A Sherbert Colored Lens: Apache Stronghold and the Uphill Battle for The Recognition of a Substantial Burden For Indigenous Plaintiffs

A Sherbert Colored Lens: Apache Stronghold and the Uphill Battle for The Recognition of a Substantial Burden For Indigenous Plaintiffs

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By: Emma P. Collins

University of Kentucky J. David Rosenberg College of Law Student, Emma P. Collins, argues for a return to the Sherbert balancing test for free exercise claims in response to the burden Indigenous religions face in trying to protect their constitutional right to freely exercise their religion. 

Enforcement Mechanisms for Supreme Court Ethics Codes: Applying State Models to SCOTUS

Enforcement Mechanisms for Supreme Court Ethics Codes: Applying State Models to SCOTUS

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By: Katherine Nipper

University of Kentucky J. David Rosenberg College of Law Student, Katherine Nipper, proposes an enforcement mechanism for the Supreme Court of the United States’ Code of Conduct, and uses state models as a basis for the proposal.

Hope in the Holler: How Eminent Domain Can Bring Economic Justice To Central Appalachia

Hope in the Holler: How Eminent Domain Can Bring Economic Justice To Central Appalachia

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By: Matthew B. Chaney

University of Kentucky J. David Rosenberg College of Law Student, Matthew B. Chaney, argues that the use of eminent domain under the Fifth Amendment’s Takings Clause provides a viable legal mechanism for revitalizing Central Appalachia. The note proposes that through eminent domain, state and local governments should condemn underutilized land in order to promote public-oriented redevelopment and address longstanding economic injustice in the region.

Much Ado About Nothing: The Effect of the “Nullity Rule” on Purported Pro Se Litigants in Federal Court (Print Vol. 114 Issue 2)

Much Ado About Nothing: The Effect of the “Nullity Rule” on Purported Pro Se Litigants in Federal Court

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By: John T. Lambert

University of Kentucky J. David Rosenberg College of Law student, John T. Lambert, calls for abolition of the nullity rule after examining the circuit split between the Eighth Circuit in Jones ex rel. Jones v. Correctional Medical Services and the Eleventh Circuit’s decision in Ireiele v. Griffin.

Consumer Bankruptcy: A “Gem” of the Legal Profession but a Diamond in the Rough (Print Vol. 114 Issue 2)

Consumer Bankruptcy: A “Gem” of the Legal Profession but a Diamond in the Rough

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By: Tori Harris

University of Kentucky J. David Rosenberg College of Law student, Tori Harris, proposes a new––less expensive and more streamlined––subchapter designed to be effective for those with low income or small debts.

Justice on a Budget: The $5,000 Charitable Bail Cap in “Safer” Kentucky

Justice on a Budget: The $5,000 Charitable Bail Cap in “Safer” Kentucky

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Amanda Lindsey*

Introduction

In March 2021, 17-year-old Madelynn Troutt was killed in a head-on collision in Louisville, Kentucky, by an intoxicated driver days after The Bail Project—a nonprofit that posts bail for individuals who cannot afford it—secured his release.[1] The tragedy drew widespread media attention and quickly became a flashpoint in Kentucky’s broader debate over pretrial release and bail reform.[2] In its wake, the Kentucky General Assembly enacted the Safer Kentucky Act, a sweeping criminal justice bill that, among other provisions, capped the amount charitable organizations may post at $5,000.[3] Supporters framed the measure as a public safety initiative aimed at curbing what they characterized as the indiscriminate release of potentially dangerous defendants.[4]

Madelynn’s death was undeniably tragic. Yet while the impulse to respond swiftly to such incidents is understandable, policymaking driven by singular tragedies risks obscuring systemic realities. The charitable bail cap exemplifies such reactionary legislation: it misallocates blame, reinforces structural inequities, and distracts from the deeper failures of Kentucky’s pretrial detention regime. In a system where defendants are detained not because they pose a demonstrable threat, but because they cannot afford bail, charitable bail organizations play an indispensable role.[5] In a state where pretrial incarceration rates remain high[6] and where poverty, substance abuse disorders, and racial disparities shape the contours of criminal legal outcomes,[7] restricting the capacity of charitable bail organizations will disproportionately harm marginalized communities.[8] It will also deepen the burdens on already overcrowded jails[9] and further erode the foundational presumption of innocence.[10]

This Note argues that the $5,000 charitable bail cap imposed by the Safer Kentucky Act constitutes a regressive and counterproductive policy that undermines pretrial justice without meaningfully enhancing public safety. Part I examines the structural flaws of Kentucky’s pretrial system, focusing on racial, geographic, and economic disparities. Part II traces the rise of charitable bail organizations as community-based interventions to counter wealth-based detention. Finally, Part III proposes alternative reforms that advance both public safety and equitable access to pretrial liberty.

I.                Detained by Design: Poverty, Race, and the Pretrial System in Kentucky

Kentucky incarcerates a greater share of its residents than any other independent democratic nation.[11] This staggering rate reflects not merely criminal conduct, but also decades of economic decline, racial inequality, and policy decisions that deploy incarceration as a mechanism for social control.[12]

A.     Structural Poverty and Economic Decline

Once competitive with other states, Kentucky’s economy has undergone a sustained and uneven decline.[13] The collapse of coal and manufacturing industries devastated rural and Appalachian regions, displacing thousands of workers.[14] As job opportunities disappeared, many residents were forced to migrate in search of employment.[15] Although the state generated approximately 250,000 new service-sector jobs in recent years, the majority of these jobs emerged in urban and suburban areas.[16] As a result, the regions most affected by industrial decline saw little benefit.[17] The conditions resulted not only in reduced household income but also in declining tax bases, shrinking federal support, and underinvestment in economic redevelopment.[18]

At the same time, the opioid epidemic exacerbated Kentucky’s social and economic instability.[19] Following the 1996 release of OxyContin—a highly addictive Schedule II narcotic[20]—Purdue Pharma launched an aggressive marketing campaign that disproportionately targeted Appalachian regions, including large swaths of eastern Kentucky.[21] Misled by claims about the drug’s safety and effectiveness, physicians overprescribed OxyContin at alarming rates.[22] This saturation of prescription opioids led to a sharp increase in addiction,[23] which in turn drove up drug-related arrests[24] and overdose fatalities.[25] Today, Kentucky continues to report overdose death rates that exceed those seen during the early years of the epidemic.[26]

B.     The Growth of Incarceration as an Economic Strategy

Against this backdrop of economic decline and social instability, many local governments in Kentucky turned to incarceration as a fiscal strategy.[27] Through the Class D Felony Program, the state began paying counties a per diem fee to house individuals convicted of low-level felonies who would otherwise be sent to overcrowded state prisons.[28] Initially conceived as a temporary measure, the program soon became a structural feature of Kentucky’s carceral system.[29] Counties grew reliant on per diem payments, which provided a stable source of revenue and incentivized both the expansion of jail capacity and the prosecution of low-level felony charges.[30] In Appalachian counties, for example, Class D felony convictions nearly doubled over a fifteen-year period.[31] Today, these per diem payments account for a substantial portion of local jail budgets, and facilities across the state continue to operate well beyond their intended capacity.[32]

Beyond direct state funding, Kentucky also generates revenue by imposing financial obligations on defendants and incarcerated individuals.[33] Courts routinely impose fines and fees without assessing a person’s ability to pay, even though state law allows for such waivers.[34] More than one thousand provisions in Kentucky law authorize criminal legal fines and fees, many of which directly fund courts, local agencies, and the state’s general fund.[35] As of January 2019, unpaid court debt in Kentucky exceeded $91 million.[36] Even while incarcerated, individuals are charged for basic needs such as phone calls, medical care, and commissary access.[37] Jails may also impose fees for room and board.[38] These cumulative costs often trap individuals in long-term cycles of debt, extending their entanglement with the criminal legal system.[39]

Kentucky’s reliance on incarceration as a source of revenue is not only shortsighted but also fiscally unsustainable.[40] While framed as a cost-saving strategy, this model has driven up public expenditures, as counties expand jail capacity, and the state shoulders the long-term financial burdens of maintaining an overextended carceral system.[41] The result is a system that extracts revenue from individuals entangled in the criminal legal process while draining state and local budgets.[42] This contradiction has helped drive Kentucky’s rise to the sixth-highest incarceration rate in the nation,[43] while its jails and prisons continue to operate beyond safe capacity.[44]

C.    A Pretrial System that Punishes Poverty

The fiscal incentives driving Kentucky’s reliance on incarceration have also permeated its pretrial process, producing detention decisions that turn less on risk than on economic status.[45] These burdens fall especially heavily in poorer, rural counties.[46] Although non-financial pretrial release is uncommon across Kentucky,[47] the consequences of poverty vary dramatically by jurisdiction.[48] In 2018, for instance, only 17% of defendants in Boyd County were granted non-financial pretrial release, compared to 65% in neighboring Lawrence County.[49] Even where courts impose financial conditions rather than outright denying release, most defendants remain incarcerated simply because they cannot afford bail.[50]

The consequences of wealth-based detention extend well beyond the period of confinement.[51] Empirical studies demonstrate that individuals held pretrial are more likely to lose employment, plead guilty regardless of actual guilt, and face higher conviction rates if their cases proceed to trial.[52] Moreover, those who remain detained are more likely to receive longer sentences than similarly situated defendants who were released.[53] In effect, pretrial detention imposes the harshest consequences not on those who pose the greatest risk, but on those who are too poor to buy their freedom.

D.    Racial Disparities in Kentucky’s Carceral System

The burdens of pretrial detention do not fall evenly. Alongside poverty, race plays a central role in determining who is detained before trial in Kentucky.[54] Although the state employs the Public Safety Assessment (PSA) tool to evaluate pretrial risk,[55] studies have shown that such risk assessment instruments can replicate and reinforce existing racial biases.[56] These tools rely on data points, such as prior arrests, convictions, and failure-to-appear records, that reflect decades of over-policing and disparate treatment in Black communities.[57] As a result, Black defendants are often rated as higher risk than their white counterparts, even when controlling for similar conduct or criminal history.[58]

These disparities are reflected in Kentucky’s incarceration statistics. As of 2021, Kentucky incarcerated 1,088 Black residents per 100,000, compared to only 375 white residents.[59] The Vera Institute attributes this overrepresentation to racially targeted law enforcement practices, prosecutorial discretion, and implicit bias among judges and juries.[60] Policies such as “three strikes” laws and geographically concentrated “hot spots” policing only reinforces these disparities.[61] Together, these dynamics create a pretrial system in which Black Kentuckians are more likely to be detained and to experience worse outcomes, regardless of the offense or risk posed.

II.              The Emergence and Impact of Charitable Bail Organizations

A.    Origins and Mission

Charitable bail organizations arose as community-based responses to the inequities of the cash bail system.[62] By intervening on behalf of defendants who cannot afford release, these organizations mitigate the disproportionate impact of pretrial detention on the poor.[63] Their operations are sustained primarily through private fundraising and community contributions.[64]

One of the most prominent examples is The Bail Project, which pioneered the “revolving bail fund” model.[65] Under this approach, the organization posts bail on behalf of clients, and upon refund at the conclusion of the case, reinvests those funds to secure the release of additional individuals.[66] Beyond the posting of bail, The Bail Project provides holistic support to its clients. As Bail Disrupter Megan Diebboll explains, the organization offers court reminders, transportation, and other services designed to promote compliance with release conditions.[67] It also engages in broader advocacy, documenting client experiences to highlight the systemic harms of wealth-based detention and to build public awareness of the costs imposed by cash bail.[68]

B.     Demonstrated Success

Charitable bail organizations have achieved measurable success in mitigating the disparities of the bail system. Since its founding in 2017, The Bail Project has reunited more than 30,000 individuals with their families and prevented over 1.18 million days of unnecessary incarceration.[69] Its clients appear for court at rates exceeding 90%,[70] which shows that charitable bail does not compromise court compliance.

Recent data further underscores this impact. Between 2023 and 2024, The Bail Project facilitated more than 250,000 court appearances while maintaining appearance rates above 90%.[71] During that period, roughly one-third of the Bail Project’s cases were ultimately dismissed, resulting in over 21,000 individuals freed from detention for charges that did not result in conviction.[72] These outcomes illustrate that charitable bail organizations reduce unnecessary pretrial detention without jeopardizing public safety. Although not a substitute for systemic reform, charitable bail organizations provide a critical safeguard within Kentucky’s pretrial system by ensuring that liberty is not reserved for those with financial means.

C.    Misplaced Blame on Charitable Bail Organizations

The national racial justice protests following the killing of George Floyd in 2020 marked a turning point in the visibility and political salience of charitable bail organizations.[73] Within two months, more than 10,000 protestors were arrested nationwide.[74] The wave of arrests generated an outpouring of public support, with millions of dollars raised to secure the release of detained protestors.[75] As a result, bail funds experienced a dramatic resurgence in popularity and became key players in ensuring that individuals, regardless of financial status, could await trial in their communities.[76]

Their prominence, however, drew heightened scrutiny.[77] Media outlets disproportionately emphasized isolated incidents in which defendants released with the support of charitable bail funds reoffended, even though such cases represented a small minority.[78] These narratives fueled public anxiety and provided political cover for legislatures advancing “tough-on-crime” measures.[79] As a result, charitable bail organizations were increasingly cast not as correctives to systemic inequity, but as scapegoats for broader fears about crime and disorder.[80]

This narrative crystallized in the aftermath of the tragic killing of Madelynn Troutt.[81] Her family brought suit against The Bail Project, alleging negligence in securing the release of the driver involved.[82] Both the Jefferson Circuit Court and the Kentucky Court of Appeals rejected these claims, holding that charitable bail organizations have no legal duty to investigate defendants’ backgrounds or supervise their conduct once released.[83] The courts further emphasized that imposing such obligations would constitute unsound public policy by transforming bail funds into supervisory agencies.[84]

Despite these rulings, Kentucky lawmakers seized upon the incident to advance restrictive legislation.[85] In July 2024, Kentucky enacted “Madelynn’s Law” as part of the broader Safer Kentucky Act, prohibiting charitable bail organizations from posting bail above $5,000.[86] The Act’s sponsors cited more than one hundred academic sources to justify a “tough-on-crime” approach.[87] Yet closer examination reveals that many of these authorities were outdated, tangential, or altogether unrelated to the bill’s provisions.[88]

III.            Toward a More Equitable Pretrial System: Alternatives to the Bail Cap

To address the ongoing challenges within Kentucky’s pretrial system and ensure fairer treatment of defendants, the legislature should repeal the $5,000 charitable bail cap imposed by the Safer Kentucky Act. That repeal is essential, but not sufficient. Eliminating restrictions on charitable bail organizations would restore a critical safety valve for low-income defendants, but true reform requires broader structural change. Kentucky must also modernize its pretrial decision-making by adopting more accurate risk assessment tools and drawing on lessons from states that have implemented successful bail reform policies. Together, these reforms would reduce the state’s reliance on cash bail, curtail unnecessary pretrial detention, and promote a more equitable balance between public safety and pretrial liberty.

A.     Improving Risk Assessment in Pretrial Decisions

As mentioned before, Kentucky currently relies on the Public Safety Assessment (PSA) tool,[89] which has failed to meaningfully reduce pretrial incarceration and has perpetuated racial disparities.[90] The solution is not to abandon risk assessment altogether, but to replace the PSA with a more accurate tool. One promising alternative is Colorado’s CPAT-R, an updated version of the Colorado Pretrial Assessment Tool.[91] Since its creation, CPAT-R has classified a greater share of defendants as low-risk while reducing racial disparities in outcomes.[92] It has also been validated at higher rates than comparable instruments used across the country.[93] Unlike the PSA, which narrowly weighs age, charge severity, and prior record, the CPAT-R incorporates additional factors such as education, employment, and recency of arrests.[94] By adopting a tool such as CPAT-R, Kentucky could better align its pretrial practices with the goals of fairness, efficiency, and public safety.

B.     Learning from Other States’ Bail Reform Models

Kentucky should also draw on the experiences of states that have moved beyond cash bail with demonstrable success. New Jersey’s bipartisan Criminal Justice Reform Act of 2017 reduced the state’s pretrial jail population by more than 20% while maintaining some of the lowest violent crime and gun violence rates in the country.[95] These outcomes were achieved not only by limiting the use of monetary bail, but also by expanding the use of summonses for nonviolent offenses, preventing thousands of individuals from entering the jail pipeline at all.[96]

Illinois provides an even more recent example. As the first state to abolish cash bail outright, Illinois has already reported encouraging results under the Pretrial Fairness Act.[97] In the year following implementation, the state saw reductions in both violent and property crime, decreases in jail populations, and improvements in appearance rates.[98] Crucially, Illinois paired abolition with meaningful investment—$15 million for pretrial support services—to ensure that defendants could comply with court obligations without being detained.[99]

Taken together, these models demonstrate that reducing or eliminating reliance on cash bail need not jeopardize public safety. On the contrary, bail reform can lower jail populations, reduce racial and economic disparities, and improve system efficiency. Kentucky’s continued reliance on cash bail, and now its regressive restrictions on charitable bail organizations, places it increasingly out of step with emerging national consensus.

Conclusion

Kentucky’s pretrial system continues to perpetuate systemic inequities, particularly for low-income and minority defendants. By restricting charitable bail organizations, the Safer Kentucky Act exacerbates these disparities while doing little to promote public safety. Repealing the charitable bail cap is therefore a necessary first step. But repeal must be accompanied by broader reforms: adopting more accurate and equitable risk assessment tools and following the lead of states such as New Jersey and Illinois in reducing reliance on cash bail. These reforms would not only alleviate unnecessary pretrial detention but also move Kentucky toward a more just and effective criminal justice system.

* * J.D. Expected 2026, University of Kentucky J. David Rosenberg College of Law; B.A. in Political Science, minor in Economics, 2022, Western Kentucky University. I would like to thank the Senior Staff Editors for their thoughtful feedback and careful editing of this Note. I am also deeply grateful to my family and friends for their constant encouragement and support, and to my fellow Volume 114 Editorial Board members for making this experience so meaningful.

[1] Kierstin Foote, Louisville Man Sentenced to More than 20 Years in Prison for Carjacking Leading to Crash That Killed Teen, WAVE (Jan. 27, 2025, at 18:22 EST), https://www.wave3.com/2025/01/27/louisville-man-sentenced-more-than-20-years-prison-carjacking-leading-crash-that-killed-teen [https://perma.cc/F6RL-N5FX]; Natalia Martinez, The Bail Project Once Paid $5,000 Bond for Suspect in Wrong-Way Crash That Killed High School Cheerleader, WAVE (Mar. 2, 2021, at 20:39 PM EST), https://www.wave3.com/2021/03/02/bail-project-once-paid-bond-suspect-wrong-way-crash-that-killed-high-school-cheerleader [https://perma.cc/RY7Y-SEUX].

[2]See, e.g., Mary Ramsey, Butler HS Student Killed in Crash on Dixie Highway; Louisville Man Charged with Murder, Louisville Courier J. (Mar. 3, 2021, at 06:42 ET), https://www.courier-journal.com/story/news/traffic/2021/03/01/louisville-traffic-teen-killed-monday-collision-dixie-highway/6880715002 [https://perma.cc/9P6X-69U6]; H.B. 5, 2024 Ky. Gen. Assemb., Reg. Sess. (Ky. 2024).

[3] Sylvia Goodman, The Kentucky General Assembly Passes the Safer Kentucky Act, Ky. Pub. Radio (Mar. 28, 2024, at 15:25 EDT), https://www.lpm.org/news/2024-03-28/the-kentucky-general-assembly-adopts-the-safer-ky-act [https://perma.cc/DR6T-6JA8].

[4]See id.

[5] Allie Preston, 3 Reasons Charitable Bail Funds Are Safer, More Just, and More Beneficial to Communities than Commercial Bail Companies, Ctr. for Am. Progress (Apr. 21, 2025), https://www.americanprogress.org/article/3-reasons-charitable-bail-funds-are-safer-more-just-and-more-beneficial-to-communities-than-commercial-bail-companies [https://perma.cc/U95C-KEGW].

[6]Kentucky profile, Prison Pol’y Initiative, https://www.prisonpolicy.org/profiles/KY.html [https://perma.cc/5B6P-3KK9] (“Kentucky has an incarceration rate of 889 per 100,000 people . . . meaning that it locks up a higher percentage of its people than any independent democratic country on earth.”) (last visited Mar. 22, 2026).

[7]See Bea Halbach-Singh, Jack Norton, Stephen Jones & Jessica Zhang, Vera Inst. Just., The Criminalization of Poverty in Kentucky 11–18 (2023), https://www.vera.org/publications/the-criminalization-of-poverty-in-kentucky [https://perma.cc/96UM-SM8M].

[8]See HB 5 - “Safer” Kentucky Act, ACLU (Jan. 17, 2024), https://www.aclu-ky.org/en/legislation/hb-5-safer-kentucky-act [https://perma.cc/9L8B-S3YF].

[9]See Jeremy Cherson, Bail Funds Are Better than Bail Bond Agents, Bail Project (May 29, 2025), https://bailproject.org/learn/bail-funds-are-better-than-bail-bond-agents [https://perma.cc/X4WB-D7SJ]; The Safer Kentucky Act Makes Jails and Prisons More Dangerous Under ‘Tough-on-Crime’ Guise, Louisville Courier J. (June 20, 2024 at 04:17 ET), https://www.courier-journal.com/story/opinion/2024/06/20/safer-kentucky-act-worsens-jail-and-prison-conditions/74136339007 [https://perma.cc/269A-Q4QX] (“Twenty-eight jails have 120%, or more, people than beds and ten of those jails are more than 150% overcrowded.”).

[10]See Monika Graham, It Is Time for Bail Reform in America: How Nonprofits Can Join the Fight for Pretrial Justice, All. for Just. (Apr. 18, 2023), https://afj.org/article/it-is-time-for-bail-reform-in-america-how-nonprofits-can-join-the-fight-for-pretrial-justice [https://perma.cc/5SZK-Z2E2]

[11] Prison Pol’y Initiative, supra note 6.

[12]See Halbach-Singh, supra note 7, at 15–18.

[13]See Andrew McNeill, The Lost Decades: Kentucky’s Economic Underperformance 1980-2020 9–11 (2020), https://www.bluegrassinstitute.org/content/files/2025/09/LostDecades.pdf [https://perma.cc/H5FN-R2MJ].

[14] Halbach-Singh, supra note 7, at 15.

[15]See Lyman Stone, Kentucky's Migration Story, Medium (Nov. 24, 2014), https://medium.com/migration-issues/kentuckys-migration-story-begins-in-the-bluegrass-d16606dad696 [https://perma.cc/Y7V5-GTX2].

[16] Halbach-Singh, supra note 7, at 15.

[17]See Bill Estep & Liz Moomey, ‘Trying to Hold On.’ Rural Kentucky Losing People as Urban Areas Grow., Lexington Herald Leader (Aug. 13, 2021, at 19:14 ET), https://www.kentucky.com/news/local/counties/fayette-county/article253466344.html [https://perma.cc/B6NQ-N5DH].

[18]Id.

[19] Joanna Walters, America’s Opioid Crisis: How Prescription Drugs Sparked a National Trauma, Guardian (Oct. 25, 2017, at 13:00 EDT), https://www.theguardian.com/us-news/2017/oct/25/americas-opioid-crisis-how-prescription-drugs-sparked-a-national-trauma [https://perma.cc/2QAF-TGZC].

[20] Kenneth D. Tunnell, The OxyContin Epidemic and Crime Panic in Rural Kentucky, 32 Contemp. Drug Probs. 225, 226 (2005).

[21]See Art Van Zee, The Promotion and Marketing of OxyContin: Commercial Triumph, Public Health Tragedy, 99 Am. J. Pub. Health 221, 221–23 (2009).

[22]See Press Release, H. Comm. on Oversight and Gov’t Reform, Comer: Purdue Pharma and Sackler Family Hold Tremendous Responsibility for Growing Opioid Epidemic (Dec. 17, 2020), https://oversight.house.gov/release/comer-purdue-pharma-and-sackler-family-hold-tremendous-responsibility-for-growing-opioid-epidemic [https://perma.cc/N7N5-UUWX].

[23]See Van Zee, supra note 21, at 223.

[24] Just. Pol’y Inst., Due South: Kentucky: Overhauling the Criminal Justice System 1 (2011), https://justicepolicy.org/wp-content/uploads/2022/02/due_south_-_kentucky.pdf [https://perma.cc/G5AT-43WU] (“Between 2000 and 2009, the percentage of all admissions to prison that were for drug offenses rose from 30 percent to 38 percent.”).

[25]See David Akers, Peter Rock, Svetla Slavova & Terry L. Bunn, Ky. Inj. Prevention Rsch. Ctr., Drug Overdose Deaths in Kentucky, 2000-2015 3 (2016).

[26]Id.; Mental Health and Substance Use State Fact Sheets, KFF (Mar. 20, 2023), https://www.kff.org/statedata/mental-health-and-substance-use-state-fact-sheets/kentucky [https://perma.cc/J2V5-4GSR].

[27]See Halbach-Singh, supra note 7, at 22–27.

[28]Id. at 23.

[29]Id. at 25.

[30]Id. at 24–27.

[31]Id. at 25.

[32]Id. at 25–26.

[33] Ashley Spalding, Pam Thomas, Patience Martin, Scott West & Kaylee Raymer, The Hidden Web of Criminal Legal System Fines and Fees in Kentucky, Ky. Ctr. for Econ. Pol’y 3 (2025), https://kypolicy.org/the-hidden-web-of-criminal-legal-system-fines-and-fees-in-kentucky [https://perma.cc/DU67-45NG].

[34]Id.

[35]Id. at 8.

[36]Id. at 3.

[37] Kaylee Raymer, Report:Criminal Fines and Fees Drive up Incarceration, Push Kentuckians Deeper Into Poverty, Ky. Ctr. for Econ. Pol’y (2023), https://kypolicy.org/kentucky-criminal-legal-system-fines-and-fees [https://perma.cc/PBL5-Y8WZ].

[38]Id.

[39] Spalding, supra note 33, at 1.

[40]See id. at 18.

[41]See Ashley Spalding, Pam Thomas & Dustin Pugel, The Golden Key: How State-Local Financial Incentives to Lock up Kentuckians Are Perpetuating Mass Incarceration, Ky. Ctr. for Econ. Pol’y 2 (2021), https://kypolicy.org/the-golden-key-how-state-local-financial-incentives-to-lock-up-kentuckians-are-perpetuating-mass-incarceration [https://perma.cc/C7EN-RMWS].

[42]See Vera Inst. Just., What Jails Cost Kentucky, https://www.vera.org/publications/what-jails-cost-statewide/kentucky [https://perma.cc/F946-ZZXN] (last visited Mar. 28, 2026).

[43]See Emily Widra, States of Incarceration: The Global Context 2024, Prison Pol’y Initiative (June 2024), https://www.prisonpolicy.org/global/2024.html [https://perma.cc/448Q-6XSD].

[44] Taylor Six, 234 People Have Died in Kentucky Jails Since 2020. Critics Call It a ‘Systemic Failure’,Lexington Herald Leader (Mar. 6, 2025 at 13:19 ET), https://www.kentucky.com/news/local/crime/article294662219.html [https://perma.cc/3A3E-XXWW].

[45] Ky. Advisory Comm. to the U.S. Comm’n on C.R., Locked Up for Being Poor: The Need for Bail Reform in Kentucky 9 (2021).

[46]See Vera Inst. Just., supra note 42; See Halbach-Singh, supra note 7, at 8.

[47] Ashley Spalding, Ky. Ctr. for Econ. Pol’y, Disparate Justice: Where Kentuckians Live Determines Whether They Stay in Jail Because They Can’t Afford Cash Bail, 3 (2019), https://kypolicy.org/disparate-justice-where-kentuckians-live-determines-whether-they-stay-in-jail [https://perma.cc/ZG42-YXG5].

[48]Id. at 4.

[49]Id.

[50]Id. at 5 (“At the county level, in Hopkins County 99% of cases subject to financial conditions resulted in pretrial release, while in Wolfe County, only 17% did.”).

[51] Léon Digard & Elizabeth Swavola, Vera Inst. Just., Justice Denied: The Harmful and Lasting Effects of Pretrial Detention, 2–6 (2019), https://vera-institute.files.svdcdn.com/production/downloads/publications/Justice-Denied-Evidence-Brief.pdf [https://perma.cc/KZ9C-4N9D].

[52]Id.

[53] Diana D’Abruzzo, The Harmful Ripples of Pretrial Detention, Advancing Pretrial Pol’y & Rsch. (Apr. 13, 2022), https://www.advancingpretrial.org/story/the-harmful-ripples-of-pretrial-detention-2 [https://perma.cc/EH5C-2CA8].

[54] Wendy Sawyer, How Race Impacts Who Is Detained Pretrial, Prison Pol’y Initiative (Oct. 9, 2019), https://www.prisonpolicy.org/blog/2019/10/09/pretrial_race [https://perma.cc/3TUA-C4MM].

[55] Laura & John Arnold Found., Results from the First Six Months of the Public Safety Assessment – Court in Kentucky 1 (2014), https://nmcourts.gov/wp-content/uploads/2023/11/Arnold-Foundation-Public-Safety-Assessment-Court-Kentucky-6-Month-Report.pdf [https://perma.cc/28FU-2SU5].

[56] Beth Schwartzapfel, Can Racist Algorithms Be Fixed?, Marshall Project (July 1, 2019, at 06:00 EDT), https://www.themarshallproject.org/2019/07/01/can-racist-algorithms-be-fixed [https://perma.cc/4V9H-EB98].

[57]See Megan Stevenson, Assessing Risk Assessment in Action, 103 Minn. L. Rev. 303, 328 (2018).

[58]See Ky. Advisory Comm. to the U.S. Comm’n on C. R., supra note 45, at 1.

[59] Prison Pol’y Initiative, supra note 6.

[60] Elizabeth Hinton, LeShae Henderson & Cindy Reed, Vera Inst. Just., An Unjust Burden: The Disparate Treatment of Black Americans in the Criminal Justice System 7–9 (2018), https://vera-institute.files.svdcdn.com/production/downloads/publications/for-the-record-unjust-burden-racial-disparities.pdf [https://perma.cc/J52L-FPHH].

[61]Id. at 3, 5.

[62] Preston, supra note 5.

[63]Id.

[64] Casey Mosley, Legislative Response to the Rapid Growth of Charitable Bail Organizations, 16 Tenn. J. L. & Pol’y 68, 70 (2023).

[65]Model, Bail Project, https://bailproject.org/model [https://perma.cc/XW6U-HSRY] (last visited Mar. 29, 2026).

[66]Id.

[67] Rachel Goldman, Megan Diebboll & Asia Johnson, Freedom Should Be Free: An Interview with the Bail Project, 24 CUNY L. Rev. 62, 62 (2021).

[68]Id. at 63.

[69] The Bail Project, Annual Report 10–11 (2023), https://bailproject.org/wp-content/uploads/2023/12/the_bail_project_annual_report_2023.pdf [https://perma.cc/45YX-5ENQ].

[70]Id.

[71]See id.; The Bail Project, Annual Report 14–15 (2024), https://bailproject.org/wp-content/uploads/2024/11/bail_project_annual_report_2024_web.pdf [https://perma.cc/7M58-FZCS].

[72] The Bail Project, supra note 69, at 10–11; The Bail Project, supra note 71, at 14–15.

[73] Kay Dervishi, Nonprofit Bail Funds, Fueled by a Surge of Funds After George Floyd Protests, Face New Challenges, Chron. Philanthropy (June 6, 2023), https://www.philanthropy.com/article/nonprofit-bail-funds-fueled-by-a-surge-of-funds-after-george-floyd-protests-face-new-challenges [https://perma.cc/8QBD-SWQC].

[74] Anita Snow, AP Tally: Arrests at Widespread US Protests Hit 10,000, AP News (June 4, 2020, at 03:23 EDT), https://apnews.com/article/american-protests-us-news-arrests-minnesota-burglary-bb2404f9b13c8b53b94c73f818f6a0b7 [https://perma.cc/R2MC-EYZN].

[75] Nicholas Kulish, Bail Funds, Flush with Cash, Learn to ‘Grind Through This Horrible Process’, N.Y. Times (June 26, 2020), https://www.nytimes.com/2020/06/25/business/bail-funds.html [https://perma.cc/KH6Q-6G7N].

[76]See Dervishi, supra note 73.

[77] Mosley, supra note 64, at 71.

[78] Lawrence Andrea, The Bail Project Sues Indiana over Restricting Law, Citing Constitutional Infringements, IndyStar (May 5, 2022, at 13:01 ET), https://www.indystar.com/story/news/crime/2022/05/04/bail-project-sues-indiana-over-law-restricting-who-they-bail-out-of-jail/9632177002 [https://perma.cc/6UB9-FTL8].

[79] Jamiles Lartey, These States Are Once Again Embracing ‘Tough-on-Crime’ Laws, Marshall Project (Mar. 9, 2024, at 12:00 EST), https://www.themarshallproject.org/2024/03/09/louisiana-georgia-kentucky-tough-on-crime [https://perma.cc/2N9R-SX4V].

[80] “[Republican Representative John Blanton] warned that the organizations had ‘no guardrails’ and were ‘indiscriminately going and bailing people out.’” Piper Hudspeth Blackburn, Kentucky House OKs Bill to Limit Bail Organizations, AP News (Mar. 1, 2022, at 16:46 EDT), https://apnews.com/article/shootings-kentucky-philanthropy-archive-louisville-a715ab1f0e0971cbaee8d5eb386c7328 [https://perma.cc/CD2V-F46Q].

[81]See Noelle Friel, ‘Madelynn’s Law’ in Honor of Madelynn Troutt passes as Part of Safer Kentucky Act, WAVE (Mar. 28, 2024, at 22:53 EDT), https://www.wave3.com/2024/03/29/madelynns-law-honor-madelynn-troutt-passes-part-safer-kentucky-act [https://perma.cc/FPA6-Z963].

[82] Troutt v. The Bail Project, No. 2023-CA-0171-MR, 2024 Ky. App. Unpub. LEXIS 225, at *3 (Ky. Ct. App. Apr. 19, 2024).

[83]Id. at *9–10.

[84]Id.

[85] Jack Karp, Do New Laws Seek to Regulate Charitable Bail, or End It?, LAW360 (April 5, 2024, at 19:04 EDT), https://www.law360.com/articles/1820106 [https://perma.cc/X3PG-JXNZ].

[86]Id.

[87] Sylvia Goodman, Criminologists Cited in Support of Safer Kentucky Act Wonder Why, Louisville Pub. Media: Ky. Pub. Radio (Feb. 22, 2024, at 06:00 EST), https://www.lpm.org/news/2024-02-22/criminologists-cited-in-support-of-safer-kentucky-act-wonder-why [https://perma.cc/7MXN-PHSL].

[88]Id.

[89] Laura & John Arnold Found., supra note 55, at 1.

[90]See Jeff Clayton, Kentucky Pretrial Release System – Ineffective Waste of Resources, Am. Bail Coalition (Jan. 18, 2018), https://ambailcoalition.org/kentucky-pretrial-release-system-ineffective-waste-resources [https://perma.cc/4PDQ-YQHE]; Savannah Molyneaux, Are Algorithms Increasing Bias? A Discussion of the Use of Risk Assessment Tools in Kentucky’s Criminal Courts, Ky. L.J. Online: Blogs (Apr. 23, 2024), https://www.kentuckylawjournal.org/blog/are-algorithms-increasing-bias-a-discussion-of-the-use-of-risk-assessment-tools-in-kentuckys-criminal-courts [https://perma.cc/HX5F-3AKE].

[91] Sydney Kern, Collaboration to Improve Pretrial Risk Assessment Earns National Recognition, U. of N. Colo. (July 29, 2024), https://www.unco.edu/news/articles/cpat-r-award-24.aspx#:~:text=Overall%2C%20the%20new%20tool%20worked,they%20helped%20make%20something%20meaningful [https://perma.cc/978R-8T7X].

[92]Id.

[93]Id.

[94] Lisel Petis, Tools for Safe and Smart Bail System Changes: Pretrial Assessments, R Street (July 19, 2023), https://www.rstreet.org/commentary/tools-for-safe-and-smart-bail-system-changes-pretrial-assessments [https://perma.cc/B4JX-RN4T].

[95] Thomas Hanna, The Facts on New Jersey Bail Reform, Arnold Ventures (Mar. 1, 2023), https://www.arnoldventures.org/stories/the-facts-on-new-jersey-bail-reform [https://perma.cc/FU9B-KNPG]; Chip Brownlee, New Jersey Ditched Cash Bail. Research Shows the Reform Didn’t Increase Violence, Trace (June 4, 2024), https://www.thetrace.org/2024/06/new-jersey-bail-reform-crime-data-study [https://perma.cc/WY3T-LQQ7].

[96]Tremendous Positive Change, Advancing Pretrial Pol’y & Rsch. (Nov. 10, 2020), https://advancingpretrial.org/story/tremendous-positive-change [https://perma.cc/EY8E-T5GQ].

[97]See Lisel Petis, Illinois Shows How Bail Can Work Better, R Street (Sept. 25, 2024), https://www.rstreet.org/commentary/illinois-shows-how-bail-can-work-better [https://perma.cc/QC98-M6R4].

[98]Id.

[99] Bella Lubelchek, Reinvention Through Reinvestment: How Illinois’s Pretrial Success Act Changes the Way We Should Look at Bail Reform, Columbia Pol. Rev. (Aug. 12, 2024), https://www.cpreview.org/articles/2024/8/reinvention-through-reinvestment-how-illinoiss-pretrial-success-act-changes-the-way-we-should-look-at-bail-reform [https://perma.cc/3JZB-G8ZC].

National Security vs. Constitutional Transparency: Reassessing the Experience and Logic Test

National Security vs. Constitutional Transparency: Reassessing the Experience and Logic Test

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Conor Washburn*

Introduction

In June of 1971, Daniel Ellsberg leaked the “Pentagon Papers,” exposing decades of United States government deception regarding the Vietnam War.[1]

In response, President Nixon formed the “White House Plumbers,” a covert unit tasked with preventing further leaks.[2] The covert unit’s illegal activities, culminating in the Watergate break-in, revealed the executive branch’s misuse of federal agencies for unlawful political surveillance.[3] These abuses prompted investigations that exposed systemic gaps in the oversight of domestic intelligence operations.[4]

In 1978, Congress passed the Foreign Intelligence Surveillance Act (“FISA”) to establish a legal framework for foreign intelligence gathering.[5] FISA governs four categories of activity: “(1) electronic surveillance, (2) physical searches, (3) pen registers and trap and trace (PR/TT) devices, . . . [and] (4) the production of certain business records.”[6] Agencies request authorization for these activities through the Foreign Intelligence Surveillance Court (“FISC”), a specialized court created to act as a “neutral arbiter of agency requests.”[7] The FISC hearings, in which requests for surveillance are considered, are ex parte and classified; the target of the order is not informed that an order has been issued, nor are they allowed to appear at the hearing, creating a judicial system largely hidden from any kind of oversight.[8]

Concerns about the breadth of this secrecy escalated in 2013, when Edward Snowden disclosed that U.S. intelligence agencies were operating bulk data collection programs, many of which had been approved by the FISC.[9] These revelations, which included warrantless acquisition of phone records and internet communications, raised alarms about the impact of such programs on privacy, free expression, and associational rights.[10] In response, Congress enacted the USA Freedom Act, requiring the Director of National Intelligence to declassify and release FISC opinions containing “significant interpretations” of law, subject to redaction where necessary for national security.[11]

Despite the Freedom Act’s mandate for increased transparency, records from FISC hearings regularly continue to be withheld.[12] Crucially, the USA Freedom Act’s declassification requirements only apply to FISC opinions issued after June 2015, leaving a vast archive of pre-2015 rulings—including those authorizing post-9/11 surveillance expansions—completely inaccessible.[13] This loophole hampers litigation efforts challenging the legality of intelligence programs that have impacted the civil liberties of millions of Americans.[14]               

To restore public trust and uphold democratic accountability, the Foreign Intelligence Surveillance Court (“FISC”) must implement greater transparency in releasing its rulings to the public. The “experience and logic” test must be reevaluated to better align the government’s national security interests with the public’s right to access critical judicial information affecting their fundamental liberties.

This Note will explore the concept of “secret law” and its impact on democratic participation and judicial oversight; analyze the First Amendment right of access, including its historical foundations and the Supreme Court’s expansion beyond criminal trials; and evaluate conflicting arguments over public access to FISC opinions, contrasting the ACLU’s call for transparency with the government’s national security concerns. It will then examine how FISC’s exceptionalism departs from constitutional norms, assess the “compelling need for secrecy” doctrine as a traditional check on confidentiality, and propose refining the “experience and logic” test by incorporating heightened judicial scrutiny and periodic review to better balance transparency, security, and the public’s right to know.

I.  “Secret Law”

“Secret law”—undisclosed legal memos, agency rules, and court opinions—sets binding standards without public scrutiny, limiting democratic participation, weakening legislative and judicial oversight, and enabling unchecked executive power.[15] When legal determinations remain hidden, the executive branch can define the scope of its authority without meaningful review, and higher courts lose the ability to ensure alignment with constitutional guarantees.[16] Secrecy also undermines stare decisis: undisclosed rulings deprive courts and litigants of guidance, producing inconsistent outcomes and eroding the coherence and predictability of the legal system.[17]

The legal analyses drafted by the FISC authorizing the kind of bulk collection programs that were exposed by Edward Snowden are the epitome of secret law. Snowden exposed thousands of classified documents as part of his leaks.[18] Contained in these documents was information about the authorization of programs known as “Prism” and “XKeyscore,” the latter of which the FISC has never declassified a ruling on.[19] The Prism program allowed the National Security Agency (“NSA”), through secret agreements with companies like Facebook, Google, Microsoft, Yahoo, Skype, and Dropbox, to access emails, documents, photos, and other kinds of private data stored on these companies’ servers.[20] The XKeyscore program functioned as the “NSA’s Google” and enabled agents to access a target’s private internet data by being secretly integrated with the physical fiber optic cables that carry the bulk of the world’s internet traffic; all that was required was the target’s email address.[21] Also detailed in these leaked documents was a claim by the NSA that FISA allowed them to secretly collect the phone records of millions of Americans from telecommunication companies like Verizon under its “business records” provision.[22]

To obtain these individual phone records, the government had to get a “Section 215” order approved by the FISC.[23] The government’s requests for the orders and the FISC’s ruling on those requests are classified, and in 2012, the FISC approved all 212 requests it received.[24] When it comes to Prism, however, the FISC’s role is limited. The government is not required to go before the FISC to receive authorization for individual surveillance orders.[25] Instead, the FISC is tasked with approving “targeting and minimization” procedures that aim to limit the amount of American citizens’ information that is captured by the program being implemented.[26] As part of its approval process, the FISC reviews whether the agencies’ proposed procedures comply with the Fourth Amendment.[27] The FISC, however, has no authority to periodically review the programs that it approves in order to make sure that the government is complying with its proposed “targeting and minimization” procedures, and both the procedures and FISC orders authorizing them are classified.[28]

In this case, the legal opinions being withheld from the public affect the rights of nearly every American.[29] By limiting knowledge of the legal framework that authorizes intelligence and national security programs, the balance of power erodes, weakening accountability and undermining democratic governance. Beyond the separation of powers, secret law calls into question the perceived legitimacy of government decisions. Citizens who cannot access or understand the rules that govern them may rightfully question whether authorities are acting within their legal bounds, leading to broader disillusionment and reduced civic engagement.[30] Over time, this sense of alienation can become entrenched, resulting in a populace skeptical of both the government’s motives and the fairness of its institutions. As secrecy expands, so too does the risk of surveillance practices creeping beyond their intended limits, redefining civil liberties in ways that the public never consented to and, in many cases, never even knew existed. If left unchecked, this structural opacity risks embedding an unreviewable system of executive power into the legal framework itself.

II.  First Amendment Right of Access

The secrecy surrounding FISC opinions is not simply poor policy—it raises legitimate constitutional concerns. In 2020, the FISC ruled that there is no First Amendment right of access to its opinions.[31] While not explicitly stated in the Constitution, the Supreme Court (“SCOTUS”) has recognized this right as implicit in the First Amendment.[32] In the landmark Richmond Newspapers case, the Court invalidated a trial judge’s order excluding the public during witness testimony,[33] emphasizing that “the trial has been open to all who cared to observe.”[34] The Court also noted that openness is essential to the proper functioning of a trial, saying that “it gave assurance that the proceedings were conducted fairly to all concerned, and it discouraged . . . decisions based on secret bias or partiality.” [35]

Two years later, in Globe Newspaper Co., the Court struck down a Massachusetts statute mandating closed courtrooms during testimony of minor victims in sex crime cases,[36] holding that, “[p]ublic scrutiny of a criminal trial enhances the quality and safeguards the integrity of the fact-finding process . . . .”[37] Public access, the Court explained, “fosters an appearance of fairness, thereby heightening public respect for the judicial process.”[38]

A.  Expansion of the Right of Access Beyond the Trial

The Supreme Court later expanded on the right of access doctrine in Press-Enterprise I and II, applying the right of access to jury selection and preliminary hearings in criminal cases.[39] In Press-Enterprise I, where most of a six-week jury selection was closed and transcripts were withheld,[40] the Court held that closure must be, “rare and only for cause shown that outweighs the value of openness.”[41] Cause, the Court states, means “an overriding interest based on findings that closure is essential to preserve higher values and is narrowly tailored to serve that interest.”[42]

Press-Enterprise II extended the right to preliminary hearings,[43] introducing the “experience and logic” test.[44] Under this test, courts first look at whether there has been a “tradition of accessibility” to the type of hearing being conducted.[45] Courts then look at whether access to the hearing “plays a particularly significant positive role in the actual functioning of the process.”[46] Importantly, the Court held that public access could outweigh a limited history of openness.[47] In El Vocero de Puerto Rico, the U.S. Supreme Court reaffirmed that the right of access applies to preliminary hearings in Puerto Rico, rejecting the local court’s reasoning that a small population justified closure.[48] “Experience,” the Court clarified, refers to the tradition in the U.S. as a whole—not the practice of a single jurisdiction.[49]

B.  Right of Access Beyond Criminal Proceeding

In the early 2000s, the Supreme Court extended the First Amendment right of access beyond criminal proceedings for the first time.[50] In Ashcroft, the Executive Branch sought to close a deportation hearing by labeling it a “special interest” case.[51] The government argued that the “experience and logic” test applied only to judicial, not administrative proceedings.[52] The Court disagreed, holding that, “[t]he First Amendment question cannot be resolved solely on the label we give the event . . . .”[53] The government further argued that closure was justified to prevent “mosaic intelligence” from revealing sensitive investigative details.[54] The Court rejected this argument, stating that the mere possibility of piecing together such information was insufficient, and warning that, “[w]hen government begins closing doors, it selectively controls information rightfully belonging to the people.”[55]

Nine years later, in litigation brought by the New York Civil Liberties Union (“NYCLU”), the Court struck down a New York City Transit Authority (“NYCTA”) policy excluding certain observers from Transit Adjudication Bureau hearings.[56] The NYCTA argued that there was no right of access to such administrative proceedings.[57] The Court disagreed, holding that the right of access does not depend on the branch of government conducting the proceeding, and that the NYCTA failed to show reasonable grounds for limitation.[58]

III.  Conflicting Interests

A.  The ACLU’s Interest in Disclosure

Similar to the NYCLU, the ACLU argues that the First Amendment gives the public a right to access FISC decisions containing significant legal opinions.[59] These decisions implicate the “privacy, expressive, and associational rights of every American.”[60] After 9/11, the Foreign Intelligence Surveillance Court (“FISC”) interpreted sections of the Foreign Intelligence Surveillance Act of 1978 (“FISA”) to authorize surveillance programs that collected mass amounts of Americans’ data.[61] In 2008, Congress amended FISA and authorized FISC to approve targeting procedures which acquired international communications of American citizens—without a warrant—under the guise of targeting foreign nationals.[62]

The FISC has also issued opinions evaluating the legality of similar programs used by the U.S. intelligence community. In 2011, the FISC issued an opinion assessing the legality of the NSA’s use of “about” collection to scan Americans’ communications for specific terms that the government deemed to be associated with its foreign intelligence targets.[63] Two years later, the FISC reexamined and upheld a 2006 authorization allowing bulk collection of domestic call records.[64] Finally, in 2018, the FISC ruled on warrantless searches of international communications databases for U.S. citizens’ information, all of which were classified.[65]

Traditionally, the FISC did not publish any of the decisions it made. Between 1978 and 2013, only two of the FISC’s opinions were ever actually published.[66] It was not until the passage of the USA Freedom Act in 2015 that Congress required the government to conduct a review of all FISC opinions and make available to the public opinions that “include a significant construction or interpretation of any provision of law.”[67] The Act’s review process, however, is flawed: it is conducted solely by the executive branch, it excludes pre-2015 opinions (when many bulk collection programs were authorized), is subject to a “national security waiver,” and omits the “experience and logic” test.[68]

Executive-only review raises three problems. First, the branch responsible for surveillance has an inherent bias toward secrecy. Second, without judicial oversight, the executive avoids scrutiny from courts that could check overbroad secrecy claims. Third, the “national security waiver” is vulnerable to abuse. A national security waiver can block the release of a FISC opinion if: (1) the Director of National Intelligence (“DNI”), in consultation with the Attorney General (“AG”) determines that it is necessary to protect the U.S., its intelligence sources, or methods, and (2) the DNI issues an unclassified statement, prepared by the AG, summarizing the decision and, “to the extent consistent with national security,” its context.[69] This statement, however, must contain “no part of the opinion of the [FISC] or [FISCR],” which means that the public receives little to no insight into the court’s reasoning or its underlying legal arguments.[70]

B.  The Government’s Interest in Secrecy

In 2013, the government opposed the ACLU’s request to publish FISC opinions authorizing mass surveillance programs, arguing that disclosure could jeopardize intelligence activities and that the ACLU failed both prongs of the “experience and logic” test.[71] In evaluating the “experience” prong, the government relied on El Vocero de P.R., which held that “experience” refers to national, not jurisdictional, practice.[72] Because the FISC’s docket consists exclusively of national security matters, it operates primarily in secret, with public access being the exception.[73] The government contends that this makes it fundamentally different from other Article III courts; therefore, the ACLU’s reliance on the tradition of openness in other courts is misplaced.[74]

On the “logic” prong, the government again invoked national security, claiming that openness would hinder—not enhance—the court’s effectiveness by exposing sensitive intelligence gathering methods and targets.[75] On the contrary, opponents argued that public access would promote trust in the judiciary and enhance democratic accountability, thus improving—not hindering—the court’s effectiveness.[76] A brief filed by former intelligence community officials contends that “the trust and confidence of the public and the assurance of strong and credible oversight are critical” in matters of national security, warning that excessive secrecy risks harmful unauthorized leaks.[77]

When another FISC petition for access was reviewed in 2020, the reviewing court asserted that the FISC lacked jurisdiction to hear First Amendment claims, emphasizing that its authority is limited to powers expressly granted by the FISA.[78] One year later, in 2021, this matter was brought before the United States Supreme Court as a petition for a writ of certiorari, which was denied.[79] Justice Gorsuch and Justice Sotomayor dissented from the court’s decision to deny cert, stating: “On the government’s view, literally no court in this country has the power to decide whether citizens possess a First Amendment right of access to the work of our national security courts.”[80] Historically, courts have recognized that all Article III courts have “supervisory power over [their] own records and files,” further bolstering the ACLU’s argument that the FISC can hear right of access cases.[81]

IV.  FISC’s Exceptionalism vs. Constitutional Norms

The FISC’s claim that it is unlike other Article III courts echoes the concept of “administrative law exceptionalism”—the mistaken belief that a regulatory field is so unique that general legal principles do not apply.[82] Other specialized tribunals (e.g., the Tax Court) have faced allegations of “administrative exceptionalism.”[83] The FISC stands out, however, for its nearly unreviewable secrecy. By design, it depends on unilateral executive branch certifications and operates without a robust adversarial challenge, conditions that critics have warned can produce bias favoring government submissions.[84]

The Court in Globe Newspapers held that closing judicial process off from the public undermines the “essential component” of transparency in the judicial system, which the Court deemed vital to maintaining public confidence.[85] Likewise, El Vocero de Puerto Rico rejected the notion that constitutional norms vary with a court’s docket when fundamental rights are at stake.[86] Yet, the FISC’s ex parte process and classified publications create a dual legal system: one for national security, another for all else—directly contradicting Boumediene v. Bush, which rejected parallel legal structures even in wartime.[87]

This structural divergence from Article III norms is not merely procedural but existential. Unlike other federal courts, which operate under a presumption of transparency as articulated by Richmond Newspapers, the FISC functions as a constitutional anomaly—a court whose very existence relies on sustained secrecy.[88] Absent adversarial testing, flawed reasoning can calcify into precedent without the safeguards needed to protect fundamental rights. The Supreme Court has repeatedly rejected blanket security claims used to justify excessive secrecy. In Globe Newspapers, it required evidence-based risks before closing proceedings.[89] Similarly, in Detroit Free Press v. Ashcroft, the Sixth Circuit applied the First Amendment right of access to “special interest” terrorism cases, dismissing the “mosaic” theory for aggregated non-classified details—underscoring that national security claims must be tied to concrete, demonstrable harm.[90]

V.  Refining the Experience and Logic Test

The ACLU’s argument for a First Amendment right of access to FISC opinions hinged on the “experience and logic” test articulated in Press-Enterprise II, which asks whether a proceeding has historically been open and whether transparency enhances fairness.[91] The government maintains that national security concerns exempt FISC opinions from this test.[92] The “experience and logic” test can be refined to balance both transparency and security by integrating elements of the “compelling need for secrecy” standard used for grand jury proceedings. Secrecy, while essential for protecting intelligence-gathering techniques and sensitive operations, must be reassessed when FISC opinions directly impact every American’s constitutional rights.

Under this refined approach, secrecy would be the exception, not the rule. [93] Consistent with precedent established by Press Enterprise II and Detroit Free Press, withholding disclosure should require a compelling, particularized showing of a substantial probability of harm, supported by concrete facts rather than vague assertions.[94] Demanding a higher evidentiary standard minimizes the risk of overbroad secrecy and ensures that closed proceedings and redacted decisions are limited to situations where no alternative measure—like partial redactions, in-camera review, or delayed release—would suffice.

While amicus curiae or “amici” have historically provided some check on FISC proceedings, their role is limited: their appointments are discretionary, their access to case information is incomplete, and they cannot seek appellate review.[95] Only the government can appeal an adverse decision of the FISC, thus limiting judicial review to a one-way street.[96] To counter this imbalance, requests for closure or redaction should undergo judicial—not executive—review by an independent panel of judges.[97] This safeguard reinforces the separation of powers and ensures that the executive cannot unilaterally decide what remains secret.

Periodic reassessment is also essential. If redaction or withholding is initially justified, the decision should be revisited at regular intervals to determine whether the threat remains credible. As in Gillispie, the need for secrecy may diminish over time; if the government cannot demonstrate an ongoing particularized risk, the presumption of openness should prevail.[98] Ultimately, this refined approach to the “experience and logic” test respects legitimate security needs while protecting democratic oversight. By requiring particularized evidence of harm, mandating independent judicial review, and limiting secrecy to circumstances where no alternatives suffice, the judiciary would strengthen public trust and uphold the principle that transparency is the rule, not the exception.   

Conclusion

The First Amendment right of access continues to serve as a pivotal safeguard for transparency, even in settings where the government asserts national security interests. By strengthening the “experience and logic” test, this Note advances a model in which courts demand specific and imminent evidence of harm before restricting public access. Such a requirement ensures that secrecy remains an exception rather than a default rule, especially when judicial opinions involve fundamental constitutional rights of privacy. Without reform, judicial deference to executive secrecy risks normalizing secret law, eroding public trust, and weakening democratic accountability. A government that operates in secrecy does not just withhold information; it alters the very relationship between the state and its citizens, replacing transparency with unilateral control.

Specialized courts like the FISC should not function as extensions of the executive. Judicial—not executive—control over secrecy decisions is essential to maintaining checks and balances. Detroit Free Press stands as a reminder that broad invocations of “national security” cannot substitute meaningful oversight: “A government operating in the shadow of secrecy stands in complete opposition to the society envisioned by the Framers . . . .”[99] In essence, maintaining open proceedings encourages accountability and public confidence in the rule of law. Adopting a heightened standard for closure or redaction can balance national security needs with public access. Requiring independent judicial review, particularized proof of harm, and periodic reassessment promotes transparency without compromising legitimate security needs. As Justice Brennan observed, “People in an open society do not demand infallibility from their institutions, but it is difficult for them to accept what they are prohibited from observing.”[100]

* J.D. Expected 2026, University of Kentucky J. David Rosenberg College of Law; MBA 2026, University of Kentucky Gatton College of Business and Economics; B.S. Political Science, minor in Legal Studies 2022, Murray State University. I would like to thank Eleri, my wife, for reading this Note and providing me with her feedback, my family for supporting me in all that I do, and the KLJO team for their efforts in helping to edit this piece.  

[1] See Pentagon Papers, Watergate and Trials, UMassAmherst,

[2] Id.

[3] See Malcolm Farnsworth, Watergate Chronology, Watergate.info, https://watergate.info/chronology [https://perma.cc/6X3B-YVX4] (last visited Oct. 22, 2024) (describing the political events that took place after the Watergate break-in); Benjamin R. Civiletti, Att’y Gen. of the U.S., Remarks at the Annual Dinner of the University of Chicago Law School and Alumni Association: Watergate Legislation in Retrospect (Apr. 25, 1980), in Dep’t of Justice NCJRS Virtual Library, 1980, at 1, 1–2.

[4] Civiletti, supra note 3, at 1–2.

[5] Andreas Kuersten, Cong. Rsch. Serv., IF11451, Foreign Intelligence Surveillance Act (FISA) (2024).

[6] Id.

[7] FISA & Section 702 FAQs, A.B.A., https://www.americanbar.org/groups/law_national_security/resources/fisa-section-702/faq [https://perma.cc/K8GG-Y9VB] (last visited Mar. 3, 2026); see also Kuersten, supra note 5 (describing the purpose of FISC).

[8] Foreign Intelligence Surveillance Court (FISC), Epic, https://epic.org/foreign-intelligence-surveillance-court-fisc [https://perma.cc/3WJR-HPTS] (last visited Oct. 23, 2024).

[9] Ewen Macaskill & Gabriel Dance, NSA Files: Decoded, What the Revelations Mean for You, Guardian (Nov. 1, 2013), https://www.theguardian.com/world/interactive/2013/nov/01/snowden-nsa-files-surveillance-revelations-decoded#section/1 [https://perma.cc/QG8V-V6LP].

[10] See Motion of ACLU for the Release of Court Records, In re Opinions and Orders of this Court Containing Novel or Significant Interpretations of Law (FISC Oct. 18, 2016).

[11] See id. (explaining Congress’ response with the USA FREEDOM Act); Foreign Intelligence Surveillance Court (FISC), supra note 8.

[12] Charlie Hogle & Alex Abdo, The Public Should Have Access to the Surveillance Court’s Opinions, Just Sec. (Apr. 19, 2021), https://www.justsecurity.org/75809/the-public-should-have-access-to-the-surveillance-courts-opinions [https://perma.cc/WNG3-TRLM].

[13] Id.

[14] See id. (explaining how the FISC and its appellate court have refused to consider First Amendment motions).

[15] Secret Law, Brennan Ctr. for Just., https://www.brennancenter.org/issues/protect-liberty-security/transparency-oversight/secret-law [https://perma.cc/8BJK-9SNZ] (last visited Jan. 3, 2025); see Bethany A. Davis Noll & Richard L. Revesz, Regulation in Transition, 104 Minn. L. Rev. 1, 4 (2019) (arguing shifts “in regulatory policy has been undertaken with low-visibility strategies,” which enables unchecked executive authority).

[16] See Noll & Revesz, supra note 15, at 100; Elizabeth Goitein, Secret Law is Not the Solution to an Overbroad Surveillance Authority, Brennan Ctr. for Just. (June 11, 2024), https://www.brennancenter.org/our-work/analysis-opinion/secret-law-not-solution-overbroad-surveillance-authority [https://perma.cc/6W5T-LDJ8]; Bruce Fein, Constitutional Peril: The Life and Death Struggle for Our Constitution and Democracy 44 (2008).

