal proceedings. I conclude that the trial demonstrates that courts can effectively navigate these paradoxes, even in the midst of institutional weakness and societal cleavages. Moreover, I suggest that domestic tribunals may be particularly well suited to navigate the constitutive paradox of transitional trials.

After the Fall: A New Framework to Regulate “Too Big to Fail” Non-Bank Financial Institutions

Alison M. Hashmall

The goal of any financial regulatory system should be to enable well-functioning markets. Meeting this goal requires reducing the impact and frequency of financial institution failures that cause systemic risk. Any regulatory structure, however, inevitably involves tradeoffs. A policy that effectively reduces systemic risk and its associated costs might also increase moral hazard. Similarly, a policy that seeks to reduce moral hazard and maintain market discipline—for example, by allowing a large interconnected institution such as Lehman Brothers to fail—might also create uncertainty, which can harm markets by creating panic. In this Note, I argue that our current regulatory structure is suboptimal in its regulation of systemic risk. A different regulatory structure could more effectively reduce the systemic risk caused by failing non-bank financial institutions, while minimizing the attendant problems caused by the regulations themselves—moral hazard and uncertainty. The federal government could strike a superior balance by establishing more stringent ex ante prudential regulations of systemically important non-bank financial institutions aimed at curbing excessive risk-taking and by implementing a regulatory process to resolve the failure of such institutions. The Obama Administration has proposed regulatory reform that endorses such beneficial changes, but certain details in the proposal fall short. I propose specific modifications to the Administration’s proposal to produce a more optimal regulatory framework. By pinpointing and examining the strengths and weaknesses of the Administration’s approach, I formulate a regulatory framework that more effectively contains systemic risk, avoids increasing moral hazard, and reduces excessive uncertainty caused by regulation.

Deregulation Through Nonenforcement

Daniel T. Deacon

This Note examines the phenomenon of deregulation through nonenforcement, drawing on examples from the George W. Bush Administration. It argues that the presumption of nonreviewability afforded to agency refusals to prosecute creates incentives for presidential administrations pursuing deregulatory agendas to manipulate agency enforcement practices. Furthermore, it contends that deregulation through nonenforcement is undesirable because it shields executive branch policy decisions from public view, thereby reducing accountability. Perhaps counterintuitively, the Note suggests that one way to counteract the negative effects of the presumption of nonreviewability is to reduce the level of review applied to other categories of agency action, such as notice-and-comment rulemaking, thus increasing the executive’s ability to act through more accountable means.