Volume 57, Number 3

SOUTH TEXAS LAW REVIEW

SOUTH TEXAS COLLEGE OF LAW HOUSTON, TEXAS

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EDITORIAL BOARD

2015-2016 KELSIE HAALAND

Editor in Chief

DRAKE LAWSAGE

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TYLER EPSTEIN

EMILY KIMMITT

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PROF. VAL D. RICKS

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Members BERNARDINO AGOSTO

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EDITORIAL BOARD

2016-2017 EMILY PENDLETON

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SOUTH TEXAS COLLEGE OF LAW DONALD J. GuTER, President, Dean, and Professor of Law MAXINE D. GooDMAN, Vice President, Associate Dean, and

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and Professor of Law

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vi

DEREK FINCHAM, B.A., University of Kansas; J.D., Wake Forest University School of Law; Ph.D., University of Aberdeen School of Law; Professor of

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Law.

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Law.

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JEFFREY L. RENSBERGER, B.A., Wabash College; J.D., Indiana University, Bloomington; Vice President for Strategic Planning and Institutional Research and Professor of Law. CHARLES W. "RocKY" RHODES, B.B.A., Baylor University; J.D., Baylor University School of Law; Vinson & Elkins Research Professor and Professor of Law. VAL D. RrcKs, B.A., Brigham Young University; J.D., Brigham Young University, J. Reuben Clark Law School; Charles Weigel II Research Professor and Professor of Law. ARNOLD RocHVARG, B.A., University of Pennsylvania; J.D., George Washington University; Visiting Professor of Law. GARY S. RosIN, B.S., Texas A&M University; J.D., University of Texas School of Law; Professor of Law. NrnRI MATHIS RUTLEDGE, B.A., Spelman College; J.D., Harvard Law School; Professor of Law. MARK R. SIEGEL, B.S., B.A., University of Florida; J.D., Florida State University College of Law; LL.M.,Emory University School of Law; Professor of Law. ANDREW T. SOLOMON, B.A., University of Michigan; J.D., Boston University School of Law; Professor of Law. TOBIN A. SPARLING, B.A., Dartmouth College; M.S., Columbia University School of Library Service; M.A., Columbia University Graduate School of Arts & Sciences; J.D., Columbia Law School; Professor of.Law. MARKE. STEINER, B.A., University of Texas; J.D., University of Houston Law Center; Ph.D., University of Houston; Professor of Law. DRu STEVENSON, B.A., Wheaton College; J.D., University of Connecticut School of Law; LL.M., Yale Law School; Professor of Law. CHERIE 0. TAYLOR, A.B., Harvard University-Radcliffe College; J.D., University of Georgia School of Law; LL.M., Georgetown University Law Center; Professor of Law. T. GERALD TREECE, B.A., University of Houston; J.D., University of Houston Law Center; Vice President, Associate Dean, Special Counsel to the President and Dean, and W. James Kronzer, Jr. Distinguished Professor of Law. MICHAEL E. WHEELER, B.A., Arkansas Tech University; J.D., University of Arkansas at Little Rock William H. Bowen School of Law; Professor of Law. KENNETH WILLIAMS, B.A., University of San Francisco; J.D., University of Virginia School of Law; Professor of Law. JoHN J. WORLEY, A.B., University of Georgia; J.D., University of Georgia School of Law; M.A., Rice University; Vice President, Associate Dean, Director of Transactional Law Practice Certificate Program and Professor of Law. KEVIN M. YAMAMOTO, B.S., University of California at Davis; J.D., University of San Diego School of Law; LL.M., University of Florida College of Law; Professor of Law.

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BOARD OF DIRECTORS EXECUTIVE COMMITTEE J. KENNETH JOHNSON

Chairman

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GENORA KENDRICK BOYKINS

s. HAYS '74 MICHAEL K. HURST '90 MICHAEL w. MILICH '97 MICHAEL

IMOGEN S. PAPADOPOULOS GORDON QUAN '77 JEFFREY RUSK

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'83

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MEMBERS

'82 '74 BURMAN '83

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MEMBERS

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VoL. 57 No. 3

ARTICLES GAY RIGHTS STRENGTHEN GuN RIGHTS .... Alice

Marie Beard 215

EQUITABLE EsTOPPEL IN THE CONTEXT OF CLAIMS FOR ToRTious INTERFERENCE WITH CONTRACTUAL RELATIONS: HAS THE TEXAS SUPREME COURT GONE Too FAR? ..................................

Clayton A. Morton 249 Tyler G. Doyle

COMMENTS CAPTIVE INSURANCE BUSINESS DEDUCTIONS: THE EVOLUTION FROM THE

pARENT­

SUBSIDIARY CAPTIVE STRUCTURE TO THE BROTHER-SISTER CAPTIVE STRUCTURE ....

BIG CITIES IN A BIGGER STATE:

A

Tyler J. Cummings 279

REVIE W OF

HoME RULE IN TEXAS AND THE CITIES THAT PusH THE BOUNDARIES OF LocAL CONTROL ....

WILL Tms DoG HuNT?:

AN ATTORNEY'S

GuIDE TO PREDICTIVE CODING ...•.......

Garrett Mize 311

Benjamin L. S. Ritz 345

REVISITING GARNER WITH GARNER: A LOOK AT DEADLY FORCE AND THE UsE OF CHOKEHOLDS

&

NECK RESTRAINTS

BY LAW ENFORCEMENT ........................

Anna Swanson 401

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GAY RIGHTS STRENGTHEN GUN RIGHTS ALICE MARIE BEARD* I.

II. III. IV. V. VI.

INTRODUCTION ............................................................................... 215 HOLDING IN OBERGEFELL V. HODGES ............................................ 216 SUPREME COURT'S 21ST CENTURY RIGHT-TO-BEAR-ARMS DECISIONS ...................................................................................... 218 OBERGEFELL STRENGTHENS RIGHT TO KEEP AND BEAR ARMS .... 221 HELLER AND MCDONALD IN THE INFERIOR COURTS ...................... 229 CONCLUSION·················································································· 238 I.

INTRODUCTION

A written constitution is a reminder that governments can be unreasonable and unjust. Rights selected for protection in the United States Constitution are considered to be peculiarly important and uniquely vulnerable to infringement. The rights guaranteed by the Constitution protect individuals against even popular conceptions of the public good.

Consequently, the judiciary's role is to act as a check on overbearing majorities and overreaching executives.

The Supreme Court held in Obergefe/l v. Hodges that the Fourteenth Amendment's guarantees of due process and equal protection protect the fundamental right of same-sex couples to marry and require every state to recognize a same-sex civil marriage lawfully licensed and performed in another state. 1 The guarantee of equal protection was implicated because the laws under review burdened the fundamental right to civil marriage.2 It was a five-to-four decision.3 Obergefell strengthens two other recent five­ to-four decisions, decisions guaranteeing the enumerated right to keep and

• J.D., George Mason University School of Law; Member District of Columbia Bar; Author of Resistance by Inferior Courts to Supreme Court's Second Amendment Decisions, 81 TENN. L. REV. 673 (2014). The author wishes to thank Professor Robert Cottrol, Dr. Stephen P. Halbrook, Professor David B. Kopel, Professor Nelson Lund, Professor George A. Mocsary, and, as ever and always, her husband.

I. See Obergefell v. Hodges, 135 S. Ct. 2584, 2607-08 (2015).

2. Id. at 2590.

3. Id. at 2591.

215

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bear arms.4 This Article examines Obergefell's methodology and applies that methodology to the right to arms.

II.

HOLDING IN OBERGEFELL V. HODGES

[S]ame-sex couples may exercise the fundamental right to marry in all States. It follows that the Court also must hold-and it now does hold-that there is no lawful basis for a State to refuse to recognize a lawful same-sex marriage performed in another State on the ground of its same-sex character. 5 The Court arrived at this holding by observing that fundamental liberties protected by the Fourteenth Amendment are not restricted to the rights enumerated in the Bill of Rights. The identification and protection of fundamental rights "has not been reduced to any formula. "6 This is especially true when the constitutional guarantee sets forth broad principles, as does the Fourteenth Amendment. 7 New insights and cultural and political developments make new dimensions of freedom and individual autonomy become apparent to new generations.8 However, both "history and tradition guide and discipline th[e] inquiry" of identifying and protecting fundamental rights. 9 The Obergefell Court acknowledged that it was not until 2003 that any court held its State Constitution's guarantee of due process and equal protection guaranteed same-sex couples the right to civil marriage. 10 A dissenting opinion noted that no country allowed same-sex marriage until 2000 when the Netherlands did so. 11

4. See generally McDonald v. City of Chicago, Ill., 561 U.S. 742 (2010); District of Columbia v. Heller (Heller I), 554 U.S. 570 (2008).

5. Obergefell, 135 S. Ct. at 2607--08.

6. Id at 2598 (citing Poe v. Ullman, 367 U.S. 497, 542 (1961) (Harlan, J., dissenting)).

7. See U.S. CONST. amend. XIV. 8. See generally Lawrence v. Texas, 539 U.S. 558 (2003), which invalidated sodomy laws.

Lawrence happened, at least in part, because of cultural and political developments. "A deep transformation in American culture and politics had brought about a profound shift in the Court's perception of gay men and lesbians." DALE CARPENTER, FLAGRANT CONDUCT: THE STORY OF LAWRENCE v. TEXAS 221 (2012). David Cole argues that changes of public opinion were responsible for three recent U.S. Supreme Court decisions: legalization of same-sex marriage, right to keep and bear arms, and protection of the rights of foreign nationals suspected of dealings with the enemy and imprisoned by U.S. in time of war. DAVID COLE, ENGINES OF LIBERTY: THE POWER OF CITIZEN ACTNJSTS TO MAKE CONSTITUTIONAL LAW (2016).

9. Obergefell, 135 S. Ct. at 2595-96, 2598.

10. See id. at 2597 (citing Goodridge v. Dep't of Pub. Health, 798 N.E.2d 941, 948 (Mass.

2003)).

11. Id. at 2640 (Alito, J., dissenting) (quoting United States v. Windsor, 133 S. Ct. 2675, 2715 (2013) (Alito, J., dissenting)).

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GAY RIGHTS STRENGTHEN GUN RIGHTS

217

However, the Framers of the Fourteenth Amendment entrusted its protections to future generations. 12 Injustice cannot always be seen at a particular time in history. Thus, we learn from history-"without allowing the past alone to rule the present"-to "protect[] the right of all persons to enjoy liberty" in all its dimensions. 13 Therefore, once a right is recognized as fundamental and is protected, the right no longer depends on the outcome of any election. 14 The Court's ultimate holding was based on an extension of its past holdings, including that a ban on freedom to marry based on racial differences is unconstitutional under the Fourteenth Amendment's guarantee of due process and equal protection; 15 that it is unconstitutional under the Fourteenth Amendment's guarantee of equal protection for a state constitution to impose a ban on protecting persons against discrimination based on sexual orientation; 16 that criminalization of certain same-sex acts of intimacy is unconstitutional under the Fourteenth Amendment's guarantee of due process; 17 and that the federal Defense of Marriage Act's restriction of the terms "marriage" and "spouse" to heterosexual unions is unconstitutional under the Fifth Amendment's guarantee of due process. 18 These decisions, like Obergefell, were based primarily on substantive due process and equal protection rather than on an enumerated right. 19 Substantive due process protects the fundamental right to marry, and the guarantee of equal protection prohibits unjustified infringement of the fundamental right to marry. 20

12. Id. at 2598 (majority opinion).

13. Id. 14. See id. at 2605-06. On November 4, 2008, California voted 52.24% in favor of Proposition 8. California Proposition 8, the "Eliminates Right of Same-Sex Couples to Marry" Initiative (2008), BALLOTPEDIA, https://ballotpedia.org/Califomia_Proposition_8,_ the_%22Eliminates_Right_of_SameSex_Couples_ to_Marry"/c,22_Initiative_(2008) (last visited Jan. 13, 2016).

15. Obergefell, 135 S. Ct. at 2589, 2598 (citing Loving v. Virginia, 388 U.S. 1, 12 (1967)).

16. Id. at 2596 (citingRomer v. Evans, 517 U.S. 620 (1996)).

17. Id. (citing Lawrence v. Texas, 539 U.S. 558, 578 (2003)). Justice O'Connor concurred based on the Fourteenth Amendment's Equal Protection Clause. Lawrence, 539 U.S. at 579 (O'Connor, J., concurring).

18. Id. at 2597 (citing United States v. Windsor, 133 S. Ct. 2675, 2681 (2013)).

19. Id. at 2602-03; see also supra notes 15-18 and accompanying text.

20. Id. at 2606.

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III. SUPREME COURT'S 21ST CENTURY RIGHT-TO-BEAR-ARMS DECISIONS

In District of Columbia v. Heller, a District of Columbia law that banned all handguns and any operable firearm in the home was held to be an unconstitutional infringement of the Second Amendment. 21 This holding was reached after dissecting the Second Amendment's guarantee-"A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed"-and interpreting its words.22 The Court stated that the prefatory clause announces a purpose. 2' With all prefatory clauses, the prefatory clause does not limit the operative clause where the operative clause is expressed in clear, unambiguous terms. 24 The Court noted that "the 'militia' . . . consisted of a subset of 'the people,' ' 25 and that "[r]eading the Second Amendment as protecting only the right to 'keep and bear Arms' in an organized militia therefore fits poorly with 26the operative clause's description of the holder of that right as 'the people."

"Arms" include modem firearms, 27 and the Court dismissed as "bordering on the frivolous" the argument that the Second Amendment protects only "those arms in existence in the 18th century., 28 The Court held that "the Second Amendment extends, prima facie, to all instruments that constitute bearable arms, even those that were not in existence at the time of the founding. 29 The Court held in Heller that "[k]eep arms" means "possessing arms, for militiamen and everyone else," 30 and that bearing arms means "carrying for a particular purpose--confrontation." 31 Bearing arms "was unambiguously used to refer to the carrying of weapons outside of an organized militia., 32 The Second Amendment is meant to protect the right

21.

District of Columbia v. Heller (Heller 1), 554 U.S. 570, 635-636 (2008). An amicus curiae was filed in Heller by the Pink Pistols and Gays and Lesbians for Individual Liberty in support of Respondent Heller. Brief of Pink Pistols and Gays & Lesbians for Individual Liberty as Amici Curiae in Support of Respondents, Heller1,554 U.S. 570 (No. 07-290).

