The Corrective Justice Theory of Punishment

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The American penal system is racist, degrading, and inefficient. Nonetheless, we cannot give up on punishment entirely, for social peace and cooperation depend on the deterrent threat of the criminal sanction. The question—central to determining the degree to which punishment is justified—is why society’s need for general deterrence is an offender’s problem. Why is it his responsibility to scare off would-be future offenders? His past offense does not magically render him accountable for the actions of total strangers. Existing theories of criminal justice are unable to answer this question.

This Article fills the lacuna—justifying state punishment, but, more importantly, establishing its moral limits—with the help of tort law principles. It argues that deterrent punishment can be justified as a means of rectifying an offender’s contribution to “criminality”—not merely the perceived but the objective threat of crime in society. Criminality chills the exercise of our rights, forces us to take expensive precautions, and exposes us to unreasonable risks of harm. By having increased the level of criminality in the past, an offender owes a duty of repair to society as a whole, a duty of “corrective justice” in the language of tort theorists. He can fulfill this duty by decreasing the threat of crime in the future. In this way, deterrent punishment does not merely sacrifice him to limit the problem of future crime, for which he has no personal responsibility. Rather, it forces him to fulfill his own duty of repair.

This novel theory—the corrective justice theory of punishment—entails three sentencing principles. First, punishment must in fact deter crime and must be the most efficient means of doing so. Second, however efficient it may be, punishment must not harm an offender more than is required to repair his criminality contribution. Third, even if it is both efficient and reparative, punishment must not harm an offender to a degree that is entirely out of proportion to the harm prevented by doing so. The Article demonstrates how these three principles, in combination, demand a radical reduction in American sentencing scales. The Article thus concludes that the corrective justice view presents stable moral ground for the de-carceral movement in America.

Introduction

The American penal system is racist,1.See Michelle Alexander, The New Jim Crow: Mass Incarceration in the Age of Colorblindness (10th Anniversary ed. 2020); Desmond S. King & Rogers M. Smith, Racial Orders in American Political Development, 99 Am. Pol. Sci. Rev. 75 (2005); Dorothy E. Roberts, The Social and Moral Cost of Mass Incarceration in African American Communities, 56 Stan. L. Rev. 1271 (2004).Show More degrading,2.See Jacob Bronsther, Long-Term Incarceration and the Moral Limits of Punishment, 41 Cardozo L. Rev. 2369 (2020); Jonathan Simon, Mass Incarceration on Trial: A Remarkable Court Decision and the Future of Prisons in America 10 (2014).Show More and inefficient.3.See Rachel Elise Barkow, Prisoners of Politics: Breaking the Cycle of Mass Incarceration (2019); David M. Kennedy, Deterrence and Crime Prevention (2009); Mark A. R. Kleiman, When Brute Force Fails: How to Have Less Crime and Less Punishment (2009); Oliver Roeder, Lauren-Brooke Eisen & Julia Bowling, What Caused the Crime Decline? (2015); Franklin E. Zimring, Gordon Hawkins & Sam Kamin, Punishment and Democracy: Three Strikes and You’re Out in California (2001).Show More We punish too many people too harshly. Nonetheless, we cannot give up on punishment entirely, for Hobbes is still right: social peace and cooperation in the modern world require state punishment for those who break the law.4.See Thomas Hobbes, Leviathan 86–129, 183–221 (Richard Tuck ed., Cambridge Univ. Press rev. student ed. 1996) (1651).Show More Not a lot of punishment.5.There is considerable evidence that the certainty of receiving some level of punishment is more important for the purpose of deterrence than the severity of the punishment applied. See Daniel S. Nagin, Deterrence in the Twenty-First Century, 42 Crime & Just. 199, 201 (2013); Andrew von Hirsch, Anthony E. Bottoms, Elizabeth Burney & Per-Olof Wikström, Criminal Deterrence and Sentence Severity: An Analysis of Recent Research 25–27, 47–48 (1999); Steven N. Durlauf & Daniel S. Nagin, Imprisonment and Crime: Can Both Be Reduced?, 10 Criminology & Pub. Pol’y 13, 13–14 (2011).Show More Much less than we currently dole out—but some. Whether as an expression of human rationality or selfishness, people behave badly without the threat of the criminal sanction.6.See Hobbes, supra note 4, at 86–100 (discussing the limited circumstances in which cooperation is rational); Robert Axelrod, The Evolution of Cooperation 3–24 (Penguin Books 1990) (1984) (same); Robert Sugden, The Economics of Rights, Co-operation and Welfare 36–57 (2d ed. 2004) (same).Show More Indeed, recent examples of societies operating without criminal justice systems—such as Denmark after German soldiers arrested its police force in 1944,7.Johannes Andenaes, The General Preventive Effects of Punishment, 114 U. Pa. L. Rev. 949, 962 (1966) (reporting that during the German occupation of Denmark, when an unarmed watch corps served as a makeshift police force, the frequency of street crimes like robbery rose very sharply).Show More Iraq after U.S. and coalition forces overthrew the Baathist regime in 2003,8.Naomi Klein, Baghdad Year Zero: Pillaging Iraq in Pursuit of a Neocon Utopia, Harper’s Mag., Sept. 2004, at 43, 46–53 (reporting widespread lawlessness after the fall of the Baathist regime); John F. Burns, Pillagers Strip Iraqi Museum of Its Treasure, N.Y. Times (Apr. 12, 2003), http://www.nytimes.com/2003/04/12/international/worldspecial/pillagers-strip-iraqi-museum-of-its-treasure.html [https://perma.cc/FN2R-H4U2] (reporting looting).Show More and the Brazilian state of Espírito Santo after its police force went on strike in 20179.Paulo Whitaker & Pablo Garcia, Over 100 Dead in Brazil as Police Strike Spurs Anarchy, Reuters (Feb. 9, 2017, 10:21 AM), http://www.reuters.com/article/us-brazil-violence-espirito-santo-idUSKBN15O1ZT [https://perma.cc/993E-JTMS] (reporting widespread violence in the wake of the police strike); Lola Mosanya, ‘Crazy Violence’ in Brazilian State During Police Strike, BBC Newsbeat (Feb. 11, 2017), http://www.bbc.co.uk/newsbeat/article/–38942911/crazy-violence-in-brazilian-state-during-police-strike [https://perma.cc/J7LC-GLZN] (same); Paulo Whitaker, Some Brazil Police Break Strike Following Wave of Homicides, Reuters (Feb. 12, 2017, 11:36 AM), http://www.reuters.com/article/us-brazil-violence-idUSKBN15R0SU [https://perma.cc/W84S-TLFL] (same).Show More—loudly support the thesis that we need some level of general deterrence to maintain civil order.

The question—central to determining the degree to which punishment is justified—is why society’s need for general deterrence is an offender’s problem. How could it be that breaking the law means that the state is entitled to harm you to scare off would-be future offenders?10 10.“Specific” deterrence, whereby an individual’s punishment is meant to discourage his own future offending, does not raise this concern.Show More There is something positively sinister in Reverend Sydney Smith’s statement of the deterrence theory from 1824: “When a man has been proved to have committed a crime, it is expedient that society should make use of that man for the diminution of crime: he belongs to them for that purpose.”11 11.Sydney Smith, The Treatment of Untried Prisoners (1824), reprinted in Essays: Social and Political 236, 249 n.* (London, Ward, Lock & Bowden, Ltd. n.d.) (emphasis added).Show More Consider, by comparison, that if punishing an entirely innocent person happened to deter crime, we still would not do it. It is not that person’s responsibility to scare off would-be future offenders. But why is it the responsibility of an actual offender? His past offense does not magically render him accountable for the actions of total strangers. His punishment would thus seem to merely sacrifice him for the greater good,12 12.See Immanuel Kant, Groundwork of the Metaphysics of Morals (1785), reprinted in Practical Philosophy 37, 80 (Mary J. Gregor ed. & trans., 1996) (1785) (“So act that you use humanity, whether in your own person or in the person of any other, always at the same time as an end, never merely as a means.”).Show More in the specific sense that it would intentionally harm him as a means of mitigating a social problem for which he lacks responsibility.13 13.See Jacob Bronsther, Vague Comparisons and Proportional Sentencing, 25 Legal Theory 26, 48 (2019).Show More In different guises, this question has been raised many times before.14 14.See, e.g., Ted Honderich, Punishment: The Supposed Justifications 53 (1969); Johannes Andenaes, The Morality of Deterrence, 37 U. Chi. L. Rev. 649, 649 (1970); Nigel Walker, The Efficacy and Morality of Deterrents, 1979 Crim. L. Rev. 129, 139; Kent Greenawalt, Punishment, 74 J. Crim. L. & Criminology 343, 353 (1983); Warren Quinn, The Right to Threaten and the Right to Punish, 14 Phil. & Pub. Affs. 327, 330–31 (1985); Wojciech Sadurski, Giving Desert Its Due: Social Justice and Legal Theory 253 (1985); Igor Primoratz, Justifying Legal Punishment 35 (1989); Victor Tadros, The Ends of Harm: The Moral Foundations of Criminal Law 113–14 (2011).Show More But thus far scholars have ignored or awkwardly side-stepped the issue,15 15.See infra Part I.Show More leaving a justificatory hole at the center of the criminal law.

