Tort Reform and the Tax Code: An Opportunity to Narrow the Personal Injuries Exemption

The Internal Revenue Code (the Code ) defines income broadly to include wealth from almost every source, while at the same time exempting a number of items for various tax and public policy reasons. One such policy-based exemption is section 104(a)(2)-the Personal Injuries Exemption-which exempts from tax any damages ... received on account of personal injuries or sickness. The Personal Injuries Exemption, however, exists in a state of disarray and needs amending. Since its inception, this exemption has lacked both clear definitions of its key terms and a sound theoretical foundation. Moreover, although courts traditionally read exemptions narrowly, they have interpreted section 104(a)(2) broadly and have applied it in a number of situations where it was not meant to be applied. As a result, the exemption now serves largely as an incentive to sue and as a windfall for those taxpayers fortunate enough to fall within its scope. So great is the disagreement over how to deal with these problems that between 1992 and 1994 the federal circuit courts of appeals split over at least three separate issues regarding the application of the exemption. The Personal Injuries Exemption should be narrowed significantly by giving it a clear definition tied to a sound theoretical foundation These changes would alleviate many of the current problems and give courts and the Internal Revenue Service (the Service ) guidance in dealing with future problems. It would also raise revenue and eliminate a major incentive to sue. It is a rare occurrence when the political will for change arises at the precise moment when an often-overlooked area of law most needs amending. Such is the case today as a result of the confluence between America\u27s desire for tort reform and the need for congressional action regarding the Personal Injuries Exemption. America currently needs and wants tort reform. Indeed, such reform was one of the major provisions of the Contract with America that helped catapult the Republicans to electoral victory in 1994. Because section 104(a)(2) serves as a significant incentive to litigate, Congress currently has an opportunity to use the political will for tort reform to simultaneously limit one of the largest and least justified tax expenditures in the Code-the tax-exempt status of damage awards received on account of personal injuries. Parts II and III of this Note discuss the legal background of and recent developments in the Personal Injuries Exemption. Part IV analyzes the problems arising from the exemption\u27s current application in more detail and proposes a statutory amendment to section 104(a)(2) which narrows the exclusion by giving it a clear definition which is closely tied to a sound theoretical foundation

What Hedge Funds Can Teach Corporate America: A Roadmap for Achieving Institutional Investor Oversight

Hedge funds and other private equity funds are aggressive monitors of corporate America. Their investment strategies are designed to squeeze agency costs and other inefficiencies out of under performing companies. Mutual funds and public pension funds, by contrast, have remained relentlessly passive despite their many resources. Rather than seek to improve the performance of their portfolio companies, they generally prefer to exit any investments that turn sour. Why the difference? In this Article, I compare the business environments and regulatory regimes affecting different types of institutional investors. I conclude that the primary reason that most institutional investors do not better discipline corporate wrongdoing is that their individual fund managers have little incentive to do so. Were they permitted to adopt the incentive compensation structure of a hedge fund, however, mutual funds and public pension funds would compete to provide the oversight necessary to make corporate managers more accountable. The result would be a deeper market for good corporate governance

What Hedge Funds Can Teach Corporate America: A Roadmap for Achieving Institutional Investor Oversight

Hedge funds and other private equity funds are aggressive monitors of corporate America. Their investment strategies are designed to squeeze agency costs and other inefficiencies out of under performing companies. Mutual funds and public pension funds, by contrast, have remained relentlessly passive despite their many resources. Rather than seek to improve the performance of their portfolio companies, they generally prefer to exit any investments that turn sour. Why the difference? In this Article, I compare the business environments and regulatory regimes affecting different types of institutional investors. I conclude that the primary reason that most institutional investors do not better discipline corporate wrongdoing is that their individual fund managers have little incentive to do so. Were they permitted to adopt the incentive compensation structure of a hedge fund, however, mutual funds and public pension funds would compete to provide the oversight necessary to make corporate managers more accountable. The result would be a deeper market for good corporate governance

The Dog That Didn\u27t Bark: Private Investment Funds and Relational Contracts in the Wake of the Great Recession