22.

HellerI, 554 U.S. at 576.

23.

Id at 599.

24.

Id. at 577-78.

25.

Id. at 580.

26.

Id. at 580-81.

27.

Id. at 581-82.

28.

Id. at 582.

29.

Id. 30.

Id. at 583.

31.

Id. at 584.

32.

Id.

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GAY RIGHTS STRENGTHEN GUN RIGHTS

of the people to be "better able to resist tyranny,"33 to prevent the government from "taking away the people's arms," 34 "to secure the ideal of a citizen militia, which might be necessary to oppose an oppressive military force if the constitutional order broke down, ' 35 and "for self-defense and hunting., 36 Self-defense is the most important guarantee of the Second Amendment because a person must be alive to enjoy any right.37 The "right of self-defense has been central to the Second Amendment right. 3 8 The home is39 "where the need for defense of self, family, and property is most acute."

The Second Amendment protects those arms that are "typically possessed by law-abiding citizens for lawful purposes" and those "in common use.' A This includes the "handgun. ' 41 However, excluded is the short-barreled4 2shotgun, "dangerous and unusual weapons," and "M-16 rifles and the like.

The Court provided examples of permissible regulation: [T]he right secured by the Second Amendment is not unlimited....

[T]he right was not a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose....

[P]rohibitions on carrying concealed weapons were lawful under the Second Amendment or state analogues.... [N]othing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools Id. at 597-98; see also Robert J. Cottrol, Second Amendment: Not Constitutional 33.

Dysfunction but Necessary Safeguard, 94 B.U.L.REv. 835, 845-48 (2014)("[Nearly 170 million people were murdered by their own governments in the twentieth century.").

Heller 1, 554 U.S. at 598. Framers had experience with disarmament by the British.

34.

Bostonians surrendered 1,778 muskets, 634 pistols, and 38 blunderbusses to General Gage's

forces.

RICHARD FROTH1NGHAM, HISTORY OF THE SIEGE OF BOSTON, AND OF THE BATTLES OF

LEXINGTON, CONCORD AND BUNKER HILL 95 (6th ed. 1903).

HellerI, 554 U.S. at 599.

35.

36. Id. 37. There is a practical reason for the right to keep and bear arms: Courts have held that neither the state nor the police owe a duty to protect the individual. DeShaney v. Winnebago Cnty.

Dep't of Soc. Servs., 489 U.S. 189, 201 (1989); Hernandez v. City of Goshen, Ind., 324 F.3d 535, 538 (7th Cir. 2003); Fox v. Custis, 712 F.2d 84, 85 (4th Cir. 1983); Zelig v. Cnty. of Los Angeles, 45 P.3d 1171, 1182 (Cal. 2002); Warren v. District of Columbia, 444 A.2d 1, 5 (D.C. 1981) (en banc); Everton v. Willard, 468 So. 2d 936, 938 (Fla. 1985); Ashburn v. Anne Arundel Cnty., 510 A.2d 1078, 1083 (Md. 1986); Weiner v. Metro. Transp. Auth., 433 N.E.2d 124 (N.Y. 1982). One federal court even stated, "[Tlhere is no constitutional right to be protected by the state against being murdered by criminals or madmen." Bowers v. DeVito, 686 F.2d 616, 618 (7th Cir. 1982).

38. Heller 1,554 U.S. at 628.

39. Id. 40. Id.at 625,627.

41. Id.at 628.

42. Id.at625, 627.

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and govermment buildings, or laws imposing conditions and qualification on the commercial sale of arms. 3 The Court noted: "We identify these presumptively lawful regulatory 44 measures only as examples; our list does not purport to be exhaustive."

The Court did not confine the right to bear arms to the home. There would be no need to mention hunting, bans on concealed carrying of arms, and bans on carrying arms in sensitive places if the right were confined to the home. 45 Heller provided examples of impermissible regulation of the right to carry arms, such as a law that would ban both open and concealed carrying of a pistol "without regard to time, place, or circumstances," and a law requiring "'arms to be so borne as to render them wholly useless for the purpose of defence."'' 46 Consequently, the Court voided the District of Columbia law that required firearms in the home to be inoperable at all times because it made "it impossible for citizens to use them for the core lawful purpose of self-defense and [was] hence unconstitutional. ' 47 The Court did not establish a standard of review for Second Amendment cases because "[u]nder any of the standards of scrutiny that we have applied to enumerated constitutional rights, banning from the home 'the most preferred firearm in the nation to "keep" and use for protection of one's home and family' would fail constitutional muster. '' 48 However, the Court rejected rational basis scrutiny and an "interest-balancing inquiry. 4 9 The Court noted that the Second Amendment "surely elevates above all other interests the right of law-abiding, responsible citizens to use arms in the defense of hearth and home., 50 The Court held that "the enshrinement of constitutional rights necessarily takes certain policy choices off the table....

[I]t is not the role of this Court to pronounce the Second 51

Amendment extinct.", Two years later, in McDonald v. City of Chicago, the Second Amendment right recognized in Heller was held to be applicable to the states through the due process clause of the Fourteenth Amendment.52 The

43.

Id.at 626-27.

44. Id.at 627 n.26.

45.

See id.at 599, 604, 626-27.

46.

Id. at 629 (quoting State v. Reid, 1 Ala. 612, 616-17 (1840); Andrews v. State, 50 Tenn. (3 Heisk.) 165, 187 (1871)) (citing Nunn v. State, 1 Ga. 243, 251 (1846)).

47.

Id.at 630.

48.

Id.at 628-29 (footnote omitted) (citations omitted).

49.

Id.at 628 n.27, 634-35.

50.

Id.at 635.

51.

Id.at 636.

52.

McDonald v. City of Chicago, Ill., 561 U.S. 742, 791 (2010). This protection has been extended to the Commonwealth of Northern Mariana Islands. Radich v. Guerrero, Case 1: 14-CV-

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Court held that the right to bear arms is "fundamental to our scheme of ordered liberty" and is "'deeply rooted in this Nation's history and tradition."' '53 Justice Thomas reached the same result but by applying the privileges or immunities clause of the Fourteenth Amendment.54 IV. OBERGEFELL STRENGTHENS RIGHT TO KEEP AND BEAR ARMS

Obergefell changed the definition of civil marriage to include samesex marriage.55 It constitutionalized what previously had been left to the legislative branch.5 6 It was 1996 when the Court first ruled that a State could not enact laws discriminating against homosexuals. 57 It was 2003 when same-sex civil marriage was first recognized as a constitutional right under a State Constitution.5 8 Over the past six years, voters and legislators in only eleven states and the District of Columbia protected the right to same-sex civil marriage. 59 And yet, in 2015, Obergefell happened.

Cultural developments in the later part of the 20th century allowed homosexuals to lead more open lives. 60 It is the flexibility of substantive due process that produced Obergefell. Surely, an enumerated and affirmative right in the Bill of Rights that has been incorporated through the Fourteenth Amendment is of equal dignity to an unenumerated right that has been recognized only by the courts, and not explicitly by the Constitution, and only through substantive due process.

Some members of the Supreme Court who voted with the majority in Obergefell not only dissented from Heller and McDonald, but are also eager to overrule both.61 The methodology used in Obergefell was one of

00020, 2016 WL 1212437 (D. N. Mar. I. Mar. 28, 2016) (striking down bans on handguns and

ammunition).

McDonald, 561 U.S. at 767-68 (quoting Washington v. Glucksberg, 521 U.S. 702, 721 53.

(1997)) (citing Duncan v. Louisiana, 391 U.S. 145, 149 (1968)).

54.

Id.at 805-06 (Thomas, J., concurring).

55.

See generally Obergefell v. Hodges, 135 S. Ct. 2584, 2605 (2015); see also supra Part

II. Obergefell, 135 S.Ct. at 2605-06.

56.

57.

See Romer v.Evans, 517 U.S. 620, 635-36 (1996).

Goodridge v. Dep't of Pub. Health, 798 N.E.2d 941, 948 (Mass. 2003).

58.

Obergefell, 135 S.Ct. at 2611, 2615 (2015) (Roberts, C.J., dissenting).

59.

Id.at 2596 (majority opinion).

60.

61.

Cottrol, supra note 33, at 839. Justice Ruth Bader Ginsburg (in the Obergefell majority) has said, "[T]he disappearance of that purpose [the need for a militia] eliminates the function of the Second Amendment." Ginsburg Draws Connection Between Immigration Reform, FairPay for Women, PRI (Sept. 18, 2013, 10:00 AM), http://www.pri.org/stories/2013-09-18/ginsburgdraws-connection-between-immigration-reform-fair-pay-women. In other words, the command that "the right of the people to keep and bear arms shall not be infringed" would be judicially repealed. Justice Stephen Breyer (also in the Obergefell majority) expressed a desire to reverse Heller and McDonald. David Kopel, Smearing Madison, DAVEKOPEL.COM (Mar. 2011),

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reviewing history, reviewing tradition, and reviewing cultural and political developments. With such a methodology, an overruling of Heller and McDonald no longer seems possible, unless the Court also wishes to overrule Obergefell.

In the United States, the history and tradition of supporting the right to bear arms as a constitutional right dates back to 1776.62 Political 63 developments demonstrate that most state legislatures support this right.

In forty states a person is entitled to a permit to carry a firearm without any requirement of showing any need; these are known as "shall issue" states.64 In thirty-one states a person may carry an unconcealed firearm without a permit; these are known as "open carry" states. 61 In eleven states, a person may carry a firearm concealed without a permit; these are known as "constitutional carry" states. 66 Polls show popular support for gun ownership and for gun rights.67 http://www.davekopel.com/2A/Mags/smearing-madison.html (discussing Justice Stephen Breyer on 'FNS', Fox NEWS (Dec. 12, 2010, 1:01 PM), http://video.foxnews.com/v/4456313/justicestephen-breyer-on-fns). Retired Justice John Paul Stevens, who dissented in Heller and McDonald, District of Columbia v. Heller (Heller 1), 554 U.S. 570, 636 (2008) (Stevens, J., dissenting); McDonald v. City of Chicago, Ill., 561 U.S. 742, 858 (2010) (Stevens, J., dissenting), left the court before Obergefell and continues to attack both Heller and McDonald: And another five words that he [Justice John Paul Stevens] proposes to add to the Second Amendment would have the effect of overturning the court's 2008 decision in District of Columbia v. Heller, from which Justice Stevens dissented: "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms when serving in the Militia shall not be infringed."

Linda Greenhouse, Speaking Truth to the Supreme Court, N.Y. TIMiES (Apr. 16, 2015), http://www.nytimes.com/2015/04/16/opinion/speaking-truth-to-the-supreme-court.html.

62.

HellerI, 554 U.S. at 600-01.

63.

See id at 675-77.

64.

Christopher Keleher, District of Columbia v. Heller: The Death Knell for Illinois Handgun Bans?, 96 ILL. B.J. 402, 405 (2008) (citing David McDowall et al., Easing Concealed FirearmsLaws: Effects on Homicide in Three States, 86 J. CRIM. L. & CRMINOLOGY 193, 193 (1995)).

65.

Drake v. Filko, 724 F.3d 426, 440 (3d Cir. 2013) (Hardiman, J., dissenting).

66.

The eleven states are Alaska, Arizona, Arkansas, Idaho, Kansas, Maine, Mississippi, Missouri, Vermont, West Virginia, and Wyoming. ALASKA STAT. § 11.61.220 (2012); ARIz. REV. STAT. ANN. § 13-3102 (West Supp. 2012); ARK. CODE ANN. § 5-73-120 (2006); VT. STAT. ANN. tit. 13, § 4003 (2009); WYO. STAT. ANN. § 6-8-104(a)(iv) (2011); Bills and Laws: SB 45, KANSAS 2015-2016 LEGIS. SESSIONS, http://www.kslegislature.org/li/b2015 16/measures/sb45; Debbie Bryce, Constitutional Carry Took Only 18 Days to Become Law, IDAHO ST. J. (Apr. 1, 2016), http://www.idahostatejournal.com/members/constitutional-carry-took-only-days-to-becomelaw/article bf3d6ddf-ff24-57lb-b6b6-5970a618db29.html; Bob Owens, Breaking: Mississippi to Join "Constitutional Carry" Wave, BEARING ARMS (Apr. 7, 2016, 2:01 PM), http://bearingarms.com/bob-o/2016/04/07/breaking-nississippi-join-constitutional-carrywave; Stephen Gutowski, Maine Becomes Sixth ConstitutionalCarry State, WASH. FREE BEACON (July 9, 2015, 1:59 PM), http://freebeacon.com/issues/maine-becomes-sixth-constitutional-carrystate; Stephen Gutowski, West Virginia Legalizes Conceal Carry Without a Permit, WASH. FREE

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The right to bear arms in the United States was first guaranteed in the Pennsylvania Constitution of 1776: That the people have a right to bear arms for the defence of themselves and the state; and as standing armies in the time of peace are dangerous to liberty, they ought not to be kept up; And that the military should be 68kept under strict subordination to, and governed by, the civil power.

It was amended in 1790 to guarantee that "[t]he right of the citizens 69to bear not be questioned., arms in defence of themselves and the state shall A minority faction in the Pennsylvania convention for the ratification of the United States Constitution was the first to make proposals for a Bill

71 7 of Rights on December 13, 1787. 0 They made fifteen proposals. The

seventh provided the following: That the people have a right to bear arms for the defence of themselves and their own State, or the United States, or for the purpose of killing game; and no law shall be passed for disarming the people or any of them, unless for crimes committed, or real danger of public injury from individuals; and as standing armies in the time of peace are dangerous to liberty, they ought not to be kept up; and that the military shall be kept 72under strict subordination to and be governed by the civil power.

Although all fifteen proposals were defeated, the United States Constitution was finally approved with the understanding that a Bill of Rights would be adopted.73 The Pennsylvania proposals eventually found

BEACON (Mar. 7, 2016, 4:15 PM), http://freebeacon.com/issues/west-virginia-legalizes-concealedcarry-without-a-permit; Jason Hancock, Missouri Republicans Vote to Override Veto of Gun Bill, KAN. CITY STAR (Sep. 14, 2016, 7:10 PM), http://www.kansascity.com/news/Politicsgovernment/articlel101906277.html.