[17] Randy J. Kozel, Settled Versus Right: A Theory of Precedent 4–5 (2017).

[18] 15 Top NSA Spy Secrets Revealed by Edward Snowden, Spyscape, https://spyscape.com/article/15-top-nsa-spy-secrets-revealed-by-snowden [https://perma.cc/CWC4-AU3S] (last visited Feb. 25, 2025).

[19] Id.

[20] Id.

[21] Id.

[22] Are They Allowed to Do That? A Breakdown of Selected Government Surveillance Programs, Brennan Ctr. For Just. (July 15, 2013), https://www.brennancenter.org/our-work/research-reports/are-they-allowed-do-breakdown-selected-government-surveillance-programs [https://perma.cc/UL43-LJZM].

[23] Id.

[24] Id.

[25] Id.

[26] Id.

[27] Id.

[28] Id.

[29] Hogle & Abdo, supra note 12.

[30] See Bruce Ackerman, The Decline and Fall of the American Republic 95–96 (2010).

[31] Meenakshi Krishnan, The Foreign Intelligence Surveillance Court and the Petition Clause: Rethinking the First Amendment Right of Access, 130 Yale L.J. 723, 723 (2021).

[32] Christopher Dunn, Column: Rediscovering the First Amendment Right of Access (New York Law Journal), NYCLU (Aug. 4, 2011), https://www.nyclu.org/commentary/column-rediscovering-first-amendment-right-access-new-york-law-journal [https://perma.cc/TVK7-RQM7].

[33] Richmond Newspapers, Inc., v. Virginia, 448 U.S. 555 (1980).

[34] Id. at 564.

[35] Id. at 569.

[36] Globe Newspaper Co., v. Superior Court, 457 U.S. 596, 599–600 (1982).

[37] Id. at 606.

[38] Id.

[39] Press-Enterprise Co. v. Superior Court, 464 U.S. 501 (1984); Press-Enterprise Co. v. Superior Court, 478 U.S. 1 (1986).

[40] Press-Enterprise Co., 464 U.S. at 510.

[41] Id. at 509.

[42] Id. at 510.

[43] Press-Enterprise Co., 478 U.S. at 10.

[44] Id. at 9.

[45] Id. at 10.

[46] Id. at 11.

[47] Id. at 12–13.

[48] El Vocero de Puerto Rico v. Puerto Rico, 508 U.S. 147, 149 (1993).

[49] Id. at 150.

[50] Detroit Free Press v. Ashcroft, 303 F.3d 681 (6th Cir. 2002).

[51] Id. at 683.

[52] Id. at 694.

[53] Id. at 695.

[54] Id. at 709.

[55] Id. at 683, 709.

[56] N.Y.C.L. Union v. N.Y.C. Transit Auth., 684 F.3d 286, 289 (2d Cir. 2012).

[57] Id. at 289–90.

[58] Id. at 290.

[59] Rohini Kurup, Civil Liberties Groups Ask Supreme Court to Make FISC Opinions Public, LAWFARE (Apr. 20, 2021), https://www.lawfaremedia.org/article/civil-liberties-groups-ask-supreme-court-make-fisc-opinions-public [https://perma.cc/WMN4-RRLF].

[60] Id.; Petition for Writ of Certiorari or Mandamus, In re Opinions and Orders of the FISC Containing Novel or Significant Interpretations of Law, at 3 (U.S. 2021) [hereinafter Opinions]; RCFP Backs Supreme Court Petition Concerning Access to FISC Decisions, Reps. Comm. For Freedom of The Press (May 27, 2021), https://www.rcfp.org/briefs-comments/aclu-v-united-states [https://perma.cc/3Z7B-9E6G].

[61] Opinions, supra note 60, at 3.

[62] See id.

[63] Id. at 4; See All About "About" Collection, Elec. Frontier Found., https://www.eff.org/pages/about-collection#:~:text=That%20term%20refers%20to%20the,identifier%20used%20by%20a%20target [https://perma.cc/WBC5-SAWD].

[64] Opinions, supra note 60, at 4.

[65] Id.

[66] Id.

[67] Id. at 5 (citing 50 U.S.C. § 1872(a)).

[68] See id.

[69] Declassification of Significant Decisions, Orders, and Opinions, 50 U.S.C. § 1872 (2015).

[70] See id.

[71] Brief for the United States at 4, 14–15, In re Ord. of this Ct. Interpreting Section 215 of the Patriot Act, No. Misc. 13-02, 2013 WL 5460064, at *1–2 (FISA Ct. Sep. 13, 2013).

[72] Id. at 5; El Vocero de P.R. (Caribbean Int'l News Corp.) v. Puerto Rico, 508 U.S. 146, 150 (1993).

[73] Brief for the United States, supra note 71, at 6.

[74] Id. at 7–8.

[75] Id. at 10–11.

[76] Motion of The American Civil Liberties Union, The American Civil Liberties Union of the Nation's Capital, and The Media Freedom and Information Access Clinic for the Release of Court Records at 9, In re Ord. of this Ct. Interpreting Section 215 of the Patriot Act, No. Misc. 13-02, 2013 WL 5460064 (FISA Ct. 2013).

[77] Jameel Jaffer & Patrick Toomey, A New Consensus Around Transparency and National Security Surveillance, ACLU (June 1, 2021), https://www.aclu.org/news/national-security/a-new-consensus-around-transparency-and-national-security-surveillance [https://perma.cc/M823-3QN5]; Brief of Former Government Officials as Amici Curiae in Support of Petitioner at 5, Am. C.L. Union v. United States, 142 S. Ct. 22 (2021) (No. 20-1499).

[78] See In re Opinions and Orders by the FISC addressing bulk collection of Data under the Foreign Intelligence Surveillance Act, No. FISCR 20-01, 8-12 (F.I.S.C.R. Apr. 24, 2020) (denying a movant’s petition for review of a decision of the United States Foreign Intelligence Surveillance Court rejecting a movant’s First Amendment claims because the FISC lacked jurisdiction to hear the same).

[79] ACLU v. United States, No. 20–1499, slip op. at 2 (U.S. Nov. 1, 2021) (Gorsuch, J., dissenting) (order denying certiorari).

[80] Id.

[81] Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978); see also Hogle & Abdo, supra note 12 (noting that the FISC and FISCR have inherent authority over the management of and public access to their own records).

[82] Christopher J. Walker, The Stages of Administrative Law Exceptionalism, Yale L.J. on Regul.: Notice & Comment (Jan. 21, 2017), https://www.yalejreg.com/nc/the-stages-of-administrative-law-exceptionalism [https://perma.cc/FYN6-BMKS].

[83] Id.

[84] John O. Tyler, Jr., FISA vs the Constitution, Houston Christian Univ. (July 24, 2018), https://hc.edu/news-and-events/2018/07/24/fisa-vs-the-constitution [https://perma.cc/Y44R-6VYR].

[85] Globe Newspaper Co. v. Superior Ct., 457 U.S. 596, 606 (1982).

[86] El Vocero de P.R. v. Puerto Rico, 508 U.S. 147, 149 (1993).

[87] See Boumediene v. Bush, 553 U.S. 723, 764–66 (2008).

[88] Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 573, 575–581 (1980).

[89] See Globe Newspaper Co., 457 U.S. at 609–610.

[90] Detroit Free Press v. Ashcroft, 303 F.3d 681, 706, 710 (6th Cir. 2002).

[91] See Opinions, supra note 60, at 4; Press-Enterprise Co. v. Superior Court, 478 U.S. 1, 8 (1986).

[92] See Orders Issued, supra note 71, at 3, 5.

[93] See Richmond Newspapers Inc., 448 U.S. at 573 (noting, by negative implication, that secrecy should not be presumed).

[94] Press-Enterprise Co., 478 U.S. at 13–14; Detroit Free Press, 303 F.3d at 706–707.

[95] Chris Baumohl, Reforming 702: Strengthening FISA Amici, Elec. Priv. Info. Ctr. (Mar. 2, 2023), https://epic.org/reforming-702-strengthening-fisa-amici [https://perma.cc/AYT5-RFLE].

[96] Id.

[97] See Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978) (emphasizing that courts have power over their own files).

[98] See State v. Gillispie, 181 N.E.3d 614, 622 (Ohio Ct. App. 2021).

[99] Detroit Free Press, 303 F.3d at 710.

[100] Richmond Newspapers Inc., 448 U.S. at 572.

Restricting Home-Cooked Meals: An Analysis of Kentucky's Cottage Food Laws

Restricting Home-Cooked Meals: An Analysis of Kentucky’s Cottage Food Laws

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Dalton Gregory*

Introduction

It is 2020 and the Covid-19 pandemic is in full swing. People rush to grocery stores to get the food they need for their families, but stores have place limits on how much people can buy. Many stores lack the amount of goods necessary for everyone to purchase what they need as global supply chains have been disrupted. Families struggle to get the food they need, and many go hungry until supply chains can be restored back to normal.

This is a scene too many Americans, and people all around the world, are familiar with. One North Carolina community responded by utilizing locally produced food while supply chains remained interrupted.[1] Local foods supplemented the limited supply of mass-produced foods in this scenario, which highlighted a key benefit of local produce.

Local foods provide many benefits ranging from supply benefits, illuminated during the pandemic, to health benefits. Despite these benefits, local foods are not widely available because of laws regulating food production and sale. In response to this every state has passed cottage food laws to encourage local foods and improve older laws.

Kentucky is one such state that has made improvements, but this note argues that Kentucky must further reform its current cottage food laws by lessening restrictions. Part I provides background on cottage food laws and what they are. Part II explains the benefits of cottage food laws and explains why they should be less restrictive. Part III dives into Kentucky’s current cottage food laws and its two-part classification system for regulating different cottage foods differently. Finally, Part IV provides recommendations for how Kentucky could update its cottage food laws.

I.               Background on Cottage Food Laws

Cottage food laws are laws relating to foods that are deemed to be low risk for contamination and are not considered hazardous.[2] These laws often result in less regulations on the preparation and sale of these foods because they are less hazardous.[3] States often regulate these foods differently, and even vary in what they consider to be “cottage foods.”[4] These laws promote the production and sale of non-hazardous foods by lessening the burdens of typical food regulations.[5] This promotes the production of locally grown and produced foods and allows for more direct purchases.[6] Some states also view these laws as a way to boost local economies.[7]

Cottage food laws often accomplish these goals through a variety of different means, but there are common elements. Most states limit the scope of cottage food laws to only cover non-hazardous foods.[8] States also often regulate where these foods can be sold, such as official farmers’ markets, produce stands, and grocery stores.[9] Cottage food laws may also require licenses, permits, and proper labels.[10] Finally, states often regulate the amount individuals can earn from selling cottage foods.[11] These elements are common across the country, but states still vary greatly in each.

In recent years, states across the country have been passing cottage food laws and reforming older laws.[12] Much of this recent change has been done to help promote local economies.[13] The Institute of Justice is one organization aiding in this movement by working with various states to reform and update their cottage food laws.[14] While there has been progress, there is still room for improvement in many states, including Kentucky.

II.             The Benefits of Cottage Foods

A. The Benefits to Food Security

One benefit of having stronger cottage food laws that impose less restrictions is the impact the laws could have on food security. Less restrictions on cottage foods would allow them to be sold more easily by giving customers direct access to producers. The potential benefit of having less restrictive cottage food laws would be particularly impactful for the country as in 2023, 13.5 percent of households experienced food insecurity at some point.[15]

The potential benefit of helping decrease food insecurity can also be more important during times of emergency and crisis. Global and national food supply lines can be disrupted during crises, and fewer restrictions on cottage foods can help to alleviate the harms. The Covid-19 pandemic saw this firsthand as countries and states implemented policies and restrictions to help slow the spread.[16] This impacted food supply chains across multiple sectors including finding laborers to harvest crops and shipping foods to different countries.[17] This led to increases in food insecurity as supply chains were disrupted.[18] Having easier access to locally grown and processed foods helps alleviate these disruptions to food sources seen during the recent pandemic.

B. Environmental Benefits of Cottage Foods

Promoting local produce would also have environmental benefits stemming from the potential harms of industrial agriculture. One potential environmental benefit would come from reducing the harmful effects of industrial agriculture on water sources. Large-scale industrialized agriculture often requires substantial amounts of water,[19] often relying on intricate irrigation systems that pull water from distant sources,[20] and accounts for around a third of the nation’s water use.[21] Effective cottage food laws would reduce water usage for crops as locally grown crops are typically not grown on the same scale that requires massive amounts of water.

Industrial agriculture also causes water pollution. Industrial agriculture creates runoff that enters the waterways and can have harmful effects downstream.[22] Fertilizers are overused and enter water sources, depleting oxygen.[23] Depleting oxygen in water sources causes dead zones below the surface, killing aquatic life.[24] Fertilizers can also contaminate drinking water as they often contain nitrates.[25] Nitrate infected water can create disorders in people relating to oxygen in the blood, and it is particularly harmful for pregnant women.[26] Pesticides, particularly atrazine often used for corn, also contaminate drinking water sources and can pose health risks to people.[27] While these risks of water pollution would not be completely solved, they would be reduced.

Promoting cottage foods also mitigates the harm from monocultures often seen in industrial agriculture. Industrial farming largely consists of monocultures, meaning that large amounts of one crop are grown year after year on the same ground.[28] Monoculture farming greatly hurts the topsoil and often causes the ground to erode because of the constant tilling of the ground loosening the soil and making it more susceptible to being carried away by runoff.[29] Erosion hurts the quality of the farmland as the nutrient-rich topsoil is lost over time to erosion, which will hurt farm production in future years, and erosion damages waterways as an estimated two billion tons of sediment enters waterways each year.[30] Supporting cottage foods can help to minimize erosion as local small-scale farmers may not follow the monoculture practices of large-scale industrial farming.

C. Health Benefits of Cottage Foods

In addition to the benefits to food security and the environment, promoting cottage foods could also have various health benefits. One key health benefit results from local produce not using the same harmful pesticides, herbicides, and fertilizers that are often used in industrial farming.[31] Consuming foods that contain these chemicals can cause harmful health implications, but locally grown foods do not usually contain these harmful chemicals.[32] Industrial agriculture also frequently utilizes chemical preservatives, but local produce often does not contain these chemical preservatives because it does not have to be shipped over long distances and stored as long.[33] The local nature of cottage foods typically means that it has less chemicals in it that people may consume, potentially causing harmful health effects.

Cottage foods may also be healthier because they are often fresh. Fresh foods are often more nutrient dense, and local produce can be harvested and quickly sold at peak freshness.[34] Processed foods are often “empty calorie foods” with high amounts of sugars and fats.[35] Replacing these with locally grown produce would provide more nutrients, antioxidants, and polyphenols that greatly benefit one’s health.[36] These healthy benefits to fresh produce can increase heart, blood, brain, digestion, and vision health, and cottage foods could provide these benefits.[37]

D. Economic Benefits

Reforming cottage food laws to be less restrictive can also have economic benefits. One benefit is that more produce could be sold in farmers’ markets. The number of farmers’ markets has significantly increased in Kentucky over the past thirty years.[38] Improving cottage food laws to make them less restrictive would allow more local produce to be sold at farmers’ markets, which means that consumers could buy more of their food locally. Spending locally has various economic benefits to local communities such as keeping more of the money local and creating local jobs.[39]

While farmers’ markets provide a great venue for local farmers to sell their produce, to fully recognize the economic benefits, laws will need to be changed to allow for cottage foods to be sold in more areas. Some organizations and groups argue that local food needs to be sold in grocery stores, restaurants, and schools.[40] The economic benefits would be significant because these institutions have greater purchasing power.[41]

The main economic benefit that would come from purchasing more cottage foods is what is known as the “multiplier effect.”[42] This is when initial spending increases later spending by consumers in the same community as the recipient of the initial spending then spends that money in their community.[43] Because cottage foods are often local foods, buying cottage foods means that the money goes to someone else in the community.[44] Purchasing local foods results in a multiplier effect that is two to three times greater than if that money were spent on non-local produce.[45]

Increasing cottage food supplies and sales could also boost local economies by creating more local jobs. One economist found that shifting just twenty percent of Detroit’s food spending towards local food could “create more than 4,700 new jobs” to the local area.[46] While the number of jobs created is not nearly as large in rural areas, studies have found that jobs would still be created.[47] Local producers also tend to pay higher wages, which can help local economies as these laborers have higher incomes.[48] While these economic benefits may vary with certain conditions, they still provide another reason to make cottage food laws less restrictive.[49]

Many of the benefits that come from cottage foods are because they are locally produced foods. Benefits such as food security, the environment, health, and local economies will not be uniform across the country, but states could still enjoy many of these benefits. To fully realize these benefits, many states, including Kentucky, will need to reform their cottage food laws.

III.           Kentucky’s Bifurcated Regulation System

Kentucky enacted its first cottage food law in 2003, but updated it in 2018 and then again in 2019.[50] Kentucky regulates cottage foods under a bifurcated system in which home-based processors and home-based microprocessors are subject to different regulations.[51]

A. Home-Based Processors

Under Kentucky’s bifurcated cottage food regulatory system, home-based processors are more strictly regulated on what they can sell but otherwise must follow fewer regulations than microprocessors.[52] Processors can only sell non-potentially hazardous foods, which include dried herbs, whole fruits and vegetables, jellies, bread, fruit pies, cakes,[53] maple syrup, granola, trail mix, and popcorn.[54] These restrictions notably exclude acidified foods and canned produce.[55]

Home-based processors must still meet proper packaging requirements. The food’s container must first be clean and sanitary.[56] The containers must also be properly labeled with the name and address of the processor, the name of the food, the ingredients, the net weight of the food, the date the food was processed, and the following statement: “This product is home-produced and processed.”[57] These requirements aim to inform and protect consumers.

There are also certain restrictions on where home-based processors can sell their foods. Home-based processors can only sell their foods directly to consumers, which means they can sell food from their homes, at markets, community events, roadside stands, or even by delivery.[58] This allows home-based processors to sell their produce online as long as they sell it directly to the consumer.[59] This direct-to-consumer restriction also means that home-based processors cannot sell their produce to grocery stores or restaurants.[60] These restrictions on where home-based processors can sell their food are less burdensome than some states, but they could still be reformed.

Kentucky does not require home-based processors to pass inspections before they can sell their produce.[61]  The Cabinet for Health and Family Services, however, can still inspect processing facilities annually if they choose to.[62] The Cabinet may also require inspections and testing if complaints are received or products are mislabeled.[63] If the Cabinet suspects “that an imminent health hazard exists,” the Cabinet can require the processor to stop until the hazard has been fixed.[64] These inspections and food samples are often up to the discretion of the cabinet and not actually required.

B. Home-Based Microprocessors

Kentucky’s second category of cottage food producers, home-based microprocessors, can sell a larger variety of homemade foods, but they must follow stricter regulations and restrictions on how they produce their foods.[65] Home-based microprocessors are farmers who process their own foods to sell to consumers.[66] The Secretary of the Cabinet for Health and Human Services is responsible for regulating home-based microprocessors to protect the public health.[67]

To qualify as a home-based microprocessor, the producer must be a farmer that grows the primary ingredient used in the food.[68] Farmers must apply with the Department for Public Health or the University of Kentucky Extension Service Office.[69] Applicants must provide information about the farm, the food to be produced, completion of the Food Processing School, an “established scheduled process for each food item,”[70] and pay a fifty dollar fee for certification every year.[71]

Microprocessors must also comply with multiple inspections and receive training before they begin producing their products. Applicants must attend Food Processing School, and microprocessors must have their recipes approved.[72] Finally, microprocessors must undergo facility inspections, and the Cabinet must inspect microprocessors’ facilities at least every four years.[73] Once a microprocessor becomes certified, the Cabinet may suspend or revoke the certification at any point for violations, but the microprocessor must receive notice.[74]

Home-based microprocessors are allowed to produce more food products than home-based processors. Microprocessors may produce all the foods processors produce, but microprocessors can produce additional acidified foods.[75] These acidified foods include many acid foods and acid food products, such as low-acid canned foods.[76] Producing canned foods allows microprocessors to can the foods they grow to last longer on shelves before or after it is sold to consumers.

To justify allowing microprocessors to sell these foods, the Cabinet makes them follow stricter guidelines on the facilities where the food is produced. Microprocessors must maintain a clean facility, ensuring that the kitchen area and any additional areas are sanitized.[77] Any vehicles used to transport food products and any other equipment must also be sanitized, but there are also strict restrictions on the type of equipment that can be used.[78] Microprocessors are only allowed to sell their foods directly to consumers at “farmers markets, certified roadside stands, or on the processor’s farm.”[79] This greatly restricts where microprocessors can conduct their business.

Like processors, microprocessors must properly label their produce. Microprocessors must label their products with the exact same information that processors do.[80] In addition to this, microprocessors must provide allergen information on their products.[81] Labeling requirements in Kentucky do not pose a severe burden and provide valuable information to the consumers.

Kentucky places many harsh restrictions and regulations on microprocessors compared to processors to justify allowing microprocessors to produce more foods. This small benefit does not justify these harsh regulations that discourage people from producing their own food to sell.

IV.       Reforming Kentucky’s Cottage Food Laws

While Kentucky’s current cottage food laws have made improvements on past laws, the state could still largely reform the current laws to better promote local foods and fully realize the benefits. Kentucky could improve its cottage food laws by allowing a larger variety of products to be sold, increasing the number of places where local producers can sell their goods, and decreasing the regulatory burdens that local producers have to go through. Not only would these changes benefit the local producers themselves, but people across the state and the state as a whole would benefit.

            One key area of Kentucky’s cottage food laws that needs to be reformed is in what food products local producers are allowed to sell. Processors should be permitted to sell more goods, especially those that pose little risk. One way to do this would be to allow processors to make and sell acidified food and low-acid canned goods. Processors in Kentucky should also be permitted to sell all shelf-stable foods instead of a list of approved foods. These foods pose little risk to public health, so making these adjustments would still protect public health and benefit processors.

The regulations on what foods home-based microprocessors may sell also needs to be reformed for Kentucky to fully realize the benefits of cottage foods. Microprocessors should be permitted to sell any foods that home-based processors may sell, but microprocessors should be allowed to also sell refrigerated goods and fermented foods. Microprocessors must be farmers under Kentucky law, so expanding what foods microprocessors may sell to include eggs and dairy products would increase the number of farmers who could sell their local produce. This would allow more local foods to be sold and increase the number of producers who could sell their foods.

Kentucky also needs to reform its restrictions on where local producers may sell their foods. With the emergence of online grocery orders and deliveries, local producers should not be disadvantaged by being prevented from selling their products online and delivering them. All local producers also need to be allowed to sell directly to consumers anywhere. These products already must be properly labeled as being homemade, so consumers could decide for themselves if they want to purchase these products. Kentucky’s current $60,000 sales cap also poses an undue restriction that should be eliminated. Eliminating the sales cap would allow local producers to make and sell their products without having to worry about the sales cap. This would further encourage local producers to sell as much produce as they can, increasing access to healthy food.

Reforming Kentucky’s law to allow microprocessors to sell their foods to restaurants would further increase access to local produce. Microprocessors must go through multiple trainings and receive permits, so they are already held to high standards. Kentucky should also reward microprocessors who must go through these hurdles by allowing them to sell their foods to schools. The Kentucky Department of Agriculture has already made this a clear goal by creating a program to reward schools for using local produce, so adapting Kentucky’s laws to allow microprocessors to sell to schools would help with this goal.[82] Microprocessors must be rewarded for Kentucky to reap the benefits of cottage foods, and expanding where microprocessors may sell their foods is key.

Kentucky’s regulations on receiving permits, training, and licenses also need to be changed, but many of these regulatory burdens can be justified if the rest of Kentucky’s cottage food laws are reformed. Processors do not face many regulatory burdens, so nothing needs to be changed for these local processors. Microprocessors do face many regulatory burdens, some of which are justified to ensure food is safe. One key reform is to only require microprocessors to be certified once instead of having to pay to renew their certification every year. Microprocessors should also not have to pay for each recipe they produce. Eliminating this requirement would encourage microprocessors to create more food products, leading to a larger variety of products.

Reforming Kentucky’s cottage food laws would lead to many benefits for the people of Kentucky and the state as a whole. Local producers would of course be the most obvious class of people benefited, but consumers would also benefit along with the economy and environment.

Kentucky’s public health would greatly benefit from these reforms by giving people easier access to local and healthy foods while still ensuring these foods do not pose a health risk. Local foods are often healthier,[83] so easing the restrictions on local produce would give more people access to healthy foods. Allowing local producers to sell a greater variety of foods would also give consumers access to a larger variety of healthy foods. Keeping some of Kentucky’s regulatory burdens in place would still ensure that local produce is safe for consumption, quelling one of the common criticisms of homemade foods, but reforms could still increase access to healthy foods.

Kentucky’s economy would also greatly benefit from reforming the cottage food laws, particularly the agricultural sectors. Farmers would be able to sell more of their produce to processors or use their own produce in foods as microprocessors. Farmers would have access to more outlets for their produce or turn it into final food products worth more. This is particularly important to Kentucky where farming has played an important role in the state’s economy but has been decreasing with the decline in small farms.[84] Reforming the laws would also help Kentucky’s economy by keeping more money local.[85] Cottage foods can significantly contribute to local economies, but for Kentucky to fully realize these benefits the state must reform its laws.

On top of these health benefits and economic benefits to Kentuckians, rural Kentuckians would greatly benefit by having easier access to food sources. Creating new sources for consumers to obtain food would decrease food insecurity, particularly in rural areas. Urban areas could also benefit if producers decided to sell their products in urban areas. Kentucky was the sixth hungriest state in 2022, and by reforming the cottage food laws the state would decrease food insecurity.[86]

On top of all these direct benefits that Kentucky would see by reforming its cottage food laws, the state, and nation, would see environmental benefits. These environmental benefits largely come from the local nature of cottage foods not produced with large-scale agricultural methods.[87] These local and national benefits highlight the need for Kentucky to reform its cottage food laws to allow more food products to be sold, more sales locations, and less regulatory burdens.

Conclusion

Cottage foods offer many benefits to society ranging from health benefits, economic benefits, and environmental benefits. Cottage food laws allow for people to sell these homemade foods without having to go through the normal processes and regulations that food producers face. These laws are often passed to promote local produce to capitalize on the many benefits that come with local foods. While Kentucky has cottage food laws in place, they fail to fully promote local produce. Kentucky must reform its current laws by expanding the foods that local producers may sell, allowing local producers to sell their products in more places, eliminating the sales cap on local producers, and decreasing the regulatory burdens on local producers. Adopting these changes will allow the state to fully recognize the many benefits that come with cottage foods.

* J.D. Expected 2026, University of Kentucky J. David Rosenberg College of Law; BA Political Science, The George Washington University, 2023. I want to thank the Senior Staff Editors on the Kentucky Law Journal Online for their hard work on this piece. I also want to thank Matthew Chaney for being the best Online Content Manager I could have asked for and for having to work closely with me throughout this journey. Finally, I want to thank my parents and the rest of my family for supporting me throughout law school. Without their support this note and my law school journey would not have been possible.

[1] Nathan Ham, High Country Food Hub Sees Major Increases in Customer Sales and in Food Supply from Local Farmers, High Country Press (May 13, 2020, 3:59 PM), https://www.hcpress.com/front-page/high-country-food-hub-sees-major-increases-in-customer-sales-and-in-food-supply-from-local-farmers.html [https://perma.cc/4CG6-2ANW].

[2] Jana Caracciolo & Peggy Kirk Hall, “Cottage Food” Laws, Nat’l Agric. L. Ctr., https://nationalaglawcenter.org/state-compilations/cottagefood/ [https://perma.cc/7TL4-UB43].

[3] Id.

[4] Id.

[5] Alli Condra, Cottage Food Laws in the United States 4 (Aug. 2013).

[6] Id.

[7] Id.

[8] Id. at 10.

[9] Id. at 12.

[10] Id. at 13, 16.

[11] Id. at 14.

[12] Recent State Reforms for Homemade Food Businesses, Inst. for Just., https://ij.org/legislative-advocacy/state-reforms-for-cottage-food-and-food-freedom-laws/ [https://perma.cc/8R4W-XH4R].

[13] Condra, supra note 5, at 4.

[14] Recent State Reforms for Homemade Food Business, supra note 12.

[15] Food Security in the U.S.: Key Statistics & Graphics, Econ. Rsch. Serv., (Jan. 8, 2025) https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-u-s/key-statistics-graphics/ [https://perma.cc/FX6G-3CMV].

[16] Hojatollah Kakaei, Heshmatollah Nourmoradi, Salar Bakhtiyari, Mohsen Jalilian, & Amin Mirzaei, COVID-19 and the Sustainable Development Goals 3, (Mohammad Hadi Dehghani, Rama Rao Karri, & Sharmili Roy eds., 2022).

[17] Serpil Aday & Mehmet Seckin Aday, Impact of COVID-19 on the Food Supply Chain, 4 Food Quality and Safety 167, 169–70 (2020).

[18] Ashley C. McCarthy, Emily H. Belarmino, Farryl Bertmann & Meredith T. Niles, Food Security Impacts of the COVID-19 Pandemic: Longitudinal Evidence from a Cohort of Adults in Vermont During the First Year, 14 Nutrients 1, Mar. 24, 2022, at 1, 11.

[19] Mary Jane Angelo, Corn, Carbon, and Conservation: Rethinking U.S. Agricultural Policy in a Changing Global Environment, 17 Geo. Mason L. Rev. 593, 603 (2010).

[20] Id. at 604.

[21] Id.

[22] Sarah Schindler, Food Federalism: States, Local Governments, and the Fight for Food Sovereignty, 79 Ohio St. L.J. 761, 766 (2018).

[23] Margot J. Pollans, Drinking Water Protection and Agricultural Exceptionalism, 77 Ohio St. L.J. 1195, 1209 (2016).

[24] Id.

[25] Id. at 1211.

[26] Id.

[27] Id. at 1213.

[28] Schindler, supra note 22, at 766.

[29] Angelo, supra note 19, at 606.

[30] Id.

[31] Madison McCurdy, Health Benefits of Eating Locally, Univ. of N.H. (May 17, 2022), https://extension.unh.edu/blog/2022/05/health-benefits-eating-locally [https://perma.cc/U7LS-BD5P].

[32] Id.

[33] See id.

[34] Id.

[35] Id.

[36] Id.

[37] Id.

[38] Kentucky Proud Farmers’ Markets, Kentucky Proud, https://www.kyproud.com/programs/farmers-markets [https://perma.cc/4W7J-8Y7Y].

[39] See id.

[40]Oran B. Hesterman, Buying Local Makes Economic Sense, Fair Food Network https://fairfoodnetwork.org/from-the-field/buying-local-makes-economic-sense/ [https://perma.cc/CN9T-D9CY].

[41] Id.

[42] Id.

[43] Id.

[44] Id.

[45] Id.

[46] Id.

[47] Dave Swenson, The Regional Economic Development Potential and Constraints to Local Foods Development in the Midwest 1, 3 (Mar. 25, 2011), https://core.ac.uk/reader/6857680 [https://perma.cc/SSW7-DVBJ].

[48] Dave Shideler, Allie Bauman, Dawn Thilmany, & Becca B.R. Jablonski, Putting Local Food Dollars to Work: The Economic Benefits of Local Food Dollars to Workers, Farms and Communities, 33 Choices, 3rd Quarter 2018, at 1, 6.

[49] Id.

[50] House Bill 468, Community Farm Alliance, https://cfaky.org/house-bill-468/ [https://perma.cc/QNG4-BLU3].

[51] Selling Homemade Food in Kentucky, Inst. for Just., https://ij.org/issues/economic-liberty/homemade-food-seller/kentucky/ [https://perma.cc/ZL2L-9X2K].

[52] Id.

[53] Ky. Rev. Stat. Ann. § 217.015(56) (2024).

[54] 902 Ky. Admin. Regs. 45:090 § 2(1) (2025).

[55] Ky. Rev. Stat. Ann. § 217.136(2) (2024).

[56] § 217.136(1)(a).

[57] § 217.136(3).

[58] § 217.136(5).

[59] Id.

[60] Selling Homemade Food in Kentucky, supra note 51.

[61] § 217.136(6).

[62] § 217.136(7).

[63] § 217.136(8).

[64] § 217.136(9).

[65] Selling Homemade Food in Kentucky, supra note 51.

[66] Ky. Rev. Stat. Ann. § 217.015(57) (2024).

[67] § 217.137.

[68] 902 Ky. Admin. Regs. 45:090 § 5(9)(a) (2025).

[69] Id. § 4(1).

[70] Id. § 4(2).

[71] Id. § 4(6).

[72] Id. § 4(2)(f)-(g).

[73] Id. § 8(1).

[74] Id. § 9(1).

[75] Ky. Rev. Stat. Ann. § 217.015(57) (2024).

[76] Id.

[77] 902 Ky. Admin. Regs. 45:090 § 6 (2025).

[78] Id. § 5.

[79] Ky. Rev. Stat. Ann. § 217.137(2) (2024).

[80] 902 Ky. Admin. Regs. 45:090 § 4(4) (2025).

[81] Id. § 3(5)(b).

[82] Nadia Ramlagan, New Kentucky Department of Agriculture Program Aims to Boost Local Farm to School Partnerships, N. Ky. Trib. (Mar. 1, 2025), nkytribune.com/2025/03/new-kentucky-department-of-agriculture-program-aims-to-boost-local-farm-to-school-partnerships/ [https://perma.cc/LU9U-DPQ8].

[83] See supra Part II(C).

[84] Bill Estep, Number of Kentucky Farms and Farmers Shrinking, but Sales Are Record Breaking, Lexington Herald Leader (Feb. 27, 2024), https://www.kentucky.com/news/state/kentucky/article285924551.html [https://perma.cc/D3TB-ZJBE].

[85] See supra Part II(D).

[86] Top 10 Hungriest States in the U.S., Friends Comm. on Nat’l Legis. (Sep. 17, 2024), https://www.fcnl.org/updates/2024-09/top-10-hungriest-states-us [https://perma.cc/FF2J-EU6C].

[87] See supra Part II(B).

The Supreme Court's Goldilocks: Why the Major Questions Doctrine Is the Ideal Compromise Between Two Unattractive Extremes (Print Vol. 114 Issue 1)

The Supreme Court's Goldilocks: Why the Major Questions Doctrine Is the Ideal Compromise Between Two Unattractive Extremes

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By: Bradley P. Simpson

University of Kentucky J. David Rosenberg College of Law student, Bradley Simpson, argues that the Major Questions Doctrine, notwithstanding its interpretive flaws, strikes an appealing balance between two extremes: an administrative state incapable of acting versus an administrative state left unchecked.

Exposing Car Dealerships’ Final Hidden Sales Con: A Call for the Disclosure of Interest Rate Markups When “Helping” Buyers with Indirect Financing (Print Vol. 114 Issue 1)

Exposing Car Dealerships’ Final Hidden Sales Con: A Call for the Disclosure of Interest Rate Markups When “Helping” Buyers with Indirect Financing

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By: John C. Simms

University of Kentucky J. David Rosenberg College of Law student, John Simms, argues that car dealerships routinely and lawfully exploit consumers by secretly marking up interest rates in indirect auto financing, a practice that remains undisclosed despite imposing significant financial harm—especially on subprime and marginalized borrowers. It concludes that existing legal justifications for nondisclosure are outdated and flawed, and calls for regulatory reform requiring dealers to disclose interest rate markups to restore transparency, bargaining power, and consumer protection.

Alone in the Storm: Trump's Plans to Dismantle Federal Disaster Response Will Leave Vulnerable States Behind the Federal Preparedness and Response Elimination Agenda

Alone in the Storm: Trump’s Plans to Dismantle Federal Disaster Response Will Leave Vulnerable States Behind the Federal Preparedness and Response Elimination Agenda

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Ella Helmuth*

Introduction

On June 10, 2025, President Trump informed the press and the country that after the 2025 hurricane season, he and Homeland Security Secretary Kristy Noem plan to dismantle the Federal Emergency Management Agency (FEMA).[1] The President has shared plans to cut funding for disaster aid in general, which will come directly from the President’s office going forward.[2] Consequently, this will drastically change the landscape of emergency response and preparedness in this country.

These plans, and those detailed below, reflect President Trump’s broader aims to limit government spending on the priorities he sees as wasteful;[3] responsibilities for natural and other widespread disasters will shift onto the states. Waiting until after the 2025 hurricane season is a new timeline but not a new plan. President Trump has previously stated: “I say you don't need FEMA, you need a good state government” and called FEMA “not good.”[4] He has cut significant leadership staff from FEMA and others have left.[5] Public and individual aid is already tapering out.[6]

In January of 2025, the White House established a FEMA review council, asserting that federal response to Hurricane Helene and other disasters demonstrated a failure in FEMA’s response capabilities and implicated bureaucratic barriers to successful disaster response.[7] The review council will provide the administration and the agency with recommendations on federal disaster response. At least in part, the establishment of the review council has led the new acting administrator of FEMA, Daniel Richardson, to neglect to publish a hurricane response plan for the 2025 season, which began on June 1.[8] He does not want to “get ahead of” the review council’s recommendations.[9] Trump has taken issue with FEMA in the past over alleged political biases in the agency’s aid responses. This concern is referenced in the order establishing the review council.[10] The council has already begun soliciting feedback from individuals and organizations who have interacted with FEMA in the past.[11]

On March 18, 2025, the Trump administration released Executive Order (EO) 14,239, “ACHIEVING EFFICIENCY THROUGH STATE AND LOCAL PREPAREDNESS.”[12] The Order focuses on the role of state and local governments in disaster resiliency, preparedness, and response.[13] The EO states, “[i]t is the policy of the United States that State and local governments and individuals play a more active and significant role in national resilience and preparedness” and that preparedness is most effectively managed at state, local, and individual levels.[14] It is the position of the EO that transferring more of these responsibilities to the state will save American lives and reduce taxpayer burdens.[15] The EO also asserts that national critical infrastructure resilience policies will shift from the all-hazards approach to a risk-based approach to disaster planning, a drastic departure from traditional models that will be explored later in this article.[16]

In April 2025, the Administration also terminated the Building Resilient Infrastructure and Communities (BRIC) grant program, FEMA’s primary disaster mitigation support for states.[17] BRIC grants supported projects to mitigate risk from future disasters.[18] Communities were required to prove the projects were cost effective and would increase their resilience to such events.[19] The termination of BRIC, in concert with EO 14,239, makes clear that states are not only losing the support of the presidential administration for their preparedness, but their funding for that purpose as well.

The combination of EO 14,239 and the elimination of BRIC, Trump’s stated plans to eliminate FEMA and dismantle its response capabilities, and the broader administrative goal of reducing federal spending has made clear what states may be able to expect in the wake of disasters going forward. FEMA recently denied the provision of aid for Arkansas tornadoes, West Virginia flooding, and Washington windstorms for which officials were anticipating assistance.[20] These denials were seen by state officials as very unusual.[21] In the aftermath of those disasters, a spokesman for the National Security Council, and thus the federal emergency apparatus, said state and local governments “often remain an impediment to their own community’s resilience,” and encouraged states to take a larger role in recovery.[22] This kind of communication shift from federal officials is jarring because FEMA has been the centralized authority for major disaster response for decades.[23] Extended relief was also recently terminated for continued impacts of Hurricane Helene in North Carolina.[24] That state is far from recovered, and its leaders too are left at a loss for how to support their citizens.[25]

This analysis considers the multifaceted impacts of dismantling federal response and preparedness infrastructure as it has existed in the past, with specific analysis of the vulnerabilities created for the state of Kentucky and other high-disaster, under-resourced states. We face the reality of state capacity limitations, the fundamental flaw in the Trump Administration’s plan to turn over disaster management to the states. Second, we explore the new risk-based approach to disaster management and examine how problems with federal emergency response and preparedness have been misinterpreted as structural issues when they are actually failures of implementation. Finally, we consider the particular vulnerabilities for the state of Kentucky caused by the proposed cuts to federal disaster intervention.

EO 14,239, along with President Trump and other officials’ statements, asserts a mandate on state governments to take over their own disaster preparedness and response with limited federal support.[26] This is a misguided upheaval of a system that allows federal disaster management on a scale that could never be achieved in all fifty states, all of which, in the age of climate change, are now at higher risk than ever for major disasters.

I.               The Reality of State Capacity vs Administration Assumptions

Natural disasters in the United States are increasing in frequency and getting more expensive.[27] The United States experienced twenty-seven-billion-dollar disasters in 2024, second only to twenty-eight in 2023.[28] In this context, now is the time to ramp up federal preparedness and response measures while supporting state mitigation efforts, not depend on states with greatly varied capacities to deal with these worsening disasters.

There are major advantages to federal authority over disaster responses, including decades of institutional knowledge, economies of scale, and established systems of communication and authority. Over its history, FEMA has built up expertise and capacity in responding to complex and widespread disasters.[29] The Director of Wyoming’s Office of Homeland Security said, “There are economies of scale [that a nationwide agency provides]. States don't have that capability built to handle a disaster every single year.”[30] To exemplify these economies of scale, Andy Beshear, Governor of Kentucky, explained that the overhead costs of setting up a system at the state level capable of replicating federal disaster response would “eat up most of that money” (the federal money) distributed between all fifty states.[31]  Former FEMA leader Michael Coen said of response and mitigation measures, “Having that capability in every single state instead of having one FEMA is not the best use of tax dollars . . . .”[32] Federal investment in and management of disaster mitigation projects nationwide are essential to ensure efficient use of funds and effort. A study showed that every dollar invested in disaster mitigation by select federal agencies saves six dollars.[33]

In contrast, putting these responsibilities onto each state willfully discards decades of institutional knowledge, the efficiency of operating on a federal scale, and the expertise and resources that come with the federal workforce. States would need “thousands of additional personnel to inspect damage, distribute disaster aid and plan the rebuilding of public infrastructure.”[34] This kind of agency construction also lacks decades of institutional knowledge held by federal agencies and puts states on a serious learning curve. The potential problem is nationwide, but it becomes more urgent in considering smaller states with small budgets, where disasters still threaten serious damage. For example, West Virginia falls in the lower half of state budgets, meaning its staff and resources are limited, but has been hit with severe flooding twice in the last year.[35] A state like West Virginia attempting to build up a program capable of replicating FEMA’s response to such disasters, even with plenty of funding, would be catastrophic if not impossible.

While there are many problems with current federal response and current federal mitigation projects, the answer is not to turn these responsibilities onto the states. Federal agency response can be fragmented and inefficient, but the solution to that problem is not to further fragment response and preparation by dividing it into fifty parts.

The nation has a cooperative aid system called the Emergency Management Assistance Compact, ratified by Congress, which allows states and territories to share resources and personnel in the event of disasters.[36] This kind of coordination from the federal organization prevents competition between states over resources, including personnel. Rescinding federal management would create a situation in which states are rivals for limited resources. This would put under-resourced states like Kentucky and West Virginia at risk of being outbid by states with more competitive economies, creating a potentially dangerous and disparate system of disaster resource distribution. If all the best emergency management staff are drawn to California, smaller states would be left treading water, literally.

II.             Misdiagnosing the Problem: Lessons Learned from Hurricane Katrina

The existing structure of emergency response and preparedness in the United States places FEMA, and its comprehensive “all-hazards” approach to disasters at the forefront.[37] An “all-hazards” approach to emergency management focuses on flexible protocols that can be applied to a broad range of disasters and emergencies.[38] President Trump’s EO and policy statements would shift that approach to a risk-based protocol, a more tailored risk versus benefit strategy which would place responsibility on the states rather than FEMA.[39] The Executive Order explicitly states:

This order empowers State, local, and individual preparedness and injects common sense into infrastructure prioritization and strategic investments through risk-informed decisions that make our infrastructure, communities, and economy resilient to global and dynamic threats and hazards.[40] 

Unfortunately, what the administration sees as common sense is not universal. FEMA’s current “all-hazards” approach, when functioning correctly, allows coordination with state and local governments while ensuring that communities are prepared to respond to a wide variety of potential disasters.[41] As with any system applied to dire situations over a significant period of time, there have been both successes and failures under the “all-hazards” system (see Hurricane Katrina[42] for failure, Hurricane Sandy[43] for success). Given this time of increased and unprecedented natural disasters[44] due to climate change, changing our approach to risk-based seems reckless. Our old risks are no longer indicative of our new ones. The implementation of all-hazards can be improved, but it and the states should not be abandoned. Now is the time to be prepared for anything.

Hurricane Katrina provides evidence for maintaining federal authority and capacity in disaster response in two different ways. The existing “all-hazards” structure was fundamentally sound, but the existing tools and authorities were not properly implemented. Additionally, the federal government was not proactive enough about “pushing” resources to the states. Trump’s plan ensures that the federal government will never be sufficiently proactive by dismantling much of its ability to respond at all.

The White House report following Hurricane Katrina identified a critical flaw in response which required reform:

Our decades-old system, built on the precepts of federalism, has been based on a model whereby local and State governments wait to reach their limits and exhaust their resources before requesting Federal assistance . . . . In other words, the system was biased toward requests and the concept of “pull” rather than toward anticipatory reactions and the proactive “push” of Federal resources.[45]

The problem with federal disaster management during Hurricane Katrina was not the “all-hazards” structure itself, but rather the implementation of existing authorities and protocols. As David Feinberg noted in his argument for greater federal involvement in disaster response, much of the issue with the response to Hurricane Katrina was the slow reaction on the part of every level of government under the cooperative federalist structure.[46] The local government of New Orleans failed to call an evacuation order quickly enough to protect its citizens, the state government failed to request federal assistance in a timely manner, and the federal government did not respond to that request promptly.[47]

However, the tools for an effective response to that disaster already existed within the federal framework. In her article Katrina and the Rhetoric of Federalism, Christina Wells details how the “pull” system collapsed, but shows the fail safes for that in the existing structure of response.[48] The Catastrophic Incident Annex is part of the existing federal system that creates a proactive, overarching federal response to catastrophic disasters by allowing the President to act without a request from the governor.[49] Its use was completely justified during Hurricane Katrina, in fact it was “written for a disaster such as Katrina.”[50] It was never deployed in 2005.[51] This demonstrates that the problem was not structural inadequacy but rather the failure to properly implement existing authorities.

Catastrophes on the scale of Hurricane Katrina require a uniquely proactive federal posture compared to the disasters many states handle every year. This is not because the cooperative federalism, “all-hazards” system in place is wrong, but because the federal government has to take on different roles under different circumstances. “All-hazards” allows this type of flexibility when applied correctly. The effective application of response capabilities under catastrophic circumstances requires the federal government to use their broad authority to the fullest extent. Leaving Louisiana and Mississippi to fend for themselves during Hurricane Katrina would have created an even greater catastrophe than the unprecedented one that occurred. But it is certain that the federal government could have invoked their existing authority and better served their citizens.

Trump’s proposals would reduce federal readiness in the event of a disaster like Katrina. Executive Order No. 14,239 focuses on preparedness and the Administration plans to dismantle the response framework as it exists by abandoning the “all-hazards” approach in exchange for a risk-based approached.[52] This is a departure from the building blocks of decades of emergency preparedness and response, at the federal level and on down. The White House report shows that the government failures of Hurricane Katrina were caused, at least in part, by the lack of federal proactiveness and too much reliance on the state to act before pulling federal resources. The Trump Administration seems intent on solving this problem by creating significantly more barriers to pulling those essential resources.

This fundamental misdiagnosis of the problem with disaster management in this country as one of structurally too much federal power will create inefficiencies and discrepancies that leave states like Kentucky vulnerable to disasters. The “all-hazards” approach provides the necessary flexibility for an era of climate-driven uncertainty, while the post-Katrina analyses pointed toward greater application of federal authority (push, not pull) in a catastrophe. Abandoning both lessons simultaneously represents a dangerous step backward in national disaster preparedness.

III.           Kentucky’s Vulnerability

Shifting the structure of emergency preparedness and response away from federal agencies will have major detrimental impacts on the Commonwealth of Kentucky and other resource-constrained, high disaster occurrence states. Kentucky has received $2.9 billion in federal disaster aid since 2017.[53] In comparison, in the 2024 budget session, the Kentucky legislature implemented caps on disaster spending, allowing the Kentucky Department of Military Affairs to request up to $75 million in the 2024 fiscal year and $100 million total over the 2024 and 2025 fiscal years.[54] It is clear from the disparity in these numbers that Kentucky agencies do not currently possess the capacity to manage billions of dollars in disaster money, the expertise the federal government brings, or the benefit of the economies of scale that exist in federal disaster response. These problems occur even if the federal government pulls their direct physical assistance and distributes financial aid directly to the states, which President Trump’s statements indicate they do not plan to do.

Kentucky has received fifteen major disaster declarations since 2020 and is representative of other resource-constrained states facing a high frequency of disasters.[55] The state’s existing emergency response system has been completely overwhelmed by the frequency of disasters, as Kentucky houses eight of the nine counties in the country with the highest disaster declarations.[56] They have no capacity to do much of anything but triage, much less completely restructure to receive fewer resources from the federal government.[57]

In the year following the 2022 Eastern Kentucky floods, the federal government spent $281 million on Eastern Kentucky recovery.[58] $108 million of that went to individual assistance for flood survivors, and $49.4 million went to public assistance for infrastructure needs.[59] As referenced above, Governor Beshear explained that the overhead costs and staffing needs would be overwhelming.[60] It is simply infeasible to expect states like Kentucky to rebuild efficient disaster preparedness and response mechanisms when the federal government has been managing all fifty states from a gigantic, heavily resourced agency for the past fifty years.

Neither state nor the federal government’s response to the 2022 flooding in Eastern Kentucky, Southwestern Virginia, and West Virginia were perfect. It shone a light on issues with the National Flood Insurance Program, FEMA flood mapping, and emergency alert systems combined with lack of broadband in rural areas.[61] But the flooding did provide an excellent example of what makes state and federal coordination so important in the wake of such a devastating disaster. In many cases, we saw rapid federal response to the flooding. President Biden issued a major disaster declaration covering thirteen counties on July 29, 2022, about two days after flooding began.[62] Temporary federal housing was up in a little more than a month, providing a critical resource for the multitudes of displaced people in the state.[63] This process generally takes several months.[64] There were also federal responses that the state of Kentucky would struggle to replicate. These included interagency recovery coordination from multiple federal agencies, the removal of 409,000 tons of debris from 606 miles of creeks and streams, and a property acquisition program moving the fastest in FEMA history.[65] Kentucky and most other states would be far out of their depth in managing a response of this magnitude.

Conclusion

The Trump Administration’s plan to eliminate federal support for disaster preparedness and response, leaving these essential government functions up to the states, demonstrates a deep misunderstanding of the problems with disaster management in this country. Dismantling decades of federal action and authority will both create financial and structural inefficiencies the administration claims it wants to avoid and leave many states completely vulnerable to disasters they are without the capacity to handle. The system of cooperative federalism as it exists has mechanisms in place to take advantage of economies of scale, allow cooperation between states, and ensure the federal government is a safeguard against state and local failures. The problems of the past are of implementation, not the structure of the system. To improve efficiency and protect citizens, the administration needs to optimize the existing systems, not fragment them into fifty uncoordinated state level parts.

* Member of the Kentucky Bar; J.D. 2024, Georgetown University Law Center; BA English and BA History, Tulane University. I would like to thank my supervisors at Appalachian Citizens' Law Center, who have been supportive of my work for many years. Finally, I would like to publish this piece in memory of my grandfather, Michael Dale Johnson J.D. He was saved from his own home as a small child during flooding in Eastern Kentucky, and fiercely supported my legal education being put to use in service of our communities. He would be proud.

[1] Gabe Cohen, Trump Says He Plans to Phase Out FEMA After 2025 Hurricane Season, CNN (June 11, 2025, 9:11 PM), https://www.cnn.com/2025/06/11/politics/fema-hurricane-season-phase-out-trump [https://perma.cc/23SV-UHPX].

[2] Id.

[3] Exec. Order No. 14,239, 90 Fed. Reg. 13267 (Mar. 18, 2025).

[4] Natalie Daher, Trump’s FEMA Risks “Flying Blind” Into Hurricane Season, Axios (May 21, 2025), https://www.axios.com/2025/05/21/trump-fema-hurricane-season-disasters [https://perma.cc/A2TP-6TRK]; Ella Nilsen, Everyone Agrees FEMA Needs to Change. The Question is How, CNN (Jan. 25, 2025 4:01 AM), https://www.cnn.com/2025/01/25/climate/trump-fema-overhaul [https://perma.cc/6QFU-P264].

[5] Cohen, supra note 1.

[6] Galen Bacharier, FEMA Will Stop Matching 100% of Helene Recovery Money in North Carolina, NC Newsline (Apr. 12, 2025, 7:00 AM), https://ncnewsline.com/2025/04/12/fema-will-stop-matching-100-of-helene-recovery-money-in-nc-stein-says/ [https://perma.cc/5P77-RMYS].

[7] Exec. Order No. 14,180, 90 Fed. Reg. 8743 (Jan. 24, 2025).

[8] Gabe Cohen, FEMA Head Told Staff He Was Previously Unaware US Has a Hurricane Season, CNN (June 3, 2025, 12:08 AM), https://www.cnn.com/2025/06/02/politics/david-richardson-fema-head-unaware-hurricane-season [https://perma.cc/5SS5-U7X6].

[9] Id.

[10] Notice of the Establishment of the Federal Emergency Management Agency Review Council, 90 Fed. Reg. 11, 123 (Feb. 21, 2025).

[11] Request for Public Input on Experiences with FEMA Disaster Responses, 90 Fed. Reg. 13771 (Mar. 26, 2025).

[12] Exec. Order No. 14,239, 90 Fed. Reg. 13267 (Mar. 21, 2025).

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17]FEMA Ends Wasteful, Politicized Grant Program, Returning Agency to Core Mission of Helping Americans Recovering from Natural Disasters, Fed. Emergency Mgmt. Agency (Apr. 4, 2025), https://www.fema.gov/press-release/20250404/fema-ends-wasteful-politicized-grant-program-returning-agency-core-mission [https://perma.cc/7X7C-QVGW].

[18] FEMA Ends Building Resilient Infrastructure and Communities Program, Am. Soc'y of Civ. Eng’r (Apr. 24, 2025), https://infrastructurereportcard.org/fema-ends-bric-program/ [https://perma.cc/4ZM7-LXRT].

[19] Id.

[20] Arkansas To Appeal Federal Denial for Individual Assistance for March 14 Storm System, Ark. Dep’t Pub. Safety (Apr. 15, 2025), https://dps.arkansas.gov/news/arkansas-to-appeal-federal-denial-for-individual-assistance-for-march-14-storm-system/ [https://perma.cc/TE8W-2ZVW]; Leann Ray, FEMA's Refusal to Help Some West Virginia Counties Just a Taste of What's to Come, W. VA. Watch (Apr. 29, 2025, 5:55 AM), https://westvirginiawatch.com/2025/04/29/femas-refusal-to-help-some-west-virginia-counties-just-a-taste-of-whats-to-come/ [https://perma.cc/KLM8-Q9YE]; Alex Brown, Trump Denies Disaster Aid, Tells States to Do More, Ass’n State Floodplain Managers (May 2, 2025), https://www.floods.org/news-views/fema-news/trump-denies-disaster-aid-tells-states-to-do-more/ [https://perma.cc/4QDR-23Y7].

[21] Brown, supra note 20.

[22] Id.

[23] FEMA: A Comprehensive History of U.S. Emergency Management, EMS1 (Jan. 27, 2025), https://www.ems1.com/emergency-management/fema-a-comprehensive-history-of-u-s-emergency-management [https://perma.cc/3FVR-BHPV].

[24] Bacharier, supra note 6.

[25] See Ben Humphries, Hurricane Helene Recovery Hearing Highlights Delays, Uncertainty in Federal Aid, EDNC (Sept. 25. 2025), https://www.ednc.org/09-25-2025-hurricane-helene-recovery-hearing-highlights-delays-uncertainty-in-federal-aid/#:~:text=As%20the%20recovery%20effort%20continues,it's%20coming%20down%20too%20slowly [https://perma.cc/N93B-2DCW].

[26] Chris Teale, Trump Order Put States at the Forefront of Cyber and Natural Disaster Response, Gov’t Exec. (Mar. 21, 2025), https://www.govexec.com/management/2025/03/trump-order-put-states-forefront-cyber-and-natural-disaster-response/403961/#:~:text=The%20executive%20order%20signed%20this,rather%20than%20the%20federal%20government.&text=President%20Donald%20Trump%20earlier%20this,for%20cybersecurity%2C%20election%20info%20sharing?&text=Could%20states'%20cyber%20get%20trickier%20under%20a%20Trump%20administration? [https://perma.cc/QCA5-CE47].

[27] Adam B. Smith, 2024: An Active Year of U.S. Billion-Dollar Weather and Climate Disasters, NOAA Climate.gov (Jan. 10, 2025), https://www.climate.gov/news-features/blogs/beyond-data/2024-active-year-us-billion-dollar-weather-and-climate-disasters [https://perma.cc/W6EU-CFFN].

[28] Id.

[29] Historic Disasters, Fed. Emergency Mgmt. Agency (Feb. 27, 2025), https://www.fema.gov/disaster/historic [https://perma.cc/G2AW-YFQJ].

[30] Ming Xie, If FEMA Didn't Exist, Could States Handle the Disaster Response Alone?, Univ. Md. Balt. Cnty. (Feb. 10, 2025), https://umbc.edu/stories/if-fema-didnt-exist-could-states-handle-the-disaster-response-alone/ [https://perma.cc/Z9C5-F6GM]; Alex Brown & Kevin Hardy, Trump Wants States to Handle Disasters Without FEMA. They Say They Can’t., Stateline (Feb. 6, 2025), https://stateline.org/2025/02/06/trump-wants-states-to-handle-disasters-without-fema-they-say-they-cant/#:~:text=State%20officials%20say%20that%20while,a%20disaster%20every%20single%20year.%E2%80%9 [https://perma.cc/W3HK-DD39].

[31] McKenna Horsley, Beshear Says Dismantling FEMA Would Be 'Disastrous' Though Improvements Need to Continue, Ky. Lantern (Feb. 6, 2025), https://www.tribunecourier.com/news/beshear-says-dismantling-fema-would-be-disastrous-though-improvements-need-to-continue/article_24a2bbeb-20ed-5f04-a853-858d7c277ef5.html [https://perma.cc/32PF-PZVW].

[32] Brown, supra note 20.

[33] Nat’l Inst. Bldg. Sci., Natural Hazard Mitigation Saves: 2017 Interim Report, at 1 (2017).

[34] Lauren Sommer, Trump Wants States to Handle Disasters. States Aren't Prepared, Nat’l Pub. Radio (Mar. 21, 2025, 4:08 PM), https://www.npr.org/2025/03/21/nx-s1-5327595/trump-order-fema-states-disaster-response [https://perma.cc/V7MJ-3DYG].

[35] Gazette-Mail Editorial: WV Must Do More Better in Prepping for Emergencies, Charleston Gazette Mail (Nov. 12, 2025), https://www.wvgazettemail.com/opinion/editorial/gazette-mail-editorial-wv-must-do-better-in-prepping-for-emergencies/article_17be393c-634c-47fd-a7de-7bf4ef4639aa.html [https://perma.cc/7UD9-QTGQ]; Chapter IV: Government in West Virginia, W.V. Univ: John Chambers Coll. Bus. and Econ., https://business.wvu.edu/research-outreach/bureau-of-business-and-economic-research/economic-outlook-conferences-and-reports/economic-outlook-reports/west-virginia-economic-outlook-2021-2025/chapter-iv-government-in-west-virginia#:~:text=West%20Virginia%20Government,are%20devoted%20to%20government%20expenditures [https://perma.cc/XND7-2Y36].

[36] Emergency Management Assistance Compact, https://www.emacweb.org/ [https://perma.cc/8VX5-5XE5].

[37] See Fed. Emergency Mgmt. Agency, State and Local Guide (SLG) 101: Guide for All-Hazard Emergency Operations Planning 6-1 (1996).

[38] Bruria Adini, Avishay Goldberg, Robert Cohen, Daniel Laor, & Yaron Bar-Dayan, Evidence-Based Support for the All-Hazards Approach to Emergency Preparedness, 1 Isr. J. Health Pol’y Res. no. 40, 2012, at 1, 1.

