Fair Lending for Cannabis Banking Justice

(PDF) 55 U. Mich. J. L. Reform Caveat

Benjamin T. Seymour*

I.  Introduction

In the past year, New Jersey, New York, Virginia, New Mexico, and Connecticut joined the growing group of states that have legalized recreational marijuana,1 bringing the share of the U.S. population living in such states to a staggering forty-three percent.2 Unsurprisingly, the legal cannabis industry has grown accordingly, reaching $17.5 billion in sales in 2019 with significant profits expected in these new markets.3

Despite billions in revenue, the legal cannabis industry remains overwhelmingly unbanked.4 Because handling the proceeds of marijuana sales constitutes money laundering under federal law,5 banks have refused to offer services to cannabis businesses, for fear of regulatory and criminal sanctions.6 Instead, the lawful cannabis industry runs almost entirely on cash.7 The costs of marijuana businesses’ reliance on cash are sizable. Theft is a perennial threat, so cannabis dispensaries must invest heavily in security equipment, armed transports, and safes.8 For state regulators, the ubiquity of cash makes monitoring and taxing marijuana businesses acutely challenging.9

Academics, executive policy-makers, and legislators alike have proposed solutions to the cannabis industry’s banking problem.10 With Democrats in control of Congress, marijuana banking reform finally seems feasible.11 Yet, racial justice advocates have raised concerns that federal marijuana reform will fail to address the enormous costs that the War on Drugs inflicted on communities of color.12 Allowing investors and businesses to profit off the new cannabis economy without ensuring some of that wealth goes to those most impacted by decades of disparately enforced prohibition would squander an opportunity to repair prior wrongs and salve the ills of mass incarceration.13

This Comment offers a fair lending solution to promote racial equity in cannabis banking reform: amend the Equal Credit Opportunity Act to ensure individuals previously arrested, charged, or convicted for selling, cultivating, or possessing marijuana will not therefore be precluded from loans to start legal cannabis businesses.14 Given disparities in the criminal enforcement of marijuana laws, this amendment would provide racial justice benefits, while also encouraging entrepreneurship. As a market-based social justice effort, this amendment offers a bipartisan approach to one of the most vexing and contentious issues in marijuana banking reform.

Part II of this Comment briefly surveys the federal statutes that have led to an under-banked cannabis industry and discusses the costs of cash for marijuana businesses. It then examines prior reforms proposed by academics, executive-branch officials, and legislators. Part III explores the racial equity concerns that these proposals fail to address, while Part IV offers a fair lending approach for justice in marijuana banking reform.

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Catch and Contain Novel Pathogens Early!—Assessing U.S. Medical Isolation Laws as Applied to a Future Pandemic Detection and Prevention Model

(PDF) 55 U. Mich. J. L. Reform Caveat

April Xiaoyi Xu*

I.  Introduction: Proposing a Modern “Test-and-Isolate” Future Pandemic Prevention Model and Identifying Relevant Legal Issues

As of July 2, 2021, there have been 196,553,009 confirmed cases of the Coronavirus Disease (COVID-19), including 4,200,412 deaths, globally.1 Unfortunately, infectious diseases have been an “unavoidable fact of life” throughout history.2 While the global community looks forward to a gradual return to normalcy from COVID-19 with an increasing number of individuals getting vaccinated on a daily basis,3 the COVID-19 public health crisis has exposed significant inadequacies in many countries’ pandemic responses—the United States included.4 Governing authorities must actively consider more effective solutions to quickly detect and prevent the spread of future pandemics.

One proposed model that offers promising potential, but is not yet developed in greater detail, is a future pandemic detection and monitoring architecture. This Comment will refer to this architecture as the “test-and-isolate model.” In his May 2020 Scientific American article, biochemist Dr. David J. Ecker recommends strategically placing modern high-speed metagenomic sequencing technology in urban hospitals across the United States to flag previously-unknown pathogens before the infectious agents have the opportunity to spread widely and pose threats of a new pandemic.5 Under this model, during a time period without any apparent pandemics (peacetime), the 200 biggest metropolitan hospitals6 in the U.S. would automatically run diagnostic tests up-front for novel causative agents for patients who visit the emergency room with severe respiratory symptoms that are possibly infectious.7 If such a system detects a sufficiently serious pathogen, public health agencies would send out diagnostic tests to all residents in the affected geographical area(s) within weeks and isolate those who test positive.8 This system could be integrated with contact tracing and more standard outbreak response.

