Federalism, Lochner, and the Individual Mandate

The individual mandate provision in the Affordable Care Act requires individuals to obtain minimum essential health insurance coverage. This provision has been the focus of legal attacks on the Act. Opponents of the mandate have contended that Congress lacks power to compel individuals to engage in a private, commercial transaction. These claims are most sensibly understood as libertarian objections - that is, objections to government attempts to regulate certain personal decisions or actions, on the ground that those decisions or actions are for the individual, and only the individual, to make or take. As such, as a doctrinal matter this objection flows most logically from the Due Process Clause of the Fifth Amendment, as a species of substantive due process. Opponents of the individual mandate, however, have framed their claims in terms of federalism, contending that Congress lacks power under Article I to regulate “inactivity.” But the libertarian objection has simply nothing to do with federalism - that is, a system for allocating power between the federal government and the states. Whether the object of regulation is passive or instead active tells us nothing about whether it is more properly regulated at the state or federal level. Incorporating a categorical libertarian limitation into federalism doctrine, moreover, would limit federal authority even when the government’s interests in regulation are compelling, and even when the states are simply unable, because of collective action problems, to address a problem of national scope and importance. Smuggling a libertarian-based limitation into constitutional law by concealing it in the garb of federalism can only deepen the suspicions of those who are already inclined to view arguments about federalism as simply a guise for some other policy agenda. If opponents of the individual mandate wish to raise a libertarian objection, then they are free to do so; but they should do so in an intellectually coherent way, and they should be clear about the consequences - both for state and federal authority - that inevitably would follow

Federalism, Lochner, and the Individual Mandate

The individual mandate provision in the Affordable Care Act requires individuals to obtain minimum essential health insurance coverage. This provision has been the focus of legal attacks on the Act. Opponents of the mandate have contended that Congress lacks power to compel individuals to engage in a private, commercial transaction. These claims are most sensibly understood as libertarian objections - that is, objections to government attempts to regulate certain personal decisions or actions, on the ground that those decisions or actions are for the individual, and only the individual, to make or take. As such, as a doctrinal matter this objection flows most logically from the Due Process Clause of the Fifth Amendment, as a species of substantive due process. Opponents of the individual mandate, however, have framed their claims in terms of federalism, contending that Congress lacks power under Article I to regulate “inactivity.” But the libertarian objection has simply nothing to do with federalism - that is, a system for allocating power between the federal government and the states. Whether the object of regulation is passive or instead active tells us nothing about whether it is more properly regulated at the state or federal level. Incorporating a categorical libertarian limitation into federalism doctrine, moreover, would limit federal authority even when the government’s interests in regulation are compelling, and even when the states are simply unable, because of collective action problems, to address a problem of national scope and importance. Smuggling a libertarian-based limitation into constitutional law by concealing it in the garb of federalism can only deepen the suspicions of those who are already inclined to view arguments about federalism as simply a guise for some other policy agenda. If opponents of the individual mandate wish to raise a libertarian objection, then they are free to do so; but they should do so in an intellectually coherent way, and they should be clear about the consequences - both for state and federal authority - that inevitably would follow

A comprehensive test of order choice theory: recent evidence from the NYSE

We perform a comprehensive test of order choice theory from a sample period when the NYSE trades in decimals and allows automatic executions. We analyze the decision to submit or cancel an order or to take no action. For submitted orders we distinguish order type (market vs. limit), order side (buy vs. sell), execution method (floor vs. automatic), and order pricing aggressiveness. We use a multinomial logit specification and a new statistical test. We find a negative autocorrelation in changes in order flow exists over five-minute intervals supporting dynamic limit order book theory, despite a positive first-order autocorrelation in order type. Orders routed to the NYSE’s floor are sensitive to market conditions (e.g., spread, depth, volume, volatility, market and individual-stock returns, and private information), but those using the automatic execution system (Direct+) are insensitive to market conditions. When the quoted depth is large, traders are more likely to “jump the queue” by submitting limit orders with limit prices bettering existing quotes. Aggressively-priced limit orders are more likely late in the trading day providing evidence in support of prior experimental results

Optimal Trading Strategy and Supply/Demand Dynamics

The supply/demand of a security in the market is an intertemporal, not a static, object and its dynamics is crucial in determining market participants' trading behavior. Previous studies on the optimal trading strategy to execute a given order focuses mostly on the static properties of the supply/demand. In this paper, we show that the dynamics of the supply/demand is of critical importance to the optimal execution strategy, especially when trading times are endogenously chosen. Using a limit-order-book market, we develop a simple framework to model the dynamics of supply/demand and its impact on execution cost. We show that the optimal execution strategy involves both discrete and continuous trades, not only continuous trades as previous work suggested. The cost savings from the optimal strategy over the simple continuous strategy can be substantial. We also show that the predictions about the optimal trading behavior can have interesting implications on the observed behavior of intraday volume, volatility and prices.

An Art for Art's Sake or a Critical Concept of Art's Autonomy? Autonomy, Arm's Length Distance, and Art's Freedom

What is the relationship between the philosophical concept of the “autonomy of art” and the cultural policy-notion of “artistic freedom”? This article seeks to answer this question by taking the Swedish governmental report This Is How Free Art Is (Så fri är konsten 2021) and its reception in the Swedish main stream media as an emblematic example and by reading it symptomatically. Firstly, it traces the critical history of “artistic freedom” and the interrelated term “arm’s length distance”, primarily in the context of Great Britain. Secondly, it critically reconstructs the concept of the “autonomy of art” in the history of Western philosophy by making a critique of a fetishized notion of art’s autonomy in the name of l’art pour l’art. The main argument is that the idea about art’s autonomy, on which the Swedish report leans, resembles such philosophical and art historical idea of art’s autonomy. The claim is also that such an understanding of art does not tie up, either philosophically or historically, with the arm’s length principle, since they ultimately rely on different conceptions of art’s freedom

