Main Content
Vol 34. No. 2 Winter 2010
ARTICLES
William A. Gregory and Sherri Johnson (251)
In Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. the United States Supreme Court interpreted Securities and Exchange Commission Rule 10b-5 and the Private Securities Litigation Reform Act of 1995 to determine whether a person liable for aiding and abetting the securities fraud of another party can be held liable as a primary violator of Rule 10b-5 for purposes of private civil actions on the theory that he participated in a scheme to defraud. In deciding that an aider and abettor is not so liable, the Court reaffirmed its prior holding in Central Bank of Denver v. First Interstate Bank of Denver that there is no private cause of action against aiders and abettors. This article reviews the history of aider and abettor liability and examines in detail the arguments of the parties in Stoneridge, with the author ultimately concluding that the case was wrongly decided. By requiring parties injured by aiders and abettors engaged in a scheme to defraud to pursue them as secondary violators, the Court bars the injured parties from the courthouse and requires them to seek SEC action, which may lead to a less than adequate remedy. The Court based its decision on a lack of required reliance by a plaintiff on deceptive actions by the aider and abettor, but it improperly found that two rebuttable presumptions of reliance (public statements under the fraud-on-the-market doctrine and omissions of material fact by one with a duty to disclose) were not satisfied by aiders and abettors engaged in schemes to defraud. Articles Editor: Levi Bennett
Previously Taxed Property Credit and the 2035(b) Gross Up
Kelly A. Moore (275)
The Economic Growth and Tax Relief and Reconciliation Act of 2001 provided for a systematic increase in the exclusion amount of the Estate Tax, with a complete repeal of the tax in the year 2010. The Act, however, did not repeal the Gift Tax. This article explores the connection between these two transfer taxes and their effect for estate planning purposes. Currently, Gift Tax paid on transfers within three years of the transferor’s death is included in the value of the transferor’s gross estate for Estate Tax purposes. This results in a nullification of the benefits of the lifetime gift─reducing the transferor’s property subject to Estate Tax. Similarly, an estate is allowed a credit of the lesser of (1) the amount of the federal estate tax attributable to the transferred property in the transferor’s estate, or (2) the amount of the federal estate tax attributable to the transferred property in the transferee’s estate for Estate Tax paid by a prior estate within ten years. Thus, the estate comprised of property received from a prior estate is granted a tax credit that is unavailable to the estate comprised of property received as a taxable gift. The author proposes changes to the Internal Revenue Code to bring these transfer taxes into agreement so that regardless of whether an estate is subject to the Estate Tax or the Gift Tax, the end result is the same. Articles Editor: Jennifer Kieffer
Paul A. Rodrigues (289)
Illinois courts continue to apply the general acceptance test announced in Frye v. United States, as opposed to the Daubert approach used by the federal courts, to determine the admissibility of expert evidence. This article reviews both standards and argues that Illinois should abandon the Frye test in favor of the current federal admissibility standard laid out in the line of cases beginning with Daubert v. Merrell Dow Pharmaceuticals, Inc. The recent Illinois Supreme Court decision in People v. McKown demonstrates the flaws of the current Frye analysis. The case fails, however, to adequately draw boundaries between “novel scientific evidence” and evidence generally. It also highlights both the problems of defining “general acceptance” for Frye purposes and the problems of using expert testimony, past judicial decisions, or technical writings to determine if scientific evidence is generally accepted. The Daubert test provides a superior alternative to the Frye admissibility test. It tests the reliability of all evidence, both scientific and non-scientific, and provides a more objective method of determining reliability that is not reliant on only one indicator of reliability. It is also more responsive to changes in the reliability of evidence due to advances in research. Articles Editor: Levi Bennett
Jason C. Miller (313)
This article examines the restrictions instated by the Hatch Act, a statute that prevents federal, state, and local employees from using their position or authority to influence elections. It also prohibits the candidacy for office for some government employees. While the author criticizes the restrictions imposed by the Act, there is support for the Act’s protections against coercion and inappropriate use of federal funds. The article analyzes the nuances of the Hatch Act and discusses perceivably negative effects of the Act on the political process, including the automatic disqualification of ideal candidates and a more restricted selection of candidates generally. The article then goes on to state reasons to believe the Hatch Act is unwise, such as its inability to survive modern constitutional scrutiny under a Pickering balancing test and the Anderson/Burdick test, as well as federalism concerns. The author discusses the strengths and weaknesses of current attempts to reform the Hatch Act and his own proposal for developing a conflict of interest standard which would provide a solution to the Act’s over-expansive scope as well as provide a more precise means of addressing the government’s specific interests in preventing partisanship and abuse of federal funds in the political process. Articles Editor: Kelsy Austin
Karen Swenson (359)
One window into the soul of a presidential administration is the work of the Office of the Solicitor General (OSG), the representative of the executive branch before the Supreme Court of the United States. This could be particularly true in the case of a president who is a lawyer with work experience as a law professor. This article examines the Obama administration’s OSG efforts in filing voluntary amicus curiae briefs before the Supreme Court. In performing this task, the OSG is at the height of its discretion vis-à-vis the demands, implicit or otherwise, of the Supreme Court and most free to represent the unadulterated views of the administration.