This Article presents a solution—justifying state punishment, but, more importantly, establishing its moral limits—through a new conception of criminal justice: the corrective justice theory of punishment. On this view, deterrent punishment can be justified, but only to a limited degree, as a means of rectifying an offender’s contribution to the threat of crime in society. Not just an abstract justification of state punishment, but also a set of strict sentencing principles, the corrective justice theory presents stable moral ground for the de-carceral movement in America.

In developing this view, the Article conceives of the criminal law as a system of protections—against murder, rape, theft, drunk driving, and so forth—upon which all citizens rely for their assured liberty and safety, and that depends for its effectiveness on the deterrent threat of punishment. This, I argue, is the function of the criminal law. We punish not to give wrongdoers a deserved allotment of suffering or condemnation, as on the retributivist view,16 16.See infra notes 35–49 and accompanying text.Show More nor simply to increase the “cost” of offending, as on the utilitarian theory of deterrence,17 17.See infra notes 29–30 and accompanying text.Show More but to help maintain a civil order in which strangers can live together peacefully and productively.

Put differently, the traditional theories understand the criminal law to have only two subjects: offenders and victims. The criminal law either (a) delivers retribution to an offender for creating a victim or (b) prevents the creation of future victims. What these theories have left out, somehow, is everybody else. When it is working, the criminal law is an indispensable source of security for all people, bathing them in protection as they, say, ride a busy subway in the morning and as they sleep in their beds at night. Beyond its protections against violence, the criminal law also helps to regulate cooperative enterprises like the traffic system and the stock market.18 18.See Lindsay Farmer, Making the Modern Criminal Law: Criminalization and Civil Order 37–60 (2016); Vincent Chiao, Criminal Law in the Age of the Administrative State 35–70 (2019).Show More Of course, other forms of law, like contract law, and non-legal social norms,19 19.See Robert C. Ellickson, Order Without Law: How Neighbors Settle Disputes (1991) (arguing that informal norms can enable social cooperation); Eric A. Posner, The Regulation of Groups: The Influence of Legal and Nonlegal Sanctions on Collective Action, 63 U. Chi. L. Rev. 133, 135 (1996) (examining the interactions between the legal and non-legal normative orders).Show More like the norm against cutting a line, also facilitate civil society. But I maintain, following Hobbes, that these more refined means of civilization depend on the underlying threat of the criminal law.

The Article then explains that the criminal law, as a system of protections, rests ultimately not on police intervention, but rather on people self-applying criminal legal norms. This, I argue, is the method of the criminal law. When I walk down a street, I am not relying upon the police to protect me like personal guards, but rather upon other people within the jurisdiction to self-apply the rules that prohibit assaulting me, stealing my wallet, and so forth.

This conception of the criminal law clarifies the nature of the criminal wrong. When an individual offender fails to self-apply the criminal law, then, in combination with other offenders, he contributes to a wider social threat. This is “criminality”—not merely the perceived but the objective threat of crime. The social costs of criminality are reflected in both the completed offenses themselves and the actions taken to prevent or avoid the completed offenses. That is, in addition to subjecting us to unreasonable risks of harm, criminality also chills the exercise of our rights and forces us to take expensive precautions. Thus, the more criminality there is in society, the less worth the criminal law has as a guide to the possible incursions of other people, and the less assured is our liberty. Deterrent punishment, as a means of holding an offender responsible for his criminality contributions, is thereby permissible; that is, it does not merely sacrifice him to mitigate a problem for which he lacks responsibility.

In accordance with the corrective justice theory, we can use an offender via general deterrence as a means of repairing the damage to our assured liberty caused by his past criminality contributions. He increased the level of criminality in the past to some degree, contributing to a threat that makes life in society more difficult, perilous, and expensive; and the way to repair that—as a means of securing what tort law theorists call “corrective justice”20 20.See generally Jules L. Coleman, Risks and Wrongs 324 (1992) (“Corrective justice imposes on wrongdoers the duty to repair their wrongs and the wrongful losses their wrongdoing occasions. . . . losses for which they are responsible.”); Ernest J. Weinrib, Corrective Justice 17 (2012) (“Because the defendant, if liable, has committed the same injustice that the plaintiff has suffered, the reason the plaintiff wins ought to be the same as the reason the defendant loses.”); Jules Coleman, Corrective Justice and Wrongful Gain, 11 J. Legal Stud. 421, 421–22 (1982) (arguing that corrective justice is the foundation of tort law and responding to efficiency-based theories of tort law); Scott Hershovitz, Corrective Justice for Civil Recourse Theorists, 39 Fla. St. U. L. Rev. 107, 109 (2011) (suggesting a conception of corrective justice that is compatible with the civil recourse theory of tort law); Stephen R. Perry, The Moral Foundations of Tort Law, 77 Iowa L. Rev. 449 (1992) (surveying and critiquing theories of corrective justice).Show More—is to use him to decrease the level of criminality in the future. The state is not merely sacrificing him to limit the problem of future crime. Rather, it is forcing him to fulfill his own duty, owed to society as a whole, to repair his criminality contributions and restore the reliability of the criminal law system. Over time, ideally—with would-be future offenders appropriately deterred—it would be as if he had never contributed to criminality at all, in terms of the average threat of crime faced by society. In this way, the Article justifies general deterrence with the help of tort law principles. It explains that we ought to conceive of the criminal wrong as a tort against society, in the form of a criminality contribution, and then of deterrent punishment as an equitable remedy for that wrong.

Does it matter whether we get this theory (or any such theory of punishment) right? Emphatically yes. As John Gardner writes, “criminalization and criminal punishment are prima facie such abhorrent practices,”21 21.John Gardner, Offences and Defences: Selected Essays in the Philosophy of Criminal Law 204 (2007).Show More and so the burden of justifying these practices rests squarely and heavily upon the state. The stakes for offenders are high, even in mild systems of punishment; and the state needs an honest and convincing answer when someone asks, “Why am I being punished?” The corrective justice theory aims to provide that answer.

Further, a society’s theory of punishment is ultimately its theory of criminal sentencing. The reasons that explain why the state can permissibly punish at all will also prescribe how much and what type of punishment is handed down. This Article examines the sentencing implications of the corrective justice theory at length. The basic sentencing principle is as follows: by increasing past criminality by X units, an offender owes a duty to society to decrease future criminality by X units. The Article then develops three subsidiary principles.

First, the infliction of penal harm must be parsimonious, meaning that it must generate deterrence and must be the most efficient means of doing so. Given that the budget for crime prevention is limited, the state should ask, for each dollar spent, whether investments in the community, such as early childhood development programs, would represent a more efficient means of reducing future criminality.

Second, punishment must be reparative, repairing only the offender’s wrongdoing, rather than merely being “useful.” The offender does not simply “belong to society,” as on Rev. Smith’s view.22 22.Smith, supra note 11, at 249.Show More When punishing an offender is in fact the most efficient means of crime prevention, the state is entitled to harm him to the degree required to erase his criminality contribution, but no more. Utilitarian deterrence theories, by comparison, lack internal sentencing limits tied to the severity of offenses and would indeed license the punishment of innocent people if it happened to maximize social welfare.

