In an Era of Social Media and Cloud Computing, It’s Time for the Server Test to Retire

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In an Era of Social Media and Cloud Computing, It’s Time for the Server Test to Retire

Kara West I

Introduction

In 2021, two photographers—Alexis Hunley and Matthew Brauer—sued the social media giant Instagram for copyright infringement.[2] Hunley and Brauer, like many other artists throughout the world, displayed their work on their Instagram accounts.[3] Online publishers then used Instagram’s embedding tool to display the photos from Hunley’s and Brauer’s profiles on their webpages without the artists’ permission.[4] To the casual internet user, a photo or video that has been embedded on a webpage could look as if it were simply copied from the source material and pasted on the page. Unlike a simple copy-paste job, however, some federal court jurisdictions don’t consider embedding to be copyright infringement.[5] Companies and users are free to use photos without permission, and artists who rely on social media to market themselves are left vulnerable to having their work essentially stolen from them.

Hunley was brought in the Ninth Circuit which had previously decided, in a case called Perfect 10 v. Amazon, that embedding does not constitute copyright infringement.[6] Using what is now termed the “server test,” the Ninth Circuit held that a party who embeds an image belonging to another as a thumbnail in its search page is not liable for copyright infringement.[7]  The district court judge in Hunley dismissed the case under the precedent of Perfect 10.[8]

This Note argues that the Ninth Circuit’s server test is outdated and should be discarded in favor of an interpretation of the display right that focuses on the audience’s perspective rather than whether a potential infringer possesses a copy of the work. Part I briefly explains the necessary history of copyright and gives statutory definitions of the relevant sections of the Copyright Act; Part II introduces the server test and alternative interpretations of the display right used by the Second Circuit that can better address the right in the modern age; Part III shows the inapplicability of the server test in the digital era and discusses an alternative in contract.

I.  A Brief History and Background 

Centuries before the birth of the Internet, English law recognized the importance of establishing a property right in intellectual works.[9] The invention of the printing press in the mid-1400’s made it easier and cheaper than ever to create copies of books.[10] In 1710, The British Parliament enacted the first formal copyright statute, the Statute of Anne.[11] Although the Statute was broadly worded and, in many cases, practically ineffective, it is the common origin of the two fundamental principles of American copyright law: the right of an author to his or her writing and the encouragement of societal learning.[12] 

The Framers purposefully incorporated the principles into the Constitution via the Intellectual Property Clause, which allotted to Congress the power “[t]o promote the [p]rogress of [s]cience and useful [a]rts, by securing for limited [t]imes to [a]uthors and [i]nventors the exclusive [r]ight to their respective [w]ritings and [d]iscoveries.”[13] The first copyright act passed by Congress in 1790 “was essentially a copy of the Statute of Anne.”[14] Under the 1790 Copyright Act, the only items that could be copyrighted were maps, charts, and books.[15] The list of copyrightable subject matter grew over time in response to advancements in technology.[16] In 1865, Congress amended the Copyright Act to include photographic prints and negatives.[17] Congress compared the image taken by the photographer to writings by an author.[18] The latest iteration of the Act lists eight broad categories of copyrightable subject matter.[19] The list is not exhaustive because the legislative drafters of the 1976 Act intentionally allowed room for new technology to be included in the eight stated categories.[20]

A.  Some Copyright Terminology 

The 1976 Copyright Act uses the term “copies” somewhat counterintuitively.[21] Imagine an artist draws an adorable furry raccoon on a sheet of paper. She places the drawing in a copier. The copier scans the drawing and then spits out an exact replica of the raccoon on another sheet of paper. Section 101 of the Act states that “copies” are “material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”[22] Both the original drawing and the copy are material objects; both are embodied on sheets of paper; both can be framed and hung on a wall, captured by photograph, and run through the copier over and over again. Both raccoons are “copies” under the Act.

A work can only be “protected by copyright” if it is “recorded in some physical[,]” tangible form—like the drawing on paper in the example above.[23]  This is known as the fixation requirement.[24] Throughout the twentieth century, works have fulfilled the fixation requirement by being recorded in the forms of “books, maps, and charts [as well as] dramatic works like plays, musical compositions, visual art, [and] photographs.”[25] In the digital world, works typically fulfill the requirement by being stored on some physical device such as a hard drive or SD card.[26]

Although a work must be “fixed” in a tangible form—like a copy—to be protected by copyright, a work is nonetheless its own distinct entity.[27] Multiple copies of the same work can exist at once, and often those copies are in different forms.[28] For example, you can buy J.R.R. Tolkien’s The Hobbit in either the form of an eBook or a classic hardcover on Amazon.

B.  The Display Right 

The term “copyright” applies to a bundle of several rights which often overlap with one another.[29] Copyright includes the right to reproduce, to prepare derivatives, to distribute, to perform, and to display.[30] The copyright holder’s “display” right is at the center of the server test.[31] The plaintiffs in Hunley alleged that the third-party publishers infringed their copyright by displaying their photos when they used Instagram’s embedding tool.[32]  When the Copyright Act of 1976 was constructed, Congress gave a few examples of what constitutes a “display”: projecting an image, transmitting the image “by electronic or other means,” and even “showing [it] on … [a] viewing apparatus connected with any sort of information storage and retrieval system.”[33] Computer displays or iPhone screens could easily fit into these examples, especially when one considers Congress’ admission that it couldn’t include every conceivable piece of future technology in 1976.[34]

II.  Introducing the Server Test

The server test was reviewed in the Ninth Circuit case Perfect 10 v. Amazon.com.[35]  Perfect 10 operated a subscription website.[36] Perfect 10’s subscribers used a password to log into a “members’ area” where they could access images of nude models that Perfect 10 had copyrighted.[37] On occasion, website publishers would “republish Perfect 10’s images on the Internet without [prior] authorization.”[38] Google’s search engine then automatically indexed the webpages that containined the images and it provided thumbnail versions of the images “in response to user inquiries.”[39] When a user clicked a thumbnail, he or she would be taken to a webpage showing the full-size version.[40] Perfect 10 claimed that Google directly infringed its copyrights by displaying Perfect 10’s photos in its image search.[41] After applying the server test, the Ninth Circuit court ruled that Google did not committed copyright infringement because Google never stored the images in its servers.[42]

The Ninth Circuit’s server test states that an alleged infringer displays an image in violation of a copyright holder's rights only if a copy of the image is stored in the infringer’s computer server, hard disk, or “other storage device.”[43]  Under the Copyright Act of 1976, “[t]o  ‘display’ a work means to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process . . . .”[44] To be “shown,” under the Copyright Act, a copy must first be “fixed.”[45] Fixation occurs when a copy is “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”[46]

This reasoning suggests that in order to “display” a copy, one must be in possession of the copy in the first place. Google never displayed a copy because it never had possession of a copy; it never had possession of a copy because it never stored (i.e., “fixed”) a copy in its servers.[47]  Instead, when a user clicks on a thumbnail in Google’s image search, HTML instructions direct the user to the image on a third party’s website.[48] The third party is in possession of the copy, not the search browser.[49]

A.  Framing v. Embedding 

Perfect 10 addresses both framing and embedding, but both types of activity violate the display right, and courts typically treat them the same.[50] However, for the sake of clarity, it is important to highlight the difference between the two. “Framing” in the digital world is similar to literally placing a frame around an original artwork.  One party displays another party’s webpage within the “frame” of its website.[51] The content from the source’s webpage appears exactly the same on the framer’s website as it does on the source’s site, “including any explanatory text, advertisements, or attribution information.”[52] The only difference between the two is the web address.

Embedding (also known as in-line linking) occurs when “code on one page . . . links to content (often images or videos) hosted elsewhere.”[53] Think of embedded links like directions on a map: they show a user’s computer “how and where to access content” elsewhere on the Internet.[54] However, embedding is different from framing in that instead of showing a source webpage as it appears on the source’s website, it places specific content from the source into the new context of another website.[55] “[A]ny text or advertisements which may have accompanied the content on the source[’s]” webpage are replaced by the text and advertisements on the new website.[56]  

B.  The Server Test and Embedding 

Although the server test closely aligns with the language in the Copyright Act, it leads to impractical real-world results. Perfect 10 was decided in 2007, three years before the creation of Instagram and almost 15 years before Hunley.[57] The Seventh Circuit used a similar construction of the server test in 2012 in Flava Works v. Gunter, where it demonstrated the flawed operation of the test’s logic.[58]

Flava Works concerned a “social bookmarking” website called myVidster, which operated somewhat like YouTube.[59] MyVidster users could “bookmark” videos they found on the Internet on its site so other users could watch them later.[60] “Upon receiving the bookmark[,] myVidster automatically requested the video’s ‘embed code’ from the server that [stored] the video.”[61] “[E]mbed codes contain[ed] the video’s web address [along with] instructions [on] how to display the video.”[62] Once myVidster received the code from the server, it created its own webpage with the video, making it appear to the user as though the video from the third-party website was located “on myVidster’s website.”[63]

The Seventh Circuit held that since the users who bookmarked videos on myVidster’s website never actually copied the videos, they had not infringed Flava Works’ copyrights;[64] and MyVidster could not have contributorily infringed because it only used embedded links and never stored any copy on any of its servers.[65] A social bookmarking service like myVidster should not be made “a policeman of copyright law[,]” the court stated, because it could never “know whether a video that a visitor bookmarks on . . . [its] website is protected by copyright”.[66]

The financial motivation for the use of copyrighted work on social media websites is far stronger now than in 2012. For example, Facebook acquired Instagram in 2012, the same year Flava Works was decided.[67] In 2012, the social media company brought in no revenue at all.[68] However, in 2021, less than ten years later, Instagram made an estimated $47.6 billion in revenue.[69] Also in 2021, advertising across all the major social media platforms grew to an estimated $57.7 billion.[70] Users generate income from the advertisements social media platforms place on their posts, creating a fierce drive to produce (and infringe on) engaging content.[71]

C.  American Broadcasting Companies, Inc. v. Aereo, Inc. 

In 2014, the Supreme Court decided American Broadcasting Companies, Inc. v. Aereo, Inc.[72] Aereo concerned the performance right, which makes up part of the bundle of rights that is copyright.[73] The Court’s opinion in Aereo is the closest the Court has come to discussing the issues surrounding the server test.[74]

Aereo offered a subscription service that allowed its subscribers to view broadcast television live over the Internet.[75]  Once a subscriber chose a show to watch on Aereo’s website, Aereo used its own antennas to capture the broadcast and its own transcoders “translate the signals received into data.”[76] It saved the data “in a subscriber-specific folder on [its] hard drive.”[77] Once a few seconds of the show had “been saved, Aereo’s server [then] stream[ed]” it “to the subscriber over the Internet.”[78]

In Fortnightly Corp. v. United Artists Television, Inc., a predecessor case to Aereo, the Court held that a service which only enhances its customers’ ability to access copyrighted material does not perform the copyrighted material in violation of the Act.[79] Instead, the service works like a stage play, the broadcaster taking on the role of an actor and the viewer taking on the role of a member of the audience.[80] However, as the Court implicitly acknowledged, this performer/viewer dichotomy fails when technology is added to the mix.[81] A broadcaster does less than an actor who creates an image of a character in front of an audience; it simply provides electronic signals.[82] And a viewer of a broadcast takes a more active role than a viewer of a stage play; he or she provides the equipment necessary to convert the broadcaster’s electronic signals into images.[83]“Broadcasters perform[ed].” Since the service simply “enhance[d] the viewer’s capacity to receive the broadcaster’s signals,” it fit the role of viewer more so than performer.[84]

Fortnightly was decided in 1968.[85] Eight years later, Congress amended the Copyright Act once again, this time with an intention to overturn the Supreme Court’s narrow construction of the performance right in Fortnightly.[86] Congress added language to clarify and broaden the scope of the right.[87] The newest version of the Act states technology that occupies the role of either broadcaster or viewer has the capacity to “perform[]’ a work”, meaning it can “show its images in any sequence or . . . make the sounds accompanying it audible.”[88]

The Aereo Court applied the amended Copyright Act’s definition of “perform” to Aereo and therefore determined that Aereo infringed on the plaintiffs’ public performance right.[89] Aereo’s activities were “substantially similar to those of the . . . companies . . . Congress” targeted when it amended the Act in 1976.[90] Under the amended Copyright Act, the companies in Fortnightly “performed” a broadcast whenever their equipment transmitted the electronic signals that made up the broadcast to their customers.[91] Similarly, Aereo “performed” whenever one of its servers streamed a program to a subscriber.[92] 

D.  The Influence of Aereo in the Southern District of New York

The Southern District of New York has explicitly rejected the server test twice in the past several years, in both instances using the Court’s holding in Aereo to support its interpretation of the display right in the Copyright Act.[93] The focus of the performance right analysis is on the effect a new piece of technology has on a viewer, not its physical structure.[94]Since the performance right and the display right are both part of the bundle of rights which comprise copyright, they should be analyzed similarly.[95]

Goldman v. Breitbart concerned a plaintiff who, similar to the plaintiffs in Hunley, owned the copyright to a photo he had taken and posted to social media. The plaintiff’s photo of football star Tom Brady had gone viral online.[96] The plaintiff alleged that, by Breitbart and other news outlets embedding Tweets that contained his photo in their articles, they infringed on his display right.[97]

The Southern District of New York pointed out that a key component of the Supreme Court’s opinion in Aereo was that “technical distinctions [that are] invisible to the user should not be the lynchpin on which copyright liability lies….”[98]  So the fact that the defendants never stored a copy in their servers is irrelevant.[99] Their websites “displayed” the plaintiff’s Tom Brady photo simply by “putting a process in place[, embedding, ]that resulted in a transmission of the photo[] so [it] could be visibly shown.”[100]

In 2021—three years after Breitbart—the Southern District of New York decided Nicklen v. Sinclair Broadcast Group, Inc.[101] The plaintiff in Sinclair was a nature photographer who had posted a video of a polar bear to his Instagram and Facebook.[102] The video’s caption expressly directed those who wished to use the video to contact the plaintiff’s organization.[103] Sinclair Broadcast Group, a Maryland-based media conglomerate, used an embedding tool to add the video to one of its articles.[104] A casual reader, even one without a Facebook or Instagram, could view the video in the article without ever having to navigate to the plaintiff’s social media accounts.[105]

The Southern District of New York described the display right as being “technology neutral.”[106] It is “concerned not with how a work is shown, but that a work is shown.”[107] So despite all the technical jargon surrounding embedding, the embed code is nonetheless “simply an information ‘retrieval system’” that allows an image or video to be seen.[108] Sinclair therefore “displayed” the plaintiff’s video within the meaning of the Copyright Act when it embedded the video in its article.[109]

E.  Other Courts’ Approaches to the Display Right 

In Leader’s Institute v. Jackson, the Northern District of Texas considered the display right in relation to framing.[110] The plaintiffs in Jackson had “framed” the defendants’ webpage by including code in their website that instructed a visitor’s browser to retrieve data from both the plaintiff’s and defendants’ servers simultaneously and display it all under the plaintiff’s web address.[111]  The plaintiffs argued along the Ninth Circuit’s reasoning in Perfect 10 that framing could not be copyright infringement because it does not require possession of a copy.[112] The Leader’s Institute court expressly disagreed with the Ninth Circuit’s holding in Perfect 10—the Copyright Act only requires that a copy be shown to be displayed.[113]

This reading closely aligns with the definition of “display” Congress used when constructing the newest version of the Act in 1976.[114] The Report for the House Committee on the Judiciary for the 1976 revision to the Copyright Act asserts that an infringement occurs if a copy is “transmitted by any method (by closed or open circuit television, for example, or by a computer system) from one place to members of the public located elsewhere” without the permission of the copyright holder.[115] The ambiguity in the use of the word “place” may imply that the framers of the 1976 amendment did not intend to require an infringer to possess a copy to display it. This implication is reinforced when noting that the report expressly addresses the issue of possession in relation to the display right only to note that possession of a copy in the form of a rental or loan does not carry with it a right to display.[116]

The Northern District of California hinted in its opinion in Free Speech Systems, LLC, v. Menzel that, even within the Ninth Circuit, the copyright holder’s display right may be broader than it was portrayed in Perfect 10; however, the court refused to deviate from the boundaries established by the Perfect 10 server test.[117] In Menzel, a news website incorporated nine photographs from a photographer’s website into one of its posts without the photographer’s consent.[118] In response to the news website’s argument that its conduct was protected by Perfect 10, the Menzel court noted that no case outside or within the Ninth Circuit had ever (at that point) applied the server test outside the specific context of search engines.[119]

The court declined to take judicial notice of whether the photographs were copied or embedded in the news website’s post, so it did not discuss the server test any further in its opinion.[120] However, the little discussion it did devote to the subject is enlightening. The court’s emphasis on the inapplicability of the test outside the specific context of search engines indicates that it may have reservations as to the usefulness of the test itself. Menzel was decided in 2019, twelve years after Perfect 10.[121] The Menzel court dealt with a highly developed digital environment, which likely had an impact on its reluctance to embrace Perfect 10’s server test.[122]

III.  The Cloud Problem and Potential Solutions

A “cloud” is a web of connected servers and software that allows users to remotely access their data and storage.[123] The cloud got its name because, like a cloud in the sky, it has no single fixed shape and it covers various geographic areas.[124] A cloud’s servers can exist anywhere in the world, but they’re usually located in clusters and are far removed from major population centers.[125]

The individuals and businesses who use cloud servers usually do not own them.[126] Instead, they pay companies like Microsoft or Google to use their clouds and thereby prevent the headaches that come with hosting and managing hardware and software.[127] A cloud, such as OneDrive, contains millions of digital files which can be easily reproduced and almost always exist in more than one place (e.g., a laptop hard drive).[128]  This greatly limits the amount of control a copyright owner can extend over any one copy.

Currently, the framework for mediating the conflict between the competing rights of consumers and creators is centered around ownership of physical copies.[129] Further, digital copies are typically treated like physical copies.[130] An owner of a copy of software, for example, has the right to make copies, run them, back them up, or modify them.[131] Copies that are stored on a public cloud server are treated as “fixed” for copyright purposes—the same way they would be if they were stored on a private home server.[132]

However, imagine the following: a cloud server owned by a single service provider stores the data of hundreds of thousands of individuals and businesses.[133] User A uploads a photo of her realistic raccoon drawing to her blog, which uses the cloud. The photo is stored in one of the cloud’s servers. User B sees the photo on the blog and, instead of embedding it, he copies and pastes it into an article he’s writing for a small news website. User A’s blog and User B’s news website happen to both use the same service provider. Obviously, User B is infringing User A’s copyright by displaying her work in his article without her permission. Using the Ninth Circuit’s server test, though, he wouldn’t be committing copyright infringement because his copy is “stored” in the same physical place as the original copy.[134] However, User B is nonetheless “displaying” the copy by “showing” it via device or process (copy-paste).[135] And he is “showing” the copy by “causing or permitting” it to be seen in his article.[136]

The server test provides just enough ambiguity in the law to allow businesses to use social media to profit at the expense of creators. Instead of seeking a license from Getty Images or a similar company, businesses can easily find a suitable image on Instagram and embed it into their webpages for free.[137] The problem is widespread—roughly 70 percent of blogs embed links.[138] The terms and conditions on social media websites often state that users cannot post third-party content without consent, but those same sites nonetheless promote the sharing of third-party content in order to increase their advertising revenue.[139]

On Instagram, copyright owners can attempt to dissuade potential copyright infringers by making their accounts private or by clicking a switch in their settings to disable automatic embedding.[140] However, embedding is still the default, and one must comb through the settings in the Instagram app or website to find the switch.[141] A court may be unlikely consider a copyright owner leaving embedding on a license for others to embed the owner’s content, but this measure alone is only flimsy stop-gap for the problem.[142] Particularly persuasive parties may try to find a way around the setting by requesting a sublicense from Instagram itself.[143]

In Sinclair v. Ziff Davis, Instagram granted a sublicense to Mashable to use a photographer’s photo that she had uploaded to her account on Instagram.[144] Mashable used the sublicense to embed the photo in its article after the photographer did not accept its offer to license the rights directly from her.[145] When the photographer sued Mashable for copyright infringement, the court held that Mashable did not infringe her copyright because she had granted Instagram a permission for to sublicense the photo by agreeing to Instagram’s terms of service when she created her account.[146] The court could not release her from the agreement she had made because it was a valid contract.[147]

As of 2023, Instagram’s terms of service still include the provision that anyone who agrees to it (and you must agree the terms of service to use Instagram) grants Instagram “a non-exclusive, royalty-free, transferable, sub-licensable, worldwide license to host, use, distribute, modify, run, copy, publicly perform or display, translate, and create derivative works of [their] content.”[148] A copyright owner can only control the content on their profile via their privacy and application settings.[149] So while they can flip the switch to prevent parties from embedding their work, if they keep their profile public to access their market, Instagram maintains the right to use and grant use to others anyway.[150] So in many ways, copyright owners only have the illusion of control over their content.

Instagram’s terms of service are not unique—on Facebook, a user with a public profile is forced by the terms of service to allow anyone who comes across the profile to display the work he or she posts.[151] Unlike traditional contracts, “which are founded on the mutual consent of the parties to agreed terms,” terms of service are contracts of adhesion.[152] Contracts of adhesion are meant to accommodate many agreements between an entity and those who wish to access its products and services at once.[153] As was the case in Ziff Davis, courts typically have no problem enforcing these types of contracts even when there is an obvious imbalance of negotiating power between the contracting parties.[154]

Hypothetically, Instagram could alter its terms of service to no longer allow the granting of a sublicenses to third parties to use content uploaded by Instagram’s users. Its terms could look like those of Pinterest, for example, which restrict Pinterest’s right to license to include only those acts which are carried out on the Pinterest platform.[155]

A.  Potential Solution: Instant Licenses

Some have suggested that platforms implement an instant license.[156] An instant license would ideally operate in the form of a “clickwrap agreement,” which requires a user to agree to a set of terms before being allowed to access any content.[157] The agreement would operate as follows: A user clicks on an embedding tool and is confronted with a pop-up that presents a choice to either accept that he or she is a obtaining a license from a copyright owner to use the owner’s image outside the bounds of the social media site or click away and thereby be prevented from using the tool.[158]

It is the opinion of this note that an instant license can be easily customized to meet the needs of both copyright owners and social media companies. It could require a small fee to proceed with embedding, for example, or clearly state that the signor recognizes that the copyright owner may choose to enforce his or her copyright against any unauthorized use. If a social media company would prefer the instant license to be as unobtrusive as possible while also keeping it accessible, the company could place a one or two-sentence statement about copyright on the pop-up along with a link to a webpage that contains the entire text of the license.

Online news outlets, by using an “instant license,” could easily license the photos and videos they find on social media and thereby shield themselves from threats of copyright infringement.[159] The lack of clarity surrounding the application of the fair use doctrine in social media, which journalists have traditionally relied on in the past, would also become less of an issue as journalists could depend on the text of the license to represent that they are operating within the bounds of copyright.[160]

The instant license would also only apply to sharing photos and videos outside the social media website via embedding, so it wouldn’t affect most of the sharing activity that occurs between users within the site. Instagram could keep its license to use users’ social media posts for that purpose. The fundamental nature of social media wouldn’t disappear completely. 

Conclusion

Copyright law evolves alongside technological innovation. The United States has had three Copyright Acts since its founding, and each Act was changed several times before being replaced.[161]

The server test relies on outdated logic—it assumes that one must possess a copy to display it.[162] In the past, that made perfect sense: if one wanted to play a film for an audience, he would have to possess a copy of it in the form of a film reel or tape first. But when film is transformed into bits of data and streamed to an audience through an Internet connection, possession becomes a lot less important.[163]

To counter the diminishing value of possession in the copyright analysis, U.S. courts potentially could follow the Southern District of New York’s example and shift their focus from the operation of the technology to the audience’s experience. The physical location of a single server matters little when it is part of a cloud managed by a large company like Apple or Amazon.[164] It’s much simpler to view an Instagram photo embedded on a webpage the same way as a physical copy of the photo hung in a window. In both cases, the photo is being displayed in violation of the owner’s copyright simply because people are viewing it without the copyright owner’s permission.

Any legislation or case law or contract that replaces the server test should prioritize protecting the interests of artists in their works. Alexis Hunley and Matthew Brauer are examples of photographers who depend on copyright to make a profit.[165] When artists like the Hunleys can enjoy the fruit of their creativity, society benefits from the presence of more beautiful photographs.

I J.D Expected 2024, University of Kentucky J. Rosenberg College of Law; BA English 2018, BA Writing, Rhetoric & Digital Studies 2018, University of Kentucky

[2] Hunley v. Instagram, LLC, No. 21-CV-03778-CRB, 2022 WL 298570, at *1 (N.D. Cal. Feb. 1, 2022).

[3] First Amended Complaint for Damages Based on Copyright Infringement at 5, Hunley v. Instagram, LLC, No. 21-CV-03778-CRB, 2022 WL 298570 (N.D. Cal. Feb. 1, 2022); see How has social media changed the world of art?, adobo mag. (Oct. 12, 2022), https://www.adobomagazine.com/press-release/how-has-social-media-changed-the-world-of-art/ [https://perma.cc/HW5W-S7HW].

[4] Hunley, 2022 WL 298570, at *1.

[5] See Perfect 10, Inc. v. Amazon, Inc., 508 F.3d 1146, 1160 (9th Cir. 2007)

[6] Id.

[7] Id. at 1159–62.

[8] Hunley, 2022 WL 298570, at *2.

[9] See The Federalist No. 43 (James Madison); Zvi S. Rosen, Common-Law Copyright, 85 U. Cin. L. Rev. 1055, 1060 (2018).

[10] See Paul Goldstein, Copyright's Highway: From the Printing Press to the Cloud 25–26 (Stanford Univ. Press 2d ed. 2019); see also M. Sophia Newman, So, Gutenberg Didn’t Actually Invent Printing As We Know It, LitHub (June 19, 2019) https://lithub.com/so-gutenberg-didnt-actually-invent-the-printing-press/#:~:text=Do%20this%20many%20times%2C%20and,printing%20of%20the%20aforementioned%20Bible [https://perma.cc/8EJ9-M82B] (explaining that the printing press was created around 1440 and that it allowed for “mass-produced books”).

[11] Diane Leenheer Zimmerman, The Statute of Anne and Its Progeny: Variations without a Theme, 47 Hous. L. Rev. 965, 966 (2010).

[12] Id. at 971–75.

[13] U.S. Const. art. I, § 8, cl. 8.

[14] Zimmerman, supra note 11, at 967.

[15] Copyright Act of 1790, 1 Stat. 124 (1790).

[16] Pamela Samuelson, Evolving Conceptions of Copyright Subject Matter, 78 U. Pitt. L. Rev. 17, 25 (2016).

[17] Goldstein, supra note 10, at 38.

[18] See id.

[19] 17 U.S.C. § 102(a).

[20] See H.R. Rep. No. 94-1476, at 47, 51–52 (1976).

[21] See 17 U.S.C. § 101.

[22] Id.

[23] Aaron Perzanowski & Jason Schultz, The End of Ownership: Personal Property in the Digital Economy 18 (2016).

[24] Id.

[25] See Perzanowski & Schultz, supra note 23, at 36.

[26] Id. at 40.

[27] Id. at 36.

[28] Id. at 36, 40.

[29] H.R. Rep. No. 94-1476, at 61 (1976).

[30] 17 U.S.C. § 106.

[31] Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1159 (9th Cir. 2007).

[32] Hunley v. Instagram, LLC, No. 21-CV-03778-CRB, 2022 WL 298570, at *1 (N.D. Cal. Feb. 1, 2022).

[33] H.R. Rep. No. 94-1476, at 64 (1976).

[34] See generally H.R. Rep. No. 94-1476, at 52 (1976) (“[T]here are unquestionably other areas of existing subject matter that this bill does not propose to protect but that future Congresses may want to.”).

[35] Perfect 10, 508 F.3d at 1159 (9th Cir. 2007).

[36] Id. at 1157.

[37] Id.

[38] Id.

[39] Id.

[40] Id.

[41] Id.

[42] Id. at 1160–61.

[43] Id. at 1159–60.

[44] 17 U.S.C. § 101.

[45] See Perfect 10, 508 F.3d at 1160–61.

[46] 17 U.S.C. § 101.

[47] Perfect 10, 508 F.3d at 1160–61.

[48] Id. at 1155–56.

[49] Jason W. Whitney, Two Cases Raise New Copyright Infringement Concerns for Internet Linking, 37 Comput. & Internet Law., 7, 7 (July 2020).

[50] Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007); see Jane C. Ginsburg & Luke Ali Budiargo, Embedding Content or Interring Copyright: Does the Internet Need the “Server Rule”?, 32 Colum. J. L. & Arts 417, 436 (2019).

[51] Ginsburg & Budiargo, supra note 50, at 435.

[52] Id.

[53] Whitney, supra note 49, at 7.

[54] Id.

[55] See generally Jonathan Bailey, Rethinking Embedding and Framing, PlagiarismToday (Mar. 23, 2021), https://www.plagiarismtoday.com/2021/03/23/rethinking-embedding-and-framing/ [https://perma.cc/HM2W-YCHH ](explaining the differences between framing and embedding).

[56] Ginsburg & Budiargo, supra note 50, at 435–36.

[57] See Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007); Raisa Bruner, A Brief History of Instagram’s Fateful First Day, Time (July 16, 2016), https://time.com/4408374/instagram-anniversary/ [https://perma.cc/89CH-DSZ4]; Hunley v. Instagram, LLC, No. 21-CV-03778-CRB, 2022 WL 298570 (N.D. Cal. Feb. 1, 2022).

[58] Flava Works, Inc. v. Gunter, 689 F.3d 754, 760 (7th Cir. 2012).

[59] Id. at 756, 759.

[60] Id. at 756.

[61] Id.

[62] Id.

[63] Id.

[64] Id. at 757–58.

[65] Id. at 758.

[66] Id.

[67] Steve Henn, Instagram Sells for $1 Billion Despite No Revenue, NPR (Apr. 10, 2012), https://www.npr.org/2012/04/10/150372288/instagram-sells-for-1-billion-despite-no-revenue [https://perma.cc/X3G5-C5QN]; see Flava Works, Inc. v. Gunter, 689 F.3d 754 (7th Cir. 2012).

[68] Id.

[69] Mansoor Iqbal, Instagram Revenue and Usage Data (2024), Bus. of Apps Data (Jan. 8, 2024), https://www.businessofapps.com/data/instagram-statistics/ [https://perma.cc/F243-5TPM].

[70] Digital Advertising Soared 35% to $189 Billion in 2021 According to the IAB Internet Advertising Revenue Report, Interactive Advert. Bureau (Apr. 12, 2022), https://www.iab.com/news/digital-advertising-soared-35-to-189-billion-in-2021-according-to-the-iab-internet-advertising-revenue-report/ [https://perma.cc/H9SR-LPVT].

[71] How to Make Money on Social Media, Accion Opportunity Fund (last visited Apr. 8, 2023) https://aofund.org/resource/make-money-social-media/ [https://perma.cc/HQ6W-TQS4].

[72] 573 U.S. 431 (2014).

[73] Id. at 438.

[74] Id. at 436–37.

[75] Id. at 436.

[76] Id.

[77] Id.

[78] Id. at 437.

[79] Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390, 398–99 (1968).

[80] Id. at 398.

[81] See id.

[82] See id.

[83] See id. at 398–99.

[84] Id. at 399.

[85] Id. at 390.

[86] Am. Broad. Cos., Inc. v. Aereo, Inc., 573 U.S. 431, 441 (2014).

[87] Id. at 441–42; see 17 U.S.C. § 102; see also Perzanowski & Schultz, supra note 23, at 36 (discussing the expansion of copyright law during the twentieth century).

[88] Aereo, 573 U.S. at 441 (quoting 17 U.S.C. § 101).

[89] Id. at 450.

[90] Id. at 442.

[91] Id. at 441–42.

[92] Id. at 443–44.

[93] Goldman v. Breitbart News Network, LLC, 302 F. Supp. 3d 585, 594–95 (S.D.N.Y. 2018); Nicklen v. Sinclair Broad. Grp., Inc., 551 F. Supp. 3d 188, 195 (S.D.N.Y. 2021).

[94] Breitbart, 302 F. Supp. 3d at 594–95.

[95] Id. at 589.

[96] Id. at 586.

[97] Id.

[98] Id. at 595.

[99] See id. at 593.

[100] Id. at 594.

[101] Nicklen v. Sinclair Broad. Grp., Inc., 551 F. Supp. 3d 188 (S.D.N.Y. 2021).

[102] Id. at 191.

[103] Id. at 192.

[104] Id.

[105] Id.

[106] Id. at 194.

[107] Id.

[108] Id.

[109] Id.

[110] Leader's Inst., LLC v. Jackson, No. 3:14-CV-3572-B, 2017 WL 5629514, at *10 (N.D. Tex. Nov. 22, 2017); see also Ginsburg & Budiargo, supra note 50, at 435 (for further explanation on the concept of “framing”).

[111] Leader's Inst., 2017 WL 5629514, at **10–11.

[112] Id. at *11; see Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007).

[113] Leader's Inst., 2017 WL 5629514, at **11–12 (citing 17 U.S.C. § 101).

[114] See 17 U.S.C. § 101.

[115] H.R. Rep. No. 94-1476, at 80 (1976).

[116] Id.

[117] Free Speech Sys., LLC v. Menzel, 390 F. Supp. 3d 1162, 1171–72 (N.D. Cal. 2019).

[118] Id. at 1166–67.

[119] Id. at 1172.

[120] See id.

[121] Id. at 1162; Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007).

[122] See generally Menzel, 390 F. Supp. 3d at 1166–68, 1171–72 (detailing the background of the case and relevant facts then contrasting the case with Perfect 10).

[123] Perzanowski & Shultz, supra note 23, at 42; Lee Davis & Rob Watts, What is Cloud Computing? The Ultimate Guide, Forbes Advisor (Oct. 19, 2022, 9:20 AM), https://www.forbes.com/advisor/business/what-is-cloud-computing/ [https://perma.cc/P632-8MFB].

[124] Tung-Hui Han, A Prehistory of the Cloud 4 (2015).

[125] See id. at 79.

[126] See James Edmondson, Pros and Cons of Cloud Storage, Bus. Tech Wkly. (Mar. 13, 2022), https://www.businesstechweekly.com/operational-efficiency/clud-computing/pros-and-cons-of-cloud-storage/ [https://perma.cc/JGE5-EXWE].

[127] Tatum Hunter, What Is Cloud Native and Why Is It Important?, builtin (Sept. 25, 2020) https://builtin.com/cloud-computing/what-is-cloud-native [https://perma.cc/X485-XRDV].

[128] See Aaron Perzanowski, You Buy It, You Break It: A Comment on Dispersing the Cloud, 74 Wash. & Lee L. Rev. 527, 527 (2017).

[129] Id. at 527–28; Perzanowski & Shultz, supra note 23, at 40.

[130] Id.

[131] Id. at 41–42.

[132] Id. at 40.

[133] Cf. id. at 44 (providing further examples of how to analogize a server to tangible items).

[134] See Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1159 (9th Cir. 2007).

[135] See Nicklen v. Sinclair Broad. Grp., Inc., 551 F. Supp. 3d 188, 194 (S.D.N.Y. 2021).

[136] See id.

[137] Ginsburg & Budiargo, supra note 50, at 430–31 (quoting Otto v. Hearst Commc'ns, Inc., 345 F. Supp. 3d 412, 482 (S.D.N.Y. 2018)).

[138] Id. at 432.

[139] H. Bosher & S. Yeşiloğlu, An Analysis of the Fundamental Tensions between Copyright and Social Media: The Legal Implications of Sharing Images on Instagram, 33 Int’l Rev. L., Computs. & Tech., 164, 177 (2019).

[140] Kyle Jahner, Embed Copyright Cases Could Multiply as Server Test Faces Siege, Bloomberg L. (Aug. 17, 2021, 5:02 AM), https://news.bloomberglaw.com/ip-law/embed-copyright-cases-could-multiply-as-server-test-faces-siege [https://perma.cc/N4EP-KSCA]; Alicia Wagner Calzada, How Instagram Changed Its Embedding Feature—and What That Means for Photographers and Publishers, Copyright All. (Jan. 20, 2022), https://copyrightalliance.org/how-instagram-changed-embedding-feature/ [https://perma.cc/KY2G-T4LD].

[141] Calzada, supra note 140.

[142] See id.

[143] Id.

[144] Sinclair v. Ziff Davis, LLC, 454 F. Supp. 3d 342, 344 (S.D.N.Y. 2020).

[145] Id. at 343.

[146] Id. at 345.

[147] See id. at 345–46.

[148] Terms of Use, Instagram (July 26, 2022), https://help.instagram.com/581066165581870.

[149] See Calzada, supra note 140.

[150] Terms of Use, Instagram (July 26, 2022), https://help.instagram.com/581066165581870.

[151] Corinne Tan, Regulating Content on Social Media: Copyright, Terms of Service and Technological Features 100 (2018).

[152] Niva Elkin-Koren, Giovanni De Gregorio & Maayan Perel, Social Media as Contractual Networks: A Bottom up Check on Content Moderation, 107 Iowa L. Rev. 987, 1022 (2022).

[153] Id.

[154] Id. at 1023.

[155] Tan, supra note 151, at 100.

[156] Jahner, supra note 140.

[157] Click Wrap Agreements, Greenberg & Lieberman, LLC, https://aplegal.com/education-tools/click-wrap-agreements/ (last visited Apr. 15, 2023) [https://perma.cc/37UW-J88V].

[158] See Chauncey Crail & Jane Haskins, Terms of Use Agreement: What it is & Do You Need it?, Forbes Advisor (Aug. 25, 2022, 1:31 PM), https://www.forbes.com/advisor/business/why-your-website-needs-terms-of-use-agreement/ [https://perma.cc/2E2Q-EVR5].

[159] See generally id. (explaining how clickwrap agreements, which would be the basis of an “instant license,” work and how they shield against copyright infringement).

[160] Patricia Aufderheide, Journalists, Social Media and Copyright: Demystifing Fair Use in the Emergent Digital Environment, 9 J. Bus. & Tech. L. 74, 86–87 (2014); see also supra note 159 and accompanying text (explaining how “instant licenses” could shield online news outlets from threats of copyright infringement).

[161] A Brief History of Copyright in the United States, U.S. Copyright Off. (last visited Apr. 15, 2023), https://www.copyright.gov/timeline/ [https://perma.cc/5F84-QHJ2].

[162] See Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1160–61 (9th Cir. 2007).

[163] See Am. Broad. Cos., Inc. v. Aereo, Inc., 573 U.S. 431, 443–44 (2014).

[164] Perzanowski & Schultz, supra note 23, at 44.

[165] See Hunley v. Instagram, LLC, No. 21-CV-03778-CRB, 2022 WL 298570, at *1 (N.D. Cal. Feb. 1, 2022).

Requiem for a Survivor: The Use of Battered Woman Syndrome in Acquitting Survivors of Abuse

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Requiem for a Survivor: The Use of Battered Woman Syndrome in Acquitting Survivors of Abuse 

Bailey Pierce I 

Introduction 

In January 2019, Marjory Dingwall was charged with three counts of robbery and three counts of brandishing a firearm during a crime of violence.[2] Dingwall admitted to the robberies but maintained that she was acting under “fear of brutal violence” by her then-boyfriend Aaron Stanley.[3] A Wisconsin District Court denied Dingwall’s motion in limine to admit detailed records of emails and text messages between Dingwall and Stanley that showed a history of abuse and an evaluation by a physician with the Midwest Domestic Violence Resource Center, who diagnosed Dingwall with Post-Traumatic Stress Disorder and Battered Woman Syndrome.[4] Marjory Dingwall was sentenced to thirty months and one day in prison along with three years of supervised release.[5]

Stories like that of Marjory Dingwall are found across the country.[6] According to a 2016/2017 report on intimate partner violence, in a twelve-month period in the United States alone, approximately eleven women experienced physical violence by an intimate partner every minute.[7] Additionally, 32.5% of women in the same twelve-month period reported severe physical violence, such as being hit by a fist, choked, burned, or harmed with a knife or gun.[8] Of 120 women in a 2012 study who are survivors of intimate partner violence, 94.2% reported being subject to economic abuse, which includes controlling how and when the woman spends her own money, forcing the woman to give the abuser money, and threatening physical violence if their financial demands are not met.[9]

Repeated and persistent physical, sexual, and/or economic abuse by an intimate partner can lead to “measurable psychological changes” that can prevent women from “recognizing opportunities for escape or other alternatives to their abusive environment.”[10] These psychological changes are collectively referred to as Battered Woman Syndrome (hereinafter “BWS”).[11] Women who experience recurring, escalating abuse often develop “avoidance responses,” such as minimizing or denying the present danger or forgetting a particular incident, that “protect [them] from experiencing the full-blown trauma response.”[12]

In the United States criminal justice system self-defense and duress defenses, as well as “a history of abuse,” can be considered to establish culpability and to determine  sentences, even in cases of murder.[13] However, cases like Marjory Dingwall’s illustrate why evidence of Battered Woman Syndrome and recurring abuse should be admissible in all cases where such a defense would be relevant.

This Note argues that evidence of Battered Woman Syndrome and related abuse should be admissible to support an affirmative duress defense, even when not related to a homicide or assault charge, in line with the guidance offered by the Seventh Circuit in United States v. Dingwall.[14] Part I explored the origins of BWS and the psychology of abuse. Part II discusses the affirmative defense of duress and its application. It also compares the use of BWS in self-defense cases to affirmative duress defenses. Part III looks at how the Circuits have addressed the use of evidence related to BWS as a defense of duress and rationale for allowing or disallowing. Use by state courts is also examined in this section. Part IV will go over why it is imperative that BWS evidence be admitted.

A.  Limitations 

Before proceeding, it is important to note a few things. The language surrounding BWS generally focuses on heterosexual relationships, where violence and abuse are perpetrated by a cisgender man against a cisgender woman.[15] Dr. Walker, in The Battered Woman Syndrome, notes that it is important to acknowledge that those who fall outside of that relationship dynamic may have different, more nuanced experiences.[16] Focusing on experiences of cisgender heterosexual intimate partner abuse is in no way intended to invalidate, ignore, or subjugate the experience of same-sex and trans survivors. Space is left open for those with more applicable identities and experiences to tell those stories.

Battered Woman Syndrome and the Psychology of Abuse 

A.  Origins in Psychology and Diagnosis

Battered Woman Syndrome was first discussed in the first edition of Dr. Lenore E. A. Walker’s book of the same name.[17] Now considered a subcategory of Post-Traumatic Stress Disorder (hereinafter “PTSD”), BWS refers to the pattern of behaviors that are often exhibited by women who have suffered persistent sexual, physical, and/or emotional abuse by an intimate partner.[18] The partner ­exerts control and power over the female that dictates her every action with no regard for her health, safety, or wellbeing.[19] BWS looks specifically at intimate partner violence,[20] which refers to partners in a “romantic or dating relationship.”[21]

Women who experience abuse go through the three phases of abuse—which Walker refers to as the “cycle of violence”—and remain in the relationship with their abuser.[22] Phase I is marked by escalating tension between the woman and the abuser.[23] The abuser may engage in intentionally hurtful behaviors, such as verbal abuse and physical violence, or express dissatisfaction and hostility.[24] These behaviors, however, do not take on the “extreme or maximally explosive form.”[25] The woman may attempt to temporarily appease the abuser to avoid further violence.[26] She is often successful at placating her abuser for a time, which begins the “unpredictable noncontingency response/outcome pattern” between the woman and the abuser.[27]

In response to Phase I, the woman is likely to withdraw from her abuser to avoid the heightening tension as she becomes more fearful of violence.[28] As she becomes more withdrawn, the abuser will intensify his oppressive actions, causing tensions to escalate even more until they reach Phase II, the “acute battering incident.”[29] The abuser releases “a barrage of verbal and physical aggression.”[30] Hence, Phase II is the phase most likely to involve injury to the woman.[31] The “acute battering incident” ends when the battering ends and is usually followed by a period of peace between the woman and the abuser, further reinforcing the phases themselves, as “[v]iolence often succeeds because it works.”[32]

Phase III, according to Walker, can take on several forms, but could be indicated by a lack of violence or tension.[33] The abuser may show remorse or kindness toward the woman, and may “shower her with gifts and/or promises.”[34] The woman likely trusts these promises and, as a result, she receives “positive reinforcement,” which could lead to “learned helplessness.”[35] While the cycle seems predictive, within each phase, the woman is unable to predict the exact reaction of her abuser, creating further noncontingency between the woman’s response to abuse and the reaction of the abuser.[36] The inability to control or predict when and why the physical, emotional, and verbal abuse of Phase I will escalate to the more severe violence in Phase II leads to “perceptual distortions,” and may “diminish the woman’s motivation to respond” or escape her relationship.[37]

Professionals have rationalized that leaving an abusive relationship requires women to make numerous difficult decisions: realizing their relationship is unhealthy, understanding it will never change, “giving up” on the hope of an idealized relationship, and facing the realization that the relationship may never truly end (e.g. shared custody of a child).[38] Further, many women in abusive relationships face barriers regarding access to shelter, economic support, and protection from the world at large.[39]

In analyzing the use of BWS in an affirmative duress defense, the need for a diagnosis is less important than the concepts and research behind the theory. Nonetheless, looking toward the introduction of PTSD diagnoses and the similarities between PTSD and BWS can provide guidance in analyzing a claim of duress.[40]  Walker’s research has produced six criteria that identify BWS: 1) intrusive reexperiencing of the trauma event(s); 2) hyperarousal and high levels of anxiety; 3) high levels of avoidant behavior and emotional numbing; 4) difficulty in cognitive function; 5) disrupted interpersonal relationships; 6) body image distortion and issues with physical health; 7) “[s]exual and intimacy issues.” [41]

Notably, the first four criteria are also present in the diagnosis of PTSD, while the remaining three criteria are unique to BWS.[42] There have been numerous uses of PTSD in criminal cases to refute both actus reus and mens rea.[43]

Affirmative Duress Defense and BWS 

A.  BWS and Self-Defense in Homicide

Historically, BWS evidence has been admissible in cases, frequently in the absence of present, immediate, and impending harm.[44] In 1989, the Pennsylvania Supreme Court overturned the conviction of a woman who killed her former boyfriend because trial counsel failed to submit evidence of BWS as a defense of duress.[45] Carol Stonehouse provided substantiated evidence of years of abuse suffered at the hands of her former boyfriend and co-worker.[46] This cycle of abuse, similar to the cycle outlined in Walker’s work, led Stonehouse to shoot and kill her abuser.[47] Though the issue of expert evidence was not raised on appeal, the Supreme Court of Pennsylvania held that failing to bring evidence of battered woman syndrome was prejudicial to Stonehouse and “allowed the jury to base the verdict on unfounded myths surrounding the battered woman.”[48]

This decision made expert testimony on BWS admissible to demonstrate the need for self-defense.[49] Other state courts at the time echoed the decision of the Pennsylvania Supreme Court.[50] State courts have also allowed expert testimony on BWS to establish the “reasonableness” requirement of self-defense.[51] The very nature of self-defense requires that an individual take account of the circumstances before defending oneself to determine the reasonableness of their actions and the force to be used.[52] In the heat of the moment, the defender does not have the Court’s gift of hindsight. This analysis begs the question of whether legal analysis of self-defense is based on what is right or what is truly justified.[53] “If the defender acts on the information available to him, has he acted justifiably?”[54]

The information available to a battered woman is not isolated to a single event, but is instead a combination of multiple, predictable interactions with a known abuser. Walker’s cycle of violence expertly paints this picture: a barrage of verbal and physical abuse escalates to a pinnacle before collapsing back into a routine of abatement and apology before beginning again.[55] This is more information than is normally available to those who fend off a strange attacker or defend their home from an intruder. Yet women who have experienced a history of battering are held to a higher standard of decorum than those in analogous positions.

B.  BWS and the Elements of Affirmative Defenses

i.  Imminent Threat

To establish a defense of duress in general, the defendant must show that there was “reasonable fear of imminent death or serious injury.”[56] Additionally, the defendant must show that there was no “reasonable, legal alternatives” available to the defendant, which prompted the commission of the crime to avoid serious bodily harm and/or death.[57]

The Federal Rules of Evidence generally allow for testimony of an “alleged victim’s pertinent trait,” such as a tendency to be violent, to demonstrate the imminence of a threat.[58] Evidence of BWS would fall under this rule to contextualize the interaction between the woman and the abuser to illustrate imminence—courts have echoed this sentiment.[59]

ii.  Reasonableness

The language surrounding a defense of duress implies that it is a defense of “self-protection.”[60] A reasonable person acting in the defendant’s position would “not be able to resist such conduct.”[61] The actor has been “placed in a moral dilemma,” where they maintain rational decision-making abilities but cannot reasonably act lawfully without endangering themselves.[62] While it is often understood to be a gender-neutral term, the Ninth Circuit has adopted a “reasonable woman standard” when addressing issues of workplace harassment.[63] The Third Circuit is the only circuit to date that has followed the Ninth in adopting a “reasonable person of the same sex in that position” standard, while “[t]he Fifth, Sixth, Eighth, and Eleventh Circuits have clearly rejected a gender-specific standard.”[64] In recent years, there has been a concerted effort to transition the court system to use more gender-neutral language in proceedings, forms, and orders.[65] Gender should be considered, however, when the disparate treatment of gender plays a central role in the dynamics between parties and their interaction with society.[66] The illusion of gender neutrality still tends to favor a “male-biased” experience and “systematically ignore[s] the experience of women.”[67] Instead, the background knowledge of preexisting social imbalance should be considered when determining true reasonableness.[68]

Given this, objective reasonableness must consider the experience of a person in that individual’s position, especially considering gender identity, gender roles, and prior experiences. This does not convert reasonableness to a subjective standard, but rather brings objectivity in line with objective reality.  

Current Circuit Split Regarding Evidence of BWS and Defense of Duress 

There has been pushback when presenting evidence of BWS to support affirmative defenses of duress, despite the similarities in the self-defense and affirmative duress defense.[69]

A.  Rejecting BWS Defenses 

The Fifth Circuit has held that evidence of BWS is “inherently subjective” and does not offer guidance on how the objective, reasonable person would have reacted in that circumstance.[70] In 1992, Kathy Willis and David Perez were arrested in connection to a narcotics transaction organized by an undercover agent.[71] Willis was charged with “carrying a firearm during, and in relation to, the commission of a drug trafficking crime….”[72] Willis alleged that Perez took a gun out of his pants and slipped it into her purse, fearing that Willis would get caught as a convicted felon in possession of a hand gun.[73]

At trial, Willis raised an affirmative defense of duress, arguing that she feared that if she refused to hold Perez’s weapon, he would have beat her in that moment, as he had done many times before.[74] The Court sustained objections against the defendant’s evidence of abuse and BWS, stating that evidence of BWS cannot be considered in conjunction with the “objective terms” of a defense of duress.[75] United States v. Dixon built upon United States v. Willis in the Fifth Circuit, finding that discussion of the defendant’s “subjective perception of danger” was irrelevant to a defense of duress.[76]

Other circuits have echoed this rationale, finding issue with the use of evidence similar to BWS to support a defense that relies on objective, reasonable fear and rational action.[77] BWS is not offered, however, to shift to a subjective view of the circumstances, but rather to add context to the “reasonableness” requirement of a defense of duress.[78]

B.  Allowing BWS Defenses

As stated, an affirmative defense of duress requires that the threat or danger be present, imminent, and impending, and place the defendant in a position where the danger is inevitable should the criminal action not occur.[79] Evidence of BWS demonstrates to a jury why the defendant had an objectively reasonable fear that harm or danger was imminent.[80] The traditional view of a defense of duress involves “"[t]he proverbial mode of. . .a gun pointed at the head as the ultimate persuader to do (or not do) something ... and right now!"'[81] Taken another way, however, it seems equally as reasonable to believe that a predictable cycle of unpredictable violence, as in Walker’s theory of BWS, would result in an objective fear of imminent harm.[82]

Recently, the Seventh Circuit ruled for Marjory Dingwall, allowing her to present evidence of persistent abuse against robbery charges.[83] Dingwall’s experience serves as a perfect picture of the cycle of violence and abuse suffered by many women. Dingwall met her abuser, Aaron Stanley, “while she was in treatment for alcohol abuse.”[84] After several bouts of homelessness and difficulty finding space at local homeless shelters, Dingwall and her daughter moved in with Stanley.[85] Dingwall and her daughter left after a week after Dingwall became concerned with Stanley’s treatment of her, but after reaching the maximum stay at the homeless shelter once again, they were forced to move back in with him.[86] After Stanley began to use crack cocaine, the abuse suffered by Dingwall escalated from emotional to physical.[87] A clear pattern emerged: “Stanley would beat Dingwall, then apologize profusely, and things would then return to ‘normal’” behavior before unpredictably beginning the cycle of abuse again. [88] At one point, Stanley bought a gun and shot “into the mattress on the side where Dingwall slept.”[89]

In January 2019, when Stanley was out of money from his own previous robberies, he drove Dingwall to a Stop-N-Go gas station, put a gun in her hand, and said it was her “turn.”[90] That night, Stanley did not hit Dingwall, “sending the message that committing the crime as ordered was a way to avoid his abuse.”[91] Dingwall would commit two more robberies at Stanley’s request before being arrested.[92]

Marjory Dingwall can be considered a “textbook” case of Walker’s cycle of violence and learned helplessness.[93] There is moderate emotional and physical abuse before escalating to physical violence.[94] Dingwall also experienced common tactics of economic abuse.[95] When Dingwall would give Stanley money, he would be “nice to [her].”[96] When Dingwall complied with Stanley’s robbery plans, she was rewarded with an evening of peace, indicating that to avoid violence, she must comply with Stanley’s wishes, regardless of the legality.[97] Dingwall expressed a desire to leave Stanley but “felt that she had no other options.”[98]

The District Court ruled that evidence of BWS and abuse would do little to satisfy the elements of a duress defense.[99] On appeal, the Seventh Circuit Court of Appeals relied on rulings from other circuits to guide new precedent.[100]

In Dando v. Yukins out of the Sixth Circuit, the petitioner committed several armed robberies with her boyfriend after he threatened to kill her.[101] The Sixth Circuit ruled that “evidence of Battered Woman's Syndrome can explain why a reasonable person might resort to such actions given a history of violent abuse and the imminent violent threats.”[102] The court noted that BWS theory “is not at odds with the reasonableness requirement” of a defense of duress, but instead, could potentially assist the jury in understanding what is or is not reasonable.[103]

Similarly, then-Judge Kavanaugh writing for the D.C. Circuit in United States v. Nwoye (Nwoye II), said, “the duress defense requires a defendant to have acted reasonably under the circumstances, and expert testimony [discussing BWS] can help a jury assess whether a battered woman’s actions were reasonable.”[104] Whether the actions taken were reasonable remains a question for the jury, but expert testimony assists in illustrating the role persistent abuse plays in “a battered woman’s particular circumstances.”[105]

The Ninth Circuit cited Nwoye II in its own landmark case regarding BWS evidence in United States v. Lopez.[106] Lopez’s abuser threatened her and her family before forcing her to buy a gun for him using her twin sister’s identification.[107] When Lopez was arrested for lying in order to obtain a firearm, she presented evidence of her abuser’s threats to support her defense of duress.[108] The Ninth Circuit reversed the exclusion of BWS evidence in the district court and affirmed that BWS lends context to the objective reasonableness element of duress, going on to say that BWS “serves an important role in helping dispel many of the misconceptions regarding women in abusive relationships.”[109] Most significantly, the Court proffered that “expert testimony may be characterized as explaining how a reasonable person can nonetheless be trapped and controlled by another at all times even if there is no overt threat of violence at any given moment.”[110]

i.  Summary

The parallels between self-defense and affirmative duress defenses are striking, calling into question the struggle the courts seem to have with allowing BWS in one instance and prohibiting it in another. Both self-defense and affirmative duress defenses require reasonableness and imminent danger.[111] Both defenses require an objective consideration of the circumstances of a reasonable person.[112] Both should allow for the admission of BWS expert testimony. While the circuits are split, there is a clear majority of circuits that find BWS admissible in affirmative duress defenses.[113] The decisions of the courts that do not allow such evidence are based on an incorrect perception of the use of such evidence. 

ii.  Moving Forward 

According to the National Coalition Against Domestic Violence, one in four women experience sexual violence or other physical violence in their lifetime.[114] “On a typical day,” more than 19,000 calls are placed to domestic violence hotlines.[115] Intimate partner violence accounted for 20% of all violent crime in the United States in 2018, which costs $5.8 billion or more a year and an accumulated eight million days of lost work for survivors.[116]

Leaving an abusive relationship requires much more than simply deciding to leave. Women must first make a series of difficult decisions including realizing that they are in fact in an abusive relationship and that their experience is unlikely to change. [117] For most, it takes experiencing a traumatic event to prompt them to leave, giving up on the hope of an idealized relationship and facing the realization that the relationship may never truly end.[118] When their abuser asks them to commit a crime—buy or sell drugs, rob a convenient store, steal from a loved one—it is often easier to comply than to risk the retaliation that they have come to expect.[119]

The circuits are currently split on whether to allow expert testimony on the impact of BWS in cases that do not involve homicide.[120] In these cases, the courts have misconstrued the purpose of BWS testimony.[121] Instead of challenging the objectivity of duress defenses, BWS testimony strives to expand juror general knowledge—knowledge that is expected to be treated as commonplace.[122] It is not only impractical, but irresponsible to ask jurors to make determinations based on a base of knowledge they do not possess. The Sixth, Seventh, Ninth, and D.C. circuits have successfully navigated this distinction.[123] Women who fall within the parameters of BWS are not unreasonable, nor do they assert this when raising a duress defense.[124] Instead, reasonable should be viewed as what a reasonable person in a similar situation would have done.[125] A similarly situated reasonable individual would likely share the perspective that is being submitted through BWS expert testimony.[126]

The statistics nationally on the prevalence of domestic violence and intimate partner violence paint a grim picture: the experiences of women who are survivors of abuse are not novel. Luckily, federal sentencing guidelines permit a court to consider an individual’s experiences in determining an appropriate sentence.[127] Judges are permitted to stray from sentencing requirements if there is evidence that the defendant "committed the offense because of serious coercion, blackmail or duress, under circumstances not amounting to a complete defense.” [128] While this is an exceptional safeguard for survivors of abuse, steps should be taken to ensure they never reach this stage.

Allowing BWS evidence to be admitted at the guilt-innocence phase of a trial will not force the criminal justice system to treat battered women any differently than other offenders.[129] This discomfort, however, should be examined further. Institutions that are typically relied on for protection, such as police or family services, have historically been inadequate at meeting the needs of battered women.[130] Battered women typically do not have an extensive criminal record and a nonexistent history of violent behavior, making their often-sudden departure into crime all more shocking.[131] It is for these reasons that attempts must be made to ensure equal treatment for the most vulnerable among us.

I J.D Expected 2024, University of Kentucky J. David Rosenberg College of Law; BA Sociology 2021, BA Political Science 2021, University of Kentucky

[2] United States v. Dingwall, 6 F.4th 744, 745 (7th Cir. 2021).

[3] Id. at 745–46.

[4] Id. at 749–50.

[5] Id. at 750.

[6] See generally Dando v. Yukins, 461 F.3d 791 (6th Cir. 2006) (explaining the case of Debra Dando, who was charged with a string of armed robberies and assaults that were committed after her boyfriend, Brian Doyle, beat her and threatened to kill her); United States v. Lopez, 913 F.3d 807 (9th Cir. 2019) (explaining the case of Lashay Marie Lopez, who was charged with three federal offenses that were committed after Hector Karaca threatened to harm her and her family); United States v. Nwoye (Nwoye II), 824 F.3d 1129 (D.C. Cir. 2016) (explaining the case of Queen Nwoye, who was charged with conspiring with her boyfriend, Adriane Osuagwu, to extort money from a doctor which was done after “Osuagwu repeatedly beat her and forced her to participate in the extortion scheme”).

[7] See Ruth W. Leemis, Norah Friar, Srijana Khatiwada, May S. Chen, Marcie-jo Kresnow, Sharon G. Smith, Sharon Caslin & Kathleen C. Basile, Ctrs. for Disease Control & Prevention, National Intimate Partner and Sexual Violence Survey: 2016/2017 Report on Intimate Partner Violence, 5 (October 2022) (The study provides that “4.5% of women (5.6 million) reported experiencing any physical violence by an intimate partner.” In dividing 5.6 million by the number of minutes in 12 months, the statistic shows that approximately eleven women experienced physical violence by an intimate partner every minute).

[8] Id.

[9] Judy L. Postmus, Sara-Beth Plummer, Sarah McMahon, N. Shaanta Murshid & Mi Sung Kim, Understanding Economic Abuse in the Lives of Survivors, 27 J. Interpersonal Violence 411, 419–20 (2012).

[10] Michaela Dunn, Note, Subjective Vulnerabilities or Individualized Realities: The Merits of Including Evidence of Past Abuse to Support a Duress Defense, 54 Suffolk Univ. L. Rev. 347, 348 (2021).

[11] Lenore E. A. Walker, The Battered Woman Syndrome 3 (4th ed. 2017).

[12] Id. at 52.

[13] See Penal Reform International, Women Who Kill in Response to Domestic Violence: How Do Criminal Justice Systems Respond?, 5–6 (2016).

[14] 6 F.4th 744, 761 (7th Cir. 2021) (“. . .we conclude that Dingwall should not have been denied the opportunity to offer evidence of battering and its effects, including expert opinions, to support her duress defense. Such evidence can help inform the factfinder how an objectively reasonable person in her circumstances may behave.”).

[15] Walker, supra note 10, at 49–50 (explaining that the original concept of BWS focused on a woman’s signs and symptoms of abuse as a pattern while also explaining that “usually, but not always, a man” is the source of abuse).

[16] See generally id. at 405 (explaining that it is important to consider “race, culture, sexual orientation, and lesbian, gay, bisexual, transgender, and queer (LGBTQ) and gender-nonconforming issues”).

[17] See Walker, supra note 10, at 5.

[18] Id. at 49–50; See also Omri Berger, Dale E. McNiel, & Rene´e L. Binder, PTSD as a Criminal Defense: A Review of Case Law, 40 J. Am. Acad. Psychiatry & L. 509, 509 (2012) (“[O]ther trauma-related syndromes not included in the DSM, such as [BWS] … have been offered as bases for criminal defenses. However, these related syndromes have generally been presented as special types [or subcategories] of PTSD.”).

[19] Walker, supra note 10, at 49–50.

[20] See id. at 8.

[21] The Language We Use, Women Against Abuse, https://www.womenagainstabuse.org/education-resources/the-language-we-use (last visited Feb. 15, 2024) (explaining the difference in domestic violence and intimate partner violence) [https://perma.cc/XNC7-Y6T8]. In this Note, I will not be using the phrases interchangeably. Any use of “domestic violence” should be understood under the definition used by Women Against Abuse.

[22] Walker, supra note 10, at 94.

[23] Id. at 94, 97.

[24] Id.

[25] Id.

[26] Id. at 97.

[27] Id.

[28] Id.

[29] Id.

[30] Id.

[31] Id.

[32] Id.

[33] Id. at 98.

[34] Id.

[35] See id. at 77, 98

[36] Id. at 75 (noting the “original intended meaning” of learned helplessness is “having lost the ability to predict that what you do will make a particular outcome occur” or “the loss of contingency between response and outcome”).

[37] See id. at 76–77, 94, 97–98 (discussing perceptual distortions because of unpredictability and explaining the phases in Walker’s cycle theory of violence).

[38] Ola W. Barnett, Why Battered Women Do Not Leave, Part I, 1 Trauma, Violence, Abuse  345–46 (2000).

[39] See id. at 347–49.

[40] See Jennifer Gentile Long & Dawn Doran Wilsey, Understanding Battered Woman Syndrome and its Application to the Duress Defense, 40 Prosecutor 36, 37–38 (2006).

[41] See Walker, supra note 10,  at 3.

[42] Id.

[43] See generally Berger, McNiel & Binder, supra note 17, at 510–17 (discussing cases such as the Daubert trio and listing in Tables 1 and 2 cases involving the use of PTSD evidence).

[44] See Elizabeth Williams, Proof of Criminal Acts Committed Under Duress, 204 Am. Juris. Proof Facts 3d 95 § 10 (2023).

[45] Commonwealth v. Stonehouse, 555 A.2d 772, 784–85 (Pa. 1989).

[46] Id. at 774–81.

[47] Compare id. (detailing the history of abuse Stonehouse suffered before fatally shooting her former boyfriend), with Walker, supra note 10, at 94–99 (explaining the cycle theory of violence).

[48] Gayle P. Lafferty, Criminal Law—Battered Women and Self-Defense—Pennsylvania Allows Expert Evidence on Battered Woman Syndrome as a Basis for Proving Justification in the Use of Deadly Force When Evidence Indicates Defendant Is Victim of Abuse: Commonwealth v. Stonehouse, 94 Dick. L. Rev. 553, 553–54 (1990).

[49] Id. at 554.

[50] See State v. Kelly, 478 A.2d 364, 375–76 (N.J. 1984); People v. Torres, 488 N.Y.S.2d 358, 362 (N.Y. Sup. Ct. 1985).

[51] See State v. Allery, 682 P.2d 312, 314 (Wash. 1984), overruled on other grounds by State v. Weaver, 198 Wash.2d 459 (2021); State v. Anaya, 438 A.2d 892, 894 (Me. 1981).

[52] Kimberly Kessler Ferzan, Justifying Self-Defense, 24 L. & Phil. 711, 715 (2005).

[53] See id. at 716.

[54] Id. at 715.

[55] See Walker, supra note 10, at 94–99 (explaining the cycle theory of violence).

[56] Williams, supra note 43, at § 4.

[57] Id.

[58] Fed. R. Evid. 404(a)(2)(B).

[59] See Battered Women Who Kill Their Abusers, 106 Harv. L. Rev. 1574, 1582 (1993); Ibn-Tamas v. United States, 407 A.2d 626, 634 (D.C. 1984); Smith v. State, 277 S.E.2d 678, 683 (Ga. 1981); State v. Anaya, 438 A.2d 892, 894 (Me. 1981); State v. Kelly, 478 A.2d 364, 377 (N.J. 1984); State v. Wilkins, 407 S.E.2d 670, 673 (S.C. 1991); State v. Allery, 682 P.2d 312, 315–16 (Wash. 1984).

[60] See Dunn, supra note 9, at 356.

[61] Id.

[62] Id. at 357.

[63] Alyssa Agostino, The Reasonable Woman Standard's Creation of the Reasonable Man Standard: The Ethical and Practical Implications of the Two Standards and Why They Should Be Abandoned, 41 J. Legal Prof. 339, 339 (2017).

[64] Nicole Newman, The Reasonable Woman: Has She Made a Difference?, 27 Bos. Coll. Third World L.J. 529, 532 (2007).

[65] Andy Wirkus, Nat’l Ctr. for State Cts. , Gender Inclusivity in the Courts: How to Treat Everyone With Fairness, Dignity, and Impartiality 21–22 (2023).

[66] See Domestic abuse is a gendered crime, Women’s Aid, https://www.womensaid.org.uk/information-support/what-is-domestic-abuse/domestic-abuse-is-a-gendered-crime/ (last visited Jan. 19, 2024) (discussing the distinct experiences of both women and men who experience abuse and the importance of providing tailored services to survivors based on the intersection of their gender identity and abuse suffered) [https://perma.cc/D8ZJ-B2M5].

[67] Newman, supra note 63, at 536.

[68] See id. at 530.

[69] See United States v. Smith, 987 F.2d 888, 891 (2d Cir. 1993) (stating that the Court found testimony of the defendant’s susceptibility to coercion due to a history of abuse “irrelevant and inadmissible”); United States v. Willis, 38 F.3d 170, 176 (5th Cir. 1994) (summarizing the Court’s finding that “evidence of the particular susceptibility of battered women could not be taken into account in determining criminal liability”); United States v. Dixon, 901 F.3d 1170, 1180–81 (10th Cir. 2018) (finding that the defendant’s “subjective beliefs” about the imminence of danger are not controlling).

[70] Willis, 38 F.3d at 175.

[71] Id. at 173.

[72] Id.

[73] Id.

[74] Id. at 174.

[75] Id. at 174–175 (“Such evidence is not addressed to whether a person of reasonable firmness would have succumbed to the level of coercion present in a given set of circumstances.”).

[76] United States v. Dixon, 413 F.3d 520, 524 (5th Cir. 2005).

[77] See United States v. Smith, 987 F.2d 888, 893 (2d Cir. 1993); United States v. Dixon, 901 F.3d 1170, 1181 (10th Cir. 2018).

[78] Alafair S. Burke, Rational Actors, Self-Defense, and Duress: Making Sense, Not Syndromes, Out of the Battered Woman, 81 N.C. L. Rev. 211, 231 (2002) (“The cycle theory of violence [a substantial component of the theory of Battered Woman Syndrome] is said to help jurors not only to weigh the credibility of a domestic violence victim’s account of subjective fear, but also to determine whether the defendant had an objectively reasonable belief that harm was imminent. If the jury is permitted to consider expert testimony summarizing the cycle theory of violence and its impact on the battered woman, the argument goes, then the jury may conclude that a reasonable person in the battered woman’s position would have perceived an imminent threat of harm, despite the apparent peacefulness of the current situation.”).

[79] See Williams, supra note 43, at § 4.

[80] See Burke, supra note 77, at 231.

[81] George P. Fletcher, Basic Concepts Of Legal Thought 105 (1996).

[82] See Burke, supra note 77, at 254.

[83] United States v. Dingwall, 6 F.4th 744, 746 (7th Cir. 2021); see supra Introduction at 1–2 (discussing Marjory Dingwall’s case).

[84] Dingwall, 6 F.4th at 747.

[85] Id. at 748.

[86] Id.

[87] Id.

[88] Id.

[89] Id.

[90] Id.

[91] Id.

[92] Id. at 748–49.

[93] Compare United States v. Dingwall, 6 F.4th 744, 747–49 (7th Cir. 2021) (detailing the history of abuse Dingwall suffered before Dingwall committed a robbery to appease Stanley), with Walker, supra note 10, at 94–99 (explaining the cycle theory of violence).

[94] See Dingwall, 6 F.4th at 748–49.

[95] See id. at 748.

[96] Id.

[97] See id.

[98] Id.

[99] Id. at 750, 762.

[100] Id. at 746, 751–53.

[101] Dando v. Yukins, 461 F.3d 791, 794 (6th Cir. 2006).

[102] Id. at 801.

[103] Id.

[104] United States v. Nwoye (Nwoye II), 824 F.3d 1129, 1136 (D.C. Cir. 2016).

[105] Id. at 1137.

[106] 913 F.3d 807, 821 (9th Cir. 2019).

[107] Id. at 811.

[108] Id.

[109] Id. at 825.

[110] Id. at 820 (citing United States v. Marenghi, 893 F.Supp. 85, 95 (D.Me. 1995)).

[111] See United States v. Dingwall, 6 F.4th 744, 746 (7th Cir. 2021) (“To present a duress defense, the defendant must produce evidence that ‘(1) she reasonably feared immediate death or serious bodily harm unless she committed the offense; and (2) there was no reasonable opportunity to refuse to commit the offense and avoid the threatened injury.’”); Lucas D. Martin, Defense of self-defense in prosecution for assault or battery, generally; elements of defense; relation of defense to retaliation or accident, Am. Juris. 2d Assault and Battery § 47 (2023).

[112] Dingwall, 6 F.4th at 752 (stating that “the duress defense used an objective standard of reasonableness”); Martin, supra note 110, at § 47. Though Martin does not use the word “objective” in laying out the elements of self-defense, the reasonable person standard is understood to be an objective standard. See Legal Information Institute, reasonable person, Cornell L. Sch., https://www.law.cornell.edu/wex/reasonable_person [https://perma.cc/EZ26-HZX3] (last updated Aug. 2021).

[113] See supra Part III a–b (discussing the current circuit split where four of the seven circuits that have faced this issue have held to allow admission of BWS evidence).

[114] National Statistics, Nat’l Coal. Against Domestic Violence (2020) https://ncadv.org/STATISTICS [https://perma.cc/8PZ5-EYQ4].

[115] Id.

[116] Id.

[117] Barnett, supra note 36, at 345–46.

[118] Id.

[119] See Burke, supra note 77, at 223–24; see also United States v. Dingwall, 6 F.4th 744, 748 (7th Cir. 2021) (Dingwall discussing that the established cycle of violence reinforced her imminent fear of abuse and danger if she denied her abuser’s wishes).

[120] See supra Part III a–b (discussing the current circuit split).

[121] Id.

[122] United States v. Marenghi, 893 F.Supp. 85, 96 (D.Me. 1995).

[123] See Dando v. Yukins, 461 F.3d 791, 801 (6th Cir. 2006); United States v. Dingwall, 6 F.4th 744, 757–58 (7th Cir. 2021); United States v. Lopez, 913 F.3d 807, 811 (9th Cir. 2019); United States v. Nwoye (Nwoye II), 824 F.3d 1129, 1136–37 (D.C. Cir. 2016).

[124] Cf. Dingwall, 6 F.4th at 751 (“Dingwall argues, however that a reasonable person in her situation, including the repeated violent abuse and psychological pressure from Stanley, could fear imminent death or serious injury if she did not commit the robberies and could not see other reasonable alternatives to the crimes.” Dingwall is asserting her reasonableness viewed in the light of someone in her situation, which is consistent with a reasonable person standard.).

[125] Cf. Dando, 461 F.3d at 802 (“The Sixth Circuit concluded that, where the defendant participated in a crime spree while accompanied by her heavily armed boyfriend who had threatened her life, ‘a reasonable person in her situation would likely have feared death or serious bodily harm.’”).

[126] Cf. id. (“The court reasoned that ‘evidence of Battered Woman’s Syndrome can explain why a reasonable person might resort to such actions given a history of violent abuse and the imminent violent threats.’”).

[127] See U.S. Sent’g Guidelines Manual § 5K2.12 (U.S. Sent’g Comm’n 2021).

[128] Id.

[129] Battered Women Who Kill Their Abusers, supra note 58, at 1591.

[130] See Julie Blackman, Potential Uses for Expert Testimony: Ideas Toward the Representation of Battered Women Who Kill, 9 Women's Rts. L. Rep. 227, 233 (1986).

[131] See Battered Women Who Kill Their Abusers, supra note 58, at 1591.

Judicial Interpretations of the "Contributing Factor" Element of Sarbanes-Oxley Retaliation Claims

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Judicial Interpretations of the "Contributing Factor" Element of Sarbanes-Oxley Retaliation Claims

Ryan Crum I

Introduction

The Sarbanes-Oxley Act (“SOX”) is, essentially, “a securities regulation smorgasbord,” enacted in response to a number of very public instances of corporate fraud in the early 2000s.[2]

Congress intended for SOX to help reestablish trust in U.S. financial markets, after seeing it eroded by the bad behavior of some of the nation’s largest companies.[3] One key provision of SOX, section 806 (codified as section 1514A), “protect[s] employees … [from] retaliatory action for providing information concerning conduct the employee reasonably believes violates . . . any … provision of federal law relating to fraud against shareholders.”[4] The legislative history provides that Congress intended section 1514A to “play a crucial role in restoring trust in the financial markets by ensuring that … corporate fraud and greed [could] be better detected.”[5] 

The text of section 1514A, however, has caused problems for courts.[6] That said, courts traditionally have uniformly identified the elements of a section 1514A claim.[7] Recently, however, the Second Circuit, in Murray v. UBS Securities, LLC, split with the Fifth and Ninth Circuits regarding its interpretation of one of the elements—the “contributing factor” element.[8] The Second Circuit held that the element “requires a whistleblower-employee to prove retaliatory intent,” a determination flatly rejected by its sister circuits.[9]

This Note explores the conflicting interpretations of the “contributing factor” element of section 1514A and argues that the correct interpretation does not require an employee to prove retaliatory intent. The remainder of this introduction provides (I) necessary background information on SOX and (II) a more detailed analysis of the SOX antiretaliation provision. In addition, the analysis that follows encompasses two parts. Part I examines judicial interpretations of the “contributing factor” element. Part II outlines why the correct reading of the statute does not require a showing of retaliatory intent. 

Necessary Background Information on SOX 

Context is vital in understanding both the scope and the purpose of SOX. It is only possible to talk about SOX by first discussing Enron. Enron, an energy trading firm, was one of the largest companies in the United States before its collapse in late 2001 and early 2002.[10] Prior to Enron's collapse, the company began experiencing economic difficulties.[11] The company's executives, however, sought to hide the reality of these hardships to avoid a decrease in the value of the company's stock.[12] To that end, “Enron executives used fraudulent accounting practices to inflate the company's revenues and hide debt in its subsidiaries.”[13] Of course, this scheme was unsustainable, and in 2001 the company filed for bankruptcy.[14] The estimated total losses from the company's downfall were $74 billion.[15] The firm's lower-level employees experienced detrimental impacts from its collapse, as much of their retirement was invested in the company's stock.[16]

The damaging effect, however, extended far beyond the company and its employees to, ultimately, the entire U.S. financial system—a system built on trust.[17] The collapse of Enron diluted that trust.[18] Within the first three months of 2002, more than 30 “Enron-inspired bills” were introduced in Congress.[19] SOX was the result of the legislative process that followed the company's demise.[20] The goal was clear; Congress wanted to restore the diluted trust in the U.S. financial system.[21] The legislation “created strict new rules for accountants, auditors, and corporate officers and imposed more stringent recordkeeping requirements.”[22] Moreover, it sought to enhance the quality of inspection and to enforce federal laws governing publicly traded companies rigorously.[23]

A More Detailed Analysis of the SOX Antiretaliation Provision

A key enforcement mechanism in SOX is its codified protection for whistleblowers—18 U.S.C. § 1514A. The statute reads as follows: 

No [publicly traded company] may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee … because of any lawful act done by the employee . . . (1) to … assist in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of [federal law].[24] 

Section 1514A allows employees alleging retaliation to seek relief with the Secretary of Labor or, under certain circumstances, in “the appropriate district court of the United States.”[25]

The statute provides that the burdens of proof for a claim of retaliation are “governed by the legal burdens of proof set forth in section 42121(b) of title 49.”[26] The referenced provision sets up a burden-shifting framework, which the Ninth Circuit neatly explains in Coppinger-Martin v. Solis.[27] To avoid dismissal by either the Secretary or District Judge, the whistle-blowing employee must make a prima facie showing of retaliation.[28] The Ninth Circuit explained:

To make a prima facie showing …, an employee's complaint must allege that (1) the employee engaged in protected activity; (2) the employer knew, actually or constructively, of the protected activity; (3) the employee suffered an unfavorable personnel action; and (4) the circumstances raise an inference that the protected activity was a contributing factor in the personnel action.[29] 

Once an employee makes a prima facie showing of retaliation, “the burden shifts to the employer to rebut the employee's prima facie case by demonstrating by clear and convincing evidence that the employer would have taken the same personnel action in the absence of the protected activity.”[30] 

Analysis

A.  Judicial Interpretations of the “Contributing Factor” Element 

As mentioned previously, in August of 2022, the Second Circuit issued Murray v. UBS Securities, LLC.[31] In Murray, the court determined that the “contributing factor” element of section 1514A required a showing of retaliatory intent.[32] In contrast, the Fifth and Ninth Circuits have held that “a whistleblower need not demonstrate the existence of a retaliatory motive on the part of the [employer]” to be successful in a section 1514A claim.[33] The Second Circuit’s “narrow interpretation of section 1514A will make it more challenging for plaintiffs [in that jurisdiction] to prove causation.”[34] 

This section of this Note explores the details of these conflicting approaches. Part A examines the Fifth Circuit's decision in Halliburton, Inc. v. Administrative Review Bd., providing insight into the school of thought against an intent requirement. Part B then examines Murray, focusing on the key facts that led the Second Circuit to stray from its sister circuits.

i.  The Fifth and Ninth Circuits Approach Illustrated by Halliburton

The Fifth Circuit in Halliburton articulated the view that proof of a retaliatory or wrongful motive is unnecessary for a successful section 1514A claim.[35] The facts of the Halliburton case are straightforward. The plaintiff, a Haliburton employee, submitted an internal complaint regarding what he felt were “questionable” accounting procedures.[36] At the same time, the plaintiff filed a complaint concerning the same accounting practices with the Securities and Exchange Commission (“SEC”), which led to an SEC investigation.[37] “When Halliburton received the SEC's notice of the investigation, the company inferred” that the plaintiff had, along with his internal complaint, filed a complaint with the SEC.[38]

The SEC instructed Halliburton “to retain certain documents during the pendency of the SEC’s investigation.”[39] Halliburton heeded the SEC's instructions by emailing several of its employees, including many of the plaintiff's colleagues, advising them of the SEC's retention recommendation.[40] The contents of said email are where this case truly begins. It suggested that document retention was necessary because “the SEC [had] opened an inquiry into the allegations of [the plaintiff],” naming the plaintiff.[41] After the email, the plaintiff was treated differently by his co-workers.[42] He felt isolated and “missed work frequently.”[43] Eventually, seeing the situation as untenable, the plaintiff sought and received administrative leave.[44] After the SEC's investigation concluded, in which the SEC determined that “no enforcement action … was recommended,” the plaintiff resigned from Halliburton.[45]

Before his resignation, the plaintiff filed a claim under the antiretaliation provision of SOX.[46] He alleged that “Halliburton retaliated against him . . . by disclosing his identity as the whistleblower.”[47] The Administrative Law Judge and the Administrative Review Board went back and forth several times, disagreeing on whether the plaintiff had satisfied both the “adverse action” and the “contributing factor” elements.[48] Haliburton finally appealed for review by the Fifth Circuit after the Administrative Review Board held that the plaintiff had established liability.[49] The Fifth Circuit addressed both section 1514A elements.[50]

The Fifth Circuit began its analysis by outlining the elements, as it describes them, of a section 1514A claim.[51]

To prevail on an antiretaliation claim …, the employee must prove . . .  that (1) he engaged in protected whistleblowing activity, (2) the employer knew that he engaged in the protected activity, (3) he suffered an “adverse action,” and (4) the protected activity was a “contributing factor” in the “adverse action.”[52]

The court briefly acknowledged that the first two elements were not at issue or contested.[53] Moreover, the court agreed with the Administrative Review Board on the “adverse action” element, finding that Halliburton's action met the court's “materially adverse” standard.[54]

Of course, the most critical conversation engaged in by the court, for purposes of this Note, concerned the “contributing factor” element. The court plainly stated its rule, “[A] ‘contributing factor’ is ‘any factor, which alone or in combination with other factors, tends to affect in any way the outcome of the decision.’”[55] The court rejected Halliburton's argument that “an employee must prove a ‘wrongfully-motivated causal connection.’”[56]

Consequently, the court determined—relatively easily—that the plaintiff's protected activity, filing the complaints mentioned above, was a “contributing factor” in Halliburton's “adverse action,” the decision to disclose the plaintiff's identity.[57] The court, somewhat sarcastically, remarked, “Given the facts of this case, it is difficult to see how a different outcome could have been possible.”[58] In other words, the court considered it evident that the plaintiff's protected activity affected Halliburton's decision to disclose the plaintiff's identity, and that was all the plaintiff needed to satisfy the “contributing factor” element.[59]

ii.  The Second Circuits Approach Illustrated by Murray.

On the other hand, the Second Circuit in Murray determined that proof of a retaliatory or wrongful motive is, in fact, requisite to a successful section 1514A claim.[60] The plaintiff worked for UBS “as a strategist in its commercial mortgage-backed securities (‘CMBS’) business.”[61] In this role, he was “responsible for performing research and creating reports [to be distributed] to [UBS’s] current and potential clients . . . .”[62] Given the nature of these reports, the SEC required that the plaintiff  “certify [that the reports] were produced independently and that they accurately reflected his own views.”[63] To that end, the plaintiff alleged that several UBS employees encouraged and, in some cases, instructed him to violate the SEC’s certification requirement.[64]

In response to this perceived pressure to disregard the SEC, the plaintiff contacted his supervisor to report the conduct of his co-workers.[65] His supervisor expressed sympathy and acknowledged that the plaintiff was in “a tough position,” but took, essentially, no further action.[66] Later, in another meeting with his supervisor, the plaintiff made a point to discuss the situation further.[67] This time, however, the plaintiff’s concerns were not met with sympathy.[68] Instead, his supervisor indicated that he would not intervene and that the plaintiff needed to continue his work accordingly—in other words, how “the business line [his co-workers] wanted” him to operate.[69] Not long after this second conversation, the plaintiff’s supervisor suggested that either the plaintiff be terminated or assigned to a different position, one “unregulated by the SEC.”[70] Ultimately, UBS terminated the plaintiff’s employment.[71]

Subsequently, the plaintiff filed suit alleging that “his termination was retaliation for whistleblowing.”[72] UBS rebutted the plaintiff’s claim by offering evidence that, at the time of the plaintiff’s termination, the company was making strategic layoffs due to financial difficulties, which happened to include the plaintiff’s position.[73] The jury sided with the plaintiff, finding UBS liable for retaliation.[74] The appeal to the Second Circuit focused almost entirely on the jury instructions.[75] Specifically, the instruction’s explanation of the “contributing factor” element, which “did not [describe] retaliatory intent as [necessary to] a section 1514A claim.”[76] UBS argued that the trial court erred by not instructing the jury that a plaintiff must show proof of retaliatory intent.[77]

The Second Circuit agreed with UBS, holding that a showing of retaliatory intent is required to satisfy the “contributing factor” element.[78] The court based its holding “on the plain meaning of the statutory language and [its] interpretation of a nearly identical statute . . . .”[79] The court focused its attention primarily on the word “discriminate” and the phrase “because of” in the statutory text.[80] In doing so, it determined that the statute 

[P]rohibits discriminatory actions caused by—or “because of”—whistleblowing, and [that] actions are “discriminat[ory]” [only] when they are based on the employer’s conscious disfavor of an employee for whistleblowing.[81]

Thus, the definition of “discriminatory” ultimately led the court to determine that the statute’s plain text indicated “that retaliatory intent is required to sustain a SOX antiretaliation claim.”[82]

The Second Circuit, albeit in a footnote, acknowledged that its holding was inconsistent with the view of both the Fifth and Ninth Circuits.[83] Seemingly to address this divide, the court looked to its interpretation of another statute, the Federal Railroad Safety Act (“FRSA”), to bolster its argument and provide evidence of its alignment with other circuits.[84] According to the court, the statute contains a “nearly identical” antiretaliation provision.[85] The relevant statutory text reads as follows:

A covered railroad carrier “may not discharge, demote, suspend, reprimand, or in any other way discriminate against an employee if such discrimination is due … to the employee’s lawful … act done … to provide information … regarding any conduct which the employee reasonably believes constitutes a violation of any [federal law].”[86] 

The court noted that in an earlier case, Tompkins v. Metro N. Commuter R.R. Co., 983 F.3d 74 (2d Cir. 2020), the court determined, “point[ing] to the [statutory] language specifically referencing discrimination,” that some proof of retaliatory intent is necessary to a successful claim under the FRSA.[87] The court noted that both the Seventh and Eighth Circuits agree with its interpretation of the FRSA.[88] Thus, the statute’s plain text and the court’s interpretation of the FRSA compelled the Second Circuit to break from the Fifth and Ninth Circuits in interpreting section 1514A.[89] 

B.  The Correct Reading of the Statute Does Not Require a Showing of Retaliatory Intent

“Judges [take] a variety of approaches to resolving the meaning of a statute.”[90] Judges often look to “the ordinary meaning of the statutory text,” the statute’s purpose (i.e., “the broader statutory context”), “the legislative history,” as well as various canons of construction.[91] This Note will analyze section 1514A utilizing each approach, taken one by one. Part A analyses the ordinary meaning of the statute. Part B examines the broader statutory context. Part C discusses the statute's purpose and legislative history. Part D, then, looks to other employer retaliation provisions for guidance.

i.  Analyzing Section 1514A’s Ordinary Meaning

Given the ambiguity of the statute, the ordinary meaning of section 1514A does little to resolve the circuit split. In examining the ordinary meaning, it is worth dissecting the Second Circuit's proposition that "the plain meaning of the statutory language makes clear that retaliatory intent is an element of a section 1514A claim."[92] If such a proposition were true, the inquiry into whether the statute requires a showing of intent would end because, as the court states, "[i]f . . .  statutory language is unambiguous . . . the inquiry [into its meaning] ceases."[93]

The Second Circuit relied on dictionaries to determine that the statute's use of the word "discriminate" necessitated a showing of retaliatory intent.[94] The court also discussed the definition of the phrase “because of.”[95] This phrase and its meaning will be discussed further in section D of this Note. To support its claim, the court cited the definition of "discriminate" in Webster's II New Riverside University Dictionary,[96] which defined the term as "[t]o act on the basis of prejudice."[97] In a parenthetical, the court also cited The New Oxford American Dictionary, which similarly provided that to discriminate is to "make an unjust or prejudicial distinction in the treatment of different categories of people."[98] The Second Circuit's interpretation seemingly turned on the inclusion of the word prejudice in both definitions. The court opined that prejudice "requires a conscious decision to act based on a protected characteristic or action."[99]

Such an interpretation is feasible. Beyond the court's reasoning, it finds support in an excerpt from Black's Law Dictionary ("Black's"), which notes that "the current political use of the term[, discrimination] is . . . non-neutral, [and] pejorative."[100] Thus, it would not be inherently inaccurate to describe the "ordinary meaning" of the word as requiring a sort of active disfavor. Nevertheless, the Second Circuit's reading of the statute fails to dispense with all ambiguity.  

An ambiguity exists when a statute is "capable of being understood in two or more possible senses or ways."[101] To that end, reaching a different conclusion is possible by looking only at different definitions. Black's defines "discrimination" as "a failure to treat all persons equally when no reasonable distinction can be found between those favored and those not favored."[102] Furthermore, Black's provides an excerpt bolstering its definition, which states that "The dictionary sense of 'discrimination' is neutral . . . ."[103] Thus, the text of section 1514A can also be interpreted to prohibit discriminatory actions—actions that result in the "failure to treat all persons equally"—because of whistleblowing.[104] Under this interpretation, the analysis of whether unequal treatment has occurred is neutral and need not consider disparagement or whether it was belittling.[105] Therefore, because the statutory language of section 1514A is ambiguous, further inquiry into its meaning is necessary. 

ii.  Examining the Broader Statutory Context

To that end, the specificity by which Congress identified the applicable burdens of proof under a section 1514A claim and an analysis of said burdens strongly support the Fifth and Ninth Circuits’ view that a showing of retaliatory intent is not required. When an interpretation of a statute turns on “the meaning of only a few words,” courts often look to “the full statutory context” for guidance.[106]

Congress was specific in its formulation of how to appropriately enforce section 1514A. Regardless of where the complaint receives review, Congress intended the "burdens of proof which . . . govern[] in the Department of Labor . . . to govern the action."[107] To that end, the Department of Labor regulations provide precise guidelines. According to the regulations:

A [section 1514A] complaint will be dismissed unless the complainant has made a prima facie showing that a protected activity was a contributing factor in the adverse action alleged in the complaint . . . . [A complaint makes this prima facie showing if it] alleges the existence of facts and either direct or circumstantial evidence . . . [that] give rise to an inference that the respondent knew or suspected that the employee engaged in protected activity and that the protected activity was a contributing factor in the adverse action. [Allegations of facts and circumstantial evidence, such as] . . . if the complaint shows that the adverse personnel action took place within a temporal proximity after the protected activity, or at the first opportunity available . . ., giv[es] rise to the inference that it was a contributing factor in the adverse action.[108]

The Ninth Circuit's analysis of the "contributing factor" element mirrors the Department of Labor's regulations. The court in Coppinger-Martin took a totality of the circumstances approach, looking to the temporal relationship between the "adverse employment action" and the "protected activity," as well as "dramatic change[s]" in the plaintiff's employment evaluations after the plaintiff engaged in "protected activity."[109] Not only does such an approach match the Department of Labor's articulation of the proof necessary to make a prima facie showing, but it also aligns with the Fifth Circuits' articulation that "any factor, which . . . tends to affect in any way" the employer's "adverse action" is a "contributing factor."[110] Thus, an analysis of the burdens, specifically identified by Congress as part of the statutory scheme, relevant to a section 1514A claim strongly supports the view that a showing of retaliatory intent is not required.

iii.  The Purpose & Legislative History of Section 1514A

Moreover, the purpose of section 1514A as a mechanism to improve corporate accountability strongly supports the Fifth and Ninth Circuits' interpretation of the statute. The legislative history of section 1514A provides critical insight into its purpose. Senator Leahy, a sponsor of the amendment that, in part, became the whistleblower provision, stated in response to Enron, Congress must “make sure that there are adequate doses of accountability in our legal system to prevent such occurrences in the future, and to offer a constructive remedy . . . should they occur.”[111] In that same report, he cleverly remarked that the provision was one of many intended to "ensure that . . . greed does not succeed."[112] In other words, Congress intended section 1514A to act as an important mechanism for accountability and transparency to combat fraud and rebuild trust in the United States economy.

That purported purpose finds additional support in excerpts from the Senate Floor regarding the need for an amendment that included section 1514A. The House passed a version of SOX before the Senate, which failed to include protections for whistleblowers.[113] Senator Boxer, echoing the sentiment of many of her Senate colleagues, considered the House bill "weak and . . . [not capable of] get[ting] the job done."[114] Senator Kohl further articulated this view.[115] He noted, "It is not enough to challenge corporate America to do better [and] [w]e must make clear that there is a cost to engaging in accounting and securities fraud."[116] Boxer felt that including section 1514A provided "the necessary teeth to clamp down on corporate irresponsibility."[117]

The Second Circuit's interpretation of section 1514A rids the provision of its "teeth." It is a simple truth that "an employee rarely is able to produce direct evidence of the retaliatory motive behind an employer's adverse actions."[118] Employees often cannot access the information and documentation necessary to show such an intent. Moreover, most employers, aided by their lawyers, are much too sophisticated to allow for the existence of a "smoking gun." It is hard to imagine how section 1514A could lead to greater accountability and transparency if it enables employers to retaliate against whistleblowing employees as long as they never say as much.

These statements are not mere conjecture. Congress considered the relative sophistication of the parties to a retaliation claim in passing section 1514A.[119] In addressing the patchwork of state laws protecting corporate employees that reported fraud before SOX, the Senate, in a Judiciary Committee Report, recognized that the "vagaries" in state law allowed "most . . .  employers, with help from their lawyers, [to] know exactly what they [could] do to a whistleblowing employee" without violating the law.[120] Requiring a whistleblowing employee to show proof of a retaliatory motive will allow for the resurgence of Congress's problem with existing state laws. Employers will escape liability simply by carefully drafting their communications with a whistleblowing employee to eliminate evidence of a wrongful motive. In short, the Second Circuit's interpretation will allow for instances where greed will succeed.

On the other hand, the Fifth and Ninth Circuits' approach to section 1514A gives the provision "teeth." Again, Congress considered whistleblowers a crucial part of ensuring accountability for corporate fraud and greed; Senator Cleveland said, "[i]t is the duty of officers and directors … to blow the whistle when they know there is wrongdoing."[121] Accountability, otherwise, is less likely to occur. Senator Leahy clearly expressed this sentiment, stating, "[Congress] can put whatever criminal law [it] wants on the books but unless there are witnesses who are not scared to help prosecutors prove what happened no one will be held accountable."[122] Employees can only feel safe blowing the whistle if it is clear they will have protection from retaliation. Thus, for SOX to properly "clamp down on corporate irresponsibility,"[123] Section 1514A must stand for the proposition that "[r]egardless of the official’s motives, personnel actions against employees should quite simply not be based on . . . whistleblowing."[124] Thus, the purpose of the provision, to serve as a mechanism to aid in accountability, strongly supports the Fifth and Ninth Circuits' interpretation of the statute.

iv.  Looking to Other Employer Retaliation Provisions for Guidance

Finally, it is important to consider other employer retaliation provisions in interpreting section 1514A. Courts interpret similar statutes similarly unless the text, "legislative history[,] or purpose suggests material differences."[125] Here, the Supreme Court’s interpretation of Title VII supports a determination that section 1514A does not require a showing of retaliatory intent. 

The Supreme Court’s interpretation of Title VII strongly supports the Fifth and Ninth Circuits’ approach. In University of Texas Southwestern Medical Center v. Nassar, the Court determined that "Title VII retaliation claims require proof that the desire to retaliate was the but-for cause of the . . . employment action."[126] A showing of but-for causation is, practically speaking, the same as a showing of proof of retaliatory motive. The Court determined that the inclusion of the word "because" in Title VII's retaliation provision "require[d] proof that the desire to retaliate was the but-for cause . . . ."[127] The Second Circuit made a similar argument in Murray.[128] Thus, at first blush, the Supreme Court's understanding of Title VII seemingly supports the Second Circuit's view of section 1514A. After considering the Supreme Court's opinion further, however, it is clear that Nassar actually endorses the Fifth and Ninth Circuit's approach. 