[39] Nat’l Aeronautics Space Admin., Risk Informed Decision Making 7, 12 (Apr. 2010), https://ntrs.nasa.gov/api/citations/20100021361/downloads/20100021361.pdf [https://perma.cc/8XAR-77GN] (describing risk-based decision making framework); Exec. Order No. 14,239, supra note 3.

[40] Exec. Order No. 14,239, supra note 3, at § 1.

[41] Fed. Emergency Mgmt. Agency, supra note 37 at iii.

[42] See Peter A. Gregory, Reassessing the Effectiveness of All-Hazards Planning in Emergency Management, 7 Inquiries J. Student Pulse, no. 6, 2015, at 1.

[43] Id.

[44] Theo Rosen, There Were 27 Major Climate-Related Disasters in the U.S. in 2024, Env’t Am. (Jan. 7, 2025), https://environmentamerica.org/center/updates/there-were-27-major-climate-related-disasters-in-the-u-s-in-2024/ [https://perma.cc/6ZJC-JSU3].

[45]  Frances Fragos Townsend, The White House, The Federal Response to Hurricane Katrina: Lessons Learned 66 (2006).

[46] David L. Feinberg, Hurricane Katrina and the Public Health-Based Argument for Greater Federal Involvement in Disaster Preparedness and Response, 13 Va. J. Soc. Pol'y & L. 596, 622–24 (2006).

[47] Id. at 609–10.

[48] Christina Wells, Katrina and the Rhetoric of Federalism, 26 Miss. C. L. Rev. 127 (2007).

[49] U.S. Dep’t of Homeland Sec., National Response Plan: Catastrophic Incident Annex (Dec. 2004), https://www.dco.uscg.mil/Portals/9/CG-5R/nsarc/Catastrophic_Incident_Annex.pdf [https://perma.cc/2XFK-6QA9].

[50] Wells, supra note 48, at 140.

[51] Id.

[52] Exec. Order No. 14,239, supra note 3.

[53] McKenna Horsley, Some Kentucky Republicans Echo Trump's Complaints About FEMA After Latest Flood, Ky. Lantern (Feb. 19, 2025, 9:49 AM), https://kentuckylantern.com/2025/02/19/some-kentucky-republicans-echo-trumps-complaints-about-fema-after-latest-flood/ [https://perma.cc/W6QD-E9EX].

[54] Liam Niemeyer, Kentucky Legislature Sends State Budget Bill to Governor, Including Billions in One-Time Spending, Ky. Lantern (Mar. 29, 2024, 1:51 AM), https://kentuckylantern.com/2024/03/29/kentucky-legislature-sends-state-budget-bills-to-governor-including-billions-in-one-time-spending/ [https://perma.cc/6XHW-QF6Y].

[55] Disasters and Other Declarations, Fed. Emergency Mgmt. Agency, https://www.fema.gov/disaster/declarations?field_dv2_declaration_date_value%5Bmin%5D=2020&field_dv2_declaration_date_value%5Bmax%5D=2025&field_dv2_declaration_type_value=DR&field_dv2_incident_type_target_id_selective=All&field_dv2_state_territory_tribal_value%5B0%5D=KY&page=0 [https://perma.cc/R33M-TUTX].

[56] Associated Press, Kentucky and Vermont Top List for Highest Number of Declared Disaster Areas, Spectrum News 1 (July 23, 2024, 11:57 AM), https://spectrumnews1.com/ky/louisville/news/2024/07/23/inland-counties-top-disaster-list [https://perma.cc/Z8CR-K8H9].

[57] Virtual Meeting with Eddie Jacobs, Department of Local Government (Feb. 11, 2025) (on file with author).

[58] Commonwealth and FEMA Flood Recovery on Course One Year Later, Fed. Emergency Mgmt. Agency (Jan. 22, 2025), https://www.fema.gov/press-release/20250122/commonwealth-and-fema-flood-recovery-course-one-year-later [https://perma.cc/4NBE-AC6K].

[59] Id.

[60] Horsley, supra note 31.

[61] Casey Tolan, 'We Thought We Were Safe': Kentucky Disaster Shows How US Is Ill-Prepared and Under-Insured for Devastating Floods, CNN (Aug. 15, 2022, 7:38 AM), https://www.cnn.com/2022/08/15/us/fema-kentucky-flood-insurance-climate-change-invs/index.html [https://perma.cc/F4UE-QMZU]; Claire Carlson & Anya Petrone Slepyan, In the Face of Extreme Flooding, Rural Kentucky Lacked Forecasting and Broadband, Daily Yonder (Mar. 23, 2023), https://dailyyonder.com/rural-kentucky-floods-lack-of-forecasting-broadband/2023/03/23/ [https://perma.cc/HEW3-KSCL].

[62] DR-4663-KY Initial Notice, Fed. Emergency Mgmt. Agency (July 29, 2022), https://www.fema.gov/disaster-federal-register-notice/dr-4663-ky-initial-notice [https://perma.cc/VCD2-VLA6].

[63] Six Months and $154.6 Million Later, Eastern Kentucky Recovery Continues, Fed. Emergency Mgmt. Agency (Jan. 27, 2023) https://www.fema.gov/press-release/20250121/six-months-and-1546-million-later-eastern-kentucky-recovery-continues [https://perma.cc/CB4Z-6JMW].

[64] Id.

[65] Commonwealth and FEMA Flood Recovery on Course One Year Later, supra note 53; Six Months and $154.6 Million Later, Eastern Kentucky Recovery Continues, supra note 59.

From a Reactive to a Proactive FDA Risk Assessment in Tampon Regulation

From a Reactive to a Proactive FDA Risk Assessment in Tampon Regulation

Download a PDF

Leigha Whitridge*

Introduction

The consumption of  personal care products, cosmetics, and cleaning products exposes Americans to a wide variety of potentially harmful chemicals on a daily basis.[1] Recently, people are asking the question we often do not pause to consider: what is in this?[2] We can all imagine the list of ingredients on the back of an unassuming product like a bag of chips, a stick of deodorant, or a bottle of household cleaner. We do not know what many of these ingredients are or even how to pronounce them. The Food and Drug Administration (FDA) regulates products that reach the hands and homes of consumers,[3] but a closer look into what substances products contain is needed.

This consumer skepticism should apply to menstrual products, especially considering recent data.[4] In June of 2024, researchers at the University of California Berkeley conducted a study regarding the presence of certain chemicals and heavy metals in tampons,[5] which has stirred discussion regarding tampon regulation.[6] The study found the presence of numerous toxic substances, including lead, within tampons.[7] Even more surprising than these findings is that this study is the first of its kind.[8]

This Note argues that before a tampon can be marketed and placed on store shelves, the risk assessment within the rules and guidelines governing tampon manufacturing and marketing should be expanded to include testing for the presence of lead and, in the event that lead is present, adequate warnings. Additionally, by expanding regulations, the FDA could address issues associated with the 510(k)-clearance process and incentivize tampon manufacturers to innovate safer products. Part I explains the history of tampons and current tampon regulation under the FDA. Part II discusses the findings of and reactions to the UC Berkeley study. Part III argues for expanding the FDA’s risk assessments to include potential lead exposure through tampon use and recommends mandatory warning labels.  

I.                    Tampons and Current FDA Regulation

A.     Tampons

Menstruation, the shedding of the uterine lining, begins a woman’s menstrual cycle.[9] The menstrual cycle “prepares [a woman’s] body for possible pregnancy.”[10] A woman’s hormone production heavily influences her menstrual cycle, which may vary each cycle.[11] The menstrual cycle is composed of four phases, each of which performs a particular function in a woman’s reproductive cycle.[12] Menstrual bleeding occurs every twenty-one to thirty-five days and lasts roughly between two to seven days.[13]

A tampon is “a device that is a plug made of cellulosic or synthetic material that is inserted into the vagina and used to absorb menstrual . . . discharge [commonly referred to as a period].”[14] Tampons existed in Egyptian society, and, historically, women used sponges or wool. [15] Tampons were not popular in the United States until the 1930s.[16] In the 1980s, tampons became associated with Toxic Shock Syndrome (TSS), a potentially fatal illness.[17] Today, tampons range in size and level of absorbency, including light, regular, super, and plus.[18] Over the course of a lifetime, women spend about 2,372 days (roughly six and a half years) menstruating and use up to 11,000 tampons during this time.[19]

B.     The FDA Framework

The Federal Food, Drug, and Cosmetic Act (FFDCA) grants the FDA authority to create and enforce rules regulating a wide range of products, including food, drugs, and cosmetics.[20] The FDA’s mission is to “[protect] the public health by ensuring the safety, efficacy, and security of human . . . medical devices; and by ensuring the safety of our nation’s food supply, cosmetics, and products that emit radiation.”[21] The agency’s mission also includes “[speeding] innovations that make medical products more effective, safer, and more affordable and by helping the public get the accurate, science-based information they need to use medical products . . . to maintain and improve their health.”[22] In order to enforce the FFDCA and carry out its mission, the FDA promulgates rules that are legally enforceable and treated as law.[23] Furthermore, the FDA creates guidances in order to inform industry, the public, and its own staff of the agency’s thoughts on product regulation.[24] These guidelines aide industries in complying with rules and explore topics such as device design, testing, manufacturing, and inspections.[25]

The FDA regulates medical devices.[26] The agency categorizes medical devices into three classes (in order of low to high risk of user harm: I, II, and III).[27] Medical devices are cleared either through a Premarket Approval (PMA) or a 510(k) Premarket Notification.[28] Class III medical devices must undergo the PMA process, which is more burdensome than the 510(k) comparative process.[29] In the PMA process, manufacturers must demonstrate “reasonable assurance that the device is safe and effective.”[30] The 510(k) process consists of traditional and abbreviated 510(k) applications.[31] The abbreviated 510(k) process is meant to “streamline and expedite” the review process.[32] Through this process, manufacturers demonstrate substantial equivalence to a “predicate device,” which is a previously cleared device.[33] Substantial equivalence is defined as “having the same intended use and the same technological characteristics as a predicate device, or different technological characteristics that do not raise different questions of safety or effectiveness.”[34] To show “substantial equivalence,” manufacturers provide information that shows their medical device has the same intended use and the same technological characteristics as the predicate device.[35] After the FDA “finds a device substantially equivalent to the predicate” device, the device may be cleared for the market.[36] Under the 510(k) process, “premarket inspections of how devices were manufactured are generally not required . . . postmarket studies are not required by FDA as a condition of clearance; and . . . FDA has limited authority to rescind or withdraw clearance if a 510(k) device is found to be unsafe or ineffective.”[37] As a result of the comparative nature of the 510(k) process, manufacturers are not required to include clinical studies or to demonstrate independent safety or effectiveness of the product.[38]

C.     Tampon Regulation

Tampons are Class II medical devices and subject to few rules, but nowhere do the rules mention testing for or disclosing the presence of lead.[39] Class II medical devices represent medical devices that pose a “moderate to high risk” of user harm.[40] Currently, tampon manufactures must include labels that clearly alert consumers to the risk of TSS, as well as the tampons absorbency level.[41] Before a tampon is marketed, the device must meet 510(k) Premarket Notification requirements and performance standards.[42]

The FDA states that before marketing a device, tampon manufacturers should meet these 510(k) requirements to comply with the FFDCA and receive FDA clearance based on “substantial equivalence.”[43] If the manufacturer meets the “substantial equivalence” standard, the FDA may clear the product to be sold.[44] Tampon manufacturers may use the traditional 510(k) clearance route or the abbreviated 510(k) process.[45] The abbreviated 510(k) process allows tampon manufacturers to submit a summary report “in lieu of detailed information about testing of the device.”[46] The summary report includes a description of the device, design, a risk assessment, and a description of tests used.[47] Tampon manufacturers also must submit information required for a traditional 510(k) submission.[48] These informational requirements are embodied in the FDA’s rules and include the following:

The device name . . .. The [device] class . . .. Proposed labels, labeling, and advertisements sufficient to describe the device, its intended use, and the directions for its use … [and] a statement indicating the device is similar to and/or different from other products of comparable type in commercial distribution, accompanied by data to support the statement. This information may include an identification of similar products, materials, design considerations, energy expected to be used or delivered by the device, and a description of the operational principles of the device.[49]

The Guidance for Industry and FDA Staff Menstrual Tampons and Pads: Information for Premarket Notification Submissions (510(k)s) (Menstrual Tampon Guidelines) assists tampon manufacturers in meeting 510(k) submission requirements.[50] Concerning biocompatibility testing, The Menstrual Tampon Guidelines direct manufacturers to another FDA guidance: the Use of International Standard ISO-10993, Biological Evaluation of Medical Devices Part-1: Evaluation and Testing (ISO Guidelines).[51] Notably, the Menstrual Tampon Guideline’s chemical concerns focus on pesticide residue, and the guidance states that “[if] identical materials are used in a predicate device with the same type and duration of user contact, you may identify the predicate device in lieu of providing biocompatibility testing in your submission.”[52] The FDA created the ISO Guidelines to “assist industry in preparing . . . Premarket Notifications (510(k)s) . . . requests for medical devices that come into direct contact or indirect contact with the human body in order to determine the potential for an unacceptable adverse biological response.”[53] Manufacturers approach biocompatibility testing within “the framework of a risk management process” and complete a risk-benefit assessment that identifies potential risks, compiles available information, and addresses missing information.[54] Potential risks of any medical device include “chemical toxicity, unacceptable biological response to physical characteristics of the device, and aspects of manufacturing and processing that could alter the physicochemical characteristics of the device, which could lead to changes in the biocompatibility response.”[55] After potential risks are identified, the manufacturer submits a risk assessment for the FDA’s review.[56]

D.    Concerns with the 510(k) Clearance Process

A risk-based clearance pathway allows the FDA to devote resources to investigating higher-risk medical devices.[57] However, the lack of clinical data in 510(k) applications may impede confirming the safety of new devices.[58] If a predicate device is later found to be unsafe, a device cleared based on comparison to the deficient device may likely be unsafe as well.[59] Over time, slight differences between predicate and new devices may aggregate, resulting in a device that is substantially different from the original predicate device and possibly unsafe.[60] The Institute of Medicine issued a report in 2011 that pointed out some of these weaknesses in the 510(k) clearance process and posed a new regulatory system for medical devices.[61] The FDA did not adopt these proposed amendments, but eventually the agency encouraged manufacturers to provide “real-world evidence” during market clearance.[62] Post-market regulations have also been introduced to compensate for these weaknesses, but the “substantial equivalence” standard still guides the 510(k) clearance process.[63] While high risk medical devices are more likely to be recalled than a medical device cleared through the 510(k) process, the vast majority of recalls are for medical devices cleared through the 510(k) process.[64] The sheer number of medical devices cleared through the 510(k) process raises public safety concerns.[65]

Congress and the FDA encourage the “least burdensome approach” to risk assessment, which includes the abbreviated 510(k) pathway.[66] This approach allows manufacturers to provide “the minimum amount of information necessary to adequately address a relevant regulatory question or issue through the most efficient manner at the right time.”[67] The 510(k) premarket notification applications for tampons appear to be fairly bare bones.[68] Additionally, the Menstrual Tampon Guidelines, per the least burdensome approach, do not require clinical studies.[69] When clinical studies are involved, they revolve around irritation, allergies, effects on vaginal microflora, abrasions, ulcerations, lacerations, and residual fiber retention, not the presence of lead.[70]

A tension exists between ensuring accessibility of tampons in a large market and prioritizing the safety of products.[71] The term “period poverty” refers to the inability to obtain menstrual products and a lack of education regarding menstruation.[72] Women in low-income households, unhoused women, and women in college are disproportionately affected by period poverty.[73] While many women struggle to afford menstrual products, an increased cost of tampon production due to expanded regulations may exacerbate this issue.[74] The FDA’s “least burdensome” approach and attempts to “streamline and expediate” marketing medical devices through the 510(k) clearance process are virtuous efforts. Balance must be kept in perspective while researchers and legislatures move forward with proposed recommendations to address toxic substances found within tampons.

II.  The UC Berkeley Study and Safety Concerns with Lead

A.     Findings from the UC Berkeley Study

The UC Berkeley study tested thirty tampons, ranging in materials used.[75] The study included both organic and non-organic tampons.[76] The researchers omitted brand names of products included in the study but noted they were popular.[77] Heavy metals (including, but not limited to, lead, arsenic, chromium, nickel, barium, cadmium, mercury, and vanadium) were present in tested tampons.[78] The majority of women who menstruate (fifty-two to eighty-six percent) use tampons, making this a pressing issue.[79] The study found that women may use more than 7,400 tampons during their lifetime, which is a conservative estimate considering other findings.[80] The study acknowledges its limitations, including the small sample size and inability to explore differences in “absorbency, lot number, brand, or manufacturer.”[81] The study did not address vaginal absorbency or the ability of metals to leach into the body’s systematic circulation through the lining of the vagina.[82] Researchers concluded that more standardization may be necessary during tampon production.[83]

B.     Lead and Effects of Exposure

Lead is one of the most notable metals found in the UC Berkeley study and was present in all tampons tested.[84] The presence of lead in tampons is concerning since lead has known negative health effects and previous research has concluded that there is no safe level of exposure to lead.[85] Additionally, lead may be stored within bones for decades.[86] According to the UC Berkely study, even minimal exposure to lead “can result in neurobehavioral impacts in adults and children, including decreased cognitive function such as impaired attention, memory, and learning ability.”[87] Lead exposure in adults can also cause high blood pressure, joint pain, memory and focus deficiencies, and miscarriage, premature birth, stillbirth, or harm to a woman’s reproductive health.[88] In general, heavy metal exposure has also been linked with infertility.[89] The UC Berkeley study also raises matter for concern considering some women begin using menstrual products in adolescence.[90] Most women begin their menstrual cycle between the ages of ten to fifteen.[91] Children also absorb more lead when exposed, and exposure may negatively affect a child’s cardiovascular and reproductive systems, decrease kidney function, and increase blood pressure.[92]

C.     Responses to the UC Berkeley Study

Following the study, members of Congress called for greater research and standards in tampon regulation.[93] The FDA promptly announced and published its research initiatives.[94] The FDA’s report included a literature review of nine articles discussing the presence of certain medals and substances in tampons.[95] The agency admitted to “regulatory science gaps and challenges” and “[a] need for tools/methods . . . that facilitate and improve consistency of toxicological risk assessments for medical devices” and adequate “guidelines for evaluating biocompatibility of medical devices . . ..”[96] Despite the FDA’s lack of understanding of a “worst-case scenario of metal exposure” during tampon use, it deems previously marketed tampons as safe.[97]

Not everyone found cause for alarm following the UC Berkeley study.[98] The American College of Medical Toxicology (ACMT) found that the study may promote unnecessary panic.[99] The ACMT noted that in order to understand health effects of tampon use, “we would need to understand how the dose delivered [through tampon use] compares to the doses where adverse effects are expected to occur.”[100] The report used estimates to conclude that it’s unlikely the amount of lead absorbed from a tampon would be harmful.[101] Nevertheless, the report still recommended further research to “understand whether absorbed doses of metals . . . approach harmful concentrations.”[102] Another hesitant reaction claimed that the study was inflammatory and exposure to metals through a single, light absorbency tampon appears to be “negligible.”[103] The UC Berkeley researchers characterized this argument as “misleading,” “premature,” and “unjustified” [104] for the following reasons:

(1) Light absorbency tampons are not commonly used. [Larger absorbency ranges] are more common. (2) Menstruators who use tampons typically use 3–4 a day, ranging from 2 to . . . 18 . . . (3) No safe level of [lead] exposure exists no matter the route of exposure. (4) Chemical absorption has been shown to be more efficient via the vaginal route compared to the oral route of exposure. In particular, unlike the oral exposure route, chemicals absorbed vaginally bypass first-pass metabolism by the liver and directly enter systemic circulation . . . [Concluding there is] negligible risk based on exposure to a single light tampon is scientifically unsupported.[105]

The UC Berkeley study simply emphasized the need for continuing research.[106] It cannot be said that the potential lead exposure is “negligible,” nor can it be said that the potential lead exposure is currently harming tampon users.[107] However, it can be said that tampon use is a potential source of lead exposure throughout a woman’s lifetime.[108] We cannot do nothing with this information simply because the full picture is not clear. A potential risk is a risk, nonetheless.

III.  Solutions

A.     Updating the Rules and Guidelines

i.                    Updating Risk Factors Within the Guidelines

First, relevant guidelines should include lead exposure as a risk associated with tampon use. Manufacturers should be advised to address this risk during the clearance process. The Menstrual Tampon Guidelines contain a chart listing risks associated with tampon use, as well as corresponding mitigation strategies.[109] These risks include adverse vaginal injury, vaginal infection, TSS, and adverse tissue reaction.[110] Labeling is a recommended mitigation strategy for all identified risks in the table.[111] Other concerns associated with tampons include chemical residues, absorbency ranges, the growth of bacteria that may cause TSS, irritation, allergies, effects on vaginal microflora, abrasions, ulcerations, lacerations and residual fiber retention.[112] However, the presence of lead is not identified anywhere within the Menstrual Tampon Guidelines or in the table of identified risks.[113] Lead exposure should be included in this chart of identified risks, and labeling warnings should be the corresponding mitigation strategy.  

Additionally, the ISO Guidelines state that unnecessary testing may be avoided considering available literature, clinical experiences, animal study experiences, consensus standards, and comparison to previously cleared devices. [114] Similar to the gaps identified in the 510(k) clearance process, a comparative analysis to previously marketed devices provides manufacturers with a pathway to conclude that biocompatibility has been properly addressed without independent clinical studies or source material testing for the presence of lead.[115] Since lead is naturally occurring in soil or may be added to tampons during the manufacturing process, the lead content in source material used in a new device may differ substantially from a predicate device.[116] Therefore, comparing a new device to a previously marketed device may not establish the absence of lead in the new device. In order to ensure the safety of tampons and alert consumers of the presence of lead, if needed, comparison to a predicate device should not be considered in a risk-based analysis of biocompatibility.

ii.                  New Legally Binding Warnings

Although the guidelines appear robust, they are not legally binding.[117] The FDA should mandate lead disclosures in the event lead is discovered within a tampon, describing the possible presence of lead and stating that lead is associated with negative health effects. This would provide women with a bare minimum understanding of possible lead exposure from tampon use.

A more informed decision may result in women purchasing alternative menstrual products rather than blindly purchasing products that may contain lead. This would offer greater decision-making power to women who suffer from reproductive conditions with unknown etymologies, those who want to avoid lead exposure, and those who want to control what substances enter their body. This proposed change incentivizes innovation. Requiring tampon manufacturers to disclose the presence of lead in their products would create a need in the market for a “lead-free” tampon and incentivize other manufacturers to create a novel tampon. If women gravitate towards other menstrual products, this may also place pressure on tampon manufacturers to improve the quality of tampons and produce lead-free products. In turn, the FDA would further its mission of accelerating the innovation of medical devices to protect the public health.[118]

B.     More Proactive Risk Assessment is Needed

i.                    Recalling the History of Menstrual TSS

A more proactive approach to risk is at the heart of this Note. In the face of the unknown, the FDA should not wait to find out the possible ramifications of lead exposure through tampon use before requiring manufacturers to inform consumers of what they are purchasing. While there are arguments that exposure to lead through tampon use may not be harmful,[119] the unknown health effects of lead exposure through tampon use presents a risk in itself.[120] The sphere of women’s health is full of unknowns and a lack of research.[121] Some health conditions that women suffer from, including endometriosis, uterine fibrosis, and ovarian cancers do not have known causes.[122] The uncertainty surrounding these etymologies and the unknown absorbency of vaginal and uterine tissues are strong reasons to create rules giving women an informed decision when purchasing menstrual products. While burdensome approaches like complete disclosure of every chemical or ingredient within tampons may not be possible, the FDA’s “least burdensome approach,” should not be the attitude towards this facet of tampon regulation.  

This is not the first time that tampon use has been under scrutiny.[123] TSS emerged in the 1970s, but awareness of the illness grew in the 1980s.[124] The illness presents as a multitude of symptoms, including “high fever, sunburn-like rash, desquamation, hypotension, and abnormalities in multiple organ systems.”[125] In the context of menstruation, a bacteria,  staphylococcus aureus, grows within a tampon, “cross[es] the vaginal epithelium, enter[s] systemic circulation,” and causes illness.[126] In the 1980s, studies determined that the overwhelming majority of TSS cases began during menstruation, and TSS was associated with continuous use of tampons and use of high absorbency tampons.[127] By the end of 1980, thirty-eight of the 772 women who suffered from menstrual TSS lost their lives.[128] In 1982, the FDA required manufacturers to produce labels warning consumers of TSS risks, pointing to the FFDCA, which calls for regulators to “prevent harm, even if the regulator is less than certain that harm is otherwise inevitable.” [129] These requirements did not include standardized absorbency ranges.[130] The terms “super” or “regular” varied between brands, so women were unable to compare absorbency ranges between brands.[131] In 1987, the CDC published a study that established a positive correlation between tampon absorbency size and the risk of TSS.[132] On August 20, 1987, the Public Citizen Health Research Group (Public Citizen) petitioned for the FDA to timely address the lack of industry-wide standardized absorbency ranges.[133] The FDA responded with proposed regulations to standardize absorbency ranges between brands.[134] While a rule was proposed, the FDA received comments and made amendments.[135] In 1989, Public Citizen filed suit, seeking rules to be enacted at once while the FDA was taking “unreasonable delay” in enacting “long-needed regulations.”[136] On August 28, 1989, the court granted Public Citizen declaratory and injunctive relief, ordering the FDA to enact a rule within two months.[137] The presiding judge characterized the FDA as “lethargic” and noted the agency’s failure in executing its mission to protect the health of the public.[138] A final rule was issued effectuated on March 1, 1990.[139] These labeling requirements alerted women of absorbency levels and terms identifying the level of absorbency indicated the same level of absorbency across brands.[140]

The history of TSS illustrates that warnings labels do prove useful. By 1990, the number of TSS cases decreased dramatically.[141] And in 2018, cases continued to decrease to a rate of 1 per 100,000 women.[142] The decrease in cases is linked to the production of lower absorbency tampons and the FDA’s new labeling requirements.[143] Tampon packaging now describes the cardinal warning signs and symptoms of TSS, how to prevent TSS, and what to do if the illness presents.[144] Public awareness and prevention of menstrual TSS are also contributory factors in the drastic decrease in TSS cases.[145] After the delay in rules requiring TSS labeling, people have asked if harm could have been avoided.[146] We should not ask the same question.

ii.                  Potential Challenges for Future Litigation

Another reason to include warning labels and shift the burden of weighing risk onto consumers is that potential litigation surrounding tampon use may be difficult on manufacturers and plaintiffs. It may be costly for manufacturers to pay plaintiffs if lead exposure through tampon use is clearly linked with harm. This may lead to the increase costs of tampons, exacerbating period poverty.[147] On the flip side, future plaintiffs may face difficulties establishing harm specifically linked with tampon use. Class action lawsuits require certification of a class.[148] In order for a class to be certified, the plaintiffs in the potential class must demonstrate that the disputed issue is common to the class and that the class’s claims or defenses are “typical” to the class.[149] A range of injuries suffered would not likely be considered “typical.” The inability to prove the cause of certain conditions, like endometriosis, and the lack of available research in this area could provide a defense against claims alleging that lead exposure through the use of tampons caused injury.[150] Additionally, because there is an array of tampon brands, it may be difficult to find a class of women that have used the same, singular brand of tampon throughout their lifetimes.

Willis-Albrigo and Wright v. The Procter & Gamble Co. highlights potential weaknesses in future plaintiffs’ claims.[151] The plaintiffs there brought their case soon after the UC Berkeley study was published.[152] They claimed that defendant Procter & Gamble’s failure to disclose that its products contained lead, violated state law, and should result in economic damages since the plaintiffs would not have purchased the tampons had they known the tampons contained lead.[153] The defendant highlighted that the plaintiffs were unable to prove that lead leeches from tampons into the body and asked the court to “give no weight” to claims that tampon use was unsafe.[154] The defendants also pointed out that the plaintiffs’ injuries must be “actual and imminent, not conjectural or hypothetical.”[155] This kind of challenging litigation may be avoided if women are able to judge risk for themselves.  

Conclusion

In order to uphold its mission of providing safe, effective, and innovative products that do not harm the public health, the FDA should require manufacturers to warn women of the presence of lead, a material known to be unsafe,[156] in a product they use over a lifetime. Despite the less-than perfect knowledge surrounding the potential risks of lead exposure through tampon use and the lack of research regarding vaginal and uterine absorbency, there is conclusive research about lead.[157] This conclusive data should be reason enough to warn women of potential exposure, rather than waiting to see what happens. The benefits of a risk-based approach allows the FDA to devote resources and attention to high-risk medical devices, quickly clear lower-risk medical devices, and ease production burdens on manufacturers.[158] These benefits are precisely why this Note focuses narrowly on the presence of lead in tampons and suggests labeling requirements. Lead warning labels would address safety concerns over the current “substantial equivalence” standard used in the regulation of tampons while keeping in mind those who are affected by period poverty.

            Concern over possible lead exposure through tampon use is not frivolous, dramatic, nor is it unnecessary. The lack of awareness of the “worst-case scenario of metal exposure” should not be a reason to continue marketing these medical devices under a system that does not address the risk of lead exposure. This lack of awareness should drive more robust labeling. The unknown is a risk in itself that women should be aware of. Beyond potential health risks, this Note hints at informed decision-making. A proactive approach to risk assessment would shift the burden of risk assessment to consumers. Women, provided with more information through labels, would be the ultimate weighers of risk. Women should be decision makers in preventing possible exposure of their bodies to lead, especially considering that there are unavoidable avenues of lead exposure.[159] The FDA has identified some risks to weigh,[160] but beyond that, determining who is weighing the risks is just as important. And in order to weigh the risks of lead exposure, women must first be informed of the potential exposure through tampon use and that lead is associated with negative health effects.

* J.D. Expected 2026, University of Kentucky J. David Rosenberg College of Law; BA Economics, minor in English 2022, The University of Alabama. I would like to thank Professor Shavonnie Carthens for her guidance while writing this Note, as well as the Senior Staff Editors who helped edit this piece. Finally, I would like thank Ben, my supportive fiancé.

[1] Potentially Toxic Chemicals in Personal Care Products, N.Y. Health Found. (June 4, 2018), https://nyhealthfoundation.org/resource/fact-sheet-potentially-toxic-chemicals-in-personal-care-products [https://perma.cc/BM7N-2CBK].

[2] Gary Drenik, Beyond the Label— Consumers Want the Truth About Product Ingredients, Forbes (July 18, 2024,  10:00 AM), https://www.forbes.com/sites/garydrenik/2024/07/18/beyond-the-label--consumers-want-the-truth-about-product-ingredients/ [https://perma.cc/8CNW-CV3V ] (discussing the “better-for-you trend” present on social media platforms); see, e.g., Adrienne Crezo, Red 3: FDA Finally Bans Cancer-Causing Food Dye, Ctr. for Sci. in the Pub. Int. (Jan. 15, 2025), https://www.cspinet.org/cspi-news/red-3-fda-finally-bans-cancer-causing-food-dye [https://perma.cc/4NH5-EMHM].

[3] What Does FDA Regulate?, U.S. Food and Drug Admin. (Mar. 29, 2024), https://www.fda.gov/about-fda/what-we-do/what-does-fda-regulate [https://perma.cc/C65Y-S6CM].

[4] See generally Jenni A. Shearston, Kristen Upson, Milo Gordon, Vivian Do, Olica Balac, Khue Nguyen, Beizhan Yan, Marianthi-Anna Kioumourtzoglou & Kathrin Schilling, Tampons as a Source of Exposure to Metal(loid)s, Env’t Int’l, Aug. 2024, at 1 (discussing the discovery of heavy metal within tampons).

[5] Id. at 2.

[6] This note focuses specifically on the presence of lead within tampons. For reactions to the UC Berkeley study and discussions on proposed legislation that focus on complete disclosure of all tampon ingredients and additives, see Pamela Mejia & Jeannie Mancheno, Congress, Intensifies Tampon Safety Efforts and FDA Takes Steps to Respond, Mintz (Sept. 25, 2024), https://www.mintz.com/insights-center/viewpoints/2146/2024-09-25-congress-intensifies-tampon-safety-efforts-and-fda-takes [https://perma.cc/UJE6-XTCL]; Judith Beck & Charlotte Oram, Tampons: Looking Beyond Toxic Shock, Sci. for the People, Sept.–Oct. 1981, at 12; Rebekah Ninan, Legal Responses to the Potential Dangers of Menstrual Products, The Petrie-Flom Ctr. (Nov. 4, 2024), https://petrieflom.law.harvard.edu/2024/11/04/legal-responses-to-the-potential-dangers-of-menstrual-products [https://perma.cc/98HS-C648]; Erica Zurek, Federal Rules Don’t Require Period Product Ingredients on Packaging Labels. States are Stepping In, CBS News (Apr. 27, 2023, 5:00 AM), https://www.cbsnews.com/news/menstrual-pads-tampons-fda-ingredients-labels [https://perma.cc/2LQ9-L4Z4].

[7] Shearson et al., supra note 4, at 5.

[8] Id. at 2.

[9] Menstrual Cycle, Cleaveland Clinic (Dec. 9, 2022), https://my.clevelandclinic.org/health/articles/10132-menstrual-cycle [https://perma.cc/H8ZJ-PD8B].

[10] Id.

[11] See Megan Fallon, Reckless Regulation: The Frightening Truth Behind Feminine Hygiene Products, 16 Elon L.R. 315, 317–20 (2024); Jessica E. McLaughlin, Menstrual Cycle, Merck Manual (July 2025), https://www.merckmanuals.com/home/women-s-health-issues/biology-of-the-female-reproductive-system/menstrual-cycle [https://perma.cc/46E7-3ME5].

[12] The Menstrual Cycle, Better Health Channel, https://www.betterhealth.vic.gov.au/health/conditionsandtreatments/menstrual-cycle# [https://perma.cc/JQD5-UAD5].

[13] Menstrual Cycle: What’s Normal, What’s Not, Mayo Clinic (Apr. 22, 2023), https://www.mayoclinic.org/healthy-lifestyle/womens-health/in-depth/menstrual-cycle/art-20047186 [https://perma.cc/8AEM-Z8JD].

[14] 21 C.F.R. § 884.5470(a) (2025).

[15] Fallon, supra note 11, at 319; Rainey Horwitz, Menstrual Tampon, Ariz. State Univ. (May 25, 2020), https://embryo.asu.edu/pages/menstrual-tampon [https://perma.cc/UQ9Z-JABP]; Alice S. Weissfeld, The History of Tampons: from Ancient Times to an FDA-Regulated Medical Device, 32 Clin. Microbiology Newsl. 73, 73 (2010).

[16] Elianna Spitzer, What’s in Your Tampon? Increasing Transparency in Menstrual Products, 48 Seattle Univ. L. Rev. 229, 234 (2024).

[17] Id. at 236; see infra, Part III.B.i.

[18] Fallon, supra note 11, at 320; Tracee Cornforth, What Light, Regular, Super and Other Tampon Absorbencies Mean: Ratings Helps You Select the Safest Tampon Option, verywellhealth (June 29, 2023), https://www.verywellhealth.com/what-do-tampon-absorbency-ratings-mean-2721890 [https://perma.cc/94PR-P5YW].

[19] Menstruation Facts and Figures, Absorbent Hygiene Prod. Mfr. Ass’n., https://www.ahpma.co.uk/menstruation_facts_and_figures [https://perma.cc/2P38-5F9F]; Jasmine Wang, The Mystery of Tampon Regulation, The Regul. Rev. (Sept. 2, 2021), https://www.theregreview.org/2021/09/02/wang-mystery-tampon-regulation [https://perma.cc/KTU6-99EW].

[20] U.S. Food and Drug Admin., supra note 3; 21 U.S.C. §371(a).

[21] What We Do, U.S. Food and Drug Admin. (Nov. 21, 2023), https://www.fda.gov/about-fda/what-we-do#mission [https://perma.cc/G5LJ-5LBH].

[22] Id.

[23] FDA Rules and Regulations, U.S. Food and Drug Admin. (Apr. 9, 2024), https://www.fda.gov/regulatory-information/fda-rules-and-regulations [https://perma.cc/CZ38-FKPY].

[24] Guidances, U.S. Food and Drug Admin. (Jan. 17, 2025), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/guidances#:~:text=In%20general%2C%20FDA's%20guidance%20documents,or%20statutory%20requirements%20are%20cited [https://perma.cc/R64V-LZCS].

[25] Background: FDA Good Guidance Practices, U.S. Food and Drug Admin. (Dec. 17, 2024), https://www.fda.gov/regulatory-information/guidances/background-fda-good-guidance-practices [https://perma.cc/J94A-NVRS]. 

[26] Overview of Device Regulation, U.S. Food and Drug Admin. (Jan. 31, 2024), https://www.fda.gov/medical-devices/device-advice-comprehensive-regulatory-assistance/overview-device-regulation [https://perma.cc/F3SY-6A7A].

[27] Judith A. Johnson, Cong. Rsch. Serv., R42130, FDA Regulation of Medical Devices 20–21 (2012); Amanda K. Sarata, Cong, Rsch. Serv., IN12441, FDA Regulation of Tampons 1 (2024).

[28] Johnson, supra note 27, at 4.

[29] Id.; Jonathan R. Dubin, Stephen D. Simon, Kirsten Norrell, Jacob Perera, Jacob Gowen & Akin Cil, Risk of Recall Among Medical Devices Undergoing US Food and Drug Administration 510(k) Clearance and Premarket Approval, 2008–2017, 4 JAMA Network, May 6, 2021, at 1, 2.

[30] Johnson, supra note 27, at 4; see Sarata supra note 27, at 1; see Regulatory Controls, U.S. Food and Drug Admin. (Mar. 27, 2018), https://www.fda.gov/medical-devices/overview-device-regulation/regulatory-controls [https://perma.cc/9X3T-GLUA]. 

[31] Johnson, supra note 27, at 9.

[32] Id. at 10.

[33] Id. at 4.

[34] Sarata, supra note 27, at 2.

[35] Johnson, supra note 27, at 4.

[36] See id. at 9.

[37] Id. at 10. 

[38] Id. at 9; Dubin et al., supra note 29, at 2.

[39] See 21 C.F.R. § 884.5470 (2025); Mejia & Mancheno, supra note 6; Sarata, supra note 27, at 1; The Facts on Tampons—and How to Use Them Safely, U.S. Food and Drug Admin. (Jan. 31, 2025), https://www.fda.gov/consumers/consumer-updates/facts-tampons-and-how-use-them-safely [https://perma.cc/5N37-TAEB].

[40] Regulatory Controls, U.S. Food and Drug Admin. (Mar. 27, 2018), https://www.fda.gov/medical-devices/overview-device-regulation/regulatory-controls [https://perma.cc/4JX5-M77A]. Class II medical devices pose a higher risk of harm compared with Class I medical devices, and a lower risk of harm compared with Class III medical devices. Class II medical devices are subject to general and special controls.

[41] 21 C.F.R. § 801.430 (2025); see infra Section III.B.i. 

[42] Sarata, supra note 27, at 1; see 21 C.F.R. § 801.430 (2025); U.S. Food and Drug Admin., Menstrual Tampons and Pads: Information for Premarket Notification Submissions (510(k)s) (2005).

[43] Sarata, supra note 27, at 2.

[44] Id. at 1–2. 

[45] Id. at 2.

[46] Id. 

[47] Id.

[48] Johnson, supra note 27, at 20.

[49] 21 C.F.R. § 807.87(a)–(f) (2025).

[50] See U.S. Food and Drug Admin., supra note 42.

[51] See id. at 11.

[52] Id.

[53] U.S. Food and Drug Admin., Use of International Standard ISO 10993-1, “Biological Evaluation of Medical Devices - Part 1: Evaluation and Testing Within a Risk Management Process” 1 (2023).

[54] Id. at 6.

[55] Id.

[56] Id.; see Sarata, supra note 27, at 2.

[57] Johnathan J. Darrow, Jerry Avorn & Aaron S. Kesselheim, FDA Regulation and Approval of Medical Devices: 1976–2020, 326 JAMA Network 420, at 427 (2021).

[58] Id. at 428.

[59] Id.

[60] Id.

[61] Id.

[62] Id.

[63] Id.; Dubin, supra note 29, at 2.

[64] Dubin, supra note 29, at 5–6.

[65] Id. at 8.

[66] U.S. Food and Drug Admin., The Least Burdensome Provisions: Concept and Principles 4 (2019).

[67] Id.

[68] See, e.g., 510(k) Premarket Notification, U.S. Food and Drug Admin. (Oct. 27, 2025), https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfpmn/pmn.cfm?start_search=1&Center=&Panel=&ProductCode=&KNumber=&Applicant=&DeviceName=unscented%20tampon&Type=&ThirdPartyReviewed=&ClinicalTrials=&Decision=&DecisionDateFrom=&DecisionDateTo=03%2F02%2F2025&IVDProducts=&Redact510K=&CombinationProducts=&ZNumber=&PAGENUM=500 [https://perma.cc/J8EP-BCQE] (providing a database of traditional and abbreviated releasable 510(k) applications from tampon manufacturers).

[69] U.S. Food and Drug Admin., supra note 42, at 12.

[70] Id.

[71] See Medical Device Safety and the 510(k) Clearance Process, U.S. Food and Drug Admin. (Sept. 6, 2023), https://www.fda.gov/medical-devices/510k-clearances/medical-device-safety-and-510k-clearance-process [https://perma.cc/3JLZ-UWQK].

[72] Katie Krumperman, Period Poverty in the United States, Ballard Brief (Feb. 2023), https://ballardbrief.byu.edu/issue-briefs/period-poverty-in-the-united-states [https://perma.cc/VR6H-TY6J].

[73] Id. 

[74] See id.

[75] Shearston et al., supra note 4, at 2.

[76] Id.

[77] Id.

[78] Id. at 5.

[79] Id. at 1; Fallon, supra note 11, at 317.

[80] Shearston et al., supra note 4, at 1; see Wang, supra note 19.

[81] Shearston et al., supra note 4, at 7.

[82] Id.

[83] Jenni A. Shearston, Kristen Upson, Milo Gordon, Vivian Do, Olgica Balac, Khue Nguyen, Beizhan Yan, Marianthi-Anna Kioumourtzoglou & Kathrin Schilling, Communicating Risk in the Face of Data Gaps: Toxic Metals in Tampons, 194 Env’t Int’l, Dec. 1, 2024, at 1.

[84] Shearston et al., supra note 4, at 5.

[85] See id.; Lead in Food and Foodwares, U.S. Food and Drug Admin. (Jan. 6, 2025), https://www.fda.gov/food/environmental-contaminants-food/lead-food-and-foodwares [https://perma.cc/7MCS-73ZS]; Lead Poisoning, World Health Org. (Sept. 27, 2024), https://www.who.int/news-room/fact-sheets/detail/lead-poisoning-and-health [https://perma.cc/8EKZ-KX44].

[86] Shearston et al., supra note 4, at 5.

[87] Id. 

[88] Lead Poisoning, Mayo Clinic (Jan. 21, 2022), https://www.mayoclinic.org/diseases-conditions/lead-poisoning/symptoms-causes/syc-20354717 [https://perma.cc/X98Z-HGZH]; About Lead and Other Heavy Metals and Reproductive Health, Ctr. for Disease Control (Feb. 14, 2024), https://www.cdc.gov/niosh/reproductive-health/prevention/lead-metals.html#:~:text=Working%20with%20lead%20or%20other,affect%20a%20baby's%20developing%20brain [https://perma.cc/HC2J-8QER].

[89] Jie Lin, Xiaoyan Lin, Jiahui Qiu, Xiumi You & Jinbang Xu, Association Between Heavy Metal Exposure and Infertility Among American Women Aged 20–44 Years: A Cross-Sectional Analysis from 2013 to 2018 NHANES Data, 11 Frontiers  Pub. Health, Feb. 13, 2023, at 1, 5.

[90] Fallon, supra note 11, at 317. See Talking to Your Child About Periods, Nemours KidsHealth (Oct. 2018), https://kidshealth.org/en/parents/talk-about-menstruation.html [https://perma.cc/5PG2-HVB9].

[91] Talking to Your Child About Periods, supra note 90.

[92] Lead Poisoning, Ctr. For Disease Control (Apr. 10, 2024), https://www.cdc.gov/lead-prevention/symptoms-complications/index.html [https://perma.cc/8MSX-5XF4]; What are Some of the Health Effects of Lead?, U.S. Env’t Prot. Agency (Jan. 13, 2025), https://www.epa.gov/lead/what-are-some-health-effects-lead [https://perma.cc/GRB9-W3CS].

[93] Mejia & Mancheno, supra note 6.

[94] Biocompatibility and Toxicology Program: Research on Medical Devices, Biocompatibility, and Toxicology, U.S. Food and Drug Admin. (Dec. 23, 2024), https://www.fda.gov/medical-devices/medical-device-regulatory-science-research-programs-conducted-osel/biocompatibility-and-toxicology-program-research-medical-devices-biocompatibility-and-toxicology.

[95] Id.

[96] Id.

[97] Id.

[98] See Mattais Öberg, Assessing the Risk of Toxic Metals in Tampons: Legitimate Concern or Misleading Alarm?, 192 Env’t Int’l, Oct. 9, 2024, at 1; Mehruba Anwar Parris, Maryann Mazer-Amirshahi, Diane P. Calello & Andrew I. Stolback, ACMT Position Statement: No Evidence that Tampons Cause Metal Poisoning, 21 J. Med. Toxicology 106, 107 (Dec. 27, 2024).

[99] Parris et al., supra note 98, at 107.

[100] Id. at 106.

[101] Id. at 106–07.

[102] Id. at 107.

[103] Öberg, supra note 98, at 1; see also Shearston et at., supra note 83, at 1. 

[104] Shearston et al., supra note 83. 

[105] Id.   

[106] Id.

[107] See id.

[108] See Shearston et at., supra note 4, at 2.

[109] U.S. Food and Drug Admin., supra note 42, at 9.

[110] Id.

[111] Id.

[112] Id. at 10–12.

[113] Mejia & Mancheno, supra note 6, at 2; see id.

[114] U.S. Food and Drug Admin., supra note 42, at 12.

[115] Id. at 11.

[116] See Shearston et al., supra note 4, at 6; Lead in Soil, U.S. Env’t. Prot. Agency (Aug. 2020), https://www.epa.gov/sites/default/files/2020-10/documents/lead-in-soil-aug2020.pdf [https://perma.cc/A3Z3-RXTX].

[117] U.S. Food and Drug Admin., supra note 42, at 1; see also Erica Seiguer & John J. Smith, Perception and Process at the Food and Drug Administration: Obligations and Trade-Offs in Rules and Guidances, 60 Food and Drug L. J. 17, 20 (2005).

[118] What We Do, supra note 21.

[119] See Öberg, supra note 98; Shearston et al., supra note 83; Parris et al., supra note 98.

[120] See Shearston et al., supra note 83. 

[121] World Economic Forum, 5 Conditions That Highlight the Women’s Health Gap, Gavi (May 6, 2024), https://www.gavi.org/vaccineswork/5-conditions-highlight-womens-health-gap [https://perma.cc/Z9YT-YV9G];  Women’s Health: Why is the Health of at Least Half the Global Population So Often Overlooked?, World Economic Forum (Jan. 2, 2023), https://www.weforum.org/stories/2023/01/women-health-gap-davos-2023 [https://perma.cc/5BSE-EEDK]; Matthew D. Baird, Melanie A. Zaber, Annie Chen, Andrew W. Dick, Chloe E. Bird, Molly Waymouth, Grace Gahlon, Denise D. Quigley, Hamad Al-Ibrahim & Lori Frank, Rsch. Funding for Women’s Health: Modeling Societal Impact 5 (Oct. 11, 2021).

[122] Endometriosis, Cleveland Clinic (Oct. 26, 2025), https://my.clevelandclinic.org/health/diseases/10857-endometriosis#symptoms-and-causes [https://perma.cc/MZ5Y-Q5X4]; Common Reproductive Health Concerns for Women, Ctr. for Disease Control (May 15, 2024), https://www.cdc.gov/reproductive-health/women-health/common-concerns.html [https://perma.cc/2YGP-3VAM]; Ovarian Cancer, NHS Inform (Feb. 21, 2025), https://www.nhsinform.scot/illnesses-and-conditions/cancer/cancer-types-in-adults/ovarian-cancer/#:~:text=What%20causes%20ovarian%20cancer%3F,breast%20cancer%20in%20the%20past [https://perma.cc/YZ84-9B3V].

[123] See Jamie M. Kohen, The History of the Regulation of Menstrual Tampons 16–20 (Apr. 6, 2001) (unpublished third year student paper), https://dash.harvard.edu/server/api/core/bitstreams/7312037c-acc7-6bd4-e053-0100007fdf3b/content [https://perma.cc/MW5R-APLM].

[124] Patrick M. Schlievert & Catherine C. Davis, Device-Associated Menstrual Toxic Shock Syndrome, 33 Clin. Microbiology Rev., May 27, 2020, at 1, 2–3.

[125]  Historical Perspectives Reduced Incidence of Menstrual Toxic-Shock Syndrome—United States, 1980-1990, Ctr. For Disease Control (June 29, 1990), https://www.cdc.gov/mmwr/preview/mmwrhtml/00001651.htm [https://perma.cc/E86E-H7NN].

[126] Schlievert & Davis, supra note 124, at 1; Spitzer, supra note 16, at 236.

[127] Kohen, supra note 123, at 6; Historical Perspectives Reduced Incidence of Menstrual Toxic-Shock Syndrome—United States, 1980-1990, supra note 125.

[128] Historical Perspectives Reduced Incidence of Menstrual Toxic-Shock Syndrome—United States, 1980-1990, supra note 125.

[129] Kohen, supra note 123, at 10 (quoting Ethyl Corp. v. EPA, 541 F.2d 1, 25 (D.C. Cir. 1976)).

[130] Id. at 10­–12.

[131] Id. at 12.

[132] Id. at 15–16.

[133] Id. at 16–17.

[134] Id. at 17–18.

[135] Id.

[136] Id. at 20.

[137] Id.

[138] Id.

[139] Id. at 23.

[140] Id. at 22-23.

[141] Id. at 34; see Historical Perspectives Reduced Incidence of Menstrual Toxic-Shock Syndrome—United States, 1980-1990, supra note 125.

[142] Fallon, supra note 10, at 324; see also Kohen, supra note 123, at 34.

[143] Kohen, supra note 123, at 34.

[144] See id.

[145] Id.

[146] Beck & Oram, supra note 6, at 12.

[147] See Krumperman, supra note 72.

[148] Fed. R. Civ. P. 23.

[149] Id.

[150] See, e.g., Defendant’s Notice of Motion and Motion to Dismiss at 4, Willis-Albrigo and Wright v. The Procter & Gamble Co. (S.D. Cal. 2024) (No. 3:24-cv-01416-GPC-SBC) (dismissed).

[151] See id.  

[152] Id. 

[153] Id. at 4–5.

[154] Id. at 15–16.

[155] Id. at 24 (citing Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 967 (9th Cir. 2018)).

[156] Lead Poisoning, supra note 85.

[157] See id.; Shearston et al., supra note 4.

[158] Don Sherratt, Taking a Risk-Based Approach to Medical Device Design, Med. Device Diagnostic & Indus. (Sept. 1, 1999), https://www.mddionline.com/design-engineering/taking-a-risk-based-approach-to-medical-device-design# [https://perma.cc/C4K5-L8VN]; Darrow et al., supra note 57, at 427.

[159] See Lead Poisoning, supra note 85. While tampons are a surprising avenue of heavy metal exposure, most people are exposed to low levels of certain metals through food, air, and water. For example, arsenic is in avocados, mercury is present in fish, and certain types of chromium may actually be used as a supplement. Avocado Pits: Start or Stop Eating?, Health Scis. Acad. https://thehealthsciencesacademy.org/health-tips/avocado-pits-start-stop-eating [https://perma.cc/AZ43-3N8L]; FDA/EPA 2004 Advice of What You Need to Know About Mercury in Fish and Shellfish, U.S. Food and Drug Admin. (Mar. 2004), https://www.fda.gov/food/environmental-contaminants-food/fdaepa-2004-advice-what-you-need-know-about-mercury-fish-and-shellfish [https://perma.cc/P65D-T2C5]; Chromium, Nat’l Inst. Health (June 2, 2022), https://ods.od.nih.gov/factsheets/Chromium-HealthProfessional [https://perma.cc/N4X5-XEP2].

[160] See U.S. Food and Drug Admin., supra note 42, at 9.

Icing on the Yellow Cake: The Future of Small Modular Reactors in Kentucky

Icing on the Yellow Cake: The Future of Small Modular Reactors in Kentucky

Download a PDF Version

Ben Schaeffer*

Introduction

On March 28, 1979, the most significant accident in the history of the operation of commercial nuclear power plants in the United States occurred.[1] Through an unfortunate combination of equipment malfunction, human error, and defects in the design of the reactor, the Three Mile Island Unit Reactor 2 near Middletown, Pennsylvania partially melted down.[2] Fortunately, the accident caused no injuries or long term health consequences.[3]  However, the more latent and longstanding impact of the meltdown, perhaps, was its effect on the public perception of nuclear energy. In fact, the number of active reactors continues to steadily fall from its peak at 111 in 1990.[4] In addition to public perception influenced by the above-mentioned accident, commentators also cite construction costs, storage issues, and regulatory hurdles as potential barriers for constructing nuclear power plants.[5]

There is, however, a point at which public skepticism of nuclear power clashes with the collective acknowledgment of the necessity for a source of energy that is both environmentally friendly and cost efficient. In a 2008 study conducted by the Pacific Northwest National Laboratory’s Joint Global Change Research Institute, scientists projected the “required growth” of nuclear power in order to alleviate the potentially detrimental environmental impact of concentrated carbon in the atmosphere.[6] Still, despite the numerous advantages that nuclear energy provides, including its reliability, competitive electricity generating costs, and low environmental impact, the future of conventional nuclear power plants in the United States remains dubious.[7]

Against this contentious backdrop, the case for small modular reactors (SMRs) becomes compelling. Unlike conventional nuclear power plants which produce one to three gigawatts (GW) of electricity, SMRs might produce as little as fifty megawatts (MW) of electricity.[8] Today, the International Atomic Energy Agency defines “small” as an energy output below 300 MW of electricity.[9] Given its smaller composition, the development and construction of SMRs could address some of the regulatory and logistical hurdles posed by larger reactors—each individual reactor is a “unit” which enables the unit to be readily transportable and the “modular” nature of the reactors refers to its ability to be assembled in a uniform manner and implemented on-site in isolated locations.[10]

Coal country is primed for the development of SMRs.[11] Despite a post–WWII boom in coal mining, production continues to steadily decline, especially in the eastern United States.[12] For example, in Kentucky, coal production reached its zenith in 1990 when 173.3 million tons of coal were mined; in the ensuing two decades, the output declined by 75%.[13] A 2022 Department of Energy report emphasized how policy goals such as the “Good Neighbor Initiative” and deregulation in the electricity market will continue to lead to the closure of coal powered plants, in turn augmenting the strain on states whose economies have historically relied on cheap energy through coal production.[14]

Therefore, for states that formerly relied on coal production, SMRs could fill a void left by the waning reliance on its output. Virginia is one such state that recently passed legislation to promote the development of SMRs.[15] For Kentucky, the collapse of the coal industry continues to lead to the “shedding” of thousands of jobs.[16] According to a report conducted by the Kentucky Energy and Environment Cabinet, coal has historically provided the Commonwealth with “low-cost electricity and energy security.”[17] In light of the decrease in coal production, Kentucky’s “electricity-intensive manufacturing” continues to be threatened.[18] In turn, Kentucky’s promulgation of a regulatory and statutory scheme for small modular nuclear reactors similar to Virginia’s will catalyze Kentucky’s already burgeoning economy because of the environmental benefits and the potential role small modular reactors could play in maximizing the efficiency and scale of manufacturing in the state.

I. Overview of Kentucky’s Manufacturing and Energy Output

Kentucky has what the U.S. Energy Information Administration, a principal agency of the U.S. Federal Statistical System, refers to as an “energy intensive economy.”[19] The Commonwealth’s industrial sector accounts for approximately thirty-five percent of its total energy consumption.[20] Given its energy-intensive status, Kentucky enjoyed the thirteenth lowest average electricity price of any state in 2023.[21] In fact, according to the Kentucky Cabinet for Economic Development in the past five years alone, manufacturers announced plans for approximately 800 facility locations and expansion projects with reported capital investments in excess of $28 billion with close to 40,000 jobs to be added to Kentucky’s economy.[22]

Despite an overall decrease in coal output, coal production still dominates the Commonwealth’s energy portfolio.[23] Kentucky currently ranks fifth in the country in terms of recoverable coal and sixth in present coal production.[24] That said, as coal-fired units continue to become more expensive to operate and maintain, 5,600 MW of energy generated by coal has shut down since 2013.[25] In turn, natural gas continues to fill that void with twenty-three percent of the Commonwealth’s electricity output being generated by natural gas powered plants in 2023.[26] The rest of Kentucky’s electricity output came from a mix of renewable and clean energy sources including hydroelectric power plants, biomass, solar energy, and petroleum-fired generation.[27]

Overall, low energy costs in Kentucky continue to be a “catalyst” for economic growth, especially for industries whose operations rely substantially on cheap energy.[28] Thus, manufacturing, which remains Kentucky’s dominant economic sector, was the “most responsive” to changes in electricity prices.[29] In turn, ensuring stable and sustainable energy consumption is crucial as Kentucky’s economy continues to grow. In 2023, the Commonwealth, at a rate of 8.39 percent, ranked eleventh nationally in energy expenditures as a percentage of current-dollar GDP.[30] Energy is an “input for almost all economic activity;” therefore, this statistic suggests that the high rate of energy consumption is a “necessary enabler” of economic growth.[31] For a state which ranked forty-fifth in overall GDP per capita in 2023, Kentucky’s high consumption of energy relative to its overall GDP manifests the continued proliferation of its manufacturing sector.[32]

In fact, manufacturing has played a central role in Kentucky’s recent economic momentum. In 2021, manufacturers accounted for 17.39 percent of the total economic output in the state and employed close to fifteen percent of the workforce.[33] Furthermore, total output from manufacturing eclipsed $38 billion in 2021.[34] According to the Lane Report, local Kentucky economic developers expect the momentum in manufacturing to continue into 2025.[35] Furthermore, local developers expect the logistics, service, life sciences, and healthcare industries to continue to blossom in Kentucky in the coming years.[36] Evidently, Kentucky is approaching an economic renaissance of sorts.

In turn, given widespread environmental concerns with coal, a clean, generative source of energy will be vital to ensure the sustainable development of Kentucky’s economy. In 2021, coal in Kentucky accounted for 52.5 million metric tons of carbon dioxide emissions.[37] Furthermore, most carbon emissions in the Commonwealth came from power plants, specifically those affiliated with the utility sector.[38] Given the disproportionate percentage of emissions generated from coal powered plants, the Commonwealth saw a spike in construction requests for solar developers.[39] Overall, state officials continue to display a propensity to turn to other sources of energy in light of current technological developments; for instance, Kentucky’s annual solar capacity increased from approximately 100 MW in 2023 to approximately 400 MW in 2024.[40] Over the next five years, Kentucky’s solar capacity is estimated to increase by approximately 4,774 MW—this estimation places Kentucky fourteenth in the country in terms of projected increase in solar capacity.[41] Moreover, Kentucky utilities including LG&E and Kentucky Utilities plan to open four natural gas plants by 2028, citing increased energy demand from new data centers and other commercial developments.[42]

II. The Role of Small Modular Reactors in Nuclear Proliferation

SMRs will play a central role in fulfilling the United States’ projected nuclear proliferation over the next several decades. A 2013 U.S. Energy Information Administration Report projected that the U.S. will increase its consumption of nuclear energy by about 68 billion kilowatt-hours by 2035.[43] According to nuclear researcher Jorge Pedraza, assuming that a 100 MW SMR operates at eighty-five percent capacity, the construction of only ninety-one SMRs could fill this gap.[44] Importantly, SMRs, unlike conventional reactors, would require less capital investment due to the lower plant cost; in addition, the modularity ensures that the amount of time spent on on-site preparation and the overall time of construction is reduced.[45] Finally, SMRs may be paired with other sources of energy, such as renewables, such that the overall efficiency of the electricity-producing system is enhanced.[46]

Overall, the lower construction costs perhaps provide the most upside when weighing the relative utility of SMRs against larger nuclear power plants. Onerous construction costs are often cited as a primary deterrent in debates over the proliferation of nuclear power, even those pertaining to the construction of SMRs.[47] For example, a research project conducted by the CATO Institute asserted that burdensome carbon taxes would have to be levied in order to ensure the cost-effectiveness of SMRs over the coming years.[48] That said, proponents of SMRs emphasize that cost efficiency would be gleaned through external factors, namely through a decreased reliance on the importation of sources of energy and through SMRs’ capacity to ensure the security of grids across the United States through dual output.[49] Furthermore, concerns about construction costs for SMRs may be displaced—SMRs would be “ready to ‘plug and play’ upon arrival,” meaning that their size and modularity would increase site flexibility and ensure lower construction costs.[50] Moreover, the modular nature provides a degree of uniformity in the assemblage of the plants such that an increased quantity in the number of plants constructed would inevitably lead to efficiency in the long term as builders may work out kinks, thus optimizing the manner and means of construction.