Growing Public Support for Gun Rights, PEW RES. CENTER (Dec. 10, 2014), 67. http://www.people-press.org/2014/12/10/growing-pubic-support-for-gun-rights; Justin McCarthy, More Than Six in 10 Americans Say Guns Make Homes Safer, GALLUP (Nov. 7, 2014), 7 92 13/six-americans-say-guns-homes-safer.aspx. http://www.gallup.com/poll/1 PA. CONST. of 1776, Declaration of Rights, art. XIII. 68.

PA. CONST. art IX, § 21 (1790).

69.

70.

PENNSYLVANIA AND THE FEDERAL CONSTITUTION 1787-1788, at 426-29 (John Bach

McMaster & Frederick D. Stone eds., 1888).

3 Id.at 421-2 .

71.

Id. at 422.

72.

73.

RANDY E. BARNETT & HOWARD E. KATZ, CONSTITUTIONAL LAW: CASES IN CONTEXT

41 (2d ed. 2013) ("There is general consensus among historians that the Constitution was headed for defeat until the Federalists solemnly promised to adopt, after ratification, a bill of rights in the form of amendments.").

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their way into the Bill of Rights and became the First, Second, Fourth, 74 Fifth, Sixth, Eighth, and Tenth Amendments.

This history demonstrates that the understanding of "to bear arms" included self-defense and hunting. Consequently, a commentator wrote more than fifty years ago: "But history does not warrant concluding that it necessarily follows from the pairing of the concepts that a person has a right 75 to bear arms solely in his function as a member of the militia., Two well-known scholars supported the view that the guarantee to arms belongs to the individual before Heller. Pulitzer Prize winning historian Leonard W. Levy stated the following: Believing that the [second] amendment does not authorize an individual's right to keep and bear arms is wrong. The right to bear arms is an individual right. The military connotation of bearing arms does not necessarily determine the meaning of a right to bear arms. If all it meant was the right to be a soldier or serve in the military, whether in the militia or the army, it would hardly be a cherished right and would never have reached constitutional status in the Bill of Rights. The "right" to be a soldier does not make much sense. Life in the military is dangerous and lonely, and a constitutionally protected claim or entitlement to serve in uniform does not have to exist in order for individuals to enlist if they so choose. Moreover, the right to bear arms does not necessarily have a military connotation, because Pennsylvania, whose constitution of 1776 first used the phrase "the right to bear arms," did not even have a state militia. In Pennsylvania, therefore, the right to bear arms was devoid of military significance.

Moreover, such significance need not necessarily be inferred even with respect to states that had militias. Bearing arms could mean 74.

(1957).

75.

See EDWARD DUMBAULD, THE BILL OF RIGHTS AND WHAT IT MEANS TODAY 50-56

Robert A. Sprecher, The Lost Amendment (pt. 1), 51 A.B.A.J. 554, 557 (1965).

The constitutional convention rejected proposals that did not guarantee a right to keep and bear arms. A July 1789 proposed Bill of Rights, in Roger Sherman's handwriting, has been discovered in James Madison's papers. It mentions the militia, but omits any right of the people to keep and bear arms: "The militia shall be under the government of the laws of the respective States, when not in the actual Service of the united [sic] States, but such rules as may be prescribed by Congress for their uniform organization & discipline shall be observed in officering and training them, but military Service shall not be required of persons religiously scrupulous of bearing arms."

The decision not to adopt Sherman's proposal indicates that the framers felt that it was inadequate.

Robert Dowlut, The Right to Keep and Bear Arms: A Right to Self-Defense Against Criminals and

Despots, 8 STAN. L. & POL'Y REv. 25, 27 (1997) (footnotes omitted) (quoting Herbert Mitgang, Handwritten Draft of a Bill of Rights Found, N.Y. TIMES, July 29, 1987, http://www.nytimes.com/1 98 7/07/29/us/handwritten-draft-of-a-bill-of-rights-found.html).

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having arms. Indeed, Blackstone's Commentaries spoke expressly of the "right to have arms." An individual could bear arms without 76 being a soldier or militiaman.

Professor Laurence H. Tribe, constitutional law expert at Harvard Law School, wrote the following: Perhaps the most accurate conclusion one can reach with any confidence is that the core meaning of the Second Amendment is a populist/republican/federalism one. Its central object is to arm "We the People" so that ordinary citizens can participate in the collective defense of their community and their state. But it does so not through directly protecting a right on the part of states or other collectivities, assertable by them against the federal government, to arm the populace as they see fit. Rather, the amendment achieves its central purpose by assuring that the federal government may not disarm individual citizens without some unusually strong justification consistent with the authority of the states to organize their own militias. That assurance in turn is provided through recognizing a right (admittedly of uncertain scope) on the part of individuals to possess and use firearms in the defense of themselves and their homes-not a right to hunt for game, quite clearly, and certainly not a right to employ firearms to commit aggressive acts against other persons-a right that directly limits action by Congress or by the Executive Branch and may well, in addition, be among the privileges or immunities of United States citizens protected by § 1 of77 the government action.

Fourteenth Amendment against state or local In 1822, the first state appellate court held that an arms law violated a 78 state constitutional guarantee to bear arms. In 1846, the Georgia Supreme 79 Court held that a firearm law violated the Second Amendment. In 1857, the U.S. Supreme Court first acknowledged the right to bear arms as an individual right in Scott v. Sandford, with Chief Justice Taney explaining that the Constitution would guarantee Dred Scott's right to keep and carry 80 arms if the Court were to rule that Dred Scott was a person. In 1871, the Tennessee Supreme Court recognized penumbral rights in an arms case when it struck down a pistol carrying statute as too restrictive in Andrews v.

State.81 Andrews held that: 76.

LEONARD W. LEVY, ORIGINS OF THE BILL OF RIGHTS 134-35 (Yale Univ. Press 1999).

LAURENCE H. TRIBE, I AMERICAN CONSTITUTIONAL LAW 901-02 n.221 (3d ed. 2000).

77.

Bliss v. Commonwealth, 12 Ky. (2 Litt.) 90, 93 (1822).

78.

Nunn v. State, 1 Ga. 243, 251 (1846).

79.

Dred Scott v. Sandford, 60 U.S. (19 How.) 393, 417, 450 (1857), superseded by 80. constitutionalamendment, U.S. CONST. amend. XIV ("[T]o keep and carry arms wherever they went.... Nor can Congress deny to the people the right to keep and bear arms, nor the right to trial by jury, nor compel anyone to be a witness against himself in a criminal proceeding.").

Andrews v. State, 50 Tenn. (3 Heisk.) 165, 178 (1871).

81.

226

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"[T]he right to keep arms for this purpose involves the right to practice their use The right to keep arms necessarily involves the right to purchase them, to keep them in a state of efficiency for use, and to purchase and provide ammunition suitable for such arms, and to keep them in 82 repair.

'

Andrews also held that "the right to keep them [arms], with all that is implied fairly as an incident to this right, is a private individual right, guaranteed to the citizen, not the soldier. '' 83 Andrews was cited several times in District of Columbia v. Heller.84

Historically, this right was so popular that future states (Vermont and Texas) guaranteed their citizens the right to bear arms while they were still independent republics. Before it was a state, Vermont guaranteed that "the people have a right to bear arms, for the defence of themselves and the State. 85 It kept an identical provision when it became a state in the union.8 6 The same is true of Texas: "Every citizen shall have the right to bear arms in defence of himself and the republic. The military shall at all times and in all cases be subordinate to the civil power., 87 The Constitution of Texas continues to guarantee a right to keep and bear arms for self-defense.88 The civil right to bear arms continues to be a popular right. 89 There is a presence of actual societal respect for this right, a presence so strong that 82.

Id 83.

Id. at 182.

84.

District of Columbia v. Heller (Heller]), 554 U.S. 570, 608, 614, 629, 688 (2008).

85.

VT. CONST. ch. I, art. XV (1777); see also George A. Mocsary, Note, Explaining Away the Obvious: The Infeasibility of Characterizingthe Second Amendment As a NonindividualRight, 76 FORDHAM L. REv. 2113, 2124 n.88 (2008).

86.

See VT. CONST. ch. I, art. XVI (1793).

87.

CONST. OF THE REPUBLIC OF TEX. of 1836, Declaration of Rights, § 14.

88.

TEX. CONST. art. 1, § 13.

89.

Nat'l Fed'n of indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2600 (2012) ("[P]rotected civil rights, such as the right to bear arms or vote in elections .... ); Ferguson v. Perry, 740 S.E.2d 598, 604 (Ga. 2013) ("[T]his Court and other courts have said that the right to possess firearms is indeed a 'civil right."'); see also, e.g., United States v. Stone, 139 F.3d 822, 830-31 (11th Cir. 1998) (per curiam) (quoting United States v. Sharp, 12 F.3d 605, 607-08 (6th Cir. 1993)) (explaining that felony convictions "carry disabilities" including the deprivation of "civil rights as important as the right to vote, the right to keep and bear arms, and the right to engage in a chosen business or profession"). State courts, interpreting state guarantees to arms, hold that the right to possess a firearm is a civil right. Fla. Carry, Inc. v. Univ. of N. Fla., 133 So. 3d 966, 983, n.12 (Fla. Dist. Ct. App. 2013) (en banc) (Makar, J., concurring); Williams v. State, 402 So. 2d 78, 79 (Fla. Dist. Ct. App. 1981); Smith v. State, 697 S.E.2d 177, 184 (Ga. 2010) (noting that a criminal conviction may impact the defendant's "civil rights, such as the right to vote or possess firearms"); State v. Trower, 629 N.W.2d 594, 597 (S.D. 2001); Andrews v. State, 50 Tenn. (3 Heisk.) 165, 182 (1871). "Heller is a victory for civil rights ....

Anders Walker, From Ballots to Bullets: District of Columbia v. Heller and the New Civil Rights, 69 LA. L. REV. 509, 510 (2009).

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one can feel it in this Nation. Presently the constitutions of forty-four states guarantee this right. 90 Only California, Iowa, Maryland, Minnesota, New 92 91 Jersey, and New York lack a guarantee. In the 21st century, Kansas, 95 Louisiana,93 Missouri,94 and Alabama strengthened their guarantees to bear arms. There is an affirmative history of protection of this right. History and tradition are powerful confirmations that the right to bear arms is deeply rooted in our history and accepted as part of the culture of this nation, and that this right fulfills the human yearning for security, safe haven, and personal autonomy.

There are, however, outliers. Massachusetts, the first state to constitutionalize same-sex civil marriage, is one outlier. In the year of the Bicentennial, Commonwealth v. Davis held that neither the state guarantee 96 protects an individual right.

Amendment Second the nor arms bear to The guarantees are reproduced in the appendix to this Article. See infra Appendix. See 90.

Eugene Volokh, State ConstitutionalRights to Keep and Bear Arms, 11 TEX. REV. L. & POL. 191 (2006), and David B. Kopel, The Second Amendment in the Nineteenth Century, 1998 BYU L. REV. 1359 (1998), for a helpful discussion of these guarantees.

However, the constitutional right to self-defense is guaranteed in California, Iowa, and 91.

New Jersey. CAL. CONST. art. 1, § 1; IOWA CONST. art. I, § 1; N.J. CONST. art. 1, 1. Logically, the guarantee to self-defense should include the right to defensive arms to make that right meaningful.

On November 2, 2010, 88.2% of the voters approved the new Kansas guarantee to bear 92. arms, thus nullifying City ofSalina v. Blaksley, 83 P. 619 (Kan. 1905), which opined that neither the state constitutional right to bear arms for defense and security nor the Second Amendment guarantee an individual right. See Kansas Right to Bear Arms Question, Constitutional BALLOTPEDIA, (2010), 1 Question Amendment https://ballotpedia.org/Kansas -Rightto -Bear Arms-Question,-Constitutional Amendment-Que stion 1_(2010) (last visited Jan. 13, 2016).

On November 6, 2012, 73.45% of the voters approved the new Louisiana guarantee 93. specifically requiring strict scrutiny interpretation. See LouisianaRight to Bear Arms, Amendment 2

(2012),

BALLOTPEDIA,

https://ballotpedia.org/LouisianaRight-toBearArms,_Amendment_2_(2012) (last visited Jan. 13, 2016).

On August 5, 2014, 60.95% of the voters approved the new Missouri guarantee 94. specifically requiring strict scrutiny interpretation. Missouri Right to Bear Arms, Amendment 5 BALLOTPEDIA, 2014), (August (last https://ballotpedia.org/MissouriRight toBear_Arms, Amendment_5_(August-2014) visited Jan. 13, 2016).

On November 4, 2014, 72.5% of the voters approved the new Alabama guarantee 95.

3 specifically requiring strict scrutiny interpretation. Alabama Right to Bear Arms, Amendment (2014),

BALLOTPEDIA,

4 https://ballotpedia.org/Alabama RighttoBearArms,_Amendment3_(201 ) (last visited Jan. 13, 2016).

Commonwealth v. Davis, 343 N.E.2d 847, 849, 850 (Mass. 1976). However, on 96.

November 2, 1976, the voters rejected the Massachusetts Prohibition of Handguns ballot with a 69.21% no vote. Massachusetts Prohibition of Handguns, Question 5 (1976), BALLOTPEDIA, https:/Iballotpedia.org/Massachusetts Prohibition of Handguns,_Question_ (1976) (last visited Jan. 13, 2016). The Massachusetts Supreme Court earlier interpreted the state guarantee to bear arms as an individual right in a libel case. Commonwealth v. Blanding, 20 Mass. (3 Pick.) 304,

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More recently, even though Heller teaches that constitutionally protected "arms" are not restricted to those of the 18th century, 97 The Massachusetts Supreme Court held in Commonwealth v. Caetano that an electric stun gun is not protected by the Second Amendment. 98 However, the U.S. Supreme Court disagreed. 99 The high court held that the decision of the Massachusetts Supreme Court was inconsistent with Heller.'° The justices said that, under Heller, arms are not restricted to those of the 18th century, and that arms are not restricted to firearms. Consequently, the judgment of the Massachusetts Supreme Court was vacated, and the case was remanded for further proceedings not inconsistent with the U.S. Supreme Court's opinion.' 1 Another outlier is New York City. It singled out the Second Amendment for especially unfavorable treatment, a notion that the Supreme Court rejected in McDonald.10 2 In Kwong v. Bloomberg,10 3 New York City's uniquely steep fee to possess a handgun in the home was upheld. 1°4 The fee is the highest in the state and in the nation. 10 5 New York City imposes a $340 application fee to obtain a residential handgun license that is valid for three years. 0 6 There is an additional $94.25 fee for fingerprinting and background checks conducted by the New York State Division of Criminal Justice Services. 10 7 The court even questioned whether the fee was an "appreciable restraint," but determined that, even if it was, the law survives intermediate scrutiny and that such fees are comparable to fees charged to hold a rally or parade. 10 8 Of course, the reality is that a rally or parade is not conducted in a home, while the Second Amendment's core right is to possess a firearm in the home. The concurring opinion agreed: "Although the fee constitutes a substantial burden on the fundamental 313-14 (1825) ("The liberty of the press was to be unrestrained, but he who used it was to be responsible in case of its abuse; like the right to keep fire arms, which does not protect him who uses them for annoyance or destruction."). The Supreme Court in Heller I addressed the court's language in Blanding, "The analogy makes no sense if firearms could not be used for any individual purpose at all." District of Columbia v. Heller (Heller1),554 U.S. 570, 602 (2008).