In the aftermath of the subprime mortgage crisis, the contract rights of numerous hedge funds and venture capital funds were breached. These contracts were complex and sophisticated and had been negotiated at great time and expense. Yet despite all of the assumptions of neo-classical contracts theory, nothing happened. Practically none of these injured parties sued to enforce their rights. Professor Illig uses this dearth of litigation to conduct a form of natural experiment as to the value of contract law. Discrete market participants contracted before the crash and then pursued their rights in court afterwards, while relational market participants contracted but refrained from suing. Given this bifurcated response to the identical stimulus, Professor Illig queries: why did the relational parties bother to contract in the first place? If they could have predicted the likelihood of their ex post inertia, then as rational economic actors they must have valued contracting for something other than as insurer of their reasonable expectations. For them, a contract must provide significant symbolic and ceremonial value. Based on this finding—as well as on complementary research from the field of behavioral economics—Professor Illig concludes by arguing against a universalist approach to contract law. Instead, he recommends that contract doctrine be evolved to reflect its dual nature—as insurer of expectations in the context of discrete exchanges and as a source of imagery and ritual in the context of relational affiliations. Doing so would enhance the impact of social norms as a mechanism for avoiding and resolving disputes

Hundreds of variants clustered in genomic loci and biological pathways affect human height

Most common human traits and diseases have a polygenic pattern of inheritance: DNA sequence variants at many genetic loci influence the phenotype. Genome-wide association (GWA) studies have identified more than 600 variants associated with human traits, but these typically explain small fractions of phenotypic variation, raising questions about the use of further studies. Here, using 183,727 individuals, we show that hundreds of genetic variants, in at least 180 loci, influence adult height, a highly heritable and classic polygenic trait. The large number of loci reveals patterns with important implications for genetic studies of common human diseases and traits. First, the 180 loci are not random, but instead are enriched for genes that are connected in biological pathways (P = 0.016) and that underlie skeletal growth defects (P < 0.001). Second, the likely causal gene is often located near the most strongly associated variant: in 13 of 21 loci containing a known skeletal growth gene, that gene was closest to the associated variant. Third, at least 19 loci have multiple independently associated variants, suggesting that allelic heterogeneity is a frequent feature of polygenic traits, that comprehensive explorations of already-discovered loci should discover additional variants and that an appreciable fraction of associated loci may have been identified. Fourth, associated variants are enriched for likely functional effects on genes, being over-represented among variants that alter amino-acid structure of proteins and expression levels of nearby genes. Our data explain approximately 10% of the phenotypic variation in height, and we estimate that unidentified common variants of similar effect sizes would increase this figure to approximately 16% of phenotypic variation (approximately 20% of heritable variation). Although additional approaches are needed to dissect the genetic architecture of polygenic human traits fully, our findings indicate that GWA studies can identify large numbers of loci that implicate biologically relevant genes and pathways.

New genetic loci implicated in fasting glucose homeostasis and their impact on type 2 diabetes risk.

Levels of circulating glucose are tightly regulated. To identify new loci influencing glycemic traits, we performed meta-analyses of 21 genome-wide association studies informative for fasting glucose, fasting insulin and indices of beta-cell function (HOMA-B) and insulin resistance (HOMA-IR) in up to 46,186 nondiabetic participants. Follow-up of 25 loci in up to 76,558 additional subjects identified 16 loci associated with fasting glucose and HOMA-B and two loci associated with fasting insulin and HOMA-IR. These include nine loci newly associated with fasting glucose (in or near ADCY5, MADD, ADRA2A, CRY2, FADS1, GLIS3, SLC2A2, PROX1 and C2CD4B) and one influencing fasting insulin and HOMA-IR (near IGF1). We also demonstrated association of ADCY5, PROX1, GCK, GCKR and DGKB-TMEM195 with type 2 diabetes. Within these loci, likely biological candidate genes influence signal transduction, cell proliferation, development, glucose-sensing and circadian regulation. Our results demonstrate that genetic studies of glycemic traits can identify type 2 diabetes risk loci, as well as loci containing gene variants that are associated with a modest elevation in glucose levels but are not associated with overt diabetes

