Agency Deference After Loper: Expertise as a Casualty of a War Against the “Administrative State”

Chevron deference has been a foundational principle for administrative law for decades. Chevron provided a two-step analysis for determining whether an agency would be given deference in its decision-making. This deferential test finds its legitimacy on the grounds of agency expertise and accountability. However, when the Supreme Court of the United States granted certiorari in Loper Bright Enterprise v. Raimondo, it positioned itself to potentially overrule or severely limit Chevron. An overruling of Chevron would place judicial deference to administrative agency decisions in peril by allowing courts to substitute their own views over the informed opinions of agency experts. This article discusses the potential consequences of Loper’s impending decision

The Section 1031 Qualified-Use Requirement

Section 1031 allows owners of real property to dispose of their property and acquire replacement real property tax-free, and it is one of the most widely used transactional-planning provisions in federal tax law. With the variation in size of the transaction to which section 1031 applies comes varying levels of advice available to property owners. The significant variation in advice that property owners receive affects the actions that they take with respect to their property. Such variation appears to be most pronounced with respect to section 1031 exchanges that occur in proximity to business transactions (i.e., contributions to and distributions from business entities). Some advisors claim that the exchange and proximate business transactions must be separated by some period or separated by a change in tax years. This Article shows that such advice has no support in the law. Despite the lack of support for such advice, the advice persists to the detriment of property owners, especially those who are under-represented. The problem is exacerbated by infrastructure that exists in the section 1031 space to facilitate section 1031 exchanges. Almost every exchange is facilitated by a section 1031 qualified intermediary. The largest section 1031 qualified intermediaries facilitate tens of thousands of exchanges each year. The exchange agents and others working within qualified intermediaries are in contact with tens of thousands of property owners each year. To economize transaction costs, property owners will often look to qualified intermediaries for advice regarding section 1031 exchanges. Because of the wide variation in property owners that engage in section 1031 exchanges and the pressure to keep costs manageable, advisors may attempt to provide general, simplified descriptions of the cases and IRS rulings that consider the qualified-use requirement. The advice may also be designed to minimize property owners’ tax risk. That approach is undermined by the significant variety of transactions that raise the qualified-use requirement. Case law and IRS rulings span various types of qualified-used transactions, each fitting into a category that is governed by its own set of rules. The relevance of qualified-use authority to any given situation depends upon the facts of the authority and the facts of the given situation.Thus, not all qualified-use authority is created equal or treated equally with respect to the various situations that raise the qualified-use requirement.This Article brings order to the qualified-use issue by describing the legally prescribed analysis that applies to tax-law questions such as the section 1031 qualified-use requirement. By categorizing the qualified-use cases and rulings according to transaction type, the Article shows that the law governing the qualified-use requirement is rational and certain with respect to several types of qualified-use exchanges. The failure of property owners and their advisors to accurately understand the law governing the qualified-use requirement could result in multiple types of risk that extend beyond tax risks. First, advice to hold property for a period under the mistaken belief that holding property longer increases the likelihood of satisfying the qualified-use requirement can create transaction risks. For instance, property could lose value, or disagreements among co-owners could arise while property is held longer under the misperception that doing so reduces tax risk. Second, advising clients to hold property longer than is needed with no authority to support such advice exposes advisors to advisory risk. Such risks are reduced when advice is based upon relevant authorities