97.

Heller I, 554 U.S. at 582.

98.

Commonwealth v. Caetano, 26 N.E.3d 688, 689 (Mass. 2015). But see People v. Yanna, 824 N.W.2d 241, 246 (Mich. Ct. App. 2012) (holding that a stun gun ban violates the right to keep and bear arms).

99.

Caetano v. Massachusetts, 136 S.Ct. 1027 (2016) (per curiam).

100.

101.

Id. Id

102.

103.

104.

105.

106.

107.

108.

McDonald v. City of Chicago, Ill., 561 U.S. 742, 778-79 (2010).

Kwong v. Bloomberg, 723 F.3d 160 (2d Cir. 2013).

Id.at 161.

Appellants' Brief at 53-55, Kwong, 723 F.3d 160 (No. 12-1578).

Kwong, 723 F.3d at 161.

Id.at 162 n.5.

Id.at 165-67.

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Second Amendment right to possess a handgun in the home for selfintermediate scrutiny, the statute defense ...and thereby necessitates 10 9 review." survives such heightened Obergefell takes a broad view of the guarantee of equal protection to prevent inequality in the enjoyment of a fundamental right." Thus, the guarantee of equal protection prevents the enforcement of laws that would confine the enjoyment of a fundamental enumerated right to only people who can afford the payment of a steep fee. Kwong was pre-Obergefell. A post-Obergefell case with similar facts and law should result in a different decision, if the standards of Obergefell are to be followed.

V.

HELLER AND McDoNALD IN THE INFERIOR COURTS

Some inferior courts since Heller and McDonald have used the Supreme Court's decisions to provide individuals with some specific Second Amendment protections. For example, bans on carrying or Il l A ban on transporting arms outside the home are unconstitutional. firearm possession cannot be based on old misdemeanor or on all misdemeanor convictions.1 12 The Second Amendment protects the sale of 14 firearms, 1 3 the possession of ammunition,' and the right to target practice 115 "Arms" protected by the so as to maintain proficiency with firearms.

1 16 and switchblade Second Amendment include electronic stun guns knives. 1 7 A ban on possession of firearms on premises where alcoholic 18 beverages are sold or consumed may not extend to a parking lot. A tenday waiting period before a firearm may be transferred may be

Id. at 172 (Walker, J., concurring) (citation omitted).

109.

See generally Obergefell v. Hodges, 135 S. Ct. 2584 (2015).

110.

Moore v. Madigan, 702 F.3d 933, 942 (7th Cir. 2012); Palmer v. District of Columbia, 111.

59 F. Supp. 3d 173, 183 (D.D.C. 2014); State v. DeCiccio, 105 A.3d 165, 209 (Conn. 2014); People v. Aguilar, 2 N.E.3d 321, 328 (Ill. 2013). But see Woollard v. Gallagher, 712 F.3d 865, 882 (4th Cir. 2013); Kachalsky v. Cnty. of Westchester, 701 F.3d 81, 101 (2d Cir. 2012).

Suarez v. Holder, No. 1:14-CV-968, 2015 U.S. Dist. LEXIS 19378, at *4 (M.D. Pa. 112.

Feb. 18, 2015); Binderup v. Holder, No. 13-cv-06750, 2014 U.S. Dist. LEXIS 135110, at *86 (E.D. Pa. Sept. 25, 2014); Wesson v. Town of Salisbury, 13 F. Supp. 3d 171, 178 (D. Mass.

2014); Gowder v. City of Chicago, 923 F. Supp. 2d 1110, 1126 (N.D. Ill. 2012). Butsee Schrader v. Holder, 704 F.3d 980, 982 (D.C. Cir. 2013).

See Mance v. Holder, 74 F. Supp. 3d 795, 804 (N.D. Tex. 2015); I11.Ass'n of Firearms 113.

Retailers v. City of Chicago, 961 F. Supp. 2d 928, 932-33 (N.D. Ill. 2014).

Herrington v. United States, 6 A.3d 1237, 1246-47 (D.C. 2010).

114.

Ezell v. City of Chicago, 651 F.3d 684, 711 (7th Cir. 2011). Target practice obviously 115. requires ammunition.

People v. Yanna, 824 N.W.2d 241, 246 (Mich. Ct. App. 2012). But see Commonwealth 116. v. Caetano, 26 N.E.3d 688, 689 (Mass. 2015).

State v. Herrmann, 873 N.W.2d 257, 260 (Wis. Ct. App. 2015).

117.

Taylor v. City of Baton Rouge, 39 F. Supp. 3d 807, 817 (M.D. La. 2014).

118.

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unconstitutional as applied.11 9 Even laws on possession of firearms while 0

intoxicated may be unconstitutional as applied.12

The New York Court of Appeals was able to avoid the constitutional

argument in a 2013 case. New York requires a permit to merely possess a pistol in the home, but it restricts permits to residents of New York. 121 The

Second Amendment was raised to challenge the residency requirement in Osterweil v. Bartlett, but the court held that part-time residents were

eligible, thus avoiding the constitutional argument. 122 Other courts have employed a narrow interpretation of Heller and McDonald, applying

intermediate scrutiny in all cases and showing deference to the legislative branch.

Friedman v. Highland Park was a challenge to an ordinance banning

firearms labeled "assault weapons" and firearm magazines with a capacity to hold more than ten rounds of ammunition. 123 According to a report from an organization opposed to the civil right to keep and bear arms, the label

"assault weapon" is based on the exploitation of confusion:

The weapons' menacing looks, coupled with the public's confusion over fully automatic machine guns versus semi-automatic assault weapons-anything that looks like a machine gun is assumed to be a machine gun-can only increase the chance of public support for restrictions on these weapons. 124

Regardless of labels-assault rifle, automatic rifle, machine gun, submachine gun, machine pistol-modern military infantry firearms have

119.

Silvester v. Harris, 41 F. Supp. 3d 927, 967-68 (E.D. Cal. 2014). A New Jersey woman was stabbed to death while waiting for a permit to purchase a gun. Jim Walsh, Ex-Boyfriend Sought in Woman's Slaying, COURIER-POST (Dec. 4, 2015, 9:56 AM), http://www.courierpostonline.com/story/news/crime/201 5/06/04/woman-fatally-stabbed-berlintwp/28461361.

120.

People v. DeRoche, 829 N.W.2d 891, 897 (Mich. Ct. App. 2013) (per curiam).

121.

See N.Y. PENAL LAW § 4 00.00(3)(a) (McKinney 2008).

122.

Osterweil v. Bartlett, 999 N.E.2d 516, 520 (N.Y. 2013). The court also held that the "residence" language in section 400.00(3)(a) was originally designed to discourage individuals from "forum-shopping" when applying for handgun permits. Id. at 519.

123.

Friedman v. City of Highland Park, Ill., 784 F.3d 406, 407 (7th Cir.), cert. denied, 136 S. Ct. 447 (2015).

124.

Assault Weapons and Accessories in America, VIOLENCE POL'Y CTR., http://www.vpc.org/studies/awaconc.htm (last visited Jan. 13, 2016). Opponents of firearm ownership also exploit this. FRANK O'BRIEN ET AL., PREVENTING GUN VIOLENCE THROUGH EFFECTIVE MESSAGING 5 (2012) ("Powerful and emotionally-engaging images are vitally important reinforcers of strong messages. For example, intimidating images of military-style weapons help bring to life the point that we are dealing with a different situation than in earlier times."). This booklet provides "language dos and don'ts" and advises to focus on emotion. Id. at 6,9.

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one thing in common: fully automatic fire capability. 125 The Supreme Court has defined the meaning of automatic, fully automatic, and semi-automatic firearm. 126 The firearms127under review in Friedman have only semiautomatic fire capability.

28 The Friedman court upheld the Highland Park ordinance. The court reasoned that the firearms in question were not common at the time of the ratification of the Second Amendment, and law-abiding citizens still retain adequate means of self-defense because most long guns, pistols, and revolvers are still available. 129 The Friedman court said that citizens and criminals can find substitutes for the banned firearms.13 ° It is unknown if that strange confederacy of citizens and criminals mentioned in the opinion is serious or satire.1 3 The court held that the benefits and burdens of the ordinance should be left to the political process, and that merely making the public feel safe is a benefit. 3 2 It is well settled that, unlike the nation against which we revolted, our constitution is supreme and not the enactments of a legislative body.133 Unlike the United Kingdom, we cannot, for example, legislatively repeal the protection against double jeopardy and against ex post facto laws. 134 The United Kingdom repealed double jeopardy in 2003 for serious offenses and paid no attention to ex post facto laws when it provided, "This' 135part applies whether acquittal was before or after the passing of this Act." See generally EDWARD C. EZELL, SMALL ARMS OF THE WORLD (12th ed. 1983); IAN 125.

HOGG, MILITARY SMALL ARMS OF THE 20TH CENTURY (7th ed. 2000).

Staples v. United States, 511 U.S. 600, 602 n.1 (1994).

126.

Friedman,784 F.3d at 415 (Manion, J., dissenting).

127.

Id.at 412 (majority opinion).

128.

Id. at 410-11.

129.

Id.at 411. In a democracy the tradition is to distinguish between the ordinary citizen 130. and the common criminal. In a democracy we do not assign collective guilt and mete out collective punishment. Communists explained their willingness to punish the innocent: "It is better to liquidate hundreds of innocent people than to let one guilty person remain in the party." JAMES A. MICHENER, THE BRIDGE AT ANDAU 119 (Fawcett Crest Books 1957).

See generallyFriedman, 784 F.3d 406.

131.

Id.at 412.

132.

U.S. CONST. art. VI, cl. 2; Vanhorne's Lessee v. Dorrance, 2 U.S. (2 Dall.) 304, 308, 28 133.

F. Cas. 1012 (C.C.D. Pa. 1795) (No. 16,857); Simpson v. State, 13 Tenn. (5 Yet.) 356, 359-60 (1833) (stating right to bear arms trumps common law).

See Vanhorne's Lessee, 2 U.S. (2 Dall.) at 309, 28 F. Cas. 1012; see also Madan Singh 134.

Choudhary, Note, Protection Against Ex-Post-Facto Laws, LEGAL SERV. INDIA, (last http://www.legalserviceindia.com/article/A60-Protection-against-ex-post-facto-laws.html visited Mar. 15, 2016).

135.. Criminal Justice Act 2003, pt. 10, § 75 (Eng.). In the United States, the Fifth Amendment protects an individual against double jeopardy. U.S. CONST. amend. V. Unlike the United Kingdom, the United States Constitution explicitly prohibits both federal and state legislatures from passing any ex post facto law. U.S. CONST. art. I, § 9, cl. 3; U.S. CONST. art.I, § 10, cl. 1.

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The Friedman court used the term "well regulated militia" to excuse a legislative enactment triumphing over an affirmative constitutional right that "shall not be infringed."' 136 The court failed to understand that at the time of the ratification of the Second Amendment the term "well regulated 13 7 militia" meant a trained militia.

The Friedman dissenting opinion reminded that in a state case the public understanding of the right to bear arms must refer to the time of the ratification of the Fourteenth Amendment, that the firearms in question are commonly used by law-abiding people throughout the country, and that strict scrutiny must apply because the ordinance is a ban on keeping arms in 138 the home by law-abiding people.

Heller instructs that arms are not restricted to those of the 18th century; to make such an argument "border[s] on the frivolous.' 13 9 Heller teaches that certain policy choices are off the table and that courts may not "pronounce the Second Amendment extinct., 140 Neither Heller nor McDonald showed deference to legislative bodies.141 Obergefell teaches 42 again that it is the Constitution that is supreme, not the political process. 1 Obergefell struck down more than thirty state constitutions that restricted 43 civil marriage to a man and a woman. 1 The New York State Rifle & Pistol Association v. Cuomo' 44 court also employed a narrow interpretation of Heller and McDonald. The case is another decision involving semi-automatic "assault weapons" and firearm magazines that hold more than ten rounds of ammunition. 14 5 The court assumed the firearms and magazines in question are commonly used and possessed by law-abiding citizens for lawful purposes. 146 The court used the commonly accepted two-step approach to a law challenged under the 136.

See Friedman, 784 F.3d at 413-14 (Manion, J., dissenting).

137.

"In its obsolete form pertaining to troops, regulatedis defined as 'properly disciplined.'

Moreover, discipline in relation to arms is defined as 'training in the practice of arms."' Robert Dowlut & Janet A. Knoop, State Constitutions and the Right to Keep and Bear Arms, 7 OKLA. CiTY U. L. REv. 177, 198-99 n.92 (citing 7 THE OxFoRD ENGLISH DICTIONARY 380 (1933); 3 THE OxFoRD ENGLISH DICTIONARY 416 (1933)). "Therefore, a well-regulated militia means one that has had some training or at least is composed of people who have had some training. This is to prevent the militia from becoming a disorderly mob, dangerous not to the enemy but to its own state and country." Id. 138.

Friedman,784 F.3d at 412,415,418 (Manion, J., dissenting).

139.

District of Columbia v. Heller (Heller 1), 554 U.S. 570, 582 (2008).

140.

Id.at 636.

141.

Friedman,784 F.3d at 413-14 (Manion, J., dissenting).

142.

Obergefell v. Hodges, 135 S.Ct. 2584, 2605 (2015).

143.

Id. at 2631-32 (Thomas, J., dissenting).

144.

N.Y. State Rifle & Pistol Ass'n v. Cuomo, 804 F.3d 242 (2d Cir. 2015).

145.

See N.Y. State Rifle & Pistol Ass'n v. Cuomo, 804 F.3d 242, 253-54 (2d Cir. 2015).