This article discusses the thirteen amicus briefs filed by the Obama OSG during the Court’s 2008 term, and provides an in-depth discussion of seven of these cases that the Court ultimately ruled upon during the 2008 term. The article analyzes the Obama OSG’s amicus choices and its level of success before the Supreme Court by looking at two important measures: whether the final outcome of the case is congruent with the OSG’s position and whether the OSG’s views were incorporated in the majority opinion. Articles Editor: Luke Stafford
COMMENTS
Curb Your Immunity: The Improper Expansion of Good Samaritan Protection in Illinois
Ben Bridges (373)
The Illinois Good Samaritan Act was originally enacted to encourage physicians to provide medical assistance “at the scene of a motor vehicle accident or in case of a nuclear attack.” Over the years, however, the Act was expanded by the Illinois General Assembly and the Illinois courts to provide civil immunity to any physician who, in good faith, provides emergency care without charging a fee. Thus a physician need only demonstrate he provided emergency care and that he did not charge a fee in order to be shielded from liability. This comment critically analyzes the current status of the Good Samaritan Act in Illinois and discusses the need to corral the immunity it provides. Specifically, the comment will discuss how the Illinois courts have allowed immunity to expand far beyond what was intended by the General Assembly when the Act was introduced. This comment does not suggest that physicians should receive no protection for providing emergency care without fee. In fact, it suggests just the opposite. Physicians should enjoy Good Samaritan immunity. But, immunity should only exist to the extent the Good Samaritan Act allows it and only to the extent the General Assembly anticipated. The comment does not suggest that immunity should be eradicated, only confined.
Cyndi Bollman (395)
There are presently two states which have legalized physician-assisted suicide by enacting death with dignity statutes: Oregon and Washington. In late 2009, the Montana Supreme Court essentially legalized physician-assisted death by stating that there was no state law to suggest that it was against public policy. Under the presently-enacted death with dignity statutes of Oregon and Washington, a person who suffers from a physically incapacitating ailment cannot be assisted by her physician in suicide because she is unable to ingest the lethal prescription herself. Additionally, the laws of Oregon and Washington each restrict physician-assisted suicide to patients who are terminally ill, thus effectively preventing those who are expected to live longer than six months, but who are suffering tremendously, from dying with dignity.
This Comment argues that if the purpose of physician-assisted suicide laws is to permit patients to die with dignity, the Oregon and Washington laws essentially prevent those who are suffering the most from doing just that. As more states consider the legalization of physician-assisted suicide, this Comment urges states to evaluate the Oregon and Washington statutes, and expand physician-assisted suicide laws to include patients who are physically incapable of ingesting the lethal medication, yet are mentally aware, and patients who are suffering from terminal ailments but are not expected to die within six months of being diagnosed.
CASENOTES
Mark L. Philipp (417)
In the wake of World War II, the United States Supreme Court created a “persecutor bar” for asylum law that denied asylum status from being granted to individuals who had “voluntarily participated” in persecution. Unfortunately, while there have been changes in the asylum law, and the world, the persecutor bar has not changed. In Negusie v. Gonzales, the Fifth Circuit refused to move away from the old persecutor bar, ultimately creating an unjust and erroneous result. The old persecutor bar is no longer appropriate for Negusie, or for any other asylum case. This Note examines why Negusie demands a new test for the persecutor bar (one based on the totality of circumstances) to ensure that the persecutor bar has the flexibility to protect victims of persecution while barring asylum to those who participated in persecution.
Leslie M. Warren (445)
Section 36(b) of the Investment Company Act imposes a fiduciary duty on mutual fund advisers to the investors of a fund. For over twenty years, the mutual fund industry and the federal judiciary used a Second Circuit Court of Appeals decision, Gartenberg v. Merrill Lynch Asset Management, Inc, as the standard in determining if a mutual fund adviser had breached his duty to the investors. The Gartenberg approach involved analyzing an adviser’s fees to determine if they were excessive or disproportionately unfair. In 2008 the Seventh Circuit Court of Appeals decided in Jones v. Harris Associates, L.L.P. to “disapprove” of the Gartenberg approach, by holding that as long as advisers made full disclosures regarding their fees, there would be no limit to the fees they could receive. This Casenote argues that the Seventh Circuit incorrectly interpreted the fiduciary duty imposed upon mutual fund advisers by section 36(b) of the Investment Company Act. Further, this Casenote argues that any person or company who holds a fiduciary duty has a much higher duty than simply making disclosures.