Myriad safety concerns, another factor that features readily in debates over nuclear power, may be assuaged by the unique features of SMRs. For starters, SMRs have a lower “source term,” or total quantity of nuclides produced in the reactor, in comparison to larger nuclear power plants.[51] In other words, Pedraza asserts that “SMRs are expected to have higher safety margins and potential lower large release frequency … which increases the ability to site SMRs closer to populated areas.”[52] Furthermore, SMRs have a lower “linear element rating” and enhanced decay heat.[53] While the reduced linear element rating provides numerous benefits, including a reduction in the amount of spent volume fuel, the enhanced decay heat “ease[s] the burden on the operating staff” and facilitates more adequate accident management.[54]

III. Virginia’s SMR Statutes

The statutory scheme recently promulgated by Virginia offers a fascinating case study into how a state once at the pinnacle of the coal industry will explore nuclear development. According to Virginia’s Department of Energy, Governor Glenn Youngkin recently announced that Virginia would build an SMR within the next decade, “making the Commonwealth the first state to adopt this innovative technology to its grid.”[55] Dominion Energy, a prominent utility company in Virginia, accepted the proposal to construct the infrastructure.[56] A statute Governor Youngkin signed into law this past summer allows Dominion to recover the construction costs of “early development” if they receive regulatory approval.[57] Specifically, the costs “would be capped at $1.40 per month for a residential customer using 1,000 kilowatt hours of electricity in a month.”[58] Additionally, this past fall, Amazon entered into an agreement with Dominion to pay for some of the development costs of the small modular reactor.[59] The announcement, according to a Virginia publication, evidences the multination technology company’s commitment to achieve clean energy goals.[60]

The Virginia Electric Utility Regulation Act has two provisions concerning the development of SMRs. While § 56–585.1:14 provides for the recovery of costs associated with small modular reactors, § 56–585.1:15 provides for the recovery of costs associated with small modular nuclear facilities.[61] § 56–585.1:14, which governs Phase II utilities, propounds the scheme under which utility companies such as Dominion may recover “project development costs.”[62] Specifically, Phase II utilities may recover up to eighty percent of their project development costs pursuant to an accelerated cost recovery scheme which allows the utility to recover from consumers on a “timely and current basis,” while the remaining twenty percent may be recovered through the utility's rates for generation and distribution services under section (A)(1) of § 56–585.1.[63] While the remaining twenty percent of costs incurred after July of 2024 are not eligible for the accelerated cost recovery through the rate adjustment clause of § 56-585.1, they may be recovered through the general scheme of rate setting for generation and distribution services under Title 56 of Virginia’s Code.[64] Furthermore, the “annual revenue requirement” of the rate adjustment clause shall not exceed an amount that would increase the monthly bill of an average Virginia consumer by more than $1.40.[65]

§ 56–585.1:15, on the other hand provides for a recompensation scheme by a Phase I Utility–these utilities can recover “all approved reasonable and prudent project development costs” for the development of a small nuclear reactor facility.[66] Again, such costs are to be recovered through a rate adjustment clause under § 56–585.1 “amortized over a period equal to the period during which the costs were incurred or five years, whichever is greater.”[67] Unlike § 56–585.1:14, which sets a cap both on the amount the Phase II utilities can recover through the rate adjustment clause and the amount that consumers’ bills will increase, § 56–585.1:15 simply provides that the overall project development costs recovered under the rate adjustment clause will not exceed $125 million.[68] Importantly, both bills are to expire in the next decade, so while there remains much work to be done in Virginia, the legislation will remain critical for Virginia in achieving its carbon-free goals.[69]

IV. The Current Status of Kentucky’s Nuclear Program

As explained by the Gateway for Accelerated Innovation in Nuclear (GAIN), Kentucky has witnessed “the volatility of coal as an energy source” in the past two decades, specifically as a result of “shrinking demand, plant closures, job losses and tougher pollution controls.”[70] Therefore, Kenya Stump, executive director of Kentucky’s Office of Energy Policy, continues to advocate for nuclear energy as the missing link in Kentucky’s otherwise “‘all of the above portfolio.’”[71] Ultimately, the Office of Energy Policy and GAIN entered into a collaborative partnership that proved beneficial—after years of advocacy in Frankfort, the “working group” succeeded in garnering bipartisan legislative support for the creation of the Kentucky Nuclear Energy Development Authority (KNEDA).[72] Late in spring of 2024, the Kentucky legislature overrode Governor Beshear’s veto and passed SB 198 and formally establishing KNEDA.[73]

According to K.R.S. § 164.2802, the mission of KNEDA shall be to “serve as the nonregulatory, trusted state government agency on nuclear energy issues” and to “support and facilitate the development of … nuclear energy … in a collaborative manner.”[74] Moreover, the statute provides for the composition of the advisory board which governs KNEDA.[75] Specifically, the advisory board is to consist of twenty-two voting members and eight non-voting members.[76] The statute provides exact criteria for each of the individual members—for example, of the seven state government members who are to be voting members, one must be the secretary of the Energy and Environment Cabinet and one must be the chair of the Public Service Commission.[77] Subsection seven of K.R.S. § 164.2802 outlines the purpose of KNEDA.[78] Notable provisions of this subsection include “assist[ing] interested communities in understanding advanced nuclear opportunities, including the importance of secure, firm, cost-competitive power for customers … as well as the potential for … economic benefits,”  “develop[ing] the capacity for nuclear energy economic development in the Commonwealth … and seeking out new grants and other financial support for nuclear energy development,” and  “build[ing] the organizational capacity to engage … stakeholders interested in nuclear energy technologies that would consist of utilities, environmental advocates, electric cooperatives, and major industrial companies.”[79] Finally, K.R.S. § 164.2802 contemplates thorough collaboration with federal regulatory bodies to ensure adequate and satisfactory proliferation.[80]

Additionally, as a part of SB 198, the Kentucky legislature codified § 164.2804 and § 164.2803, which respectively provide for a framework for identifying communities that may be ready and willing to develop nuclear energy-related projects and financial assistance program for nuclear energy-related projects.[81] According to § 164.2804, the criteria to “attain the designation” as a “nuclear-ready community” includes: (a) holding local public educational meetings; (b) the availability of sites identified by the Cabinet for Economic Development as being suitable for nuclear projects; and (c) “the adoption of resolutions from the county and all cities in the county or a successful county ballot initiative declaring the community's readiness.”[82] §154.12-340, on the other hand, provides the basic foundation for how these large scale infrastructure projects will be financed.[83] According to the statute, KNEDA is to “create and implement” a financial assistance program for the location of nuclear energy projects within the state.[84] To finance the development of projects, KNEDA will enact regulations to further the purposes of this particular subsection.[85]

V. Why Kentucky Should Adopt a Statutory Scheme Like Virginia’s

In light of Kentucky’s recent “economic momentum,” the uncertainty wrought by the “volatility of coal as an energy source” necessitates decisive legislative action to promulgate a statutory scheme similar to the one Virginia recently enacted.[86] Although a principal barrier to nuclear proliferation is the prohibitive expenses associated with development, the cost-recovery scheme in the Virginia law will perpetuate positive externalities that offset the costs. As explained by Severin Borenstein, co-director of the University of California Energy Institute, in instances of utility revenue raising, economic efficiency is maximized “when price reflects full short-run social marginal cost.”[87] Besides the obvious costs of labor and construction, society’s marginal costs include negative externalities such as emissions and pollution.[88] Although the development of a small modular reactor will undoubtedly require intensive labor and capital, the reduction in negative externalities associated with Kentucky’s current energy infrastructure will reap future health and economic benefits.

Virginia’s statutory scheme for the development of SMRs has two different rate-adjustment provisions: while Phase II utilities can recover up to eighty percent of their development costs through accelerated cost recovery with an increase on consumers’ electric bill capped at $1.40/month, Phase I utilities can recover up to $125 million in development costs.[89] K.R.S. § 164.2803, on the other hand, merely authorizes KNEDA to “verify and process” eligible financial assistance requests pursuant to Kentucky’s economic development fund outlined in K.R.S. § 154.12-100.[90] The relevant language of § 164.2803 provides that KNEDA will process such requests in a manner that will “precipitate further investment in the nuclear energy ecosystem,” consider “the economic impact of the grant funding on the community and region where the proposed project will be located,” as well as “the readiness of the community where the proposed project will be located,” and the “amount of additional investment that would be made in the proposed project,” which suggests KNEDA will take the place of the secretary of the Cabinet for Economic Development under § 154.12-100.[91] Assuming the financial assistance program operated by KNEDA mirrors the secretary’s management of the economic development fund program, § 154.12-100 imposes a number of hurdles, including a report outlining “projected job creation and retention, an investment breakdown, and overall project description,” and the projects themselves are funded through the issuance of bonds with the amount of funds issued capped ultimately by the balance of the fund.[92] Contrasted with the Virginia scheme which provides for cost recovery as a matter of law, it is clear that the current financial assistance program will impose burdensome transaction costs.  

When Governor Youngkin signed the Virginia legislation in law, he expressed his intention to make Virginia “the world’s leading nuclear innovation hub.”[93] By passing similar legislation, Kentucky will be able to foster the growth of its manufacturing sector. According to the U.S. Department of Energy, SMR deployment “would result in significant growth in domestic manufacturing, tax base, and high paying factory jobs.”[94] Under the leadership of Governor Beshear, Kentucky is poised to witness more than 1,100 expansion projects and $35 billion in investments.[95] In fact, in 2022, Kentucky placed sixth in Site Selection Magazine’s annual Prosperity Cup, which tracks economic growth and the S&P Global Ratings upgraded Kentucky’s financial outlook to “positive.”[96] With Kentucky’s economic momentum set to continue, a firm commitment to the development of SMRs could cement Kentucky’s status as a leading innovator in nuclear development. In other words, similar to Governor Youngkin’s stated goal of Virginia becoming a world-leading innovator in nuclear technology, Kentucky could play a similar role in nuclear energy’s resurgence with legislation that mirrors that of Virginia’s.

A firm commitment to the development of SMRs would confer a degree of reputational capital upon Kentucky’s manufacturing sector that would continue to attract private investments, contributing to the state’s growth. Although reputational capital is an intangible measure not readily quantifiable, it “can be defined as a value consisting of trust, positive image and commitment.”[97] This “web of impressions” will not only be crucial for private investors and manufacturers looking to find a home in Kentucky for developmental projects, but also encompasses stakeholders in the communities in which SMRs would ideally be placed.[98] Ultimately, Kentucky’s cultivation of reputational capital in the nuclear sector as a world-leading innovator will be crucial for long-term success, and a firm commitment to the development of SMRs will be a necessary first step.[99]

Conclusion

Overall, considering Kentucky’s recent economic momentum, adding nuclear to the Commonwealth’s energy portfolio will be vital for continued growth.[100] Specifically, the development of small modular reactors, advanced nuclear reactors that can be sited in areas otherwise ill-suited for nuclear power plants, will provide indispensable benefits logistically, environmentally, and economically.[101] Even moderate deployment levels of SMRs would reap “significant economic impact.”[102] Consequently, the waning contribution of coal to Kentucky’s energy grid is occurring simultaneously with prolific economic growth in the manufacturing sector of the Commonwealth; therefore, energy innovation is necessary to keep pace with electricity demands. Ultimately, a statutory cost recovery provision for SMRs enacted by the General Assembly would ensure development actually occurs and enable Kentucky to continue to be a global leader in energy innovation.

* J.D Expected 2026, University of Kentucky J. David Rosenberg College of Law; BA History 2022, Swarthmore College

[1] Backgrounder on the Three Mile Island Accident, U.S. Nuclear Regul. Comm’n (March 28, 2024), https://www.nrc.gov/reading-rm/doc-collections/fact-sheets/3mile-isle.html [https://perma.cc/7XF5-JGHJ].

[2] Id.

[3] See 5 Facts to Know About Three Mile Island, Office of Nuclear Energy (May 4, 2022), https://www.energy.gov/ne/articles/5-facts-know-about-three-mile-island [https://perma.cc/9WP4-NJ67].

[4] Rebecca Leppert & Brian Kennedy, Majority of Americans Support More Nuclear Power in the Country, Pew Rsch. Ctr. (Aug. 5, 2024), https://www.pewresearch.org/short-reads/2024/08/05/majority-of-americans-support-more-nuclear-power-in-the-country/ [https://perma.cc/BAK4-V5TG].

[5] Id.

[6] Jorge Morales Pedraza, Small Modular Reactors for Electricity Generation: An Economic and Technologically Sound Alternative 13 (2017).

[7] Id. at 241–43.

[8] Craig Bettenhausen, Can Small Modular Reactors Save Nuclear Energy?, 101 Chem. & Eng’g News, no. 30, Sep. 11, 2023, at 30, 31. 

[9] Small Nuclear Power Reactors, World Nuclear Power Ass’n (June 17, 2025), https://world-nuclear.org/information-library/nuclear-fuel-cycle/nuclear-power-reactors/small-nuclear-power-reactors [https://perma.cc/ZP2F-U43P].

10 Bahman Zohuri, Small Modular Reactors as Renewable Energy Sources 195 (2018).

[11] Evan Halper, Smaller, Safer, Cheaper? Modular Nuclear Plants Could Reshape Coal Country, Wash Post (Feb. 19, 2023), https://www.washingtonpost.com/climate-solutions/2023/02/19/coal-nuclear-smr-modular/.

[12] Charles D. Kolstad, What is Killing the U.S. Coal Industry?, Stan. Inst. for econ. Pol’y Rsch. (Mar. 2017), https://siepr.stanford.edu/publications/policy-brief/what-killing-us-coal-industry [https://perma.cc/ZG6U-XU3X].

[13] Kentucky Coal Facts 15 (Ky. Energy and Env’t Cabinet, Dep’t for Energy and Indep., 17th ed. 2017).

[14] J. Hansen, W. Jenson, A. Wrobel, N. Stauff, K. Biegel, T. Kim, R. Belles & F. Omitaomu, U.S. Dept. of Energy, Investigating Benefits and Challenges of Converting Retiring Coal Plants into Nuclear Plants: Nuclear Fuel Cycle and Supply Chain 1 (2022).

[15] Legislation on Small Modular Reactor Development Advances Virginia’s Shift to Clean Energy, Mcguire Woods (Apr. 25, 2024), https://www.mcguirewoods.com/client-resources/alerts/2024/4/legislation-on-small-modular-reactor-development-advances-virginias-shift-to-clean-energy/.

[16] James Bruggers, The Decline of Kentucky’s Coal Industry Has Produced Hundreds of Safety and Environmental Violations at Strip Mines, Inside Climate News (Apr. 18, 2022), https://insideclimatenews.org/news/18042022/kentucky-coal-mining-violations/ [https://perma.cc/9TDX-E7TY].

[17] Aron Patrick, Ky. Energy and Env’t Cabinet, The Vulnerability of Kentucky’s Manufacturing Economy to Increasing Electricity Prices 2 (Oct. 2012).

[18] See id. at 6.

[19] Kentucky: State Profile and Energy Estimates, U.S. Energy Info. Admin. (Oct. 17, 2024), https://www.eia.gov/state/analysis.php?sid=KY [https://perma.cc/9ATZ-YRXL].

[20] Id.

[21] Id.

[22] Existing Industries: Manufacturing, Ky. Cabinet for Econ. Dev., https://ced.ky.gov/existing_industries/manufacturing [https://perma.cc/7W5W-36MP].

[23] U.S. Energy Info. Admin., supra note 19.

[24] Id.

[25] Id.

[26] Id.

[27] Id.

[28] Patrick, supra note 17, at 7.

[29] Id. at 9.

[30] Table E15. Total Energy Price and Expenditure Estimates (Total, Per Capita, and Per GDP), Ranked by State, 2023, U.S. Energy Info. and Admin, https://www.eia.gov/state/seds/data.php?incfile=/state/seds/sep_sum/html/rank_pr.html&sid=US [https://perma.cc/9Y9N-3R69].

[31] Todd Moss & Jacob Kinser, How Does Energy Impact Economic Growth? An Overview of the Evidence, Energy for Growth Hub (March 7, 2023), https://energyforgrowth.org/article/how-does-energy-impact-economic-growth-an-overview-of-the-evidence [https://perma.cc/XG9P-TKSG].

[32] Pallavi Rao, Mapped: GDP per Capita, by U.S. State, Visual Capitalist (Oct. 23, 2024), https://www.visualcapitalist.com/mapped-u-s-states-by-gdp-per-capita.

[33] Ky. Ctr. for Stats. (KYSTATS), Kentucky Economic Analysis PY 2022 6–7 (Sept. 2022), https://kystats.ky.gov/Content/Reports/Kentucky%20PY%202021%20Annual%20Economic%20Analysis.pdf [https://perma.cc/UL2D-UQ64].

[34] Gross Domestic Product: Manufacturing (31-33) in Kentucky, Fed. Rsrv. Bank of St. Louis (Sep. 26, 2025), https://fred.stlouisfed.org/series/KYMANNGSP# [https://perma.cc/C5RZ-DX99].

[35] Mark Green, Economic Development: Kentucky’s Economic Momentum Continues in 2025, The Lane Rep. (Dec. 1, 2024), https://www.lanereport.com/177911/2024/12/economic-development-kentuckys-economic-momentum-continues-in-2025 [https://perma.cc/MGG9-43HD].

[36] Id.

[37] Total Carbon Dioxide Emissions from All Sectors, Coal for Kentucky, Fed. Rsrv. Econ. Data (Sep. 19, 2023), https://fred.stlouisfed.org/series/EMISSCO2TOTVTTCOKYA [https://perma.cc/FNH4-XZ47].

[38] Liam Niemeyer, How Kentucky Generates Electricity - And Emits Tons of Greenhouse Gasses, Ky. Lantern (June 14, 2023, 5:00 AM), https://kentuckylantern.com/2023/06/14/how-kentucky-generates-electricity-and-emits-tons-of-greenhouse-gasses/#:~:text=By%3A%20Liam%20Niemeyer%20%2D%20June%2014%2C%202023%205%3A00%20am&text=A%20recent%20state%20analysis%20found,of%20electricity%20in%20the%20state.

[39] Id.

[40] Kentucky State Solar Overview, Solar Energy Indus. Ass’n (2025), https://seia.org/state-solar-policy/kentucky-solar [https://perma.cc/D2RN-EQB6].

[41] Id.

[42] Kentucky Utility Plans More Natural Gas and Solar Power, Moving Away from Coal, EHN (Oct. 28, 2024), https://www.ehn.org/kentucky-utility-plans-more-natural-gas-and-solar-power-moving-away-from-coal-2669488262.html#:~:text=In%20short%3A,60%25%20by%20the%20early%202030s [https://perma.cc/GVE3-F8YZ].

[43] Pedraza, supra note 6, at 137.

[44] Id.

[45] Office of Nuclear Energy, Benefits of Small Modular Reactors (SMRs), U.S. Dep’t of Energy, https://www.energy.gov/ne/benefits-small-modular-reactors-smrs [https://perma.cc/G3BS-LUYU].

[46] Id.

[47] See David Kemp & Peter Van Doren, Cost Escalation and Delays for Small Modular Reactors Suggest Caution About Nuclear Power Renaissance, Cato Inst. (Mar. 1, 2023, 12:31 PM), https://www.cato.org/blog/cost-escalation-delays-small-modular-reactors-suggest-caution-about-nuclear-power-0.

[48] Id.

[49] Zohuri, supra note 10, at 195.

[50] Pedraza, supra note 6, at viii.

[51] Id. at 244.

[52] Id.

[53] Id. at 244–45.

[54] Id.

[55] Nuclear Energy: Virginia’s Energy Safety Net, Va. Dep’t of Energy, https://www.energy.virginia.gov/renewable-energy/Nuclear.shtml#:~:text=As%20part%20of%20the%202022,innovative%20technology%20to%20its%20grid [https://perma.cc/QPG3-YLMM].

[56] Patrick Larsen, Dominion Plans to Operate Small Modular Nuclear Reactor, VPM (July 10, 2024, 5:27 PM), https://www.vpm.org/news/2024-07-10/dominion-plans-to-operate-first-small-modular-nuclear-reactor-in-u-s.

[57] Id.

[58] Id.

[59] Charlie Paullin, Amazon Announces Deal with Dominion Energy to Develop a Small Nuclear Reactor, Va. Mercury (Oct. 17, 2024, 1:34 PM), https://virginiamercury.com/2024/10/17/amazon-announces-deal-with-dominion-energy-to-develop-a-small-nuclear-reactor/.

[60] Id.

[61] Va. Code Ann. §§ 56-585.1:14–15 (2024).

[62] Va. Code Ann. § 56-585.1:14 (2024).

[63] Id. at (B).

[64] Id.

[65] Id. at (C).

[66] Va. Code Ann. § 56-585.1:15 (C).

[67] Id.

[68] Id.

[69] Legislation on Small Modular Reactor Development Advances Virginia’s Shift to Clean Energy, supra note 15.

[70] Donna Kemp Spangler, GAIN Helped Kentucky Clear the Runway for Nuclear Energy. Now the Coal-dependent State is Waiting for the Plane to Land, Gateway for Accelerated Innovation in Nuclear, https://gain.inl.gov/gain-helped-kentucky-clear-the-runway-for-nuclear-energy/ [https://perma.cc/2XWS-MW9V].

[71] Id.

[72] Id.

[73] Gregory Dutton & Pierce Tomoki Stevenson, State Legislature Sparks Nuclear Energy Development in Kentucky with SB 198, Frost Brown Todd (May 16, 2024), https://frostbrowntodd.com/state-legislature-sparks-nuclear-energy-development-in-kentucky-with-sb-198/ [https://perma.cc/G3QN-UZNE].

[74] Ky. Rev. Stat. Ann. § 164.2802(1) (2024).

[75] Id. at (2).

[76] Id.

[77] § 164.2802(2)(a)(2), (4).

[78] § 164.2802(7).

[79] § 164.2802(7)(a), (c), (g).

[80] See § 164.2802(7)(f), (h).

[81] Ky. Rev. Stat. Ann. § 164.2804(1) (West 2024); Ky. Rev. Stat. Ann. § 164.2803 (2025).

[82] § 164.2804(1)(a)-(c).

[83] § 164.2803(2).

[84] Id.

[85] Id.

[86] See Green, supra note 35; Spangler, supra note 69.

[87] Severin Borenstein, The Economics of Fixed Cost Recovery by Utilities, Berkeley Lab Future Elec. Util. Regul., June 2016, at 47, 48.

[88] Id. at 47.

[89] Legislation on Small Modular Reactor Development Advances Virginia’s Shift to Clean Energy, supra note 15.

[90] Ky. Rev. Stat. Ann. § 164.2803(1).

[91] § 164.2803(2); see Va. Code Ann. § 154.12-100(3).

[92] § 154.12-100(2), (4), (7).

[93] David Dalton, Virginia Governor Signs Into Law Multiple Bills on SMR Development, NucNet (Mar. 31, 2023), https://www.nucnet.org/news/virginia-governor-signs-into-law-multiple-bills-on-smr-development-3-5-2023 [https://perma.cc/55AR-D6MA].

[94] Office of Nuclear Energy, supra note 45.

[95] Nicole Shakir, Kentucky’s Historic Economic Momentum Continues to Build Into 2025, Expansion Sol. Mag. (Feb. 20, 2025), https://www.expansionsolutionsmagazine.com/kentuckys-historic-economic-momentum-continues-2025/ [https://perma.cc/N6GS-33D6].

[96] Kentucky’s Booming Economy, Ky. Gov. Andy Beshear, https://governor.ky.gov/Priority/Pages/economy.aspx [https://perma.cc/9ASY-PRR6].

[97] Vilma Luoma-Aho, Reputation Among the Public: It Can be Measured, in Building, Measuring and Improving Public Confidence in the Nuclear Regulator 119, 120 (2004).

[98] Id. at 121.

[99] See Valentina Drofa, Trust Me If You Can: Why Reputation Capital Is a Must for Fintech Startups in This Economic Downturn, Forbes (Feb. 6, 2023, 9:45 AM), https://www.forbes.com/councils/forbesbusinesscouncil/2023/02/06/trust-me-if-you-can-why-reputation-capital-is-a-must-for-fintech-startups-in-this-economic-downturn/ [https://perma.cc/42KU-GTAB] (arguing that reputational capital is an intangible asset that can be crucial for a company’s long term success).

[100] See Spangler, supra note 69.

[101] Joanne Liou, What are Small Modular Reactors, Int’l Atomic Energy Agency (Sept. 13, 2023), https://www.iaea.org/newscenter/news/what-are-small-modular-reactors-smrs [https://perma.cc/P48N-BX7Z].

[102] Office of Nuclear Energy, supra note 45.

Kentucky Business Organizations “Created” by a Filing with the Secretary of State

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Kentucky Business Organizations “Created” by a Filing with the Secretary of State 

Thomas E. Rutledge* 

Introduction

Under the federal Corporate Transparency Act (the “CTA”)[2] and the related Reporting Regulations,[3] most business organizations created in the United States[4] are subject, absent the availability of one or more of twenty-three exemptions,[5] to beneficial ownership reporting obligations.[6] Now “most” is not all, so it is important to distinguish between those organizations that at least initially are subject to these reporting obligations with all of the penalties that may attach upon a failure to discharge those obligations from those organizations that are ab initio outside the scope of the CTA and the Reporting Regulations. This differentiation will often be a matter of state law, and the objective of this article is to review Kentucky law against those particular provisions of the CTA and the Reporting Regulations. 

I.      The Gateway Question - Is My ??? a Reporting Company? 

The first step in the CTA analysis of a particular venture is to determine whether it is “reporting company.” A reporting company is obligated to file beneficial ownership reports into the Beneficial Ownership Secure System (“BOSS”) database being set up by FinCEN.[7] But if not a reporting company, then there is no filing obligation. The Reporting Regulations provide:

The term “domestic reporting company” means any entity that is: 

(A)   A corporation;

(B) A limited liability company; or

(C) Created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe.[8]

At first blush this provision seems to identify three paths, any of which results in the venture under consideration being a reporting company:[9] (i) if venture is a corporation then it is a domestic reporting company; (ii) if venture is a limited liability company then it is a domestic reporting company; and (iii) if venture is a business entity that is not a corporation or a limited liability company but it is created by “created by the filing of a document with a secretary of state” then it is a domestic reporting company. However, FinCEN has issued a FAQ contradicting that reading, stating:

While FinCEN’s BOI reporting regulations define a domestic reporting company as including a corporation or limited liability company, the inclusion of those entities is based on an understanding that domestic corporations and LLCs are generally created by the filing of a document with a secretary of state or similar office. In an unusual circumstance where a domestic corporation or limited liability company is created, but not by the filing of a document with a secretary of state or similar office, such an entity is not a reporting company.[10] 

The second element of the defined term is the use the word “entity.” Recognizing that “entity” is not itself defined (a recurrent problem in this provision and the CTA generally is the utilization of technical, often limiting terms, but without providing a definition), the question is whether the word is employed (i) as a generic equivalent to “any business organization form” or (ii) in its technical sense such that there may be “business organization forms” (to carry over the generic utilization) that are themselves not entities? If the former then “reporting company” is coincident with “created by a filing with the Secretary of State.”[11] Alternatively, if the latter is the correct reading, “reporting company” is the common area in the Venn diagram of (a) an “entity” and (b) “created by a filing with the Secretary of State.” If the first reading is correct, then “entity” may simply be little more than a term of itself denoting noting more than “a something.” If in the alternative “entity” is a second hurdle to classification as a reporting company there arises the significant problem that the term is undefined in the CTA and the Reporting Regulations. Indeed the word, in the context of the law of business organizations, lacks an agreed upon definition in that there is no consistent set of characteristics that follow from “a something” being identified (or not) as an entity.[12] That makes “entityness” a limiting factor unknowable as it does not define of knowable set; “what’s the difference between an orange?”

As that last question is irresolvable, we will here proceed on the basis of the first reading, that “reporting company” is equivalent to “created by a filing with the Secretary of State.” Well, not so fast. The term “created” is not defined in the CTA or the Reporting Regulations, and it is a term not employed in most business organization law. There are clearly defined terms for the “incorporation” of a corporation (business, non-profit, cooperative) and the organization of limited liability companies and other structures such as a cooperative association; they do not discuss how, when or by what mechanism any of those organizational structures are “created.”[13] This is an important issue in a statute with significant penalties, including the possibility of incarceration; ambiguities raise the costs of compliance and unjustifiably raise risk. For that reason, the CTA and the Reporting Regulations should be read as penal statutes in which all ambiguities are interpreted against the government.

But back to the task at hand; if we are to proceed on the basis that “reporting company” is equivalent to “created by a filing with the Secretary of State,” then when an attorney is presented with a particular business organization and needs to advise on whether it is a reporting company and therefore likely subject to the CTA’s reporting obligations[14] it is necessary to investigate the statute under which the organization was “created.”[15] To that end, this article reviews the iterations of the various statutes governing the formation of various business organizational forms to see whether they provide that a particular form is or at least arguably is not “created” by a filing with the Secretary of State.[16] Bear in mind that absent contrary language in the particular statute new legislation becomes effect the summer after then end of a particular General Assembly session. [17] When a law is herein described as being adopted in a particular year the statement speaks to the latter portion of the year. A business organization created earlier in the year, before the revision in the law takes effect is bound as to its organizational procedure by the prior law. For that reason as to business organizations formed in a year in which the law changed, particular attention to formation date and the effective date of new legislation for that year, is necessary.

After considering sole proprietorships, the order in which various forms are considered is based upon the order of the controlling statutes as set forth in KRS. 

II.    Sole Proprietorships

A sole proprietorship is simply a natural person doing business for her or his own account and benefit; there is no business structure separate and apart from the individual.[18] No filing with the Secretary of State is required for an individual to go into business for himself or herself. Even the filing of an assumed name certificate on behalf of a sole proprietorship is not filed with the Secretary of State - those filings are made with the county clerk.[19] Ergo a sole proprietorship is not a CTA reporting company.[20]

III.   Corporations 

Under Kentucky law “corporations” cast a wide net and encompasses traditional for profit and non-profit companies as well as atypical organizational forms such as the cooperative corporation. While some, at least in their current incarnations, “piggy-back” on the organizational model utilized for business corporations, that is not always the case. Hence a review of the particular statute under which an organization was incorporated is necessary.

A.    Corporations - Business

Kentucky’s 1891 Constitution provided that corporations shall not be chartered by local or special acts.[21] In furtherance thereof Kentucky has adopted a series of “business corporation” acts. Those acts are: (i) the current Kentucky Business Corporation Act, initially adopted in 1988 and codified at KRS ch. 271B (the “BCA-1988”);[22] (ii) the Business Corporation Act adopted in 1972[23] and codified at KRS ch. 271A (the “BCA-1972”);[24] (iii) the 1946 adoption of the Uniform Business Corporation Act codified at KRS ch. 271 (the “BCA-1946”);[25] and prior law (the “Pre-1946 BCA”).[26] In addition there were corporate laws in effect before the 1891 Constitution (the “Pre-1892 BCA”). They are each considered below in that order.

 i.         The BCA-1988

Under the Kentucky Business Corporation Act adopted in 1988,[27] it based upon the then recently updated Model Business Corporation Act, it is express that incorporation is accomplished by means of a filing with the Secretary of State[28] with incorporation effected by the Secretary of State filing the articles of incorporation.[29] Ergo, every corporation incorporated under the BCA-1988 is a CTA reporting company. 

ii.         The BCA-1972

Under this act, once articles of incorporation were prepared satisfying the statutory requirements,[30] they were then delivered to the Secretary of State. Assuming they met the statutory requirements and necessary fees were paid, the articles were then endorsed and filed in “his” office.[31] Thereafter, the effect of the certificate of incorporation was defined as:

upon the issuance of the certificate incorporation, the corporate existence shall begin, and such certificate of incorporation shall be conclusive evidence that all conditions required to be performed by the incorporators have been complied with, and that the corporation has been incorporated under this chapter , except as against this state in a proceeding to cancel or revoke the certification or involuntary dissolution of the corporation.[32]

Ergo, a corporation incorporated under the BCA-1972 is a CTA reporting company.

iii.         The BCA-1946 

Under the 1946 business corporation act, once articles of incorporation satisfying the statutory requirements were prepared and then “signed in triplicate originals by each of the incorporators,”[33] they were then delivered to the Secretary of State.[34] Assuming the requirements were deemed satisfied, the Secretary of State would file the articles and issue a certificate of incorporation.[35] While it remained necessary to file a duplicate copy of the articles of incorporation with the county clerk in which the registered office of the corporation was located,[36] it was upon the Secretary of State’s issuance of the certificate of incorporation that the corporate existence began.[37] Ergo, a corporation incorporated under the BCA-1946 is a CTA reporting company.

iv.         Pre-1946 BCA

The General Assembly, in 1893, no doubt in response to the recently approved state constitution and its numerous provisions directly regulating corporations,[38] adopted a comprehensive corporation statute.[39] Thereunder articles of incorporation, the requirements therefore being detailed,[40] were to be signed and then first “recorded in the county clerk’s office of the county in which its principal office or place of business is to be located” and then thereafter “a copy thereof shall be filed and recorded in the office of the Secretary of State.”[41] The statute is less than clear as to differentiating the effect of the county clerk and Secretary of State filings: 

When the articles are filed and recorded as provided, and the license tax imposed is paid to the State, the corporation shall be deemed to be organized for the purpose of transacting, promoting or carrying on the business or purpose for which it was created; and shall thereupon become a body-corporate, and be known by its corporate name, and as such may adopt and use a corporate seal; and shall have the power to sue and be sued, to contract and be contracted with; . . .[42] 

Now our inquiry is whether or not a particular organization is “created by the filing of a document with [the Kentucky] secretary of state.”[43] In this instance it would appear that both a state and county level filing were necessary for incorporation to take effect, leaving open the question of whether a mandatory two-office filing is outside the CTA’s definition of what is a reporting company, or in the alternative is the fact that there was a required Secretary of State filing, and “he” got the final word, sufficient to bring corporations formed thereunder within the scope of the CTA? It may be important that the delivery to the Secretary of State was of a “copy” of the document submitted to and filed by the county clerk. A reasonable case may be made that a corporation incorporated under 1893 law is not a CTA reporting company. 

B.     Corporations - Nonprofit

Kentucky initially adopted its current nonprofit corporation act in 1968.[44] Thereunder, incorporation of the corporation is accomplished by first delivering to the Secretary of State articles of incorporation satisfying the statutory requirements, and upon a determination that the articles “have been signed and acknowledged according to law,” then “he” (the Secretary of State) will “record one original in his office and issue a certificate of incorporation.”[45] Ergo, a nonprofit corporation incorporated under the Kentucky Nonprofit Corporation Act (1968) is a CTA reporting company.

Previously, the law governing nonprofit corporations was not so straightforward. There was one body of law that governed religious, educational and other charitable organizations. These entities, but for the requirement that they maintain an agent for service of process, were not subject to the rules governing for-profit corporations.[46] The organization of such a corporation required that articles of incorporation be signed, and then “filed in the office of the secretary of state, and recorded in the county clerk’s office of the county where the principal place of business of the corporation is located.”[47] From there, it was provided that “when the articles are filed and recorded, and a certificate of that fact is issued by the Secretary of State, the corporation shall be considered organized….”[48] Ergo, these religious, educational, and other charitable nonprofit corporations are CTA reporting companies.

In addition, there existed separate provisions addressing a nonstock, nonprofit corporation.[49] As was the case above with respect to expressly religious organizations, a nonstock, nonprofit corporation is not subject to the laws governing business corporations.[50] After detailing the required contents of the articles of incorporation,[51] it was provided that “The articles of incorporation shall be filed and recorded, a certificate of incorporation shall be issued, in the same manner and upon payment of the same fees, with the same effect, as provided in KRS § 271.055 for business corporations.”[52] It is further provided that “upon the issuance of the certificate of incorporation, the corporate existence shall begin ….”[53] Ergo, these nonstock, nonprofit corporations are CTA reporting companies.

C.     Corporations - Cooperative

Kentucky law provides for a variety of purposes (marketing, agricultural and livestock) for which a cooperative corporation may be formed. To suggest that the statutes governing these organizations are confusing would be generous, and in any instance it is going to be necessary to undertake a deep investigation of the statute in place at the time a particular cooperative corporation was created. Restricting this review to the statutes in effect since the mid-1960s, with respect to an agricultural cooperative association it is clear that formation was accomplished by the filing of articles of incorporation with the Kentucky Secretary of State.[54] The curious provision requiring that the Secretary of State provide a certified copy of the articles of incorporation to the Dean of the College of Agriculture at the University of Kentucky and the Commissioner of the Department of Agriculture[55] is not a condition precedent to the due incorporation of the cooperative corporation. Ergo, an agricultural cooperative corporation is a CTA reporting company.

Another form of the cooperative corporation is a livestock protective association. These organizations are a subset of corporations and are to the extent not modified by KRS 272.360 through 272.510 subject to the business corporation act. Organization of a cooperative livestock protective association is accomplished through the filing of articles of incorporation with the Secretary of State as provided for in the then applicable business corporation act.[56] There is, however, a provision that raises the question of whether the action of the Secretary of State is effective to create the corporation, or whether a further act is required; that provision reads: 

and, in addition, a quadruplicate of the articles, indorsed by the Secretary of State with the fact and time of recording of the articles in his office, shall be filed with the Department of Agriculture within ten (10) days after the articles have been recorded in the office of the Secretary of State. After the articles have been duly filed and recorded, and a certificate of incorporation has been issued, the corporation may proceed to do business.[57] 

Whether the filing of the Secretary of State’s file stamped articles with the Department of Agriculture is a condition precedent to the due incorporation of the livestock protective association, or alternatively whether that is a mere notice filing similar to the filings made for an agricultural cooperative association, is unclear. For that reason, it is not possible to make a definitive statement as to whether a particular cooperative livestock protective corporation was or was not incorporated upon the filing by the Secretary of State of the articles of incorporation; rather this is a question particular to each organization. In consideration of the question, attention should be paid to the applicable statute equivalent to KRS sections 271B.2-030[58] and 14A.2-070.[59] 

D.     Corporations - Professional Service

The “professional service corporation” arose out the efforts by members of the “learned professions” to benefit from the tax treatment, particularly as to tax-favored benefit and retirement plans, available to shareholders in a corporation.[60] After the IRS adopted the so-called “Kintner Regulations,” thereby effectively precluding professionals from structuring formats, examples being the partnership association and the limited partnership association, that would sufficiently mimic a corporation (as contemplated by the tax code), those “learned professionals” convinced state legislatures to amend their respective business corporation acts so as to permit the incorporation of professional firms.[61] The resultant professional service corporations (“P.S.C”s) are in almost every state organized as corporations under the applicable business corporation act[62] with particular language mandatory in the articles and other organizational documents meant to further the professional nature of the services rendered through the firm; in Kentucky those requirements are set forth in what is currently KRS section 274.015(1).[63]In that a PSC pre-supposes the incorporation of a business corporation under the business corporation act,[64] a professional services corporation is ab initio a reporting company.

E.     Corporations - Rural Electric and Rural Telephone 

Kentucky has had a statute specific to rural electric cooperative corporations since 1937,[65] the statute being declared an emergency and immediately effective.[66] The incorporation of a rural electric cooperative corporation is initiated through the preparation of articles of incorporation,[67] it at one point in time requiring that there be not less than five incorporators.[68] Thereafter: 

The articles of incorporation shall be executed in quadruplicate by the incorporators and each copy shall be acknowledged by each of the incorporators before a notary public or and other officer authorized by the laws of the Commonwealth of Kentucky to take acknowledgements of deeds. When so acknowledged, the four copies of the articles of incorporation, together with the certificate of acknowledgement, shall be filed with the office of the Secretary of State, who, if he shall find the same legal and valid, shall forthwith indorse his approval on each of the said four copies, retain, record and file one of said copies in his office, delivering the other three copies thereof with his approval endorsed thereon to the incorporators, the incorporators upon the receipt of said approved copies of the articles of incorporation, shall thereupon file one of said approved copies of said articles of incorporation in the office of the county court clerk in the county where is to be located the principal office of said corporation and one of said approved copies of said articles of incorporation with the Dean of the College of Agriculture of the University of Kentucky. As soon as the Secretary of State shall have approved the articles of incorporation and endorsed his approval thereon, the proposed corporation described in the articles of incorporation so filed, shall, under its designated name, be and constitute a body politic and corporate and shall thereupon be fully authorized to transact business in its corporate name.[69]

Essentially the same language as to when the existence of the rural electric cooperate corporation exists in the current law, namely: 

(2) As soon as the Secretary of State has filed the articles of incorporation, the proposed corporation shall be a body politic and corporate and may transact business in its corporate name.[70]

Ergo, whether formed under the statute as first adopted in 1936 or under the more modern statute, a rural electric cooperative corporation is a CTA reporting company.

Turning to rural telephone cooperatives, the statute providing for their creation was approved by the Kentucky General Assembly in 1950.[71] As then provided, articles of incorporation are to be prepared,[72] and once executed by at least the minimum of five incorporators,[73] the articles are delivered to the to the Secretary of State for filing.

The incorporators shall execute four copies of the articles of incorporation, and each incorporator shall acknowledge each copy before an officer authorized to take acknowledgments of deeds. They shall then file the four copies, together with the certificate of acknowledgment, in the office of the Secretary of State. If the Secretary of State finds the articles to be legal and valid, he shall immediately endorse his approval on each of the copies, retain, record and file one copy in his office, and deliver the three other copies, with his approval endorsed thereon, to the incorporators. The incorporators shall then file one approve copy in the office of the county clerk of the county in which the principal office of the corporation is to be located.[74] 

Thankfully avoiding any ambiguity as to whether the county filing was a condition precedent to the incorporation, the statute went on to provide:

As soon as the Secretary of State has endorsed his approval of the articles of incorporation, the proposed corporation shall be a body politic and corporate and may transact business in its corporate name.[75] 

This same language as to when the corporate existence begins exists in the modern codification of this statute.[76] Ergo, a rural telephone cooperative corporation is a CTA reporting company. It should be noted, however, that each rural electric cooperative corporation and rural electric telephone cooperative almost certainly is exempt from the CTA’s definition of a “reporting company” by reason of the exemption for “public utilities”[77] 

F.     Benefit Corporations

“Benefit corporations” were added to the Kentucky Business Corporation Act in 2017.[78] Rather than a distinct organizational form, a benefit corporation is one that elects in its articles of incorporation to be a benefit corporation, thereby altering the (supposed) rule of shareholder primacy in the operation of the corporation and permitting the Board of Directors to consider the interests of “other constituencies” when making determinations as to the corporation’s path.[79] As a benefit corporation is simply a corporation that has elected a different paradigm for its internal allocation of responsibilities, and pre-supposes the incorporation of a business corporation under the business corporation act, a benefit corporation is ab initio a reporting company.[80]

G.     Legislative Corporations

It is a truism that for every categorical statement there is an exception, and there is one here. As noted above, a corporation, LLC or other business organization not created by a secretary of state filing pursuant to a so-called “enabling statute” such as the Kentucky Business Corporation Act or the Kentucky Limited Liability Company Act but rather by a state or federal legislative or other executive act is not a “reporting company.”[81] Certain corporations including those created by legislative act rather than a secretary of state filing are not subject to the CTA as they are not within the scope of the definition of a reporting company.[82] Those corporations are few and far between, but they do exist.[83]

IV.   Limited Liability Companies

Kentucky first adopted an LLC Act in 1994.[84] While the LLC Act has undergone repeated amendment in order to accommodate the rapidly evolving form,[85] the manner in which they have been organized has remained consistent, namely through articles of organization that become effective either when filed by the Secretary of State or upon an effective date that post-dates the Secretary of State’s filing, thereby causing the LLC to come into existence.[86]

Ergo, for our purposes, an LLC is created by a filing with the Secretary of State. This conclusion is equally applicable to an LLC that has a single member (a SMLLC) that is for tax purposes treated as either a sole-proprietorship (if the sole member is a natural person) or a division (if the sole member is another business organization). Irrespective[87] of tax classification, the venture is an LLC and therefore falls within the definition of what is a reporting company.

 Kentucky permits a general partnership to “convert” into a limited liability company by filing articles of organization that as well as the typical requirements[88] recite additional facts as to the pre-conversion partnership.[89] The conversion is effective upon the Secretary of State’s filing of the articles or organization.[90] So far it would appear we have a CTA reporting company. But then there is the question of the effect of a conversion; the statute provides in part:

A partnership or limited partnership that has been converted pursuant to this chapter shall for all purposes be the same entity that existed before the conversion.[91] 

Does the fact that the now LLC is the “same entity” that was converted impact the CTA analysis when it is remembered that a general partnership (even one that has elected LLP status) is not a CTA reporting company? To date FinCEN has issued no guidance on the question. While it may be argued that the LLC formed via the conversion of a general partnership is not a reporting company, that answer is a stretch, and likely the better answer is to treat the post-conversion LLC as a reporting company.

V.    General Partnerships Including Limited Liability Partnerships

No state requires a secretary of state or other filing in order for a general partnership to come into existence.[92] This rule is elemental in that partnership is a default category; when persons enter into a business relationship that satisfies the terms of what is a partnership then a partnership comes into being[93] unless they elect to structure their relations in another way such as a corporation or LLC.[94]

While some states permit a notice filing of a Statement of Partnership Authority to be made for the purpose of making clear who are (and by implication who are not) the partners therein and who has authority to on the partnership’s behalf convey its property,[95] the partnership making that filing exists by reason of the agreement of the partners to be, inter alia, partners, and that relationship is not altered by the fact of filing a Statement of Partnership Authority. There are certain other optional filings that a general partnership governed by a statute patterned upon RUPA may file such as a Statement of Denial,[96] filed by a person to deny they are a partner as listed in a Statement of Partnership Authority, a Statement of Dissociation,[97] filed by a person to state that they are no longer a partner in the named partnership, and a Statement of Dissolution.[98] None of these filings is necessary for the transaction in question to be effective; for example, a partnership may dissolve without filing a Statement of Dissolution.

In that no Secretary of State filing is required for a general partnership to come into being, a general partnership is not a CTA “reporting company” and is not subject to its reporting obligations.

A “limited liability partnership” (“LLP”), which under the Kentucky enactment of the Uniform Partnership Act is labeled a “registered limited liability partnership,”[99] is generally speaking a general partnership that via a state notice filing has elected to be governed by a special rule as to the vicarious liability of a partner for the partnership’s debts and obligations.[100] In a classic general partnership each partner is on a joint and several basis vicariously liable with the partnership and each other partner for the partnership’s debts and obligations.[101] While this rule had a number of benefits in small ventures including professional firms, the fallout of the Savings and Loan Crisis demonstrated that exposing partners across the country and across practices to personal liability for claims often arising in a distant office was no longer a viable structure.[102] There existed, however, a dearth of viable options as particularly professional firms were stymied by state law limitations on how they could be structured.[103] The LLP arose out of that tension. Continuation of the partnership format was desired as it continued existing management structures and tax treatment as well as the perceived value of identifying the firm’s principals as “partners” while not running afoul of then existing rules limiting professional practices to the forms of a general partnership and in certain instances a professional service corporation.[104] What was no longer desired was the rule of joint and several vicarious liability among the partners; the LLP format addressed that by means of a notice filing made by an existing partnership with a Secretary of State combined with a requirement as to the partnership’s name resulting in the elimination of the rule of joint and several liability. While there are a variety of distinctions under various state laws, if a partnership makes this notice filing and satisfies the name requirements, the partners qua partners are to one degree or another (the distinction is between so-called “partial” and “full” shield LLPs) not subject to joint and several liability for the partnership’s obligations, but rather enjoy limited liability akin to that enjoyed by shareholders in a corporation.[105] Some states require that the partnership periodically renew its LLP filing and that in the absence of that renewal it reverts to a traditional general partnership. Kentucky provides that the partnership that elects LLP status is the same entity that existed before that election was made.[106] Ergo, no business organization is “created” by an election by a partnership to be an LLP. Rather, there was a partnership that was not an LLP, and then there was a partnership that is an LLP, and it may come to pass that there is a partnership that once was but is no longer and LLP - throughout all of those conditions there was a single partnership.

In that a limited liability partnership, whether existing under the Kentucky Uniform Partnership Act or the Kentucky Revised Uniform Partnership Act (2006), is a general partnership whose organization was not contingent upon a Secretary of State filing, it is not a CTA reporting company. 

VI.   Limited Partnerships Including Limited Liability Limited Partnerships

Kentucky’s laws governing limited partnerships date back to 1849-50, and over the years there have been numerous iterations of these laws, including the adoption in sequence of three uniform acts. Under only the last two are limited partnerships “created” by a Secretary of State filing, so only they are subject to characterization as a “reporting company.”

The most recent statute is the Kentucky Uniform Limited Partnership Act (2006).[107] Under its provisions a limited partnership comes into being through a filing with the Secretary of State.[108]

Under the immediately preceding statute, an enactment of the Uniform Limited Partnership Act of 1976 with the 1985 Amendments adopted in Kentucky in 1988,[109] a limited partnership came into being through a filing with the Secretary of State.[110]

Previously, under Kentucky’s 1970 adoption of the Uniform Limited Partnership Act (1916),[111] a limited partnership was formed via the preparation and execution of a certificate satisfying the statutory requirements that was then “file[d] for record the certificate in the office of the clerk of the county court in the county in which the principal place of business of the partnership is located.”, formation taking place upon “substantial compliance” with those requirements.[112] While the statute is not express as to whether the county clerk filing was a precondition to formation (i.e., is the only manner of substantial compliance with the filing requirement to effect the filing), the certificate was filed at the county, and not the Secretary of State, level. Ergo, a limited partnership formed under the 1970 limited partnership act is not a reporting company. Well, almost. In 1986 the KRS section 362.420 was amended to provide:

(1)    Two (2) or more persons desiring to form a limited partnership shall:

….

(b) File for record duplicate copies of the certificate first with the secretary of state, and thereafter file for record one (1) duplicate original of the certificate in the office of the county clerk in the county in which the principal place of business of the partnership is located.[113]

Now what is less than clear is whether that Secretary of State filing was a condition precedent to the formation of the limited partnership as only “substantial compliance” with the laws governing the filing of the certificate (as well as its contents) was required.[114] For our purposes a provision addressing which filing (if any) was necessary for the limited partnership to come into being would be most helpful but alas there is none. While reasonable minds could differ on the point, a solid case may be made that a limited partnership governed by this amendment to Kentucky’s then limited partnership act (i.e., one formed after the effective date of the 1986 amendment and before the effective date of the Act adopted in 1988), while being the first time a Secretary of State filing is provided for in connection with a limited partnership’s formation, is not a CTA reporting company.

Before 1970 Kentucky limited partnerships were covered by a statute codified at KRS 362.010 through 362.160, ultimately having been adopted in 1849-50 and codified at ch. 82. Thereunder, irrespective of the iteration, the certificate of limited partnership was filed with a county level office and not with the Secretary of State.[115] Ergo, a limited partnership formed under the pre-1970 limited partnership law is not a reporting company.

A limited liability limited partnership (“LLLP”) is a limited partnership that has as to the general partner component thereof elected LLP status. There are, however, for purposes of this inquiry, important distinctions between a limited partnership electing LLLP status and a general partnership electing LLP status. Unlike a general partnership/LLP in which a pre-existing partnership makes the LLP election, under Kentucky’s most modern limited partnership law, namely the Kentucky Uniform Limited Partnership Act (2006), the election by a limited partnership to be an LLLP is made in the certificate of limited partnership to the effect that there was never a time in which the LLLP was not a limited partnership created by a filing by the Secretary of State of a certificate of limited partnership.[116] While it is conceivable that a limited partnership created under a pre-2006 statute could elect LLP status under the LLP amendments to the Kentucky Uniform Partnership Act,[117] which at the time of their adoption were not limited to general partnerships,[118] such organizations are at best few and far between. Still, it is possible that they exist, and if they do they are not CTA reporting companies. Other LLLPs existing under the 2006 Limited Partnership Act are CTA reporting companies. 

VII.  Business and Statutory Trusts 

Kentucky has two statutes governing the business organizations generically referenced as “business trusts,” one utilizing the common law concept and the second a statutory model. Both are fully in effect, business trusts organized under the common law model have not been subsumed into the statutory paradigm, and it is possible today to form under either option.

The statute addressing the common law model was adopted in 1966, and under it a business trust[119] comes into being by the declaration of a trust relationship.[120] In 2012 Kentucky adopted a modified form of the Uniform Statutory Trust Entity Act[121] under the name the Kentucky Uniform Statutory Trust Act (2012).[122] In contact to the common law mechanism used under the other statute, under the Statutory Trust Act formation is accomplished by means of a filing with the Secretary of State.[123]

Ergo, whether a “business trust” organized in Kentucky is a CTA reporting company depends upon under which statute it was organized; if under the common law formula it is not while if formed under the Statutory Trust Act then it is a reporting company. 

VIII.    Limited Cooperative Associations

Kentucky adopted a modified form of the Uniform Limited Cooperative Association Act in 2012.[124] The formation of a limited cooperative association is accomplished via a filing with the Secretary of State.[125] The creation of a Kentucky limited cooperative association being premised upon a Secretary of State filing, a Kentucky limited cooperative association is a reporting company under the CTA.

IX. Unincorporated Non-Profit Associations

Kentucky adopted a version of the Uniform Unincorporated Nonprofit Association Act in 2015,[126] thereby creating a statutory form for what are often informal nonprofit organizations that do not fall within the scope of one of the other organizational forms.[127] Initially, a UNPA comes into being by the agreement of the participants therein and does not require a Secretary of State or other filing.[128] An existing UNPA may file a certificate of association with the Secretary of State, whereupon the otherwise applicable rule of vicarious liability of the participants in the venture for its debts and obligation[129] is set aside, and those persons are no longer vicariously liable for the UNPA’s debts and obligations.[130] Therefore, irrespective of whether an UNPA has filed a certificate of association with the Secretary of State, a UNPA is not created by a Secretary of State filing and is therefore not a CTA reporting company.

Conclusion

The application of the Corporate Transparency Act is a watershed event in business law, it requiring answers to a variety of new questions including the one here reviewed, namely what is a “reporting company” as that term is applied to business organization formed in the Commonwealth of Kentucky. Hopefully these thoughts will guide the assessment of particular organizations.

Post-Script

In late 2024 and through the first months of 2025 there was a flurry of judicial, legislative and executive action as to the validity and application of the Corporate Transparency Act.[131] While the authority to do so has been challenged,[132] on March 26, 2025, the Department of the Treasury published an Interim Final Rule[133] amending the Final Rules to the effect that a “reporting company” does not include a business venture created in the U.S. and that the beneficial owners of the remaining “reporting companies,” they being formed outside of the U.S. and then qualified to transact business under the laws of one of the states, will not include any persons who are U.S. citizens.[134] What is most important for this analysis is that the statutory definition of what is a reporting company has not been altered by this regulatory change.

* * * * * * * * * *

*I am a member of Stoll Keenon Ogden PLLC resident in its Louisville, Kentucky office where my practice is focused on the law of business organizations. In addition, I am a frequent commentator on the law of business organizations and am an elected member of the American Law Institute. In 2018 I joined Ribstein and Keatinge on Limited Liability Companies as a co-author in place of the late Professor Ribstein. I would be remiss to not thank William A. Hilyerd, librarian at the University of Louisville Brandeis School of Law, for his cheerful assistance in tracking down some of the law herein discussed.

[2] The Corporate Transparency Act (the “CTA”) was adopted as part of the Anti-Money Laundering Act of 2020, it being part of the 2021 National Defense Authorization Act for Fiscal Year 2021 (the “NDAA”). The full name of the NDAA is the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, H.R. 6395, 116th Cong. (2021). Congress’ override of the President’s veto was taken in Record Vote No. 292 (Jan. 1, 2021). The anti-money laundering provisions are found in §§ 6001-6511 of the NDAA. The CTA consists of §§ 6401-6403 of the NDAA. Section 6402 of the NDAA sets forth Congress’ findings and objectives in passing the CTA, and § 6403 contains its substantive provisions, primarily adding § 5336 to Title 31 of the United States Code.

[3] The Reporting Regulations appear at 31 C.F.R. § 1010.380 (2023). The “final” beneficial ownership report regulations were released in Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. 59498 (Sept. 30, 2022).Those “final” regulations were as to certain due dates amended by Beneficial Ownership Information Reporting Deadline Extension for Reporting Companies Created or Registered in 2024, 88 Fed. Reg. 66730 (Sept. 28, 2023) and supplemented as to the use of FinCEN Identifiers by the release Use of FinCEN Identifiers for Reporting Beneficial Ownership Information of Entities, 88 Fed. Reg. 76995 (Nov. 8, 2023).

The most recent change to the Reporting Regulations took place on October 17, 2024, when FinCEN altered the definition of what is a “public utility” able to utilize a particular exemption from the CTA’s definition of what is a “reporting company.” See Update of the Public Utility Exemption Under the Beneficial Ownership Information Reporting Rule, 89 Fed. Reg. 83782 (Oct. 18, 2024) (collectively the “Reporting Regulations”).In interpreting and applying the Reporting Regulations, reference should be made as well to the Beneficial Ownership Information Reporting - Frequently Asked Questions (the “FinCEN FAQs”) and the FinCEN Small Entity Compliance Guide - Reporting Requirements (the “FinCEN Guide”). See also infra notes 131 through 134 and accompanying text.

[4] There is under the CTA and the Reporting Regulations a series of reporting requirements applicable to entities “formed” outside the U.S. and qualified to transact in one or more of the states. See, e.g., 31 C.F.R. § 1010.380(c)(1)(ii) (2023) (outlining the reporting requirements for foreign reporting companies under the Reporting Regulations). As this article is focused on business organizations organized in Kentucky those non-U.S. organizations are excluded from this discussion.                                      

[5] An organization that is a “reporting company” may be excised from that classification by the application of one or more of twenty-three exceptions. See 31 U.S.C. § 5336(a)(11)(B) (“The term ‘reporting company’ . . . does not include”); 31 C.F.R. § 1010.380(c)(2) (2023) (“Notwithstanding paragraph (c)(1) of this section, the term ‘reporting company’ does not include:”). The exemptions, as set forth in the Reporting Regulations, appear at 31 C.F.R. §§ 1010.380(c)(2)(i) - (xxiii) (2023).

[6] For a review of the CTA and the Reporting Regulations generally, see Allison J. Donovan and Thomas E. Rutledge, The Corporate Transparency Act Is Happening To You and Your Clients: Dealing with the Tsunami, Kentucky Bar Ass’n (July 30, 2024) (hereinafter “Donovan & Rutledge, Tsunami”) https://www.skofirm.com/news/the-corporate-transparency-act-is-happening-to-you-and-your-clients-dealing-with-the-tsunami/ [https://perma.cc/FX9K-SQ27]. See also 1 Larry E. Ribstein, Robert R. Keatinge and Thomas E. Rutledge, Ribstein & Keatinge on Limited Liability Companies ch. 4A 293 – 460 (2024).

[7] See generally Donovan & Rutledge, Tsunami, supra note 6, at 9.

[8] 31 C.F.R. §§ 1010.380(c)(i)(A)-(C) (2023).

[9] Technically a “domestic reporting company,” but as this article is discussing only reporting companies formed in Kentucky the “domestic” is hereinafter being dropped.