146.

Id. at 254-55 (citing District of Columbia v. Heller (Heller 1), 554 U.S. 570, 627 (2008)).

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Second Amendment. 147 It first decided that the prohibited conduct fell under the Second Amendment. 148 Since the Second Amendment was implicated, the court had to settle on a level of scrutiny.1 49 It applied intermediate scrutiny and upheld the statute because the statute was substantially related to public safety and crime reduction.15 ° The court noted that alternative firearms were available and that the ban applied only to a limited subset of arms. 15 1 semi-automatic firearms and thus did not ban an entire class of However, the ban on loading more than seven rounds of ammunition into a firearm magazine capable of holding ten rounds and the ban on a non-semiautomatic rifle (i.e., pump-action) did not survive intermediate scrutiny based on the record presented.' 52 Another court held that, if a class of arms and the is protected, banning a subset of such arms is unconstitutional, 153 availability of alternative arms will not save the statute.

Another narrow interpretation came from Heller Ji154 The case involved a Second Amendment challenge to statutes that included a ban on magazines certain semi-automatic firearms and a ban on ammunition 55 having a capacity of more than ten rounds of ammunition.1 In Heller II, the court concluded that semi-automatic rifles and magazines having a capacity of more than ten rounds are in "common use."' 15 6 However, it did not decide whether the prohibition of certain semiautomatic rifles and magazines "meaningfully affect the right to keep and bear arms.', 157 The majority stated, "We need not resolve that question, however, because even assuming they do impinge upon the right protected by the Second Amendment, we think intermediate scrutiny is the appropriate standard of review and the prohibitions survive that standard.' 58 Thus, the court upheld a total ban on the possession of commonly possessed firearms and magazines by law-abiding persons in pistols are their homes. 159 It even questioned whether semi-automatic 160 protected by the Supreme Court's Heller I decision.

147.

148.

149.

150.

151.

152.

153.

154.

155.

156.

157.

158.

159.

160.

ld.at 252-53.

Id.at 257.

Id. Id. at 260-61.

Id.at 260.

Id.at 269.

State v. Herrmann, 873 N.W.2d 257, 263 (Wis. Ct. App. 2015).

Heller v. District of Columbia (HellerI1), 670 F.3d 1244, 1267 (D.C. Cir. 2011).

Id.at 1249.

Id.at 1261.

Id. Id. Id.at 1247-48.

See id at 1267.

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The majority in Heller II confused point-of-sale record keeping requirements with the requirement that a pistol, in order to be lawfully possessed, must be registered to the possessor of the pistol with some governmental agency. 161 New York serves as an example for the latter. In New York, the pistol license contains a description of the license holder and a description of the pistol, such as "calibre, make, model, manufacturer's name and serial number.' ' 162 There is no evidence that pistol registration is longstanding. It is an outlier law that cannot serve as a justification for 163 rejecting a constitutional challenge.

The dissenting opinion in Heller II noted that the Supreme Court rejected Justice Breyer's form of intermediate scrutiny, but that the majority employed it to uphold the challenged law. 164 The dissent stated, "Hellerwas resolved in favor of categoricalism-with the categories defined by text, history, and tradition-and against balancing tests such as strict or intermediate scrutiny or reasonableness.' 65 The dissent also noted, No court of appeals decision since Heller has applied intermediate scrutiny to a ban on a class of arms that have not traditionally been banned and are in common use. A ban on a class of arms is not an "incidental" regulation. It is equivalent to a ban on a category of speech. Such restrictions on core enumerated constitutional protections are not subjected to mere intermediate scrutiny review.

The majority opinion here is in uncharted territory in suggesting that intermediate scrutiny can apply to an outright ban on possession of a 66 class of weapons that have not traditionally been banned. 1 Since Judge Kavanaugh's dissent in Heller 11, a number of courts have held that so-called assault weapons and magazines having a capacity in 67 excess often rounds of ammunition can be banned.

Heller v. District of Columbia (Heller I1, D.C. Cir., 2015) was the third Second Amendment challenge to a local law by Mr. Heller. The Heller III court employed a narrow interpretation of Heller I, with mixed results.' 68 The court applied the now familiar two-step analysis.1 69 After 161.

See id. at 1253-54.

162.

N.Y. PENAL LAW § 400.00(7) (McKinney 2008).

163.

Heller I, 670 F.3d at 1270-71 (Kavanaugh, J., dissenting).

164.

Id. at 1275-77.

165.

Id. at 1282.

166.

Id. at 1285 (first emphasis added).

167.

See, e.g., N.Y. State Rifle & Pistol Ass'n v. Cuomo, 804 F.3d 242, 269 (2d Cir. 2015); Friedman v. City of Highland Park, Ill., 784 F.3d 406, 407, 412 (7th Cir.), cert. denied, 136 S. Ct. 447 (2015); People v. Zondorak, 163 Cal. Rptr. 3d 491, 498 (Ct. App. 2013).

168.

Heller v. District of Columbia (Heller 11), 801 F.3d 264, 274 (D.C. Cir. 2015) (upholding Heller Ibut ruling some of the requirements unconstitutional based on the intermediate scrutiny test, which Heller I did not apply).

169.

Id. at 272.

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finding that the challenged laws implicated the Second Amendment, it then to determine which laws were infringements applied intermediate scrutiny 170 not. were laws which and The Heller I1 court upheld the basic registration requirement as applied to long guns, the requirement that a registrant be fingerprinted and photographed and make a personal appearance to register a firearm, the requirement that an individual pay certain fees associated with the registration of a firearm, and the requirement that registrants complete a firearms safety and training course. 171 However, the court voided the requirement that a person bring with him or her the firearm to be registered, the requirement that a gun owner re-register his firearm every three years, the requirement that conditions registration of a firearm upon passing a test of knowledge of the District's firearms laws, and the prohibition on registration of more than one pistol per registrant during any 30-day period.172 The Supreme Court in Heller I held that a purpose of the Second Amendment includes the ability to better resist tyranny and to prevent disarming of the people. 173 Intermediate scrutiny, applied to people who do not fall into a class that can presumptively be disarmed, such as the mentally ill, provides for incremental disarmament because the government has the low burden of merely demonstrating that the statute is substantially related to public safety and crime reduction. 7 4 Furthermore, registration of firearms greatly facilitates civilian disarmament.' 75

170. Id. at 274.

Id. at 274-75,278-79.

171.

172. Id. at 277-80.

District of Columbia v. Heller (Heller 1), 554 U.S. 570, 598-99 (2008).

173.

See Heller I1, 801 F.3d at 274, 286-87.

174.

Totalitarian states are obsessed with disarming designated public enemies. See 175. generally STEPHEN P. HALBROOK, GUN CONTROL iN THE THIRD REICH: DISARMING THE JEWS AND "ENEMIES OF THE STATE" (2013) (discussing how strict gun-control laws during the time of the Third Reich rendered Jews and political opponents practically defenseless). Disarmament by oppressors is well known. Bostonians surrendered 1,778 muskets, 634 pistols, and 38 blunderbusses to General Gage's forces. FROTHINGHAM, supra note 34, at 95. "Anybody posting a placard the Germans didn't like would be liable to immediate execution, and a similar penalty was provided for those who failed to tam in firearms or radio sets within twenty-four hours."

WILLIAM L. SHIRER, THE RISE AND FALL OF THE THIRD REICH: A HISTORY OF NAZI GERMANY 782 (1960). The Nazis seized Albert Einstein's bank account for a weapons violation: the possession of a common knife in his home. 1 JOHN TOLAND, ADOLF HITLER 310 (1976). "The repression continued with issuance of a series of harsh edicts[,] ... such as the one to surrender all arms immediately or be shot." Id. at 81. Hitler, however, during the early stages of his climb to power, got a pistol permit from the sympathetic police. Id. at 114. "Owning a pistol meant an obligatory conviction for terrorism." 1 ALEKSANDR I. SOLZHENITSYN, THE GULAG ARCHIPELAGO 195 (Thomas P. Whitney trans., 1974). The right to have firearms or other weapons is forbidden and self-defense is also curtailed. Id. at 431-32.

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An example of a court that takes a narrow interpretation of Heller by

confining the Second Amendment to the home is the Maryland Court of Appeals. Maryland forbids the carrying of a pistol without a license, whether openly or concealed, and the issuing of a license is strictly discretionary. 176 The court refused to extend Heller beyond the home. 17 7 It held, "If the Supreme Court, in this dicta, meant its holding to extend beyond home possession, it will need to say so more plainly. ' 1 78 The court

ignored decisions that say that inferior courts are bound by Supreme Court dicta. 179

Some courts have recognized an existing animus against the Second Amendment: The fact that courts may be reluctant to recognize the protection of the Second Amendment outside the home says more about the courts than the Second Amendment. Limiting this fundamental right to the home would be akin to limiting the protection of First Amendment8 freedom of speech to political speech or college 1 campuses. 0

Gun owners have been subjected to vicious stereotypes. 18' They are no different from other groups who petition the courts for the protection of their rights. It took two recent Supreme Court opinions to provide them with some protection.

Inferior courts should interpret the Second Amendment in a way that is supported by Heller I and McDonald, by history, and by modem technology. The Supreme Court excluded from Second Amendment

176.

See Woollard v. Gallagher, 712 F.3d 865, 869 (4th Cir. 2013).

177.

See Heller 1, 554 U.S. at 635; Williams v. State, 10 A.3d 1167, 1177 (Md. 2011).

178.

Williams, 10 A.3d at 1177.

179.

Peterson v. Martinez, 707 F.3d 1197, 1210 (10th Cir. 2013).

180.

United States v. Weaver, No. 2:09-cr-00222, 2012 U.S. Dist. LEXIS 29613, at *14 n.7 (S.D. W. Va. Mar. 7, 2012).

181.

Subjecting law-abiding gun owners to vicious stereotypes is nothing new, and commentators have condemned it. See Anthony J. Dennis, Clearing the Smoke from the Right to Bear Arms and the Second Amendment, 29 AKRON L. REV. 57, 63-64 (1995); Nicholas J. Johnson, Beyond the Second Amendment: An Individual Right to Arms Viewed Through the Ninth Amendment, 24 RUTGERS L.J. 1, 72-73 & n.227 (1992); Douglas Laycock, Vicious Stereotypes in Polite Society, 8 CONST. COMMENT. 395, 397-98 (1991); L.A. Powe, Jr., Guns, Words, and ConstitutionalInterpretation, 38 WM. & MARY L. REv. 1311, 1376-77 (1997); see also David Babat, Senior Honors Project, The Discriminatory History of Gun Control, UNIV. R.I. (2009), http://digitalcommons.uri.edu/cgi/viewcontent.cgi?article=1 142&context-srhonorsprog.

Former N.Y. City Mayor Michael Bloomberg claimed that "95 percent of murders fall into a specific category: a male minority between the ages of 15 and 25." Jessica Chasmar, Michael Bloomberg Suggests Disarming Minorities to 'Keep Them Alive', WASH. TIMEs (Feb. 8, 2015), http://www.washingtontimes.com/news/201 5/feb/8/sughed-michael-bloomberg-suggestsdisarming-minori. He said, "Cities need to get guns out of this group's hands and keep them alive ..

d.

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protection machine guns, shotguns with a barrel length under eighteen inches, and dangerous and unusual weapons. 182 Furthermore, it held that 183 arms technology is not limited to that of the 18th century. Therefore, there should be a strong presumption that all arms that are not specifically excluded from the protection of the Second Amendment are constitutionally to it an protected. Thus, an arm could not be banned by simply applying weapon. 1 84 "assault as such label misleading and emotionally-laden Strict scrutiny should be applied to any law that implicates the Second Amendment and involves its core right, that is, possession of arms in the home by law-abiding people. This would prevent the common practice of simply applying intermediate scrutiny to any law that implicates the Second Amendment.

Obergefell requires every state to recognize a same-sex civil marriage 185 Since the Second lawfully licensed and performed in another state.

Amendment is an enumerated and affirmative right that applies to the entire nation, this principle of law from Obergefell should apply to firearm licenses or permits from a sister state. This would avoid severe injustices.

Two examples will be given. In one, a young woman with a Pennsylvania pistol carrying license was arrested in New Jersey following a minor traffic 87 infraction.1 86 New Jersey does not recognize an out-of-state license.' She was facing a felony charge and a mandatory term of imprisonment, but the 88 governor of New Jersey pardoned her after a nationwide outcry. In the other case, a Marine veteran, a double amputee in a wheel chair, came for 89 treatment at Walter Reed Army Medical Center in Washington, D.C. 1 He had an Ohio license to carry a pistol. 190 His pistol was discovered after his 1 91 The District of car had a flat tire and was taken to a repair shop.

HellerI, 554 U.S. at 627, 637, 720.

182.

Id.at 582.

183.

See id at 713.

184.

Obergefell v. Hodges, 135 S. Ct. 2584, 2607-08 (2015).

185.

Claude Brodesser-Akner, Gov. Christie Grants Pardon to Pistol-PackingPa. Mother 186.

PM), 2:53 2015, 2, (Apr. NJ.COM Allen, Shaneen http://www.nj.com/politics/index.ssf/2015/04/gov-christiegrantspardon topistolpackingpamo.html.

187. See id.

188. Id; see also Claude Brodesser-Akner, Christie Pardons Three of N.J. Gun Charges, AM), 8:17 2015, 1, (Oct. NJ.COM http://www.nj.com/politics/index.ssf/2015/10/christiepardons-threeof njguncharges.html.

189. Keith L. Alexander, Marine Amputee Acquitted on Gun Possession Charges, WASH. http://www.washingtonpost.com/wp2009), 14, (Jan. POST dyn/content/article/2009/01/13/AR2009011302840.html.

190. Id. Id. 191.

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Columbia does not recognize an out-of-state license.1 92 He was charged with having an unregistered pistol, possessing ammunition for an unregistered pistol, and carrying a pistol without a license.1 93 The last 195 charge is a five-year felony.1 94 A jury acquitted him on the felony charge.

It remains to be seen whether the Second Amendment will be treated in the future as an ordinary constitutional right or as the greatly weakened private property taking clause of the Fifth Amendment 196 or the occasionally enforced Tenth Amendment.1 97 VI. CONCLUSION

Constitutional guarantees to protect personal liberty are to be liberally construed. 198 The decision in Heller was based on the text of an enumerated and affirmative right, and that text is supported by long history and tradition. Obergefell, on the other hand, was decided based on substantive due process and on recent cultural changes. The Second Amendment is an affirmative right that is deeply rooted in this nation's history and tradition.

