September 29, 2007
Interesting Piece on SSRN: Judicial Regulations
This piece, Andy Grewal, Substance over Form? Phantom Regulations and the Internatl Revenue Code, was called to my attention by a reader, and sounds fascinating from the abstract:
What happens when Congress commands the Secretary of an administrative agency to issue regulations, but the Secretary fails to act?
In most areas of the law, the answer is obvious: a party aggrieved by the Secretary's delay should file a suit (under 5 U.S.C. 706 or a similar provision) asking a court to compel the Secretary to issue regulations.
In the tax area, however, a different pattern has emerged. When Congress enacts a statute commanding the Secretary of the Treasury to act, the courts generally have not bothered to issue an order compelling him to do so. Rather, the reviewing court steps into the Secretary's shoes and creates phantom regulations, announcing the rules that it thinks the Secretary should promulgate pursuant to Congress's directive.
As is often the case, tax lawyers, the IRS, and courts have ignored generally applicable law in favor of a solution that seems "right" as a policy matter. This paper addresses the propriety of that unusual approach and concludes that phantom regulations should never be employed by courts, the IRS, or taxpayers.
I think he's right. It raises up some interesting efficiency issues, though.
September 27, 2007
Interesting Insurance Statute Case out of Alabama
In Fed. Mut. Ins. Co. v. Vaughn, 961 So.2d 816 (Ala. 2007),the Alabama Supreme Court issued an interpretation of first ipression as to whether an employer could reject uniderinsured coverage, wholly or in part. The statute only gave the insured the right to "reject" coverage, but the insured had taken limited amounts of under-insurance coverage. The court held that "because the greater typically includes the lesser, the right ot reject totally UM coverage implies the righ to reject it partially." I couldn't find the opinion on line for free...
September 24, 2007
Another interesting article
I couldn't find it on ssrn (though he has several other interesting pieces there), but another reader sent me Seth Barrett Tillman, Noncontemporary Lawmaking: Can the 110th Senate Enact a Bill Passed by the 109th House, 16 Cornell J. of L & Pub Pol'y 331 (2007).
Mr. Tillman himself wrote in:
A reader sent me a copy of Aaron-Andrew P. Bruhl, Using Statutes to Set Legislative Rules: Entrenchment, Separation of Powers, and the Rules of Proceedings Clause, 4 J. L. & Politcs 245 (2003), which analyzes fast track legislation specifically, and "statutized" (not a fan of that word) legislative rules generally. Interesting piece.