[10] See Frequently Asked Questions, C.9, FINCEN (Apr. 18, 2024), https://www.fincen.gov/boi-faqs [https://perma.cc/789C-PXM2] (emphasis added). This emphasis upon creation by a Secretary of State filing is consistent with certain commentary released in connection with the release of the final Reporting Rules. See Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. 59498, 59538 (Sept. 30, 2022) (“FinCEN . . . notes that the core consideration for the purposes of the CTA’s statutory text and the final rule is whether an ‘entity’ is ‘created’ by the filing of the document with the relevant authority.”); Id. (“We emphasize again that the only relevant issue for the purposes of the CTA and the final rule is whether the filing ‘creates’ the entity.”).

[11] Under the CTA and the Reporting Regulations there is not a defined term that encompasses all filing offices in the states including those such as Virginia where the filing is with the Corporations Commission and the equivalent offices of for example the various Indian Tribes, although there is a FAQ on point. See Frequently Asked Questions, C.17, FINCEN (Oct. 3, 2024), https://www.fincen.gov/boi-faqs [https://perma.cc/789C-PXM2]. Again, as we are here concerned only with Kentucky the label Secretary of State is accurate.

[12] See Thomas E. Rutledge, External Entities and Internal Aggregates: A Deconstructionist Conundrum, 42 Suffolk U. L. Rev. 655 (2009) (exploring the characteristics of business organizations identified as being an “entity” and determining the label has no inherent meaning); see also J. William Callison, Indeterminacy, Irony and Partnership Law, 2 Stan. Agora 73–76 (2001), http:// agora.stanford.edu/agora/libArticles2/agora2v1.pdf [permalink unavailable]; David Millon, The Ambiguous Significance of Corporate Personhood, 2 Stan. Agora 38, 58 (2001), http://agora.stanford.edu/agora/libArticles2/ agora2v1.pdf [permalink unavailable].

[13] See, e.g., Ky. Rev. Stat. Ann. § 271B.2-030 (West 2024) (“. . . the corporate existence shall begin . . .”); Ky. Rev. Stat. Ann § 272A.3-010(2) (West 2024) (“The limited cooperative association is formed when . . . ”); Ky. Rev. Stat. Ann. § 273.2531 (West 2024) (“. . . [T]he corporate existence shall begin when . . .”); Ky. Rev. Stat. Ann. § 275.020(2) (West 2024) ([T]he existence of the limited liability company shall begin when . . .”).

[14] Under the CTA and the Reporting regulations, a reporting company may be exempt from the reporting obligations if it meets one or more of twenty-three exemptions. Relatively few companies will fall within the scope of the exemptions; one of them, that for financial market utilities (see 31 C.F.R. 1010.380(c)(2)(xvii) (2023), applies to eight companies (listing available at https://www.federalreserve.gov/paymentsystems/designated_fmu_about.htm [https://perma.cc/XW85-R2T5]).                        

[15] A great many of the citations to Kentucky’s statutes governing various business organization forms have been “repealed,” but the references herein do not recite a history of, for example, “repealed effective July 15, 2024.”That is intentional because herein the consideration of what was the law governing the organization of a particular form at a particular date - it is the procedure dictated by the law of the time of formation that determines whether a particular company is a CTA reporting company. That a particular statute was subsequently repealed and replaced does not retroactively alter the manner in which a particular organization came into being.

[16] The “arguably” qualification acknowledges that notwithstanding the statutory language as carried forward in the Reporting Regulations, FinCEN could by fiat declare what is not a reporting company to indeed be a reporting company. The likelihood of a lawsuit challenging that determination must be recognized as being low, but still, it is not impossible. In Massachusetts a lawsuit was brought by a (common law) business trust seeking a determination that it and other business trusts are not reporting companies, but it was quickly dismissed for failing to state a claim for which relief can be granted. The plaintiffs asserted that a Massachusetts Business Trust is not a reporting company in that it is not formed by a filing by a Secretary of State or similar officer, an assertion with which FinCEN agreed. There being no controversy as to the non-application of the CTA to the plaintiff its broader challenge to the CTA’s constitutionality was set aside for lack of standings. See Trustees of the Lewis Wharf Condominium Trust v. Yellen, No. 24-11679-LTS, (D. Mass. Nov. 22, 2024) (order granting Defendants’ motion to dismiss without prejudice).

[17] See Ky. Const. § 55 (“No act, except general appropriation bills, shall become a law until ninety days after the adjournment of the session at which it was passed”).

[18] As to the characteristics of a sole proprietorship, see Sparkman v. CONSOL Energy, Inc., 470 S.W.3d 321, 328 (Ky. 2015) (citations omitted):

A sole proprietorship is defined as a business in which one person owns all the assets, owes all the liabilities, and operates in his or her personal capacity. Black's Law Dictionary (10th ed. 2014). A sole proprietorship, therefore, differs greatly from other business organizations such as corporations or limited liability companies (LLCs), even in cases where a business organization has only one shareholder or member. For example, the sole member of an LLC or sole shareholder of a corporation is not entitled to assert in his or her individual capacity the rights of the business organization. An owner of a sole proprietorship, on the other hand, is liable in his or her personal capacity for the liabilities of the sole proprietorship and may assert the rights of the sole proprietorship in his individual capacity.

Keep in mind that the “sole proprietor” here being discussed is a state law concept; a single member LLC that is for tax classification purposes a “disregarded entity” is under the CTA, absent one of the twenty-three exemptions discussed below, a reporting company. See also Frequently Asked Questions, C.8, FINCEN (Apr. 18, 2024) (clarifying pass-through tax treatment of an S-corporation does not exempt it from characterization as a reporting company) https://www.fincen.gov/boi-faqs [https://perma.cc/789C-PXM2].

[19] See Ky. Rev. Stat. Ann. § 365.015(3) (West 2024).

[20]See Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. 59498, 59537 (Sept. 30, 2022) (“In general, FinCEN believes that sole proprietorships, . . . would not be a reporting company under the final rule.”); Frequently Asked Questions, C.6, FINCEN (Dec. 12, 2023), https://www.fincen.gov/boi-faqs [https://perma.cc/789C-PXM2].  

[21] See Ky. Const. § 59 (“The General Assembly shall not pass local or special acts concerning any of the following subjects, or for any of the following purposes, namely: . . . Seventeenth, To grant a charter to any corporation, or to amend the charter of any existing corporation . . .”).

[22] See 1988 Ky. Acts, ch. 389; see also Ky. Rev. Stat. Ann. § 271B.1-010 (West 2024) (“This chapter shall be known and may be cited as the ‘Kentucky Business Corporation Act’.”).

[23] See 1972 Ky. Acts, ch. 274 (H.B. 178), see also id., § 1 (codified at Ky. Rev. Stat. Ann. § 271A.005 (“This Act shall be known and may be cited as the Kentucky Business Corporation Act.”) (repealed 1988).

[24] This act was based upon the 1972 edition of the Model Business Corporation Act. See James C. Seiffert, Kentucky Corporation Law with Forms, in Kentucky Practice Series § 3.1 (June 2022).

[25] See 1946 Ky Acts, ch. 141 (S.B. 6) (repealed 1972). This statute was one of the few adoptions of the Uniform Business Corporation Act (1928) written and promulgated by the National Conference of Commissioners of Uniform State Laws (“NCCUSL”), now known as the Uniform Law Commission (the “ULC”). Still, it was not adopted without sometimes questionable modification. See Willburt D. Ham, The Close Corporation Under Kentucky Law, 50 Ky. L. J. 125, 128 (1961). Not long after promulgating this Act NCCUSL abandoned corporate law to the American Bar Association and its Committee on Corporate Laws (the “ABA”). This is the source of the division of labor between the two groups with the ULC being charged with the unincorporated laws (e.g., the Uniform Partnership Act, the Revised Uniform Limited Liability Company Act and the Uniform Unincorporated Nonprofit Association Act) and the ABA taking as its charge the Model Business Corporation Act and the Model Nonprofit Corporation Act. The crafting of the Uniform Commercial Code is governed by different rules.

[26] See generally 1893 Ky. Acts, ch. 171.

[27] See 1988 Ky. Acts, ch. 23 (H.B. 323), codified at KRS ch 271B.

[28] See Ky. Rev. Stat. Ann. § 271B.2-010 (West 2024) (incorporation accomplished by delivering articles of incorporation to the Secretary of State for filing); id. § 271B.2-020 (required contents of articles of incorporation).

[29] See Ky. Rev. Stat. Ann. § 271B.2-030(1) (West 2024) (“Unless a delayed effective date is specified, the corporate existence shall begin when the articles of incorporation are filed by the Secretary of State.”).

[30] See Ky. Rev. Stat. Ann. § 271A.270 (1972 Ky. Acts, ch. 274, § 54).

[31] See Ky. Rev. Stat. Ann. § 271A.275 (1972 Ky. Acts, ch. 274, § 55).

[32] See Ky. Rev. Stat. Ann. § 271A.280 (1972 Ky. Acts, ch. 274, § 57).

[33] See Ky. Rev. Stat. Ann. § 271.035 (1946 Ky. Acts, p. 383).

[34] See Ky. Rev. Stat. Ann. § 271.055(1) (1946 Ky. Acts, p. 385).

[35] Id.

[36] See Ky. Rev. Stat. Ann. § 271.055(2) (1946 Ky. Acts, p. 385).

[37] See Ky. Rev. Stat. Ann. § 271.065 (1946 Ky. Acts, p. 386).

[38] See, e.g., Ky. Const. § 207 (repealed 2002) (requiring that corporations utilize cumulative voting in the election of directors).

[39] See generally 1893 Ky. Acts, ch. 171.

[40] See 1893 Ky. Acts, ch. 171, § 2 (detailing the requirements to properly effectuate articles of incorporation).

[41] See 1893 Ky. Acts, ch. 171, § 3.

[42] 1893 Ky. Acts, ch. 171, § 5.

[43] 31 U.S.C.A. § 5336(a)(11)(A)(i).

[44] See 1968 Ky. Acts, ch. 165 (S.B. 254); id. § 1 (“This Act shall be known and may be cited as the ‘Kentucky Nonprofit Corporation Act.’”).

[45] See 1968 Ky. Acts, ch. 165, § 29.

[46] See Ky. Rev. Stat. Ann. § 273.010 (repealed 1968) (“Unless expressly included, corporations organized under KRS 273.020 shall not be subject to any statutes relating to corporations having a capital stock or organized for pecuniary profit, except KRS 271.385, requiring an agent for service of process, but shall at all times, be subject to visitation by the legislature.”).

[47] See Ky. Rev. Stat. Ann. § 273.020 (repealed 1968).

[48] See Ky. Rev. Stat. Ann. § 273.030 (repealed 1968).

[49] See Ky. Rev. Stat. Ann. § 273.160 (repealed 1968).

[50] See Ky. Rev. Stat. Ann. § 273.160(4) (repealed 1968) (“except as specifically provided in KRS 273.160 to 273.290, corporations organized under KRS 273.160 to 273.290 are not subject to any of the statues relating to corporations having capital stock or organized for pecuniary profit . . . .”).

[51] See Ky. Rev. Stat. Ann. § 273.170 (repealed 1968).

[52] See Ky. Rev. Stat. Ann. § 273.190 (repealed 1968).

[53] See Ky. Rev. Stat. Ann. § 273.200 (repealed 1968).

[54] See Ky. Rev. Stat. Ann. § 272.131(3) (repealed and reenacted 2010) (The articles of incorporation “shall be filed and recorded in accordance with the statute relating to corporations generally; and when so filed, the articles of incorporation, or certified copies thereof, shall be received in all the courts of this state, and other places, as prima facie evidence of the facts contained therein, and of the due incorporation of the association . . . .”).

[55] See Id. (“A copy of the articles of incorporation, indorsed by the Secretary of State with the fact and time of recording in his office, shall be filed with the dean of the College of Agriculture of the University of Kentucky and with the Commissioner of the Department of Agriculture.”).

[56] See Ky. Rev. Stat. Ann. § 272.410 (amended 1980) (“The articles of incorporation shall be signed, acknowledged, filed and recorded in accordance with the provisions of the general corporation law of this state, . . . .”).

[57] See Id.

[58] Currently, KRS § 271B.2-030 provides:

(1) Unless a delayed effective date is specified, the corporate existence shall begin when the articles of incorporation are filed by the Secretary of State.

(2) The Secretary of State's filing of the articles of incorporation shall be conclusive proof that the incorporators satisfied all conditions precedent to incorporation, except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.

[59] Currently, KRS § 14A.2-070(1) provides:

(1)  Except as provided in subsection (2) of this section and KRS 14A.2-090(3), a document delivered to the Secretary of State for filing shall be effective:

(a)  On the date and at the time of filing, as evidenced by such means as the Secretary of State may use for the purpose of recording the date and time of filing; or                                          
(b) At the time specified in the document as its effective time on the date it is effective.

[60] See Thomas E. Rutledge and Lady E. Booth, The Limited Liability Company Act: Understanding Kentucky’s New Organizational Option, 83 Ky. L. J. 1 at 59 - 61 (1994-95).

[61] See T.D. 6797, 1965-1 C.B. 553. This path greatly irritated the IRS, and it attempted to deprive these newly minted corporations of classification as “corporations” under the Internal Revenue Code. See Rutledge & Booth, supra note 60, at 74 (“Those efforts were unavailing and ultimately abandoned by the Service”). Professional service corporation provisions were first added to Kentucky law in 1962. See 1962 Ky. Acts, ch. 236 (H.B. 97).                        

[62] See Ky. Rev. Stat. Ann. § 274.015:

(1) One (1) or more individuals, … may incorporate and form a professional service corporation by filing articles of incorporation in the office of the Secretary of State.….

(2) A professional service corporation formed under the provisions of this chapter, except as this chapter may otherwise provide, shall have the same powers, authority, duties, and liabilities as a corporation formed under, and shall be otherwise governed by, KRS Chapter 271B. 

[63] See also 1962 Ky. Acts, ch. 236 (H.B. 97) § 2(1) (referencing then in effect KRS ch. 271).

[64] See also Ky. Rev. Stat. Ann. § 274.015(2); 1962 Ky. Acts, ch. 236, § 2(2).

[65] See 1936 Ky. Acts, 4th Ext. Sess. ch. 6, § 1 (“This act may be known, cited and referred to as the ‘Rural Electric Cooperative Corporation Act.’”).

[66] See 1936 Ky. Acts, 4th Ext. Sess. ch. 6, § 32 (“Whereas, many Rural Electric Cooperative Corporations are now ready to be organized and delay in their organization will endanger their receiving the federal funds appropriated for that purpose, an emergency is hereby declared to exist and this Act shall become a law and be effective from and after it’s approval by the Governor.”).

[67] See Baldwins (1939 supp.) § 833j-4 (Setting forth the required contents of the articles of incorporation); Ky. Rev. Stat. Ann. § 279.030 (repealed and reenacted 2010).

[68] See Baldwins (1939 supp.) § 833j-3; Ky. Rev. Stat. Ann. § 279.020 (Under current law the required number of incorporators has been reduced to three).

[69] See Baldwins (1939 supp.) § 833j-5.

[70] See Ky. Rev. Stat. Ann. § 279.040(2) (amended 2010).

[71] See 1950 Ky. Acts, ch. 147 (S.B. 69).

[72] See 1950 Ky. Acts, ch. 147, § 3 (detailing required and optional provisions of articles of incorporation).

[73] See 1950 Ky. Acts, ch. 147, § 2.

[74] See 1950 Ky. Acts, ch. 147, § 5(1).

[75] See 1950 Ky. Acts, ch. 147, § 5(2).

[76] See Ky. Rev. Stat. Ann. § 279.350 (amended in 2010).

[77] See 31 C.F.R. § 1010.380(c)(2)(xvi); see also Update of the Public Utility Exemption Under the Beneficial Ownership Information Reporting Rule, 89 Fed. Reg. 83782 (Oct. 18, 2024).

[78] See 2017 Ky. Acts ch. 28, § 7(8) (H.B. 35); Ky. Rev. Stat. Ann. § 271B.8-300(8) (amended in 2017).

[79] See also Thomas E. Rutledge, The 2017 Amendments to Kentucky’s Business Entity Statutes, 56 Lou.                         L. Rev. 55 (Fall 2017). Amendments to the Model Business Corporation Act to provide for benefit corporations were approved in 2020. See Proposed Changes to the Model Business Corporation Act - New Chapter 17 on Benefit Corporations, 74 Bus. L. 819 (Summer 2019); Proposed (Revised) Changes to the Model Business Corporation Act - New Chapter 17 on Benefit Corporations, 74 Bus. L. 1177 (Fall 2019).

[80] The CTA and the Reporting Regulations provide an exception from classification as a reporting company for a “tax exempt entity.” See 31 C.F.R. § 1010.380(c)(2)(xix). This exemption is not applicable to a benefit corporation in that a benefit corporation is a for-profit venture that ipso facto is not a non-profit organization able to qualify under Code § 501(c).

[81] See FinCEN FAQ C.9 (Apr. 18, 2024) (emphasis added) https://www.fincen.gov/boi-faqs [https://perma.cc/789C-PXM2]. This focus upon creation by a Secretary of State filing is consistent with certain commentary released in connection with the release of the final Reporting Rules. See Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. at 59538 (“FinCEN … notes that the core consideration for the purposes of the CTA’s statutory text and the final rule is whether an “entity” is “created” by the filing of the document with the relevant authority.”); id. (“We emphasize again that the only relevant issue for the purposes of the CTA and the final rule is whether the filing “creates” the “entity.”) (emphasis added).                        

[82] See FinCEN FAQ C.9 (Apr. 18, 2024) https://www.fincen.gov/boi-faqs [https://perma.cc/789C-PXM2].

[83] See, e.g., 2021 Ky. Acts. ch. 203, § 3 (HB 321) (creating a corporation under the name the “West End Opportunity Partnership”); 2024 Ky. Acts ch. 171, § 4 (SB 299) (repealing and reenacting KRS § 230.225(1) to establish a corporation under the name the “Kentucky Horse Racing and Gaming Corporation.”). See also Mark Harris, The Government Corporation in Kentucky, 29 Ky. L. J. 288 (1941). At the federal level, the Boy Scouts of America is a corporation created through federal law passed by Congress. See 36 U.S.C. § 30901(a). The same applies to the Girl Scouts of the United States of America. See 36 U.S.C. § 80301. Indian tribal corporations may be formed under federal law through the issuance of a charter of incorporation by the Secretary of the Interior pursuant to section 17 of the Indian Reorganization Act of 1934 (25 U.S.C. § 477) while in Oklahoma the same action is accomplished under section 3 of the Oklahoma Indian Welfare Act. See 25 U.S.C. § 503. See also U.S. Dept. of the Interior, Tribal Economic Development Principles at a Glance Series - Choosing a Tribal Business Structure, (last visited Aug. 13, 2024) https://www.bia.gov/sites/default/files/dup/assets/as-ia/ieed/bia/pdf/idc1-032915.pdf [https://perma.cc/52QC-6TPW]. As such, these are not “reporting companies” as defined under the CTA. Alternatively, corporations may come into existence pursuant to Indian tribal law or through a state corporation act; in either of those instances the company so created is absent an applicable exemption subject to the CTA as a reporting company.

[84] See 1994 Ky. Acts, ch. 389; see also Rutledge & Booth, supra note 60 at 4.

[85] By way of example, under the LLC Act as originally adopted, it was required that the articles of organization recite that the LLC would have at least two members. This requirement was put in as a bulwark against the accidental creation of a single member LLC, an organizational structure that, in 1994, was significantly unknown as the tax code did not contemplate a single-member limited liability organization that was not a corporation. See also Rutledge & Booth, supra note 60 at 9–10. In December 1996, the IRS modified its classification rules, abandoning as to unincorporated entities the “Kintner Regulations” and adopting the current “Check the Box” rules and as well providing for the tax treatment of what was referred to therein as a “disregarded entity.” In response this provision of the LLC act was repealed, allowing there to be organized in Kentucky single-member limited liability company. See 1998 Ky Acts, ch. 341, § 23 (amending KRS § 275.025).

[86] See Ky. Rev. Stat. Ann. § 275.025(7) (2011); id. §§ 14A.2-070(1), (2) (2011).

[87] And not “irregardless.”

[88] See Ky. Rev. Stat. Ann. § 275.025 (2011).

[89] See Ky. Rev. Stat. Ann. §§ 275.370(3)(a)-(e) (2010).

[90] See Ky. Rev. Stat. Ann. § 275.370(4) (2010).

[91] See Ky. Rev. Stat. Ann. § 275.375(1) (2010).

[92] I cannot address the laws of any of the Indian Tribes or of any of the U.S. Territories.

[93] See, e.g., Unif. P’ship. Act (1914) § 6(1); Revised Unif. P’ship. Act (1997) § 202(a); 6 Del. Code § 15-202(a); Ala. Code § 10A-8A-1.01; Ky. Rev. Stat. Ann. § 362.175; id. § 362.1-202(1); Va. Code § 50-73.88(A); see also In re: Copeland, 291 B.R. 740, 769 (Bankr. E.D. Tenn. 2003); Flying Phx. Corp. v. Sinclair, 2024 WYCH 3, 40–41, 2024 Wyo. Trial Order LEXIS 4 (Wyo. Chan. Ct. April 25,2024) (“A partnership is formed when ‘two or more persons’ associate ‘to carry on as co-owners a business for profit,’ ‘whether or not the persons intended to form a partnership.’ The determinative intent is not the parties’ subjective intent to be characterized (or not characterized) as partners, but their ‘intent to do things that constitute a partnership.’ This means that absent a partnership agreement, or even when the parties express their subjective intent not to form a partnership, the parties may inadvertently create a partnership through their conduct.”) (citations omitted); William Mead Fletcher, Fletcher Cyclopedia of the Law of Private Corporations, § 20 (1917) (“A partnership is created by mere agreement between the partners. The approval of the state is not necessary.”); John Bouvier, A Law Dictionary, vol. II, Partnership, 228 (1839) (“Partnerships are created by mere act of the parties; and in this they differ from corporations which require the sanction of state authority, either express or implied.”) (Law Book Exchange, 2003, at p. 294).

[94] See Unif. P’ship. Act. (1914) § 6(2); Rev. Unif. P’ship. Act (1997) § 202(b); 6 Del. Code § 15-202(b); Ky. Rev. Stat. Ann. § 362.175 (2011); id. § 362.1-202(2); Va. Code § 50-73.88(B).

[95] See, e.g., Revised Unif. P’ship. Act (1997) § 303; 6 Del. Code § 15-303(b); Ala. Code § 10A-8A-3.03; Calif. Corps. Code § 16105; Ky. Rev. Stat. Ann. § 362.1-303 (2011); Va. Code § 50-73.93.

[96] See, e.g., Revised Unif. P’ship. Act (1997) § 304; Ala. Code § 10A-8A-3.04; Ky. Rev. Stat. Ann. § 362.1-304 (2011); Va. Code § 50-73.94.

[97] See, e.g., Revised Unif. P’ship. Act (1997) § 704; 6 Del. Code § 15-704(a); Ala. Code § 10-8A-7.04; Ky. Rev. Stat. Ann. § 362.1-704 (2011); Va. Code § 50-73.115.

[98] See, e.g., Revised Unif. P’ship. Act (1997) § 805; 6 Del. Code § 15-805; Ala. Code §10-8A-8.05; Ky. Rev. Stat. Ann. § 362.1-805 (2011); Va. Code § 50-73.121.

[99] See Ky. Rev. Stat. Ann. § 362.555(1) (2011); id. § 362.155(7).

[100] In certain states including Delaware a limited partnership may as well make this filing, but for purposes of simplicity and to retain our focus upon Kentucky law this discussion is in the context of a general partnership. Under the Kentucky Revised Uniform Partnership Act (2006), a limited partnership may not elect LLP statute. See Ky. Rev. Stat. Ann. § 362.1-931 (2013) (LLP election made in a statement of qualification which may be filed by a “partnership,” a class that does not encompass a limited partnership); id. § 362.1-202(2) (an organization created other than under the partnership act is not a partnership).

[101] See Unif. P’ship. Act § 15; Revised Unif. P’ship. Act § 306(a); 6 Del. Code § 15-306(a); Ky. Rev. Stat. Ann. § 362.220 (2007); id. § 362.2-306(1).                        

[102] See, e.g., Thomas E. Rutledge and Robert R. Keatinge, LLPS Are Not Reporting Companies, Bus. L. Today (Oct. 10, 2024); Robert W. Hamilton, Registered Limited Liability Partnerships: Present at Birth (Nearly), 66 Colo. L. Rev. 1065, 1069 (1995); Robert R. Keatinge et al., Limited Liability Partnerships: The Next Step in the Evolution of the Unincorporated Business Organization, 51 Bus. L. 147, 147–49 (Nov. 1995). See also Harwell Wells, The Unexpected Origins of the US Limited Liability Partnership, in The Origins of Company Law (eds. Victoria Barnes and Jonathan Hardman 2024).

[103] See generally Thomas E. Rutledge, The Place (If Any) of the Professional Structure in Entity Rationalization, 58 Bus. L. 1413, 1419–21 (Aug. 2003) (discussing several states’ partnership laws, with a focus on the leniency of some states compared to others). Please note as well that from 1982 through 1997, S-corporation status was limited to firms with 75 or fewer shareholders, greatly reducing the utility of S-corporation classified PSCs for the organization of professional firms. Further, because of the requirement to accelerate recognition of accounts receivable upon conversion from Subchapter K to either Subchapter C or Subchapter S, there existed significant impediments to the conversion of an existing firm from a general partnership to a professional service corporation.

[104] Through 1992 the AICPA provided that CPAs could practice as sole proprietorships, as general partnerships and as professional service corporations. See also Rutledge and Keatinge, supra note 102.

[105] See, e.g., Ky. Rev. Stat. Ann. § 362.220(2) (2007); id. § 362.555 (a partial shield statute); id. 362.1- 306 (full shield); Rev. Unif. P’ship. Act § 306(c) (full shield); 6 Del. Code § 15-306(c); Ala. Code § 10-8A-306(c); Va. Code §50-73.96(C).

[106] See Ky. Rev. Stat. Ann.§ 362.1-201(2)(2006); see also Revised Unif. P’ship. Act § 201(b) (“A limited liability partnership continues to be the same entity that existed before the filing of the statement of qualification under Section 1001.”); 6 Del. Code § 15-201(b); 805 ILCS 206/201(b); Va. Code § 50-73.132(E) (“A partnership that has been registered as a limited liability partnership under this chapter is, for all purposes, the same entity that existed before it registered.”); Mudge Rose Guthrie Alexander & Ferdon v. Pickett, 11 F.Supp.2d 449, 452 at fn. 12 (S.D. N.Y. 1998) (commenting in footnote that the New York LLP statute “clearly enunciates that a general partnership that is registered as a RLLP is for all purposes the same entity that existed before registration and continues to be general partnership under the laws of New York”) (citation omitted); Howard v. Klynveld Peat Marwick Goerdeler, 977 F.Supp. 654, 657 fn.1 (S.D.N.Y. 1997), aff’d 173 F.3d 844 (2nd Cir. 1999) (upon a partnership becoming a limited liability partnership, “The partnership was not dissolved and continued without interruption with the same partners, principals, employees, assets, rights, obligations, liabilities and operations as maintained prior to the change. Thus, Peat Marwick LLP is in all respects the successor in interest to Peat Marwick.”); Sascki v. McKinnon, 707 N.E.2d 9, 14 (Ohio App. 1997) (“Those two entities, E&Y and E&Y LLP are, but for the corporate change to a limited liability partnership designation, the same entities for all practical intents and purposes.”); Maupin v. Meadow Park Manor, 125 P.2d 611 (Mont. 2005) (LLP is “same entity that existed before registration”); Ex parte Haynes Downard Andra & Jones, LLP, 924 So.2d 687, 699 (Ala. 2005) (A LLP “is for all purposes, except as provided in Section 10-8A-306 [not relevant to our inquiry], the same entity that existed before the registration and continues to be a partnership under the laws of this state . . . .” (citing Ala. Code § 10-8A-1001(i)); Riccardi v. Young & Young, LLP, 74 Misc.3d 911, 915 (City Court of New York, Cohoes, Albany County 2022) (“An LLP is a general partnership which acquires limited liability characteristics upon registration with the Secretary of State.”) (citation omitted).

[107] Codified at Ky. Rev. Stat. Ann. ch. 362.2. See also Thomas E. Rutledge & Allan W. Vestal, The Uniform Limited Partnership Act (2001) Comes to Kentucky: An Owner’s Manual, 34 N. Ky. L. Rev. 41, 411–121 (2007); Thomas E. Rutledge and Allan W. Vestal, Rutledge & Vestal on Kentucky Partnerships and Limited Partnerships (2010).

[108] See Ky. Rev. Stat. Ann. § 362.2-201(1) (2011) (“In order to form a limited partnership, a certificate of limited partnership shall be delivered to the Secretary of State for filing.”); see also id. § 14A.2-010 (2015); id. § 14A.2-070 (2012).

[109] See 1988 Ky Acts, ch. 284 (HB 582), codified at KRS §§ 362.401 through 550.

[110] See Ky. Rev. Stat. Ann. § 362.415(1) (“In order to form a limited partnership, a certificate of limited partnership shall be executed and filed with the Secretary of State.”); id. § 362.415(2) (“A limited partnership shall be formed at the time of the filing of the certificate of limited partnership with the Secretary of State or at any later times specified in the certificate of limited partnership …”).                        

[111] See 1970 Ky. Acts ch. 97 (S.B. 172).

[112] See Ky. Rev. Stat. Ann. § 362.420(b).

[113] See Ky. Rev. Stat. Ann. § 362.420 as amended by 1986 Ky. Acts 342 (SB 224) (newly added text underlined and italics).

[114] See Ky. Rev. Stat. Ann. § 362.420(2) (“A limited partnership is formed if there has been substantial compliance in good faith with the requirements of subsection (1) of this section.”).

[115] See Ky. Rev. Stat. Ann. § 362.020 (“The persons desiring to form a limited partnership shall sign a written statement, showing the name and place of residence of each partner, the name or style of the firm, who are the general and who are the special partners, ….”); id. § 362.030 (“The statement and affidavit shall be acknowledged or approved before and recorded by the county clerk of each county in which a place of business of the firm is situated, in the same manner as deeds are acknowledged, approved and recorded. No limited partnership shall be deemed to have been formed until such record has been made and the statement has been published once a week for four consecutive weeks in a newspaper printed in each of the proposed places of business”); see also Baldwins 3769, GS ch. 82, § 4.

[116] See Ky. Rev. Stat. Ann. § 362.2-201(2).

[117] See Ky. Rev. Stat. Ann. § 362.555.

[118] See 1994 Ky. Acts, ch. 389, § 102(1) (not containing the “that is not a limited partnership” language subsequently added in 2006).

[119] What is a “business trust” under this statute is defined as:

A business trust is an express trust created by a written declaration of trust whereby property is conveyed to one (1) or more trustees, who hold and manage same for the benefit and profit of such persons as may be or become, the holders of transferable certificates evidencing the beneficial interest in the trust estate. For the purposes of KRS 386.370 to 386.440, business trusts shall include but are not limited to "Real Estate Investment Trusts" as defined by and which comply with the Federal Internal Revenue Code of 1986 as amended or such section or sections of any subsequent Internal Revenue Code as may be applicable to real estate investment trusts.

See Ky. Rev. Stat. Ann § 386.370(1) (2010).

[120] See Ky. Rev. Stat. Ann § 386.380 (1966) (“A business trust may be established by a declaration of trusts, duly executed by one (1) or more trustees, for any full purpose . . . .”).

[121] For a review of this uniform act, see Thomas E. Rutledge & Ellisa O. Habbart, The Uniform Statutory Trust Entity Act: A Review, 65 Bus. L. 1055 (Aug. 2010).

[122] See Ky. Rev. Stat. Ann. § 386A.1-010 (2012). For a review of this act as adopted in Kentucky, see Thomas E. Rutledge, The Kentucky Uniform Statutory Trust Act (2012): A Review, 40 N. Ky. L. Rev. 93 (2012–13) (explaining how at the time of the work’s publication, Kentucky was at the forefront of states by enacting the USTA).

[123] See Ky. Rev. Stat. Ann. § 386A.2-010(1) (2012) (“A statutory trust is formed when a certificate of trust that complies with subsection (2) of this section and filed by the Secretary of State is effective as determined under KRS 14A.2–070.”).

[124]See Thomas Earl Geu and James Dean, The Uniform Limited Cooperative Association Act: An Introduction, 13 Drake J. of Agric. L. 63 (2008) (reviewing the Uniform Act); Thomas E. Rutledge, The 2012 Amendments to Kentucky’s Business Entity Statutes, 101 Ky. L.J. Online 1 (2012) (reviewing the act as adopted in Kentucky including the departures from the uniform act). The Kentucky Limited Cooperative Associations Act is codified at chapter 272A of KRS.

[125] See Ky. Rev. Stat. Ann. § 272A.3-010(2) (2012) (“To form a limited cooperative association, an organizer of the association shall deliver articles of association to the Secretary of State for filing. The limited cooperative association is formed when articles of association that comply with subsection (3) of this section are filed by the Secretary of State, and are effective as determined under KRS 14A.2-070.”).

[126] See Ky. Rev. Stat. ch. 273A.

[127] See generally Thomas. E. Rutledge, The 2015 Amendments to the Kentucky Business Entity Statutes, 42 N. Ky. L. Rev. 128 at 160 et seq. (2016) (explaining the formation process).

[128] See Ky. Rev. Stat. Ann. § 273A.005(11) (2015) (“‘Unincorporated nonprofit association’ means in unincorporated association consisting of two (2) or more members joined under an agreement that is oral, in a record, or implied from conduct, for one (1) or more common, nonprofit purposes.”).

[129] See Ky. Rev. Stat. Ann. § 273A.040 (2017).

[130] See Ky. Rev. Stat. Ann. § 273A.030(1) (2015).

[131]See Christina M. Houston, Robert R. Keatinge, Thomas E. Rutledge & James J. Wheaton, The Corporate Transparency Act: Are Rumors of its Death Exaggerated?, Bus. L. Today (March 17, 2025); Christina M. Houston, Robert R. Keatinge, Thomas E. Rutledge & James J. Wheaton, The Corporate Transparency Act Is Still on Pause, but Less So, Bus. L. Today (Feb. 7, 2025); and Christina M. Houston, Robert R. Keatinge, Thomas E. Rutledge & James J. Wheaton, The FinCEN That Stole Christmas: The Corporate Transparency Act Year 1, Bus. L. Today (Jan. 13, 2025).

[132] See Letter from Senators Sheldon Whitehouse and Charles E. Grassley to Scott Bessent, U.S. Sec’y of Treasury (Mar. 10, 2025).

[133] See Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension, 90 C.F.R. 13688 (Mar. 26, 2025); see also FinCEN, Interim Final Rule: Questions and Answers, available at Interim Final Rule: Questions and Answers. FinCEN.gov.

[134] See also Nikki McCann Ramirez, Exciting News’: Trump Brags About Gutting Anti-Money Laundering Law, Rolling Stone (March 3, 2025); Casey Wetherbee, The United States of Money Laundering, MSN.com (March 8, 2025).

State Executive Impeachment – We Need to Know More

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State Executive Impeachment – We Need to Know More

Gerald L. Neuman*

Impeachment in the legislature provides an important method of accountability for the abuse of executive office in the states, although the political character of the forum also creates risks. At the highest level of state government, impeachment enables state legislators to oust a transgressive governor. Over the years, eight state governors have been impeached and removed,[2] and others have resigned to avoid impeachment.[3] Resignations can be as important a result of an impeachment inquiry as a completed conviction.

Impeachment also reaches lower levels of the executive branch, most importantly the various executive officers who are independently elected and not freely subject to removal by the governor during their terms. State government structure contrasts with the federal government in the multiplicity of elected executive officials. No federal executive officer has ever been impeached and convicted, while quite a few state officers have been.[4] Kentucky recently witnessed its first impeachment conviction in over a century, of an elected prosecutor who extorted nude photos from a criminal defendant.[5] The last preceding conviction involved state treasurer James W. “Honest Dick” Tate, who embezzled vast sums and fled the country.[6] Other Kentucky officials have resigned after efforts began to impeach them.[7]

Consistent with the focus in the Journal’s recent Symposium on legislative/executive interactions, I emphasize here impeachment of executives, not judges. Impeachment does apply to judges, and in fact the only federal officers whom Congress has removed by impeachment have been life-tenured Article III judges.[8] However, impeachment of judges raises distinct issues of judicial independence, and the need for impeachment of state judges has decreased with the advent of modern systems of judicial discipline.[9]  Nonetheless, threats of impeachment and occasional removals do still occur.[10]

Impeachment talk is notoriously common. Reportedly, the past few decades saw a rise in demands for impeachment and the current extremely polarized political environment has resulted in a further increase.[11] Nonetheless even today the impetus for impeachment of an abusive official may come from the official’s own party.[12] We need more data to understand better the factors that make impeachment efforts at the state level succeed, and how the relevant factors may change over time.

Unfortunately, scholars have not given commensurate attention to the operation of state legislative impeachment, particularly on a nationwide comparative basis. The documentation of these lower profile events is dispersed, even for actual convictions, let alone for impeachment efforts that produce resignations. In 1895, the prolific treatise-writer Roger Foster included an avowedly incomplete survey of state impeachment trials in his Commentaries on U.S. constitutional law.[13] He also observed that the “fear of the disgrace [of impeachment] has caused the resignation of many corrupt judges, State and Federal, who shall here remain nameless.”[14] Just over forty years ago, Professors Peter Charles Hoffer and Natalie Hull published a volume analyzing the origins of U.S. impeachment practice and its application in the early Republic.[15] There are occasionally studies of particular states or of particularly significant state impeachments.[16]

Fuller knowledge of the facts could facilitate comparative studies of the dynamics of impeachment efforts and their effects. Impeachment now exists in all the states, after a 2024 ballot measure adopted it for Oregon.[17] Modern impeachment procedures in most states resemble the federal model, with accusation voted in the lower house, and trial in the state senate.[18] The percentage of legislators required at each stage can vary from the federal practice. Several states (now including Oregon) require 2/3 of the lower house to vote for impeachment instead of a majority.[19] Massachusetts requires only a majority of the upper house to convict instead of two-thirds, and has actually removed an official using this rule.[20]  One might expect that the varying percentages of votes required at each stage of impeachment proceedings affect the likelihood of initiation or of conviction, but there appears to be no study examining this question.                                                                                                                                              

In normative terms, it must be recognized that the impeachment process is subject to abuse for purposes foreign to its ostensible rationale. Allowing groups of politicians to judge claims of misconduct by a government official opens opportunities for partisanship and arbitrariness. Nonetheless, legislative authority provides an ultimate check on official wrongdoing that executive authority cannot or will not prevent. The need for running the risk may depend on the availability of other methods of removing the officials who are subject to impeachment.

Undoubtedly, impeachment has been abused in the past. A notorious set of examples arose after the Civil War, when the resurgent ex-Confederates used various types of law and violence to drive Blacks and their allies out of state governments. The impeachment of North Carolina Governor William Woods Holden, and the resignations of Mississippi Governor Adelbert Ames[21] and of the distinguished Black jurist Jonathan Jasper Wright,[22] are prominent illustrations. The early 20th century impeachment of New York Governor William Sulzer, as the Tammany Hall machine’s revenge after he turned to reform, offers another object lesson.[23]

In empirical terms, it seems reasonable to assume that impeachment competes with other removal options, and that one of the factors making impeachments or convictions less likely to occur would be the availability of easier alternatives. On the other hand, in most states (as in the federal government) impeachment can lead not only to removal but to disqualification from future office, which may be important to legislators in particular cases.[24] Without better data, the interaction among alternatives is difficult to explore.

One alternative mechanism for removal is a recall election. Nineteen states (not Kentucky) provide for recall of statewide officials.[25] Successful recalls of governors are rare – only two so far, one in North Dakota in 1921, and Gray Davis of California in 2003, who was replaced by Arnold Schwarzenegger.[26]

In a small minority of states certain executive officials may also be subject to removal by legislative “address,” a procedure originally created in England for removal of royal judges by Parliament, and adapted in state constitutions as a form of removal for state judges or executive officials or both. (Kentucky’s 1792 constitution authorized address for removal of state judges,[27] and the 1891 constitution extended it to railroad commissioners,[28] but these provisions have since been repealed.) As the Delaware Supreme Court explained in a 2022 opinion, removal by address can respond to less serious causes of unfitness for office than impeachment would legally require.[29] Different state constitutions frame the legislature’s address as a request to the governor to remove the individual, or as obliging the government to remove the individual.[30] Depending on the purpose of the analysis, the obligatory version of address might be viewed as a variant form of impeachment, while the nonbinding version of address might be viewed as a separate procedure that makes impeachment unnecessary if a larger set of actors agrees on removal.

Unlike U.S. presidents,[31] state governors who commit crimes, including some forms of corruption, may be subject to federal prosecution while in office. Independent state attorneys general or prosecutors may also be able to investigate or indict governors in ways that provoke resignation. State constitutions or statutes often provide that an executive official who is convicted of certain crimes shall be removed from office, or that the office automatically becomes vacant.[32] Nonetheless, the state legislature may be unwilling to leave an abusive official in power while awaiting the outcome of the criminal process, especially if the office remains occupied pending appeal.[33]

Thus, the greater independence that elected state officials have creates more occasions for state legislative intervention, and to varying degrees the need for intervention is counterbalanced by the availability of other methods for removal.

In short, the prevailing concentration of scholars on federal impeachment has distracted from a larger body of evidence regarding state-level impeachment. Our understanding of state practice would benefit from a variety of qualitative and quantitative studies, and to that end from the collection and publication of relevant data for all states. Both historical and contemporary projects would be useful here. As a starting point, I provide below a listing of the state-level impeachment convictions from 1776 to 2023 that I have found in the course of my own reading and research. We need to know more.

List of State Executive and Judicial Impeachment Convictions

(not necessarily complete) 

State and Year	Name	Office (or former office)
New Jersey 1778	Thomas Denny	Judge
New Jersey 1779	William Miller	Judge
New Jersey 1784	Peter Hopkins	Judge
Vermont* 1785	John Barret	Judge
Vermont* 1785	Matthew Lyon	Clerk of Court
Massachusetts 1788	William Greenleaf	Sheriff
Georgia 1791	Henry Osborne	Judge
South Carolina 1793	Alexander Moultrie	Attorney General
Massachusetts 1794	William Hunt	Judge
New Jersey 1799	Elijah Godfrey	Judge
Massachusetts 1800	John Vinal	Judge
Kentucky 1803	Thomas Jones	Surveyor
Ohio 1805	William Irvin	Judge
Pennsylvania 1805	Alexander Addison	Judge
Tennessee 1806	Isaac Philips	Judge
Ohio 1807	Robert Slaughter	Judge
South Carolina 1807	Daniel D’Oyley	Treasurer
South Carolina 1812	John Clark	Sheriff
Tennessee 1812	William Cocke	Judge
South Carolina 1814	Matthew O’Driscoll	Clerk of Court
Massachusetts 1821	James Prescott	Judge
Indiana 1821	Aaron Vandever	Judge
Tennessee 1822	Samuel Williams	Surveyor
Indiana 1825	Isaiah Cooper	Judge
Indiana 1826	Nathaniel Marks	Sheriff
Missouri 1826	Richard Thomas	Judge
New Jersey 1830	Henry Miller	Judge
Indiana 1832	Young Hughes	Judge
Louisiana 1844	Benjamin Elliot	Judge
California 1857	Henry Bates	Treasurer
California 1862	James Hardy	Judge
Kansas 1862	George Hillyer	Auditor
Kansas 1862	John Robinson	Secretary of State
Missouri 1867	Walter King	Judge
Tennessee 1867	Thomas Frazier	Judge
Louisiana 1870	George Wickliffe	Auditor
North Carolina 1871	William Woods Holden	Governor
Nebraska 1871	David Butler	Governor
New York 1872	George Barnard	Judge
Minnesota 1853	William Seeger	Treasurer
West Virginia 1875	John Burdett	Treasurer
Mississippi 1876	Alexander Kelso Davis	Lieutenant Governor
Georgia 1879	Washington Goldsmith	Comptroller General
Minnesota 1881	E. St. Julien Cox	Judge
New Jersey 1886	Patrick Laverty	Prison Warden
Kentucky 1888	James Tate	Treasurer
New Jersey 1895	Patrick Connelly	Judge
New York 1913	William Sulzer	Governor
Oklahoma 1915	A.P. Watson	Corporations Commissioner
Tennessee 1916	Jesse Edgington	Judge
Tennessee 1916	Z. Newton Estes	District Attorney
Texas 1917	James Ferguson	Governor
Montana 1918	Charles Liebert Crum	Judge
Oklahoma 1923	John Walton	Governor
Montana 1927	Charles Stewart	Secretary of State
Oklahoma 1929	Henry Johnston	Governor
Massachusetts 1941	Daniel Coakley	Governor’s Council
Michigan 1943	Michael Nolan	Judge
Tennessee 1958	Raulston Schoolfield	Judge
Oklahoma 1965	Napoleon Johnson	Judge
Texas 1976	O.P. Carrillo	Judge
Florida 1978	Samuel Smith	Judge
Arizona 1988	Evan Mecham	Governor
Pennsylvania 1994	Rolf Larsen	Judge
Missouri 1994	Judith Moriarty	Secretary of State
Nevada 2004	Kathy Augustine	Controller
Nebraska 2006	C. David Hergert	Regent
Illinois 2009	Rod Blagojevich	Governor
South Dakota 2022	Jason Ravnsborg	Attorney General
Kentucky 2023	Ronnie Goldy Jr.	Prosecutor

(*Vermont was not admitted as a state until 1791)

* J. Sinclair Armstrong Professor of International, Foreign, and Comparative Law, Harvard Law School.

[2] The eight were William Woods Holden, North Carolina (1871); David Butler, Nebraska (1871); William Sulzer, New York (1913); James Ferguson, Texas (1917); John Walton, Oklahoma (1923); Henry Johnston, Oklahoma (1929); Evan Mecham, New Mexico (1988); and Rod Blagojevich, Illinois (2009). See Becky Little, 8 US Governors Who Were Impeached and Convicted, History (Aug. 16, 2021), https://www.history.com/news/us-governors-impeached-convicted-left-office [https://perma.cc/9F9T-G659].

[3] Such as Andrew Cuomo in New York (2021), and John G. Rowland in Connecticut (2004). See Luis Ferré-Sadurní and Jeffery C. Mays, Cuomo Is Resigning, but Some Legislators Still Want to Impeach Him, N.Y. Times (Aug. 12, 2021), https://www.nytimes.com/2021/08/12/nyregion/cuomo-impeachment-investigation.html [permalink unavailable]; Office of the Governor v. Select Committee of Inquiry, 858 A.2d 709, 712 n.1 (Conn. 2004). At the federal level, Richard Nixon resigned to avoid impeachment. See Ron Elving, Half a century ago, Nixon became the only president to resign, NPR (Aug. 9, 2024), https://www.npr.org/2024/08/09/nx-s1-5068704/nixon-resign [https://perma.cc/93RP-PFLX].

[4] How federal impeachment works, USA.Gov (last accessed Feb. 24, 2025), https://www.usa.gov/impeachment [https://perma.cc/7ADF-AHKR].

[5] See Kentucky Senate convicts ex-prosecutor in impeachment trial, Associated Press (Mar. 20, 2023), https://apnews.com/article/impeachment-prosecutor-nude-photos-kentucky-senate-f5e6774d8622739e8842ede5777a431e [permalink unavailable]. The prosecutor, Ronnie Goldy, Jr., had resigned amidst the impeachment proceedings, but the legislators still went forward, and Goldy was convicted and disqualified from future office in Kentucky. See In re Articles of Impeachment against Ronnie Lee Goldy, Jr., 2023 Sess. (Ky. 2023) https://apps.legislature.ky.gov/record/23rs/RLGJ_ImpeachmentResult.pdf [https://perma.cc/NB3M-QMBJ].

[6] See Robert Schrage & John Schaaf, Hidden History of Kentucky Political Scandals, ch. 3 (2020).

[7] In 1991, Commissioner of Agriculture Ward Burnette resigned after impeachment and before Senate trial. See Jailed Kentucky Official Quits, N.Y. Times (Feb. 7, 1991), https://www.nytimes.com/1991/02/07/us/7-arizona-lawmakers-charged-with-corruption.html [permalink unavailable]. Also in 2023, prosecutor Richard Boling resigned after the introduction of an impeachment resolution against him. See Andrew Wolfson, Western Kentucky prosecutor to resign rather than face impeachment, Louisville Courier J. (Jan. 9, 2023), https://www.courier-journal.com/story/news/2023/01/09/rick-boling-resignation-kentucky-commonwealth-attorney/69792238007/ [https://perma.cc/C7SU-QHJP].

[8]  See List of Individuals Impeached by the House of Representatives, U.S. House of Representatives Archive, https://history.house.gov/Institution/Impeachment/Impeachment-List/ [https://perma.cc/8HNY-VV2F] (listing all impeachments passed by the House and their outcomes).

[9]  See, e.g., Hon. R. David Proctor, An Overview of Judicial Independence from Impeachment to Court-Packing, 47 U. Mem. L. Rev. 1147, 1152-59 (2017); See also Gerald L. Neuman, Impeachment as Cause or Cure of Human Rights Violations, in Impeachment in a Global Context: Law, Politics, and Comparative Practice 3 (Chris Monaghan, Matthew Flinders & Aziz Z. Huq eds. 2024).

[10] See, e.g., Miriam Seifter, Judging Power Plays in the American States, 97 Tex. L. Rev. 1217, 1229-30 (2019) (discussing 2018 impeachment of the entire supreme court of West Virginia); In re Larsen, 812 A.2d 642, 644-46 (Pa. Spec. Trib. 2002) (discussing 1994 impeachment and removal of Supreme Court Justice Rolf Larsen).

[11] See, e.g., Peter Baker, Inside Impeachment’s Rise as a Weapon of Partisan Warfare, N.Y. Times (Feb. 1, 2024) https://www.nytimes.com/2024/02/01/us/politics/impeachments-weapon-partisan-warfare.html. [permalink unavailable]; Bruce Schreiner, Impeachment fever hits Kentucky with efforts to oust leaders, Associated Press (Jan. 31, 2021) https://apnews.com/general-news-f9ebaa25985fee93634e1f28500536c1 [permalink unavailable].

[12] Recent examples include the impeachment and removal of South Dakota Attorney General Jason Ravnsborg, and the impeachment but acquittal of Texas Attorney General Robert Paxton. See Julie Bosman, South Dakota Removes Its Attorney General After Fatal Crash, N.Y. Times (June 21, 2022) https://www.nytimes.com/2022/06/21/us/jason-ravnsborg-impeachment-south-dakota.html [permalink unavailable] (discussing the impeachment and conviction of South Dakota’s Republican Attorney General, Jason Ravnsborg, by a Republican dominated state Senate); Zach Despart, Texas Attorney General Ken Paxton acquitted on all 16 articles of impeachment, The Tex. Tribune (Sept. 16, 2023) https://www.texastribune.org/2023/09/16/ken-paxton-acquitted-impeachment-texas-attorney-general/ [https://perma.cc/JC9N-NSW9] (discussing the impeachment of Texas Republican Attorney General Ken Paxton by House Republicans and acquittal in state Senate). As prominent examples from earlier times, Governors Butler, Sulzer and Ferguson were removed by opponents from their own party. Supra note 2.

[13] See 1 Roger Foster, Commentaries on the Constitution of the United States, Historical and Juridical, with Observations upon the Ordinary Provisions of State Constitutions and a Comparison with the Constitutions of Other Countries 633-713 (Boston, The Boston Book Co.1895) (describing acquittals and abandoned proceedings as well as convictions).

[14] Id. at 630.

[15] See Peter Charles Hoffer & N.E.H. Hull, Impeachment in America 1635-1805 (1984).

[16] See, e.g., Cortez A.M. Ewing, Early Tennessee Impeachments, 16 Tenn. Hist. Q. 291 (1957) (surveying Tennessee impeachments); Impeached: The Removal of Texas Governor James E. Ferguson 14 (Jessica Brannon-Wranosky & Bruce A. Glasrud eds. 2017) (chronicling the impeachment of Texas governor James E. Ferguson); Hannah Haksgaard, Tyler Moore, & Gabrielle Unruh, Making South Dakota History: An Introduction to the Special Impeachment Issue, S. D. L. Rev. 159 (2023) (issue focused on the impeachment of Attorney General Jason Ravnsborg).

[17] See Dianne Lugo, 3 of 5 statewide ballot measures fail in Oregon, Salem Statesman J. (Nov. 9, 2024), https://www.statesmanjournal.com/story/news/politics/elections/2024/11/09/oregon-election-results-2024-ballot-measures-approve-fail/76091373007/ [https://perma.cc/687D-GKAY] (discussing the passing of Ballot Measure 115, granting Oregon lawmakers impeachment power); Or. Const. art. IV, §34. Previously the Oregon Constitution had dispensed with impeachment. See Foster, supra note 13, at 528; Or. Const. 1857, art. VII, §19.

[18] Alaska Const. art. II, § 20 (The Alaska Constitution reverses the roles of the house and senate); Mo. Const. art. VII, § 2; Neb. Const. art. III, § 17 (Missouri and Nebraska provide for trial in the state supreme court, after accusation by the house in Missouri, and by the unicameral state legislature in Nebraska).

[19] E.g., Fla. Const. art. III, §17; Utah Const. art. VI, §17.

[20] See Mass. Const. of 1780, part II, ch. I, §2, art. VIII; 1941 Mass. Sen. J. 1535-52 (1941) (giving count-by-count votes on conviction and removal by majority of Daniel Coakley, an elected member of the Governor’s Council).

[21] See Eric Foner, Reconstruction: America’s Unfinished Revolution, 1863-1877, 441, 562 (1988) (on Holden and Ames).

[22]  See Richard Gergel & Belinda Gergel, “To Vindicate the Cause of the Downtrodden”: Associate Justice Jonathan Jasper Wright and Reconstruction in South Carolina, in At Freedom’s Door: African American Founding Fathers and Lawyers in Reconstruction South Carolina 36 (James Lowell Underwood & W. Lewis Burke Jr. eds. 2000).

[23] See e.g., Matthew L. Lifflander, The Only New York Governor Ever Impeached, 85(5) N.Y. State Bar Assn. J. 11 (2013).

[24] See Gerald L. Neuman, Impeachment, Disqualification, and Human Rights, 54 Colum. Hum. Rts. L. Rev. 627, 652 (2023); In re Goldy, supra note 5; John R. Lundberg, The Great Texas “Bear Fight”: Progressivism and the Impeachment of James E. Ferguson, in Brannon-Wranosky & Glasrud , supra note 16, at 44-45.

[25] Recall of State Officials, National Conference of State Legislatures, (last updated Sep. 15, 2021) https://www.ncsl.org/elections-and-campaigns/recall-of-state-officials [permalink unavailable].

[26] See Shaun Bowler, Recall and Representation: Arnold Schwarzenegger Meets Edmund Burke, 40 Representation 200 (2004); Id. at 207-08 (Bowler also reported a figure of 15 successful recalls of statewide officials (not including Davis), and many more at the municipal level).

[27]  Ky. Const. of 1792 art. V, para. 2; see also Ky. Const. §§ 112, 129 (repealed 1975).

[28]  Ky. Const. § 209 (repealed 2000).

[29]  Opinion of the Justices, 274 A.3d 269, 278-79 (Del. Supreme Court 2022) (Although the opinion was sought and given in general terms, the legislature’s request was prompted by improprieties attributed to the elected state auditor, Kathy McGuiness, who subsequently resigned after being convicted of misdemeanors); Melissa Steele, General Assembly Seeks Guidance on Removing Elected Officials, Cape Gazette, (Nov. 5, 2021) https://www.capegazette.com/article/general-assembly-seeks-guidance-removing-elected-officials/230000 [https://perma.cc/W23C-KQ49]; Ryan Mavity, Del. Auditor McGuiness Sentenced to Probation, Fined, Cape Gazette, (Oct. 19, 2022) https://www.capegazette.com/article/del-auditor-mcguiness-sentenced-probation-fined/247818?source=rs [https://perma.cc/WSB9-768Y]; See N.H. Const. art. 73 (In some states, the constitutional provision on address expressly targets the process at causes that would not be sufficient to justify impeachment).

[30]  See S.C. Const. art. XV, § 3 (obligatory: “shall” remove); Del. Const. art. III, § 13 (discretionary: may remove).

[31]  See Trump v. United States, 603 U.S. 593 (2024).

[32] See , e.g., Cal. Const. art. XX, § 11; Del. Const. art. XV, § 6 (“The Governor shall remove…”); for Kentucky, see Troy B. Daniels, Dawn L. Danley-Nichols, Kate R. Morgan, & Bryce C. Rhoades, Kentucky’s Statutory Collateral Consequences Arising From Felony Convictions: A Practitioner’s Guide, 35 N. Ky. L. Rev. 413, 425-28 (2008) (for Kentucky); Ky Const. art. 150.

[33] See State ex rel. Olsen v. Langer, 256 N.W. 377 (N.D. 1934) (finding that office of governor was immediately vacated upon federal fraud conviction, despite pendency of appeal); City of Pineville v. Collett, 172 S.W.2d 640 (Ky. 1943) (finding that office of city clerk was not vacated upon conviction for voluntary manslaughter until appeal had been decided).

Navigating Intoxicated Parenting: A Call for Clear Guidelines in Kentucky Law

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Navigating Intoxicated Parenting: A Call for Clear Guidelines in Kentucky Law

Emily Prince*

Introduction

While no specific age is provided in Kentucky law for when a child may stay home alone, in certain circumstances, Child Protective Services (CPS) will substantiate neglect against parents who leave their child unattended.[2] This occurs if the child is, for whatever reason, incapable of meeting their immediate needs while unattended in such a way “that the physical health and safety of the child is negatively affected.”[3] Similarly, if the child is of sufficient age and mental capacity so that the child is not placed at risk of harm by being alone, CPS will not substantiate a finding of supervision neglect against the parents or legal guardians.[4] CPS social workers often piggyback off of supervision neglect to substantiate findings of neglect against parents who are physically present but too intoxicated to care for the basic needs of their children, thereby negatively affecting the physical health and safety of the child.

An interesting conundrum occurs when the child is sufficiently capable of providing for their own immediate needs, yet the parent is physically present and intoxicated. In instances such as these, I, a former Kentucky CPS social worker from 2021 to 2022, was advised by different supervisors in different cases to do different things. In the first case, I was advised to unsubstantiate the allegation of neglect because there was no proof that the parental substance use affected the child. In the second case, I was advised to substantiate the allegation of neglect because the parental substance use alone does negatively affect the child. The reasons given were that in the case of an emergency, a parent would be unable to transport the child to a hospital or give consent to treatment, parental substance abuse places the child at greater risk of other abuse and neglect, and it places the child at risk of accidental ingestion or other exposure to drugs and drug paraphernalia. In both cases, the children were sufficiently competent such that a finding of supervision neglect would have been unsubstantiated should the child have been alone for the same amount of time.

Currently, Kentucky leaves significant room open for CPS and trial courts to find supervision neglect against a parent solely due to a parent’s misuse of substances, even though the parent did not expose the child to increased risk in other ways. Such a finding of neglect can lead to the child being removed from the home and placed with relatives or in foster care. While parental substance abuse may increase the risk of environmental hazards[5] and is correlated with negative social-psychological effects,[6] when these risks are not present or are minimized, the child’s interest in stability and maintaining family bonds and the state’s interest in preserving resources should be predominant. Unfortunately, the ambiguities in Kentucky’s statutory and administrative guidelines have proven ripe for CPS social worker discretion and inconsistency in finding parental substance misuse as child neglect. In response, Kentucky rule–makers should amend statutory and administrative guidelines to make clear that parental substance abuse alone, without more, is not grounds for substantiating neglect, but may be grounds for other interventions aimed at strengthening families and reducing the associated risks. 

     I.         Current Kentucky Law Leaves Too Much Room for Inconsistent Application 

A.     Existing Kentucky Legislation Leaves Significant Discretion for the Cabinet 

Kentucky Revised Statutes defines “abused or neglected child” in relevant part as:

(1) [A] child whose health or welfare is harmed or threatened with harm when:

(a) His or her parent, guardian, person in a position of authority or special trust, as defined in KRS 532.045, or other person exercising custodial control or supervision of the child: . . .