Third, sentences must be equitable. What if the infliction of deterrent harm were parsimonious and reparative, but nonetheless draconian? Imagine that only thirty-year prison sentences could erase the criminality contributions of car thieves. This Article draws insight from the law of equity, examining when courts will grant an injunction in response to a tort or specific performance in response to a breach of contract. The Article concludes that it is impermissible to harm an offender to a degree that is entirely out of proportion to the harm prevented by doing so. A thirty-year sentence for a car thief, even if it were the singular means of generating the requisite amount of deterrence, would be entirely out of proportion to the reparative benefit gained by society.23 23.Cf. Blackfield v. Thomas Allec Corp., 17 P.2d 165, 165 (Cal. Dist. Ct. App. 1932) (holding that removing an overhang at a cost of $6,875 was entirely out of proportion to the $200 in damages suffered by the plaintiff).Show More

Finally, the Article explains how jurisdictions can apply these principles in the real world and demonstrates how they would radically reduce American sentencing scales.

This Article proceeds in four parts. Part I demonstrates that the two dominant schools of criminal law theory—utilitarianism and retributivism—are unable to explain how general deterrence might be consistent with a principled refusal to sacrifice people to limit harms or threats for which they lack responsibility. Part II introduces the conception of the criminal law as a system of protections. It shows how this system depends on people self-applying criminal legal norms and how offenders create the threat of criminality as a byproduct of their unreliability with regard to upholding the criminal law. The analogy is to factories contributing to smog and global warming as a byproduct of their pollution. Part II also defends the empirical premise that this system of protections requires a certain amount of deterrent punishment to function effectively. Part III introduces the “corrective justice” principle that provides an exception to the general prohibition on using people as a means to the greater good. This principle explains that an individual has a duty to rectify the losses or damage caused by his wrongful conduct and that he can permissibly be forced to fulfill this duty. Part III then applies this principle to the conception of the criminal law and criminality detailed above to generate the corrective justice theory of punishment. Part IV develops the corrective justice theory of sentencing.

Redefining the Relationship Between Stone and AEDPA

This Note challenges the current conception of the availability of federal habeas corpus relief for state prisoners claiming a violation of the Fourth Amendment. Since the Supreme Court’s 1973 decision in Stone v. Powell, federal courts have analyzed Fourth Amendment violations under a different legal regime than that used for other constitutional violations challenged on habeas corpus. This has persisted despite passage of the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), which amended the federal habeas corpus statute for state prisoners, 28 U.S.C. § 2254. Federal courts have largely held that AEDPA has not changed the relationship between Stone’s holding and Section 2254. This Note argues that the current conception of federal habeas corpus review of Fourth Amendment claims is fundamentally inconsistent and asserts that the AEDPA standard should be applied to Fourth Amendment claims brought by state prisoners.

Introduction

On June 17, 2013, the Baton Rouge Police Department received an unconfirmed anonymous tip that Cedric Spears was trafficking cocaine and in possession of a firearm in his home.1.Spears v. Vannoy(Spears I), Civ. No. 15-495-SDD-RLB, 2018 WL 2423017, *1 (M.D. La. Apr. 30, 2018).Show More Two police officers obtained Spears’s criminal history, confirmed only that he was a convicted felon, and, without a warrant, proceeded to his apartment complex.2.Id.Show More The officers waited in the parking lot until just before midnight to approach the apartment, when, coincidentally, Spears opened the door.3.Id.Show More The officers spotted a gun in his apartment.4.Id.Show More After officers gathered Spears and the apartment’s other occupants into a central location and patted them down, Spears was handcuffed and read his rights.5.Id.Show More

Spears admitted to owning the gun.6.Id.Show More On November 4, 2013, he was convicted on one count of felon in possession of a firearm and was sentenced to eighteen years of hard labor without benefit or probation, parole, or suspension of sentence.7.Id.Show More Spears filed a pro se appeal to the Louisiana Court of Appeal for the First Circuit, arguing that the trial court wrongly denied his motion to suppress the evidence resulting from the illegal warrantless search.8.Id.Show More His appeal was denied.9.Id.Show More He then petitioned for supervisory review in the Louisiana Supreme Court.10 10.Id.Show More His petition was denied.11 11.Id.Show More Spears then filed a pro se petition for federal habeas corpus relief in the Middle District of Louisiana.12 12.Id.Show More This petition was denied, as well.13 13.Spears v. Vannoy(Spears II), Civ. No. 15-495-SDD-RLB, 2018 WL 2422749, *1 (M.D. La. May 29, 2018) (adopting the magistrate judge’s report and recommendation).Show More

In denying Spears’s habeas petition, the federal court simply stated that Fourth Amendment violations are “generally not cognizable on federal habeas review.”14 14.Spears I,2018 WL 2423017, at *2.Show More This categorical denial is based on the Supreme Court’s 1976 decision in Stone v. Powell,15 15.428 U.S. 465 (1976).Show More which held that a state prisoner may not be granted federal habeas corpus relief based on a Fourth Amendment violation “where the State has provided an opportunity for full and fair litigation of [that] Fourth Amendment claim.”16 16.Id. at 482, 494.Show More Despite Spears’s claim of a “defective warrant”—or lack of a warrant—the court held that the Fifth Circuit only requires the trial court to provide “an opportunity” to litigate one’s claim, nothing further.17 17.Spears I, 2018 WL 2423017, at *2–3.Show More A mere opportunity to litigate a Fourth Amendment claim in state court is all that is required for a federal court to refuse to even consider a state prisoner’s habeas petition.18 18.Id.at *2 (citing Carver v. Alabama, 577 F.2d 1188, 1192 (5th Cir. 1978)).Show More In Spears’s case, the federal district court went on to deny him a certificate of appealability, terminating his one remaining option.19 19.Spears v. Vannoy(Spears II), Civ. No. 15-495-SDD-RLB, 2018 WL 2422749, *1 (M.D. La. May 29, 2018).Show More Despite no search warrant and arguably no probable cause to approach the house, Cedric Spears was searched, tried, convicted, and sentenced to eighteen years in prison.20 20.Spears I,2018 WL 2423017, at *1, *3–4.Show More And the federal court would not even entertain his petition for habeas corpus.

As displayed in Spears’s case, federal courts currently hold Stone v. Powell to be controlling when state prisoners allege a Fourth Amendment violation on habeas. All other constitutional violations, on the other hand, are adjudicated under a different standard provided by the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA).21 21.Pub. L. No. 104-132, 110 Stat. 1218. AEDPA amended 28 U.S.C. § 2254, the sole statute governing habeas corpus review for state prisoners; thus, “the AEDPA standard” refers to the standard of review enacted as a result of the passage of AEDPA and is codified at 28 U.S.C. § 2254(d).Show More The two regimes have at least one primary difference. While Stone restricts the cognizance of such habeas petitions, AEDPA at least allows federal courts to review the petitioner’s claim. Fourth Amendment violations are the only constitutional violations not litigated under the AEDPA standard. Therefore, if Spears was alleging a due process violation or bringing a claim for ineffective assistance of counsel, his case would at least have been heard by a federal court rather than dismissed as not cognizable.

This Note argues that the current approach adopted by the federal courts is incorrect in light of AEDPA. Instead of looking to Stone for guidance, federal courts should adopt the AEDPA standard for habeas review in the context of alleged Fourth Amendment violations. This presents a rare opportunity to right the current course of the federal courts. With this approach, federal courts would treat Fourth Amendment violations the same as every other constitutional violation with respect to federal habeas petitions, instead of relegating Fourth Amendment claims to a lower tier.

Adopting the AEDPA standard will provide four primary benefits. First, this change will simplify the process for state prisoners. This is especially important for those representing themselves pro se, like Cedric Spears. Holding alleged Fourth Amendment violations to a different standard than all other constitutional harms only further complicates an already complex area of law that affects many criminal defendants.22 22.According to a study funded by the United States Department of Justice, state prisoners file about 16,000 to 18,000 habeas petitions every year. Unfortunately, a breakdown by constitutional violation is not available. See Nancy J. King et al., Habeas Corpus Litigation in United States District Courts: An Empirical Study, 20002006, at ii, iv (2013), https://doi.org/10.3886/ICPSR21200.v1 [https://perma.cc/Z7RS-AECM].Show More Second, it would resolve a split among the federal circuits as to how to interpret the meaning of the Court’s language in Stone, and thereby create a uniform, national standard of review. A uniform, national standard is vitally important because where one’s claim is brought should not determine whether that state prisoner has access to federal habeas review. Third, adopting the AEDPA standard will allow state prisoners to actually have their federal habeas petitions reviewed, rather than denied without consideration, as Spears’s was. As a matter of procedural justice, all habeas petitioners deserve the right to be heard, regardless of the nature of their claim. Litigants, especially pro se litigants, can use this Note as a roadmap to challenge the current legal regime and, hopefully, have their petitions heard by the federal courts.