This model can be significantly more effective than the system that the U.S. currently has in place, which has not consistently tested and isolated asymptomatic carriers of novel pathogens sufficiently early in the disease spread timeline. Given the exponential nature of pandemics,9 pandemic response will be more feasible and cost-effective the earlier it begins—every day counts in the early stages. Ecker analogizes this system to common forest fire prevention strategies that “survey aggressively for smaller brush fires and stomp them out immediately.”10 The proposed “test-and-isolate” future pandemic prevention model responds earlier than existing status quo systems in two major ways. Firstly, the proactive diagnostic testing in hospitals detects the new pathogen earlier. Secondly, identifying and isolating infected persons within weeks reduces disease spread among other members of society more quickly. Because isolating only those who test positive is less disruptive than more general social distancing measures, the test-and-isolate model would have made it economically and politically less costly to isolate early during the Covid-19 pandemic.11 According to Monte Carlo simulations—a form of computational algorithm that applies “repeated random sampling to obtain the likelihood of a range of results of occurring,”12 there is a “95 percent probability of identifying an emerging infectious disease outbreak if only seven symptomatic patients seek health care in this system.”13

The legal architecture surrounding medical isolation plays an essential role in determining whether test-and-isolate methodology could be successfully implemented in the U.S. in practice. Given that Ecker’s proposed model is relatively new and little explored, especially in the field of law,14 this Comment focuses on the legal issues surrounding the “isolate” portion of the aforementioned “test-and-isolate” model as part of the broader pandemic detection and prevention architecture. Despite the potential of Ecker’s model in preventing the next public health tragedy, there are a number of legal challenges that may obstruct the practical implementation of such a model, as the law strives to balance pressing public health needs with individual civil liberty rights. For a model that prioritizes early detection and early response over exactitude on factors such as the novel disease’s incubation period and severity level, the status quo law in the U.S. is disappointingly insistent on demanding more certainty and rigorous scientific evidence of future public health risks before authorities can legally mandate medical isolations, although there are ambiguities and uncertainties in relevant federal and state law alike.

Having provided an overview of the “test-and-isolate” model, this Comment next zooms in on current pandemic-related medical isolation laws in the U.S., offering an overview of the relevant federal and state laws, a brief survey of recent scholarship in relation to COVID-19, and a summary of an influential recent precedent, Hickox v. Christie.15 This Comment then focuses on applying current laws to the “isolate” part of the proposed pandemic prevention model to determine gaps and challenges for the proposed model given the U.S. legal landscape. Finally, this Comment will conclude with forward-looking recommendations and reform proposals.

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How the Supreme Court Can Improve Educational Opportunities for African American and Hispanic Students by Ruling Against Harvard College’s Use of Race Data

Featured

(PDF) 55 U. Mich. J. L. Reform Caveat

Genevieve Kelly*

Abstract

Students for Fair Admissions v. Harvard has not only exposed ways in which Harvard College’s admissions office unfairly assesses Asian American applicants, but it has also revealed that Harvard’s fixation on race per se can disadvantage the very African American and Hispanic students best positioned to bring instructive and underrepresented perspectives to the college. The facts show that Harvard’s “tips” and “one-pager” system values African American and Hispanic students for their ability to boost Harvard’s racial profile more than for their actual experiences confronting racial discrimination. This Comment explains how, by ruling against Harvard (and without overruling Grutter or Fisher II), the Court can force the college to adopt admissions policies that not only treat all applicants more fairly, but that more fully affirm African American and Hispanic applicants. This Comment also offers ways that a ruling against Harvard could benefit disadvantaged African American and Hispanic students at every grade level—whether or not they ever apply to Harvard.

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Border Searches for Investigatory Purposes: Implementing a Border Nexus Standard

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(PDF) 54 U. Mich. J. L. Reform Caveat 

Brenna Ferris*

Abstract

Border searches are a commonly used exception to the Fourth Amendment’s probable cause and warrant requirements. Using a border search, the government can conduct searches of individuals without any kind of individualized suspicion. Border searches pose a concerning risk to privacy when they are used as a tool for criminal investigations. The Supreme Court has never ruled on searches used in this way, but lower courts are addressing the technique and reaching conflicting decisions. Courts need to take an approach that will protect the privacy interests of individuals while allowing the government to advance its interests in protecting its borders and fighting crime. Courts should adopt a border nexus standard: to be considered a border search, and therefore excepted from probable cause and warrant requirements, the search at a border must have a tie to the historic rationales of border searches or be investigating a transnational crime.

