Conflicts of Interest at an Organization’s Highest Authority: How the District of Columbia’s Rules of Professional Conduct Can Fail to Protect Private Organizations

This Article examines how the District of Columbia’s incomplete incorporation of the Model Rules of Professional Conduct into its own Rules of Professional Conduct has created a scenario in which wrongdoing inside a private organization can flourish. In 2002, following the Enron scandal, the American Bar Association (ABA) revisited and revised its Model Rules of Professional Conduct. The ABA nevertheless took a conservative route, rejecting rules long proposed by experts which would have permitted attorneys aware of corporate crimes, fraud, and other wrongdoing to report their concerns to individuals or entities outside the organization’s reporting structure. Additional scandals unfolded contemporaneous with the ABA’s revisions, instigating federal legislation, the Sarbanes-Oxley Act of 2002. Regulations promulgated under that Act included the reporting out opportunity long sought by ethics experts. In light of the new federal legislation, the ABA, in 2003, finally passed a revised Model Rule 1.13 which requires attorneys to report wrongdoing up the ladder to an organization’s highest authority and permits those attorneys to report out such wrongdoing in the event the highest authority failed to respond appropriately. Unfortunately, the District of Columbia did not heed these lessons. Citing antiquated notions of client confidentiality, the District adopted an approach which requires an attorney to report wrongdoing up the ladder but then fully accept the results of that reporting, even if the highest authority to whom the attorney reports the misconduct is the one engaging in the misconduct. In so doing, the District has created a structure which incentivizes the termination of ethical attorneys in order to cover up corporate wrongdoing. This Article recommends changes to the District of Columbia’s Rules of Professional Conduct which will enable the District to take the lead in promoting a bar committed to ethical conduct and appropriate corporate governance

134th Commencement Address

Video is not available. With Dr. Peter K. Kilpatrick, President of The Catholic University of America, standing beside her, Mary Graw Leary, Senior Associate Dean for Academic Affairs and Professor of Law, introduced Rachael Denhollander, recipient of The Catholic University of America’s President’s Medal. Denhollander, a lawyer and former gymnast, was the first woman to publicly denounce and pursue criminal charges against USA Gymnastics’s former team doctor Larry Nassar. Named “the bravest person I have ever had in my courtroom” by trial judge Rosemarie Aquilina, Denhollander’s pursuit of justice has demonstrated to fellow survivors the unassailable force with which she has refused to let her victimization define her. Indeed, this sentiment permeated the Basilica as well, and President Kilpatrick, referencing this feat later, during his closing remarks, labelled her the representation of “moral courage in the face of adversity.” Following her acceptance of the award from President Kilpatrick, Denhollander addressed the Class of 2023, challenging its graduates to follow the charge written millennia ago in the Book of Micah and chiseled—more recently, in 1994—into the west façade of the Columbus School of Law building: “Do justice, love mercy, and walk humbly with your God” (Micah 6:8)

Short Circuiting the Administrative Judiciary: A response to Linda Jellum

Linda Jellum provides a powerful analysis of the status of the exhaustion process for the SEC administrative judiciary and more broadly of the entire administrative judiciary. Many of her arguments are telling and on point. I disagree with a number of her technical and statutory arguments, and even more so the consequences of her analysis for the administrative state as we know it. Jellum\u27s argument is that Congress did not intend to preclude district courts from hearing constitutional challenges to SEC adjudications because agency ALJs are not the right adjudicators to hear challenges to the constitutionality of their own operations

The Curious Case of Tort Liability For A Defective Product That The Defendant Did Not Make, Sell, Or Distribute

Rarely does the United States Supreme Court consider and decide an issue of tort law, especially one that does not implicate any aspect of federal constitutional law. The problem of bare-metal equipment is just such an issue, taken up and addressed by the U.S. Supreme Court less than three years ago in the case of Air and Liquid Systems Corp. v. DeVries. Despite the Court’s opinion, the question continues to generate different responses from state courts and fails to enjoy much accord or consensus at the state-law level, where it has the greatest practical impact. The problem presented to the courts by bare-metal equipment is determining under what circumstances the manufacturer or seller of a product that is reasonably safe at the time of sale, and then made unreasonably unsafe by the post-sale addition of defective parts manufactured and supplied by third parties, may be liable to a person injured by that combined equipment. Upon examination, this turns out to be a more difficult and subtle problem than it may first appear. Especially for courts not accustomed to analyzing products liability issues, there can be a temptation to analyze the problem somewhat casually—thereby failing to securely situate it within the specific and quite different doctrinal frameworks in which it can arise. Some federal courts, including the U.S. Supreme Court, have yielded to that temptation. As a result, these courts have not sufficiently appreciated that this issue presents very different conceptual challenges and requires dramatically different consideration and analysis, depending on whether it arises in the context of a negligence claim or in the context of a strict products liability claim. Failure to appreciate the different nature of the problem in the context of these two quite different causes of action has led some courts, including the U.S. Supreme Court, to offer a single, univocal approach to this problem that both oversimplifies and overcomplicates the matter. Specifically in the case of the U.S. Supreme Court, its holding, opposed by a vigorous dissent, produces a set of rules that are at the same time both inconsequential in the negligence context and conceptually incoherent in the context of a strict products liability claim. This article describes and analyzes this fascinating issue, including the recent U.S. Supreme Court decision which squarely addresses it. It proposes an approach to future consideration of the problem by courts that grounds the analysis in the specific doctrinal frameworks within which the issue may arise and explains the very different qualities and challenges that the issue presents in these different doctrinal contexts