The Nassar Court distinguished Title VII "status-based discrimination claims" from Title VII "unlawful employer retaliation" claims.[129] 42 U.S.C. § 2000e-2 is the relevant statute for status-based claims.[130] On the other hand, 42 U.S.C. § 2000e-3 governs unlawful employer retaliation.[131] Notably, notwithstanding both statutes' inclusion of the word "because," the Court determined that "[a]n employee who alleges status-based discrimination under Title VII need not show" but-for causation.[132] The Court ignored its textualist interpretation of “because” due to Congress's codification of a "burden-shifting and lessened causation framework" in section 2000e-2.[133]

The Nassar Court created a very workable standard—including the word "because" in discrimination and retaliation provisions requires a showing of retaliatory intent or "but-for" causation unless Congress specified otherwise.[134] In section 1514A, Congress did just that.[135] As discussed in detail above, section 1514A(b)(2)(C) provides that claims under section 1514A will operate under a burden-shifting framework.[136] Moreover, the provision, albeit not as directly as section 2000e-2, calls for lessened causation. Section 1514A(b)(1) requires employees to first file complaints under the provision with the Secretary of Labor, and only "if the Secretary has not issued a final decision within 180 days of the filing of the complaint" may the employee bring an action in federal district court.[137] Regardless, however, of where the section 1514A claim ultimately receives review, Congress intended the burdens of proof established by the Department of Labor to govern.[138] The Department of Labor's requirement for "causation" is merely a showing that "[t]he circumstances were sufficient to raise the inference that the protected activity was a contributing factor in the adverse action."[139] This burden can be satisfied by showing evidence as slight as temporal proximity between the protected activity and the adverse personnel action.[140] Therefore, it does not require employees to show "proof that the desire to retaliate was the but-for cause of the challenged employment action."[141] Thus, because Congress specified otherwise, the inclusion of the word "because" in section 1514A does not require a showing of retaliatory intent. 

Conclusion

SOX, especially section 1514A, embodies Congress's attempt to "clamp down"[142] on securities fraud and corporate greed. The whistle-blower provision provides an effective and consistent mechanism for achieving that purpose and providing accountability. To that end, the "contributing factor" element must be interpreted not to require a showing of retaliatory intent. To interpret the statute otherwise rids the provision of its "teeth"[143] and disregards Congress's explicit designation of the burdens of proof applicable to a section 1514A claim.

I J.D. Expected 2024, University of Kentucky J. David Rosenberg College of Law; BSBA Marketing 2021, University of Louisville

[2] Harold S. Bloomenthal & Samuel Wolff, Sarbanes-Oxley Act in Perspective ch. 1, pt. 2, § 1:10 (2021–2022 ed. 2021).

[3] U.S. Securities and Exchange Commission, What Did the Sarbanes-Oxley Act do? | Office Hours with Gary Gensler, YouTube (Aug. 2, 2022), https://www.youtube.com/watch?v=eJChWPaOMJo [https://perma.cc/2MAE-KPBV].

[4] Bloomenthal & Wolff, supra note 2, at ch. 14, pt.1, § 14:1 (citing 18 U.S.C. § 1514A).

[5] S. Rep. No. 107-146, at 2, 18–19 (2002).

[6] See generally Bloomenthal & Wolff, supra note 2, at ch. 14, pt. 1, § 14:1 (discussing Senator discourse and multiple case holdings).

[7] See, e.g., Murray v. UBC Securities L.L.C., 43 F.4th 254, 257-258 (2d Cir. 2022); Coppinger-Martin v. Solis, 627 F.3d 745, 750 (9th Cir. 2010); Halliburton, Inc. v. Admin. Rev. Bd., 771 F.3d 254, 259 (5th Cir. 2014).

[8] Murray v. UBC Securities L.L.C., 43 F.4th 254 (2d Cir. 2022); see also Bradley J. Bondi, Cyrus N. Bordbar & Jason M. Ecker, United States: Second Circuit Requires Proof Of Retaliatory Intent In Sarbanes-Oxley Whistleblower Claim, mondaq (Sept. 13, 2022), https://www.mondaq.com/unitedstates/whistleblowing/1229540/second-circuit-requires-proof-of-retaliatory-intent-in-sarbanes-oxley-whistleblower-claim [https://perma.cc/VS9D-AEMU] (discussing how the Second Circuit in Murray created a circuit split).

[9] See Murray, 43 F.4th at 258, 261, n.7.

[10] CNN Editorial Research, Enron Fast Facts, CNN (Apr. 12, 2023, 2:52 PM), https://www.cnn.com/2013/07/02/us/enron-fast-facts/index.html [https://perma.cc/X3B9-R5Z5].

[11] Adam Hayes, What Was Enron? What Happened and Who Was Responsible, Investopedia (Mar. 28, 2023), https://www.investopedia.com/terms/e/enron.asp#:~:text=Enron%20was%20an%20energy%20company,and%20bankruptcy%20in%20recen t%20history [https://perma.cc/U3CJ-76UM]. 

[12] See id.

[13] Id.

[14] Enron Fast Facts, supra note 10.

[15] Id.

[16] Id.

[17] U.S. Securities and Exchange Commission, supra note 3.

[18] Id.

[19] Bloomenthal & Wolff, supra note 2, at ch. 1, pt. 2, § 1:09.

[20] See id.

[21] U.S. Securities and Exchange Commission, supra note 3.

[22] Will Kenton, Sarbanes-Oxley Act: What it Does to Protect Investors, Investopedia (May 8, 2022), https://www.investopedia.com/terms/s/sarbanesoxleyact.asp [https://perma.cc/9DEY-SWD8].

[23] U.S. Securities and Exchange Commission, supra note 3.

[24] 18 U.S.C. § 1514A(a)(1) (2010).

[25] § 1514A(b)(1).

[26] § 1514A(b)(2)(C).

[27] Coppinger-Martin v. Solis, 627 F.3d 745, 750 (9th Cir. 2010).

[28] 49 U.S.C. § 42121(b)(2)(B)(i).

[29] Coppinger-Martin, 627 F.3d at 750 (citing 29 C.F.R. § 1980.104(b)(1)).

[30] Id. (citing 49 U.S.C. § 42121(b)(2)(B)(ii); 18 U.S.C. § 1514A(b)(2)(C)).

[31] 43 F.4th 254 (2d Cir. 2022).

[32] Id. at 256.

[33] Halliburton, Inc. v. Admin. Rev. Bd., 771 F.3d 254, 263 (5th Cir. 2014); see also Coppinger-Martin, 627 F.3d at 750 (“A prima facie case does not require that the employee conclusively demonstrate the employer’s retaliatory motive.”).

[34] Pinchos (Pinny) Goldberg & Alisha A. Bruce, Second Circuit: SOX Whistleblower Claims Require Retaliatory Intent, Nat’l L. Rev. (Sept. 13, 2022), https://www.natlawreview.com/article/second-circuit-sox-whistleblower-claims-require-retaliatory-intent [https://perma.cc/U2MG-DPG2].

[35] Halliburton, 771 F.3d at 263.

[36] Id. at 255–56.

[37] Id. at 255–57.

[38] Id. at 255.

[39] Id.

[40] Id. at 255.

[41] Id.

[42] Id. at 257.

[43] Id.

[44] Id.

[45] Id.

[46] Id.

[47] Id.

[48] Id.

[49] Id. at 258.

[50] Id. at 259.

[51] Id.

[52] Id.

[53] Id.

[54] Id. at 262.

[55] Id. at 263 (quoting Allen v. Admin Rev. Bd., 514 F.3d 468, 476, n. 3 (5th Cir. 2008)).

[56] Id.

[57] Id. at 262–63.

[58] Id. at 263.

[59] Id.

[60] Murray v. UBC Securities L.L.C., 43 F.4th 254, 258 (2d Cir. 2022).

[61] Id. at 256.

[62] Id.

[63] Id.

[64] Id. at 256–57.

[65] Id. at 256.

[66] Id. at 257.

[67] Id.

[68] Id. 

[69] Id.

[70] Id.

[71] Id.

[72] Id.

[73] Id.

[74] Id. at 258.

[75] Id.

[76] Id.

[77] Id.

[78] Id. at 258–60.

[79] Id. at 258.

[80] Id at 259.

[81] Id.

[82] Id.

[83] Id. at 261, n.7.

[84] Id. at 260, 261, n.7.

[85] Id. at 260.

[86] Id. at 260 (quoting 29 U.S.C. § 20109(a)).

[87] Id. at 261.

[88] Id. at 261, n.7.

[89] Id. at 262–63.

[90] Valerie Brannon, Cong. Rsch. Serv., R45153, Statutory Interpretation: Theories, Tools, and Trends 2 (2018).

[91] Id. at 2–3.

[92] Murray, 43 F.4th at 258–259.

[93] Id. at 259.

[94] Id.

[95] Id.

[96] Id.

[97] Id.

[98] Id.

[99] Id.

[100] Discrimination, Black’s Law Dictionary (11th ed. 2019).

[101] Ambiguous, Merriam-Webster, https://www.merriam-webster.com/dictionary/ambiguous [https://perma.cc/98MB-6CZ9] (last visited Mar. 14, 2023).

[102] Discrimination, supra note 100.

[103] Id.

[104] Id.; See supra text accompanying notes 80–82.

[105] Discrimination, supra note 100; Pejorative, Merriam-Webster, https://www.merriam-webster.com/dictionary/pejorative [https://perma.cc/4AHJ-V7GE] (last visited Mar. 14, 2023).

[106] Brannon, supra note 90, at 25.

[107] S. Rep. No. 107-146, at 19–20 (2002).

[108] 29 C.F.R. § 1980.104(e)(1), (3) (2022).

[109] Coppinger-Martin v. Solis, 627 F.3d 745, 751 (9th Cir. 2010).

[110] Halliburton, Inc. v. Admin. Rev. Bd., 771 F.3d 254, 263 (5th Cir. 2014).

[111] S. Rep. No. 107-146, at 11 (2002).

[112] Id. at 2.

[113] See 148 Cong. Rec. S6759 (daily ed. Jul. 15, 2002) (statement of Sen. Barbara Boxer).

[114] Id.

[115] Id. at S6758 (statement of Sen. Herbert H. Kohl).

[116] Id.

[117] Id. at S6759 (statement of Sen. Barbara Boxer).

[118] Melanie M. Poturica & Liebert Cassidy Whitmore, Retaliation: So Many Laws, So Little Time (Speaking of Time, Is Temporal Proximity All a Plaintiff Needs?), casetext (Jun. 30, 2011), https://casetext.com/analysis/retaliation-so-many-laws-so-little-time-speaking-of-time-is-temporal-proximity-all-a-plaintiff-needs [https://perma.cc/5Z9G-Z7YJ].

[119] See S. Rep. No. 107-146, at 17 (2002).

[120] Id. at 19.

[121] 148 Cong. Rec. S6754 (daily ed. July 15, 2002) (statement of Sen. Max Cleland).

[122] Id. at S6768 (statement of Sen. Patrick Leahy).

[123] Id. at S6759 (statement of Sen. Barbara Boxer).

[124] Halliburton, Inc. v. Admin. Rev. Bd., 771 F.3d 254, 263 (5th Cir. 2014).

[125] Brannon, supra note 90, at 58 n.588.

[126] Univ. of  Tex. Sw. Med. Ctr. v. Nassar, 570 U.S. 338, 352 (2013).

[127] Id. at 352.

[128] See Murray v. UBS Sec., LLC, 43 F.4th 254, 259 (2nd Cir. 2022).

[129] Nassar, 570 U.S. at 343, 351–52.

[130] 42 U.S.C. § 2000e-2 (1991).

[131] 42 U.S.C. § 2000e-3 (1972).

[132] Nassar, 570 U.S. at 343.

[133] Id. at 348–50.

[134] Id. at 347–52.

[135] 18 U.S.C § 1514A(b)(2)(C); see S. Rep. No. 107-146, at 13 (2002).

[136] See § 1514A(b)(2)(C).

[137] See § 1514A(b)(1).

[138] S. Rep. No. 107-146, at 19–20 (2002).

[139] 29 C.F.R. § 1980.104(e)(2)(iv) (2022).

[140] See 29 C.F.R. § 1980.104(e)(3).

[141] Univ. of Tex. Sw. Med. Ctr. v. Nassar, 570 U.S. 338, 352 (2013).

[142] 148 Cong. Rec. S6759 (daily ed. July 15, 2002) (statement of Sen. Barbara Boxer).

[143] Id.

The Permissible Scope of Releases Within FELA Claims

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The Permissible Scope of Releases Within FELA Claims

Kaylee Secor I

I.  Introduction

The Federal Employers’ Liability Act (FELA), enacted in 1908 and codified as 45 U.S.C. §§ 51–60, established liability for railroads if the railroad’s negligence causes an employee’s injury or death.[2] Section 5 of FELA provides that “any contract, rule, regulation, or device whatsoever, the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter shall to that extent be void[.]”[3] The language in Section 5 creates uncertainty as to whether certain releases of FELA claims are enforceable. A three-way circuit split has developed between the Sixth, Third, and Fifth Circuits concerning whether a release that extinguishes future claims regarding undiagnosed injuries is valid under FELA.[4] The Supreme Court of the United States has failed to rule on this particular issue but has ruled in general that releases are not per se invalid.[5]

This Note discusses the scope of releases and their validity under FELA while arguing that the Supreme Court should adopt the Third Circuit’s fact-intensive standard for determining whether a release is valid under Section 5.[6] The Third Circuit’s approach seems to allow employers and employees to settle the controversy on their own terms while safeguarding employees from waiving unknown claims. Part II of this Note discusses the history of the Supreme Court’s case law surrounding releases under FELA. Part III analyzes the three-way circuit split between the Sixth, Third, and Fifth Circuits and discusses case law that has developed around the split. Finally, Part IV explores why the Supreme Court should adopt the Third Circuit’s fact-intensive standard and why it should not adopt the other circuit’s approaches. 

II.  History of the Supreme Court’s Interpretation of Releases Under FELA

The purpose of FELA, as established by 45 U.S.C. § 51, is to hold every common carrier by railroad liable for the injuries of an employee due to the carrier’s negligence.[7] Also, according to Section 5, any contract that attempts to exempt a common carrier from FELA liability is void.[8]  After FELA was adopted, the Supreme Court of the United States began to set the outer limits of Section 5.[9]

A.  The Supreme Court Upholds the Validity of Section 5 of FELA

In Mondou v. N.Y., New Haven, & Hartfield R.R. Co., the Supreme Court upheld Section 5 as valid and noted that “if Congress possesses the power to impose that liability … it also possesses the power to insure its efficacy by prohibiting any contract, rule, regulation or device in evasion of it.”[10] Later that same year, in Philadelphia, Baltimore & Washington Railroad Co. v. Schubert, the Supreme Court found that an employee’s application for a relief fund membership that stipulated the employee’s receival of benefits constituted a release of all claims against the employer and was invalid under Section 5.[11] The Court reasoned that the stipulation was an attempt by the employer to avoid liability through contract, which violates FELA.[12]

B.  The Supreme Court Determines that Releases are not Per Se Invalid

The Supreme Court, however, has acknowledged an exception to Section 5’s rule against exempting an employer’s liability through contract.[13] In Callen v. Pennsylvania Railroad Co., the plaintiff brought an action under FELA for injuries that he sustained due to his employer’s alleged negligence.[14] After the plaintiff’s injuries, he signed a release exempting his employer from liability for the injuries he sustained during the accident and in exchange the plaintiff received two hundred and fifty dollars.[15]

In Callen, the Supreme Court held that a release is not a way for an employer to exempt itself from liability but is rather a “means of compromising a claimed liability and to that extent recognizing its possibility.”[16] The Court’s opinion in Callen also acknowledges that when there are controversies surrounding whether liability exists or how much exists, Congress has not said that an employer and its employee cannot settle their dispute without litigation.[17] Thus, a release is not per se invalid and can survive Section 5 if it is executed “as part of a settlement of disputed liability for work-related injuries.”[18]

It is disputed as to what precisely qualifies as “compromising a claimed liability,” but employers and employees can settle their disputes whenever there are controversies surrounding liability.[19] The only “explicit requirement” is that there must be an actual controversy that the employer and employee are trying to settle.[20] The circuit split between the Sixth, Third, and now the Fifth Circuit revolves around what qualifies as a “controversy” as stated in Callen, with each circuit finding the meaning of the word to be slightly different. 

III.  Different Interpretations of the Enforceability of Releases Under FELA

Despite the Supreme Court’s rulings on Section 5 and releases under FELA, there seems to be disagreement on the proper application of this section and what can be included in releases.[21] This disagreement has led to the three-way circuit split between the Sixth, Third, and Fifth Circuit.[22] The Sixth Circuit, in Babbitt v. Norfolk & Western Railway Co., created a bright-line rule in which releases are limited to injuries known to the employee at the time the release agreement is signed.[23] The Third Circuit, in Wicker v. Consolidated Rail Corp., rejected the Sixth Circuit’s bright-line rule and created a “known risk” or “fact-intensive” standard in which releases are limited to “risks which are known to the parties at the time the release is signed.”[24] In an unpublished opinion, Mendoza-Gomez v. Union Pacific Railroad Co., the Fifth Circuit rejected both standards set forth by the Sixth and Third Circuits and, by looking to the plain language of the release, created a standard with virtually no limits.[25]

A.  The Sixth Circuit’s Bright-Line Rule Allowing for Only Known Injuries Within Releases

In Babbitt, the Sixth Circuit was one of the first circuits to establish a standard to determine whether railroads could absolve themselves from liability of “known or unknown” claims through a general release.[26] The plaintiffs in Babbitt were former employees of Norfolk & Western Railway Company and were seeking damages under FELA.[27] The plaintiffs alleged they experienced hearing loss because of their exposure to excessive noise during their employment.[28]

When the plaintiffs left Norfolk, they signed a “Resignation and Release Agreement,” which was a part of Norfolk’s “Voluntary Separation Program.”[29] The program included early retirement, a “lump sum payment,” and “continuation of health, and other benefits.”[30] Norfolk argued that the Release “was an attempt to settle all claims as part of the cessation of a worker’s employment relationship with the railroad” and that the purpose was for the railroad to “‘buy its peace’” from former employees.[31] Norfolk argued that the Release barred the plaintiffs’ claims because the plaintiffs knew of their claims before the Release was signed.[32] On the other hand, the plaintiffs contend that they did not know of their claims until they no longer worked for Norfolk.[33]

The Sixth Circuit began its analysis by looking at the language of FELA and, in doing so, the court determined that “the purpose of FELA, as stated in 45 U.S.C. §§ 51 and 55, is to require negligent railroads to assume liability for injuries to employees in the course of their employment.”[34] The court goes on to acknowledge the exception to Section 5, as laid out in Callen, that “FELA claims can have the same effect as any other release, in that it may constitute a settlement or compromise, rather than an attempt to escape liability.[35] Focusing on the release at issue in Callen, the Sixth Circuit found that “the employer and employee executed a contract that settled an actual controversy, i.e., liability for the plaintiff’s specific injuries.”[36]

The Sixth Circuit adopted a rule stating that for a release to be valid it must “reflect a bargained-for settlement of a known claim for a specific injury,” rather than act as an attempt on the employer’s behalf to extinguish an employee’s future claims arising out of injuries that may be “known or unknown” to the employee.[37] The Sixth Circuit reversed the district court’s summary judgment in favor of Norfolk and remanded the case to the district court because the district court did not determine if the release executed was for the specific injuries regarding the plaintiffs’ hearing loss.[38]

The rule adopted by the Sixth Circuit in Babbitt is known as the “bright-line rule approach,” meaning that a release can only be valid for “the specific injury at issue and cannot go beyond that specific injury to any other injury or conditions that may later develop.”[39] Other federal circuit courts and lower courts have declined to follow the Sixth Circuit’s bright-line rule approach, making this approach one of the least favored outside of the Sixth Circuit.[40]

B.  The Third Circuit’s Fact-Intensive Standard Allowing for Known Injuries and Known Risks Within Releases

Only one year after the Sixth Circuit’s opinion in Babbitt, the Third Circuit adopted its own approach in determining whether a release is valid under Section 5 of FELA.[41] In Wicker v. Consolidated Rail Corp., the Third Circuit rejected the Sixth Circuit’s bright-line rule and created the initial circuit split by adopting a fact-intensive standard to determine the enforceability of releases.[42] The plaintiffs in Wicker were all injured during their employment at Consolidated Railroad Corporation (Conrail).[43] Most of the plaintiffs signed a release that exempted Conrail from any liability for past or future claims the plaintiffs may have, regardless of whether the claims or injuries were known or unknown by the plaintiffs at the time.[44]

After the plaintiffs signed the releases and left Conrail, they began to experience injuries unrelated to the initial injury for which they signed the release.[45] For example, one plaintiff suffered from a back injury that occurred during his employment and signed a release.[46] The plaintiff testified exposure to toxic chemicals during his employment at Conrail caused him to experience many symptoms, such as “swollen eyes, infected tear ducts, nosebleeds,” etc.[47] The plaintiff claimed that some of the symptoms were present when he signed the release, however, many of the symptoms were developments that occurred after the release was executed.[48]

The plaintiffs each brought a FELA suit against Conrail for alleged exposure to toxic chemicals during the duration of their employment, causing each of them various injuries.[49] Conrail argued that the plaintiffs’ claims were barred because of the releases that each plaintiff signed.[50] The plaintiffs argued that the releases only barred claims relating to their initial injuries at the time of signing the release and that the releases were not valid under Section 5.[51]

The Third Circuit’s approach involved a compromise between protecting employees’ FELA rights while, at the same time, allowing employers and employees to settle controversies through contracts about potential liability relating to known risks of future injuries.[52] The Third Circuit held that Section 5 is not violated if a release “is executed for valid consideration as part of a settlement, and the scope of the release is limited to those risks which are known to the parties at the time the release is signed.”[53] The Third Circuit goes on to say that claims regarding unknown risks cannot be waived under Section 5 because they “do not constitute ‘controversies,’” as acknowledged in Callen.[54]

The Third Circuit specifies that:

a release that spells out the quantity, location and duration of potential risks to which the employee has been exposed—for example toxic exposure—allowing the employee to make a reasoned decision whether to release the employer from liability for future injuries of specifically known risks does not violate § 5 of FELA.[55]

The court notes, however, that the validity of a release does not turn on the way the release is written, even though a release that specifies the known risks would serve as strong support for the release defense.[56] There was concern that employers could easily write “detailed boiler plate agreements” that “include an extensive catalog of every chemical and hazard known to railroad employment.”[57] In response, the court resorts to an additional “fact-intensive process” that involves discerning the parties’ intent when executing the release.[58] The court goes on to say that “[w]here a specific known risk of malady is not mentioned in the release, it would seem difficult for the employer to show it was known to the employee and that he or she intended to release liability for it.”[59]

The Third Circuit found that the releases in question were not valid because there was no demonstration that the employees knew of the risks that they were exposed to and the releases attempted to settle all the claims against Conrail regardless of whether or not the parties knew about the risks.[60] For example, some of the releases at issue were “short, pro forma waivers,” and did not indicate any negotiation between the parties other than the settlement amount.[61] Other examples of releases that were signed by the plaintiffs were “more detailed, blanket releases” that attempted to exempt Conrail from all potential liabilities.[62] Overall, none of the releases demonstrated that “the employees knew of the actual risks to which they were exposed and from which the employer was being released.”[63]

The court acknowledges that Babbitt’s bright-line rule is more predictable than the fact-intensive standard set forth, however, the court believes that the trial courts are able to apply the fact-intensive process to determine the parties’ intent and whether the release is valid.[64] The standard announced by the Third Circuit in Wicker is known as the “known risk or fact-intensive standard,” meaning that a release is valid if it was a “negotiated settlement of a controversy that is limited to those injuries and risks that are known to the parties’ at the time the release is executed.”[65]

Many lower courts have adopted the Third Circuit’s fact-intensive approach, making it the more popular standard for determining whether a release is valid under Section 5.[66] Even the Eleventh Circuit adopted the Third Circuit’s fact-intensive approach in Sea-Land Serv., Inc. v. Sellan.[67] The plaintiff in Sea-Land was an employee who experienced lower back pain while aboard one of Sea-Land’s ships.[68] Sea-Land paid all of the plaintiff's medical expenses, including surgery, however, the plaintiff was deemed permanently disabled and unable to perform his duties.[69] The parties signed a release and a “‘Settlement Agreement Not to Sail or Work’” and in exchange, Sea-Land paid the plaintiff $364,500.[70]

The agreement stated that the plaintiff agreed to “not work, sail and/or navigate, and/or seek to sail, navigate or work, in any capacity, including shore relief, aboard vessels owned, managed, and/or operated by Sea-Land Service, Inc., and/or any of its affiliates and/or subsidiaries, in the future.”[71] If the plaintiff was eventually able to come back to work for Sea-Land, the agreement stated that “he shall do so at his own risk, and the company will bear no responsibility for an illness and/or injuries he may suffer while in service aboard any such vessel.”[72]

Two years later, the plaintiff received a union physical to determine his duty status and was deemed fit for duty, but he did not inform the doctor who performed the physical of his medical history.[73] After the plaintiff returned as an employee at Sea-Land, he reported that he re-injured his back.[74] Sea-Land brought suit to obtain a judgment that declared the agreement between the parties enforceable, so the plaintiff could not seek damages for his re-injured back.[75] The district court found in favor of Sea-Land and ruled that the agreement was enforceable under FELA.[76] Relying on the Sixth Circuit’s approach, the plaintiff appealed to the Eleventh Circuit arguing that the agreement violates Section 5 of FELA because the agreement “exempts Sea-Land, a common carrier, from liability under the Act by releasing it from future claims.”[77]

The Eleventh Circuit adopted the Third Circuit’s standard and said that “cases involving the validity of releases are fact-driven.”[78] The court upheld the district court’s decision that the agreement was enforceable because the agreement forbid “future employment by a totally disabled seaman that would expose him to known and unacceptable risks” and since it was a “valid overall settlement of a specific claim of injury,” the agreement does not violate FELA.[79]

C.  The Fifth Circuit’s New and More Expansive Approach to Releases

A new approach has recently emerged from the Fifth Circuit, in an unpublished opinion, to determine whether a release is valid, creating a three-way circuit split between the Sixth, Third, and Fifth Circuit.[80] In Mendoza-Gomez v. Union Pacific Railroad, the plaintiff was a Union Pacific Railroad (Union) employee and alleged that he encountered exposure to toxic substances while employed there.[81] In 2019, the plaintiff was diagnosed with asbestosis and cancer and, thereafter, filed a FELA suit against Union.[82] Union argued that the plaintiff’s claims were barred because, in 2012, the plaintiff pursued a toxic tort claim against Union and the two parties signed a release to resolve that claim.[83]

The language of the release agreement stated that the plaintiff accepted payment as a “complete compromise” of all claims against Union as a result of the plaintiff's “alleged illnesses, injuries, cancers, future cancers, diseases, and/or death, or any fears or psychological disorders relating to contracting same, as a result of Alleged Exposures while [Mendoza-Gomez] was employed by [Union].”[84] The release included not only claims that the plaintiff knew of at the time of the release, but also ones that could develop after the release was executed.[85] The plaintiff argued that the release was unenforceable under Section 5 because FELA prohibits employers from extinguishing liability through contracts.[86]

The District Court for the Southern District of Texas declined to adopt either of the approaches in Wicker or Babbitt and instead relied on the language of the release agreement finding the release valid.[87] Citing Callen, the district court determined that “[a]greements that allow parties to settle their claims without litigation is a permissible ‘full compromise’ under Section 55.”[88] In determining whether the release was valid under Section 5, the Fifth Circuit relied on the Supreme Court’s decision in Callen, stating that “‘a release is not a device to exempt from liability but is a means of compromising a claimed liability and to that extent recognizing its possibility.’”[89] The Fifth Circuit agreed with the district court’s ruling that the plaintiff’s claims were barred because of the release’s “plain language” regarding what the release encompassed.[90]

The plaintiff tried to draw the Fifth Circuit’s attention to Hartman v. Illinois Railroad Co., a district court case that involved a release similar to the one in Mendoza-Gomez.[91] Applying Wicker, the district court in Hartman found that the release was a “‘boiler-plate list of hazards’” and did not bar the plaintiff’s claims.[92] The Fifth Circuit found that the plaintiff’s case was distinguishable from Hartman.[93] Since the release was specific to the injuries within the plaintiff’s original toxic tort complaint against Union and the injuries he developed years later, including “cancers” and “future cancers,” the court did not find the release to be a “boilerplate list” of injuries unrelated to the plaintiff’s present claims.[94] The Fifth Circuit, instead, found that the release was a contract and the language of the release governed.[95]

Relatively few cases have discussed the Fifth Circuit’s approach in Mendoza-Gomez, however, in Fisher v. BNSF Railway Co., the Court of Appeals of Texas, Fort Worth analyzes the district court’s and Fifth Circuit’s approach to determine the validity of a release.[96] The Court of Appeals of Texas states that the district court granted summary judgment to Union “on the face of the release.”[97] Since the release disclosed future risks on its face, such as cancer relating to asbestos, it was “executed as part of a full compromise of litigation.”[98]

Therefore, the Fifth Circuit’s approach appears to determine whether a release is valid by turning to the language “on the face of the release.”[99] Unlike Wicker, there seems to be no fact-finding performed by the court to determine if the release is valid or if it was the intent of the parties to release the possible risks.[100] Instead, the Fifth Circuit seems to rely heavily on Callen’s language that “a release is not a device to exempt from liability but is a means of compromising a claimed liability and to that extent recognizing its possibility.”[101] Under Babbitt, the release at issue in Mendoza-Gomez would not be found valid and under Wicker, the release would at least create a question of fact.[102] Under the Fifth Circuit’s approach, however, the release is found to be completely valid.[103]

The Fifth Circuit’s approach creates a new split in the federal circuit courts by citing to Callen and holding broadly that Section 5 imposes very few limits on FELA claims.[104] The plaintiff in Mendoza-Gomez filed a Petition for Writ of Certiorari with the Supreme Court of the United States claiming that the case could resolve the circuit split.[105] This could have been the perfect opportunity for the Supreme Court to shed some light on the controversy surrounding FELA claims and releases; however, the Petition was dismissed.[106]

IV.  The U.S. Supreme Court Should Adopt the Third Circuit’s Fact-Intensive Approach to Resolve the Three-Way Circuit Split

The resolution of the three-way circuit split will substantially affect the outcome of FELA cases in the future. If the Supreme Court adopts one of the circuit’s approaches, it will aid workers and common carriers in determining whether or not the release they are trying to execute is valid. Also, the resolution of the three-way circuit split could significantly affect the way common carriers draft releases.[107] By clarifying the proper standard for FELA releases, the Court could “equip the railroad companies with the knowledge of what language they need to include in a FELA release in order for the release to be deemed valid and to protect the employer from liability in additional suits.”[108] Additionally, by adopting one of the three approaches, the Court would finally end the long debate of whether or not the parties are allowed to release only known injuries, known injuries as well as known risks, or even risks that the plaintiff did not intend to release but were found to be included on the face of the release.

Even though the Supreme Court dismissed Mendoza-Gomez’s petition for review,[109] the issue of what standard applies in determining whether a release is valid under Section 5 still exists. The Supreme Court could still choose to rule on this issue if the opportunity presents itself, and if the Court does choose to address the split, it should adopt the Third Circuit’s fact-intensive approach in Wicker. Wicker’s rationale is the best compromise between the three approaches by allowing employers and employees to “negotiate and settle” their claims without litigation[110] and is the most widely adopted approach by a majority of state and federal courts.[111]

A.  Why the Sixth Circuit’s Bright Line Rule Should Not Be Adopted by the U.S. Supreme Court

Although the Sixth Circuit’s bright-line rule has some advantages, the Third Circuit’s fact-intensive standard is superior in many ways. Under Babbitt’s bright line rule, “a release must reflect a bargained-for-settlement of a known claim for a specific injury, as contrasted with an attempt to extinguish potential future claims the employee might have arising from injuries known or unknown by him.”[112] It is clear, and acknowledged by the Third Circuit itself, that the bright line approach presented in Babbitt may be easier to apply than Wicker’s fact-intensive standard and has the “benefit of predictability.”[113] In other words, Babbitt’s rule appears predictable because it only allows employees to sign a release for a specific injury that has already occurred and the employer will know when a release will or will not be considered valid.[114]

Even though it may appear that the Sixth Circuit’s approach provides an easier resolution to the enforcement of releases, the result may actually be a “more complicated inquiry into the exact nature and scope of the injury compromised” or have “a chilling effect on the resolution by compromise of any claims.”[115] For example, the effects of exposure to asbestos “may be latent for a considerable period of time.”[116] Under Babbitt’s approach, a new claim would be permitted against the employer for every new manifestation of asbestos exposure, “regardless of the extent of the parties’ awareness of such risks.”[117] This would result in a decrease in settlements because “there would be no incentive” for the employer to compromise.[118] Therefore, Babbitt’s bright-line rule would require injured workers to litigate claims against negligent employers, resulting in employees waiting long periods of time to receive compensation for their injuries as well as more attorney’s fees due to extended litigation.

Additionally, it can be argued that Babbitt’s bright line rule is more protective of workers as compared to the Third Circuit’s standard because of the “unequal bargaining power” between the employer and the employees.[119] Employers and their attorneys obviously will try to obtain a cheaper settlement of known injuries and known risks, and it is argued that plaintiff attorneys “will be quick to settle in order to get their cut of the settlement with no regard to the future liability claims they are releasing.”[120] Yet, there are at least two reasons why this argument fails.

First, plaintiff attorneys will usually want to obtain the highest settlement possible for the plaintiff because they will receive a percentage of the settlement amount. Just because the employer and its attorney attempt to obtain the lowest settlement amount for themselves, it does not follow that the plaintiff and their attorney will not be successful in procuring a higher settlement. By allowing for a settlement of future known risks, the plaintiff would be able to bargain for an amount that would compensate them for the potential development of those risks. To determine an appropriate amount of compensation, the parties could take into account the probability of the plaintiff developing injuries from these known risks and the cost of treatment if they do develop. Therefore, the parties will have full knowledge of the probability and costs of the known risks, which would counteract the issue of “unequal bargaining power.”

The second reason this argument fails is because Wicker’s fact-intensive standard allows courts to thwart the issue of “unequal bargaining power” between the employer and the employee. Even though Wicker’s fact-intensive standard looks to whether it was the intention of the parties to release known risks,[121] the fact-intensive process could reveal if the employer used its “unequal bargaining power” over the employee to coerce them into signing a release that they actually did not want to sign. Courts should be able to recognize coercion through the fact-intensive process and not allow the release to bar the plaintiff’s claims. In other words, Wicker’s standard is just as protective of workers as Babbitt’s bright line rule.

The Supreme Court should also not adopt the Sixth Circuit’s bright line rule in Babbitt because it is too restrictive and paternalistic. The Sixth Circuit approach limits the plaintiff’s settlement to only known injuries at the time the release is signed even if both parties would rather settle all future claims.[122] “[I]t is entirely conceivable that both employee and employer could fully comprehend future risks and potential liabilities and, for different reasons, want an immediate and permanent settlement.”[123] The employer obviously would want a permanent settlement to reduce the amount of future liabilities it may be subject to.[124] On the other hand, the employee may want an immediate settlement to get compensation for their potential injuries now, rather than waiting on injuries that may or may not develop in the future.[125]

Other federal and state courts have also adopted the Third Circuit’s fact-intensive approach over the Sixth Circuit’s bright-line rule, making it the more popular of the two standards among courts.[126] In Jaqua v. Canadian National Railroad, Inc., the Court of Appeals of Michigan adopted Wicker’s standard and stated that “[t]he rationale in Wicker allows the employer and the employee the freedom to negotiate and settle claims, but protects the employee from releasing the employer for unknown liability that was not considered and resolved in an informed manner.”[127] In Loyal v. Norfolk Southern Corp., the Court of Appeals of Georgia stated that an industry “that has a number of known occupational risks and diseases, it is important to both the employer and employee to be able to settle potential claims regarding injuries or diseases prior to actual discovery.”[128] Also adopting the Third Circuit’s standard, the Supreme Court of Mississippi, in Illinois Central Railroad Co. v. Acuff, found that “Babbitt’s rule barring the release of future claims unfairly restricts the ability of an employer and employee to knowingly and voluntarily settle both current and future claims, should the parties so desire.”[129]

Overall, the Supreme Court should not adopt the Sixth Circuit’s bright-line rule because of its many disadvantages. Babbitt’s ruling is too restrictive of the employees' ability to release known risks if they choose to do so.[130] Allowing releases only for known injuries may also decrease the number of settlements that employers will agree to because there is less of an incentive for them to participate in these settlements.[131] This would result in more litigation, causing the injured plaintiff to wait longer for compensation as well as higher attorney’s fees. The Supreme Court should instead adopt the Third Circuit’s approach because it allows the parties to negotiate while still protecting the employee from releasing the employer from unknown risks.[132]

B.  Why the Fifth Circuit’s New and More Expansive Approach Should Not Be Adopted by the U.S. Supreme Court

While the Sixth Circuit’s bright-line rule is too restrictive and paternalistic, the Fifth Circuit’s approach is on the opposite end of the spectrum by placing barely any restrictions on what can be included in releases.[133] Rather, the District Court for the Southern District of Texas and Fifth Circuit in Mendoza-Gomez found that the release at issue disclosed the future risks of cancer on its face, so it was deemed valid.[134] The Supreme Court should not adopt the Fifth Circuit’s approach because, as compared to the Third Circuit’s standard, it completely undermines the purpose of FELA.

By looking at the language of the release on its face, there is no fact-intensive process conducted, as in Wicker, to determine if the parties actually intended to include certain future claims in the release.[135] According to the Fifth Circuit, the analysis in determining the intentions of the parties “begins and ends with the contract’s express language.”[136] The result of the Fifth Circuit’s approach will likely find a release valid even if there is no evidence that the parties, specifically the plaintiffs, knew of the specific risks they were exposed to. As long as the “express language” of the release provides that the plaintiff accepts a settlement amount as consideration for “full and complete release of any and all claims” resulting from a specific instance, such as exposure to toxic chemicals, then the release will be found valid and the plaintiff’s future claims for any injuries will be barred against the employer.[137]

The Fifth Circuit’s new approach runs contrary to FELA’s purpose of holding common carriers liable to their injured employees.[138] This approach will result in injured workers’ claims being barred because they signed blanket releases in which they were unaware included certain risks. It will encourage employers to write very broad releases, resulting in boilerplate language. The Third Circuit’s approach conducts a fact-intensive process that seeks to determine the parties’ intent, which combats the issues the Fifth Circuit’s approach creates.[139]

Even though the Fifth Circuit’s approach has the advantage of allowing the parties the freedom of contract, like the Third Circuit’s standard, it does not properly protect workers because it does not specifically disallow releases of unknown risks.[140] Since unknown risks could potentially be released under the Fifth Circuit’s approach, undermining the purpose of FELA, the Supreme Court should instead adopt the Third Circuit’s fact-intensive standard that provides the parties the freedom of contract while protecting workers at the same time.

V.  Conclusion

In sum, to resolve the three-way circuit split the Supreme Court should adopt the Third Circuit’s fact-intensive standard that allows known risks to be included in FELA releases.[141] Wicker’s standard is the proper compromise between the three approaches as it allows employers and employees to negotiate and settle their claims without litigation,[142] and it is the most widely adopted approach by a majority of state and federal courts.[143] The Third Circuit’s standard allows parties the freedom of contract to determine what is best for themselves, while still adhering to FELA’s purpose by protecting workers by not allowing unknown risks to be waived.[144]

I J.D. Expected 2024, University of Kentucky J. David Rosenberg College of Law; B.S. Political Science 2021, University of Louisville

[2] Federal Employers’ Liability Act, 45 U.S.C. §§ 51–60 (1908).

[3] 45 U.S.C. § 55.

[4] See Babbitt v. Norfolk & W. Ry. Co., 104 F.3d 89, 91 (6th Cir. 1997); Wicker v. Consol. Rail Corp., 142 F.3d 690, 690 (3d Cir. 1998); Mendoza-Gomez v. Union Pac. R.R., No. 21-20397, 2022 WL 1117698, at *2 (5th Cir. Apr. 14, 2022).

[5] Callen v. Pa. R.R. Co., 332 U.S. 625, 631 (1948).

[6] Wicker, 142 F.3d at 696.

[7] 45 U.S.C. § 51; Babbitt, 104 F.3d at 91.

[8] 45 U.S.C. § 55.

[9] Wicker, 142 F.3d at 696.

[10] Mondou v. N.Y., New Haven & Hartfield R.R. Co., 223 U.S. 1, 52 (1912).

[11] Phila., Balt., & Wash. R.R. Co. v. Schubert, 224 U.S. 603, 612 (1912).

[12] Id.

[13] Babbitt v. Norfolk & W. Ry. Co., 104 F.3d 89, 92 (6th Cir. 1997); Callen v. Pa. R.R. Co., 332 U.S. 625, 631 (1948). 

[14] Callen, 332 U.S. at 626.

[15] Id. at 626–27.

[16] Id. at 631.

[17] Id.

[18] Babbitt, 104 F.3d at 92.

[19] Callen, 332 U.S. at 631.

[20] Wicker v. Consol. Rail Corp., 142 F.3d 690, 697 (3d Cir. 1998).

[21] Id. at 698.

[22] See Babbitt, 104 F.3d at 89; Wicker, 142 F.3d at 690; Mendoza-Gomez v. Union Pac. R.R., No. 21-20397, 2022 WL 1117698 (5th Cir. Apr. 14, 2022).

[23] Babbitt, 104 F.3d at 93.

[24] Wicker, 142 F.3d at 701.

[25] See Mendoza-Gomez v. Union Pac. R.R. Co., No. 4:19-CV-4742, slip op. at *4 (S.D. Tex. July 28, 2021); See Fisher v. BNSF Ry. Co., 650 S.W.3d 880, 887 (Tex. App.—Fort Worth 2022).

[26] Babbitt, 104 F.3d at 91, 93.

[27] Id. at 90.

[28] Id.

[29] Id.

[30] Id.

[31] Id.

[32] Id.

[33] Id.

[34] Id. at 91.

[35] Id. at 92.

[36] Id.

[37] Id. at 93.

[38] Id.

[39] Brooke Granger, Known Injuries vs. Known Risks: Finding the Appropriate Standard for Determining the Validity of Releases Under the Federal Employers’ Liability Act, 52 Hous. L. Rev. 1463, 1476 (2015).

[40] Id. at 1477; See e.g., Sea-Land Serv., Inc. v. Sellan, 231 F.3d 848, 852 (11th Cir. 2000) (adopting the Third Circuit’s standard); Wicker v. Consol. Rail Corp., 142 F.3d 690, 701 (3d Cir. 1998) (Third Circuit creates its own standard); Fisher v. BNSF Ry. Co., 650 S.W.3d 880, 886–88 (Tex. App. 2022) (declines to adopt the Sixth Circuit’s standard but does not decide on whether to adopt the Third Circuit’s or Fifth Circuit’s approach because the result would be the same regardless of which standard the court chooses to apply).

[41] Wicker, 142 F.3d at 701.

[42] Id.

[43] Id. at 692–93.

[44] Id. at 693–94.

[45] Id. at 692–93.

[46] Id. at 692.

[47] Id.

[48] Id. at 692–93.

[49] Id. at 694.

[50] Id.

[51] Id.

[52] Id. at 700–01.

[53] Id. at 701.

[54] Id. (citing Callen v. Pa. R.R. Co., 332 U.S. 625, 631 (1948)).

[55] Id.

[56] Id.

[57] Id.

[58] Id.

[59] Id.

[60] Id. at 701–02.

[61] Id. at 701.

[62] Id.

[63] Id.

[64] Id. at 700–01.

[65] Granger, supra note 39, at 1481–82.

[66] See e.g., Murphy v. Union Pac. R.R. Co., 574 S.W.3d 676, 682 (Ark. Ct. App. 2019) (adopting the Third Circuit’s standard); Jaqua v. Canadian Nat’l R.R., 734 N.W.2d 228, 229 (Mich. Ct. App. 2007) (adopting the Third Circuit’s standard); Loyal v. Norfolk S. Corp., 507 S.E.2d 499, 502 (Ga. Ct. App. 1998) (adopting the Third Circuit’s standard); Ward v. Ill. Cent. R.R. Co., 271 So. 3d 466, 472–73 (Miss. 2019) (applying the Third Circuit’s standard); Cole v. Norfolk S. Ry. Co., 803 S.E.2d 346, 352 (Va. 2017) (adopting the Third Circuit’s standard); Sinclair v. Burlington N. & Santa Fe Ry. Co., 200 P.3d 46, 59 (Mont. 2008) (adopting the Third Circuit’s standard); Ill. Cent. R.R. Co., v. Acuff, 950 So.2d 947, 960 (Miss. 2006) (adopting the Third Circuit’s approach); Oliverio v. Consol. Rail Corp., 822 N.Y.S.2d 699, 702 (N.Y. Sup. Ct. 2006) (adopting the Third Circuit’s approach).

[67] See 231 F.3d 848, 852 (11th Cir. 2000).

[68] Id. at 849.

[69] Id.

[70] Id.

[71] Id. at 850.

[72] Id.

[73] Id.

[74] Id.

[75] Id.

[76] Id.

[77] Id. at 849.

[78] Id. at 852.

[79] Id. at 852–53.

[80] See Mendoza-Gomez v. Union Pac. R.R., No. 21-20397, 2022 WL 1117698, at *3 (5th Cir. Apr. 14, 2022).

[81] Id. at *1.

[82] Id.

[83] Id.

[84] Id.

[85] Id.

[86] Id. at *2.

[87] Mendoza-Gomez v. Union Pac. R.R. Co., No. 4:19-CV-4742, slip op. at *4 (S.D. Tex. Jul. 28, 2021).

[88] Id. (citing Callen v. Pa. R. Co., 332 U.S. 625, 631 (1948)).

[89] Mendoza-Gomez, No. 21-20397, 2022 WL 1117698 at *3; Callen, 332 U.S. at 631 (1948).

[90] Mendoza-Gomez, No. 21-20397, 2022 WL 1117698 at *2.

[91] Id. at *4 n.1.

[92] Id. (citing Hartman v. Ill. R.R. Co., No. 20-1633, slip op. at *2 (E.D. La. Mar. 29, 2022).

[93] Id.

[94] Id.

[95] 2022-7061 Mealey’s Daily News Update 3.

[96] Fisher v. BNSF Ry. Co., 650 S.W.3d 880, 886–88 (Tex. App. 2022).

[97] Id. at 887.

[98] Id.

[99] Id.

[100] Wicker v. Consol. Rail Corp., 142 F.3d 690, 701 (3d Cir. 1998).

[101] Mendoza-Gomez v. Union Pac. R.R., No. 21-20397, 2022 WL 1117698 at *3 (5th Cir. Apr. 14, 2022) (citing Callen v. Pa. R.R. Co., 332 U.S. 625, 631 (1948)).

[102] 2022-7061 Mealey’s Daily News Update 3.

[103] Id.

[104] Id.

[105] Petition for Writ of Certiorari at 6, Mendoza-Gomez v. Union Pac. R.R. Co., No. 21-20397, 2022 WL 1117698 (5th Cir. Apr. 14, 2022) (No. 22-225); 2022-7061 Mealey’s Daily News Update 3.

[106] Mendoza-Gomez v. Union Pac. R.R., No. 21-20397, 2022 WL 1117698 (5th Cir. Apr. 14), cert. dismissed, 143 S. Ct. 420 (2022).

[107] Granger, supra note 39, at 1483.

[108] Id.

[109] Mendoza-Gomez v. Union Pac. R.R., No. 21-20397, 2022 WL 1117698 (5th Cir. Apr. 14), cert. dismissed, 143 S. Ct. 420 (2022).

[110] Jaqua v. Canadian Nat’l R.R., 734 N.W.2d 228, 229 (Mich. Ct. App. 2007).

[111] Fisher v. BNSF Ry. Co., 650 S.W.3d 880, 886 (Tex. App. 2022).

[112] Babbitt v. Norfolk & W. Ry. Co., 104 F.3d 89, 93 (6th Cir. 1997).

[113] Wicker v. Consol. Rail Corp., 142 F.3d 690, 700 (3d Cir. 1998).

[114] Granger, supra note 39, at 1493.

[115] Oliverio v. Consol. Rail Corp., 822 N.Y.S.2d 699, 701–02 (N.Y. Sup. Ct. 2006).

[116] Id. at 702.

[117] Id.

[118] Id.

[119] Granger, supra note 39, at 1491.

[120] Id.

[121] Wicker v. Consol. Rail Corp., 142 F.3d 690, 700 (3d Cir. 1998).

[122] Ill. Cent. R.R. Co. v. Acuff, 950 So. 2d 947, 960 (Miss. 2006).

[123] Wicker, 142 F.3d at 700.

[124] Id.

[125] Id.

[126] See e.g., Murphy v. Union Pac. R.R. Co., 574 S.W.3d 676, 682 (Ark. Ct. App. 2019) (adopting the Third Circuit’s standard); Jaqua v. Canadian Nat’l R.R., 734 N.W.2d 228, 229 (Mich. Ct. App. 2007) (adopting the Third Circuit’s standard); Loyal v. Norfolk S. Corp., 507 S.E.2d 499, 502 (Ga. Ct. App. 1998) (adopting the Third Circuit’s standard); Ward v. Ill. Cent. R.R. Co., 271 So. 3d 466, 472–73 (Miss. 2019) (applying the Third Circuit’s standard); Cole v. Norfolk S. Ry. Co., 803 S.E.2d 346, 352 (Va. 2017) (adopting the Third Circuit’s standard); Sinclair v. Burlington N. & Santa Fe Ry., 200 P.3d 46, 59 (Mont. 2008) (adopting the Third Circuit’s standard); Ill. Cent. R.R. Co., v. Acuff, 950 So. 2d 947, 960 (Miss. 2006) (adopting the Third Circuit’s approach); Oliverio v. Consol. Rail Corp., 822 N.Y.S.2d 699, 702 (N.Y. Sup. Ct. 2006) (adopting the Third Circuit’s approach).

[127] Jaqua, 734 N.W.2d at 229.

[128] Loyal, 507 S.E.2d at 502.

[129] Acuff, 950 So. 2d at 960.

[130] Id.

[131] Oliverio, 822 N.Y.S.2d at 702.

[132] Jaqua, 734 N.W.2d at 229.

[133] Petition for Writ of Certiorari at 6, Mendoza-Gomez, Union Pac. R.R. Co., No. 21-20397, 2022 WL 1117698 (5th Cir. Apr. 14, 2022) (No. 22-225).

[134] Fisher v. BNSF Ry. Co., 650 S.W.3d 880, 887 (Tex. App. 2022).

[135] Wicker v. Consol. Rail Corp., 142 F.3d 690, 701 (3d Cir. 1998).

[136] Mendoza-Gomez v. Union Pac. R.R., No. 21-20397, 2022 WL 1117698 at *3 (5th Cir. Apr. 14, 2022) (citing Huckaba v. Ref-Chem, L.P., 892 F.3d 686, 689 (5th Cir. 2018)).

[137] Id.

[138] 45 U.S.C. § 51.

[139] Wicker, 142 F.3d at 701.

[140] Compare Mendoza-Gomez, No. 21-20397, 2022 WL 1117698 at *3 (acknowledging that the analysis “begins and ends with the contract’s express language,” which does not involve the fact-intensive process of determining whether the risk was known or unknown to the plaintiff), with Wicker, 142 F.3d at 701 (stating that “[c]laims relating to unknown risks do not constitute ‘controversies,’ and may not be waived under § 5 of FELA”).

[141] Wicker, 142 F.3d at 701.

[142] Jaqua v. Canadian Nat’l R.R., 734 N.W.2d 228, 229 (Mich. Ct. App. 2007).

[143] Fisher v. BNSF Ry. Co., 650 S.W.3d 880, 886 (Tex. App. 2022).

[144] Wicker, 142 F.3d 690, 701 (3d. Cir. 1998).

“Objective Falsity” in Healthcare Fraud and Abuse

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“Objective Falsity” in Healthcare Fraud and Abuse  

Adriel E. Wilson I 

Introduction 

There is currently a circuit split on the meaning of “falsity” under the False Claims Act (“FCA”).[2] This paper aims to demonstrate why the Supreme Court should adopt the Eleventh Circuit’s objective falsity standard in which “a clinical judgment of terminal illness warranting hospice benefits under Medicare cannot be deemed false, for purposes of the False Claims Act, when there is only a reasonable disagreement between medical experts as to the accuracy of that conclusion.”[3] The Supreme Court should adopt this theory for several reasons: (1) the courts actually seem to agree on whether a medical opinion can be deemed untrue, (2) they mainly disagree on the purpose of the documentation requirements and its effect on a falsity determination, (3) the Eleventh Circuit’s analysis is superior because the Supreme Court has explicitly held the FCA is not there to punish garden-variety regulatory infractions,[4] and (4) the presence of uncertainty in medical sciences.[5]

I.  False Claims Act

The civil FCA is located at 31 U.S.C. § 3729 through §3733.[6] This statute aims to protect the “Government from being overcharged or sold shoddy goods or services.”[7] “[N]o specific intent to defraud is required,” thus “knowing” under the statute includes “not only actual knowledge” but also “deliberate ignorance or reckless disregard of the truth or falsity of the information.”[8] Additionally, there is a criminal FCA located at 18 U.S.C. § 287.[9] Under this statute, criminal penalties for false claim submissions include fines and imprisonment for a period of up to five years.[10]

Violating the FCA can result in substantial consequences, as the statute permits treble damages, a penalty for each false claim, and exclusion from participation in both Medicaid and Medicare[11]—a possibility that can be ruinous to most medical practices.[12] The aim is to deter these unsafe and abusive practices as much as possible.[13]

II.  “Objective Falsity” under the FCA 

The judicial “objective falsity” standard “requires a false claim to be based on objectively verifiable facts to establish liability under the FCA.”[14] Circuit courts, however, are split as to “whether a difference in expert medical opinion that certain health services are medically necessary”—and therefore payable by the government—is sufficient to establish that the claim for services provided is false or fraudulent under the statute.[15]

       In February 2021, the Supreme Court rejected, without comment, two petitions presenting that exact issue of “whether an expert medical opinion that differs from the defendant’s clinical judgment” is sufficient to establish liability under the FCA’s falsity definition.[16] These petitions are Care Alternatives v. United States et al. and RollinsNelson LTC Corp. v. United States ex rel. Winters.[17]

III.  Circuit Split 

For purposes of clarity throughout this paper, the Eleventh Circuit’s theory will be termed the “objective standard,” meaning there must be a flagrant abuse of the defendant’s medical judgment in order for a plaintiff to prevail on a FCA claim, and reasonable disagreement between medical experts is insufficient.[18] Alternatively, the opposing theory will be termed the “reasonable disagreement standard,” meaning a reasonable disagreement between medical experts is sufficient to support a plaintiff’s FCA claim.[19]

A.  Reasonable Disagreement Standard 

The Third Circuit rejected the objective falsity standard last year in United States ex rel. Druding v. Druding (which became Care Alternatives on appeal).[20] In that case, former employees sued Care Alternatives for allegedly “admit[ing] patients who were ineligible for hospice care and direct[ing] employees to alter patient records to allow for eligibility.”[21] The court focused on whether Care Alternatives’s physicians correctly assessed that their patients were terminally ill (meaning expected to die within six months) and therefore eligible for Medicare and Medicaid to cover their hospice care.[22] The issue presented was whether a physician’s clinical judgment can be considered a legal falsity if it is later challenged by a medical expert with a different judgment.[23] The Third Circuit found that the difference in opinion did create a “genuine dispute of material fact as to falsity” and ruled in favor of the former employees.[24]

B.  Analysis of Care Alternatives Opinion

In Druding, the plaintiffs retained an expert who opined that, based on the forty-seven patient records he examined, the patients were inappropriately certified for hospice care thirty-five percent of the time.[25] He also found “that the medical records were incomplete for at least three patients.”[26] However, Care Alternatives’s expert disagreed and testified that a reasonable physician would have found all of those patients eligible for hospice.[27]

Care Alternatives is a hospice facility, and the Medicare provisions for hospice benefits provide payment for individuals considered terminally ill.[28] The statute requires the individual to be certified accordingly by at least one physician,[29] and regulations promulgated by the Secretary add another requirement for that certification to be accompanied by “clinical information and other documentation that support the medical prognosis” of terminal illness in the medical record.[30]

Care Alternatives sought summary judgment, arguing the plaintiffs could not prove the prima facie elements of an FCA claim: “falsity, causation, knowledge, and materiality.”[31] Namely, Care Alternatives contended the plaintiffs had failed to produce sufficient evidence of “falsity.”[32] The district court granted the motion for summary judgment, holding that “a mere difference of opinion” between experts regarding the accuracy of the prognosis was insufficient to create a triable dispute of fact as to the element of falsity, which reflected the Eleventh Circuit’s standard.[33] It instead required the plaintiffs to produce evidence of an “objective falsehood, that the physicians’ prognosis of terminal illness was incorrect, in order to prevail on the element of falsity.”[34]

On appeal to the Third Circuit, the main issue was “whether a hospice-care provider’s claim for reimbursement can be considered ‘false’ under the FCA on the basis of medical-expert testimony that opines that accompanying patient certifications did not support patients’ prognoses of terminal illness.”[35] The Third Circuit held the answer is yes, thereby rejecting the Eleventh Circuit’s “objective falsity” standard from the previous year.[36] Instead, the court found the plaintiffs’ expert medical testimony created “a genuine dispute of material fact as to the element of falsity.”[37]

The Third Circuit came to this conclusion for two reasons: (1) the district court’s standard “is at odds with the meaning of ‘false’ under the” statute’s text; and (2) the “‘objective’ falsity standard improperly conflates the elements of falsity and scienter.”[38]

First, because Congress did not define “false” under the FCA, the Supreme Court looked to common law for guidance in Escobar, stating that “[a]bsent other indication, Congress intends to incorporate the well-settled meaning of the common-law terms it uses.”[39] The Restatement (Second) of Torts suggests “an opinion may be false when the speaker makes an express statement contrary to the opinion he or she actually holds.”[40] Thus, the Third Circuit found that the lower court’s premise—that an opinion is subjective, and a difference of opinion is therefore not enough to show falsity—is inconsistent with the meaning of “false” under the FCA.[41]

The Third Circuit explicitly disagreed with the Eleventh Circuit’s determination that “clinical judgments cannot be untrue.”[42] The Third Circuit reasoned that an “opinion…will be deemed untrue…if it is issued without reasonable genuine belief or if it has no basis.”[43] Thus, the court found that “a physician’s judgment may be scrutinized and considered false.”[44] Therefore, a difference of medical opinion is enough evidence to create a triable issue of fact regarding FCA falsity.[45]

Second, the Third Circuit found that the lower court’s “objective falsity” standard conflates the elements of scienter (“knowledge”) and falsity under the statute.[46] The court reasoned that scienter helps limit the possibility that providers would be exposed to FCA liability anytime the government found an expert who disagreed with the certifying physician’s medical prognosis.[47] The Third Circuit wrote, “By requiring ‘factual evidence that Defendant’s certifying doctor was making a knowingly false determination,’ the District Court’s ‘objective’ falsity standard conflates scienter and falsity.”[48]

Thus, the Third Circuit stated that a claim can be proven “false” in two ways: (1) “factually, when the facts contained within the claim are untrue”; and (2) legally, “when the claimant…falsely certifies that it has complied with a statute or regulation the compliance with which is a condition for Government payment.”[49] For legal falsity, the Medicare Health Benefit regulations state two requirements: “(1) that a physician certifies the patient as terminally ill and (2) that clinical information and documentation supporting the prognosis accompany the certification.”[50] The Circuit Court reasoned that the District Court’s standard only found an expert medical opinion to be false when there is a showing proving a violation of factual falsity under avenue (1), while the Circuit Court advanced a standard that finds liability when there has been a violation of either factual falsity under avenue (1) or of legal falsity under avenue (2).[51] Under avenue (2), legal falsity is found, meaning an FCA violation has been committed, when clinical information and other documentation that support the medical prognosis do not accompany the certification.[52] Based on this theory, the Third Circuit held that “disagreement between experts as to a patient’s prognosis may be evidence of [element (2)]; its relevance need not be limited to the accuracy of another physician’s judgment.”[53]

The Third Circuit found support in the Tenth Circuit’s holding in Polukoff, where that court held that FCA falsity can be based on legal falsity, where “falsity is simply a question of whether the claim is reimbursable, that is, compliance with the Medicare reimbursement instructions.”[54] That circuit found the defendant cardiologist’s procedures were “false” due to failure to follow Medicare procedures.[55] Those procedures require certification of the necessity of services and, in some instances, recertification of the continued need for those services that are reasonable and necessary.[56] However, it is worth noting that the facts in that case made the defendant’s conduct appear to be more obviously egregious: the plaintiff physician alleged (1) the defendant performed an unusually large number of the specific cardiac procedure at issue; (2) these procedures violated industry and hospital guidelines; (3) other physicians had objected to defendant’s practice; (4) the medical center (Intermountain) eventually audited the defendant’s practice and reached the conclusion that the guidelines were violated in many of the cases reviewed; and (5) the defendant knew that Medicare and Medicaid would not pay for this cardiac procedure to treat migraines, and he “chose to represent that the procedures had been performed based on indications set forth” in the American Heart Association and American Stroke Association guidelines.[57]

In summation, according to the Third Circuit, “[u]nder a legal falsity theory, a medical opinion that differs from the certifying physician’s opinion is…relevant evidence of the latter requirement, whether there was documentation accompanying the certification that supported the medical prognosis.”[58] The court continued: “[A] difference of medical opinion is enough evidence to create a triable dispute of fact regarding FCA falsity. This does not mean that objectivity is never relevant for FCA liability…[h]owever, we find that objectivity speaks to the element of scienter, not falsity.”[59] Thus, according to the Third Circuit, “scienter” pertains to factual falsity under avenue (1) while “falsity” pertains to legal falsity under avenue (2) when a defendant fails to comply with statutory and regulatory requirements.[60]

Hence, the Third Circuit reversed the District Court’s grant of summary judgment, finding that the plaintiffs’ expert report challenging the defendant’s hospice certifications created a triable issue of material fact for a jury regarding falsity.[61] Again, it is worth noting this does not seem to rise to the level of egregious conduct in the Tenth Circuit case, which the Third Circuit relied upon.

C.  Objective Falsity Standard

In contrast, the Eleventh Circuit found the opposite in United States v. AseraCare, Inc.[62] This court determined that a “difference of reasonable opinion” alone is insufficient to establish falsity under the FCA’s objective falsity standard.[63] AseraCare involved nearly identical facts to Care Alternatives, but this court instead adopted an objective standard of falsity, which was affirmed on appeal: “[A] clinical judgment of terminal illness warranting hospice benefits under Medicare cannot be deemed false, for purposes of the False Claims Act, when there is only a reasonable disagreement between medical experts as to the accuracy of that conclusion.”[64]

D.  Analysis of AseraCare Opinion 

Similar to Care Alternatives, in AseraCare, the government alleged the defendants certified patients as “eligible for Medicare’s hospice benefit, and billed Medicare accordingly, on the basis of erroneous clinical judgments that those patients were terminally ill.”[65] The government’s contention depended upon its expert witness’s opinion that the patients at issue were not terminally ill at the time they were certified.[66] The district court granted summary judgment to defendant AseraCare “on the issue of falsity.”[67]

On appeal, the Eleventh Circuit agreed with the district court’s determination “that a clinical judgment of terminal illness warranting hospice benefits under Medicare cannot be deemed false, for purposes of the False Claims Act, when there is only a reasonable disagreement between medical experts as to the accuracy of that conclusion, with no other evidence to prove the falsity of the assessment [italics added].”[68]

After a review of the statute and implementing regulations, the Eleventh Circuit reasoned that certification for terminal illness “will be based on the physician’s or medical director’s clinical judgment regarding the normal course of the individual’s illness.”[69] This subjective clinical judgment in light of the patient’s complete medical picture lies at the center of the eligibility inquiry.[70] In fact, the Centers for Medicate and Medicaid Services (“CMS”) has recognized that “predicting life expectancy is not an exact science,” so the prognosis does not have to be proven as a matter of medical fact.[71] Thus, CMS expects “that the certifying physicians will use their best clinical judgment.”[72]

The Government argued that their expert’s testimony created a factual dispute as to whether clinical information and other supporting documentation supported the medical prognosis of the terminally ill.[73] However, the Circuit Court explained that the statutory and regulatory requirements for supporting documentation to accompany the claim is meant to address the CMS mandate that “there must be a clinical basis for a certification.”[74] Therefore, “the physician’s clinical judgment dictates eligibility as long as it represents a reasonable interpretation of the relevant medical records…[and] Congress said nothing to indicate that the medical documentation presented with a claim must prove the veracity of the clinical judgment on an after-the-fact review [by plaintiff’s expert].”[75] The Eleventh Circuit decided CMS’s commentary indicates that well-founded clinical judgments be granted deference.[76]

To support this view further, CMS removed the term “criteria” from a proposed regulation which defined requirements for certification, wishing “to remove any implication that there are specific CMS clinical benchmarks” that must be met to constitute terminal illness.[77] This law is designed to give physicians “meaningful latitude to make informed judgments without fear that those judgments will be second-guessed after the fact by laymen in a liability proceeding.”[78] This does not, as the Government suggests, allow a physician to disregard the patient’s underlying medical condition when making a determination.[79] In fact, CMS retains a “well-established right” to review claims and deny those “it does not consider reasonable and necessary under the statutory standard.”[80]

This begs the question: When can a physician’s clinical judgment regarding a patient’s prognosis be deemed false?[81] The Eleventh Circuit explained that falsehood “can be shown in a variety of ways.”[82] For instance when: (1) “a certifying physician fails to review a patient’s medical records or otherwise familiarize himself with the patient’s condition before” determining he is terminally ill; (2) a plaintiff proves the physician did not subjectively believe his patient was terminally ill; and (3) expert evidence proves that “no reasonable physician could have concluded that a patient was terminally ill given the relevant medical records.”[83] The reason for using this objective falsehood standard is because, “in each of these examples, the clinical judgment on which the claim is based contains a flaw that can be demonstrated through verifiable facts.”[84]

In contrast, a reasonable difference of opinion among physicians that review medical documents after the fact, alone, is insufficient to suggest that the certifying physician’s judgments (or claims based on them) are false under the FCA.[85] The court went on to say that “[a] properly formed and sincerely held clinical judgment is not untrue even if a different physician later contends that the judgment is wrong.”[86] Accordingly, the rule laid down by this circuit is that, in order to properly state a claim under the FCA in the hospice reimbursement context, a plaintiff alleging a patient was falsely certified must show facts and circumstances surrounding the certification “that are inconsistent with the proper exercise of a physician’s clinical judgment.”[87] Where such facts are not shown, the FCA claim must fail as a matter of law.[88]

The court distinguished the hospice context here from Paulus, in which the physician-defendant was convicted of healthcare fraud based on his performance of allegedly unnecessary heart procedures.[89] The difference in that case was that the Government was able to produce expert testimony that the physician blatantly lied.[90] This testimony specifically disputed that the level of blockage displayed by the angiogram test was at the level the defendant claimed that it was.[91] Therefore, opinions are not entirely insulated from scrutiny, as they can trigger liability for fraud “when they are not honestly held by their maker, or when the speaker knows of facts that are fundamentally incompatible with his opinion.”[92] The Eleventh Circuit reasoned that this instance was distinct from the situation presented in AseraCare, where the Government’s experts reached differing conclusions merely by weighing certain medical benchmarks differently than the defendants did.[93] In other words, a good-faith medical diagnosis cannot be false, whereas an assertion regarding the degree of a blockage can be “objectively true or false.”[94] Thus, the defendant in Paulus was convicted for a misrepresentation of fact, not for providing an opinion.[95] Essentially, the Government’s expert testimony in that case “suggest[ed] that no reasonable doctor could [have] interpret[ed] the scan” as the defendant-physician did, which indicated Paulus was actually lying.[96] Therefore, it was up to the jury to decide the reliability of the cardiology expert’s testimony attempting to prove his colleague was lying about the scans.[97]

Although the Government expressed concern in AseraCare that an objective falsehood standard would be too difficult for plaintiffs to meet, the court concluded if this is a problem, it is one for Congress or CMS to resolve—not the courts.[98] CMS and Congress could have imposed criteria for eligibility determinations to minimize the role of clinical judgment, but they were instead careful to position the clinical judgment of the physician at the core of the inquiry.[99] Thus, the Eleventh Court held, “absent a showing of an objective and knowing falsehood, the FCA is an inappropriate instrument to serve as the Government’s primary line of defense against questionable claims for reimbursement of hospice benefits.”[100]

However, because the Government was precluded from presenting evidence about some questionable certification practices that AseraCare utilized, the case was remanded.[101] Nine witnesses testified AseraCare had an intentional practice of failing to give physicians accurate, relevant, and complete information regarding patient certifications for hospice when requesting doctors to sign the certifications.[102] For example, one physician had a habit of signing off on certifications prior to reviewing any medical documentation at all.[103] These facts and circumstances presented triable issues of fact regarding the falsity of the specific claims at issue.[104] 

IV.  Supreme Court Guidance 

One previous Supreme Court decision may offer some guidance for the lower courts, but there is still ambiguity since the Court rejected the two more recent petitions.[105] In the 2016 Supreme Court case, Universal Health Services, Inc. v. United States ex rel. Escobar, the Court held that an alleged false claim requires that the claim be “material” to the payment decision made by the government to establish liability under the FCA.[106] It specifically noted that “materiality” is defined in the statute as “having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.”[107] It also held that the FCA is not “an all-purpose antifraud statute,” nor is it a “vehicle for punishing garden-variety breaches of contract or regulatory violations.”[108]

The Supreme Court’s decisions to deny certiorari are, arguably, consistent with the Escobar decision—and likely with an explicit objective falsity standard—in order to avoid multitudes of “garden variety” claims jamming up the courts.[109] Despite this, the circuits remain split as to their respective approaches to objective falsity, and it is not hard to see why, as the decision did not overtly address this particular question.[110] Thus, it may be worth the Supreme Court hearing the issue.

V. Reconciling the Third and Eleventh Circuits

There are three notable points for reconciling the two circuits and in determining the Eleventh Circuit has the superior analysis: (1) the courts actually seem to agree on whether a medical opinion can be deemed untrue, (2) the courts mainly disagree on the purpose of the documentation requirements and its effect on a falsity determination, and (3) the Eleventh Circuit’s analysis is superior because the Supreme Court has explicitly held the FCA is not there to punish garden-variety regulatory infractions.

First, regarding what the Third Circuit refers to as “factual falsity,” the two circuits seem to agree. Both courts determined medical opinions are not shielded from scrutiny, although the Third Circuit suggested the Eleventh Circuit thought otherwise.[111] Specifically, both circuits determined that an opinion is “false” if it is not genuinely held by the speaker.[112]

Second, the courts seem to mainly disagree on the role the documentation requirements play in the Medicare Hospice Benefit. The Third Circuit found it is evidence of a violation of legal falsity, while the Eleventh Circuit held it is merely there to provide documentation of the doctor’s rationale[113] and address the requirement that a medical basis exist for certification.[114]

Finally, the Eleventh Circuit’s analysis is superior to the Third Circuit’s because it promotes the considerations addressed in the Supreme Court’s Escobar decision. Akin Gump wrote:

In Escobar, the Court made clear that the FCA is not “an all-purpose antifraud statute…” [or] a “vehicle for punishing garden-variety breaches of contract or regulatory violations…” Instead, as one recent court summarized… “Escobar rejects a system of government traps, zaps, and zingers that permits the government to retain the benefit of a substantially conforming good or service but to recover the price entirely–multiplied by three–because of some immaterial contractual or regulatory non-compliance.”[115]

Reflecting this sentiment, according to the Eleventh Circuit, “absent a showing of an objective and knowing falsehood, the FCA is an inappropriate instrument to serve as the Government’s primary line of defense against questionable claims for reimbursement of hospice benefits.”[116]

This analysis could even be taken beyond the hospice context for FCA liability to the medical field at large regarding FCA claims. This would work in other contexts for the same reasons it works in the hospice realm. Furthermore, objective falsity is a superior standard because it offers safeguards against patient abuse but also allows leeway for physician autonomy and good-faith clinical judgments, especially in light of medical uncertainties. 

VI. Uncertainty of Medical Sciences and the “Two Schools of Thought” Doctrine

Another reason the objective standard of falsity is preferable is the uncertainty of medical sciences.[117] In an ancillary legal field, medical negligence liability, some states have adopted the “two schools of thought” doctrine.[118] In their article, “Medical Uncertainty, Diagnostic Testing, and Legal Liability,” Eric E. Fortress and Marshall B. Kapp wrote: “Health care cost considerations exert[] increasing influence today over clinical decisionmaking. One way to help contain costs while maintaining the quality of health care may be to increase among both physicians and patients an acknowledgment of, and tolerance for, a reasonable degree of medical uncertainty.”[119] Due to the ubiquity of patient-initiated medical malpractice lawsuits, many physicians resort to “defensive medicine,” which is the practice of over-testing and overtreating in order to avoid the threat of liability of this kind.[120] One problem with this, however, is that it can obviously lead to another danger: billing for medically unnecessary tests, which is another type of FCA violation.

The two schools of thought doctrine was articulated in Jones v. Chidester.[121] The main proposition of the doctrine is that if there are two bona fide schools of thought among physicians, then a physician cannot be held liable in negligence for choosing one school of thought over another.[122] The rationale for this theory is if there are two legitimate schools of thought, then a jury of lay persons should not have to decide the better alternative.[123] The jury simply determines whether it believes there are two legitimate schools of thought sufficient to insulate the defendant from liability.[124] Although this is in the medical negligence field, its rationale is applicable to the objective falsity issue for the FCA as well: lay persons are not qualified to determine liability when there are differing opinions between trained medical experts.[125] However, because this is a claim based on a federal statute as opposed to state tort law, the issue should be decided in the preliminary stages by the judge instead as a matter of law, as the Eleventh Circuit explained in AseraCare.

VII. Uniformity Considerations 

Third and finally, the Supreme Court should adopt the Eleventh Circuit’s objective standard to promote simplicity and uniformity among the lower courts. The extent to which reasonable minds differ regarding medical opinions can be easily determined with medical experts. If the defendant can find a reputable medical provider who would have followed the defendant’s course of action as well, then this standard allows a judge to resolve the issue before presenting it to a jury—a jury which, as mentioned above, is not qualified to determine which of two medical professionals is “correct.” In contrast, in the egregious situations (such as those discussed above in Polukoff) when it is not possible to find reputable expert medical testimony or other evidence that the defendant’s course of action was reasonable, this would become a triable issue that is better suited for a jury of laypersons. This is much simpler than trying to hash out which of two “reasonable minds” were more reasonable at trial. Furthermore, by decisively laying down this standard, the Supreme Court would provide clarity and uniformity among the lower courts. This would be beneficial for potential plaintiffs, potential defendants, and even the courts.

Conclusion

In conclusion, the Supreme Court should adopt the Eleventh Circuit’s explicit objective falsity standard. This will finally resolve the confusion among lower courts in applying an important federal Act. Furthermore, it is the superior theory for several reasons: (1) the courts actually seem to agree on whether a medical opinion can be deemed untrue, (2) the courts mainly disagree on the purpose of the documentation requirements and its effect on a falsity determination, (3) the Eleventh Circuit’s analysis is superior because the Supreme Court has explicitly held the FCA is not there to punish garden-variety regulatory infractions,[126] and (4) the presence of uncertainty in medical sciences.[127]

I J.D., University of Kentucky J. David Rosenberg College of Law, Class of 2023; Master of Health Administration (MHA), University of Kentucky College of Public Health, Class of 2023.

[2] Foley Hoag LLP, ‘Objective Falsity’ and the FCA: An Ongoing Circuit Split, JD Supra (Mar. 15, 2021), https://www.jdsupra.com/legalnews/objective-falsity-and-the-fca-an-2164689/ [https://perma.cc/7CTM-DDKW].

[3] Id.; United States v. AseraCare, Inc., 938 F.3d 1278, 1281 (11th Cir. 2019); United States v. AseraCare Inc.,176 F. Supp. 3d 1282, 1286 (N.D. Ala. 2016).

[4] Universal Health Servs., Inc. v. United States, 579 U.S. 176, 194 (2016).

[5] Mark A. Hall, David Orentlicher, Mary Anne Bobinski, Nicholas Bagley, & I. Glenn Cohen, Medical Liability and Treatment Relationships 363–64 (4th ed. 2018).

[6] False Claims Act, 31 U.S.C. §§ 3729–3733.

[7] Fraud & Abuse Laws, Off. of Inspector Gen. U.S. Dep’t of Health and Hum. Servs. (last visited Feb. 15, 2022), https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/ [https://perma.cc/BC5D-3A5N].

[8] Id.

[9] Id.; 18 U.S.C. § 287.

[10] 18 U.S.C. § 287.

[11] False Claims Act Prevention, Univ. of Rochester Med. Ctr. (last visited Feb. 15, 2022), https://www.urmc.rochester.edu/compliance-office/education-tools/false-claims-act-prevention.aspx [https://perma.cc/A3UV-MRB3].

[12] See Robert L. Vogel, The False Claims Act and its Impact on Medical Practices, Vogel, Slade & Goldstein, LLP (last visited Feb. 15, 2022), https://www.vsg-law.com/blog/the-false-claims-act-and-its-impact-on-medical-practices/ [https://perma.cc/539Q-LDVW].

[13] See THE FALSE CLAIMS ACT & WHY IT MATTERS TO HEALTHCARE PROVIDERS, Lewis Brisbois (Oct. 23, 2019), https://lewisbrisbois.com/newsroom/legal-alerts/the-false-claims-act-why-it-matters-to-healthcare-providers [https://perma.cc/JL24-AXUF].

[14] Foley Hoag LLP, supra note 2.

[15] Id.

[16] Id.

[17] Id.; Petition for Writ of Certiorari, Care Alts. v. United States, et al. ex rel. Druding, et al., No. 20-371 (Sep. 16, 2020); Petition for Writ of Certiorari, RollinsNelson LTC Corp., et al., Petitioners v. United States, ex rel. Jane Winters, No. 20-805 (Dec. 3, 2020).

[18] See Foley Hoag LLP, supra note 2.

[19] See Foley Hoag LLP, supra note 2.

[20] Id.; see United States v. Care Alts., 952 F.3d 89, 89–90 (3d Cir. 2020).

[21] Foley Hoag LLP, supra note 2; see Care Alt., 952 F.3d at 92.

[22] Care Alts., 952 F.3d at 92.

[23] See id. at 95.

[24] Id. at 91, 95.

[25] Id. at 94.

[26] Id.

[27] See id.

[28] Id. at 91–92.

[29] Id. at 92; 42 U.S.C. § 1395f(a)(7)(A).

[30] Care Alts., 952 F.3d at 93; 42 C.F.R. § 418.22(b)(2) (2011).

[31] Care Alts., 952 F.3d at 94.

[32] Id.

[33] Id.

[34] Id.

[35] Id. at 95.

[36] Id.

[37] Id.

[38] Id.

[39] Id. (citing United Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989, 1999–2000 (2016)).

[40] Id.

[41] See id. at 97.

[42] Id. at 100.

[43] Id. at 95 (citing Herskowitz v. Nutri/Sys., Inc., (857 F.2d 179, 184) (3d Cir. 1988)).

[44] Id. at 100–101.

[45] Id. at 101.

[46] Id. at 96.

[47] Id.

[48] Id. (citing Druding v. Care Alternatives, Inc., 346 F. Supp. 3d 669, 688 (D.N.J., Sept. 26, 2018)).

[49] Id. at 96.

[50] Id. at 100.

[51] See id. at 97.

[52] Id.

[53] Id.

[54] Id. (citing United States ex rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730, 742–43 (10th Cir. 2018)).

[55] Care Alts., 952 F.3d at 97–98.

[56] Polukoff, 895 F.3d at 735.

[57] Id. at 743.

[58] Care Alts., 952 F.3d at 100.

[59] Id.

[60] Id.

[61] Id. at 101.

[62] 938 F.3d 1278,1278 (11th Cir. 2019); see Foley Hoag LLP, supra note 2.

[63] AseraCare, 938 F.3d at 1278.

[64] Id. at 1281.

[65] Id.

[66] Id.

[67] Id.

[68] Id.

[69] Id. at 1293.

[70] See id.

[71] Id.

[72] Id. at 1294.

[73] Id.

[74] Id.

[75] Id.

[76] Id. at 1295.

[77] Id.

[78] Id.

[79] Id.

[80] Id.

[81] Id. at 1296.

[82] Id. at 1297.

[83] Id.

[84] Id.

[85] Id. 

[86] Id.

[87] Id.

[88] Id.

[89] United States v. Paulus, 894 F.3d 267, 270 (6th Cir. 2018).

[90] See AseraCare, 938 F.3d at 1299–1300.

[91] Id. at 1299.

[92] Id. at 1300.

[93] Id.

[94] Id.

[95] Id.

[96] Id.

[97] Id.

[98] Id. at 1301.

[99] Id.

[100] Id.

[101] Id. at 1305.

[102] Id. at 1303.

[103] Id. at 1305.

[104] Id. at 1304.

[105] See Foley Hoag LLP, supra note 2.

[106] Id.; Universal Health Servs. v. United States ex rel. Escobar, 579 U.S. 176, 181 (2016).

[107] Universal Health Servs., 579 U.S. at 192–93 (emphasis added).

[108] Id. at 194.

[109] Foley Hoag LLP, supra note 2.

[110] Id.

[111] United States v. Care Alts., 952 F.3d 89, 100 (3d Cir. 2020).

[112] Id. at 95; See United States v. AseraCare, Inc., 938 F.3d 1278, 1300 n.13, 1301 n.15 (11th Cir. 2019).

[113] See AseraCare, 938 F.3d at 1296.

[114] Care Alts., 952 F.3d at 99.

[115] Strauss Hauer & Feld LLP, 9th Circuit Makes Mandatory Escobar’s Implied False Certification Test, but Fails to Faithfully Follow Escobar’s Directives, Akin Gump (Sept. 4, 2018), https://www.akingump.com/en/news-insights/9th-circuit-makes-mandatory-escobar-s-implied-false.html [https://perma.cc/P89F-28M3].

[116] AseraCare, 938 F.3d at 1301.

[117] See Hall, supra note 5, at 363–64.

[118] Id. at 338–40.

[119] Id. at 363–64.

[120] Id. at 364.

[121] 610 A.2d 964, 965 (Pa. 1992); Hall, supra note 5, at 338.

[122] Hall, supra note 5 at 338.

[123] See id. at at 339–40.

[124] Id. at 340.

[125] See id.

[126] Universal Health Servs. v. United States ex rel. Escobar, 579 U.S. 176, 194 (2016)

[127] See Hall, supra note 5 at 363–64.

No Such Thing as a Child Prostitute State Lawmakers Need to Enact Safe Harbor Laws to Protect Victims of Child Sex Trafficking

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NO SUCH THING AS A CHILD PROSTITUTE

State Lawmakers Need to Enact Safe Harbor Laws to Protect Victims of Child Sex Trafficking

Blair Johnson Stevens I 

Abstract

      The fastest-growing and second-largest criminal enterprise in the world is the buying and selling of people — especially children.[2] Child sex trafficking has been reported in every state in America.[3] The average age of entry into the sex trade is 12–14 years old for females, and it is believed to be even younger for boys and transgender children.[4] Although it is not allowed, in any state, for a child under the age of consent to consent to any type of sexual activity, the majority of states still criminalize sex-trafficked children as prostitutes.[5] Some states have developed Safe Harbor Laws to address the inconsistencies with how children who are exploited for commercial sex are treated in the United States.[6] “A complete Safe Harbor Law (1) prevents minors…from being prosecuted for prostitution and (2) directs juvenile sex trafficking victims to non-punitive specialized services.”[7] These services can range from providing food and shelter to offering mental health counseling, substance abuse treatment, and assistance with educational opportunities and finding employment.[8]

      States’ child sex trafficking statutes should aim to treat trafficked youth as survivors of trauma rather than perpetrators of the crimes they were made to commit. State lawmakers need to enact Safe Harbor Laws that provide minors with criminal protection from being prosecuted for prostitution, prostitution-related offenses, and status offenses committed as a result of being trafficked. In addition, state lawmakers must address the rate at which minority children are trafficked and arrested. Due to disparate economic situations coupled with the rate at which minority children are disproportionately arrested, Black and Latino children are far more likely to fall victim to being trafficked for commercial sex and subsequently arrested for child prostitution than white children.[9] In short, attitudes and stereotypes about minority children make it so that they are more vulnerable to sex trafficking but less likely to be identified or seen as victims.

Introduction: What Are Safe Harbor Laws?  

       A Safe Harbor Law is a condition of a statute or regulation that indicates that a specific circumstance of behavior will be deemed not to violate a given rule.[10] In other words, a Safe Harbor Law is a provision that grants “protection from liability or penalty if certain conditions are met” and may be included in legislation to “give peace of mind to good-faith actors who might otherwise violate the law on technicalities beyond their reasonable control.”[11] This note will focus specifically on Safe Harbor Laws as they apply to victims of child sex trafficking.

       Every day in the United States, minor children (any child under the age of eighteen) are forced, induced, or coerced into providing commercial sex.[12] “Human trafficking has surpassed the illegal sale of firearms,” and it is expected to surpass the illegal sale of drugs in the coming years.[13] Nevertheless, a staggering amount of child sex trafficking, and human trafficking in general, goes undetected due to the fact that tracing this illegal practice is very challenging.[14] It is estimated that less than half of a percent of cases of human trafficking get identified or reported.[15] In 2018, over half of the active sex trafficking cases in the United States involved only children.[16] In fact, children are four times more likely to be trafficked for sex than adults.[17]

       A trafficked child may be compelled to engage in prostitution and often many other illegal activities.[18] In most states, instead of being treated as a victim, this child is treated as a criminal and faces prosecution.[19] Being arrested and prosecuted undoubtedly further traumatizes child sex trafficking victims. This type of treatment may also cause them to form a deep distrust of law enforcement and the justice system. Additionally, the criminal record that a child victim of sex trafficking incurs serves as a barrier to future educational opportunities, employment, and other prospects. Thus, due to the prevalence of child sex trafficking in the United States, coupled with the harsh punishments minor victims currently face, it is necessary for all states to enact Safe Harbor Laws that protect and assist children who have been exploited for sex. It is also extremely necessary to take into consideration the disproportionate amount of minority children and groups who are trafficked and subsequently prosecuted.

The Federal Law 

       Over the past few decades, the United States has nationally recognized and addressed the need for protecting victims of sex trafficking. The Trafficking Victims Protection Act (TVPA), first enacted in 2000, is the national framework for the federal response to human trafficking, and the law has been reauthorized and updated five times — most recently in January 2019 with bipartisan support.[20] It is now referred to as the Trafficking Victims Protection Reauthorization Act (TVPRA).[21] In the 2019 fiscal year, Congress purportedly appropriated $250 million toward these efforts.[22] The TVPRA is based on a three-pronged approach to fighting trafficking— prevention, prosecution, protection.[23] In addition to the Trafficking Victims Protection Reauthorization Act, there is the Justice for Victims of Trafficking Act of 2015.[24] This bill increases compensation and restitution under the federal criminal code for victims of human trafficking and classifies producers of child pornography as engaged in illicit sexual conduct involving human trafficking.[25] Most importantly, for the purposes of this analysis, the bill awards funding to states that combat trafficking and provides protection and assistance for victims of trafficking.[26] Yet, the bill does not offer any sort of general framework or guideline for how this initiative is supposed to be carried out by the states.

       According to the United States Code, when a minor is involved in sex trafficking, Section 1591 of Title 18 does not require proof that the defendant used force, threats of force, fraud, coercion, or any combination of those means, to cause the minor to engage in a commercial sex act.[27] This means that as long as the trafficker is an adult and the victim being trafficked is under the age of eighteen, the intent or ‘willingness’ of the minor does not matter. Thus, according to federal law, minor victims who are involved in sex trafficking cannot be held responsible for their so-called actions, nor should they be prosecuted as criminals. Unfortunately, this does not mean that minor victims cannot be arrested and prosecuted for prostitution at the state level.[28] For example, in 2019, Texas Governor Greg Abbott vetoed a bill “prohibiting minors from being arrested or going to jail for prostitution.”[29] In 2019, the state with the most minors arrested for prostitution-related offenses was Nevada with approximately 110 minors arrested.[30]

The Most Common Judicial Protections Applied to Minor Victims  

       Some state lawmakers “have legislated several criminal protections and civil remedies” in the judicial system for victims of child sex trafficking.[31] “Measures have provided immunity to, diversion from, and affirmative defenses against, criminal prosecution for actions victims were forced to commit by their traffickers.”[32] Some lawmakers have also created mechanisms to vacate or expunge “previous criminal convictions and provide for civil standing and restitution procedures that enable survivors to recover financially from their traffickers.”[33] While civil relief should be granted to survivors, this analysis is a review of the criminal protections granted to minors.

A. Vacation & Expungement  

       Offering the least amount of protection, some states offer child victims of sex trafficking the opportunity to vacate or expunge their criminal record as it relates to them being trafficked. Many trafficked survivors have criminal records as a result of the actions they were forced to commit by their traffickers. At least twenty-nine states have created procedures for trafficking survivors to vacate or expunge criminal records, however, many of these state laws have strict provisions and processes and are limited to specific crimes.[34] Still, some states have less harsh stipulations. For example, the Florida law governing expungements applies to all arrests, charges, and convictions if they occurred when a minor was a victim of trafficking.[35] The Florida law “does not limit the number of arrests or convictions.”[36] Another state, New Mexico, “enables a trafficked survivors’ record to be sealed for non-homicide crimes if their involvement was due to duress, coercion, use of force or fraud.”[37] As mentioned previously, clearing a survivor’s criminal record removes significant barriers to obtaining housing, gaining employment, pursuing education, and restoring certain civic rights.

B.  Affirmative Defense  

       Next, there are affirmative defenses. Most states enable child victims of sex trafficking “to assert an affirmative defense to criminal charges they face as a result of actions they were forced to commit by their traffickers.”[38] An affirmative defense is evidence that, if found credible, negates criminal liability even if it is proved the defendant (more correctly in the cases at hand, the minor victim) committed the acts at issue.[39] Statutes differ in the crimes for which an affirmative defense can be raised, but many only cover prostitution, loitering, and solicitation. Wisconsin allows a victim of sex trafficking to assert an affirmative defense for “any crime he or she committed as a direct result of the trafficking without regard to whether anyone was prosecuted or convicted for trafficking.”[40]

C. Diversion 

       Diversion is a form of pretrial sentencing in which a criminal offender joins a rehabilitation program to help remedy the behavior leading to the arrest, allow the offender to avoid conviction and, in some jurisdictions, avoid a criminal record.[41] Diversion programs often frame these requirements as an alternative to further prosecution.[42] Successful completion of the requirements laid out by the diversion program may result in a dismissal or reduction of charges. Unsuccessful completion of the program may bring back the charges or heighten the penalties involved. Diversion programs have specifically played a key role in rehabilitating youthful offenders.[43] “The concept of [juvenile] diversion is based on the theory that processing certain youth through the juvenile justice system may do more harm than good.”[44] Nevertheless, for child victims of sex trafficking diversion can sometimes mean re-traumatization and further suffering as will be discussed below. As of today, twenty-five states offer some form of a diversion program to child sex trafficking victims.[45]

D. Immunity  

       “Immunity from prosecution,” or full legal immunity, is a status in which an individual cannot be held liable for violating legal obligations of the law.[46] Full immunity from prosecution is not common, and its main purpose is to facilitate societal aims that outweigh the value of imposing liability. Only three states in the country — Montana, New Hampshire, and South Carolina — grant full immunity to child victims of sex trafficking.[47]

The Diversion Debate & Human Trafficking Court  

       As public awareness of human trafficking has increased over the past few decades, human trafficking diversion courts have emerged in the United States.[48] While the title, “human trafficking court”, may sound like a court that’s purpose is to prosecute traffickers, the defendants in these particular courts are not child sex traffickers.[49] The defendants in these courts are the minor victims of trafficking and sexual exploitation whom the government has charged with prostitution and other offenses related to their exploitation.[50] While human trafficking diversion courts may help some survivors heal, other survivors are re-traumatized as a result of the requirement of participation.[51]

       On one hand, there are some glaringly obvious benefits to youth diversion programs. Sex traffickers often target runaway and homeless youth, as well as children who have been abused or neglected. When minors are forced to engage in commercial sex, it places them at risk for prosecution under prostitution laws. By enrolling in a diversion program, children have the opportunity to be provided with their basic needs like food and shelter, and some diversion programs offer mental health counseling, substance abuse treatment, and assistance with educational opportunities and finding employment.[52]

       On the other hand, there are some pretty harmful consequences of requiring a survivor to enroll in a diversion program. Some programs seem to criminalize the wrong actor, the victim, rather than the trafficker, possibly by requiring an admission of guilt or the entering of a conditional plea.[53] This criminalizes the wrong actor, the survivor, rather than the trafficker. Diversion programs also require the victim to continuously show up in court and appear in front of a judge.[54] Courtrooms can be frightening to some people, especially children.[55] Almost all diversion programs employ rehabilitation courses that the minor victim must complete in order to have their charges removed or reduced. These courses are designed to teach the victim how to change their behavior so that they are not brought into the justice system again. Once again, this philosophy is criminalizing the wrong actor and could easily be equated to victim blaming. Although the recidivism rate for women with prostitution-related offenses nationwide is eighty percent, survivors often do not need to be re-educated in order to leave the sex trade.[56] In reality, most survivors report needing a stable environment, housing, and steady employment.[57]

       In addition, most diversion programs require survivors to participate in random drug screening.[58] While survivors’ issues with substance abuse should definitely be assessed and treated, it is very harmful to require that survivors automatically be drug-free or that they pass random drug screenings to remain enrolled in their respective programs. The reality is that for numerous victims of child sex trafficking, addiction to illegal substances or alcohol was their trafficker’s main source of control over them.[59] In many states’ diversion programs, child victims of sex trafficking are expected to successfully complete the program.[60] If a child victim of sex trafficking does not successfully complete their court-mandated program, possibly due to a failed drug test, they can be removed from the diversion program and prosecuted for their alleged crimes.[61]

Opposition to Safe Harbor Laws

       It is no surprise that society stigmatizes child victims of sex trafficking. Members of society do not always see or consider all of the trauma, hardship, and abuse child victims have endured. Consider the following instance showcasing how a minor girl was treated by law enforcement:

A 13-year-old runaway was gang raped by 10 men for several hours in a Texas apartment last year. When she was rescued, authorities took her to a hospital where she was given a rape kit, which was used along with her account to quickly find two of her assailants, who were charged with felony sexual assault of a child.[62]

Andrea Powell continues:

Now consider the story of another 13-year-old girl, who was sold by a pimp to dozens of men throughout Washington, D.C. She experienced the same pain, fear, trauma, and abuse as the first child. But when an undercover officer, posing as a John, encountered her in a hotel room, she was arrested for prostitution and sent to juvenile jail. The men who bought her (or, more correctly, raped her) walked away free.[63]

Our society labeling one of these girls as a criminal and the other a victim is shameful. No 13-year-old child should face prosecution for prostitution. Ultimately, both children in the above examples were sent to treatment centers.[64] In contrast, though, the second child “had the added trauma of going through the penal system and carrying an arrest record.”[65] Andrea Powell explained:

This difference is based in a deeply rooted misunderstanding that the second girl made “a choice” because she was paid. Since she has a pimp, she is no longer considered a victim of statutory rape and sexual abuse. This misguided notion leads police to arrest more than 1,000 victimized children a year for prostitution – a crime they aren’t even capable of committing.[66]       

     In 2021, the University of Kentucky conducted a study about the state’s current Safe Harbor Laws which revealed that while Kentucky’s Safe Harbor Laws have helped decriminalize sex-trafficked youth in the state, there is still a lack of training and resources for child welfare personnel and judges who work with these youth.[67] The child welfare personnel noted in their interviews that all victims received services including “mental health and trauma counseling, medical evaluations, anti-trafficking victim services, residential placement, placement with alternative caregivers, drug treatment, language services, legal services, and basic needs.”[68] In addition, “40 of the 55 juvenile and family judges from the state replied that they observed “positive changes in practices consistent with the intent of the laws, including: decriminalization of youth; increased penalties for traffickers and buyers; … increased collaboration between service providers; increased training of judges and court personnel; and improved processes for screening and identifying youth victims.”[69]

      Unfortunately, not all responses were in support of Kentucky’s Safe Harbor laws. The findings showed that “[m]ore male judges agreed with statements that criminalized minors involved in commercial sex while more female judges agreed with less punitive interventions for these minors and harsher penalties for buyers and traffickers.”[70] Opposition to Safe Harbor Laws is a prevalent issue among numerous states across America.[71] Not only are child victims of sex trafficking faced with a special type of vulnerability when it comes to being trafficked, but they are also viewed as criminals by the system that is supposed to be in place to help them seek justice. The opposition, subliminally identified in the University of Kentucky study’s findings, is often rooted in racist, sexist, and classist ideologies which will be further examined below.

Race, Class, Gender, and Sexual Orientation  

       When it comes to the demographics of a child who is sex trafficked, those living in poverty are far more likely to succumb to this fate as they may not have any economic option aside from their trafficking situation, or they may be psychologically vulnerable to false promises which could lure them into trafficking.[72] These instances become even greater when it comes to those children who are African American and Latino.

       While the data from child sex trafficking is not exceptionally definitive, we still know it is a prevalent issue affecting American children. We also know it is very prevalent among minority children. For example, “we know that in Louisiana, Black girls account for nearly 49 percent of child sex trafficking victims, though Black girls comprise approximately 19 percent of Louisiana’s youth population ….”[73] Similarly, in King County, Washington, “84 percent of child sex trafficking victims are Black while Black children and adults together only comprise 7% of the general population”.[74]

       Likewise, there is strong evidence from the United States National Human Trafficking Hotline that Latinos are disproportionately represented among child sex trafficking victims, and survivors, in general.[75] The most likely explanation is a broken immigration system that makes immigrants vulnerable to trafficking, whether it be due to their status as undocumented or the feeling that they are indebted to their trafficker if they are here on a temporary work visa, and the reality is that today more than ever before, immigrants that come to the United States are likely to come from Latin America.[76]

       The underlying scheme in both of these situations is racism and power. These factors manifest as discrimination, particularly, but not solely, economic discrimination. Racism has historically and presently fueled policies that stunt the economic opportunity and upward mobility of minority people in the United States for generations.[77] This coupled with the fact that there have always been children who are, for a variety of disturbing reasons, far more likely to be targeted by trafficking operations than others, make minority children an easy target for commercial sex trafficking. For example, homeownership is a primary driver of family wealth in the United States.[78] Racist “redlining” has “kept minority families out of majority-white neighborhoods that might have grown in value by keeping them from getting mortgages.”[79] The resulting poverty and the general unequal protection of minorities under the law have been key risk factors in determining what demographic of children in America are most trafficked.