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The Need for an Established Senate Rule on Election-Year and Lame Duck Session Supreme Court Nominations

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(PDF) 54 U. Mich. J. L. Reform Caveat

Jacob R. Weaver*

Introduction

In 2016, the Republican-held Senate refused to hold a hearing on President Barack Obama’s nominee, Merrick Garland, sparking outrage among the Democratic Party.1 Then-Senate Majority Leader Mitch McConnell justified his party’s actions based on what became known as the “McConnell Rule.” This controversial rule holds that during years of presidential elections, when the president and the Senate majority are of different parties, the Senate is not expected to confirm the president’s Supreme Court nominees; but, when the president and Senate majority are of the same party, vacancies may be filled.2

When the Senate applied this rule in 2020, the stakes were even higher. Revered liberal stalwart Justice Ruth Bader Ginsburg passed away only 46 days before the 2020 presidential election.3 Invoking the McConnell Rule,4 the Republican-held Senate moved forward with the confirmation of President Trump’s nominee Amy Coney Barrett.5 This contentious move again infuriated Democrats, and the topic of court-packing soon became a central issue for the presidential campaign.6

Now that Justice Barrett has been appointed and the presidential election has passed, it is useful to look back on the history of Supreme Court nominations during presidential election years. Such a review suggests that the so-called McConnell Rule is rooted in valid historical precedent. In fact, viewed in light of American history, even a Trump lame duck nomination and confirmation would have been valid.

This blog post argues that the Senate should distill this historical precedent into an explicit Rule of the Senate that will govern the chamber going forward. The rule should obligate the Senate to either (1) hold a vote to confirm the election-year or lame duck nominee, or (2) hold a vote to postpone action on the nomination. If a vote to postpone action on the nomination fails, the rule should then compel the Senate to hold a vote to confirm the nominee. Such a rule removes all doubt about the Senate’s authority to act or refuse to act on election-year and lame duck nominees, exposes unfounded threats of retaliation by minority parties, and best conforms to the Constitution.

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Serving-Up the ACE: Understanding Adverse Childhood Experiences (“ACE”) in Dependency Adoption Through the Lens of Social Science

(PDF) 54 U. Mich. J. L. Reform Caveat 1 (2020)

Cynthia G. Hawkins* and Taylor Scribner**

I. Introduction

The damage done to us during our childhood cannot be undone, since we cannot change anything in our past. We can, however, change ourselves. We can repair ourselves and gain our lost integrity by choosing to look more closely at the knowledge that is stored inside our bodies and bringing this closer to our awareness. This path, although certainly not easy, is the only route by which we can leave behind the cruel, invisible prison of our childhood. We become free by transforming ourselves from unaware victims of the past into responsible individuals in the present, who are aware of our past and are thus able to live with it.1

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A Better Madden Fix: Holistic Reform, Not Band-aids, to Modernize Banking Law

(PDF) 54 U. Mich. J. L. Reform Caveat 1 (2020)

Matthew J. Razzano*

Introduction

Historically, state usury laws prohibited lending above certain interest rates, but in 1978 the Supreme Court interpreted the National Bank Act (NBA) to allow chartered banks to issue loans at rates based on where they were headquartered rather than where the loan originated.1 States like South Dakota virtually eliminated interest rate ceilings to attract business, incentivizing national banks to base credit operations there and avoid local usury laws.2 In 2015, however, the Second Circuit decided Madden v. Midland Funding, LLC and reversed long-standing banking practices, ruling that non-chartered financial institutions were not covered by the NBA and were therefore subject to state usury laws where the loan originated.3 The underlying reasoning for the court’s decision was well-intentioned and based on (a) an unwillingness to allow non-chartered institutions to function as pseudo-banks4 and (b) a desire to protect consumers.5 The court’s radical decision received widespread criticism,6 and empirical studies have demonstrated a noteworthy decrease in credit availability in the Second Circuit7—negating the court’s own policy rationales. Since Madden, Congress and federal agencies have attempted an outright reversal, but none of their solutions address the Madden court’s fundamental concerns. This Essay argues that a Madden fix is needed, but the most effective solution must incorporate and address the Second Circuit’s underlying concerns.

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Running it Twice (or Thrice): Double-Header, Triple-Header, and Reverse Baseball Arbitration

(PDF) 52 U. Mich. J. L. Reform Caveat 1

Michael J. Hasday*

This Essay illustrates how the “Running It Twice” concept that makes poker games less of a gamble can also be used in another forum where large amounts of money can be at stake: arbitrations. I introduce three new forms of arbitration based on this concept: Double-Header Baseball Arbitration, Triple-Header Baseball Arbitration, and Reverse Baseball Arbitration. In this Essay, I show that that these new forms of arbitration are superior to current methods because they result in what the average or median qualified arbitrator would award—thereby making arbitration more accurate, predictable, and fair.