Finally, adopting this approach will allow any future statutory reform to current habeas corpus law to include claims alleging violations of the Fourth Amendment, rather than continue to leave them behind. Fourth Amendment violations are treated differently than all other constitutional violations. While all other constitutional violations are governed by AEDPA, Fourth Amendment violations are treated as outside the statutory scheme. Adopting this approach, however, brings Fourth Amendment violations back into the fold of AEDPA alongside all other constitutional violations. If federal courts continue to treat Fourth Amendment violations as outside of the AEDPA statutory scheme,23 23.See infra Part III.Show More then future habeas reform will not affect habeas petitions alleging Fourth Amendment violations. Thus, if the language of AEDPA is amended, under this proposed approach, the statutory reform would not further widen the gap between how Fourth Amendment claims are treated and how all other constitutional claims are treated.

As explained below, the two regimes—review under AEDPA and review under Stone—currently produce similar outcomes;24 24.See infra Section II.C, Part III.Show More however, future changes to the AEDPA standard could yield different outcomes for Fourth Amendment violations and all other constitutional violations. Adopting the AEDPA standard will have truly tangible benefits to defendants, practitioners, and judges even if it may not have an enormous impact on the number of federal habeas petitions ultimately granted for state prisoners.25 25.See infra Part III.Show More As one commentator has put it, habeas corpus has played an “important role . . . as a postconviction remedy” and has the “unique nature and suitability . . . to bring about transformative change.”26 26.LeRoy Pernell, Racial Justice and Federal Habeas Corpus as Postconviction Relief from State Convictions,69 Mercer L. Rev. 453, 453 (2018).Show More

Surprisingly, despite the significant academic attention dedicated to federal habeas corpus, little attention has been focused on the collateral review of alleged Fourth Amendment violations. Much of the post-AEDPA academic literature identifies and defines the standard set forth in AEDPA,27 27.See e.g.,John H. Blume, AEDPA: The “Hype” and The “Bite,” 91 Cornell L. Rev. 259, 272–73 (2006); Evan Tsen Lee, Section 2254(d) of the Federal Habeas Statute: Is It Beyond Reason?, 56 Hastings L.J. 283, 283 (2004); Adam N. Steinman, Reconceptualizing Federal Habeas Corpus for State Prisoners: How Should AEDPA’s Standard of Review Operate After Williams v. Taylor?, 2001 Wis. L. Rev. 1493, 1495.Show More further defines the standard set forth in Stone independent from AEDPA, 28 28.See e.g.,Justin F. Marceau, Challenging the Habeas Process Rather Than the Result, 69 Wash. & Lee L. Rev. 85, 141 (2012); Justin F. Marceau, Don’t Forget Due Process: The Path Not (Yet) Taken in § 2254 Habeas Corpus Adjudications, 62 Hastings L.J. 1, 17, 26–27 (2010).Show More or argues for an overhaul of the current federal habeas system altogether.29 29.See e.g.,Joseph L. Hoffmann & Nancy J. King, Rethinking the Federal Role in State Criminal Justice, 84 N.Y.U. L. Rev. 791, 797 (2009).Show More Some of the nation’s leading federal courts textbooks do not even specifically address this issue.30 30.See, e.g., Brandon L. Garrett & Lee Kovarsky, Federal Habeas Corpus: Executive Detention and Post-Conviction Litigation 14150 (2013) (failing to discuss the issue); Peter W. Low et al., Federal Courts and the Law of Federal-State Relations 966 (9th ed. 2018)(speculating only that AEDPA “may have introduced a subtle but not fundamental change in the meaning of Stone v. Powell”).Show More

Only one scholar has touched on the relationship between Stone and AEDPA. In a 2006 article, Professor Steven Semeraro argued that the historical changes in the treatment of the exclusionary rule, which is the primary vehicle by which courts remedy Fourth Amendment violations, coupled with the changes to habeas practice generally, require that Stone be overruled.31 31.Steven Semeraro, Enforcing Fourth Amendment Rights Through Federal Habeas Corpus, 58 Rutgers L. Rev. 983, 1016–18 (2006). Professor Semeraro also notes that “there has been remarkably little historical analysis directed at the judicial treatment of collateral search-and-seizure claims.” Id. at 984–85.Show More Professor Semeraro’s argument is primarily focused on Stone’s deficiencies in modern litigation and the reasons that decision should be overturned rather than, as this Note argues, the reasons why AEDPA specifically should replace it.32 32.See id. at 986.Show More This Note examines the various possible solutions to reconciling the language of Stone with the text of AEDPA and argues for a clear, simple, statutory text-based rule for the federal courts to follow.

Part II of this Note reviews the legal history of the availability of habeas corpus relief for violations of the Fourth Amendment. It summarizes the evolution of federal habeas corpus law from the Supreme Court’s landmark decision in Brown v. Allen,33 33.344 U.S. 443 (1953).Show More to its Fourth Amendment carve out in Stone v. Powell, to the enactment of AEDPA. Part III describes the current approach taken to federal habeas petitions brought by state prisoners alleging a violation of the Fourth Amendment and why there is a need for change. Part IV analyzes two possible solutions to reconciling the standard set forth by AEDPA with the Stone decision. Finally, Part V proposes that federal district courts adopt a third solution and hold that the AEDPA standard replace Stone’s framework with respect to Fourth Amendment claims going forward.

  1. * J.D., University of Virginia School of Law, 2019. I would like to extend a special thanks to Professor Peter W. Low for supervising my research, for without his help, this would not be possible. Thanks are also owed to Olivia Vaden, Zachary Ingber, Spencer Ryan, and Jessie Michelin for their helpful feedback and unwavering support throughout this process.

  2. Spears v. Vannoy (Spears I), Civ. No. 15-495-SDD-RLB, 2018 WL 2423017, *1 (M.D. La. Apr. 30, 2018).
  3. Id.
  4. Id.
  5. Id.
  6. Id.
  7. Id.
  8. Id.
  9. Id.
  10. Id.
  11. Id.
  12. Id.
  13. Id.
  14. Spears v. Vannoy (Spears II), Civ. No. 15-495-SDD-RLB, 2018 WL 2422749, *1 (M.D. La. May 29, 2018) (adopting the magistrate judge’s report and recommendation).
  15. Spears I, 2018 WL 2423017, at *2.
  16. 428 U.S. 465 (1976).
  17. Id. at 482, 494.
  18. Spears I, 2018 WL 2423017, at *2–3.
  19. Id. at *2 (citing Carver v. Alabama, 577 F.2d 1188, 1192 (5th Cir. 1978)).
  20. Spears v. Vannoy (Spears II), Civ. No. 15-495-SDD-RLB, 2018 WL 2422749, *1 (M.D. La. May 29, 2018).
  21. Spears I, 2018 WL 2423017, at *1, *3–4.
  22. Pub. L. No. 104-132, 110 Stat. 1218. AEDPA amended 28 U.S.C. § 2254, the sole statute governing habeas corpus review for state prisoners; thus, “the AEDPA standard” refers to the standard of review enacted as a result of the passage of AEDPA and is codified at 28 U.S.C. § 2254(d).
  23. According to a study funded by the United States Department of Justice, state prisoners file about 16,000 to 18,000 habeas petitions every year. Unfortunately, a breakdown by constitutional violation is not available. See Nancy J. King et al., Habeas Corpus Litigation in United States District Courts: An Empirical Study
    , 2000–2006,

    at ii, iv (2013), https://doi.org/10.3886/ICPSR21200.v1 [https://perma.cc/Z7RS-AECM].

  24. See infra Part III.
  25. See infra Section II.C, Part III.
  26. See infra Part III.
  27. LeRoy Pernell, Racial Justice and Federal Habeas Corpus as Postconviction Relief from State Convictions
    ,
    69

    Mercer L. Rev.

    453

    , 453 (2018).