Heller and McDonald teach that the Court will not pronounce an enumerated freedom extinct. In our system of government, the constitution reigns and not the predilection of judges or of members of the legislative and executive branches.

192.

Id. 193.

Id 194.

See id.

195.

Id. 196.

See generally Kelo v. City of New London, 545 U.S. 469 (2005).

197.

See, e.g., Shelby Cnty., Ala. v. Holder, 133 S. Ct. 2612, 2623-24 (2013); Bond v.

United States, 131 S.Ct. 2355 (2011); Printz v. United States, 521 U.S. 898, 918-19 (1997).

198.

Boyd v. United States, 116 U.S. 616, 635 (1886) ("[C]onstitutional provisions for the security of person and property should be liberally construed.").

Constitutional rights thus implicitly protect those closely related acts necessary to their exercise. "There comes a point . . . at which the regulation of action intimately and unavoidably connected with [a right] is a regulation of [the right] itself." The right to keep and bear arms, for example, "implies a corresponding right to obtain the bullets necessary to use them," and "to acquire and maintain proficiency in their use." Without protection for these closely related rights, the Second Amendment would be toothless. Likewise, the First Amendment "right to speak would be largely ineffective if it did not include the right to engage in financial transactions that are the incidents of its exercise."

Luis v. United States, No. 14-149, 2016 WL 1228690, at *15 (Mar. 30, 2016) (Thomas, J., concurring) (citations omitted).

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239

The Court cannot throw out Heller without throwing out Obergefell. If Obergefell stays at the party, so does Heller. It is a marriage pronounced by the Supreme Court.

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APPENDIX STATE CONSTITUTIONAL GUARANTEES TO ARMS

Alabama: (a) Every citizen has a fundamental right to bear arms in defense of himself or herself and the state. Any restriction on this right shall be subject to strict scrutiny. (b) No citizen shall be compelled by any international treaty or international law to take an action that prohibits, limits, or otherwise interferes with his or her fundamental right to keep and bear arms in defense of himself or herself and the state, if such treaty or law, or its adoption, violates the United States Constitution. ALA. CONST. art. I, § 26 (West, Westlaw through Dec. 1, 2014 amendments).

Alaska: A well-regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.

The individual right to keep and bear arms shall not be denied or infringed by the State or a political subdivision of the State. ALASKA CONST. art. I, § 19.

Arizona: The right of the individual citizen to bear arms in defense of himself or the state shall not be impaired, but nothing in this section shall be construed as authorizing individuals or corporations to organize, maintain, or employ an armed body of men. ARIz. CONST. art. II, § 26.

Arkansas. The citizens of this State shall have the right to keep and bear arms, for their common defense. ARK. CONST. art. HI, § 5.

California:No provision.

Colorado: The right of no person to keep and bear arms in defense of his home, person and property, or in aid of the civil power when thereto legally summoned, shall be called in question; but nothing herein contained shall be construed to justify the practice of carrying concealed weapons. COLO. CONST. art. II, § 13.

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Connecticut: Every citizen has a right to bear arms in defense of himself and the state. CONN. CONST. art. I, § 15.

Delaware:A person has the right to keep and bear arms for the defense of self, family, home and State, and for hunting and recreational use. DEL. CONST. art. I, § 20.

Florida:(a) The right of the people to keep and bear arms in defense of themselves and of the lawful authority of the state shall not be infringed, except that the manner of bearing arms may be regulated by law. (b) There shall be a mandatory period of three days, excluding weekends and legal holidays, between the purchase and delivery at retail of any handgun. For the purposes of this section, "purchase" means the transfer of money or other valuable consideration to the retailer, and "handgun" means a firearm capable of being carried and used by one hand, such as a pistol or revolver. Holders of a concealed weapon permit as prescribed in Florida law shall not be subject to the provisions of this paragraph. (c) The legislature shall enact legislation implementing subsection (b) of this section, effective no later than December 31, 1991, which shall provide that anyone violating the provisions of subsection (b) shall be guilty of a felony. (d) This restriction shall not apply to a trade in of another handgun. FLA. CONST. art. I, § 8.

Georgia: The right of the people to keep and bear arms shall not be infringed, but the General Assembly shall have power to prescribe the manner in which arms may be borne. GA. CONST. art. I, § 1, VI. Hawaii: A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed. HAW. CONST. art. I, § 17.

Idaho: The people have the right to keep and bear arms, which right shall not be abridged; but this provision shall not prevent the passage of laws to govern the carrying of weapons concealed on the person nor prevent passage of legislation providing minimum sentences for crimes committed while in possession of a firearm, nor prevent the passage of legislation providing penalties for the possession of firearms by a convicted felon, nor

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prevent the passage of any legislation punishing the use of a firearm. No law shall impose licensure, registration or special taxation on the ownership or possession of firearms or ammunition. Nor shall any law permit the confiscation of firearms, except those actually used in the commission of a felony. IDAHO CONST. art. I, § 11.

Illinois: Subject only to the police power, the right of the individual citizen to keep and bear arms shall not be infringed. ILL. CONST. art. I, § 22.

Indiana: The people shall have a right to bear arms, for the defense of themselves and the State. IND. CONST. art. 1, § 32.

Iowa: No provision.

Kansas: The people have the right to bear arms for their defense and security; but standing armies, in time of peace, are dangerous to liberty, and shall not be tolerated, and the military shall be in strict subordination to the civil power. KAN. CONST. b. rts., § 4.

Kentucky: All men are, by nature, free and equal, and have certain inherent and inalienable rights, among which may be reckoned: First: The right of enjoying and defending their lives and liberties....

Seventh: The right to bear arms in defense of themselves and of the State, subject to the power of the General Assembly to enact laws to prevent persons from carrying concealed weapons. KY. CONST. b. rts., § 1.

Louisiana:The right of each citizen to keep and bear arms is fundamental and shall not be infringed. Any restriction on this right shall be subject to strict scrutiny. LA. CONST. art. I, § 11.

Maine: Every citizen has a right to keep and bear arms for the common defense; and this right shall never be questioned. ME. CONST. art. I, § 16.

Maryland: No provision.

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Massachusetts: The people have a right to keep and to bear arms for the common defence. And as, in time of peace, armies are dangerous to liberty, they ought not to be maintained without the consent of the legislature; and the military power shall always be held in an exact subordination to the civil authority, and be governed by it. MASS. CONST. pt. I, art. XVII.

Michigan: Every person has a right to keep and bear arms for the defense of himself and the state. MICH. CONST. art. I, § 6.

Minnesota: No provision.

Mississippi: The right of every citizen to keep and bear arms in defense of his home, person, or property, or in aid of the civil power when thereto legally summoned, shall not be called in question, but the legislature may regulate or forbid carrying concealed weapons. MISS. CONST. art. III, § 12.

Missouri: That the right of every citizen to keep and bear arms, ammunition, and accessories typical to the normal function of such arms, in defense of his home, person, family and property, or when lawfully summoned in aid of the civil power, shall not be questioned. The rights guaranteed by this section shall be unalienable. Any restriction on these rights shall be subject to strict scrutiny and the state of Missouri shall be obligated to uphold these rights and shall under no circumstances decline to protect against their infringement. Nothing in this section shall be construed to prevent the general assembly from enacting general laws which limit the right of convicted violent felons or those adjudicated by a court to be a danger to self or others as result of a mental disorder or mental infirmity.

MO. CONST. art. I, § 23.

Montana: The right of any person to keep or bear arms in defense of his own home, person, and property, or in aid of the civil power when thereto legally summoned, shall not be called in question, but nothing herein contained shall be held to permit the carrying of concealed weapons. MONT. CONST. art. II, § 12.

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Nebraska: All persons are by nature free and independent, and have certain inherent and inalienable rights; among these are life, liberty, the pursuit of happiness, and the right to keep and bear arms for security or defense of self, family, home, and others, and for lawful common defense, hunting, recreational use, and all other lawful purposes, and such rights shall not be denied or infringed by the state or any subdivision thereof. To secure these rights, and the protection of property, governments are instituted among people, deriving their just powers from the consent of the governed. NEB. CONST. art. I, § 1.

Nevada: Every citizen has the right to keep and bear arms for security and defense, for lawful hunting and recreational use and for other lawful purposes. NEV. CONST. art. I, § 11(1).

New Hampshire: All persons have the right to keep and bear arms in defense of themselves, their families, their property and the state. N.H. CONST. pt. 1, art. 2-a.

New Jersey: No provision.

New Mexico: No law shall abridge the right of the citizen to keep and bear arms for security and defense, for lawful hunting and recreational use and for other lawful purposes, but nothing herein shall be held to permit the carrying of concealed weapons. No municipality or county shall regulate, in any way, an incident of the right to keep and bear arms. N.M. CONST. art. H,

§ 6.

New York. No provision.

North Carolina:A well regulated militia being necessary to the security of a free State, the right of the people to keep and bear arms shall not be infringed; and, as standing armies in time of peace are dangerous to liberty, they shall not be maintained, and the military shall be kept under strict subordination to, and governed by, the civil power. Nothing herein shall

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justify the practice of carrying concealed weapons, or prevent the General Assembly from enacting penal statutes against that practice. N.C. CONST. art. I, § 30.

North Dakota: All individuals are by nature equally free and independent and have certain inalienable rights, among which are those of enjoying and defending life and liberty; acquiring, possessing and protecting property and reputation; pursuing and obtaining safety and happiness; and to keep and bear arms for the defense of their person, family, property, and the state, and for lawful hunting, recreational, and other lawful purposes, which shall not be infringed. N.D. CONST. art. I, § 1.

Ohio: The people have the right to bear arms for their defense and security; but standing armies, in time of peace, are dangerous to liberty, and shall not be kept up; and the military shall be in strict subordination to the civil power. OHIO CONST. art. I,

§ 4.

Oklahoma: The right of a citizen to keep and bear arms in defense of his home, person, or property, or in aid of the civil power, when thereunto legally summoned, shall never be prohibited; but nothing herein contained shall prevent the Legislature from regulating the carrying of weapons. OKLA. CONST. art. II, § 26.

Oregon: The people shall have the right to bear arms for the defence of themselves, and the State, but the Military shall be kept in strict subordination to the civil power[.] OR. CONST. art. I, § 27.

Pennsylvania:The right of the citizens to bear arms in defence of themselves and the State shall not be questioned. PA. CONST. art. I,

§ 21.

Rhode Island: The right of the people to keep and bear arms shall not be infringed. R.I. CONST. art. I, § 22.

South Carolina:A well regulated militia being necessary to the security of a free State, the right of the people to keep and bear arms shall not be

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infringed. As, in times of peace, armies are dangerous to liberty, they shall not be maintained without the consent of the General Assembly. The military power of the State shall always be held in subordination to the civil authority and be governed by it. S.C. CONST. art. I, § 20.

South Dakota: The right of the citizens to bear arms in defense of themselves and the state shall not be denied. S.D. CONST. art. VI, § 24.

Tennessee: That the citizens of this State have a right to keep and to bear arms for their common defense; but the Legislature shall have power, by law, to regulate the wearing of arms with a view to prevent crime. TENN. CONST. art. I, § 26.

Texas: Every citizen shall have the right to keep and bear arms in the lawful defense of himself or the State; but the Legislature shall have power, by law, to regulate the wearing of arms, with a view to prevent crime. TEX. CONST. art. I, § 23.

Utah: The individual right of the people to keep and bear arms for security and defense of self, family, others, property, or the state, as well as for other lawful purposes shall not be infringed; but nothing herein shall prevent the legislature from defining the lawful use of arms. UTAH CONST. art. I, § 6.

Vermont: That the people have a right to bear arms for the defence of themselves and the State-and as standing armies in time of peace are dangerous to liberty, they ought not to be kept up; and that the military should be kept under strict subordination to and governed by the civil power. VT. CONST. ch. I, art. 16.

Virginia: That a well regulated militia, composed of the body of the people, trained to arms, is the proper, natural, and safe defense of a free state, therefore, the right of the people to keep and bear arms shall not be infringed; that standing armies, in time of peace, should be avoided as dangerous to liberty; and that in all cases the military should be under strict subordination to, and governed by, the civil power. VA. CONST. art. I, § 13.

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Washington: The right of the individual citizen to bear arms in defense of himself, or the state, shall not be impaired, but nothing in this section shall be construed as authorizing individuals or corporations to organize, maintain or employ an armed body of men. WASH. CONST. art. I, § 24.

West Virginia: A person has the right to keep and bear arms for the defense of self, family, home and state, and for lawful hunting and recreational use. W. VA. CONST. art. III, § 22.

Wisconsin: The people have the right to keep and bear arms for security, defense, hunting, recreation or any other lawful purpose. WIS. CONST. art. I, § 25.

Wyoming: The right of citizens to bear arms in defense of themselves and of the state shall not be denied. WYO. CONST. art. I, § 24.

EQUITABLE ESTOPPEL IN THE CONTEXT OF CLAIMS FOR TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS: HAS THE TEXAS SUPREME COURT

GONE Too FAR? CLAYTON A. MORTON

& TYLER G. DOYLE

249 IN TRODU CTION ...........................................

252 ORIGINS OF THE DOCTRINE OF EQUITABLE ESTOPPEL ..................

252 A. Grigson v. CreativeArtists Agency, L.L.C. ..........................

256 B. MS Dealer Service Corp. v. Franklin .............................

259 C. Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc ...................

261 EQUITABLE ESTOPPEL IN TEXAS .......................................

262 A. In re V esta Group, Inc .......................................

265 B. Meyer v. WM CO-GP,L.L.C. ...................................

267 C. In re M errill Lynch Trust Co ...................................

268 EQUITABLE ESTOPPEL IN THE SECOND CIRCUIT ............................

A. Non-signatoryAttempts to Enforce an Arbitration Clause 269 Against a Signatory.........................................

B. Signatory Attempts to Enforce an Arbitration Clause 271 A gainst a Non-signatory .....................................

272 ANALYSIS AND RECOMMENDATION ........................................

277 C ON CLU SION ..........................................................

I.

II.

III.

IV.

V. VI.

I.