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U.S. v. Warren, OH: The Case for Applying Aristotelian Modeling in Police Reform

(PDF) 51 U. Mich. J. L. Reform Caveat 1 (2018)

Alicia McCaffrey

Abstract:

Police reform scholarship tends to emphasize the bureaucratic nature of problems in policing, and, in turn, proposes administrative solutions, such as providing more training or critiquing specific language in a manual. This comment argues that instead of viewing policing problems as at their core administrative, we should be willing to view them, at least in part, as moral failings warranting ethical solutions. This perspective allows research on police reform to draw from a much larger corpus of existing ethical writings. This paper applies ethical theory to police reform in the specific context of U.S. v. Warren, arguing that the success of the reforms implemented in the Warren Police Department is due in large part to the department’s use of Aristotle’s theory of “ethical modeling”: ethics is best taught by providing people with moral models whose behavior they can emulate. Other police departments can apply Aristotelian ethical theory by providing positive models from which officers can learn proper policing practices. This can be accomplished in several ways, such as expanding the use of mentoring programs, using more hypothetical role-playing in training, and publicizing stories of officers who properly de-escalated tense situations.

Introduction

Under the authority provided by 42 U.S.C. § 14141, the Department of Justice (DOJ) can file a lawsuit against a local police department for a “pattern or practice of conduct . . . that deprives persons of rights, privileges, or immunities secured or protected by the Constitution or laws of the United States.”[1] The DOJ filed a claim against the Warren Police Department (WPD) in 2012 using this statute.[2] While the Technical Assistance Letter that the DOJ issued as a result of its investigation was largely ineffective in facilitating reform, the Settlement Agreement which the lawsuit produced led to several reforms in the following years, most of which are largely regarded as successful.[3] This paper examines U.S. v. Warren to identify why the Settlement Agreement reforms in Warren were so successful and how those factors can be used in the future to create meaningful reform in other police departments.

I argue that the predominant factor that led to success in Warren was the implementation of the Aristotelian idea that people learn ethical behavior by watching role models; the WPD implemented this idea by providing positive models of constitutional policing for officers to emulate. This modeling took several forms, such as the examples set by the leaders in the police department and the use of a mentorship program to train officers. This paper examines the Aristotelian principles in context. Part I focuses on the specific situation in Warren, Ohio, including the incidents that led to the investigation, the provisions of the Technical Assistance Letter and the Settlement Agreement, and the current state of compliance. Part II situates the practical discussion of the use of positive models within a wider ethical framework, arguing that one should view police reform at least in part as an ethical issue and thus should draw from ethical concepts when considering how to successfully implement police reform. Part III concludes by examining how the use of positive models can be used in other police reforms going forward.

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A Research Exemption for the 21st Century

Nicholas Short

50 U. Mich. J. L. Reform Caveat 1 (pdf)

On March 20, 2015, Robert Kastenmeier, who represented Wisconsin’s Second Congressional District from 1959 to 1991, passed away at his home in Arlington, Virginia. Though Kastenmeier may not have been well known outside of legislative circles and his home state of Wisconsin, he was in fact one of the most prolific policy makers—if not the most prolific policy maker—in the field of intellectual property law in the 20th century. He is impressively credited with authoring more than forty-eight laws dealing with intellectual property matters during his legislative tenure, including the Copyright Act of 1976, which remains the primary legal framework for copyright law in the United States.

One of the last bills that Kastenmeier introduced in the House of Representatives was a major piece of patent reform legislation dubbed the Patent Competitiveness and Technological Innovation Act of 1990 (PCTIA). Kastenmeier introduced the bill on September 20, 1990, but left office less than four months later on January 3, 1991, after losing an election to Scott Klug. The PCTIA contained five separate titles, and dealt with subjects as varied as the patentability of inventions made in outer space to the repeal of state sovereign immunity from infringement liability. One of those titles, Title IV, garnered little attention at the time, but addressed a subject of tremendous importance today: the need to codify and strengthen the long-standing common law research exemption in American patent law.

I have written elsewhere about the political economy of the research exemption in American patent law from 1970 to the present day, with an emphasis on analyzing the political coalitions that have historically argued in favor of or against such exemptions, and the economic arguments they often invoke. The purpose of this article, in contrast, is to carry forward the torch that Kastenmeier lit, and argue in favor of codifying a robust research exemption. To that end, section two briefly explains how the law pertaining to research exemptions has developed since 1970, with an eye towards understanding what these developments mean for policy makers. Section three summarizes the findings of relevant survey evidence and statistical studies. Section four critiques several scholarly proposals for a research exemption or proposals that attempt to accomplish similar ends through different means, like the proposal for creating a “fair use” exception in patent law, or for modifying the Bayh-Dole Act to give federal funding agencies more discretion when determining whether the results of publicly-funded research should be patented. Section five concludes by summarizing the basic argument in favor of the Robert Kastenmeier Memorial Act, a new bill to codify a robust research exemption in American patent law.