Metabolites of milk intake: a metabolomic approach in UK twins with findings replicated in two European cohorts

Purpose: Milk provides a significant source of calcium, protein, vitamins and other minerals to Western populations throughout life. Due to its widespread use, the metabolic and health impact of milk consumption warrants further investigation and biomarkers would aid epidemiological studies.  Methods: Milk intake assessed by a validated food frequency questionnaire was analyzed against fasting blood metabolomic profiles from two metabolomic platforms in females from the TwinsUK cohort (n = 3559). The top metabolites were then replicated in two independent populations (EGCUT, n = 1109 and KORA, n = 1593), and the results from all cohorts were meta-analyzed.  Results: Four metabolites were significantly associated with milk intake in the TwinsUK cohort after adjustment for multiple testing (P < 8.08 × 10−5) and covariates (BMI, age, batch effects, family relatedness and dietary covariates) and replicated in the independent cohorts. Among the metabolites identified, the carnitine metabolite trimethyl-N-aminovalerate (β = 0.012, SE = 0.002, P = 2.98 × 10−12) and the nucleotide uridine (β = 0.004, SE = 0.001, P = 9.86 × 10−6) were the strongest novel predictive biomarkers from the non-targeted platform. Notably, the association between trimethyl-N-aminovalerate and milk intake was significant in a group of MZ twins discordant for milk intake (β = 0.050, SE = 0.015, P = 7.53 × 10−4) and validated in the urine of 236 UK twins (β = 0.091, SE = 0.032, P = 0.004). Two metabolites from the targeted platform, hydroxysphingomyelin C14:1 (β = 0.034, SE = 0.005, P = 9.75 × 10−14) and diacylphosphatidylcholine C28:1 (β = 0.034, SE = 0.004, P = 4.53 × 10−16), were also replicated.  Conclusions: We identified and replicated in independent populations four novel biomarkers of milk intake: trimethyl-N-aminovalerate, uridine, hydroxysphingomyelin C14:1 and diacylphosphatidylcholine C28:1. Together, these metabolites have potential to objectively examine and refine milk-disease associations

Characterizing blood metabolomics profiles associated with self-reported food intakes in female twins

Using dietary biomarkers in nutritional epidemiological studies may better capture exposure and improve the level at which diet-disease associations can be established and explored. Here, we aimed to identify and evaluate reproducibility of novel biomarkers of reported habitual food intake using targeted and non-targeted metabolomic blood profiling in a large twin cohort. Reported intakes of 71 food groups, determined by FFQ, were assessed against 601 fasting blood metabolites in over 3500 adult female twins from the TwinsUK cohort. For each metabolite, linear regression analysis was undertaken in the discovery group (excluding MZ twin pairs discordant [≥1 SD apart] for food group intake) with each food group as a predictor adjusting for age, batch effects, BMI, family relatedness and multiple testing (1.17x10-6 = 0.05/[71 food groups x 601 detected metabolites]). Significant results were then replicated (non-targeted: P<0.05; targeted: same direction) in the MZ discordant twin group and results from both analyses meta-analyzed. We identified and replicated 180 significant associations with 39 food groups (P<1.17x10-6), overall consisting of 106 different metabolites (74 known and 32 unknown), including 73 novel associations. In particular we identified trans-4-hydroxyproline as a potential marker of red meat intake (0.075[0.009]; P = 1.08x10-17), ergothioneine as a marker of mushroom consumption (0.181[0.019]; P = 5.93x10-22), and three potential markers of fruit consumption (top association: apple and pears): including metabolites derived from gut bacterial transformation of phenolic compounds, 3-phenylpropionate (0.024[0.004]; P = 1.24x10-8) and indolepropionate (0.026[0.004]; P = 2.39x10-9), and threitol (0.033[0.003]; P = 1.69x10-21). With the largest nutritional metabolomics dataset to date, we have identified 73 novel candidate biomarkers of food intake for potential use in nutritional epidemiological studies. We compiled our findings into the DietMetab database (http://www.twinsuk.ac.uk/dietmetab-data/), an online tool to investigate our top associations