       Child sex traffickers take full advantage of economic disparity and minority discrimination to entice and bait children into trafficking rings and, ultimately, trap them there, often promising glamorous, or even just comfortable, lives.[80] They will convince children whose families have been cut off from economic opportunity that commercially selling sex is the way to a better future for themselves; traffickers are able to manipulate children into thinking commercially selling sex is the only way to a better future.[81]

       While the economic consequence of racism is the most explicit link between why children of color and minority children are more likely to be trafficked and arrested for prostitution than their white counterparts, it is definitely not the sole reason. The way minorities are treated by American law enforcement also needs to be taken into consideration. In 2018, an examination of arrest data reported to the Federal Bureau of Investigation by thousands of police departments revealed that “in 800 jurisdictions, black people were arrested at a rate five times higher than white people…”[82] “In 250 jurisdictions, black people were 10 times more likely to be arrested than their white counterparts.”[83] The examination, conducted by ABC News in collaboration with other ABC-owned stations, covered a three-year period that ended in 2018.[84]

      Thus, due to their disparate economic situations coupled with the rate at which they are disproportionately arrested, Black and Latino children are far more likely to fall victim to being trafficked for commercial sex and subsequently arrested for child prostitution than white children. In short, attitudes and stereotypes about minority children make it so that they are more vulnerable to sex trafficking but less likely to be identified or seen as victims.[85]

      This experience of being less likely to be seen as a victim also exists among young boys who are victims of child sex trafficking. In Massachusetts, there is one program that focuses solely on helping male youth and trans females who are sexually exploited.[86] The program’s revenue last year was less than half of the revenue of its sister program for female youth.[87] Both programs were run by the same nonprofit, Roxbury Youthworks, Inc.[88] Prosecuting those who exploit and traffic boys presents another, more difficult challenge. The Office of the Massachusetts Attorney General has only had one case that includes a male victim out of the 62 sex trafficking cases that have been filed since 2012.[89]

    While we know that trafficking affects all demographics, we also know that traffickers frequently target specific individuals. This includes those lacking support from their community, those experiencing financial hardships, those who have experienced violence, and those marginalized by society. “Without adequate community support, youth who identify as lesbian, gay, bisexual, transgender, queer, or questioning (LGBTQ) may be at particular risk for sex trafficking.”[90] Individuals who have been trafficked often find it hard to reach out for assistance, especially individuals who fear that “they will be mistreated or not believed because of their gender identity or sexual orientation.”[91] Additionally, “[s]tudies have found that LGBTQ youth are overrepresented in detention for prostitution-related offenses and report higher levels of police misconduct than their straight peers.”[92] In Massachusetts alone, since 2018, more than 411 boys, who were concerned to have been victims of commercial sexual exploitation, have been referred to the Department of Children and Families of Massachusetts — this accounts for about 15 percent of the total number of referrals the Department has received.[93] In addition to the 411 boys identified, 109 more youth were identified as trans or non-binary.[94] Jennifer McKim and Phillip Martin indicate that “The state just started collecting this data in 2016, and it is widely considered to be an undercount.”[95] While definitive data is lacking, recent studies show boys are being exploited at much higher rates than what was originally understood.[96]

Argument for Full Legal Immunity from Prostitution, Prostitution-Related Offenses, and Status Offenses  

       One of the key considerations that states assess when it comes to legislating Safe Harbor Laws is whether that state will create full legal immunity from prosecution or create a diversion program. While there is disagreement among experts and variation in the studies reported, Polaris believes that the combination of legal immunity and unrestricted services provides the most legal protection and goes the furthest to ensure that a victim of child sex trafficking receives the benefits and care they require.[97]

       In 2011, the Uniform Law Commission and the American Bar Association urged the American Bar Association delegates to draft a resolution advising states not to charge child sex trafficking victims with prostitution or prostitution-related offenses, and to instead provide them with rehabilitative services.[98] This means unrestrictive services — not those acquired only through successful completion of a diversion program. The preference for the immunity model for child victims of sex trafficking is clearly and unequivocally reflected. Language from the Uniform Act on Prevention of and Remedies for Human Trafficking Act is as follows:

Section 15. Immunity of a Minor

(a) An individual who was a minor at the time of the offense is not criminally liable or subject to [juvenile delinquency proceeding] for [prostitution] and [insert other non-violent offenses] committed as a direct result of being a victim of human trafficking.[99]

       Based on the examination of the evidence gathered, and the discernment of how re-traumatization due to diversion proceedings and requirements can affect a child victim of sex trafficking, state lawmakers should enact Safe Harbor Laws that will provide minors with full legal immunity from being prosecuted for prostitution; prostitution-related offenses such as loitering and solicitation; and status offenses related to conduct arising from being trafficked. In juvenile cases, a "status offense" involves conduct that would not be a crime if it were committed by an adult.[100] Some examples include truancy, violating a city or county curfew, underage possession or consumption of alcohol, and running away or being beyond the control of parents or guardians.[101] These types of offenses are far less likely to present a danger to society than ordinary public offenses.[102] Therefore, child victims of sex trafficking should not be penalized for status offenses committed while under the undue influence and control of their trafficker.

       When child trafficking victims are convicted of prostitution, they are often transferred from the control of a trafficker to the control of the criminal justice system. The right Safe Harbor Laws protect child victims of sex trafficking from unjust criminalization.

Protection From Other Crimes

       Another position some advocates push for is protecting child sex trafficking victims from other types of prosecution for the crimes they commit while under the control of their trafficker. These crimes could range from petty theft, robbery, and grand theft auto — all the way up to crimes such as serious physical assault and homicide. A recent case in which a child victim of sex trafficking was ultimately granted protection from being further punished for the crimes she committed while being trafficked is the case of Cyntoia Brown.[103] Cyntoia Brown, who was a young girl at the time of the alleged murder, spent roughly 15 years in prison for killing and robbing a man in what most have determined to be self-defense.[104] In 2019, she was finally granted clemency by Tennessee Governor Bill Haslam.[105] This was an unusual occurrence in America as black Americans are nearly four times less likely than white criminals to be granted a pardon — even when the type of crime and the severity of the sentence are taken into account.[106] Protection from other crimes has not been heavily researched or reviewed. Further, protection from crimes outside of prostitution-related offenses and status offenses, especially violent crimes, is considered by some to be extreme or dangerous. Still, minor victims of sex trafficking should never be punished for acting in self-defense.

Conclusion

       While some state lawmakers have successfully passed legislation that serves to provide child sex trafficking victims with judicial protections from prosecution for prostitution and various other related offenses, there is still a long way to go. As noted, only some states in America currently grant full legal immunity to child victims of sex trafficking from prosecution for prostitution.[107] There should be no such thing as a child prostitute in America. State lawmakers must enact Safe Harbor Laws that provide child victims of sex trafficking not only with protections from prosecution but also unrestricted services that serve to assist them in rising out of the circumstances that made them susceptible to being sex trafficked in the first place. The providing of these services should not be made contingent upon successful participation in a diversionary program. Rather, rehabilitative services should be offered freely and non-contingently to all sexually exploited youth who wish to receive them. These services should range from providing food and shelter to offering mental health counseling, substance abuse treatment, and assistance with educational opportunities and finding employment. It is also extremely necessary for state lawmakers to take into consideration the disproportionate amount of minority children and groups who are trafficked and subsequently prosecuted. Ultimately, the combination of legal immunity and unrestricted victim services provides the most legal protection and goes the furthest to ensure that a victim of child sex trafficking receives the benefits and care they require. When child sex trafficking victims are convicted of prostitution, they are often transferred from the control of a trafficker to the control of the criminal justice system. The right Safe Harbor Laws protect child victims of sex trafficking from unjust criminalization.

I J.D., University of Kentucky J. David Rosenberg College of Law, Class of 2023

[2] See The Statistics, Tabitha’s House, https://tabithashouseint.org/resources/statistics/ (last visited Dec. 6, 2021) [https://perma.cc/V4QJ-FQ7X].

[3] Sex Trafficking Statistics, Guardian Grp., https://guardiangroup.org/sex-trafficking-statistics/ (last visited Dec. 6, 2021) [https://perma.cc/D4RY-F98H].

[4] Heather J. Clawson et al., Human Trafficking Into and Within the United States: A Review of the Literature 1, 8–9, U.S. Dep’t. of Health and Hum. Servs. (Aug. 29, 2009), https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//43241/index.pdf [https://perma.cc/J5YF-XCP8].

[5] See Safe Harbor: Does Your State Arrest Minors for Prostitution?, Hum. Trafficking Search (Oct. 18, 2018), https://humantraffickingsearch.org/safe-harbor-does-your-state-arrest-minors-for-prostitution/ [https://perma.cc/R3FJ-EZ6F].

[6] See Human Trafficking State Laws, Nat’l Conf. of St. Legislatures, https://www.ncsl.org/research/civil-and-criminal-justice/human-trafficking-laws.aspx (last updated Aug. 12, 2020) [https://perma.cc/7HZB-GEFK].

[7] Fact Sheet: Safe Harbor Laws, Nat’l Council of Jewish Women (Sept. 2016), https://www.ncjw.org/wp-content/uploads/2017/07/Fact-Sheet_Safe-Harbor_Updated-2016.pdf [https://perma.cc/EFC2-PE4K].

[8] See Continuum of Services for Pre-arrest Diversion Programs, Cmty. Catalyst, https://www.communitycatalyst.org/resources/publications/document/Continuum-of-Services-FINAL-2.pdf (last visited Dec. 5, 2021) [https://perma.cc/8VGP-M3RK].

[9] See Bradley Hardy & Trevon Logan, Race and the lack of intergenerational economic mobility in the United States, Wash. Ctr. for Equitable Growth (Feb. 18, 2020), https://equitablegrowth.org/race-and-the-lack-of-intergenerational-economic-mobility-in-the-united-states/ [https://perma.cc/PUZ5-TAPT]; The Latino Face of Human Trafficking and Exploitation in the United States, Polaris (Apr. 27, 2020), https://polarisproject.org/press-releases/the-latino-face-of-human-trafficking-and-exploitation-in-the-united-states/ [https://perma.cc/T2S5-M5E5]; Pierre Thomas, John Kelly & Tonya Simpson, ABC News analysis of police arrests nationwide reveals stark racial disparity, ABC News Internet Ventures (June 11, 2020, 5:04 AM), https://abcnews.go.com/US/abc-news-analysis-police-arrests-nationwidereveals-stark/story?id=71188546 [https://perma.cc/A937-BXVH].

[10] Legal Information Institute, Safe harbor, Cornell L. Sch., https://www.law.cornell.edu/wex/safe_harbor (last visited Nov. 25, 2021) [https://perma.cc/6KY7-8BR5].

[11] Id.

[12] See Child Trafficking Statistics, Child Liberation Found., https://liberatechildren.org/child-trafficking-statistics (last visited Dec. 2, 2021) [https://perma.cc/9VVX-AB4P].

[13] Id.

[14] See Priscilla Alvarez, When Sex Trafficking Goes Unnoticed in America, The Atlantic (Feb. 23, 2016), https://www.theatlantic.com/politics/archive/2016/02/how-sex-trafficking-goes-unnoticed-in-america/470166/ [https://perma.cc/6JY4-HN87].

[15] Child Trafficking Statistics, supra note 12.

[16] Id.

[17] Id.

[18] See Human Trafficking of Children in the United States-A Fact Sheet for Schools, Off. of Elementary & Secondary Educ., https://oese.ed.gov/human-trafficking-of-children-in-the-united-states-a-fact-sheet-for-schools/ (last visited Mar. 12, 2022) [https://perma.cc/FG5V-CPSH].

[19] See Human Trafficking State Laws, supra note 6.

[20] Kristen Wells, The 2019 Trafficking Victims Protection Reauthorization Act: A Topical Summary and Analysis of Four Bills, Polaris (2019), https://polarisproject.org/wp-content/uploads/2020/01/Polaris-TVPRA-2019-Analysis.pdf [https://perma.cc/LYC5-MHR7].

[21] Id.

[22] See id.

[23] See id.

[24] Justice for Victims of Trafficking Act of 2015, H.R. Res, 181, 114th Cong. (2015) (enacted).

[25] Id.

[26] Id.

[27] See Sex Trafficking of Children or by Force, Fraud, or Coercion, 18 U.S.C § 1591 (2020).

[28] See Chelsea Parsons et al., 3 Key Challenges in Combating the Sex Trafficking of Minors in the United States, Ctr. for Am. Progress (Apr. 8, 2014), https://www.americanprogress.org/article/3-key-challenges-in-combating-the-sex-trafficking-of-minors-in-the-united-states/ [https://perma.cc/CFD4-L3PU].

[29] Child Victims of Sex Trafficking Can Be Arrested for Prostitution, Neal Davis L. Firm (Sept. 8, 2021), https://www.nealdavislaw.com/blog/sex-crimes/child-prostitution-victim-arrests [https://perma.cc/G6TL-3LTL].

[30] Jessica Contrera, Sex-trafficked kids are crime victims. In Las Vegas, they still go to jail., Wash. Post (Aug. 26, 2021), https://www.washingtonpost.com/dc-md-va/interactive/2021/vegas-child-sex-trafficking-victims-jailed/ [https://perma.cc/8HPV-T4NZ].

[31] Human Trafficking State Laws, supra note 6.

[32] Id.

[33] Id.

[34] Id.

[35] Id.

[36] Id.

[37] Id.

[38] Id.

[39] See Legal Information Institute, Affirmative Defense, Cornell L. Sch., https://www.law.cornell.edu/wex/affirmative_defense (last visited Dec. 2, 2021) [https://perma.cc/48SX-TYMU].

[40] Human Trafficking Statute § 940.302, https://www.doj.state.wi.us/sites/default/files/ocvs/vawa/wcasa-human-trafficking-resource-card-statutes-web.pdf (last visited Dec. 1, 2021) [https://perma.cc/8XHB-MDBX].

[41] See Legal Information Institute, Diversion, Cornell L. Sch., https://www.law.cornell.edu/wex/diversion (last visited Dec. 5, 2021) [https://perma.cc/YF6D-C5Y9].

[42] See id.

[43] See What Is Diversion in Juvenile Justice?, Annie E. Casey Found. (Oct. 22, 2020), https://www.aecf.org/blog/what-is-juvenile-diversion [https://perma.cc/H3T4-7A5U].

[44] Detention Diversion Advocacy, Diversion Programs: An Overview, The Ctr. on Juvenile and Crim. Just. (Sept. 1999), https://www.ncjrs.gov/html/ojjdp/9909-3/div.html [https://perma.cc/MH3J-KX6P].

[45] See Human Trafficking State Laws, supra note 6.

[46] See Legal Information Institute, Immunity, Cornell L. Sch., https://www.law.cornell.edu/wex/immunity (last visited Dec. 3, 2021) [https://perma.cc/D2ZD-65DL].

[47] See Human Trafficking State Laws, supra note 6.

[48] See Human Trafficking Courts, Off. of Just. Programs, https://www.ovcttac.gov/taskforceguide/eguide/6-the-role-of-courts/64-innovative-court-responses/human-trafficking-courts/ (last visited Dec. 3, 2021) [https://perma.cc/5BVV-5ZEK].

[49] See id.

[50] See id.

[51] Elise White et al., Navigating Force and Choice: Experiences in the New York City Sex Trade and the Criminal

Justice System’s Response, Ctr. for Ct. Innovation (Dec. 2017), https://www.courtinnovation.org/sites/default/files/media/documents/2018-03/nyc_sex_trade.pdf [https://perma.cc/FVE3-8BPY].

[52] Continuum of Services for Pre-arrest Diversion Programs, Cmty. Catalyst, https://www.communitycatalyst.org/resources/publications/document/Continuum-of-Services-FINAL-2.pdf (last visited Dec. 5, 2021) [https://perma.cc/RK5R-WTBV].

[53] See Emmylou Manwill, Human Trafficking Courts: Diversion To Or From Justice?, Hum. Trafficking Inst., (Apr. 1, 2020) https://traffickinginstitute.org/human-trafficking-courts-diversion-to-or-from-justice/ [https://perma.cc/XZH4-ENUC].

[54] See Gail S. Goodman, Testifying in Criminal Court: Emotional Effects on Child Sexual Assault Victims, 57 Soc’y for Rsch. in Child Dev., no. 5, 1992, at 40–43.

[55] See id. at v.

[56] Paige Pfleger, A Pioneering Ohio Courtroom Helps Trafficking Victims Find Hope, Nat’l Pub. radio (Oct. 7, 2019, 12:16 PM), https://www.npr.org/2019/10/07/767850332/a-pioneering-columbus-courtroom-helps-trafficking-victimsfind-hope [https://perma.cc/P37G-PBPV].

[57] Brendan M. Conner, In Loco Aequitatis: The Dangers of ‘Safe Harbor’ Laws for Youth in the Sex Trades, Wm. & Mary L. Sch. Scholarship Repository 43, 58–61 (2016).

[58] Diversion Programs, U.S. Dep’t of Just., https://www.justice.gov/usao-dc/diversion-programs (last updated Mar. 3, 2021) [https://perma.cc/BD8P-WAE2].

[59] See Marc O’Neill & Jeremie Barclay, Combating Drug-Facilitated Sex Trafficking of Runaway Youth, Police Chief Mag. (Nov. 25, 2020), https://www.policechiefmagazine.org/combating-drug-facilitated-sex-trafficking-of-runaway-youth/ [https://perma.cc/A7VW-4JTD].

[60] See Manwill, supra note 53.

[61] See id.

[62] Andrea Powell, Children who are prostituted aren’t criminals. So why do we keep putting them in jail?, Wash. Post (Dec. 5, 2014, 10:57 AM), https://www.washingtonpost.com/posteverything/wp/2014/12/05/child-prostitutes-arent-criminals-so-why-do-we-keep-putting-them-in-jail/ [https://perma.cc/3TA2-4LPH].

[63] Id.

[64] Id.

[65] Id.

[66] Id.

[67] Study Revealed Safe Harbor Laws Increased Protections for Sex-Trafficked Youth, Identified Needs for Agency Support and Judicial Training, Nat’l Inst. of Just. (Mar. 8, 2021), https://nij.ojp.gov/topics/articles/study-revealed-safe-harbor-laws-increased-protections-sex-trafficked-youth [https://perma.cc/6JAP-SXSM].

[68] Id.

[69] Id.

[70] Id.

[71] See Powell, supra note 62.

[72] Racial Disparities, COVID-19, and Human Trafficking, Polaris (July 29, 2020), https://polarisproject.org/blog/2020/07/racial-disparities-covid-19-and-human-trafficking/ [https://perma.cc/KK5W-8RRG].

[73] Id.

[74] Id.

[75] See The Latino Face of Human Trafficking and Exploitation in the United States, Polaris (Apr. 27, 2020), https://polarisproject.org/press-releases/the-latino-face-of-human-trafficking-and-exploitation-in-the-united-states/ [https://perma.cc/5VM9-DUL8].

[76] See id.

[77] See Hardy & Logan, supra note 9.

[78] Homeownership Remains Primary Driver of Household Wealth, Nat’l Ass’n of Home Builders (Feb. 18, 2021), https://nahbnow.com/2021/02/homeownership-remains-primary-driver-of-household-wealth/ [https://perma.cc/YQ6U-GPD8].

[79] Racial Disparities, COVID-19, and Human Trafficking, supra note 72.

[80] See Human Trafficking in Youth-serving Programs: A Blueprint for Organizations Working with Street Youth, Homeless Youth, and Youth at Risk 9­–11, Fam. & Youth Servs. Bureau, https://www.rhyttac.net/assets/docs/Resources/HumanTraffickingBlueprint-508.pdf (last visited Dec. 8, 2021) [https://perma.cc/E5S7-UQ65].

[81] See id.

[82] Pierre Thomas, John Kelly, & Tonya Simpson, ABC News analysis of police arrests nationwide reveals stark racial disparity, ABC News Internet Ventures (June 11, 2020, 5:04 AM), https://abcnews.go.com/US/abc-news-analysis-police-arrests-nationwidereveals-stark/story?id=71188546 [https://perma.cc/NCS9-4SR2].

[83] Id.

[84] Id.

[85] See Racial Disparities, COVID-19, and Human Trafficking, supra note 72.

[86] Jennifer B. McKim & Phillip Martin, Unseen, part 1: The boy victims of the sex trade, GBH (Apr. 15, 2021), https://www.wgbh.org/news/national/2021-04-05/unseen-the-boy-victims-of-the-sex-trade-pt-1 [https://perma.cc/8UMN-KQ8N].

[87] Id.

[88] Id.

[89] Id.

[90] Sex Trafficking and LGBTQ Youth, Polaris, https://polarisproject.org/wp-content/uploads/2019/09/LGBTQ-Sex-Trafficking.pdf (last visited Dec. 10, 2021) [https://perma.cc/V2LY-E5B4].

[91] Id.

[92] Id.

[93] McKim & Martin, supra note 86.

[94] Id.

[95] Id.

[96] Id.

[97] See Human Trafficking Issue Brief: Safe Harbor Fall 2015, Polaris, https://polarisproject.org/wp-content/uploads/2019/09/2015-Safe-Harbor-Issue-Brief.pdf (last visited Dec. 2, 2021) [https://perma.cc/LB9Y-URLF].

[98] See id.

[99] Id.

[100] See What Are Status Offenses and Why Do They Matter?, The Annie E. Casey Found. (Apr. 6, 2019), https://www.aecf.org/blog/what-are-status-offenses-and-why-do-they-matter [https://perma.cc/CEU7-GSC4].

[101] Id.

[102] See id.

[103] Bobby Allyn, Cyntoia Brown Released After 15 Years In Prison For Murder, Nat’l Pub. Radio (Aug. 7, 2019, 12:24 PM) https://www.npr.org/2019/08/07/749025458/cyntoia-brown-released-after-15-years-in-prison-for-murder [https://perma.cc/UW36-VV55].

[104] Id.

[105] Id.

[106] See Dafna Linzer & Jennifer LaFleur, Presidential Pardons: Presidential Pardons Heavily Favor Whites, ProPublica (Dec. 3, 2011, 11:00 PM), https://www.propublica.org/article/shades-of-mercy-presidential-forgiveness-heavily-favors-whites [https://perma.cc/C4SW-S8DA].

[107] See Human Trafficking State Laws, supra note 6.

The Reciprocity of Conservation and Hunting: Improving Kentucky’s North American Model of Wildlife Conservation

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The Reciprocity of Conservation and Hunting: Improving Kentucky’s North American Model of Wildlife Conservation 

Dustyn Sams I

Introduction

      Some people consider conservation and wildlife management (hunting, fishing, trapping, etc.) divergent practices.[2] Yet, the two of them embrace an intricate theme of reciprocity.[3] In America, dollars from hunter and angler license sales are a major, if not the most significant, source of conservation funding.[4] This inextricable link between conservation and management warrants the reasonable preservation of both practices, not one without the other. The Commonwealth of Kentucky is a great place to start.

        The Kentucky Department of Fish and Wildlife successfully maintains its conservation and management model, but it does articulate a need for additional funding.[5] Further, Kentucky’s existing model emphasizes the preservation of game species but neglects the preservation of non-game species.[6] Hunters are also arguably declining,[7] and the Department’s conservation and management funding is volatile as hunter dollars are its cornerstone.[8] Therefore, Kentucky should adopt a “dual-payer” model of funding that combines its current model with additional funding sources of redistributed agency funds and reallocated taxes.

         In 2001, the Association of Fish and Wildlife Agencies (AFWA) formally adopted the “North American Model of Wildlife Conservation.”[9] One of the AFWA’s key tenants is, “hunters and anglers pay for wildlife conservation and management.”[10] This is called a “user-pays” model.[11] All states employ some form of a user-pays model, including Kentucky.[12] The Commonwealth’s current model includes more than one “user,” a “dual-payer” model, comprised of money from license fees and money from federal and other sources. This model is precarious because it relies heavily on any user-pays model’s largest weakness: that there will always be as many hunters as there are now.

     This article proposes several feasible improvements to Kentucky’s model. One improvement calls for the Kentucky Legislature to amend the Department of Parks enabling statute with express authority to redistribute funds toward activities closer linked to conservation and management efforts. Another improvement calls them to reallocate a portion of the sales tax collected on outdoor equipment to the Department of Fish and Wildlife by statutory amendment. A stronger dual-payer model would ensure a healthy future for Kentucky’s ecosystems and pave the way for other states to adhere to a similar plan. Part II provides an overview of America’s history of wildlife impositions, conservation, and management. Part III uncovers the need for a more stable wildlife conservation and management model in Kentucky. Part IV proposes the details of two amendments to create a strengthened dual-payer model.

I.  America’s History of Wildlife Impositions, Conservation, and Management

       A review of America’s history of wildlife impositions, conservation, and management efforts illuminates its current flavor of wildlife conservation and management. One can divide America’s wildlife conservation and management history into three eras.[13] First, America’s wildlife roamed comparatively undisturbed before America’s birth. Second, human encroachment on wildlife was prevalent at America’s origin. Third, state and federal actors combated exploitation.

A.  Early, Primal Impositions

      Before the colonization of North America, wildlife roamed arguably freer than today.[14] A variety of life inhabited the continent, from wolves, bison, and other fauna to a guild of flora.[15] Scholars often employ one theory, Pleistocene Overkill, to explain the demise of these species.[16] It suggests that native people preyed on these animals to a noticeable detriment.[17]

      From the 1500s to the mid-1600s, North America’s wildlife species were much like those present today.[18] On one hand, scholars believe Native Americans embodied a culture that encouraged minimal wildlife impositions. On the other, though, recent scholarship reveals Native Americans impacted wildlife on a larger scale than previously thought. Regardless, their interference was nominal and primal when compared to the effects of today’s rural municipalities and cityscapes.

B.  Decimation of America’s Wildlife

      The Colonial Age and Westward Expansion fostered a new age of wildlife impositions. Europeans found America rich in wildlife.[19] Deer, elk, moose, and beavers inhabited eastern forests;[20] Bison, antelope, bears, elk, sheep, and moose inhabited the west.[21] Scholars believe colonialists’ arrival to North America initially spiked wildlife populations due to the transmission of diseases to Native Americans, the preeminent cause of wildlife decimation at the time.[22]

       Colonial settlers exploited America’s wildlife by commercializing hunting and fur trapping.[23] As early as 1650, beavers were nearly eliminated from the eastern coast.[24] In 1748, South Carolina records account for a shipment of about 160 thousand deer pelts to Great Britain.[25] Passenger pigeons initially numbered between three and five billion, but by the 1850s, settlers sometimes killed over fifty thousand birds daily.[26]

       Western Expansion created further opportunities for exploitative professions. Forty to seventy million bison and about ten million pronghorns then roamed the western plains.[27] In 1833, the American Fur Company exported over forty thousand bison hides overseas.[28] In 1865, commercial hunters killed about one million bison.[29] By 1871, the number increased five million per year.[30] Around 1900, a census recorded only 540 remaining bison.[31] The onslaught of passenger pigeons progressed too.[32] By then, no pigeons remained in the wild, and passenger pigeons became extinct fourteen years later.[33] The government and public sentiments began recognizing the exploitation of America’s wildlife.[34] This “laid the foundation for the North American Model of Wildlife Conservation.”[35]

C.  Increase in Government Efforts to Conserve and Manage Wildlife

     After taking notice of the country’s unsustainable practices, the federal government and state governments addressed America’s wildlife exploitation.[36] First, the states and Supreme Court addressed conservation and management at a large scale.[37] Later, Congress acted through several statutes.[38]

i.  Rise of State Conservation and Management Efforts and the Supreme Court

       The States and people were the first to address wildlife exploitation. In 1844, the New York Sportsmen’s Club was formed.[39] New York also drafted some of America’s first management laws. Subsequently, state legislatures passed similar laws. Many hunting, conservation, and scientific organizations formed.[40] Some lobbied for stricter exploitation laws and bans on wasteful hunting.[41] In response, states created wildlife commissions and agencies.[42] These entities implemented the practice of collecting money for hunting and angler licenses, thereby establishing user-pays models.[43]

       Kentucky was among the first states to recognize the need for proper conservation and management.[44] As early as 1738, deer-harvest laws applied to the territory that would become the Commonwealth.[45] From the mid-1700s to around the last half of the century, Kentucky’s efforts to conserve wildlife were sporadic.[46] In 1912, The Kentucky Game and Fish Commission was born, which later became the Kentucky Department of Fish and Wildlife.[47]

      The Supreme Court answered challenges regarding wildlife management too.[48] In Martin v. Waddell’s Lessee, a seminal natural resource law authority, the Court recognized the public trust doctrine, where the government holds the land under navigable waterways in trust for the public.[49] There, the Court denied a property owner’s attempt to prevent others from taking oysters he claimed.[50] The doctrine bolstered the user-pays model by tacitly encouraging use of wildlife and natural resources by the layperson.

       The Court next affirmed the States’ authority to regulate wildlife. In Geer v. Connecticut, it held the citizens’ common ownership of wildlife imposes a duty of state legislatures to enact laws that will best preserve nature held in trust.[51] There, the defendant challenged a Connecticut penalty for illegally transporting animals to another state.[52] The Court upheld the penalty.[53] This fortified the state ownership doctrine, which emphasizes the states’ sovereignty to conserve and manage wildlife within their borders.[54]

       Later, a new line of cases eroded the state ownership doctrine’s muscle. In Missouri v. Holland, the Court held that States cannot usurp federal statutory authority.[55] There, Missouri challenged the Migratory Bird Act for infringing on its power over wildlife within its borders.[56] This permitted the federal government to implement wildlife management laws within the States. In Kleppe v. New Mexico, the Court held New Mexico’s challenge of the Wild and Free-Roaming Burros Act was invalid because the federal government can govern animals on federal land.[57] In Hughes v. Oklahoma, the Court held an Oklahoma law that prohibited transporting minnows out of state violated the Commerce Clause, extending federal control further.[58]

      Each of these cases fashioned a canvas for states to implement functional dual-payer models with a user-pays prong. But these states relied heavily on the user-pays license fees. Thus, many states like Kentucky became more, and still are, dependent on hunter and angler dollars than before to support conservation and management efforts.

ii.  Rise of Congress and the President’s Conservation and Management Efforts

      Congress and the President became heavily concerned with exploitation at the turn of the twentieth century. This created the bedrock for many federal wildlife impositions today.

     Congress first addressed habitat protection. In 1891, Congress passed the Forest Reserve Act to prevent exploitative logging.[59] The forests reserved by the Act eventually became the national forests Americans recognize today. For example, the Shoshone National Forest was America’s first federally managed forest service.[60] In 1905, the United States Forestry eventually took over managing reserves from the General Land Office.[61]

       Congress then addressed exploitation of wildlife. In 1900, Congress enacted the Lacey Game and Wild Birds Preservation and Disposition Act.[62] The Act made it unlawful for one to import, export, sell, acquire, or purchase wildlife, fish, and plants transported or sold in violation of U.S. law, or in interstate commerce in violation of state law.[63]

       Congress also turned its attention to wildlife harvesting regulations. In 1918, it passed the Migratory Bird Treaty Act.[64] Congress believed the measure would increase the “sustainability of populations of all protected migratory bird species.”[65] This Act eliminated the ability of Americans to hunt “migratory birds,” and offered protection to migratory birds’ nests and eggs.[66]

      Although the Act only pertains to birds, its passage was a first domino to subsequent legislation concerning regulating America’s wildlife by federal means.

       President Theodore Roosevelt’s administration pressed a robust wildlife conservation agenda.[67] Roosevelt’s early involvement with the Boone and Crockett Club translated into his presidency years later.[68] By the end of Roosevelt’s presidency, his administration set aside over 230 million acres of American soil as federally protected land, established fifty-five wildlife refuges, and five national parks.[69] Some scholars criticize Roosevelt for usurping power not delegated to the president,[70] but others praise his efforts for reversing America’s wildlife exploitation. Nevertheless, Roosevelt shaped American conservation and management efforts for the long haul.

       Other presidents left their mark on American wildlife. In 1872, President Ulysses S. Grant established the three thousand square mile Yellow Stone National Park.[71] In 1964, President Lyndon Johnson backed the Wilderness Act and Wild and Scenic Rivers Act.[72]

      Entering the twentieth century, the States, Congress, Supreme Court, and President had created the framework for the world’s leading wildlife conservation and management model, the North American Model. Kentucky still lies at Model’s core. How to retain adequate funding in specific states became a different question.[73]

II.  Current Funding for Kentucky Wildlife Conservation and Management

       Unpredictable revenue streams currently fuel the Kentucky Department of Fish and Wildlife.[74] If reasonable conservation and management is the desired end, then it only helps if funding derives from principles of stability and predictability. Understanding the intricacies of the Department’s funds unveils that it lacks, to a noticeable extent, stabilityand predictability.

        As stated before, Kentucky’s Department of Fish and Wildlife is formally financed through a dual-payer model. Yet, its user-pays component is a dominant source of funding upon which Kentucky relies. In 2005, over 50% of the Department’s budget, excluding federal funding, came from hunting and angler licenses.[75]

      The Department of Fish and Wildlife has expressed their need for more funding to achieve their goals of conserving and managing all of Kentucky’s wildlife, as opposed to species just desirable to take.[76] If funding of the department most closely associated with Kentucky’s wildlife is inadequate, then one cannot expect a status quo of nourished ecosystems. This, combined with the number of arguably declining hunters, is enough to provoke concern. While scholars debate the accuracy of hunter-decline statistics, evidence supports that outdoorsmen and outdoorswomen are becoming older, and a younger generation is not taking their place.[77] Therefore, Kentucky’s wildlife conservation and management efforts are subject to volatility, because such relies too much on hunter and angler dollars. The chance is not worth taking.

       States like Wyoming are prime examples of a working dual-payer model that Kentucky can look to. Wyoming is known for its natural sites, healthy wildlife populations, and prominent state and federal parks.[78] Wyoming’s dual-payer model funds its renowned system of wildlife conservation and management. One prong of its model is a user-pays prong.[79] Like Kentucky, this prong has proved a viable method for funding wildlife conservation and management.[80] Wyoming employs a second prong of robust, diverse funding measures.[81] It includes hefty federal funding, grants, donations, and revenue from state-owned property.[82] It is important to note that Kentucky and Wyoming are distinct states with distinct natural landscapes, politics, and needs. But the states are not so different as to render any ideas Kentucky draws from Wyoming valueless. The proposed Kentucky dual-payer model is less about the specific categories of additional funds and more about establishing several robust sources that fund wildlife conservation and management.

III. The Proposed Kentucky Dual-Payer Model

          For any agency to raise additional funds is difficult alone, and pushback from legislators and voters add to that difficulty. For these reasons, the dual-payer model should derive its funding not from new money but through reallocated and redistributed money. These transfers of money will serve as one “payer” of the dual-payer model, and the money from outdoorsmen licenses, fees, and other contributions will serve as the other “payer.” There are two feasible ways to improve Kentucky’s conservation and management model: (A.) redistributing how portion of the Department of Parks budget is spent; (B.) redirecting tax money already collected from outdoor equipment sales.

A.  Redistributing Money from the Department of Parks to the Department of Fish and Wildlife

        The Department of Fish and Wildlife assumes hands-on conservation and management of Kentucky wildlife, while the Department of Parks is involved more in the administrative side of state parks.[83] The Department of Parks devotes significantly less money each year directly attributable to conserving and managing wildlife than the Department of Fish and Wildlife.[84] Rather, most of the Department of Parks expenditures are allocated toward tourism and outdoor recreation.[85] The Department of Parks has the authority and ability to make more financial contributions in closer relation to Kentucky’s wildlife, but a noticeable portion of its expenditures goes towards projects in closer relation to tourists’ pastimes.[86]

       Tourism is predicated on tourists having something to see. In Kentucky, this means seeing its natural landscapes, fauna, and flora.[87] If the General Assembly passed a law that funneled more of the Department of Parks’ activity into endeavors closer related to conservation and management, it could ensure a more stable future for both nature and tourism.

         The Department of Fish and Wildlife comprises a little under half of Kentucky’s expenditures in the Tourism, Arts, and Heritage Cabinet.[88] The Department currently runs on around 250 million dollars a year.[89] This budget is comprised of state, federal, and other funding sources.[90] The Department spends over 57 million dollars a year.[91] Of that 57 million dollars in expenditures, it spends over half on wildlife management and fisheries management.[92] The Department focuses its other half of expenditures on administration and support, information and education, law enforcement, marketing, engineering, infrastructure, and technology resources.[93] A significant portion fosters a close relationship with Kentucky’s wildlife.[94]

         The Department of Parks comprises a little under half of Kentucky’s expenditures on Tourism, Arts, and Heritage.[95] Currently, the Department of Parks runs on around 100 million dollars a year.[96] This budget is comprised of state, federal, and other funding sources.[97] The Department spends almost its entire budget.[98] Of that 100 million dollars in expenditures, it spends about 64 million on Resort Parks with the vast amount of the money used for the resorts inside the parks.[99] This spending includes golf carts, upgrading fitness equipment, painting buildings, upgrading electric services, and pool repairs.[100] The other portion of the Department’s expenditures supports state cafeterias, administration and staff, recreation parks, and historic sites.[101] Although these improvements are not inherently valueless, the susceptibility of Kentucky’s wildlife conservation and management model outweighs the negatives of this exact allocation. More efficient use of the Department’s funds would not only benefit Kentucky’s wildlife, but sow benefits that the Kentucky natural tourism industry could reap from in the near future.

       The Department of Fish and Wildlife and the Department of Parks are inextricably linked. Although they are their own entities with separate funding and purposes, each department shares many similarities in their day-to-day operations. Each department finds intrinsic value in Kentucky’s nature. The Department of Fish and Wildlife largely manage the fauna and flora within their habitats.[102] The Department of Parks largely maintains the parks where many of Kentucky’s fauna and flora claim habitat.[103] Although their statutory purposes are different, their broader goal of protecting Kentucky’s wildlife renders each department a companion agency to the other.

       In all fairness, there are key distinctions within each Department’s enabling acts. The Department of Fish and Wildlife’s enabling act, KRS § 150.015, emphasizes principles of management and conservation.[104] Section 150.015 lists several of its purposes.[105] First, its purpose is to “protect and conserve” state wildlife.[106] Second, its purpose is to ensure a “permanent and continued supply of the wildlife resources” to “furnish[ ] sport and recreation.”[107] Third, its purpose is to “provide for the prudent taking and disposition of wildlife within reasonable limits.”[108]

         The Department of Parks’ enabling act, KRS § 148.021, hinges on principles of conservation and improving Kentucky state parks.[109] Section 148.021 lists several of its functions and powers.[110] First, the Department “may improve [state] parks by constructing and equipping improvements of facilities in said parks.”[111] Second, the Department “shall exercise all administrative functions of the state relating to the operation of state parks.”[112] Third, the Department has the power to collect fees and acquire more land for state parks.[113]

         Innate in § 148.021’s nature is the legislature’s concern for improving many of the habitats in which wildlife lives.[114] That wildlife is protected by the Department of Fish and Wildlife.[115] Because § 148.021 authorizes the Department of Parks to “improve” state parks,[116] this language could yield the creation of more wildlife research centers than resorts. For example, because the Department must exercise “all administrative functions” relating to the operation of state parks,[117] those efforts could aim towards operation of endangered species advancement projects. Section 148.021 permits the Department to collect land and acquire land for state parks. [118] It should use that authority to acquire such resources for projects like habitat expansion endeavors. The broad language of § 148.021 leaves room for the Department’s funding to be directed toward more meaningful undertakings than its current expenditures reflect. The statute’s vagueness arguably is one of the reasons why the Department of Parks and Department of Fish and Wildlife already have numerous, functional similarities.

       The language of § 148.021 appears broad enough for the Department to funnel expenditures toward more of the activities listed in the previous paragraph. Still, funneling expenditures in this way faces several obstacles. First, the Department of Parks might be hesitant to redistribute money towards tasks that do not fit their traditional responsibilities. Second, the Department might misunderstand a redistribution of expenditures as a “pay cut.” The Department might also face pushback from its constituents. Such obstacles prompt the Department’s need for an explicit statutory trigger to make redistributions more feasible.

        So, tying the Department of Parks’ expenditures closer to wildlife conservation and management efforts first requires the state legislature to amend § 148.021. The amendment will provide a standard to guide the Department. While the legislature might balk at including the standard in a new statute, amending § 148.021, rather than begetting a new creature of authority, might suffice.

        There are many ways to amend § 148.021. First, the legislature could add the phrase “improvement, and perpetuation” to section (1) of the statute: “the Department of Parks shall exercise all administrative functions of the state relating to the operation, improvement, and perpetuation of state parks.” Second, the legislature could add the phrase “and related auxiliaries” to section (3) of the statute: “[t]he [D]epartment may improve [state] parks by constructing and equipping improvements of facilities and related auxiliaries in said parks.” Finally, the legislature could add a third subsection in section (4) that permits the Department to use collected money from fees and charges for use of the parks toward endeavors “directly attributable to the improvement and perpetuation of such state parks.”

           Each amendment would bridge the hurdles legislators might face in promoting wildlife management and conservation with the current act. This is not an exhaustive list of amendments but just a few illustrative references. Moreover, these examples do not cross into the authority of the Department of Fish and Wildlife, as they still cater to the administration of state parks. Yet, the amendments would give the Department of Parks authority that is not so attenuated to render its fiscal resources hopeless, in terms of conservation and management. This explicit authority would be akin to that of the Department of Fish and Wildlife, nonetheless distinct.

           If a statutory standard is not feasible, there are other avenues to provide a more stable future for Kentucky’s wildlife. The governor could issue an executive order to allocate or distribute funds to the Department of Fish and Wildlife to remedy the most direct ecological issues in Kentucky. It might, however, face pushback from legislators, voters, scholars, and/or lawyers. These potential problems might politically force the governor to leave the state budget and expenditures as is.

          Further, Kentucky agencies and executive offices could promulgate their own regulations and govern their expenditure habits to promote wildlife conservation and management. In terms of their authority, some agencies might be better for the job, but any efforts at the agency level could be beneficial. Agencies like the Department of Kentucky Fish and Wildlife and Kentucky Parks could promulgate regulations that create expenditure targets. Relevant government offices, such as the Department for Environmental Protection, Division of Conservation, Office of Consumer and Environmental Protection, and Office of Civil and Environmental Law can also affect Kentucky’s wildlife.[119] However, incentivizing agencies and executive offices would require internal consensus or some other impetus to overcome any hint of agency capture.

         Another way to impact Kentucky’s wildlife is to advocate for the Department of Fish and Wildlife to distribute more funding towards efforts like endangered species rehabilitation programs, population studies, and habitat restoration. The Department currently has a budget of about 250 million but spends only around 57 million a year.[120] Kentuckians and government officials could petition for a change in this spending pattern. Still, changing a department’s spending habits may be easier said than done.

       Even though many avenues for promoting conservation and management of Kentucky’s wildlife exist, it appears an amendment to § 148.021 would face the least, or close to the least, scrutiny. The easier a positive change can be implemented, the faster Kentucky’s wildlife encounters a brighter future. Changing the law is a first step.

      Grassroots movements within Kentucky already espouse initiatives with similar goals to the proposed amendments. Groups like the Audubon Society, Kentuckians for the Commonwealth, Iroquois Hunt Club, Kentucky Waterways Alliance, and several others would likely support efforts to better conserve Kentucky wildlife.[121] The groups might differ in their opinions on whether to promote the taking of wildlife, but the amendments this article proposes would prioritize conservation efforts, something they all agree on. At the end of the day, it is prudent to recognize that this amendment only vests authority to the Department of Parks to redistribute funds; that does not mean they will do it. Pressure from constituents, grassroot movements, and government agents will serve as the impetus to implement the reallocation of funds. This is not a foolproof plan, but among the most feasible of plans for the bluegrass state.

       Thus, a stronger dual-payer model would brighten the future of Kentucky’s wildlife. By expanding the scope of § 148.021, the legislature can ensure the Department of Parks works even closer with the Department of Fish and Wildlife. Harmonizing the efforts of both departments would benefit Kentucky’s wildlife, tourism, and the state as a whole.

B.  Diversion from Sales Tax Collected on Outdoor Equipment

       Another way to generate revenue for Kentucky’s wildlife is to divert a portion of taxes the state already collects from outdoor equipment. By diverting outdoor equipment sales tax, the state can circumvent the issues accompanying raising taxes or other revenue collection methods. This money would also mitigate the volatility of Kentucky’s current model.

      Several states have employed different methods to raise additional revenue to fund wildlife conservation and management.[122] Arizona, Colorado, and Maine required their state lotteries to allocate a portion of their revenue to wildlife conservation and management.[123] This model is not viable for Kentucky, as the majority of its lottery funds go towards aiding students pursuing education.[124] Georgia and Pennsylvania allocate a portion of the proceeds from specialty license plate sales toward wildlife conservation and management, a model Kentucky already replicates.[125] Arkansas and Missouri created an additional sales tax which allocates money toward their fish and wildlife agencies.[126] Kentucky’s traditional resistance towards additional taxes, however, makes this particular model unrealistic.[127]

          A diversion of tax money from outdoor equipment sales is more likely to survive political muster than other revenue collection methods employed by other states. Those who use outdoor equipment are arguably more likely than others to be proponents of wildlife conservation and management, as their livelihoods and hobbies rely on healthy Kentucky ecosystems.[128] This suggests they might be more likely to support a redistribution of the taxes they already pay.[129]

       Texas and Virginia have employed models that impose a sales tax on outdoor equipment that returns to specified wildlife conservation and management programs.[130] Those programs embrace the essence of the North American Model, “since [those who purchase outdoor equipment] are likely wildlife users in either the traditional hunting or fishing sense, or as part of an indirect use such as camping, hiking, [and] photographing.”[131] The General Assembly should adopt a model like Texas and Virginia’s. Kentuckians spend millions each year on outdoor activities, many of which likely include the purchase of outdoor equipment.[132] The state imposes a six percent sales tax on such sales.[133] Although the necessary statistics and information are not available to produce an estimated revenue figure, it is feasible that outdoor equipment sales tax would help protect Kentucky’s wildlife.

         The proposed tax distribution would best be imposed through an amendment to KRS § 139.200, Kentucky’s sales tax statute.[134] For many of the reasons listed in part IV section A, an amendment through the legislature would fare better than any alternative. Yet, several challenges follow. The biggest challenge is the Kentucky legislature seems to frown upon earmarking general fund dollars, as compared to other states.[135] In 1954, Kentucky earmarked 46% of its general funds.[136] That percentage dwindled to 16% in 1984 and 12% in 2005.[137] The General Assembly’s engrained hesitancy to earmark general funds[138] might threaten earmarking a portion of the tax collected on outdoor equipment sales. Also, agency directors and voters could raise concerns “that diverting these general fund dollars . . . will negatively impact their ability to function as mandated.”[139]

           Thus, redistributing outdoor equipment tax money yields a benefit to the Commonwealth.

          Any benefit is better than none. America’s historic toil in exploiting its wildlife and natural resources is a reminder of the progress it has made. Kentucky, however, must not forget that America’s complacency with society and technological development has put its nature at risk several times before. Therefore, a redistribution of tax dollars from outdoor equipment sales would give Kentucky’s wildlife another leg up.

IV.  Conclusion

           Most people do not realize the reciprocal, intimate nature of wildlife conservation and management. This misconception especially pertains to how states fund their conservation and management efforts. America has a long history of imposing on its wildlife, which caused many federal and state actors to remedy exploitation. Now, every state employs some version of the North American Model, but funding issues arise in certain states, like Kentucky.[140]

        The Kentucky Department of Fish and Wildlife has indicated a need for more funding to conserve, protect, and manage all wildlife.[141] Although most agencies “need more funds,” the magnitude of importance in conserving and managing Kentucky’s wildlife overrides any hesitancy. Kentucky can employ a similar model to Wyoming’s in creating multiple reliable sources of funding for conservation efforts.[142] Legislative amendments to § 148.021[143] and § 139.200[144] would direct more of Kentucky’s efforts toward conserving and managing its wildlife.

            The goal of this article is to solve foreseeable issues before they gain traction; it is a prophylactic measure. Like with every proposal, there are positives and negatives to Kentucky’s proposed dual-payer model. Not only would a stronger dual-payer model suit Kentucky well, but it would ensure an efficient, stable, predictable, and feasible system of conservation and management for all species, not just game species. After all, an improved model for wildlife conservation and management is better than just an existing good one.

I Dustyn is a Senior Staff Editor of the Kentucky Law Journal. At the time of this article’s publication, Sams is a third-year law student at the University of Kentucky J. David Rosenberg College of Law. Sams thanks Dr. Nathan A. Coleman, a professor of America’s Founding Era at the University of the Cumberlands, Sams’ former professor, and one of his mentors, for assisting him in revising this article.

[2] See Teresa M. Telecky, Hunting is A Setback to Wildlife Conservation, 29 EARTH ISLAND J. 45, 45–46 (2014).

[3] See generally John F. Organ, Valerius Geist, Shane P. Mahoney, et al., The North American Model of Wildlife Conservation: Technical Review 12-04, THE WILDLIFE SOC’Y & THE BOONE & CROCKETT CLUB 1–5 (Dec. 2012) (demonstrating the reciprocity of hunting and conservation).

[4] Bill O’Brian, Hunters as Conservationists, U.S. FISH & WILDLIFE SERV. (Feb. 12, 2018), https://www.fws.gov/story/hunters-conservationists [https://perma.cc/G8BB-32LR]; Mike Harmon, Examination of Certain Operations and Financial Activity of the Kentucky Department of Fish and Wildlife Resources, KY. OFF. AUDITOR OF PUB. ACCTS. 6 (Dec. 18, 2018); Division of Fish & Wildlife Funding, IND. DEP’T OF NAT. RES. (2021), https://www.in.gov/dnr/fish-and-wildlife/about-us/funding-and-license-sales/#American_System_of_Conservation_Funding_Infographic_text_ [https://perma.cc/68MY-C76Z].

[5] Jonathan Gassett, Wildlife Action Plan, KY. DEP’T OF FISH & WILDLIFE RES. (Feb. 5, 2013), https://fw.ky.gov/WAP/Pages/Wildlife-Action-Plan-Full.aspx [https://perma.cc/ZL87-Y7NY].

[6] Id.

[7] David Willms & Anne Alexander, The North American Model of Wildlife Conservation in Wyoming: Understanding It, Preserving It, and Funding Its Future, 14 WYo. L. REV. 659, 684 (2014).

[8] Harmon, supra note 3, at 7.

[9] Willms, supra note 6, at 659–60; Organ, supra note 2, at 1–2.

[10] Willms, supra note 6, at 660.

[11] Id.

[12] Organ, supra note 2, at 6–8.

[13] Willms, supra note 6, at 662.

[14] Id.

[15] Peter Moyle & Mary A. Orland, Humans and Wildlife in America, THE MARINEBIO CONSERVATION SOC’Y, https://www.marinebio.org/creatures/essays-on-wildlife-conservation/3/ (last visited Jan. 6, 2022) [https://perma.cc/4RDF-5LF6].

[16] Id.

[17] Id.

[18] See Robert Brown, A Conservation Timeline: Milestones of the Model’s Evolution, THE WILDLIFE SOC’Y 28–29 (2010), http://wildlifehabitat.tamu.edu/Lessons/Habitat-Concepts-1/Readings/A-Conservation-Timeline.pdf [https://perma.cc/KM34-RMKK].

[19] Id. at 28.

[20] Id.

[21] Id. at 30.

[22] Id. at 28.

[23] Id.

[24] Id.

[25] Id.

[26] The Passenger Pigeon, SMITHSONIAN INFORMATION, https://www.si.edu/spotlight/passenger-pigeon [https://perma.cc/DQ5H-24EM].

[27] Brown, supra note 17, at 28.

[28] Id.

[29] Id. at 29.

[30] Id.

[31] Id.

[32] Id.

[33] The Passenger Pigeon, supra note 25.

[34] Id.

[35] Organ, supra note 2, at 6–10.

[36] See generally Martin v. Lessee of Waddell, 41 U.S. 367 (1842) (demonstrating an instance of state and federal consideration of wildlife exploitation).

[37] See Brown, supra note 17, at 29.

[38] 16 U.S.C. §§ 1331–1332 (1971); 16 U.S.C. § 47 (1906) (repealed 1976).

[39] Brown, supra note 17, at 29.

[40] Id.

[41] Id.

[42] Id.

[43] Brown, supra note 17, at 30; Willms, supra note 6, at 660.

[44] See History of the Kentucky Department of Fish and Wildlife Resources from Settlement Through 1944, KY. DEP’T OF FISH & WILDLIFE RES., https://fw.ky.gov/More/Pages/History.aspx [https://perma.cc/7395-RBNS].

[45] Id.

[46] Id.

[47] Id.

[48] Martin v. Lessee of Waddell, 41 U.S. 367 (1842); Geer v. Connecticut, 161 U.S. 519 (1896), overruled by Hughes v. Oklahoma, 441 U.S. 322 (1979); Missouri v. Holland, 252 U.S. 416 (1920); Kleppe v. New Mexico, 426 U.S. 529 (1976).

[49] Martin, 41 U.S. at 411.

[50] Id. at 407–18.

[51] Geer, 161 U.S. at 529.

[52] Id. at 519–20.

[53] Id. at 529.

[54] The opinion also articulated dicta, which many scholars use to employ an extended public trust doctrine that applies to property other than land under navigable water. Geer, 161 U.S. at 529 (“[T]he power or control lodged in the State, resulting from this common ownership, is to be exercised, like all other powers of government, as a trust for the benefit of the people, and not as a prerogative for the advantage of the government, as distinct from the people, or for the benefit of private individuals as distinguished from the public good”).

[55] Missouri v. Holland, 252 U.S. 416, 434 (1920).

[56] Id. at 417–20.

[57] Kleppe v. New Mexico, 426 U.S. 529, 539–41, 546 (1976).

[58] Hughes v. Oklahoma, 441 U.S. 322 (1979).

[59] 16 U.S.C. § 471 (1891) (repealed 1976); How the United States Started Saving its National Forests, THE WILDERNESS SOC’Y, https://www.wilderness.org/articles/article/how-united-states-started-saving-national-forests (last visited Mar. 24, 2022) [https://perma.cc/N663-YA8M].

[60] Brown, supra note 17, at 29.

[61] Id.

[62] Id.

[63] Id.

[64] Migratory Bird Treaty Act, 16 U.S.C. §§ 703–712 (1918).

[65] Migratory Bird Treaty Act of 1918, U.S. FISH & WILDLIFE SERVS., https://www.fws.gov/law/migratory-bird-treaty-act-1918 (last visited Mar. 24, 2020) [https://perma.cc/6GER-2LNB].

[66] Migratory Bird Treaty Act, 16 U.S.C. §§ 703–712 (1918).

[67] Brown, supra note 17, at 29–30.

[68] Id.

[69] Id.

[70] Henry P. Monaghan, The Protective Power of the Presidency, 93 COLUM. L. REV. 1, 35 (1993).

[71] Brown, supra note 17, at 29.

[72] Id. at 30.

[73] Willms, supra note 6, at 660.

[74] Gassett, supra note 4.

[75] Id.

[76] Id.

[77] Id.

[78] Cynthia Levy, 10 Best National Parks to Visit in the USA, THE TRAVEL (Mar. 23, 2022), https://www.thetravel.com/10-best-national-parks-in-usa/ [https://perma.cc/5TSM-N3H4].

[79] Wyoming Game and Fish Commission FY 2022 Budget, JOINT APPROPRIATION COMM. 4–6, https://www.wyoleg.gov/InterimCommittee/2021/02-20211213040-102-GandF-WGFCFY22Budget.pdf (last visited Mar. 25, 2022) [https://perma.cc/T7TJ-LDWR].

[80] See generally id. (demonstrating how Wyoming’s funding is dispersed throughout its programs).

[81] Id. at 4–6.

[82] Id. at 1–15.

[83] Ky. Rev. Stat. Ann. § 150.015 (West 2006); Ky. Rev. Stat. Ann. § 148.021 (West 2006).

[84] Kentucky Spending Search: Search of Current Fiscal Year Spending, KY. TRANSPARENCY (2022), https://transparency.ky.gov/search/Pages/spendingsearch.aspx#/spending [https://perma.cc/6GAJ-V7Q5].

[85] Kentucky State Park’s Improvements: Park Projects, KY. STATE PARKS, https://parks.ky.gov/park_improvements (last visited Mar. 24, 2021) [https://perma.cc/5KMZ-2NTA].

[86] Id.

[87] Kentucky – Nature and Scientific Wonders, SMITHSONIAN MAG. (Nov. 6, 2007), https://www.smithsonianmag.com/travel/kentucky-nature-and-scientific-wonders-177754574/ [https://perma.cc/2KBF-MDZ6].

[88] Kentucky Spending Search: Search of Current Fiscal Year Spending, supra note 83.

[89] Andy Beshear & John Hicks, 2022-2024 Executive Budget, 1 Team Kentucky 1, 335, https://osbd.ky.gov/Publications/Documents/Budget%20Documents/2022-2024%20Executive%20Budget%20Recommendation/2022-2024%20Executive%20Budget%20-Volume%20I%20(Full%20Version).pdf [https://perma.cc/8452-TTUJ].

[90] Id.

[91] Id.

[92] Id.

[93] Id.

[94] See generally id. at 335–36 (explaining the roles of each unit and how it relates to Kentucky’s wildlife).

[95] Kentucky Spending Search: Search of Current Fiscal Year Spending, supra note 83.

[96] Id.

[97] Beshear, supra note 88, at 328.

[98] Id.

[99] Id.

[100] Kentucky State Park’s Improvements: Park Projects, supra note 84.

[101] Beshear, supra note 88, at 328.

[102] Ky. Rev. Stat. Ann. § 150.015 (West 2006).

[103] Ky. Rev. Stat. Ann. § 148.021 (West 2006).

[104] Ky. Rev. Stat. Ann. § 150.015 (West 2006).

[105] Id.

[106] Id.

[107] Id.

[108] Id.

[109] Ky. Rev. Stat. Ann. § 148.021 (West 2006).

[110] Id.

[111] Id.

[112] Id.

[113] Id.

[114] Id.

[115] Ky. Rev. Stat. Ann. § 150.015 (West 2006).

[116] Ky. Rev. Stat. Ann. § 148.021 (West 2006).

[117] Id.

[118] Id.

[119] See generally Executive Branch, Transparency, https://transparency.ky.gov/accountability/Pages/executive.aspx (last visited Mar. 24, 2022) (listing other cabinets that contain agencies supporting Kentucky’s wildlife) [https://perma.cc/2GVL-ESQN].

[120] Beshear, supra note 88.

[121] See generally Bird-Friendly Communities, AUDUBON SOC’Y, https://www.audubon.org/bird-friendly-communities#:~:text=Audubon%27s%20Bird%2Dfriendly%20Communities%20strives,and%20Bird%2Dfriendly%20Buildings%20programs (last visited March 24, 2022) (showing efforts to conserve habitats and bird populations) [https://perma.cc/YLQ7-8KES]; History, KENTUCKIANS FOR THE

COMMONWEALTH, https://kftc.org/#history (last visited March 24, 2022) (showing work throughout Kentucky communities) [https://perma.cc/9MKM-XMUW]; A Kentucky Tradition in Animal Welfare, Community and Conservation, IROQUOIS HUNT CLUB, iroquoishunt.com (last visited March 24, 2022) (demonstrating a Kentucky organization devoted to conservation of historic fox hunting) [https://perma.cc/5T6P-CLXJ]; Who We Are, KY. WATERWAYS ALL., https://www.kwalliance.org/who-we-are.html (demonstrating an organization concerned with preserving Kentucky waterways) (last visited March 24, 2022) [https://perma.cc/3JPM-3R8J].

[122] Willms, supra note 6, at 695.

[123] Id.

[124]Where’s the Money Go?, KY. LOTTERY, https://www.kylottery.com/apps/about_us/where_the_money_goes.html (last visited Mar. 24, 2022) [https://perma.cc/6WR4-FRKR].

[125] Willms, supra note 6, at 695.; E.g., Kentucky DU License Plate, DUCKS UNLIMITED, https://www.ducks.org/kentucky/kentucky-license-plate-program (last visited Mar. 24, 2022) [https://perma.cc/N882-CU4Y].

[126] Willms, supra note 6, at 695.

[127] See Teacher Victory: Kentucky House Overrides Tax Increase Veto, CBS NEWS (Apr. 13, 2018), https://www.cbsnews.com/news/kentucky-house-overrides-tax-increase-veto/ [https://perma.cc/N3FW-VKQJ].

[128] Willms, supra note 6, at 695.

[129] Id. at 695–96.

[130] Id. at 695.

[131] Id.

[132] David Knopf, Scott Lemmons & Barry Adams, U.S. DEP’T OF AGRIC., Kentucky Agricultural Statistics 2020 Annual Bulletin 5–6 (Dec. 2020).

[133] Ky. Rev. Stat. Ann. § 139.200 (West 2023).

[134] Id.

[135] See Arturo Pérez, NAT’L CONF. OF STATE LEGISLATURES, Earmarking State Taxes 5 (Sep. 2008).

[136] Id.

[137] Id.

[138] See id.

[139] Willms, supra note 6, at 696.

[140] Organ, supra note 2, at 24–25.

[141] Gassett, supra note 4.

[142] Willms, supra note 6, at 694.

[143] Ky. Rev. Stat. Ann. § 148.021 (West 2006).

[144] Ky. Rev. Stat. Ann. § 139.200 (West 2023).

All That Glitters Is Not Gold: Mergers and Acquisitions

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 All That Glitters Is Not Gold: Mergers and Acquisitions

Amanda Guillen[I]

The office of the scholar is to cheer, to raise, and to guide men by showing them facts amidst appearances.[2]

Introduction

      In 2021, “the overall value of Mergers and Acquisitions (“M&A”) stood at $5.8 trillion,” an increase of 64% from 2020.[2] Not only did 2021 have a scorching increase from the prior year, but the sheer dollar amount of $5.8 trillion of M&A activity is worth mentioning as well. $5.8 trillion is the equivalent to the market value of Apple ($3 trillion), Microsoft ($2.5 trillion), and Disney ($0.3 trillion) combined.[3] With the headwinds faced moving into 2022, such as inflation, rising cost of capital, supply chain issues with Ukraine, and geopolitical tensions from US-China[4]… 2022 will still likely reach $4.7 trillion in deal value by year-end, which would make it one of the strongest markets of the past 20 years.

      “Firms engage in mergers because they see a profitable opportunity.”[5] If a firm can purchase another company in the hopes of reducing costs, “the result can be lower prices for consumers and improved overall economic welfare.”[6] This is just one example of how a firm can meet the goal of a profitable opportunity. One of the most significant mergers that impact life today is the growth of the American Telephone and Telegraph (AT&T).[7] In 1883, AT&T “adopted a strategy of merging local telephone companies into a national system.[8] The resulting network reduced the costs of interconnecting large numbers of users, and the telephone quickly replaced the telegraph as the communications technology of choice.”[9] Ultimately generating long-term value for shareholders, who provide the capital that allows companies to invest, and innovate, is a fundamental reason for firms engaging in a merger.[10] Bringing us back to present day, with the trending highest volume of M&A activity in history… is this activity still generating value for shareholders?

      It is too early to tell if the flurry of activity from 2021 to 2022 will lead to successful business outcomes. However, data for previous years’ M&A activity is available.[11] Per Harvard Business Review, typically “70%-90% of acquisitions are abysmal failures.”[12] Failure is the state or condition of not meeting a desirable or intended objective and may be viewed as the opposite of success[13]—and it seems a bit harsh to put M&A activity in that category. Because failure may seem fatal, as if it is impossible to climb out of this state of failure. But failure is not fatal. The failure to recognize change to meet the intended objective is fatal.

      This Note begins in Part I with an overview of M&A. This section discusses the original goal of M&A which is to maximize shareholder value. In theory, the shareholder wealth maximization norm[14] is the north star that guides business executives and the law. The shareholder wealth maximation norm sets the intended objective as—the pursuit of increasing share price maximizes the wealth of actual shareholders.[15] Moreover, Part I sets the stage for what is a corporation and M&A. In Part II, this section builds on a case study of recent M&A transactions. Further, this Part goes into the factors that may contribute to challenges seen in M&A. In Part III, this Part proposes using earnout provisions in M&A contracts as a solution for leaders to implement.

                              I.              The Measure for Successful M&A—Shareholder Wealth Maximization

      U.S. Corporate law gives control of the corporation in the board of directors and those executives to whom the board properly delegates decision-making authority.[16] The discretionary powers conferred on directors and officers, are to be directed towards a single end; the maximization of shareholder wealth.[17] “Shareholder wealth maximization long has been the fundamental norm which guides U.S. corporate decisionmakers.”[18] In the landmark Michigan Supreme Court case Dodge v. Ford Motor, Co.:

A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the nondistribution of profits among stockholders in order to devote them to other purposes.[19]

“The shareholder wealth maximization norm exerts tremendous influence on both business practice and corporate legal scholarship.”[20] Per eBay Domestic Holdings, Inc., corporate management is legally required to pursue profit; it must also seek to maximize the shareholders’ financial interests.[21] As such, publicly traded companies place great importance on their stock share price, which reflects a corporation’s overall financial health. The higher a stock price is, the more ideal a company’s prospects are. The norm and the related focus on share prices rest on two key assumptions: (1) that the pursuit of shareholder wealth maximization, as measured by share price, effectively maximizes the wealth of actual shareholders and (2) that the pursuit of shareholder wealth maximization, as measured by share price, is socially beneficial.[22] If the share price is not increasing, then the practice should be to change course.

          With the proliferation of M&A activity in recent years, it would be safe to assume that share prices are also increasing. But is all this huge influx of M&A activity providing increased shareholder value or is all that glitters is not gold? 

A.         Background

      A corporation is a legal entity.[23] One of the main advantages of a corporation is the benefit of centralized management.[24] Shareholders elect a corporation’s directors, who have the power to manage and oversee the corporation’s business.[25] Shareholders play only a limited governance role, in part because the directors have fiduciary duties to act in the best interests of the corporation.[26] The directors typically delegate responsibility for daily decisions to corporate officers.[27] The separation between shareholder ownership and managerial control is one of the distinctive features of modern corporations.[28]

      Centralized management has allowed individuals to partake in a comparative advantage. Comparative advantages describe a situation in which an individual can produce a service at a lower opportunity cost than another.[29] Here, a shareholder elects a corporation’s directors so that they can best utilize their time as they see fit. The corporation’s directors produce a more significant financial benefit in the best interests of the corporation. In theory, the corporation’s directors manage a corporation at a lower opportunity cost, compared to an individual shareholder given their knowledge and expertise. 

      While a corporation has many advantages, there are also corresponding disadvantages—agency issues. The corporation, a legal construct, can act only through the agency of human beings.[30] Agency is a consensual relationship between two parties, the “principal” and the “agent.”[31] The principal selects the agent, who agrees to act on the principal’s behalf and subject to the principal’s control.[32]

      In regard to mergers and acquisitions, agency implications could be value destroying when managers engage in opportunistic acquisition reasons for self-interest.[33] Empire building motives, managerial myopia, overconfidence, misaligned incentives, and poor corporate governance can all exacerbate the agency problem.[34] For example, there are various ways that managers can build empires so as to increase the size of their firm, also known as their sphere of control.[35] When managers have larger companies to manage, they are seen as having more power.[36] Managers’ empire building incentives can also be related to their compensation packages, which are often tied to a larger firm size measured by its combined market value.[37] Therefore, mergers and acquisitions are often considered a good candidate for rapidly and effectively increasing firm size.[38] Studies also show that where managerial compensation is based on the acquisition of profits, with no emphasis on long-term incentives, that this would provide managers with perverse incentives to acquire companies so as to increase the size of their firm, despite ultimately leading to deterioration in shareholder value.[39]  

      Another issue between “agents” and “principals” are misuse of resources. “Agents” can use their position to divert the corporation’s funds towards initiatives that the “agent” personally wants to achieve. Breaching fiduciary duties[40], a manager could have the desire to acquire a company as a “pet project,” which may have diminishing returns.[41] The desire to acquire this “pet project” company would devote millions, potentially billions of dollars of financial and human resources that belong to the corporation, but in essence, funds that belong to the shareholders. For example, AOL’s CEO hatched Patch in 2007 while an executive at Google, then convinced AOL to purchase Patch after he took over in 2009.[42] AOL shareholders felt the CEO cling to Patch with a blind paternal love.[43] Over five years, Patch is estimated to cost AOL between $200 million and $300 million to run.[44] “It is easy to see how an agent, having the power to exercise control over assets belonging to the principal, may be tempted to use those assets in a way that benefits the agent’s ego”.[45]  

      This challenge between “agents” and “principals,” it might seem as though the ability to maximize value may never be achieved.[46] Even with the agency issues, the ability to maximize value has been achieved—historically, the stock market has provided around 6% of annual returns over the long term.[47] For most Americans, 6% sounds pretty good. And for most Americans, how much they have to invest is singularly a function of how much they can make from their labor. The American people who owe almost all their wealth to their ability to hold a job and to secure gains in wages—"is true for 99% of Americans”.[48] After putting in a minimum 40 hours of work a week, the fruits of American labor are spent on a house and car payment, student loans, wedding debt, and the leftover cash is put towards a new air conditioner or an on-call plumber. The remainder is invested in a 401(k) plan where the funds are out of reach until the investor reaches the age fifty-nine and a half.[49] It is not a surprise that “…nearly half of all working-age families have zero retirement savings…”[50] For these reasons, it makes sense to question whether this hard-earned money is earning the biggest bang for your buck. If these agency issues were nailed down, could the new normal average returns be 12% or 24%? The sky is the limit.

B.         M&A

      M&A involves the buying and selling of corporations.[51]  M&A deals are done from the direction of executives, “who also largely run the deal-making process”.[52] The acquiring company is called the “bidder” or “acquirer”. The “target” is the company that is about to be acquired. Historically, the United States has had a relatively pro takeover regulatory environment.[53]

      With the general economic outlook relatively stable, executive confidence is at an all-time high to pursue acquisitions they have long considered.[54] “Management teams have been dusting off corporate playbooks for potential deals”[55] and to do—acquire companies—than do not. Based on the converging factors, dealmakers find themselves in a sweet spot between the optimism of the market and the bountiful economic landscape. M&A will continue as a central feature of the global corporate landscape. But, the question still remains whether the flurry of activity continues to increase shareholder wealth.[56]

II.            Analysis

      This Part examines why M&A activity may not be as valuable as initially intended—increasing shareholder wealth. The first Section discusses M&A impact on shareholder prices by case studies. The second Section discusses inherent finance and legal challenges inherent in M&A deals.

A.       Profitability Analysis of Companies Engaging in M&A

Many scholars have examined the impact of M&A and whether there have been profitable results. In theory, these studies have inherently had several limitations. The main limitation is truly understanding the source of merger gains or losses and gathering this data systematically across companies in similar industries, sizes, and goals. The challenge is clearly correlating that M&A activity is the source of increased share price or if there are other factors involved. Perhaps there could be a new marketing scheme that propelled the stock price, or a competitor left the industry, in which both instances could increase the share price—neither having to do with increased M&A activity. Correspondingly, the reverse is true. Companies could neglect their marketing teams and a competitor enter the market, causing cause share price to decrease—again, these activities would have nothing to do with M&A activity. Because of the difficulty of acquiring the necessary data, scholars have typically taken a case study approach, examining a few mergers within the same of comparable industries.[57]

Studies have been completed over the years conveying evidence that mergers cut deep into the financial red. In general, many large-scale acquisitions of public companies by other public companies result in significant losses for shareholders of acquiring firms.[58] Not only do bidder shareholders lose, but the losses from these deals can be staggering.[59] For example, a study of deals from 1998 to 2001, finds that bidder shareholders lost 12% for every dollar spent on acquisitions, for a total of $240 billion.[60] A study on law firm mergers performed analysis to contradict the conventional wisdom that mergers enhance profitability through increased revenues and reduced costs.[61] The study showed that law firms post-merger revenues were lower relative to competitor firms that than the sum of predecessor firms’ revenues, and cost per lawyer increase markedly.[62] Further, a study of Asian bank mergers found no observable efficiency effects.[63] Another example in the electric power industry, evidence suggests there are no net efficiency gains from M&A.[64] Ultimately, a significant body of recent finance literature finds evidence that many, although not all, acquisitions destroy value for long-term [Bidder] shareholders.[65]

In contrast, there is data showing that mergers suggest that there are efficiency gains. One review suggests that efficiency gains predominated in North American and European bank mergers.[66] Another study reviewed forty-nine studies and found that nearly three-quarters of them showed mergers resulted in price increases.[67] In 2016, Bruce Blonigen and Justin Pierce studied U.S. manufacturing industries that covered companies from the timber to electronics to printing services.[68] Blonigen’s and Pierce’s research demonstrated that the average merger increased market power.[69] These studies contradict the initial case study on companies in the healthcare industry.

Overall, the infamous lawyerly response to whether mergers increase or decrease shareholder value is—it depends. It depends various circumstances that vary according to market composition, industry, geographic location,[70] economics, and available data. Evidence supports each view and the effects of mergers remain in dispute.[71] The idiosyncrasies of the specific companies and sectors limit the ability to generalize the data.[72] Evidence exists that routinely show stock market event studies that find shareholder gains from mergers, at least in the short term.[73] On the other hand, there are studies of actual operating effects that tend to show that gains from mergers are the exception rather than the rule.[74] The best example of the ambivalent results is an economist who attempted to study the effects of all mergers in the world occurring over fifteen years.[75] The result of the study found that only 29.1% of mergers appear to result in efficiency gains, with approximately the same number actually reducing efficiency.[76]

Although the data can be inconclusive as to whether mergers increase or decrease share price, it is important to recognize that the conventional wisdom that mergers enhance profitability should not be assumed.

B.      Legal and Finance

This section assesses the factors that may have an impact on shareholder returns for M&A: Legal and Finance.

  i. Legal—Limited Liability for failed M&A Transactions

      In 2015, Microsoft wrote off 96% of the value of the handset business it had acquired from Nokia for $7.9 billion the previous year.[77] If an executive were forced to clear out $7.9 billion from their savings account for a failed business acquisition, would the executive have purchased it in the first place? Likely, not. Instead, the present law shields decision-makers from a potential liability through the business judgment rule leaving shareholders, who are—besides employees—typically harmed the most by failed M&A transactions, largely unprotected.[78] Directors of public corporations are seldom held personally liable for their decision making.[79]

      As part of the common law for at least one hundred and fifty years, the business judgment rule protects directors from liability for business decisions, even those that were ill-chosen and resulted in losses to the corporation.[80] In Wrigley, the Chicago Cubs’ president refused to install field lights for night games at Wrigley Field against the wishes of a shareholder.[81] The shareholder claimed that because the president refused to install field lights for night games leading to lower profits for shareholders.[82] The court held that the judgment of the directors of the corporation enjoys the benefit of a presumption that it was formed in good faith and was designed to promote the best interests of the corporation they serve.[83] If the decisions are within the “realm of reason,” it generally will be protected.[84]

      The underlying consideration behind the business judgment rule is that the courts’ role is inherently different than a business decisionmaker for a variety of reasons. For example, a judge deciding on a decision after the fact is plagued with hindsight bias.[85] Thus, judges tend to be ill-equipped for reliably second-guessing the quality of business decisions.[86] Additionally, substantive judicial review of business decisions would require significant resources.[87] As a manager in Corporate America, imagine if every time a poor decision was made, the courts were looming close by, reprimanding every step. The business judgment rule expresses a balance between embracing economic freedom and informed risk-taking.[88] It presumes the benefits from entrepreneurial risk-taking exceeds the cost resulting from wrong business decisions.[89] Essentially, the business decision makers at Microsoft, although writing off $7.9 billion in 2015, have led to revenue growth of $800 billion in three years.[90]

          Despite the risks that directors and officers contribute to the failure of M&A transactions, they cannot be held liable under current law. The courts understand that there is no reward with no risk and, as such, shareholders can be rewarded nicely or inadequately. The business judgment rule protects directors and officers from liability which effectually makes acquiring companies a “win-win” because there is minimal risk to the directors but a maximum reward to shareholders.

ii. Finance— 2+2 = 5?

This section begins with the following observation made by an experienced M&A lawyer:

A major merger or acquisition can be a company-defining moment. The right business combination at the right price, with good execution, can reposition the company, accelerate growth and shareholder return, and even change the game for an industry. But a bad deal—whether the failure is rooted in the concept [i.e., the “logic of the deal,” that is, the business justification for the proposed acquisition], the price, or the execution—is probably the fastest legal means of destroying shareholder value.[91] 

      Thus, in order to create shareholder value, the acquirer must purchase the target for a fair price.[92] When an acquirer overpays for a target, spending resources on trying to meet unattainable financial goals can be unsalvageable. If each company A and B is worth $2, then after the merger transaction, per the shareholder wealth maximization theory, it should be worth $5. If A purchases B for $2.5, but the benefits fail to materialize over several years, this acquisition is doomed for failure. Because each year is spent trying to climb out of the financial hole it initially dug itself in. However, zealous business executives continue to search for profitable opportunities in the hopes of increasing shareholder value. But all too often, as seen in the popular press,[93] bidder overpayment and poorly performing corporate acquisitions strike out.

      An example is when Hewlett Packard (“HP”) purchased a British company, Autonomy, for $10.3 billion—a decision that was controversial with HP shareholders who claimed HP was overpaying for Autonomy.[94] A year later, HP announced a write-down of $8.8 billion related to the acquisition due to accounting irregularities.[95] HP was unable to realize the gains it expected from the acquisition.[96] Not only was there no added benefit to the acquisition, but the cherry on top was a large securities class action suit.[97]

      A crucial component that can lead to the success of an M&A transaction begins at the initial due diligence. Due diligence is a thorough analysis and investigation of the target company.[98] A company usually has a corporate development team that provides decision-makers with financial information and assesses the risk and opportunities of engaging in a M&A transaction. Besides risk assessment and valuation, it typically prepares for the composition of the contractual representations and warranties[99] and assesses whether the target company is a profitable opportunity. In complete secrecy, the target provides information to the acquirer about the business, finances, tax, legal, and human resources.[100] Due to the small window for providing this information, acquirer decision-makers rarely receive the information they need to make an informed decision from the target. Additionally, another challenge for the acquirer is the mass of information that would need to be digested in a short timeline to make a well-informed decision, not to mention ensuring that the right questions are asked of the target.

          After collecting information in the due diligence phase, the acquirer uses this information to make a well-informed purchase price for the target. One of the most common methods to assess the value of a company is the discounted cash flow (DCF).[101] DCF models rely on estimates and discounting all future cash flows to determine net present value.[102] The offer amount largely depends on the quality and extent of the available data.[103] The models use assumptions provided by the target and market data to form a purchase price.[104]  The assumptions are the greatest weakness in valuation models because essentially these assumptions predict the future[105]—something that is very challenging to do.

      With a mix of time pressures and assumptions to value the target, this could lead to negative financial consequences in which the acquirer overpays for the target.[106] With the legal and financial challenges at play in an M&A transaction, is there a potential solution for management to engage?

III.  An Opportunity for More Shareholder Wealth—A Call to Action

          Part III reflects on the challenges discussed in Part II and provides a solutions to the legal and financial challenges presented, by using earnout provisions to align compensation incentives.

      As shadows cannot exist without light, the corporation’s advantage of a centralized management cannot exist without agency issues.[107] In M&A deals, executive compensation is generally issued for “closing the deal”[108] rather than the financial success of the deal which can often take years. On average, about a quarter of executives in acquired top management teams leave within the first year, a departure rate about three times higher than in comparable companies that haven’t been acquired.[109] An additional 15% depart in the second year, roughly double the normal turnover rate.[110] All too often, after the close of the deal, target executives are either mentally out the door or forcibly ushered out the door by the acquirer. Target executives leave voluntarily after an acquisition for a variety of reasons. A couple of reasons are that target CEOs receive golden parachutes at the time the merger is approved, [111] need a break, or don’t feel needed in the new company.[112] Limited liability, as discussed in Part II, could be a hindrance to shareholder profitability when combined with executives that have no skin in the game.

      During the deal negotiation between the acquirer and target, an earnout provision can create incentives that encourage management to stay after the acquisition. An earnout provision is a contractual payment mechanism in M&A where a relatively large part (often around a third) of the deal consideration is deferred and payable at multiple stages, contingent upon observable measures of the target firm’s future performance.[113] Another benefit of an earnout provision is that it provides continuity for the success after the acquisition. Target leaders can guide the integration of the two companies, rather than leaving abruptly after the close of the transaction. Instead of incentivizing target executives to successfully complete the transaction, the acquirer can negotiate incentives tied to the future success of the integration of the two companies.

An earnout provision emphasizes more skin in the game when it comes to spending the corporations, or shareholders’, assets for an acquisition. Target managers are motivated to remain in the firm and maximize its performance (to receive the deferred payments).[114] Studies convey that earnouts reduce the underlying valuation gap between the merging firms by explicitly linking the target firm’s payment in the acquisition to its future performance.[115] This, in turn, is associated with an increased overall likelihood of merger success (and higher merger synergies).[116] Additionally, the findings suggest higher acquirer gains relative to counterpart M&As without earnouts.[117]

      The financial blinders of overpaying for a company[118] can be reduced when earnout provisions are introduced. The leaders of the target corporation will be incentivized to integrate the two companies successfully when their bonus is tied to completion milestones. Integration is the phase after the transaction closes where employees from the target and acquirer work together to combine the companies. The integration involves constant and cross-communication between all functions in the target and acquirer corporation—legal, human resources, finance, information technology, R&D, and more. The integration phase is a people-intensive activity, and the corporation cannot have a successful conclusion unless they are fully sourced and managed by empowered leaders.

      So, why is it that only 27% of companies utilize an earnout provision?[119] It is quite risky for the acquirer and target—it represents real dollars.[120] An earnout provision could result in the acquirer paying more for the target than the buyer may have originally intended to pay.[121] Additionally, the buyer and seller are at risk for litigation when it comes to the earnout formulae for the acquired business, leading to more expenses.[122] For example, the allocation of overheard costs is a common challenge.[123] Or consider potential disputes over what numbers are included in financial metrics to earn the earnout bonus. Further, goals may not be aligned.[124] For instance, the target’s management may be motivated to maximize earn-out payments, but not necessarily to advance the buyer’s business strategy or interests.[125]

      Unfortunately, earnout provisions are often heavily negotiated and fact specific.[126] In 2013 to 2019, the percentage of transactions with earnouts have been 25% to 27%.[127] This is a steep decline from the upward trend in 2007 to 2011, where the percentage of transactions with earnouts increased from 19% to 38%, respectively.[128] An earnout forces the parties to think about the future, which is a good thing.[129] But, the earnout also keeps an acquisition attorney asleep with one eye open because of the possible dreary outcomes. Lawyers negotiating earnouts on behalf of their clients must have a keen eye for the relative risks and rewards of earnout provisions. As a result, the inclusion of earnout provisions in M&A tends to be the exception rather than the rule.[130] However, using an earnout provision is a tool to provide leadership a tangible action toward climbing an upward mountain of improving insatiable shareholder growth.

Conclusion

      This Note uses M&A activity as a lens to examine the shareholder wealth maximization norm. Part I provides the background on corporate M&A and the shareholder wealth maximization norm. Part II examines case studies on M&A activity and trends in share price, and some of the financial and legal reasons for some lackluster deals. Part III provides tangible solutions to improve shareholder wealth—earnout provisions. Overall, this Note reveals that the traditional shareholder wealth maximization is limited and problematic. This Note does not attempt to prove that M&A activity does not further shareholder wealth. But instead, whether shareholders could benefit from leadership decisions that execute on the plans they initially intended. If shareholders are receiving a benefit from M&A activity, could shareholders be receiving more of a benefit?

      When AT&T merged with local telephone companies into a national system, the company changed America and, more importantly, the world.  The ability to receive and send instant communication in this day has propelled our society to a new level of efficiency. Although 1883 was a much simpler time with less globalization and fewer legal rules, one thing remains the same: creating value for shareholders. M&A should be more than just romantic; it should produce a more efficient and valuable product. The idea that M&A could be just romantic rather than real begs the question—is M&A providing a real benefit to shareholders? If not, how can we make it better? Or is M&A activity capped at maximum efficiency?

      For now, the law recognizes shareholder wealth maximization as the only game in town.[131] It is not about to change.[132] Further research could persuade leaders, lawyers, and all those involved with M&A—to do the right thing—for the benefit of shareholders. If these questions are not asked, shareholders will bear the brunt of the loss.        

[ I ] J.D. & M.B.A. Candidate 2023, University of Kentucky J. David Rosenberg College of Law; B.B.A. 2012, University of Texas at Austin, McCombs School of Business. Grateful for the support from my husband Roy Guillen. Special thanks to Professor Alan Kluegel, PhD for guidance and comments.    

[1] Ralph Waldo Emerson, The American Scholar, in Ralph Waldo Emerson Essays & Lectures 51, 63 (Joel Porte ed., 1983).

[2] Niket Nishant, Global M&A Volumes Hit Record High in 2021, Breach $5 Trillion For First Time, Reuters (Dec. 31, 2021, 12:44 AM ), https://www.reuters.com/markets/us/global-ma-volumes-hit-record-high-2021-breach-5-trillion-first-time-2021-12-31/ [perma.cc/J79F-L4W6].

[3] Jack Nickas, Apple Becomes First Company to Hit $3 Trillion Market Value, New York Times (Jan. 3, 2022),  https://www.nytimes.com/2022/01/03/technology/apple-3-trillion-market-value.html.

[4] Les Baird, David Harding, Suzanne Kumar & Andrei Vorobyov, Global M&A Report Midyear 2022, Bain & Co. (Jul. 7, 2022), https://www.bain.com/insights/global-m-and-a-report-midyear-2022/ [https://perma.cc/9ZZ9-CK5X].

[5] Bruce A. Blonigen & Justin R. Pierce, Mergers May Be Profitable, But Are They Good For The Economy?, Harvard Business Review (Nov. 15, 2016), https://hbr.org/2016/11/mergers-may-be-profitable-but-are-they-good-for-the-economy [https://perma.cc/7BUJ-AXYD].

[6] Id.

[7] David Besanko, David Dranove, Mark Shanley & Scott Schaefer, Economics of Strategy 107 (5th ed. 2010).

[8] Id.

[9] Id.

[10] Statement on the Purpose of a Corporation, Bus. Roundtable (Aug. 19, 2019).

[11] Roger L. Martin, M&A: The One Thing You Need to Get Right, Harvard Bus. Rev. (June 2016), https://hbr.org/2016/06/ma-the-one-thing-you-need-to-get-right [https://perma.cc/PC7G-M54V].

[12] Id.

[13] Failure, Merriam Webster (1st ed. 2016).

[14] Infra note 15—note 21.

[15] See generally Caleb N. Griffin, The Hidden Cost of M&A, 48 Tex. J. Bus. L. at 71 (2019).

[16] See, e.g., Del. Code Ann. Tit. 8, 141(a) (2001) (the corporation’s business and affairs “shall be managed by or under the direction of a board of directions”). All state corporate codes likewise provide for a system of nearly absolute delegation of power to the board of directors, which in turn is authorized to further delegate power to subordinate firm agents. See Model Bus. Corp. Act Ann. 8.01 cmt. (1995) (reviewing statutes).

[17] See Infra note 15 and accompanying text; See supra note 18.

[18] Stephen M. Bainbridge, In Defense of The Shareholder Wealth Maximization Norm: A Reply to Professor Green, 50 Wash. & Lee L. Rev. 1423, 1423 (1993); Stephen M. Bainbridge, Corporate Law 141 (2d ed. 2009) (“It is well-settled that directors have a duty to maximize shareholder wealth.” (citing Dodge for the assertion that corporations should have a “profit-maximizing purpose”).

[19] Dodge v. Ford Motor Co., 170 N.W. 668, 684 (Mich. 1919) (emphasis added); See, e.g., Katz v. Oak Indus. Inc., 508 A.2d 873, 879 (Del. Ch. 1986) (suggests that directors have a duty to maximize shareholder value).

[20] Griffin, supra note 15, at 71.

[21] See eBay Domestic Holdings, Inc. v. Newmark, 16 A.3d 1 (Del. Ch. 2010); Lyman Johnson & David Millon, Corporate Law after Hobby Lobby, 70 Bus. Law. 1, 10 (2014).

[22] Id.

[23] Alan Palmiter, Frank Partnoy & Elizabeth Pollman, Business Organizations: A Contemporary Approach 74 (3rd ed. 2019).

[24] See id. at 77.

[25] Id.

[26] Id.

[27] Id.

[28] Id.

[29] See James A. Brickley, Clifford W. Smith, & Jerold L. Zimmerman, Managerial Economics and Organizational Structure 64 (5th ed. 2009). Comparative Advantage is generally used in terms of goods. In advanced economies, individuals specialize in producing goods where they have a comparative advantage; they then trade to acquire other goods. Specialization enhances the standard of living of a society.

[30] Palmiter, supra note 23, at 220.

[31] Restatement (Third) of Agency § 1.01 (2006); Palmiter, supra note 23,  at 903.

[32] Id.

[33] Scott Fung, Hoje Jo, Shih-Chuan Tsai, Agency Problems In Stock Market-Driven Acquisitions, Emerald Insight, (Oct. 30, 2009) https://www.emerald.com/insight/content/doi/10.1108/14757700911006958/full/html.

[34] Id.

[35] Id.

[36] Id.

[37] Id.

[38] Id.

[39] Id.

[40] Palmiter, supra note 23,  at 22. “Fiduciary duties seek to protect those who delegate authority against the negligence, disloyalty, or worse of those who exercise this authority on their behalf.”

[41] Net present value is the present value of cash flows at the required rate of return of your project compared to your initial investment. In practical terms, it is a financial metric used to evaluate whether you proceed with a project or not. Generally, a positive net present value means the project is worthwhile. Amy Gallo, A Refresher on Net Present Value, Harvard Bus. Rev. (Nov. 19, 2014), https://hbr.org/2014/11/a-refresher-on-net-present-value [https://perma.cc/YXC8-9F9V].

[42] Jeff Brown, Latest CEO Pet Project to Fail: AOL’s Patch, CNBC (Dec. 16, 2013, 3:34 PM), https://www.cnbc.com/2013/12/16/latest-ceo-pet-project-to-fail-aols-patch.html [https://perma.cc/E27F-ALT5].

[43] Id.

[44] Matt Burns, Patch Hit with Sweeping Layoffs as New Owner Hale Global Restructures, Tech Crunch (Jan. 29, 2014, 11:58 AM), https://techcrunch.com/2014/01/29/patch-hit-with-sweeping-layoffs-as-new-owner-hale-global-restructures/ [https://perma.cc/8L6D-72V7].

[45] Meinhard v. Salmon, 164 N.E. 545, 547 (N.Y. 1928); Max Stul Oppenheimer, Fame: Ownership Implications of Intellectual Property and Agency Law, 30 Fordham Intell. Prop. Media & Ent. L. J. 447, 477 (2020).

[46] Solutions to these overarching agency issues are discussed see infra Part III.

[47] Office of Investor Education and Advocacy, A Roadmap to Your Financial Security Through Saving and Investing, SEC, https://www.sec.gov/investor/pubs/sec-guide-to-savings-and-investing.pdf [https://perma.cc/Q2L8-26QU].

[48]  See Leo E. Strine, Jr., Who Bleeds When the Wolves Bit?: A Flesh-and-Blood Perspective on Hedge Fund Activism and Our Strange Corporate Governance System, 126 Yale L.J. 1870, 1876 (2017).

[49] I.R.C. § 72(t)(2)(A)(i)(2012). Also applies to IRAs. Id. § 408A(d)(2)(A)(i).

[50] Leo E. Strine, Jr., Supra note 41, at 1880.

[51] Alan Palmiter, Frank Partnoy & Elizabeth Pollman at 903.

[52] Afra Afsharipour, Bias, Identity and M&A, 2020 Wis. L. Rev. 471 (2020).

[53] James A. Brickley, Clifford W. Smith, & Jerold L. Zimmerman at 589. For example, between 1993 and 1999 the value of corporate mergers represented 8.4 percent of the gross domestic product (GDP).

[54] David Gelles, Hostile Takeover Bids for Big Firms Across Industries Make a Comeback, N.Y. Times, (Jun. 12, 2014), https://dealbook.nytimes.com/2014/06/12/hostile-takeover-bids-for-big-firms-across-industries-make-a-comeback/ [https://perma.cc/FQ2G-9HYP].

[55] See generally Michael J. De La Merced, Mergers Hit a 7-Year High, Propelled by a Series of Blockbuster Deals, N.Y. Times (Jul. 1, 2014), https://dealbook.nytimes.com/2014/06/30/propelled-by-a-series-of-blockbuster-deals-mergers-hit-a-7-year-high/.

[56] See infra Part II.

[57] Griffin, supra note 15 at 71, 83.

[58] Afra Afsharipour, Revaluating Shareholder Voting Rights in M&A Transactions, 70 Okla. L. Rev. 127, 129 (2017).

[59] Id.

[60] Id.

[61] Hugh A. Simons & Nicholas Bruch, Do Mergers Increase Profitability?, L. J. Newsletters (Jan. 2018), https://www.lawjournalnewsletters.com/sites/lawjournalnewsletters/2018/01/01/do-mergers-increase-profitability/ [https://perma.cc/5LGR-EMZY].

[62] Id.

[63] Griffin, supra note 15 at 85.

[64] Id.

[65] Theresa H. Maynard, Mergers and Acquisitions: Cases, Materials, and Problems 25 (5th ed. 2021).

[66] Griffin, supra note 15 at 84—85.

[67] Id. at 84.

[68] Id. at 86.

[69] Id. at 84.

[70] Id. at 83.

[71] Griffin, supra note 15 at 84.

[72] Id.

[73] Id.

[74] Id.

[75] Id. at 85—86.

[76] Id.

[77] Roger L. Martin, M&A: The One Thing You Need to Get Right, Harvard Bus. Rev. (Jun. 2016), https://hbr.org/2016/06/ma-the-one-thing-you-need-to-get-right [https://perma.cc/LY3B-LVWV]; See infra note 111.

[78] Gerrit M. Bechaus, “Comply or Explain”—A Flexible Mechanism to Countervail Behavioral Biases in M&A Transactions, 21 U. Miami Bus. L. Rev. 183, 187 (2013).

[79] Alan Palmiter, Frank Partnoy & Elizabeth Pollman at 545.

[80] Id.

[81] Schlensky v. Wrigley, 237 N.E.2d 776 (Ill. Ct. App. 1968).

[82] Id. at 777.  

[83] Id. at 779.

[84] Alan Palmiter, Frank Partnoy & Elizabeth Pollman, supra note 23, at 546.

[85] Bechaus, supra note 71, at 202.

[86] Id.

[87] Id. at 202—203.

[88] Id. at 203.

[89] Id.

[90] Trefis Team, How Microsoft Created $800 Billion in 3 Years—Can it Repeat?, Forbes (Jul. 2020), https://www.forbes.com/sites/greatspeculations/2020/07/06/how-microsoft-created-800-billion-in-3-years--can-it-repeat/?sh=18276507dd1c [https://perma.cc/LVT5-7E5X].

[91] See Ken Smith, The M&A Buck Stops at the Board, 41 Mergers and Acquisitions 48, 49 (Apr. 2006); Afra Afsharipour, A Shareholders’ Put Option: Counteracting the Acquirer Over-payment Problem, 96 Minn. L. Rev. 1018, 1028 (2012); Maynard, supra note 58, at 26 [emphasis added].

[92] See John Callaham, Google Made Its Best Acquisition Nearly 16 Year Ago: Can You Guess What It Was?, Android Authority (May 2021), https://www.androidauthority.com/google-android-acquisition-884194/ [https://perma.cc/9GJB-48FF] (Admittedly, there are exceptions. For example, Google purchased Android for what was considered an exorbitant price at the time. Years later, Google was able to capitalize on the purchase of Android and turn it into a profitable mobile line).

[93] See Robert F. Bruner, Deals from Hell: M&A Lessons That Rise Above the Ashes, N.Y. Times 265—291 (2005) (For example, America Online and Time Warner reported a $45 billion write-down in 2003 and then a $100 billion yearly loss.); See also Strife of Brian, Economist (Sep. 7, 2011), https://www.economist.com/finance-and-economics/2011/09/17/strife-of-brian [https://perma.cc/V2SY-GSWH] (Countrywide acquisition by Bank America that led to $30 billion in legal settlements and mortgage-related losses.); See, e.g. infra note 98 and accompanying text. See also Fools Rush In: 37 of the Worst Corporate M&A Flops, CBI Insights (Oct. 2018), https://www.cbinsights.com/research/merger-acquisition-corporate-fails/ [perma.cc/MGC4-STT8].

[94] See Afra Afsharipour, Revaluating Shareholder Voting Rights, 70 Okla. L. Rev. 127, 128 (2017).

[95] See id.

[96] See id.

[97] See id.

[98] See Maynard, supra note 58, at 35.

