Law Upside Down: A Critical Essay on Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc.

Franklin A. Gevurtz[*]

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Introduction

Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc.[1] is one of the most contentious securities law decisions handed down by the United States Supreme Court in recent years.[2]  At issue in the case was the scope of liability created by § 10(b) of the Securities Exchange Act of 1934 and by Rule 10b-5, promulgated pursuant to that section.[3]  Specifically, the Court considered whether parties beyond the corporation issuing a false financial report could be held liable to private plaintiffs for their fraudulent acts in violation of these provisions.[4]  The defendants in the Stoneridge case were (in a somewhat unusual set of facts) third-party vendors of the corporation issuing the false statement,[5] but everyone understood that the Supreme Court’s decision would impact accountants, lawyers, investment bankers, and the like, who have been involved in transactions resulting in fraudulent financial reporting.  As a result of the decision’s anticipated impact, the Supreme Court was inundated with amicus briefs.[6]  Given the current leaning of the Supreme Court, victory for the defendants in Stoneridge was probably predictable.  Nevertheless, the decision is worth academic discussion because it illustrates how utterly irrational the law governing private securities fraud actions has become.[7]

Lost in Space: Laurence Tribe's Invisible Constitution

Eric J. Segall[*]

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For over two hundred years, scholars, judges, and constitutional theorists have debated whether the American people possess fundamental rights and liberties beyond those derived from the explicit text of the United States Constitution.  As early as 1798, Justices Chase and Iredell differed over whether Supreme Court Justices should employ natural law principles to decide the cases before them.[1]  Almost one hundred years later, James Bradley Thayer argued for greater judicial deference to political institutions by suggesting that judges should invalidate decisions by the elected branches only when those decisions were clearly inconsistent with unambiguous constitutional text.[2]  In the 1960’s, Alexander Bickel wrote of the “counter-majoritarian difficulty,”[3] spawning hundreds of law review articles written by the legal academy’s most esteemed scholars trying to justify decisions such as Brown v. Board of Education, Baker v. Carr, and Roe v. Wade[4] against the charge that the rights protected in those cases could not be gleaned through constitutional text and history.[5]  And in 1975, Thomas Grey wrote his seminal article Do We Have an Unwritten Constitution?,[6] which helped spark a volume of responses on this question from eminent scholars on both the left and the right.[7]  Now, one of the most prominent constitutional lawyers of our generation and our chief legal doctrinalist, Laurence Tribe, has tried to contribute to this discourse with his book The Invisible Constitution.[8]  Given my inclination to agree with Professor Tribe’s politics, and in light of his substantial reputation as a teacher, scholar, and constitutional litigator, it would be wonderful to report that his new book adds to the considerable literature on this subject.  Unfortunately, The Invisible Constitution fails to advance the debate.

The Mother's Milk of Politics is Corrupting Absolutely

Dan Walker[*]

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There is today a “clear and present danger”[1] that political contribution corruption threatens the integrity of our political system.  The time for action has arrived.  This Essay explores the extent of pay-to-play corruption and its implications for campaign finance law. 

I.  The Pay-to-Play Corruption Epidemic

Let us start with Illinois, where I served as governor.  Chicago and Illinois have long been known for scandals, both private and public.  According to a recent Chicago Tribune editorial, Chicago is the most corrupt city in the nation and Illinois one of its most corrupt states.[2]  For many decades, Chicago was known for Al Capone and machine guns.

Now, Illinois is known for something entirely new: attempting to auction a seat in the U.S. Senate to the highest bidder.  Recently impeached Governor Rod Blagojevich’s taped, expletive-filled telephone conversations involve blatant, large-money deals between him and various candidates for the Senate seat vacated by President Barack Obama.  Said the governor in a recorded conversation: “I’ve got this thing and it’s [bleeping] golden and . . . I’m not just giving it up for [bleeping] nothing.”[3]

Remand and Appellate Review Issues Facing the Supreme Court in Carlsbad Technology, Inc. v. HIF BIO, Inc.

Deborah J. Challener[*] & John B. Howell, III[**]

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Under 28 U.S.C. §§ 1447(c) and (d), remand orders in removed cases are immune from appellate review when they are based on a lack of subject matter jurisdiction.[1]  Until recently, all appellate courts that had addressed the issue had concluded that when a district court declines to exercise supplemental jurisdiction under 28 U.S.C. § 1367(c)[2] and remands the supplemental claims to state court, the remand is not based on a lack of subject matter jurisdiction and is therefore reviewable on appeal.[3]  In HIF Bio, Inc. v. Yung Shin Pharmaceuticals Industrial Co.,[4] however, the United States Court of Appeals for the Federal Circuit became the first circuit to hold that such remands, sometimes referred to as Cohill remands,[5] are based on a jurisdictional defect and therefore are not subject to appellate review.[6]  On October 14, 2008, the Supreme Court granted certiorari in HIF Bio to resolve the circuit split created by the Federal Circuit.[7]  The Court heard oral argument in the case, now captioned Carlsbad Technology, Inc. v. HIF Bio, Inc., on February 24, 2009. 

This Essay provides a brief explanation of § 1367 and §§ 1447(c) and (d) and argues that the Supreme Court should reverse the Federal Circuit’s decision in HIF Bio.  We contend that the Federal Circuit erred in concluding that Cohill remands are subject-matter jurisdictional because a district court does not remand supplemental claims based on its lack of power over the claims.  Instead, a district court remands supplemental claims based on its discretionary decision under § 1367(c) that a state court is a better forum in which to litigate them.  After establishing that Cohill remands are not subject-matter jurisdictional and therefore are reviewable on appeal, we examine the district court’s remand order and the Federal Circuit’s opinion in HIF Bio.  We assert that in reviewing the remand order in HIF Bio and deciding that Cohill remands fall within §§ 1447(c) and (d), the Federal Circuit incorrectly applied the Supreme Court’s recent decision in Powerex Corp. v. Reliant Energy Services, Inc.[8]  Finally, we offer a few comments about whether Cohill remands should be reviewable on appeal.

St. George Tucker's Lecture Notes, the Second Amendment, and Originalist Methodology: A Critical Comment

Saul Cornell[*]

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More than two hundred years after the publication of his influential edition of Blackstone’s Commentaries, St. George Tucker, the distinguished Jeffersonian jurist, is at the center of controversy.  Gun-rights advocates claim Tucker as their spiritual forebear, but opponents of this view argue that Tucker’s interpretation of the Second Amendment[1] can not be pressed into service in the modern gun debate without doing great violence to his thinking.  The stakes in this intellectual debate have been raised in the wake of the Supreme Court’s historic decision in District of Columbia v. Heller.[2]  In that decision, two very different interpretations of Tucker’s views of the Second Amendment were set out.  Justice Scalia adopted the gun-rights view of Tucker and Justice Stevens took the opposing view. One of the central points of contention in this modern debate over Tucker arises from the learned judge’s earliest discussion of the Second Amendment in his unpublished law lectures.[3]