Why Agencies Punish

In addition to promulgating regulations, federal administrative agencies penalize entities that violate their rules. In 2010 alone, the National Highway Traffic Safety Administration imposed a statutory maximum $16.4 million penalty on Toyota, and the Securities and Exchange Commission recovered$535 million from Goldman Sachs, the largest civil penalty a financial services firm has ever paid. The academic literature proposes two major theories explaining why agencies might seek these monetary penalties. First, agencies might seek to deter misconduct by using civil penalties to raise the expected cost of regulatory violations above the cost of compliance. Alternatively, agencies might use civil penalties as one step in an escalating series of enforcement responses to recalcitrant behavior by a regulated entity. Both of these theories assume that agencies punish in order to induce compliance with agency regulations. In the language of the criminal law, agencies are assumed to be consequentialists. Agency descriptions of their penalty policies support this assumption. Agencies claim to focus on deterrence, not retribution, when setting penalties. This Article argues that consequentialist theories fail to explain the actual civil penalty policies in place at a range of federal administrative agencies. Instead, agency penalty policies are largely designed to achieve retributive ends. In short, agencies are more interested in desert than deterrence. The presence of widespread retribution in agency punishment raises serious concerns about legitimacy and competence. Administrative agency punishment lacks the transparency and structural protections that legitimize retribution in the criminal context. Additionally, agency subject matter expertise is unlikely to extend far enough to implement retributive theories effectively

Why Agencies Punish

In addition to promulgating regulations, federal administrative agencies penalize entities that violate their rules. In 2010 alone, the National Highway Traffic Safety Administration imposed a statutory maximum $16.4 million penalty on Toyota, and the Securities and Exchange Commission recovered$535 million from Goldman Sachs, the largest civil penalty a financial services firm has ever paid. The academic literature proposes two major theories explaining why agencies might seek these monetary penalties. First, agencies might seek to deter misconduct by using civil penalties to raise the expected cost of regulatory violations above the cost of compliance. Alternatively, agencies might use civil penalties as one step in an escalating series of enforcement responses to recalcitrant behavior by a regulated entity. Both of these theories assume that agencies punish in order to induce compliance with agency regulations. In the language of the criminal law, agencies are assumed to be consequentialists. Agency descriptions of their penalty policies support this assumption. Agencies claim to focus on deterrence, not retribution, when setting penalties. This Article argues that consequentialist theories fail to explain the actual civil penalty policies in place at a range of federal administrative agencies. Instead, agency penalty policies are largely designed to achieve retributive ends. In short, agencies are more interested in desert than deterrence. The presence of widespread retribution in agency punishment raises serious concerns about legitimacy and competence. Administrative agency punishment lacks the transparency and structural protections that legitimize retribution in the criminal context. Additionally, agency subject matter expertise is unlikely to extend far enough to implement retributive theories effectively

Entrenching Interests: State Supermajority Requirements to Raise Taxes

This article attempts to answer the question of supermajority design. If alterations in the tax code are to be restricted, how should they be limited? To what type of bills should a supermajority requirement apply? At what level should the requirement be implemented? When and how should the legislature be allowed to avoid the rule? Part II discusses the current House rule and considers why it was imposed, whether or not it is constitutional, and the effect the rule has had in practice. Part III moves to the states\u27 experiences with supermajority requirements, and examines both the de jure limitations on legislative behavior and the practical effects of various forms of supermajority requirements. Finally, Part IV discusses the primary alternative method that has been used to limit state tax growth: revenue caps