[99] Bechaus, supra note 71, at 195.

[100] Id.  

[101] Id. at 196.

[102] Id.

[103] Id.

[104] Id.

[105] Id.

[106] Id.

[107] Alan Palmiter, Frank Partnoy & Elizabeth Pollman, supra note 23,  at 28. 

[108] Robert Fields, EXECUTIVE COMPENSATION AND EMPLOYEE BENEFITS ISSUES IN M&A SITUATIONS, RMF (2021), https://www.rmfieldslaw.com/post/executive-compensation-and-employee-benefits-issues-in-m-a-situations [https://perma.cc/NQV6-DUCT].

[109] Jeffrey A. Krug, Why Do They Keep Leaving?, Harvard Bus. Rev. (2003), https://hbr.org/2003/02/why-do-they-keep-leaving [https://perma.cc/PY3G-KUUM].

[110] Id.

[111] See Afra Afsharipour, supra note 45, at 481.

[112] See Jeffrey A. Krug, supra note 102.

[113] Jo Danbolt, The Real Effects of Earnout Contracts in M&As, J. of Fin. Research 607 (2021).

[114] Id. at 608.

[115] Id.

[116] Id. at 608—609.

[117] Id. at 609.

[118] Infra Part II.A.ii.

[119] Daniel R. Avery & Goulston & Storrs, Earnout Provisions, BL 2 (2020) (referring to a study completed by the American Bar Association’s Private Target Mergers and Acquisitions Deal Point Studies. Interestingly, 60%-70% of earnout provisions used earnings before interest, taxes, depreciation, and amortization (EBITDA) or revenue as the principal earnout metric).

[120] Id.

[121] 1 M&A Practice Guide § 9.10 (2021).

[122] Daniel R. Avery & Goulston & Storrs, supra note 112 at 5.

[123] 1 M&A Practice Guide § 9.10 (2021).

[124] Id.

[125] Id.

[126] Daniel R. Avery & Goulston & Storrs, supra note 112 at 5.

[127] Id. at  4.

[128] Id.

[129] 1 M&A Practice Guide § 9.10 (2021).

[130] Daniel R. Avery & Goulston & Storrs, supra note 112 at 5.

[131] Jay Coen Gilbert, What eBay’s Court Fight with Craigslist Reveals, Forbes: Corp. Soc. Resp (Sep. 2010), https://www.forbes.com/sites/csr/2010/09/21/what-ebays-court-fight-with-craigslist-reveals/?sh=6db8dccb2dd8 [https://perma.cc/886R-854Q].

[132] Id. 

Not so Lucky in Kentucky: Constitutionality of Kentucky's Slot Machines

Download a PDF Below:

 NOT SO LUCKY IN KENTUCKY: CONSTITUTIONALITY OF KENTUCKY’S SLOT MACHINES 

Ryan Roark [1]

Introduction

                If you ask the average American what Kentucky is known for, the words “horse racing” are a likely answer to follow. Along with “bourbon” and “fried chicken,” Kentucky is interconnected with the horse racing industry and is commonly known as the “Horse Capital of the World.”[2] Gambling has always been an integral part of horse racing in Kentucky ever since tracks began to open in 1875.[3] Fans flock to the betting windows at Churchill Downs, Keeneland, and Red Mile to bet on the races they are spectating, or even other races at different tracks through simulcasting.[4] Patrons pick horses for a multitude of reasons, such as recent horse performance, favorite trainer or jockey, or their favorite color worn by the horse and jockey.[5] The overall economic impact the industry has on Kentucky is extensive, accounting for thousands of jobs and millions in revenue, with wagering revenue accounting for a substantial amount.[6] Wagering is the main appeal for horse racing fans, and it is what has kept the sport alive in an age where professional team sports dominate the sporting industry.[7] With that said, horse racing wagering is the only type of gambling that is legal in the state of Kentucky (excluding charitable gaming and the state lottery) and is regulated by section 528 of the Kentucky statutes and the Kentucky Horse Racing Commission (KHRC).[8]

                While these gambling laws of Kentucky have been explicitly clear, the lines have been blurred recently due to horse racing tracks introducing the Historical Horse Racing Machines (HHR machines) beginning in 2011.[9] These HHR machines resemble the classic “slot machines” that are found in a typical Las Vegas casino with flashing lights, action-themed games, and instant-type betting[10] —the very type of casino-like gaming of chance that is illegal in Kentucky.[11] In fact, in 2020, the Supreme Court of Kentucky ruled these HHR machines are illegal and do not qualify as pari-mutuel wagering—the cornerstone of what is required for horse racing wagering to be considered legal under Kentucky statutes.[12] In response, the legislature, ignoring the Court’s criteria for what constitutes pari-mutuel wagering, simply adopted a new statutory definition for pari-mutuel wagering, one not shared by anyone outside Kentucky, to allow for the powerful horse industry to continue to exclusively run their slot-like gaming systems.[13] This legislation, Senate Bill 120 (commonly referred to as the “slots bill”), allowing this type of gambling was also passed without a Constitutional Amendment.[14] In other words, Kentuckians did not have any say in the implementation of these highly addictive gambling machines.

                This Note concludes the legislation passed redefining the term “pari-mutuel wagering” is unconstitutional because it defies section 226 of the Kentucky Constitution, it is special legislation benefitting only a special interest, and it violates the separation of powers clause. Part I clarifies the factual definition of pari-mutuel wagering and why the HHR machines do not fall under this category. Part II outlines the language of the bill that redefined pari-mutuel wagering and its implications. Part III discusses how this act of legislation violates both section 226, and the separation of powers clause, of the Kentucky Constitution. Part IV addresses the inferior tax structure and clear favoritism of the horse industry. Lastly, Part V examines solutions in terms of why a constitutional amendment is required for expanded gaming such as this, and how legalized gaming should be taxed.

I. What is Pari-Mutuel Wagering? 

                In the state of Kentucky, any wagering on horse racing must be based on a pari-mutuel system.[15] Section 226 of the State Constitution says that “lotteries and gift enterprises are forbidden, . . . and none shall be exercised, and no schemes for similar purposes shall be allowed.” meaning, as Kentucky courts have interpreted, gambling is generally outlawed in the state of Kentucky.[16] There are key exceptions, however, such as the state lottery, charitable gaming and of course, pari-mutuel horse racing.[17]

                Pari-mutuel wagering differs significantly from typical casino or sports wagering in that a bettor is betting against other bettors rather than against the association (“house”), like in a blackjack game, for example.[18] In other words, at any given horse race, there is a pool of money that consists of every bet that has been placed on that current race.[19] This pool of bets also dictates the odds and potential payout of each horse, which provides transparency to every bettor.[20] When the race ends, the pool of money is then disbursed to those with winning bets, and the payout to the winners depends on the final odds just before the race began with lower final odds resulting in a higher payout for the winners.[21]

                If the bettors are only betting amongst themselves, what is in it for the racetrack owners, the horsemen, and horse owners? This is referred to as the “takeout,” which is a percentage of the winnings (usually 10-20% depending on the state and track) distributed among these participants of the race itself and to taxes.[22] Because the rates of the takeout do not change, the winning bettors are essentially paying a cut to the racetrack for putting on the race.[23]

A.      Common Meaning 

                Given that KRS Chapter 230, which regulates pari-mutuel horse racing, does not define the term “pari-mutuel,” Kentucky courts have used a variety of sources to ascertain the commonly understood meaning of the term.[24] For example, the federal Interstate Horseracing Act of 1978, which was designed to standardize the practice of off-track betting, described pari-mutuel wagering as "[a]ny system whereby wagers with respect to the outcome of a horserace are placed with, or in, a wagering pool conducted by a person licensed or otherwise permitted to do so under State law, and in which the participants are wagering with each other and not against the operator.”.[25]

                The term “pari-mutuel” comes from the French language with “pari” meaning “to bet” and “mutual” meaning “mutual” or “reciprocal.”[26] In Commonwealth v. Kentucky Jockey Club, the Court of Appeals of Kentucky described pari-mutuel as:

[t]he operator of the machine does not bet at all. He merely conducts a game, which is played by the use of a certain machine, the effect of which is that all who buy pools on a given race bet as among themselves; the wagers of all constituting a pool going to the winner or winners. The operator receives 5 per cent. of the wages as his commission. But in selling ordinary pools on horse races the seller does not operate a “machine or contrivance used in betting.” Neither does he bet on a horse race.[27]

In addition, the KHRC’s regulatory definition matches squarely with these historic definitions in providing that it is: “wagering among themselves and not against the association and amounts wagered are placed in one or more designated wagering pools and the net pool is returned to the winning patrons.”[28]

                The Kentucky courts, KHRC, and federal government agreed on the uniform definition. Thus, before the year 2021, “pari-mutuel” inarguably had a factual, universal meaning.

B.      HHR Machines are not Pari-Mutuel Wagering 

                Despite the well-understood meaning of pari-mutuel, Kentucky horse tracks began to push the envelope (or simply throw the envelope away) by introducing the HHR machines in 2011.[29]  “Triple Action Dragons”, “The Enforcer” and “Tiger Lord” are just a few of the hundreds of various HHR slot gaming themes.[30] The machine itself resembles that of a slot machine exactly. Money is inserted. The patron hits a button. Spinning wheels, lights and sounds stimulate each patron.[31] The horse tracks and KHRC justified the inception with the fact that the results produced by the machines were based on previously run races.[32] The Supreme Court of Kentucky in Family Trust Foundation of Kentucky, Inc. v. Kentucky Horse Racing Commission disagreed, however, and in a 7-0 ruling held the HHR machines did not constitute a pari-mutuel system of wagering.[33]

                In the ruling Justice VanMeter explained that there are two essential elements that must be in place for pari-mutuel wagering, being “patrons are wagering among themselves and not against the association,” and “amounts wagered are placed in one or more designated wagering pools.”[34] 

                In order for patrons to be able to bet among themselves, there must be a discreet, individual event on which wagers are made.[35] For example, all horse races are discrete in that thousands of bettors are able to wager among themselves at the same time, which is absolutely necessary for pari-mutuel wagering to take place. The biggest key to this—as the court explained—is reciprocity.[36] Reciprocity, translated from the French word mutuel, means mutual dependence on another.[37] In wagering, this is the requirement for bettors to have dependence on each other’s bet or to “bet amongst themselves.”[38] In describing this reciprocity, Justice VanMeter stated, “Without providing simultaneous access to one historical horse race to the same group of patrons, no pari-mutuel pool can be created among the patrons in which they are wagering among themselves, setting the odds and the payout.”[39]

In addition to reciprocity, the second prong is that there must be one or more designated wagering pools for the given event.[40] In Family Trust, KHRC contended that because there was an “initial seed pool” created by the racetracks, the pool designation prong was satisfied.[41] The Supreme Court again disagreed stating:

“The betting pools are required to be established only by the patrons. And, as found by the trial court, based on testimony, a possibility exists that one patron could win all of the net pool, which would then require the association to step back in and replenish the seed pool. At such points, the pools are not created by the patrons as required by pari-mutuel wagering.”[42]  

In other words, when it comes to HHR machines, the association is the opposition on the other end of a given bet by a patron, making it impossible for pari-mutuel wagering to exist. Regardless of how the money lost by patrons is organized, the bottom line is that there cannot be a common pool among patrons when only the association establishes the “pool”—which is unavoidable with HHR machines.[43]

II. The “Slots Bill” 

                In response to the Supreme Court’s ruling that HHR machines did not constitute pari-mutuel wagering, the Kentucky General Assembly immediately passed Senate Bill 120 that simply redefined the term “pari-mutuel” under KRS Chapter 230 to fit the KHRC and keep the horse industry’s exclusive slot gaming business alive.[44] The “new” definition provided in KRS Chapter 230 is as follows:

“Pari-mutuel wagering”… means any method of wagering previously or hereafter approved by the racing commission in which one (1) or more patrons wager on a horse race or races, whether live, simulcast, or previously run. Wagers shall be placed in one (1) or more wagering pools, and wagers on different races or sets of races may be pooled together. Patrons may establish odds or payouts, and winning patrons share in amounts wagered including any carryover amounts, plus any amounts provided by an association less any deductions required, as approved by the racing commission and permitted by law. Pools may be paid out incrementally over time as approved by the racing commission.[45] 

It is immediately apparent that the General Assembly completely ignored the factual definition of pari-mutuel. In the paragraph-long definition there is no mention of “patrons wagering among themselves and not against the association” or “wagering generated only by the patrons”—the two key requirements of pari-mutuel wagering the Supreme Court of Kentucky laid out just months prior to this bill.[46] As Martin Cothran for the Family Foundation put it, “the legislature…simply wrote a new definition for pari-mutuel wagering, one not shared by anyone outside Kentucky…rather than the horse tracks and their allies on the Kentucky Horse Racing Commission changing their actions to bring them into alignment with the law, lawmakers simply changed the law to suit a very wealthy and influential special interest.”[47]

                Not only did the legislature disregard the Supreme Court’s requirements of what constitutes pari-mutuel wagering, the substance of the new definition does not resemble what actual pari-mutuel wagering is.[48] Breaking down the first sentence, the statute states, “any method approved by the KHRC in which one or more patrons wager on a horse race.”[49] The key here is that it states “one or more.” [Opposite of what pari-mutuel actually means (wager among others, dependence on each other, reciprocity, etc.), allowing one person to make a bet against the association is exactly what it sounds like—a slot machine bet.[50]]

                The second half of the definition attempts to address the “wagering pool” concept that is necessary for wagering to be pari-mutuel.[51] Remember, it must be a pool established only by the patrons on a discrete, finite event.[52] The legislature completely does away with this requirement as well. Instead of requiring patrons to establish the odds and pool, the bill states the “patrons may establish odds or payouts” giving leeway to the association to establish it themselves.[53] Also, pools “being paid out overtime” are the opposite of a pool created for a discrete event. Essentially, this gives the association authority to handle the wagers however it pleases with zero transparency to the patrons. Even though the legislature uses the term “pool,” this is simply a façade. Just as a typical casino does, the “house” keeps the money lost by patrons and pays that money out over time to their discretion.[54]

                The implication of the bill is that it allows the horsetracks to run casinos (at the discretion of the KHRC, who has every incentive to only bolster the horsetracks) without fear of competition or consequences.[55] Prominent spokesperson of the Kentucky faithful and Kentucky Sports Radio founder, Matt Jones, has recognized the absurdity of the bill. Just after the bill was passed Jones stated, “In Kentucky we now have legal lottery and slot machines, the two worst forms of gambling that are the hardest to win, most regressive and addictive. Meanwhile sports gambling, poker, etc where you actually can win are still illegal. Logic and reason is not our strong suit.”[56] Kentucky voters thought they were electing representatives who would act in their constituents’ best interest—yet, what they got was the legalization of slot machines, which are a regressive tax on lower income individuals and more addictive than any other form of gambling.[57]

III. Section 226 of the Kentucky Constitution and the Separation of Powers 

A.      HRR Machines Violate Section 226.               

 Any proposed expanded form of gambling in Kentucky must pass the scrutiny of section226 of the Kentucky Constitution, which states, “lotteries and gift enterprises are forbidden, and none shall be exercised, and no schemes for similar purposes shall be allowed.”[58] At the time of its adoption the framers of the current Kentucky Constitution understood the term “lottery” to mean a system in which players wager that a particular number will be selected in a random drawing.[59] The seminal case Commonwealth v. Kentucky Jockey Club,[60] delineated the scope of the provision and the definition of the term lottery in saying:

A lottery, it is said, is a species of gambling, described as a scheme for the distribution of prizes or things of value, by lot or by chance, among persons who have paid, or agree to pay, a valuable consideration, for the chance to share in the distribution…[61]

The court summarized this definition as comprising four elements “consideration, chance, prize, and means of disbursement.”[62] While pari-mutuel horse race betting clearly involves these four elements, the court still allowed for the exception of this type of gambling.[63] The essence of the holding was the element of skill rather than chance in horse race wagering.[64] The court found that “the clear weight of authority does not sustain the position . . . that the result of a horse race depends on mere chance within the meaning of that term in the definition of a lottery.”[65] At the core of this reasoning was the distinction between gaming, betting, and lotteries. As the court stated, “Gaming, betting, and lotteries are separate and distinct things in law and in fact, and have been recognized consistently as calling for different treatment and varying penalties. The distinctions are well developed, clearly marked, and in most instances rigidly maintained.”[66] To truly understand why the court allowed for pari-mutuel wagering, a dissection of these terms must be done.

                The term “lottery,” as stated before, requires there be consideration, chance, prize, and means of disbursement.[67] Kentucky courts have interpreted this term broadly as any game distributing a prize predominately by chance for consideration.[68] In determining whether a device or system constitutes a lottery, the element of chance is most debated. Kentucky courts have ruled where chance is the “dominant factor” in deciding the outcome, the scheme is deemed a lottery and thus prohibited.[69] This dominant factor approach has prohibited numerous gambling schemes in Kentucky, including pinball machines,[70] promotional enterprises based on theater ticket sales,[71] pyramid schemes,[72] and numbers games.[73] All of these are lotteries in that chance is the predominant factor producing the result.

                Historically, “gaming” refers to individuals participating in playing a game such as cards or dice, with a wager involved, and where chance is the controlling factor of the outcome.[74] The term “has a rather restricted meaning, and applies only to betting upon the result of some game played with cards, dice, machine, wheel, or other contrivance.”[75] Gaming and lotteries are often used interchangeably in that both involve a predominant factor of chance.[76] The term “lottery” is broader in that it encompasses all games of chance, including drawings, raffles, etc.[77] The bottom line is that both lotteries and gaming, because of their predominant factor of chance, are prohibited under section 226 of the Kentucky Constitution.[78]

                The term “betting,” includes all forms of gambling, both legal and illegal in the state of Kentucky.[79] “To bet is to put to hazard a sum ascertained on a future happening of some event then uncertain; to gamble or game for money or other stakes; or to stake or pledge money or property on an event of a contingent issue, or to wager.”[80] The court in McDevitt v Thomas seemed to distinguish the wagering done under a lottery versus that of betting on horses:

[T]he words “betting” and “wagering” have a much broader and more comprehensive meaning than the word “gaming.” They are unrestricted in their scope, and it is immaterial whether the subject of the wager is one denounced or prohibited by statute or not. The subject of a wager may be, and frequently is, a perfectly innocent pastime, or a legally authorized act; such as the test of speed of animals or men, or the result of an election, or it may be based upon a mere matter of opinion or the exercise of judgment, such as the height of a mountain, the width of a river, the distance of an object, or the weight of a given article.[81]

Years later, in Kentucky Jockey Club, the court legally authorized betting on horses, revolving around the idea that a wager is placed on the basis of an exercise of opinion or judgment.[82] That is to say, the betting that is legal under section 226 may not be on the basis of mere chance.[83] Precedent after Kentucky Jockey Club expanded on this concept as the courts began to view these issues under the light of a dominant factor approach.[84] This approach stipulates, “the test of the character of the game is not whether it contains an element of chance or an element of skill, but which is the dominating element that determines the results of the game.”[85] This approach was used in the case of Commonwealth v Allen, where the court held that “chance permeated the entire scheme,” rendering it a lottery.[86]

                Applying the holding of Kentucky Jockey Club and its precedents to the present day issue of the HHR machines, it is clear the machines do not constitute legal wagering under section 226.[87] The only way the machines pass the scrutiny of section 226 is if they constitute pari-mutuel horse betting.[88] As discussed in Part I, the 7-0 ruling from the Kentucky Supreme Court answered the question of whether the machines use a pari-mutuel system.[89] The HHR machines do not work under a pari-mutuel system because there is no reciprocity and the patrons do not establish the wagering pools.[90]

                In addition to not being under a pari-mutuel system, the very nature of wagering the HHR machines administer is unlawful under the holding of Kentucky Jockey Club, because the machines constitute a lottery prohibited by section 226.[91] The machines are a lottery as they operate on the basis of chance rather than an exercise of a patron’s judgment, opinion, or skill.[92] To place a bet on an HHR machine a patron merely approaches the machine, inserts money, presses a button, and within seconds either wins or loses.[93] There is no judgment or skill involved and the user experience is the same as playing a slot machine at a casino.[94]

                The KHRC and horse tracks contend that because the machines produce results based on past races they are different from the standard casino slot machine.[95] However, while the mechanism may be different, the effect on the patron wagering is still the same—that is, randomness.[96] HHR machines generate numbers by selecting at random three different races from a database of historical races.[97] Whether or not a machine uses a random number generator or past races does not matter to the patron playing because the end result is that it is still random. There is no opportunity for skill or judgment. In actual horse racing or simulcasting a bettor has the chance to study statistics of each horse, see the horses in real time and learn the tendencies of jockeys and trainers.[98] In HHR gaming, however, these factors are not relevant, nor are they known to the bettor.[99] Ironically, Kentucky horse tracks such as Red Mile, even refer to the HHR system as “gaming”—a word narrowly used for casino games of chance, as previously mentioned.[100] Jordan Scot Flynn Hollander of the UNLV Gaming Law Journal addressed the issue of instant horse machines as it pertains to New Jersey in saying:

The random races that determine the outcome of games played on these devices are based on previously run races, not live races, nor are they based on actual-time simulcasting of those races…while instant horse wagering devices may be based on historical horse races, they are simply not the same as live and simulcast pari-mutuel wagering. They are slot machines with a different kind of random number generator.[101]

The essence of the issue is that the mechanism, in which HHR machines operate, relies on a system of mere chance.[102] The same nature of mere chance that Kentucky Jockey Club distinguished as a lottery that is prohibited under section 226 of the Kentucky Constitution.[103] Despite the HHR machines being in clear violation of this provision of the Kentucky Constitution, the General Assembly decided to circumvent this constitutional restriction on games of chance by redefining the word “pari-mutuel wagering” to include HHR machines.[104]

B.  Violation Of The Separation Of Powers Clause 

                Section 27 of the Kentucky Constitution states, “The powers of the government of the Commonwealth of Kentucky shall be divided into three distinct departments, and each of them be confined to a separate body of magistracy, to wit: Those which are legislative, to one; those which are executive, to another; and those which are judicial, to another.”[105] The idea of separation of powers has always been an integral part of the federal government and national constitution.[106] At the state level, “it is well settled law in the state of Kentucky that one branch of Kentucky’s tripartite government may not encroach upon the inherent powers granted to it by any other branch.”[107] The powers of each branch are also plainly delineated, being that, the legislature makes, the executive executes, and the judiciary construes the law.[108]

                In the case of the HHR machines, the legislative branch of Kentucky completely ignored the powers of the judiciary. As discussed in Part II, under the slots bill, the General Assembly wrote an entirely new definition for “pari-mutuel,” only months after the Kentucky Supreme Court’s ruling that HHR machines did not constitute pari-mutuel wagering.[109] Not only does the new definition allow for wagering against the house, instead of among patrons (as required under a pari-mutuel system), it also allows for wagering on previously run races.[110] This provision was for the HHR machines. Even though they use “previously run races” simply as a random number generator, the inclusion of this provision and the elimination of reciprocity and patrons establishing the pools, are all the horse tracks needed to keep the HHR machines running.[111] While the legislature’s job is to make the law, the General Assembly in Kentucky decided it was also under their power to construe, and define it.[112]

                Each branch of government is responsible for their duties and the courts’ deference to the legislative branch has its limits.[113] These limits are in place for the protection of the people and for the courts to be able to construe the law as to it what it means in reference to the Constitution.[114] There is perhaps no better example of these limits on legislative deference in the state of Kentucky than the seminal case in 1989 of Rose v. Council for Better Educ., Inc.[115]

                In Rose, the Supreme Court of Kentucky interpreted section 183 of the Kentucky Constitution which states,  “The General Assembly shall, by appropriate legislation, provide for an efficient system of common schools throughout the State."[116] The court ruled that the General Assembly did not satisfy the constitutional requirement because it did not provide an efficient school system throughout the state.[117] Representatives of the General Assembly argued that they should have the sole discretionary power to determine whether the school system is constitutionally sufficient.[118] But the Supreme Court stood its ground. Chief Justice Stevens made it clear to the legislature that while the opinions of the legislature are given some weight and deference, the ultimate duty of enforcing the Constitution lies with the judiciary—“it is our sworn duty, to decide such questions when they are before us by applying the constitution.”[119] As Justice Stevens stated the court is charged with the responsibility of holding the legislature accountable to the Constitution and to protect the rights of the people.[120] Expanding on this idea, Justice Stevens stated, “to avoid deciding the case because of ‘legislative discretion,’ ‘legislative function,’ etc., would be a denigration of our own constitutional duty.[121] To allow the General Assembly (or, in point of fact, the Executive) to decide whether its actions are constitutional is literally unthinkable.”[122]

                Rose is now viewed as a landmark case because it truly shows how the separation of powers is supposed to work.[123] Immediately after the ruling, the General Assembly acted with tremendous speed, reforming the educational system providing funding across the Commonwealth to public schools.[124] The legislature listened to the judiciary and Kentucky “sustained the most long-lasting, comprehensive education reforms in the nation.”[125]

                Why is this relevant to the case of HHR machines in Kentucky? The holding of Rose revolved around the definition of one word—“efficient.”[126] Before Rose, the legislature thought they had the power to interpret what the word meant in the public school system.[127] Due to incentives such as reelection and seeking to please interest groups, the politicians’ definition of what “efficient” meant did not align with the purpose of section 183 and most importantly, the interest of the people.[128] That is where the judiciary steps in. Where the legislature fails to align with the values, purpose, and interest of the Constitution and its people, the judiciary’s role is to step in and enforce these interests.[129]

In concluding the role of the judiciary in Rose Justice Stevens ended with these powerful words:

The judiciary has the ultimate power, and the duty, to apply, interpret, define, construe all words, phrases, sentences and sections of the Kentucky Constitution as necessitated by the controversies before it. It is solely the function of the judiciary to so do. This duty must be exercised even when such action serves as a check on the activities of another branch of government or when the court's view of the constitution is contrary to that of other branches, or even that of the public.[130]

In the case of HHR, the Supreme Court unanimously defined “pari-mutuel” as it applies to section 226 of the Constitution.[131] The purpose of section 226 was to prevent the proliferation of gambling on mere chance throughout the state of Kentucky.[132] Just like in Rose, the court defined what the law meant, protecting the purpose of the Constitution and the interest of the people.[133] Instead of allowing the court to construe what the law means, the legislature took it upon themselves to do just that.[134] The General Assembly decided they had the power to define and construe the law and implemented the new definition—a definition that is not shared by anyone outside the state of Kentucky.[135] A definition that goes against the very purpose of section 226.[136] A definition that allows for the most addictive and regressive form of gambling to be spread throughout the Commonwealth.[137]

IV. The Legislature’s Favoritism of the Horse Racing Industry   

                After the legislature executed the slots bill, the floodgates have opened for the expansion of  gaming in Kentucky. Various gaming machines, referred to as “gray machines” have already begun to show up across the state at gas stations, convenient stores, and bars.[138] Operators of the machines argue they operate just the same as the HHR machines, and in fact, allow for an opportunity of judgment and skill, unlike HHR machines.[139] Instead of merely pressing a button, a player wins a game by tapping the screen on an icon, to match three of the same icons in a row.[140] After all, if the horse racing industry can run machines of chance, why can another company not do the same with games of skill? 

                This is where the true interest of the legislature shows itself. Lawmakers have already began to speak on the issue of gray machines simply because they do not support the horse racing industry like the HHR machines.[141] In fact, the legislature has already proposed a bill outlawing the gray machines.[142] Senate Majority Floor Leader, Damon Thayer, justified his position in opposing the gray machines saying they do not serve a “higher purpose.”[143] Just what is the higher purpose Senator Thayer is referring to? That would be the purpose of HHR, which is to benefit the horse industry, and a very small percentage actually going to the coffers of the state of Kentucky.[144] While the gray machines provide benefits to small business and proceeds to the Fraternal Order of Police, that does not seem to be the “higher purpose” Senator Thayer is looking for.[145] As Linda Blackford of Kentucky’s Herald Leader put it, “Damon Thayer and his allies showed how easy it is to make some formerly illegal slot machines legal and now the gray machine advocates want a shot. The horse people showed them a really good model: Shower your legislators with attention and donations and they will make your slot machines legal, too.”[146]

                The small percentage of HHR going to Kentucky’s General Fund is a result of the appalling tax structure.[147] The tax structure of HHR is the most blatant evidence of the legislature catering to the whims of the horse industry. Currently, the state of Kentucky tax on HHR machines is only 1.5% of the handle, the total amount wagered on the machines by the public.[148] With this minute tax, the actual percentage that is then converted to the Kentucky General Fund is a mere 8% of the gross commission.[149] This is grossly lower than what relative states tax on their slot machines. Slots are taxed at 55% in Pennsylvania, 53.5% in West Virginia, 33% in Ohio, 40% in Indiana, and 50% in Illinois.[150]

Conclusion 

                Putting aside the issue of the constitutionality of HHR machines, the first step Kentucky must take is to tax them. Between the years 2016 to 2021, betting on HHR machines in the state of Kentucky grew 463% with the total amount of $3.6 billion being bet in the year 2021.[151] That is twice what Kentuckians bet on the lottery and live horse racing combined.[152] Yet, the General Fund collected only $15 million in tax revenue in 2020, compared to $274 million from the lottery.[153] As Democratic Representative Tina Bojanowski put it:

Through the backdoor of HHR slot machines, we now have slots in Kentucky. But because of the egregiously low tax rate, we are not seeing the tax revenue we should. We’re paying the social costs of gambling but receiving almost none of the benefit.[154]

If Kentucky simply raised the tax rate to be in the range of other states, $100 million would be raised annually for public investment, like health care and education.[155] The Kentucky legislature needs to act now and get Kentucky its fair share.

                With that being said, the law the legislature passed allowing slot machines explicitly violates section 226 of the Constitution.[156] If this law is here to stay, there is no bound to how far the legislature may go in expanding gaming in the state. As recently as March of 2022, lawmakers have introduced a bill to legalize sports betting that would be regulated by the KHRC.[157] If enacted, this bill would violate section 226, without giving a voice to the people, just as the slots bill did.

                In order to solve this issue, Kentucky should introduce expanded gambling the proper way via a constitutional amendment. Whether it is slot machines in the form of HHR, sports gambling, or casino gambling in general, the only way these forms can be introduced without violating section 226 is through a constitutional amendment.[158] This would put the issue of expanded gambling to a vote, putting it in the hands of the people, rather than the legislature. Stan Cave, a Lexington-based attorney with the Family Foundation, is a proponent of this idea with any form of expanded gambling in Kentucky: “the plain language in Section 226 of the Kentucky Constitution, an opinion of the highest court in Kentucky at the time and two attorney general opinions make clear that a constitutional amendment is required to legalize sports wagering of the types being considered.”[159] A constitutional amendment is also how Kentucky legalized the state lottery in 1988.[160] Even though the lottery was clearly prohibited by section 226, a referendum by the people allowed this narrow exception, and the Kentucky Constitution was amended.[161] It is well founded that the legislature of a state cannot legalize any form of gambling that is within the scope and meaning of a prohibition in the constitution of the state, unless there is an amendment to the state constitution.[162] A look how a similar state has expanded gambling can be used as a model for Kentucky.

                One of Kentucky’s neighboring states, Ohio, is a great example of using a constitutional amendment for casino gambling. Ohio’s gambling laws under the Ohio Constitution were almost identical to that of Kentucky’s in that “[l]otteries, and the sale of lottery tickets, for any purpose whatever, shall forever be prohibited in this State.”[163] In 2009, however, a constitutional amendment was put to a vote and the people in Ohio elected to allow casino gaming.[164] Features of the bill included a tax rate of 33% of all gross casino revenue (with details regarding how the money will be distributed), a requirement of $50 million fee for any casino to open, and creating an Ohio gaming commission whose sole responsibility is to regulate casino gaming in Ohio.[165] Putting the issue of expanded gambling to a vote incentivizes the legislature to provide citizen-focused policies in the bill, as they did Ohio, because its passage is dependent on the peoples’ approval (as a change to the state constitution should be). If the people of Kentucky elect to allow HHR slots, sports gambling, or casinos--vices they know will have great cost to Kentuckians—they no doubt will want their fair share of taxes and an independent gaming commission regulating it. A monopolistic horse racing industry having an entire gambling market to themselves, with the aligned horse racing commission regulating it, is not in the interest of the public. If gaming is going to enter the state, Kentuckians should have the ability to choose if it is done, and how it is done.

[1] J.D. Expected 2023, University of Kentucky J. David Rosenberg College of Law; B.S. Economics 2019, University of Kentucky

[2]See Horse Capital of the World, Lexington Visitor Ctr., https://www.visitlex.com/ things-to-do/horses/ (last visited Dec. 10, 2022) [https://perma.cc/5XTM-4U3Q].

[3] John Isaac, Guide to Online Casinos in Kentucky: The Best Kentucky Casino Sites for 2022, Online-Gambling, https://www.online-gambling.com/us/kentucky/casinos/ (last visited Oct. 11, 2022) [https://perma.cc/WU9M-GAQY].

[4] M. Shannon Bishop, And They're Off: The Legality of Interstate Pari-Mutuel Wagering and Its Impact on the Thoroughbred Horse Industry, 89 Ky. L.J. 711, 712 (2001).

[5] Id.

[6] Economic Impact of the EQUINE INDUSTRY in Kentucky, Kentuckybred.org, https://www.kentuckybred.org/kentucky-equine-industry-impact/ (last visited Oct. 17, 2022) [https://perma.cc/9CRH-6DZU]; J. Shannon Neibergs, Kentucky Parimutuel Revenue Policy Simulator, Gaming Rsch. & Rev. J. 17 (2000).

[7] Horse Racing History, Winning Ponies.com, https://www.winningponies.com/horse-racing-history.html (last visited Oct. 11, 2022) [https://perma.cc/WW2G-9CYR].

[8] See Kentucky Online Casinos & Real Money Gambling, Lets Gamble USA (Aug. 30, 2021), https://www.letsgambleusa.com/kentucky/ [https://perma.cc/4CSE-MSPL].

[9] Adam K. Raymond, How decades-old horse races saved a signature kentucky industry, Spectrum News 1 (Apr. 23, 2021), https://spectrumnews1.com/ky/louisville/news/2021/ 04/21/the-rise-of-historical-horse-racing-in-kentucky [https://perma.cc/E253-ZFTG]; Mike Murphy, Kentucky Supreme Court Rules Against Historical Horse Racing, BettingUSA.com (Oct. 6, 2020), https://www.bettingusa.com/supreme-court-kentucky-hhr-case/ [https://perma.cc/742C-QDRL].

[10] Id.

[11] Ky. Op. Att’ys Gen. 93–58 (1993).                                                        

[12] Fam. Tr. Found. of Ky., Inc. v. Ky. Horse Racing Comm'n, 620 S.W.3d 595, 600–03 (Ky. 2020).

[13] Ky. Op. Att’ys Gen. 93–58 (1993).

[14] Joe Sonka, Kentucky Senate Passes Bill to Legalize Slot-Like Historical Horse Racing Machines, Louisville Courier J. (Feb. 9, 2021), https://www.courier-journal.com/story/ news/politics/ky-general-assembly/2021/02/09/senate-passes-bill-legalizing-historical-horse-racing-machines/4455009001/ [https://perma.cc/CR7G-6EAT].

[15] 811 Ky. Admin. Regs. 2:060 (2021).

[16] Ky. Const. § 226, Bishop, supra note 4, at 603.

[17] Jane Block, Legal Betting, Poker & Casinos in Kentucky, Gambling Online (Oct. 15, 2021), https://www.gamblingonline.com/laws/kentucky/ [https://perma.cc/3N5J-XJ6W].

[18] Pari-Mutuel Betting—What It Is and How It Works, New York Sports Betting https://www.nysportsbetting.com/guide/pari-mutuel/ (last visited Oct. 25, 2022) [https://perma.cc/3MKR-8VEB].

[19] Id.

[20] Id.

[21] Id.

[22] What is a Takeout in Horse Betting, Ezhorsebetting (June 16, 2017), https://www.ezhorsebetting.com/what-is-takeout-in-horse-betting/ [https://perma.cc/HVZ6-MZXM]; Paul Bergeron, Why Horse Bettors Should Eye Takeout Rates and Bet Accordingly, PlayUSA (June 2, 2021), https://www.playusa.com/why-horse-bettors-should-eye-takeout-rates/ [https://perma.cc/2XVS-PWRX].

[23] Id.

[24] Fam. Tr. Found. of Ky. v. Ky. Horse Racing Comm’n, 620 S.W.3d 595, 600 (Ky. 2020).

[25] International Horseracing Act of 1978, Pub. L. No. 95–515 § 3, 92 Stat. 1811, 1812 (1978).

[26] Pari-Mutuel, Online Etymology Dictionary (Jan. 15, 2020), https://www.etymonline.com/word/pari-mutuel [https://perma.cc/UQ4H-YU55].

[27] Commonwealth v. Ky. Jockey Club, 38 S.W.2d 987, 991 (Ky. Ct. App. 1931).

[28] 811 Ky. Admin. Regs. 1:005 (effective May 31, 2019, the Commission revised its regulations).

[29] Raymond, supra note 9;  Murphy, supra note 9.

[30] Themed Games, Red Mile Gaming & Racing, https://redmileky.com/gaming/themed-games (last visited Oct. 26, 2022) [https://perma.cc/96N6-BCZR].

[31] Brief for Appellant at 10, Fam. Tr. Found. of Ky., Inc. v. Ky. Horse Racing Comm'n, 620 S.W.3d 595 (Ky. 2020) (No. 2018-SC-000630-TG).

[32] Id.

[33]  Fam. Tr. Found. of Ky. v. Ky. Horse Racing Comm’n, 620 S.W.3d 595, 600 (Ky. 2020).

[34] Id.

[35] Id.

[36] Id. at 601.

[37] Reciprocal, Interglot Translation Dictionary, https://www.interglot.com/ dictionary/en/fr/search?q=reciprocal (last visited Oct. 26, 2022) [https://perma.cc/VJJ9-KGW2].

[38] Fam. Tr. Found., 620 S.W.3d at 600.

[39] Id. at 601.

[40] Id. at 600.

[41] Id. at 599.

[42] Id. at 601.

[43] Id.

[44] S. 120, (2021) https://apps.legislature.ky.gov/record/21RS/sb120.html [https://perma.cc/6S6W-MXXL].

[45] Id.

[46] Fam. Tr. Found., 620 S.W.3d at 600.

[47] SB 120—The Slots Bill Was an Unconstitutional Millionaire’s Stimulus Bill, The Family Foundation (Feb. 15, 2021), https://www.kentuckyfamily.org/sb-120-the-slots-bill-was-an-unconstitutional-millionaires-stimulus-bill/ [https://perma.cc/XS5F-6RWZ].

[48] S. 120 § 15, supra note 45 (current/final version).

[49] Id.

[50] WILLSTN-CN § 17:7.

[51] S. 120 § 15, supra note 45.

[52] Fam. Tr. Found., 620 S.W.3d at 600.

[53] S. 120, supra note 45.

[54]  WILLSTN-CN § 17:7.

[55] Jon Friedl, Kentucky Slot Machine Casino Gambling, Professor Slots (Sep. 22, 2021), https://professorslots.com/kentucky-slot-machine-casino-gambling/ [https://perma.cc/9687-M299].

[56] Jennifer Newell, PokerStars Settles with Kentucky After SCOTUS Petition, Legal US Poker Sites (Sep. 27, 2021), https://www.legaluspokersites.com/news/pokerstars-settles-with-kentucky/28193/ [https://perma.cc/3SC8-E84A].

[57] Joseph Bentivegna, Sports Gambling is Another Tax on the Poor and Minorities, CT Viewpoints (Apr. 1, 2021), https://ctmirror.org/category/ct-viewpoints/sports-gambling-is-another-tax-on-the-poor-and-minorities [https://perma.cc/G29L-34T6].

[58] Ky. Const. § 226.

[59] Op. Att’ys Gen. 05–003 (2005).

[60] Kentucky Jockey Club, 38 S.W.2d at 992.

[61] Id.

[62] Id.

[63] Id. at 1009.

[64] Id.

[65] Id.

[66] Id. at 994.

[67] Id. at 992.

[68] Otto v. Kosofsky, 476 S.W.2d 626, 629 (Ky. 1971).

[69] Ky. Op. Att’ys Gen. 93–58 (1993).

[70] A. B. Long Music Co. v. Com., 429 S.W.2d 391 (Ky. 1968).

[71] Commonwealth v. Malco-Memphis Theatres, Inc., 169 S.W.2d 596 (1943).

[72] Commonwealth v. Allen, 404 S.W.2d 464 (1966).

[73] Gilley v. Commonwealth, 229 S.W.2d 60 (1950).

[74] Kimberly C. Simmons, Definitions of "Gambling" and "Gaming", 38 Corpus Juris Secundum 5 (2022).

[75] McDevitt v. Thomas, 114 S.W. 273, 274 (1908).

[76] Op. Att’ys Gen. 93–58 (1993).

[77] Id.

[78] Id.

[79] Id.

[80] Kimberly C. Simmons, Definitions of "Gambling" and "Gaming"—terms Descriptive of Related Acts, 38 Corpus Juris Secundum 6 (2022).

[81] McDevitt, 114 S.W. at 274.

[82] Kentucky Jockey Club, 38 S.W.2d at 992.

[83] Id.

[84] Op. Att’ys Gen. 93–58 (1993).

[85] Kimberly C. Simmons, Definitions and Distinctions Regarding Games of Skill and Games of Chance, 38 Corpus Juris Secundum 2 (2022).

[86] Commonwealth v. Allen, 404 S.W.2d 464, 466 (1966).

[87] Brief for Petitioner at 10, Fam. Tr. Found. of Kentucky, Inc. v. Kentucky Horse Racing Comm'n, 620 S.W.3d 595 (Ky. 2020) (No. 2018-SC-0630-TG).

[88] Kentucky Jockey Club, 38 S.W.2d at 992.

[89] Fam. Tr. Found., 620 S.W.3d at 600.

[90] Id.

[91] Id.

[92] Id.

[93] Brief for Petitioner at 10, Fam. Tr. Found. of Kentucky, Inc. v. Kentucky Horse Racing Comm'n, 620 S.W.3d 595 (Ky. 2020) (No. 2018-SC-0630-TG).

[94] Id.

[95] Fam. Tr. Found., 620 S.W.3d at 600.

[96] Id.

[97] Brief for Petitioner at 10, Fam. Tr. Found. of Kentucky, Inc. v. Kentucky Horse Racing Comm'n, 620 S.W.3d 595 (Ky. 2020) (No. 2018-SC-0630-TG).

[98] Factors to Consider When Betting on Horse Racing, The Plaid Horse (July 7, 2021), https://www.theplaidhorse.com/2021/07/07/factors-to-consider-when-betting-on-horse-racing/ [https://perma.cc/5EZH-H5M4].

[99] Brief for Petitioner at 10, Fam. Tr. Found. of Kentucky, Inc. v. Kentucky Horse Racing Comm'n, 620 S.W.3d 595 (Ky. 2020) (No. 2018-SC-0630-TG).

[100] Themed Games, Red Mile Gaming & Racing, https://redmileky.com/gaming/themed-games (last visited Dec. 12. 2022) [https://perma.cc/Y8F7-BNVZ].

[101] Jordan Scot Flynn Hollander, And They're Off! Would Instant Horse Wagering in New Jersey Require Voter Approval?, 6 UNLV GAMING L.J. 239 (2016).

[102] Id.

[103] Kentucky Jockey Club, 38 S.W.2d at 992.

[104] S. 120, supra note 45.

[105] Ky. Const. § 27.

[106] Buckley v. Valeo, 424 U.S. 1, 124 (1976).

[107] Commonwealth ex rel. Beshear v. Bevin, 575 S.W.3d 673, 681 (Ky. 2019).

[108] Id.

[109] S. 120, supra note 45.

[110] Id.

[111] Brief for Petitioner at 10, Fam. Tr. Found. of Kentucky, Inc. v. Kentucky Horse Racing Comm'n, 620 S.W.3d 595 (Ky. 2020) (No. 2018-SC-0630-TG).

[112] S. 120, supra note 45.

[113] Sonja Ralston Elder, STANDING UP TO LEGISLATIVE BULLIES: SEPARATION OF POWERS, STATE COURTS, AND EDUCATIONAL RIGHTS, 57 Duke L.J. 755 (2007).

[114] Id.

[115] Rose v. Council for Better Educ., Inc., 790 S.W.2d 186 (Ky. 1989).

[116] Ky. Const. § 183.

[117] Rose, 790 S.W.2d at 213.

[118] Id. at 205.

[119] Id. at 209.

[120] Id.

[121] Id.

[122] Id.

[123] Elder, supra note 114.

[124] Id.

[125] Molly A. Hunter, All Eyes Forward: Public Engagement and Educational Reform in Kentucky, 28 J.L. & Educ. 485 (1999).

[126] Rose, 790 S.W.2d at 213.

[127] Id.

[128] Elder, supra note 114.

[129] Id.

[130] Rose, 790 S.W.2d at 209.

[131] Fam. Tr. Found., 620 S.W.3d at 600.

[132] Op. Att’ys Gen. 93–58 (1993).

[133] Rose, 790 S.W.2d at 209.

[134] Martin Cothran, SB 120 – THE SLOTS BILL – WAS AN UNCONSTITUTIONAL MILLIONAIRE’S STIMULUS BILL, The Family Foundation (Feb. 15, 2021), https://www.kentuckyfamily.org/sb-120-the-slots-bill-was-an-unconstitutional-millionaires-stimulus-bill/ [https://perma.cc/DC45-8T4Y].

[135] Id.

[136] Op. Att’ys Gen. 93–58 (1993).

[137] Joseph Bentivegna MD, Sports Gambling Is Another Tax on the Poor and Minorities, CT Viewpoints (Apr. 1, 2021), https://ctmirror.org/2021/04/01/sports-gambling-is-another-tax-on-the-poor-and-minorities/ [https://perma.cc/26VR-8Y3A].

[138] Janet Patton & Bill Estep, Unregulated Slot Machines Are Flooding Kentucky. and Police Are Helping, for a Cut, Lexington Herald Leader (Feb. 6, 2022), https://www.kentucky.com/news/politics-government/article257134862.html.

[139] Id.

[140] Id.

[141] Id.

[142] H. B. 606 (2022), https://legiscan.com/KY/text/SB213/2022 [https://perma.cc/4482-5K4L].

[143] Patton & Estep, supra note 139.

[144] Linda Blackford, New Slot Machines Show Confusion of Ky’s Gambling Laws. the Answer: Legalize Everything., Lexington Herald Leader, https://www.kentucky.com/ opinion/linda-blackford/article257654873.html ( Feb. 6, 2022).

[145] Patton & Estep, supra note 139.

[146] Blackford, supra note 145.

[147] Jason Bailey, Letter to the Kentucky House of Representatives on Raising the Inadequate Tax Rate on HHR Slot Machines, Kentucky Center for Economic Policy (Feb. 20, 2021), https://kypolicy.org/letter-to-kentucky-house-raising-hhr-slot-machine-tax-rate/ [https://perma.cc/5544-263P].

[148] Id.

[149] Id.

[150] Id.

[151] Tina Bojanowski, Kentucky Lawmakers Must Fix a Tax-Rate Mistake While Protecting Historical Horse Racing, Courier Journal (Feb. 5, 2021), https://www.courier-journal.com/story/opinion/2021/02/05/historic-horse-racing-kentucky-should-raise-tax-rate-machines/4412150001/ [https://perma.cc/DS9V-UR4Z].

[152] Id.

[153] Id.

[154] Id.

[155] Id.

[156] S. 120, supra note 45.

[157] H. B. 606 (2022), https://legiscan.com/KY/text/SB213/2022 [https://perma.cc/N2BJ-7RRS].

[158] Legislative Research Commission, House Votes to Take a Gamble on Sports Betting, Times Tribune (Mar. 21, 2022), https://www.thetimestribune.com/news/local_news/house-votes-to-take-a-gamble-on-sports-betting/article_20379d67-fd44-5358-bf8d-596e5a23b148.html [https://perma.cc/9XJF-TKLS].

[159] Kentucky: Sports Betting Would Not Require Constitutional Amendment, Yogonet, https://www.yogonet.com/international/news/2019/12/19/51914-kentucky-sports-betting-would-not-require-constitutional-amendment (last visited Dec. 21, 2022) [https://perma.cc/DE5M-438K].

[160] Kentucky Lottery History, Lottery-tickets.net (Sept. 15, 2021), https://www.lottery-tickets.net/kentucky-lottery/ [https://perma.cc/32WY-YZHQ].

[161] Op. Att’ys Gen. 93–58 (1993).

[162] Kimberly C. Simmons, Statutory and Constitutional Provisions Regarding Gaming, Generally, 38 Corpus Juris Secundum 18 (2022).

[163] Ohio Const. art. XV, § 6.

[164] Ohio Casino Approval and Tax Distribution, Amendment 3, Ballotpedia (2009), https://dev.ballotpedia.org/Ohio_Casino_Approval_and_Tax_Distribution,_Amendment_3_ [https://perma.cc/E8AJ-FW4X].

[165] Id.

Unconstitutional: Key Searches of Residential Doors by Law Enforcement Are Violative of the Fourth Amendment

Download a PDF Below:

 Kendra A. CraftI

Introduction

The Fourth Amendment to the United States Constitution provides the foundation for all search and seizure issues in criminal law proceedings. In doing so, the Fourth Amendment plays two vital roles in the American legal system. First, the Fourth Amendment protects the privacy of the individual, extending to “all invasions on the part of the government and its employees on the sanctity of a man’s home and the privacies of life.”[2] Second, but equally important, the Fourth Amendment provides regulation for government actors. The actors who are typically the subject of Fourth Amendment inquiries are police.[3] The Fourth Amendment is the primary form of legal constraint on police. While most states have their own laws governing search and seizure issues, they are comparatively sparse and are typically skipped over in favor of the Fourth Amendment. The text of the Fourth Amendment guarantees:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.[4]

As the amount of policing in the United States has increased within the past century, so have the number of alleged Fourth Amendment violations committed by law enforcement.[5] These violations have effectuated a substantial set of caselaw that continues to expand with each new issue regarding a Fourth Amendment violation.[6] While the breadth of issues regarding the Fourth Amendment is vast, the basic structure of the inquiry remains the same. Modern Fourth Amendment litigation involves a challenge to the evidence obtained during a search and seizure conducted by police. More particularly, the court examines the means by which the challenged evidence was obtained by police in the course of the investigation or in enforcement of ordinary criminal proceedings. Most often, defendants will seek to exclude, or suppress, the evidence gathered in these searches or seizures.

While certain aspects of a Fourth Amendment search and seizure seem to be well settled within the law, there are still many aspects that remain unresolved. Today, several circuit courts remain split as to whether an unreasonable search occurs within the Fourth Amendment when a law enforcement officer removes a key from an arrested person, uses that key determine whether it unlocks a door to a residence, and ultimately uses that information to obtain a search warrant for the arrestee’s residence.[7]

This Note considers the conflicting judicial interpretations of statutory language and argues that an unreasonable search occurs within the Fourth Amendment when a law enforcement officer removes a key from an arrested person, uses that key to determine whether it unlocks a door to a residence, and ultimately uses that information to obtain a search warrant for the arrestee’s residence. Part I provides the history of the Fourth Amendment in criminal proceedings and discusses the evolving rules and standards that are implicated by Fourth Amendment search and seizure cases. Part II examines the circuits’ conflicting interpretations of the Fourth Amendment in cases that involve the use of a key to unlock an arrestee’s residence. Part III explains why an unlawful search occurs when an officer removes a key from an arrested person, uses that key to determine whether it unlocks a door to a residence, and uses that information to obtain a search warrant for the residence.

I.        The History and Development of Fourth Amendment Searches and Seizures

The ideals that define the Fourth Amendment, much like the common law itself, have pre-colonial roots. The Fourth Amendment, though often credited to be a result of tensions with the British that spawned the American Revolution, actually originates from British legal theory.[8] The axiom that a man’s home is his castle is represented by the passionate speech of William Pitt to Parliament in 1763, where he argued that:

The poorest man may in his cottage bid defiance to all the force of the crown. It may be frail—its roof may shake—the wind may blow through it—the storm may enter, the rain may enter—but the King of England cannot enter—all his force dares not cross the threshold of the ruined tenement.[9]

Such beliefs did have supporting legal precedent, as exhibited by Entick v. Carrington and the series of accompanying actions against government actors that spanned across the early 1700s.[10] These actions were a result of searches and seizures carried out with general warrants, with the intentions to uncover evidence in connection with the pamphlets of John Wilkes, who criticized the King and his policies.[11] Entick, an associate of Wilkes, sued the government agents for forcibly entering his home, breaking into locked desks and boxes, and seizing evidence from the search.[12] The court agreed with Entick and declared the search, and the general warrant that permitted it, contrary to “all of the comforts of society” and “contrary to the genius of the law of England.”[13] The ruling required that warrants must be issued under statute or other legal precedent in order to be considered valid under the laws of England. Entick is regarded as a “landmark of English liberty” and a guide to understanding the Framers’ intentions in penning the Fourth Amendment.[14]

Though the Fourth Amendment was ratified into the United States Constitution in 1791, it remained predominantly powerless until the ruling of Mapp v. Ohio in 1961.[15] In 1957, police arrived at Ms. Mapp’s home in response to information that she was hiding a fugitive wanted in connection with a recent bombing.[16] After Mapp refused to allow police to enter her home without a warrant, police produced a sheet of paper claimed to be a warrant.[17] An altercation ensued between Mapp and the officers as Mapp tried to read the warrant and police eventually forcibly entered the home.[18] Upon illegally searching the home, police found no evidence of a fugitive. Instead, they found “obscene papers” and Mapp was ultimately charged and convicted of possessing obscene materials.[19] The Supreme Court reversed Mapp’s conviction, holding that evidence that is obtained by illegal means is to be considered inadmissible in state court; this was an extension of the pre-existing rule that prohibited illegal searches in federal court.[20]

Since the ruling of Mapp v. Ohio, there have been countless significant rulings that have added, and occasionally pulled, teeth from the Fourth Amendment. These rulings provide tests and factors to determine whether a search or seizure has occurred within the Fourth Amendment, whether the warrant requirement has been satisfied, and whether there is an exception to the warrant requirement that applies to the particular facts of a case. First, a search must be reasonable. A search may be subjected to the reasonable expectations test as depicted in the concurrence of Katz v. United States.[21] The test consists of two questions: the first is whether there is an actual, subjective expectation of privacy and the second is whether that expectation is objectively reasonable.[22]  A search may also be subjected to the common-law trespass test of Florida v. Jardines, wherein if the government “obtains information by physically intruding on persons, houses, papers, or effects,” a search has “undoubtedly occurred.”[23] The Katz test and the Jardines test work cohesively together, with neither one maintaining superiority over the other.[24] From Jardines, there is a subset of property tests. The first appears within Jardines itself and is a test to determine whether a physical intrusion has occurred on the curtilage of the home.[25] Under Jardines, a physical intrusion into a protected area that results in the acquisition of information only fails to constitute a search if that intrusion is permitted by a license such as one that is available to other, “normal,” members of the public such as neighbors or solicitors.[26]

The specific test for determining exactly what areas qualify as the curtilage of the home is defined in United States v. Dunn, wherein the court noted that  “the centrally relevant consideration” in determining the extent of a home's curtilage is “whether the area in question is so intimately tied to the home itself that it should be placed under the home's ‘umbrella’ of Fourth Amendment protection.”[27] The court points to four specific factors, which are: “the proximity of the area claimed to be curtilage to the home;” “whether the area is included within an enclosure surrounding the home;” “the nature of the uses to which the area is put;” and “the steps taken by the resident to protect the area from observation by people passing by.”[28] These property rights are not solely for those residences that are owned outright and renters of apartments are also afforded these same rights. The Fourth Amendment places extraordinary value on “the right of a man to retreat into his own home and there be free from unreasonable governmental intrusion.”[29] As the court in United States v. Bain later points out, there is “no reason to expect a different answer when the home is a rented condominium.”[30] While certain issues and tests regarding Fourth Amendment search and seizure seem to be well settled within the law, there are still many aspects that remain unresolved.

II.       The Issue of Key Searches and a Circuit Split

While certain aspects of Fourth Amendment search and seizure seem to be well settled within the law, there are still many particulars that remain unresolved. One of these particulars is the issue of key searches. A key search occurs when an agent of the government, often a law enforcement officer, removes a key from an arrested person, uses that key to determine whether it unlocks a door to a residence, and ultimately uses that information to obtain a search warrant for the arrestee’s residence.[31] Today, several circuit courts remain split as to whether these events constitute an unreasonable search within the bounds of the Fourth Amendment.[32] 

A.       United States v. Moses and United States v. Concepcion: Restricting Constitutional Protections to Key Searches of Residential Doors

The Fourth Circuit in United States v. Moses held that an officer’s key search was reasonable based on the Fourth Amendment.[33] In 2006, a Tactical Special Enforcement Team began investigating a local street gang known as the “Goodfellas” in connection with drug trafficking and violent crimes.[34] One month later, the team apprehended the leader of the gang, Carl Kotay Graham, who provided officers with information naming Covonti Kwa Moses as a member of the gang.[35] Graham told the officers that Moses had guns and cocaine, amongst other gang-related items, stashed at a “cream-colored duplex” on “Cedar Street.”[36] After arresting Moses for driving with a suspended license and for possession of marijuana, an officer brought Moses back to Cedar Street, where officers used the keys obtained from a search to determine whether one of them unlocked unit A.[37] The key opened unit A and officers conducted a protective sweep of the unit and discovered, in plain view, crack cocaine and marijuana residue.[38]

While still at the scene, another tip was received that Moses was selling crack cocaine from another residence; police also used Moses’ keys to unlock this residence and found more evidence of crack cocaine.[39] Using this information, officers obtained a search warrant and discovered evidence used to charge Moses with possession of a firearm and possession with intent to distribute crack cocaine.[40] Moses appealed these pleadings, arguing that the officers entered the two residences without a warrant. Amongst other arguments, Moses argued that the district court was not entitled to rely on the evidence that the keys in his possession unlocked the doors “because the use of the key was part of the illegal entry into a residence” and the use of the key was the “beginning of an illegal search.”[41] The Fourth Circuit, with very little rationale other than following the lead of other circuits, upheld the conviction, arguing that the “discrete” act of inserting the key into the lock to determine whether it fit did not “offend the Fourth Amendment.”[42]

The Seventh Circuit in United States v. Concepcion held that an officer’s key search was reasonable based on the Fourth Amendment.[43] Gamalier Concepcion consented to a search of his apartment wherein DEA agents found evidence of cocaine.[44] This evidence was used to secure a guilty plea of possession of cocaine with intent to distribute that landed Concepcion with over three years imprisonment; however, Concepcion reversed for appeal an objection as to the validity of his consent to the search of his apartment.[45] Concepcion, in his appeal to the Seventh Circuit argued that his consent was “fruit of two unlawful searches.”[46] After arresting and searching Concepcion, the DEA agents seized his keys and began searching for his apartment. After locating a mailbox with the nameplate “Concepcion,” police inserted one of the keys found on Concepcion to open the exterior door to the apartment.[47] After entering the apartment’s common area, agents used another key to unlock Concepcion’s individual bedspace.[48] After unlocking the door, agents opened the door an inch, closed the door, then locked the door again without looking inside. Concepcion initially denied knowing anything about the apartment, but later relented and signed a consent form for the search of the bedspace.[49] The district court’s opinion held neither the entry into the common area of the apartment nor the insertion of the key into the lock to be an unreasonable search.[50] The district court held, and the Seventh Circuit agreed, that a search is the invasion of a sphere in which society recognizes reasonable expectations of privacy.[51]

The Seventh Circuit, however, differentiated the entry of the key into the lock as being a much more complicated issue. A keyhole, as explained by the court, is a “potentially protected zone,” as it “contains information—information about who has access to the space beyond.”[52] After acknowledging the already-growing circuit split between the Sixth and First Circuits and the Ninth Circuit, the Seventh Circuit held that because the DEA agents were obtaining information from the inside of the lock, which “is both used frequently by the owner and not open to public view,” the insertion of the key must be considered a search under the Fourth Amendment.[53] The Seventh Circuit then qualified the search as reasonable based on a slippery slope analysis. The court reasoned that because Concepcion was properly arrested and searched without a warrant, there should not be a warrant requirement to “learn whether the keys in Concepcion’s possession operate a lock.”[54] The Seventh Circuit concluded by affirming the conviction with the confident assumption that, while an owner of a lock has a privacy interest in the keyhole, that interest is “so small” as to be deemed insignificant.[55]

B.       United States v. Bain: Extending Constitutional Protections to Key Searches of Residential Doors

More recently, the First Circuit in United States v. Bain has taken a confident step towards the future of the Fourth Amendment.[56] Yrvens Bain was arrested after he emerged from a multi-family unit apartment building. After Bain was searched, police found a set of keys in his possession and subsequently used these keys to open the front door of the building and attempted to open three apartments within the building. After trying and failing to open one apartment on the first floor and another apartment on the second floor, the key finally succeeded in opening a door on the second floor. Police used this information to apply for and secure a warrant to search the apartment; this search produced a firearm and drug paraphernalia.[57] Bain attempted to suppress the evidence, arguing that the officers conducted an unlawful search by turning the key in the locks to identify the unit and that there was no probable cause absent that identification. The district court denied this motion and Bain was convicted. The First Circuit found that the turning of a key in a lock is unreasonable and a warrantless search unsupported by “any clear precedent” and that “without the information obtained by turning the key, there was no probable cause to issue a warrant.”[58]

The First Circuit reached this conclusion by citing to United States v. Dunn and holding that, even if the lock on the apartment door is not within the home itself, it is at minimum a part of the curtilage of the home.[59] The court used the Dunn factors to conclude that the lock on a door is sufficiently proximate to the interior of the home, is included within or adjacent to the door’s outer face, is intended by nature to bar unwelcome entry and the invasion of privacy, and that the “very design” of a lock hides its interior from being examined.[60] The court also cited to Jardines, arguing that a physical intrusion into the curtilage to obtain information is a search, unless it is within the “implicit license” which “typically permits the visitor to approach the home by the front path, knock promptly, wait briefly to be received, and then (absent invitation to linger longer) leave.”[61] As the behavior of police was not considered to be within social norms, a search occurred under the Fourth Amendment. While the government referenced United States v. Lyons and United States v. Hawkins to bolster its argument that key searches are reasonable under the Fourth Amendment, the court disagreed based upon the specific facts of these cases.[62]

The First Circuit dismissed the government’s citation to other circuit court opinions, like those discussed in previous paragraphs. The court distinguished key searches of car doors from key searches of residential doors, arguing that the Constitutional protections of automobiles are much less strong than that of residences.[63] The court also took aim at the Moses decision for containing no real analysis of the issue.[64] Finally, the court addressed the Seventh Circuits holding in Concepcion, questioning “the logic of justifying a search of this type” by way of the plain view doctrine.[65] The First Circuit referenced the ease by which the government could have obtained other identifying information and questions why it would be necessary to invade the curtilage of the home, rather than using those less invasive means. Conclusively, the court pointed to the fact that the officers invaded the curtilage of Bain’s home for the sole purpose of gaining evidence to use against him in a criminal action and argued that there is “no reason to conclude that the law enforcement-related concerns sufficiently outweighed the privacy-related convers to render this search reasonable.”[66] While the court ultimately falls back on a good-faith exception to the warrant requirement, their initial holding that key searches are violative of the Fourth Amendment has created a circuit split amongst the courts. This split remains unresolved.

III.     Key Searches of Residential Doors are a Violation of the Fourth Amendment

As indicated by the plain text and purpose of the Fourth Amendment and the judicial history surrounding the application of the Fourth Amendment to the home, an officer removing a key from an arrested person, using that key to determine whether it unlocks the door of a residence, and using that information to obtain a search warrant for the residence is a violation of the Fourth Amendment. These arguments will be considered below.

A.     The Distinction Between Residential and Non-Residential Key Searches

Before an argument for extending the Fourth Amendment to key searches of residential can be made, the distinction between residential and non-residential key searches must be clarified. While the issue of key searches certainly has not been brought up so frequently as to lend itself to a comprehensive solution, it does seem that the circuits have agreed that Fourth Amendment protections will not extend to key searches on car doors or storage units. This decision likely has roots in the automobile exception and the ideals behind it. The automobile exception was first introduced in Carroll v. United States.[67] In Carroll, federal prohibition agents encountered a car on the highway that they had reason to believe was being driven by bootleggers.[68] The agents stopped the car, searched it without a warrant, and discovered bottles of whiskey and gin hidden within the car’s upholstery.[69] In upholding the search, the court created the automobile exception, which permitted searches and seizures of cars stopped alongside the road if obtaining a warrant would not be “reasonably practicable” and the agent has reasonable or probable cause to believe that the automobile has contraband liquor that is being transported.[70] While the specific restrictions of prohibition have long since ended, the automobile exception has not only remained, but has expanded. Courts have extended the automobile exception to allow agents to move and search a vehicle.[71] Courts have also extended the automobile exception to apply to containers within a vehicle, whether owned by the owner of the vehicle or by a passenger.[72] The Supreme Court, in California v. Carney, went so far as to extend the automobile exception to a mobile home.[73] The majority in Carney holds that it is too difficult to draw distinctions between residential and non-residential moveable vehicles and claims that such a task will be “impossible” for officers.[74] Justice Stevens’ dissent, joined by Justice Brennan and Justice Marshall, pushes back on this assumption and argues that, by looking at the exterior of the mobile home, officers should be able to pick up on “clues” as to whether the mobile home is being used as a residence.[75] Given the Supreme Court’s historical hesitancy to extend stringent Fourth Amendment protections to automobiles and typically non-residential spaces, it is unsurprising to see the circuits follow this line of reasoning to reject, seemingly unanimously, any argument regarding key searches on car doors and storage units.

B.  Plain Text and Purpose of the Fourth Amendment

The plain text and the purpose of the Fourth Amendment supports the argument that an officer removing a key from an arrested person, using that key to determine whether it unlocks the door of a residence, and using that information to obtain a search warrant for the residence is a violation of the Fourth Amendment. The text of the Fourth Amendment guarantees:

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.[76]

As shown above, the plain text of the Fourth Amendment requires all searches to be reasonable. Even as conceded by many of the courts in previous paragraphs, key searches are typically unreasonable and invade the sense of privacy and security that people value in their homes and, to a lesser extent, in their automobiles. The plain text of the Fourth Amendment fails to lend itself to the assertion that residential key searches are reasonable. Further, the apparent purpose of the Fourth Amendment, as introduced by the Framers of the United States Constitution, was not to allow government to overstep into the lives of its citizens. Looking back to the case of Entick v. Carrington, where the court declared a search, and the general warrant that permitted it, contrary to “all of the comforts of society” and “contrary to the genius of the law of England.”[77] The ruling of Entick, and others like it, which the Framers used as the foundation for the Fourth Amendment, place fervent value on the principles of privacy, freedom, and liberty of the individual. Allowing government actors to circumvent these rights by removing keys from an arrestee, using those keys to determine whether they unlock a door to a residence, and using this information to secure a warrant against the arrestee certainly seems to work against the values secured within the Fourth Amendment. Thus, the plain text and the mere purpose of the Fourth Amendment support the argument that an officer removing a key from an arrested person, using that key to determine whether it unlocks the door of a residence, and using that information to obtain a search warrant for the residence is a violation of the Fourth Amendment.

C.  Judicial History of the Fourth Amendment: The Trend Towards More Stringent Fourth Amendment Protections

The judicial history of the Fourth Amendment also supports the argument that an officer removing a key from an arrested person, using that key to determine whether it unlocks the door of a residence, and using that information to obtain a search warrant for the residence is a violation of the Fourth Amendment. As explained by the court in Bain, the only precedential case to thoroughly address the issue of a residential key search was the Seventh Circuit in Concepcion. The holding in Concepcion had no constitutional argument or evidence to support its conclusion that residential key searches are per se reasonable. Rather, Concepcion relied on an extension of the plain view doctrine from Arizona v. Hicks, wherein police lawfully entered and searched an apartment and noticed stolen stereo equipment.[78] As the court in Hicks itself notes, warrantless searches and seizures are presumptively unreasonable and there is no reason why an exception to the warrant requirement should require a lesser standard of cause than that needed to obtain an actual warrant. Further, though not mentioned by the court in Concepcion or the court in Bain, the facts of the Hicks seem similar in a different way. In Hicks, the court ultimately holds that, while the plain view doctrine is certainly valid, the officer’s action of physically touching and manipulating the stereo system in order to observe and record the serial number oversteps the bounds of the exception to the warrant requirement and is thus unconstitutional.[79] This excessiveness seems rather comparable to an officer removing a key from an arrested person, transporting the key to a residential door, and inserting and manipulating the key in order to unlock and often open the door. As conceded by many of the circuit opinions within this line of cases, the information needed to obtain a search warrant could possibly be found by other, less intrusive means. If this is true, as Bain hints at, there should be no reason for an officer to take the extra, invasive steps in order to trespass on the curtilage of an arrestee’s home to secure a warrant.

Further, it does not seem to run afoul of any of the relevant constitutional tests to consider residential key searches violative of the Fourth Amendment. As noted by the Court in Kentucky v. King, it is the “basic principle of Fourth Amendment law… that searches and seizures inside a home without a warrant are presumptively unreasonable.”[80] As further identified by Florida v. Jardines, a search may also be subjected to the common-law trespass test. In this case, it seems as if the area of the home impacted by a key search falls within the curtilage of the home as defined by Florida v. Jardines and United States v. Dunn. As the Katz test and the Jardines test work cohesively together, with neither one maintaining superiority over the other, we must also assure that the Katz test is satisfied. The test consists of two questions: the first is whether there is an actual, subjective expectation of privacy and the second is whether that expectation is objectively reasonable.[81] It would certainly be difficult to argue that an individual did not have a reasonable expectation of privacy in the lock on their front door. Under Jardines, a physical intrusion into a protected area that results in the acquisition of information only fails to constitute a search if that intrusion is permitted by a license such as one that is available to other, ‘normal’ members of the public. As normal members of the public, such as neighbors and solicitors, certainly do not have the license to remove a key from an arrestee or use that key to determine whether it unlocks the door of a residence, we can conclude that the police do not have the license to do so. Thus, the judicial history of the Fourth Amendment also supports the argument that an officer removing a key from an arrested person, using that key to determine whether it unlocks the door of a residence, and using that information to obtain a search warrant for the residence is a violation of the Fourth Amendment.

D.  Existing Doctrines Provide Sufficient Exceptions for Law Enforcement

Fourth Amendment protections have been continuously evolving since United States v. Mapp. While the Fourth Amendment is no longer the toothless doctrine it once was, there are still multiple exceptions to the prohibition on unreasonable searches and seizures. An underlying concern that seems to be coursing through the opinions of many circuit courts is that of police efficiency. This concern is certainly not a new or novel one. As such, there are numerous exceptions that have been carved out by the courts over the past century. One of the chief exceptions is known as the exigent circumstances doctrine. The exigent circumstances doctrine, along with numerous other exceptions, such as the plain view doctrine, the automobile exception, hot pursuit, and the good faith exception, provide a plethora of protections for efficiency in police administration. Each of these doctrines protect police at the disadvantage of the individual. These doctrines provide sufficient exceptions for law enforcement when conducting otherwise unlawful searches and seizures; the remaining circuits should follow the lead of the First Circuit in finding key searches on residential doors to be unlawful, absent a warrant or exigent circumstances.

IV.     Conclusion

As indicated by the plain text and purpose of the Fourth Amendment and the judicial history surrounding the application of the Fourth Amendment to the home, an officer removing a key from an arrested person, using that key to determine whether it unlocks the door of a residence, and using that information to obtain a search warrant for the residence is a violation of the Fourth Amendment. Other circuits should follow the lead of the First Circuit in analyzing future key search cases in order to better protect the constitutional rights of criminal defendants, weighing efficiency needs and other exceptions as required, on an individual case basis.

I J.D. 2022, University of Kentucky J. David Rosenberg College of Law; B.A. in English 2018, University of Kentucky.

[2] Boyd v. United States, 116 U.S. 616 (1886).

[3] Id.

[4]  U.S. Const. amend IV.

[5] See generally, President’s Commission on Law Enforcement & Administration of Justice, The Challenge of Crime in a Free Society (Feb. 1967) (a report from the Johnson Administration, enacting new guidelines for policing and kick-starting the practice of active policing); Cheryl Corley, President Johnson’s Crime Commission Report, 50 Years Later NPR (Oct. 6, 2017 at 7:00 AM) (https://www.npr.org/2017/10/06/542487124/president-johnson-s-crime-commission-report-50-years-later) (discussing the impacts of the 1967 act).

[6] See generally, Overview of the Fourth Amendment, 33 Geo. L.J. Ann. Rev. Crim. Proc. 5 (2004) (a summarized history of the Fourth Amendment).

[7] See United States v. DeBardeleben, 740 F.2d 440 (6th Cir. 1984); United States v. Concepcion, 942 F.2d 1170 (7th Cir. 1991); United States v. $109,179 in U.S. Currency, 228 F.3d 1080 (9th Cir. 2000); United States v. Moses, 540 F.3d 263 (4th Cir. 2008); United States v. Bain, 874 F.3d 1 (1st Cir. 2017).

[8] Leonard W. Levy, Origins of the Fourth Amendment, Political Science Quarterly 114, no. 1 (1999). 

[9] Id. at 80.

[10] Id. at 88–89.

[11] Id.

[12] Id.

[13] Boyd, 116 U.S. at 626.

[14] Id.

[15] Mapp v. Ohio, 367 U.S. 643 (1961).

[16] Id. at 644.

[17] Id.

[18] Id. at 644–45.

[19] Id. at 645.

[20] Mapp, 367 U.S. at 665–60; See also, Weeks v. United States, 232 U.S. 343 (1914) (introduced the exclusionary rule in federal courts).

[21] Katz v. United States, 389 U.S. 347, 360–61 (1967) (J. Harlan, concurring) (conception of the “reasonable expectations” test that is now cited as controlling in modern caselaw).

[22] Id.

[23] Florida v. Jardines, 569 U.S. 1 (2013).

[24] United States v. Jones, 565 U.S. 400, 409 (2012).

[25] Jardines, 569 U.S. at 3–4 (defining the curtilage as the area immediately surrounding and associated with the home).

[26] Id. at 6 (quoting Breard v. Alexandria, 341 U.S. 622, 626 (1951)).

[27] United States v. Dunn, 480 U.S. 294, 295 (1987) (defining the test for curtilage).

[28] Id.

[29] Jardines, 569 U.S. at 4 (quoting Silverman v. United States, 365 U.S. 505, 511 (1961)).

[30] United States v. Bain, 874 F.3d 1 (1st Cir. 2017) (citing generally to Chapman v. United States, 365 U.S. 610, 615 (1961) (rented premises); Johnson v. United States, 333 U.S. 10, 17 (1948) (hotel rooms).

[31] Courts have also considered the Constitutionality of key searches in regard to automobiles and storage units, seeming to settle that neither violate the Fourth Amendment. See United States v. $109,179 in U.S. Currency, 228 F.3d 1080 (9th Cir. 2000); United States v. Lyons, 898 F.2d 210 (1st Cir. 1990); United States v. DeBardeleben, 740 F.2d 440 (6th Cir. 1984).

[32] See United States v. DeBardeleben, 740 F.2d 440 (6th Cir. 1984); United States v. Concepcion, 942 F.2d 1170 (7th Cir. 1991); United States v. $109,179 in U.S. Currency, 228 F.3d 1080 (9th Cir. 2000); United States v. Moses, 540 F.3d 263 (4th Cir. 2008); United States v. Bain, 874 F.3d 1 (1st Cir. 2017) (examples of key search cases on both car doors and residential doors).

[33] U.S. v. Moses, 540 F.3d 263 (4th Cir. 2008).

[34] Id. at 265.

[35] Id.

[36] Id.

[37] Id at 266.

[38] Id. at 266–67.

[39] Id. at 267.

[40] Id. at 267–268.

[41] Moses, 540 F.3d 263 at 272.

[42] Id.

[43] United States v. Concepcion, 942 F.2d 1170 (7th Cir. 1991).

[44] Id.

[45] Id. at 1171.

[46] Id.

[47] Id.

[48] Id.

[49] Id. at 1171–72.

[50] United States v. Concepcion, 742 F. Supp. 503 (N.D.III. 1990).

[51] Concepcion, 942 F.2d at 1172 (quoting United States v. Jacobsen, 466 U.S. 109, 113 (1984)).

[52] Id. at 1172.

[53] Id.

[54] Id.

[55] Id. at 1173.

[56] United States v. Bain, 874 F.3d 1 (1st Cir. 2017).

[57] Id. at 9–10.

[58] Id. at 11.

[59] See United States v. Dunn, 480 U.S. 294, 295 (1987) (defining the test for curtilage).

[60] Bain, 874 F.3d at 15.

[61] Id.

[62] Id. (distinguishing the facts of the current case to the facts of United States v. Lyons, 898 F.2d 210 (1st Cir. 1990) and United States v. Hawkins, F.3d 29 (1st Cir. 1998), which applied to locks on storage containers, rather than residential locks)).

[63] Id.

[64] Id. (distinguishing from Moses).

[65] Bain, 874 F.3d at 18 (distinguishing from Concepcion).

[66] Id. at 19.

[67] See Carroll v. U.S., 267 U.S. 132 (1924).

[68] Id. at 135.

[69] Id. at 136.

[70] Id. at 156.

[71] See Chambers v. Maroney, 399 U.S. 42 (1970) (upholding the decision to move a suspect’s car from the road to the police station for a search).

[72] See California v. Acevedo, 500 U.S. 565 (1991) (holding that the automobile exception applies to containers within the vehicle if probable cause is present); Wyoming v. Houghton, 526 U.S. 295 (1999) (holding that the automobile exception applies to passengers within a vehicle, as passengers should also have a deceased expectation of privacy).

[73] California v. Carney, 471 U.S. 386 (1984).

[74] Id. at 386 (quoting South Dakota v. Opperman, 428 U.S. 364, 387 (1976)).

[75] Carney, 471 U.S. at 406 (Stevens J., dissenting).

[76] U.S. Const. amend IV.

[77] United States v. Boyd, 116 U.S. 616, 626 (1886).

[78] Arizona v. Hicks, 480 U.S. 321 (1987).

[79] Id.

[80] Kentucky v. King, 563 U.S. 1, 5 (quoting Bingham City v. Stuart, 547 U.S. 398, 403 (2006)).

[81] United States v. Jones, 565 U.S. 400, 409 (2012).

Nexus of Vulnerability: An Expanded View of Drug-Based Coercion

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Ben VanSlyke[I]

[D]rugs are used like weapons—they are used as a tool of mass destruction; as a tool to gain advantage over an already vulnerable victim; and as a tool to disarm a victim due to its power. Drugs are weaponized in the sex trafficking world.[2]

In the last two decades, sex trafficking has received increasing attention throughout the United States and the world.[3] In roughly the same timeframe, the United States has seen a meteoric rise in the use of opioids and related overdoses.[4] Independently, illicit drug trafficking is the largest criminal industry in the world, and human trafficking is the second largest.[5] Each generate billions of dollars of profit per year.[6] Both of these industries are just that: industries. Like any businessperson, criminals seek new markets to expand into, including other criminal markets. For someone already engaged in one industry, the decision to expand into the other is largely financial; if they have the means to spread out their resources for greater profits, it makes sense to do so. This includes by using one to facilitate the other: for example, forcing trafficking survivors to transport or deliver drugs, or using their access to drugs as a means to control a trafficking survivor through addiction.[7]

For too long, these have been seen as distinct issues. Recently, however, practitioners in various fields have begun to recognize the intrinsically intersectional nature of sex trafficking and the opioid crisis. This article seeks to contribute to this dialogue, expanding upon the extreme nature of the vulnerabilities created when these two issues collide, and supporting the application of the criminal law concept of drug-based coercion to civil litigation so as to increase the availability of remedies to survivors of this vicious form of exploitation.

As a preliminary matter, the author acknowledges that some of the assertions and correlating support contained in this article rely on primarily anecdotal information. By nature of the topic and its relatively recent recognition, quantitative analysis of the intersection between sex trafficking and opioids is limited, and even individually both topics are still not completely understood. By incorporating the author’s first-hand experiences working in this arena with corroborating support, qualitative research, information about related topics, and logical inferences, this article seeks to provide a forward-looking analysis of an issue that desperately warrants greater research.

Section I of this article provides relevant background information about the legal theory of drug-based coercion to frame further discussion. Section II identifies risk factors for both addiction and human trafficking and identifies the many ways in which the two coincide. Section III delves deeper into the realities of drug-based coercion and the many horrific forms it can take. In Section IV, the author draws upon his experience litigating civil cases on behalf of trafficking survivors to consider the role of drug-based coercion in the context of civil litigation, as well as to counter foreseeable challenges. Finally, Section V reflects upon the earlier discussions to offer insights and recommendations on this complex topic.

 

I.  Background

The legal theory of drug-based coercion is rooted in the statutory language of 18 U.S.C. § 1591(a)(2).[8] This section provides that “force, threats of force, fraud, coercion . . . or any combination of such means” are sufficient to satisfy the relevant element of a sex trafficking offense.[9] Section 1591(e)(2) proceeds to define coercion as “threats of serious harm to or physical restraint against any person” or “any scheme, plan, or pattern intended to cause a person to believe that failure to perform an act would result in serious harm to or physical restraint against any person.”[10] The operative term here, “serious harm,” is further defined in Section 1591(e)(5) as “any harm, whether physical or nonphysical, . . . that is sufficiently serious, under all the surrounding circumstances, to compel a reasonable person of the same background and in the same circumstances to perform or continue performing commercial sexual activity in order to avoid incurring that harm.”[11]

This statutory language has been interpreted to conclude that, under Section 1591, a trafficker withholding an individual’s drug supply when that individual suffers from drug addiction—medically referred to as substance use disorder (“SUD”)—constitutes serious harm and thereby constitutes coercion.[12] This includes threatening to withhold the supply, even if it is not actually withheld, so long as the threat is intended to cause the individual to believe that noncompliance will lead to the supply being withheld.[13] In United States v. Fields, for example, a district court found that the “threat of withdrawal sickness constitutes ‘psychological’ harm that is ‘sufficiently serious, under all the surrounding circumstances, to compel a reasonable person of the same background and in the same circumstances to perform or to continue performing commercial sexual activity in order to avoid incurring that harm.’”[14]

This understanding relies on the concept of special vulnerability. Federal prosecutors have argued in favor of “seeking both an appropriate ‘vulnerability’ jury instruction and sentencing enhancement.”[15] This interpretation is supported by Supreme Court decisions in other contexts.[16] However, to effectively utilize special vulnerability in cases involving sex trafficking, it is important that attorneys understand why people suffering from addiction are uniquely vulnerable to being trafficked. On one hand, given the significant overlap between risk factors for addiction and risk factors for falling prey to sex trafficking, many people who develop addictions are at greater risk of trafficking even before substance use plays a role, and the presence of addiction can flag the likely presence of these other risk factors.[17] On the other hand, once an addiction is established, both the immediate effects of the substance use (i.e., the “high”) and the constant fear of withdrawal symptoms produce additional vulnerability unique to addiction, which only exacerbate any preexisting risk factors.[18] As a result, when addiction and trafficking coincide, the victim is often already vulnerable due to other risk factors and rendered doubly vulnerable by the effects of drug use and addiction. Both of these categories of vulnerability fall within the consideration of section 1591(e)(5), as they are certainly background and circumstantial factors that affect the reasonableness of an individual’s actions in response to coercion by a trafficker, including coercion by threat of withholding their drug supply.[19]

In the context of federal criminal trials—as well as federal civil actions[20]—drug-based coercion is independently established through federal common law.[21] However, this concept is not new. Some states have codified this interpretation of coercion explicitly,[22] and the Uniform Law Commission recommended the adoption of this definition as early as 2013.[23] Further, this model law has been supported by the American Bar Association since 2013.[24]

II.  Comparative Risk Factors Of Addiction and Trafficking

Through decades of study, numerous factors have been identified as indicators that an individual is at a higher than average risk of developing an addiction.[25] Though non-exhaustive, some of the relevant factors include:

·                  Early substance use;

·                  Early and persistent behavior issues;

·                  Peer substance use;

·                  Poor family structures and/or family conflict;

·                  High availability of substances in the area;

·                  High crime rates in the area; and

·                  Low socioeconomic status.[26]

By and large, these risk factors should be unsurprising; it seems intuitive, for example, that individuals who spend significant amounts of time around friends and family who engage in substance use are more likely to do so themselves. However, the fact that these factors are so well-documented lends support to legal theories that rely on this information to demonstrate a client’s vulnerability.

Additionally, researchers have identified that individuals who are survivors of violence or abuse—particularly when the abuse occurred as a child—are statistically much more likely to develop addictions.[27] “A review of studies on associations between childhood sexual and physical abuse and substance use problems concluded that childhood abuse is a factor in the development of substance use problems but the relationship is likely mediated by psychiatric conditions, such as anxiety and depressive disorders.”[28] More generally, “[h]igh rates of trauma exposure have been observed in both male and female substance-using populations.”[29] While the exact process by which these traumatic experiences translate into addiction and related problems remains disputed,[30] the correlation itself is “well-documented.”[31]

Risk factors for sex trafficking are somewhat less clear. Even specifically in regard to child sex trafficking—often the focus of media and legislative attention on the topic—“very little empirical research has been conducted.”[32] Still, there is sufficient information to strongly suggest that many of those most at risk of developing addictions are also at risk of being targeted for sex trafficking.[33] Current information holds that “[t]raffickers disproportionately target at-risk populations including individuals who have experienced or been exposed to other forms of violence (child abuse and maltreatment, interpersonal violence and sexual assault, community and gang violence) and individuals disconnected from stable support networks (runaway and homeless youth, unaccompanied minors, persons displaced during natural disasters).”[34] Specifically, “[a]ccording to reports, 70 percent to 90 percent of commercially sexually exploited youth have a history of child sexual abuse.”[35] “In addition, youth who have experienced dating violence and rape are also at higher-risk for trafficking.”[36] While additional empirical research on this topic is still needed, these risk factors are corroborated by what many service providers have identified on the ground—including the author’s own experiences working with trafficking survivors.

On balance then, there are many factors which simultaneously indicate that an individual is at risk for developing an addiction and being targeted for trafficking. For the purposes of this article, when an individual is presently experiencing or has previously experienced the following, it will be considered an overlapping risk factor:

·         Childhood sexual abuse;

·         Child abuse and neglect generally;

·         Rape or sexual assault;

·         Interpersonal, community, or gang violence;

·         Involvement in the foster care system;

·         Homelessness or running away from home;

·         Family history of addiction;

·         Substance use within the individual’s social group;

·         And family conflict or instability.[37]

In addition, as discussed in more detail below, addiction itself will be considered a risk factor for trafficking and vice versa, as both create additional vulnerability to the other.[38] To be clear, some of this overlap relies on inferences, but the inferences are independently supported. For example, although family history of addiction has not typically been identified as a risk factor for human trafficking in academic literature on the topic,[39] family history of addiction does contribute to rates of involvement in foster care,[40] which is a well-documented risk factor for human trafficking.[41]

III.  Analysis Of Special Vulnerability Where Addiction and Trafficking Intersect

The underpinnings of the drug-based coercion theory are that, in addition to the risk factors for trafficking itself, addiction is essentially a risk factor for trafficking.[42] In other words, the presence of addiction indicates that someone is distinctly vulnerable to being trafficked, separate from, and in addition to, any other trafficking risk factors the person may have. Likewise, if a victim of trafficking is not already struggling with a drug addiction, they may be additionally vulnerable to developing such an addiction. Attorneys know this; indeed, step-by-step guides have been written about how attorneys can lean on this relationship in order to prosecute traffickers.[43] What this section seeks to expand upon is the human experience behind the legal theory: what does this special vulnerability look like?

A.  Traffickers use opioids to effectuate control through both the immediate effects of opioids and their control over the survivor’s drug supply, in addition to capitalizing on external factors.

i.  Immediate vulnerability: symptoms of the high.

One way in which a trafficker can use drugs to exploit a trafficking survivor is through the effects of the drug itself. In an immediate sense, an individual under the influence of opioids is extremely vulnerable to the coercion or control of others by the very nature of opioid use. Short-term effects of opioids include “extreme relaxation”, “drowsiness and clumsiness”, and “confusion”.[44] This is aside from their primary medical purpose as analgesics, or pain relievers.[45] In addition, many users report “an intense rush of pleasure or euphoria” immediately after the opioid takes effect.[46]

For these reasons, drugs can be “used to incapacitate [an individual] so that [she] conforms to the demands of the trafficker.”[47] One survivor described this, saying that her trafficker “used drugs as a method of trying to keep me controllable and docile[.]”[48] Although this angle often receives less attention than the fear of withdrawal discussed below, these effects give traffickers significant leverage by which to exploit their victims.

Common sense indicates that an individual who is relaxed, drowsy, or confused, is more susceptible to manipulation, whether through physical force or not. A trafficker or a “John” can take advantage of someone sedated by opioids in ways that the survivor may resist—or resist more effectively—if they were not under the influence of opioids.[49] Likewise, both the euphoric and analgesic effects of the high can serve as a sort of reprieve in the otherwise bleak situation that survivors are faced with. This incentivizes survivors to take advantage of the drugs available to them, and allows traffickers to frame the drugs they provide as a reward obtained through “compliance.”[50] All the while, this only intensifies the survivor’s addiction and sets them up for further coercion by the trafficker’s ability to withhold the survivor’s drug supply.

ii.  Sustained vulnerability: control over drug supply.

Another mechanism of drug-based coercion—arguably the most prevalent[51]—is to exploit a survivor’s ongoing addiction to opioids.[52] The driving force behind this type of coercion is a survivor’s addiction and consequent fear of withdrawal symptoms. These symptoms include, among other things, muscle and bone pain, increased body temperature, nausea and vomiting, diarrhea, anxiety, sweating, and chills.[53] These symptoms have been aptly described as “flu-like,” but to an extreme degree, sufficient to cause “tremendous physical and psychological distress to the person suffering” from this process.[54] These symptoms generally begin approximately eight to ten hours after the last dose of opioids, and peak after approximately one to three days, before gradually decreasing.[55] From the perspective that traffickers are deliberately subjecting survivors under their control to this excruciating experience by withholding drugs from them, one could appropriately analogize this punishment to torture.[56]

Unsurprisingly, after experiencing these withdrawals one or more times, survivors develop a pervasive fear of having to go through it again. Approximately three to four hours after their last dose, individuals addicted to opioids often become anxious or fearful, experience “cravings,” and engage in “drug-seeking behavior.”[57] “The physical craving the body develops for opioids is profound and unrelenting,”[58] which generates a “powerful fear of withdrawal that causes [the addicted individual] to look for the drug at all costs.”[59] When employed by traffickers as a threatened punishment, the cost is compliance, and trafficking survivors often comply with their traffickers’ demands in order to avoid this severe punishment. One survivor described this coercion, saying that “if I didn’t make a certain amount of money a day, he would not give me any heroin . . . he pretty much controlled me with the drug because he knew I couldn’t function without it. I was dependent on it at that point.”[60]

Addiction, and specifically addiction to opioids, is incredibly challenging to overcome, even under ordinary circumstances.[61] It often requires residential (inpatient) rehabilitation, help from professional therapists, and “medication-assisted treatment.”[62] Many people also rely heavily on peer support from other recovering addicts during their recovery.[63] Moreover, when an individual has a severe addiction to opioids and does not detox properly (i.e., quitting cold-turkey), opioid withdrawals can be fatal.[64] Given the level of control and isolation cultivated by traffickers, survivors struggling from opioid addictions do not have the ability to seek out these supports to pursue sobriety, particularly when—as discussed in the previous section—traffickers may go so far as to force the survivor to take opioids in order to sustain the addiction and perpetuate their control.[65] This is without even taking into account the additional incentive trafficking survivors have to use opioids and other drugs as a means to “numb the pain” of past trauma.[66] The extent to which a trafficking survivor is trapped—both within the trafficking scenario and within their addiction—makes their path to sobriety markedly more difficult than it already is. The power that this gives to traffickers must not be underestimated.

 

iii.  External vulnerability: criminalization and credibility.

In addition to the control the trafficker exerts directly through a survivor’s addiction to opioids and other drugs, they take advantage of external factors to further enhance their control. On one hand, “substance abuse camouflages the crime of sex trafficking under a layer of illegal drug possession and other related criminal activity.”[67] A trafficker may capitalize on a survivor’s substance use as a means to “set up the trafficking victim in case she is ever arrested on prostitution and/or prostitution-related charges. If apprehended by law enforcement while under the influence or in possession, drug using victims may lose their credibility or presumed innocence. The trafficker knows that her arrest will distract from her victimization.”[68] On the other hand, in the event that law enforcement seeks to prosecute the trafficker, the survivor’s substance use often hinders their ability to contribute to this prosecution as a witness.[69] Due to the strong anesthetic effects of opioids, “victims often have distorted or insufficient memory of their forced commercial sex acts.”[70] Victims also “report being warned by their trafficker that, because they have a prostitution record, they will never be able to obtain legal employment, and that if they consider filing a report, no one would believe them because they are merely prostitutes.”[71] The same is almost certainly true regarding addiction and drug-related charges. Traffickers utilize every method of control available to them, turning external stigmas about addictions to their advantage is no exception.

B.  Drug-based Coercion Takes Many Forms.

The preceding categories of vulnerability, generated by opioids, illustrate the mechanisms by which traffickers can use these substances to generate control. Out of context, however, these still fail to describe the lived experience of what this looks like. Like any tool, these mechanisms of control can be used in a variety of ways, generating a variety of exploitative relationships. In this section, multiple example scenarios will be described, illustrating how these mechanisms coalesce with the risk factors described above to create powerful forms of coercion.[72]

These scenarios have been fictionalized and simplified to provide greater clarity. While some elements are based on private client interactions, many of the facts have been pulled from publicly available cases and survivor stories.[73] Although these scenarios do not provide an exhaustive account of the myriad ways in which sex trafficking and opioids can intersect, the do illustrate, in general terms some, of the most common examples.

i. Opioids can be used to sedate someone and create vulnerability.

Ayesha was 16. She had been arguing with her mother—who was raising Ayesha alone—and left the house after it became physical. She called a friend, Bianca, who said that Ayesha could spend a few days with her. Bianca was going to stay with her out-of-town boyfriend for the weekend, and Ayesha tagged along. On the first night, Bianca and her boyfriend smoked heroin, and encouraged Ayesha to try it, with Bianca claiming it helped her when she was stressed. Ayesha tried heroin for the first time, and as promised, she felt very relaxed—a pleasant change, coming from a household full of constant conflict. The next day, Bianca and her boyfriend got in a fight, and the boyfriend made them leave. Not ready to go home, they visited an acquaintance of Bianca’s, who had several friends over. The acquaintance offered them heroin, and they accepted. Once Ayesha and Bianca were high on heroin, barely aware of their surroundings, the acquaintance and his friends raped them. Over the next few days, the acquaintance kept Ayesha and Bianca high, while allowing multiple men to visit, pay him, and rape the two girls.

 Ayesha was faced with several of the risk factors identified above. She had experienced physical abuse at the hands of her mother, and more generally experienced conflict and instability within her family. She ran away from home and took shelter with a friend and gained access to heroin through her social group. This quickly escalated to a situation in which Ayesha was vulnerable and taken advantage of. In a perfect world, Ayesha and Bianca would soon get away from their trafficker—Bianca’s acquaintance—and return home, where their families would ensure they received therapy and other supports. Equally likely, however, they may remain under the control of their trafficker for an extended time or return home to a family that rejects them and leaves them vulnerable to further exploitation in the future.

ii.  Opioids can be presented as appealing in order to lure someone into further vulnerability, which can then be exploited.

Clara was placed in foster care at the age of 12, after child protective services discovered that her mother was a severe alcoholic, and her father was sexually abusing her while her mother was unconscious. Over the next two years, Clara was moved between foster homes, and at two of them, she was physically assaulted by older girls in the home. After being threatened by someone at her new home, Clara ran away. She went to a nearby park, where she was approached by a man in his twenties expressing romantic interest in her. He took her to a nearby diner for some food and asked about her story. He seemed to care, and Clara was not used to that. He offered to be her boyfriend and take care of her, and she gladly accepted. They were staying at a hotel, and he offered Clara pills that he said would help her relax. She tried them, without knowing they were prescription opioids. She kept taking them, initially at his suggestion, but as she got used to them, she started to enjoy them. After a week, he told her that he needed her help paying for the hotel, and that he could get her dates to make some money. He said she wouldn’t have to do more than kiss the dates, but the first date insisted she have sex. After she told her boyfriend, he said she just needs to figure out how to make it work. The next date did the same thing, and the next, but when she asked to stop her boyfriend grew angry and threatened to hurt her or call the police on her if she didn’t go along with it. Eventually, Clara started taking pills before every date to make them easier.

Clara, too, showed several of the identified risk factors. She had a mother who suffered from addiction before her, and endured childhood sexual abuse at the hands of her father. After entering foster care, she was subjected to interpersonal violence by other residents, and eventually ran away. This left Clara vulnerable to exploitation by an older man who showed her a modicum of kindness to lure her in before trafficking her. If Clara managed to get away from the man soon, she may have been able to return to foster care or enter a short-term rehabilitation program. If not, she likely continued on, becoming more severely addicted and more entrapped in a cycle of abuse, and sooner or later being convicted of prostitution or drug possession.

 

iii.  Traffickers can force survivors under their control to develop an addiction to opioids, which the trafficker can then leverage for further control.