2. Creates or allows to be created a risk of physical or emotional injury as defined in this section to the child by other than accidental means;

3. Engages in a pattern of conduct that renders the parent incapable of caring for the immediate and ongoing needs of the child, including but not limited to parental incapacity due to a substance use disorder as defined in KRS 222.005;

4. Continuously or repeatedly fails or refuses to provide essential parental care and protection for the child, considering the age of the child; . . .

8. Does not provide the child with adequate care, supervision, food, clothing, shelter, and education or medical care necessary for the child's well-being when financially able to do so or offered financial or other means to do so . . .  [.][7]

Three points are noteworthy. First, parental substance abuse is mentioned only in subsection three. Second, to satisfy subsection three, the phrase, “[e]ngages in a pattern of conduct . . .” indicates that abuse or neglect in this instance requires a pattern of offenses, not just an isolated incident. Third, substance use disorder alone is insufficient to meet the criteria of abuse or neglect—the parent must also be incapable of meeting the child’s needs. In other words, the parent’s substance use must have an effect on the child.  

B.     Administrative Regulations Leave Significant Discretion for Worker 

922 KAR 1:330(2)(4) provides, in relevant part, that the Cabinet for Health and Family Services (Cabinet) shall: 

(b) Investigate or conduct an assessment upon receipt of a report that alleges neglect of a child perpetrated by a caretaker that may result in harm to the health and safety of a child in the following areas: . . .

2. Supervision neglect if the individual reporting has reason to believe that the physical health and safety of the child is negatively affected by lack of necessary and appropriate supervision; . . .

8. Neglect due to a caretaker's use of drugs or alcohol that results in:

a. A child born exposed to drugs or alcohol, as documented by a health care provider pursuant to:

(i) 42 U.S.C. 5106a(b)(2)(B)(ii); and

(ii) KRS 620.030(2);

b. A child's facilitated access to and use of drugs or alcohol that may result in a life-threatening situation for the child . . . [.][8] 

As substance abuse is only specifically mentioned regarding children’s access or exposure to drugs, social workers typically rely on supervision neglect when confronted with allegations of parental substance abuse.[9] The theory is that intoxication renders the parents unable to appropriately supervise their children. Although statutory and administrative guidance comes short in answering what constitutes “necessary and appropriate supervision,”[10] it nevertheless remains clear that the child must be detrimentally affected by the failure of the parents to supervise their child.[11] Inconsistency arises in practice concerning whether the “physical health and safety of the child is negatively affected” when the only potential for abuse arises from parental substance abuse in otherwise self–sufficient children. 

C.     Case Law Gives Rise to Unanswered Questions

M.C. v. Cabinet for Health and Family Services[12] almost squarely addresses the problem presented in the introduction.  Although the father regularly consumed alcohol around his three children, who were thirteen and fifteen at the time, he maintained that his drinking did not “have an effect on his ability to parent and care for his children” and refused to attend intensive outpatient treatment.[13] When he drank, the children observed a change in the appearance of his eyes and his words would be slurred.[14] He only drank at night and always drank away from the children on the deck.[15] When he drove the children to school in the morning, he was sober.[16] One child was bothered by his drinking and it sometimes led to arguments between the child and her father.[17] The children had good school attendance and were excelling in school.[18] The social worker had “no concerns about them being properly fed, clothed, or otherwise provided for.”[19] The home was described as “extremely cluttered” but not dirty, and there was no indication that anything in the home posed “a threat to the children’s health or well-being.”[20]

The trial court “found that the children were neglected under KRS 600.020(1)(a)2, 3, 4, and 8.”[21] Finding that there were no means available to leave the children inside the home due to the father’s refusal to stop drinking or attend intensive outpatient treatment, the trial court removed the children from the home.[22] The Cabinet changed the permanency goal of the family to adoption and abandoned reunification efforts.[23] The father, M.C., “appealed the family court’s decision to the Court of Appeals, which affirmed” the family court’s decision.[24]

M.C. appealed to the Supreme Court of Kentucky, and the Supreme Court overturned the trial court’s finding of neglect.[25] The Supreme Court acknowledged that KRS 600.020(1)(a)(2) allows a neglect finding where “a risk of abuse exists and does not require actual abuse prior to the child’s removal from the home or limitation on the contact with an abusive parent,”[26] but nevertheless held that “‘the risk of harm must be more than a mere theoretical possibility,’ it must be ‘an actual and reasonable potential for harm.’”[27] The Court relied on the children’s age and abilities in overturning the neglect finding but declined to create a categorical age in which a child cannot be subjected to neglect from a parent’s substance use.[28] The Court distinguished this case from one in which the child was a newborn and required care “nearly twenty-four hours a day.”[29] The Court also emphasized that the record was devoid of evidence indicating that the father’s alcoholism impacted the needs of the children in any detrimental way.[30] The Court stated that, while “M.C. would be well-advised to continue to seek substance use treatment,” his substance use had not rendered him neglectful of his children.[31]

The case of M.C. was somewhat unique in two respects. First, M.C.’s success can be attributed to his ability to appeal the trial court’s ruling and overcome the discretion afforded to trial courts’ determinations of fact. In neglect and abuse cases, the Cabinet must prove neglect or abuse only by a preponderance of the evidence.[32] “A family court’s finding of fact in [an abuse or neglect] action ‘shall not be set aside unless clearly erroneous.’”[33] Trial courts have broad discretion in finding whether a child has been neglected or abused[34] and significant leeway in safekeeping their determinations from being overturned on appeal.[35] M.C. went through two appeals before the Supreme Court of Kentucky overturned the trial court’s finding of neglect.[36] Not all parents deemed neglectful due to a substance abuse disorder will be fortunate enough to have the resources to appeal once, let alone twice.[37]

Second, in M.C., the father was using alcohol, not illegal substances. Although M.C. did not address the distinction, it leaves open the question of whether the illegal nature of other substances places the children at higher risk of not having their needs met. Whether through causation or correlation, parental alcohol use appears to have better outcomes for those in the child protection systems than parental use of illegal drugs.[38] The Court also leaves open the question of what abuse or neglect due to substance abuse would look like for children who are self–sufficient and able to be on their own without supervision for extended periods.

In Cabinet for Health and Family Services on behalf of C.R. v. C.B.,[39] which the appellate court heavily relied on and the Supreme Court of Kentucky distinguished in M.C.,[40] the Court found that substance use alone can be the basis of a neglect finding without additional finding of harm to the particular child when the substance use has been the basis for a prior involuntary termination of parental rights (TPR).[41] In C.B., the father of a newborn who tested positive for suboxone at birth due to the mother’s prenatal substance use “admitted to using heroin, Percocet, and off-street suboxone.”[42] The father had previously had his parental rights to other children involuntarily terminated.[43] In upholding the trial court’s finding of neglect and reversing the Court of Appeals, the Supreme Court of Kentucky stated that the father’s “prior history of drug abuse was found to have created a risk of harm in the prior TPR proceeding” and “the family court certainly does not have to wait for actual harm to occur before taking protective measures.”[44] The Court reiterated that “[KRS 600.020(1)(a)(2)], as written, permits the court’s finding where a risk of abuse exists and does not require actual abuse prior to the child’s removal from the home or limitation on the contact with an abusive parent.”[45] 

What exactly constitutes “a risk of abuse” is left undefined and subject to interpretation. The Court has insisted that “risk of harm must be more than a mere theoretical possibility” but “an actual and reasonable potential for harm.”[46] Surely, an alcoholic father of teenagers increases some risk of harm, yet M.C. found that it did not. While C.R. focused mostly on the prior TPR of the father,[47] the Court in M.C. made clear that the children’s ages were a predominant factor for the distinction.[48] M.C. also made clear that the fact that the children’s needs had not gone unmet was a motivating factor,[49] but no evidence was presented in C.R. that the newborn’s needs had gone unmet due to the father’s substance use.[50] What is left after these two cases is confusion, and confusion is a ripe breeding ground for inconsistent application of the law.

     II.         Supervision Neglect as a Basis for Finding Neglect Due to Parental Substance Abuse 

Given that no separate category of neglect exists for situations in which a parent is present but intoxicated, Cabinet workers must find that a case meets the criteria for supervision neglect before substantiating an allegation of neglect in such situations. The question becomes, then, whether, with all else being equal, the criteria for evaluating whether a child can be left unattended should be the same for when a child can be left alone with an intoxicated parent. Kentucky does not have a set age for when a child is permitted to stay alone.[51] Instead, Kentucky will accept a report for supervision neglect “if the individual reporting has reason to believe that the physical health and safety of the child is negatively affected by lack of necessary and appropriate supervision.”[52] Beyond this, workers are given a high level of discretion in how they determine whether a child may be left alone. One Cabinet worker, Misty, reported that she bases her discretion on “age, maturity, cognitive ability, etc.”[53] Misty assesses the child’s ability to respond appropriately in case of an emergency by providing the child with emergency scenarios and asking the child how they would respond, and also determining whether the child has access to emergency numbers.[54] Other workers will likely use similar criteria, but each worker will evaluate the information obtained differently.

Evaluating whether other factors should be considered beyond the age and abilities of the child when determining whether the child may be left with an intoxicated caregiver requires asking whether adding an intoxicated caregiver increases the risks that would otherwise exist if the child were left alone. The answer to this is in the affirmative—a present but intoxicated caregiver does pose potential risks to a child that would not be present if the child were alone.  A caretaker using substances exposes children to the risk of coming into contact with environmental hazards such as alcohol, drugs, or drug paraphernalia, which may lead to accidental overdose or physical injury to young children[55] and experimental drug use in older children.[56] These additional risks, however, fall under the Cabinet’s category of environmental neglect and could be charged as such if the parent exposes the child to a dangerous environment by leaving alcohol, drugs, and drug paraphernalia unsecured.[57]  These are distinct categories that must be separately satisfied. Fully or partially meeting the criteria for one does not substitute for fully meeting the criteria of another.

Another potentially added risk of an intoxicated parent versus an absent parent is that, in the case of an emergency, the parent would be unable to consent to treatment. Medical practitioners must gain the informed consent of a patient or their representative before providing treatment[58] and failure to do so can be considered malpractice.[59] Informed consent requires that the person giving the consent is able “to understand relevant medical information and the implications of treatment alternatives and to make an independent, voluntary decision.”[60] Depending on the level of intoxication, a parent may not have the requisite mental capacity to understand these risks and provide informed consent.[61] Fortunately, the Kentucky legislature has anticipated times when medical treatment should be given without pause.[62] In such cases, there is an exception to the requirement of informed consent for emergencies[63] and when “in the professional's judgment, the risk to the minor's life or health is of such a nature that treatment should be given without delay and the requirement of consent would result in delay or denial of treatment.”[64]

Of course, should these provisions fail to accommodate the situation and the child be forced to go without medical care based on the parent’s inability to consent, this potentially could be considered medical neglect. However, the criterion for medical neglect makes this scenario unlikely if not impossible. Medical neglect requires that the child not receive treatment for injury, illness, or disability that may be life threatening, “result in permanent impairment,” “interfere with normal functioning and worsen,” or “be a serious threat to the child’s health due to the outbreak of a vaccine preventable disease, unless the child is granted an exception to immunization pursuant to [statute].”[65] The statutory exceptions to informed consent discussed above ensure that consent is not a hurdle to seeking treatment for the sorts of ailments that would be considered medical neglect if gone untreated. Transportation to the hospital in the case of an emergency could still be a barrier to treatment when the driver is too intoxicated to drive, but limited transportation is not always considered neglect, such as when it is due to poverty.[66] Ambulatory services are capable of transporting children to the hospital in situations such as these.  Therefore, although intoxicated parents do increase risks, these risks are either considered neglect under a separate category or are sufficiently minimized to not constitute neglect.
 

III.         Considerations and Competing Interests

Determining how to address parental substance abuse in a child abuse or neglect context requires a weighing of multiple factors including parental rights, the best interests of the child, and the state’s interests in conserving its resources.

A.     Preserving Parental Rights 

Parents have a long–established fundamental liberty interest in the care, custody, and control of their children,[67] meaning that “a parent has a basic and fundamental right to be free from governmental interference when parenting a child.”[68] This is true even if the parents “have not been model parents.”[69] The Court has recognized a parent’s “‘desire for and right to the companionship, care, custody, and management of his or her children’ is an interest far more precious than any property right.”[70]  Before a parent can be deprived of this fundamental liberty interest by the state, the parent is entitled to procedural safeguards.[71]

In state–initiated abuse or neglect proceedings, the Cabinet must prove abuse or neglect as defined in KRS 600.020[72] by a preponderance of the evidence.[73] In K.H. v. Cabinet for Health and Family Services, the Court of Appeals of Kentucky refused to uphold neglect findings where the risk of harm to the child was a “mere theoretical possibility” and where the conclusion was merely speculative and “based upon the compounding of inferences upon inferences.”[74] In so deciding, the court stressed the dangers of “wide-reaching intrusion by the state into the parent-child relationship” and warned that allowing the Cabinet to find neglect based on attenuated circumstances would give the state too much power in imposing its views about proper parenting.[75] A parent against whom neglect is found is placed on a registry and barred from working many jobs involving children and other vulnerable populations.[76] Given what a parent has at stake in abuse and neglect proceedings, it is crucial that a court ensure that the parent placed the child at risk of actual harm and not merely at risk of violating social norms.[77] 

B.     Preserving State Resources 

The state has “a fiscal and administrative interest in reducing the cost and burden” of neglect and abuse proceedings.[78] In 2016, Kentucky spent an estimated $560 million on child neglect and maltreatment.[79] It is nearly impossible to estimate how much money Kentucky spends on instances similar enough to the introductory scenario to be meaningful and thus determine how much Kentucky would save by constraining the criteria in which this sort of neglect is found. Nonetheless, a natural inference is that a narrower definition of abuse or neglect would result in fewer cases of neglect and less money expenditure by the state for investigating allegations and funding foster homes. Given that the state pays between $27 and $108.64 per day per child in foster care just to reimburse the foster parents, not factoring in other costs such as Medicaid coverage or food assistance[80], minimizing the number of children that go to foster care is a logical way to reduce financial expenditure by the state.

C.     Mitigating Harm to Children

Parental substance abuse poses dangers beyond inadequate supervision. CPS workers are highly aware that parental substance abuse is associated with an increased risk of child abuse and neglect.[81] Of course, correlation doesn’t necessarily mean causation. Many factors contribute to both substance abuse and child maltreatment, including parental mental illness, lower socioeconomic status, lower education, higher levels of stress in the home, and residential and caretaker instability.[82] Interestingly, child abuse rates are the same for parents with a current diagnosis of substance abuse as parents with a prior diagnosis of substance abuse, suggesting that sobriety does not mitigate the likelihood of committing abuse.[83] This implies that substance abuse itself is not the cause of child abuse but rather another symptom of a complex interplay between social, biological, and environmental factors.

Perhaps, then, the most efficient way to address child abuse through the lens of parental substance misuse is to broaden the scope of the inquiry to include other risk factors associated with parental substance misuse. In this vein, perhaps the state should consider making parental mental illness, lower socioeconomical status, lower education, higher levels of stress in the home, and residential and caretaker instability child abuse or neglect. Of course, this idea would shock the conscience of the average citizen, who would balk at the idea by saying that children are always exposed to risks, and such is part of life. There is some risk in giving a child a deadly weapon, yet school aged children all across the country are armed every year with bows and arrows in the name of archery. There is always a risk that a child will choke on solid foods, yet no pediatrician would advise the parents to maintain a liquid diet until the child is an adult. For that matter, parental cigarette smoking poses risks to children without benefiting them in any way, yet Kentucky does not make cigarette smoking by parents child abuse.[84]

This creates an interesting quandary about which risks society is willing to tolerate and which risks cross the line into abuse or neglect. The answer to this seems to focus not on the amount of risk but on the social acceptance of the act leading to the risk. For example, in my experience as a social worker and observing other workers, I noticed that the parent’s reasons for leaving a child unsupervised influenced whether the worker substantiated the neglect allegation. If the parents left the child home alone to go to work, the outcome would be more favorable to them than if they had left the child to visit a paramour. The risk to the child was the same but the outcomes of the cases were different. A similar bias seems to be at play regarding the “risk” of parental substance use and inadequate supervision. When discussing this topic with my former supervisor and coworkers, I was advised that if the parent is incapacitated due to drugs, this is neglect because the parent is unavailable should the child need medical treatment. At the same time, if the parent is sedated for surgery, this would not be neglect because it is for medical reasons. Again, the risk to the child is the same but the cases have different outcomes.

It is thus fair to conclude that, for better or for worse, in the abuse and neglect arena, the “risks” of parental substance abuse encompass more than just the risks to the child. The “risks” include at least some amount of social judgment of the proprieties of the parent’s actions. This is particularly relevant when contemplating whether to distinguish M.C. v. Cabinet for Health and Family Services[85] (discussed above) from the introductory scenario. M.C. involved parental alcohol abuse.[86] Studies estimate between 12% and 70% of child abusers are alcoholics.[87] This overlaps significantly with the estimated 40% to 80% increase in child abuse brought on by parental substance misuse other than alcohol.[88] This indicates that there may not be a meaningful distinction drawn between the effects of parental substance abuse and parental alcohol abuse regarding child abuse sufficient to justify differential treatment of them in the dependency, neglect, and abuse courts. 

D.     Preventing Further Harm to Children by Removal

When the Cabinet believes there is sufficient evidence for the court to find neglect or abuse and the court agrees, the child may be removed from their family home and either placed with relatives, fictive kin, or put in foster care.[89] While removing a child from an at–risk home may intuitively seem to be in the best interests of the child, it is often the case that removing the child from their parents causes more psychological trauma than if the child had been left in the home.[90] In addition to the trauma associated with removal, children are frequently exposed to abuse and neglect in their foster homes.[91]

IV.         Balancing Risk and Intervention: The Argument for ‘Services Needed’ Approach 

Kentucky implemented its juvenile code to protect children and maintain family bonds by adopting effective policies and practices that are supported by empirical evidence and “offering all available resources to any family in need of them.”[92] Clearly, parental substance abuse is a real issue of concern for those concerned about child safety and welfare. While this Note argues that the current state of the law does not call for a finding of neglect for parental substance use beyond what is appropriate for such a finding under supervision neglect (or the narrow circumstances defined in 922 KAR 1:330(2)(4)(b)(8)),[93] it would be naïve to ignore the increased risk that accompanies such behavior. Parents that use substances expose their children to an increased risk of educational delays; insufficient dental and medical attention; mental, behavioral, and emotional issues; injury due to dangerous home environment; and substance abuse issues for the child themselves as they grow older.[94] Even if these risks are not sufficient to justify classifying the root behavior as neglect or abuse, perhaps other routes can be taken to improve outcomes.

Instead of substantiating or unsubstantiating an allegation of abuse or neglect, the Cabinet can instead make a “services needed” finding.[95] This finding is appropriate when the family has high risk factors but “the child was found to be safe during the child protection intervention” and the risk factors are at an insufficient level to open a protection case.[96] The goal of such a finding is to reduce these risk factors and provide services to the family.[97] If the Cabinet makes a “services needed” finding, the Cabinet would open an ongoing case and work with the family to provide empirical and strengths based preventative services, such as substance abuse treatment and mental health counseling.[98] These services are voluntary and the family is free to refuse them.[99] Should the family refuse and the Cabinet lacks the evidence to make a finding of abuse or neglect, the case is closed without providing further services.[100]

This avenue is the appropriate avenue for the introductory scenario. It recognizes that substance abuse raises the risk of maltreatment but isn’t in itself maltreatment. It allows the family the opportunity to receive services before the issues turn into abuse but abstains from encroaching on the parents’ fundamental rights. It also allows the state to conserve its resources and spend them wisely by investing them in those willing to make meaningful changes. 

Conclusion 

Understandably, the Kentucky legislature has given room to the Cabinet to decide what constitutes abuse or neglect. Also understandably, the Cabinet has attempted to give its workers wide enough latitude to deal with real life situations as they arise. These situations are varied, complex, and hard to predict. It would be impossible to exhaustively anticipate and provide guidance on all potential scenarios. One scenario, nonetheless, is reoccurring and demands more thorough guidance: the situation in which a child that would otherwise be competent to be unsupervised is left to the sole care of an intoxicated parent and no other associated risk is present. The law as it stands seems to indicate that this situation would not encompass neglect, but experience indicates a variety of approaches by differing workers and supervisors and results in different outcomes for materially equal cases. To prevent such inconsistency, Kentucky lawmakers should provide more guidance about how to address this situation. The most logical approach is to unsubstantiate claims of neglect in such a scenario and instead offer a “services needed” finding. This approach recognizes that risks are present when parents abuse substances but honors the parent’s constitutional rights, considers the best interests of the child, and takes into account the state’s interest in ensuring stability for the child and familial unity while also managing state resources efficiently. Kentucky lawmakers should update relevant laws to reflect these goals and remove discretion inconsistent with this recommendation.

* J.D Expected 2025, University of Kentucky Rosenberg College of Law; BS Criminal Justice 2020, Eastern Kentucky University.

[2] Ana Rocío Álvarez Bríñez, At What Age Can You Leave Children Home Alone in Kentucky?, Louisville Courier J., https://www.courier-journal.com/story/news/2023/06/09/planning-on-leaving-your-kids-alone-this-summer-get-ready/70271092007/ [https://perma.cc/DT8M-ZV9X ] (June 10, 2023, 5:45 PM).

[3] See 922 Ky. Admin. Regs. 1:330 (2023).

[4] See id.

[5] Vincent C. Smith & Celeste R. Wilson, Families Affected by Parental Substance Use, 138 American Acad. of Pediatrics e2, e4 (Aug. 2016), http://publications.aap.org/pediatrics/article-pdf/138/2/e20161575/1507458/peds_20161575.pdf [permalink unavailable].

[6] See Jessica M. Solis, Julia M. Shadur, Alison R. Burns & Andrea M. Hussong, Understanding the Diverse Needs of Children Whose Parents Abuse Substances, 5 Current Drug Abuse Rev. 135, 135 (2012).

[7] Ky. Rev. Stat. Ann. § 600.020 (West 2022) (emphasis added).

[8] 922 Ky. Admin. Regs. 1:330(2)(4)(b) (2023).

[9] Email interview with Misty Adkins, Social Service Worker, Cabinet for Health & Fam. Servs. (Jan. 31, 2024, 8:49 AM EST) (on file with author).

[10] See Ky. Rev. Stat. Ann. § 600.020 (West 2022); Ky. Rev. Stat. Ann. § 620.020 (West 2019); 922 Ky. Admin. Regs. 1:330 (2023).

[11] 922 Ky. Admin. Regs. 1:330(2)(4)(b) (2023).

[12] M.C. v. Cabinet for Health & Fam. Servs., 614 S.W.3d 915 (Ky. 2021).

[13] Id. at 919.

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id. at 919–20.

[20] Id. at 920.

[21] Id.

[22] Id.

[23] Id.

[24] Id.

[25] Id. at 917.

[26] Id. at 923 (citing Cabinet for Health & Fam. Servs. ex rel. C.R. v. C.B., 556 S.W.3d 568, 576 (Ky. 2018)).

[27] Id. (citing K.H. v. Cabinet for Health & Fam. Servs., 358 S.W.3d 29, 32 (Ky. Ct. App. 2011)).

[28] Id. at 924–25.

[29] Id. at 924 (distinguishing Cabinet for Health & Fam. Servs. ex rel. C.R. v. C.B., 556 S.W.3d 568, 573 (Ky. 2018)).

[30] Id.

[31] Id. at 929.

[32] Ky. Rev. Stat. Ann. § 620.100(3) (West 2021).

[33] M.C., 614 S.W.3d at 921 (citing Ky. R. Civ. Proc. 52.01).

[34] Cabinet for Health & Fam. Servs. ex rel. C.R. v. C.B., 556 S.W.3d 568, 573 (Ky. 2018) (citing Dep’t for

Human Res. v. Moore, 552 S.W.2d 672, 675 (Ky. Ct. App. 1977)).

[35] See id. at 574.

[36] M.C., 614 S.W.3d at 920.

[37] See Maia Szalavitz, Addictions Are Harder to Kick When You’re Poor. Here’s Why, Guardian (June 1, 2016), https://www.theguardian.com/commentisfree/2016/jun/01/drug-addiction-income-inequality-impacts-recovery?CMP=share_btn_fb [https://perma.cc/HRN9-3NG8] (“addiction . . . is far less likely to hit people who have stable, structured lives and decent employment than it is those whose lives are marked by uncertainty and lack of work.”).  

[38] Child Welfare Info. Gateway, Parental Substance Use: A Primer for Child Welfare Professionals, 4 (2021), https://www.childwelfare.gov/resources/parental-substance-use-primer-child-welfare-professionals [permalink unavailable].

[39] C.B., 556 S.W.3d 568.

[40] M.C., 614 S.W.3d at 923–25.

[41] C.B., 556 S.W.3d at 576.

[42] Id. at 570.

[43] Id.

[44] Id. at 576.

[45] Id.

[46] M.C., 614 S.W.3d at 923.

[47] C.B., 556 S.W.3d at 575–76.

[48] M.C., 614 S.W.3d at 924–25.

[49] Id. at 924.

[50] See C.B., 556 S.W.3d at 576 (illustrating that the Court bases its holding on the father’s condition and drug use without evaluating whether the needs of the children were going unmet).

[51] Compare Md. Code Ann., Fam. Law § 5-801 (West 1986) (stating that a caretaker may not leave a child eight years of age in a building or vehicle unless someone thirteen years of age or older is with them), and Or. Rev. Stat. Ann. § 163.545 (West 1991) (stating that a custodian or caregiver may be charged with neglect if they leave a child under 10 years of age unattended), with Ky. Rev. Stat. Ann. § 600.020 (West 2022) (failing to include any age restriction on leaving children unattended under neglect parameters).

[52] 922 Ky. Admin. Regs. 1:330 (2023).

[53] Email interview with Misty Adkins, supra note 9.

[54] Id.

[55] See Sofie Kuppens, Simon C. Moore, Vanessa Gross, Emily Lowthian & Andy P. Siddaway, The Enduring Effects of Parental Alcohol, Tobacco, and Drug Use on Child Well–Being: A Multilevel Meta–Analysis, 32 Dev. Psychopathology 765, 765 (2019). For a discussion regarding the causes of accidental overdose in children, see Brian C. Kelly, Mike Vuolo, & Laura C. Frizzell, Pediatric Drug Overdose Mortality: Contextual and Policy Effects for Children Under 12, Pediatric Rsch. 1258, 1259 (May 21, 2021).

[56] How Do Teens Find Drugs?, Recovery Village, https://www.therecoveryvillage.com/teen-addiction/drug/how-teens-get-drugs/  [https://perma.cc/K3HU-3QRL] (Aug. 30, 2024).

[57] Cabinet for Health & Fam. Servs., Standards of Practice Manual: 2.3 Acceptance Criteria (effective Oct. 1, 2022), https://manuals-sp-chfs.ky.gov/chapter2/Pages/2-3.aspx [https://perma.cc/SBJ9-BNYL].

[58] Opinion 2.1.1: Informed Consent, AMA Code of Ethics, https://code-medical-ethics.ama-assn.org/ethics-opinions/informed-consent [https://perma.cc/7MR2-VWQP] (last visited Apr. 12, 2025).

[59] See Ky. Rev. Stat. Ann. § 411.167(4) (West 2019); Informed consent in Kentucky, Gray L., PLLC (Sept. 25, 2019), https://www.dgraylaw.com/blog/2019/09/informed-consent-in-kentucky/#:~:text=Physicians%20must%20get%20

informed%20consent,informed%20consent%20constitutes%20medical%20malpractice [permalink unavailable].

[60] Opinion 2.1.1: Informed Consent, supra note 58.

[61] See Catherine A. Marco, Does Patient Autonomy Outweigh Duty to Treat?, 5 Am. Med. Ass’n J. Ethics 37, 39 (2003).

[62] Ky. Rev. Stat. Ann. § 304.40–320 (West 1976).

[63] Id. § 304.40–320(3).

[64] Ky. Rev. Stat. Ann. § 214.185(5) (West 2021).

[65] Cabinet for Health & Fam. Servs., supra note 57.

[66] See Ky. Rev. Stat. Ann. § 600.020(1)(a)(8) (West 2022).

[67] Prince v. Massachusetts, 321 U.S. 158, 166 (1944); Santosky v. Kramer, 455 U.S. 745, 753 (1982).

[68] Z.T. v. M.T., 258 S.W.3d 31, 33 (Ky, Ct. App. 2008).

[69] Santosky, 455 U.S. at 753.

[70] Id. at 758–59 (quoting Lassiter v. Dep't of Soc. Servs., 452 U.S. 18, 27 (1981)).

[71] Id. at 753–54.

[72] Ky. Rev. Stat. Ann. § 600.020 (West 2022).

[73] K.H. v. Cabinet for Health & Fam. Servs., 358 S.W.3d 29, 30 (Ky. Ct. App. 2011).

[74] Id. at 32 (overturning neglect finding against mother who refused to keep her children away from their father who had substantiated sexual abuse findings against a different child because the risk of harm to her children was too attenuated to constitute neglect).

[75] Id. at 31.

[76] See National Background Check Program (NBCP), Cabinet for Health & Fam. Servs., https://www.chfs.ky.gov/agen

cies/dcbs/dcc/Pages/nationalbackgroundcheck.aspx [permalink unavailable] (last visited Apr. 12, 2025).

[77] See K.H., 358 S.W.3d at 31. (“It is not enough for the Cabinet to show that K.H. would be well–advised to agree to the terms of the Aftercare Plan. The applicable statutory definition requires a finding that K.H. created or allowed to be created a risk that an act of sexual abuse will be committed upon the children”).

[78] Santosky v. Kramer, 455 U.S. 745, 766 (1982).

[79] Prevent Child Abuse Kentucky, Primary Prevention of Child Abuse and Neglect, Prevent Child Abuse Am., https://apps.legislature.ky.gov/CommitteeDocuments/320/12791/7%2022%202020%20Primary%20Prevention%20KY.pdf [https://perma.cc/K83C-43WW ].

[80] Cabinet for Health & Fam. Servs., Standards of Practi. Manual: 12.24 Per Diem rates (Including Specialized Foster Care) (effective Feb. 15, 2024), https://manuals-sp-chfs.ky.gov/chapter12/Pages/12-24.aspx#Practice_Guidance [https://perma.cc/GW3T-P3KY].

[81] See Cabinet for Health & Fam. Servs., Standards of Practi. Manual: 7.4 CPS Prevention Planning (effective June 29, 2020), https://manuals-sp-chfs.ky.gov/chapter7/Pages/7-4.aspx [permalink unavailable]; Kuppens, Moore, Gross, Lowthian & Siddaway, supra note 55.

[82] Solis, Shadur, Burns & Hussong, supra note 6.

[83] Id.

[84] Id.

[85] M.C. v. Cabinet for Health & Fam. Servs., 614 S.W.3d 915 (Ky. 2021).

[86] Id. at 918.

[87] Effects of Parental Substance Abuse on Children and Families, Am. Acad. of Experts in Traumatic Stress, https://www.aaets.org/traumatic-stress-library/effects-of-parental-substance-abuse-on-children-and-families [https://perma.cc/4NNY-4S7D ] (last visited Apr. 12, 2025).

[88] Solis, Shadur, Burns & Hussong, supra note 6.

[89] See Cabinet for Health & Fam. Servs., Standards of Practi. Manual: 5.1 Relative and Fictive Kin Placement Consideration (effective Oct. 4, 2023), https://manuals-sp-chfs.ky.gov/chapter5/Pages/5-1.aspx [https://perma.cc/63XK-8RCH]; Ct. Improvement Program State Team, Dependency, Neglect and Abuse Cases: Know Your Rights and Responsibilities 5–8 (Oct. 2020), https://apps.legislature.ky.gov/CommitteeDocuments/17/13364/July%207%

202021%20Vanover%20Dependency%20Neglect%20and%20Abuse%20Booklet.pdf [permalink unavailable].

[90] Shanta Trivedi, The Harm of Child Removal, 43 N.Y.U. Rev. of L. & Soc. Change 523, 527–41 (2019).

[91] Id. at 542–44.

[92] Ky. Rev. Stat. Ann. § 600.010(2)(a) (West 2014).

[93] 922 Ky. Admin. Regs. 1:330(2)(4)(b)(8) (2023).

[94] Solis, Shadur, Burns & Hussong, supra note 6.

[95] Cabinet for Health & Fam. Servs., Standards of Practi. Manual: 2.22 Making a Finding, Notifications, and Court Involvement (effective Oct. 19, 2022), https://manuals-sp-chfs.ky.gov/chapter2/Pages/2-22.aspx [permalink unavailable].

[96] Id.

[97] Id.

[98] Id.

[99] Id.

[100] Id.

Blank Space: Film and Television’s Missing Statute

Download a PDF Version

Blank Space: Film and Television’s Missing Statute

Meghan Goins*

Introduction

Artists and consumers alike are currently grappling with rapidly changing technology. As digital media grows in popularity and prominence, some art forms, such as music, may be more harmonious with copyright law than others. Copyright law should be applied more evenly across various art forms and streaming platforms to better incentivize creativity and make art more easily accessible to consumers. Recognizing that music copyright needed to be updated, Congress has recently acted to further those interests for the music industry. The passage of the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (MMA)[2] was a legislative response to the significant changes in the music industry.[3] To best achieve the goals of copyright law while balancing the interests of copyright holders and consumers, a statute analogous to the MMA should be passed for the film and television industries.

It will be important to first conduct a brief overview of the MMA and the history of the evolving vehicles for the consumption of copyright works. Rather than analyzing every major streaming platform, this Note will examine a few platforms which hold the most consumer attention regarding the specific art forms the platform provides access to. This Note will explore recent litigation and new developments within copyright law to determine how to achieve the goal of greater consumer accessibility to art. Ultimately, that discussion will lead to the recommendation that copyright standards for music should be adapted to visual media through a statute similar to Title I of the MMA.

I.      Background

Copyrights are automatically created when an artist (also called the “author” for purposes of copyright law) generates a creative work in a fixed medium.[4] Beyond the copyright automatically generated when a work is created, artists may also seek a copyright registration, which functions as a “public record of . . . ownership” and gives artists “access to federal courts in the case of infringement.”[5] To obtain copyright registration for a musical composition, artists may register “an individual sound recording or musical work,” “up to ten unpublished works all by the same author,” or “up to twenty musical works or twenty sound recordings if the works are created by the same author or have at least one common author, and if the claimant for each work in the group is the same.”[6] For films, a copyright is also automatically created when the film is generated, but copyright law protects “only the expression fixed in a motion picture (camera work, dialogue, sounds, and so on)” and “does not cover the idea or concept behind a work or any characters portrayed in it.”[7] Television shows are automatically protected by copyright law as well. For any type of media, though, registration is required “in order to file an infringement lawsuit.”[8]

Licenses allow a person or entity other than the copyright holder to legally use the copyrighted work. To obtain a license, one can contact the owner of the copyright for a particular work.[9] Importantly, “licenses allow a copyright owner to retain the rights while giving someone else a right to exercise some of them. . . .”[10] The rights a licensee has depend on whether the license granted is exclusive or nonexclusive, aside from the inability of a licensee to “authorize others to exercise the rights to that work without permission from the copyright owner.”[11] Additionally, no licensee can “sue and potentially recover damages for [copyright] infringement.”[12] If the license granted is nonexclusive, the original copyright owner of the work may still authorize other entities to use the work, and the original copyright owner may still “[use] the work in the manner and length of time described in the license.”[13] If the copyright owner grants an exclusive license, no one other than the exclusive licensee may use the work in the agreed upon manner for the duration of the license agreement, and no one else may be granted a license for that work during that time.[14]

A plaintiff in an action for copyright infringement may recover damages if the plaintiff can show “(1) ownership of a valid copyright, and (2) copyright of constituent elements of the work that are original.”[15] In the event of copyright litigation, the fair use doctrine allows an entity to, in some circumstances, use a copyrighted work without first obtaining a license from the copyright holder.[16] When a particular use falls under the fair use doctrine, it is not an infringing use of the copyrighted work.[17] The fair use doctrine is an existing mechanism within copyright law that allows for greater access to creative works.[18] In addition to the fair use doctrine, certain statutes have been created to address the needs of particular creative industries, such as the MMA for the music industry.[19] The following sections will explain the technological changes that necessitated the creation of the MMA, and the provisions of it that could resolve problems within the film and television industries.

II.     Accessibility of Music

A.     The Music Modernization Act

Following changes to modes of music consumption, the Music Modernization Act was adopted by Congress in 2018, which allows copyright owners to obtain a compulsory license, through which copyright owners can receive royalties for their work without needing to grant “explicit permission” each time a license is sought from that copyright owner.[20] The MMA reflects a recent legislative update in the realm of copyright law, expanding it beyond the changes made to copyright law under the Federal Copyright Act of 1976.[21] The MMA is divided into three Titles: “Musical Works; Modernization Act, The Classics Protection and Access Act; and The Allocation for Music Producers Act.”[22]

The first of the three Titles “replaces the existing song-by-song compulsory licensing structure for making and distributing musical works with a blanket licensing system for digital music providers to make and distribute digital phonorecord deliveries (e.g., permanent downloads, limited downloads, or interactive streams).”[23] Blanket licenses give the licensee the ability to use and “access. . . a rightsholder’s entire catalog.”[24] Successfully obtaining a blanket license also protects the licensee from “an action for infringement. . . .”[25] To obtain a blanket license under the MMA, one must satisfy certain requirements.[26] To be eligible, the “primary purpose in making phonorecords of the musical work [must be] to distribute them to the public for private use, including by means of digital phonorecord delivery.”[27] One must also “[h]ave a direct contractual, subscription or other economic relationship with listeners or. . . must exercise direct control over providing the service to the listeners; [b]e able to report revenues (or other consideration) generated by the service; and [b]e able to provide certain reporting on usage of sound recordings of musical work.”[28]

As of January 1, 2021, the blanket licensing system, in its current form, is being operated by the Mechanical Licensing Collective (MLC), established by the MMA.[29] Collective copyright management organizations can help artists to earn more for their work than they would under a performing rights organization (PRO), from which artists only earn performance royalties, or without either a PRO or a Collective Management Organization (CMO). [30] CMOs help artists to earn royalties for both the performance of their work and to earn “mechanical royalties.”[31] Mechanical royalties are earned when a licensee “reproduce[s] a piece of music onto CDs, DVDs, records or tapes.”[32]

B.     Technological and Legal Progression

Prior to the Music Modernization Act’s passage in 2018, several important technological shifts changed the way in which consumers engage with musical works.

Early streaming platforms violated copyright law by distributing music without first obtaining licenses or permission from the copyright holders of the music.[33] Without the protection of the fair use doctrine, which would have allowed these early platforms to continue operating legally, such distribution constituted copyright infringement. For instance, LimeWire was sued by various record labels alleging that LimeWire had directly infringed on their copyrighted works and had induced copyright infringement.[34] LimeWire ultimately settled and agreed to pay over $100 million in damages.[35]

C.     Streaming Titans and Digital Downloads

As technology continued to progress during the 2000s and 2010s, other legal streaming platforms rose in popularity. These platforms, to remain competitive, introduced new features to the market, such as digital downloading. Today, Apple Music, Spotify and SoundCloud are among the three most used music streaming platforms by consumers.[36] Spotify, which now has 640 million monthly users,[37] has a vast library of music[38] that spans countless genres, decades, and cultures.[39] Spotify is available in the form of a subscription, or as a free service with advertisements and restrictions on features such as the ability to “skip” songs.[40] Spotify had the largest payout to artists of any streaming platform in 2022, four years after the passage of the MMA.[41] To further illustrate the manner in which Spotify has grown to dominate the music streaming market, “[o]nline streaming services such [as] Spotify and Apple Music have become the music industry’s single biggest revenue source, overtaking physical sales and digital downloads for the first time.”[42] When a song or other audio on a streaming platform is played, artists can receive a payout.[43] These royalties consist of recording and publishing royalties. Importantly, publishing royalties “are [now] issued to publishers, collecting societies, and mechanical agencies.”[44]

Another notable feature of many current day streaming services is the ability to download the content found on the platform. Digital downloads, along with streaming, “predominate in the United States,”[45] rather than accessing music through physical copies such as vinyl, CDs, or other means. Digital downloads also allow streaming platform users to either obtain a permanent copy of a particular musical work, or to obtain a copy of a musical work “for offline listening.”[46] This gives consumers access to music without needing to obtain a physical copy of the music, meaning that consumers now have instantaneous access to nearly any song, provided it has been uploaded to the internet.[47] Both “the reproduction right” of “the sound recording and the underlying musical composition” are “implicat[ed]” by digital downloads.[48] The “reproduction right” is a right granted to artists through copyright law, giving them the exclusive right “to perform the copyrighted work publicly by means of a digital audio transmission.”[49] The rights to “the sound recording and the underlying musical composition” are codified at 17 U.S.C. § 114, and these rights give artists the exclusive rights to the sound of the song and the song in its written form.[50]

In a post-Napster era of the internet, streaming platforms are “enabling the market to reach new regions of the world, while helping wean[] a generation of music fans away from free or pirated music.”[51]  

III.   Accessibility of Television and Motion Pictures

A.     Licensing

Similar to the music industry, licenses can be obtained from the copyright owner or from an organization in order to show or distribute a film or television show.[52] Distributors of films and television shows include familiar companies such as Warner Bros., Sony, and Lionsgate.[53]

B.     Technology

Technology has also changed the television and film industries. Similarly, to the music industry, consumers now rely more on the internet than physical copies to access visual media.[54]

Netflix, which launched in 1997 and launched its streaming service in 2007, “now owns a 7.8% share of the US screen time,” second to YouTube.[55] Netflix obtains distribution and licensing rights through “Digital Exploitation Agreements.”[56] Through “Digital Exploitation Agreement[s],” Netflix obtains a license from “the producer of the film. . . [for] the right to communicate the film to the public.”[57] In May 2023, Netflix changed its policies to make it more difficult for subscribers to share a singular account across multiple home addresses.[58] This change resulted in increased rates of new subscriptions despite the “substantial risk” that the updated policy posed for Netflix.[59] Netflix’s prominence and popularity within the industry does not come without problems, though. Problems for the future of copyright law and the market for creative works have arisen as competitors for Netflix have appeared in recent years, as streaming platforms have to keep up with one another and with rapidly changing technology.

In 2018, a smaller streaming platform’s attempt to provide consumers with an easier way to access television was not considered fair use and was held to be unlawful by the United States Court of Appeals for the Second Circuit.[60] The smaller streaming platform was distributing content from larger television networks, allowing its subscribers to not only watch ten-minute clips of television shows, but to also “email the clips for viewing by others, including those who are not TVEyes clients.”[61] The specific features of TVEyes platform that led to the lawsuit were the ten-minute clips available to its subscribers, as well as the shorter, fourteen-second clips available when a subscriber searched for a specific term.[62] Ultimately, fair use did not protect TVEyes largely because of the potential that TVEyes would harm the marketability of the news Fox was providing.[63]

In recent litigation involving major streaming platforms, including Netflix, the platforms sued an individual who was the “operator of two illegal streaming sites.”[64] That operator attempted, through two services, to provide consumers with content ordinarily available across several platforms that sometimes require separate subscriptions.[65] The operator’s two services, “AllAccessTV (AATV) and Quality Restreams,” gave consumers the opportunity to purchase subscriptions and to have access to a “live channel feed.”[66] The subscriptions allowed AATV and Quality Restreams subscribers to watch and download “copyrighted movies and TV shows.”[67] That recent case and TVEyes are two examples of the approach of modern copyright law as it relates to the distribution of visual media by entities other than major television networks or streaming platforms: attempts to distribute content for profit that belongs to another streaming platform will be swiftly stricken down, with no protection available from the fair use doctrine. This keeps visual media stuck in a patchwork of paywalls.

IV.   “Television and Film” Modernization Act: Recommended Solution

One possible solution to the problems faced by consumers and potential consumers of visual media would be the passage of the film and television equivalent of Title I of the MMA, establishing a new licensing system for the film and television industries. A new statute is also needed to protect artists regardless of the streaming platform their works end up on or how much the work gets distributed across the internet, and to give consumers more reliable (and legal) access to visual media.

A.     Artist Compensation

One problem shared by music streaming platforms is low pay for the creators of the media supplied by various platforms.[68] Writers, producers, and actors alike have received low royalties from Netflix, even when the television shows they have worked on have become popular.[69] A statute similar to Title I of the MMA could guarantee royalties for writers, producers, and actors, specifically. A “Film and Television” Modernization Act could do this by establishing a “mechanical licensing collective” that, like the MLC established by Title I of the MMA, “collect[s] and distribute[s] royalties, and identif[ies] musical works and their owners for payment.”[70] The MLC established by the MMA also maintains a database listing entities eligible to receive royalties.[71] An analogous statute for the film and television industries should provide for the creation and maintenance of a similar database. This could help ensure that creatives involved with the production of film and television projects earn royalties for their work, no matter where those projects (legally) end up across various streaming platforms.

Without a statute that ensures copyright holders receive compensation for the distribution of their work on streaming platforms, though, the film and television industries may face more strikes in the future, as technology continues to change. As seen in 2023, such strikes are incredibly costly and inherently reduce the content available to consumers because very little new content is being created.[72]

The MMA requires potential licensees to “have a direct contractual, subscription or other economic relationship with listeners or. . . must exercise direct control over providing the service to the listeners; [b]e able to report revenues (or other consideration) generated by the service; and [b]e able to provide certain reporting on usage of sound recordings of musical work.”[73] A similar statute for the film and television industries could mitigate some of the increased costs of fairly compensating writers and actors by requiring that licensees provide content through a paid subscription service, for which the revenues would have to be reported. This could, ideally, pave the way for greater transparency and accountability for the payment of royalties. Additionally, the licensees under such a statute should be required to report their usage of the copyrighted works to which they are given distribution rights, further ensuring that all royalties are accounted for.

B.     Consumer Access and Stability

It can become incredibly difficult for members of the public to access some films and television shows when, due to licensing agreements, they are removed from Netflix after a set amount of time.[74] Unstable consumer access is another reason why Congress should pass a statute similar to the MMA. Blanket licensing, especially one centralized and regulated through a licensing collective established through such a statute, could make it easier to distribute the content in a manner that the removal of it from one streaming platform would not render it nearly impossible to find and engage with. Through a blanket license, a platform such as Netflix would have the ability to distribute greater amounts of content without relying on piecemeal licensing agreements.

A statute similar to Title I of the MMA could inhibit competition between streaming platforms, ideally leading to fewer streaming platforms capable of legally distributing greater amounts of content. These streaming platforms could obtain blanket licenses through a “Film and Television Mechanical Licensing Collective,” which could allow for more streamlined distribution, with regard to both the content itself and the process of requesting a license for the use of such content. The existence of fewer streaming platforms with larger amounts of available content could mark the beginning of a more consumer-friendly streaming world.

C.     Modernization

The passage of the MMA also demonstrates that updating the laws to reflect the needs of creatives and consumers in a rapidly changing world is not an impossible task, even though it may be a difficult one. Although daunting and murky, the realm of copyright law that protects film and television needs to be updated to combat the modern problems facing creatives and consumers alike, such as piracy on social media.

Rampant piracy on TikTok, and other popular social media applications, further highlights the urgency which copyright law must adapt to technological changes. Online piracy can be difficult to regulate, and if existing copyright law cannot control it, it is doubtful that a new statute for film and television would be able to do so either. To leave the film and television industry without greater protection from piracy, though, would allow piracy to continue to spiral out of control. In contrast to the manner in which music streaming platforms have reduced the demand for pirated copies of music,[75] piracy of visual media still poses a great threat to the market for visual media streaming platforms.[76] The screen recording capabilities on various devices allow users of those apps to create copies of the posted movies, meaning that an individual could create copies that exist even after the post in the screen recording has been removed at the request of a copyright holder.[77]

Congress must respond to piracy by ensuring that legal infrastructure is in place to better facilitate licensing for film and television, thereby eliminating the need for consumers to illegally access visual media when content is removed from a given streaming service. Additionally, as with artist compensation, requiring the usage of copyrighted works by licensees to be reported could mitigate some problems caused by piracy by establishing a more centralized method for tracking where certain content has legally ended up across the internet.[78]

V.  Addressing the Complexities of Copyright Law: Potential Weaknesses

To propose a solution to problems within a particular creative field without acknowledging the flaws of that solution would do an incredible disservice to members of that field, the market, and consumers of the art produced by that field. Consequently, there are numerous potential issues that could arise if a kind of “Film and Television Modernization Act” is passed, each of which must be addressed. These potential issues include: monopolization, disparities between artists as a result of the MMA, and weaknesses—exposed by consumer engagement—with the copyrighted works made more easily available to them as a result of the MMA. Despite these concerns, though, there are ways that a “Film and Television” Modernization Act could ease them as the streaming world continues to change.

A.     Problems

It should be acknowledged that there are problems within music copyright law and that adapting music copyright law to other forms of media will not necessarily solve all problems in copyright law. There is a risk that those problems may be transferred to the television and film industry if copyright law is treated as “one size fits all.”

One problem with passing a statute analogous to Title I of the MMA for the film and television industries is that the market for collective licensing is already “a heavily regulated market” regarding music because of the potential for “monopoly pricing…of collective copyright control.”[79] If collective blanket licenses are utilized for visual media, then heavy regulation will also be needed to prevent monopolization, and the process of getting to a point of effective regulation could be fraught with litigation, lasting several years and potentially causing problems for consumers. It is also possible that increased regulation in the film and television industries could exacerbate current consumer access issues by making it even more difficult to access copyrighted works.

The use of virtual private networks (VPNs) may also eliminate the need for such a statute. VPNs allow users to access content available on streaming platforms in other countries, making creative works easily accessible to consumers.[80] VPNs could eliminate the need for an improved blanket licensing system for visual streaming platforms. Downloading a VPN is a much quicker process than waiting for new legislation to facilitate greater consumer access to media. VPNs also give consumers unlimited access, in a sense, to media. A consumer could digitally “follow” a piece of media around if it comes and goes from various platforms and on different versions of those platforms in various countries.[81]

With the merging of several streaming platforms,[82] it is possible that a statute similar to the MMA is not needed to resolve the problem presented by the existence of so many streaming platforms with no overlapping content. Perhaps all one needs to do is wait for this era of streaming to end, and to simply wait for studios to combine their platforms until there are fewer platforms to subscribe to in order to access all the content one wishes to access.

Recent developments in music copyright have put legal flaws on display for consumers, calling into question the ability of a “Film and Television Modernization Act” to successfully facilitate increased consumer access to copyrighted works. As of February 2024, music distributed through United Music Group (UMG) has been removed from the app TikTok, leaving countless videos on the platform without any sound.[83] This ongoing situation is one example of the legal relationship between major music distributors and a social media platform failing and leaving consumers to deal with the fallout. If the MMA could not prevent such an event, then its ability to ensure that artists receive royalties for their work is dubious, as well as its ability to foster the distribution and access of creative works. Such an event begs the question: why have a mechanical licensing collective in place if it cannot stop a mass-deletion of media from a popular platform, and why have such a collective in place for film and television if countless amounts of content could theoretically be wiped from Netflix the day after its establishment?

Some artists were dissatisfied with the MMA not long after its passage. This dissatisfaction led to litigation between Eight Mile Style—the publishing company of the rapper Eminem—and Spotify, which began in August 2019, less than one year after the MMA was signed into law. In that case, the plaintiff went so far as to allege that the MMA is unconstitutional. In Eight Mile Style’s complaint, it argued that the MMA “retroactive[ly] eliminat[ed] . . . the right of a plaintiff to receive profits attributable to infringement, statutory damages, and attorneys’ fees,” amounting to two violations of the Constitution: “denial of due process . . . and an unconstitutional taking of vested property rights.”[84]

B.     Final Discussion

The current state of the film and television industries is piecemeal and fragmented, a choppy legal sea upon which consumers must travel to access protected creative works. Streaming platforms are ever-changing, altering their policies to compete with one another. In the midst of those changes, a statute that regulates licensing of the content on those streaming platforms could offer some stability and consistency for consumers. A statute is also needed to protect the rights of creatives within the film and television industries. Although such a statute might not solve all the problems in the film and television industries, it could serve as a step in a new, more positive direction for the future of film and television. Such a statute could fill the existing gaps in copyright law created by rapidly advancing technology and could mitigate issues that have arisen in the years since streaming became such a central part of the film and television industries.

Conclusion

While there are problems with the manner in which copyright law has been applied to music streaming platforms as well as visual media streaming platforms, aspects of music streaming platforms should be adapted to visual media streaming platforms to better provide consumers access to the greatest amount of art and to ensure that there will continue to be a market for streaming platforms. Changes should be made to allow consumers to access visual media more easily, similar to the manner in which music is easily accessible on the internet. The many creatives of the film and television industries, and the consumers of their content, could be served well by a federal statute with similar provisions as the Music Modernization Act. No one can say with complete certainty what the current trajectory of the streaming world is, but the passage of a “Film and Television” Modernization Act could place copyright law on a path toward a brighter future, one in which the “blank space” currently left by Congress is gone.

* J.D. Expected 2025, University of Kentucky Rosenberg College of Law; BA Political Science 2023, University of Kentucky.

[2] Orrin G. Hatch-Bob Goodlatte Music Modernization Act, Pub. L. No. 115-264 (2018) [hereinafter MMA].

[3] The Creation of the Music Modernization Act, Copyright.gov, https://www.copyright.gov/music-modernization/creation.html?loclr=eamma" (last visited Mar. 4, 2025).

[4] What is Copyright?, Copyright.gov, https://www.copyright.gov/what-is-copyright/#:~:text=What%20is%20copyright%20registration%3F,step%20is%20registering%20the%20work (last visited Mar. 4, 2025).

[5] What Musicians Should Know about Copyright, Copyright.gov, https://www.copyright.gov/engage/musicians/#:~:text=Generally%2C%20to%20use%20the%20sound,set%20by%20the%20licensing%20contract (last visited Mar. 4, 2025).

[6] Id.

[7] U.S. Copyright Office, Circular No. 45, Mar. 2014, at 1, https://www.copyright.gov/circs/circ45.pdf.

[8] Copyright litigation 101, Thomas Reuters (Dec. 16, 2022), https://legal.thomsonreuters.com/blog/copyright-litigation-101/#:~:text=A%20copyright%20owner%20can%20sue,specific%20conditions%20(see%20below).

[9] U.S. Copyright Office, Circular No. 16A, Mar. 2021, at 1, https://www.copyright.gov/circs/m10.pdf.

[10] Copyright Licensing Under the Law, Justia, https://www.justia.com/intellectual-property/copyright/copyright-licensing/ (Oct. 2024).

[11] Michelle Kaminsky, What is a Copyright License?, LegalZoom, https://www.legalzoom.com/articles/what-is-a-copyright-license (Jan. 24, 2025).

[12] Id.

[13] Id.

[14] Id.

[15] Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991).

[16] U.S. Copyright Office Fair Use Index, Copyright.gov, https://www.copyright.gov/fair-use/ (Nov. 2023).

[17] 17 U.S.C. § 107.

[18] U.S. Copyright Office Fair Use Index, supra note 16.

[19] The Music Modernization Act, Copyright.gov, https://copyright.gov/music-modernization/.

[20] 17 U.S.C. § 115; Compulsory license, Black’s Law Dictionary (12 ed. 2024).

[21] Flo & Eddie, Inc. v. Pandora Media, Inc., 851 F.3d 950, 953 (9th Cir. 2017); see also The Creation of the Music Modernization Act, Copyright.gov, https://www.copyright.gov/music-modernization/creation.html?loclr=eamma (last visited Mar. 9, 2025).

[22] The Music Modernization Act, Copyright.gov, https://www.copyright.gov/music-modernization/ (last visited Mar. 9, 2025).

[23] Musical Works Modernization Act, Copyright.gov, https://www.copyright.gov/music-modernization/115/ (last visited Mar. 9, 2025).

[24] What Is a Blanket License?, Songtrust, https://help.songtrust.com/knowledge/what-is-a-blanket-license.

[25] Music Modernization Act (“MMA”) § 102(d)(1)(D).

[26] Digital License Coordinator, The Blanket License – Who Needs It and What You Need to Know, https://digitallicenseecoordinator.org/wp-content/uploads/2020/09/Defining-and-Differentiating-between-a-%E2%80%9CBlanket-Licensee%E2%80%9D-and-a-%E2%80%9CSignificant-NonBlanket-Licensee%E2%80%9D-Resource-Document.pdf; MMA § 102(a)(1).

[27]MMA § 102(a)(1).

[28] Digital License Coordinator, The Blanket License – Who Needs It and What You Need to Know, https://digitallicenseecoordinator.org/wp-content/uploads/2020/09/Defining-and-Differentiating-between-a-%E2%80%9CBlanket-Licensee%E2%80%9D-and-a-%E2%80%9CSignificant-NonBlanket-Licensee%E2%80%9D-Resource-Document.pdf.

[29] U.S. Copyright Office, Frequently Asked Questions, copyright.gov, https://www.copyright.gov/music-modernization/faq.html#:~:text=The%20Music%20Modernization%20Act%20updates,addresses%20distribution%20of%20producer%20royalties.

[30] Id. at 5; Andrew Parks, Defining Pay Sources: CMO vs PRO, SONGTRUST, (last updated Dec. 11, 2023), https://blog.songtrust.com/pay-sources-difference-between-a-pro-and-cmo.

[31] Andrew Parks, Defining Pay Sources: CMO vs PRO, SONGTRUST, (last updated Dec. 11, 2023), https://blog.songtrust.com/pay-sources-difference-between-a-pro-and-cmo.

[32] BMI, What is the difference between performing right royalties, mechanical royalties and sync royalties?, BMI Member FAQs, https://www.bmi.com/faq/entry/what_is_the_difference_between_performing_right_royalties_mechanical_r.

[33] Quinn He, The vast accessibility of modern music streaming, Mass. Daily Collegian, (Dec. 10, 2019), https://dailycollegian.com/2019/12/the-vast-accessibility-of-modern-music-streaming/.

[34] Arista Records LLC v. Lime Group LLC, 715 F.Supp.2d 398, 409 (S.D.N.Y. 2010).

[35] Jonathan Stempel, LimeWire to pay record labels $105 million, ends suit, Reuters, (May 13, 2011), https://www.reuters.com/article/idUSTRE74B783/.

[36] He, supra note 33.

[37] Shubham Singh, Spotify Users Statistics 2025: Subscribers & Demographics Data, demandsage, (Jan. 15, 2025), https://www.demandsage.com/spotify-stats/.

[38] See Tim Ingham, Over 60,000 Tracks Are Now Uploaded To Spotify Every Day. That’s Nearly One Per Second, Music Bus. Worldwide, (Feb. 24, 2021), https://perma.cc/A34C-4TVJ.

[39] He, supra note 33.

[40] Get more out of your music with Premium, Spotify, https://www.spotify.com/us/premium/.

[41] Singh, supra note 35.

[42] Music streaming overtakes physical sales for the first time -industry body, Reuters, (Apr. 24, 2018), https://www.reuters.com/article/music-sales/music-streaming-overtakes-physical-sales-for-the-first-time-industry-body-idUSL8N1S143H.

[43] See Spotify, Royalties, Spotify for Artists, https://support.spotify.com/us/artists/article/royalties/.

[44] Id.

[45] Eric Priest, The Future of Music Copyright Collectives in the Digital Streaming Age, 45 Colum. J.L. & Arts 1, 6 (2021).

[46] Id. at 7.

[47] See id.

[48] Id.

[49] 17 U.S.C. § 106(6).

[50] Moses Singer, Getting in Turn with Copyright Law: Musical Compositions vs. Sound Recordings in Richardson v. Kharbouch, Moses Singer Publ’ns (Mar. 5, 2024), www.mosessinger.com/publications/getting-in-tune-with-copyright-law-musical-compositions-vs-sound-recordings-in-richardson-v-kharbouch.

[51] Reuters, supra note 42.

[52] See, e.g., Media - Public Performance and Streaming Licenses: How to Obtain Rights, Univ. of Wis. Whitewater, https://libguides.uww.edu/c.php?g=548422&p=3762449#:~:text=Feature%20films%20and%20television%20shows,pictures%20from%20many%20major%20studios.https://libguides.uww.edu/c.php?g=548422&p=3762449#:~:text=Feature%20films%20and%20television%20shows,pictures%20from%20many%20major%20studios.

