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Susannah Camic Tahk

ABSTRACT

The federal tax code erects and enforces a firm border between for-profit and nonprofit organizations. Multiple provisions of the code monitor the boundaries of the tax-exempt, or nonprofit, sector to ensure that no nonprofit organization slips across the border to become a for-profit organization. Other code provisions restrict entry into the tax-exempt sector by for-profit organizations. Despite serious legal impediments, however, organizations on both sides of the boundary have increasingly found means by which to cross the border. Arrangements such as corporate social responsibility, for-profit philanthropy, and social enterprise illustrate this recent trend. Through these arrangements, for-profit organizations are beginning to embrace social goals, while nonprofit organizations have started to use methods more traditionally associated with efficient business organizations. Research in organizational sociology provides tools by which to understand these new cross-border developments. This body of research has shown that organizational sectors, or fields, evolve according to well-understood patterns, whose significance tax scholars have overlooked. Furthermore, federal tax law has failed to recognize and to make productive use of these organizational trends. This Article proposes that tax law should acknowledge the cross-sector movements of for-profit and nonprofit organizations, as well as the major advantages that these movements can produce. Tax law could then harness border-crossing activity to create social benefits. To achieve this result, federal tax law should loosen the for-profit/nonprofit boundary. This change would enable the tax code to encourage cross-sector “collaborations” between for-profit and nonprofit organizations. This change to the tax law is one that Congress and the Internal Revenue Service could now accomplish through several basic measures. These measures would make it possible for federal tax law to realize the large potential for social good that lies at the changing for-profit/nonprofit border.

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preferred citation: Susannah Camic Tahk, Crossing the Tax Code’s For-Profit/Nonprofit Border, 118 Penn St. L. Rev. 489 (2014).

Scott DeVito & Andrew W. Jurs

ABSTRACT

Tort reform legislation developed as a response to a series of insurance crises and reactions that blamed the personal injury compensation system for those problems. Since measures of tort reform have been adopted, many researchers have analyzed their effects within and beyond the legal system, assessing how they affect damages, insurance claims, health costs, and physician supply.

Our study analyzes an underdeveloped area of research: the effect of tort reform on the filing of cases in court. Using two databases of state court filing data over 12 years, we examine how a damages cap for medical negligence claims affects case filings in the years immediately after its adoption. With several test states, we find that when a state adopts med mal damages caps, there is a statistically significant drop of 23 percent in med mal filings. We confirm this effect by also measuring the effect of a cap’s nullification, and find that in the aftermath of a cap’s removal case filings increase by 29 percent. Our work can therefore confirm and quantify the effect of damages caps on case filing.

Yet the finding is much more salient when we consider it in the context of a new and interesting study published in the Journal of Empirical Legal Studies. In their 2013 study, Myungho Paik, Bernard Black, and David Hyman found that filings of med mal torts have decreased in the last decade, not only in tort reform states but also in states without it! If so, our finding of a statistically significant drop in med mal filings in response to tort reform has a “doubling-down” effect: there is one reduction in filings due to tort reform, and also a background reduction in filings based on larger, non-statutory changes.

We believe that our findings regarding the effect of tort reform on med mal filings and the “doubling-down” effect significantly modify the cost-benefit analysis of tort reform. The positive impacts of tort reform have been significantly oversold, and the effects of tort reform disproportionately impact certain vulnerable citizens. If so, we believe that claimants are being doubly squeezed without significant public benefit. We therefore suggest that state legislators reconsider these efforts, or risk court intervention due to equal protection challenges.

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preferred citation: Scott DeVito & Andrew W. Jurs, “Doubling-Down” for Defendants: The Pernicious Effects of Tort Reform, 118 Penn St. L. Rev. 543 (2014).

Steven J. Eagle

ABSTRACT

This Article examines the ad hoc, multifactor, regulatory takings doctrine derived from Penn Central Transportation Co. v. City of New York. It analyzes the conventional three-factor characterization of the Penn Central factors, and concludes that a four-factor approach better captures the dynamics of the Penn Central analysis. “Parcel as a whole,” conceptually regarded as delimiting the relevant parcel for the Penn Central inquiry, in fact interacts with the “economic impact,” “investment-backed expectations,” and “character of the regulation” factors. While the four-factor analysis advocated here is conceptually better and enhances an understanding of how Penn Central operates, the doctrine remains under-theorized, subjective, with its factors mutually referential, and unable to provide a reliable guide to courts or litigants

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preferred citation: Steven J. Eagle, The Four-Factor Penn Central Regulatory Takings Test, 118 Penn St. L. Rev. 601 (2014).

Christopher J. Tyson

ABSTRACT

Detroit is bankrupt, and very little of the theorizing and editorializing about this watershed event has contemplated municipal boundary law as a contributing factor. To the extent that it has, the analysis fails to grasp how essential municipal boundaries are to the creation of economic and social value in the modern metropolis. It has been almost 20 years since Richard Briffault, Gerald Frug, and Richard Ford released their path-breaking scholarship on the municipal boundary problem, yet metropolitan regions continue to fragment in much the same way Detroit did throughout the twentieth century.

The persistent fragmentation evident in many metropolitan areas raises familiar questions about the meaning and function of municipal boundaries and how local government law should respond. At the center of the contemporary metropolitan boundary problem are the localist ambitions of the cityhood and annexation movements. Their appeal underscores the extent to which the politics around metropolitan area location, autonomy, and identity (specifically in relation to the suburbs) are understood, expressed and defended by laymen and courts alike in the rhetoric and logic of property rights. The relationship between private property rights and the perceived right to autonomous local government has taken on popular meanings that, while not always grounded in actual law, do have a real impact on politics. That perceived entitlement forms the ideological basis for what is essentially a socially constructed property right in municipal identity. Municipal identity as property is largely a reflection of the high-stakes nature of contemporary suburban identity. Suburban residents feel particularly threatened by the prospect of being swallowed up by their metropolitan area central city, or, even worse, ending up in an unincorporated, undervalued location. The extent to which residing in a particular municipality is understood as highly consequential for wealth building, quality of life, family security, and status is a key feature of the contemporary suburban identity and experience. Battles over municipal boundaries reveal the ways in which suburban residents express what amounts to a deeply felt entitlement to separate government.

While notions of municipal identity as property reflect the cumulative weight of twentieth-century social and economic developments, the courts have played a role as well. Legal rhetoric and legal reasoning are essential components of the property rights expectations that municipal identity fosters. This Article explores how municipal boundary law, social developments, and jurisprudence have bolstered a perceived property right in municipal identity and its role in shaping the modern metropolis.

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preferred citation: Christopher J. Tyson, Municipal Identity as Property, 118 Penn St. L. Rev. 647 (2014).