Daliyah was a young mother, nineteen with a newborn son. Looking to make money to support herself and her child, she responded to a job posting online. The post advertised for a promotional model, indicating that she would be promoting a product at concerts and other events. Over emails, she discussed pay and travel expenses with the purported manager and disclosed that she was looking for a way to provide for her son. Her mother—who had recovered from her own previous drug addiction and managed to work two jobs and raise Daliyah alone—agreed to take care of her son in the evenings when she was working, so she accepted the job. The day came for her first shift, at a concert in a town a couple of hours away. She met who she thought was her manager, who would be driving her to the event. Instead of a concert venue, however, he took her to a motel in a different city entirely. He told Daliyah that she works for him now, and that if she refuses, he will hurt her son. At gunpoint, Daliyah was forced to take prescription opioids, raped, and trafficked throughout the night and into the early morning. While taking Daliyah home, her trafficker reiterated his threats against her son and told her that she must continue to work for him. Fearing for the safety of her son, not to mention herself, Daliyah complied. Daliyah regularly told her mother that she was going to work, but instead, went with her trafficker and did as she was told.

In Daliyah’s case, the only obvious risk factor is that her mother previously struggled with addiction. However, being raised by a single mother working two jobs, Daliyah was likely often left home alone from a relatively young age, thereby suffering from child neglect despite her mother’s best efforts to care for her. Coupled with her financial vulnerability as a single teenage mother, the trafficker was able to manipulate her into compliance. If Daliyah had refused to comply and gone to the police, she may have escaped trafficking, although her trafficker may well have followed through on his threats before the police caught up with him. While under the trafficker’s control, however, Daliyah likely developed an addiction to the drugs she was forced to take, giving the trafficker even more leverage to control her.

 

iv.  A survivor of trafficking may independently develop an addiction to opioids as a means to escape from the horrific experiences they are forced to endure by their trafficker.

Ella was fifteen. Her mother had died when she was twelve, and she lived with her father. Her father had been distant and irritable since her mother’s death, often ignoring Ella or growing angry at her over minor things. Ella started spending a lot of time out of the house, hanging out with friends rather than being at home, and her father never seemed to mind. One day, Ella tagged along with an acquaintance to what she thought was a party. The party turned out to be a house where people sold and used heroin.

Once they arrived, her acquaintance was given heroin seemingly in exchange for bringing Ella along, and the friend retired to a room where he used the heroin and became extremely sedated. Ella attempted to leave, but there was a guard at each door and she was not allowed to. After escalating force was used to prevent her from leaving, Ella was eventually raped by multiple guards in turn. She was kept captive in a room, where various men were allowed to rape her almost every day. With no way to leave and no sign that anyone was coming to help her, Ella started asking the men who came into her room for drugs. If they shared their heroin with her, Ella became quiet and complacent, and this soon became the norm. Once her traffickers caught on, they started keeping her high and selling her even more often. Ella developed a severe addiction to heroin as a means to numb herself to the horrors she was being subjected to.

After the trauma of losing her mother, Ella experienced neglect and verbal abuse from her father. Although not a runaway, Ella actively avoided the constant conflict at home and placed herself in vulnerable situations to avoid it. Moreover, Ella became associated with a heroin addict, who eventually led her into the grasp of her traffickers. Forced to cope with repeated rape and abuse, Ella took advantage of the only accessible way to numb the pain—drugs. In this case, Ella’s experience being trafficked was a risk factor that led to her developing an addiction. If the house was eventually raided by police, they likely treated her as simply another addict and charged her with a drug crime. If not, Ella likely remained in this cycle of abuse until she was no longer useful to her traffickers, or until she overdosed.

 

v.  A trafficker may seek out addicts and target them, due to their likely preexisting increased vulnerability to trafficking, as well as their susceptibility to drug-based coercion.

Felicia was a transgender, sixteen year old woman. After coming out to her parents, she was kicked out of the house. Ashamed and not wanting to see her fourteen year old brother at school, Felicia dropped out. Eventually, Felicia was placed in foster care—in a home for boys—where she was made fun of and beaten by the other boys who lived there. Felicia ran away from foster care, seeking to avoid this violence, and took to living on the streets instead, where she eventually developed an addiction.

 Some years later, when Felicia was twenty-five, she heard about a homeless shelter that accepted trans-women and helped them obtain their GED or employment training, but the shelter did not allow anyone addicted to drugs into their program. Determined to turn her life around, Felicia signed herself into a public rehabilitation facility, where she got off of drugs and spent thirty days sober. But after completing rehab, Felicia called the shelter and found that they had filled all of their beds and could not offer her a spot until one opened. Unsure where to go, Felicia left the rehab facility and walked to a nearby park. Meanwhile, a man parked in a car across the street from the rehab facility was watching. He followed her to the park, spoke to her, and said that he has a home for trans-women and that Felicia could stay there. Felicia was delighted and took him up on the offer. However, Felicia soon discovered that these women were doing drugs. She decided to stay, since she had nowhere else to go, and try to resist the temptation to relapse. Two days in, the temptation overwhelmed her, and she did drugs with one of the other women, rekindling her old addiction. She asked the woman how to get more drugs, and she told Felicia to ask the owner. When Felicia asked, he told her to go out with the other woman this evening, and if she did a good job, he would give her the drugs she wanted, but if she didn’t, she would have to leave. Felicia did go out that night, and the other woman showed her how to “walk the track” and solicit commercial sex. Felicia and the other women brought the proceeds to the owner, who gave them drugs and welcomed Felicia to stay as long as she wanted. No longer eligible for the shelter program, and with nowhere else to go, Felicia remained at the house and continued to walk the streets to earn her drugs.

After family conflict in response to coming out as transgender, and after her experiences with violence in foster care, Felicia became a runaway. She fell in with other homeless people suffering from an addiction, and soon developed one herself. After finally getting sober, she was targeted while leaving the rehab facility, and lured into a scenario that capitalized on her recent addiction and made it difficult for her to stay sober. After Felicia relapsed, she was coerced into trafficking in order to both feed her addiction and secure her a place to live. In this way, Felicia’s addiction was a risk factor that led to her being trafficked. If Felicia summoned the willpower to leave this new home and return to rehab—assuming the facility allows people back in—she may have managed to continue her recovery and eventually secure placement in the shelter. If not, Felicia likely continued being trafficked, eventually being arrested while “walking the track” and charged with drug or prostitution offenses.

IV.  Civil Remedies Under 18 U.S.C. § 1595

Each of these scenarios is horrific in its own way, and such conduct is rightly prohibited under the laws of the United States and virtually every other nation. Although sex trafficking is generally thought of as a criminal offense,[74] Congress has also enacted 18 U.S.C. § 1595, creating a federal civil cause of action through which survivors of trafficking can seek damages against their trafficker or “whoever knowingly benefits, financially or by receiving anything of value from participation in a venture which that person knew or should have known has engaged in” sex trafficking.[75] This is the statute upon which much of the civil litigation related to sex trafficking is premised.

A.  Civil Remedies Play An Important Role In Meeting The Legislative Objectives Of Protecting Survivors And Fighting Human Trafficking.

“It is estimated that human trafficking generates many billions of dollars of profit per year, second only to drug trafficking as the most profitable form of transnational crime.”[76] Given the prevalence and complexity of human trafficking, Congress was right to enact broad measures to combat it. As a supplement to the criminal provisions, the civil cause of action established by 18 U.S.C. § 1595 serves at least two important purposes. First, it allows survivors to seek a measure of recompense that would otherwise be completely unavailable to them, potentially opening doors to recovery in the wake of this horrible crime that would otherwise be closed. Second, it allows for indirect measures to inhibit trafficking that have the potential to have greater widespread impact than the criminal prosecution of any individual trafficker could.

i.  This civil remedy can play an important part in a survivor’s healing journey after the trafficking has occurred.

Survivors of trafficking experience some of the most complex and all-encompassing barriers of any crime survivors as they try to move on. In an immediate sense, there are crucial supports that these survivors need—from the moment they are free from their trafficker—in order to stabilize and begin to heal.

The basic necessities are many, and include providing: (1) an interpreter or translator to make the survivor feel more comfortable and understood [if there are language barriers]; (2) crisis intervention and safety planning to ensure that the impact of the recent trauma is addressed and there is a plan to keep the survivor safe through the duration of the reintegration period; (3) health care, including immediate medical attention, sexual assault evaluations, substance abuse counseling, and other health care to ensure the survivor is well; . . . and (5) food and clothing.[77]

The legal system is far too slow-moving for any damages recovered under Section 1595 to fulfill these immediate needs. For better or worse, these needs must continue to be satisfied by service providers, government-funded crime victim programs, and charitable organizations.

       However, once these immediate stabilization needs are met, survivors still face an incredibly diverse array of issues, such as ongoing health needs (including mental health), criminal records, employment challenges, immigration requirements, and more.[78] Many trafficking survivors never have these long-term needs met and continue to suffer from the effects of being trafficked for the rest of their lives.[79]

A network of trafficking survivors conducted a survey of its members on the continuing impacts of their criminal histories alone. Below are some of their responses.

·         “[A] lot of p[ro]spective employers shut down and do not ask for explanations or do not want to listen. Hard to find employment with a criminal record and with no other options for work this could lead to re-trafficking.”[80]

·         “I continue to feel ‘[t]he invisible bars even though I am free[.]’”[81]

·         “[A]s a result of having to register as a sex offender my children were taken away and I lost these children for life.”[82]

·         “After escaping I found that I could not rent an apartment in my own name because of extensive background checks by property management. I always have a roommate and can’t have my name on mailboxes, report problems, or receive deliveries. Sometimes I have to hide from landlords.”[83]

·         “After having ‘escaped’ from my sex trafficker, I have still been enslaved by the charges. Unable to get employment year after year after year resulted in homelessness and suicide attempts.”[84]

·         “One of my charges was for a forgery that involved $28,000 being extracted from a[n account I wrongly believed was dormant]. . . I’ve paid back $10K but will spend the rest of my life paying off the balance.”[85]

By and large, these are problems that would be improved if a survivor succeeds in obtaining damages under Section 1595. Whether the survivor has direct debts to pay off, needs the money for housing or education, or wishes to retain an attorney to pursue expungement or child custody, the financial remedies available through civil litigation can make a life-changing difference.

All of these examples result from the narrow situation of criminal convictions and their consequences, but similar needs arise from other scenarios. For example, instead of debts, survivors may have ongoing medical expenses for mental health care or HIV treatment.[86] The costs of human trafficking can continue to impact survivors indefinitely, even after they are no longer being trafficked. Although no amount of money can undo the suffering these survivors have endured, remedies under Section 1595 can help defray these costs and open doors to a brighter future that would otherwise be out of reach.

 

ii. Civil penalties can incentivize action by defendants who have the ability to inhibit human trafficking but escape criminal liability.

The ugly truth is that traffickers themselves are not the only ones responsible for the prevalence of human trafficking; many of our businesses turn a blind eye to the ways they and their apparatuses enable trafficking. Perhaps the clearest illustration of this is the website Backpage, largely the inspiration for, if not the target of, the controversial 2018 FOSTA-SESTA legislation.[87] The effectiveness of FOSTA-SESTA is hotly contested,[88] and to a lesser extent the relative culpability of Backpage,[89] but what is clear is that the platform provided by Backpage was widely used by sex traffickers.[90] Backpage executives plead guilty to conspiracy charges, but Backpage did not engage in sex trafficking directly; rather, it provided an online communications platform which was used by traffickers to post advertisements to recruit customers.[91]

One of the most egregious instances of this can be seen in the hospitality industry. “Hotels and motels are a common venue for sex trafficking, due to ease of access for buyers, ability to pay in cash and maintain secrecy through finances, and lack of facility maintenance or upkeep expenses.”[92] In one survey, 79% of respondents indicated that their exploitation involved hotels or motels.[93] Hotels have been aware of their involvement in sex trafficking for years.[94] Many have even made public commitments to enacting measures to prevent trafficking from occurring at their properties.[95] Despite these commitments, however, hotels are largely “failing to address the risks of modern slavery in their direct operations and supply chains.”[96] For example, only 14% of anti-trafficking statements by hotel companies report specific approaches or policies for “dealing with the risk of sexual exploitation in their operations and supply chains.”[97] “These failures can be explained by a lack of commitment by hotel companies to prioriti[z]e the elimination of modern slavery[.]”[98]

This is where civil liability under Section 1595 can make a difference. While it is possible for companies like hotels or Backpage to be subjected to criminal sanctions for their role in trafficking,[99] it is rare, and it is often quite difficult for the government to demonstrate criminal liability beyond a shadow of a doubt. Civil liability can fill in this gap and incentivize companies to take meaningful steps toward not allowing traffickers to use their apparatuses to facilitate trafficking, and this incentive can have a significant impact. For example in 2011, Marriott International partnered with ECPAT-USA, a non-profit organization aimed at child trafficking prevention, “to co-develop training to help hotel employees recognize the indicators for human trafficking,” but did not commit to making this training mandatory for its employees—as previously recommended by ECPAT and others—until 2017.[100] Notably, this was in the wake of an increase in attention to the possible liability of hotel chains under Section 1595.[101]

The example of hotels serves to further illustrate once more the interconnectedness of sex trafficking and illicit drugs. Expanding upon the concept that the use of opioids and other drugs is a risk factor for trafficking, and vice-versa, hotels are in a position to see and act on this correlation. If a hotel employee observes signs of drug use on the hotel premises, a red flag should go up and they should wonder whether trafficking is also present. No risk factor is universally present, and questioning the presence of trafficking when drug use is observed will undoubtedly result in false alarms, but it would also lead to the identification of untold numbers of survivors who would otherwise remain invisible. This illustration is not limited to hotels, either. In the same manner, if social media platforms, or the like, isolated patterns that relate to drug sales, these same patterns would almost certainly be utilized by traffickers. Given that both the sex trafficking and the opioid markets are illicit industries, they inherently rely on the same market practices that pervade these industries; the use of these types of business apparatuses is standard procedure in the same way that placing ads on websites is for typical businesses.

B.  Drug-based Coercion Is Sufficient To Satisfy 18 U.S.C. § 1595.

Under § 1595(a), one of the elements that survivors must prove is that they are, in fact, survivors of sex trafficking before obtaining recovery in the civil context.[102] One means by which a defendant may escape liability, then, is to successfully argue that the plaintiff was not trafficked. There are at least two methods by which defendants might make such an argument. First, they could argue that drug-based coercion simply does not apply in a civil context. Second, they could argue that, because Section 1595 creates a civil cause of action through the incorporation of the criminal offenses defined in the rest of the relevant Chapter,[103] a criminal burden of proof should apply to that element of the civil claim—in other words, that the underlying criminal offense must be proven beyond a reasonable doubt, rather than merely by the preponderance of the evidence. However, both of these arguments fail.

i.  Drug-based coercion applies in civil cases.

In no uncertain terms, the precedent established by federal criminal cases such as United States v. Fields,[104] United States v. Mack,[105] United States v. Groce,[106] and others since, carries over to civil lawsuits filed under Section 1595. In other contexts, courts have rightly concluded that federal common law applies under Section 1595,[107] and the same is true in this context. These decisions recognizing drug-based coercion as sufficient for a criminal conviction carry the same weight in regard to civil cases as they do criminal. Even if that were not the case, the arguments that persuaded the courts to accept the theory of drug-based coercion under Section 1591 are equally applicable and persuasive under Section 1595. [108]

In any case, Section 1595 does not create a separate but parallel civil offense of human trafficking; it directly incorporates the criminal offense, thereby incorporating all of the applicable precedent under the offense. Before the question of what satisfies Section 1595 comes the question of what satisfies Section 1591, [109] and that question is settled—drug-based coercion is sufficient to satisfy Section 1591. Logically, then, drug-based coercion must be sufficient to satisfy Section 1595. [110]  

ii.  If a plaintiff in a civil case relies upon a theory of drug-based coercion, the plaintiff need only prove that the drug-based coercion occurred by a preponderance of the evidence.

Defendants of Section 1595 claims have already tried to import criminal law standards into civil litigation when it suits them.[111] It is not hard to imagine a defendant making the claim that, because drug-based coercion is a common law doctrine stemming from criminal human trafficking cases, a theory of drug-based coercion should require a heightened burden of proof if applied in a civil case at all. Though it contradicts widely held understandings of the distinction between criminal and civil litigation, such an argument would not be unprecedented.

Section 1595 is one of relatively few civil causes of action that directly incorporate a criminal offense. One of the most common examples of such a structure is the Racketeer Influenced and Corrupt Organizations (RICO) Act, codified as 18 U.S.C. § 1964.[112] Though RICO is most often discussed in its criminal context, Congress has also authorized a civil cause of action.[113] In a civil RICO case, the Second Circuit concluded that “in the absence of previous convictions a civil plaintiff must carry a burden equal to that in a criminal case in proving that criminal conduct.”[114] However, the Supreme Court resoundingly rejected that reasoning:

We are not at all convinced that the predicate acts must be established beyond a reasonable doubt in a proceeding under § 1964(c). In a number of settings, conduct that can be punished as criminal only upon proof beyond a reasonable doubt will support civil sanctions under a preponderance standard. There is no indication that Congress sought to depart from this general principle here. . . . That the offending conduct is described by reference to criminal statutes does not mean that its occurrence must be established by criminal standards or that the consequences of a finding of liability in a private civil action are identical to the consequences of a criminal conviction.[115]

This statutory configuration closely aligns with the relationship between the civil cause of action authorized by Section 1595 and the criminal offense contained in Section 1591. Following the same reasoning, there is no requirement that the criminal predicate acts described in Section 1591 need to be proved by anything higher than a preponderance of the evidence standard when raised in a civil proceeding under Section 1595. For human trafficking survivors who bring civil lawsuits under Section 1595, given that the other elements are satisfied, proving by a preponderance standard that they were compelled to engage in commercial sex through drug-based coercion is sufficient to succeed on their claim.

V.  Implications

Today, we have enough information to conclude that there is an inherent relationship between sex trafficking and the opioid crisis. So, what do we do about it? There are a number of implications that follow this conclusion, and these implications must be incorporated into the measures we take to address both sex trafficking and the opioid crisis.

First and foremost, it is essential that education on this topic is promoted at all levels, and throughout both the public and private sectors. This article is not the first to call for this type of education, but it bears repeating. Educating law enforcement officers, prosecutors, and judges can help to identify trafficking survivors who may be facing criminal charges related to substance abuse or related offenses. Likewise, training provided to hospital staff, rehabilitation centers, and others who work with people suffering from addiction and overdose can allow them to identify survivors in other settings. These trainings should acknowledge that drug use is a risk factor that may indicate the presence of human trafficking. The inverse is also true; if a survivor of trafficking is identified through other means, those interacting with the survivor should bear in mind that the survivor may be suffering from addiction. These trainings should also discuss the unique needs and challenges of survivors who are suffering from addiction and provide resources to help those receiving training respond effectively, empathetically, and nonjudgmentally.

Second, there is a significant need for further research on the interrelationship of sex trafficking and opioids. As discussed in the introduction to this article, there is no shortage of qualitative information on this topic. Some organizations have conducted limited studies to provide what evidence of this overlap can be obtained through firsthand accounts, and this corroborates the relationship that practitioners have observed on the ground. What is lacking, however, is detailed quantitative research. There are practical challenges to obtaining this sort of information on human trafficking in general, as many cases are misreported or not reported at all, but these challenges can—and must—be worked around. Accurate data on this topic could allow for more targeted and effective strategies to combat these issues, and in a very practical sense, both public and private funds significantly follow hard data. This type of research will draw funders’ attention to programs that operate in this nexus and provide services to those affected.

Third, the gradual shift away from law enforcement and toward public health as the lens through which we address the opioid crisis must include the opioid crisis as it intersects with sex trafficking. With the knowledge we now have of the power and pervasiveness of drug-based coercion, there is no conscionable reason that safe harbor provisions should not be expanded. These provisions are designed to protect survivors of trafficking from being prosecuted for the actions they were compelled to undertake at the hands of their trafficker. Various stakeholders have campaigned across the country for states to enact these protections, and have been largely successful, but these campaigns have been too narrow. Given the strong relationship between sex trafficking and opioids, and drugs more generally, state legislatures must expand these provisions. Prostitution is not the only criminal offense survivors are likely to face. Continuing to hold these survivors criminally liable for drug offenses only continues to empower traffickers; this creates an absurd scenario where the trafficker can threaten to call the police and have the survivor arrested. Moreover, safe harbor provisions are often restricted to minors. While minors are even more vulnerable, they are no more culpable for their coerced actions, and adult survivors should not be denied these protections. Additionally, many adult survivors are merely childhood survivors of trafficking or similar abuse that were never identified before reaching adulthood.[116] In any case, viewing survivors’ struggles with addiction through a public health lens, criminalizing them will not achieve the desired results. Even more so than non-trafficked individuals, these survivors desperately need resources that allow them to overcome these challenges and heal. As discussed above, these survivors have complex needs that must be met if they are to shed their vulnerabilities and go on to lead whole and healthy lives.

Fourth, to the extent that the government seeks to use criminal liability in its fight against trafficking or the opioid crisis on a systematic level, it should consider this intersection as a potential route to do so. Federal prosecutions relying on drug-based coercion are one piece of this, but another tool has gone largely unnoticed. Due to the flexibility and anonymity they can provide, hotels and motels in high-crime areas are significantly connected to the worlds of both sex trafficking and illicit drug distribution. While it would be difficult for the government to attach criminal liability to entities such as hotel parent companies, criminal charges have successfully been brought against local hotels and their owners or managers who have turned a blind eye to trafficking on their property. Separately, 18 U.S.C. § 1594 provides for the forfeiture of “any property, real or personal, that was involved in, used, or intended to be used to commit or facilitate” a human trafficking violation.[117] In conjunction, the government could hypothetically prosecute the owners of hotels and motels that implicitly allow trafficking to occur on their property and force them to forfeit the hotel or motel itself. This leads to questions of what to do with it then, and whether it can be avoided that another hotel or motel will open up in its place. At minimum though, large-scale pursuit of forfeitures such as this could stem the flow of both sex trafficking and opioids in the short term, and the sale of forfeited property could fund measures intended to address both issues from the public health perspective.

 

VI.  Conclusion

Awareness of the intrinsic connectedness of sex trafficking and the opioid crisis is on the rise. Acknowledging this relationship and addressing both issues accordingly is essential to the effectiveness of our efforts to combat them. Although the concept of drug-based coercion is not yet universally accepted, it has gained significant traction in recent years and attorneys engaged in anti-trafficking work should not be shy to employ it. Nonetheless, attorneys too still have room to learn about this relationship and the severe vulnerability it generates.

Indicative of this room to grow, the legal system has yet to capitalize on the full potential of human trafficking laws in the United States. Some attorneys have sought to help trafficking survivors hold accountable those who contributed to their trafficking through civil remedies. However, this line of litigation is still new and delicate. If successful precedent is established, it may someday be applied on a much broader scale, effectuating real and systemic change. The government too has untapped avenues, including deterring this sort of economic ambivalence through the seizure of property, not to mention the expansion of safe harbor protections for survivors.

Across the board, it is imperative that we learn to see through stigmas and provide nonjudgmental, trauma-informed care to both survivors of trafficking and those struggling to overcome opioid addictions. While the two certainly do not always overlap, the frequency with which they do should serve to illustrate that people are complex and so are their needs. Someone who escapes trafficking but does not receive treatment for addiction may end up re-trafficked because their trafficker can sustain their addiction; someone arrested for what appears to be simple opioid use may really be in the midst of being trafficked. As a society, and especially as attorneys who often make decisions that affect the lives of people in this nexus of vulnerability, we must educate ourselves about the relationship between sex trafficking and opioids if we are to competently work in either area. We can help to end these cyclical traumas, but to do so, we must learn to see past societal stigmas and meet people where they really are.

 

[I] Ben VanSlyke is an associate attorney at Weitz & Luxenberg, P.C., and a member of the firm’s sex trafficking litigation team. Before pursuing law, he worked in the non-profit sector, where he was tasked with identifying and providing services to trafficking survivors as well as serving on an active anti-trafficking taskforce with law enforcement and social service agencies. He also previously worked with an orphanage in Cambodia, providing employment and life-skills training to survivors of trafficking in order to reduce vulnerability to future trafficking.

[2] Jacquelyn C.A. Meshelemiah & Raven E. Lynch, The Cause and Consequence of Human Trafficking: Human Rights Violations 130 (2019).

[3] See generally Ann Wagner & Rachel Wagley McCann, Prostitutes or Prey? The Evolution of Congressional Intent in Combating Sex Trafficking, 54 Harv. J. on Legis. 17, 47–72 (2017) (discussing the evolution of federal sex trafficking legislation from the Trafficking Victims Protection Act of 2000 to the Justice for Victims of Trafficking Act of 2015).

[4] See, e.g., Overdose Death Rates, Nat. Inst. on Drug Abuse fig. 3 (Jan. 29, 2021), https://www.drugabuse.gov/drug-topics/trends-statistics/overdose-death-rates [https://perma.cc/TQ66-HGJE] (showing that opioid overdose deaths increased from fewer than 10,000 in 1999 to nearly 50,000 in 2019).

[5] S&T Combatting Human Trafficking Using Social Science, U.S. Dep’t Homeland Sec. (Jan. 30, 2019), https://www.dhs.gov/science-and-technology/news/2019/01/30/st-combatting-human-trafficking-using-social-science [https://perma.cc/JBX4-WA8J].

[6] Id.

[7] Jarod Forget, Violent drug organizations use human trafficking to expand profits, U.S. Drug Enf’t Adm’ (Jan. 28, 2021), https://www.dea.gov/stories/2021/2021-01/2021-01-28/violent-drug-organizations-use-human-trafficking-expand-profits [https://perma.cc/6N5E-JY96].

[8] 18 U.S.C. § 1591(a)(2).

[9] Id.

[10] 18 U.S.C. § 1591(e)(2).

[11] 18 U.S.C. § 1591(e)(5).

[12] United States v. Fields, No. 8:13-CR-198-T-30TGW, 2013 WL 5278499, at *1 (M.D. Fla. Sept. 18, 2013) ("[F]ear of severe withdrawal symptoms meets the definition of “serious harm” as defined by the Statute.”).

[13] Id.

[14] Id. (quoting “serious harm” as defined by 18 U.S.C. § 1591(e)(5)).

[15] Lindsey Roberson & Shan Patel, Prosecuting Sex Trafficking Cases Using a Drug-Based Theory of Coercion, 65 U.S. Att’ys Bull. 175, 183 (2017).

[16] See, e.g., United States v. Kozminski, 487 U.S. 931, 952–53 (1988) (holding that an individual who “use[s] or threat[ens] . . . coercion” in an attempt to force another into “involuntary servitude” will face “criminal prosecution”).

[17] See infra Part II.

[18] See infra Part II.

[19] 18 U.S.C. § 1591(e)(2).

[20] See infra Section IV.B.1.

[21] Infra Section IV.B.1.

[22] See, e.g., Ky. Rev. Stat. Ann. § 529.010(6)(c) (LexisNexis 2021) (“‘Force, fraud, or coercion’ includes but is not limited to . . . [f]acilitating, controlling, or threatening to control an individual’s access to a controlled substance . . . .”); Ariz. Rev. Stat. § 13-1307(C)(1)(e) (LexisNexis 2021) (“Coercion includes . . . [f]acilitating or controlling another person’s access to a controlled substance.”); Del. Code. Ann. tit. 11, § 787(a)(2)(d) (2021) (“‘Coercion’ means . . . [c]ontrolling or threatening to control an individual’s access to a controlled substance . . . .”).

[23] Unif. Act on Prevention of & Remedies for Hum. Trafficking § 2(2)(D) (Unif. L. Comm’n 2013) (“‘Coercion’ means . . .  controlling or threatening to control and individual’s access to a controlled substance . . . .”).

[24] Human Trafficking Legislation, A.B.A., https://www.americanbar.org/groups/human_rights/human-trafficking/trafficking-legislation/ [https://perma.cc/2S6F-F776].

[25] Office of the Surgeon Gen., U.S. Dep’t of Health & Hum. Servs., Facing Addiction in America: The Surgeon General’s Report on Alcohol, Drugs, and Health 3-5 to 3-6 tbl.3.1 (2016), https://addiction.surgeongeneral.gov/sites/default/files/surgeon-generals-report.pdf [https://perma.cc/9ZSP-LMAK].

[26] Id.

[27] Jane Liebschutz et al., The Relationship Between Sexual and Physical Abuse and Substance Abuse Consequences, 22 J. Substance Abuse Treatment 121, 124 (“[P]ast physical or sexual abuse was significantly associated with more substance abuse consequences . . . . When calculated for different types of violence, there were no differences in substance abuse consequences . . . between physical only vs. sexual with or without physical . . . , whereas there were significant differences between physical only vs. none and sexual only vs. none.”) (internal citations omitted).

[28] Lil Tonmyr & Margot Shields, Childhood Sexual Abuse and Substance Abuse: A Gender Paradox?, 63 Child Abuse & Neglect 284, 290 (2017).

[29] Priscilla Dass-Brailford & Amie C. Myrick, Psychological Trauma and Substance Abuse: The Need for an Integrated Approach, 11 Trauma, Violence, & Abuse 202, 202 (2010).

[30] Tonmyr & Shields, supra note 28, at 289 (“Three explanatory models have been proposed for the link between [childhood sexual abuse] and adolescent substance abuse; PTSD models focusing on the trauma-inducing aspects of child maltreatment, self-dysfunction models, and relationship difficulty models.”). These distinctions focus more on the psychological underpinnings of this link, which are beyond the scope of this article and irrelevant to the legal consideration of risk factors and associated vulnerability.

[31] Id. at 284.

[32] Lisa Fedina et al., Risk Factors for Domestic Child Sex Trafficking in the United States, 34 J. Interpersonal Violence 2653, 2654 (2019).

[33] See Facing Addiction in America: The Surgeon General’s Report on Alcohol, Drugs, and Health, supra note 25, at 3-5 to 3-6 tbl.3.1 (discussing risk factors for drug abuse); U.S. Dep’t of Health & Hum. Servs., Admin. for Child. & Families, Off. on Trafficking in Persons, Fact Sheet: Human Trafficking 1 (2017), https://www.acf.hhs.gov/sites/default/files/documents/otip/fact_sheet_human_trafficking_fy18.pdf [https://perma.cc/E28X-CVCC] (identifying how at-risk populations are most likely to be trafficked). 

[34] Office on Trafficking in Persons, U.S. Dep’t of Health & Hum. Servs., OTIP-FS-18-01, Fact Sheet: Human Trafficking (2017), https://www.acf.hhs.gov/sites/default/files/documents/otip/fact_sheet_human_trafficking_fy18.pdf [https://perma.cc/2HTQ-S2UE].

[35] Admin. for Child., Youth and Families, U.S. Dep’t of Health & Hum. Servs., Guidance to States and Services on Addressing Human Trafficking of Children and Youth in the United States 4 (2013), https://www.acf.hhs.gov/sites/default/files/documents/cb/acyf_human_trafficking_guidance.pdf [https://perma.cc/575C-UDMD].

[36] Id.

[37] Id. at 3 – 4.

[38] See infra Part III.

[39] See, e.g., West Virginia Sees Increase in ‘Family’ Sex Trafficking Related to Opioid Epidemic, W. Va. Pub. Broad. (Jan. 9, 2018, 4:42 PM), https://www.wvpublic.org/news/2018-01-09/west-virginia-sees-increase-in-family-sex-trafficking-related-to-opioid-epidemic [https://perma.cc/66C2-XLX8]. However, some information indicates a potential rise in “familial trafficking” of children by family members seeking to sustain their addiction.

[40] See generally Susie Neilson, More Kids Are Getting Placed In Foster Care Because Of Parents’ Drug Use, NPR (July 15, 2019, 11:27 AM), https://www.npr.org/sections/health-shots/2019/07/15/741790195/more-kids-are-getting-placed-in-foster-care-because-of-parents-drug-use [https://perma.cc/R9CU-CFLJ] (“The number of cases of children entering the foster care system due to parental drug use has more than doubled since 2000 . . . .”)

[41] Facing Addiction in America: The Surgeon General’s Report on Alcohol, Drugs, and Health., supra note 25, 3-5 to 3-6 tbl.3.1.

[42] Office to Monitor and Combat Trafficking in Persons, U.S. Dep't of State, 2020 Trafficking in Persons Report 32 (20th ed. 2020), https://www.state.gov/wp-content/uploads/2020/06/2020-TIP-Report-Complete-062420-FINAL.pdf [https://perma.cc/A7WP-FTJY].

[43] See generally Roberson & Patel, supra note 15.

[44] Opioids, Alcohol & Drug Found. (Nov. 5, 2021), https://adf.org.au/drug-facts/opioids/#wheel.

[45] Kendra Cherry, Why an Opiate’s Impact on the Brain Can Cause Addiction, verywellmind (Mar. 23, 2020), https://www.verywellmind.com/what-are-opiates-2795406 [https://perma.cc/L7TU-55GE]; Roberson & Patel, supra note 15, at 175–76.

[46] Camille Renzoni, Exploring Why Opiates Make You Feel Good, The Recovery Village (Aug. 21, 2021),https://www.therecoveryvillage.com/opiate-addiction/exploring-why-opiates-make-you-feel-good/ [https://perma.cc/K66V-T7QY]. It is worth noting that there has been an increase in literature disputing the prevalence of this sort of positive feeling. See, e.g., Nicoletta Lanese, Most People Don’t Actually Feel Euphoric When They Take Opioids, Study Finds, LiveScience (Oct. 28, 2019), https://www.livescience.com/opioid-euphoria-mostly-a-myth.html [https://perma.cc/2VUY-JT53]. However, this is still considered a minority view, and detailed scientific studies have connected opioid use to immediate activity within the pleasure centers of the brain. See generally Antoine Bechara et al., A Neurobehavioral Approach to Addiction: Implications for the Opioid Epidemic and the Psychology of Addiction, 20 Psych. Sci. Pub. Int. 96, 101 (2019).

[47] Meshelemiah & Lynch, supra note 2, at 129.

[48] Heather R. Evans, From the Voices of Domestic Sex Trafficking Survivors: Experiences of Complex Trauma & Posttraumatic Growth 102 (May 20, 2019) (Ph.D. dissertation, University of Pennsylvania) (ScholarlyCommons), https://repository.upenn.edu/cgi/viewcontent.cgi?article=1131&context=edissertations_sp2 [https://perma.cc/M67D-67MB].

[49] Upper Peninsula Women Drugged, Sex Trafficked in Lower Michigan, WLUC (Jan. 23, 2020, 5:08 AM), https://www.uppermichiganssource.com/content/news/Upper-Peninsula-women-drugged-sex-trafficked-in-Lower-Michigan-567225371.html [https://perma.cc/BSV6-7ANY]. Describing one case of sex trafficking that occurred in Flint, Michigan, the Genesee County Sheriff stated that the traffickers “kept [the survivors] high, so they couldn’t make sound decisions to try to get out.”

[50] Meshelemiah & Lynch, supra note 2, at 128 (stating that “drugs are often used as a reward (for compliance”).

[51] See Hum. Trafficking Inst., 2017 Federal Human Trafficking Report 16 (2017), https://traffickinginstitute.org/wp-content/uploads/2022/01/2017-Federal-Human-Trafficking-Report-WEB-Low-Res.pdf [https://perma.cc/6C3W-8E8J].

[52] Emma Eastwood-Paticchio, Addicted to You: Drug Addiction as a Means of Coercion, Trafficking Matters (Jan. 30, 2019), https://traffickinginstitute.org/addicted-to-you-drug-addiction-as-a-means-of-coercion/ [https://perma.cc/7SC6-97KV] (“According to the 2017 Federal Human Trafficking Report, traffickers exploited victims’ substance abuse issues in one third of active criminal sex trafficking cases in 2017, over three times more than traffickers exploited romantic relationships.”); See Hum. Trafficking Inst., 2017 Federal Human Trafficking Report 16 (2017), https://traffickinginstitute.org/wp-content/uploads/2022/01/2017-Federal-Human-Trafficking-Report-WEB-Low-Res.pdf [https://perma.cc/6C3W-8E8J].

[53] Leah K. Walker, Opioid Withdrawal: Signs, Symptoms & Addiction Treatment, Am. Addiction Treatment Ctrs. (Jan. 23, 2022), https://americanaddictioncenters.org/withdrawal-timelines-treatments/opiate [https://perma.cc/8KVV-EMMF].

[54] Jeffrey Juergens, What Is Opiate Withdrawal?, Addiction Center (Nov. 9, 2021), https://www.addictioncenter.com/opiates/withdrawal-detox/ [https://perma.cc/RA6Y-TRT5].

[55] Id.

[56] See 18 U.S.C. § 2340 (defining torture as an act “specifically intended to inflict severe physical or mental pain or suffering . . . upon another person within his custody or physical control”).

[57] Juergens, supra note 54.

[58] Roberson & Patel, supra note 15, at 176 (citing Katherine Chon, Human Trafficking and Opioid Abuse, Admin. for Child. & Families: The Family Room Blog (May 17, 2016), https://wayback.archive-it.org/8654/20170322021028/https:/www.acf.hhs.gov/blog/2016/05/human-trafficking-and-opioid-abuse [https://perma.cc/2XAA-2XV6] (discussing an interview with Dr. Hanni Stoklosa)).

[59] Lindsey N. Roberson, She Leads a Lonely Life: When Sex Trafficking and Drug Addiction Collide, 52 Wake Forest L. Rev. 359, 376 (2017) (citing United States v. Guidry, 817 F.3d 997, 1004 (7th Cir. 2016) (internal quotations omitted)).

[60] Evans, supra note 48, at 102.

[61] Understanding and Overcoming Opioid Abuse, Am. Psych. Ass’n (Jan. 1, 2017), https://www.apa.org/topics/substance-use-abuse-addiction/opioid-abuse [https://perma.cc/NK9D-97E3].

[62] Id.

[63] See generally Kathlene Tracy & Samantha P. Wallace, Benefits of Peer Support Groups in the Treatment of Addiction, 7 Substance Abuse & Rehab. 143, 152 (2016) (concluding that data regarding the positive effects of peer support groups on addiction recovery is limited but encouraging).

[64] See generally Shane Darke et al., Yes, People Can Die from Opiate Withdrawal, 122 Addiction 199 (2016) (highlighting several instances of withdrawal-caused deaths across the world’s incarcerated population).  

[65] Roberson, supra note 59, at 371.

[66] Id. at 370.

[67] Roberson & Patel, supra note 15, at 177.

[68] Meshelemiah & Lynch, supra note 2, at 129–30.

[69] Sabrina Balmgamwalla, Trafficking in Narratives: Conceptualizing and Recasting Victims, Offenders, and Rescuers in the War on Human Trafficking, 94 Denv. L. Rev. 1, 27 (2016).

[70] Matthew Myatt, The “Victim-Perpetrator” Dilemma: The Role of State Safe Harbor Laws in Creating a Presumption of Coercion for Human Trafficking Victims, 25 Wm. & Mary J. Race Gender & Soc. Just. 555, 568 (2019).

[71] Kate Mogulescu, The Public Defender as Anti-Trafficking Advocate, an Unlikely Role: How Current New York City Arrest and Prosecution Policies Systematically Criminalize Victims of Sex Trafficking, 15 CUNY L. Rev. 471, 482 (2012).

[72] See supra Section III.A.

[73] See generally United States v. Fields, 625 F. App’x 949 (11th Cir. 2015) (per curiam); United States v. Mack, 808 F.3d 1074 (6th Cir. 2015); United States v. Groce, 891 F.3d 260 (7th Cir. 2018); Caitlin Johnston, Man Convicted of Human Trafficking Gets 34 Years in Prison, Tampa Bay Times (Jan. 30, 2014), https://www.tampabay.com/news/courts/criminal/man-convicted-of-human-trafficking-gets-34-years-in-prison/2163311/ [https://perma.cc/JA2K-DRXT]; Lindsay Moore, Police, Survivors Debunk Human Trafficking Kidnapping Myths, MLive (Jan. 16, 2020, 11:08 AM), https://www.mlive.com/news/kalamazoo/2020/01/police-survivors-debunk-human-trafficking-kidnapping-myths.html [https://perma.cc/W24P-ZRTR]; Shandra Woworuntu, Shandra Woworuntu: My Life as a Sex-Trafficking Victim, BBC News (Mar. 29, 2016), https://www.bbc.com/news/magazine-35846207 [https://perma.cc/7Q35-BT3R]; Lex Talamo, Victim: I Was 4 When My Dad Started Trafficking Me, Shreveport Times (May 23, 2016), https://www.shreveporttimes.com/story/news/watchdog/2016/05/23/victims-sex-trafficking-share-their-stories/83538332/ [https://perma.cc/48MW-FHRZ]; Esther Honig, How One Woman Escaped Sex Trafficking and Overcame Her Opioid Addiction, Side Effects Pub. Media (May 23, 2018 4:34 PM), https://www.sideeffectspublicmedia.org/post/how-one-woman-escaped-sex-trafficking-and-overcame-her-opioid-addiction [https://perma.cc/LE5B-9SFV]; Kristin Detrow, The Link Between Opioid Abuse and Sex Trafficking, Crime Rep. (Jan. 17, 2018), https://thecrimereport.org/2018/01/17/the-link-between-opioid-abuse-and-sex-trafficking/ [https://perma.cc/Z7JE-VL4P]; American Addiction Centers Editorial Staff, Drug Addiction Fuels the Fire of Human Trafficking, Am. Addiction Ctrs. (Nov. 4, 2019), https://www.rehabs.com/blog/drug-addiction-fuels-the-fire-of-human-trafficking/ [https://perma.cc/G5EJ-THAU].

[74] See 18 U.S.C. § 1591; see generally 18 U.S.C. §§ 1581–1597.

[75] 18 U.S.C. § 1595(a).

[76] The United States Attorney’s Office for the Middle District of Alabama, Human Trafficking Task Force, U.S. Dep’t of Just. (May 11, 2021), https://www.justice.gov/usao-mdal/human-trafficking-task-force [https://perma.cc/G7FK-SWRG].

[77] Meghan McCann, Nat’l conf. of State Legislatures, Human Trafficking: An Overview of Services and Funding for Survivors 3 (2018).

[78] See generally id. at 3–8.

[79] See generally Evans, supra note 48, at 51–59 (Chapter 4 on the “Post-Trafficking Experience”); Kimberly Mehlman-Orozco, What Happens After a Human Trafficking Victim is ‘Rescued’?, The Hill (July 29, 2016 4:28 PM), https://thehill.com/blogs/congress-blog/judicial/289709-what-happens-after-a-human-trafficking-victim-is-rescued [https://perma.cc/R5BW-LSZV] (conveying the hardships sex trafficking survivors face using one woman’s story as an example).

[80] Nat’l Survivor Network, National Survivor Network Members Survey: Impact of Criminal Arrest and Detention on Survivors of Human Trafficking 7 (2016).

[81] Id.

[82] Id.

[83] Id.

[84] Id.

[85] Id. at 9.

[86] McCann, supra note 77 at 4.

[87] See Liz Tung, FOSTA-SESTA was Supposed to Thwart Sex Trafficking. Instead, it’s Sparked a Movement, PULSE (July 10, 2020), https://whyy.org/segments/fosta-sesta-was-supposed-to-thwart-sex-trafficking-instead-its-sparked-a-movement/ [https://perma.cc/RDS9-EV5X] (“[Although Backpage] was actually shut down by federal authorities before FOSTA-SESTA passed, supporters of the legislation still have implied that it paved the way for the seizure.”).

[88] See, e.g., Daisy Soderberg-Rivkin, The Lessons of FOSTA-SESTA from a Former Content Moderator, Medium (Apr. 8, 2020), https://medium.com/@Daisy_Soderberg_Rivkin/the-lessons-of-fosta-sesta-from-a-former-content-moderator-24ab256dc9e5 [https://perma.cc/VBH5-ZMVQ] (noting the negative impact had on sex workers); Karol Markowicz, Congress’ Awful Anti-Sex-Trafficking Law Has Only Put Sex Workers in Danger and Wasted Taxpayer Money, Bus. Insider (July 14, 2019, 8:38 AM), https://www.businessinsider.com/fosta-sesta-anti-sex-trafficking-law-has-been-failure-opinion-2019-7 [https://perma.cc/FCU8-BA3W] (“[T]here’s no evidence that [FOSTA-SESTA] has made any difference whatsoever.”).

[89] See, e.g., Elizabeth Nolan Brown, Secret Memos Show the Government Has Been Lying About Backpage All Along, Reason (Aug. 26, 2019, 12:48 PM), https://reason.com/2019/08/26/secret-memos-show-the-government-has-been-lying-about-backpage/ [https://perma.cc/8TTC-QEH5]. Although Backpage did know that its website was used to advertise sex trafficking and refused to remove all adult content from its website, they actively assisted law enforcement in sex trafficking investigations, going above and beyond their legal requirements, taking the initiative to report particularly concerning posts to law enforcement themselves, providing seminars and trainings to law enforcement on how to effectively utilize Backpage data in their investigations and prosecutions, and providing authentication testimony at trials.

[90] S. Rep. No. 114-214, at 4 (2016).

[91] See Press Release, Off. of Pub. Affs., U.S. Dep’t of Just., Backpage’s Co-Founder and CEO, As Well As Several Backpage-Related Corporate Entities, Enter Guilty Pleas, (Apr. 12, 2018), https://www.justice.gov/opa/pr/backpage-s-co-founder-and-ceo-well-several-backpage-related-corporate-entities-enter-guilty [https://perma.cc/B5JB-WVYR]. Notably, there is dispute as to how culpable Backpage truly was.

[92] Hotel/Motel-Based, Hum. Trafficking Hotline, https://humantraffickinghotline.org/sex-trafficking-venuesindustries/hotelmotel-based [https://perma.cc/J3UH-MZUG].

[93] Polaris, On-Ramps, Intersections, and Exit Routes: A Roadmap for Systems and Industries to Prevent and Disrupt Human Trafficking 12 fig. 1.6 (2018).

[94] See generally Human Trafficking in the Hotel Industry, Polaris Project (Feb. 10, 2016), https://polarisproject.org/blog/2016/02/human-trafficking-in-the-hotel-industry/ [https://perma.cc/SV4V-CPK8]; U.S. Dep’t of Homeland Sec., Blue Campaign, Hospitality Toolkit (2016), https://www.dhs.gov/sites/default/files/publications/blue-campaign/toolkits/hospitality-toolkit-eng.pdf [https://perma.cc/S9K4-FRP7].

[95] See Press Release, Stephen P. Holmes, Chairman of Wyndham Hotels & Resorts, Inc., Modern Slavery Statement (June 1, 2018), https://corporate.wyndhamhotels.com/modern-slavery-statement/ [https://perma.cc/R9AW-KTLF]; Press Release, Mark S. Hoplamazian, President and Chief Executive Officer of Hyatt Hotels Corporation, Hyatt Hotels Corp. Hum. Rts. Statement (January 2017), https://about.hyatt.com/content/dam/HyattStories/thrive/Hyatt-Global-Human-Rights-Statement-Modern-Day-Slavery-020117.pdf [https://perma.cc/64XT-QTPL].

[96] Minderoo Foundation’s Walk Free Initiative et al., Beyond Compliance in the Hotel Sector: A Review of UK Modern Slavery Act Statements 2 (2019).

[97] Id. at 4, 14.

[98] Id. at 2.

[99] See, e.g., Press Release, Off. of Pub. Affs., U.S. Dep’t of Just., Louisiana Motel Owner Pleads Guilty in Sex Trafficking Case, U.S. Dep’t of Just. (July 1, 2015), https://www.justice.gov/opa/pr/louisiana-motel-owner-pleads-guilty-sex-trafficking-case [https://perma.cc/J8PP-G2D9]; Press Release, Off. of Pub. Affs., U.S. Dep’t of Just., Backpage’s Co-Founder and CEO, As Well As Several Backpage-Related Corporate Entities, Enter Guilty Pleas, (Apr. 12, 2018), https://www.justice.gov/opa/pr/backpage-s-co-founder-and-ceo-well-several-backpage-related-corporate-entities-enter-guilty [https://perma.cc/B5JB-WVYR].

[100] Press Release, ECPAT-USA, ECPAT-USA and Marriott International Announce New Partnership to Protect Children from Trafficking, (Jan. 29, 2018), https://www.ecpatusa.org/blog/2018/1/29/ecpat-usa-and-marriott-international-announce-new-partnership [https://perma.cc/ERY5-25KZ].

[101] See generally Shea M. Rhodes, Sex Trafficking and the Hotel Industry: Criminal and Civil Liability for Hotels and their Employees (2015), https://cseinstitute.org/wp-content/uploads/2015/06/Hotel_Policy_Paper-1.pdf [https://perma.cc/MU5B-3SWU]; Gallant Fish, No Rest for the Wicked: Civil Liability Against Hotels in Cases of Sex Trafficking, 23 Buff. Hum. Rts. L. Rev. 119, 146 (2017); Ricchio v. McLean, 853 F.3d 553, 555 (1st Cir. 2017); Doe #1 v. Red Roof Inns, Inc., 21 F.4th 714, 725-27 (11th Cir. 2021).

[102] 18 U.S.C. § 1595(a) (“An individual who is a victim of a violation of this chapter may bring a civil action . . . .”) (emphasis added).

[103] Id. (“An individual who is a victim of a violation of this chapter may bring a civil action . . . .”) (referring to 18 U.S.C. §§ 1581–1596).

[104] United States v. Fields, No. 8:13-CR-198-T-30TGW, 2013 WL 5278499, at *1 (M.D. Fla. Sept. 18, 2013) (stating “fear of severe withdrawal symptoms meets the definition of ‘serious harm’ as defined by the Statute.”).

[105] U.S. v. Mack, 808 F.3d 1074, 1081 (6th Cir. 2015) (holding that evidence depicting defendant’s initial cultivation and subsequent exploitation of victims’ drug addictions adequately supported his conviction under Section 1591).

[106] U.S. v. Groce, 891 F.3d 260, 267 (7th Cir. 2018) (“[A] victim’s prior sexual conduct is irrelevant to the sex-trafficking mens rea: ‘whether the victims had previously worked as prostitutes was irrelevant to the required mens rea for the crime.’”) (quoting United States v. Carson, 870 F.3d 584, 593 (7th Cir. 2017).

[107] See, e.g., J.C. v. Choice Hotels Int'l, Inc., No. 20-CV-00155-WHO, 2020 WL 3035794, at *1 (N.D. Cal. June 5, 2020) (“[T]he TVPRA is silent on the issue of indirect [or vicarious] liability, which suggests that the federal common law of agency should apply.”). This holding conforms with the widely-held belief that “statutes are presumed not to disturb the common law, ‘unless the language of the statute [is] clear and explicit for this purpose.’” State Eng'r of Nev. v. S. Fork Band of Te-Moak Tribe of W. Shoshone Indians of Nev., 339 F.3d 804, 814 (9th Cir. 2003) (quoting Norfolk Redevelopment & Hous. Auth. v. Chesapeake & Potomac Tel. Co. of Virginia, 464 U.S. 30, 35–36 (1983)). However, some courts may still opt to apply state law. But see K.B. v. Inter-Cont'l Hotels Corp., No. 19-CV-1213-AJ, 2020 WL 8674188, at *9 n.7 (D.N.H. Sept. 28, 2020) ("The TVPRA does not address the issue of indirect or vicarious liability. As the parties both cite primarily to New Hampshire law regarding the franchise relationship, the court does so as well.”).

[108] See supra Part I.

[109] 18 U.S.C. § 1595(a). Any violation of a criminal offense outlined in 18 U.S.C 77 will satisfy Section 1595. However, the vast majority of sex trafficking cases—as contemplated by this article—take place under 18 U.S.C. § 1591. For the purposes of this Article, I focus on violations of 18 U.S.C. § 1591.

[110] Section 1595 incorporates Section 1591 (among the other Sections of Chapter 77); Section 1591 includes coercion as sufficient to satisfy the relevant element of a sex trafficking offense; Section 1591 includes threats of serious harm as sufficient to constitute coercion; and the decisions cited above, supra notes 104–106, concluded that drug-based coercion is sufficient to constitute serious harm. As such, following a logical chain of if-then statements: if drug-based coercion constitutes serious harm, then drug-based coercion constitutes coercion; if drug-based coercion constitutes coercion under Section 1591, then drug-based coercion satisfies Section 1591; and if drug-based coercion satisfies Section 1591, then drug-based coercion satisfies Section 1595. The first logical proposition in that chain is true: drug-based coercion constitutes serious harm as defined in Section 1591. Therefore, the conclusion must also be true: drug-based coercion satisfies Section 1595.

[111] See M.A. v. Wyndham Hotels & Resorts, Inc., 425 F.Supp.3d 959, 969–70 (S.D. Ohio 2019) (rejecting defendant’s notion that judicial interpretation of the phrase ‘participation in a venture’ done in the criminal context of Section 1591 should apply to the interpretation of the same phrase done in the civil context of Section 1595).

[112] 18 U.S.C. § 1964.

[113] 18 U.S.C. § 1964(c).

[114] Sedima, S.P.R.L. v. Imrex Co., 741 F.2d 482, 501-02.

[115] Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 491 (1985) (citing the following as examples of other settings where criminal conduct can warrant civil sanctions under a preponderance of the evidence standard: United States. v. One Assortment of 89 Firearms, 465 U.S. 354 (1984); One Lot Emerald Cut Stones v. United States, 409 U.S. 232, 235 (1972); Helvering v. Mitchell, 303 U.S. 391, 397 (1938); United States v. Regan, 232 U.S. 37, 47–49 (1914)).

[116] See Impact of Trafficking, National Child Traumatic Stress Network, (May 15, 2022) https://www.nctsn.org/what-child-trauma/trauma-types/sex-trafficking/effects.

[117] 18 U.S.C. § 1594(d)(2). However, the success of such an approach would admittedly be uncertain in relation to the Civil Asset Forfeiture Reform Act of 2000, Pub. L. No. 106-185 (2000).

Probation Ineligibility: A Time For Reconsideration in Kentucky

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Brady Grove[I]

Introduction

In the United States, each state has the authority to shape its own criminal justice and juvenile justice systems.[2] With this regulatory power, states across the country have enacted statutes permitting youths under the age of 18 to be tried as adults for qualifying crimes.[3] In Kentucky, a youthful offender is placed in the jurisdiction of an “adult court” through a mandatory waiver or discretionary transfer. Under the mandatory waiver method, a youth, aged fourteen or older, at the time he or she allegedly utilized a firearm to commit a felony, may be transferred to the Circuit Court and tried as an adult.[4] Under the discretionary transfer method, upon motion of the county attorney, a youth satisfying prescribed statutory requirements may be transferred from the juvenile justice system and tried as an adult.[5] These youthful offenders not only face legal consequences; disruptions to academic development; and social stigma, but also various procedural hurdles.

In Kentucky, upon turning eighteen, youthful offenders still in Department of Juvenile Justice (DJJ) custody, must return to their sentencing court for an age-eighteen hearing to determine whether he or she will be paroled, released, placed in a treatment program, or incarcerated within a facility operated by the Department of Corrections (Corrections).[6] However, the DJJ and Corrections may together decide to bypass a court ordered incarceration, allowing a youthful offender to remain in the DJJ’s custody until his or her release, parole, or twenty-first birthday.[7] Those allowed to stay may petition the court for probation reconsideration once, upon "completion of a minimum twelve (12) months additional service of sentence."[8] Notably, some courts have declined to extend this amnesty to youthful offenders already barred from probation at their age-eighteen hearing due to the nature of their crime.[9] The Supreme Court of Kentucky has not yet weighed in on the matter.[10] Due to recent developments in sociology and legal philosophy, youthful offenders seeking probation reconsideration should not be prohibited simply because of prior ineligibility at the time of their age-eighteen hearing.         

This Note argues that the Kentucky Legislature should amend KRS § 532.045(2) to permit probationary release for youthful offenders during their probation reconsideration hearing, as prescribed under KRS § 640.075(4). With this modification, the court would receive discretionary latitude in its probation decision, rather than be statutorily mandated to deny the request. Although the crimes in question are extremely serious, the mounting evidence of the negative impact of juvenile incarceration warrants reevaluation of how youthful offenders are treated in Kentucky and the nation at large.

Section I will examine the historical background for youthful offenders in the U.S. and Kentucky; most advancements being quite recent due to increased research and public focus. Section II examines the negative societal impact of current law from a public policy perspective and the implicated federal and state constitutional issues. Last, Section III will propose a statutory solution and appropriate rehabilitation measures for Kentucky that could be adopted by jurisdictions throughout the nation.

I.  Background

A. Juvenile Justice Reform for Youthful Offenders at the National Level

The juvenile justice system has been reactionary to the social and political concerns of the time.[11] The first U.S. juvenile court was established in 1889 due to the dangers of incarcerating children with adults, recognizing the two as being at different developmental stages with different needs.[12] In response to a surge in crime throughout the latter-half of the twentieth century, state governments enacted stricter laws that caused far more juveniles to be tried and sentenced as adults.[13] From 1985 to 2003, twenty-two youthful offenders, between the ages of twenty-three and thirty-eight, received the death penalty for their crimes.[14] Notably, a majority of those twenty-two put to death were members of minority groups.[15]

In 2005, the United States Supreme Court addressed the constitutionality of death penalty sentences imposed on juvenile offenders.[16] In Roper v. Simmons, an eighteen-year-old sentenced to death for a murder he committed while seventeen-years-old,[17] petitioned the court for postconviction relief, analogizing the execution of youthful offenders to that of the mentally disabled,[18] in violation of the Eighth Amendment of the U.S. Constitution under Atkins v. Virginia.[19] The Supreme Court agreed, identifying three key differences between juveniles and adults that preclude offenders under the age of eighteen from capital punishment.[20] The first is juveniles’ lack of maturity and responsibility as compared to adults, causing impulsive decision-making.[21] The Court noted that states do not allow juveniles to vote or purchase alcohol for this “comparative immaturity.”[22] The second difference is that juveniles have far less environmental control while adults have the power to avoid criminal activity.[23] The third difference is that juveniles hold malleable ethics and morality with the greater chance of rehabilitation.[24]

The next step was holding that sentencing youthful offenders to life without parole for a non-homicide violated the Eight Amendment. In Graham v. Florida, the Court reasoned that while states can prioritize different criminal justice goals, it is flawed to ignore age, as lesser incentive to demonstrate the rehabilitation ultimately discourages self-improvement efforts by those wanting to reenter society.[25] The most recent major reform is the prohibition of mandatory life-without parole sentences under the Eight Amendment for youthful offenders who committed homicide.

In Miller v. Alabama, the Court reasoned that a mandatory sentence precludes evaluating factors that contribute to culpability and improvement potential such as crime details, mental capacity, and dysfunctional life variables that led to criminal acts.[26] The Court places great importance on the role brain development plays in the legal process, recognizing that juveniles may not face such harsh punishment if they had the maturity to best deal with police and attorneys.[27] The key takeaway is the importance of exercising discretion based on individual factors, no matter the offense.[28] Without this measure, youthful offenders and adults are equally punished for the same crime, regardless of culpability and rehabilitation potential.[29]

While these landmark cases deal with the most serious offenses, the core principles are widely applicable. Society is not bettered by treating youthful offenders equal to adults, even during crime waves. With the social stigma of sexual offenses being arguably stronger than that of serious violent crimes, it is logical to project that reevaluation of youth sex offender treatment will follow from Simmons-Graham-Miller jurisprudence.

B.  An Issue of First Impression in Kentucky

Before its grant of discretionary review in Bloyer v. Commonwealth,[30] the Kentucky Supreme Court considered whether youthful offenders may be statutorily precluded from probation, despite its availability under KRS § 640.030.[31] In Commonwealth v. Taylor, a youthful offender convicted of first-degree sodomy and sexual abuse received a twenty-year sentence.[32] The offender was a teenager, while the victim, his younger sister, was a small child.[33] At sentencing, the court classified the youthful offender as a “juvenile sexual offender” and committed him to a treatment program until age twenty-one, as prescribed by state law.[34] Upon turning twenty-one, the youthful offender returned to court and was granted probation in light of his “excellent performance” in the court-mandated program.[35]

However, the Commonwealth appealed the trial court’s decision to grant probation, arguing that KRS § 532.045(2) prohibits probation as a matter of law when the convicted offense is one of the enumerated crimes.[36] The Commonwealth cited KRS § 640.030, mandating that “youthful offenders[s] . . . convicted of a felony offense” receive “the same type of sentencing procedures . . . including probation,” as adult felony offenders.[37] However, the juvenile contended that his classification as a “youthful offender,” and subsequent treatment under KRS § 640.030(4), exempted him from the probation bar located within KRS § 532.045(2).[38] The court found the Commonwealth’s position persuasive and reversed the trial court’s grant of probation. [39] In its decision, the court viewed KRS § 640.030 as a “clear legislative pronouncement” of equal treatment between youthful felony offenders and adult felony offenders.[40]

It is difficult to see how the court could have reached a different conclusion. The statute is unambiguous and allows for a single logical interpretation.[41] However, equal treatment of youthful offenders and adults, as well as the disallowance of discretion, should be avoided. Whether or not granting probation based on treatment program participation was advisable, the trial court was so impressed that they thought it the appropriate time to reintegrate the offender into society.[42] In denying probation as a matter of law, there is far less incentive to make a strong rehabilitative effort.[43] With little incentive to self-improve, it is more likely that the system is releasing offenders back into society in equal or worse condition.[44]

In Bloyer v. Commonwealth, the Kentucky Court of Appeals addressed an issue of first impression: whether youthful offenders statutorily barred from probation at their age-eighteen hearing are also barred at their probation reconsideration hearing.[45] At age sixteen, Bloyer pled guilty to multiple sexual offenses, including six counts of incest against his younger siblings, and was sentenced to fifteen years’ imprisonment and placed in DJJ custody.[46] At Bloyer’s age-eighteen hearing, the court denied probation and ordered he be transferred to Corrections until his twenty-first birthday.[47] However, the DJJ and Corrections mutually decided to allow Bloyer remain with the DJJ until he reached the age of twenty-one.[48] As this date approached, Bloyer unsuccessfully petitioned the court for probation reconsideration.[49] The trial court found Bloyer ineligible for probation as a matter of law under KRS § 532.045(2), as the offenses clearly met the statutory criteria.[50] On appeal, Bloyer argued that the court violated the Eighth Amendment and Section Two of the Kentucky Constitution, prohibiting absolute and arbitrary state power over life, liberty, and property.[51] Bloyer urged the court to consider his unfortunate childhood and substandard intelligence in its analysis.[52]

As to Bloyer’s background, the court believed these factors caused psychological distress but deemed them irrelevant to the issue.[53] The court stated that if Bloyer was legally competent, outside factors do not excuse crime and are immaterial to the question.[54] The constitutional claims were rejected in an equally emphatic fashion.[55] The Eighth Amendment prohibits “cruel and unusual” punishment:[56] punishment extremely disproportionate to the offense.[57] The court acknowledges reform trends around youthful offenders, citing Roper, Graham, and Miller, the court refused to view Bloyer’s fifteen-year sentence as an unreasonably severe punishment in violation of the Eighth Amendment.[58] As Bloyer’s fifteen-year sentence was lower than the statutory maximum for his offenses, the court found no disproportion between Bloyer’s crime and subsequent sentence, thus rejecting his Eighth Amendment argument.[59]

Bloyer’s state constitution claim was met with further skepticism. Section Two of the Kentucky Constitution, a broad-sweeping provision prohibiting arbitrary use of state power,[60] requires state actions be “reasonably within the scope of a legitimate public purpose.”[61] Using a rational basis test, the court reasoned that the enumerated offenses were heinous and the legislature had a legitimate purpose in denying probation to protect the public from additional threat, even if assuming youthful offenders are less prone to recidivism than adults.[62] The court concluded its analysis and affirmed the lower court judgment, holding that youthful offenders statutorily ineligible for probation at their age-eighteen hearing, remain ineligible at a hearing for probation reconsideration.[63] Under this ruling, there is no room for judicial discretion or individual consideration at a youthful offender’s probation reconsideration hearing. While this lack of offender-specific analysis is easier to apply uniformly, the potentially positive impact of greater flexibility regarding youthful offenders outweighs this administrative ease.

II.  Concerns with Current Approaches Despite Steps in the Right Direction

       Jurisprudence gradually evolves over time, especially when controversial, as change must occur within the general population and political process. The technical details of criminal procedure can be difficult to understand, especially with each state having its own unique body of law. Though recent years have put greater focus on the treatment of different classes within the justice system, laws on probation eligibility do not command headlines, and violent offenders are not the subjects of public sympathy.

However, advancements in the perception of youthful offenders over past decades have been substantial and in quick succession, placing an increased focus on resolving criminal inequalities and finding efficient, fair solutions that match the goals of today’s society.[64] However, these modifications cannot depend solely on Supreme Court action, as criminal justice statutes are the making of state legislatures.[65] Kentucky should amend the current law by including a youthful offender exception at reconsideration hearings, allowing for judicial discretion regarding probation, as the constitutional issues and public policy concerns render the matter-of-law prohibition outdated and threatening to individual liberty.

A.  Constitutional Issues

The Eighth Amendment guarantees freedom from “cruel and unusual punishment.”[66] This means that no citizen shall be punished excessively. To determine if a punishment meets constitutional muster, courts look to society’s “evolving standards of decency,” weighing the crime’s resulting harm against the sentence’s possible restrictions of life, liberty, and property.[67] Due to this balancing analysis, the figurative line separating unconstitutional, “cruel and unusual punishment[s]” from those that considered proper, may shift with every offense.[68] While harsher punishments may have stronger deterring and incapacitating effects, an individual’s constitutional rights and protections must take precedence.[69]

However, the severity of the punishment imposed should not simply be measured in proportion to the severity of the offense. Especially, as we have come to a greater understanding of the impact a juvenile’s incomplete mental development and emotional maturity, lack of personal identity, peer pressure, and other individualized circumstances, may have on his susceptibility to criminal behavior.[70] Instead, the severity of the punishment should be measured against the offense and the particular perpetrator.[71] These underlying circumstances contribute to one’s self-perception, dominion over their personal environment, ability to understand the consequences and harm of their actions, self-perception, and overall feelings of desperation that results in the offense and “nothing to lose” mentality if caught and punished.[72]

Because some people have been dealt circumstances that make their criminal behavior more understandable, it would be inequitable to judge them on an even plane with those who had all of the power in the world to avoid criminal activity yet chose not to. For example, youthful offenders are severely limited in their capacity to leave crime-ravished neighborhoods or move out of abusive homes.[73] In addition, scientific advancements have shown stark neurological differences between youthful offenders and adult offenders regarding “behavior control.”[74] Unlike adult offenders, youthful offenders are more prone to impulsive action and risk-taking, making them less culpable for their actions and more likely to reform upon reaching mental maturity.[75] Further, several sociological studies previously conducted demonstrate that only a small percentage of youths involved in criminal activity actually develop any lingering pattern of criminal behavior.[76]

       It is here that the separation in reasoning between the Supreme Court over the past two decades and the courts in Taylor and Bloyer expands exponentially. An automatic prohibition of probation for offenders convicted of enumerated offenses removes the judicial discretion surrounding a probation determination.[77] For example, KRS § 532.045(2) requires a court to deny probation to any offender, regardless of age, convicted of a crime as prescribed by the statute.[78] This result may also be mandated in probation reconsideration hearings of youthful offenders, held under KRS§ 640.075(4), regardless of whether the court believes that the individual has been successfully reformed and warrants the probationary release.[79] This lacks the common sense of giving wide deference to the finder of fact and allowing judicial discretion in an area where it is otherwise dominant.

Ultimately, the equal treatment of youthful and adult offenders mandated by KRS § 532.045(2) renders the statute unconstitutional as cruel and unusual punishment. Although youthful offenders are less culpable, receive far more benefits with probationary release, and are less likely to return to criminal activity upon release, they are mandatorily subject to the same prohibitions as adult offenders. Both youthful and adult offenders operate with the same numerator, but very different denominators. This disproportionality disregards the principles set forth by the Supreme Court in Roper, Graham and Miller.

While opponents of this contention argue that the probation prohibition is perfectly proportional in light of the seriousness of the offenses which trigger it, the fact remains that youthful offenders receive punishments equal to that of adult offenders, despite the fact they are of lesser capacity, lesser culpability, and are lesser threats to the public upon release.[80] The disproportion may be slight, the punishment is still excessive when considering the circumstances of the youthful offender. Proportionality can easily be restored by the Kentucky Legislature amending KRS § 532.045, permitting probationary release for youthful offenders seeking it during their probation reconsideration hearing, as prescribed under KRS § 640.075(4).[81] With this statutory leeway, courts may then utilize its judicial discretion in determining whether the youthful offender would be better served by being released on probation.

       The probation prohibition for youthful offenders also violates Section Two of the Kentucky Constitution, forbidding the arbitrary and absolute power of the state over life, liberty, and property, absent a compelling state interest.[82] The word “arbitrary,” as relating to government function, is simply defined as a “ruling by absolute authority.”[83] Under KRS § 532.045(2), the absolute authority of the state deprives youthful offenders of their liberty, through its statutory ban on probation.[84]

Opponents of this contention will likely argue that the statutory probation bar for those convicted of deplorable crimes fails to constitute an arbitrary state action that results in an inequity “exceed[ing] the reasonable and legitimate interest of the people.”[85] In their view, a statute enacted to prevent offenders convicted of heinous crimes from reentering society is an appropriately tailored state action to achieve the interest of keeping the public safe from youthful offenders. Therefore, KRS § 532.045(2) does not violate Section Two of the Kentucky Constitution. While this belief may hold true regarding adult offenders, it is not the case for youthful offenders.

While it is likely a reasonable and legitimate state interest to keep this class of adult offenders away from the people due to their greater likelihood of recidivism, no genuine interest exists with respect to youthful offenders. Youthful offenders are considerably less prone to recidivism when given the opportunity to begin rehabilitation before fully maturing.[86] By keeping youthful offenders incarcerated, a greater danger is imposed on the society by the inverse: reducing the likelihood of meaningful rehabilitation, while increasing the chance of recidivism upon post-maturity release.[87]

B.  Public Policy Considerations

From a public policy standpoint, the goals of society are more effectively met by pursuing the rehabilitation of youthful offenders during the development of their psyche. During this period, they are more susceptible to rehabilitative efforts. At its conclusion, the possibility of true reform is greatly reduced. Additionally, public policy dictates society encourage the self-improvement of youthful offenders. As it currently stands, a youthful offender, subject to the probation prohibition, has little incentive to better himself while incarcerated due to the lengthy sentences upon conviction and absence of behavior-based early release. This perpetuates a greater threat of continued criminal activity inside and out of prison confines.

By amending KRS § 532.045(2) to permit probationary release for youthful offenders seeking probation reconsideration pursuant to KRS § 640.075(4), judges are given the discretion to make their determination on whether the individual has demonstrated commitment and responsiveness to rehabilitating themselves, to the point that they are capable and deserving of reintegrating with society. With this statutory modification, the state would both encourage youthful offenders to devote their time spent incarcerated to self-betterment, while also disincentivizing further unlawful behavior while imprisoned and upon eventual release.

Opponents of the proposed amendment will likely argue that public policy demands heinous criminal activity be disincentivized through probation prohibition, regardless of the offender’s age. Furthermore, they note that the state’s legitimate interest in public safety should be prioritized and pursued through deterrence and incapacitation.

However, due to a youthful offender’s incomplete mental development and lack of emotional maturity, youthful offenders are less likely to fully appreciate the consequences of their actions and long-term decision making, rendering a punishment’s deterrence efforts futile and incapacitation efforts temporary at best. A better, more permanent solution can be found in the encouragement of rehabilitation. Under this method, youthful offenders stand a greater chance of reentering society with the faculties necessary to avoid further criminal activity, accomplishing utilitarian goals of betterment to society through youthful offenders thus improving their post-release lives and society as a whole.

III.  Restoring the Balance in Kentucky by Allowing a Fighting Chance

       With the possible rigid judicial interpretation of KRS § 532.045(2),[88] the Kentucky Legislature now has the opportunity to further evolve the way in which youthful offenders are treated by the criminal justice system. Reforming KRS § 532.045(2) to exempt youthful offenders from its application at probation reconsideration hearings, legislators can rectify the statute’s harmful effects by allowing judicial discretion in whether or not to grant probation based on the circumstances of the individual’s life, the commitment the individual has shown to self-improvement, and the probability that probation would best serve the individual towards living a meaningful life as a contributing member of society.

       A probation system, appropriately tailored to the needs of youthful offenders and their communities, seems to be the puzzle that every state is looking to put together. Unfortunately, despite the greater push by many states on this front, jurisdictions have various, inconsistent methods for the collection and publication of empirical data regarding the success of their respective juvenile justice programs, with sparce mention of program success rates for youthful offenders.[89]

For instance, the Kentucky Juvenile Manual, a publication by the Kentucky Department of Public Advocacy focused on juvenile justice law throughout the state, includes a section on the parole of youthful offenders but provides no layout of how the program operates or its success rate.[90] However, the “Classification and Placement Manual”, published by the Kentucky Department of Juvenile Justice, explains juvenile probation more fully, including the use of placement tiers based on a youthful offender’s ability to function in school, the resources the community is able to provide for their treatment, and the ability of the caregiver to participate in and assist with the program.[91]

There are, however, a few states that keep progressive recidivism data regarding their juvenile justice programs run by the state. For example, in Florida, the Florida Department of Juvenile Justice reported a fifteen percent recidivism rate in 2015.[92] This figure includes juveniles that successfully completed probationary releases, diversion releases, and community programs.[93] While the data on the matter is surprisingly limited, it does seem to indicate a general level of success for state probation programs with natural variation that can be expected from different states with unique problems and resource limitations. Traditional state programs appear to be of adequate quality but given the sensitive nature of the offenses that currently prohibit youthful offenders from probation at age-twenty-one hearings, it is possible that the offerings by the adult and juvenile probation programs will not quite fit the unique needs of youthful offenders.

Following a startling increase in the incarceration rate of minority youth, California shifted incarcerated youthful offenders from state-run juvenile prisons to local rehabilitation centers.[94] A decision made possible after the state was awarded several grants aimed at providing counseling services for trauma, families, substance abuse, situational awareness, and mental health.[95] This reform could serve as an example for other states’ juvenile justice systems, placing the betterment of the youthful offender at the forefront.

In addition, Canada has enacted legislation geared at the rehabilitation and reintegration of youthful offenders.[96] For example, the Youth Criminal Justice Act requires police officers contemplate “extrajudicial measures,” such as referrals to community programs or agencies, before criminally charging a juvenile.[97] However, the social stigma of these programs, in conjunction with their post-imprisonment restrictions, have led to mixed reviews from participants and their families.[98] For example, youthful sexual offenders sentenced to a term of home confinement may be barred from leaving their home, interacting with people below a certain age, or using the internet.[99] Those who violate these restrictions may be detained at the “Young Offender Centre” and placed into isolation for up to seventy-two hours.[100] The province of Alberta has experienced statistical drops in the total youth accused of crimes, total convictions, and the “Youth Crime Severity Index”, in recent years.[101] Those who have found success in these programs attribute it to the programs’ structure, focus on rehabilitation, and the identities of the participants are kept from publication.[102]

The Canadian juvenile justice system’s use of rehabilitative programs for youthful offenders should influence its American counterpart. While this approach may require a significant amount of time and resources from a variety of state actors, the statistical evidence of Alberta’s reduction in total youth crime and serious youth crime should make these contributions worthwhile.[103] The Canadian system has legitimized the goals of youthful offender probation and rehabilitation, which should manifest confidence from American jurisdictions seeking to reform in similar ways.[104]

IV.  Conclusion

In conclusion, KRS § 532.045(2), prohibiting probationary release for youthful offenders seeking probation reconsideration pursuant to KRS § 640.075(4), violates the Eighth Amendment of the United States Constitution, by imposing cruel and unusual punishment, as well as Section Two of the Kentucky Constitution, by authorizing arbitrary state action without a reasonable and legitimate interest. These constitutional violations, at both the federal and state level, present a significant threat to the liberty of an already vulnerable population, and it is this population of at-risk youth that needs protection and separate consideration the most.

 To protect juveniles from this injustice, the Kentucky Legislature must amend KRS § 532.045(2) to permit probationary release for youthful offenders seeking it during their probation reconsideration hearing under KRS § 640.075(4). This amendment would better serve public policy by incentivizing self-betterment and rehabilitation while incarcerated. By prioritizing rehabilitation and allowing the fighting chance for probation, the state will be providing powerful motivation for youthful offenders to take full advantage of the opportunities to better themselves with the goal of early release, reintegration into society, and living meaningful, contributing lives from that point forward. With these benefits in mind, it is clear that the Kentucky Legislature must take this step. This amendment places the question of probation squarely in the hands of the presiding judge. Under this new method, judges exercise their discretion, weighing the youthful offender’s individual circumstances and propensity for rehabilitation, before determining whether the youthful offender and surrounding community would benefit more from the offender’s reintegration into society or further incarceration.

[I] J.D. Candidate 2022, University of Kentucky J. David Rosenberg College of Law.

[2] Bureau of Just. Stat., The Justice System: What is the Sequence of Events in the Criminal Justice System?, (June 3, 2021), https://bjs.ojp.gov/justice-system [https://perma.cc/B8T3-Y3QM].

[3] Nat’l Juv. Def. Ctr., Kentucky, (July 2018), https://njdc.info/practice-policy-resources/state-profiles/kentucky/ [https://perma.cc/2827-JMPA].

[4] Id.; Ky. Rev. Stat. Ann. § 635.020(4) (West 2021).

[5] Nat’l Juv. Def. Ctr., supra note 3; Ky. Rev. Stat. Ann. §§ 635.020(2)–(7) (West 2021).

[6] Ky. Rev. Stat. Ann. § 640.030(2) (West 2006).

[7] Ky. Rev. Stat. Ann. § 640.075(1) (West 2002).

[8] Ky. Rev. Stat. Ann. § 640.075(4) (West 2002).

[9] Bloyer v. Commonwealth, No. 2019-CA-000890-MR, 2020 Ky. App. LEXIS 828, at *10–11 (Ky. Ct. App. Aug. 28, 2020), review granted, (June 9, 2021) and not published by operation of CR 76.28(4)(c) (unpublished decision). After examining this issue of first impression, the Kentucky Court of Appeals concluded that a youthful offender ineligible for probation at his age-eighteen hearing, remained ineligible at his probation consideration hearing. On June 9, 2021, the Supreme Court of Kentucky granted discretionary review.

[10] Bloyer v. Commonwealth, No. 2020-SC-0473-DG, 2021 Ky. LEXIS 204 (June 9, 2021).

[11] Lynn Cothern, Juveniles and the Death Penalty, Coordinating Council on Juv. Just. and Delinq. Prevention 9 (Nov. 2000), https://www.ncjrs.gov/pdffiles1/ojjdp/184748.pdf [https://perma.cc/58JR-ZAPE].

[12] Id. at 1.

[13] Id.

[14] Executions of Juveniles in the U.S. 1976-2005, Death Penalty Info. Center, https://deathpenaltyinfo.org/policy-issues/juveniles/executions-of-juveniles-since-1976 [https://perma.cc/GPN3-7JHK].

[15] Id. From 1985 to 2003, twenty-two youthful offenders, consisting of eleven African-Americans, ten Caucasians, and one Latino, were executed.

[16] Roper v. Simmons, 543 U.S. 551 (2005).

[17] Id. at 556.

[18] Id. at 559.

[19] Id.; Atkins v. Virginia, 536 U.S. 304 (2002) (barring the imposition of capital punishment for the mentally disabled).

[20] Simmons, 543 U.S. at 569.

[21] Id.

[22] Id.

[23] Id.

[24] Id. at 570.

[25] Graham v. Florida, 560 U.S. 48, 82 (2010).

[26] Miller v. Alabama, 567 U.S. 460, 477, 489, (2012).

[27] Id. at 477–78.

[28] Id. at 476–77.

[29] Id. at 477.

[30] Bloyer v. Commonwealth, No. 2020-SC-0473-DG, 2021 Ky. LEXIS 204 (June 9, 2021).

[31] Commonwealth v. Taylor, 945 S.W.2d 420, 423 (Ky. 1997).

[32] Id. at 421.

[33] Id.

[34] Id.

[35] Id.

[36] Id. at 421–22; Ky. Rev. Stat. Ann. § 532.045(2) (West 2014).

[37] Taylor, 945 S.W.2d at 423; Ky. Rev. Stat. Ann. § 640.030(5) (West 2006).

[38] Taylor, 945 S.W.2d at 423.

[39] Id.  

[40] Id.

[41] Ky. Rev. Stat. Ann. § 532.045(2) (West 2014).

[42] Taylor, 945 S.W.2d at 421.

[43] See Graham v. Florida, 560 U.S. 48, 79 (2010). 

[44] See id.

[45] Bloyer v. Commonwealth, No. 2019-CA-000890-MR, 2020 Ky. App. LEXIS 828, at *2 (Ky. Ct. App. Aug. 28, 2020), review granted, (June 9, 2021) and not published by operation of CR 76.28(4)(c) (unpublished decision).

[46] Id. at *3.

[47] Id. at *7.

[48] Id.

[49] Id. at *8.

[50] Id.  

[51] Id. at *24–25.

[52] Id. at *9–10.

[53] Id.

[54] See id.

[55] Id. at *24–31.

[56] U.S. Const. amend. VIII.

[57] Bloyer, 2020 Ky. App. LEXIS 828 at *25 (“Though [the Eighth Amendment] does not mention proportionality, [it] nonetheless encompasses a proportionality requirement”) (citation omitted).

[58] Id. at *27.

[59] Id. at *28.

[60] Ky. Const. § 2.

[61] Moore v. Ward, 377 S.W.2d 881, 883 (Ky. 1964).

[62] Id. at *31–32.

[63] Id. at *32.

[64] See generally Roper v. Simmons, 543 U.S. 551 (2005) (prohibiting the imposition of capital punishment on youthful offenders); Graham v. Florida, 560 U.S. 48 (2010) (prohibiting the imposition of life imprisonment without parole on youthful non-homicide offenders); Miller v. Alabama, 567 U.S. 460 (2012) (prohibiting the imposition of life imprisonment without parole on all youthful offenders regardless of crime).

[65] Bureau of Just. Stat., supra note 2.

[66] U.S. CONST. amend. VIII.

[67] Roper, 543 at 560­–61 (citations omitted).

[68] See Weems v. United States, 217 U.S. 349, 367­–78 (1910) (examining differing judicial opinions on what constitutes excessive punishment).

[69] See Graham, 560 U.S. at 59.

[70] Laurence Steinberg & Elizabeth S. Scott, Less Guilty by Reason of Adolescence: Developmental Immaturity, Diminished Responsibility, and the Juvenile Death Penalty, 58 Am. Psych. 1009, 1010–14 (2003).

[71] Miller v. Alabama, 567 U.S. 460, 469 (2012).

[72] See Graham, 560 U.S. at 68; Roper, 543 U.S. at 569–70.

[73] Miller, 567 U.S. at 471 (citations omitted).

[74] Graham, 560 U.S. at 68 (citations omitted).

[75] Miller, 567 U.S. at 472.

[76] Steinberg & Scott, supra note 70, at 1014.

[77] Nancy J. King & Brynn E. Applebaum, Alleyne on the Ground: Factfinding that Limits Eligibility for Probation or Parole Release, 26 Fed. Sent’g Rep. 287, 291–92 (2014).

[78] Ky. Rev. Stat. Ann. § 532.045(4) (West 2014); Commonwealth v. Taylor, 945 S.W.2d 420 (1997).

[79] Bloyer v. Commonwealth, No. 2019-CA-000890-MR, 2020 Ky. App. LEXIS 828 (Ky. Ct. App. Aug. 28, 2020), review granted, (June 9, 2021) and not published by operation of CR 76.28(4)(c). (unpublished decision). On June 9, 2021, the Supreme Court of Kentucky granted discretionary review to determine whether a youthful offender statutorily exempt from probation at his age-eighteen hearing, was also exempt at his probation reconsideration hearing. As of December 29, 2021, no decision has been rendered.

[80] Steinberg & Scott, supra note 70, at 1010.

[81] See Aldon Thomas Stiles, Come July, California Will Swap Juvenile Jails for Reform-Minded Rehab Centers, L.A. Sentinel (Mar. 18, 2021), https://lasentinel.net/come-july-california-will-swap-juvenile-jails-for-reform-minded-rehab-centers.html [https://perma.cc/H6JM-3XXF]; Otiena Ellwand, Breaking the Youth Crime Cycle: New Strategies Aiming to Rehabilitate Young Offenders Have Mixed Results, Edmonton J. (Aug. 18, 2016), https://edmontonjournal.com/news/insight/breaking-the-youth-crime-cycle-new-strategies-aiming-to-rehabilitate-young-offenders-have-mixed-results [https://perma.cc/GR4Q-SDCN].

[82] Ky. Const. § 2.

[83] Arbitrary, Merriam-Webster.com, https://www.merriam-webster.com/dictionary/arbitrary [https://perma.cc/HRX5-Z26K].

[84] Ky. Rev. Stat. Ann. § 532.045(2) (West 2014).

[85] Kentucky Milk Mktg. and Antimonopoly Com'n v. Kroger Co., 691 S.W.2d 893, 899 (Ky. 1985).

[86] Steinberg & Scott, supra note 70, at 1014–15.

[87] See id. at 1015–16.

[88] Bloyer v. Commonwealth, No. 2019-CA-000890-MR, 2020 Ky. App. LEXIS 828 (Ky. Ct. App. Aug. 28, 2020), review granted, (June 9, 2021) and not published by operation of CR 76.28(4)(c) (unpublished decision).

[89] See Juvenile Justice Services, Juv. Just., Geography, Pol’y, Prac. & Stat., http://www.jjgps.org/juvenile-justice-services [https://perma.cc/HFD9-Q5L7].

[90] Kentucky Dep’t of Pub. Advoc., Juv. Advoc. Manual 29­–32 (2013), https://dpa.ky.gov/Public_Defender_Resources/Documents/JuvenileManualFINAL060513.pdf [https://perma.cc/J5ME-6FHZ].

[91] Kentucky Dep’t of Juv. Just., Classification and Placement Manual (2019), https://djj.ky.gov/200%20Policy%20Manual/Classification%20and%20Placement%20Manual%20040519.pdf [https://perma.cc/3FWM-E4JB].

[92] Juvenile Justice Services, supra note 89.

[93] Id.

[94] Stiles, supra note 81. 

[95] Id.

[96] Government of Canada, The Youth Criminal Justice Act Summary and Background, Government of Canada, https://www.justice.gc.ca/eng/cj-jp/yj-jj/tools-outils/back-hist.html (last modified July 7, 2021) [https://perma.cc/9MB7-Z3C2].

[97] Government of Canada, The Youth Criminal Justice Act Summary and Background, Government of Canada, https://www.justice.gc.ca/eng/cj-jp/yj-jj/tools-outils/back-hist.html (last modified July 7, 2021) [https://perma.cc/9MB7-Z3C2 ].

[98] See Ellwand, supra note 81.

[99] Id.

[100] Id.

[101] Id.

[102] Id.

[103] See Id.

[104] Id.

A Strike Against Black Lives Matter: A Batson Violation or Preserving Impartiality

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Andrew Moore [I]

Introduction

We are “a government of laws, not of men.”[2] Yet an impartial, disinterested group of people ultimately stand between the accused and the power of the State to take his or her right to life and liberty away.[3] Our society wants to believe the jury system determines guilt or innocence on impartial and fair fact,[4] but that is not always the case as the jury is made up of people—each coming with biases, beliefs, perceptions.[5] The voir dire is the process the courts use to ensure members of the petit jury, those who determine guilt or innocence, will follow the judge’s instructions and determine the outcome of the case based solely on the facts presented to them at trial.[6] The process differs slightly in federal and state courts as voir dire in federal court is conducted mainly by the judge, whereas, in most state courts the attorneys play a more active role in vetting jurors.[7]

The voir dire is not supposed to be a major part of the trial, but in recent jurisprudence it has come under closer scrutiny. Parties have weaponized the process, particularly prosecutors, by using discriminatory tactics to remove people from the jury pool based off their race, sex, and ethnicity.[8] In order to get into the particular legal questions of this Note, it is important to understand how members of the petit jury are selected or removed from sitting at trial—the ultimate objective to sit, as much as possible, an impartial jury.[9] The first step to seating a jury is a random selection of members from the community.[10] Second, those selected are divided into a smaller group and sent to a courtroom for their specific case.[11] Lastly, the parties then can challenge jurors and try to have jurors they find not to be sympathetic to their side removed.[12] The Supreme Court has clearly opined that voir dire plays an essential part in protecting the defendant’s right to an impartial jury allowing the judge and parties to discover potential bias in a venireperson.[13] An attorney may remove a venireperson by exercising a “challenge for cause” asking the judge to remove the juror for a reason of impartiality or bias or by using a peremptory strike.[14]

A peremptory strike allows an attorney to remove a venireperson from the jury pool for any reason, but they are statutorily limited to a set number.[15] The idea of a peremptory strike is it ensures the parties are given a “fair and impartial jur[y]” by allowing “each side to exclude those jurors it believes will be most partial toward the other side . . . eliminating extremes of partiality on both sides, thereby assuring the selection of a qualified and unbiased jury.”[16] However, recent studies have made it increasingly clear prosecutors use peremptory strikes to create prosecution friendly juries by excluding minorities and women to create a nearly all-white male jury.[17]

As many Americans have begun to take a more active role in confronting systemic racism, Black Lives Matter (BLM) has become a mainstream political and civil rights group seeking change to society, focusing primarily on the judicial system.[18] Parties have begun to inquire into juror’s support of BLM.[19] This inquiry has led to an increase in the use of peremptory strikes to remove supporters of BLM when the judge has refused to remove the juror for cause based on him or her supporting the group.[20] As BLM has become more prevalent in society, it is apparent that questions about a venireperson’s support for the group will become more prevalent.[21] An issue courts now must decide is whether asking venirepersons about BLM and using a peremptory strike to remove the venireperson violates the Equal Protection Clause, or does using a peremptory strike on a BLM supporter provide a race-neutral reason ensuring a fair and impartial jury.[22]

North Carolina upheld the convictions of Black men despite the prosecutor asking a venireperson about their views on BLM and using a peremptory strike to then remove the juror.[23] However, Nevada ordered a new trial after criticizing the prosecutor for asking about BLM saying it was a pretextual reason to remove a Black juror.[24] In State v. Gresham, the Minnesota Court of Appeals affirmed a lower court decision that acknowledged “racial overtones” surrounding the prosecution’s line of questioning, but declined to accept the defense’s Batson challenge “because the . . . question[ing] did not establish purposeful discrimination based on the juror’s race.”[25] California is set to soon rule on a prosecutor peremptorily striking a Black woman for her answering on a questionnaire that she supports BLM.[26]

Part I of this Note reviews the Supreme Court’s decision in Batson v. Kentucky and its progeny to eliminate the use of discriminatory peremptory strikes. Part II looks at how the lower courts and state courts have been expanding Batson. Part III shows how asking BLM impacts a juror’s rights of Equal Protection and First Amendment rights. Part IV discusses how the defendant’s rights to an impartial jury and a juror’s right to be equally protected by the law require courts to not allow parties to ask about supporting BLM because it provides too easy of a pretextual reason to discriminate against minority juror members.

I.  Batson and Its Progeny

In Batson, after the prosecutor used all of his peremptory strikes to remove all Black people from the venire, Mr. Batson, a Black man, was convicted by the jury of second-degree burglary and receiving stolen goods.[27] Mr. Batson argued that the prosecutor had violated his Sixth and Fourteenth Amendment right “to a jury drawn from a cross section of the community,” and violated his right to equal protection of the laws.[28] The intention of the Supreme Court in Batson was to make it easier for a defendant to challenge a prosecutor from purposefully removing minorities from the jury when a person of their race stood accused.[29] The Court stated, “The Equal Protection Clause guarantees the defendant that the State will not exclude members of his race from the jury venire on account of race, or on the false assumption that members of his race as a group are not qualified to serve as jurors.”[30] The Court made clear that not only does purposeful discrimination violate the Equal Protection Clause, it also calls into question the defendant’s right to an impartial jury, the constitutional protection from “the arbitrary exercise of power by [a] prosecutor or judge.”[31]

In Batson, the Supreme Court created a three step analysis to use when a party objects to the use of a peremptory strike based on an impermissible stereotype of a venire member.[32] First, the opponent to the strike must establish an “inference of purposeful discrimination” using “all relevant circumstances.”[33] This requires the defendant to establish (a) “that he is a member of a cognizable racial group”; (b) the prosecution has improperly utilized its peremptory strikes to “remove from the venire[,] members of the defendant’s race”; (c) that he “is entitled to rely on the fact, as to which there can be no dispute, that peremptory challenges constitute a jury selection practice that permits ‘those to discriminate who are of a mind to discriminate’”; and (d) that the surrounding “facts and any other relevant circumstances raise an inference that the prosecutor used that practice to exclude the veniremen from the petit jury on account of their race.”[34] Second, the prosecutor must then provide a race-neutral reason for excusing the juror.[35] Finally, the trial court is to weigh the reason given by the prosecutor based on the totality of the circumstances and decide if the reason or reasons given are true or merely pretextual covering a discriminatory intent.[36]

Batson immediately received criticism as many legal scholars, and a sitting Supreme Court Justice, believed the Court did not do enough to end the discrimination against minorities. In his concurring opinion, Justice Marshall applauded the Court’s efforts, but predicted discriminatory practices would continue—unless peremptory challenges were eliminated completely.[37] Justice Marshall’s argument for abolishing the peremptory strike in its entirety was it would be too easy for prosecutors to provide a race neutral explanation cover rendering the courts largely ineffective in stopping discrimination.[38] Justice Marshall’s opinion proved accurate as prosecutors and other parties have continually discriminated, consciously or unconsciously, against minorities evidenced by both prosecutors own accounts and statistical analysis.[39]

In subsequent decisions, the Court has explained how “discriminatory use of peremptory challenges harms the excluded jurors and the community at large.”[40] The jury is a well thought out safeguard to the powers of the legal system which allows the people to trust the legal system knowing there is a buffer between them and the oppressive power of the State.[41] In Powers v. Ohio, the Supreme Court expanded Batson by ruling the Equal Protection Clause not only protects defendants from discrimination, but it also protects each individual juror from being discriminated against.[42] The Court recently reaffirmed the importance of extending Batson to each juror saying, “[o]ther than voting, serving on a jury is the most substantial opportunity that most citizens have to participate in the democratic process.”[43] Realizing how important the perception of fairness is to the judicial system, the Supreme Court expanded Batson to civil cases seeking to rid the courtroom of “state-sponsored group stereotypes rooted in, and reflective of, historical prejudice.”[44]

The Court repeatedly holds discrimination has no place in the courtroom and hurts society at large, yet the Court continues to reject a growing push to get rid of peremptory strikes. Many legal scholars and activists support Justice Marshall’s argument that peremptory strikes have become a tool for discrimination used to deprive defendant’s right to a fair trial, and the only way to ensure fairness is to completely eliminate the peremptory strike.[45] However, proponents of the peremptory strike remain steadfast in believing the peremptory strike must remain a part of the voir dire process.[46] Courts and proponents of peremptory strikes maintain the benefit of ensuring a fair and impartial trial outweighs the cost of discrimination.[47]

One argument for continuing the use of peremptory strikes is it allows the attorneys, who are most familiar with the facts and best equipped to detect bias, to strike jurors who they know will be prejudice against their client without being able to articulate a for-cause reason.[48]In her concurring opinion in J.E.B. v. Alabama ex rel. T.B., Justice O’Connor described peremptory strikes as a well-established and needed tradition that allows both sides to feel secure in knowing they will be tried in front of an impartial jury.[49] The issue of peremptory strikes is judged with a balancing test, and proponents of peremptory strikes argue the defendant’s right to a fair and speedy trial is benefited from their use.[50] Peremptory strikes also serve the goal of efficiency and ensuring the voir dire is quick allowing parties to focus on the merits of the case.[51] Lastly, proponents argue peremptory strikes actually protect jurors because it allows the parties to remove them without having to dig too far into the potential juror’s private life offending his or her right to privacy.[52] While there are some benefits of peremptory strikes, the question still remains, do they outweigh the costs of court room discrimination? Should our society tolerate questions “tantamount to interrogating [someone’s] Blackness.”[53]

The Batson decision was a good starting point by the Supreme Court to clean the courtroom of discriminatory practices, but it did not do enough. Our justice system only works if people perceive it to be fair and impartial.[54] The U.S. Constitution is clear on how important the right to a fair trial is before a person’s life, liberty, and property are taken away.[55] The courts appear to be set in keeping the peremptory strike as being a way to ensure a fair jury.[56] However, it appears misplaced to utilize a “mere strategic device” to violate someone’s equal protection rights.[57]

If the courts are to amend their public image, they need to expand Batson to exclude prosecutors from (a) asking questions that clearly target a juror’s race, and (b) striking a potential juror because of their affiliations with groups seeking to advance equality for minorities. Many courts, at both the federal and state level, have already begun to expand Batson to other cognizable groups and expressed a desire to protect a jurors’ First Amendment rights.[58] These cases will illustrate why the courts should not allow questions about affiliations that easily allow for pretextual reason to exclude a juror.