The Section 1031 Exchange Requirement

Section 1031 is the most widely used transactional tax-planning tool in federal income tax law. It allows owners of real property to transfer their property and acquire like-kind real property without recognizing taxable gain. Yet one of its most fundamental elements—the exchange requirement—remains under-analyzed and widely misunderstood, with costly consequences to untold numbers of taxpayers every year. Inaccurate information regarding the exchange requirement is disseminated to property owners by advisors and exchange professionals, causing property owners to forego business and transactional opportunities. Other property owners pay for costly transactional planning at the urging of advisors who misunderstand the exchange requirement. Thus, the section 1031 exchange requirement is in desperate need of in-depth analysis and clarification. This Article applies in-depth analysis to demystify the exchange requirement. The resulting clarity will relieve property owners of costs resulting from lost opportunities and expensive transactional planning. The costly pressure points related to the exchange requirement are most pronounced with exchanges that commonly occur (or would occur more commonly with a clear understanding of the exchange requirement) in proximity to tax-free business transactions (i.e., contributions to and distributions from entities). This Article draws from legislation, legislative history, case law, IRS guidance, and tax policy to show that the exchange requirement attracts a form-driven analysis, which deviates from the standard substance-over-form analyses that apply to most federal income tax issues. The Article shows that courts deliberately adopt the form-driven analysis and shun substance-over-form analyses because the latter fail to provide clarity, and it shows how that analytical framework applies to exchanges that occur in proximity to business transactions. This novel analysis and understanding of the section 1031 exchange requirement provides newfound clarity to judges, advisors, property owners, scholars, and commentators. In doing so, it will free property owners to engage in business transactions confidently, forego costly transactional structures, and thereby increase general economic activity

Plea Bargains, Prosecutorial Breach, and the Curious Right to Cure

When the prosecutor breaches a plea bargain—e.g., by recommending prison instead of the agreed-upon probation—the defendant is entitled to a remedy: either sentencing in front of a different judge or plea withdrawal. However, if defense counsel objects to the breach, the prosecutor may halfheartedly change the recommendation to probation. Most courts have held that to be an effective “cure”—even when the judge then sentences the defendant to prison, as the prosecutor originally recommended. The right to cure, which was intended for commercial sales contracts, fails miserably in the plea-bargain context. In the above example, the attempted cure is too late, it fails to unring the bell of the earlier prison recommendation, and it violates the defendant’s reasonable expectations under the plea deal. Further, when the judge dutifully sends the defendant to prison as the prosecutor originally recommended, it reeks of collusion and destroys the appearance of fairness. Most significantly, the cure doctrine creates a dilemma for the defense lawyer. If defense counsel does not object to the breach, the prosecutor will not be able to cure; therefore, if the judge sentences the defendant to prison, the defendant will receive a remedy on appeal—thanks to defense counsel’s “ineffectiveness” in not objecting. Conversely, if defense counsel objects and the prosecutor “cures,” the judge may still sentence the defendant to prison; however, the defendant will not receive a remedy—paradoxically, thanks to defense counsel’s “effectiveness” in objecting. This raises the question: Is ineffective the new effective? Perhaps, but intentional ineffectiveness carries risks for both defense counsel and the client. Therefore, this article develops an alternative response to prosecutorial breach that protects both the defense lawyer and the defendant, is highly efficient, and is undeniably fair—even to the breaching party that created the problem in the first place

When Life Takes Your Lemons: Resolving the Legislative Prayer Debate in School Board Settings in Light of Kennedy v. Bremerton School District

The COVID-19 pandemic fanned the flames of a fire that had been slowly but steadily burning since 2016, arming the loudest warriors of America’s endless culture war with a slew of new divisive issues. Virtually overnight, parental rights groups began capitalizing on the frustration in their communities in order to spur political change, training their ire toward public schools. What began as a crusade against mask mandates and vaccines manifested into a well-funded effort by ultraconservative groups to undermine the public education system as a whole. Against this backdrop, the legislative prayer exception—which was meant to sanction the practice of opening sessions of legislative and other deliberative public bodies with prayer as a part of our nation’s history and tradition and thus compatible with the Establishment Clause—now sows more division than unity. This doctrine rests on the premise that invoking religion in this context is not “establishment,” but rather a means of lending gravity to the occasion or a “tolerable acknowledgment” of widely held beliefs. Despite detailed accounts of the history and tradition of prayer in this nation, none of the Court’s precedents have dictated any specific test or limit for legislative prayer beyond compatibility with historical practice, leaving open the question of how far the exception extends and in what contexts. A question that remains unresolved is whether a school board should be considered a legislature within the meaning of this exception or a school-sanctioned event, where prayer is generally prohibited. The issue has been further complicated the Court’s pronouncement in Kennedy v. Bremerton School District in 2022 that none of the Court’s formal tests—the Lemon test, the Endorsement test or the Coercion test—are applicable when evaluating an Establishment Clause challenge, as the clause must only be interpreted by reference to history and tradition—thus upending the current debate. In light of this abrogation, all government sanctioned prayer will effectively be treated like legislative prayers and therefore likely accepted, including in schools. This note will advocate for a new approach that can distinguish between “tolerable acknowledgement of beliefs widely held” and the kind of religious indoctrination that the current zealotry surrounding school boards is trending toward. This proposed test first examines (1) if a meeting’s purpose includes judicial or executive functions or only legislative tasks; (2) the presence of students at the meeting and the purpose of their attendance; (3) the degree of control the board holds over the prayer; and (4) any overriding history or tradition. It then determines whether the practice of prayer is coercive. In order to meaningfully protect the secularization of public schools, this test seeks to account for the concerns that arise when children are implicated in an Establishment Clause challenge, while acknowledging history and tradition, as Kennedy now mandates