  28. See e.g., John H. Blume, AEDPA: The “Hype” and The “Bite,” 91 Cornell L. Rev. 259, 272–73 (2006); Evan Tsen Lee, Section 2254(d) of the Federal Habeas Statute: Is It Beyond Reason?, 56 Hastings L.J. 283, 283 (2004); Adam N. Steinman, Reconceptualizing Federal Habeas Corpus for State Prisoners: How Should AEDPA’s Standard of Review Operate After Williams v. Taylor?, 2001 Wis. L. Rev. 1493, 1495.
  29. See e.g., Justin F. Marceau, Challenging the Habeas Process Rather Than the Result, 69 Wash. & Lee L. Rev. 85, 141 (2012); Justin F. Marceau, Don’t Forget Due Process: The Path Not (Yet) Taken in § 2254 Habeas Corpus Adjudications, 62 Hastings L.J. 1, 17, 26–27 (2010).
  30. See e.g., Joseph L. Hoffmann & Nancy J. King, Rethinking the Federal Role in State Criminal Justice, 84 N.Y.U. L. Rev. 791, 797 (2009).
  31. See, e.g., Brandon L. Garrett & Lee Kovarsky, Federal Habeas Corpus: Executive Detention and Post-Conviction Litigation
    141–50

    (2013) (failing to discuss the issue); Peter W. Low et al., Federal Courts and the Law of Federal-State Relations

    966

    (9th ed. 2018) (speculating only that AEDPA “may have introduced a subtle but not fundamental change in the meaning of Stone v. Powell”).

  32. Steven Semeraro, Enforcing Fourth Amendment Rights Through Federal Habeas Corpus,
    58

    Rutgers L. Rev. 983, 1016–18 (2006). Professor Semeraro also notes that “there has been remarkably little historical analysis directed at the judicial treatment of collateral search-and-seizure claims.” Id. at 984–85.

  33. See id. at 986.
  34. 344 U.S. 443 (1953).

The New Gatekeepers: Private Firms as Public Enforcers

The world’s largest businesses must routinely police other businesses. By public mandate, Facebook monitors app developers’ privacy safeguards, Citibank audits call centers for deceptive sales practices, and Exxon reviews offshore oil platforms’ environmental standards. Scholars have devoted significant attention to how policy makers deploy other private sector enforcers, such as certification bodies, accountants, lawyers, and other periphery “gatekeepers.” However, the literature has paid insufficient attention to the emerging regulatory conscription of large firms at the center of the economy. This Article examines the rise of the enforcer-firm through case studies of the industries that are home to the most valuable companies in technology, banking, oil, and pharmaceuticals. Over the past two decades, administrative agencies have used legal rules, guidance documents, and court orders to mandate that private firms in these and other industries perform the duties of a public regulator. More specifically, firms must write rules in their contracts that reserve the right to inspect third parties. When they find violations, they must pressure or punish the wrongdoer. This form of governance has important intellectual and policy implications. It imposes more of a public duty on the firm, alters corporate governance, and may even reshape business organizations. It also gives resource-strapped regulators promising tools. If designed poorly, however, the enforcer-firm will create an expansive area of unaccountable authority. Any comprehensive account of the firm or regulation must give a prominent role to the administrative state’s newest gatekeepers.

Introduction

In 2018, Facebook Chairman and CEO Mark Zuckerberg faced senators on national television regarding conduct that prompted the Federal Trade Commission (FTC) to seek its largest ever fine.1.Cecilia Kang, A Facebook Settlement with the F.T.C. Could Run into the Billions, N.Y. Times, Feb. 15, 2019, at B6.Show More The main issue was not what Facebook did directly to its users. Instead, the hearing focused on the social network’s failure to restrain third parties. Most notably, the political consulting firm Cambridge Analytica had accessed millions of users’ accounts in an effort to support election candidates.2.Katy Steinmetz, Mark Zuckerberg Survived Congress. Now Facebook Has to Survive the FTC, Time (Apr. 13, 2018, 12:42 PM), https://time.com/5237900/facebook-ftc-privacy-data-cambridge-analytica/ [https://perma.cc/4SJJ-YHP9].Show More Before Zuckerberg’s Senate testimony, the FTC had already sued Google and Amazon to force them to monitor third parties for privacy violations and in-app video game purchases by children that sometimes reached in the thousands of dollars.3.See FTC v. Amazon.com, Inc., No. C14-1038-JCC, 2016 WL 10654030, at *8 (W.D. Wash. July 22, 2016) (finding Amazon accountable for in-app charges); Agreement Containing Consent Order at 5, Google Inc., No. 102-3136, (F.T.C. Mar. 30, 2011), https://www.ftc.gov/sites/default/files/documents/cases/2011/03/110330googlebuzzagreeorder.pdf [https://perma.cc/7R6W-5VNP] (ordering Google to require “service providers by contract to implement and maintain appropriate privacy protections”).Show More In other words, the FTC is requiring large technology companies to act in ways traditionally associated with public regulators—by policing other businesses for legal violations.

Over time, policy makers have enlisted a large array of private actors in their quest for optimal regulatory design.4.See, e.g., Kenneth A. Bamberger, Regulation as Delegation: Private Firms, Decisionmaking, and Accountability in the Administrative State, 56 Duke L.J. 377, 453 (2006) (conceiving of regulators’ decisions to let regulated entities fill in vague mandates as delegation); Cary Coglianese & David Lazer, Management-Based Regulation: Prescribing Private Management to Achieve Public Goals, 37 Law & Soc’y Rev. 691, 691, 726 (2003) (describing the “intertwining of the public and private sectors”); Jody Freeman, The Private Role in Public Governance, 75 N.Y.U. L. Rev. 543, 549–56 (2000) (surveying the great diversity of private governance actors); Gillian E. Metzger, Privatization as Delegation, 103 Colum. L. Rev. 1367, 1369 (2003) (conceiving of privatization of health care, welfare provision, prisons, and public education as delegation); Martha Minow, Public and Private Partnerships: Accounting for the New Religion, 116 Harv. L. Rev. 1229, 1237–42 (2003) (exploring implications of privatization for public values).Show More Scholarship on the private role in public governance has focused on third-party enforcers whose main function is to provide a support service. Those enforcers include self-regulatory organizations formed by industry and independent auditors mandated by regulators.5.See Bamberger, supra note 4, at 452–58; Freeman, supra note 4, at 635, 644. As another example, in policing stock exchanges, the Securities and Exchange Commission (SEC) relies heavily on self-regulatory organizations to monitor wrongdoing and propose rules. Jennifer M. Pacella, If the Shoe of the SEC Doesn’t Fit: Self-Regulatory Organizations and Absolute Immunity, 58 Wayne L. Rev. 201, 202 (2012). Courts also order third-party monitors. See Veronica Root, The Monitor-“Client” Relationship, 100 Va. L. Rev. 523, 531–33 (2014).Show More The corporate law strand of this enforcement literature emphasizes a network of “gatekeepers,” such as lawyers, accountants, and certifiers who guard against compliance and governance failures.6.See John C. Coffee, Jr., Gatekeepers: The Professions and Corporate Governance 2–3 (2006) (chronicling the evolution of auditors, attorneys, securities analysts, and credit-rating agencies in guarding against corporate governance failures); Assaf Hamdani, Gatekeeper Liability, 77 S. Cal. L. Rev. 53, 117–18 (2003) (discussing the need to expand gatekeeper liability in the wake of the Enron fraud scandal); Reinier H. Kraakman, Gatekeepers: The Anatomy of a Third-Party Enforcement Strategy, 2 J.L. Econ. & Org. 53, 54 (1986) (contrasting whistleblowers with gatekeepers, who are third parties that can “prevent misconduct by withholding support”).Show More For instance, before releasing annual reports, a publicly traded company must obtain the signoff of a certified accountant.7.15 U.S.C. § 78m(a) (2018) (“Every issuer of a security . . . shall file with the Commission . . . such annual reports (and such copies thereof), certified if required by the rules and regulations of the Commission by independent public accountants . . . .”).Show More In these more familiar private enforcement contexts, the private “cops on the beat”8.Kraakman, supra note 6, at 53 n.1 (attributing to Jeremy Bentham the “cop-on-the-beat” metaphor and using it to describe gatekeepers).Show More are ancillary actors rather than core market participants.9.The literature has also extensively analyzed self-regulation as part of a broader new governance that arose in recent decades. Administrative agencies now pursue collaborative and responsive models of public governance designed to encourage the business sector to self-regulate. See, e.g., Ian Ayres & John Braithwaite, Responsive Regulation: Transcending the Deregulation Debate 3 (1992); Jody Freeman, Collaborative Governance in the Administrative State, 45 UCLA L. Rev. 1, 6–7 (1997). Additionally, large businesses have dramatically grown their compliance departments to police the firm from within. See, e.g., Sean J. Griffith, Corporate Governance in an Era of Compliance, 57 Wm. & Mary L. Rev. 2075, 2077 (2016); Kimberly D. Krawiec, Organizational Misconduct: Beyond the Principal-Agent Model, 32 Fla. St. U. L. Rev. 571, 572 (2005); Veronica Root, Coordinating Compliance Incentives, 102 Cornell L. Rev. 1003, 1004 (2017). This important and nascent literature on corporate compliance has remained focused on the firm’s role in overseeing internal operations, or on traditional gatekeepers doing so.Show More