II.  Expanding Batson to Other Cognizable Groups

The lower courts and state courts have wrestled with Batson ever since it was decided. Since then, the courts have had Batson challenges that the Supreme Court could not have envisioned with only a handful reaching the Supreme Court since deciding Batson.[59] Courts now have ruled on many issues involving peremptory strikes and discrimination with the problem being inconsistent on how to apply Batson beyond race, ethnicity, and gender.[60] In the federal system, courts have applied Batson to peremptory strikes used against potential jurors that are members of groups that have traditionally received heightened judicial scrutiny.[61] Additionally, some lower courts have found Batson violations in striking potential jurors because they were “Jews, Italians, whites, and Native Americans.”[62]

The groups that have proven hardest for the courts to decide are groups that an individual chooses to affiliate with or join.[63] Both state and federal courts have drawn a fine line between a permissible strike and a Batson violation. When evaluating the permissibility of a religion-based peremptory challenge, the distinguishing fact appears to be whether the strike was based on religious affiliation, which would be unconstitutional, or on the juror’s religious beliefs or belief system, which is allowed due to beliefs being an indicator of how the juror may decide the case.[64] Then-Judge Alito opined that questioning if someone was a Quaker was fine because it would indicate whether or not she could vote for the death penalty.[65] These distinctions between strikes, due to affiliations, or strikes, due to beliefs, will prove to be the best analogy for determining if asking about BLM is a Batson violation or permissible. Before analyzing the cases that deal with peremptory strikes and affiliations, it is important to see how the courts have dealt with a juror’s group affiliations and for-cause challenges.

A.  For-Cause Removal of Jurors Based on Group Affiliations

In U.S. v. Salamone, the defendant was charged with multiple firearms charges.[66] The trial judge asked venire members if they supported the National Rifle Association (NRA) or had any affiliation with the NRA.[67] The trial court then dismissed one potential juror and five potential alternates from the venire.[68] The Third Circuit discussed how allowing “trial judges and prosecutors to determine juror eligibility based solely on their perceptions of the external associations of a juror” would afford them too much arbitrary power and would call into question the impartiality and fairness of the jury.[69] The court went onto to criticize the government’s argument that someone affiliated with the NRA would not be a fair juror because the case was gun-related.[70] The court pointed out that juror competence is an individual assessment and excluding “for cause of NAACP members [in] enforcement of civil rights statutes, Moral Majority activists from pornography cases, [or] Catholics from cases involving abortion clinics” bears not on their ability to be a juror.[71]

Courts have affirmed trial courts’ decision allowing a former police officer or police officer’s spouses to sit on the jury.[72] In United States v. McIntyre, the United States Court of Appeals for the Tenth Circuit denied a criminal defendant’s appeal arising from a jury member’s former occupation as a police officer. Citing the trial judge’s “careful and thorough examination” of the former policeman, in conjunction with the surrounding circumstances, the court failed to identify any error requiring judicial relief.[73] This notion has also been applied in the context of federal employees. The Supreme Court ruled employment to the federal government is not grounds for dismissal,[74] and a lower court reasoned that a federal employee could serve as juror even when her employer is a party to the case.[75]

The courts are clear that they do not believe affiliations are enough to dismiss a juror for cause without the trial judge finding the potential juror has actual biasness.[76] Jurors are not to be judged for being part of a group because that does not show if they are competent to fairly decide a trial. These cases dealing with dismissal by a for-cause challenge are illustrative of how courts can protect the right to a fair trial but not infringe upon the rights of the jurors. But why treat peremptory strikes so differently when the potential for discrimination is larger and often changes the outcome of a case?[77]

B.  Peremptory Strikes Based on Religious Affiliations

State and federal courts have struggled to create a consistent rule for evaluating peremptory strikes based on affiliations with a religious group. Again, the deciding factor has been whether the strike was based on religious affiliations or a juror’s belief system.[78] There is a trend of cases where judges allow peremptory strikes based on a juror’s religious activities or beliefs but decline to extend this to religious affiliation.[79] Some states allow jurors to be removed due to the juror’s religious affiliation, reasoning the defendant’s right to having a fair and impartial jury is greater than that of the individual jurors.[80] Comparing two cases will show how inconsistent state courts have been when applying Batson to affiliations which is a problem as the makeup of the jury often determines the outcome of the trial.

In State v. Davis, the prosecutor used a peremptory strike to remove a Black man from jury service due to his affiliation with the Jehovah’s Witness religious group.[81] The trial court asked the prosecutor to state her reason for striking the Black juror after the defense raised a Batson challenge.[82] The prosecutor was upfront saying the juror’s affiliation with Jehovah’s Witness was the sole reason for her strike because “in [her] experience J[e]hovah Witness are reluctant to exercise authority over their fellow human beings in this Court House.”[83] The prosecutor explained, “I would never fail . . . to strike a J[e]hovah Witness,” if she had a peremptory strike still to use at the close of jury selection.[84]

The Minnesota Supreme Court analyzed the Supreme Court’s ruling in Powers v. Ohio.[85] There, the Court examined a claim of “cross-bias” discrimination concerning a white defendant and black juror. Ultimately, the Court concluded that the removed juror’s right to equal protection had been violated, though the defendant’s had not, because (a) “racial discrimination ‘invites cynicism respecting the jury’s neutrality and its obligation to adhere to the law’” and (b) “the juror rejected solely because of skin color ‘suffers a profound personal humiliation.”[86] The Minnesota Supreme Court started their review by asking if the peremptory strike was used to “perpetrate religious bigotry to the extent that the institutional integrity of the jury had been impaired.”[87] The court, like so many other opinions, made sure to emphasize the importance of the peremptory strike and its aid in ensuring a fair trial.[88] The court conceded that some unbiased jurors are excused, but that was outweighed by the need to ensure no biased jurors could influence the decision.[89] The court then highlighted and explained the differences between religious discrimination and race or gender discrimination.[90]

The opinion distinguished Davis with the fact that religion has not faced the same bias that race has in the use of peremptory strikes.[91] The court emphasized how, unlike race, religious affiliations can give insight into one’s beliefs, which provide a good indicator on how one will decide the facts, and the assumption is not based on a bias against the potential juror.[92] Lastly, the court stressed that “religious affiliation (or lack thereof) is not as self-evident as race or gender,” which would complicate voir dire and invade a jurors right to privacy.[93] In denying certiorari, Justice Ginsburg agreed with the Minnesota Supreme Court’s reasoning stating a juror is much more easily discriminated against due to self-evident characteristics.[94] She also discussed how extending Batson to religious affiliation would complicate the voir dire and posed some practical concerns.[95]

In State v. Fuller, a case factually similar to Davis, the Supreme Court of New Jersey decided to not allow jurors to be excused for their religious affiliations.[96] Here, a prosecutor struck two jurors due to their religious practices.[97] One juror was struck for wearing what the prosecutor described as a “Muslim ‘garb’ (‘a skull cap or rather long outer garment’),” and the other was struck due to his work as a missionary which indicated to the prosecutor that both jurors would favor the defendant.[98] On review, the Court opined that this was a blanket stereotype of an individual which the law sought to eliminate.[99] While the court agreed that finding a biased belief would be enough to remove a juror, removal based solely on a stereotype would frustrate the goals of peremptory strikes and could not be permitted.[100] Following, the New Jersey Supreme Court agreed with two federal opinions that religious affiliations are part of a cognizable group and may not be the basis for a peremptory strike.[101]

These two cases illustrate the difficulty jurors’ affiliations pose in the voir dire process. Trial courts are forced into balancing the protected rights of the defendant and the potential juror. Some argue that because the defendant’s life, liberty, and property are on the line, attorneys should be able to ask about affiliations and strike jurors based on them to ensure a fair trial.[102] While others argue, asking about group affiliations has become another way for parties to discriminate against jurors they find to not be sympathetic to their side.[103] The problem with allowing questions about group affiliations is they give parties pretextual reason to exclude potential jurors who are part of cognizable groups. Lawyers, primarily prosecutors, have proved to be quite good at providing race-neutral reasons for excluding jurors that are but a mere pretext to race.[104] The ability to ask about jurors’ affiliations to groups who are socially and politically active should be a violation of their First Amendment rights and will undoubtedly be used to target minorities. The next section of this Note will look at how asking about BLM is harmful to defendants, the venire member, and society as a whole.

III.  Black Lives Matter Protected by the First and Fourteenth Amendments

“Injustice anywhere is a threat to justice everywhere.”[105] The idea that our justice system can survive racial stereotypes is a farce. People are looking for reassurance that they will be treated equally under the law. The ultimate danger of continuing to allow parties to ask racially charged questions is people will lose faith in the justice system.[106] The American democratic experience is built on the idea people will not be targeted for their beliefs or for whom they affiliate with.[107] It is a good thing for society when citizens actively seek to participate in the democratic process. Jury duty has been repeatedly recognized by the courts as one of the best ways for someone to participate in that process.[108] This means the court needs to be seen as a protector serving in the democratic process, not an agent for carrying out blanket stereotypes preventing participation.

While many people may feel jury duty is a waste of time or an extreme annoyance, there are some who look at jury duty as one of the best means to participating in the democratic process. The Supreme Court in 2019 said, “[o]ther than voting, serving on a jury is the most substantial opportunity that most citizens have to participate in the democratic process.”[109] Many people, like Crishala Reed, are excited to serve as a jury member and participate in the judicial system.[110] Ms. Reed went into the courtroom excited to be on the jury serving her community, but her hopes were cut short when a prosecutor used a preemptive strike to remove her from the jury pool after she said she supported BLM.[111] In response, Ms. Reed said, “‘I felt targeted . . . [i]t was a life-changing experience for me, personally.’”[112]

Her story illustrates how hurtful and embarrassing discrimination in the voir dire can be. As the Supreme Court recognized, not only is the right of the defendant implicated in discriminatory use of peremptory strikes, but the image of the justice system is tarnished, and the individual juror’s right has been infringed.[113] The justice system works best when the system is perceived as inclusive and fair, not excluding people based on their affiliations.[114] Courts are running into the danger of turning trials into a show of who supports what group. If obvious racially charged questions are allowed to persist, people will lose faith in the judicial system.

One of the problems with allowing a party to question someone’s support of BLM is that it is hard for a venire person to fully answer that question. It is safe to assume a majority of people will agree each person’s individual life matters and would affiliate with a group that promotes that general idea. However, the juror may not necessarily support all the beliefs that BLM supports. Allowing the question about supporting BLM, gives prosecutors an easy way to ask a question which allows them to get their preferred jury—mostly white males.[115]

Another harm with asking about BLM is it has great potential to infringe on an individual’s fundamental rights. The Equal Protection Clause guarantees an individual equal treatment under the law and provides protection for an individual when he or she seeks to exercise a fundamental right.[116] A party removing a venireperson for supporting BLM has the effect of a judge enforcing a stereotype that infringes on the right of the individual to assemble and affiliate with whomever they want. An affiliation with a group is not a good enough reason to remove someone from participating in the democratic process, and courts have not allowed removal based solely on affiliation.[117]

We want people to feel free to participate in democracy, whether that be by voting, serving in the jury, or seeking change through engaging in intellectual debate and activism. BLM has become a mainstream movement for seeking such change. No one should be barred from serving because they are exercising rights so dear and precious to our democracy. Let alone being barred by the very system supposed to protect those rights. If people are worried that questions about BLM will create impartial juries, there are already readily available safeguards and procedures in place that will ensure the jury stays as fair as possible. The safeguard is allowing for questions that go to someone’s beliefs, but not allowing questions on affiliations that perpetuate and enforce stereotypes. The good news is courts already have a workable framework with cases dealing with religious groups, and other well-known groups, which will allow them to determine these apparent conflicting rights.

IV.  Solutions

Legal scholars and practitioners propose many ways to stop discrimination from being a factor in picking a jury. On one extreme, there are people who argue for an out right end to the use of peremptory strikes to pick a jury.[118] Opponents of the peremptory strike join Justice Marshall in his Batson concurrence, arguing that as long as the peremptory strike is allowed, parties will abuse it to discriminate against jurors. While this may be the best way to ensure against discrimination, there are two main issues with this argument. Firstly, the accused is the one with his or her life and liberty at stake, and his or her attorney needs to have all the tools available to them to ensure a fair trial. Secondly, too many Justices and judges believe in the peremptory strike and are unwilling to end the practice all together.[119] Therefore, this is not a good or viable solution as of now.

However, there are two solutions which would allow courts to more effectively police and stop the use of discriminatory peremptory strikes. One is to follow the Nevada Supreme Court’s Cooper v. State analysis and question the relevance of such questions.[120] The other is to rework the framework of Batson to discourage the use of questions asking about affiliations with socially active groups.[121]

In Cooper v. State, the Nevada Supreme Court reviewed the appeal of a criminal defendant convicted of child abuse, neglect, or endangerment, and some domestic violence related charges.[122] During voir dire, the prosecutor asked venirepersons if they had a strong opinion about BLM.[123] On appeal, the court found a Batson violation, thus vacating and remanding.[124] The court noted how the question itself was problematic with “indisputable racial undertones” and had little-to-no relevance to the case.[125] Combined with the fact that the prosecutor used 40% of its peremptory strikes to remove two of three jurors Black jurors from jury was enough to find a violation of the Equal Protection Clause.[126]

This is a good approach to eliminating discrimination from the voir dire. One, if there are no racial issues at stake in the case, then the question about affiliating with BLM should be outright barred. As several cases discussed in this Note have shown, affiliations do not reflect on a juror’s ability to fairly decide a case.[127] Questions about one’s beliefs could still be allowed to ensure an impartial jury, but beliefs are always relevant to a case whereas affiliations usually are not. After questions about support for BLM alerted the Nevada Supreme Court to possible discrimination, the Court took appropriate action by scrutinizing the statistics of Black Jurors being removed.[128} If a party wants to ask about BLM and like groups, an appellate court should then be more willing to find a Batson violation when the statistics show a pattern of discrimination not the usual deference to the trial court. This is a good approach for how to evaluate Batson violations where there are no racial implications, but unfortunately, racial issues are relevant in cases like the O.J. Simpson case or the Derek Chauvin trial.[129] This is where a slight reworking of Batson comes into play.

To show a Batson violation, a party alleging a violation must make a prima facie showing of intentional discrimination to remove a juror with the trial judge considering all the relevant circumstances.[130] The burden will then be on the opposing party to provide a race neutral reason for removing the juror.[131] Then, the prosecutor needs to offer a non-discriminatory based explanation that is a race neutral explanation for removing the juror.[132]

When a party asks questions about one’s views of BLM, the courts should assume a prima facie case has been made by the party challenging the peremptory strike. No further evidence should be needed to show discrimination. After all, even if one is removed from the jury, the damage to the court’s image can have lasting effects.[133] Once the court allows the challenge to the peremptory strike, the burden on the party exercising the peremptory strike should be raised to a level not satisfied by general explanations for the use of the strike which often reflect racial stereotypes.[134] General explanations should not be accepted because they do not provide a “neutral explanation”[135] to a specific question that targets one fundamental right to association. The courts have a “duty to determine if the defendant has established purposeful discrimination.”[136] The prosecutor should need to give an explanation as to what answer the juror gave that called into question his or her credibility to be impartial. They need to be able to articulate a plausible reason for bias, which should be more than just not liking the demeanor or appearance of the venireperson.[137] The right to freely assemble and affiliate is a treasured right we hold in our society. It is upsetting to allow people to be removed from a jury simply because they affiliate or support a group for social change.

If the court is worried about prejudice slipping into the jury, the court is always free to remove a juror for cause. This is where looking to precedent on removal for religious reasons will help. If the venireperson were to give an answer that his belief would affect his judgment, a for-cause challenge would remove him or her. Questions that go towards a general belief system are clearly allowed. But questions that make jurors feel singled out, discriminated against or amount “to interrogating their Blackness” have no place in voir dire.[138]

V. Conclusion

Courts can still easily administer a fair trial without allowing for questions that ask about a venireperson’s support or affiliation with a group. The rights of the defendant to an impartial jury cuts both ways in this argument. A party is entitled to a fair and impartial jury whose beliefs should be found out in voir dire, but a party can easily do that by asking about beliefs not affiliations. However, by allowing for questions about BLM a defendant’s right to a fair trial is much more likely to be infringed because when a prosecutor is able to sit a predominately white jury, they are more likely to get a conviction.[139] The rights of all the people involved a case, the defendant and jurors, are harmed when discrimination creeps into the court.[140] The court system is an integral part of our society that needs to have a clean, clear perception for society to believe in equitable justice. The benefits of having a trial free of racial prejudice are obvious. The courts should take an affirmative step in clearing out racial prejudice by not allowing questions about BLM and similar groups when there are many alternative questions to find out one’s belief.

[I] JD Expected 2022, University of Kentucky J. David Rosenberg College of Law; B.S. in Finance, 2014, Mississippi College.

[2] Richard Samuelson, A Government of Laws, Not Men, 17 Claremont Rev. Books: J. Pol. Thought And Statesmanship,45, 46 (2017) (reviewing Richard Ryerson, John Adams’s Republic: The One, the Few, and the Many (2016) and Luke Mayville, John Adams and the Fear of American Oligarchy (2016)) (quoting John Adams on the foundation of the American republic).

[3] Batson v. Kentucky, 476 U.S. 79, 86 (1986).

[4] Powers v. Ohio, 499 U.S. 400, 413 (1991).

[5] Cynthia Lee, A New Approach to Voir Dire on Racial Bias, 5 U.C. Irvine L. Rev. 843, 847 (2015).

[6] Id. at 845.

[7] Id.

[8] Batson, 476 U.S. at 88 (holding that race-based peremptory challenges violate the Equal Protection Clause of the Fourteenth Amendment); J.E.B. v. Alabama ex rel. T.B., 511 U.S. 127, 145 (1994) (holding that gender-based peremptory challenges violate the Equal Protection Clause of the Fourteenth Amendment). The Supreme Court has only recognized peremptory challenges based solely upon the cognizable characteristics of race and gender as unconstitutional. However, this Note, will also examine lower court and state court rulings of challenges based on sexual orientation, religion, and certain group affiliations.

[9] Michael L. Neff, In Defense of Voir Dire: Legal History and Social Science Demand Appropriate Voir Dire, 17 Ga. Bar J. 14, 15 (2011) (quoting Thomas Jefferson “I consider trial by jury as the only anchor ever imagined yet by man, by which a government can be held to the principles of its constitution.”).

[10] Flowers v. Mississippi, 139 S. Ct. 2228, 2238 (2019).

[11] Id.

[12] Id.

[13] J.E.B, 511 U.S. at 143–44.

[14] Mark E. Wojcik, Extending Batson to Peremptory Challenges of Jurors Based on Sexual Orientation and Gender Identity, 40 N. Ill. U. L. Rev. 1, 4 (2019).

[15] Id.

[16] J.E.B., 511 U.S. at 147 (O’Connor J., concurring) (quoting Holland v. Illinois, 493 U.S. 474, 484 (1990)).

[17] Elisabeth Semel et al., Whitewashing the Jury Box: How California Perpetuates the Discriminatory Exclusion of Black and Latinx Jurors, 13 (2020).

[18] Abbie Vansickle, You Can Get Kicked Out of a Jury Pool for Supporting Black Lives Matter: But is it Legal? A California Appeals Court is Going to Decide, The Marshall Project (Jul. 7, 2020, 6:00 AM), https://www.themarshallproject.org/2020/07/07/you-can-get-kicked-out-of-a-jury-pool-for-supporting-black-lives-matter [https://perma.cc/EYL2-4ZUR].

[19] Id.

[20] Id.

[21] Id.

[22] Id.; Batson v. Kentucky, 476 U.S. 79, 86 (1986); U.S. Const. amend. XIV, § 1.

[23] State v. Campbell, 846 S.E.2d 804, 806-07, 811 (N.C. Ct. App. 2020).

[24] Cooper v. State, 432 P.3d 202, 206 (Nev. 2018).

[25] See State v. Gresham, No. A15-1691, 2016 Minn. App. Unpub. LEXIS 1104, at *1 (Minn. Ct. App. Dec. 19, 2016).

[26] Vansickle, supra note 18.

[27] Batson, 476 U.S. at 82–83.

[28] Id. at 83.

[29] Id. at 85–86.

[30] Id. at 86 (citation omitted).

[31] Id.

[32] Batson, 476 U.S. at 96.

[33] Id.; Flowers v. Mississippi, 139 S. Ct. 2228, 2243 (2019) (stating defendants may use statistical evidence of peremptory strikes used against black prospective jurors compared to white prospective jurors, evidence of disparate questioning and investigation of black and white jurors, a comparative analysis of those struck and left on the case, prosecutions reason for striking the juror, relevant history from past case, and other relevant circumstances showing racial discrimination.).

[34] Batson, 476 U.S. at 96. Following its decision in Batson, the Supreme Court has broadened the scope of this element. See Powers v. Ohio, 499 U.S. 401, 415 (1991) (holding that a criminal defendant may assert a claim of purposeful discrimination in jury selection, irrespective of whether he and the excluded jurors were of the same racial group); Edmonson v. Leesville Concrete Co., 500 U.S. 614, 630 (1991) (holding that private parties in a civil suit are barred from racially discriminatory peremptory strikes); Georgia v. McCollum, 505 U.S. 42, 59 (1992) (holding that a criminal defendant is barred from racially discriminatory peremptory strikes); J.E.B. v. Alabama ex rel. T.B., 511 U.S. 129, 146 (1994) (holding that gender-based peremptory strikes violate the Equal Protection Clause).

[35] Batson, 476 U.S. at 98.

[36] Flowers, 139 S. Ct. at 2241.

[37] Batson v. Kentucky, 476 U.S. 79, 102–03 (1986) (Marshall, J., concurring).

[38] Id. at 105–06.

[39] Semel, supra note 17, at 36.

[40] Powers v. Ohio, 499 U.S. 400, 406 (1991).

[41] Id. at 406–07.

[42] Id. at 409.

[43] Flowers v. Mississippi, 139 S. Ct. 2228, 2238 (2019) (citing Powers v. Ohio, 499 U.S. 400, 407 (1991)).

[44] J.E.B v. Alabama ex rel. T.B., 511 U.S. 127, 128 (1994).

[45] Batson v. Kentucky, 476 U.S. 79, 105 (1986) (Marshall, J., concurring); Semel, supra note 17, at 36.

[46] See A.C. Johnstone, Peremptory Pragmatism: Religion and the Administration of the Batson Rule, 1998 U. Chi. Legal F.441, 452–55 (1998).

[47] J.E.B, 511 U.S. at 146–51 (1994) (O’Connor J., concurring) (arguing that gender-based peremptory strikes should be barred from government use but preserved for civil litigants and criminal defendants); Johnstone, supra note 46, at 461; see Michael L. Neff, In Defense of Voir Dire: Legal History and Social Science Demand Appropriate Voir Dire, 17 Ga. Bar J. 14, 18, 20 (2011).

[48] Johnstone, supra note 46, at 444.

[49] J.E.B., 511 U.S. at 147 (O’Connor J., concurring).

[50] Johnstone, supra note 46, at 459.

[51] Id. at 444.

[52] Id. at 445.

[53] Andrew Karpan, When Can a Juror Say Black Lives Matter?, LAW 360, (Aug. 9, 2020 8:02 PM), https://www.law360.com/articles/1299398 [https://perma.cc/D4RR-YSQS].

[54] J.E.B., 511 U.S. at 136–37.

[55] See U.S. Const. amend. V; U.S. Const. amend. VI; U.S. Const. amend. XIV.

[56] See J.E.B., 511 U.S. at 147–48 (O’Connor J., concurring) (describing the benefits of peremptory strikes); See Batson, 476 U.S. at 98–99.

[57] Cheryl G. Bader, Batson Meets the First Amendment: Prohibiting Peremptory Challenges that Violate a Prospective Juror’s Speech and Association Rights, 24 Hofstra L. Rev. 567, 570 (1996).

[58] U.S. Const. amend. I.

[59] Johnstone, supra note 46, at 452–55 (1998); Bader, supra note 57, at 570.

[60] United States v. DeJesus, 347 F.3d 500, 510–11 (3d Cir. 2003) (discussing how different states have treated peremptory strikes based on religious affiliations and beliefs); SmithKline Beecham Corp. v. Abbott Labs, 740 F.3d 471, 484 (9th Cir. 2014) (ruling a strike based upon a juror’s sexual orientation violated the Equal Protection Clause); Card v. United States, 776 A.2d 581, 595 (D.C. 2001), vacated, 863 A.2d 821 (D.C. 2004) (finding that a juror’s affiliation to a religious activist was a race-neutral reason to remove the juror); State v. Davis, 504 N.W.2d 767, 771 (Minn. 1993) (declining to extend Batson to peremptory strikes based on religious affiliations).

[61] Mark E. Wojcik, Extending Batson to Peremptory Challenges of Jurors Based on Sexual Orientation and Gender Identity, 40 N. Ill. U. L. Rev. 1, 11 (2019).

[62] Id. at 12.

[63] See United States v. Brown, 352 F.3d 654, 666–67 (2d Cir. 2003); DeJesus, 347 F.3d at 510.

[64] Brown, 352 F.3d at 666-67; DeJesus, 347 F.3d at 510–11; United States v. Stafford, 136 F.3d 1109, 1114 (7th Cir. 1998) (stating in dicta how “[i]t would be improper and perhaps unconstitutional to strike a juror on the basis of his being a Catholic, a Jew, a Muslim, etc.,” but a strike due to a belief even a religious one would be proper.).

[65] Bronshtein v. Horn, 404 F.3d 700, 725 (3d Cir. 2005).

[66] United States v. Salamone, 800 F.2d 1216, 1217–18 (3d Cir. 2003).

[67] Id. at 1220.

[68] Id. at 1218.

[69] Id. at 1225.

[70] Id. at 1225–56.

[71] Id.

[72] United States v. McIntyre, 997 F.2d 687, 697–98 (10th Cir. 1993); United States v. Grismore, 546 F.2d 844, 849 (10th Cir. 1976) (concluding that a juror’s status as wife of a policeman did not instantaneously justify a just-cause challenge); Mikus v. United States, 433 F.2d 719, 724 (2d Cir. 1970).

[73] McIntyre, 997 F.2d at 697–98.

[74] Dennis v. United States, 339 U.S. 950, 171–72 (1950).

[75] United States v. Polichemi, 219 F.3d 698, 704 (7th Cir. 2000) (“government employment alone is not . . . enough to trigger the [implied bias] rule under which an employee is disqualified from serving as a juror in a case involving her employer.”).

[76] See United States v. Mitchell, 690 F.3d 137, 143 (3d Cir. 2012) (citing Smith v. Phillips, 455
U.S. 209, 102 (1982)).

[77] Semel, supra note 17, at 11–13.

[78] United States v. DeJesus, 347 F.3d 500, 510–11 (3d Cir. 2003).

[79] See United States v. Brown, 352 F.3d 654, 669 (2d Cir. 2003); United States v. Stafford, 136 F.3d 1109, 1114 (7th Cir. 1998); State v. Hodge, 726 A.2d 531, 553 (Conn. 1999); Thorson v. State, 721 So.2d 590, 595 (Miss. 1998).

[80] See Casarez v. State, 913 S.W.2d 468, 496 (Tex. Crim. App. 1994) (en banc); State v. Davis, 504 N.W.2d 767, 772 (Minn. 1993).

[81] Davis, 504 N.W.2d at 768.

[82] Id.

[83] Id.

[84] Id.

[85] Id. at 769 (“[I]n Powers, . . . the Court sustained the Batson challenge [not] on the theory that the defendant’s equal protection rights were violated; rather, the decision was based on an equal protection violation of the excused juror’s rights.”) (citations omitted).

[86] Id. at 769.

[87] Id. at 770.

[88] Id.

[89] Id.

[90] Id. at 771.

[91] Id.

[92] Id.

[93] Id.

[94] Davis v. Minnesota, 511 U.S. 1115, 1115 (1994) (Ginsburg J., concurring in denial of certiorari).

[95] Id.

[96] State v. Fuller, 862 A.2d 1130, 1140 (N.J. 2004).

[97] Id. at 1144.

[98] Id.

[99] Id. at 1147.

[100] Id. at 1143, 1147.

[101] Id. at 1144–46. See United States v. DeJesus, 347 F.3d 500, 510 (3d Cir. 2003); United States v. Stafford, 136 F.3d 1109, 1114 (7th Cir. 1998).

[102] See Johnstone, supra note 46, at 461–62.

[103] Bader, supra note 57, at 621.

[104] Semel, supra note 17, at 44.

[105] Martin Luther King Jr., Letter from Birmingham Jail, 26 U.C. Davis L. Rev. 835, 835

(1993).

[106] Miller-El v. Dretke, 545 U.S. 231, 238 (2005).

[107] See Bader, supra note 57, at 621.

[108] Flowers v. Mississippi 139 S. Ct. 2228, 2238 (2019); see Powers v. Ohio, 499 U.S. 400, 402 (1991).

[109] Flowers, 139 S. Ct. at 2238.

[110] Vansickle, supra note 18.

[111] Id.

[112] Id.

[113] Powers v. Ohio, 499 U.S. 400, 402 (1991); Wojcik, supra note 14, at 15.

[114] See Bader, supra note 57, at 570.

[115] See Cooper v. State, 432 P.3d 202, 206 (Nev. 2018) (comparing asking about Black Lives Matter to asking about feelings about O.J. Simpson’s murder trial when there were no relevant racial issues in the case).

[116] U.S. Const. amend. XIV. § 1; Bader, supra note 57, at 593.

[117] See United States v. Brown, 352 F.3d 654, 666–67 (2d Cir. 2003); United States v. DeJesus, 347 F.3d 500, 510–11 (3d Cir.2003); United States v. Stafford, 136 F.3d 1109, 1114 (7th Cir. 1998).

[118] Batson v. Kentucky, 476 U.S. 79, 102–03 (1986) (Marshall, J., concurring).

[119] Id. at 98 (“the peremptory challenge occupies an important position in our trial procedures”); J.E.B v. Alabama ex rel. T.B. 511 U.S. 127, 147 (1994) (O’Connor J., concurring) (“[t]he principal value of the peremptory is that it helps produce fair and impartial juries.”).

[120] Cooper v. State, 432 P.3d 202, 206 (Nev. 2018).

[121] See Batson, 476 U.S. at 96–98 (outlining the Batson burden-shifting framework).

[122] Cooper, 432 P.3d at 204.

[123] Id. at 206.

[124] Id. at 20607.

[125] Id. at 206.

[126] Id. at 206–07.

[127] United States v. McIntyre, 997 F.2d 687, 697–98 (10th Cir. 1993).

[128] Compare Cooper, 432 P.3d at 204–05, with State v. Campbell, 846 S.E.2d 804, 807–11 (N.C. Ct. App. 2020) (holding the prosecutor using 75% of their peremptory strikes to remove Black jurors and asking about Black Lives Matter was not enough to find a Batson violation).

[129] Rory Carroll, OJ Simpson: An Eternal Symbol of Racial Division – Or Has America Moved On?, The Guardian, Oct. 1, 2017, https://www.theguardian.com/us-news/2017/oct/01/oj-simpson-prison-release-america-race-debate; Adrian Florido, Half of the Jury in the Chauvin Trial is Nonwhite. That’s Only Part of the Story, NPR, (Mar. 25, 2021, https://www.npr.org/2021/03/25/980646634/half-of-the-jury-in-the-chauvin-trial-is-non-white-thats-only-part-of-the-story [https://perma.cc/DN5P-B79D].

[130] Batson v. Kentucky, 476 U.S. 79, 96 (1986).

[131] Id. at 97.

[132] Id.

[133] Miller-El v. Dretke, 545 U.S. 231, 238 (2005).

[134] See Semel, supra note 17, at 14. (discussing racial and ethnic stereotypes California prosecutors relied on when using peremptory strikes to excuse Black and Latino jurors).

[135] Batson, 476 U.S. at 98.

[136] Batson, 476 U.S. at 98.           

[137] Semel, supra note 17, at 16.

[138] Karpan, supra note 53.

[139] See Flowers v. Mississippi, 139 S. Ct. 2228, 2235 (2019). The case is an example of how a different jury make up will affect the verdict of the trial.

[140] Miller-El v. Dretke, 545 U.S. 231, 238 (2005).

Non-Restorable Competence to Stand Trial: A Loophole in Kentucky's Law

Download a PDF Below:

Sean Harrison[1]

Introduction 

 In Kentucky, a defendant’s competence to stand trial may be called into question at any point after arraignment.[2] If reasonable grounds exist for the court to believe that the defendant is not competent to stand trial, the proceedings are halted and a full determination of the defendant’s capacity must be made.[3] The court must then appoint a psychologist or psychiatrist to assess the defendant’s competence and file a report with the court detailing his or her findings.[4] Once the report is submitted, the court holds a hearing to determine if the defendant is competent to stand trial.[5] If the court deems the defendant incompetent to stand trial (IST), such a defendant may not be “tried, convicted, or sentenced so long as the incompetency continues.”[6] Kentucky is not unique in this procedure—the federal judiciary, as well as a majority of states, use this same process to assess a defendant’s ability to stand trial.[7]

Competency proceedings increase in complexity when courts are faced with the decision of how to treat, detain, and rehabilitate such IST defendants. In Kentucky, the appointed psychologist or psychiatrist is required to make a second finding: What is the likelihood of the defendant’s competence being restored in the foreseeable future?[8] When a defendant is found to be incompetent, but competence is substantially likely to be restored in the foreseeable future, the court will generally commit the defendant to a forensic psychiatry facility for competency restoration treatment for a period of sixty days.[9] At the end of those sixty days, if the defendant is found competent to stand trial, the proceedings against him will continue.[10]

A defect appears in Kentucky’s criminal procedure, however, when a defendant is found incompetent and his competence is deemed unlikely to be restored in the foreseeable future. In this case, the court is required to conduct an involuntary hospitalization of the defendant pursuant to chapter 202A or 202B of the Kentucky Revised Statutes.[11] The proscribed chapters outline the criteria for involuntary hospitalization for a person with a mental illness[12] or a person with an intellectual disability.[13] One element of both criteria is that the patient can reasonably benefit from the treatment provided in the hospitalization.[14] When a person is deemed to have non-restorable competence, however, there is, by definition, no possible treatment which could benefit their condition. Thus, once such a defendant is hospitalized involuntarily, the hospital must discharge him because he fails to meet the criteria for an admission under KRS 202A or 202B.[15] Kentucky law provides little recourse for courts to prevent such defendants from being discharged.[16]

This Note will examine the legal and historical framework that has led to this gap in criminal procedure in Kentucky and other states. Part I will outline the history of competence as a critical element of a criminal defense. Part II will distinguish the legal determination of competence from the clinical determination of capacity. Part III will address the due process and equal protection concerns associated with involuntary hospitalization or commitment for incompetency to stand trial. Part IV will explore Texas’s recent statutory scheme aimed at addressing the loophole in criminal procedure created by non-restorable competence. Part V will consider a pending criminal case against a Kentucky defendant who has been repeatedly classified as incompetent to stand trial and unlikely to regain competence. Part VI will examine proposed legislation and other measures to assure both due process to defendants and public safety to community-members. Lastly, Part VII will propose the simplest, least expensive criminal procedural reform in Kentucky’s history.

I.               The History of Competence

As early as 1845, courts recognized the need for unique legal treatment of those designated criminally insane.[17] In the Massachusetts case The Matter of Josiah Oakes, Judge Shaw found the “great law of humanity” to be sufficient legal basis for involuntary hospitalization of an insane person who presented a danger to himself or others.[18] Further, Shaw found that the restraint could continue for an indefinite period of time—as long as the restraint was necessary to protect the defendant or others.[19] Shaw’s theory of indefinite restraint and imprisonment of the criminally insane was popular among the states.[20] By 1890, every state in the U.S. operated some form of “publicly-supported mental hospital,”[21] the earliest being Virginia’s Eastern State Hospital, established in 1773.[22]

The process by which a person was relegated to these facilities varied: a husband could have his wife committed,[23] a family member could recommend commitment, or a judicial decision could require commit.[24] These early involuntary commitments were subject only to the requirement that the individual would benefit from treatment.[25] As cases alleging wrongful commitment began to arise commonly in the late 1800s, institutions began identifying more formal criteria for admission.[26] States soon began to enact stricter methods for commitment,[27] but in criminal cases, a finding that a defendant lacked the mental competence to stand trial often resulted in an indefinite, automatic commitment to an asylum or psychiatric treatment facility.[28]

Beginning in 1960, a series of Supreme Court decisions began to create guidelines for the legal treatment of criminal defendants whose competence was in question.[29] In Dusky v. U.S., the Court held that a defendant's competence is determined by his “present ability to consult with his lawyer with a reasonable degree of rational understanding—and whether he has a rational and factual understanding of the proceedings against him.”[30] The Court also distinguished mere orientation and recollection from legal competence to stand trial.[31] In 1975, the Court further held that a defendant must also be able to assist in preparing his defense in order to be found competent to stand trial.[32]

As courts adopted higher standards for involuntary and criminal commitments, Congress passed the Community Mental Health Act, moving funding out of state mental hospitals and into smaller treatment centers, intending to allow those housed in state mental hospitals to be treated quickly and released back into society.[33] In combination with the release of the first anti-psychotic drug, this legislation enabled many mentally ill patients to return to their homes.[34] Those with the most severe mental conditions, however, were left without treatment options.[35]

Between 1970 and 2014, the U.S. has experienced a 77% decline in total capacity for 24-hour psychiatric treatment.[36] This decline can be attributed to the increase in outpatient treatment and the push for deinstitutionalization.[37] Instead of returning home, many of these patients were “transinstitutionalized” into incarceration.[38] Between four to seven percent of the growth in U.S. incarceration rates between 1980 and 2000 is attributable this lack of psychiatric care.[39] To its shame, the three largest mental health treatment facilities in the U.S. are the Cook County Jail, Los Angeles County Jail, and Rikers Island.[40]

II.              Competence and Capacity: Legal and Clinical Differentiation

Kentucky’s problems in dealing with IST defendants begin with the designation of incompetence itself. In 1966, the U.S. Supreme Court held that if a district court does not allow an inquiry into a defendant’s competence to stand trial, the court deprives the defendant of his “constitutional right to a fair trial.”[41] The appointed expert, however, can only provide advisory information to the judge who makes the ultimate competency assessment.[42]  Kentucky statutory law provides little discussion of what constitutes competence to stand trial.[43] Although the Supreme Court has provided instruction on the theoretical basis of competence, little guidance is given for situations in which a judge might disagree with the psychiatric appointee’s recommendation. 

When making a ruling on the defendant’s competence, the court is not limited to specific criteria to consider.[44] Some federal courts have considered factors like inability to communicate intelligently,[45] family history of mental health issues,[46] self-defeating behavior,[47]hallucinations,[48] prior use of antipsychotic medications,[49] and more. A mental disorder alone is not dispositive in showing incompetence.[50] The judicial determination of competence revolves around one legal question—whether continuing with judicial proceedings affords the defendant a reasonable opportunity to participate in his defense.[51]

When the court disagrees with the assessment performed by the appointed psychiatrist or psychologist, the court is at liberty to act against the expert’s recommendation.[52] Because the current legal framework grants wide latitude and little concrete guidance on the specific criteria of a competency analysis, judges have become dependent upon appointed experts for diagnoses of defendants’ mental deficits.[53] However, a study conducted on competence-to-stand-trial assessments in Hawaii found that judges are more likely to rule a defendant incompetent, rather than competent, after hearing conflicting expert testimony on competency.[54]

The determination of the restorability of a defendant’s competence is even more convoluted. In some states, the court assesses the likelihood of restoration of a defendant’s competence within a statutorily specified timeframe; in other states, the court decides if restoration is likely in the foreseeable future.[55] In Texas, restoration is predicated on guidance from the facility where the defendant was being treated. [56]

The greatest disparity between the legal and clinical distinctions occurs when an IST defendant whose competence is unlikely to be restored is relegated to involuntary commitment in a psychiatric treatment facility. In Kentucky, this issue manifests in the difference between the legal criteria for incompetence and the legal criteria for involuntary hospitalization.[57] A defendant may be found incompetent by the courts, but his incompetence does not necessarily make him a candidate for involuntary hospitalization.[58] Although the statutes allow an IST defendant to be committed into a psychiatric facility for hospitalization,[59] they do not allow the facility to continue such a hospitalization once they deem the defendant to be unlikely to benefit from treatment.[60] By creating the legal category of “non-restorable competence,” the Kentucky legislature has created a class of criminal defendants whom they cannot legally jail, try, or commit. Any solution offered to this issue will require a standardization of language and a revision of the statutes to create a cohesive plan of both legal and psychiatric treatment for such IST defendants.

III.            Due Process and Equal Protection Concerns

In Pate v. Robinson, the Supreme Court made a definitive ruling that to try or sentence a defendant who is incompetent to stand trial is a denial of due process of law.[61] With substantive due process, a defendant has the right to not be prosecuted while incompetent.[62] With procedural due process, a defendant has the right to a reasonable examination of his competency to stand trial.[63] However, if a defendant’s competence is found unlikely to be restored, the application of due process to his circumstances becomes less clear. 

Nearly a decade after Pate, in Jackson v. Indiana, the Court addressed the issue of competence that is unlikely to be restored.[64] Theon Jackson, a deaf-mute defendant accused of two thefts amounting to less than $10, was found incompetent to stand trial after a court-appointed psychiatrist testified that no state facilities were capable of developing Johnson’s communication abilities.[65] Additionally, experts testified that even if Jackson were to gain “minimal communication skills,” he would still lack the mental capacity necessary to be found competent to stand trial.[66]Jackson was committed by the lower court until he could be deemed “sane.”[67] On appeal, Jackson’s counsel argued that this commitment violated the Fourteenth Amendment’s Equal Protection Clause[68] and Due Process Clause.[69]

Jackson’s claim that he was deprived of equal protection of the law stems from Indiana’s standards for commitment and release of criminal defendants in comparison to the commitment and release of individuals with mental illness who are undergoing civil commitment proceedings.[70]The Court agreed with Jackson, finding that the State’s standard for commitment of criminal defendants was more lenient than the standard for commitment of mentally ill individuals under the civil commitment statute.[71] Under both standards, commitment required examination by two doctors, a judicial hearing with opportunity for cross-examination, opportunity to introduce evidence, and opportunity for appellate review.[72]However, the standard for commitment of a criminal defendant only required the State to show that Jackson was incompetent to stand trial.[73] Also, the State applied a more stringent standard for release for those committed as criminal defendants than those committed for mental illness.[74] Under the civil commitment statute, a person committed for mental health reasons could be released as soon as the head of the commitment facility believed that their condition no longer justified commitment.[75] A criminal defendant who had been committed, however, could only be released from his commitment after a “substantial change for the better in his condition.”[76]

In Jackson’s case, the standard for release was especially stringent, considering experts had testified that he was likely unable to ever regain competence.[77] The Court upheld Jackson’s equal protection challenge, finding that that the leniency in the standard for commitment of criminal defendants and the stringency of the standard for release of committed criminal defendants deprived Jackson of equal protection of the laws.[78]

Further, Jackson contended that his right to due process of the law was violated by his indefinite commitment on the sole account of his incapacity to stand trial.[79] By recognizing that Jackson’s competence was unlikely to be restored, but still committing him until he regained sanity, the district court’s commitment was a life sentence.[80] The Court agreed with Jackson, holding that a criminal defendant may only be held a length of time reasonable to determine his competence and the likelihood of restoration of competence.[81] If competence is deemed unlikely to be restored, the state must either drop the charges against the defendant or commit him under the state’s civil commitment procedures.[82] If the defendant’s competence is deemed likely to be restored, his commitment must be beneficial in advancing his competence.[83] Thus, if the defendant is not progressing or not able to progress toward competence, his remaining in state criminal custody is improper.[84]

A more recent attack on modern competence restoration schemes turns on a defendant’s deprivation of protections afforded by the Americans with Disabilities Act.[85] In Olmstead v. L.C., the Supreme Court held that Title II of the ADA prohibits discrimination on the basis of disability[86]and requires States to allow individuals with mental disabilities to be treated in community-based programs if a State treatment professional has deemed community placement appropriate, the transfer is unopposed by the individual, and the placement can be reasonably accommodated by the State.[87]

In adopting jail-based competency restoration programs,[88] several states have begun placing IST defendants in jail, regardless of the seriousness of their alleged crime or the danger they pose to themselves or others.[89] Because many of these defendants would benefit from treatment in an integrated, community-based setting due to their mental disability, their assignment to jail-based competency restoration programs constitutes discrimination on the basis of disability.[90] Broadly placing IST defendants into jail-based competency restoration programs neglects the ADA’s mandate for the least restrictive treatment setting necessary, and states that continue to disregard this requirement risk being found in violation of the ADA, regardless of intent.[91]

IV.            Case Study: Texas

In 2007, Advocacy, Inc., on behalf of a group of defendants deemed incompetent to stand trial, filed suit against the Texas Department of State Health Services, arguing that the defendants’ due process rights were violated by the State’s policy of holding IST defendants in jail, without treatment, until psychiatric treatment facility beds became available.[92] Obtaining a bed in such a facility often took six months or longer.[93] After the aforementioned case was decided on jurisdictional grounds, a Texas state court considered the issue and ordered that IST defendants be given a bed within 21 days from the day he receives notice of his commitment. [94]  

However, in 2014, the Texas Court of Appeals overturned this decision[95] and IST defendants were once again forced to remain in jail for months before placement in psychiatric treatment facilities.[96] Texas lawmakers’ solution to this dilemma was the creation of jail-based competency restoration programs.[97] In response, Texas lawmakers began to consider an alternative option for competency restoration in IST defendants—jail-based competency restoration programs.[98]

During the 2013 Texas legislative session, legislators passed a bill that utilized state funds to create jail-based competency restoration pilot programs,[99] but the program was never implemented due to lack of personnel.[100] Funding for the program was renewed in 2015, but implementation was further delayed by the “lack of a strong competitive pool” of bids for the contract for jail-based competency restoration services.[101] In 2016, the Texas Judicial Council created a Mental Health Committee to explore the effectiveness and cost of various measures to determine the “best practices” of civil and criminal justice for those with mental illness, including IST defendants.[102] The committee’s findings included a recommendation that current state law be changed to allow for alternative competency restoration settings, including jail-based programs.[103] In 2017, the Texas legislature approved an appropriation for a pilot program for a third time.[104] In addition to the appropriation, but without performing a pilot, lawmakers passed S.B. No. 1326, allowing for the use of jail-based competency restoration programs as an alternative to outpatient competency restoration programs or inpatient hospital competency programs.[105]

The Texas Health and Human Services Commission awarded $1.9 million of the 2017 appropriation to four Texas jail-based competency restoration programs.[106] The services the programs provided included multidisciplinary treatment, cognitive behavioral therapy, coordination of general healthcare, competency restoration education, and interviewing .[107] During 2019, these programs served 346 patient-defendants and restored competency to over 30% of those patient-defendants.[108] Of those whose competence was not restored, some were sent to state hospitals and others had their charges dropped and were released.[109] Upon review, a representative of the pilot program at Lubbock considered the programs successful and was pleased with the program’s progress.[110]

The Texas legislation allowing for jail-based competency restoration would be toothless were it not for another law passed in the 2007 legislative session: Article 46B.0095.[111] This statute includes a provision allowing an IST defendant to be committed to a mental hospital, inpatient competency restoration program, or jail-based competency restoration program for a period of time up to the length of the maximum term for the offense of which the defendant is accused.[112] If the court has found that a defendant’s competence is unlikely to be restored, this provision allows for a de facto finding of guilt—a maximum sentence for a crime for which the defendant has neither been tried nor found guilty. In essence, this is a sentence punishing the crime of incompetence. 

By imposing the sentencing term from the patient-defendant’s accused crime, the Texas legislature has circumvented the Court’s decision in Jackson v. Indiana that held that the indefinite commitment of an IST defendant is a violation of due process.[113] However, the Texas statute creates a constitutional issue by affording a de facto sentence to a defendant who has neither been tried nor found guilty.[114] This violation of procedural due process is particularly offensive because it preys upon defendants who do not have the practical capacity to question the statute’s constitutionality. 

To date, only one case has addressed Texas’s practice of applying statutory sentences to civil commitments. In Reinke v. State, Mr. Reinke, a defendant declared by the court to be incompetent to stand trial, was committed to a mental health facility.[115] On appeal, Mr. Reinke challenged the lower court’s use of punishment enhancements to increase his commitment from 20 years (the statutory maximum for attempted murder, the crime of which he was accused), to 99 years.[116] The court held that the use of enhancements was improper, and that the authorizing statute’s language[117]did not provide for the use of sentence enhancements.[118] The court remanded the case to the district court for readjustment of Mr. Reinke’s commitment to 20 years.[119]

At present, six states allow courts to involuntarily commit IST defendants for the maximum sentence for the crime of which they are accused.[120] Other states employ varying standards, including commitment for the “two-thirds of the authorized maximum term of imprisonment for the highest class felony charged”[121] and “three years” except when charged with murder.[122]

V.             An Urgent Need for Change

The problem with Kentucky’s law regarding incompetence is highlighted in the case of Cane Madden. In August  2019, a Louisville, Kentucky court found Madden incompetent to stand trial for a charge of burglary from May 2019, and he was involuntarily committed to Central State Hospital.[123] But because administrators at Central State deemed Madden to be unresponsive to treatment,[124] he was released less than 24 hours later.[125] In August 2019, an eight-year-old girl in Louisville was hit in the head with a shovel, fracturing her skull, and raped.[126] Madden was seen in the area before and after the assault, and he was arrested by Louisville police during the early hours of the morning.[127] Madden revealed to officers explicit details of the assault and rape.[128]

When Madden appeared in court, his attorney requested that the charges against him be dropped, citing a past criminal matter against Madden were charges dropped due to incompetence.[129] Judge O’Connell denied the motion and scheduled a hearing, allowing the Kentucky legislature the opportunity to amend the statutory provisions governing IST defendants with no substantial likelihood of regaining competence.[130]

Madden’s case has garnered national attention,[131] and Kentucky legislators encountered outrage from the community, including a petition with over 11,000 signatures demanding that Madden not be released.[132] On February 20, 2020, Senator Morgan McGarvey, a Democrat from Kentucky’s 19th District, filed Senate Bill 188.[133] The bill, co-sponsored by Senator Julie Raque Adams (a Republican from Kentucky’s 36thDistrict) and Senator Denise Harper Angel (a Democrat from Kentucky’s 35th district),[134] would enable certain violent criminal IST defendants, with no substantial probability of attaining competency, to be placed on judicial commitment.[135] Under this form of commitment, a judge appoints a guardian ad litem to the defendant who is then tasked with advising and representing the defendant at all legal proceedings.[136]

Although Senate Bill 188 proposed solutions, it also introduced a myriad of constitutional, procedural, and logistical problems. The first problem encountered is with the appointment of a guardian ad litem to an IST defendant.[137] The use of a guardian ad litem in representing a criminal defendant is unprecedented in the United States. To appoint a guardian ad litem to a criminal defendant is to acknowledge his incompetence, and such an acknowledgement mandates that the criminal proceedings be halted until competence is regained.[138] Regardless of the advocacy a guardian ad litem might provide, the defendant still does not have the ability to understand the proceedings against him, and that is the crux of his substantive due process rights.[139] The ability of a defendant to participate in his defense is crucial.[140] The appointment of a guardian ad litem simply does not comport with the spirit or letter of the law requiring a court to halt proceedings against an incompetent defendant.

Further, Senate Bill 188 called for the application of a “clear and convincing evidence” standard of proof in the competency hearing the bill prescribes.[141] Under current Kentucky law, the standard of proof at a competency hearing is the same as that for all evidentiary hearings.[142] This standard is in compliance with Supreme Court precedent, which clearly prohibits a state from requiring a defendant’s incompetence to be proven by a “clear and convincing evidence” standard, because it would allow a state to try a defendant who is more likely incompetent than competent, a clear violation of due process.[143] For this reason, if enacted, S.B. 188 would be susceptible to constitutional challenges on the standard of proof it seeks to impose.

Lastly, Senate Bill 188 implicitly authorized indefinite commitment of IST defendants.[144] After a defendant has been committed, he must undergo periodic review hearings to reassess competency.[145] During the first year of commitment, the defendant’s competence shall be reviewed every three months; during the second year of commitment, the defendant’s competence shall be reviewed every six months; and during subsequent years, the defendant’s competence shall be reviewed annually.[146] In fewer words, the proposed bill authorized the commitment of an IST defendant until the end of his life or until he regains competence, whichever happens sooner.[147] This indefinite commitment is in clear defiance of the Court’s holding that such commitments resulting from incompetence to stand trial are in violation of the Fourteenth Amendment’s guarantee of due process.[148]

Before Senate Bill 188 could be approved by the Senate Health, Welfare, and Family Services Committee, COVID-19 eclipsed the state’s legislative agenda.[149] The bill never reached the Senate floor for a vote.[150]

VI.            Closing the Loophole in Kentucky

 Community members, prosecutors, victims’ advocates, judges, and public defenders have all voiced opinions on how Kentucky’s laws might be amended in order to prevent situations like Madden’s from occurring. The suggestions carry varying levels of applicability, relevance, and constitutionality and are individually considered here.

Wendy Morris, Commissioner of the Kentucky Department for Behavioral Health, recently suggested that creation of more mental health courts could prevent exploitation of this loophole in Kentucky’s competency laws.[151] However, the jurisdiction of Kentucky’s mental health courts will require significant expansion. At present, none of Kentucky’s mental health courts accept defendants charged with violent felonies or sexual offenses.[152] Further, most mental health courts across the country do not provide services to IST defendants because involvement in such courts is supposed to be voluntary and participatory.[153] For these reasons, the institution of more mental health courts in Kentucky is unlikely to create a meaningful impact on the loophole at hand.

Another proposed solution is to add a provision to Kentucky’s statutes that allows for the involuntary commitment of an incompetent criminal defendant for a length of time up to the maximum statutory sentence for the crime of which he is accused.[154] This strategy is employed by a few other states and has weathered challenges thus far.[155] However, the implementation of such legislation is likely to be unpopular among mental health advocates who find this form of sentencing without trial or verdict to be an alarming threat to the constitutional rights afforded to criminal defendants.

Instead of committing IST defendants under KRS 202A.026 or KRS 202B.040, the legislature could create a third provision exclusively for criminal commitment. To pass such a law would, in effect, be to revive the age of the asylum, as these indefinitely committed criminals would require housing in forensic psychiatry facilities. If such a provision were to contain similar criteria to that of KRS 202A.026 and KRS 202B.040, the statute could experience challenges on the grounds of imposing unnecessary restraint on defendants and on the grounds of the Jackson v. Indiana ruling prohibiting indefinite commitment.[156]

If the criminal commitment statute created varied from those criteria set out in KRS 202A.026 and KRS 202B.040, however, the statute could be challenged for violation of the Equal Protection Clause. Equal Protection Clause violations like the one the court found in Jackson v. Indianacould be avoided by placing the same standards for commitment and release on criminal defendants that KRS 202A.026 and KRS 202B.040 place on those undergoing civil commitment and release proceedings.[157]

Kentucky is one of only three states which require in statute that a patient be likely to benefit from treatment in order to remain involuntarily committed in an inpatient facility.[158] If Kentucky were to change this requirement from mandatory criteria to permissive criteria, the problem of mental health administrators releasing dangerous, IST defendants with no substantial likelihood of restoration would likely be avoided. The statutory language “benefit from treatment” harkens back to the earliest days of involuntary commitment when such benefit comprised the sole criterion for commitment.[159] However, as Kentucky’s statutory scheme for commitments have undergone numerous revisions,[160] and include other criteria in step with the commitment statutes of most other states,[161] there is no longer a need for such an ambiguous nicety. The statutory provisions already in place, regarding the least restrictive care setting possible, and regarding a defendant’s threat of danger to self or others provide sufficient safeguards for the humane treatment of involuntarily committed psychiatric patients.

VII.          Conclusion: Rethinking Commitment Standards

The eyes of Kentuckians are upon the legislature as it attempts to both close this loophole in Kentucky’s law and determine the disposition of Cane Madden’s pending criminal charges. The implications of Kentucky’s action regarding incompetency will extend far beyond the case at hand, despite the limited impact the state’s legislature anticipates. Fiscal impacts aside, the legislation Kentucky enacts will reflect the esteem with which it regards public safety, accountability, and due process. 

Among the solutions offered here, the most feasible, wholistic option is the removal of “who can reasonably benefit from treatment” from the commitment criteria under KRS 202A and 202B. Under such circumstances, a defendant like Cane Madden could be civilly committed on the criteria that he is a danger to himself or others, and that such commitment is the least restrictive form of treatment available. Such commitment would end, then, not when the defendant achieved competence, but when he no longer posed a danger to himself or others. Although the United States Supreme Court has struck down statutes authorizing indefinite commitment for the reason of incompetence alone,[162] the Court has found that proof of dangerousness, in combination with incompetence, is sufficient grounds for the commitment of civil defendants.[163]

No Kentucky case law gives significant meaning to the phrase “can reasonably benefit from treatment.” The phrase is a remnant of the intake procedure of 17th century insane asylums, and has regularly been embedded within Kentucky’s commitment statutes. There is little risk to removing this criterion, but there is great protection to be gained from it. Without it, administrators of forensic psychiatry facilities must justify the release of IST defendants on either the grounds that they are no longer dangerous, or there is a less restrictive mode of treatment available to the defendant.[164]

This solution is most feasible because it does not require the creation of a new system of courts, it does not require the addition of a new classification of commitment, and it does not face inevitable constitutional challenge. It does, however, preserve the rights of IST criminal defendants and limit the court’s ability to commit them indefinitely for non-violent offenses. With the disposition of Cane Madden’s case hanging in the balance, it is essential that Kentucky lawmakers choose a course of statutory action that maximizes protection of the public and preservation of constitutional rights—and in this circumstance, the simplest solution just might be the best one. Deleting this element of commitment criteria could be the simplest, least-expensive, most popular criminal procedural reform in Kentucky’s history.

[1] J.D. Candidate, The University of Kentucky J. David Rosenberg College of Law (2021); B.S. in Community Communications and Leadership Development, University of Kentucky.

[2] Ky. R. Crim. P. 8.06 (West 2020).

[3] Id.

[4] Ky. Rev. Stat. Ann. § 504.100(1) (West 2020).

[5] Ky. Rev. Stat. Ann. § 504.100(3) (West 2020).

[6] Ky. Rev. Stat. Ann. § 504.090 (West 2019).

[7] See Jennifer Piel, Michael J. Finkle, Megan Giske, & Gregory B. Leong, Determining a Criminal Defendant’s Competency to Proceed With an Extradition Hearing, 43 J. Am. Acad. Psychiatry Law 201, 202 (2015).

[8] Ky. Rev. Stat. Ann. § 504.100(2) (West 2020).

[9] Ky. Rev. Stat. Ann. § 504.110(1) (West 2020).

[10] Ky. Rev. Stat. Ann. § 504.110(3) (West 2020).

[11] Ky. Rev. Stat. Ann. § 504.110(2) (West 2020).

[12] Ky. Rev. Stat. Ann. § 202A.026 (West 2020).

[13] Ky. Rev. Stat. Ann. § 202B.040 (West 2020).

[14] Id.; Ky. Rev. Stat. Ann. § 202A.026 (West 2020).

[15] See Ky. Rev. Stat. Ann. § 202A.026 (West 2020); Ky. Rev. Stat. Ann. § 202B.040 (West 2020).

[16] See generally Jason Riley & Chad Mills, Attorney Asks Judge to Dismiss Cane Madden’s Child Rape Case, WDRB.com (Oct. 18, 2019), https://www.wdrb.com/in-depth/attorney-asks-judge-to-dismiss-cane-madden-s-child-rape/article_0d3d533c-f1da-11e9-8ef6-b7ec86cdb9bb.html [https://perma.cc/9SGY-NQAS] (describing the loophole in Kentucky’s involuntary hospitalization statutes).

[17] See generally Matters of Josiah Oakes, 8 Law Rep. 123 (Mass. 1845) (holding that criminally insane defendants can be involuntary hospitalized if they are deemed a danger to themselves or others).

[18] Id. at 123.

[19] Id.

[20] See Frederic Garver, The Subvention in the State Finances of Pennsylvania 229 (1919).

[21] Early Psychiatric Hospitals & Asylums, U.S. Nat’l Libr. of Med., https://www.nlm.nih.gov/hmd/diseases/early.html [https://perma.cc/T54N-6KZE].

[22] The History of Eastern State, Virginia.gov, http://www.esh.dbhds.virginia.gov/History.html [https://perma.cc/WJK8-AXX5].

[23] Maureen Dabbagh, Parental Kidnapping in America: An Historical and Cultural Analysis 36 (2012). 

[24] Substance Abuse and Mental Health Services Admin., Civil Commitment and the Mental Health Care Continuum: Historical Trends and Principles for Law and Practice 3 (2019), available at 

https://www.samhsa.gov/sites/default/files/civil-commitment-continuum-of-care_041919_508.pdf [https://perma.cc/GYG3-W8NN].

[25] Id.

[26] Id.

[27] See id. (“Following a series of celebrated cases in the late 1800’s alleging wrongful commitment, procedures for commitment (but not legal criteria) were tightened.”).

[28] See Douglas R. Morris & Nathaniel J. DeYoung, Long-Term Competence Restoration, 42 J. Am. Acad. Psychiatry L. 81 (2014).

[29] 18 U.S.C. § 4244 (2020); 18 U.S.C. § 4241 (2020); 18 U.S.C. § 4246 (2020).

[30] Dusky v. United States, 362 U.S. 402, 402 (1960). 

[31] Id.

[32] Drope v. Missouri, 420 U.S. 162, 171 (1975).

[33] Michelle R. Smith, Kennedy’s Vision for Mental Health Never Realized, Associated Press (Oct. 20, 2013), https://apnews.com/4423a7a8da484b7fb0cb29dfdd1ddb96 [https://perma.cc/SWW5-G8WZ]. However, Kennedy is not all to blame. See Samantha Raphelson, How the Loss of U.S. Psychiatric Hospitals Led to a Mental Health Crisis, NPR (Nov. 30, 2017, 1:15AM), https://www.npr.org/2017/11/30/567477160/how-the-loss-of-u-s-psychiatric-hospitals-led-to-a-mental-health-crisis [https://perma.cc/XC28-FUP5] (explaining that a provision in Medicaid prevents the program from covering long-term care in state institutions).

[34] Smith, supra note 33.

[35] Id.

[36] Ted Lutterman, Robert Shaw, William Fisher & Ronald Manderscheid, Trend in Psychiatric Inpatient Capacity, United States and Each State, 1970 to 2014 29 (2017).

[37] Megan Testa & Sara G. West, Civil Commitment in the United States, 7 Psychiatry 30, 33 (2010).

[38] Steven Raphael & Michael A. Stoll, Assessing the Contribution of the Deinstitutionalization of the Mentally Ill to Growth in the U.S. Incarceration Rate, 42 J. Legal Stud.187, 189, 219 (2013).

[39] Id. at 190.

[40] Smith, supra note 33.

[41] Pate v. Robinson, 383 U.S. 375, 385 (1966).

[42] Ky. Rev. Stat. Ann. § 504.100 (West 2020).

[43] See Ky. Rev. Stat. Ann. § 504.090 (West 2020) (stating that incompetent defendants cannot stand trial but does not define what it means to be incompetent).

[44] See Ky. Rev. Stat. Ann. § 504.110 (West 2019) (listing the procedure for judicial determinations of incompetence)

[45] United States v. Nichelson, 550 F.2d 502, 504 (8th Cir. 1977).

[46] Id.

[47] Torres v. Prunty, 223 F.3d 1103, 1109 (9th Cir. 2000).

[48] Tiller v. Esposito, 911 F.2d 575, 577 (11th Cir. 1990).

[49] Cowley v. Stricklin, 929 F.2d 640, 641 (11th Cir. 1991).

[50] Wolf v. United States, 430 F.2d 443, 445 (10th Cir. 1970).

[51] Barry W. Wall et. al., AAPL Practice Resource for the Forensic Psychiatric Evaluation of Competence to Stand Trial, 46 J. Am. Acad. Psychiatric L. S1, S30 (2018).

[52] Randy K. Otto, Competency to Stand Trial, 2 Applied Psych. Crim. Just. 82, 84 (2006) (“Competence is ultimately a legal issue that is to be decided by the legal decision maker.”).

[53] David Collins, Re-Evaluating Competence to Stand Trial, 82 L. & Contemp. Probs. 157, 176 (2019).

[54] W. Neil Gowensmith, Daniel C. Murrie & Marcus T. Boccaccini., Field Reliability of Competence to Stand Trial Opinions: How Often Do Evaluators Agree, and What Do Judges Decide When Evaluators Disagree?, 36 L. & Hum. Behav. 130, 135 (2012).

[55] Grant H. Morris & J. Reid Meloy, Out of Mind? Out of Sight: The Uncivil Commitment of Permanently Incompetent Criminal Defendants, 27 U.C. Davis L. Rev. 1, 10 (1993).

[56] Tex. Code Crim. Proc. Ann. art. 46B.079 (West 2020).

[57] Compare Ky. Rev. Stat. Ann. § 504.100 (West 2020) (discussing the appointment of mental health experts to determine defendant competency), with Ky. Rev. Stat. Ann. § 202B.040 (West 2020) (listing the criteria for a intellectually disabled defendant to be involuntarily committed), and Ky. Rev. Stat. Ann. § 202A.026 (West 2020) (listing the criteria for a mentally ill defendant to be involuntarily committed).

[58] Ky. Rev. Stat. Ann. § 202A.026 (West 2020); Ky. Rev. Stat. Ann. § 202B.040 (West 2020).

[59] Ky. Rev. Stat. Ann. § 504.110 (West 2020).

[60] Ky. Rev. Stat. Ann. § 202A.026 (West 2020) (defendant must “reasonably benefit” from treatment to be legally hospitalized involuntarily); accord Ky. Rev. Stat. Ann. § 202B.040 (West 2020).

[61] Pate v. Robinson, 383 U.S. 375, 378 (1966); see also United States v. Gonzalez-Ramirez, 561 F.3d 22, 28 (1st Cir. 2009) (“A defendant’s due process right to a fair trial includes the right not to be tried, convicted or sentenced while incompetent.”).

[62] David W. Beaudreau, Due Process or "Some Process"? Restoring Pate v. Robinson's Guarantee of Adequate Competency Procedures, 47 Cal. W. L. Rev. 369, 370–71 (2001).

[63] Id.

[64] Jackson v. Indiana, 406 U.S. 715 (1972).

[65] Id. at 717–19.

[66] Id. at 719.

[67] Id.

[68] Id. 

[69] Id.

[70] Id. at 723.

[71] Id. at 730.

[72] Id. at 727.

[73] Id.

[74] Id. at 728–29.

[75] Id. at 728.

[76] Id. at 729.

[77] Id. at 719.

[78] Id. at 730.

[79] Id. at 719.

[80] Id. 

[81] Id. at 738.

[82] Id.

[83] Id.

[84] See id.

[85] Alexandra Douglas, Caging the Incompetent: Why Jail-Based Competency Restoration Programs Violate the Americans with Disabilities Act Under Olmstead v. L.C., 32 Geo. J. Legal Ethics 525, 528 (2019).

[86] 42 U.S.C. § 12132 (2019).

[87] Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 607 (1999)

[88] See infra Part IV.

[89] See Douglas, supra note 85.

[90] Olmstead, 527 U.S. at 597.

[91] See Samuel R. Bagenstos, The Past and Future of Deinstitutionalization Litigation, 34 Cardozo L. Rev. 1, 32 (2012).

[92] Lakey v. Taylor ex rel. Shearer, 278 S.W.3d 6, 11 (Tex. Ct. App. 2007); Brian Chasnoff & Melissa Fletcher Stoeltje, Texas 49th in Mental Health Funding, San Antonio Express-News (Nov. 1, 2010), https://www.mysanantonio.com/news/local_news/article/Texas-49th-in-mental-health-funding-780070.php [https://perma.cc/29SW-UZRZ].

[93] Lakey, 278 S.W.3d at 12.

[94]  Lakey v. Taylor, 435 S.W.3d 309, 316 (Tex. Ct. App. 2014).

[95] Brian D. Shannon, Competency, Ethics, and Morality, 49 Tex. Tech. L. Rev. 861, 872 (2017).

[96] Keri Blakinger, Lack of Beds for Inmates Needing Mental Health Help, Houston Chron. (Oct. 10, 2017), https://www.houstonchronicle.com/news/article/Lack-of-beds-for-inmates-needing-mental-health-12268349.php [https://perma.cc/Z5T7-GFRC].

[97] Hogg Found. for Mental Health, Texas 83rd Legislative Session: Summary of Mental-Health Related Legislation 1, 10 (2013).

[98] Brandi Grissom, Proposal: Allow Private Firms to Provide Mental Health Services in Jails, Tex. Trib. (Apr. 9, 2013), http://www.texastribune.org/2013/04/09/proposal-allow-private-mental-health-services-jail/ [https://perma.cc/2LY9-Q5DB].

[99] Act of Sept. 1, 2013, ch. 797, § 2, 2013 Tex. Sess. Law Serv. 1, 1–2 (West) (codified as Tex. Code Crim. Proc. Ann. art. 46B.090)

[100] Amanda Wik, Alternatives to Inpatient Competency Restoration Programs: Jail-Based Competency Restoration Programs 1, 7 (2018).

[101] Health & Hum. Services Comm’n, Report on the Jail-Based Competency Restoration Pilot Program 1, 5 (2017).

[102] Tex. Jud. Council, Mental Health Committee Reports & Recommendations 1, 7 (2016).

[103] Id. at 6. 

[104] Act of Sept. 1, 2017, ch. 748, § 29, 2017 Tex. Sess. Law Serv. 1, 33–36 (West) (codified as amended at Tex. Code Crim. Proc. Ann. art. 46B.090).

[105] Act of Sept. 1, 2017, ch. 748, § 14, 2017 Tex. Sess. Law Serv. 1, 17–19 (West) (codified as amended at Tex. Code Crim. Proc. Ann. art. 46B.073).

[106] LaQuinta Swan & Lucrece Pierre-Carr, Texas Competency Restoration: Outpatient and Jail-Base 1, 13 (2019).

[107] Id. at 14.

[108] See id. at 15.

[109] Id. at 9.

[110] Tex. Jud. Comm’n on Mental Health, Meeting Notebook 1, 19 (2019).

[111] Tex. Code Crim. Proc. Ann. art. 46B.0095 (West 2017) (previously codified as Tex. Code. Crim. Proc. Ann. art. 46B.009). 

[112] Id.

[113] Jackson v. Indiana, 406 U.S. 715, 731 (1972) (“[W]e . . . hold that Indiana’s indefinite commitment of a criminal defendant solely on account of his incompetency to stand trial does not square with the Fourteenth Amendment’s guarantee of due process.”).

[114] See art. 46B.0095. 

[115] Reinke v. State, 348 S.W.3d 373, 375 (Tex. Ct. App. 2011).

[116] Id.

[117] Tex. Code. Crim. Proc. Ann. art. 46B.0095 (West 2020).

[118] Reinke, 348 S.W.3d at 381 (interpreting Tex. Code. Crim. Proc. Ann. art. 46B.0095 (West 2020)).

[119] Id. (failing to show any indication that Mr. Reinke’s attorney raised the issue that the commitment itself may be a violation of Mr. Reinke’s procedural due process rights: an issue of constitutionality that Texas courts have not yet been faced with respect to this statutory scheme).

[120] La. Code Crim. Proc. Ann. art. 648 (2017); N.D. Cent. Code Ann. § 12.1-04-08 (West 2013); S.C. Code Ann. § 44-23-460 (2011); S.D. Codified Laws § 23A-10A-15 (2020); Tex. Code Crim. Proc. Ann. art. 46B.0095 (West 2017); Utah Code Ann. § 77-15-6 (West 2018).

[121] N.Y. Crim. Proc. Law § 730.50 (McKinney 2013).

[122] Minn. Stat. Ann. § 20.01 (West 2020) (not specifying the time frame for commitment for a defendant accused of murder). Courts have generally upheld these qualified statutory commitments, with the exception of a Massachusetts statute that was held in violation of due process when it authorized commitment for the maximum time of imprisonment that person would serve before becoming eligible for parole for their most serious charge. Sharris v. Commonwealth, 106 N.E.3d 661 (Mass. 2018). Because the Massachusetts statutory scheme denies parole eligibility to those serving a life sentence for first degree murder, the Massachusetts Supreme Court held that the application of this statutory commitment to an IST defendant accused of first-degree murder amounted to an indefinite commitment and a violation of substantive due process. Id. at 664; see Mass. Gen. Laws Ann. ch. 123, § 16 (West 2015); see also Mass. Gen. Laws. Ann. ch. 265, § 2 (West 2014).

[123] Jason Riley & Chad Mills, ‘Every Prosecutor’s Nightmare’: Sex Assaults Highlight ‘Crazy Loophole’ Freeing Mentally Ill Defendants, WDRB.com (Aug. 25, 2019), https://www.wdrb.com/in-depth/sunday-edition-sex-assaults-highlight-crazy-loophole-freeing-mentally-ill/article_a4a498f2-c5bb-11e9-9284-ffe7e1349599.html [https://perma.cc/5KVF-GENR].

[124] See id.

[125] Id.

[126] Billy Kobin, Louisville Man Fractured 8-Year-Old’s Skull With a Shovel and Raped Her, Police Say, Courier Journal (Aug. 12, 2019, 4:34 PM), https://www.courier-journal.com/story/news/crime/2019/08/10/louisville-police-man-cane-madden-raped-8-year-old-fractured-her-skull-shovel/1975531001/ [https://perma.cc/DS2S-9HT6].

[127] Id.

[128] Id.

[129] Deni Kamper, Man Accused of Raping 8-Year-Old is Example of Crack in System, Lawmaker Says, WLKY.com (Oct. 25, 2019, 5:09 PM), https://www.wlky.com/article/man-accused-of-raping-8-year-old-is-example-of-crack-in-system-lawmaker-says/29591750# [https://perma.cc/H8SZ-BHQ5].

[130] See id.

[131] John Hirschauer, Kentucky’s Insane Civil-Commitment Policy, Nat’l Rev. (Oct. 24, 2019, 9:01 PM), https://www.nationalreview.com/2019/10/kentuckys-insane-civil-commitment-policy/ [https://perma.cc/P673-ZZ5R]; Josh Saunders, Man, 29, is Arrested for Raping an 8-Year-Old Girl After First Hitting Her Over the Head with a Shovel – Two Years After He Was Let Off On Another Sex Assault Charge, DailyMail.com (Aug. 12, 2019, 9:55 PM), https://www.dailymail.co.uk/news/article-7346203/Man-29-arrested-hitting-eight-year-old-girl-head-shovel-raping-her.html [https://perma.cc/RM7F-8E4T]; Dom Calicchio, Man Raped 8-Year-Old Girl After Hitting Her in Head with Shovel, Fracturing Her Skull: Police, Fox News (Aug. 10, 2019), https://www.foxnews.com/us/man-hit-8-year-old-girl-in-head-with-shovel-fracturing-her-skull-then-raped-her-police [https://perma.cc/GV23-6ARK].

[132] Denita Wright, California Neighborhood Residents Request the Non-Release of Cane Madden, change.org, https://www.change.org/p/senator-morgan-mcgarvey-california-neighborhood-residents-request-the-non-release-of-cane-madden [https://perma.cc/B67C-5WTS].

[133] S. B. 188, 2020 Reg. Sess. (Ky. 2020). 

[134] Senate Members by Name, KY. Gen. Assembly, https://apps.legislature.ky.gov/Legislators/smembers_alpha.html [https://perma.cc/8WS2-ZWK3]. Somewhat inexplicably, Senator Harper Angel is the only one of the bill’s sponsors whose district includes the location of Madden’s last alleged attack.

[135] Ky. S.B. 188. 

[136] Id.

[137] Id.

[138] See Pate v. Robinson, 383 U.S. 375, 378 (1966) (“[T]he conviction of an accused person while he is legally incompetent violates due process . . . .”).

[139] See Dusky v. United States, 362 U.S. 402, 402 (1960) (holding that test of competency is whether a defendant has reasonable ability to consult with his lawyer and reasonably comprehends the legal proceedings against him).

[140] See Drope v. Missouri, 420 U.S. 162, 172 (1975) (“[A] person whose mental condition is such that he lacks the capacity to . . . assist in preparing his defense may not be subjected to trial.”).

[141] Ky. S.B. 188.

[142] Chapman v. Commonwealth, 265 S.W.3d 156, 174 (Ky. 2007).

[143] Cooper v. Oklahoma, 517 U.S. 348, 369–70 (1996).

[144] See Ky. S.B. 188.

[145] Id.

[146] Id.

[147] Id.

[148] Jackson v. Indiana, 406 U.S. 715, 732 (1972).

[149] Jack Brammer & Daniel Desrochers, Beshear Gives Lawmakers 2 Options Amid Controversy Over Legislature Continuing to Meet, Herald Leader (Mar. 17, 2020, 8:25 PM), https://www.kentucky.com/news/coronavirus/article241261676.html.

[150] See Mills & Riley, supra note 123.

[151] Id.

[152] See Adult Mental Health Treatment Court Locator, Substance Abuse & Mental Health Services Admin., https://www.samhsa.gov/gains-center/mental-health-treatment-court-locator/adults?field_gains_mhc_state_value=KY [https://perma.cc/TKD7-EXVA].

[153] Michael Thompson, Fred Osher & Denise Tomasini-Joshi, Improving Responses to People with Mental Illnesses: The Essential Elements of a Mental Health Court 1, 5 (2007); Shelli B. Rossman et al., Criminal Justice Interventions for Offenders with Mental Illness: Evaluation of Mental Health Courts in Bronx and Brooklyn, New York 1, 45 (2012).

[154] See Tex. Code. Crim. Proc. Ann. art. 46B.0095 (West 2019).

[155] La. Code Crim. Proc. Ann. art. 648 (2017); N.D. Cent. Code Ann. § 12.1-04-08 (West 2013); S.C. Code Ann. Regs. § 44-23-460 (2011); Tex. Code. Crim. Proc. Ann. art. 46B.0095 (West 2017); Utah Code Ann. § 77-15-6 (West 2020); Wash. Rev. Code Ann. § 10.77.025 (West 2018).

[156] Jackson v. Indiana, 406 U.S. 715, 738 (1972).

[157] Id. at 727.

[158] Treatment Advoc. Ctr., State Standards Charts for Assisted Treatment Civil Commitment Criteria and Initiation Procedure 1, 4–11 (2011).

[159] Substance Abuse and Mental Health Services Admin., supra note 24.

[160] See Ky. Rev. Stat. Ann. § 202.012 (West 2020) (repealed 1976); Ky. Rev. Stat. Ann. § 202.027 (West 2020) (repealed 1976); Ky. Rev. Stat. Ann. § 202.060 (West 2020) (repealed 1976).

[161] Treatment Advoc. Ctr., supra note 158.

[162] See, e.g., Jackson v. Indiana, 406 U.S. 715, 731 (1972).

[163] Kansas v. Hendricks, 521 U.S. 346, 358 (1997).

[164] Ky. Rev. Stat. Ann. § 202A.026 (West 2021); Ky. Rev. Stat. Ann. § 202B.040 (West 2021).

American Moneymakers: The Future of Online Poker After PASPA

Download a PDF Below:

Christian FarmerI

Introduction

Where competition and chance are found, those willing to gamble on the outcome are often present. In the 21st Century, many people have been enticed by online forms of gambling (known simply as “gaming”).2 Traditional forms of gambling, such as parimutuel horse betting, are available online, as well as new forms of gambling like Daily Fantasy Sports (DFS).[1]3 Games of chance and games of skill alike are at the fingertips of players. However, there is one particular game that is effectively banned from being played online: poker.

With the advent of the internet, online poker soon followed; the first real money game was played in 1998.[4] The online poker industry quickly boomed, highlighted by the success of its most storied figure, Chris Moneymaker.[5] In 2003, the aptly-named accountant and poker player became the first person to qualify for the gargantuan World Series of Poker tournament through an online qualifier—he would go on to win the tournament and the $2.5 million cash prize.[6] This spark led to the explosion of online poker in America and abroad.

While his unexpected victory bolstered the online poker industry, Congress made other plans when they passed the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).[7] While the Act was not a direct ban of online poker per se, it effectively rendered the game unplayable in the United States by prohibiting financial institutions from allowing wire transfers to internet gambling sites.[8] The Act cited internet gambling as a “growing cause of debt collection problems for insured depository institutions and the consumer credit industry.”[9] However, online poker platforms continued to operate in the United States in direct defiance of the Act.[10] On April 15, 2011, deemed “Black Friday,” the industry was dealt a death blow when the Department of Justice indicted the three largest poker sites operating in the United States, causing them to leave the American market for fear of violating the UIGEA.[11] The industry crumbled in the United States.[12]

One of the most popular and illustrious forms of gambling is sports betting. Until 2018, sports betting had endured a similar ban in the United States under the Professional and Amateur Sports Protection Act (PASPA).[13] The Supreme Court’s landmark decision in Murphy v. NCAA reversed the Congressional ban on sports betting holding that PASPA is unconstitutional and giving states the authority to make sports betting legal within their borders.[14] In the years leading up to this decision, the national sentiment surrounding sports has become increasingly positive.[15] For example, in 2016, one survey found that “[o]f those who watched Super Bowl 50, 80% want to see the country’s current sports betting laws change.”[16] In the wake of this ruling, twenty states have now legalized sports betting and many other states have active legislation moving towards legalization.[17]

This Note will argue that the original concerns leading to the enactment of the UIGEA are outdated and unreasonable in light of the Supreme Court’s recent ruling in Murphy. With the defeat of PASPA, a way forward can and should be forged for legal online poker to return to its former prominence in America. Any discussion of American gambling post-Murphy will necessarily include a discussion of sports betting. Part I contains an initial overview of the UIGEA, including an analysis of case law surrounding the UIGEA. Part II will elucidate the circumstances surrounding the defeat of PASPA in Murphy and what impact that has on litigation surrounding the UIGEA. Part III will argue that legalization of online poker will bring greater government oversight and benefit players overall, as many players turned to unregulated offshore sites following Black Friday. Part IV will discuss the state of online poker today, including the benefits the game brings to the four states where online poker is currently legal. Part V will speculate on a possible path forward for states where online poker has been historically banned, utilizing Kentucky as an example. 

I.      Overview and Preliminary Refutations of the UIGEA 

Due to being outdated and unfairly restrictive of online poker, the efficacy of the UIGEA needs to be reconsidered. When PASPA was still valid, it imposed a nationwide ban on sports betting.[18] Conversely, the UIGEA does not alter, limit, or extend any Federal or State law “prohibiting, permitting, or regulating gambling within the United States.”[19] Instead, the Act prohibits those “engaged in the business of betting or wagering” from knowingly accepting funds of any kind “in connection with the participation of another person in unlawful internet gambling.”[20] Unlawful Internet gambling is defined as placing, receiving, or knowingly transmitting “a bet or wager by any means which involves the use . . . of the Internet where such a bet or wager is unlawful under any applicable Federal or State law” where “the bet or wager is . . . made.”[21] This definition would later be subject to multiple interpretations by the DOJ; more on that later.[22]

The UIGEA describes a “bet or wager” in part as “the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance.”[23] The Act notably carves out exceptions for other gambling venues such as horse racing, intratribal gaming, securities exchanges, and fantasy sports.[24] It is important to reiterate that the Act does not explicitly ban online poker, but rather, it effectively bans players in the United States from depositing funds to these sites through financial institutions.[25]

While PASPA was inherently unconstitutional, the UIGEA is not. In Murphy v. NCAA, PASPA was deemed to have violated foundational principles of federalism and dual sovereignty, holding that the Act “‘regulate[s] state governments’ regulation’ of their citizens.”[26] However, the UIGEA notably does not regulate state governments’ regulation of their citizens; it does not alter or limit any existing Federal or State regulation on gambling.[27] The language within the Act is not inherently unconstitutional. But, the absence of certain words or phrases reveals important information about the UIGEA.

While the word “poker” or the phrase “online poker” is never explicitly mentioned in the Act, courts have largely considered poker as a “game subject to chance.”[28] In an overwhelming display of failure, the Act itself does not include any language aiding courts in the determination of whether a particular game should fall under the designation of being “subject to chance.”[29] Following the enactment of the statute, state courts were quickly faced with the question of determining whether games are subject to chance or not. Judges employed various tests aimed at solving this problem, one of the most oft utilized being the predominate-factor test.[30]

In Joker Club, a North Carolina Court of Appeals case, the court elucidates the predominate-factor test.[31] The court noted that “while all games have elements of chance, games which can be determined by superior skill are not games of chance.”[32] The court compares poker to games such as bowling and billiards, highlighting that “the instrumentality for victory is in each player’s hands and his fortunes will be determined by how skillfully he use[s] that instrumentality.”[33] In this court’s view, poker does not provide players with the instrumentalities needed for victory; chance takes this out of the player’s hands.[34] Further, the court reasoned that while a skilled player may have a statistical advantage, they are always subject to a turn of a card, which is an instrumentality beyond their control.[35] In Dent, the Superior Court of Pennsylvania, relied on Joker Club in their terse discussion of chance and skill, ultimately grafting Joker Club’s exact reasoning onto the facts of their case without much further consideration.[36]The ambiguity inherent in the UIGEA left trial courts with the burden of making important determinations on whether poker fell under the language of the statute or not.

Poker players who are more skilled and knowledgeable can certainly increase their chance of winning over less-skilled players by studying odds, playing stronger hands, and making quick determinations with the limited information available on the table at any given time.[37] However, courts have maintained that the game itself is ultimately predicated on chance.[38] This is likely due to an overall unfamiliarity with the mechanics of the game coupled with ambiguous statutory language. Because poker has historically been understood as a game which is “subject to chance,” it falls under the purview of the UIGEA. However, there is a strong argument to be made that any game may be interpreted as a game “subject to chance.” 

To begin, the phrase “subject to chance” is subject to many competing interpretations. It can be construed either quite liberally or quite narrowly. It is difficult for one to imagine a game which does not include some element which happens to be “subject to chance.” The strike of a golf ball, no matter how perfect, is subject to the chance that a gust of wind will cause the ball to miss its target ever so slightly.[39] Is the wind an instrumentality which is essential to the game of golf, yet “beyond the player’s control?” Clearly. Golf, like poker, is a game subject to chance. Under the reasoning of Joker Club, golf should also be considered a game of chance, not skill. This example highlights the shortcomings of the outdated and unclear statutory language employed in the UIGEA’s construction. 

The UIGEA’s prohibition on games “subject to chance” makes even less sense when posed with a list of legal, regulated games which are also “subject to chance.” For example, parimutuel horse betting, DFS, and most recently, sports betting, are all games which are able to be legalized and regulated by states if they so choose.[40] Employing the predominate-factor test leads to the realization that all three of these are subject to more chance than skill; the instrumentalities essential to these games are all out of the player’s control. The results of sports matches are wholly determined by the players in the particular game, not any bet placed on the contest. The accuracy of LeBron James’ jump shot is dependent on LeBron James, not a person sitting on their couch watching the game and betting on whether the shot will go in. Conversely, a poker player controls whether they choose to play the hand they are dealt as well as whether they would like to bet, and if so, how much. The poker player competes against other individual agents. However, online poker remains held hostage by the UIGEA. The argument that online poker should be effectively banned because it is “subject to chance” fails.

Another criticism of the UIGEA is that it unduly restrains citizens’ pursuit of happiness.[41] The restrictions of the Act limit citizens’ ability to spend their money how they so choose. It also requires citizens to adhere to the moral code of the State—the outdated paternalistic argument that the State is protecting its citizens by restricting them from internet gambling.[42] The UIGEA contains serious statutory and conceptual flaws, which will be discussed below. 

II.     What Does PASPA’s Defeat Signal for the UIGEA?

There is hope that the UIGEA will fall subject to a similar fate as PASPA. The Supreme Court’s decision in Murphy v. NCAA was the culmination of a long battle against PASPA.[43] The citizens of New Jersey ultimately voted for an amendment to the state constitution which allowed sports gambling to be conducted within its borders.[44] Multiple lawsuits were brought by the NCAA and three major sports organizations, eventually culminating in Murphy.[45] The plaintiffs argued that New Jersey’s legislature violated PASPA’s language which prohibited states from enacting laws authorizing sports betting.[46] In the majority opinion, Justice Alito stated that PASPA violated the anti-commandeering principle by dictating what the New Jersey legislature may or may not do.[47] After holding that no provision of PASPA was severable, it was no longer the law.[48]Unfortunately, the constitutional principles leading to the Supreme Court’s abrogation of PASPA do not transpose to the UIGEA. Thus, the decision in Murphy does not provide any corollary legal precedent which can be utilized.

However, the Supreme Court’s decision reveals the defeat of the rationale which originally supported the passing of PASPA in 1992. The same rationale which supported the former ban on sports gambling undergirds the current ban on online poker. Opponents reason that both are particularly addicting, especially to young people.[49] Both bans led to significant illegal activity which flew in the face of federal legislation. Reports from 2017 (before Murphy) indicated that an estimated amount of $150 billion annually was illegally wagered on sports while PASPA was still in effect.[50]Much like the era of Prohibition on alcohol, Americans have proven that they will continue to gamble despite federal regulation attempting to change their behavior.[51] The American spirit endures.

In years past, opponents of sports gambling included representatives from all four major professional sports organizations: the NBA (National Basketball Association), MLB (Major League Baseball), NFL (National Football League), and NHL (National Hockey League).[52] Interestingly, the NFL has now turned to partnering with major sports betting and DFS sites such as DraftKings.[53] The NBA has also come to partner with sports betting operators, even amidst infamous scandals of game fixing throughout its history.[54] Former opponents have come to be proponents. The growing acceptance of sports gambling signals hope for advocates of online poker. As states pursue legislation seeking to legalize sports gambling, it will provide the perfect venue for discussing the legalization and regulation of poker. Murphy signals a turning of the tides. If states are willing to consider legalizing sports betting, which is undoubtedly “subject to chance,” they should also consider legalizing online poker—arguably a game of skill.

III.   The State of Online Poker in America Today

The online poker industry has been in a constant state of development and fluctuation since its inception. Historically, violations of the UIGEA have relied on underlying violations of the Federal Wire Act of 1961.[55] The Wire Act makes it illegal to knowingly use a wire communication facility for the placing of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest.[56] Since its enactment, “the federal government repeatedly employed the Wire Act as a tool to prosecute individuals engaged in unlawful interstate gambling, including sports wagering and non-sports wagering.”[57] Once the internet age arrived, the government utilized the phrase “wire communication facility” to directly reach those using their computers and the internet in their transmissions.[58] Much like people use phones to contact their local bookie to place bets, people use computers to compete in online poker tournaments. The Department of Justice (DOJ) utilized the broad language of the Wire Act to gain control over the online gambling industry in the modern age.[59]

In a surprising move in 2011, the Department of Justice’s Office of Legal Counsel (OLC) released a memo regarding the Wire Act that led to major changes for online poker.[60] The OLC stated that “the Wire Act does not reach interstate transmission of wire communications that do not relate to a ‘sporting event or contest.’”[61] With these words, the DOJ seemingly lost its foothold for prosecutions unrelated to sports contests. Finally, the laws surrounding online gambling seemed clear and discernable. Relying on this newly printed memo, multiple states—Nevada, New Jersey, Delaware, and Pennsylvania—passed legislation legalizing online poker within their borders.[62]

The industry took one great stride forward, but shortly took two steps back. The OLC surprisingly reversed their 2011 opinion in a recent memo from 2018 regarding their interpretation of the Wire Act.[63] This opinion asserted that “all but one of the Wire Act’s four prohibitions go beyond sports wagering and extend to all internet gambling, including online casino games, poker, and lotteries.”[64] With the 2018 memo, states were again left in the dark on the federal legality of online poker. States that passed legislation regulating online poker have continued to operate despite the 2018 memo.[65] Unfortunately, they face the possibility that courts may adopt the DOJ’s interpretation and invalidate their legislation.[66] The relative ease with which the DOJ continues to interpret and reinterpret this provision is unsettling and may cause hesitation from states attempting to pass future legislation surrounding online gambling.

Nevertheless, a few states have moved forward in the midst of uncertainty. By 2014, three states had legalized online poker: Nevada, New Jersey, and Delaware.[67] Players located in these three states can legally play online poker through WSOP.com.[68] These states have fairly small populations: Nevada and Delaware are only the 35th and 45th most populous states respectively.[69] Therefore, to increase the overall health of the player pool, they signed an interstate agreement allowing them to consolidate the player pools.[70] This means that a poker player located in Nevada can compete online against a player in Delaware at any given time. Recently in 2017, New Jersey joined in this agreement, adding to the player population.[71] This partnership should continue to flourish as more states join the agreement.

Pennsylvania is relatively new to the online poker scene, passing legislation legalizing online gambling in 2017 in the midst of the OLC’s initial Wire Act interpretation.[72] Following a soft launch in late 2019, December brought the official launch of online poker in Pennsylvania through PokerStars.[73] The most prominent online poker site has partnered with Mount Airy Casino Resort to obtain their license to operate in Pennsylvania.[74] At this point, Pennsylvania has not joined the interstate agreement with the few other states allowing regulated online poker.[75] In the month of December alone, online poker generated $2.5 million in revenue in the state.[76] Analysts predict that the online market as a whole will continue to grow as more players move online in the years to come.[77]

As the industry matures and continues to develop, online poker will play a significant role in the ultimate success of gaming. As it stands, there are only six states with laws authorizing online poker.[78] The path to legalization looks different for many states, however there is hope that the law will catch up with the public consensus in due time. For citizens of most states, players must get creative in order to find a table to deal them in.

IV.   American Players Access Offshore Sites to

Play Online Poker Today

During Prohibition, those who desired a bit of a stronger drink than others had to come by that drink through alternative means.[79] However, the creativity and ingenuity of the American people ensured that liquor was readily available in the midst of its illegality.[80] Similarly, online poker remains under prohibitive regulation. Today, crafty online poker players must access offshore sites which are not under the purview of American regulation.[81]

There are numerous offshore sites offering online poker including Bovada and BetOnline which receive heavy traffic from American players.[82]The UIGEA failed to keep American players from simply accessing alternative websites at the click of a mouse and a few keystrokes. The overarching issue with a multiplicity of offshore sites is that players often struggle determining which ones to trust.[83] Additionally, players may use alternate means of funding their accounts, such as utilizing cryptocurrency, which is not backed by any regulated financial institution.[84] These difficulties underscore the need for further reconsideration of the UIGEA and its unintended consequences for American players.

One illustrious scandal occurred shortly after the passage of the UIGEA in 2007. A prominent site called Absolute Poker was founded in 2003 by a group of Montana fraternity brothers with no previous experience.[85] The company was moved to Costa Rica where it was able to operate without a legitimate gaming license.[86] After the exodus of established sites in America following the passage of the UIGEA, “Absolute Poker remained and became a legitimate contender in the market despite its rudimentary software.”[87] In 2007, players began noticing suspicious activity from one particular player named “Potripper” who was located in Costa Rica.[88] It was discovered that Potripper had access to every other player’s hole cards throughout the tournament through the use of a separate master account.[89] In poker, every piece of information is incredibly valuable and he had access to it all. This account would follow Potripper from table to table, revealing complete information on the cards of the other contestants.[90] The site was eventually shut down in 2011, resulting in a 100 percent loss of player funds.[91] Unfortunately, these stories are common, especially with players utilizing offshore sites. 

There is a myriad of solutions to this predicament, but some are more viable than others for the long-term success of online poker in America. It is abundantly clear that the UIGEA and the Wire Act have not worked to ban online gambling in America. One possible solution is inaction—the federal government could certainly continue allowing American players to send their money to offshore sites and incur difficulties using Bitcoin. This would avoid the problem of American financial institutions accepting funds associated with gambling. It would accomplish the letter of the law, but not accomplish the intended effect of enacting the UIGEA in the first place, which is to stop Americans from gambling online.[92] They will find a way to work around the strictures of the UIGEA. Another possible solution is for the DOJ to issue another clarifying memo regarding the Wire Act and the UIGEA. While this would provide states with a quick solution, uncertainty as to the enforcement of these provisions would yet remain. We cannot have another situation on an unregulated site such as the Potripper debacle. Realistically, there are two solutions that take precedent and are more viable over any others. 

First, the Department of Justice should repeal the UIGEA. States which have already offered regulated online poker to their citizens deserve to know their hard work will not be taken away from them at a moment’s notice by the Department of Justice’s interpretative memos. Many of the games the UIGEA sought to ban are subject to carve outs or other exceptions, which now includes sports betting.[93] It is only a matter of time before the language on online poker is chipped away as well, rendering the statute meaningless. This is one possible solution, but there is more that can be done.

Second, citizens should take action to show their state legislators that online gambling is here to stay. States should capitalize on these tax revenue streams as quickly as possible by implementing and maintaining infrastructure in order to accommodate the demand. With the defeat of PASPA, states can choose to offer sports betting.[94] Many states already allow parimutuel horse betting.[95] Daily Fantasy Sports are growing rapidly in many states.[96] Online poker should be available alongside these companions.

While there is no direct legal precedent supporting an immediate challenge of the UIGEA, there is still action to be taken. Of the two possible solutions, it would be more economically and politically efficient for the federal government to return the right to decide back to the individual states through a repeal of the UIGEA. Individual states are better suited to understand the desires of their citizens and the challenges that may come with implementation in their specific contexts. Moreover, with so many carve outs already in place for the various forms of gambling mentioned above, the UIGEA is merely a shell of what it was originally intended to accomplish. Its scope has narrowed to only effectively ban online poker and online casino games.[97] With a repeal, state legislatures would be able to act without fear that a simple DOJ interpretation may invalidate an entire piece of legislation. There must be a better environment for Americans to play online poker other than untrustworthy offshore websites often funded through backdoor cryptocurrency transactions. 