For-Profit Public Enforcement

This Article investigates an important yet undertheorized phenomenon: financial incentives in public enforcement. Each year, public enforcers assess billions of dollars in penalties and other financial sanctions for violations of state and federal law. Why? If the awards in question were the result of private lawsuits, the answer would be obvious. We expect that private enforcers—the victims of law violations and their fee-seeking attorneys—will attempt to maximize financial recoveries. Record recoveries come as no surprise in private class actions, for example. But dollar signs are harder to explain in the context of public enforcement. Unlike private attorneys, public enforcers are paid by salary. They have no direct financial stake in successful enforcement efforts. We assume that public enforcers pursue financial awards only for their deterrent value, not for the benefits that such recoveries can bring the enforcement agency itself. Or do they? This Article argues, contrary to the conventional wisdom on the division between public and private enforcement, that public enforcers often seek large monetary awards for self-interested reasons divorced from the public interest in deterrence. The incentives are strongest when enforcement agencies are permitted to retain all or some of the proceeds of enforcement—an institutional arrangement that is common at the state level and beginning to crop up in federal law. Yet even when public enforcers must turn over their winnings to the general treasury, they may have reputational incentives to focus their efforts on measurable units like dollars earned. Financially motivated public enforcers are likely to behave more like private enforcers than is commonly appreciated: they will undertake more enforcement actions, focus on maximizing financial recoveries rather than securing injunctive relief, and compete with other would-be enforcers for lucrative cases. Those effects will often be undesirable, particularly in circumstances where the risk of over-enforcement is high. But financial incentives might provide a valuable spur to action for agencies that currently are performing well below optimal levels. Policymakers recognize as much when they seek to boost private enforcement by promising prevailing plaintiffs supra-compensatory damages. We show that financial incentives can serve a similar purpose in the public sphere, offering policymakers an additional tool for calibrating the level of public enforcement

Habeas Corpus in New Mexico

In January 2015, the New Mexico Supreme Court implemented major revisions to the procedural rules governing petitions for habeas corpus and post-conviction relief. These changes clarified the limits on post-conviction relief, expanded and altered the process, and adopted a new rule to clarify the relief available to petitioners who have completed their sentence. This Article, written by the Chair of the Ad Hoc Committee on Habeas Corpus, describes the changes to assist judges and lawyers in implementing the new rules. The amendments have three major components. First, the rules now include a clear path for petitioners seeking to vacate their conviction after their sentence is complete. Second, the rule amendments expanded the case processing options for district judges presented with post-conviction petitions and also provide increased discovery rights to litigants in these cases. Third, the rules codify and clarify the exhaustion rules, the time limitations, and the preclusion doctrines for such petitions. Taken together, these changes are designed to simplify and expedite the resolution of post-conviction challenges in New Mexico

Saving Stare Decisis: Preclusion, Precedent, and Procedural Due Process

Judgments do not bind nonparties. This core due process constraint on issue preclusion means that courts can only adjudicate questions of fact and law with respect to those individuals appearing in court. However, the operation of stare decisis routinely extinguishes the rights of nonparties without notice or an opportunity to be heard. This Article examines the due process challenge to the operation of precedent. The traditional justifications for applying a due process analysis only to preclusion and not to precedent are inadequate. Instead of excepting stare decisis from the operation of procedural due process, we should see it as meeting those requirements. Using the Supreme Court\u27s analysis from Mathews v. Eldridge, stare decisis can survive a due process challenge based on the central value of third party reliance. While stare decisis survives in general, applying notions of procedural due process changes the traditional view of precedent in important situations. In cases where reliance is nonexistent, or where the initial process was corrupted, application of stare decisis may not withstand a due process challenge

Gagged but not Bound: The Ineffectiveness of the Rules Governing Judicial Campaign Speech

This article argues that while the text and the history of the gag rule would seem to indicate that implied commitments are prohibited, candidates have a wide variety of methods available to signal voters how they might decide cases if they reach the bench. Courts have failed to recognize the importance of limiting speech other than traditional policy promises due to a failure to adequately consider the most important motivating factor behind the gag rule: providing litigants impartial adjudication. Because courts have not made this the primary consideration in the gag rule cases, speech occurs in campaigns that would otherwise be forbidden under the Canon. The author purposes a new, functional interpretation of the gag rule that forbids statements which would cause constituents to vote based on how judges will decide cases