Eychaner v. City of Chicago: Repercussions after The Supreme Court refuses to take up a Takings Clause Reconsideration

On February 21, 2023, the Catholic Law community joined together for the second presentation of the 2023 Student Scholars Series, given by third-year law student Mark Tocchio. Tocchio\u27s work entitled, Eychaner v. City of Chicago: Repercussions after The Supreme Court refuses to take up a Takings Clause Reconsideration, examines the vulnerability of property owners having their property taken away in urban and low-income areas. The Presentation respondent was Mark S. Bourbeau, Esq. of DTM, PC. In July 2021, the U.S. Supreme Court denied cert. in Eychaner v. City of Chicago, an eminent domain case that presented the Court with an opportunity to address the controversial holding established in Kelo v. City of New London. Without reconsidering Kelo, and by failing to reject the “future blight” justification presented in Eychaner, the Court has made private property owners in urban and low-income areas vulnerable to the taking of property for the benefit of those with political power and deep pockets

Federal Protection of Illegal Short-Term Rentals: How the Protecting Local Authority and Neighborhoods Act Will Hold Airbnb Liable, Enforcing Local Regulations

Section 230 has come under scrutiny from academics and politicians, leading to calls on lawmakers to limit, or even end, Section 230’s immunity for Internet corporations; however, less attention has been given to the effects of Section 230 on the legal landscape in local, off-line communities. Online providers of short-term rental (STR) services such as Airbnb have used Section 230’s protection to shift the burden of complying with local laws and lease agreements onto the users listing STRs. By wielding Section 230 as both a sword and shield in litigation over their listings that violate local laws and lease agreements, these providers leave landlords and local governments seemingly without recourse. The PLAN Act (the Bill for Protecting Local Authority and Neighborhoods Act), proposed in the House in the 117th Congress in 2021, would remedy this overlooked and unjust result of Section 230’s protection. This article seeks to demonstrate why the PLAN Act must be passed to prevent further unfair application of Section 230

The \u3ci\u3ePanuwat\u3ci\u3e Snowball: Correlation Does Not Equal Materiality

Insider trading is a term of art referencing the fraudulent practice of trading securities in a company on the basis of material, nonpublic information about that same company in breach of some duty owed to another. The practice erodes the public’s trust in the integrity of our capital markets for a reason that is rather intuitive: it is inherently unfair to allow an individual to make a quick and certain profit by exploiting material, nonpublic information to which he privy due solely to his position in a company or some other relationship of trust and confidence. In this context, unrelenting civil enforcement by the Securities and Exchange Commission (“SEC”) is surely warranted. But, what if an individual in possession of material, nonpublic information about one company trades in the securities of a different company? Is a civil enforcement action warranted in this context? This question is derived from the novel “shadow trading” theory of insider trading liability proffered by the SEC in its August 2021 civil enforcement action against Matthew Panuwat. Judicial endorsement of the SEC’s shadow trading theory presents concerning doctrinal and practical implications. First, it upends the traditional materiality inquiry required in an insider trading action. Second, it transforms Rule 10b-5—the SEC’s primary enforcement mechanism—into a rule without limitation. Third, it will increase the cost of executing securities transactions as investors in possession of material, nonpublic information about one company could be required to abstain from trading in an endless list of companies, industries, and investment vehicles. Taken together, these considerations compel the rejection of the SEC’s shadow trading theory of insider trading liability

Climate Discrimination

This Article focuses on the coming legal plight of workers in the United States, who will likely face discrimination as they search for work outside their home states. The Article takes for granted that climate change will have forced those workers across state and international boundaries, a reality dramatically witnessed in the United States during the Dust Bowl of the 1930s. During that environmental emergency (and the devastation it wrought), workers were forced across boundaries only to be violently discriminated against upon arrival in their new domiciles. Such discrimination is likely to recur, and it will threaten the livelihoods of workers across the country, especially the poor and workers from minority communities. While it may be tempting to believe that the current array of federal employment-discrimination laws is both comprehensive and flexible enough to meet the challenges ahead, the prevailing interpretations of federal employment-discrimination laws show that applicable federal law will not be able to respond. Specifically, the main federal statutes targeting employment discrimination, including the Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, Title I of the Americans with Disabilities Act of 1990, and 42 U.S.C. § 1981 (1991) will be of limited utility to judges, workers, lawyers, and employers, among others, if Congress does not amend them. The Article is novel in at least three ways. First, it is the only article addressing the confluence of climate change and employment discrimination in the United States. Second, the Article is innovative in an additional way—it argues that groundbreaking recent precedent from the Supreme Court of the United States interpreting a federal employment anti-discrimination statute, notably Bostock v. Clayton County, does not cover employment discrimination based on climatic displacement. Third, the Article is the first to propose a number of climate-related changes to federal employment-discrimination statutes to facilitate the work of judges, workers, lawyers, and employers, among others. The Article argues that in the absence of protection under federal law, claimants will likely turn to state employment-discrimination laws, state common-law causes of action, and constitutional claims under federal law that likely will provide inadequate relief