[53] See, e.g., Market Share for Each Distributor 1995-2024, The Numbers, https://www.the-numbers.com/market/distributors.

[54] See Sarah Whitten, The Death of the DVD: Why Sales Dropped More than 86% in 13 Years, CNBC (Nov. 8, 2019), https://www.cnbc.com/2019/11/08/the-death-of-the-dvd-why-sales-dropped-more-than-86percent-in-13-years.html.

[55] Mindy Born, 60 Netflix Statistics & Facts for 2025: Subscribers, Revenue & More, Cloudwards (May 13, 2024), https://www.cloudwards.net/netflix-statistics/.

[56] Riya Gupta, How Does Netflix Obtain the Rights for Streaming Movies, iPleaders (Apr. 26, 2021), https://blog.ipleaders.in/netflix-obtain-rights-streaming-movies/ .

[57] Id.

[58] Aaron Gregg & Eli Tan, Netflix Sign-Ups Double After Crackdown on Account Sharing, Wash. Post (June 9, 2023), https://www.washingtonpost.com/business/2023/06/09/netflix-password-sharing-rules/. 

[59] Id.

[60] Fox News Network, LLC v. TVEyes, Inc., 883 F.3d 169, 173–74 (2d Cir. 2018).

[61] Id. at 175.

[62] Id.

[63] Id. at 179–80.

[64] Winston Cho, Disney, Major Studios Get $30M From Illegal Streaming Sites Amid Piracy Crackdown, Hollywood Rep. (Mar. 27, 2023), https://www.hollywoodreporter.com/business/business-news/disney-major-studios-win-judgment-from-illegal-streaming-sites-1235361828/. 

[65] Id.

[66] Id.

[67] Id.

[68] Nathan Kamal, Netflix Pays Zero Royalties for Its Most Popular Show Ever, Inside the Magic (June 28, 2023), https://insidethemagic.net/2023/06/netflix-squid-game-zero-royalties-nk1/.

[69] Id.

[70] U.S. Copyright Off., supra note 23.

[71] See 37 C.F.R. § 210.31 (2020).

[72] See, e.g., Robert Hum, The Hollywood Actors’ Strike is Over, but the Impact Will Linger for Some Big Companies, CNBC (Nov. 9, 2023), https://www.cnbc.com/2023/11/09/sag-aftra-strike-impact.html#:~:text=CFO%20Gunnar%20Wiedenfels%20said%20on,strong%20films%20and%20games%20performance.%E2%80%9D (discussing the strike’s financial impact on studios and movie theaters).

[73] Digital License Coordinator, supra note 26.

[74] Why Do TV Shows and Movies Leave Netflix?, Netflix, https://help.netflix.com/en/node/60541.

[75] See Reuters, supra note 40.

[76] Brett Danaher, Michael D. Smith & Rahul Telang, Piracy and Copyright Enforcement

Mechanisms, 14 Innovation Pol'y & Econ. 25, 27 (2014).

[77] See How to Screen Record Protected Videos [Completed Guide], iTop, https://recorder.itopvpn.com/blog/how-to-screen-record-protected-videos-1225 (Dec. 23, 2024).

[78] See, e.g., Digital License Coordinator, supra note 24.

[79] Priest, supra note 43, at 2.

[80] What is a VPN?, Microsoft Azure, https://azure.microsoft.com/en-us/resources/cloud-computing-dictionary/what-is-vpn#:~:text=A%20VPN%2C%20which%20stands%20for,and%20firewalls%20on%20the%20internet.

[81] Id.

[82] See, e.g., Ana Faguy, What a Warner Bros./Paramount Merger Could Mean for Users, Forbes (Dec. 21, 2023), https://www.forbes.com/sites/anafaguy/2023/12/21/what-a-warner-brosparamount-merger-could-mean-for-users/?sh=6b9de96c1dbe.

[83] Jem Aswad, TikTok Begins Removing Universal Music Publishing Songs, Expanding Royalty Battle, Variety (Feb. 27, 2024), https://variety.com/2024/music/musicians/tiktok-removing-universal-music-publishing-songs-1235923848/.

[84] Althea Legaspi, Eminem Publisher Sues Spotify for Copyright Infringement, Rolling Stone (Aug. 21, 2019), https://www.rollingstone.com/music/music-news/eminem-publisher-spotify-copyright-infringement-lawsuit-874956/.

The Affordable Care Act’s Employer “Pay or Play” Mandate: A Tax or Regulation?

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The Affordable Care Act’s Employer “Pay or Play” Mandate: A Tax or Regulation?

Beckett Cromwell*

Introduction – About the Affordable Care Act

Imagine you are injured in a routine accident, and you have no means of paying for your hospital visit; however, you do not have prescribed medical insurance coverage or saved up cash to pay your medical bills out of pocket. Hopelessness begins to set in as you need medical attention but cannot bear the financial consequences of paying for the treatment yourself. The Patient Protection and Affordable Care Act or simply the “Affordable Care Act” was implemented in two parts as a way to help Americans manage their healthcare insurance coverage in a cheaper and more efficient way.[2] The overall goals of the Affordable Care Act are to, “make affordable health insurance available to more people; expand the Medicaid program to cover all adults with income below 138% of the [federal poverty line]; and support innovative medical care delivery methods designed to lower the costs of health care generally.”[3] These are undoubtedly broad goals that require specific implementation in order to achieve them.

Key features of the Affordable Care Act include an increased access to medical insurance, increased protections for consumer medical coverage holders, emphasized early disease and illness detection and prevention, and lower care costs with improved system performances.[4] The Affordable Care Act widened the availability of consumer insurance coverage in two ways.[5] First, it allowed individual consumers to compare various plans and coverage options that were offered by individual states at the state level and gave a choice as to which coverage plan they wanted based on their health needs or other factors.[6] Second, as mentioned previously, the Act expanded Medicaid coverage to encompass more individuals and families below the poverty line, and as of 2018, in the eight years since the implementation of the Act in 2010, “the number of uninsured people in the country [had] fallen by about 20 million.”[7] The Department of Health and Human Services (HHS) enhanced early disease and illness detection and prevention in early 2022 as a response to the COVID-19 pandemic.[8] This allowed for an estimated 150 million patients to have free-of-charge access to important preventative measures and diagnostic testing such as “vaccinations, contraception, and cancer screening” which is required by the Affordable Care Act.[9] These key features are important mechanisms enabling the Act to achieve its aforementioned broad goals of ensuring more Americans have cost-effective health insurance, precisely what Congress hoped to accomplish when it voted on and passed this healthcare reform legislation. Both premiums paid for health insurance and the number of uninsured Americans have gone down since the passing of the Affordable Care Act, thus making strides towards Congress’ goals of the Act.[10] This may be but a coincidence or a correlation and not caused by the Affordable Care Act but there are some metrics allowing the argument to be made.

Although the Act is arguably successful in achieving what it set out to accomplish, the Affordable Care Act has not been without controversy, and since its enactment, “the public was almost evenly divided between those who supported it and those who opposed it.”[11] Like many legislative bills, partisan issues arose and made the garnering of votes to have the bill pass through Congress a challenge itself, before each side of the aisle could even agree to the terms inside.[12] Upon the initial vote, partisan issues were prevalent as reports of up  to “80 percent of Democrats” supported the Affordable Care Act and around “81 percent of Republicans were strongly negative” toward the bill.[13] As a simple reminder, the Affordable Care Act was passed under a Democrat-controlled Congress under then-President Barack Obama.[14] Simple partisan divide is one reason for the opposition to the bill, but not the only reason.[15] Many people, including Republicans, were not in favor of the Affordable Care Act because of the “individual mandate” with some calling it “by far the most unpopular provision of the law”[16] and “one of U.S. history’s most contested laws.”[17] It required “all Americans to obtain health insurance or pay a tax penalty[.]”[18] Thus, Congress’ goals were bound to be met as Americans were obligated to have health insurance coverage, and by requiring people to have insurance, logically the number of uninsured Americans would go down, so the individual mandate was the driving force of the Act.[19]

I.      The Supreme Court’s Affordable Care Act Stance Background

In 2012, a Supreme Court case, National Federation of Independent Business v. Sebelius (NFIB) issued major guidance as to the individual mandate found in the Affordable Care Act.[20] In this case, the Supreme Court held that the individual mandate was constitutional under Congress’ taxing power, not under the Commerce Clause.[21] This was an unexpected decision because the lower courts that reviewed this case addressed the Commerce Clause argument and not Congress’ taxing power.[22] That still left the issue of whether the exaction was deemed a tax or a penalty.[23] The Court held that “because we have a duty to construe a statute to save it, if fairly possible, § 5000A can be interpreted as a tax.”[24] The Supreme Court used their precedential canon of construction and construed § 5000A as a tax in order to retain its constitutionality.[25] Should they have done this? Yes, it is easier to patch a hole in a leaky roof rather than replace the entire roof, but at some point a complete renovation will need to be undertaken to preserve the integrity of the structure. “As this note later discusses the employer mandate under the Affordable Care Act, it is imperative to think about the above statement as it relates to the consequences of a “tax” determination.

In 2016, Donald Trump, a Republican, won the Presidential election and took control of the White House.[26] As stated earlier, Republicans strongly disfavored the individual mandate found in the Affordable Care Act.[27] Consequently, included in The Tax Cuts and Jobs Act of 2017[28] –spearheaded by Republicans in Congress – was a provision that in all practical effect, nullified the individual mandate.[29] In an explanation of the Tax Cut and Jobs Act, the Joint Committee on Taxation stated the explanation of the provision is to “reduce[] the amount of the individual shared responsibility payment, enacted as part of the Affordable Care Act, to zero.”[30] Thus, in effect, there is no consequence for not abiding. The individual mandate “tax” is still zero dollars as of the completion of this note with no public plan to change any time soon.

Although Congress and the Supreme Court appear to have decided the individual mandate, the employer mandate that is still in effect[31] The employer mandate worked in conjunction with the individual mandate to fulfill Congress’ goals of lower costs of medical care and reducing the number of uninsured Americans.[32] The employer mandate provides that “certain employers (called applicable large employers or ALEs) must either offer health coverage that is “affordable” and that provides “minimum value” to their full-time employees (and offer coverage to the full-time employees’ dependents), or potentially make an employer shared responsibility payment to the IRS[.]”[33] In simple terms, places of employment that have more than fifty full-time employees or full-time equivalent employees are deemed ALEs and are subject to the employer mandate and must offer healthcare coverage to their employees as required by the Affordable Care Act or else they pay an exaction to the IRS.[34] This mandate went into effect in 2015 and requires that if you are an ALE then ninety-five percent of your full-time employees must have been offered healthcare coverage insurance.[35] Once again, this was another way of ensuring the Congressional goals of the Act were to be successful as more Americans would be accounted for when it came to healthcare insurance. Although the employer mandate seemingly infringed less on private citizens’ rights, the same partisan favor and disfavor was prevalent.[36] With regards to the employer mandate, thirty-four percent of Republicans favored it as compared to seventy-eight percent of Democrats.[37]

The penalty that is associated with non-conformance of the employer mandate is up for debate.[38] Even though the language of the statute in § 4980H does not provide the phrase “excise tax” anywhere, let alone “excise,”[39] the section falls under subtitle D which is “miscellaneous excise taxes.” Thus, some people view the employer shared responsibility payment for noncompliance with the mandate as an excise tax instead of a mere penalty.[40] So, like the individual mandate and the discussion in NFIB, there is division as to whether the payment is a “tax” or a “penalty.”[41]

The analysis may seem straightforward, as the U.S. Supreme Court has already decided that the individual shared responsibility payment that attached to the individual mandate was a tax, but it is hard to conclude that a fair comparison can be made between the two mandates because it is not necessarily a one-for-one comparison.[42] Further consideration shall be made upon different variables regarding the employer aspect that were not prevalent in the individual mandate, and there is always the possibility that the Supreme Court rushed to judgment when deciding that the individual mandate penalty was a “tax.” It appears the Supreme Court was trying to save the constitutionality of the Act as its main goal in NFIB, and may have not given enough thought as to whether the payment was a “tax” or if that was merely a means to save the Affordable Care Act from being nullified and rendered unconstitutional.[43]

Further, this note explores the differing rationales from the various circuits that are split in agreement concerning the employer shared responsibility payment as it pertains to the employer mandate as part of the Affordable Care Act. Part I, above, delved into the caselaw history of the individual mandate stemming from the Affordable Care Act in NFIB and the justifications for rendering the mandate to be a “tax,” but also considering possible Supreme Court shortcomings. Part II examines the split created by the Fourth, Fifth, and D.C. Circuits. Part III compares and contrasts the varying circuits decisions while weighing the holdings made by each court and concludes that due to the purpose behind the enactment of the Affordable Care Act, the categorization of the exaction as a tax imposes a punitive damage rather than a proper deterring effect and thus the exaction should be labeled as a penalty and not a tax.

II.    Differing Circuits

Circuit courts are split as to the classification of the employer shared responsibility payment that attaches to the employer mandate under the Affordable Care Act.[44] There are varying different views as it pertains to the characteristic of the employer shared responsibility payment and whether it is a “tax” or not.[45] The Fifth and D.C. Circuits have held the employer shared responsibility payment to be a tax and thus the Anti-Injunction Act[46] strips the court’s jurisdiction from any suit as the suit restrains the collection of a tax if it has not been previously paid.[47] The Fourth Circuit held employer shared responsibility payment to not be a tax because, as the individual mandate is concerned, Congress treats “penalties and liabilities” found in subchapter 68B of the Internal Revenue Code as taxes for the purposes of the Anti-Injunction Act and neither the individual mandate nor the employer mandate was found in subchapter 68B.[48] In sub-part A of this section, the Anti-Injunction Act and its procedural importance to tax liability litigation is considered. Sub-part B looks at the D.C. and Fifth Circuit’s interpretation of the employer mandate of the Affordable Care Act and their concluded agreement that the mandate is indeed a tax. Sup-part C of this section looks at the Fourth Circuit’s determination that the exaction under the employer mandate of the Affordable Care Act is not a tax but is a penalty.

A.     Anti-Injunction Act

Before we begin the analysis between the various Circuits and how their characterization of the employer shared responsibility payment under the Affordable Care Act differs, it should be noted what the Anti-Injunction Act is and its importance to the discussion as it may either be invoked or useless depending on the court’s characterization of the employer shared responsibility payment. The Anti-Injunction Act is designed to allow for the collection of taxes in even the most mitigating of circumstances and provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.”[49] The rule stems from the rule elucidated in Flora v. United States, which provides that a person who disagrees with the assessment of a tax must first pay the full amount of tax owed and then file an administrative complaint to have the tax recovered as damages in a suit.[50] In short, Congress does not want the revenue they raise from tax collection to be limited by egregious lawsuits.[51] They want to be able to answer questions and decide issues later.

This is important as it pertains to the employer shared responsibility payment that attaches to failed completion of the employer mandate because a court cannot rule on a case before the tax is paid.[52] The key word in that sentence is “tax.” If the payment under the Act is deemed to not be a tax, then the Anti-Injunction Act will never apply as it only applies to suits that “restrain[] the assessment or collection of any tax[.]”[53] In an instance where the Anti-Injunction Act precludes a lawsuit from being brought, courts will not have subject-matter jurisdiction over the case.[54]

For example, if there is a suit brought in the D.C. Circuit by a company that owes an exaction to the Internal Revenue Service for a failure to abide by the employer mandate and another company in the Fourth Circuit that also owes an exaction to the IRS, one would be able to bring suit in the Fourth Circuit while the other would be barred from bringing suit in the Fifth and D.C. Circuits to challenge their exaction owed because of the Anti-Injunction Act.[55] This is why the characterization of tax or penalty is very important as it creates a procedural hurdle for courts and parties to overcome and disallow a court from hearing a suit.[56]

B.     Indeed a Tax – The Congressional Intent Theories

The D.C. Circuit and Fifth Circuit agree that the employer shared responsibility payment is a “tax” and thus the Anti-Injunction Act as described above applies. A lawsuit may not be brought until the tax has been paid to the Internal Revenue Service and an administrative claim for a refund has been filed.[57]

i.       The Fifth Circuit – Hotze v. Burwell

In the Fifth Circuit case, Hotze v. Burwell, Braidwood Management was the employer responsible for paying the employer shared responsibility payment as they met the requisite employment of more than 50 individuals.[58] Stephen Hotze and Braidwood Management sued over both the individual and employer mandate.[59] They argue that the individual and employer mandates violate both the Origination Clause and the Takings Clause of the Constitution.[60] Concerning the employer mandate, the defendants argued that the Anti-Injunction Act barred any action filed by Braidwood as they had yet to pay the assessed tax and file an administrative claim seeking refund first.[61] The defendants argued that the Affordable Care Act is not a revenue raising bill, but a bill to expand healthcare coverage and therefore the Origination Clause does not apply.[62] The district court followed this argument and found that there was proper jurisdiction and dismissed Hotze’s and Braidwood’s claim.[63] On appeal, the Fifth Circuit stated that the district court improperly concluded as to the merits of the Origination Clause argument and should have dismissed for lack of subject-matter jurisdiction.[64] Turning to the employer mandate analysis, the court recognized that “the employer mandate is the ACA provision that imposes a ‘tax’ on certain employers who fail to provide ‘affordable’ health-insurance coverage to their employees.”[65] As mentioned earlier, the Anti-Injunction Act bars any suit “for the purpose of restraining the assessment or collection of any tax[.]”[66] The Court recognizes the purpose behind the Anti-Injunction Act when it cites NFIB and states it “protects the Government's ability to collect a consistent stream of revenue, by barring litigation to enjoin or otherwise obstruct the collection of taxes.”[67]

The parties did not dispute that if the payment under the employer mandate were to be construed as a tax, then it would violate the Anti-Injunction Act and bar suit.[68] Instead, the court addressed whether the payment was a tax. The Anti-Injunction Act would apply if such payment was a tax, ending the need for further analysis.[69] The court recognized that both the Affordable Care Act and Anti-Injunction Act were created by Congress, so it was imperative to look at Congress’s intent when determining what is deemed a tax under the Anti-Injunction Act.[70] The court found that when looking at the language of the statute, Congress referred to the individual mandate as a “penalty” but referred to the employer mandate and many other exactions within the Affordable Care Act as a “tax.”[71] Going further, the court stated that “the employer-mandate exaction functions like a tax—it is collected by the IRS ‘in the same manner’ as a tax, . . . and the funds raised go to the general Treasury.”[72] There are numerous instances where the court highlighted the fact that the employer shared responsibility payment is referred to as a “tax” in the statute; the court showcases three portions of the Affordable Care Act where the payment is referred to as a tax.[73] The court here regurgitated what the Supreme Court said in NFIB stating “textual evidence is the ‘best evidence’ of whether an exaction constitutes a ‘tax’ for the purposes of the [Anti-Injunction Act].”[74] Finally, the court held that “the text of the ACA explicitly indicates that the employer-mandate exaction indeed is a ‘tax[;]’” therefore, the Anti-Injunction Act barred the employer-mandate as a consequence of Braidwood’s failure to pay the tax (the employer mandate) before filing suit.[75]

ii.     The D.C. Circuit – Optimal Wireless v. Internal Revenue Service

As mentioned previously, the D.C. Circuit, in parallel with the Fifth Circuit, held the exaction assessed from the employer mandate was indeed a tax and not a penalty. In Optimal Wireless v. Internal Revenue Service, appellant, Optimal Wireless operated as a company that provided wireless communications services in several states, including, Texas, New Mexico, Oklahoma, and Louisiana.[76] Prior to the D.C. Circuit taking the case, “[t]he district court dismissed Optimal’s suit for lack of jurisdiction[]” and “held that an exaction under § 4980H is a ‘tax’ for purposes of the Anti-Injunction Act, which strips courts of jurisdiction over suits having the ‘purpose of restraining the assessment or collection of any tax.’”[77] The court recognized the potential imposition of the Anti-Injunction Act when it stated, “Optimal plainly seeks to ‘restrain [] the assessment or collection’ of an exaction under § 4980H.”[78] Thus, prompting the court to derive a distinction between a tax or penalty as the case’s jurisdictional bar hinges upon this classification.[79]

The court began its discussion by going through background of the Affordable Care Act, its purpose, and a few nuances of the Act, such as what happens if an employer fails to offer a plan that provides “minimum essential coverage” or if an employee were to “claim[] a premium tax credit or cost-sharing reduction[.]”[80] As the Optimal Wireless court illustrated, there are two ways to violate the employer mandate of the Act and be subject to an exaction in the event that an employer does not provide minimum coverage or does not provide coverage at all.[81] First, liability is imposed on an employer in the form of an exaction “if it ‘fails to offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan . . . for any month.’”[82] Second, liability is imposed on an employer in the form of an exaction “if it does ‘offer [] to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage’ but an employee is still certified as having received a premium tax credit or cost-sharing reduction.”[83] The court distinguished the two liability hooks by simplifying them and stating “Section 4980H(a) applies when an employer does not provide minimum essential coverage at all, whereas Section 4980H(b) applies when the employer offers coverage but that coverage fails to qualify as affordable or as providing minimum value.”[84] Through another distinguishing factor, the court explained that “Section 4980H(a)’s exaction amount is a function of the employer’s total number of full-time employees, whereas Section 4980H(b)’s exaction amount is a function of only the number of employees certified as having received a premium tax credit or cost-sharing reduction.”[85] In Optimal Wireless, the court specifically highlighted different ways that a company may be held liable and how the exaction assessed against it may differ whereas the court in Hotze provides more of a generic overview of employer liability.[86]

In Optimal Wireless, the court determined that Optimal Wireless was liable for an exaction under the first hook, Section 4980H(a), as “one or more of Optimal’s employees had been enrolled in a qualified health plan for which a premium tax credit was allowed.”[87] Optimal’s exactions totaled “$395,640 for 2016 and $736,383 for 2017[,]” which is, in this author’s opinion, no small sum, especially when you consider the pay first, ask for a refund second model that the Anti-Injunction Act prescribes.[88] Optimal originally filed suit in federal district court against both the Internal Revenue Service and the Department of Health and Human Services (HHS), arguing that the regulations that should apply require HHS, and not the IRS, “to issue the certification concerning an employee’s receipt of a premium tax credit or cost-sharing reduction, but HHS had not done so.”[89] The government argued dismissal of Optimal Wireless’s case on several grounds, the main one being the Anti-Injunction Act strips the court of jurisdiction to hear the case as the requisite exaction has not been paid yet.[90] The district court granted the government’s motion to dismiss for lack of jurisdiction, holding that the exaction imposed under Section 4980H is a “tax” and that the Anti-Injunction act is applicable.[91]

Optimal Wireless began its argument in the D.C. Circuit by arguing that to even conclude that the exaction that Section 4980H imposes is a “tax” that it “must contain a clear statement” saying so.[92] Their principal basis behind this argument was that there are harsh consequences that are associated with the statute, such as the imposition and requisite full payment of the exaction before a party is allowed to sue for a refund.[93] The court maintained that Optimal Wireless is confused with the statute, as it is really the Anti-Injunction Act that imposes the harsh consequences and not § 4980H of the Affordable Care Act.[94] The court reasoned that the “question of whether another statute is best read to implicate the Anti-Injunction Act’s jurisdictional bar – which here turns on whether Section 4980H imposes a “tax” – is governed by ordinary principle of statutory interpretation, not by any clear-statement rule.”[95] By looking at NFIB, the D.C. Circuit attempted to use the Supreme Court’s “congressional intent” theory where “Congress repeatedly described the exaction for noncompliance with the individual mandate as ‘a “penalty” rather than a tax,” the Anti-Injunction Act’s jurisdictional bar did not apply.”[96] When the D.C. Circuit here applied that same approach to the exaction under the employer mandate, the opposite conclusion was reached.[97] In the instance of the employer mandate, Congress expressly referred to the employer mandate exaction under Section 4980H as a “tax” on four separate occasions, whereas with the individual mandate it was described as a “penalty” and not a tax.[98]

Concerning the four references of “tax” associated with the employer mandate, “three are found in Section 4980H itself.”[99] The court went through the instances that the word is encountered to determine the context behind its use and whether Congress intended for the “tax” phrasing to be applied to the exaction as a whole or if the phrasing was mere surplusage.[100] The first instance pertained to employers offering unaffordable or “inadequate in value” coverage, stating that the “aggregate amount of tax determined under [subsection (b)(1)] ... shall not exceed the product of the applicable payment amount and the number of individuals employed by the employer as full-time employees during such month.”[101] The second instance pertained to deductions and states “[f]or denial of deduction for the tax imposed by this section, see section 275(a)(6).”[102] The last instance found explicitly in Section 4980H refers to the same section as before, but this time the title of the subsection itself its “Tax nondeductible.”[103] Lastly, in the sole reference not found within Section 4980H, another section implored the Secretary of the HHS to create “a separate appeals process for employers who are notified that that ‘may be liable for a tax imposed by section 4980H of Title 26.”[104] The court concluded that “[t]he multiple statutory references to Section 4980H’s exaction as a “tax” thus render it a tax for purposes of the Anti-Injunction Act.”[105] Optimal attempted and failed to provide another justification aside from the Anti-Injunction Act for the usage of the word “tax,” but the court here relied on precedent that states “Congress said what it meant and meant what it said” as a means to upholding the usage of tax as Congress would not mistakenly and inappropriately use this terminology in contravention of their intentions.[106]

Even though Congress used other terms such as “assessable payment” or “penalty” when describing the exaction, those terms do not dissuade the court that “tax” was the true and main meaning of exaction under Section 4980H. A tax is a type of assessable payment and “[i]f Congress had only used the more general term ‘assessable payment’ to describe an exaction under Section 4980H, it might be unclear whether the exaction qualifies as a ‘tax’ for the purposes of the Anti-Injunction Act.”[107] Since “Congress also used the more specific term ‘tax’ to describe the same exaction (and did so repeatedly), it thereby established the applicability of the Anti-Injunction Act.”[108] The court here was equally convinced with the term “penalty” as they were with the term “assessable payment.”[109] The court drew a comparison between “tax” and “penalty” in that both can be used to describe an exaction and just because a tax seeks to influence conduct, like a penalty, that alone is not enough to strip an exaction of its “tax” status.[110] While recognizing that “Congress cannot change whether an exaction is a tax or a penalty for constitutional purposes simply by describing it as one or the other[,]” Congress does have the power to “describe something as a penalty but direct that it nonetheless be treated as a tax for purposes of the Anti-Injunction Act.”[111] A common way that Congress does so is to “expressly label the exaction as a ‘tax,’ as [they] did for the exaction under Section 4980H.”[112]

In its holding, the Court concluded that “[b]ecause Congress repeatedly called the Section 4980H exaction a tax, Optimal’s suit is barred by the Anti-Injunction Act.”[113] The Court here used the same Congressional intent theory elucidated in Hotze to uphold the employer shared responsibility payment as a “tax” with regard to the Anti-Injunction Act.[114] While the Congressional Intent theory rules the day in the Fifth and D.C. Circuits when determining that the exaction is a “tax,” a competing jurisdiction, the Fourth Circuit, uses a different spin on the Congressional intent theory to conclude that the exaction is not a tax. An analysis of that theory will be covered in the next sub-part.

C.     Not a Tax

The Fourth Circuit, in Liberty Univ., Inc. v. Lew, held that the employer mandate under the Affordable Care Act did not constitute a “tax” under the Anti-Injunction Act.[115] Plaintiffs, including Liberty University and other individuals, brought suit challenging both the individual mandate and the employer mandate of the Affordable Care Act.[116] Prior to the case’s current position, the original district court dismissed the lawsuit, and upheld the constitutionality of both the individual and employer mandate of the Affordable Care Act.[117] The Fourth Circuit, on appeal, determined that the Anti-Injunction Act disallowed jurisdiction over Plaintiffs’ claims as they were seeking to contest the exaction without paying it in full first.[118] Consequently, because the Anti-Injunction Act stripped the court of jurisdiction, the Fourth Circuit remanded the case back down to the district court with an instruction to dismiss for lack of jurisdiction.[119] The Supreme Court granted certiorari, vacated the Fourth Circuit’s judgment, and remanded the case to further consider the implications of a the newly-decided NFIB case covering some of the same issues.[120]

The court began discussion of the employer mandate by defining various terms, determining when exactions must be paid, and how much the exaction is, among other things.[121] As mentioned in the above discussion of other circuit’s cases, and helpful to reiterate when drawing comparisons, this court determined that an employer mandate is required when an “applicable large employer” – which is an employer with “an average at least fifty full-time employees during the preceding year[]” – does not provide “affordable health care coverage to its full-time employees and their dependents[.]”[122] If at least one of the employers’ full-time employees is eligible for “an applicable premium tax credit or cost-sharing reduction” in an effort to alleviate the costs of the medical coverage, the employer is then required to make the exaction or “assessable payment.”[123] An employee becomes “eligible for an ‘applicable premium tax credit’ or ‘cost-sharing reduction’ if the employer fails to offer the employee ‘affordable’ coverage providing ‘minimum value’ and the employee’s income falls between 100% and 400% of the poverty line.”[124] The court then discussed how the exaction is calculated under various scenarios, but that is not necessarily germane to our discussion.[125] It is important to note, however, that the court recognized that pertaining to the employer mandate, “the Secretary of the Treasury has the authority to assess and collect the exaction in the same manner as a tax[,]” which was important to highlight since the individual mandate was deemed a “tax” in NFIB and the statute prescribes identical collection treatment to the employer mandate at issue.[126] The court here, highlighted the two liability hooks found in Section 4980H in (a) and (b) and states that “[i]n effect, then, § 4980H(a) imposes an assessable payment on an applicable employer who fails to offer coverage to its full-time employees and their dependents, while § 4980H(b) imposes an assessable payment on an applicable employer who provides coverage that does not satisfy the mandate’s affordability criteria.”[127]

Liberty University “employs approximately 3900 full-time faculty and staff[]” and is self-insured whole offering various insurance policies, savings accounts, and other reimbursement options to employees for their health care.[128] Liberty contended that depending on the definition of “minimum essential coverage” among other items, the University’s coverage may be deemed to be insufficient or unaffordable and thus cause them to be subject to payment of an exaction under the employer mandate of the ACA.[129] Even though one of the goals of the Act was to lower the costs of health care coverage for Americans, Liberty also asserts that “the employer mandate will ‘increase the cost of care . . . [and] will directly and negatively affect [the University] by increasing the cost of providing health insurance coverage[.]”[130] Finally, as a policy consideration, Liberty is a Christian institution that has certain moral beliefs, including the pro-life belief and that by helping fund abortions through paying an exaction, it is adverse to their religious grounding.[131] Bypassing the other issues, the Court here, on remand, “must decide whether the Anti-Injunction Act bars this pre-enforcement challenge to the employer mandate[.]”[132]

What Liberty contested regarding the employer mandate here “is a pre-enforcement suit to enjoin the collection of an exaction that is codified in the Internal Revenue Code, and which the Secretary of the Treasury is empowered to collect in the same manner as a tax.”[133] The court here recognized from NFIB that application of the Anti-Injunction Act is in effect “only where Congress intends it to[,]” which is the same argument that the Fifth and D.C. Circuits made when looking at Congressional intent.[134] The Secretary of the Treasury uses two instances found in the Affordable Care Act referencing the exaction stemming from the employer mandate as a “tax” to bolster their position that the Anti-Injunction Act bars a challenge to the employer mandate without first paying the exaction in full then seeking a refund.[135] When refuting this observation by the Secretary, the court attempted to contradict him by highlighting that “the Secretary virtually ignores the fact that the Act does not consistently characterize the exaction as a tax[,]” but instead used the term “assessable payment” from time-to-time, including the first instance the exaction was mentioned.[136] Regarding the two instances found in the Affordable Care Act that reference the exaction from the employer mandate as a “tax,” one of them is in a “tax-specific context” and the court maintained that the use of another word besides “tax” would lead to interpretive confusion.[137] The first provision provides “[f]or denial of deduction for the tax imposed by this section . . .” and the second provision provides that “[n]o deduction shall be allowed for the following taxes[.]”[138] The court attempted to illustrate that through its cross-referencing sections of the code, Congress intended to be crystal clear that the exaction is a “tax” which is requisite for deductibility.[139] The court was less confident about an obvious justification for the second instance of the word “tax” being used in the Act.[140] The court did not place much weight on the inability to provide a concrete justification for this other instance of “tax” being used.[141] Instead, they realized that one instance of a lack of explanation is okay “[b]ecause Congress initially and primarily [referred] to the exaction as an ‘assessable payment’ and not a ‘tax,’ the statutory text suggests that Congress did not intend the exaction to be treated as a tax” under the analysis of the Anti-Injunction Act.[142]

While concluding the discussion, the court recognized that “Congress did not otherwise indicate that the employer mandate exaction qualifies as a tax for [Anti-Injunction Act] purposes, though of course it could have done so.”[143] The court here made it a point to highlight that the Supreme Court in NFIB noted that “26 U.S.C. § 6671(a) provides that the ‘penalties and liabilities’ found in subchapter 68B of the Internal Revenue Code are ‘treated as taxes’ for purposes of the [Anti-Injunction Act].”[144] The court stated that “[t]he employer mandate, like the individual mandate, is not included in subchapter 68B, and no other provision indicates that we are to treat its ‘assessable payment’ as a tax.”[145]

Overall, the court in Liberty University thinks that “to adopt the Secretary’s position would lead to an anomalous result[]” because “the Supreme Court has expressly held that a person subject to the individual mandate can bring a pre-enforcement suit challenging that provision[,] [b]ut, under the Secretary’s theory, an employer subject to the employer mandate could bring only a post-enforcement suit challenging that provision.”[146] The court found it hard to believe that Congress, in just two isolated uses of the word “tax,” would have vastly different treatments of the mandates in terms of the Anti-Injunction Act’s applicability.[147] In layman’s terms, the court here believed that when Congress acts, it acts purposefully, and here they did not refer to the exaction as a tax initially, and they did not include it as a “tax” in subchapter 68B of the Internal Revenue Code. If Congress intended to have the exaction under the employer mandate be a tax, then they would have made it clear. The court, in few words, decided the “tax” versus “penalty” issue by stating “the employer mandate exaction, like the individual mandate exaction, does not constitute a tax for the purposes of the [Anti-Injunction Act]. Therefore, the [Anti-Injunction Act] does not bar this suit.”[148]

Conclusion – Not a Tax

With the circuit courts being split in multiple directions, the question arises – which interpretation is correct? The answer to this question carries great importance as a Plaintiff’s rights can vary depending on their geographic location. The procedural and jurisdictional limitations that the Anti-Injunction Act places on the employer mandate are varied throughout circuits and need to be addressed.

As mentioned previously, precedent states “Congress said what it meant and meant what it said[,]” so it is imperative to examine their actions under a proverbial “microscope” when parsing a statute.[149] When examining the Fourth Circuit’s spin on the Congressional intent theory versus the Fifth and D.C. Circuit’s version of the Congressional intent theory, the notion that the exaction under the employer mandate is not a “tax” becomes clear.

Refer earlier to the introduction when the note discussed the overarching goal of the Affordable Care Act was to provide more affordable health care coverage to more Americans. A punishment would deter a company from doing something in the future whereas taxes are more routine in nature. To align with the goals of the Affordable Care Act, the exaction to be labeled as a “penalty” makes the most sense. This is a regulatory punishment to ensure more Americans are properly accounted for in terms of health care. There was never a revenue raising aspect of the employer mandate that typically accompanies a tax.

Further, of the interpretations, the one that makes the most sense with Congressional intent is the “penalty” classification. If Congress wanted to ensure that the employer mandate was a “tax,” then they could have and would have done so. It would have been easier for Congress to have expressly said that the exaction was a “tax” for purposes of the Anti-Injunction Act as only where they intended the Anti-Injunction Act to apply is where it applies.[150] With all the time that goes into writing, lobbying, and amending a bill, Congress would have wanted to ensure that they were sending out a complete product that was not contradictory. Congress would not want to have two separate instances of the word “tax” being used that have vastly different consequences in terms of the Anti-Injunction Act.

For that reason, the proper interpretation when considering Congressional intent, the goals of the Affordable Care Act, and the language of the statute is that the employer mandate exaction is a “penalty” and not a “tax.” 

* J.D Expected 2025, University of Kentucky J. Rosenberg College of Law; BS Accounting & Finance 2021, University of Kentucky.

[2] What is the Affordable Care Act?, U.S. Dep’t Health & Hum. Servs., https://www.hhs.gov/answers/health-insurance-reform/what-is-the-affordable-care-act/index.html] (last updated Apr. 20, 2023) [permalink unavailable]; See also John Han, Why and How the Affordable Care Act Was Passed, Review (May 9, 2018), https://virginiapolitics.org/online/2018/5/9/why-and-how-the-affordable-care-act-was-passed [https://perma.cc/6CQG-UVSB].

[3] About the Affordable Care Act, U.S. Dep’t of Health & Hum. Servs., https://www.hhs.gov/healthcare/about-the-aca/index.html (last updated Mar. 17, 2022) [permalink unavailable].

[4] Will Kenton, Affordable Care Act (ACA): What It Is, Key Features, and Updates, Investopedia (last updated Sept. 23, 2022), https://www.investopedia.com/terms/a/affordable-care-act.asp [https://perma.cc/9N7N-FZZQ].

[5] Adrianna McIntyre & Zirui Song, The US Affordable Care Act: Reflections and Directions at the Close of a Decade, PLOS Med. (Feb. 26, 2019), https://journals.plos.org/plosmedicine/article/file?id=10.1371/journal.pmed.1002752&type=printable [https://perma.cc/3RPG-72ZF].

[6] Id.

[7] Id.

[8] HRSA Updates the Affordable Care Act Preventive Health Care Guidelines to Improve Care for Women and Children, U.S. Dep’t of Health & Hum. Servs. (Jan. 11, 2022), https://www.hhs.gov/about/news/2022/01/11/hrsa-updates-affordable-care-act-preventive-health-care-guidelines-improve-care-women-children.html [permalink unavailable].

[9] Id.

[10] Mike Patton, Obamacare 10 Years Later: Success or Failure?, Forbes (Nov. 11, 2020, 4:59 PM), https://www.forbes.com/sites/mikepatton/2020/11/11/obamacare-10-years-later-success-or-failure/?sh=3e7154c24844 [https://perma.cc/7NRD-6ZVD].

[11] Julie Rovner, Why Do So Many People Hate Obamacare So Much?, NPR (Dec. 13, 2017, 11:48 AM), https://www.npr.org/sections/health-shots/2017/12/13/570479181/why-do-so-many-people-hate-obamacare-so-much [https://perma.cc/M8UL-U53H].

[12] See, e.g., Susan Milligan, How Partisan Politics Threatened Even Must-Pass Legislation in Congress, U.S. News & World Rep. (Oct. 1, 2021, 6:00 AM), https://www.usnews.com/news/the-report/articles/2021-10-01/how-partisan-politics-threatened-even-must-pass-legislation-in-congress [permalink unavailable] (highlighting the Build Back Better bill from 2021 as an example showing how the contents of the bill provide for necessary infrastructure improvements that all Americans enjoy the benefits of and need, but Congress cannot come to an agreement due to political strife).

[13] Rovner, supra note 11.

[14] 111th United States Congress, Ballotpedia https://ballotpedia.org/111th_United_States_Congress [https://perma.cc/KZK7-BG7M] (showing the breakdown of Congress at the time that the Affordable Care Act or “Obamacare” was passed. The Democratic Party had control over the House, Senate, and Presidency at the same time, the first occurrence for them since the 103rd Congress in 1993. This was a major boost to gathering support for getting the bill passed and possibly a reasonable irritant for the objectives of dissenting Republicans).

[15] Rovner, supra note 11.

[16] Id.

[17] John E. McDonough, The Tortured Saga of America’s Least-Loved Policy Idea, Politico (May 22, 2021), https://www.politico.com/news/magazine/2021/05/22/health-care-individual-mandate-policy-conservative-idea-history-489956 [permalink unavailable].

[18] Matthew Fiedler, The ACA’s Individual Mandate In Retrospect: What Did It Do And Where Do We Go From Here?, 39 Health Affs. 429, 429 (2020).

[19] See id.

[20] Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 561–74 (2012).

[21] Id. at 575.

[22] Erika K. Lunder & Jennifer Staman, NFIB v. Sebelius: Constitutionality of the Individual Mandate, Cong. Rsch. Serv. (Sept. 3, 2012), https://www.crsreports.congress.gov/product/pdf/R/R42698/3 [permalink unavailable].

[23] NFIB, 567 U.S. at 562–63.

[24] Id. at 574 (emphasis added).

[25] Id. at 575.

[26] 2016 Presidential Election Results, N.Y. Times (Aug. 9, 2017, 9:00 AM), https://www.nytimes.com/elections/2016/results/president [https://perma.cc/A8C6-7JE7].

[27] Rovner, supra note 11.

[28] Tax Cut and Jobs Act of 2017, Pub. L. No. 115-97.

[29] General Explanation of Pub. L. No. 115-97 at 91, https://efaidnbmnnnibpcajpcglclefindmkaj/https://www.govinfo.gov/content/pkg/CPRT-115JPRT33137/pdf/CPRT-115JPRT33137.pdf [permalink unavailable].

[30] Id. at 92.

[31] 26 U.S.C. § 4980H.

[32] About the Affordable Care Act, supra note 3.

[33] Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act, Internal Revenue Serv., https://www.irs.gov/affordable-care-act/employers/questions-and-answers-on-employer-shared-responsibility-provisions-under-the-affordable-care-act (last accessed Oct. 26, 2024) [https://perma.cc/745Z-M4UX].

[34] Id.

[35] Nanci N. Rogers & Joe Keavy, Treasury and IRS Issue Final Employer Mandate Rules for the Affordable Care Act, Robbins Schwartz (Feb. 13, 2014), https://www.rsnlt.com/news/law-alerts/2014/02/13/treasury-and-irs-issue-final-employer-mandate-rules-for-the-affordable-care-act/ [https://perma.cc/5DY6-X7JV].

[36] Rakesh Singh & Chris Lee, Majority Favors the Affordable Care Act’s Employer Mandate, But Opinion Can Shift When Presented With Pros and Cons, KFF (Dec. 18, 2014), https://www.kff.org/health-reform/press-release/majority-favors-the-affordable-care-acts-employer-mandate-but-opinion-can-shift-when-presented-with-pros-and-cons/ [https://perma.cc/XF2B-8GSX].

[37] Id.

[38] Compare Hotze v. Burwell, 784 F.3d 984, 996–99 (5th Cir. 2015) (holding that the employer shared responsibility payment under § 4980H to be a tax) with Liberty Univ., Inc. v. Lew, 733 F.3d 72, 88–89 (4th Cir. 2013) (holding the employer shared responsibility payment under § 4980H to not be a tax).

[39] See 26 U.S.C. § 4980H.

[40] Erik P. Doerring, Section 4980H Employer Shared Responsibility Payments (ESRP): The New “IRS Employment Tax Penalty”?, Burr & Forman LLP (Apr. 15, 2019), https://www.burr.com/tax-law-insights/section-4980h-employer-shared-responsibility-payments-esrp-the-new-irs-employment-tax-penalty [https://perma.cc/N3JW-HGKN].

[41] Compare Hotze, 784 F.3d at 996–99 (holding that the employer shared responsibility payment under § 4980H to be a tax) with Liberty Univ., 733 F.3d at 88–89 (holding the employer shared responsibility payment under § 4980H to not be a tax).

[42] Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 574 (2012).

[43] Id. at 575.

[44] See Liberty Univ., 733 F.3d at 88–89; Hotze, 784 F.3d at 996–99; Korte v. Sebelius, 735 F.3d 654, 669–70 (7th Cir. 2013); Optimal Wireless v. Internal Revenue Serv., 77 F.4th 1069, 1076 (D.C. Cir. 2023).

[45] Compare Optimal Wireless, 77 F.4th at 1076 and Hotze, 784 F.3d at 996–99 with Liberty Univ., 733 F.3d at 88–89 and Korte, 735 F.3d at 669–70.

[46] 26 U.S.C. § 7421.

[47] Optimal Wireless, 77 F.4th at 1076; Hotze, 784 F.3d at 996–99.

[48] Liberty, 733 F.3d at 88–89.

[49] 26 U.S.C. § 7421(a).

[50] Flora v. United States, 362 U.S. 145, 159–60 (1960).

[51] See 26 U.S.C. § 7421(a).

[52] Id.

[53] Id. (emphasis added).

[54] Dye v. United States, 516 F. Supp. 2d 61, 73 (D.D.C. 2007).

[55] Compare Liberty Univ., 733 F.3d at 87-89 with Optimal Wireless, 77 F.4th at 1076–77 (The effect of the Anti-Injunction Act allowed the plaintiff in Liberty University to bring a claim in the Fourth Circuit that the plaintiff from Optimal Wireless was barred from bringing in the Fifth and D.C. Circuits).

[56] See Optimal Wireless, 77 F.4th at 1076–77.

[57] Optimal Wireless, 77 F.4th at 1073, 1077; Hotze v. Burwell, 784 F.3d 984, 997, 999 (5th Cir. 2015); Comm’r v. Lundy, 516 U.S. 235, 240 (1996).

[58] Hotze, 784 F.3d at 989.

[59] Id.

[60] Id.

[61] Id. at 990.

[62] Id.

[63] Id.

[64] Id. at 991.

[65] Id. at 996.

[66] 26 U.S.C. § 7421(a).

[67] Hotze, 784 F.3d at 996 (citing Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 543 (2012)).

[68] Hotze, 784 F.3d at 996.

[69] Id.

[70] Id. at 997.

[71] Id.

[72] Hotze, 784 F.3d at 997 (citing 26 U.S.C. § 4980H(d)(1)).

[73] Hotze, 784 F.3d at 997.

[74] Hotze, 784 F.3d at 997 (citing NFIB, 567 U.S. at 544).

[75] Id. at 997, 999; 26 U.S.C. 7421(a); Comm’r of Internal Revenue Serv. v. Lundy, 516 U.S. 235, 240 (1996).

[76] Optimal Wireless v. Internal Revenue Serv., 77 F.4th 1069, 1072 (D.C. Cir. 2023).

[77] Id. at 1070–71.

[78] Id. at 1073 (citing 26 U.S.C. § 7421(a)).

[79] Id.

[80] Id. at 1071.

[81] Id.

[82] Id. (citing 26 U.S.C. § 4980H(a)(1)).

[83] Id. at 1071–72 (citing § 4980H(b)).

[84] Id. at 1072.

[85] Id.

[86] Compare Optimal Wireless, 77 F.4th at 1071–72, with Hotze v. Burwell, 784 F.3d 984, 988 (5th Cir. 2015).

[87] Optimal Wireless, 77 F.4th at 1072.

[88] Id.

[89] Id. (citing 42 U.S.C. § 18081(e)(4)(B)(iii); 45 C.F.R. § 155.310(h)).

[90] Id.

[91] Id.

[92] Id. at 1073.

[93] Id.

[94] Id. at 1073–74.

[95] Id.

[96] Id. at 1073–74.

[97] Id. at 1074.

[98] Id.

[99] Id.

[100] See id.

[101] Id. (citing 26 U.S.C. § 4980H(b)(2)).

[102] Id. (citing 26 U.S.C. § 4980H(c)(7) (emphasis added)).

[103] Id. (citing 26 U.S.C. § 4980H(c)(7) (emphasis added)).

[104] Id. (citing 42 U.S.C. § 18081(f)(2)(A) (emphasis added)).

[105] Id.

[106] Id.

[107] Id. at 1075.

[108] Id.

[109] Id.

[110] Id.

[111] Id. at 1076 (quoting Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 544 (2012)).

[112] Id. (citing CIC Servs., LLC v. Internal Revenue Serv., 593 U.S. 209, 212–13 (2021)).

[113] Id.

[114] Id. at 1074; Hotze v. Burwell, 784 F.3d 984, 999 (5th Cir. 2015).

[115] Liberty Univ., Inc. v. Lew, 733 F.3d 72, 89 (4th Cir. 2013).

[116] Id. at 83.

[117] Id.

[118] Id.

[119] Id. (citing Liberty Univ., Inc. v. Geithner, 671 F.3d 391 (4th Cir. 2011)).

[120] Id. (citing Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519 (2012)).

[121] Id. at 84–85.

[122] Id. at 84.

[123] Id.

[124] Id. at 84–85.

[125] Id. at 85.

[126] Id.

[127] Id.

[128] Id. at 86.

[129] Id.

[130] Id.

[131] Id.

[132] Id. at 87.

[133] Id.

[134] Id.

[135] Id. at 88.

[136] Id.

[137] Id.

[138] Id.

[139] Id.

[140] Id.

[141] Id.

[142] Id.

[143] Id.

[144] Id. (citing Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 543 (2012)).

[145] Id.

[146] Id.

[147] Id.

[148] Id. at 89. (emphasis added).

[149] Optimal Wireless v. Internal Revenue Serv., 77 F.4th 1069, 1074 (D.C. Cir. 2023).

[150] Liberty Univ., Inc. v. Lew, 733 F.3d 72, 87 (4th Cir. 2013).

Habitual Offender Statutes: A Need for Change

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Habitual Offender Statutes: A Need for Change

Jacob Bush[*]

Introduction

Many states have habitual offender statutes, which label those who violate the statutes as either habitual felony offenders or persistent felony offenders (hereinafter referred to as HFO).[2] While these statutes differ state-by-state, they all serve as a deterrent to those who may recommit felonies. In addition to longer sentences, many of those convicted under a HFO statute are also restricted in their eligibility for the different types of probation.[3]

While it may seem fair to punish those who are reoffenders harsher than first time-offenders, HFO statutes have a detrimental effect to our society. First, these kinds of statutes can be used by prosecutors in a way that interferes with traditional notions of fairness. Second, the punishment for those who have committed the lowest level of felonies, such as drug possession or petty theft can be sentenced similarly to felons convicted of violent crimes.[4] Finally, the public suffers financially from how they are currently used.[5] The solution to these issues requires two changes. First, to ensure fairness is preserved, the procedures that apply to HFO statutes should be similar to the procedures for capital punishment defendants. Second, HFO statutes should be revised to exclude low-level felonies.[6]

This Article can be broken down into five parts. Part I introduces the reader to the article and provides a broad view of the arguments to be made. Part II contains four subparts that discuss arbitrary use of persistent felony offender statutes. Part III involves amending HFO statutes. Part IV provides a short section of some of the changes being made or attempting to be made to remedy the problems with HFO statutes. Part V concludes the article by recognizing and refuting a potential counterargument and summarizing the content of this article.

 I.     Arbitrary Use of the Persistent Felony Offender Statute

To uphold the fairness our judicial system claims to promote, policies need to be applied to everyone equally. HFO statutes, however, are not applied equally to African Americans.[7] Four subparts will provide readers with sufficient evidence to support this. Subpart one introduces the reader to how prosecutorial discretion affects HFOs. Subpart two highlights how minorities are more often convicted of being a HFO than white people. The third and fourth subpart offers a solution to this issue.

A.    Prosecutorial Discretion

Prosecutorial discretion comes from the common law principle that the government has “broad discretion” on who to prosecute.[8] The purpose of this discretion is to provide for a more efficient way to prosecute crimes while staying in line with the public interest.[9] Broad discretion also extends to whether a defendant will face a HFO charge. An example of this can be seen in Bordenkircher v. Hayes.[10] This case involves the denial of a HFO’s habeas corpus claim.[11] The Supreme Court held that the prosecutor seeking a HFO charge, after the defendant denied a plea deal from the prosecution, was not a violation of due process because of the prosecutor’s broad discretion.[12] A palatable solution would be for states to adopt procedures that will ensure a fair sentencing process for defendants. Adopting these new procedures would take away the ability for prosecutors to use these statutes to impose a heftier sentence on a person solely because of a prosecutor’s personal biases.

Making changes to a specific kind of prosecution is not a foreign concept. In cases before the U.S. Supreme Court, counsel appearing on behalf of death penalty petitioners have urged that such cases are inherently “different.”.[13] With the steep sentences sometimes being imposed lower-level felons, HFO statutes should fall under this “different” category as well. The additional protections added for capital cases are very expensive and in some circumstances cost four times the amount of a non-death penalty case.[14]

Due to the large number of defendants facing a HFO charge, it would be unreasonable to expect all of the additional protections to apply to HFOs.[15] Applying all protections would create an overwhelming financial strain on the criminal justice system.[16] Instead, states should adopt select policies from the capital punishment procedures that would lower the amount of people being charged as a HFO. Specifically, instead of a prosecutor deciding if HFO status will apply to a defendant, that should be left up to an unbiased jury. Additionally, defense counsel should be required to do mitigation investigation and should be allowed to offer mitigating evidence to the jury.[17]

B.     Racial Disparity Among Habitual Offenders’ Sentencings

Many states leave it to the prosecutor to decide who will be charged as a HFO, which can create an environment where personal bias or prejudice can influence the sentence of the defendant.[18] One of the biggest areas for potential prejudice is race.[19] Several studies have looked at the disparities between race and when HFO statutes are applied. These studies have used data to show that in areas where there is increased “racial threat,” African Americans are more likely to be sentenced under the HFO statute compared to their similarly charged white counterparts.[20] The term racial threat refers to those in power feeling threatened by minorities.[21] Combining this fear with stereotypes about crime often leads to minorities receiving harsher sentences.[22] The disparity between race and HFOs are not exclusive to one state either.

In Mississippi, seventy-five percent of HFOs are African American.[23] While this statistic could be the consequence of a higher African American population in the general public of these states and in prison, the race disparity regarding HFOs is worse than the disparity of being incarcerated within the state of Mississippi.[24] African Americans make up fifty-eight percent of Mississippi’s prison population and comprise less than forty percent of the state’s population as a whole.[25] Maryland is another example of racial disparity among HFOs outside of the south.[26] In Maryland, seventy-five percent of people sentenced to life in prison under the HFO statute are also African American.[27] This is not an argument that prosecutors are inherently racist, but statistics show that there is a large disparity between which races are sentenced under the HFO statutes.[28] Because of this disparity, extra safeguards are needed to make sure that the justice system is fair and absent of personal bias.

C.     Taking the Decision Away from the Prosecutor

Allowing the jury to decide whether a person should be considered a HFO would provide an avenue less likely corrupted by prejudice. In Apprendi v. New Jersey, the Supreme Court looked at a statute that would allow a defendant to be convicted of a second-degree offense by a jury but then have a sentence imposed on them as if it was a first-degree offense.[29] New Jersey allowed the sentence to be enhanced because it was considered a hate crime on top of the original offense committed.[30] The Supreme Court decided that other than a prior conviction, anything that could increase the penalty for a crime beyond the possible maximum penalty for the statute had to be submitted to the jury and proved beyond a reasonable doubt.[31] While this rule eventually was applied to capital sentencing and provided substantial protections to defendants facing the death penalty, the court expressly excluded prior offenses from the holding.[32] Doing so sets the stage for HFO statutes to continue to be used to sentence defendants to extreme sentences compared to what it would be without HFO status.

In 2002, the Supreme Court reinforced the belief that a defendant has the right to a jury determination that he or she is not only guilty of the crime but that the aggravating circumstances exist as well.[33] In Ring v. Arizona, the Court looked back to Apprendi and relied on the same logic in coming to the conclusion in the current case.[34] Summing up this connection, Justice Ginsburg makes a comparison between the two cases stating, “[t]he right to trial by jury guaranteed by the Sixth Amendment would be senselessly diminished if it encompassed the factfinding necessary to increase a defendant’s sentence by two years, but not the factfinding necessary to put him to death.”[35] This quote from Justice Ginsburg highlights the core problem with those facing HFO sentencing. If someone who is facing an enhancer of two years is required to have that determined by the jury, why are those facing up to life enhancements not offered the same opportunity?

Recently, in 2016, the Court took a step further than Ring, in Hurst v. Florida.[36] In Hurst, the Court determined that a recommendation of death is not enough; it must be a determination made by the jury.[37] Many HFO statutes do technically leave this decision to the jury, but they have very little actual say in the sentence.[38] For the statute to activate, the jury just has to decide whether or not the defendant has prior applicable offenses. Once that is established, HFO status applies. For a more just outcome, the jury should be able to consider factors like those in death penalty cases that can provide context for a possible lighter sentence. Look at the case of Fair Wayne Bryant.[39] Bryant, a Louisiana man, was sentenced to life in prison for stealing a pair of hedge clippers.[40] Stealing hedge clippers on its own does not lead to a life sentence, but Louisiana’s HFO statute was used in this case due to Bryant’s four prior felonies.[41] Had Apprendi applied to prior convictions, Bryant may have received the same sentence, but it would have been up to the discretion and determinations of the jury and not a statute that automatically applied regardless of the crime.[42] This is not an isolated occurrence. Charles Collins is another person who was sentenced to life without the possibility of parole in 2010 for drug charges. [43] Again, his life sentence came from the HFO statute in Illinois, tying the hands of the judge who had no choice but to impose that sentence.[44] Illinois Governor, JB Pritzker commuted Collins’s sentence to allow life with the possibility of parole.[45] Fortunately, Bryant was paroled in 2020[46] and Collins in 2023,[47] but many non-violent HFOs have not received the same fate. A 2005 study in California showed that out of those sentenced under the state’s HFO statute, a little over half of those inmates were convicted of nonviolent offenses.[48] In some circumstances, the judge or jury lacks the authority to decide whether someone is considered a HFO.[49] In some states, once the prosecutor convicts on the original-charged felony, they then only have to prove the defendant has prior felony convictions within the statutory time frame.[50] Look back to Collins’s case, where the judge made the comment that there was nothing she could do in regards to the sentence.[51] A blanket approach to stopping repeat offenders has created a risk of non-violent offenders slipping through the cracks and being lumped in with violent offenders.

D.    The Need for Mitigating Evidence

Capital punishment has been a controversial topic for decades, which has led to ample case law that has provided protections for defendants facing the death penalty.[52] One protection is requiring defense counsel to do investigation into mitigating evidence.[53] Even more important, however, is requiring the jury to consider that mitigating evidence before imposing the sentence.

Before a jury can be required to hear and consider mitigating factors of a potential HFO, the defendant’s attorney must produce it. In the realm of capital punishment, this is a requirement. In Wiggins v. Smtih, Wiggins sought relief after his ineffective assistance of counsel claim was denied by the United States Court of Appeals.[54] In his original case, Wiggins was convicted of murder and sentenced to death.[55] Partially to blame for the sentence, is his defense team not providing mitigating evidence on Wiggins’s behalf.[56] On appeal, the Supreme Court analyzed Wiggin’s mitigating evidence, which included several instances of severe trauma.[57] It then concluded that a competent attorney would have introduced the mitigation evidence at trial, and that it would be relevant to the defendant’s mitigation argument..[58] They reason this is because society believes that defendants with a traumatic background are held to be less culpable those who do not.[59] Not only does this show that the Supreme Court recognizes how important it is to humanize people before a sentence is imposed on them, but that society believes that those with difficult life history are less culpable.[60] Establishing this procedural rule is necessary to implement the next point.

Mitigating evidence must be considered by the jury before imposing a sentence upon a defendant in a death penalty case. In Lockett v. Ohio, the defendant was convicted of murder and under the Ohio statute, the sentencer, did not consider certain mitigating evidence.[61] The Supreme Court analyzed this and recognized that, the lack of a requirement for mitigating evidence to be considered is attributable to a public policy decision, enacted through statute..[62] Even so, they recognized that treating defendants with “respect and uniqueness” is much more important in capital cases as there are not as many remedies for those defendants and because of the severity of the punishment.[63] The Court then held that a statute that prevents the sentencer in capital cases from considering the “defendant’s character and record” as well as circumstances of the offense, can create a situation where a lesser penalty would be imposed instead.[64] While this case does involve the most severe punishment in the United States, these cases normally involve the most heinous crimes. This logic should also be applied to HFO statutes. HFOs face punishments as severe as life in prison without the possibility of parole for drug or property crimes, which are much less severe than a capital offense.[65] It seems just as important to make sure these defendants should be just as protected from the harsh penalties under the HFO statutes as capital defendants are against capital punishments.[66]

An argument is likely to be made against these revisions from those who hold a staunch tough-on-crime mindset.[67] While the proponents of these kinds of laws are concerned about a real issue in the United States,[68] making the amendments proposed above would not be as light on crime as some may argue. If the changes suggested above were adopted, the prosecution would be allowed to offer up aggravating circumstances as well, to sway the jury toward applying HFO status just as if they were deciding for the death penalty in a capital punishment case.[69]

Jurek v. Texas, a capital punishment case, sets out this capital punishment procedure.[70] In this case, the Court observed that the jury weighed aggravating circumstances against the mitigating evidence, and the jury found that the prosecution’s aggravating circumstances weighed heavier.[71] The same procedures can be applied to HFO cases. For example, a defendant who is charged with felony drug possession could offer up facts such as a traumatic childhood, that their parents were addicted to drugs, or any information that could justify a lighter sentence. The prosecution could then point out factors that could sway the jury to not be as sympathetic.