Amending Maine\u27s Plain Language Law to Ensure Complete Disclosure To Consumers Signing Arbitration Contracts

Arbitration has been defined as an informal procedure used by disputants to resolve their differences in a forum other than a court of law. By agreeing to arbitration, the parties submit their disputes to selected arbitrators, whose reasoning and final decisions or awards supplant the judgment of the established judicial tribunals. Further, the decisions of arbitrators are usually binding and enforceable in courts. Although arbitration has been lauded for being less expensive and time-consuming than litigation, consumers arbitrating disputes with large companies may not be playing on a level field. It is important, however, to distinguish arbitration from mediation. Arbitrators, unlike mediators, are given the power to resolve the dispute before them and to force, if necessary, settlement upon the parties. Alternative dispute resolution (ADR), meanwhile, is a term that subsumes both arbitration and mediation, as well as neutral evaluation, settlement conferences, and the use of special masters, minitrials, and summary jury trials. Discussions and criticisms in this Comment focus only upon arbitration, emphasizing the use by financial institutions of that form of ADR to resolve disputes arising subsequent to their customers\u27 execution of an arbitration agreement. In the early part of this century, courts, eager to preserve their jurisdiction, often refused to enforce arbitration agreements. At the same time, fair resolution of commercial disputes may have required expertise in analyzing the underlying transactions. Arguably, the need for experts familiar with commercial practices increased in proportion to the complexity of commercial transactions. Even the most qualified of judges recognized the need for experts to assist the courts in resolving disputes among merchants. Nonetheless, the courts remained suspicious of arbitration in general and continued to invalidate agreements. To counter the courts\u27 tendency to invalidate predispute arbitration agreements, Congress passed the Federal Arbitration Act (FAA) in 1925. Apparently, the narrow purpose of this Act was “to give the merchants the right or the privilege of sitting down and agreeing with each other as to what their damages are, if they want to do it.” Thus, arbitration originally served the limited purpose of providing expert adjudication of disputes among consenting merchants of presumed equal bargaining power, and Congress enacted the FAA to counteract judicial hostility toward that form of arbitration. At the time of its passage, the FAA was viewed as a simple declaration of the new federal policy recognizing and enforcing agreements to arbitrate disputes among merchants. Further, the FAA was not to “encroach upon the province of the individual States.” By 1996, however, the FAA was held to preempt state disclosure laws enacted to ensure that arbitration clauses contained in contracts be brought to the attention of all signatories. This Comment assumes that consumers, overall, benefit from these disclosure laws, whereas lenders and merchants find them cumbersome, due to the significant paperwork they must generate to remain in compliance. The Author argues that lenders have as many reasons to favor arbitration as consumers have to fear this method of resolving post-closing, consumer-lender disputes. Preemption of laws requiring heightened disclosure of arbitration clauses is good news for lenders but detrimental to the interests of consumers for reasons that are enumerated later in this Comment

Energy Re-Investment

Despite worsening climate change threats, investment in energy—in the United States and globally—is dominated by fossil fuels. This Article provides a novel analysis of two pathways in corporate and securities law that together have the potential to shift patterns of energy investment. The first pathway targets current investments and corporate decision-making. It includes efforts to influence investors to divest from owning shares in fossil fuel companies and to influence companies to address climate change risks in their internal decision-making processes. This pathway has received increasing attention, especially in light of the Paris Agreement and the Trump Administration’s decision to withdraw from it. But, alone, it will not be enough to foster transition to a cleaner mix of energy sources. Key to achieving this goal of energy reinvestment is a second pathway focused on fostering investments in new companies innovating in clean energy. This pathway —which has received far less attention—uses emerging legal mechanisms to support greater investment in entrepreneurial clean energy ventures. The Article’s analysis of this pathway looks beyond the well-established ways in which subsidies support fossil fuels and renewable energy. It instead examines the significance for energy reinvestment of changes in U.S. securities regulation permitting greater crowdsourcing of investment and in state laws allowing for new types of corporations. This Article is the first to examine how these two pathways can synergistically promote energy reinvestment. The first pathway moves money away from fossil fuels, while the second helps to spur needed reinvestment. The Article proposes strategies for deploying the tools in the two pathways together, taking into account the motivations and constraints of diverse investors and corporations

Energy Re-Investment

Despite worsening climate change threats, investment in energy — in the United States and globally — is dominated by fossil fuels. This Article provides a novel analysis of two pathways in corporate and securities law that together have the potential to shift patterns of energy investment.The first pathway targets current investments and corporate decision-making. It includes efforts to influence investors to divest from owning shares in fossil fuel companies and to influence companies to address climate change risks in their internal decision-making processes. This pathway has received increasing attention, especially in light of the Paris Agreement and the Trump Administration’s decision to withdraw from it. But, alone, it will not be enough to foster transition to a cleaner mix of energy sources.Key to achieving this goal of energy reinvestment is a second pathway focused on fostering investments in new companies innovating in clean energy. This pathway — which has received far less attention — uses emerging legal mechanisms to support greater investment in entrepreneurial clean energy ventures. The Article’s analysis of this pathway looks beyond the well-established ways in which subsidies support fossil fuels and renewable energy. It instead examines the significance for energy reinvestment of changes in U.S. securities regulation permitting greater crowdsourcing of investment and in state laws allowing for new types of corporations.This Article is the first to examine how these two pathways can synergistically promote energy reinvestment. The first pathway moves money away from fossil fuels, while the second helps to spur needed reinvestment. The Article proposes strategies for deploying the tools in the two pathways together, taking into account the motivations and constraints of diverse investors and corporations