A Simple Approach to Preventing the Next Housing Crisis-Why We Need ONe, What One Would Look Like, and Why Dodd-Frank Isn\u27t It

This article considers the adequacy of The Dodd-Frank Act in terms of its potential ability to prevent another crisis in the housing market. The author argues that Dodd-Frank, even if implemented broadly, will not address the key problem of excess complexity in the housing and financial markets. The author then suggests additional reform focusing on simplicity, exemplified by the existing regulatory framework in Denmark. Lastly, the author addresses the current political economy, which is blamed for making the passage of effective regulation too difficult

The Case for an Information-Forcing Regulatory Definition of “Nanomaterials”

This Article reviews regulatory attempts to define nanomaterials to date, including the European Commission’s definition. It then sets forth and explains why agencies should adopt what I am calling an information-forcing definition of nanomaterials. Nanomaterials implicate the same informational problem as many other substances or practices that are the subject of political and legal debate: that is, we (the public) know enough to know that there are some risks but not enough to specify and assess those risks. We know risks are posed by some kinds of small-scale materials in some contexts, but not enough is known to define the universe of which particular materials pose risk and which do not (or how much risk is posed by those materials that do pose risk). Regulators, therefore, do not know enough to specify the health and environmental risks from nanomaterials with any precision. Regulatory definitions are, therefore, needed that facilitate the production and sharing by industry of information about the small-scale materials they use, why they use them, and what behaviors those materials exhibit that may translate into human health and/or ecological risk. The regulatory definitions should be structured so as not only to force information from industry, but also to force, or at least encourage, agencies not to give in to powerful forces of bureaucratic inertia and stick with regulatory definitions even after emerging science and other public information suggest they are obsolete

Adequacy of Representation\u27 in Time (Or Why the Result in Stephenson is Correct)

This essay sketches a Rawlsian defense of allowing subsequent challenges to class action settlements, as in the Stephenson agent orange case and the Homeside Bank Boston case. My normative claim is that the Rawlsian original position is a helpful way of thinking about what a fair distribution among class members entails that is, we should ask whether a settlement conceivably could have been agreed to by class members standing behind a veil of ignorance as to what their particular position or place within the class would be beyond the veil. Subsequent challenges to settlements should be permitted where no reasonable class member standing behind the veil of ignorance, employing maximum decisionmaking, would have consented to the settlement. I also argue that proposed reforms in the manner by which judges approve class action settlements, while perhaps sensible, will not eliminate the problem of inadequate representation, and that the availability of such subsequent challenges based on inadequacy of representation will not appreciably reduce the settlement rate in class actions or otherwise destroy the class action as a dispute resolution mechanism

Commodifying and Banking Pollution Rights, Reducing Innovation

This Article represents an attempt to fill a gap in the existing environmental law and policy literature by exploring the interplay between the extent to which, and the conditions under which, polluting firms are allowed to bank excess pollution credits and the strength of the incentives for polluting firms to invest in the development of new pollution reduction and control technologies. The central argument in the Article is this: permitting the banking of pollution credits has both a pro-innovation and anti-innovation incentive effect, and the anti-innovation effect for each firm is a function both of how many credits that firm has in the bank and of how many credits it knows that its competitors have in their banks. Although my analysis does not point to any particular rule regarding banking, it does provide some support for limits on the banking of credits. The intuition behind the analysis is simple: once firms have banked pollution credits, they are in the position of both a prospective buyer and a prospective seller of pollution credits. As prospective buyers of credits, firms have an incentive to further the development of pollution reduction and control technology that will (in addition to other things) reduce the prevailing market price for credits. As prospective sellers of pollution credits, by contrast, firms have an incentive to deter, or at least not further, the development of pollution reduction and control technology that will reduce the prevailing price for credits

Adequacy of Representation\u27 in Time (Or Why the Result in Stephenson is Correct)

This essay sketches a Rawlsian defense of allowing subsequent challenges to class action settlements, as in the Stephenson agent orange case and the Homeside Bank Boston case. My normative claim is that the Rawlsian original position is a helpful way of thinking about what a fair distribution among class members entails that is, we should ask whether a settlement conceivably could have been agreed to by class members standing behind a veil of ignorance as to what their particular position or place within the class would be beyond the veil. Subsequent challenges to settlements should be permitted where no reasonable class member standing behind the veil of ignorance, employing maximum decisionmaking, would have consented to the settlement. I also argue that proposed reforms in the manner by which judges approve class action settlements, while perhaps sensible, will not eliminate the problem of inadequate representation, and that the availability of such subsequent challenges based on inadequacy of representation will not appreciably reduce the settlement rate in class actions or otherwise destroy the class action as a dispute resolution mechanism