While not as automatic as most states’ current HFO statutes, adopting some of the procedures from capital punishment cases would make sentencing fairer for defendants, while still maintaining a toughness toward crime. This would be done by taking the decision away from the prosecutor and allowing a jury, who is unbiased, to hear contextual information about the defendant and then make the decision to give them an enhanced sentence or not.

 II.     Excluding Lower-Level Felonies from Habitual Offender Statutes

Many states’ HFO statutes include lower-level felonies, which is detrimental for two reasons. First, many lower-level felonies are influenced by a person’s addiction to some sort of substance. Second, the financial impact that sentencing low-level felons to substantial prison time is a heavy burden on the public and the state prisons. Part III of this note will analyze this issue in two subparts. Subpart A will examine the kinds of lower-level felonies that are often included in HFO statutes. Subpart B will then examine the financial impact of lengthy sentences on lower-level felons.

A.     The Relationship between Substance Abuse and Lower-Level Felonies

When thinking of people who are serving the rest of their lives in prison, people’s minds are likely to go to murderers. Despite that, an ACLU study from 2012 shows that, throughout nine states, there were a total of 1,205 people sentenced to life without the possibility of parole (LWOP) for non-violent crimes.[72] Some examples of crimes that have resulted in LWOP include: possession of stolen wrenches, shoplifting, breaking into a liquor store afterhours, and possession of a crack pipe.[73] Many of those convicted under these kinds of statutes, also have a substance abuse disorder.[74] As many statutes currently stand, many people with a substance use disorder are at a risk of receiving sentences similar to those who have been convicted of murder.[75]

This fact is made worse considering society has recently developed a better understanding of substance use disorders. In addition, other experts have determined that a person’s environment (e.g., traumatic experiences) can increase their chances of developing a substance use disorder.[76] Furthermore, if a person lives in a neighborhood that is high in poverty and/or violence, they are also more likely to develop a substance use disorder.[77] These facts have led some to believe that there are more effective ways to rehabilitate people with substance use disorders, rather than giving them a lengthy prison sentence.[78]

One alternative to a prison sentence is, placing offenders in cognitive-behavioral therapy (CBT). CBT is a psychological treatment that focuses on changing an addict’s thought process.[79] This form of therapy is based on three key tenants:.First is the principle that psychological problems can be the result of negative thoughts; .Second, patterns of unpleasant behavior can also cause psychological problems; Finally, people can learn to cope with these psychological problems, which will give them relief from their symptoms.[80] A 2010 study, which included over 2,000 people with a substance use disorder, determined that CBT was an effective method of treatment.[81] They concluded that to get the highest chance of success in CBT, the patient should combine this therapy with another form of treatment.[82] Accomplishing this would be difficult if the person is confined to a prison, where they have limited treatment options. A 2005 report highlights this issue. The author in this report uses a chart to show that 71 percent of prisoners do not receive substance abuse treatment because of budgetary issues.[83] The next two biggest reasons for not receiving treatment is space limitation (51 percent of prisoners) and limited counselors (39 percent of prisoners).[84] If people with substance use disorders were required to complete CBT rather than sentenced to years in prison, they could receive the treatment they need to solve their issues long term. Instead, when they are sentenced to prison, they have a high likelihood of using drugs again when they are released.[85]

CBT is not the only alternative either. While not a particular kind of treatment, in-patient rehabilitation centers can offer a “best of both worlds” approach. On the one hand, the patient, who has committed a crime, is sent to a facility where he or she will be punished for leaving prematurely. On the other hand, the patient is in a facility for a much shorter period than if he or she was sentenced under a HFO statute. Even more importantly, this facility would focus on rehabilitation, whereas a prison serves multiple purposes.[86]

One of the main benefits of an in-patient rehab, compared to any service offered in prisons, is the ability to personalize treatment. To determine which treatment would be the most beneficial to a specific client, a medical professional looks at the substance the person is addicted to.[87] For example, for those addicted to opioids, the preferred treatment is methadone, buprenorphine, extended-release naltrexone, and lofexidine.[88] To emphasize the importance of medicinal rehabilitation, look at its effectiveness.[89] For example, in a 2009 study, those being treated with methadone, “had 33 percent fewer opioid-positive drug tests and were 4.44 times more likely to stay in treatment."[90] This inclusion is important as most prisons do not use medicinal rehabilitation for prisoners who suffer from some substance use disorder.[91] If some of the most effective forms of rehabilitation are not permitted in prisons, then it is time to ask whether or not some prisoners — as well as the public — would benefit more from lower-level felons receiving proper drug treatment, rather than sitting in prisons for years.

B.     Financial Impact of Habitual Offender Statutes

At least two factors impact the cost of how much money HFO statutes cost taxpayers: the normal cost for annually housing an inmate, and healthcare cost for elderly inmates who are serving under HFO statutes.

First, state prisons are significantly funded by the citizens of the state.[92] From 1987 to 2008, state expenditures for corrections went from $10.62 billion to $47.73 billion, an increase of 349 percent.[93] As of 2021, this number had increased to around $80 billion.[94] To add some context to this data, one can look at states that are in different parts of the country and see the costs it takes to house inmates. First, in California, it is estimated to cost about $106,000 to incarcerate an inmate per year.[95] This number is 117 percent higher than a decade prior due to staff and medical costs.[96] In total, California spends around $8.5 billion annually for their incarcerated population.[97] HFOs specifically cost $5.5 billion from 2010 to 2020.[98] On the other side of the country, New York pays around $115,000 per year for each inmate incarcerated.[99] This figure as a whole is a part of a $3.5 billion annual budget for corrections in New York.[100] While California’s cost is the highest in the country, those states not mentioned also are burdened by extreme costs. For example, eleven other states spent at least $ 1 billion annually to incarcerate individuals.[101]

To see how expensive HFOs can be, one must look at the number of HFOs who have been sentenced for a substantial amount of time in a particular state. Take this number and multiply it with the average sentence for those offenders. Then take this number and multiply it with the amount of money a state spends on a prisoner per year. The result will give the average amount of money that the HFOs, with the longest time to serve, will cost the state over the course of their sentence. In 2019, a study was done in Mississippi that highlights these offenders.[102] Mississippi had over 2,600 people incarcerated under its HFO statute in 2019.[103] Of this number, 906 people have been sentenced to at least twenty years, with 439 more being sentenced to at least fifty years in prison.[104] Even by being conservative and using the lowest possible number for each set, the average sentence of these individuals is thirty-five years in prison.[105] Moreover, Mississippi pays around $20,000 per year per inmate, which is one of the lowest in the country.[106] To get the average cost of HFOs in Mississippi over the course of their sentence, multiply the total number of HFOs with substantial sentences (900 inmates) by the average sentence (35 years), which equals 31,500 total years.[107] Then take the total years (31,500 years) and multiply them by the annual cost per inmate ($20,000), which equals $630 million. This is the total amount of money spent over the course of the inmates’ sentences. For transparency, it is important to note that it is unclear how many of the HFOs with substantial sentences are charged with lesser level felonies. The statistics are nonetheless important, however. Removing those who are significantly sentenced for lower-level felonies from the pool would still save the state money, which it could use to combat other issues affecting its citizens.

Furthermore, aside from the normal costs of incarceration, when inmates are sentenced to prison for their entire life or until they are elderly, which are the sentences given to many HFOs, the state becomes responsible for their healthcare. In the United States, the average medical cost per prisoner, per year, is around $6,000, which makes up 18 percent of the average state prison’s expenditures.[108]

These statistics, however, are an average of all prisoners, when the more expensive medical care comes from the aging prison population.[109] This is because senior citizens, regardless of incarceration status, have a higher chance to develop dementia, have impaired mobility, and are more likely to suffer from hearing and vision loss.[110] When incarcerated, however, the Bureau of Justice Statistics concluded that older inmates are more likely to have chronic conditions as well as age quicker than those not incarcerated.[111] This can require the facility to have structural and security accommodations, treatments, and staff trained for special care.[112] Some studies have shown that the cost of incarcerating aging inmates is around $16 billion a year.[113] Maryland recognized this issue as well when it reduced prison sentences with the purpose of lowering the age of the age of its incarcerated population.[114] This move saved them around $185 million over the course of five years.[115] Using Maryland as an example, other states, should look to releasing some of its aging inmates who are only convicted of lower-level felonies. Not only would it benefit those incarcerated, but it would free up some state funds to solve other problems that the public may need assistance with.

Some may argue that compassionate release is already a remedy to this problem and those who are not granted release should still be in there. The problem with this line of thought is the infrequency in which compassionate release is used. 49 states, with the exclusion of Iowa, have some sort of compassionate release, but rarely use them.[116] To add some perspective, in Pennsylvania and Kansas from 2009 to 2016 only sixteen people were granted compassionate release.[117] Statistics for many states are hard to find as only thirteen states are required to track them.[118] Even without the tracking, the difficulty in being granted compassionate release can be seen in the statutes permitting it. California, one of the more severe statutes, requires the person to be, “permanently medically incapacitated, and unable to perform … breathing, eating or eliminating, and require round-the-clock care.”[119] Geogia has a similar statute, which requires the person to be totally incapacitated and expected to die within a year.[120] While it may seem like there is already a remedy for aging inmates, in the form of compassionate release, it is not accessible enough to fix the problem.

III.     A Step in the Right Direction

While the status of HFO statutes paints a bleak picture to many Americans, some states are taking, or attempting to take steps in the right direction. In 2017, Louisiana revised its HFO laws to prohibit life sentences for repeat offenders charged with drug crimes.[121] In addition to these changes, Louisiana judges can also suspend or reduce the sentences of HFOs.[122] Attempting to remedy this issue further, Louisiana extended parole eligibility to over three thousand inmates in 2021.[123] Kentucky is another example of a state where there has been an unsuccessful attempt to fix its HFO statute. Kentucky’s attempt comes in the form of SB 225 which, if passed, would allow the jury to reject the application of the HFO status, allow parole for those serving for non-violent crimes, and prohibit the use of the statute for simple drug possession crimes.[124] Not only was this bill not passed, but Kentucky has passed several laws that will worsen the state’s substantially high incarceration rate.[125]

What happened with Kentucky’s efforts to amend its HFO statutes is not the only example of injustice for HFOs. Even in states like Louisianna, problems remain for thousands of HFO inmates. The remedies provided in the 2017 law are helpful for many inmates, but the benefits do not apply retroactively.[126] When remedying this issue, it is important to not think of those who may be hindered in the future, but to also look back on those already sentenced under HFO statutes.

Conclusion

The public has an interest in punishing repeat felony offenders. The changes that this article suggests would work toward the same goal, while amending the harsh HFO statutes. First, by removing the decision to apply HFO status from the prosecutor and placing it in the hands of the jury, the risk of one person’s potential bias is removed, and the jury would decide if a prolonged sentence were necessary. Secondly, by removing lower-level felonies from HFO statutes, many people who are motivated by drug use can get the help they need, which could give them a better chance of being a productive member in the future. If alternative treatment is not convincing, the money saved, could be put back into the community and would benefit the public more than incarcerating a person with substance use disorder.

The solution to the biggest problems with HFO statutes is simple: Fix the arbitrariness of their application to ensure that every defendant has an equal chance and exclude lower-level felonies from the statutes to ensure the public does not have to bear the financial burden and the defendant gets proper treatment instead.

[*] J.D Expected 2025, University of Kentucky J. Rosenberg College of Law; BA History & Legal Studies 2021, Morehead State University.

[2] See Matt Mencarini, Chris Kenning & Jonathan Bullington What is a persistent felony offender? The law fueling Kentucky’s huge incarceration rate, Courier J. (Feb. 3, 2022), https://www.courier-journal.com/story/news/investigations/2022/02/03/what-to-know-kentucky-persistent-felony-offender-pfo-law/8811901002/ [https://perma.cc/E3VE-WMFP]; see also Emily Frances Lynch, Johnson v. United States: The Impact on Texas’ Habitual Offender Statute, 45 Hastings Const. L.Q. 187 (2017).

[3] Ky. Rev. Stat. Ann. § 532.080 (West 2012).

[4] Ky. Rev. Stat. Ann. § 218A.1415 –1417 (West 2011); Mencarini, Kenning & Bullington, supra note 2.

[5] See Infra Part II B.

[6] Ky. Rev. Stat. Ann. § 532.060 (West 2011).

[7] See Matthew S. Crow & Katherine A. Johnson, Race, Ethnicity, and Habitual-Offender Sentencing: A Multilevel Analysis of Individual and Contextual Threat, 19 Crim. Just. Pol’y. Rev. 63, 63 (2008); See also Charles Crawford, Gender, Race, and Habitual Offender Sentencing in Florida, 38 Criminol’y 263, 276–278 (1998) (noting that black females are more than twice as likely to be habitualized in areas where economic inequality along racial lines is comparatively low).

[8] Wayte v. United States, 470 U.S. 598, 607 (1985) (citing United States v. Goodwin, 457 U.S. 368, 380, n.11 (1982)).

[9] See Peter Krug, Prosecutorial Discretion and Its Limits, 50 Am. J. Compar. L. Supp. 643, 643–47 (2002).

[10] Bordenkircher v. Hayes, 434 U.S. 357, 364 (1978).

[11] Id at 360.

[12] Id. at 364–365.

[13] James D. Zirin, Death is Different, The Hill (Dec. 14, 2020, 1:30 PM), https://thehill.com/opinion/criminal-justice/531564-death-is-different/; accord Furman v. Georgia, 408 U.S. 238, 248 n.11 (1972) (Douglas, J., concurring).

[14] See., Facts about the Death Penalty, Death Penalty Info. Ctr. (Dec. 7, 2016), https://www.supremecourt.gov/opinions/URLs_Cited/OT2016/16-5247/16-5247-2.pdf [https://perma.cc/AE4A-NMH8].

[15] See Caitlyn Lee Hall, Good Intentions: A National Survey of Life Sentences for Nonviolent Offenses, 16 NYU J. Leg. & Pub. Pol’y. 1101, 1139–41 (2013).

[16] See Death Penalty Info. Ctr., supra note 12; see also Hall, supra note 13.

[17] Lockett v. Ohio, 438 U.S 586, 605 (1978).

[18] See e.g., Ky. Rev. Stat. Ann. § 532.080 (West 2012); see also LA R.S. 15.529.1 (West 2019).

[19] See Death Penalty Info. Ctr., supra note 12.

[20] See Crow & Johnson, supra note 5; see also Crawford supra note 5.

[21] See Crow & Johnson, supra note 5, at 64.

[22] See Id.

[23] Tana Ganeva, ‘Habitual Offender’ Laws Imprison Thousands for Small Crimes – Sometimes for Life, Scheerpost (Sep. 28, 2022), https://scheerpost.com/2022/09/28/habitual-offender-laws-imprison-thousands-for-small-crimes-sometimes-for-life/. [https://perma.cc/5NXP-ZX6L].

[24] Id.

[25] Id.

[26] Race and Sentencing, Nat’l. Ass’n. Crim. Def. Law., (Nov. 23, 2022), https://www.nacdl.org/Content/Race-and-Sentencing. [https://perma.cc/DZQ6-5NSE].

[27] Id.

[28] See Death Penalty Info. Ctr, supra note 12; See also Crow & Johnson, supra note 5; see also Crawford, supra note 7; see also Ganeva, supra note 21; see also Beth Shelburne, Alabama’s Habitual Offender Law: Driving Mass Incarceration Since 1977, ACLU Alabama (May 1, 2020), https://www.alabamasmartjustice.org/reports/hfoa (providing evidence of disparity between races when it comes to habitual offender statute application); [https://perma.cc/QHA8-2QFK]; see also, Race and Sentencing, supra note 24.

[29] See Apprendi v. New Jersey, 530 U.S. 466, 490–91 (2000).

[30] Id.

[31] Id.

[32] Id. at 490-97.

[33] Ring v. Arizona, 536 U.S. 584, 602 (2002).

[34] Id.

[35] Ring, 536 U.S. at 609.

[36]See Hurst v. Florida, 577 U.S. 92 (2016).

[37] Id. at 97.

[38] Ky. Rev. Stat. Ann. § 532.080(1) (West 2012); La. Stat. Ann. § 15:529.1 (2019).

[39] See Matthew S. Schwartz, Black Man Serving Life Sentence for Stealing Hedge Clippers Granted Parole, NPR (Oct. 18, 2020, 8:06 AM), https://www.npr.org/2020/10/18/925198663/black-man-serving-life-sentence-for-stealing-hedge-clippers-granted-parole [https://perma.cc/5AWS-WSEC].

[40] Id.

[41] Id.

[42] See Apprendi, 530 U.S. at 490.

[43] Beth Hundsdorfer, Prisoner Review Board releases final Illinoisan serving life sentence for ‘three-stikes’ drug offense, NPR Ill. (Dec. 21, 2023, 1:15 PM), https://www.nprillinois.org/equity-justice/2023-12-21/prisoner-review-board-releases-final-illinoisan-serving-life-sentence-for-three-strikes-drug-offense [https://perma.cc/ZYN6-T9HT].

[44] Id.

[45] Id.

[46] Schwartz, supra note 39.

[47] Hundsdorfer, supra note 43.

[48] Brian Brown & Greg Jolivette, A Primer: Three Strikes – The Impact After More Than a Decade, Legis.Analyst’s Office (Oct. 2005), https://lao.ca.gov/2005/3_Strikes/3_strikes_102005.htm [https://perma.cc/A5G8-X9XM].

[49] See generally, Hundsdorfer, supra note 43 (Providing an example of where a judge explicitly stated their hands were tied when it came to habitual offender sentencing).

[50] See Ky. Rev. Stat. Ann. § 532.080 (West 2012); see N.Y. § 70.10 (McKinney 2010); see Fla. Stat. Ann. § 775.087 (West 2023).

[51] Id.

[52] See ACLU, The Case Against the Death Penalty (Dec. 11, 2012), https://www.aclu.org/documents/case-against-death-penalty. [https://perma.cc/66PR-E5GV].

[53] SeeWiggins v. Smith, 539 U.S. 510, 534–38 (2003) (deciding that mitigating evidence could have influenced the outcome of the case, so ineffective assistance of counsel under the Sixth Amendment was a valid claim).

[54] Id. at 514.

[55] Id. at 515–16.

[56] Id.

[57] Id. at 535.

[58] Id.

[59] Id (citing Penry v. Lynaugh, 492 U.S. 302, 319 (1989)).

[60] Id.

[61] Lockett, 438 U.S. at 602–06.

[62] Id. at 604–05.

[63] Id. at 605.

[64] Id. at 605.

[65] See ACLU, A Living Death: Life without Parole for Nonviolent Offenders 35–36 (2013) [hereinafter “A Living Death”].

[66] See Id.

[67] See Charis E. Kubrin & Rebecca Rublitz, How to Think about Criminal Justice Reform: Conceptual and Practical Considerations, 47 Am . J. Crim. Just. 1050, 1053 (2022).

[68] Id. at 1057.

[69] See Jurek v. Texas, 428 U.S. 262, 270 (1976).

[70] Id. at 267, 270.

[71] Id. at 271 n.6.

[72] A Living Death, supra note 61, at 22.

[73] Id. at 5, 22.

[74] Cf. Abigail A. McNelis, Habitually Offending the Constitution: The Cruel and Unusual Consequences of Habitual Offender Laws and Mandatory Minimums, 28 Geo. Mason Univ. Civ. Rts. L.J. 97, 97–98 (2017) (Proving an example of a man sentenced to LWOP for cultivating marijuana for his own personal use).

[75] Id.

[76] Prevention, Nat’l. Inst. on Drug Abuse (Sept. 2023), https://nida.nih.gov/research-topics/prevention#risk-and-protective-factors-impact [https://perma.cc/P75H-K7R4].

[77] Id.

[78] See Nora Volkow, Addiction Should Be Treated Not Penalized, Nat. Inst. on Drug Abuse (May 7, 2021), https://nida.nih.gov/about-nida/noras-blog/2021/05/addiction-should-be-treated-not-penalized [https://perma.cc/W6JV-F8VE].

[79] Stephan J. Bahr, Amber L. Masters, & Bryan M. Taylor, What Works in Substance Abuse Treatment Programs for Offenders. 92 Prison J. 155, 157 (2012).

[80] What is Cognitive Behavioral Therapy, Am. Psych. Assoc. (2017), https://www.apa.org/ptsd-guideline/patients-and-families/cognitive-behavioral [https://perma.cc/QJK2-N44J].

[81] R. Kathryn McHugh, Bridget A. Hearon, & Michael W. Otto, Cognitive-Behavioral Therapy for Substance Use Disorders, 33 Psychiatric Clinics N. Am. 511, 512 (2010).

[82] Id. at 520.

[83] Center for Substance Abuse Treatment, Substance Abuse Treatment for Adults in the Criminal Justice System 190–91 (2005).

[84] Id.

[85] See Ingrid A. Binswanger, Carolyn Nowels, Karen F. Corsi, Jason Glanz, Jeremy Long, Robert E. Booth, & John F. Steiner, Return to drug use and overdose after release from prison: a qualitive study of risk and protective factors, 7 Addiction Sci. & Clinical Prac., no. 1, 2012, at 1–5.

[86] Manuel Escamilla-Castillo, The Purposes of Legal Punishment, 23 Ratio Juris 460, 460 (2010).

[87] Drugs Brains and Behavior: The Science of Addiction, Nat’l. Inst. Drug Abuse (July 2011), https://nida.nih.gov/publications/drugs-brains-behavior-science-addiction/treatment-recovery [https://perma.cc/V7MJ-Z7CM].

[88] Id.

[89] See How effective are medications to treat opioid use disorder?, Nat’l. Inst. Drug Abuse (May 2017), https://nida.nih.gov/publications/research-reports/medications-to-treat-opioid-addiction/efficacy-medications-opioid-use-disorder [https://perma.cc/7PPV-7S37].

[90] Id.

[91] How is opioid use disorder treated in the criminal justice system?, Nat’l. Inst. Drug Abuse (May 2017), https://nida.nih.gov/publications/research-reports/medications-to-treat-opioid-addiction/how-opioid-use-disorder-treated-in-criminal-justice-system. [https://perma.cc/33UB-WDA6].

[92] See Dave Adkisson et al., Right-Sizing Prisons, Pew Ctr. on States (Jan. 2010), https://www.pewtrusts.org/-/media/legacy/uploadedfiles/pcs_assets/2010/rightsizing20prisonspdf.pdf [https://perma.cc/63EL-PLHZ].

[93] Id.

[94] Ronnie K. Stephens, Annual Prison Costs A Huge Part Of State and Federal Budgets, Interrogating Just. (Feb. 16, 2021), https://interrogatingjustice.org/prisons/annual-prison-costs-budgets/ [https://perma.cc/6GNS-45X2].

[95] How much does it cost to incarcerate an inmate?, Legis. Analyst’s Off. (Jan. 2022), https://lao.ca.gov/policyareas/cj/6_cj_inmatecost [https://perma.cc/RQ7C-4AF6].

[96] Id.

[97] Stephens, supra note 93.

[98] See Anthony Nagorski, Arguments Against the Use of Recidivist Statutes That Contain Mandatory Minimum Sentences, U. St. Thomas J. L. & Pub. Pol’y, Fall 2010, at 214, 228 (2010).

[99] Jullian Harris-Calvin, Sebastian Solomon, Benjamin Heller, & Brian King, The Cost of Incarceration in New York State, Vera (Oct. 2022), https://www.vera.org/the-cost-of-incarceration-in-new-york-state [https://perma.cc/D5BV-96MC].

[100] Jullian Harris-Calvin, Sebastian Solomon, Benjamin Heller, & Brian King, An Analysis of the New York State Department of Corrections and Community Supervision’s Budget, Vera (Oct. 2022), https://www.vera.org/downloads/GJNY_DOCCS-Budget-Explainer_10.25.22.pdf. [https://perma.cc/X9H6-X53W].

[101] See Stephens, supra note 93.

[102] FWD, We All Pay: Mississippi’s Harmful Habitual Laws (Nov. 2019), https://www.fwd.us/criminal-justice/mississippi/we-all-pay/ [https://perma.cc/C2AY-MS5C].

[103] Id. at 2.

[104] Id.

[105] See Id.

[106] National Institute of Corrections, Mississippi 2019, https://dev-nicic.zaidev.net/resources/nic-library/state-statistics/2019/mississippi-2019 (last visited Sep. 6, 2024).

[107] See generally, FWD supra note 101.

[108] Shivpriya Sridhar, Robert Cornish, & Seena Fazel, The Costs of Healthcare in Prison and Custody: Systematic Review of Current Estimates and Proposed Guidelines for Future Reporting, Frontiers Psych., Dec. 2018, at 5.

[109] Matt McKillop & Alex Boucher, Aging Prison Populations Drive Up Costs: Older individuals have more chronic illnesses and other ailments that necessitate greater spending, Pew (Feb. 20, 2018), https://www.pewtrusts.org/en/research-and-analysis/articles/2018/02/20/aging-prison-populations-drive-up-costs. [https://perma.cc/6763-R7ZG].

[110] Id.

[111] Id.

[112] Id.

[113] Hope Reese, What Should We Do about Our Aging Prison Population?, JSTOR Daily (July 17, 2019), https://daily.jstor.org/what-should-we-do-about-our-aging-prison-population/ [https://perma.cc/4ASX-DELF].

[114] Id.

[115] Id.

[116] Mary Price, Everywhere and Nowhere: Compassionate Release in the States, Release Aging People in Prison 8, 12 (June 2018), https://famm.org/wp-content/uploads/2023/12/Exec-Summary-Report.pdf [https://perma.cc/UN9Y-G3SZ].

[117] Id. at 12–13.

[118] Id. at 12.

[119] Id. at 13.

[120] Id.

[121] Dan Copp, Changes Coming to Habitual Offender Law, Houmatoday (Updated Jan. 22, 2018, 3:25 PM), https://www.houmatoday.com/story/news/crime/2017/09/25/changes-coming-to-habitual-offender-law/16029712007/ [https://perma.cc/NE6C-P9SR].

[122] Id.

[123] Mark Ballard, About 3,000 Inmates in Louisiana Could Get Parole Under New Law; Here’s Who Would be Eligible, The Advocate (July 31, 2021), https://www.theadvocate.com/baton_rouge/news/politics/legislature/article_6461957c-f234-11eb-9813-677f50cb4b9a.html [https://perma.cc/XZ9K-9ALL].

[124] Kaylee Raymer, Progress Made on Drug Policy in 2023 Though the Legislature Increased Other Criminal Penalties, KyPolicy (Apr. 13, 2023), https://kypolicy.org/kentucky-criminal-legal-recap-2023/ [https://perma.cc/T6KQ-9L7G].

[125] Id.

[126] Ballard, supra note 122.

DISPARATE IMPACT CLAIMS AND THE AMERICANS WITH DISABILITIES ACT AND REHABILITATION ACT OF 1973

Download a PDF Version

Disparate Impact Claims and the Americans with Disabilities Act and Rehabilitation Act of 1973

Billy Devericks[I] 

Introduction            

In 2018, a class action complaint was filed against a group of defendants which included CVS Health Corporation, CVS Pharmacy, Inc., and other pharmaceutical companies.[2] These companies administered health plans where CVS Caremark withheld authority over pharmacy benefits and required enrollees to receive HIV/AIDS medications from specifically assigned pharmacies.[3] If the enrollees did not receive their medications from these pharmacies, they had to pay more (either with “no insurance benefits” at full price or more out-of-pocket expenses).[4] Since these medications were required by the enrollees in order to live, the plaintiffs alleged that they were harmed by being forced to spend substantially more money to obtain their medications.[5]

The defendants in this action provided financial incentives to employer sponsors of CVS Caremark to utilize the program in their employment practices and provided no ability for enrollees to opt-out.[6] Prior to implementation of the program by employers, enrollees were able to obtain their medications from other non-CVS pharmacies with full insurance coverage.[7] The plaintiffs in this action had developed critical relationships with their pharmacists where they provided “essential counseling to help Plaintiffs and their families navigate the challenges of living with a chronic condition.”[8] All of the previously discussed procedures within the Program have resulted in negative impacts upon the ability of people with HIV/AIDS to obtain the necessary medications/treatments.[9] The enrollees were required by Caremark to receive their medications from a pharmacy whose practice is to mail the medications either to enrollees directly, or to make available for pick-up by the enrollees.[10] Due to delivery issues, there were multiple instances where enrollees had to wait days for delivery and missed appointments with their doctors, as well as work, as a result.[11] Even if enrollees chose to pick-up medications at a CVS pharmacy, these pharmacies were oftentimes many miles away, with pharmacies occasionally filling incorrect prescriptions, as well as staff shouting names of their medications in the presence of other customers.[12] The plaintiffs in this action were essentially given a choice between facing issues such as those previously described, or to pay large amounts of money for their medications at non-CVS pharmacies.[13]

The plaintiffs in Doe One v. CVS Pharmacy, Inc. alleged that this program implemented by CVS discriminated against them in violation of the Affordable Care Act (“ACA”), Americans with Disabilities Act (“ADA”) and, in turn, Section 504 of the Rehabilitation Act of 1973.[14] The Supreme Court of the United States has yet to determine whether disparate impact claims are recognized under the Americans with Disabilities Act or Section 504 of the Rehabilitation Act, therefore, the California Northern District Court relied upon the Court for the Western District Tennessee’s reasoning in Doe v. BlueCross BlueShield of Tennessee Inc. in holding that a disparate impact claim was not cognizable and the plaintiffs’ ACA claim was dismissed after applying a meaningful access standard.[15] This decision was appealed to the Ninth Circuit Court of Appeals where the Court affirmed the decision of the lower court to use a meaningful access standard, but stated that disparate impact claims were not precluded simply based upon a lack of meaningful access.[16] The Supreme Court of the United States granted the writ of certiorari, but the petition was dismissed following a stipulation by all parties that the writ of certiorari be dismissed.[17]

Given that the petition for writ of certiorari was dismissed in Doe v. CVS Pharmacy, Inc.,[18] the Supreme Court has yet to make a decision regarding whether disparate impact claims brought under the Americans with Disabilities Act or Section 504 of the Rehabilitation Act are cognizable. Based on the Congressional history, policy implications and progression in recognition of disparate impact claims under the ADA and Rehabilitations Act across circuits, disparate impact claims should be cognizable under both Acts.

Part I of this note will define disparate impact and provide a general understanding of the Americans with Disabilities Act and Section 504 of the Rehabilitation Act. Part II will provide a comparative analysis of the split between the Sixth, Ninth and Third Circuits regarding disparate impact claims under the Acts. Part III of this note will provide support for the argument that the Supreme Court of the United States should hold that disparate impact claims are cognizable under both the Americans with Disabilities Act and Section 504 of the Rehabilitation Act.  

Part I.  Understanding the ADA and Rehabilitation Act 

A.     Rehabilitation Act of 1973

The Rehabilitation Act of 1973 was passed by Congress in 1973 to require those who are governed by the statute to make accommodations for disabled Americans to obtain services.[19] Section 504 of this Act was designed with a pattern nearly identical to discrimination provisions of Title VI of the Civil Rights Act of 1964.[20] The aim was to provide disabled individuals opportunities to pursue certain things such as employment or education free of any discrimination against them.[21] The Rehabilitation Act states that

No otherwise qualified individual with a disability in the United States…shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving [f]ederal financial assistance or under any program or activity conducted by any Executive [A]gency…[22] 

Congress had specifically stated that the purpose of Section 504 of the Rehabilitation Act was to ensure that discrimination against those with disabilities would be prevented “regardless of their need for, or ability to benefit from, vocational rehabilitation services, in relation to . . . any other [f]ederally-aided programs.”[23] An issue here is that the statute specifically only related to discrimination under programs or activities receiving “[f]ederal financial assistance”[24] and limited the application of the Act’s protections against discrimination based upon disability.[25] 

B.     Americans with Disabilities Act 

The Americans with Disabilities Act (“ADA”) was designed by Congress to address the issue of protection limitations presented by Section 504 of the Rehabilitation Act listed above.[26] The ADA met this goal by extending the rights under the Rehabilitation Act to the private sector as well, with a focus on employment.[27] The ADA states that “[n]o covered entity shall discriminate against a qualified individual on the basis of disability in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.”[28] These protections against discrimination also apply to denial of “the benefits of the services, programs, or activities of a public entity”[29] and also apply to “any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.”[30] The ADA provides a long list of private entities which constitute public accommodations assuming that said entity will affect commerce.[31] For example, pharmacies are explicitly stated to be a public accommodation.[32]

In order to understand how Courts have addressed disparate impact issues under the ADA, it is important to understand how and why Section 504 of the Rehabilitation Act of 1973 is consistently brought up in most attempts at bringing disparate impact claims. Given that the ADA was created to extend the rights provided to disabled individuals under the Rehabilitation Act,[33] the two acts logically go hand-in-hand in many cases.[34] Since both of the Acts have “served as twin pillars of federal disability discrimination law,”[35] they have been “constant companions in our case law as it has developed to effect those rights.”[36] Before addressing the split amongst the Circuits, there must be a complete understanding of what disparate impact claims are.

C.    Disparate Impact Claims

There are two major concepts that arise when dealing with discrimination against protected classes: disparate treatment and disparate impact.[37] Where an action that is alleged to be discriminatory is alleged to be intentionally discriminatory, one must analyze the effects of the disparate treatment.[38] Discriminations of this type are the most common.[39] A good example of disparate treatment can be found in International Brotherhood of Teamsters v. United States.[40] In this case, the plaintiffs brought suit against a union and employer alleging discriminatory employment practices in violation of Title VII of the Civil Rights Act of 1964.[41] The employer was purposefully treating minority employees in a discriminatory manner by refusing to hire minorities as a practice, constituting disparate treatment.[42]

Disparate impact, in contrast, is a type of discrimination in which the discriminatory action/rule is, on its face, neutral or fair in its form, but results in a discriminatory consequence which impacts a protected class.[43] A case which illustrates this concept is Griggs v. Duke Power Co.[44] In this case, a company implemented a policy which required at least a high school education for initial department assignments or any transfers and required passing scores on two aptitude tests, which did not measure any abilities to perform jobs.[45] Due to a tendency for Caucasian employees to meet these requirements at a higher, disproportionate rate to minority group members, the Court held that the consequence was “directly traceable to race.”[46] Due to this disparate impact, the actions taken by the company were in violations of the Civil Rights Act.[47] Given how great the consequences of disregarding discriminatory consequences of facially neutral governmental actions may be, there is a great demand for disparate impact claims to be cognizable. This demand is rooted in justice and equality for all people, to prevent unchecked discrimination, especially under the Americans with Disabilities Act and the Rehabilitation Act.

Part II.  Comparative Analysis 

A.  Background Case Law

There are two United States Supreme Court cases that are often cited when addressing disparate impact claims: Alexander v. Choate[48] and Alexander v. Sandoval.[49] In Choate, Tennessee suggested imposing a reduction in the number of days of inpatient care in hospitals that would be covered by Tennessee’s Medicaid program in an attempt to ease the burden on the state of Medicaid costs.[50] The plaintiffs brought suit alleging that the change would result in discrimination of handicapped persons as statistics demonstrated that a disproportionate number of handicapped persons would be negatively impacted by the change in violation of Section 504 of the Rehabilitation Act.[51] The Sixth Circuit Court of Appeals stated that the presentation of the statistics showing a disproportionate impact constituted a prima facie case.[52] The Supreme Court stated discrimination against the disabled was “most often the product, not of invidious animus, but rather of thoughtlessness and indifference — of benign neglect.”[53] The Supreme Court further stated “the plight of the handicapped… [is] that discrimination against the handicapped is primarily the result of apathetic attitudes rather than affirmative animus.”[54] The Court in Choate went on to discuss how Congress intended to alter conduct that would be extremely difficult or impossible to reach if the Rehabilitation Act was limited “only to conduct fueled by discriminatory intent.”[55]

Despite the focus on fulfilling the purpose of the Rehabilitation Act by preventing discrimination that is not facially or intentionally discriminatory, the Court held that a prima facie violation of the Rehabilitation Act was not established.[56] In what appears to be an attempt to delay the decision to recognize disparate impact claims as constituting prima facie violations, the Court stated that “we assume without deciding that § 504 reaches at least some conduct that has an unjustifiable disparate impact upon the handicapped.”[57] The reversal was grounded in the reasoning of balancing the financial burden on the state to the impact upon handicapped users.[58] The Court stated that the costs would be more than minimal and to require a decision to be the least disadvantageous to disabled individuals would create an unworkable requirement on the state.[59] The Court, seemingly without justification, equates the administrative burden of preventing disparate impacts to the administrative burden imposed upon entities by the National Environmental Policy Act, and even toys with the idea of a “Handicapped Impact Statement” as an assumption of the burden without provocation by the plaintiffs.[60]

Following the decision not to decide upon the issue of recognition of disparate impact claims, the Court applies a meaningful access standard, which states that a “benefit… cannot be defined in a way that effectively denies otherwise qualified handicapped individuals meaningful access to which they are entitled; to assure meaningful access, reasonable accommodations in the grantee’s program or benefits may have to be made.”[61] This standard allowed for the Court to reason that because there is still access to Medicaid services for 14 days (compared to the previous 20 day limitation), handicapped users will still receive a benefit, regardless of the impact of the change in Medicaid service.[62] This arguably disregards the Court’s previous statement in the opinion that the purpose of the Act would be disregarded if the Act could not “rectify the harms resulting from action that discriminated by effect as well as by design.”[63]

A little over sixteen years later, Choate was cited multiple times when addressing private rights to action in regard to disparate impact claims under Title VI of the Civil Rights Act of 1964.[64] In Alexander v. Sandoval, the Alabama Department of Public Safety received grants from the U.S. Department of Transportation and U.S. Department of Justice which in turn, subjected the Department of Public Safety to Title VI of the Civil Rights Act, which prohibited discrimination on the grounds of race.[65] Alabama, through an amendment to its Constitution, declared English as the state’s official language.[66] Following this amendment, the Department of Public Safety only administered examinations for driver’s licenses in English.[67] The Court held that a private right of action exists to sue for violations of § 601 of the Civil Rights Act, but that § 601 only prohibits intentional discrimination.[68] The Court addresses the possibility, however, that disparate impact claims may be permissible under § 602 even though activities which are unintentionally discriminatory under § 601 are valid.[69] The issue was ultimately avoided since the petitioners in Sandoval did not challenge such regulations and the Court assumed that the regulations challenged will hold no disparate impact issues.[70] Again, while the issue in Sandoval revolved around the Civil Rights Act, Section 504 of the Rehabilitation Act was modeled after the Civil Rights Act, and the Americans with Disabilities Act was intended to expand the scope of the Rehabilitation Act.[71] 

i.  Sixth Circuit

In Doe v. BlueCross BlueShield of Tennessee, Inc., John Doe (plaintiff) was an enrollee of a BlueCross BlueShield health care plan which required Doe to obtain his medicine for HIV via mail or a specialty pharmacy.[72] Medications under this plan which had the mail or specialty pharmacy requirements were usually very expensive medicines for serious diseases.[73] After implementation of the plan’s requirements, Doe would be required to pay “thousands of dollars per batch” if he did not go to a specialty pharmacy.[74] This situation bothered Doe because he had grown accustom to talking to his regular pharmacists who were aware of his specific needs and medical history.[75] Doe was also highly concerned about his privacy.[76] Doe then sued BlueCross BlueShield in violation of the ADA and the Affordable Care Act (ACA).[77]

The Americans with Disabilities Act claim did not survive because the Court held that BlueCross BlueShield is an insurance company, and not a pharmacy, and therefore they were not an entity to be considered a public accommodation under the ADA.[78] However, the disparate impact claim did not stop there. The Rehabilitation Act applies to claims under the Affordable Care Act because it is a federally financed health program.[79] The Sixth Circuit cited Sandoval and stated the Title VII of the Civil Rights Act allows for actions which may have a discriminatory disparate impact.[80] The Court relies upon the language of a single act, the Age Discrimination in Employment Act of 1967, to hold that disparate impact discrimination is valid under the Rehabilitation Act.[81] More specifically, because the Rehabilitation Act does not specifically prohibit activities/actions that “otherwise adversely affects” disabled individuals, there can be no disparate impact claim and cites, among other cases, Griggs v. Duke Power Co. and Sandoval to lend support.[82]

The Court’s reasoning for its decision lies in administrative and financial burdens that will be imposed as a result of deeming disparate impact claims cognizable under the ADA and Rehabilitation Act.[83] It is reasoned that many policies which are facially neutral have negative impacts on those with disabilities, but because an “unwieldy administrative and adjudicative burden” would be imposed, the claims should not be recognized.[84] The Court goes on to reason that because the Supreme Court in Choate made an assumption, rather than a decision, the Sixth Circuit was free to decide however it wanted in the case at hand.[85] 

ii. Third Circuit 

While Helen L. v. DiDario does not explicitly discuss disparate impact, its analysis of Section 504 of the Rehabilitation Act and Americans with Disabilities Act served as grounds for the decision in a later case involving disparate impact claims under the ADA.[86] The plaintiff in DiDario suffered from meningitis which resulted in her being partially paralyzed years.[87] The Department of Public Welfare, through Medicaid, provides an attendant care program which provides for basic needs of disabled individuals in the home of the individual rather than in a nursing home.[88] The plaintiff, although eligible for attendant care, was placed in a nursing home because she was on a waitlist, which was much more expensive for the Commonwealth.[89] The plaintiff, due to her lack of contact with persons other than the staff and her two children who visit the home, alleged that she was discriminated against in violation of Title II of the ADA.[90]

The Court then went on to delve deep into the Congressional intent of both Section 504 of the Rehabilitation Act and the Americans with Disabilities Act.[91] The Court highlighted the purpose of responding to societal neglect of handicapped individuals in which Section 504 of the Rehabilitation Act intended to serve by rectifying oversights of such neglect.[92] The ADA was created to address the shortcomings of Section 504 of the Rehabilitation Act.[93] The Third Circuit stated that “Congress did not intend to condition the protection of the ADA upon a finding of ‘discrimination.’”[94] The Court further explained it is not possible that Congress intended to limit the protections of the ADA only to situations with intentional discrimination.[95]

This decision stood as the grounds for the Pennsylvania Eastern District Court to hold that disparate impact claims under Title II of the ADA are cognizable.[96] In Doe v. Perkiomen Valley School District, a group of children with disabilities, along with their parents, brought a class action against the Perkiomen Valley School District due to the Board’s decision to make wearing a mask during the COVID-19 pandemic in the schools optional.[97] Before the district made this decision, they developed a health plan for schools to return to in-person courses.[98] The argument by the plaintiffs was that the change in the rule discriminated against disabled children because it excluded them from a public institution, or denied them from participation in school district services.[99] This denial is rooted in the argument that optional masking increases COVID-19 transmission rates, and in turn, increase the likelihood that disabled children would become infected.[100] The children and parents alleged that this discrimination was in violation of the ADA and Section 504 of the Rehabilitation Act.[101]

In bringing their claim, the plaintiffs focused on a disparate impact argument.[102] The Pennsylvania Eastern District Court recognized the plaintiff’s disparate impact claim.[103] The Court reasoned that the Supreme Court in Choate opened the door to recognizing disparate impact claims as prima facie evidence by referencing to the need to fulfill the purpose of the Rehabilitation Act by doing so.[104] Then, the Third Circuit led the way towards such a finding in DiDario, which allowed for the decision to be made in Perkiomen Valley School District.[105]  

iii.  Ninth Circuit 

The Ninth Circuit addressed a case involving the Los Angeles Community College District (“LACCD”), which operates community colleges in California, and two blind students, Roy Payan and Portia Mason, who were enrolled in class in the LACCD.[106] Mason and Payan were granted accommodations.[107] Although the students were given accommodations, they faced accessibility issues at LACCD, which they categorized as inaccessibility to in-class materials, educational technology, research databases, computer applications and websites, and textbooks.[108] The students filed suit alleging that these failures to accommodate for students with disabilities by LACCD was in violation of “Section 504 of the Rehabilitation Act and Title II of the [Americans with Disabilities Act].”[109]

The Ninth Circuit first found that a “private right of action” existed, which would allow for the Plaintiffs to bring the suit and for the court to enforce the Title II Americans with Disabilities Act and Section 504.[110] Then, the Payan court concluded that disparate impact claims are cognizable under Section 504 and the Americans with Disabilities Act.[111] The Ninth Circuit based its decision that disparate impact claims are cognizable upon two cases: Alexander v. Choate[112] and Crowder v. Kitagawa.[113],[114]  The court in Payan recited the popular line in Choate which stated that Section 504 can govern conduct which has a disparate impact on disabled individuals.[115] In Crowder, the Ninth Circuit held that disparate impact claims are cognizable under the Americans with Disabilities Act when a state’s practices discriminate against disabled persons.[116]

Part III.  Disparate Impact Claims Should be Cognizable 

A.  Legislative History

The legislative history of Section 504 of the Rehabilitation Act of 1973 and the Americans with Disabilities Act provide strong support for the Third and Ninth Circuit’s approach.

For decades, the Rehabilitation Act and its progeny, the Americans with Disabilities Act, have served as twin pillars of federal disability discrimination law. Both statutes secure the rights of individuals with disabilities to independence and full inclusion in American society and, unsurprisingly, have been constant companions in our case law as it has developed to effect those rights.[117]

After all, Section 504 is known as “the cornerstone of the civil rights movement of the mobility-impaired.”[118]

The Congressional intent to prohibit discrimination in the Rehabilitation Act would “ring hollow if the resulting legislation could not rectify the harms resulting from action that discriminated by effect as well as design.”[119] It is clear that this intent calls for protections of disabled individuals where the discriminatory impact is both intentional, or unintentional, as in disparate impact claims. The crucial thrust of the Rehabilitation Act is to “eliminate the creaming and shift the focus to harder cases in order to serve individuals” with disabilities.[120] Further, the Rehabilitation Act was intended to provide additional services for disabled individuals, and to provide them with more attention “to focus . . . on making employment and participation in society more accessible.”[121]

When the Rehabilitation Act was drafted, there were certain expectations in mind whenever it came to how disabled individuals should benefit from it. One of which was to serve individuals with disabilities through the provision of a reasonable expectation that said disabled individuals could benefit from the fruit of the act and that they would be “fit to engage” in societal and employment activities.[122] Senator Cranston, being an original sponsor of the legislation, was a staunch advocate for change to support Americans suffering from disabilities.[123] Cranston argued that “[f]or those millions of handicapped individuals who pay taxes and have the right to expect that their tax will go toward making their environment more accessible” and that these individuals had a right for their lives to be easier.[124] Cranston emphasized it is the right of disabled individuals to have “employment which complements their abilities represent overdue avenues of restitution for previous societal neglect.”[125] Senator Humphrey, known for his previous attempts to pass legislation to protect disabled individuals, famously said, “the time has come to firmly establish the right of disabled Americans to dignity and self-respect as equal and contributing members of society and to end the virtual isolation[.]”[126]

The legislative intent that brought the Americans with Disabilities Act to light supports the proposition that there is no Congressional intent to strictly limit claims against parties in violation of either Act to situations where discriminatory intent exists. One of the fundamental conclusions reached by Congress was that current laws prior to the enactment of the Americans with Disabilities Act were inadequate to confront and address discrimination against disabled people.[127] Given that the Rehabilitation Act was already enacted by this time, it is evident that Congress intended for the protections provided by the ADA would be intended to govern all issues involved discrimination regardless of intent. Additionally, the report from the Committee reached the fundamental conclusion that “discrimination denies people with disabilities the opportunity to compete on an equal basis and costs the United States…and the private sector billions of dollars in unnecessary expenses” as a result.[128]

Most importantly, the report states that discrimination that discriminates “by effect as well as by intent or design” is the discrimination in which the ADA intends to address.[129] “Discrimination also includes harms resulting from . . . the adoption or application of standards and criteria and practices and procedures based on thoughtlessness or indifference––of benign neglect.”[130] These statements make it clear that there is no doubt that the ADA was passed with the intentions of preventing discrimination implemented by any manner. The report goes as far to recognize the issues of enforcement of the Rehabilitation Act in that the disparate impact claims were difficult to bring based upon the language of the statute.[131] “The Committee recognizes that . . . this legislation differs from section 504 by virtue of the fact that the phrase ‘solely by reason of his or her handicap’ has been deleted.”[132] Congress learned from its previous mistakes and stated the reliance on the language of Section 504 led to absurd results in attempts to enforce the protections of the Rehabilitation Act.[133] By adopting differing language, Congress intended to reject such absurd results.[134] This Congressional intent has been recognized as a key component in repairing any damages done by the lack of enforcement of provisions protecting disabled classes in previous years.[135]

The combined intent of Congress in passing both the Rehabilitation Act of 1973 and the ADA presents strong opposition to the holding of the Sixth Circuit in Doe v. BlueCross BlueShield of Tenn., Inc.[136] The Supreme Court in Sandoval reasoned that it was beyond dispute that Title VI of the Civil Rights Act “prohibits only intentional discrimination.”[137] The Supreme Court, however, did not rely on the statutory text of the Civil Rights Act but instead relied upon two Supreme Court cases to form their decision.[138] The Ninth Circuit pointed out this flaw. The Payan court stated that “[b]ecause this limitation is not based on the statutory text of the Civil Rights Act, the similar statutory language in Section 504 and the ADA does not create an analogous limitation on disparate impact disability discrimination claims.”[139] The Ninth Circuit went on: “Sandoval, therefore, does not upset the historical understanding that Section 504 and the ADA were specifically intended to address both intentional discrimination and discrimination caused by ‘thoughtless indifference’ or ‘benign neglect.’”[140] 

Conclusion 

Congressional intent has played a significant role in determining whether disparate impact claims in civil rights cases are cognizable. The United States Supreme Court in Griggs relied heavily Congressional intent in making its landmark decision to ensure that the civil rights of citizens were protected.[141] The Supreme Court, when presented with the issue again of whether disparate impact claims are cognizable under Section 504 of the Rehabilitation Act of 1973 and the ADA, should follow the reasoning of the Third and Ninth Circuits. In particular, the Supreme Court should give significant weight to the legislative history of both the Rehabilitation Act and the ADA and hold, in accordance with the intent of Congress, that disparate impact claims are cognizable under both Acts. 

[I] J.D. 2024, University of Kentucky J. David Rosenberg College of Law; BA Political Science & History 2021, University of Kentucky.

[2] First Amended Class Action Complaint at 1, Doe One v. CVS Pharmacy, Inc., 348 F. Supp. 3d 967 (N.D. Cal. 2018) (No. 3:18-cv-01031-EMC) 2018 U.S. Dist. Ct. Pleadings LEXIS 20162 at *1.

[3] Id.

[4] Id. at 1–2.

[5] Id. at 2–3.

[6] Id. at 2.

[7] Doe One v. CVS Pharmacy, Inc., 348 F. Supp. 3d 967, 978 (N.D. Cal. 2018).

[8] Id.

[9] Id.

[10] Id. at 977.

[11] Id. at 978.

[12] Id.

[13] Id.

[14] Id. at 977, 980.

[15] CVS Pharmacy, Inc., 348 F. Supp. 3d at 981–86.

[16]  Doe v. CVS Pharmacy, Inc., 982 F.3d 1204, 1210–12 (9th Cir. 2020).

[17] CVS Pharmacy, Inc. v. Doe, 142 S. Ct. 480 (2021).

[18] 982 F.3d 1204 (9th Cir. 2020).

[19]  See Wright v. Giuliani, 230 F.3d 543, 546 (2d Cir. 2000).

[20]  S. Rep. No. 93-1297, at 39 (1974).

[21] Paralyzed Veterans of Am. v. Civ. Aeronautics Bd., 752 F.2d 694, 706 (D.C. Cir. 1985).

[22] 29 U.S.C. § 794(a).

[23] S. Rep. No. 93-1297, at 38 (1974).

[24] 29 U.S.C. § 794(a).

[25] Lauren R.S. Mendonsa, Dualing Causation and the Rights of Employees With HIV Under § 504 of The Rehabilitation Act, 13 Scholar: St. Mary’s L. Rev. on Race and Soc. Just. 273, 285 (2010).

[26] See Ruth Colker, The Death of Section 504, 35 U. Mich. J.L. Reform 219, 219 (2002).

[27] Id.

[28] 42 U.S.C. § 12112(a).

[29] Id. § 12132.

[30] Id. § 12182(a).

[31] See id. § 12181(7).

[32] Id. § 12181(7)(F).

[33] Colker, supra note 26, at 219.

[34] See, e.g., Doe v. BlueCross BlueShield of Tenn., Inc., 926 F.3d 235, 241–44 (6th Cir. 2019); Doe 1 v. Perkiomen Valley Sch. Dist., 585 F. Supp. 3d 668, 673 (E.D. Pa. 2022); Helen L. v. DiDario, 46 F.3d 325, 329–32 (3d Cir. 1995).

[35] Berardelli v. Allied Servs. Inst. of Rehab. Med., 900 F.3d 104, 109 (3rd Cir. 2018).

[36] Id. at 110.

[37] See Legal Update on ADA Claims of Disparate Impact vs. Disparate Treatment, Great Lakes ADA Ctr. (Mar. 16, 2022) https://www.accessibilityonline.org/ada-legal/archives/110998. [https://perma.cc/8M6F-9ZXA]

[38] Michael Ashley Stein & Michael E. Waterstone, Disability, Disparate Impact, and Class Actions, 56 Duke L. J. 861, 868 (2006).

[39] See Great Lakes ADA Ctr, supra note 37.

[40] 431 U.S. 324 (1977).

[41] Id. at 328.

[42] Id. at 334–37.

[43] See Griggs v. Duke Power Co., 401 U.S. 424, 430–31 (1971).

[44] Id.

[45] Id. at 425–28.

[46] Id. at 430.

[47] See id.

[48] 469 U.S. 287 (1985).

[49] 532 U.S. 275 (2001).

[50] Choate, 469 U.S. 287 at 289 (1985) (The change was “a reduction from 20 to 14 in the number of inpatient hospital days per fiscal year” that Medicaid would cover).

[51]Id. at 289–90 (“Statistical evidence…indicated that…27.4% of all handicapped users of hospital services who received Medicaid required more than 14 days of care, while only 7.8% of nonhandicapped users required more than 14 days of care.”). See also 42 U.S.C. §12112.

[52] Choate, 469 U.S. at 291–92 (“Because both the 14-day rule and any annual limitation on inpatient coverage disparately affected the handicapped, the panel found that a prima facie case had been made out…”).

[53] Id. at 295.

[54] Id.at 296.

[55] Id.at 296–97.

[56] Id. at 309.

[57] Id. at 299.

[58] Id. at 308. 

[59] Id.

[60] See id. at 298­–99 (“Had Congress intended § 504 to be a National Environmental Policy Act for the handicapped, requiring the preparation of ‘Handicapped Impact Statements’ before any action was taken… we would expect some indication of that purpose in the statute or its legislative history.”). see also U.S. Env’t Prot. Agency, National Environmental Policy Act Review Process (Oct. 5, 2022)  https://www.epa.gov/nepa/national-environmental-policy-act-review-process. [https://perma.cc/A8HD-3VSW]

[61] Choate, 469 U.S. at 301.

[62] Id. at 302.

[63] Id. at 297.

[64] See Sandoval, 532 U.S. at 278.

[65] Id.

[66] Id.

[67] Id.at 279.

[68] Id. at 280–81.

[69] Id. at 281 (“[R]egulations promulgated under § 602 of Title VI may validly proscribe activities that have a disparate impact on racial groups, even though such activities are permissible under § 601.”).

[70] Id. at 282.

[71] See supra text accompanying note 19–20. See also Colker, supra note 26.

[72] 926 F.3d 235, 237 (6th Cir. 2019).

[73] Id.

[74] Id. at 238.

[75] See id.

[76] Id.

[77] Id.

[78] Id. at 243–44.

[79] Id. at 239.

[80] Id at 240.

[81] Id.

[82] Id. at 240–41. (“The Age Discrimination in Employment Act of 1967, it is true, prohibits disparate-impact discrimination… [b]ut unlike that statute, the 1975 Age Act does not bar practices that ‘otherwise adversely affect’ people because of their age..”).

[83] See id. at 242.

[84] Id.

[85] Id. (“The key word is ‘assume.’ Because Choate did not decide the issue either way, and in fact expressed reservations about the effects of disparate-impact liability in this area, we remain free to hold that § 504 does not cover disparate-impact claims.”).

[86] 46 F.3d 325 (3rd Cir. 1995).

[87] Id. at 328.

[88] Id. at 329.

[89] Id.

[90] Id.

[91] See id. at 331–35.

[92] See DiDario, 46 F.3d at 330.

[93] See id. at 331. See also S. Rep. No. 101–116, at 18 (1989) (“State laws are inadequate to address the pervasive problems of discrimination that people with disabilities are facing.”).

[94] DiDario, 46 F.3d at 334.

[95] See id. at 335.

[96] Doe v. Perkiomen Valley Sch. Dist., 585 F. Supp. 3d 668, 688 (E.D. Pa. 2022).

[97] Id. at 673.

[98] Id at 674-75.

[99] Id. at 679.

[100] Id. at 680.

[101] Id. at 679.

[102] Id. at 687.

[103] Id.

[104] See id.; see supra text accompanying notes 52–55.

[105] See Perkiomen Valley Sch. Dist., 926 F.3d at 687–88.

[106] Payan v. L.A. Cmty. Coll. Dist., 11 F.4th 729, 731 (9th Cir. 2021).

[107] Id. at 732.

[108] Id.

[109] Id. at 733.

[110] Id at 734.

[111] Id. at 737.

[112] 469 U.S. 287 (1985).

[113] 81 F.3d 1480 (9th Cir. 1996).

[114] Payan, 11 F.4th at 734–35.

[115] See id.; see supra text accompanying note 55.

[116] Crowder, 81 F.3d at 1485.

[117] Berardelli v. Allied Servs. Inst. Of Rehab. Med., 900 F.3d 104, 109–10 (3d Cir. 2018).

[118] Helen L. v. DiDario, 46 F.3d 325, 331 (3d Cir. 1995) (citing ADAPT v. Skinner, 881 F.2d 1184, 1205 (3d Cir. 1989)).

[119] Alexander v. Choate, 469 U.S. 287, 297 (1985).

[120] 119 Cong. Rec. 5861 (1973).

[121] Id. at 5863.

[122] Id.

[123] See Kitty Cone, Short History of the 504 Sit-in, Disability Rights Education & Defense Fund, https://dredf.org/504-sit-in-20th-anniversary/short-history-of-the-504-sit-in/.

[124] See 119 Cong. Rec. 5882–83 (1973).

[125] Id. at 5883.

[126] Kitty Cone, Short History of the 504 Sit-in, Disability Rights Education & Defense Fund, https://dredf.org/504-sit-in-20th-anniversary/short-history-of-the-504-sit-in/.

[127] S. Rep. No. 101­–116, at 6 (1989).

[128] Id.

[129] Id.

[130] Id.

[131] Id. at 44.

[132] Id.

[133] Id.

[134] Id. at 45.

[135] See Helen L. v. DiDario, 46 F.3d 325, 335 (3d. Cir. 1995).

[136] 926 F.3d 235 (6th Cir. 2019).

[137] Alexander v. Sandoval, 532 U.S. 275, 280 (2001).

[138] Id. at 280–282. See also Payan v. L.A. Cmty. College Dist., 11 F.4th 729, 736–737 (9th Cir. 2021) (stating that Sandoval supported its proposition with the use of two Supreme Court cases).

[139] Payan, 11 F.4th at 736.

[140] Id.at 736-37.

[141] See Griggs v. Duke Power Co., 401 U.S. 424, 433–36 (1971).