INTRODUCTION

The United States Supreme Court has emphasized that, under the Federal Arbitration Act (the FAA), arbitration "is a matter of consent, not coercion,"' the FAA "does not require parties to arbitrate when they have not agreed to do so, '' 2 and its purpose is "to make arbitration agreements as '3 enforceable as other contracts, but not more so." Texas courts, however,

1.

2.

3.

Volt Info. Scis., Inc. v. Bd. of Trs., 489 U.S. 468, 479 (1989).

EEOC v. Waffle House, Inc., 534 U.S. 279, 293 (2002) (quoting Volt, 489 U.S. at 478).

Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395,404 n. 12 (1967).

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have disregarded these strictures through the doctrine of equitable estoppel.4 Generally speaking, Texas courts use the doctrine of equitable estoppel to compel arbitration of any dispute in which a plaintiff seeks to derive a "direct benefit" from a contract containing an arbitration clause, regardless of whether the parties to the dispute agreed to arbitrate with each other.5 The equitable foundation of the direct-benefits test stems from the idea that a party should not seek to hold the non-signatory liable under duties imposed by a contract that contains an arbitration clause, while simultaneously denying applicability of the arbitration clause because the defendant is a non-signatory. 6 Ostensibly, this foundation appears to be sound, but it crumbles when courts attempt to apply it to claims for tortious interference with contractual relations-the intersection of tort law and contract law.

In the context of a claim of tortious interference, the direct-benefits test undermines the purpose of the FAA by making arbitration clauses more enforceable than ordinary contractual provisions, which require the mutual assent of at least two parties.7 Additionally, the failure of the direct-benefits test to account for any expressed or implied agreement of the parties to arbitrate leads to inequitable results. For example, a plaintiff who files a claim for tortious interference is always seeking a direct benefit from a contract, and in many cases, the plaintiff cannot be said to have agreed (expressly or impliedly) to arbitrate any disputes with the tortfeasor, who, from the plaintiffs perspective, may be a complete stranger. Allowing a tortfeasor to enforce an arbitration clause merely because a plaintiff attempts to secure the benefits of a contract through a tortious interference claim is not equity, and it contravenes the traditional equitable principals adopted by Texas courts.

Under the doctrine of promissory estoppel, equity will only estop a party from avoiding an agreement that lacks the formalities of a contract when there is: "(1) a promise, (2) foreseeability of reliance thereon by the promisor, and (3) substantial reliance by the promisee to [its] detriment. ''8 Similarly, the test for equitable estoppel applied outside the context of arbitration requires: 4.

G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 524 (Tex. 2015) ("We have recognized, however, that in some circumstances a non-signatory can be bound to, or permitted to enforce, an arbitration agreement.").

5.

Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 305 & nn. 10-12 (Tex. 2006) (citing cases where non-signatories have compelled and been compelled to arbitrate disputes with signatories based on the direct benefits test).

6.

See G.T Leach Builders, 458 S.W.3d at 527.

7.

See Prima Paint,388 U.S. at 404 n. 12.

8.

English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983) (citing Aubrey v. Workman, 384 S.W.2d 389, 393 (Tex. Civ. App.-Fort Worth 1964, writ refd n.r.e.).

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(1) [A] false representation or concealment of material facts; (2) made with knowledge, actual or constructive, of those facts; (3) with the intention that it should be acted on; (4) to a party without [and] knowledge or means of obtaining knowledge of the facts; 9 misrepresentation. the (5) who detrimentally relie[d] on Inherent in both the test for promissory estoppel and equitable estoppel is the implied element of consent of all parties to be bound to an agreement 10 that lacks the formalities of a traditional contract. Despite the usual importance of consent in contract law" and the United States Supreme Court's statements regarding the importance of consent in the context of arbitration clauses,1 2 Texas has adopted a test for equitable estoppel in the context of arbitration that (1) ignores the traditional equitable doctrines used to enforce implied agreements, and (2) forces parties to arbitrate in circumstances where there is no express or implied agreement to arbitrate."

To remedy this problem, eliminate uncertainty from this area of law, and restore arbitration agreements to their rightful place of equality among all other contractual provisions, Texas courts should consider adopting a more doctrine of equitable estoppel that incorporates an stringent test for the 14 consent. of element Part II of this Article discusses the origins of the modem doctrine of equitable estoppel in Texas, focusing specifically on a series of cases that the Texas Supreme Court has used to support its direct-benefits test. Part III examines the Texas Supreme Court cases that have addressed the doctrine of equitable estoppel in the context of arbitration, particularly the inconsistencies in the recent case law. Part IV discusses the doctrine of Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 515-16 9.

(Tex. 1998) (citing Schroeder v. Tex. Iron Works, Inc., 813 S.W.2d 483, 489 (Tex. 1991), overruled by In re United Servs. Auto. Ass'n, 307 S.W.3d 299 (Tex. 2010)).

Compare English, 660 S.W.2d at 524 (providing the elements of promissory estoppel), 10. with Kenneco Energy, 962 S.W.2d at 515-16 (providing the elements of equitable estoppel).

Parker Drilling Co. v. Romfor Supply Co., 316 S.W.3d 68, 72 (Tex. App.-Houston 11.

[14th Dist.] 2010, pet. denied)) ("A legally enforceable contract consists of (1) an offer, (2) acceptance in strict compliance with the terms of the offer, (3) a meeting of the minds, (4) each party's consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding.").

EEOC v. Waffle House, Inc., 534 U.S. 279, 293-94 (2002); Volt Info. Scis., Inc. v. Bd. 12.

U.S. 468, 479 (1989).

489 Trs., of See discussion infra Part Ill. 13.

See J. Douglas Uloth & J. Hamilton Rial, ml, Equitable Estoppel As a Basis for 14.

Compelling Nonsignatories to Arbitrate-A Bridge Too Far?, 21 REv. LITIG. 593, 632 (2002) ("At this point, the expanded two-pronged intertwined claims equitable estoppel doctrine is poised to overwhelm the original fundamental premise that a party cannot be compelled to arbitrate a matter without its agreement. Thus, courts should return to an emphasis on the relationship of both the party seeking arbitration and of the rights in issue in the litigation to the obligations created by the contract.").

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equitable estoppel in the Second Circuit, which has adopted a bifurcated test for equitable estoppel that incorporates the traditional equitable doctrines used to enforce implied agreements and an element of implied "consent" to arbitrate that is missing in the Texas test. Finally, Part V contains an analysis of the respective tests for the doctrine of equitable estoppel in Texas and the Second Circuit, as well as a recommendation that the Texas Supreme Court adopt a test for equitable estoppel that incorporates the essential elements of the Second Circuit test.

II.

A.

ORIGINS OF THE DOCTRINE OF EQUITABLE ESTOPPEL

Grigson v. Creative Artists Agency, L.L.C.

Texas jurisprudence governing the doctrine of equitable estoppel emanates from the Fifth Circuit's decision in Grigson v. Creative Artists Agency, L.L.C. i5 In Grigson, the plaintiffs, Charles Grigson, River City Films, Inc., and Ultra Muchos, Inc. (the Plaintiffs)-the trustee and owners of the movie, "Return of the Texas Chain Saw Massacre," which was filmed in 1993-94 and starred "then obscure actors Matthew McConaughey and Renee Zellweger"-entered into a distribution agreement with Columbia TriStar Home Video, Inc. (TriStar). 16 The distribution agreement

contained an arbitration clause, and it gave TriStar the distribution rights to the movie and complete discretion with regard to how to exercise them. 17 Soon after the movie wrapped, McConaughey entered into an agency agreement with Creative Artists Agency, L.L.C. (CAA).18 In an effort to capitalize on the success of Zellweger and McConaughey in subsequent movies, TriStar delayed the distribution of the movie, but ultimately released the movie in a limited distribution. 19 Plaintiffs sued McConaughey and CAA in late 1997 for tortious interference with the distribution agreement, alleging that McConaughey and CAA "pressured TriStar to limit the release because they viewed it as an improper exploitation of McConaughey's success post-acting in the movie."2 ° McConaughey and CAA, "although non-signatories to [Plaintiffs'] distribution agreement [with TriStar], moved to compel arbitration under the agreement" based upon the doctrine of equitable estoppel.2'

15.

16.

17.

Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524 (5th Cir. 2000).

Id.at 525-26.

Id.at 526.

18.

19.

Id. Id.

20.

21.

Id. Id.

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EQUITABLE ESTOPPEL

To determine whether Plaintiffs should be compelled to arbitrate their claims against McConaughey and CAA, the Fifth Circuit adopted the test for equitable estoppel that the Eleventh Circuit articulated in MS Dealer Service Corp. v. Franklin:22 Existing case law demonstrates that equitable estoppel allows a nonsignatory to compel arbitration in two different circumstances.

First, equitable estoppel applies when the signatory to a written agreement containing an arbitration clause must rely on the terms of the written agreement in asserting its claims against the nonsignatory. When each of a signatory's claims against a nonsignatory makes reference to or presumes the existence of the written agreement, the signatory's claims arise out of and relate directly to the written agreement, and arbitration is appropriate.

Second, application of equitable estoppel is warranted when the signatory to the contract containing an arbitration clause raises allegations of substantially interdependent and concerted misconduct by both the nonsignatory and one or more of the signatories to the contract. Otherwise the arbitration proceedings between the two signatories would be rendered meaningless23 and the federal policy in favor of arbitration effectively thwarted.

Ultimately, the Fifth Circuit held that the doctrine of equitable estoppel required Plaintiffs to arbitrate their claims against McConaughey and CAA because the facts of the case satisfied the two independent bases the 24 Eleventh Circuit advanced. The court held: [A]lthough arbitration is a matter of contract and cannot, in general, be required for a matter involving an arbitration agreement non-signatory, a signatory to that agreement cannot, in those instances described in MS Dealer Serv. Corp., "have it both ways": it cannot, on the one hand, seek to hold the non-signatory liable pursuant to duties imposed by the agreement, which contains an arbitration provision, but, on the other hand, deny applicability because the defendant is a nonarbitration's 25 signatory.

The court also noted that refusing to compel arbitration would be especially inequitable because Plaintiffs had alleged that McConaughey, CAA, and 26 TriStar engaged in concerted misconduct. Despite TriStar's (a signatory)

22. Id. at 527.

Id. (quoting MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 947 (11th Cir. 1999) 23. (citations omitted)).

24. Id. at 527-28.

Id. at 528 (citing MS Dealer, 177 F.3d at 947; Hughes Masonry Co. v. Greater Clark 25.

Cnty. Sch. Bldg. Corp., 659 F.2d 836, 838-39 (7th Cir. 1981)).

26. Id.

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misconduct, Plaintiffs were attempting to avoid the arbitration agreement by suing only non-signatories (McConaughey and CAA).27 Judge Dennis authored a lengthy and well-reasoned dissent to the majority opinion, noting that the majority's decision was not based on the traditional doctrine of estoppel, but a bastardized attempt by the Eleventh Circuit in MS Dealer to articulate "some abstract equitable estoppel explanatory principles" that were never intended to be "applied as freestanding rules of law.",28 Judge Dennis argued that claimants, who are not parties to a contract containing an arbitration clause, cannot compel arbitration, and only parties to a contract containing an arbitration clause are bound to arbitrate.2 9 While "[t]he federal policy favoring arbitration is strong,... it alone cannot authorize a non-party to invoke arbitration or require a non-signatory to arbitrate. '' 30 Application of ordinary state-law principles of agency or contract may, nevertheless, bind or afford rights under an arbitration agreement to a non-signatory.3 1 Judge Dennis acknowledged that several theories stemming from common law principles of agency and contract have been recognized by courts as a way of binding non-signatories to the arbitration agreements of others.32 Judge Dennis noted: In theory, under ordinary state-law principles of equitable and promissory estoppel, a non-party to a contract containing an arbitration clause may invoke the clause and compel a signatory party to arbitrate when the signatory reasonably should have expected that, because of his statements or conduct, the nonsignatory would be induced to rely justifiably on the contract and would be injured thereby if the signatory refused to recognize the non-signatory's rights or entitlements with respect to the contract.3 3 However, Judge Dennis went on to recognize: [T]here have been few, if any, cases in which a non-signatory has successfully invoked an arbitration clause against a party signatory to the contract under ordinary equitable or promissory estoppel principles. In a relatively few arbitration cases, a nonsignatory to the arbitration agreement has been allowed to compel 27.

28.

29.

Id. Id. at 536 (Dennis, J., dissenting).

Id. at 532.

30.

Id.

31.

Id. 32.

Id. These theories include: "(1) [Ilncorporation by reference; (2) assumption by conduct; (3) agency; (4) veil-piercing/alter ego; and (5) estoppel." Id. (citing cases recognizing the

various theories).

33.

Id.

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EQUITABLE ESTOPPEL

arbitration under a spurious estoppel theory when the peculiar integrated or interlocking circumstances of the parties' assigned contractually contracts, related relationships, responsibilities, conduct, and disputes would allow the inference that the signatory and non-signatory parties have by an agreement by the arbitration implied in fact become bound reciprocally 34 clause or the contract of which it is a part.

After examining these cases, Judge Dennis found that the "facts and reasoning upon which the courts in those cases ordered a signatory to an arbitration agreement to arbitrate a dispute with a non-signatory [had] the earmarks of a foundation for an agreement implied in fact rather than an ordinary equitable or promissory estoppel.,, 35 Even in MS Dealer Service Corp. v. Franklin, [t]he Eleventh Circuit concluded that Franklin was compelled to arbitrate her dispute with MS Dealer only after pointing out facts indicating that both parties had actually manifested their mutual assent to a bargain in which they exchanged promises of performances with each other and with Jim Burke Motors; that the buyer's order incorporating the arbitration clause and the retail installment contract, which incorporated the service contract with MS Dealer, were all parts of the bargain of which Franklin, MS Dealer, and Burke were aware or should have been aware before they entered the agreement; and that, if MS Dealer was a coconspirator with Burke in defrauding Franklin as she alleged, her claim against MS Dealer was part of her dispute with Burke, with whom she was a co-signatory of the arbitration agreement.36 Judge Dennis averred that the Plaintiffs should not have been compelled to arbitrate their tortious interference claim against CAA and McConaughey because no express or implied agreement to arbitrate that dispute existed between the parties, and, further, the evidence did not establish any of the requisites of the Texas three-prong test for promissory estoppel-(l) a promise, (2) foreseeability of reliance by the promisor, and (3) substantial reliance by the promisee to its detriment-or of section 90 of the Restatement (Second) of Contracts.37 Judge Dennis concluded that "the majority erroneously attempt[ed] to follow MS Dealer and compound[ed] its error by mistaking MS Dealer's highly abstract explanatory 'equitable estoppel' principles for the Eleventh Circuit's complete [rationale, and] [c]onsequently, the majority overlook[ed] the importance of the material 34.