This Article demonstrates how policymakers have enlisted a new class of more powerful third-party enforcers: the businesses at the heart of the economy. The ten largest American companies by valuation operate in information technology, finance, oil, and pharmaceuticals.10 10.Fortune 500 List, Fortune (last visited Oct. 18, 2019), http://fortune.com/fortune­500/list/filtered?sortBy=mktval (identifying the ten most valuable American companies as Apple, Alphabet, Microsoft, Amazon, Berkshire Hathaway, Facebook, JPMorgan Chase, Johnson & Johnson, Exxon Mobil, and Bank of America). One of these companies, Berkshire Hathaway, is a conglomerate operating in diverse industries, including finance, while Johnson & Johnson sells pharmaceuticals in addition to consumer goods. Berkshire Hathaway, Fortune (updated Mar. 29, 2018), https://fortune.com/fortune500/2018/berkshire-hathaway/; Johnson & Johnson, Fortune (updated Mar. 29, 2018), https://fortune.com/fortune500/2018/johnson-johnson/.Show More A regulator has put leading firms in each of these industries on notice about their responsibilities for third-party oversight.11 11.See infra Part II.Show More In addition to the FTC, the Environmental Protection Agency (EPA)—along with the Department of Justice (DOJ)—requires BP Oil and other energy companies to audit offshore oil platform operators for environmental compliance.12 12.Consent Decree Among Defendant BP Exploration & Production Inc., the United States of America, and the States of Alabama, Florida, Louisiana, Mississippi, and Texas at 32–33, In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mex., on Apr. 20, 2010, No. 10-MDL-2179 (E.D. La. Oct. 5, 2015), ECF No. 15436-1 [hereinafter BP Consent Decree].Show More The Food and Drug Administration (FDA) expects Pfizer and other drug companies to ensure suppliers and third-party labs follow the agency’s health and safety guidelines.13 13.21 C.F.R. § 211.22(a) (2018) (explaining best practices for quality control of contractors); FDA Warning Letter from Cheryl A. Bigham, Dist. Dir., Kan. City Dist., Office of Regulatory Affairs, to Thomas Handel, President & Gen. Manager, Meridian Med. Techs., Inc., a Pfizer Co. (Sept. 5, 2017), https://www.fda.gov/iceci/enforcementactions/warningletters/2017/ucm­574981.htm [https://perma.cc/JMX9-V7VL].Show More The Consumer Financial Protection Bureau (CFPB) orders financial institutions, such as American Express, to monitor independent debt collectors and call centers for deceptive practices.14 14.Am. Express Centurion Bank, CFPB No. 2012-CFPB-0002 (Oct. 1, 2012) (joint consent order).Show More

The widespread conscription of businesses as enforcers—also called “enforcer-firms” below—shares characteristics with, but differs meaningfully from, prior iterations of third-party regulation. For instance, the FTC’s original administrative order required Facebook to hire a third-party auditor—an example of the old gatekeeper model—to certify Facebook’s compliance.15 15.Facebook, Inc., FTC File No. 0923184, No. C-4365, at 3–4 (F.T.C. July 27, 2012) (decision and order).Show More In that arrangement, refusing to sign off on Facebook’s biennial reports to the FTC constituted the auditor’s main sanction.16 16.See id. at 6.Show More Facebook could, however, respond to that sanction by bringing its business elsewhere.17 17.The consent order does not prevent such a response. See id.Show More That ability to retaliate weakens traditional gatekeepers’ power and independence.18 18.See Joel S. Demski, Corporate Conflicts of Interest, 17 J. Econ. Persp. 51, 57 (2003).Show More

In contrast, the enforcer-firm is usually the client—or at least a crucial business partner—of the third parties it regulates. Its main sanction is to cease doing business with those third parties, which can prove devastating.19 19.See infra Section IV.A.Show More The client relationship that weakens traditional gatekeepers thus strengthens the enforcer-firm. In short, policymakers have begun relying on third-party enforcement by the real gatekeepers of the economy: the firms who control access to core product markets.20 20.A diversified firm may play both a new and traditional gatekeeper role. For instance, by allowing a company to serve as both a commercial bank and investment bank, the law enables large financial institutions to operate as both traditional gatekeepers—overseeing their clients by underwriting securities, prompted by liability avoidance under the Securities Act of 1933—and as new gatekeepers, being the clients who hire third-party businesses. See infraSection II.A; Kraakman, supranote 6, at 82–83.Show More

In highlighting an overlooked enforcement model, this Article builds on the literature scrutinizing the increasingly narrow divide between private businesses and the administrative state.21 21.See supra note 4 and accompanying text.Show More Although that scholarship has yet to examine the enforcer-firm in any sustained manner,22 22.To the extent scholars have discussed mandated third-party governance it has been in passing or in narrower contexts such as in criminal or international law. See, e.g., Larry Catá Backer, Surveillance and Control: Privatizing and Nationalizing Corporate Monitoring After Sarbanes-Oxley, 2004 Mich. St. L. Rev. 327, 433–34 (2004) (referencing how the Bank Secrecy Act causes a larger number of businesses to become “part of the network of the state’s eyes and ears”); John Braithwaite, Responsive Regulation and Developing Economies, 34 World Dev. 884, 889–90 (2006) (exploring how domestic firms can serve as a means of reaching foreign actors); Stavros Gadinis & Colby Mangels, Collaborative Gatekeepers, 73 Wash. & Lee L. Rev. 797, 910–11 (2016) (focusing on money laundering); Itai Grinberg, The Battle over Taxing Offshore Accounts, 60 UCLA L. Rev. 304, 304 (2012) (referencing a “growing consensus that financial institutions should act as cross-border tax intermediaries”). For other ways that scholars have recognized that businesses regulate other firms, see infra Part I.Show More mandated third-party governance raises some similar accountability issues as previous generations of third-party enforcement. In particular, as a new area of quasi-regulatory activity unlikely to be overturned by judicial review, conscripted enforcement lacks transparency and traditional measures of public involvement, such as notice and comment rulemaking.23 23.See, e.g., Rachel E. Barkow, Overseeing Agency Enforcement, 84 Geo. Wash. L. Rev. 1129, 1130 (2016) (“Most aspects of agency enforcement policy generally escape judicial review.”); Freeman, supra note 4, at 647 (“Most self-regulatory programs lack the transparency and public involvement that characterize legislative rulemaking.”); Lesley K. McAllister, Regulation by Third-Party Verification, 53 B.C. L. Rev. 1, 3–4 (2012) (identifying accountability challenges with third-party enforcement models).Show More

However, if designed well, the enforcer-firm offers some hope for improving upon prior regulatory models’ accountability. Because enforcer-firms often sell directly to consumers, they may prove more responsive to public concerns when compared to traditional gatekeepers, which interact most closely with regulated entities.24 24.See, e.g., Coffee, supra note 6, at 15–18 (describing gatekeeper shortcomings).Show More And because the enforcer-firm is itself a prime target of public regulation, it would be easier for an administrative agency to oversee it than to add a whole new category of firms as required for oversight of traditional gatekeepers.25 25.See infra Section IV.B.Show More The conscription of businesses proved crucial in other administrative contexts, including the implementation of a personal income tax.26 26.Ajay K. Mehrotra, Making the Modern American Fiscal State: Law, Politics, and the Rise of Progressive Taxation, 1877–1929, at 282–83 (2013).Show More The enforcer-firm could, by analogy, enable the regulatory state to bring dispersed business actors into compliance.