V.    An Example of a Path to Legalization: The Bluegrass State

State lawmakers must work against the broad federal laws in place if they want to pass legislation allowing online gambling—that is, a muddy interpretation of the Wire Act and confusion as to the DOJ’s enforcement of the UIGEA. The path to legalization will likely be more difficult for states which have not historically embraced online gambling and which do not have land-based casinos. Kentucky has historically embraced gambling related to horse racing.[98] Historical racing machines, which functionally operate like classic slot machines using past horse races, have been used in the Bluegrass state for nearly a decade.[99] Currently, there is a bill in progress to protect the operation of these machines after the Kentucky Supreme Court ruled that they did not fall under the Kentucky statute’s definition of pari-mutuel wagering.[100] Nevertheless, Churchill Downs offers online and mobile betting through their TwinSpires subsidiary.[101] The same enthusiasm, however, has not surrounded other forms of gambling in Kentucky.

Kentucky has notoriously been opposed to online poker for over a decade. In 2008, then-governor, Steve Beshear, attempted “to seize 141 domain names registered to online companies” in order to prevent Kentuckians from accessing the sites.[102] The Governor’s rationale included many familiar arguments, including the claim that minors had easy access to the sites and the sites took away taxes that would usually go to the state.[103]The state recently won litigation against PokerStars, though it is still seeking recovery of the $1.3 billion.[104] The case was originally brought in 2010 following the enactment of the UIGEA.[105]

Even in a state as hostile to online poker as Kentucky, there is surprisingly a chance that legalization will occur in the near future. Ironically, the current Governor, Andy Beshear, Steve Beshear’s son, is advocating for the online poker industry to come to Kentucky.[106] The revenue raised by the gambling industry will predominately be used to help fund a severely underfunded pension plan for state educators—a viable solution to an overwhelming issue in the Commonwealth.[107]

The Governor also has legislators on his side. On the first day of the 2020 session, Representative Adam Koenig introduced HB 137 which purported legalization of sports betting, DFS, and online poker.[108] Under HB 137, players who would like to bet online would have to register in person with a licensed organization—likely one of the state’s racetracks.[109] Although this bill was approved by the House, it was killed by partisan politics before it could reach the Kentucky Senate.[110] Unfortunately, in 2021, a similar bill, HB 241, failed in the Kentucky House, because of the more pressing issue of historic horse betting.[111] Koenig plans to reintroduce the bill in the 2022 session.[112] Kentucky should look to surrounding states as guides in determining tax rates that will be most beneficial to its businesses as well as its citizens. With each passing year, Kentucky loses tax revenue to Indiana, Ohio, and other surrounding states.[113]

The Commonwealth will, however, still have to contend with challenges by the federal government under the UIGEA. If the DOJ’s Criminal Division chooses to prosecute online poker operators again as in Black Friday, states would have to argue against the UIGEA and the Wire Act. This matter is complicated given the OLC’s 2018 memo.[114]  If Kentucky follows the solution offered above, however, there is greater hope that online gambling will be here to stay in the Bluegrass State for good. If the Governor and Legislature work together to bring gambling to Kentucky, it could serve as a viable solution to the pension crisis facing the state.

VI.   Conclusion

The path to legalization among states is encouraging in light of the multi-state online agreement. The foundation has been laid for states to legalize poker in their jurisdiction and then join the multi-state agreement. This would exponentially increase the player pools across the states, adding to the overall health and continuity of the industry. The fact that states like Kentucky are pursuing legalization of online gaming is promising for the future of the industry.

Now is the time for the federal government and individual states to embrace the legalization of many forms of gaming, including online poker. Public approval for online gambling is increasing, offering a prime opportunity for states to act. Rather than allowing offshore gaming websites to infiltrate the American market, states should reclaim the market share. Online gaming will give states access to additional tax revenue which can be put to use improving the lives of their citizens. States are merely delaying the inevitable legalization of online poker if they choose to wait. For now, states should play their hand right instead of folding.

I Senior Staff Editor, Kentucky Law Journal, Vol. 109; J.D. Candidate, The University of Kentucky J. David Rosenberg College of Law (2021); B.A., The University of Kentucky (2017).

2 Global Gambling Industry in Recent Years, Casino.org www.casino.org/features/gambling-statistics [https://perma.cc/BX2P-SCF2].

3 See Welcome to TwinSpires, TwinSpires, https://www.twinspires.com/about-us [https://perma.cc/53SD-ZCMS]; FanDuel, https://www.fanduel.com[https://perma.cc/NR2M-GHP8]; DraftKings, http://www.draftkings.com [https://perma.cc/L7NW-DNFF].

[4] Erik Smith, Planet Poker Era, Poker Hist. (Aug. 10, 2011, 5:15 PM), www.pokerhistory.eu/history/planet-poker-first-online-poker-room [https://perma.cc/MTB2-UWHU].

[5] See Bernard Lee, Life and Legacy of Chris Moneymaker, ESPN (May 24, 2018), www.espn.com/poker/story/_/id/23594337/world-series-poker-life-legacy-chris-moneymaker-15-years-2003-wsop-main-event-win-changed-world-poker [https://perma.cc/MCL9-UX8S].

[6] Chris Moneymaker, PokerListings, https://www.pokerlistings.com/poker-player/chris-moneymaker [https://perma.cc/SFS5-A89Z].

[7] Unlawful Internet Gambling Enforcement Act of 2006, ch. 53, sec. 802, §§ 5361–67, Pub. L. No. 109-347, 120 Stat. 1952 (codified as 31 U.S.C. §§ 5361–67).

[8] 31 U.S.C. § 5363 (2006).

[9] 31 U.S.C. § 5361 (2006).

[10] Andrew M. Nevill, Folded Industry? Black Friday’s Effect on the Future of Online Poker in the United States, 2013 U. Ill. J.L. Tech. & Pol’y 203, 204 (2013).

[11] Id.

[12] See id.

[13] Professional and Amateur Sports Protection Act, ch. 178, sec. 1–3, §§ 3701–3704, Pub. L. No. 102-559, 106 Stat. 4227 (1992); see generally John T. Holden, Prohibitive Failure: The Demise of the Ban on Sports Betting, 35 Ga. St. U.L. Rev. 329, 334­–37 (2019) (explaining the events leading up to and the passage of PASPA).

[14] Murphy v. NCAA, 138 S. Ct. 1461, 1484–85 (2018).

[15] See Justin Fielkow et al., Tackling PASPA: The Past, Present, and Future of Sports Gambling in America, 66 DePaul L. Rev. 23, 47–49 (2016).

[16] Id. at 48.

[17] Ryan Rodenberg, United States of Sports Betting: An Updated Map of Where Every State Stands, ESPN (Apr. 7, 2021) https://www.espn.com/chalk/story/_/id/19740480/the-united-states-sports-betting-where-all-50-states-stand-legalization [https://perma.cc/52YC-5W43].

[18] 28 U.S.C. § 3702 (1992).

[19] 31 U.S.C. § 5361(b) (2006).

[20] Id. at § 5363.

[21] Id. at § 5362.

[22] See infra Part III.

[23] 31 U.S.C. § 5362 (2006).

[24] Id.

[25] Id. at § 5363.

[26] Murphy v. NCAA, 138 S. Ct. 1461, 1485 (2018) (quoting New York v. United States, 505 U.S. 144, 166 (1992)).

[27] 31 U.S.C. § 5361(b) (2006).

[28] Joker Club, L.L.C. v. Hardin, 643 S.E.2d 626, 630–31 (N.C. Ct. App. 2007); Commonwealth v. Dent, 992 A.2d 190, 195–96 (Pa. Super. Ct. 2010). 

[29] 31 U.S.C. §§ 5361–67.

[30] See, e.g., Joker Club, 643 S.E.2d at 629–30.

[31] Id. 

[32] Id. at 630.

[33] Id.

[34] Id.

[35] Id. at 630–31.

[36] Commonwealth v. Dent, 992 A.2d 190, 196 (Pa. Super. Ct. 2010).

[37] See generally, Poker Starting Hands Percentage & How to Play Your Position, CardsChat, http://www.cardschat.com/poker-starting-hands-percentage.php [https://perma.cc/KLU6-NAVQ] (explaining different poker strategies).

[38] E.g., Dent, 992 A.2d at 195–96.

[39] See Roman V. Yampolskiy, Game Skill Measure for Mixed Games, 1 Int’l J. Computer & Info. Engineering, 662, 663 (2007), https://publications.waset.org/4769/pdf [https://perma.cc/ZB5Q-FRT5].

[40] 31 U.S.C. § 5362.

[41] See Michael A. Tselnik, Note, Check, Raise, Or Fold: Poker and the Unlawful Internet Gambling Enforcement Act, 35 Hofstra L. Rev. 1617, 1669 (2007).

[42] Id.

[43] Murphy v. NCAA, 138 S. Ct. 1461 (2018).

[44] Id. at 1471.

[45] See id. at 1465–66.

[46] Id. at 1471. Holden’s article provides a much deeper analysis of the litigation history surrounding PASPA. Holden, supra note 13, at 353–64.

[47] Murphy, 138 S. Ct. at 1478.

[48] Id. at 1484.

[49] Id. at 1469.

[50] See Holden, supra note 13, at 336.

[51] See generally Jack S. Blocker, Jr., Did Prohibition Really Work?, 96 Am. J. Pub. Health 233 (2006) (arguing that Prohibition did not eliminate alcohol consumption in America, but it significantly reduced it). 

[52] Holden, supra note 13, at 337, 339–42, 346.

[53] DraftKings to Open Fantasy Lounges at AT&T Stadium, Gillette Stadium & Arrowhead Stadium to Kick Off the Football Season, PRNewswire (Aug. 26, 2015, 11:52 PM), http://www.prnewswire.com/news-releases/draftkings-to-open-fantasy-lounges-at-att-stadium-gillette-stadium--arrowhead-stadium-to-kick-off-the-football-season-300133579.html [https://perma.cc/4LS7-AKEX].

[54] See NBA Announces Sports Betting Partnership with William Hill, NBA (Oct. 2, 2019, 12:40 PM), http://www.nba.com/article/2019/10/02/nba-partnership-william-hill-official-release [https://perma.cc/J5PV-8FQT]; see also Scott Eden, How Former Ref Tim Donaghy Conspired to Fix NBA Games, ESPN (Jul. 9, 2020), http://www.espn.com/nba/story/_/id/25980368/how-former-ref-tim-donaghy-conspired-fix-nba-games [https://perma.cc/R4C3-VGYC] (showing game-fixing in the NBA).

[55] See Gregory A. Brower & Mark R. Starr, The Wire Act Revisited: How the DOJ’s Recent Reinterpretation May Affect Gaming in Nevada, Nev. Law., Apr. 2019, at 8, 10.

[56] Id. at 9 (citing 18 U.S.C. § 1084(a)).

[57] Id.

[58] See id.

[59] Id.

[60] Id.

[61] Id. (citation omitted). 

[62] Id.

[63] Id.

[64] Id.

[65] See id. at 10.

[66] Id.

[67] Pete Kaminski, Legal Nevada Online Poker, Legal US Poker Sites (Feb. 23, 2021), www.legaluspokersites.com/state-laws/nevada [https://perma.cc/EHM7-WXSF].

[68] Id.

[69] Cliff Spiller, Nevada and Delaware Sign an Agreement to Share iPoker Player Pools, Legal US Poker Sites (Nov. 2, 2018), www.legaluspokersites.com/news/nevada-and-delaware-sign-an-agreement-to-share-ipoker-player-pools/3212 [https://perma.cc/UVA8-8K4F].

[70] Id.

[71] Kaminski, supra note 67.

[72] Steve Schult, Pennsylvania Online Poker Generates $2.5 Million Worth of Revenue in First Month, Card Player (Jan. 21, 2020), www.cardplayer.com/poker-news/24602-pennsylvania-online-poker-generates-2-5-million-in-revenue-in-first-full-month [https://perma.cc/YR7V-P789].

[73] Id.

[74] PokerStars Launches in Pennsylvania, Poker Stars (Nov. 4, 2019), https://www.pokerstars.com/en/news/pokerstars-launches-in-pennsylvania/57916/?no_redirect=1 [https://perma.cc/U7ZQ-PQJF].

[75] Multi-State Legal Online Poker, Online Poker Rep. (Mar. 22, 2021), www.onlinepokerreport.com/multi-state-poker [https://perma.cc/DB2Z-9XRT].

[76] Schult, supra note 72.

[77] Id. The outset of the COVID-19 pandemic has kept most gamblers at home. As anticipated, the online gaming industry has only continued to thrive due to widespread restrictions on in-person betting. If more states had online options available, gamblers may not have to risk their health by going to a casino during a pandemic in order to make their bets. See FN Media Group, How Sports Betting is Thriving Despite COVID-19 Lockdowns, PRNewswire (July 17, 2020, 8:00 PM), www.prnewswire.com/news-releases/how-sports-betting-is-thriving-despite-covid-19-lockdowns-301095319.html [https://perma.cc/2ACF-9SUN].

[78] Multi-State Legal Online Poker, supra note 75. 

[79] See Blocker, supra note 51, at 237 (discussing the sale of dehydrated grapes and how consumers would rehydrate and ferment them to make wine). 

[80] See id.

[81] Nevill, supra note 10, at 217.

[82] Adrian Sterne, Offshore Poker Sites, Top 10 Poker Sites, https://www.top10pokersites.net/offshore-poker-sites [https://perma.cc/3L28-MBUC].

[83] See Jake Patel, Offshore Gambling, Compare.Bet, www.compare.bet/en-us/offshore-gambling [https://perma.cc/BL4K-MBTW].

[84] See generally Avery Minor, Note, Cryptocurrency Regulations Wanted: Iterative, Flexible, and Pro-Competitive Preferred, 61 B.C.L. Rev. 1149, 1150 (discussing cryptocurrency in the United States).

[85] Natalie Faulk, Ultimate Bet and Absolute Poker: What Happened?, Upswing Poker (Mar. 27, 2018), www.upswingpoker.com/ultimate-bet-absolute-poker-scandal [https://perma.cc/4EAH-J7R6].

[86] Id.

[87] Id.

[88] Id.

[89] Id.

[90] Id.

[91] Absolute Poker, Safest Poker Sites, www.safestpokersites.com/absolute-poker [https://perma.cc/QAS9-T8VD].

[92] 31 U.S.C. § 5361.

[93] Murphy v. NCAA, 138 S. Ct. 1461, 1485 (2018).

[94] Id. at 1484–85.

[95] States with Legal Horse Betting, Legal Sports Betting (Mar. 29, 2021), https://www.legalsportsbetting.com/states-with-horse-betting/ [https://perma.cc/7ASA-8HK5].

[96] Fielkow et al., supra note 15, at 48–49.

[97] 31 U.S.C. § 5361.

[98] States with Legal Horse Betting, supra note 95; see generally Ky Rev. Stat. Ann. § 230.260 (West 2011) (providing authority to the Kentucky Horse Racing Commission)

[99] Steve Bittenbender, Kentucky Legislation Begins Action to Legalize Historical Horse Racing Machines, Ctr. Square (Feb. 4, 2021), https://www.thecentersquare.com/kentucky/kentucky-legislature-begins-action-to-legalize-historical-horse-racing-machines/article_3ec45258-6721-11eb-b253-a7a291baf292.html [https://perma.cc/JR8A-VKAP].

[100] Id.; Family Tr. Found., Inc. v. Ky. Horse Racing Comm'n, No. 2018-SC-0630-TG, 2020 WL 5806813, at *5 (Ky. Sept. 24, 2020), reh'g denied (Jan. 21, 2021).

[101] Bet Online with TwinSpires, TwinSpires, www.Twinspires.com [https://perma.cc/G64M-DE24].

[102] Bob Pajich, Kentucky Attempts to Seize Online Poker Domains, Card Player (Sep. 22, 2008), www.cardplayer.com/poker-news/5121-kentucky-attempts-to-seize-online-poker-domains [https://perma.cc/QZC6-HPVT].

[103] Id.

[104] John Cheves, Online Poker Site Owes KY $1.3 Billion. The State is Reaching for First $100 Million., Lexington Herald Leader (Mar. 25, 2021, 3:29 PM), https://www.kentucky.com/news/politics-government/article250204085.html#:~:text=The%20high%20court%20said%20Kentucky's,poker%20is%20illegal%20in%20Kentucky.

[105] Steve Schult, Kentucky Wins $1.3 Billion Lawsuit Against PokerStars, Card Player (Dec. 17, 2020), https://www.cardplayer.com/poker-news/25559-kentucky-wins-1-3-billion-lawsuit-against-pokerstars [https://perma.cc/MY2G-Y96Y].

[106] Jennifer Newell, Online Poker Remains in Kentucky Gubernatorial Debates, Legal Us Poker Sites (Oct. 17, 2019), www.legaluspokersites.com/news/online-poker-kentucky/19482 [https://perma.cc/W8MB-JLN8].

[107] Id.

[108] Alex Weldon, Kentucky Online Poker Bill Clears First Committee Hurdle with Ease, Online Poker Rep. (Jan. 22, 2020, 5:00 PM), www.onlinepokerreport.com/39654/kentucky-online-poker-bill-advances [https://perma.cc/E9VY-P4M2].

[109] Id.

[110] Tim Sullivan, Despite Majority Support in Kentucky House, Odds Were Against Sports Betting Bill, Louisville Courier J. (Apr. 8, 2020, 5:50 PM),  https://www.courier-journal.com/story/sports/2020/04/08/kentucky-house-politics-kills-kentucky-sports-betting-bill/2970078001/ [https://perma.cc/2KYY-JXGT].

[111] Christina Monroe, Kentucky Kills Bill for Legal Sports Betting in 2021, Legal Sports Betting (Mar. 14, 2021, 12:03 PM), https://www.legalsportsbetting.com/news/kentucky-kills-bill-for-legal-sports-betting-in-2021/ [https://perma.cc/5TY5-K76J].

[112] Id.

[113] James McNair, How Kentucky Money Fuels Cross-Border Casinos, Other State Budgets, Ky. Ctr. Investigative Reporting (Mar. 6, 2015), https://kycir.org/2015/03/06/how-kentucky-money-fuels-cross-border-casinos-other-state-budgets/ [https://perma.cc/K3BF-5KF6]. While the article’s numerical data is outdated in this rapidly growing industry, it is a detailed empirical analysis of the problem, and the same issues yet remain for Kentuckians today.

[114] Brower & Starr, supra note 55, at 9.

Setting a Dangerous Precedent: A Constitutional Analysis of Kentucky Courts' Public Policy Exception to Conflicts-of-Law Jurisprudence

Download a PDF Below:

Cameron F. Myers[1]

Introduction

In resolving contractual disputes in which the contract or the contracting parties are connected to multiple states, courts are often charged with the daunting task of determining which state’s law provides the proper avenue for handling the dispute. In Kentucky, courts generally follow the Restatements (Second) of Conflicts of Laws “most significant relationship” test.[2]

The most significant relationship test instructs courts to consider several factors: the place of formation of the contract; the place where the contract was or is to be performed; the physical location, if any, of the contract’s subject matter; as well as the domicile, residence, and/or place of business of the contracting parties.[3] The idea is for these factors, taken together, to provide a defendable means for Kentucky courts to determine which state has the “most significant relationship to the transaction and the parties,” and, consequently, which state’s law should govern the contractual dispute.[4]

But even if the application of the most significant relationship test clearly identifies a state other than Kentucky as the state with the most significant relationship to the transaction and the parties, Kentucky courts will nevertheless refuse to apply the law of that state if doing so would violate a well-established public policy of the Commonwealth.[5] Notably, however, Kentucky courts will invoke this public policy exception to the most significant relationship test only for the protection of a Kentucky resident. As Justice Abramson once wrote for the Supreme Court of Kentucky, the public policy exception requires a “well-founded rule of domestic policy established to protect the morals, safety, or welfare of our people.”[6]The court emphasized that “[w]here no Kentucky resident has been affected, rarely will that standard be met.”[7]

This Note explores the constitutionality of Kentucky courts’ refusal to extend the public policy exception to nonresidents who properly bring suit in Kentucky. Part I employs case law examples to illustrate how Kentucky courts routinely apply the public policy exception for the protection of Kentucky residents, and it traces the historical trend of Kentucky courts toward denying the public policy exception to nonresidents. Part II analyzes the constitutionality of Kentucky courts’ application of the public policy exception under the Equal Protection Clause. Part III examines the constitutionality of Kentucky courts’ application of the public policy exception under the Privileges and Immunities Clause. Part IV provides a brief synopsis of the reasons why Kentucky should apply the public policy exception equally to all persons within its boundaries, regardless of residency.  

 I.           The Case Law

Recently, the public policy exception was used for the protection of a Kentucky resident in the case Woods v. Standard Fire Insurance Company.[8] In Woods, a Kentucky resident was gravely wounded in a car crash on a Kentucky roadway.[9] Woods, the Kentucky resident, acquired medical charges surpassing $250,000.[10] During the collision, Woods was operating her father’s car, a resident of Connecticut.[11] The car was insured by Standard Fire, a Connecticut insurance company with its principal place of business in Connecticut.[12] Under the terms of the policy, Woods’ father was the named insured and Woods was in no way covered.[13]

The other motorist in the collision was insured by United States Automobile Association (USAA).[14] Woods settled her tort claim with USAA for $50,000.[15] Woods obtained $11,000 in “UIM benefits” from Standard Fire, the insurer of her father’s vehicle, and requested an additional $100,000 in UIM benefits from the company.[16] The Standard Fire policy contained a set-off provision which lowered its “limit of liability . . . by all sums” paid by other parties possibly “legally responsible” for collisions causing physical damage.[17]

Under Connecticut law, where such provisions are enforceable, this clause would reduce (“set-off”) Woods’ $100,000 UIM payment from Standard Fire by $61,000, the total amount previously received from USAA and Standard Fire.[18] Under Kentucky law, however, such set-off provisions are not enforceable as against public policy and would therefore not reduce Woods’ total amount recoverable by the prior amounts received.[19] Consequently, the case turned on whether Connecticut law or Kentucky law governed the interpretation of the policy.[20]

Despite its conclusion that the application of the most significant relationship test weighed in favor of applying Connecticut law, the court nevertheless held that the public policy exception required application of Kentucky law to the insurance policy.[21] The court “acknowledge[d] that application of the public policy exception in this case swallows the most significant relationship test analysis, which points in favor of application of Connecticut law.”[22] But the court reasoned that Kentucky state courts have “demonstrated a willingness to disregard the most significant relationship test” when its application would clearly violate the public policy of Kentucky.[23]

Although the court made no comment of the fact that it was disregarding another state’s substantive law for the protection of a Kentucky resident, as opposed to a non-resident, this decision is consistent with the pattern of Kentucky courts only applying the public policy exception if a Kentucky resident stands to benefit.

A similar example reflecting this pattern is found in the case of Schardein v. State Auto Insurance Company.[24] Schardein involved an automobile accident on a Kentucky roadway between a Kentucky resident and another driver.[25] The Kentucky resident, a 19-year-old, was killed in the collision.[26] The decedent’s estate moved against the uninsured motorist policy of his father, an Indiana resident insured by State Auto.[27]Similar to the insurance policy in Woods, the policy issued by State Farm to the decedent’s father contained a set-off provision which reduced the payments receivable from State Farm by all other amounts paid by other parties as a result of the collision.[28]

The decedent’s estate conceded that under Kentucky’s traditional conflict of laws analysis Indiana law would apply, but nevertheless argued that Kentucky law should apply under the public policy exception.[29] The court agreed.[30] Despite the fact that the named policy holders were both Indiana residents, the court held that the decedent was a resident of Kentucky and therefore his estate was “entitled to the protection of Kentucky’s laws.”[31]

A.      The Unfollowed Exception

State Farm v. Marley appears to be the only case in which the Kentucky Supreme Court applied the public policy exception for the protection of a nonresident of Kentucky,[32] but that opinion has not been followed and was later implicitly rejected by the Kentucky Supreme Court itself.[33]

In Marley, an Indiana resident fell asleep behind the wheel and lost control of his vehicle while driving through Kentucky with his family.[34] The driver of the vehicle had a personal liability umbrella insurance policy issued in Indiana.[35] The driver’s injured family members, all of which were Indiana residents, subsequently filed a personal injury claim against the driver in Kentucky.[36] The driver’s insurer contended that a household exclusion provision within the policy was valid and enforceable and therefore prevented the family members from recovering against the driver’s policy.[37]

In finding that such provisions clearly violated the public policy of Kentucky, the court held the household exclusion provision void and unenforceable as applied to the automobile liability coverage.[38] The court reasoned that it is clear public policy of Kentucky “to ensure that victims of motor vehicle accidents on Kentucky highways are fully compensated.”[39] The majority opinion made no distinction between residents and non-residents in holding the household exclusion provision unenforceable as against public policy.[40]

Despite the majority’s constitutionally-compliant opinion, the dissenting opinion has since become the prevailing view of the Commonwealth.[41]The dissent takes the position that it is illogical for Kentucky courts to apply Kentucky’s public policy exception in a way that would “provide rights to nonresidents to which they are not entitled under the law of their home state.”[42] Because all of the parties to this action were residents of Indiana, the dissent contends, Indiana law should govern the interpretation of the policy and that should be the end of the matter.[43] The crux of the dissent’s argument is that nonresidents of Kentucky should not be afforded the protections of the public policy of Kentucky merely because they got into an accident in Kentucky.[44]

In support of this view, the dissent makes two main arguments. First, the dissent argues generally that extending the public policy exception to out-of-state residents encourages forum shopping, which, itself, violates the public policy of Kentucky.[45] Second, and more related to the facts of the case at hand, the dissent contends that a majority of other jurisdictions have held such household exclusion clauses enforceable “if valid where the policy was issued and where the parties reside even if invalid in the state where the accident occurred.”[46]

On their face, the dissent’s arguments in support of denying the public policy exception to out-of-state residents are both logical and well-reasoned. It is true that a majority of other jurisdictions have held these clauses enforceable if valid where the policy was issued, even if the clauses were invalid in the state where the accident occurred.[47] It is likewise true that forum shopping is against the public policy of Kentucky.[48] Logical as these arguments may be, however, they suffer two critical flaws. 

First, the dissent’s “everyone else is doing it” argument overlooks, as many other jurisdictions have, the fact that routinely applying this exception for the protection of in-state residents while consistently denying its applicability to similarly-situated nonresidents implicates the Equal Protection Clause. The Equal Protection Clause unequivocally commands that no state shall “deny to any person within its jurisdiction the equal protection of the laws.”[49] The public policy exception clearly constitutes law, and it certainly provides protection for those whom it is invoked for.[50]  Accordingly, it is difficult to see how the Equal Protection Clause could be read to require anything other than that Kentucky courts apply the protections of the public policy exception equally to residents and nonresidents in Kentucky. 

Second, the dissent’s forum-shopping argument overlooks the Supremacy Clause. As explained above, it is hard to see how the Equal Protection Clause could be read to not require Kentucky courts to apply the protections of the public policy exception equally to residents and nonresidents alike. The dissent’s argument that applying the public policy exception to non-residents would violate state law of preventing forum-shopping therefore creates a direct conflict of laws between the U.S. Constitution and state law. In situations such as this, the Supremacy Clause commands that the U.S. Constitution prevail over state law.[51]

B.      Denial of Public Policy Exception to Nonresidents

In the 2013 decision of Hodgkiss-Warrick,[52] the Kentucky Supreme Court implicitly changed its view on the applicability of the public policy exception to out-of-state residents. In that case, a Pennsylvania resident sued to recover for injuries sustained in an automobile collision while riding with her daughter on a Kentucky roadway.[53] The suit named the injured Pennsylvania resident’s insurance company as defendant, alleging insufficient motorist coverage under a policy issued in Pennsylvania and covering a vehicle registered and used exclusively in Pennsylvania.[54] The policy at issue contained an exclusion prohibiting the injured Pennsylvania resident from recovering damages arising out of an accident involving an automobile used by a resident relative, including the Pennsylvania resident’s daughter.[55]

While conceding that under traditional conflict-of-law analysis Pennsylvania law would govern the interpretation of the insurance policy, the Pennsylvania resident argued that the exclusion of her daughter’s vehicle from the policy’s coverage would so violate the public policy of Kentucky that Kentucky law, rather than Pennsylvania law, must apply.[56] Under Kentucky law, the Appellee argued that such exclusions from insurance policies are unenforceable as against Kentucky public policy.[57]

Although the court found that the exclusion at issue did not, in fact, run afoul of Kentucky public policy, the court acknowledged that, even if it did, the public policy exception would nevertheless be inapplicable to the facts of this case.[58] The court reasoned that in order for the public policy exception to bar enforcement of a contractual provision that is valid where made, the Kentucky public policy against such enforcement must be significant.[59] According to the court, a public policy is only substantial if it is a “well-founded rule of domestic policy established to protect the morals, safety or welfare of our people.”[60] “Where no Kentucky resident has been affected,” the court continued, “rarely will that standard be met.”[61]

Following the logic of Hodgkiss-Warrick, the U.S. District Court for the Eastern District of Kentucky, applying Kentucky law, similarly declined to invoke the public policy exception for the benefit of a Kentucky nonresident in the 2014 case of Georgel v. Preece.[62] Georgel involved an accident between a West Virginia resident and a Kentucky resident on a Kentucky roadway.[63] Georgel, the West Virginia resident, filed suit against Preece, the Kentucky resident, as well as Preece’s insurance company seeking damages for injuries he sustained as a result of the accident.[64]Georgel’s insurance company countered that Georgel’s own comparative fault precluded Georgel from recovery.[65] Because West Virginia law encompasses the doctrine of modified comparative negligence, which bars a plaintiff who is fifty percent or more responsible from recovery, Georgel’s chances of recovery were far less viable in West Virginia than in Kentucky.[66]

In its application of the “most significant relationship” test, the court ultimately concluded that West Virginia had the most significant relationship to the transaction and the parties and, therefore, West Virginia law should apply.[67] Georgel urged the court to apply the public policy exception, arguing that Kentucky has a strong, clearly-established public policy of recognizing pure comparative fault.[68] Georgel explained that the purpose behind Kentucky’s doctrine of pure comparative fault is “to promote the policy of allowing injured persons to recover despite being partially responsible for their own injuries.”[69] If the court were to apply West Virginia law, Georgel argued, he would be denied the policy’s benefit.[70]

But Georgel’s pleas fell on deaf ears due to the simple fact that Georgel was not a resident of Kentucky.[71] In declining to extend the public policy exception, the court distinguished a prior case recognizing this public policy on the sole basis that in that case the party who stood to benefit from Kentucky law was a Kentucky resident, whereas Georgel was not.[72] In addition to the court’s reliance on Hodgkiss-Warrick, the court also cited the dissenting opinion in Marley for the proposition that Kentucky has no interest in applying its public policy to provide benefits to out-of-state residents who would not be entitled to such benefits in their own state of residence.[73]

  II.           Constitutionality Under Equal Protection Clause

As addressed above, Kentucky courts’ denial of the public policy exception to nonresidents implicates the Equal Protection Clause. To be sure, the Clause is implicated whenever a government action draws a distinction between groups of people and provides one group more or less protection under the law than the other group.[74] Here, in the context of conflict-of-law disputes, Kentucky courts have drawn a distinction between Kentucky residents and nonresidents and afforded Kentucky residents greater protection under the law by only invoking the public policy exception on their behalf. The Equal Protection Clause is implicated by this residency-based discrimination, and the question next becomes the appropriate level of scrutiny for constitutional review.[75]

Typically, laws or government actions which draw such classifications between groups of people will survive judicial review under the Equal Protection Clause so long as the classification is “rationally related to a legitimate government interest.”[76] This standard is known as rational basis review, and it is used to analyze government regulations, laws, or actions involving classifications that do not implicate an immutable characteristic (e.g., race, national origin, aliens, gender) or encroach on a fundamental right (i.e., rights specifically recognized by the Supreme Court as granted by the Constitution).[77] This is a relatively lenient standard in which the government is normally—though not always—given a significant amount of deference.[78]

In the context of Kentucky’s denial of its public policy exception to nonresidents, rational basis review is likely the proper standard of constitutional scrutiny. The classification made by Kentucky courts in this regard is based on state of residency, which is not an immutable characteristic warranting a higher level of scrutiny.[79] Likewise, it is unlikely that the denial of the public policy exception to nonresidents interferes impermissibly with the exercise of a fundamental right—at least under traditional Equal Protection Clause analysis.[80] Even under rational basis review, however, courts will strike down laws or governmental actions if there is simply no plausible legitimate state interest for the state to advance.[81]

In Romer v. Evans, for example, the Court struck down under rational basis review a Colorado Constitutional Amendment which precluded any judicial, legislative, or executive action designed to protect persons from discrimination based on their sexual orientation.[82] The State’s proffered interest in adopting the Amendment was the protection of “the liberties of landlords or employers who have personal or religious objections to homosexuality.”[83] In declining to deem this interest legitimate, the Court reasoned that if equal protection of the laws means anything, “it must at the very least mean that a bare . . . desire to harm a politically unpopular group cannot constitute a legitimate government interest.”[84]

Similarly, in Metropolitan Life Insurance Company v. Ward, the Court used rational basis review to strike down an Alabama law which attempted to promote the growth of an in-state insurance industry by taxing in-state companies at much lower rates than out-of-state companies doing business in the State.[85] The Court found the State’s preferred interest to be “purely and completely discriminatory,” and accordingly deemed the law the “very sort of parochial discrimination that the Equal Protection Clause was intended to prevent.”[86]  

Based on the language of the Kentucky opinions denying the public policy exception to out-of-state residents, there appear to be two state interests Kentucky could advance in support of making this distinction. First, Kentucky could argue that it has a legitimate state interest in declining to “provide rights to nonresidents to which they are not entitled in their home state.”[87] It is difficult to distinguish such an interest from the impermissible state interest offered by the Colorado government in Romer, as it seems to be more of a bare desire to disfavor a particular group of people within the Kentucky’s borders than an effort to advance a bona-fide interest for the benefit of the Commonwealth. 

Though Kentucky’s inequal application of its public policy exception harms a group of people less directly than the Colorado constitutional amendment did in Romer (which is perhaps part of the reason why such practices have escaped Constitutional scrutiny thus far), the practical effect is the same. In both instances, the government action singles out a particular group with little political power (homosexual Colorado citizens in Romer)or no political power (nonresidents who properly bring suit in Kentucky) within a state and disadvantages that group.[88] Accordingly, it seems plausible that even under rational basis review this interest would fail to qualify as legitimate.  

Alternatively, Kentucky could argue that it has a legitimate state interest in refusing to disrupt the balance of public policies that other states have chosen for their citizens.[89] Here too, though, it is uncertain whether such an interest would qualify as legitimate, as there appears to be no case law even remotely on point. Logically speaking, however, one major flaw in this argument is that Kentucky has no issue overriding the balance of public policies and substantive laws that another state has chosen for its residents when doing so protects a Kentucky resident.[90]

Furthermore, such a disparate treatment of non-residents who properly bring suit in Kentucky could be analogized, albeit imperfectly, to Alabama’s “purely and completely discriminatory” treatment of out-of-state companies doing business in Alabama as in Ward.[91] Just as the Supreme Court there deemed the State’s interest in discriminating against out-of-state companies in order to protect domestic growth to be illegitimate,[92] the Supreme Court could likewise hold Kentucky’s interest in declining to disrupt the balance of policies chosen by other states for their residents, except when doing so would benefit a Kentucky resident, to be insufficient. Accordingly, it seems quite plausible Kentucky’s practice of denying its public policy exception to nonresidents could fail even the most deferential standard of constitutional scrutiny. 

III. Constitutionality Under Privileges and Immunities Clause

Article IV, Section 2 of the United States Constitution requires that “[t]he Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.”[93] Historically, the Privileges and Immunities Clause has been used primarily to protect rights which are either fundamental or involve important economic activities.[94]

The most obvious privileges and immunities, for example, are constitutional rights,[95] such as the right to own and dispose of property,[96] or the right to pursue “a common calling.”[97] By the same token, the right to engage in a particular trade or profession, or to pay an equal licensing fee as residents for certain commercial activities, also qualify as privileges and immunities under the clause.[98] Rights which are not considered fundamental, such as the right to hunt for sport, for example, do not qualify as privileges and immunities.[99]

In the context of conflicts-of-law, the Privileges and Immunities Clause has a particularly curious history. While Supreme Court justices have acknowledged the inherent overlap between constitutional law and conflicts-of-law principles,[100] the modern Court has never heard a Privileges and Immunities Clause challenge to a state conflicts-of-law rule.[101] In fact, the Court has not invalidated a state conflict-of-law decision under anyconstitutional provision since 1951.[102] This is true despite the fact that conflict-of-law rules that give preference to local litigants constitute a “prima facie” violation of the Privileges and Immunities Clause under even the most liberal reading of the Clause’s text.[103]

But for some reason, the Supreme Court has steered clear of this convoluted intersection of law for more than a half-century, leaving its resolution entirely to state courts and legal theorists.[104] The result of leaving this power with the states has, predictably, resulted in a system by which local discrimination against nonresidents often escapes judicial review.[105]

In the context of Kentucky only applying its public policy exception for the protection of Kentucky residents, for example, certain residents of other states who lawfully bring suit in Kentucky are denied Kentucky’s favorable policies. Truthfully, it is less than clear exactly what constitutes a “privilege” or “immunity” under the Clause as to warrant constitutional protection against discrimination on the basis of state residency.[106] But because Kentucky advances these policies for the protection of Kentucky residents, its denial to residents of other states at least arguably deprives those citizens of a fundamental right or “privilege” under the clause—the constitutional right to equal protection of the laws. 

As one prominent legal theorist put it, “if the state’s conflicts rules provides that a local right will prevail in a particular case when asserted by a local, that right must prevail when asserted in the same case by an out-of-state[] [resident], unless there is some nondiscriminatory reason why it should not.”[107] The theorist continued, “[j]udicious use of garden-variety antidiscrimination principles embedded in the . . . Privileges and Immunities Clause,” would prevent such local favoritism by states.[108]

Yet, because the Supreme Court refuses to address this issue, states are permitted to continue discriminating against nonresidents through conflict-of-law rules in ways that run afoul of the Privileges and Immunities Clause.[109] For this reason, it is crucial for states like Kentucky who employ these rules to recognize the constitutional ramifications of their actions and lead the way in shifting towards a less-discriminatory body of law. If Kentucky were to reconcile its conflicts-of-law rules with the U.S. Constitution, the Commonwealth would be taking a significant step towards achieving the Framers’ core purpose in drafting the Privileges and Immunities Clause.[110]

IV. Kentucky Courts Should Apply the Public Policy Exception Without Regard to Residency

Given the constitutional issues surrounding conflicts-of-law practices in Kentucky, Kentucky courts should apply its public policy exception equally to residents and nonresidents alike. For one, it is questionable whether Kentucky’s current practice of denying its public policy exception to out-of-state residents could survive even the lowest level of constitutional scrutiny under the Equal Protection Clause.[111] Secondly, such discriminatory behavior is precisely what the Privileges and Immunities Clause was drafted to protect against.[112]

While it is true that the practice is unlikely to be reviewed by the Supreme Court in the near future,[113] Kentucky should nevertheless lead the way in exercising constitutionally compliant conflicts-of-law rules. To be sure, equal protection in the courts between residents and nonresidents alike was a vital part of the Framers’ understanding of the Privileges and Immunities Clause.[114] Further, the plain text of the Equal Protection Clause requires that no person (whether or not that person is a citizen, noncitizen, resident or nonresident) within a state’s jurisdiction be denied equal protection of the laws of that state.[115]

In order for nonresidents who properly bring suit in Kentucky to receive equal protection in this context, they must be governed by “equal application of equal laws.”[116]  By embedding within its conflicts-of-law rules an exception, which can only be used for the protection of Kentucky residents, Kentucky courts violate this principle in the most literal sense.

Conclusion

In sum, by denying out-of-state residents, who properly bring suit in Kentucky, certain legal protections afforded to in-state residents, Kentucky’s application of the public policy exception to the Restatement (Second) Conflicts of Law test is at odds with both the Equal Protection Clause and the Privileges and Immunities Clause of the United States Constitution.  If Kentucky courts wish to continue overriding the Commonwealth’s conflicts-of-law principles with public policy, they should do so without regard to the claimant’s residency. By continuing to apply the public policy exception in a way that favors only local litigants, Kentucky courts set the dangerous precedent of ignoring some of the United States’ most fundamental laws.

I J.D. Candidate, University of Kentucky J. David Rosenberg College of Law (2021). 

[2] See, e.g., State Farm Mut. Auto. Ins. Co. v. Hodgkiss-Warrick, 413 S.W.3d 875, 878 (Ky. 2013) (quoting Restatement (Second) of Conflict of Laws §188(1) (Am. Law Inst. 1977)).

[3] Id. at 878–79.

[4] Id. at 878 (quoting Restatement (Second) of Conflict of Laws §188(1) (Am. L. Inst. 1977)).

[5] State Farm Mut. Auto. Ins. Co. v. Marley, 151 S.W.3d 33, 35 (Ky. 2004). 

[6] Hodgkiss-Warrick, 413 S.W.3d at 882 (quoting R.S. Barbee & Co. v. Bevins, Hopkins & Co. 195 S.W. 154, 155 (Ky. 1917)).

[7] Id.; see also Marley, 151 S.W.3d at 42 (Cooper, J., dissenting) (“Kentucky has no interest in applying our public policy to provide benefits to Indiana residents who would not be entitled to them under Indiana law.”).

[8] Woods v. Standard Fire Ins. Co., 411 F. Supp. 3d 397, 406 (E.D. Ky. 2019). 

[9] Id. at 399.

[10] Id.

[11] Id. at 400.

[12] Id.

[13] Id.

[14] Id. at 399.

[15] Id. at 400.

[16] Id.

[17] Id.

[18] Id. at 400–01.

[19] Id. at 401.

[20] Id.

[21] Id. at 405–06.  

[22] Id. at 405.

[23] Id.

[24] Schardein v. State Auto. Ins. Co., No. 12-288-C, 2012 U.S. Dist. LEXIS 180746, at *4–5 (W.D. Ky. Dec. 20, 2012).

[25] Id. at *1.

[26] Id.

[27] Id. at *2.

[28] Id. at *2–3.

[29] Id. at *3–4.

[30] Id. at *6.

[31] Id. at *4.

[32] See State Farm Mut. Auto. Ins. Co. v. Marley, 151 S.W.3d 33, 34, 36 (Ky. 2004).

[33] State Farm Mut. Auto. Ins. Co. v. Hodgkiss-Warrick, 413 S.W.3d 875, 882, 885 (Ky. 2013) (concluding that the Marley rationale was only applicable in limited circumstances: “Where no Kentucky resident has been affected, rarely will [the public policy exception] be met.”); see also Georgel v. Preece, No. 13-57-DLB-EBA, 2014 U.S. Dist. LEXIS 154678, at *22 (E.D. Ky. Oct. 30, 2014) (“[T]he Court sees no plausible basis for applying a public policy exception to the standard choice of law framework.”). 

[34] Marley, 151 S.W.3d at 34. 

[35] Id.

[36] Id.

[37] Id. at 35

[38] Id. at 36. 

[39] Id.

[40] See id. (“This claim arises from the ownership, operation, and use of a motor vehicle within Kentucky . . . .”).

[41] See State Farm Mut. Auto. Ins. Co. v. Hodgkiss-Warrick, 413 S.W.3d 875, 885, 887 (Ky. 2013); Georgel v. Preece, No. 13-57-DLB-EBA, 2014 U.S. Dist. LEXIS 154678, *at 22 (E.D. Ky. Oct. 30, 2014) (“[T]he Court sees no plausible basis for applying a public policy exception to the standard choice of law framework.”).

[42] Marley, 151 S.W.3d at 41 (Cooper, J., dissenting).

[43] Id.

[44] See id. at 40 (Cooper, J., dissenting).

[45] Id. at 41 (Cooper, J., dissenting).

[46] Id. at 42 (Cooper, J., dissenting)..

[47] See, e.g., Am. Fam. Mut. Ins. Co. v. Williams, 839 F. Supp. 579, 583 (S.D. Ind. 1993) (upholding exclusion clause under Indiana law even though accident occurred in Kansas where exclusion was invalid); Allstate Ins. Co. v. Hart, 611 A.2d 100, 103–04 (Md. 1992) (upholding exclusion clause under Florida law even though accident occurred in Maryland where exclusion violated public policy); Sotirakis v. United Serv. Auto. Ass’n., 787 P.2d 788, 790–91 (Nev. 1990) (upholding exclusion clause under California law even though accident occurred in Nevada where exclusion was invalid); Draper v. Draper, 772 P.2d 180, 183 (Idaho 1989) (upholding exclusion clause under Oregon law even though accident occurred in New Mexico where exclusion was invalid). 

[48] See, e.g., Stewart v. Kentuckiana Med. Ctr., 604 S.W.3d 264, 270 (Ky. Ct. App. 2019).

[49] U.S. Const.  amend. XIV.

[50] See State Farm Mut. Auto. Ins. Co. v. Hodgkiss-Warrick, 413 S.W.3d 875, 881 (Ky. 2013) (“[P]ublic policy, invoked to bar the enforcement of a contract, is not simply something courts establish from general considerations of supposed public interest, but rather something that must be found clearly expressed in the applicable law.”) (emphasis added). 

[51] U.S. Const.  art. VI, cl. 2.

[52] Hodgkiss-Warrick, 413 S.W.3d 875. 

[53] Id. at 876.

[54] Id.

[55] Id. at 878.

[56] Id. at 878, 879.

[57] Id. at 878.

[58] See id. at 882–83. 

[59] Id. at 882.

[60] Id. (quoting R.S. Barbee & Co. v. Bevins, Hopkins & Co. 195 S.W. 154, 155 (Ky. 1917)). 

[61] Id.

[62] Georgel v. Preece, No. 13-57-DLB-EBA, 2014 U.S. Dist. LEXIS 154678, at *18–19, *21–22 (E.D. Ky. Oct. 30, 2014).

[63] Id. at *2. 

[64] Id. at *2–3. 

[65] Id. at *3.

[66] Id.

[67] Id. at *16–17. 

[68] Id. at *20.

[69] Id.

[70] Id.

[71] Id. at *20–21. 

[72] Id.

[73] Id. at *21 (quoting State Farm Mut. Auto. Ins. Co. v. Marley, 151 S.W.3d 33, 42 (Ky. 2004)).

[74] See Christopher R. Green, The Original Sense of the (Equal) Protection Clause: Subsequent Interpretation and Application, 19 Geo. Mason U. C.R. L. J. 219, 220 (2009).

[75] Erwin Chemerinsky, Constitutional Law 727 (Wolters Kluwer eds., 5th ed. 2017). 

[76] See id. at 728 (“Rational basis review is the minimum level of scrutiny that all laws challenged under equal protection must meet. All laws not subjected to strict or intermediate scrutiny are evaluated under the rational basis test.”). 

[77] See, e.g., Colin Callahan & Amelia Kaufman, Equal Protection, 5 Geo. J. Gender & L. 17, 23, 26 (2004). 

[78] Chemerinsky, supra note 75, at 728. 

[79] Id. (“The notion [that immutable characteristics warrant heightened scrutiny] is [predicated on the fact] that it is unfair to penalize a person for characteristics that the person did not choose and that the individual cannot change.”). 

[80] Id. at 730. Cf. Part III, infra pp. 12–14 (discussing the possibility under Privileges and Immunities Clause analysis that the distinction encroaches on the fundamental right to equal protection of the laws). The only other fundamental right which could possibly be encroached by the denial of the public policy exception is the fundamental right to travel. The Supreme Court has made clear that “freedom to travel throughout the United States has long been recognized as a basic right under the Constitution.” Dunn v. Blumstein, 405 U.S. 330, 338 (1972) (citation omitted). Thus far, however, the Supreme Court’s jurisprudence concerning the fundamental right to travel has primarily concerned state durational residency requirements. See id. at 334; Attorney Gen. of N.Y. v. Soto-Lopez, 476 U.S. 898, 900–01, 907 (1986). Since the denial of the public policy exception is not a durational residency requirement, it is unlikely such a denial implicates any fundamental right as to require strict scrutiny. 

[81] See, e.g., Chemerinsky, supra note 75, at 728. 

[82] Romer v. Evans, 517 U.S. 620, 623–24, 635 (1996). 

[83] Id. at 635.

[84] Id. at 634 (quoting United States Dep't of Agric. v. Moreno, 413 U.S. 528, 534 (1973)).

[85] Metro. Life Ins. Co. v. Ward, 470 U.S. 869, 882–83 (1985).

[86] Id. at 878.

[87] State Farm Mut. Auto. Ins. Co. v. Marley, 151 S.W.3d 33, 41 (Ky. 2004) (Cooper, J., dissenting). 

[88] See Romer, 517 U.S. at 635.

[89] See State Farm Mut. Auto. Ins. Co. v. Hodgkiss-Warrick, 413 S.W.3d 875, 883 (Ky. 2013) (explaining that “nothing requires a Kentucky court to interfere with the balance Pennsylvania has chosen for its citizens.”) (citation omitted). 

[90] See, e.g., Woods v. Std. Fire Ins. Co., 411 F. Supp. 3d 397, 404 (E.D. Ky. 2019); Schardein v. State Auto. Ins. Co., No. 12-288-C, U.S. Dist. LEXIS 180746 *4 (W.D. Ky. Dec. 21, 2012).

[91] Metro. Life Ins. Co. v. Ward, 470 U.S. 869, 869 (1985).

[92] Id.

[93] U.S. Const. art. IV, § 2, cl. 1.

[94] Chemerinsky, supra note 75, at 476. 

[95] Duncan v. Louisiana, 391 U.S. 145, 166 (1968) (“What more precious ‘privilege’ of American citizenship could there be than that privilege to claim the protections of our great Bill of Rights?”).

[96] Blake v. McClung, 172 U.S. 239, 249 (1998).

[97] United Bldg. & Constr. Trades Council v. Camden, 465 U.S. 208, 219 (1984) (“[T]he pursuit of a common calling is one of the most fundamental of those privileges protected by the [Privileges and Immunities] Clause.”).

[98] Sup. Ct. of N.H. v. Piper, 470 U.S. 274, 281 (1985) (discussing the privileges and immunities clause in terms of a particular trade); Toomer v. Witsell, 334 U.S. 385, 395 (1948) (discussing the privileges and immunities clause in terms of paying an equal licensing fee).

[99] Baldwin v. Fish & Game Comm’n, 436 U.S 371, 388 (1978) (holding that elk hunting by nonresidents in Montana was not a fundamental right under the Privileges and Immunities Clause).

[100] See Robert H. Jackson, Full Faith and Credit—The Lawyer’s Clause of the Constitution, 45 Colum. L. Rev. 1, 2 (1945).

[101] Douglas Laycock, Equal Citizens of Equal and Territorial States: The Constitutional Foundations of Choice of Law, 92 Colum. L. Rev. 249, 257 (1992).

[102] Id.; Hughes v. Fetter, 341 U.S. 609, 613 (1951) (holding that a state’s refusal to enforce the law of the state where the injury occurred violates the Full Faith and Credit Clause).

[103] Laycock, supra note 101, at 265. 

[104] Id. at 258–59.

[105] See id. at 268, 278.

[106] E.g., Baldwin v. Fish and Game Comm’n., 436 U.S. 371, 380 (1978) (noting that “the contours of [the Privileges and Immunities Clause] are not well developed”).

[107] Kermit Roosevelt III, The Myth of Choice of Law: Rethinking Conflicts, 97 Mich. L. Rev. 2448, 2517 (1999).

[108] Id. at 2453.

[109] Laycock, supra note 101, at 268, 278.

[110] Id. at 266.

[111] See Part II, supra pp. 9­–12.

[112] Laycock, supra note 101, at 266.

[113] See id. at 257 (noting that the Court has not invalidated a state conflict-of-law decision under any constitutional provision since 1951).

[114] Laycock, supra note 101, at 266.

[115] U.S. Const.  amend. XIV (emphasis added).

[116] Laycock, supra note 101, at 266.

The USMCA: An Ideal "New NAFTA?"

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Robert HudsonI

Introduction 

On December 8th, 1993, President Bill Clinton signed the North American Free Trade Agreement (“NAFTA”), a treaty that eliminated trade barriers between the United States, Canada, and Mexico.2 At the time, Mexico’s tariffs were five times higher than the United States’ tariffs.3Supporters of the agreement touted job creation and lower costs for consumers, but detractors warned it would cause a “giant sucking sound” of jobs flowing to Mexico.4 After signing, President Clinton remarked, “I believe that NAFTA will create a million jobs in the first five years of its impact. And I believe that that is many more jobs than will be lost, as inevitably some will be as always happens when you open up the mix to a new range of competition.”[5]

As President Clinton candidly observed, free trade agreements can reshape industries and leave many people unemployed for a period of time. About one-third of U.S. residents do not support free trade.[6] Unlike free trade’s immediate burden of worker displacement, free trade benefits typically indirectly filter through the larger populations over time.[7] Free trade agreements can make products less costly for consumers, spur economic growth, and encourage technological advances through increased competition.[8] Economists generally agree that the “diffuse and long-term benefits” of free trade outweigh the “concentrated short-term costs.”[9]

NAFTA and its successor agreement, the United States-Mexico-Canada Agreement (“USMCA”), embody the free trade debate.[10] NAFTA brought lower prices to consumers and allowed U.S. agriculture to flourish with tariff-free exports to Mexico, but it contributed to the U.S. manufacturing decline by incentivizing companies to outsource to low-wage regions in Mexico.[11] Noting the manufacturing job loss, President Trump negotiated the USMCA, often referred to as the “new NAFTA,” which replaced NAFTA on July 1, 2020.[12] As this Note will discuss, the USMCA strays away from free trade principles in an effort to stimulate U.S. manufacturing.[13]

This Note addresses the USMCA’s key impacts in comparison to NAFTA. Because Mexico is one of the U.S.’s largest trade partners and because U.S. trade with Mexico is a common subject of political debate, this Note focuses primarily on NAFTA and the USMCA as they relate to the U.S.-Mexico trade relationship.[14] Part I of this Note provides an overview of NAFTA and the USMCA. Part II discusses NAFTA’s effects on the U.S. agricultural sector, a key beneficiary of NAFTA, and argues that the USMCA is a slight improvement over NAFTA for that sector. Part III analyzes NAFTA’s effects on the U.S. manufacturing sector and argues that the USMCA poses significant risks to that sector. Finally, part IV concludes by advocating that the USMCA is unlikely to lead to substantial U.S. economic improvements over NAFTA.

I. Overview of NAFTA and the USMCA

A.  NAFTA Ushered in an Era of Increased Trade and Large Deficits

Technological developments and increasing trade with other countries complicate the determination of NAFTA’s precise effects on the North American economy.[15] Still, the agreement clearly proliferated trade between the North American countries.[16] From 1993 to 2015, trade between the United States and Mexico more than quintupled, increasing from $85.2 billion to $481.5 billion.[17]

NAFTA simultaneously ushered in unprecedented trade deficits with Mexico. A trade deficit occurs when a country imports more than it exports.[18] The world’s most prosperous countries often run trade deficits in certain areas, but elected officials and voters generally prefer trade surpluses.[19] In the nine years immediately preceding NAFTA, the U.S. averaged a $1.5 billion goods trade deficit with Mexico, and enjoyed a surplus three out of the nine years.[20] In NAFTA’s first ten years, the U.S. goods trade with Mexico averaged a $21.8 billion deficit which continues to grow.[21]NAFTA went into force on January 1, 1994.[22] Goods trade with Mexico between 1994 and 2019 averaged a $47.6 billion deficit, including a staggering $101.4 billion in 2019.[23] Since 1995, the U.S. has not experienced a single goods trade surplus with Mexico.[24]

These trade deficits are more than just numbers—they represent U.S. workers forced to change careers in an uncertain time. By 2010, trade deficits with Mexico eliminated an estimated 682,900 jobs, 60% of which were in manufacturing.[25] Manufacturing employment in the U.S. declined by 30% between 1993 and 2016.[26] Mexico often experienced manufacturing trade deficits with the U.S. before NAFTA, but the country now enjoys a manufacturing trade surplus of over $58 billion.[27] Abandoned factories and displaced workers in Ohio and Michigan illustrate the effects of the post-NAFTA trade imbalance with Mexico.[28] Meanwhile, U.S. farmers excelled under NAFTA.[29] The U.S. experienced an agricultural trade surplus with Mexico for twenty of the agreement’s first twenty-three years.[30]

Since the beginning of his campaign, President Trump repeatedly called for the repeal or renegotiation of NAFTA, referring to it as the “worst trade deal in history.[31] In May of 2018, Trump imposed tariffs on steel and aluminum imports from Mexico and Canada, effectively violating NAFTA.[32] Less than a week later, Mexico enacted retaliatory tariffs on various U.S. exports to Mexico, including agricultural products.[33] Canada followed suit and enacted similar tariffs in July 2018.[34]

B. The USMCA Emerges as the “New NAFTA”

On September 30, 2018, the dust settled from the trade disputes and the United States, Mexico, and Canada negotiated a NAFTA replacement: the USMCA.[35] The USMCA retains tariff-free treatment for all products that were tariff-free under NAFTA, but also provides farmers with new access to Canadian markets.[36] The USMCA aims to revitalize U.S. manufacturing by raising labor standards for Mexican workers and employing “rules of origin” provisions, which condition tariff-free treatment on a certain percentage of a finished good’s components being manufactured in the NAFTA region.[37]

II. U.S. Agriculture: NAFTA vs. The USMCA

A. U.S. Agriculture Under NAFTA

i.  The U.S. Agricultural Sector Flourished Under NAFTA

U.S. farmers fared well under NAFTA. Over eighty agricultural groups and corporations, representing every sector of the agricultural industry, petitioned jointly to the U.S. Secretary of Commerce explaining NAFTA’s positive impacts on the industry.[38] Removal of trade barriers within the NAFTA region gave U.S. farmers access to new customers, which massively increased agricultural exports.[39] Under NAFTA, U.S. agricultural exports to Mexico more than quintupled.[40]

NAFTA helped Mexico and Canada to become critical sources of supply and demand for U.S. farmers.[41] According to the United States Department of Agriculture (“USDA”) NAFTA supported 25,000 jobs related to corn farming and facilitated one-third of U.S. pork exports and over half of U.S. vegetable exports.[42] NAFTA set the stage for Mexico to become the U.S.’s top export customer for several U.S. grown products, including beef, rice, soybean meal, corn sweeteners, and apples.[43]

U.S. government subsidies, particularly with respect to corn production, helped American farmers excel under NAFTA.[44] Mexico is the U.S. corn industry’s biggest customer.[45] Before NAFTA, the Mexican government limited corn imports to times when its own production failed to meet the country’s needs.[46] NAFTA prohibited Mexico from limiting its corn imports but still allowed the U.S. to subsidize its farmers.[47] After NAFTA, U.S. corn quickly flooded the Mexican market.[48] More corn drove down the price of corn in Mexico, which meant that many Mexican farmers could no longer sell corn at a price sufficient to support themselves.[49] In NAFTA’s first decade, over 900,000 Mexican farmers lost their jobs.[50]

NAFTA is not without criticism from U.S. farmers. The last few decades have marked a decline of local family farms and the rise of large, industrial farms.[51] NAFTA increased the “size of the pie,” but industrial farms now “control most of the slices.”[52] Despite the massive increase in agricultural exports, America shed over 100,000 farms between 2011 and 2018.[53]  NAFTA and globalization in general likely contributed to the industry consolidation.[54] Generally, free trade agreements allow farmers from all over the world to sell their crops in U.S. markets, which makes prices lower and more volatile.[55] Large industrial farms typically operate with lower costs, which allows them to sell at lower prices and withstand price fluctuations.[56]

According to the USDA, the change in industry composition “reflects a farm economy experiencing rapid technological change.”[57] Farms that implement new technology can produce more crops at cheaper prices, which naturally drives out smaller, less efficient competing farmers. Ultimately, NAFTA simply facilitated unobstructed access to new markets, which expanded the industry and naturally propelled larger businesses to the top.[58]Placing trade barriers against Mexico, inevitably prompting retaliatory tariffs and reducing demand for U.S. crops from all farmers, is simply not a preferred method for curbing consolidation in the agricultural sector.

Farmers also criticize NAFTA because it allowed Canada to retain a pricing system that discriminated against U.S. farmers.[59] Canada applies a strict import quota system on dairy products and levies tariffs as high as 300% for imports that exceed the quota.[60] In 2017, Canada imposed even more protections for its dairy industry by implementing a milk pricing system.[61] Fortunately, the USMCA limits Canada’s ability to impose these trade barriers.[62]

ii. Post-2015 Agricultural Trade Deficits Illustrate 

the Danger of Trade Barriers

NAFTA’s success for the agricultural sector may be reflected by the U.S.-Mexico agricultural trade balance. The U.S. experienced an agricultural trade surplus with Mexico every year between 1991 and 2015.[63] Between 2016 and 2018, however, the U.S. averaged a $6 billion trade deficit with Mexico.[64] Three factors primarily caused these deficits.

 First, the U.S. dollar has been relatively strong compared to the Mexican Peso since 2015.[65] A stronger currency results in cheaper imports and more expensive exports.[66] With most countries, the value of its currency fluctuates with the strength of the economy.[67] Generally, the stronger the economy, the higher-priced the currency.[68] Lower priced currency makes a country’s exports more competitive.[69] For example, suppose that the dollar is priced highly so that two pesos are worth one dollar. Mexican citizens would have to spend two pesos to buy a U.S. product worth one dollar, but U.S. residents would only need to spend one dollar to buy a Mexican product worth two pesos. In fact, “Mexico’s exchange rates exhibit almost perfect negative correlation with [the U.S.] agricultural trade surplus and deficit.”[70] As the dollar strengthens, exports to Mexico decrease, adversely affecting the U.S. trade balance.[71]

Second, the prices of primary U.S. agricultural exports fell.[72] If the crops sold in 2017 were sold at 2012 prices, when crops were selling at a record high, the deficit would have been drastically reduced.[73] Third, President Trump’s trade disputes increased the deficits. In response to President Trump’s threats to withdraw from NAFTA, Mexican farming operations lost confidence in the U.S. as a reliable supplier and began to search for alternate sources.[74] In 2017, Mexican buyers imported ten times more corn from Brazil than in 2016.[75]  

In May 2018, President Trump enacted tariffs against Mexican imports, to which Mexico responded with retaliatory tariffs.[76] The Congressional Research Service (“CRS”) predicted that retaliatory tariffs could adversely impact U.S. farmers by eroding their competitiveness in foreign markets.[77] The CRS also noted that if the tariffs remain in effect long-term, U.S. farmers could lose their market share as suppliers seek out cheaper alternatives.[78] A Purdue University study predicted U.S. agricultural exports could be reduced by as much as $8 billion after markets adjust to the retaliatory tariffs.[79]

The effects of Mexico’s past retaliatory tariffs lend credence to these predictions. In response to the U.S.’s violation of NAFTA trucking provisions, Mexico levied retaliatory tariffs against U.S. agricultural products from 2009 until 2011.[80] During this period of tariffs, U.S. agricultural exports to Mexico fell by $1.1 billion—a reduction of nearly 22%.[81] Mexico’s history of retaliatory tariffs illustrates the need for the USMCA to retain tariff-free treatment of U.S. agricultural exports. 

 B. The USMCA Improves the U.S. Agricultural Trade Position

The USMCA leaves the NAFTA agricultural provisions largely unchanged.[82] Under the USMCA, “[a]ll food and agriculture products that [had] zero tariffs under the North American Free Trade Agreement (NAFTA) will remain at zero tariffs.”[83] As its key agricultural change, the USMCA expanded access to the Canadian market.[84] The USMCA keeps Canada’s import quota and dairy pricing systems largely in place but allows the U.S. to export more “class 7” dairy products to Canada.[85] This increased dairy access amounts to an additional 2.6% of Canada’s dairy market.[86] The USMCA also allows the U.S. to export to Canada more chicken, turkey, and eggs.[87]

The U.S. Farm Bureau predicts that the USMCA will increase U.S. agricultural exports by $2 billion and increase gross domestic product by $65 billion.[88] An October 2018 study by the Farm Foundation more conservatively estimates that the USMCA would increase agricultural exports to Canada by $450 million, which is about 1% of current exports under NAFTA.[89] The USMCA will likely help U.S. farmers, because it preserves the prohibition of trade barriers between the North American countries, reduces uncertainty caused by retaliatory tariffs, and removes Canadian trade barriers. The USMCA’s potential effect on U.S. manufacturing, however, is far less clear. 

III. U.S. Manufacturing: NAFTA vs. The USMCA

A. U.S. Manufacturing Suffered Under NAFTA, But Not Because of NAFTA

i. The U.S. Manufacturing Decline

Foreign goods, in 1960, made up only 8% of U.S. purchases.[90] By 2011, that number rose to nearly 60%.[91] As U.S. residents purchased less U.S.-made goods, U.S. factories laid off workers.[92] Since January 2000, U.S. manufacturing employment has fallen approximately 30%, from 17.2 million jobs to 12.2 million jobs.[93] The U.S. automobile industry alone lost 350,000 jobs—approximately 1/3 of all workers—during NAFTA’s first two decades.[94]

Some economists attribute the manufacturing decline to increased technology rather than free trade.[95] Automation allows factories to produce more products using fewer employees, which causes job loss.[96] Still, NAFTA’s enactment clearly coincides with a decrease in U.S. manufacturing and an increase in Mexican manufacturing. U.S. foreign direct investment (“FDI”) in Mexico statistics support this conclusion.[97] Generally, FDI occurs when a company invests in operations in a different country.[98] Businesses commonly produce FDI by building a new factory in another country or by purchasing an existing business in another country.[99] From 1993 to 2017, U.S. FDI in Mexico increased over 600% from $15.2 billion to $109.7 billion.[100] Under NAFTA, more U.S. companies invested resources in their operations in Mexico.[101]

The disparity in manufacturing wages between the U.S. and Mexico incentivizes companies to relocate south of the border.[102] For example, in the late 2000s, Delphi Automotive, once one of the largest employers in northern Ohio, relocated their factory from northern Ohio to Mexico.[103]Delphi employees in Ohio made $30 per hour, but Delphi employees in Mexico earn only $1 per hour.[104] Another company, Brake Parts Inc., manufactured brake calipers in California for nearly thirty years.[105] In 2015, Brake Parts laid off 280 workers and relocated their factory to Mexico.[106] A Brake Parts executive explained that the company’s competitors were located in Mexico where they could pay workers only $3.50 to $4 per hour.[107] Yet another company, Rexnord Corp., laid off 300 workers and moved their factory from Indianapolis to Mexico.[108] Relocation to Mexico reduced Rexnord’s labor costs from $25 per hour with benefits to only $3 per hour without benefits—a cost savings of $15.5 million per year.[109] Mondelez International, another company that relocated to Mexico, claimed its move saved $46 million per year.[110]

Low wages in Mexico present a tempting opportunity to lower costs and maximize profits. Some may say greed drives these moves, but relocating can become a borderline necessity for a company after its competitors relocate. It is very difficult for a company paying workers $25 per hour to compete with a company in the same industry paying workers $3 per hour for the same work. Before NAFTA, the U.S. could mitigate the incentive to relocate by enacting trade barriers, but NAFTA prevented any such remedy.[111]

ii. China May Be Primarily Responsible for the U.S. Manufacturing Decline 

Many economists argue that China, not NAFTA, caused the decline in U.S. manufacturing.[112]  From 2012 to 2019, the U.S. averaged a $354 billion trade deficit with China and only a $67.9 million trade deficit with Mexico.[113] The trade deficit with China has quintupled since 2001, the year China joined the World Trade Organization (“WTO”).[114] This five-fold increase caused 3.4 million lost U.S. jobs, nearly 75% of which were in manufacturing.[115] FDI figures also suggest that U.S. companies are diverting an increasing amount of resources to China operations. From 2001 to 2019, U.S. FDI in China increased ten-fold from approximately $12 billion to approximately $116 billion.[116] According to a professor at the Wharton School of the University of Pennsylvania, an Ivy League business school, the U.S.-China trade imbalance means that “for every job we have lost in the U.S. to Mexico, five [jobs] were lost to China.”[117]

Cheap Chinese currency and low Chinese wages power the U.S. job loss.[118] China controls its currency prices so that its currency is almost always cheaper than the dollar, which makes their goods cheaper than U.S. goods.[119] Additionally, China’s manufacturing sector is competitive because the country’s low cost of living and subpar workers’ rights allow companies to pay their workers very low wages.[120] In 2018, Chinese manufacturing workers were paid an average $5.51 per hour,[121] while U.S. manufacturing workers were paid an average of $26.97 per hour—a disparity of over $20 per hour.[122] Other Asian countries pay as little as $2.73 per hour.[123] While Chinese wages are consistently rising in comparison to other Asian countries, U.S. manufacturing wages remain far less competitive than Chinese manufacturing wages.[124]

iii. U.S. Manufacturing May Have Fared Worse Without NAFTA

Many economists credit NAFTA for making the U.S. manufacturing more globally competitive by developing supply chains across North America.[125] Much of the trade between the U.S. and Mexico occurs in the context of production sharing, with each country involved in different manufacturing steps with respect to the same final product.[126]  Taking advantage of cheap labor, many companies produce basic parts in Mexico and ship them to the U.S. to assemble the more complicated finished products.[127] Despite the U.S. automobile industry shedding a third of its workforce, the total value added by car and car part makers in the U.S. is only slightly lower than it was in NAFTA’s first year.[128] Underscoring the integration of manufacturing between the U.S. and Mexico, Delphi Automotive’s CFO warned that if the border were closed to trade, “in less than a week, all of the people who voted for [Trump] in Michigan and Ohio would be out of work.”[129]

The automobile industry is especially integrated between the U.S. and Mexico. For example, the Honda CR-V is assembled in Mexico, but roughly 70% of its content is either U.S. or Canadian.[130] This supply chain integration contributes to the 4.9 million U.S. jobs created by trade with Mexico.[131] This means that one out of twenty-nine U.S. jobs depends on the country’s economic relationship with Mexico.[132] Gordon Hanson, a professor at the University of California, San Diego, explained to the New York Times that “[w]ithout the ability to move lower-wage jobs to Mexico we would have lost the whole [automobile] industry.”[133]

From a cost perspective, low wages in Mexico provide an integral way for the U.S. to compete with Asia’s wages.[134] Without NAFTA, it could be cheaper for companies to simply abandon the U.S.’s expensive labor entirely rather than incorporate the U.S. into their supply chains. A trade agreement that levies high tariffs on U.S. imports from Mexico could eliminate the cost feasibility of the NAFTA region. Instead of forcing manufacturing jobs back into the United States, high tariffs against Mexico have the potential to do just the opposite. 

B. The USMCA and Manufacturing

i. “Rules of Origin” Provisions

The USMCA implements “rules of origin” provisions to encourage manufacturers to employ more U.S. workers.[135] Rules of origin provisions condition tariff-free treatment on exported finished goods using a certain percentage of components that were manufactured in the NAFTA region.[136] Goods that do not meet the rules of origin requirements are subject to the “most-favored-nation” tariff rate.[137] The USMCA increases the required percentage of components manufactured in a NAFTA region for several manufacturing industries, including automobiles, textiles, and cosmetics.[138] The automobile rules of origin provisions may have the largest impact on the North American economy. At 3.5% of the U.S. gross domestic product, the automobile industry is one of the most important segments of the U.S. economy.[139]

The USMCA contains several rules of origin provisions intended to stimulate growth in the U.S. automobile industry. The USMCA increases NAFTA’s rule of origin requirement by requiring at least 75% of an automobile’s components to be manufactured in the NAFTA region.[140] That number was 62.5% under NAFTA.[141] In addition, 70% of a vehicle’s steel and aluminum must originate in North America.[142]

The USMCA’s automobile rules of origin requirements could incentivize automobile producers to incorporate more of their supply chains in the NAFTA region. Under NAFTA, automobile producers have arranged their supply chains in the most efficient ways possible including sourcing some parts from outside of the NAFTA region.[143] Faced with the new 75% requirement, businesses will likely compare the costs of changing their supply chains to the cost of a tariff and take whichever route is cheaper. Because automobile companies generally prefer to keep component sources near assembly plants to minimize delays, the 75% requirement may prompt companies to integrate more of their supply chains into the NAFTA-region.[144]

If businesses incorporate more of their supply chains into the NAFTA region, employment numbers will rise, but so will prices for consumers.[145] If automobile manufacturers modify their pre-USMCA cost-minimizing supply chains to source more parts from the NAFTA region, they will likely pay more for those parts than before.[146] Manufacturers may be able to absorb a portion of the costs as lost profit or renegotiate supply contracts to push costs up the supply chain, but some of the cost increase will inevitably flow to consumer prices.[147]

Automobile executives anticipate cost increases caused by the USMCA.[148] In a 2018 survey of 100 U.S.-based automotive executives, 63% expected USMCA-related production cost increases and 58% believed the costs will be passed onto consumers.[149] Many of the executives already took concrete steps to comply with the new USMCA requirements.[150] Thirty-six percent are negotiating with suppliers to seek production-related cost savings and “[s]eventy-eight percent cite[d] finding North American suppliers or identifying alternate suppliers as a near-term priority for their supply chains.”[151]

While the 75% requirement could increase North American employment, it could lead to the opposite result, with supply chains becoming even more outsourced. To receive tariff-free treatment under NAFTA, companies had to incorporate at least 62.5% of their supply chains in the NAFTA region.[152] If increasing to 75% proves too burdensome, simply paying the tariff will become the preferred option. After paying the tariff, there will be no trade barrier incentives to encourage companies to incorporate even 62.5% of their supply chains in the NAFTA region. Absent trade agreements levying tariffs against other countries, businesses will be free to source parts from anywhere in the world. 

ii. Automobile Wage Provisions

Even if the rules of origin requirements bring jobs back to the NAFTA region, many of those jobs will go to lower-cost regions in Mexico. To address this issue, the USMCA contains several wage and workers’ rights provisions that increase the cost of doing business in Mexico.[153] First, “[a]t least 40% of the value of a passenger car and 45% of a light truck must be made by workers earning at an average of $16 per hour.”[154]Second, Mexico must pass pro-unionization laws.[155] Automotive companies that do not meet the above requirements will be subject to the most-favored-nation tariff of 2.5%.[156] A committee will be formed to monitor Mexico’s progress on labor issues against clear benchmarks set by the agreement.[157] NAFTA did not contain any provisions related to wages or workers’ rights.[158]

Automobile manufacturers faced with the new USMCA wage provisions will therefore have three primary courses of action: (1) pay 40% to 45% of workers at least $16 per hour; (2) pay the 2.5% tariff and keep wages the same; or (3) if wages overseas are cheaper than wages in the NAFTA region, and that cost savings outweighs the costs and uncertainties associated with relocation, leave the NAFTA region for countries with cheaper wages.

The average hourly wage for automobile assembly workers in Mexico was $7.34 in 2017.[159] In the U.S., workers involved in motor vehicles and parts manufacturing were paid $23.50 per hour on average in 2019.[160] In China, the average automobile industry wage was between $5.00 and $6.00 per hour in 2017.[161] Automobile industry wages are even cheaper in other Asian countries. In India, for example, the average automobile industry wage was only $1.09 per hour in 2017.[162]

The USMCA wage provisions could incentivize manufacturers to hire more U.S. workers by making Mexican workers more expensive. However, the $16 per hour required wage is still almost $8 per hour less than the U.S. average automobile industry wage.[163] Therefore, it could also incentivize manufacturers to simply raise wages for their workers in Mexico. In response to the wage requirements, several automobile manufacturers in Mexico have already chosen to triple their Mexican wages rather than relocate to the U.S.[164] More importantly, it could cause automobile manufacturers to pay a tariff and leave Mexico for lower-cost regions, such as India or China.[165] If manufacturers in Mexico leave for Asia, connected manufacturers in the U.S. would likely lay off workers. 

USMCA proponents cite several points in arguing why manufacturers in Mexico will be unlikely to relocate to Asia. First, due to integrated supply chains, many North American car makers in the U.S. already conform with the requirement that 40% of the car be produced where the workers make at least $16 an hour.[166] Second, the USMCA contains a sunset clause, which allows the countries to renegotiate or end the agreement in as early as six years and provides for the agreement to expire automatically after sixteen years if not specifically renewed.[167] By injecting a layer of uncertainty into the USMCA provisions, the sunset clause discourages companies from relocating. If companies decide to move to another country, important USMCA provisions could completely change shortly after they establish their operations. Third, based on an assumption that free trade will continue, automobile companies have invested billions of dollars in new North American factories.[168] Moving to Asia would require millions, if not billions of dollars in new investments, all of which could prove too risky given the sunset clause and today’s tumultuous trade climate. 

Whether the USMCA will create more employment in the U.S. manufacturing sector depends on thousands of decisions by individual companies, including decisions that turn on factors aside from the USMCA. Still, the USMCA presents two points of certainty. First, its sourcing and wage provisions, by increasing costs, necessarily make Asia a more attractive business location from a cost standpoint. Second, if the USMCA works as intended and companies employ more U.S. workers, costs to automobile companies will rise, which will increase the price of U.S. cars and render them less competitive in the global marketplace.[169] 

IV.  Conclusion

The substantial difference between wages in the U.S. and competing countries undermines U.S. manufacturing’s ability to secure a competitive advantage. NAFTA allowed manufacturing companies to take advantage of low wages in Mexico while still employing U.S. workers by assembling basic parts in Mexico and undertaking more complex work in the U.S.[170] Though the U.S. lost millions of manufacturing jobs under NAFTA, even more could have lost their jobs to Asia without NAFTA.[171] The U.S. should preserve, rather than diminish, manufacturing companies’ ability to take advantage of low wages in Mexico while still employing U.S. workers.  

Through its protectionist labor, source, and trade requirements, the USMCA represents a bold, risky step in the wrong direction. The USMCA could create some U.S. jobs by encouraging companies to source more parts in North America and increasing labor costs in Mexico, but it will raise costs for automobile manufacturers and consumers. Because businesses will direct capital to its most profitable use, the USMCA’s added costs could encourage automobile companies to consider outsourcing to Asia even more. The USMCA will help U.S. farmers by slightly expanding market access into Canada, but these relatively modest agricultural gains could be substantially outweighed by the risks it poses to the much larger U.S. manufacturing industry. 

I J.D. Candidate 2021, University of Kentucky J. David Rosenberg College of Law; B.S. in Accounting and Economics, University of Kentucky. 

2 Anne Sraders, What Is NAFTA? History, Purpose and What It Means in 2019, TheStreet (Aug. 22, 2019, 12:34 PM), https://www.thestreet.com/politics/nafta-north-american-free-trade-agreement-14651970 [https://perma.cc/J7GJ-P3FJ].

3 M. Angeles Villarreal & Ian F. Fergusson, Cong. Research Serv., R42965, The North American Free Trade Agreement (NAFTA) 6 (May 24, 2017), https://fas.org/sgp/crs/row/R42965.pdf [https://perma.cc/X3E9-D7X7].

4 Andrew Chatzky et al., NAFTA and the USMCA: Weighing the Impact of North American Trade, Council on Foreign Rel. (Jul. 1, 2020, 8:00 AM), https://www.cfr.org/backgrounder/nafta-and-usmca-weighing-impact-north-american-trade [https://perma.cc/F3Y6-EXLK].

[5] Press Release, Office of the Press Secretary, Remarks by President Clinton, President Bush, President Carter, President Ford, And Vice President Gore in Signing of NAFTA Side Agreements (Sep.14, 1993) (archived by The White House), https://clintonwhitehouse6.archives.gov/1993/09/1993-09-14-remarks-by-clinton-and-former-presidents-on-nafta.html [https://perma.cc/EKS8-HF88].

[6] Mark Murray, Support for Free Trade Reaches New High in NBC/WSJ Poll, NBC News (Aug. 18, 2019, 9:00 AM), https://www.nbcnews.com/politics/meet-the-press/support-free-trade-reaches-new-high-nbc-wsj-poll-n1043601[https://perma.cc/74HN-WF8C].

[7] See Daniel Fried, Cong. Budget Off., How Preferential Trade Agreements Affect the U.S. Economy, 1–4 (Sept. 29, 2016), https://www.cbo.gov/publication/51924[https://perma.cc/P3GH-GDWS].

[8] See Brandon Scudder, Do Free Trade Agreements Encourage Economic Development in the U.S.?, NCBFAA, https://www.ncbfaa.org/Scripts/4Disapi.dll/4DCGI/cms/review.html?Action=CMS_Document&DocID=17730&MenuKey=pubs [https://perma.cc/7U6X-2JBR].

[9] Fried, supra note 7, at 1. 

[10] U.S–Mexico–Canada Agreement (USMCA), U.S. Customs and Border Prot., https://www.cbp.gov/trade/priority-issues/trade-agreements/free-trade-agreements/USMCA#:~:text=Entry%2Dinto%20Force,rules%20will%20continue%20to%20apply [https://perma.cc/C53D-4XLW].

[11] Chatzky et al., supra note 4.

[12] U.S.–Mexico–Canada Agreement (USMCA), supra note 10; Jessica Murphy & Natalie Sherman, USMCA Trade Deal: Who Gets What From 'New Nafta'?, BBC News(Oct. 1, 2018), https://www.bbc.com/news/world-us-canada-45674261 [https://perma.cc/KV62-V8HL].

[13] See United States–Mexico–Canada Trade Fact Sheet Rebalancing Trade to Support Manufacturing, Off. U.S. Trade Representative, https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/fact-sheets/rebalancing [https://perma.cc/3UTH-XMM4] [hereinafter Rebalancing Trade to Support Manufacturing].

[14] Ken Roberts, Mexico is Now Top U.S. Trade Partner, Ahead of China, Canada, Forbes (Apr. 26, 2019, 5:07 AM), https://www.forbes.com/sites/kenroberts/2019/04/26/mexico-is-now-top-u-s-trade-partner-ahead-of-china-canada/?sh=6a1522a349fb [https://perma.cc/38SY-N9PK].

[15] See David Floyd, NAFTA's Winners and Losers, Investopedia (Nov. 11, 2020), https://www.investopedia.com/articles/economics/08/north-american-free-trade-agreement.asp/ [https://perma.cc/B2HT-AQQ8].

[16] Id.

[17] Id.

[18] Will Kenton, Trade Surplus, Investopedia (Nov. 22, 2020), https://www.investopedia.com/terms/t/trade-surplus.asp [https://perma.cc/6B9H-WZXC]; see also Jared Bernstein & Dean Baker, Why Trade Deficits Matter, Atlantic (Dec. 8, 2016), https://www.theatlantic.com/business/archive/2016/12/trump-trade-deficit/509912/  [https://perma.cc/9KRR-DJK8].

[19] See generally, James McBride & Andrew Chatzky, The U.S. Trade Deficit: How Much Does It Matter?, Council on Foreign Rel. (Mar. 8, 2019, 7:00 AM), https://www.cfr.org/backgrounder/us-trade-deficit-how-much-does-it-matter [https://perma.cc/BE47-LP7D] (discussing the arguments for and against trade deficits); see alsoBalance of Trade, Trading Econ., https://tradingeconomics.com/country-list/balance-of-trade [https://perma.cc/79U8-UCGV] (showing different countries with trade deficits). 

[20] Trade in Goods with Mexico, U.S. Census Bureau, https://www.census.gov/foreign-trade/balance/c2010.html [https://perma.cc/FQG7-EA3R]. Trade with foreign countries is measured in two forms: “goods” (also known as “merchandise”) trade and “services” trade which includes business and financial services. See M. Angeles Villarreal, Cong. Research Serv., IF11175, US-Mexico Trade Relations (April 9, 2019), https://fas.org/sgp/crs/row/IF11175.pdf [https://perma.cc/SX96-QDPA] [hereinafter Villarreal IF11175]. The U.S. Census Bureau defines “goods” as “[m]erchandise, supplies, raw materials, and products or any other item identified by a Harmonized System (HS) code,” and describes six types of import and export services: “Travel; Passenger Fares; Other Transportation; Royalties and License Fees; Other Private Services; and U.S. Government Miscellaneous Services” as well as an additional service category titled “Transfers Under U.S. Military Sales Contracts” for exports and “Direct Defense Expenditures” for imports. Foreign Trade: Trade Definitions, U.S. Census Bureau (Oct. 6, 2020), https://www.census.gov/foreign-trade/reference/definitions/index.html[https://perma.cc/8B2P-25BK]. 

[21] See Trade in Goods with Mexico, supra note 20. 

[22] Villarreal IF11175, supra note 20.

[23] Trade in Goods with Mexico, supra note 20. The U.S. typically experiences a modest surplus in services trade with Mexico, but the goods trade deficit overshadows it tenfold. Villarreal IF11175, supra note 20.

[24] Trade in Goods with Mexico, supra note 20.

[25] NAFTA, 20 Years Later: Do the Benefits Outweigh the Costs?, Wharton Univ. of Pa. (Feb. 19, 2019), https://knowledge.wharton.upenn.edu/article/nafta-20-years-later-benefits-outweigh-costs/ [https://perma.cc/2HPA-MAC3].

[26] Floyd, supra note 15.

[27] Id.

[28] See Kate Linthicum, A Tale of Two Cities: What Happened When Factory Jobs Moved from Warren, Ohio, to Juarez, Mexico, L.A. Times (Feb. 17, 2017, 11:51 AM), https://www.latimes.com/world/mexico-americas/la-fg-mexico-us-factories-20170217-htmlstory.html [https://perma.cc/X8ML-HNEQ].

[29] Jenny Hopkinson, Cong. Research Serv., IN10962, Agricultural Trade with Mexico and the Preliminary U.S.-Mexico Agreement in NAFTA Negotiations 1 (Aug. 29, 2018), https://crsreports.congress.gov/product/pdf/IN/IN10962 [https://perma.cc/FKV7-PBHQ] [Hopkinson IN10962].

[30] Farmers Fear Impact of U.S. Exit from NAFTA, CBS News (May 19, 2017, 11:03 AM), https://www.cbsnews.com/news/farmers-fear-impact-of-u-s-exit-from-nafta/[https://perma.cc/JEB9-PVN3]. 

[31] Clark Packard, The New U.S.-Mexico-Canada Trade Deal Can Work for Everyone, Foreign Pol’y (July 15, 2019, 3:01 PM), https://foreignpolicy.com/2019/07/15/the-new-u-s-mexico-canada-trade-deal-can-work-for-everyone/ [https://perma.cc/VXS6-U6TY].

[32] Heather Long, Trump has Officially Put More Tariffs on U.S. Allies Than on China, Wash. Post (May 31, 2018, 5:34 PM), https://www.washingtonpost.com/news/wonk/wp/2018/05/31/trump-has-officially-put-more-tariffs-on-u-s-allies-than-on-china/ [https://perma.cc/Z43J-RC8D].

[33] Ana Swanson & Jim Tankersley, Mexico, Hitting Back, Imposes Tariffs on $3 Billion Worth of U.S. Goods, N.Y. Times (June 5, 2018), https://www.nytimes.com/2018/06/05/us/politics/trump-trade-canada-mexico-nafta.html [https://perma.cc/8RU9-E5PP].

[34] Canada Retaliatory Tariffs on US Goods Come Into Force, BBC News (July 1, 2018), https://www.bbc.com/news/world-us-canada-44635490 [https://perma.cc/GV8U-ELF5].

[35] Katie Dangerfield, NAFTA Deal Reached: Canada, U.S., Mexico Reach Trade Agreement Under New Name, Global News (Sept. 30, 2018, 9:13 PM), https://globalnews.ca/news/4500068/nafta-2018-agreement-finalized/ [https://perma.cc/VW6H-XPV8].

[36] See FAS Directive 0202.19, Secretary Perdue Statement on USMCA Agreement (U.S.D.A. 2019), https://www.fas.usda.gov/newsroom/secretary-perdue-statement-usmca-agreement [https://perma.cc/EV96-TUVN]; Rob Portman, USMCA is a Needed Upgrade From NAFTA. Let’s Get it Passed., Wash. Post (Sept. 9, 2019, 2:17 PM), https://www.washingtonpost.com/opinions/usmca-is-a-needed-upgrade-from-nafta-lets-get-it-passed/2019/09/09/c31e1862-d015-11e9-b29b-a528dc82154a_story.html[https://perma.cc/9LKP-RFSD].

[37] See Rebalancing Trade to Support Manufacturing, supra note 13.

[38] NAFTA’s Impact on U.S. Agriculture, CME Group (May 1, 2018), https://www.cmegroup.com/education/articles-and-reports/naftas-impact-on-us-agriculture.html[https://perma.cc/2NZH-B4S2].

[39] Jacob Bunge, U.S. Farmers Welcome New North American Trade Pact, Wall St. J. (Oct. 1, 2018, 2:01 PM), https://www.wsj.com/articles/u-s-farmers-welcome-new-trade-pact-with-mexico-canada-1538401359 [https://perma.cc/B625-6X46].

[40] From 1991 to 1993, U.S. agricultural exports to Mexico averaged $3.5 billion which jumped to over $18 billion from 2014 to 2017. Hopkinson IN10962, supra note 29. 

[41] Bunge, supra note 39.  

[42] Id.

[43] Kevin Skunes, NAFTA has Helped Grow American Agriculture for Two Decades, Hill (Jan. 23, 2018, 5:45 PM), https://thehill.com/opinion/energy-environment/370363-nafta-has-helped-grow-american-agriculture-for-two-decades [https://perma.cc/TMV2-BX5S]. 

[44] Renée Alexander, Want to Understand the Border Crisis? Look to American Corn Policy, Counter (July 24, 2018, 12:51 PM), https://thecounter.org/border-crisis-immigration-mexican-corn-nafta/ [https://perma.cc/2Z6D-VMNQ].

[45] NAFTA’s Impact on U.S. Agriculture, supra note 38. In 2017 alone, the U.S. exported $2.7 billion worth of corn to Mexico. Id.

[46] Alexander, supra note 44.

[47] Id.

[48] Id.

[49] Id.

[50] Shasta Darlington & Patrick Gillespie, Mexican Farmer’s Daughter: NAFTA Destroyed Us, CNN Bus. (Feb. 9, 2017, 12:19 PM), https://money.cnn.com/2017/02/09/news/economy/nafta-farming-mexico-us-corn-jobs/index.html [https://perma.cc/8EGA-T3GK]. Many of these displaced farmers decided to work in factories, which contributed to the abundance of cheap labor in Mexico. See Linthicum, supra note 28. Now, most of Mexico’s agricultural output comes from large industrial farming operations. See Alexander, supra note 44.

[51] Kristina Johnson & Samuel Fromartz, NAFTA’s ‘Broken Promises’: These Farmers Say They Got The Raw End Of Trade Deal, NPR (Aug. 7, 2017, 7:00 AM), https://www.npr.org/sections/thesalt/2017/08/07/541671747/nafta-s-broken-promises-these-farmers-say-they-got-the-raw-end-of-trade-deal [https://perma.cc/8HV9-2Q38].  

[52] Id.

[53] Alana Semuels, ‘They're Trying to Wipe Us Off the Map.’ Small American Farmers Are Nearing Extinction, Time (Nov. 27, 2019, 1:16 PM), https://time.com/5736789/small-american-farmers-debt-crisis-extinction/ [https://perma.cc/8YFX-MY7A]. 

[54] Johnson & Fromartz, supra note 51.

[55] Semuels, supra note 53. 

[56] See id.

[57] Christopher Burns, The Number of Midsize Farms Declined From 1992 to 2012, But Their Household Finances Remain Strong, U.S. Dep’t of Agric. (Dec. 5, 2016), https://www.ers.usda.gov/amber-waves/2016/december/the-number-of-midsize-farms-declined-from-1992-to-2012-but-their-household-finances-remain-strong/[https://perma.cc/D3E7-674Z]. 

[58] Johnson & Fromartz, supra note 51.  

[59] Katie Lobosco, Why Canada's Dairy Market is a Target in NAFTA Talks, CNN Pol. (Sep. 5, 2018, 8:33 PM), https://www.cnn.com/2018/09/05/politics/nafta-canada-dairy-tariffs/index.html [https://perma.cc/XFG2-KZM6]. 

[60] Id.

[61] Id.

[62] See Heather Long, The USMCA is Finally Done. Here’s What is in It., Wash. Post (Dec. 10, 2019, 5:13 PM), https://www.washingtonpost.com/business/2019/12/10/usmca-is-finally-done-deal-after-democrats-sign-off-heres-what-is-it/ [https://perma.cc/737S-SZS4] [hereinafter The USMCA is Finally Done].

[63] See Renée Johnson, Cong. Research Serv., IF10800, Agric. Trade Balances Under NAFTA (Dec. 29, 2017), https://nationalaglawcenter.org/wp-content/uploads//assets/crs/IF10800.pdf [https://perma.cc/VHV6-FHK9].

[64] Philip Martin, Mexico-US Agricultural Trade, Wilson Center (June 24, 2020), https://www.wilsoncenter.org/article/mexico-us-agricultural-trade#:~:text=The%20US%20also%20has%20a,of%20%246%20billion%20a%20year [https://perma.cc/F5BC-55U6].

[65] Steve Burak et al., Gambling on Exports: A Review of the Facts on U.S. Agricultural Trade, Farmdoc Daily (June 8, 2018), https://farmdocdaily.illinois.edu/2018/06/gambling-on-exports-review-facts-us-agri-trade.html [https://perma.cc/R2M8-Z3JZ]. 

[66] Id.

[67] See Tejvan Pettinger, Is a Strong Economy Generally Accompanied by a Strong Currency?, Econ. Help (Nov. 7, 2018), https://www.economicshelp.org/blog/143224/economics/is-a-strong-economy-generally-accompanied-by-a-strong-currency/ [https://perma.cc/P5PN-3F6D].

[68] Id.

[69] Burak et al., supra note 65; see also Pettinger, supra note 67. 

[70] Burak et al., supra note 65.

[71] See id. 

[72] Id.

[73] Id.

[74] P.J. Huffstutter & Adriana Barrera, Exclusive: As Trump Trashes NAFTA, Mexico Turns to Brazilian Corn, Reuters (Feb. 22, 2018, 7:35 AM), https://www.reuters.com/article/us-trump-effect-corn-exclusive/exclusive-as-trump-trashes-nafta-mexico-turns-to-brazilian-corn-idUSKCN1G61J4 [https://perma.cc/6XDP-PAA7]. 

[75] Id.

[76] Jenny Hopkinson, Cong. Res. Serv., R45448, Profiles and Effects of Retaliatory Tariffs on U.S. Agric. Exports 1 (Dec. 31, 2018), https://crsreports.congress.gov/product/pdf/R/R45448 [https://perma.cc/Q262-VY3W].

[77] Id.

[78] Id.

[79] Maksym Chepeliev et al., How U.S. Agriculture Will Fare Under the USMCA and Retaliatory Tariffs 18 (Glob. Trade Analysis Project, Working Paper No. 84, 2018). 

[80] ERS Directive WRS-15-01, NAFTA at 20: North America’s Free-Trade Area and Its Impact on Agriculture (U.S.D.A. 2015), https://www.ers.usda.gov/webdocs/outlooks/40485/51265_wrs-15-01.pdf?v=7367.6 [https://perma.cc/HL7X-HPUT].

[81] Id.

[82] See FAS Directive 0202.19, supra note 36.

[83] Id.

[84] See The USMCA is Finally Done, supra note 62. 

[85] Id.

[86] Bob Bryan & Joseph Zeballos-Roig, Trump's New Major Trade Deal Looks a Lot Like NAFTA. Here are Key Differences Between Them., Mkt. Insider (Dec. 10, 2019, 3:43 PM), https://markets.businessinsider.com/news/stocks/us-canada-mexico-trade-deal-usmca-nafta-details-dairy-auto-dispute-resolution-2018-10-1027579947[https://perma.cc/JA5C-B4AR]. 

[87] United States–Mexico–Canada Trade Fact Sheet Agriculture: Market Access and Dairy Outcomes of the USMC Agreement, Off. U.S. Trade Representative, https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/fact-sheets/market-access-and-dairy-outcomes [https://perma.cc/Z9DJ-4ACJ].

[88] USMCA, Am. Farm Bureau Fed’n, https://www.fb.org/issues/trade/usmca/ [https://perma.cc/A3XQ-X56Y].

[89] Anita Regmi, Cong. Res. Serv., R45661, Agricultural Provisions of the U.S.-Mexico-Canada Agreement 14 (Apr. 8, 2019), https://fas.org/sgp/crs/row/R45661.pdf[https://perma.cc/8F9A-28VY]. 

[90] Bradley Blackburn & Eric Noll, Made in America: A Brief History of U.S. Manufacturing, ABC News (Feb. 4, 2011, 6:04 PM), https://abcnews.go.com/Business/made-america-middle-class-built-manufacturing-jobs/story?id=12916118 [https://perma.cc/3ENV-YZVS].

[91] Id.

[92] See id.; U.S. Bureau of Labor Statistics, All Employees, Manufacturing, FRED Econ. Data, https://fred.stlouisfed.org/series/MANEMP [https://perma.cc/H2J3-8ALN]. 

[93] See U.S. Bureau of Labor Statistics, supra note 92.

[94] Eduardo Porter, Nafta May Have Saved Many Autoworkers’ Jobs, N.Y. Times (Mar. 29, 2016), https://www.nytimes.com/2016/03/30/business/economy/nafta-may-have-saved-many-autoworkers-jobs.html?auth=login-email&login=email [https://perma.cc/BD3M-EK72].

[95] Jeffry Bartash, China Really is to Blame for Millions of Lost U.S. Manufacturing Jobs, New Study Finds, MarketWatch (May 14, 2018, 1:30 PM), https://www.marketwatch.com/story/china-really-is-to-blame-for-millions-of-lost-us-manufacturing-jobs-new-study-finds-2018-05-14 [https://perma.cc/K2JH-PMAH].  

[96] Id.