Existence Value and Federal Preservation Regulation

Conventional economic and political theory predicts that the states will underregulate the degradation or destruction of natural resources within their borders when some or all of the resulting adverse effects fall outside their borders, that is, upon out-of-staters. Academic critics of the federalization of environmental law agree with this conventional view at an abstract level, but, in their view, only the physical effects of the destruction of a natural resource on out-of-staters should count as an interstate externality that can justify federal intervention. The federal courts may be moving toward an even narrower conception of what constitutes an environmental externality that can justify federal regulatory intervention - a conception in which the externality must entail interstate market effects in addition to interstate physical effects. This Article argues that a significant set of the interstate effects of natural resource degradation and destruction on the American populace cannot plausibly be classified as either physical or market effects: some, perhaps many, Americans lose some sense of well-being simply by virtue of the loss of the existence of wetlands, waterways, and other natural resources in states where they do not live. Existence values (or more precisely, the desire to prevent the loss of existence values) provide a powerful positive account of how the federal political process, despite concerted opposition by well-organized business interests, has at times come to restrict the degradation of natural spaces that few out-of-state residents are likely to ever visit or otherwise use. Existence values also provide a strong normative account of why such restrictions are, from a societal vantage, presumptively welfare-maximizing. Indeed, as explained in Part III of the Article, federal regulation is more likely to be necessary to maximize welfare in the context of interstate losses in existence value than in the context of interstate physical effects, such as air or water pollution crossing state lines. The principal claim of those who reject the use of existence values as a rationale for federal regulation is that existence values are nonmeasurable and hence unsuitable for consideration in public policy. As explored in Part IV of the Article, this empirical objection is inconsistent with the findings of contingent value (CV) surveys in which respondents have been asked how much they would be willing to pay for the preservation of one or more natural resources. The CV surveys completed to date, although admittedly imperfect as measurement devices, suggest significant values for the preservation of a range of natural resources. More important, the federal political process itself provides a comparative measure of the magnitude of the existence-value benefits of natural preservation (on the one hand) and the magnitude of the competing economic benefits associated with the degradation or destruction of natural settings (on the other). If anything, given the core insights of public choice theory and the structural supports in the federal political process for industries whose economic interests often run counter to natural preservation (e.g., the mining, timber, and oil industries), we should expect the federal political process to understate significantly the comparative magnitude of the existence-value benefits of natural preservation. The current literature also contains a non-empirical objection to existence values as a justification for federal regulation. The essence of this objection is that federal preservation regulation premised on existence value preferences is illegitimate because it violates the principles of respect for private property rights and distributive justice among communities. As explained in Part V of the Article, these principles, at best, support the claim that all sorts of government regulation - and not just federal regulation aimed at preserving natural resources - is illegitimate from a particular (and highly contestable) point of view. The normative defense of existence values and existence-value-driven regulation developed in Parts III-V provides a useful perspective from which to evaluate the current state of Commerce Clause doctrine. Commerce Clause doctrine has never formally recognized existence-value concerns as a basis for federal jurisdiction, and that is unlikely to change. However, certain doctrinal approaches to the Commerce Clause create room for regulation motivated by existence-value concerns, and others, such as the approach arguably endorsed by the majority in SWANCC, do not. If one accepts that federal regulation premised on existence-value concerns is presumptively welfare maximizing, then one must accept that Commerce Clause tests that preclude such regulation carry a substantial social cost. The normative defense of existence-value regulation also has implications for the choice between approaches to standing that facilitate citizen enforcement of regulations premised on existence-value concerns, and approaches, such as that endorsed by the majority in Lujan v. Defenders of Wildlife, that impede such enforcement

Exclusionary Eminent Domain

This Article explores the phenomenon of exclusionary eminent domain – the exercise of eminent domain that has the effect of excluding low-income households from an otherwise predominantly or entirely middle-class or wealthy neighborhood or locality, whether or not exclusion itself was the purpose of the condemnation. All condemnations exclude the condemned owner (and his or her tenants, if any) from the condemned property. Exercises of what I am calling exclusionary eminent domain are doubly exclusive because the displaced residents are unable to afford new housing in the same neighborhood or locality as their now-condemned, former homes. In exclusionary eminent domain, low-incomes households are excluded not only from their homes but also from their home neighborhood or locality. Exclusionary eminent domain, as I am using the term, seems to occur in two distinct contexts. In the suburban context, a structure or structures occupied by low-income households are condemned by a predominantly non-low-income locality in the interest of attracting new development that will house or otherwise be geared to middle-class or wealthy people. The threatened condemnations of mobile home parks in suburban New Jersey towns such as Lodi are examples of this type of exclusionary eminent domain. In the urban gentrification mode of exclusionary eminent domain, a large city with a mix of wealthy and poor areas condemns low-income housing in a gentrifying or largely gentrified area, with the result that the displaced low-income residents must move to poorer areas of the city or out of the city. The use of threats of eminent domain to facilitate the massive Atlantic Yards development in north central Brooklyn – a development that will feature seventeen luxury towers to be constructed by Frank Geahry – illustrates this model of exclusionary eminent domain. This Article assesses the case for a new state constitutional law doctrine limiting exclusionary eminent domain, and argues that, on balance, the advantages of such a doctrine may exceed the disadvantages. The particular form of exclusionary eminent domain doctrine I am positing would incorporate two of the features of the most analogous existing doctrine, the state constitutional law doctrine regarding exclusionary zoning. Those features are, first, judicial evaluation of a locality\u27s actions in terms of the metropolitan regional needs for low-income housing and each locality\u27s fair share obligation with respect to those needs, and, second, the creation of a rebuttable presumption of illegality when the locality takes an action that will bring its stock of affordable housing below or further below its fair share obligation. An exclusionary eminent domain doctrine would not absolutely bar condemnation of low-income housing in a locality or neighborhood that otherwise has less than its fair share of such housing, but rather would result in the application of heightened review to such condemnations. The condemning authority would have to provide a more compelling, more-tailored justification for condemnation than rational basis review would require. An exclusionary eminent domain doctrine would raise the cost to local officials of condemning low-income housing located in middle-class or wealthy neighborhoods or localities, and thereby would make it more likely that those officials would configure new development so as to leave such housing in place. The doctrine also would provide a strong incentive for a locality that wanted to proceed with the condemnation of low-income housing to create substitute low-income housing in the same neighborhood as the development site, as by doing so they would negate the claim that condemnations would drop the locality or neighborhood below its pre-condemnation fair share of low-income housing. In addition, the doctrine would have the effect of increasing the bargaining power of owners of low-income housing owners who want to sell, so that they would receive larger payments than they would have if there were no exclusionary eminent domain doctrine