Restrictions on campaign speech violate the First Amendment unless they are aimed at preventing either corruption or the appearance of corruption. The definition of corruption is thus central to campaign finance jurisprudence. In Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), the Supreme Court defined corruption narrowly, to include a quid pro quo exchange and nothing else. In this Note, I examine the viability of that definition by combining two previously dissociated bodies of literature—one exploring the Court’s varying definitions of corruption in campaign finance cases and the other addressing the proper role of a representative in a democracy. I argue that, although any viable definition of corruption must be based on an underlying theory of representation, no commonly accepted theory of representation underlies the narrow quid pro quo definition adopted in Citizens United. Thus, I suggest the Court take up another campaign finance case soon, so that it can either (1) articulate a theory of representation that justifies its narrow quid pro quo definition of corruption or (2) reconsider that definition.
Issue 6
The Securities Law Implications of Financial Illiteracy
Every financial literacy study conducted over the last few decades concurs: Americans, including American investors, are financially illiterate. This Article argues that America’s financial illiteracy poses a significant, widespread, and long-term challenge for our federal securities regime because that regime is premised almost entirely on disclosure as the best form of investor protection and, by extension, on investors’ ability to understand disclosure. By advancing a typology of investors and their disclosure needs, this Article further argues that we may have significantly underestimated the extent of the financial illiteracy problem based on at least two flawed assumptions. First, we have presumed that the financial illiteracy problem is limited to retail investors—individuals (as opposed to institutions) who invest directly in the securities markets and who represent a small segment of the overall investor population. However, such a presumption fails to sufficiently account for the literacy concerns of individuals who invest indirectly in the market in the form of holdings in mutual funds, pension funds, and other institutions, and who comprise a substantial segment of the market. The second flawed presumption relates to the notion that disclosure is not intended for the individual retail investor. Many insist that disclosure is intended for sophisticated institutional investors and financial intermediaries who provide signals to less sophisticated investors about suitable investment choices. However, the anecdotal and empirical evidence suggests not only that our presumptions about the sophistication of institutional investors and intermediaries are debatable, but also that such actors do not perform their signaling function as effectively or as consistently as we presumed. Thus, the effort to minimize the financial literacy problem through reliance on these other investors is misguided. Finally, this Article contends that the very fact that regulators have sought to combat financial illiteracy for more than two decades without appreciable changes in financial literacy rates suggests that the problem may be long-term and that the reform of choice—investor education—may require supplementation. Based on these conclusions, this Article insists that we must grapple much more seriously with the financial literacy problem and offers suggestions about the best path forward.
Constitutional Avoidance: The Single Subject Rule as an Interpretive Principle
The single subject rule, which prohibits bills from containing more than one “subject,” is in place in forty-three state constitutions and has existed since the nineteenth century. It is frequently litigated and has led to many high-profile laws being invalidated or severed. Although the policy rationales behind the rule are well known and largely agreed upon, applying the rule has proven challenging. Courts have struggled to formulate coherent doctrine for what constitutes a distinct “subject,” as demonstrated by the myriad of vague, malleable tests developed by state courts. As a result, single subject rule jurisprudence suffers from fundamental flaws, including unpredictable, arbitrary decision making and high enforcement costs.
This Note posits that the single subject rule’s enforcement problems stem from courts’ perception of it exclusively as a substantive rule to prevent logrolling and to further other policy goals. This Note proposes an alternative conception of the single subject rule: as an interpretive principle based on the canon of avoidance of constitutional doubt. Approaching single subject rule adjudication in this way would allow courts to enforce the principles of the single subject rule without having to precisely define the contours of a statute’s “subjects,” thus averting many of the difficulties in applying the rule. Employing the rule as an interpretive tool would also allow courts to uphold a law while still enforcing the single subject rule by narrowly construing the law’s various ambiguous provisions. In this way, it would help courts skirt the negative consequences that may result from severing or invalidating popularly enacted statutes and initiatives.