[97] Villarreal IF11175, supra note 20; M. Angeles Villarreal, Cong. Res. Serv., RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications (Jun. 25, 2020), https://fas.org/sgp/crs/row/RL32934.pdf [https://perma.cc/AE79-X4ZR] [hereinafter Villarreal RL32934].

[98] James Chen, Foreign Direct Investment (FDI), Investopedia (Feb. 24, 2020), https://www.investopedia.com/terms/f/fdi.asp [https://perma.cc/TL38-G59J].

[99] Id.

[100] Villarreal IF11175, supra note 20.

[101] Villarreal RL32934, supra note 97.

[102] See Linthicum, supra note 28.

[103] Id.

[104] Id.

[105] Jim Puzzanghera, These Three U.S. Companies Moved Jobs to Mexico. Here’s Why, L.A. Times (Dec. 19, 2016, 6:00 AM), https://www.latimes.com/business/la-fi-mexico-jobs-20161212-story.html [https://perma.cc/J9W2-83HC]. 

[106] Id. 

[107] Id.

[108] Id.

[109] Id.

[110] Id.

[111] See Villarreal & Fergusson, supra note 3, at 5. 

[112] See, e.g., Porter, supra note 94; NAFTA, 20 Years Later: Do the Benefits Outweigh the Costs?, supra note 25.

[113] Trade in Goods with China, U.S. Census Bureau, https://www.census.gov/foreign-trade/balance/c5700.html [https://perma.cc/F6C6-WD6K]; Trade in Goods with Mexico, supra note 20.

[114] Margot Roosevelt, California Lost More Manufacturing Jobs to China Than Any Other State, Report Says, L.A. Times (Jan. 30, 2020, 7:30 AM), https://www.latimes.com/business/story/2020-01-30/la-fi-california-china-trade-job-loss [https://perma.cc/J8B2-TJS2].

[115] Robert E. Scott & Zane Mokhiber, Econ. Pol’y Inst., 156645, The China Toll Deepens, 2 (Oct. 23, 2018), https://files.epi.org/pdf/156645.pdf[https://perma.cc/BYR3-HBLS].

[116] Statista Research Department, Direct Investment Position of the United States in China From 2000-2019, Statista (Dec. 9, 2020), https://www.statista.com/statistics/188629/united-states-direct-investments-in-china-since-2000/ [https://perma.cc/V2PG-DGRW].

[117] NAFTA, 20 Years Later: Do the Benefits Outweigh the Costs?, supra note 25.

[118] Bartash, supra note 95; Kimberly Amadeo, US Trade Deficit With China and Why It’s So High, Balance (Jan. 21, 2021), https://www.thebalance.com/u-s-china-trade-deficit-causes-effects-and-solutions-3306277#annual-trade-deficit [https://perma.cc/Z8V7-JD3M] [hereinafter US Trade Deficit With China]; see also Scott & Mokhiber, supranote 115, at 3, 5.

[119] E.g., US Trade Deficit With China, supra note 118; Robert E. Scott & Will Kimball, Econ. Pol’y Inst., Briefing Paper 385, China Trade, Outsourcing and Jobs, 21 (Dec. 11, 2014), https://files.epi.org/2014/bp385-china-trade-deficit.pdf [https://perma.cc/MW72-FKRL].

[120] US Trade Deficit With China, supra note 118; see also Scott & Kimball, supra note 119, at 23.

[121] M. Szmigiera, Manufacturing Labor Costs Per Hour: China, Vietnam, Mexico 2016-2020, Statista (Mar. 12, 2021), https://www.statista.com/statistics/744071/manufacturing-labor-costs-per-hour-china-vietnam-mexico/ [https://perma.cc/7QEH-RTU5].

[122] Statista Research Department, Hourly Earnings in U.S. Manufacturing 2006-2019, Statista (May 11, 2020), https://www.statista.com/statistics/187380/hourly-earnings-in-us-manufacturing-since-1965/ [https://perma.cc/RT9A-G8V6].

[123] Szmigiera, supra note 121 (average manufacturing wage in Vietnam in 2018).

[124] See Sophia Yan, ‘Made in China’ Isn’t So Cheap Anymore, and That Could Spell Headache for Beijing, CNBC (Feb. 27, 2017, 12:37 AM), https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-isnt-so-cheap-anymore.html [https://perma.cc/LQ39-ANA5]; see also Dmitriy Plekhanov, Is China’s Era of Cheap Labor Really Over?, Diplomat (Dec. 13, 2017), https://thediplomat.com/2017/12/is-chinas-era-of-cheap-labor-really-over/ [https://perma.cc/PB88-K9GU].

[125] See Floyd, supra note 15; Villarreal & Fergusson, supra note 3, at 16; Villarreal IF11175, supra note 20.

[126] Villarreal & Fergusson, supra note 3, at 16–17.

[127] Id. at 32. 

[128] Porter, supra note 94.

[129] Linthicum, supra note 28.

[130] Porter, supra note 94.

[131] Alexia Fernández Campbell, Nearly 5 Million U.S. Jobs Depend on Trade With Mexico, Atlantic (Dec. 9, 2016), https://www.theatlantic.com/business/archive/2016/12/mexico-nafta-trade/510008/ [https://perma.cc/KR9H-GX6Q]. 

[132] Id.

[133] Porter, supra note 94.

[134] See id.

[135] Rebalancing Trade to Support Manufacturing, supra note 13.

[136] Sue Senger, Understanding the NAFTA Rules of Origin, Shipping Solutions (May 23, 2018), https://www.shippingsolutions.com/blog/nafta-rules-of-origin-part-1[https://perma.cc/PEW3-AU8N]. 

[137] Id.

[138] See Rebalancing Trade to Support Manufacturing, supra note 13.

[139] Kim Hill et al., Ctr.  Automotive Res., Contribution of the Automotive Industry to the Economies of All Fifty States and the United States (Apr. 2010), https://www.cargroup.org/publication/contribution-of-the-automotive-industry-to-the-economies-of-all-fifty-state-and-the-united-states/ [https://perma.cc/4JKX-9PDX].

[140] Kimberly Amadeo, Trump’s NAFTA Changes, Balance (Feb. 4, 2021), https://www.thebalance.com/donald-trump-nafta-4111368#6-changes-to-nafta-under-the-usmca[https://perma.cc/LRT9-E9BA][hereinafter Trump’s NAFTA Changes].

[141] Id.

[142] M. Angeles Villarreal et al., Cong. Res. Serv., IF11387, USMCA: Motor Vehicle Provisions and Issues (Dec. 19, 2019), https://crsreports.congress.gov/product/pdf/IF/IF11387 [https://perma.cc/8TYP-ATLX].

[143] See Finbarr Bermingham, U.S. and Chinese Companies Fear Trump’s Coming Trade War On Car Industry, Politico (Apr. 17, 2019, 5:19 AM), https://www.politico.com/story/2019/04/17/us-china-trade-car-industry-1358959 [https://perma.cc/GR7C-X9SC].

[144] Owen Stuart, How Will the Shift from NAFTA to USMCA Affect the Auto Industry?, Indus. Wk. (Oct. 12, 2018), https://www.industryweek.com/the-economy/article/22026500/how-will-the-shift-from-nafta-to-usmca-affect-the-auto-industry [https://perma.cc/8VHY-HRSK].

[145] E.g., Villarreal et al., supra note 142.

[146] Stuart, supra note 144. Automobile manufacturers have four main options for addressing this cost increase: (1) absorb the higher costs as lost profit, (2) renegotiate component supply contracts to pass the cost increase to suppliers, (3) change the product mix to make offerings less expensive, or (4) raise the price of finished goods and pass the increase on to consumers. Id. Automobile producers will likely implement a combination of all four options, resulting in some form of increase in the price of cars. Id.

[147] Gabrielle Jasinski, LevaData Survey: 63 Percent of Automotive Executives Believe Production Costs Will Increase Due to USMCA, Bus. Wire (Jan. 10, 2019, 9:00 AM), https://www.businesswire.com/news/home/20190110005101/en/ [https://perma.cc/CD7Q-9W4J]; Bridget McCrea, How Will USMCA Impact the Automotive Supply Chain?, Source Today (Feb. 13, 2019), https://www.sourcetoday.com/supply-chain/article/21867315/how-will-usmca-impact-the-automotive-supply-chain [https://perma.cc/3DJF-LXMB].

[148] Jasinski, supra note 147; McCrea, supra note 147.

[149] Jasinski, supra note 147; McCrea, supra note 147.

[150] McCrea, supra note 147.

[151] Id.

[152] See Trump’s NAFTA Changes, supra note 140.

[153] See Rebalancing Trade to Support Manufacturing, supra note 13. Because cheap labor was the driving force behind the mass exodus of U.S. companies crossing the border, it may seem counterintuitive for Mexico to accept the USMCA wage and labor provisions. But under its first labor-friendly president in modern Mexican history, Mexico has passed several laws improving workers’ rights with the USMCA serving as part of an overarching goal to raise working standards. Lauren Kaori Gurley, Is Mexico on the Brink of a Labor Revolution?, New Republic (Apr. 5, 2019), https://newrepublic.com/article/153467/mexico-brink-labor-revolution [https://perma.cc/UTZ9-AFC9]. Further,Mexico presented little opposition to the USMCA because approximately 80% of its exports are sent to the U.S., and Mexico hopes to preserve positive relations with the U.S. and Canada after the uncertainty caused by President Trump’s threats to disrupt trade. Mary Beth Sheridan, Mexico Becomes First Country to Ratify New North American Trade Deal, Wash. Post (June 19, 2019, 8:42 PM), https://www.washingtonpost.com/world/the_americas/mexico-becomes-first-country-to-ratify-usmca-north-american-trade-deal/2019/06/19/500dd8c0-92b3-11e9-956a-88c291ab5c38_story.html [https://perma.cc/Y7EE-TB3Q].

[154] Trump’s NAFTA Changes, supra note 140.

[155] The USMCA is Finally Done, supra note 62.

[156] David A. Gantz, Rice Univ.’s Baker Inst. Pub. Pol’y, The United States-Mexico-Canada Agreement: Tariffs, Customs, and Rules of Origin 3–4 (Feb. 21, 2019), https://www.bakerinstitute.org/media/files/files/6ee1ade5/bi-report-022119-mex-usmca.pdf [https://perma.cc/SB29-M7S7]. 

[157] The USMCA is Finally Done, supra note 62.

[158] See Villarreal et al., supra note 142. 

[159] Id.

[160] Automotive Industry: Employment, Earnings, and Hours, U.S. Bureau Lab. Stats., https://www.bls.gov/iag/tgs/iagauto.htm [https://perma.cc/TPM5-GG36].

[161] See Mike Rutherford, The Global Car Manufacturing Wage Gap: What Do Car Factory Workers Earn?, Auto Express (Mar. 22, 2017), https://www.autoexpress.co.uk/car-news/98986/the-global-car-manufacturing-wage-gap-what-do-car-factory-workers-earn [https://perma.cc/BQT5-3ZVH]. 

[162] Id.

[163] The U.S. average wage of $23.5 per hour minus the new $16 required wage is almost an $8 difference. Trump’s NAFTA Changes, supra note 140; Automotive Industry: Employment, Earnings, and Hours, supra note 160.

[164] Shuji Nakayama & Ryo Asayama, Japan Auto Companies Triple Mexican Pay Rather Than Move to US, Nikkei Asia (June 28, 2020, 4:35 AM), https://asia.nikkei.com/Business/Automobiles/Japan-auto-companies-triple-Mexican-pay-rather-than-move-to-US [https://perma.cc/G224-G6GE]. 

[165] See Daniel J. Ikenson, Protectionist Love Child of the Labor Left and the Nationalist Right, Cato Inst. (Dec. 13, 2019, 8:02 AM), https://www.cato.org/blog/protectionist-love-child-labor-left-nationalist-right [https://perma.cc/BPJ9-SVQ2]. 

[166] Carrie Kahn, Will NAFTA 2.0 Really Boost Mexican Wages?, NPR (Oct. 17, 2018, 9:05 AM), https://www.npr.org/2018/10/17/657806248/will-nafta-2-0-really-boost-mexican-wages [https://perma.cc/CV8T-CUC5]. 

[167] Inu Manak & Simon Lester, Evaluating the New USMCA, Cato Inst. (Dec. 11, 2019, 4:47 PM), https://www.cato.org/blog/evaluating-new-usmca-0[https://perma.cc/B9CS-GKK9]. 

[168] Niraj Chokshi, Unions Skeptical Trump’s Trade Deal Will Bring Back Auto Jobs, N.Y. Times (Jan. 29, 2020), https://www.nytimes.com/2019/12/11/business/nafta-usmca-auto-jobs.html [https://perma.cc/YC89-CYKF]. 

[169] Brian Reinbold & Yi Wen, Changing Trade Relations May Affect U.S. Auto Exports in Long Run, Fed. Res. Bank St. Louis (Mar. 7, 2019), https://www.stlouisfed.org/publications/regional-economist/first-quarter-2019/changing-trade-relations-auto-exports [https://perma.cc/2ULJ-YS5V] (USMCA auto provisions “could lead to decreased global demand for cars manufactured in North America as they become less competitive in a global market” due to higher prices; “the USMCA is a solution searching for a problem in regard to auto trade”); U.S.-Mexico-Canada Trade Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors, Inv. No. TPA 105-003, USITC Pub. 4889 (Apr. 2019) (Final) (USMCA likely to increase production costs in the United States, resulting in higher prices for automobiles and 140,000 fewer vehicles sold); Meet the New NAFTA, Ctr. for Automotive Res. (Oct. 16, 2018), https://www.cargroup.org/meet-the-new-nafta/ [https://perma.cc/NAE7-9CQH] (“Conforming to the USMCA rules and strategic responses to avoid the risk of additional tariffs will raise production costs for light vehicles and automotive parts, driving up consumer prices.”). 

[170] See Villarreal & Fergusson, supra note 3, at 32.

[171] See U.S. Bureau of Labor Statistics supra note 92; see supra notes 137–38 and the accompanying text.

Telling the Whole Truth Behind the Mic: Applying the Rules of Evidence to True Crime Podcasts

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Kami GriffithI

Introduction 

America has an obsession with true crime. Although tales of guilt and innocence have fascinated people for centuries, the genre is more accessible than ever with podcasts, audiobooks, and television channels that are entirely dedicated to crime and the courtroom.[2]

True crime podcasts rank among the top-downloaded podcasts on Apple’s iTunes.[3] The genre has caught the attention of not only amateur sleuths, but police officers and lawyers, as well.[4] For example, in 2018, a California Police Department created its own podcast to bring awareness to a case that detectives had trouble cracking.[5] Officers were able to track down the suspect within months of the podcast’s run.[6]

Another real-world example ended up in the Supreme Court.[7] Season two of In the Dark covered the story of Curtis Flowers, a man who was “tried six times for the same crime.”[8] The podcast brought considerable public attention to Flowers’ case.[9] Eventually, the Supreme Court overturned his conviction and all charges against Mr. Flowers have since been dropped.[10]

True crime podcasts generally adhere to two different structures. As one reporter put it: “Some reinvestigate cases with reams of original research or interviews. Others resemble Wikipedia-esque retellings.”[11] Some podcasts focus on a different case each episode, giving listeners the highlights from the investigation or court proceedings.[12] Other podcasts, like In the Dark, focus on a single case for an entire season, allowing the hosts to provide a deeper analysis of the facts and evidence.[13] However, it is this analysis of the “evidence” that can lead to problems. 

True crime is a genre that generates strong emotions. According to some social scientists, deaths and disappearances pique a natural curiosity surrounding tragedy.[14] Other studies suggest that consuming true crime “is one way we can feel prepared, and perhaps even comforted.”[15]Because of the heightened emotions at play, hosts and authors focus on telling the best story, but sometimes, “in the author’s quest to make the topic more interesting, facts may become lost or may be fabricated entirely.”[16] One popular true crime podcast, My Favorite Murder, even has a weekly segment entitled “Corrections Corner” during which the hosts take time to correct facts they got wrong on the previous episode.[17]

Not only do hosts take liberties with the facts of cases, it is often hard to recognize exactly where the facts are coming from. Although some shows attempt to acknowledge their sources, hosts can fall short. One podcast even removed several episodes from streaming platforms after the hosts faced plagiarism accusations.[18] When the focus is on telling the most sensational story, it can be tempting for podcasters to be lax on referencing sources, especially “when producers develop a following and feel they ‘constantly have to feed the beast.’”[19]   

Podcast hosts also give off a false air of trustworthiness. A listener might assume that because someone makes money producing episodes, they are an expert in the field. Podcast hosts also often refer to “authorities” or “officials” while talking about crimes without naming a particular authority.[20] The podcast host is attempting to back up what they are saying without needing to be held accountable by a specific member of law enforcement.

Another issue regarding facts and evidence is that podcast hosts can say whatever they want without many repercussions. Unlike prosecutors, podcasters are not subject to any limitations on how they present evidence.[21] Sometimes, podcasts present a mountain of “evidence” and then ask why investigators did not catch the right suspect.[22] However, much of the “evidence” presented by the host would not be admissible in court.[23]

Not all podcasts are up front about misinformation, so listeners assume that they are being exposed to the entire picture, but listeners might not be aware of the limitations placed on police officers and attorneys. This can be dangerous: “A major issue with the media is that ‘coverage of crime and punishment is notoriously inaccurate and . . . biased toward sensationalized accounts.’”[24]

In this Note I argue that true crime podcasts have great influence on how the public views the criminal justice system. I further argue that podcast hosts need to be aware that there is a difference between information that can point to guilt and information that can be presented to a trier of fact. In Part I of this Note I will explain theories behind the importance of the Federal Rules of Evidence. In the second section Part II, I will apply the Federal Rules of Evidence to popular true crime podcast episodes. I will focus on three different rules that are commonly disregarded by podcast hosts. First, I will apply the propensity limitations. Second, I will focus on the rule regarding opinion testimony by lay witnesses. Finally, I will discuss the general bar against hearsay and how information can be admitted through one of the various exceptions. Part III of this Note will focus on how podcasts can help further criminal law understanding among the general public and in the legal field. I will argue that hosts have an ethical responsibility to ensure that their audiences are aware of the evidentiary discrepancies.

I.        The Reasons for the Rules of Evidence

Rules of evidence are essential to the workings of the criminal justice system. The necessity is seen across jurisdictions, regardless of which version of the rules is in place. Although the necessity of uniformity is a general concept, scholars have reached different conclusions on the exact reasoning of the rules.[25] On one hand, the rules are seen as a mechanism to bypass confusing or irrelevant information and get the jury to the truth.[26] However, some scholars believe evidentiary rules are actually meant to promote public acceptance of jury decisions.[27]

The public acceptance theory depends on the particular evidence and rule in question. For example, Charles Nesson argues that hearsay rules are meant to promote confidence in juries.[28]  Nesson says that hearsay rules “prevent jurors from basing a verdict on the statement of an out-of-court declarant who might later recant the statement and discredit the verdict.”[29] The rules allow the public to assume that juries are hearing only reliable information.[30]

Nesson’s theory on the function of evidence rules has been applied to the popular podcast Serial, which questions the validity of Adnan Sayed’s murder conviction.[31]  Paul Berman looks at Nesson’s differentiation between direct and circumstantial evidence.[32]  The case against Sayed was built on eyewitness testimony.[33] Berman says that based on Nesson’s logic, the public is more likely to accept the jury’s decision to convict, because the jury members are the ones who heard the testimony and decided that the witnesses were credible.[34] Berman argues that it is only after members of the public hear statements that would violate evidence rules that the credibility of witnesses is called into question, even though these out-of-court statements often lack credibility.[35]

The rules of evidence are not only meant to promote the finding of the truth, but also to allow the public to maintain confidence in the court system.[36] The functions are both practical and theoretical. Sometimes podcasts can undercut both.

II.       Rules Commonly Violated by Podcasts 

Podcasts, unlike trials, are forms of entertainment. Podcasting is a business that relies on download numbers and crowdsourcing websites to operate.[37] Therefore, the pressure is on to keep listenership up and make sure new audience members are contributing to advertising revenue. Because of this, legality takes a backseat to good storytelling. In this section, I will elaborate on some of the most common Federal Rules of Evidence that are broken in the name of narrative: the bar against using character evidence to prove propensity, the bar on lay persons offering expert opinions, and the general bar on hearsay. 

A.      Being a Bad Person Doesn’t Make You Guilty

The premise of Rule 404 is simple: having questionable character does not necessarily make it more likely that you are a criminal.[38] Rule 404 says that evidence of a person’s character cannot be used to “prove that on a particular occasion the person acted in accordance with the character or trait.”[39] There are exceptions to the rule, most notably in 404(b).[40] Under Rule 404(b), evidence of crimes or other prior acts cannot be used as character evidence to prove someone committed a crime.[41] However, such evidence is admissible if it is evidence of motive, knowledge, or absence of mistake.[42] In order to determine if prior acts are admissible, courts generally balance the probative value of the information with the prejudicial impact.[43] Even relevant information should be excluded if “its probative value is substantially outweighed by the danger of unfair prejudice.”[44]

The issue in the podcasting world is that no balancing is ever done. Because background information is important to effective storytelling, prior acts and crimes of suspects are often included in a case narrative. However, if you follow the logic of the rules, this background information, that can provide a holistic view of the suspect, would not be helpful in a court of law, unless it fits into one of the exceptions outlined in Rule 404(b)(2). Although it does provide listeners with a more complete view of the suspect, this practice does not explain anything about a crime, unless it encompasses one of the exceptions outlined in Rule 404(b)(2).

In A Killing on the Cape, an ABC podcast about the case of Christa Worthington, the intricacies of Rule 404(b) are exemplified.[45] Worthington was murdered ion Cape Cod in 2002.[46] Although a man is currently serving three life sentences for the crime, questions about his guilt remain.[47]One of the other suspects in the case is Elizabeth Porter, the girlfriend of Christa Worthington’s father.[48] During the podcast, the ABC contributor brings up Porter’s history with prostitution and heroin use.[49] If this podcast was subject to the Federal Rules of Evidence Rule 404(a) general bar against character evidence to prove propensity, this information about Porter would not be admissible.[50]

However, the podcast host goes on to mention that Christa Worthington was “quite upset” about the relationship because of Porter’s past, a fact that could possibly trigger a Rule 404(b) exception.[51] Because of Porter’s history, Christa Worthington did not want her to date her father, giving Porter a reason to want to get rid of Christa.[52] Proving motive is one of the exceptions listed under Rule 404(b).[53] A judge could find that the probative value of this information would outweigh the prejudicial impact.[54] The purpose in admitting the evidence here would not be to say that Porter was more likely to commit the crime because she had a history of drug abuse, but that she was more likely to commit the crime because of how her drug abuse influenced her relationship with the victim . 

Not all podcasts contain information that follows the relationship between sections (a) and (b) of Rule 404. Oftentimes, hosts bring up information that would not be admissible at all under the propensity bar. Take for instance the My Favorite Murder episode covering serial killer Richard Chase.[55] One of the hosts began the episode by introducing Chase’s rough upbringing.[56] She talked about how Chase had issues with bed wetting, arson, and cruelty to animals when he was a child.[57] She mentioned that this is known as the “McDonald triad,” which is falsely believed to be a direct link between certain behaviors in children and violent tendencies once those children reach adulthood.[58] This theory has not been backed up by statistics, which the host quickly noted.[59] Since there is no scientific connection between these three actions and any of the exceptions outlined in Rule 404(b)(2), this evidence would not be admissible in court.[60]

B.      If You are Going to Act Like an Expert, Be One

In a case it does not matter how much evidence you have if a jury does not believe it. This is especially true for complicated forensic evidence.[61]Evidence involving scientific techniques can be extremely helpful for a jury.[62] However, misuse of that same evidence can lead to wrongful convictions, which in turn leads to a breakdown of the public acceptance of the criminal justice system.[63] Hiring the right expert to explain nuanced principles to a jury can make or break a case.[64]

The Federal Rules of Evidence account for the need of expert testimony in Rule 701. This rule says that if someone is not testifying as an expert then their opinion testimony must be limited to what the witness has perceived and information that would actually help the fact-finder.[65] Most importantly, opinions offered by a lay witness must “not be based on scientific, technical, or other specialized knowledge within the scope of Rule 702.”[66] Therefore, the rule does not “distinguish between expert and lay witnesses, but rather between expert and lay testimony.”[67]  Essentially the difference is that people without a specialty can testify to things that come from “reasoning familiar in everyday life,” whereas expert testimony “results from a process of reasoning which can be mastered only by specialists in the field.”[68]

The issue with the podcasting platform is that hosts come from a variety of backgrounds. Although some podcasts are created by journalists, or those who work in law enforcement, many hosts are simply people who have a true crime fascination.[69] Because podcast hosts are often the people presenting the information, they need to be mindful about how they frame complicated topics such as forensics. Unfortunately, not all podcasts frame the intricacies of these sciences as they should.

One example is the Wine and Crime podcast’s episode on blood spatter analysis.[70] During the first segment of the episode, one of the hosts attempts to go over the basics for blood spatter analysis.[71] She mentions the different types of blood stains and how they are made.[72] Later in the episode the hosts touch on how blood spatter analysis impacted specific cases.[73] Because the hosts do not have any formal training in blood spatter analysis,[74] a listener must trust that the hosts are relying on the right information. However, the podcast does mention how many different areas of study must be mastered to be considered an expert in blood spatter analysis.[75] Although this fact is discussed, the hosts do not make any connection between an expert’s opinion and the facts as they themselves are presenting them.[76]

A common way for podcasts to avoid the danger of misleading listeners is to go directly to the source and interview those who work in specific scientific or professional fields. My Favorite Murder, which is usually hosted by two amateur true crime observers, turned to a law enforcement officer for help in explaining the arrest in the infamous Golden State Killer case.[77] The case was open for nearly forty years until law enforcement agents used a genealogy website to trace D.N.A. from one of the crime scenes to the suspect, ultimately leading to an arrest.[78]

The hosts of My Favorite Murder knew that the familial gene technique was an investigative tool that their listeners were confused and concerned about, so they invited one of the investigators on the case to explain the tactic.[79] The investigator, Paul Holes, explained how law enforcement officials used D.N.A. to locate the familial branch of the suspect and how that information led to the arrest.[80] Holes also addressed the confidentiality concerns regarding the use of family members to aid in identifying suspects.[81] Because a person with specialized training on using D.N.A. evidence to perform a criminal investigation is the person explaining the procedure to the audience, the information is more credible. Not only that, but Holes is the sort of witness that would be able to testify to this information in court under Rule 702.[82]

It is important for podcast hosts to acknowledge that being extremely interested in a topic does not equate with being an expert in the field. Explaining highly convoluted, scientific areas without any formal training can lead to the spread of misinformation, which is why the limitations imposed by Rule 701 are so important.

C.      Hearsay is Rampant

Hearsay and its thirty-one exceptions, arguably the most complicated section within the Federal Rules of Evidence, is the most obvious issue with true crime podcasts. By nature, every single word uttered in a podcast could be categorized as hearsay.[83] The rule places a general bar on any out-of-court statements made “to prove the truth of the matter asserted.”[84]  Essentially, “the hearsay rule requires that people testify directly to what they saw or heard rather than repeating information from others.”[85] The general policy justification behind the rule is simple: the credibility of firsthand accounts are more credible than secondhand accounts.[86] Aside from interviews with victims or suspects, most of the information provided in podcasts are secondhand accounts. Even still, the rare interviews with eyewitnesses are considered hearsay because they are uttered outside of a court of law.[87]

Serial, the podcast that many people believe launched the nation’s true crime podcast obsession,[88] is ripe with hearsay issues:

The Serial podcast does not take place in court. It is therefore no surprise that hearsay is as rampant in the podcast as it is in the world outside the courtroom. Koenig asks almost everyone she interviews to talk about what they heard from other people. To give one example, Jay's friend Chris's sole contribution to the podcast is to talk about what Jay told him about how Adnan forced him to help bury Hae.[89]

Another example of hearsay evidence is in Episode 4 of Serial.[90] Sarah Koeing, the show’s host, plays a recording of a police interview with a witness named Jenn Pusateri.[91] Pusateri describes how Adnan Syed allegedly killed Hae Min Lee.[92] However, Pusateri herself did not witness any of this. She was simply telling a police officer what a man named Jay had told her.[93] The information coming from Pusateri could be potentially damning for a murder suspect, but Koeing had no way of knowing if it was true. 

       Podcasts, as discussed previously, are a form of entertainment. One of the many tactics used by hosts to make their episodes more gripping and engaging is the use of 911 calls.[94] These calls bring emotion, urgency, and authenticity to stories. However, these calls are technically statements made out of a courtroom and can be categorized as hearsay, especially if the calls are being used to prove a fact included in the substance of the phone conversation.[95]

       Sometimes podcasts will dedicate entire episodes to analyzing 911 calls.[96] For example, the podcast Cold Case Murder Mysteries played and analyzed a 911 call from a high-profile murder investigation in North Carolina.[97] The call was placed in the middle of the night by Michael Peterson, the main suspect in the murder of his wife, Kathleen.[98] In this episode, the disturbing call is played at the beginning of the episode.[99]The podcast host then analyzes the call as an indicator of Peterson’s guilt or innocence.[100] However, under the general hearsay ban, the call would not be admissible unless it met one of the explicit exceptions in Rule 803. 

Although 911 calls are technically out-of-court statements, there are a couple of exceptions that an attorney could use to admit these phone conversations into evidence. In the case of the Michael Peterson phone call, an attorney could argue that the conversation is admissible under the “excited utterance” exception.[101] In order for a statement to be classified as an “excited utterance” the statement must be about a startling event and “made while the declarant was under the stress of excitement that it caused.”[102] The 911 call made by Michael Peterson would likely fall into this exception. This, of course, depends on whether you believe his attorney’s timeline of events. If Peterson made the call directly after finding his wife lying at the foot of the stairs, it is likely he made the call while still under the “stress of excitement” of the discovery.[103] The urgency and emotion in Peterson’s voice also suggests that he was upset when he called the dispatcher.[104] Therefore, an attorney in this case would likely convince a judge to admit the 911 call. 

Emergency calls could also fall under the “present sense impressions” exception.[105] This exception to the hearsay bar applies to any “statement describing or explaining an event or condition, made while or immediately after the declarant perceived it.”[106] Essentially, the exception admits a play-by-play of events as a person sees them. Peterson’s call, being used as another example, would likely not fall under this exception. Peterson’s entire defense strategy hinged on the fact that he did not directly perceive his wife falling down the stairs.[107] Peterson claimed he found her after she had already fallen.[108] Therefore, Peterson’s call, that would probably be admitted under Rule 803(2), would probably not be admitted under Rule 803(1). Though there are multiple ways to get 911 calls admitted, many podcast hosts treat these conversations as if they are automatically something a jury would hear.[109] This offers another example of how the Federal Rules of Evidence can be misconstrued.

The hearsay portion of the Federal Rules of Evidence are meant to promote the use of firsthand accounts to avoid credibility questions.[110]Podcasts are by nature secondhand accounts outside the courtroom. Therefore, all podcasts are hearsay. There are many instances where podcast hosts talk about hearsay issues as if they are automatically admissible, such as with emergency calls.[111] Ideally, podcast hosts would dissect the problems with hearsay evidence and demonstrate to listeners why the it is less credible..

III.     Podcasting Potential

It is true that sometimes podcast producers and hosts do not do enough to ensure that their audiences are learning about proper court procedures. However, there are instances where podcasts can be a great educational tool for the average listener. Some podcasts offer accurate portrayals of criminal procedure. One example is the podcast Bardstown.[112] This podcast is produced by two women; one is a journalist from Louisville, Kentucky.[113] The podcast includes narration and interviews centered around unsolved deaths in Bardstown, Kentucky.[114] One episode described the search of a farm property that was possibly connected to one of the five deaths in town.[115] The owner of the farm invoked her Fifth Amendment right against self-incrimination.[116] The podcast host then delved into the meaning of the Fifth Amendment and the implications it could have on the investigation.[117]

Other podcasts actually attack admissibility issues head-on. The podcast Shallow Graves covers a cold case surrounding a missing college student from Florida and a potential serial killer.[118] In the first episode of the podcast the host discussed an early crime committed by the main suspect.[119] In this particular investigation, the only evidence left at the scene was in the form of a toeprint.[120] The host discussed how the police were confident who the print belonged to, but that if they did not follow the correct procedure, the toeprint would not be admissible in court.[121] The host discussed the difference between having a suspect’s consent for a search and seeking a search warrant.[122] To further enlighten listeners on the subject, she interviewed an investigator on the case and asked him to discuss the factors he weighed when deciding whether consent or a search warrant should be sought.[123] Later on, the host explained how a motion to suppress works and the implications a suppression ruling can have on a trial.[124] Shallow Graves is another great example of how criminal investigations should go, how evidence is admitted at court, and the restraints placed on law enforcement officers as they gather pieces of evidence. It focuses on a specific evidentiary issue and breaks it down so that the listener can follow along.[125]

Not only are podcasts educating the general public about criminal investigations and court proceedings, but they can also inspire important conversations about socioeconomic issues. For example, Karen Kilgariff and Georgia Hardstark from My Favorite Murder made headlines after a listener complained to them about the use of the term “prostitute.”[126] During one of their episodes they apologized for using the term and acknowledged that it could be perceived as offensive.[127] The hosts clarified that they would refer to these women as “sex workers” instead of “prostitutes.”[128] Hardstark said, “we have a platform that we can announce these things and so we’re lucky and we should do it.”[129]

Podcasts can also educate law students or those in the legal field. A few scholars argued that the popularity of Serial provides an opportunity for educators to introduce new ideas in the legal classroom.[130] They believe that bingeable forms of entertainment, like podcasts, can put legal analysis “into twenty-first-century problems of language, narrative form, authenticity, and audiences.”[131] Serial and other podcasts like it can enhance a legal learning experience because they are all about doubt, wanting more, and ultimately not knowing the concrete answer.[132] Further, “[q]uestioning the reason for and function of desire for closure in law and its pursuit of justice, connected with its role as popular entertainment, enriches classroom discussions about the common law, jurisprudence, ethical advocacy, legal storytelling, and legal institutional competencies.”[133]

It is also important to note that the information and investigations being fueled by the podcasting world are having real-world implications inside the courtroom. As previously mentioned, the Supreme Court has overturned a conviction that was highlighted by the podcast In the Dark.[134]Although the podcast might not have been the sole reason for the Supreme Court’s opinion, information brought to light by the host did show the flaws in the original trial.[135] Serial is another example—new evidence uncovered in the podcast was actually read into evidence during a post-conviction relief hearing for Adnan Syed.[136] There is potential for podcasts to be effective not only in educating the public and future lawyers, but also inside the courtroom. 

Conclusion

The Federal Rules of Evidence are in place to make sure our courts run efficiently, get to the truth, and protect the public’s faith in the criminal justice system.[137] However, these rules are not at play in forms of mass media, like podcasts. It is true that thoughtful listeners and viewers can take into account the nuances of the criminal justice system without such guidance.[138] It is irresponsible for podcast hosts to assume that all listeners and viewers are going to be thoughtful during their own media consumption. This Note does not argue that podcasts need to stray away from true crime reporting or that podcasts should only by hosted by law enforcement officers. This Note does, however, argue that podcast hosts need to recognize the power they have in shaping the public’s view of criminal justice and how they often fall short. This is a great power with even greater responsibility. Podcasters need to be mindful about telling the truth, the whole truth, and nothing but the truth. 

I J.D. Candidate, University of Kentucky J. David Rosenberg College of Law (2021). 

[2] See David Costello, Un-Making a Murderer: New True Crime Sensationalism and the Criminal Justice System, 55 Am. Crim. L. Rev. Online 77, 78­–82 (2018).

[3] See Brad Hill, Apple’s Most-Downloaded Podcasts of 2018, Rain News (Dec. 6, 2018), https://rainnews.com/apples-most-downloaded-podcasts-of-2018/ [https://perma.cc/9HSV-MCWD].

[4] Paige Hymson, Play Next: What a True-Crime Podcast Meant for a Real-World Investigation, L.A. Times (Aug. 13, 2019, 6:00 AM),https://www.latimes.com/california/story/2019-08-12/play-next-this-police-department-made-a-podcast-to-find-a-fugitive-it-helped [https://perma.cc/SA3G-P8G5].

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Flowers v. Mississippi, 139 S. Ct. 2228, 2251 (2019); Nicholas Bogel-Burroughs, After 6 Murder Trials and Nearly 24 Years, Charges Dropped Against Curtis Flowers,N.Y. Times (Sept. 4, 2020), https://www.nytimes.com/2020/09/04/us/after-6-murder-trials-and-nearly-24-years-charges-dropped-against-curtis-flowers.html[https://perma.cc/8PFB-2L44].

[11] Derrick Bryson Taylor & Christine Hauser, Popular ‘Crime Junkie’ Podcast Removes Episodes After Plagiarism Accusation, N.Y. Times  (Aug. 22, 2019),         https://www.nytimes.com/2019/08/22/business/media/crime-junkie-podcast-plagiarism.html [https://perma.cc/SH2S-JP2Q].

[12] See, e.g., Crime Junkie, https://crimejunkiepodcast.com/ [https://perma.cc/EQV9-GZVZ]; Morbid: A True Crime Podcast, https://www.morbidpodcast.com/[https://perma.cc/3QA3-CFPB]; Generation Why Podcast, https://genwhypod.com/ [https://perma.cc/CX84-S2YV].

[13] APM Reports, https://features.apmreports.org/in-the-dark/season-two/ [https://perma.cc/95YD-GJEM]; see also Alissa Zhu, How an Investigative Podcast Helped Free Curtis Flowers, Clarion Ledger (Sept. 10, 2020, 5:00 AM), https://www.clarionledger.com/story/news/2020/09/10/how-investigative-podcast-in-dark-helped-free-curtis-flowers/5747054002/ [https://perma.cc/VWY4-4Y2S] (explaining the intense investigation into Flowers’ case).

[14] Sarah Watts, What One Researcher Discovered About America’s True Crime Obsession, Forbes (Feb. 28, 2019, 5:31 PM), https://www.forbes.com/sites/sarahwatts/2019/02/28/what-one-researcher-discovered-about-americas-true-crime-obsession/#180940c35e6e [https://perma.cc/K3UP-DA8T].

[15] Id.

[16] Costello, supra note 2, at 95.

[17] Jen Thompson, “My Favorite Murder”: Women Creating Community in Crime, Golin (Mar. 18, 2021),  https://golin.com/2021/03/18/my-favorite-murder-women-creating-community-in-crime/            [https://perma.cc/RA72-EWKN].

[18] Taylor & Hauser, supra note 11.

[19] Id.

[20] Dean A. Strang, Beyond Guilt or Innocence: Larger Issues that Making a Murderer Invite Us to Consider, 49 Tex. Tech. L. Rev. 891, 898 (2017).

[21] Megan Boorsma, The Whole Truth: The Implications of America’s True Crime Obsession, 9 Elon L. Rev. 209, 223 (2017).

[22] Episode 154: DNA Dad, My Favorite Murder, at 1:04:48 (Jan. 3, 2019), https://myfavoritemurder.com/154-dna-dad/ [https://perma.cc/C8D8-VX8W] (discussing deathbed statements that indicated a suspect as well as previous statements from the victim before the murder that may not be admissible in court).

[23] Boorsma, supra note 21.

[24] Id. at 214 (quoting Justin T. Pickett et al., Public (Mis)Understanding of Crime Policy: The Effects of Criminal Justice Experience and Media Reliance, 26 Crim. Just. Pol’y Rev. 500, 501 (2015)).

[25] Charles Nesson, The Evidence or the Event? On Judicial Proof and the Acceptability of Verdicts, 98 Harv. L. Rev. 1357, 1369 (1985).

[26] See id. at 1368–69. 

[27] Id.

[28] Id. at 1372. 

[29] Id. at 1373.

[30] Id.

[31] Paul Schiff Berman et al., A Law Faculty Listens to Serial, 48 Conn. L. Rev. 1593, 1633 (2016).

[32] Id. at 1634. 

[33] Id.

[34] Id.

[35] See id. at 1635.

[36] Nesson, supra note 25, at 1368.

[37] Todd Spangler, Spotify Launches Podcast Streaming Ad Insertion and Measurement, Variety (Jan. 8, 2020, 8:00 AM), https://variety.com/2020/digital/news/spotify-podcast-dynamic-streaming-ad-insertion-measurement-1203459830/ [https://perma.cc/8T6N-9BZH]; Roger Kay, Crowdsourcing Drives Podcast Quality, Forbes (Jan. 13, 2014, 10:19 AM), https://www.forbes.com/sites/rogerkay/2014/01/13/crowdsourcing-drives-podcast-quality/?sh=396b4003473d [https://perma.cc/62GV-DDSY].

[38] See Fed. R. Evid. 404.

[39] Fed. R. Evid. 404(a)(1).

[40] Fed. R. Evid. 404(b).

[41] Id.

[42] Fed. R. Evid. 404(b)(2).

[43] United States v. Lattner, 385 F.3d 947, 955 (6th Cir. 2004) (establishing a three-part test for Rule 404(b) evidence that looks at the likelihood the prior act happened, whether the evidence goes to one of the exceptions outlined in Rule 404(b)(2), and how the probative value of the evidence related to prejudicial impact).

[44] Huddleston v. United States, 485 U.S. 681, 687 (1988) (quoting Fed. R. Evid. 403).

[45] See generally David Sloan et al., A Killing on the Cape, ABC, https://abcnews.go.com/2020/deepdive/a-killing-on-the-cape-50254778 [https://perma.cc/L849-5YC7] (discussing inadmissible character evidence of a suspect).

[46] Id.

[47] See id.

[48] A Killing on the Cape: More Leads, More Dead Ends, ABC News, at 22:00 (Nov. 7, 2017), https://www.stitcher.com/podcast/abc-news/a-killing-on-the-cape/e/52234591 [https://perma.cc/649U-8FZB].

[49] Id. at 22:40.

[50] Fed. R. Evid. 404(a)(1).

[51] A Killing on the Cape: More Leads, More Dead Ends, supra note 48, at 22:30.

[52] Id. at 26:50.

[53] Fed. R. Evid. 404(b).

[54] Fed. R. Evid. 403. 

[55] Episode 10: Murderous TENdencies, My Favorite Murder, at 48:00 (Apr. 1, 2016), https://www.stitcher.com/show/my-favorite-murder-with-karen-kilgariff-and-georgia-hardstark/episode/10-murderous-tendencies-200174474 [https://perma.cc/3AQ3-NET8].

[56] Id.

[57] Id.

[58] Id. at 48:20.

[59] Id.; Karen Franklin, Homicidal Triad: Predictor of Violence or Urban Myth?, Psychol. Today (May 2, 2012), https://www.psychologytoday.com/us/blog/witness/201205/homicidal-triad-predictor-violence-or-urban-myth [https://perma.cc/2FNR-YZDZ]. 

[60] Fed. R. Evid. 404(b)(2) (including exceptions such as “proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident”).

[61] See Kimberly Schweitzer & Narina Nunez, What Evidence Matters to Jurors? The Prevalence and Importance of Different Homicide Trial Evidence to Mock Jurors, 25 Psychiatry, Psychol. & L. 437, 444 (2018).

[62] Id.

[63] Berman et al., supra note 31, at 1639 (arguing that forensic evidence can lead to unwanted results if not broken down in an acceptable way).

[64] See Rabia Chaudry, Undiscovered: Five Legal Lessons from the Case of Adnan Syed, 48 Tex. Tech. L. Rev. 363, 370–71 (2016) (arguing that the case discussed in the Serial podcast could have had a different outcome with the addition of even just one expert).

[65] Fed. R. Evid. 701(a), (b).

[66] Fed. R. Evid. 701(c).

[67] Fed. R. Evid. 701 (advisory committee’s note on 2000 amendments).

[68] State v. Brown, 836 S.W.2d 530, 549 (Tenn. 1992) (citation omitted). 

[69] Two of the most-downloaded true crime podcasts are hosted by a pair of women who are interested in true crime but have no formal training in law or law enforcement.See About My Favorite Murder, My Favorite Murder, https://myfavoritemurder.com/about [https://perma.cc/9TTE-VZ2S]; About Us, Crime Junkie, https://crimejunkiepodcast.com/about-us/ [https://perma.cc/UE93-J383].

[70] Ep10: Blood Spatter, Wine & Crime Podcast (Apr. 5, 2017), https://wineandcrimepodcast.com/show_episodes/ep10-blood-spatter/ [https://perma.cc/N56Z-E5KV].

[71] Id. at 10:30. 

[72] Id. at 10:10.

[73] Id. at 1:07:00.

[74] About Wine & Crime, Wine and Crime Podcast, https://wineandcrimepodcast.com/about/ [https://perma.cc/43G8-RW42].

[75] Ep10: Blood Spatter, supra note 70, at 37:50.

[76] See id.

[77] MFM Show, My Favorite Murder – 122 – Surprise! It’s Paul Holes, YouTube (May 24, 2018), https://www.youtube.com/watch?v=55omfgKDvTc [https://perma.cc/N8J7-M472]. 

[78] Laurel Wamsley, After Arrest of Suspected Golden State Killer, Details of His Life Emerge, NPR (Apr. 26, 2018, 3:51 PM), https://www.npr.org/sections/thetwo-way/2018/04/26/606060349/after-arrest-of-suspected-golden-state-killer-details-of-his-life-emerge [https://perma.cc/XHV3-W5EZ].

[79] See MFM Show, supra note 77, at 55:30.

[80] Id.

[81] Id.

[82] Fed. R. Evid. 702 (listing acceptable expert witnesses as people with “specialized knowledge” and opinions based “on sufficient facts or data” rooted in “reliable principles and methods”).

[83] Fed. R. Evid. 801(c)(1).

[84] Fed. R. Evid. 801(c).

[85] Berman et al., supra note 31, at 1635.

[86] Deborah Jones Merritt & Ric Simmons, Learning Evidence: From the Federal Rules to the Courtroom 444 (4th ed. 2018).

[87] See Fed. R. Evid. 801(c).

[88] See Tony Jeff, Crowdsourcing Justice, 35 Miss. C.L. Rev. 365, 366 (2017).

[89] Berman et al., supra note 31, at 1635.

[90] See Episode 4: Inconsistencies, Serial, at 7:47 (2014), https://serialpodcast.org/season-one/4/inconsistencies [https://perma.cc/VCE8-4DBN].

[91] Id.

[92] Id.

[93] Id.

[94] See, e.g., 911 Calls Podcast with The Operator, 11:59 Media, https://www.1159media.com/911-calls [https://perma.cc/5K6K-YWD9] (dedicating an entire podcast to analyzing 911 calls).

[95] See Fed. R. Evid. 801(c).

[96] Episode 141: Analyzing the 911 Calls – The Staircase, Stitcher (Aug. 29, 2018), https://www.stitcher.com/podcast/wondery/real-crime-profile/e/55998180?autoplay=true [https://perma.cc/SJ87-F8DF].

[97] The Staircase Murder – E004, Cold Case Murder Mysteries, at 0:01, https://www.coldcasemurdermysteries.com/e004-the-staircase-murder [https://perma.cc/SZ4E-QUJ8].

[98] Id.

[99] Id.

[100] Id.

[101] Fed. R. Evid. 803(2).

[102] Id.

[103] Id.

[104] See The Staircase Murder – E004, supra note 97.

[105] Fed. R. Evid. 803(1).

[106] Id.

[107]  Rebecca Reisner, Michael Peterson: An Update, Forensic Files Now, https://forensicfilesnow.com/index.php/2019/09/26/michael-peterson-an-update/comment-page-1/ [https://perma.cc/W4G9-KV8G].

[108] Id.

[109] See The Staircase Murder – E004, supra at note 97 (discussing a 911 call and a subsequent trial without explaining the relationship between the two).

[110] Note, The Theoretical Foundation of the Hearsay Rules, 93 Harv. L. Rev. 1786, 1788 (1980).  

[111] See Episode 4: Inconsistencies, supra note 90, at 1:00.

[112] Bardstown, Vault Studios, https://www.bardstownpodcast.com  [https://perma.cc/C936-APVT].

[113] Jackelyn Jorgensen et al., The making of the Bardstown podcast, First Coast News (Aug. 27, 2019, 6:50 PM), https://www.firstcoastnews.com/article/news/local/the-making-of-the-bardstown-podcast/417-b16b8c85-0cfd-4d72-b6be-49fd3dcc59ad#:~:text=Shay%20McAlister%20is%20an%20investigative,the%20new%20podcast%20'Bardstown [https://perma.cc/ZCV9-ZBKV].

[114] Id.

[115] Bardstown: Prime Suspect, supra note 112, at 13:00. 

[116] Id.

[117] See id.

[118] See Linda, Shallow Graves (Feb. 20, 2020), https://podcasts.apple.com/us/podcast/linda/id1497630439?i=1000466281242 [https://perma.cc/6ZDQ-PBNS].

[119] Id. at 20:00.

[120] Id.

[121] Id. at 25:00.

[122] Id.

[123] Id.

[124] Id. at 36:36.

[125] Id.

[126] Becky Hughes, My Favorite Murder Podcasters Karen Kilgariff and Georgia Hardstark on Their Famous Friendship, Love of True Crime and More, Parade (May 28, 2019, 5:00 AM), https://parade.com/884730/beckyhughes/my-favorite-murder-podcasters-karen-kilgariff-and-georgia-hardstark-on-their-famous-friendship-love-of-true-crime-and-more [https://perma.cc/7B5Z-7BNS].

[127] Episode 12: Our Bodies, Our Twelves, My Favorite Murder, at 54:00, https://www.iheart.com/podcast/268-my-favorite-murder-w-27911429/episode/12-our-bodies-our-twelves-28977250/ [https://perma.cc/SJ75-WMYX].

[128] Id. at 55:47.

[129] Id. at 56:50.

[130] Zahr K. Said & Jessica Silbey, Narrative Topoi in the Digital Age, 68 J. Legal Educ. 103, 104, 107 (2018).

[131] Id. at 104.

[132] Id. at 106.

[133] Id. at 107.

[134] Dan Mangan, Curtis Flowers—Black Man Tried Six Times for Same Murders—Released on Bail After Supreme Court Reversed Case Detailed in Podcast, CNBC (Dec. 16, 2019, 5:13 PM), https://www.cnbc.com/2019/12/16/bail-set-for-curtis-flowers-in-murder-case-overturned-by-supreme-court.html [https://perma.cc/9AKF-7VRX].

[135] Id.

[136] Jeff, supra note 88 at 365–66.

[137] Nesson, supra note 25.

[138] See Strang, supra note 20, at 891.

A Ward of the State: The First Amendment as Protecting the Best Interest of the Child in Custody Disputes

Download a PDF Below:

Ellen C. Ray[1] 

Introduction

One of the most challenging First Amendment questions facing the courts is whether a public employee’s speech should be classified as a public concern or a private interest.[2] This distinction affects whether the speech will be treated the same as speech from ordinary citizens working in the private sector and be protected by the First Amendment, or whether the public employee will be subject to retaliation and possible termination by the public employer for their speech.[3] While the courts have dispelled the idea that public employees may be subjected to exorbitant restraints by the state due to their employment status, today the question has shifted to finding the appropriate balance between protecting both the right of the employer to control its public message and the right of the employee as a citizen to speak one’s mind, as granted by the Constitution.[4]

The law on public employee freedom of speech has expanded into a five-step analysis, often referred to as the Pickering/Garcetti test (hereinafter Pickering test), adapted from leading First Amendment public employee Supreme Court cases, which is described as follows:

(1) whether the speech was made pursuant to an employee's official duties; (2) whether the speech was on a matter of public concern; (3) whether the government's interests, as employer, in promoting the efficiency of the public service are sufficient to outweigh the plaintiff's free speech interests; (4) whether the protected speech was a motivating factor in the adverse employment action; and (5) whether the defendant would have reached the same employment decision in the absence of the protected conduct.[5]

Steps one through three are classified as issues of law to be analyzed and resolved by the court, while steps four and five are left to the trier of fact, typically a jury.[6] This step-by-step analysis allows courts a clear path to rule on freedom of speech issues for public employees, but the ambiguity of some of these categories leaves the court with ample discretion to determine what exactly is within the scope of official duties or on a matter of public concern. Since there is ambiguity within these categories, courts have rendered opposing decisions on what speech qualifies for protection for decades. 

In 2014, the Supreme Court of the United States decided in Lane v. Franks that a public employee giving truthful, sworn testimony outside the scope of his or her employment is protected by the First Amendment.[7] Edward Lane was hired by Central Alabama Community College (hereinafter CACC) to be the Director of Community Intensive Training for Youth.[8] Lane fired Suzanne Schmitz for lack of appropriate reporting, which he discovered by conducting an audit, but then Lane was fired by the President of CACC, Steve Franks, for his testimony in the Schmitz trial.[9] Lane brought suit against Franks, arguing that he was improperly retaliated against for testifying in the Schmitz trial for mail fraud and improper use of federal funds.[10] The Court held that Lane had a right to First Amendment protection for his truthful testimony, prompted by subpoena, because “[s]worn testimony in judicial proceedings is a quintessential example of speech as a citizen for a simple reason: Anyone who testifies in court bears an obligation, to the court and society at large, to tell the truth.”[11] From the Lane ruling it appeared as though a point of clarity had been reached for public employees testifying in court, a small degree of clarification for the complex Pickering test. 

However, only a few years later, in the 2019 case of  Butler v. Board of County Commissioners for San Miguel County, the Tenth Circuit held that the truthful, sworn testimony of a public employee in a child custody hearing was not protected by the First Amendment.[12] This case centered on the testimony of Jerud Butler, a public employee, working as a newly-appointed supervisor in the Road and Bridge Department for San Miguel County.[13] Butler testified on behalf of his sister-in-law in a custody dispute for her children and was predominately asked to relay information about his working hours and job requirements since the child’s father also worked for the Department.[14] Two weeks later, Butler was demoted and reprimanded for his testimony in the proceeding, and he subsequently brought suit against his employer for violation of his First Amendment rights.[15] In Butler, the Tenth Circuit ruled that the issue of child custody is a private, domestic interest, “not of general interest to the community as a whole,” and, thus, is not subject to First Amendment protections because it fails the “public concern” prong.[16] Not only is this holding in direct conflict with Lane, it also contradicts the long-held family law standard that it is the duty of the state to consider the best interest of the child as a public concern in child custody hearings.[17]

The law presumes parents will make decisions in the best interests of their children because “parents possess what a child lacks in maturity, experience, and capacity for judgment required for making life’s difficult decisions.”[18] Under the Fourteenth Amendment’s Due Process Clause, parents have a constitutionally protected right to “the custody, care, and nurtur[ing] of the child,” to which the state cannot interfere “without some showing of unfitness.”[19] The best interest of the child is a burden-shifting responsibility that requires the state to provide protection for minors when the fitness of the parents is called into question.[20] The Butler holding is contrary to the standard set forth in family law, which promotes the best interest of the child as a state protected interest through the doctrine of parens patriae—the idea that the state steps in as protector to prevent “injury to those who cannot protect themselves.”[21] The holding in Lane is more consistent with the promotion of the best interest of the child standard. Testimony in a custody dispute is a public concern that should per se qualify under the second prong of the Pickering test because the state has a duty to take an active role in protecting minors under the standards of parens patriae and the best interest of the child. 

Part I of this Note will offer a review of First Amendment rights for public employees, looking at the development of the Pickering test. Part II will discuss the importance of the best interest of the child standard in custody disputes and how it is used by courts today. Part III will analyze the holding in Butler against that of Lane and Part IV will argue that it is necessary to include public employee testimony in child custody disputes as a per se public concern under the Pickering test, due to the best interest of the child standard. 

I. History of Public Employee Protections and the First Amendment

The First Amendment to the United States Constitution protects, among other freedoms, the freedom of speech for people within the United States.[22] This protection prohibits the government from punishing, altering, or restricting verbal or written statements made by persons in the United States, in order to promote trust and self-governance among the people.[23] Through the Due Process Clause of the Fourteenth Amendment, these First Amendment protections from government regulation of speech are applied to the states.[24]

However, because public employees are “in a special relationship to the government,” their speech is not protected under the First Amendment when it is considered to be detrimental to the public employer, as determined by the test first established in the 1968 Supreme Court case, Pickering v.Board of Education.[25]

Pickering held that public employees do not give up First Amendment protection by accepting a job with the government or another public institution.[26] In this case, a public school teacher was fired for publishing a letter in response to recent actions taken by the School Board related to funding.[27] The school alleged that the teacher’s remarks were both false and damaging to the reputation of the school.[28] The Court held that Pickering’s letter was protected by the First Amendment because it represented a difference of opinion on a general public interest topic, taken up in the public sphere, and did not warrant his dismissal.[29] The Court emphasized the importance of a balancing test in this arena of free speech because the employer’s interest in limiting an employee’s “contribut[ion] to public debate is not significantly greater than its interest in limiting a similar contribution by any member of the general public.”[30] Furthermore, this case defined the public employee First Amendment protection exception as a fact-specific balancing test.[31] The Court held that teachers should be able to express opinions freely on the topics which they are the “most likely to have informed and definite opinions” on, and that the topic of school system funding was a “matter of legitimate public concern” for which “free and open debate is vital to informed decision-making.”[32] Pickering established itself as a foundational case for discerning the role of governmental protections for public employees’ speech. 

The next case that helped build First Amendment precedent in regard to public employees is Connick v. Meyers, which held that a state Assistant District Attorney’s termination for publishing a questionnaire related to office protocol after refusing to accept a transfer did not involve matters of public concern.[33] The Court set another standard of analyzing the content, form, and context of the public employee’s speech to determine whether it should be classified as a public concern.[34] It determined that the internal questionnaire meant for employees focused on internal opinion of internal action and did not seek the public’s opinion, nor attempt to show any wrongful action by any of the attorney’s superiors to the public.[35]Based on this analysis, the termination was not in violation of the attorney’s First Amendment right because the issue was a matter of private concern which can be subject to retaliation and, therefore, does not require analysis under the Pickering balancing test.[36] Connick will be further addressed later in this Note to determine if a child custody dispute and sworn testimony meet the requisite form, context, and content to be classified as interests of public concern. 

The final foundational case for First Amendment public employee protections is Garcetti v. Ceballos. [37] The Court held that Ceballos was acting in his capacity as a calendar deputy when he wrote a memorandum regarding government misconduct in a particular case to his supervisor.[38]Thus, his speech was not protected by the First Amendment, and his internal punishments of reassignment and denial of promotion were appropriate.[39] This case takes a more detailed look at the first step in the analysis outlined in Butler: whether the employee is acting pursuant to his or her official duties.[40] Through the outlining of these cases, it is clear that public employee First Amendment protections are a fact-specific, case-by-case decision for courts, and because of the discrepancies in this form of analysis, they often lead to circuit splits. 

The three cases discussed above help to build a foundation for the tests applied in Butler and Lane. It appeared as though the Supreme Court had issued the final say in Lane in holding that the First Amendment protects the truthful, sworn testimony of a public employee, prompted by subpoena, and not acting in his or her capacity as an employee.[41] However, five years later, the Tenth Circuit held in Butler that this standard was not directly applicable to public employees testifying in child custody cases.[42] When looking at the elements discussed in Connick, the apparent per se rule created by Lane, that public employees’ sworn testimony is protected by the First Amendment, places too much emphasis on the form and context of the speech and not the content.[43] The Tenth Circuit ultimately ruled that while the form and context of Butler’s speech for his sister-in-law’s custody hearing met the public concern standard, the content was simply too personal and only “of great significance to the private parties involved in the proceeding,” and because the hearing related to an individual parent’s custody right to her own child, it was not a “political, social, or other concern of the larger community.”[44] This is where Butler and the precedent of family law do not coincide.  

II. History of the Best Interest of the Child and the State as Parens Patriae

The doctrine of parens patriae directly translates to “parent of the county,” and represents the idea that the state can step into a protector role when citizens, who have the initial right of protector status, fail to do so.[45] While historically the common-law doctrine applied to situations of mental incapacity, more recently it has been legislatively applied to states’ control of certain areas, including:[46] natural resources,[47] and, most significantly for this Note, the welfare of a child.[48]

The Supreme Court of the United States held that “[t]he State has an urgent interest in the welfare of the child . . . . As parens patriae, the State’s goal is to provide the child with a permanent home.”[49] Additionally, the Tenth Circuit has emphasized that “[s]tates have a parens patriae interest in preserving and promoting children’s welfare.”[50] Specifically in Colorado, the state of origin of the Butler case, the court recognized that the state, as parens patriae, has a continuing responsibility for the protection of children in its territory under § 19-1-104(1)(c) of the Colorado Children’s Code.[51] These jurisdiction-specific holdings demonstrate the state has a universally understood interest to protect children within its borders under the doctrine of parens patriae. 

During a child custody hearing, as occurred in Butler, the universally applied standard is known as the best interest of the child standard.[52] This standard is represented in section 402 of the Uniform Marriage and Divorce Act (hereinafter UMDA).[53] It was born out of a century of gender-based presumptions controlling custody decisions post-divorce.[54] First, children were considered property; therefore, custody favored fathers, as women could not own property.[55] This view then shifted to the since-abolished “tender years doctrine” in the early 1800s, which preferred maternal custody if the child was young.[56] Finally the courts arrived at a more gender neutral, child-centered approach in the mid-1800s, known as the best interest of the child doctrine.[57] As defined in the UMDA, the doctrine is comprised of five factors.[58] The court analyzes a custody decision based on: (1) the desires of parents, (2) the wishes of the child,  (3) the child’s interactions with each parent and other related parties, (4) the concerns related to the child’s home or school environment, and (5) the mental and physical well-being of all involved parties.[59]

While all of the above factors are significant in determining custody, for Butler, it is important to distinguish that there may be expert witnesses such as social workers, psychologists, and doctors who testify related to their expert knowledge in order for the court to determine custody.[60]However, Butler was a character witness who also happened to be a public employee.[61] He was not providing testimony because of his employment, but rather because of his personal connections to the parents and the insights he could offer about the father’s work.[62]

Butler worked for the Road and Bridge Department in San Miguel County, Colorado, alongside his sister-in-law’s ex-husband.[63] While on the stand, Butler was asked about the hours of operation for the Department and other operational questions because the child’s father also worked for the Road and Bridge Department.[64] In response to this testimony, his employer demoted him.[65] This employer retaliation is not in line with the protections afforded to public employees under the First Amendment and Lane v. Franks.[66]

Butler was in a unique position to offer knowledge as to the father’s work schedule for purposes of the custody arrangement, just as the teacher in Pickering had unique knowledge of the way money should be spent in schools.[67] As “members of a community most likely to have informed and definite opinions”[68] related to the issue at hand, both should feel equally safe to be able to speak freely on these important public issues—education and child custody—without fear of retaliatory dismissal due to the issue’s classification as a private concern.

The foundational case for the best interest standard is Troxel v. Granville, which limits the state’s ability to interfere with a parent’s rearing of their child due to the parent’s constitutionally guaranteed right to make decisions on behalf of the child, pursuant to the Fourteenth Amendment.[69] In Troxel, the Court improperly superseded the mother’s fundamental right to decide what is in the child’s best interest and granted the paternal grandparents visitation rights.[70] Therefore, unless the custody of the child is put into question, triggering an analysis by the court using the five-factors discussed above, the parents retain decision making power for the child.

Another often cited best interest case is McDermott v. Dougherty, which discusses more directly the best interest standard as applied to parental custody disputes.[71] The best interest standard is particularly important in custody disputes between parents, and is significant to the Butler case, because it shows the court’s need for accurate information from character witnesses in making custody determinations. While each parent may appear biased based on their personal interests, third parties—like Butler—who have a familial relationship with the parties, may be of particular use in the courts in determining the best interest of the child. 

Thus, the best interest of the child is a paramount legal standard in the U.S..[72] Arguably, one of the most useful pieces of evidence in a custody dispute is third-party testimony that puts the statements or actions of one parent in question. For example, in OCBSS v. Manuel, the court dismissed a mother’s petition after third-party testimony contradicted her own testimony by countering the mother’s statements related to financial stability and disputing the child’s happiness in the mother’s home.[73] Contrary to this, arguments have been made that the best interest standard is not in conformity with the fundamental right of parents to parent their children.[74] In states that lack a joint custody standard, the best interest determination may appear to grant the judge too much power in independently determining the best interest of the child in the role of parens patriae.[75] However, most states, including Colorado,[76] follow a joint custody standard,[77] where the best interest factors are a more productive and fairer analysis for the court to use.  

III. Butler’s Silence on the Best Interest Standard: Is this a Problem?

By connecting these two doctrines, parens patriae and the best interest of the child, the state’s role in child custody proceedings is clear: protect the child without overstepping the constitutional interests of the parent. The Butler majority opinion begins by citing to the first three steps of the Pickering/Garcetti test: public employee speech is protected only when that speech is “(1) made as a citizen (2) on a matter of public concern (3) if the employee’s right to speak outweighs the government’s interest as an employer in an efficient workplace.”[78] The case specifically deals with whether child custody cases should be classified as issues of public concern.[79]

The majority held that “[a]lthough Butler’s testimony involved a matter of great significance to the private parties involved in the proceeding, it did not relate to any matter of political, social or other concern of the larger community,” thus the testimony was not on a public concern.[80]However, based on the holdings in both Lane and Troxel, because this case arose from post-divorce proceedings, it is one in which the courts must intervene with a parent’s constitutional right to raise and make decisions for their children. Contrary to Troxel, where the mother was the sole surviving parent,[81] and therefore had the only say in parenting decisions, in Butler, the parents are in a custody dispute following their separation.[82] Because of this, the court should use the best interest of the child standard to determine what the best custody arrangement is for this situation.  

Butler argued that he was speaking on a matter of public concern because “the state’s general interest in child welfare and fair custody proceedings,” classifies a child custody hearing as such.[83] The Tenth Circuit disagreed, providing case-based examples of what would classify as public concern, including “evidence of corruption, impropriety, or other malfeasance within the government entity,” but not usually “internal personnel disputes and working conditions.”[84] In the Connick test, as discussed above, there are three main criteria for deciding if speech should be classified as relating to public concern: form, context, and content.[85] Here, too much emphasis is placed on the content of the speech, meaning the questions that Butler was asked while testifying in the child custody proceeding.[86]

When looking at the form and context of the speech, the court also rejects the significance of First Amendment protection for public employees testifying in child custody cases. The court reasons that because the community at large did not have an interest in the hours of operation of the Department or the sister-in-law’s character, the testimony was on a private concern and could be subject to retaliation because Butler spoke of something which was readily accessible to the public (namely the hours of operation).[87] While it is reasonable to argue that the information Butler provided in his testimony was likely readily accessible in another format to be presented to the court, this does not mean that it should have been against the employer’s interest for Butler to testify as he did. 

As Cynthia Estlund argues, the classifications of specific practices as being within public concern for purposes of the First Amendment under Connick is a limiting practice on what our society is told to value.[88] If a subject is not considered to be within the realm of public concern, then the possibility increases that it will no longer be viewed as a “legitimate subject[] of public discussion.”[89] If more courts refuse to classify child custody hearings as matters of public concern, the integrity and safety of the process of determining custody through the courts will be delegitimized and countless children disenfranchised.[90] Ultimately, the stringent classifications in the public concerns test, “discounts the importance, and undermines the claim to constitutional status, of speech grounded in the real, everyday experience of ordinary people.”[91]

Estlund further points out that the public concerns test, as it is presently applied, also prohibits “women in particular” from these public employee protections because women are often less able to “participate in public life” due to “pregnancy, childbirth and childrearing responsibilities.”[92] The limitations of the public concern test keep women from having the opportunity to participate in public discourse without fear of retaliation by public employers because the issues that are frequently expected to be at the forefront of their minds have not been classified as “public” enough to warrant free speech privileges. 

The dissent in Butler, written by Judge Lucero, advocates for the use of the best interest standard in this case.[93] Colorado declared that the placement of children was a matter of public concern through its statutes,[94] which should have provided a basis for an argument that the majority did not address. Furthermore, the dissent correctly points out that while custody “is partly personal in nature, it is at its root a societal and public issue.”[95] Before incorporating analysis of the best interest of the child, the dissent makes multiple astute arguments that Lane intended for the form and the context of testimony in a public court case to be enough to raise the speech to a realm of public concern.[96] Moreover, a connection is drawn between sentencing proceedings, which were held to invoke public concern in Bailey v. Indep. Sch. Dis. No. 69,[97] and child custody cases.[98] Both proceedings are paid for by the public, become public record, and are able to be viewed by the public.[99] The court is at the forefront of public discourse in America, and all proceedings before it should be viewed as relating to public concern. 

The dissent draws connections the majority failed to see. First, Colorado clearly supports and enforces the parens patriae doctrine, requiring the state to care for “children who cannot care for themselves.”[100] This protection is achieved when the court, again following Colorado’s instruction, “make[s] an independent examination of the best interest of the child in custody matters.”[101] The majority appears to ignore Colorado precedent which promotes custody disputes as related to the state’s public interest, and even more that child support has a public function as well.[102] The dissent makes the same conclusion as this Note: Lane creates the Supreme Court precedent for testimony to be classified as public concern, Colorado further promotes child custody and welfare as a public concern, and nowhere is child custody classified as a private interest.[103] Butler’s testimony is quintessential public concern for child custody cases and yet he is punished for acting in conformity with two widely accepted and applied legal standards.  

IV. What is the Solution? 

The Tenth Circuit was incorrect to rule against Butler and the best interest standard. While the court did not have to go so far as to say that there is a per se First Amendment protection for public employees testifying in court, the court should have recognized the significance of child welfare in Colorado and the public concern given to this topic. The United States Supreme Court should take up this case on appeal in order to more clearly classify all proceedings in a public courtroom as related to public concern, especially those dealing with the welfare of children. 

When Lane was decided, there was a massive circuit split on what to do about public employee testimony in court cases, not just in child custody decisions.[104] The nuances of the Garcetti and Pickering tests were interpreted differently by the circuits, each placing emphasis on different aspects.[105] The Supreme Court needs to create a streamlined approach, which more clearly includes room for child custody proceedings as a public concern. While the Lane decision created a clearer, more standardized approach to dealing with public employee testimony, more could have been said. As Sara Robertson argues, altering the standard to first determine “whether the speech is on a matter of public concern as the sole threshold question,” before applying the Pickering test would better balance all parties interests.[106] If this standard were adopted, then the Tenth Circuit would have had to first consider that Butler was testifying in a child custody case, which under Colorado law is a public concern.[107] With such an approach implemented, the court would then be able to tell the employer that because Butler was testifying in a case which was related to public concern, namely the welfare of a child, his speech was protected from employer retaliation. 

An alternative, which is slightly counter-intuitive, requires restraint on the state’s parens patriae power to remove child custody disputes from the courts and resolve them instead through arbitration.[108] According to Aaron Zurek, the current system in many states does not allow for “arbitration of custody disputes or subject[s] the award to de novo judicial review.”[109] This allows for significant control of child custody cases in the court system and in turn makes public employees vulnerable to retaliation for their testimony in such cases. Arbitration of child custody decisions also promotes the best interest of the child by “allowing parents to choose the values that shall govern the decisionmaker’s resolution of their custody dispute.”[110] Allowing parents to arbitrate their child custody decisions is a practical alternative to relieve stress on the court system and honor the best interest of the child standard. 

Conclusion

One’s position as a public employee should not hinder nor suppress the truth when something as significant as a child’s well-being and safety is on the line. The Tenth Circuit, in Butler, threatened this idea by holding that public employee testimony is not related to a public concern in child custody cases. With clear evidence from Colorado, the state of origin of the case, that the state has an interest in protecting the welfare of children coupled with a storied history of traditions of parens patriae and the best interest of the child standard across the nation, the Tenth Circuit ignored precedent and deemed child custody to be a domestic, private matter. 

Private negotiations and mediations are not in the realm of public concern; divorce and custody battles that happen outside the courtroom are not public concern. But when the welfare of a child is put into the hands of the court, a public institution, the state must protect the interests of the child. Courts have taken advantage of their unique role in child custody proceedings, too often usurping the parents’ desires in the name of the best interest standard. The ability of parents to provide testimony of witnesses, whether they be employed publicly or privately, is a right that no court should try to abridge. The sanctity, procedure, and classification of the court as dealing with matters of public concern should be appreciated and adhered to across all disciplines of the law, even when the case relates to matters of the family. 

[I] Notes Editor, Kentucky Law Journal, Volume 109; J.D. Candidate, University of Kentucky J. David Rosenberg College of Law (2021); B.A. English, Centre College (2018).

[2] See Pickering v. Bd. of Educ., 391 U.S. 563, 574 (1968).

[3] Id.

[4] Id. at 568.

[5] Butler v. Bd. of Cty. Comm’rs., 920 F.3d 651, 655 (10th Cir. 2019) (internal citations omitted). 

[6] Id.

[7] Lane v. Franks, 573 U.S. 228, 231 (2014). 

[8] Id. at 231–32.

[9] Id. at 232–33. 

[10] Id. at 234.

[11] Id. at 238.

[12] Butler v. Bd. of Cty. Comm’rs., 920 F.3d 651, 653–54 (10th Cir. 2019).

[13] Id. at 653. 

[14] Id. at 654.

[15] Id.

[16] Id. at 663.

[17] Id. at 667 (Lucero, J., dissenting). 

[18] Parham v. J.R., 442 U.S. 584, 602 (1979).

[19] Quilloin v. Walcott, 434 U.S. 246, 255 (1978).

[20] See id. 

[21] Alfred L. Snapp & Son, Inc., v. Puerto Rico, 458 U.S. 592, 600 (1982); see also McDermott v. Dougherty, 869 A.2d 751, 803 (Md. 2005) (discussing the role of the judge to consider a father’s fitness when making a custody ruling under the doctrine of parens patriae).

[22] U.S. Const. amend. I.

[23] See Geoffrey R. Stone & Eugene Volokh, Freedom of Speech and the Press, Nat’l Const. Ctr., https://constitutioncenter.org/interactive-constitution/interpretation/amendment-i/interps/266 [https://perma.cc/6F8F-DRED] (last visited Feb. 22, 2021). 

[24] U.S. Const. amend. XIV, §1.

[25] Stone & Volokh, supra note 23; Pickering v. Bd. of Educ., 391 U.S. 563, 565 (1968).

[26] Pickering, 391 U.S. at 573. 

[27] Id. at 566–67.

[28] Id.  

[29] Id. at 571–73.

[30] Id. at 573. 

[31] Id. at 568.

[32] Id. at 571–72. 

[33] Connick v. Meyers, 461 U.S. 138, 148 (1983).

[34] Id. at 147–48. 

[35] Id. at 148. 

[36] Id. at 154 (citing Pickering v. Bd. of Educ., 391 U.S. 563, 568 (1968)) (throughout the Connick opinion, the Pickering balancing test was applied to reach this conclusion). 

[37] Garcetti v. Ceballos, 547 U.S. 410 (2006).

[38] Id. at 421.

[39] Id. 

[40] Id.; Butler v. Bd. of Cty. Comm’rs., 920 F.3d 651, 655 (10th Cir. 2019).

[41] Lane v. Franks, 573 U.S. 228, 238 (2014).

[42] Butler, 920 F.3d at 653–54.

[43] Id.

[44] Id. at 654.

[45] See Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592, 600 (1982).

[46] Id. 

[47] See generally New Mexico v. GE, 467 F.3d 1223 (10th Cir. 2006) (explaining parens patriae interests of states protecting the public’s beneficial use of groundwater).

[48] Santosky v. Kramer, 455 U.S. 745, 766 (1982).

[49] Id.

[50] Gomes v. Wood, 451 F.3d 1122, 1128 (10th Cir. 2006).

[51] E.P. v. District Court, 696 P.2d 254, 258 (Colo. 1985).

[52] Ex rel E.L.M.C., 100 P.3d 546, 558 (Colo. App. 2004).

[53] Erin Bajackson, Best Interests of the Child—A Legislative Journey Still in Motion, 25 J. Am. Acad. Matrimonial L. 311, 311 (2013).

[54] Id. at 312–14.

[55] Id. 

[56] Id.

[57] Id. at 314. 

[58] Id. at 315. 

[59] Id.

[60] See generally Reginald A. Hirsch, Expert Witnesses in Child Custody Cases, 19 Family L. Q. 207 (1985) (outlining the use of expert witnesses in child custody cases). 

[61] Butler v. Bd. of Cty. Comm’rs., 920 F.3d 651, 653 (10th Cir. 2019).

[62] Id.

[63] Id.

[64] Id. at 654. 

[65] Id. 

[66] Id. at 668–69 (Lucero, J., dissenting).

[67] Pickering v. Bd. of Educ., 391 U.S. 563, 572 (1968).

[68] Id.

[69] Troxel v. Granville, 530 U.S. 57, 65 (2000).

[70] Id. at 68–69.

[71] McDermott v. Dougherty, 869 A.2d 751, 770 (Md. 2005).

[72] Troxel v. Granville, 530 U.S. 57, 86, 91 (2000).

[73] George L. Blum, Annotation, Sufficiency of Evidence to Modify Existing Joint Legal Custody of Children Pursuant to Consent Order and/or Divorce Judgment—General Principles, Jurisdictional Issues, and General Issues Related to “Best Interest of Child,” 99 A.L.R.6th 203 § 28 (2014).

[74] See Nicole Lapatis, In the Best Interest of No One: How New York’s “Best Interest of the Child” Law Violates Parents’ Fundamental Right to the Care, Custody, and Control of their Children, 86 St. John’s L. Rev. 673, 678 (2012).

[75] Id. at 688. 

[76] Colo. Rev. Stat. § 14-10-124(1) (2014).

[77] Lapatis, supra note 74, at 678. 

[78] Butler v. Bd. of Cty. Comm’rs., 920 F.3d 651, 653 (10th Cir. 2019).

[79] Id. at 653–54. 

[80] Id. at 654. 

[81] Troxel v. Granville, 530 U.S. 57, 60 (2000).

[82] Butler, 920 F.3d at 653. 

[83] Id. at 656–57. 

[84] Id. at 656.

[85] Id. at 657. 

[86] Id. at 665 (Lucero, J., dissenting).

[87] Id. at 664.

[88] Cynthia L. Estlund, Speech on Matters of Public Concern: The Perils of an Emerging First Amendment Category, 59 Geo. Wash. L. Rev. 1, 3 (1990).

[89] Id.

[90] See Butler, 920 F.3d at 665–68 (Lucero, J., dissenting).

[91] Estlund, supra note 88, at 37. 

[92] Id. at 39. 

[93] Butler, 920 F.3d at 667 (Lucero, J., dissenting). 

[94] Colo. Rev. Stat. § 19-3-100.5(1) (2018).

[95] Butler, 920 F.3d at 665 (Lucero, J., dissenting).

[96] Id. at 666 (Lucero, J., dissenting).

[97] Bailey v. Indep. Sch. Dist. No. 69, 896 F.3d 1176, 1181 (10th Cir. 2018). 

[98] Butler, 920 F.3d at 666 (Lucero, J., dissenting). 

[99] Id.

[100] Id. at 667.

[101] Id.

[102] Id. 

[103] Id. at 666–67.

[104] Sara J. Robertson, Note, Lane v. Franks: The Supreme Court Frankly Fails to Go Far Enough, 60 St. Louis U. L.J. 293, 300–01 (2016).

[105] Id. 

[106] Id. at 314.

[107] See generally Butler, 920 F.3d at 665–67 (Lucero, J., dissenting) (citing Colorado laws pertaining to the public interest in child custody).

[108] Aaron E. Zurek, Note, All the King’s Horses and All the King’s Men: The American Family After Troxel, the Parens Patriae Power of the State, a Mere Eggshell Against the Fundamental Right of Parents to Arbitrate Custody Disputes, 27 Hamline J. Pub. L. & Pol’y 357, 364 (2006). 

[109] Id.

[110] E. Gary Spitko, Reclaiming the “Creatures of the State”: Contracting for Child Custody Decisionmaking in the Best Interests of the Family, 57 Wash. & Lee L. Rev. 1139, 1144 (2000). 

Textualism and Culpability of the Reader

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Collin Hong[1]

Introduction

A great divide in statutory interpretation has been between purposivism and textualism.[2] Textualism has largely won this debate and has gained extensive popularity in contemporary legal culture over purposivism.[3] However, simply deciding to employ textualism over intentionalism does not fully resolve cases in many situations. In Bostock v. Clayton County, the majority, written by Justice Gorsuch, using the meaning of the language enacted by Congress in 1964, employed textualism to determine that Title VII’s prohibition on discrimination “because of  . . . sex” included discrimination based on sexual orientation.[4] The dissent, written by Justice Alito, argued that the majority was not employing textualism at all, and that textualism actually led to the opposite conclusion.[5]

This is not a new phenomenon. Throughout the Supreme Court’s recent history, different lawyers and judges have employed “plain meaning” differently based on their adopted definition of “plain meaning.”[6] In Smith, both Justice O’Connor’s majority opinion and Justice Scalia’s dissent claimed to be appealing to ordinary meaning.[7] Scalia interpreted the phrase “use a firearm” “during and in relation to” a drug trafficking crime as being limited to using a firearm as a weapon.[8] In contrast, the majority interpreted the statutory language “us[ing] a firearm” to not only include the use of the firearm as a weapon, but also the act of trading a firearm for drugs, expanding beyond Scalia’s interpretation.[9] Both the dissent and the majority characterized their interpretation as the ordinary meaning of the text despite having different outcomes.[10]

Similarly, as noted by scholars such as Victoria Nourse, textualists have not definitively determined what version of plain meaning they will use.[11] The common trend seems to lean towards expansive, legalist meaning.[12] An alternative to this expansive meaning is using prototypical meaning that represents the most common or first thought-of meaning in a given context.[13] The divide in Smith could be described as a divide between expansive and prototypical meaning, with using a firearm ‘as a weapon’ being the most prototypical meaning. The conclusion of Nourse’s article is the that textualists should clarify what type of plain meaning he or she is using when interpreting statutory text.[14]

The line between prototypical and expansive is often blurry. This paper proposes a different framing for the divide between the types of “plain meaning” in terms of the degree to which a typical reader would be aware of its meaning. This distinction implicates the culpability of the individual governed by the statute. Employing textualism should be informed by one of the primary benefits of textualism over intentionalism: fair notice to those under the statute.[15] The permissible meanings of a statute must therefore be in some way tied to the ability of the target of the statute to fairly determine the meaning. If a meaning is completely outside the reasonable contemplation of the target audience of a statute, then that target cannot be said to be fairly on notice as to the meaning of the statute. This would leave out highly unintuitive legalistic meanings that an ordinary reader of the statute could not reasonably contemplate. If a reasonable person would contemplate that meaning, even if that person was not sure whether that meaning is in the statute, then that would potentially be sufficient notice. This framing allows us to recognize a third category of textual meaning as well: a technical meaning that is the full logical extension of a phrase to the point where a reasonable person would not even contemplate that meaning.

I.  “Reasonable to Know” Meanings and “Reasonable to Contemplate” Meanings

When framed in terms of culpability, the divide between expansive and prototypical meaning can be described as a divide between a reasonable reader knowing that a particular act is covered and a reasonable reader knowing an act might be covered. A person would be culpable to some degree if she committed an act that a reasonable person would know to be forbidden or a reasonable person might not know but would contemplate that it might be forbidden. The former involves a higher level of culpability than the latter, but the latter is still nonzero culpability.

Therefore, there are two possible standards by which we can grant meaning to a statute. The first, which is similar to prototypical meaning, is that a statute simply means what a reasonable person would know it to mean. The second, similar to expansive meaning, would include anything a reasonable person would contemplate it encompassing. 

This difference can be elucidated by example. Say we have a statute: “One cannot sell fruits in this area.” A reasonable person would know with certainty that a strawberry was covered by the statute. Therefore, a strawberry would be covered by the statute by the narrower standard of “reasonable to know.” On the other hand, a reasonable person would pause at the question of whether tomatoes are covered. A reasonable person might not be sure that tomatoes are or are not covered. But if the reasonable reader were trying to sell tomatoes and knew of this statute, she would pause to consider the possibility and may seek counsel.

In both of these situations, the fruit seller can be said to have nonzero culpability if she proceeds with her act. If she attempted to sell strawberries while knowing of the statute, she would be at least negligent with respect to governing law. Not knowing that strawberries were covered would be negligent because a reasonable person would know that strawberries fall within the meaning of the word fruit. If she decided to sell tomatoes, she would be negligent if she did not pause at all because a reasonable person would know to pause and potentially investigate further. 

These two types of negligence are “reasonable to know” and “reasonable to contemplate.” The former type of negligence is of a higher degree of culpability than the latter, but both would fall under the Model Penal Code’s (MPC) definition of negligence, which is when a "reasonable person" would be aware of a "substantial and unjustifiable risk" that his or her conduct is of a prohibited nature, will lead to a prohibited result, and/or is under prohibited attendant circumstances, and the actor was not so aware but should have been.[16] Therefore, the reasonable person would not have to know that the conduct is prohibited, just know that there is a substantial risk that the conduct is prohibited.

This “reasonable to contemplate” standard is not as expansive as the most expansive usages of textualism. It would prevent any arcane and unknowable legalist meaning from controlling, unlike some formulations of expansive meaning that include technical meanings. It also prevents the intention of the legislature from controlling when that intent is not evident from the statute. 

Negligence is the bare minimum standard in terms of culpability.[17] However, when determining if a defendant is guilty of committing a crime, the standard of culpability is generally evaluated with respect to elements of the statute to determine if a defendant committed an “action” with the requisite mental state; to further clarify, whether a defendant is guilty of a crime is not determined by asking if the defendant knew her act was illegal. In criminal law generally mens rea with respect to governing law, or knowing that something is against the law, is not necessary to find culpability.[18] For example, one does not have to know that burglary is a crime to knowingly entering someone else’s property with intent to commit a crime. A reasonable person can generally be convicted of a crime without having personal knowledge of the law. This may be because there is now a presumption that there are too many laws for our system to always operate based on one having knowledge with respect to governing law, and that people in general are on notice to the fact that there might be a law governing a variety of actions. Additionally, it may be expected that a reasonable person knows what actions are generally considered immoral, such as burglary, without having to expressly know whether or not a statute exists to make such an action illegal.

However, there’s also a principle in criminal law that if one does look at a statute, or attempt to know what the governing law is, then that individual has the right to rely on the statute, or an official’s formulation of the law, under certain circumstances.[19] Further, laws can be void for vagueness if a law is so vague that a reasonable person could not know what the law covers.[20] Finally, the rule of lenity holds that ambiguous criminal statutes should be construed in favor of defendants, though it’s been limited to cases of “grievous ambiguity”.[21] So, while knowledge of governing law is not generally considered by courts when no effort was made by the criminal defendant to discover the law, courts do consider a criminal defendant’s ability to learn the law.[22] So, in the context of a retail store, since a statute barring the sale of fruit would not comport with generally understood morality, it may be more likely that some kind of warning other than just the statute’s existence should be present. Further, the United States Supreme Court has held that putting statutes behind a paywall or copyright is prohibited.[23] When one does decide to seek out the law, the law is required to be accessible — giving the reader at least some kind of constructive notice.

If a primary purpose of textualism and plain meaning is to further this principle of accessibility of law, “reasonable to contemplate” seems like the outer bounds of the meanings that would be permissible, preventing any really unknowable meanings from making it in. Textualists then must decide which, between these standards, “reasonable to know” or “reasonable to contemplate,” to employ. 

In Smith, Scalia’s meaning would fall under a “reasonable to know” formulation, as any reasonable person looking at the statute would know that using a firearm as a weapon would be covered.[24] There is a question of whether Justice O’Connor’s understanding of “use a firearm” in any way would be covered under a “reasonable to know” standard, but it would very likely be covered under a “reasonable to contemplate” standard.[25]

Another example in which the majority and the dissent were divided on the interpretation of the meaning of a statute is in Small v. United States.[26] In this case, the majority took “any court” to mean any court within the United States and not foreign courts.[27] The dissent, joined by Justice Scalia, was of the opinion that “any court” extended to foreign courts.[28] What is notable is that Justice Scalia seems to have joined an expansive meaning in Small whereas in Smith he subscribed to a prototypical meaning. This shows how imprecise even the same person asserting textual meaning without specifying what type of textual meaning can be.

Under expansive meaning, Justice Gorsuch’s textual reading of Title VII in Bostock v. Clayton Cnty., Ga is entirely valid.[29] Even at the time of its passage, it may have been reasonable to at least contemplate that Title VII would bar discrimination based on sex stereotyping. A reasonable employer is therefore on some level of notice if they were to read Title VII. If an employer were to read Title VII and proceed to discriminate based on sexual orientation alone, one may conclude that the employer would be acting with at least negligence. Therefore, discrimination on the basis of sexual orientation could fall under the textual meaning of the statute. 

II.  Technical Meaning as a Third Category of Meaning

It is possible for some logical extensions of meanings to be totally outside what is even reasonable to contemplate. For example, there may be some vegetable that current science is unaware is actually a fruit. Logically, that vegetable should be considered a fruit, just no one would reasonably be aware of that fact. Nourse grouped these technical meanings with expansive meanings,[30] but if we use the lens of culpability, we can distinguish expansive meanings that people have some notice of from meanings that a reasonable person would not even contemplate. 

Reasonable to contemplate meanings are therefore situated between prototypical and technical meanings in terms of accessibility and dependence on science. Therefore, we have not two, but actually three possible meanings that could all plausibly be called the textual meaning.   

In Smith, neither Scalia nor O’Connor asserted a technical meaning.[31] A technical meaning of this statute was asserted in Bailey vs. United States.[32] In Bailey, the government asserted that “use a firearm” included the defendant Robinson having a firearm in her apartment while she was conducting a drug trafficking transaction.[33] The government argued that she was “using” the firearm for self-defense in a passive sense in that it was present while she was trafficking drugs, even though the firearm was unloaded and locked in a trunk in the closet.[34] This meaning of “use a firearm” is arguably beyond what is “reasonable to contemplate.” O’Connor wrote for a unanimous court, but this time in favor of the more limited meaning of “use.”[35] The Court held that “use” in this context must involve “active employment.”[36] This is a meaning that is more expansive than Scalia’s Smith dissent equating “use” to “use as a firearm,”[37] but less expansive than using a firearm in a passive way as argued by the government in Bailey.[38] The below scheme is a framework to describe different textual meanings. 

Example Phrase	Prototypical Meaning (reasonable to know)	Expansive Meaning (reasonable to contemplate)	Technical Meaning (reasonable person would not contemplate)
"use a firearm"	Use a firearm as a weapon (Scalia)	Use a firearm in an active way, e.g. trading it for drugs (O'Connor)	Use a firearm in a passive way (government in U.S. v. Bailey)
Discrimination because of ... sex"	Discrimination based on gender identity	Discrimination based on sex stereotyping, including sexual orientation	Discrimination based on aspects of sex yet unkown
Fruit	e.g. Strawberries	e.g. Tomatoes	Something which no one yet knows is a fruit

[39] [40] [41] [42] 

III.  The Case for Expansive Meaning

Textualists generally disclaim use of technical meaning when they define textualism and, instead, favor defining textualism as using what meaning a reasonable person would understand the statute to mean.[43] When technical meaning is used, instead of what is reasonable to contemplate, we lose the culpability element since it is, at a minimum, seemingly unjust to find one culpable for what one cannot contemplate. Another reason we should not use these fully extended logical meanings is that Congress may not have the technical ability in each case to know the full logical meaning used by the court.

I submit that expansive meanings should not be written off like technical meanings and should be available for use. This is because a reader is still culpable with respect to governing law when they commit an act under expansive meaning. If culpability and accessibility of the law is to be the driving force in determining law, then the dividing line is between expansive meaning and technical meaning, not between prototypical meaning and expansive meaning.

Choosing between the prototypical meaning and the expansive meaning in any given case may come down to stare decisis, legislative history, or policy considerations. But if a court wanted to stick with just one type of meaning in every case, expansive meaning seems to be a better choice than prototypical meaning. 

It is somewhat difficult to find a formalist principle that actually distinguishes prototypical and expansive meaning in terms of what should be applied. Both standards would apply the MPC’s definition of negligence, “aware of a substantial and unjustifiable risk,” where applicable.[44]Prototypical meaning does not cover all the instances in which there would be a substantial risk of proceeding. Therefore, solely based on culpability of the reader, the most principled place to draw the line of textual meaning would be where a reasonable person would detect a substantial risk, meaning the expansive meaning.

Other instrumental advantages may go either way. Using “reasonable to know” would basically be like saying “if you’re unsure, then it’s not covered.” That would allow people to proceed without looking up their specific circumstance, which may be an instrumental advantage.

The line for what is reasonable to contemplate is at least marginally clearer than the line for what is reasonable to know. This is because what is reasonable to contemplate is aligned with the logical extension of the definitions of words, whereas what is reasonable to know depends more on subjective evaluations on what is the most common usage. The procedure for determining expansive meaning would be to figure out the furthest logical extension, then cut off the applications that a reasonable person would not even contemplate. 

Prototypical meaning is also at least marginally more variable between parts of the U.S. than expansive meaning is. In some parts of the U.S., it might be considered reasonable to know that a tomato is a fruit. However, that might not be the case everywhere. One may argue that the expansive meaning of “fruit” is more dependent on botany rather than common regional usages. Therefore, it’s clearer and more consistent to use the expansive, logical meaning. By the same token, it’s easier for Congress to use expansive meaning to legislate rather than trying to figure out what the prototypical meaning is. 

Conclusion

What is considered the textual meaning can vary depending on what level of typicality one adopts when reading. Using culpability of the reader as a lens allows us to discern three meanings with decreasing typicality: prototypical, expansive, and technical. What makes expansive meaning the best meaning to use is that it is the logical extension of a meaning up until the point where a reasonable person would not even contemplate it. The expansive meaning is easier to discern and uniform than the prototypical meaning because it is informed by the logical extension of the words to a greater degree than the prototypical meaning. However, it does not go so far as to be inscrutable, like the technical meaning. 

[I] J.D. Candidate, Stanford Law School, 2021. 

[2] Robert A. Katzmann, Judging Statutes.

[3] Jonathan T. Molot, The Rise and Fall of Textualism, 106 Colum. L. Rev. 1, 2, 29–30 (2006) (“Textualists have been so successful discrediting strong purposivism, and distinguishing their new brand of ‘modern textualism’ from the older, more extreme ‘plain meaning’ school, that they no longer can identify, let alone conquer, any remaining territory between textualism's adherents and nonadherents.”).

[4] Bostock v. Clayton Cnty., Ga., 140 S. Ct. 1731, 1737–39, 1741 (2020).

[5] Id. at 1755–56.

[6] See Michael L. Geis, The Meaning of Meaning in the Law, 73 Wash. U. L. Q. 1125, 1126 (1995).

[7] Id. at 1134 (“[T]hey each claim that they are proffering the ‘ordinary meaning’ of the phrase.”); Smith v. United States, 508 U.S. 223, 228, 242 (1993). 

[8] Smith, 508 U.S. at 245–46.

[9] Id. at 240–41 (“Both a firearm's use as a weapon and its use as an item of barter fall within the plain language of § 924(c)(1) . . . .”).

[10] Id. at 228, 242. 

[11] Victoria F. Nourse, Two Kinds of Plain Meaning, 76 Brook. L. Rev. 997, 997, 1005 (2011).

[12] Id. at 1003.

[13] Id. at 1000–01. 

[14] See id. at 1005.

[15] Note, Textualism as Fair Notice, 123 Harv. L. Rev. 542, 542 (2009).

[16] Model Penal Code §2.02 (Am. Law Inst. 2019).

[17] See id.

[18] United States v. Baker, 807 F.2d 427, 428–29 (5th Cir. 1986).

[19] Commonwealth v. Twitchell, 617 N.E.2d 609, 619 (Mass. 1993). 

[20] See Skilling v. United States, 561 U.S. 358, 402–03 (2010) (“To satisfy due process, ‘a penal statute [must] define the criminal offense [1] with sufficient definiteness that ordinary people can understand what conduct is prohibited and [2] in a manner that does not encourage arbitrary and discriminatory enforcement.’” (citing Kolender v. Lawson, 461 U.S. 352, 357 (1983))).

[21] Muscarello v. United States, 524 U.S. 125 (1998).

[22] See Baker, 807 F.2d at 428-29; Twitchell, 617 N.E.2d at 619. 

[23] Georgia v. Public.Resource.Org, Inc., 140 S. Ct. 1498, 1503–04, 1508 (2020).

[24] See Smith v. United States, 508 U.S. 223, 241–44 (1993).

[25] See id. at 240–41. 

[26] See 544 U.S. 385, 387–88 (2005).

[27] Id. at 387.

[28] Id. at 397–98. 

[29] See, 140 S. Ct. 1731, 1737-39 (2020).

[30] See Nourse, supra note 11, at 1002–03. 

[31] See Smith v. United States, 508 U.S. 223 (1993). 

[32] See Bailey v. United States, 516 U.S. 137 (1995).

[33] Id. at 142–43, 49.               

[34] Id. at 149.

[35] Id. at 149–150.

[36] Id. at 144. (“We conclude that the language, context, and history of § 924(c)(1) indicate that the Government must show active employment of the firearm.”).

[37] Smith v. United States, 508 U.S. 223, 242 (1993). 

[38] See Bailey, 516 U.S. at 148–149.

[39] See Smith, 508 U.S. at 242 (1993).

[40] See id. at 240.

[41] See 516 U.S. at 148–49. 

[42] See Bostock v. Clayton Cnty., Ga., 140 S.Ct. 1731, 1737 (2020).

[43] See John F. Manning, What Divides Textualists from Purposivists, 106 Colum. L. Rev. 70, 76  (2006) (“Textualists give precedence to semantic context—evidence that goes to the way a reasonable person would use language under the circumstances.”). 

[44] Model Penal Code §2.02 (2019).