Fetch the Bolt Cutters: Reflections on Racial Capitalism and the NAFTA/USMCA

Using the pecan orchards of West Texas as a starting point, this Article offers a reflection on the utility of racial capitalism as an organizing frame for understanding international trade and trade agreements. The Article is also a tribute to other scholars in this field, whose work long precedes and informs my own. It is an expanded version of a presentation given for an symposium at Brooklyn Law School in October 2023 on Promises and Challenges for the Future of North American Trade, and it is written for readers who may be unfamiliar with this body of work

Unintended Consequences: The New Test for Interlocutory Mandatory Injunctions

Interlocutory mandatory injunctions can be an important remedy during the pendency of a trial. With its decision in R. v. Canadian Broadcasting Corp, the Supreme Court of Canada revised its test for an interlocutory mandatory injunction, holding that it should require a higher threshold and be therefore harder to obtain than an interlocutory prohibitive injunction. This higher threshold requires that the applicant demonstrate a strong prima facie case that it will succeed at trial based on law and evidence. This change adds uncertainty to the process, ultimately complicating and adding costs to litigation

Balancing Chevron, Skidmore, and Major Questions: A Novel Framework for Judicial Deference to Agency Legal Interpretations

The Supreme Court’s decision in West Virginia v. EPA is a watershed moment for administrative law. For the first time, the Court explicitly invoked the Major Questions Doctrine by name in a majority opinion. The usage of the Major Questions Doctrine is important on its own, but equally important is the fact that the longstanding Chevron doctrine played no part in the majority’s analysis. The absence of Chevron doctrine in West Virginia in favor of the Major Questions Doctrine continues a trend where the Court has been relying on Chevron less often. The threats the Chevron faces do not appear to be ending with West Virginia either. In 2024, the Court will hear Loper Bright Enterprises v. Raimondo, in which the question presented is whether the Court should overrule Chevron entirely. With the Major Questions Doctrine on the rise and the fate of Chevron in doubt, now is the perfect time to rethink how judicial deference to the administrative state operates. This note proposes a novel framework for judicial deference that includes Chevron, Skidmore, and the Major Questions Doctrine in an effort to balance an effective and efficient administrative state against constitutional separation of powers principles. This framework centers on the question of if the regulation at hand involves questions of “political and economic significance” to make a determination between applying either a deferential Chevron standard (if no) or the Skidmore standard (if yes)

American Handling of Holocaust Property Takings: What We Can Learn From International Policies

The Supreme Court decision in Federal Republic of Germany v. Philipp and US enforcement of the Foreign Sovereign Immunities Act have made it extremely difficult for Holocaust survivors and their families to recover lost and stolen property from during the World War II era. Other countries, such as the United Kingdom, France, and Germany, have had great success in this arena through various methods. This Note explores the ways in which US jurisprudence continues to make recovery inaccessible, while highlighting the specific processes these few European countries have created to foster recovery. Finally, this Note argues that the US must adopt an agency that uses mediation-based proceedings to resolve issues of looted art