None of this should be taken as an endorsement of the enforcer-firm, which is too new and understudied to yield strong normative conclusions. However, an openness to the upsides of the enforcer-firm responds to the critique that administrative law scholars have too often portrayed private actors as an intrusion into legitimacy, which prevents “imagining the means by which private actors might contribute to accountability.”27 27.Freeman, supra note 4, at 675. Numerous scholars have taken up this call in other contexts. See, e.g., Sarah E. Light, The Law of the Corporation as Environmental Law, 71 Stan. L. Rev. 137, 139–41 (2019) (calling for a holistic view of corporations’ role in promoting environmental goals).Show More

Mandated third-party governance also speaks to vibrant corporate law inquiries. Scholars have paid considerable attention to the duties of directors and officers, personal liability for corporate wrongdoing, and organizational structure.28 28.See generally Nicolai J. Foss et al., The Theory of the Firm, in 3 Encyclopedia of Law and Economics 631 (Boudewijn Bouckaert & Gerrit De Geest eds., 2000); infra Part III.Show More Conscripted enforcement shapes each of these areas and pushes against depictions of the firm emphasizing its private nature. Those depictions are rooted in the influential metaphor—sometimes described as the most dominant theory of the firm—that the firm is a “nexus of contracts” among owners, managers, laborers, suppliers, and customers.29 29.See, e.g., Melvin A. Eisenberg, The Conception That the Corporation Is a Nexus of Contracts, and the Dual Nature of the Firm, 24 J. Corp. L. 819, 820 (1999); Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure, 3 J. Fin. Econ. 305, 310 (1976); Steven L. Schwarcz, Misalignment: Corporate Risk-Taking and Public Duty, 92 Notre Dame L. Rev. 1, 26 (2016).Show More The firm remains exceedingly private. But by directing businesses to write enforcement-oriented contract clauses and monitor external relationships for legal violations, as a descriptive matter the state is pushing the firm toward a larger public role.30 30.See infra Section III.A.Show More

That insight is relevant beyond theory and institutional design. In the highest legislative circles and corporate boardrooms, debates are unfolding about what duties corporations owe to society, with some taking particular aim at the idea that shareholders should come above all other stakeholders.31 31.See Elizabeth Warren, Companies Shouldn’t Be Accountable Only to Shareholders, Wall St. J., Aug. 15, 2018, at A17; Larry Fink, Larry Fink’s 2018 Letter to CEOs: A Sense of Purpose, BlackRock, https://www.blackrock.com/corporate/investor-relations/2018-larry-fin­k-ceo-letter [https://perma.cc/P9X6-HN85] (last visited Jan. 13, 2020); Martin Lipton et al., It’s Time to Adopt the New Paradigm, Harv. L. Sch. F. Corp. Governance, https://corpgov.­law.harvard.edu/2019/02/11/its-time-to-adopt-the-new-paradigm [https://perma.cc/3XH9-SSRS] (last visited Jan. 13, 2020); Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans,’ Business Roundtable (Aug. 19, 2019), [https://perma.cc/9K2F-2HLG]. On shareholder primacy, see infra note 189 and accompanying text.Show More Conscripted enforcement marks a significant uptick in federal regulatory involvement in the firm by imposing more of an affirmative public duty to act.32 32.See infra Section III.D.Show More Cast against the backdrop of the firm as public enforcer, calls for business leaders to do more for society appear less disconnected from reality than would be the case under a largely private conception of the firm.33 33.There is arguably a gap between rhetoric and reality. See Marcel Kahan & Edward Rock, Symbolic Corporate Governance Politics, 94 B.U. L. Rev. 1997, 2042 (2014).Show More

The Article is structured as follows. Part I provides an overview of the well-studied ways that private entities serve as enforcers. Part II offers four case studies of how regulators have implemented mandated enforcement of third parties in some of the largest U.S. industries: the FTC and technology, the CFPB and banking, the EPA and oil, and the FDA and pharmaceuticals. Part III examines how mandated enforcement alters the firm’s contracts, relationships, and governance. It also explores shifts in liability at the personal and entity level, which could influence organizational structure. Part IV concludes by considering implications for the effectiveness and accountability of the administrative state.

