This Note attempts to answer the question, “What can state courts do to solve problems in the legislative redistricting process?” To answer this question, the Note examines one recent case from the North Carolina Supreme Court, Stephenson v. Bartlett. At the time the suit was filed, the North Carolina redistricting process was already subject to many state and federal constitutional restraints, as well as the federal statutory restraints of the Voting Rights Act. Relying on a dubious interpretation of the state constitution’s equal protection clause and an elevation of “traditional redistricting principles” to the level of a constitutional mandate, the North Carolina Supreme Court took the opportunity to create even more restraints on legislative redistricting process. Whitaker examines possible justifications for the opinion, and after rejecting textualist, purposivist and partisan political explanations, explains the opinion as an attempt by the judiciary to increase electoral competition by reducing the discretion of the state legislature over redistricting.
Note
Toward a Controlling Shareholder Safe Harbor
This Note surveys the law governing transactions between public corporations and their controlling shareholders. It explains that Delaware courts review these “controlling shareholder transactions” under the “entire fairness” standard. Yet, Delaware and the Model Act provide safe harbors to review independently approved transactions between corporations and their directors under the business judgment rule. This Note questions the disparate treatment and suggests that the same constraints on interested directors—namely, disinterested approval and market checks—are at least as effective in supervising controlling shareholders.
Next, this Note proposes that a safe harbor doctrine extend to controlling shareholder transactions. The premise is that, so long as the interests of controlling and minority shareholders are aligned, independent approval and market checks together provide sufficient constraints that challenge the utility of the current entire fairness rule. Yet, because these constraints fail when shareholder interests diverge in the so-called “final period,” this Note suggests that controlling shareholder transactions be separated into (1) final period and (2) non-final period categories. Business judgment is appropriate when shareholder interests are aligned, but entire fairness is necessary in the final period to protect the minority from the controlling shareholder’s self interest.
This argument relies on two principal Delaware cases: Puma v. Marriott (1971) and Kahn v. Lynch Communications (1994). It suggests that Lynch implicitly recognized the final period problem, while Puma declined judicial review because the aggregate interests of shareholders were aligned. Thus, read together, they are seen as wholly consistent with the theory underlying a controlling shareholder safe harbor.
A Law and Norms Critique of the Constitutional Law of Defamation
This Note applies some implications of recent law and norms literature, unexplored in existent academic writing, to the constitutional law of defamation. Theories of norms conceptualize social perceptions as constraints upon selfish individual behavior. Community members experience costs when they are observed violating social norms. These costs increase the likelihood of individual conformity to a norm. When the norm corresponds to cooperation in the face of collective action problems, social judgment benefits the community by making such cooperation more likely. The maintenance of high levels of norm adherence within a community depends on the public circulation of true information regarding members’ norm adherence. False information alleging norm violation, or false negative gossip, imposes a negative externality by decreasing the expected costs of norm violation. Law and norms, therefore, suggests that dissemination of false negative gossip should be harshly punished to minimize its associated negative externality. The actual U.S. law of defamation, surprisingly, has moved in the opposite direction—relaxing the common law’s harsh punishment for dissemination of false negative speech. While this shift rests upon a defensible understanding of the incentives to engage in political speech, the Supreme Court opinions overturning the common law of defamation seriously underestimate the costs of false negative gossip. As a result, negligence liability was quite likely a better replacement for strict liability common law defamation than the recklessness rule actually adopted. Worse still, the common law of defamation may have been socially optimal, making it entirely right and any Court-imposed changes entirely wrong.