  1. * Associate Professor of Law, Boston University; Affiliated Fellow, Yale Law School Information Society Project. For extremely valuable input, I am grateful to Hilary Allen, William Eskridge, George Geis, Anna Gelpern, Jonathan Lipson, Nicholas Parrillo, Carla Reyes, Kevin Schwartz, Andrew Tuch, Michael Vandenbergh, David Walker, and Jay Wexler, and to workshop participants at Boston University, the University of Pennsylvania, the University of Virginia, and Yale ISP. Special thanks to Eric Talley for unusually formative early comments. Jacob Axelrod, Sam Burgess, Omeed Firoozgan, Christopher Hamilton, Allison Mcsorley, Tyler Stites, Kelsey Sullivan, and Gavin Tullis provided excellent research assistance. The Virginia Law Review editors, and particularly Mark Russell, were tremendously thorough and helpful throughout.
  2. Cecilia Kang, A Facebook Settlement with the F.T.C. Could Run into the Billions, N.Y. Times, Feb. 15, 2019, at B6.
  3. Katy Steinmetz, Mark Zuckerberg Survived Congress. Now Facebook Has to Survive the FTC, Time (Apr. 13, 2018, 12:42 PM), https://time.com/5237900/facebook-ftc-privacy-data-cambridge-analytica/ [https://perma.cc/4SJJ-YHP9].
  4. See FTC v. Amazon.com, Inc., No. C14-1038-JCC, 2016 WL 10654030, at *8 (W.D. Wash. July 22, 2016) (finding Amazon accountable for in-app charges); Agreement Containing Consent Order at 5, Google Inc., No. 102-3136, (F.T.C. Mar. 30, 2011), https://www.ftc.gov/sites/default/files/documents/cases/2011/03/110330googlebuzzagreeorder.pdf [https://perma.cc/7R6W-5VNP] (ordering Google to require “service providers by contract to implement and maintain appropriate privacy protections”).
  5. See, e.g., Kenneth A. Bamberger, Regulation as Delegation: Private Firms, Decisionmaking, and Accountability in the Administrative State, 56 Duke L.J. 377, 453 (2006) (conceiving of regulators’ decisions to let regulated entities fill in vague mandates as delegation); Cary Coglianese & David Lazer, Management-Based Regulation: Prescribing Private Management to Achieve Public Goals, 37 Law & Soc’y Rev. 691, 691, 726 (2003) (describing the “intertwining of the public and private sectors”); Jody Freeman, The Private Role in Public Governance, 75 N.Y.U. L. Rev. 543, 549–56 (2000) (surveying the great diversity of private governance actors); Gillian E. Metzger, Privatization as Delegation, 103 Colum. L. Rev. 1367, 1369 (2003) (conceiving of privatization of health care, welfare provision, prisons, and public education as delegation); Martha Minow, Public and Private Partnerships: Accounting for the New Religion, 116 Harv. L. Rev. 1229, 1237–42 (2003) (exploring implications of privatization for public values).
  6. See Bamberger, supra note 4, at 452–58; Freeman, supra note 4, at 635, 644. As another example, in policing stock exchanges, the Securities and Exchange Commission (SEC) relies heavily on self-regulatory organizations to monitor wrongdoing and propose rules. Jennifer M. Pacella, If the Shoe of the SEC Doesn’t Fit: Self-Regulatory Organizations and Absolute Immunity, 58 Wayne L. Rev. 201, 202 (2012). Courts also order third-party monitors. See Veronica Root, The Monitor-“Client” Relationship, 100 Va. L. Rev. 523, 531–33 (2014).
  7. See John C. Coffee, Jr., Gatekeepers: The Professions and Corporate Governance 2–3 (2006) (chronicling the evolution of auditors, attorneys, securities analysts, and credit-rating agencies in guarding against corporate governance failures); Assaf Hamdani, Gatekeeper Liability, 77 S. Cal. L. Rev. 53, 117–18 (2003) (discussing the need to expand gatekeeper liability in the wake of the Enron fraud scandal); Reinier H. Kraakman, Gatekeepers: The Anatomy of a Third-Party Enforcement Strategy, 2 J.L. Econ. & Org. 53, 54 (1986) (contrasting whistleblowers with gatekeepers, who are third parties that can “prevent misconduct by withholding support”).
  8. 15 U.S.C. § 78m(a) (2018) (“Every issuer of a security . . . shall file with the Commission . . . such annual reports (and such copies thereof), certified if required by the rules and regulations of the Commission by independent public accountants . . . .”).
  9. Kraakman, supra note 6, at 53 n.1 (attributing to Jeremy Bentham the “cop-on-the-beat” metaphor and using it to describe gatekeepers).
  10. The literature has also extensively analyzed self-regulation as part of a broader new governance that arose in recent decades. Administrative agencies now pursue collaborative and responsive models of public governance designed to encourage the business sector to self-regulate. See, e.g., Ian Ayres & John Braithwaite, Responsive Regulation: Transcending the Deregulation Debate 3 (1992); Jody Freeman, Collaborative Governance in the Administrative State, 45 UCLA L. Rev. 1, 6–7 (1997). Additionally, large businesses have dramatically grown their compliance departments to police the firm from within. See, e.g., Sean J. Griffith, Corporate Governance in an Era of Compliance, 57 Wm. & Mary L. Rev. 2075, 2077 (2016); Kimberly D. Krawiec, Organizational Misconduct: Beyond the Principal-Agent Model, 32 Fla. St. U. L. Rev. 571, 572 (2005); Veronica Root, Coordinating Compliance Incentives, 102 Cornell L. Rev. 1003, 1004 (2017). This important and nascent literature on corporate compliance has remained focused on the firm’s role in overseeing internal operations, or on traditional gatekeepers doing so.
  11. Fortune 500 List, Fortune (last visited Oct. 18, 2019), http://fortune.com/fortune­500/list/filtered?sortBy=mktval (identifying the ten most valuable American companies as Apple, Alphabet, Microsoft, Amazon, Berkshire Hathaway, Facebook, JPMorgan Chase, Johnson & Johnson, Exxon Mobil, and Bank of America). One of these companies, Berkshire Hathaway, is a conglomerate operating in diverse industries, including finance, while Johnson & Johnson sells pharmaceuticals in addition to consumer goods. Berkshire Hathaway, Fortune (updated Mar. 29, 2018), https://fortune.com/fortune500/2018/berkshire-hathaway/; Johnson & Johnson, Fortune (updated Mar. 29, 2018), https://fortune.com/fortune500/2018/johnson-johnson/.
  12. See infra Part II.
  13. Consent Decree Among Defendant BP Exploration & Production Inc., the United States of America, and the States of Alabama, Florida, Louisiana, Mississippi, and Texas at 32–33, In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mex., on Apr. 20, 2010, No. 10-MDL-2179 (E.D. La. Oct. 5, 2015), ECF No. 15436-1 [hereinafter BP Consent Decree].
  14. 21 C.F.R. § 211.22(a) (2018) (explaining best practices for quality control of contractors); FDA Warning Letter from Cheryl A. Bigham, Dist. Dir., Kan. City Dist., Office of Regulatory Affairs, to Thomas Handel, President & Gen. Manager, Meridian Med. Techs., Inc., a Pfizer Co. (Sept. 5, 2017), https://www.fda.gov/iceci/enforcementactions/warningletters/2017/ucm­574981.htm [https://perma.cc/JMX9-V7VL].
  15. Am. Express Centurion Bank, CFPB No. 2012-CFPB-0002 (Oct. 1, 2012) (joint consent order).
  16. Facebook, Inc., FTC File No. 0923184, No. C-4365, at 3–4 (F.T.C. July 27, 2012) (decision and order).
  17. See id. at 6.
  18. The consent order does not prevent such a response. See id.
  19. See Joel S. Demski, Corporate Conflicts of Interest, 17 J. Econ. Persp. 51, 57 (2003).
  20. See infra Section IV.A.
  21. A diversified firm may play both a new and traditional gatekeeper role. For instance, by allowing a company to serve as both a commercial bank and investment bank, the law enables large financial institutions to operate as both traditional gatekeepers—overseeing their clients by underwriting securities, prompted by liability avoidance under the Securities Act of 1933—and as new gatekeepers, being the clients who hire third-party businesses. See infra Section II.A; Kraakman, supra note 6, at 82–83.
  22. See supra note 4 and accompanying text.
  23. To the extent scholars have discussed mandated third-party governance it has been in passing or in narrower contexts such as in criminal or international law. See, e.g., Larry Catá Backer, Surveillance and Control: Privatizing and Nationalizing Corporate Monitoring After Sarbanes-Oxley, 2004 Mich. St. L. Rev. 327, 433–34 (2004) (referencing how the Bank Secrecy Act causes a larger number of businesses to become “part of the network of the state’s eyes and ears”); John Braithwaite, Responsive Regulation and Developing Economies, 34 World Dev. 884, 889–90 (2006) (exploring how domestic firms can serve as a means of reaching foreign actors); Stavros Gadinis & Colby Mangels, Collaborative Gatekeepers, 73 Wash. & Lee L. Rev. 797, 910–11 (2016) (focusing on money laundering); Itai Grinberg, The Battle over Taxing Offshore Accounts, 60 UCLA L. Rev. 304, 304 (2012) (referencing a “growing consensus that financial institutions should act as cross-border tax intermediaries”). For other ways that scholars have recognized that businesses regulate other firms, see infra Part I.
  24. See, e.g., Rachel E. Barkow, Overseeing Agency Enforcement, 84 Geo. Wash. L. Rev. 1129, 1130 (2016) (“Most aspects of agency enforcement policy generally escape judicial review.”); Freeman, supra note 4, at 647 (“Most self-regulatory programs lack the transparency and public involvement that characterize legislative rulemaking.”); Lesley K. McAllister, Regulation by Third-Party Verification, 53 B.C. L. Rev. 1, 3–4 (2012) (identifying accountability challenges with third-party enforcement models).
  25. See, e.g., Coffee, supra note 6, at 15–18 (describing gatekeeper shortcomings).
  26. See infra Section IV.B.
  27. Ajay K. Mehrotra, Making the Modern American Fiscal State: Law, Politics, and the Rise of Progressive Taxation, 1877–1929, at 282–83 (2013).
  28. Freeman, supra note 4, at 675. Numerous scholars have taken up this call in other contexts. See, e.g., Sarah E. Light, The Law of the Corporation as Environmental Law, 71 Stan. L. Rev. 137, 139–41 (2019) (calling for a holistic view of corporations’ role in promoting environmental goals).
  29. See generally Nicolai J. Foss et al., The Theory of the Firm, in 3 Encyclopedia of Law and Economics 631 (Boudewijn Bouckaert & Gerrit De Geest eds., 2000); infra Part III.
  30. See, e.g., Melvin A. Eisenberg, The Conception That the Corporation Is a Nexus of Contracts, and the Dual Nature of the Firm, 24 J. Corp. L. 819, 820 (1999); Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure, 3 J. Fin. Econ. 305, 310 (1976); Steven L. Schwarcz, Misalignment: Corporate Risk-Taking and Public Duty, 92 Notre Dame L. Rev. 1, 26 (2016).
  31. See infra Section III.A.
  32. See Elizabeth Warren, Companies Shouldn’t Be Accountable Only to Shareholders, Wall St. J., Aug. 15, 2018, at A17; Larry Fink, Larry Fink’s 2018 Letter to CEOs: A Sense of Purpose, BlackRock, https://www.blackrock.com/corporate/investor-relations/2018-larry-fin­k-ceo-letter [https://perma.cc/P9X6-HN85] (last visited Jan. 13, 2020); Martin Lipton et al., It’s Time to Adopt the New Paradigm, Harv. L. Sch. F. Corp. Governance, https://corpgov.­law.harvard.edu/2019/02/11/its-time-to-adopt-the-new-paradigm [https://perma.cc/3XH9-SSRS] (last visited Jan. 13, 2020); Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans,’ Business Roundtable (Aug. 19, 2019), [https://perma.cc/9K2F-2HLG]. On shareholder primacy, see infra note 189 and accompanying text.
  33. See infra Section III.D.
  34. There is arguably a gap between rhetoric and reality. See Marcel Kahan & Edward Rock, Symbolic Corporate Governance Politics, 94 B.U. L. Rev. 1997, 2042 (2014).