35.

36.

Id. at 532-33.

Id. at 533.

Id. at 536 (citing MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 947-49 (1 lth Cir.

1999)).

37.

Id. at 538.

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facts upon which the MS Dealer decision [was] actually based. 3 8 "[B]y disregarding the important material facts underlying MS Dealer, and by adopting and applying only that decision's skeletal explanatory theory," Judge Dennis asserted that the majority "unleash[ed] an indeterminate precedent capable in its application of sweeping countless parties' disputes into arbitration without even a semblance of their agreement under ordinary state-law principles of contracts, agency or equitable estoppel."3 9 As discussed below, in the years succeeding the Grigson opinion, this assertion has proved to be acutely prescient. Judge Dennis's critique of the majority's opinion succinctly articulated not only the flaws inherent in the majority's rationale, but also the key equitable principles that the doctrine of equitable estoppel must incorporate if it truly is to be considered equitable.

B.

MS Dealer Service Corp. v. Franklin

In MS Dealer Service Corp. v. Franklin, Sharon Franklin (Franklin) agreed to purchase a vehicle from Jim Burke Motors, Inc. (Jim Burke) by executing a "Buyers Order. ' 4° A "Retail Installment Contract"--charging Franklin $990.00 for a service contract with MS Dealer-was incorporated by reference into the Buyers Order. 4 The Buyers Order also contained an arbitration clause that required the signatories to arbitrate any and all disputes that arose out of or in connection with the Buyers Order.42 Neither the Buyers Order nor the Retail Installment Contract was signed by MS Dealer.43 After Franklin took possession of the vehicle and discovered that it contained a number of defects, Franklin brought an action against Jim Burke, MS Dealer, and Chrysler Credit Corporation (the assignee of the Retail Installment Contract). 44 The suit asserted claims for breach of contract, breach of warranty, fraud, and conspiracy.45 "All of [Franklin's] claims against MS Dealer [arose] out of the $990.00 charge identified in the Retail Installment Contract for the service contract." 4 MS Dealer moved to compel arbitration based on the arbitration clause in the Buyers Order, but

38.

39.

40.

41.

42.

43.

Id. at 539.

Id. MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 944 (11 th Cir. 1999).

Id. Id.

Id.

Id.

44.

45.

Id.at 944-45.

46.

Id.at 945 (emphasis added).

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the district court denied the request because MS Dealer was not a signatory to the Buyers Order.47 MS Dealer appealed the case to the Eleventh Circuit, which reversed the district court and compelled arbitration under the doctrine of equitable estoppel. 4 8 The court began its opinion by noting that "[a]lthough arbitration is a contractual right that is generally predicated on an express decision to waive the right to trial in a judicial forum, this court has held that the lack of a written arbitration agreement is not an impediment to arbitration. 'A9 The court then articulated three exceptions that allow nonsignatories to a contract to compel arbitration: (1) equitable50 estoppel, (2) agency or related principles, and (3) third-party beneficiaries.

[E]quitable estoppel allows a nonsignatory to compel arbitration in two different circumstances. First, equitable estoppel applies when the signatory to a written agreement containing an arbitration clause "must rely on the terms of the written agreement in asserting [its] claims against the non-signatory.". . . Second, "application of equitable estoppel is warranted when the signatory [to the contract containing the arbitration clause] raises allegations of... substantially interdependent and concerted misconduct by both the nonsignatory and one or more of the signatories to the contract. 51 The second exception-agency or related principles-requires a compulsory arbitration where "the relationship between the signatory and nonsignatory defendants is sufficiently close that only by permitting the nonsignatory to invoke arbitration may evisceration of the underlying arbitration agreement between the signatories be avoided. 5 2 The final exception, which addresses situations involving third-party beneficiaries, occurs "when the parties to a contract together agree, upon formation of their agreement, to confer certain benefits thereunder upon a third party, contract. 53 affording that third party rights of action against them under the The court compelled arbitration under both prongs of the test for equitable estoppel, reasoning that Franklin's claims against Jim Burke and MS Dealer were inseparable and based upon the same facts.54 Additionally, Id. 47.

Id. at 945, 948-49.

48.

Id. at 947 (quoting Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 49.

756-57 (11th Cir. 1993)).

50.

Id.

Id. (quoting Sunkist Soft Drinks, 10 F.3d at 757; Boyd v. Homes of Legend, Inc., 981 51.

F.Supp. 1423, 1433 (M.D. Ala. 1997)).

Id. (quoting Boyd, 981 F.Supp. at 1432).

52.

Id. (quoting Boyd, 981 F. Supp. at 1432).

53.

Id. at 947-48.

54.

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"Franklin's obligation to pay the $990.00 charge arose under the Buyers Order and ... she specifically allege[d] that MS Dealer worked hand-inhand with Jim Burke and Chrysler Credit Corporation in [the] alleged fraudulent scheme."55 Because the court compelled arbitration under a theory of equitable estoppel, it did not reach the question of whether arbitration should also be compelled under an agency or third-party beneficiary theory.56 Although the court did not address whether arbitration should also be compelled under an agency or third-party beneficiary theory,57 the court's assertion that its decision to compel arbitration was based solely on the equitable estoppel theory is dubious considering all of the facts that could have supported a compelled arbitration under the other theories. Arguably, the factual foundations necessary to support a compelled arbitration under both the agency theory and the third-party beneficiary theory were present in MS Dealer. The agency theory is particularly important because the test articulated by the MS Dealer court that would justify a compelled arbitration under the agency theory requires a "relationship between the signatory and nonsignatory defendants [which] is sufficiently close that only by permitting the nonsignatory to invoke arbitration may evisceration of the underlying arbitration agreement between the signatories be avoided., 58 Thus, whether the MS Dealer court acknowledged it or not, the relationship between Jim Burke (a signatory) and MS Dealer (a nonsignatory),5 9 was likely an important factor in its decision. In fact, the most important piece of evidence supporting a compelled arbitration under all three theories is the fact that the Buyers Order-the contract that contained the arbitration clause-incorporated by reference the Retail Installment Contract in which Franklin was charged $990.00 for a service contract through MS Dealer. 60 Thus, when MS Dealer sought to compel arbitration under the Buyers Order,61 it was not acting as a stranger to the contract that contained an arbitration clause. MS Dealer (although a non-signatory) was practically a party to the contract, or at the very least, a third-party beneficiary. Furthermore, MS Dealer did not involve a claim for tortious interference against a stranger to the contract, 62 which means that the court 55.

Id. at 948.

56.

Id. ("For the foregoing reasons, we find that Franklin is equitably estopped from avoiding arbitration with MS Dealer. Accordingly, we need not determine whether MS Dealer * could enforce arbitration under an agency theory or a third-party-beneficiary theory.").

57.

Id.

58.

59.

Id. at 947 (quoting Boyd, 981 F. Supp. at 1432).

Id. at 944.

60.

Id.

61.

Id. at 945.

62.

Id. at 944-45.

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likely did not consider the impact of its test for equitable estoppel in the context of the factual scenario presented in Grigson.

C.

Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc.

The MS Dealer court cited Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc. to support its holding that "equitable estoppel applies when the signatory to a written agreement containing an arbitration clause 'must rely on the terms of the agreement in asserting [its] claims' against the nonsignatory. ' 63 In Sunkist, Sunkist Growers, Inc. (Sunkist), the defendant, was the exclusive owner and licensor of the "Sunkist" trademark. 64 Sunkist provided General Cinema Corporation (GCC) with a contractual right for the marketing and selling of an orange soda under the brand name "Sunkist." 65 Sunkist Soft Drinks (SSD), a wholly owned subsidiary, was created by GCC to produce and market its soft drink.66 Sunkist and SSD thereafter executed a licensing agreement defining the framework for the marketing and sale of "Sunkist" soft drinks.67 The agreement included an arbitration clause that required the arbitration of "any controversy or claim arising out of or relating to this Agreement or the breach thereof." 68 Del Monte Corporation (Del Monte) eventually purchased the SSD stock from GCC, which allowed Del Monte to absorb SSD into its own beverage products division. 697° This action brought the "Sunkist" brand under a single administration with Del Monte's own soft drink brands, and effectively removed the employees, management, and separate operating status from SSD.7 1 In 1987, Sunkist sued Del Monte in contract and tort, alleging that Del Monte caused SSD to violate various terms of the license agreement through its management and operation of SSD. 72 Despite its status as a nonsignatory, "Del Monte filed a motion to compel arbitration on the grounds that Sunkist was contractually obligated to arbitrate its claims under the

Id. at 947 (alteration in original) (quoting Sunkist Soft Drinks, Inc. v. Sunkist Growers, 63.

Inc., 10 F.3d 753, 757 (1 1th Cir. 1993)).

64.

Sunkist Soft Drinks, 10 F.3d at 755.

Id. 65.

Id. 66.

Id. 67.

Id. 68.

Id. 69.

Id. 70.

Id. 71.

Id. 72.

260

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terms of the license agreement [with SSD]. ' The district court agreed with Del Monte and compelled the case to arbitration.74 On appeal, Sunkist asserted that the district court erred in determining, as a matter of law, the arbitrability of its claims against Del Monte.75 The Eleventh Circuit affirmed the district court's decision to compel the case to arbitration. 6 The court reasoned that the doctrine of equitable estoppel required Sunkist to arbitrate its claims against Del Monte because each of Sunkist's claims made reference to and presumed the existence of the license agreement.7 7 The court also reasoned that arbitration in this circumstance was proper because "upon acquiring ownership of SSD, Del Monte ceased operating [SSD] as an independent enterprise and absorbed it into Del Monte's own internal soft drink division., 78 In effect, this resulted in SSD becoming a part of Del Monte and thereby losing its independent operating status. 79 The court held that "[t]he nexus between Sunkist's claims and the license agreement, as well as the integral relationship between SSD and Del Monte, leads us to the conclusion that the claims are 80 'intimately founded in and intertwined with' the license agreement."

While the Sunkist court partially based its decision to compel arbitration on the fact that each claim "maintained by Sunkist [arose] out of and relate[d] directly to the license agreement," the court expressly noted that its decision was also partially based on the "integral relationship between SSD and Del Monte., 81 As noted above, however, the MS Dealer court cited Sunkist to support its articulation of a test for equitable estoppel that does not require a close relationship.82 In light of the Sunkist court's assertion that its decision was at least partially based on the "integral relationship between SSD and Del Monte, 83 the rule articulated by the MS 84 Dealercourt (and later adopted by the Grigson court) is patently incorrect.

73. Id.at 755-56.

74. Id at 756.

75. Id. 76. Id at 758,760.

77. Id. at 758.

78. Id. 79. Id. 80. Id. 81. Id. 82. MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 947 (1 lth Cir. 1999).

83. Sunkist Soft Drinks, 10 F.3d at 758.

84. The Eleventh Circuit's decision in Sunkist was based upon the reasoning articulated in McBro Planning & Development Co. v. Triangle Electrical Construction Co. and Hughes Masonry Co. v. Greater Clark County School Building Corp. Id. at 757 (citing Hughes Masonry Co. v. Greater Clark Cnty. Sch. Bldg. Corp., 659 F.2d 836 (7th Cir. 1981); McBro Planning & Dev. Co. v. Triangle Elec. Constr. Co., 741 F.2d 342 (11th Cir. 1984)). In both cases, the courts applied the doctrine of equitable estoppel and compelled arbitration of claims for tortious interference in part because of the relationships of the signatory and non-signatory parties. McBro

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III. EQUITABLE ESTOPPEL IN TEXAS Under the FAA, the question of whether an arbitration agreement binds a non-signatory or may be invoked by a non-signatory is a gateway matter to be determined by courts rather than arbitrators, unless the parties 85 clearly and unmistakably provide otherwise. Texas courts apply state substantive law to this question and they "endeavor to keep it consistent with federal law.",86 Under Texas law, non-signatories may invoke an arbitration clause, or be bound to adhere to an arbitration clause, "when rules of law or equity" would bind them or allow them to enforce the contract generally. 87 The circumstances and rules of law and equity that may permit arbitration with a non-signatory include: "(1) incorporation by (4) alter ego; (5) equitable estoppel; reference; (2) assumption; (3) agency; 88 beneficiary. and (6) third-party The Texas Supreme Court has used the rationale from the majority's opinion in Grigson on numerous occasions to articulate a test for equitable estoppel. The most recent iteration of the test may be found in G.T.Leach Builders, LLC v. Sapphire V.P., LP.89 In G.T. Leach Builders, LLC, the court held that under principles of equitable estoppel, a litigant who sues based on a contract subjects him or herself to the contract's terms, including the arbitration clause. 90 "This is because the claimant cannot 'have it both ways'; it cannot, 'on the one hand, seek to hold the non-signatory liable pursuant to duties imposed by the agreement, which contains an arbitration provision, but, on the other hand, deny arbitration provision's applicability because the defendant is a non-signatory." 9 This equitable principle applies Planning, 741 F.2d at 343 ("However, the close relationship of the three entities here involvedSt. Margaret's, Triangle, and McBro-and the close relationship of the alleged wrongs to McBro's contractual duties to perform as construction manager, give one pause."); Hughes Masonry, 659 F.2d at 840 ("Similarly, in its 'Specific Contentions' filed at the request of the district court on August 29, 1980, Hughes alleged, as the basis for its claims against J.A., that J.A., as Clark's 'agent,' failed to carry out various duties and responsibilities specified in the HughesClark agreement and therefore 'intentionally interfered' with that agreement.").

G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 524 (Tex. 2015); In 85. re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009); In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005); see also Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83-

84 (2002).

86.

In re LabattFood Serv., 279 S.W.3d at 643 (citing In re Weekley Homes, 180 S.W.3d at

131).

G.T. Leach Builders, 458 S.W.3d at 523; In re Labatt Food Serv., 279 S.W.3d at 643; 87.

In re Weeldey Homes, 180 S.W.3d at 129.

88.

In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005).

89.

G.T Leach Builders, 458 S.W.3d at 527-28.

90. Id.at 527; see also Meyer v. WMCO-GP, LLC,211 S.W.3d 302, 305 n. 12 (Tex. 2006) (listing cases so holding).

G.T. Leach Builders, 458 S.W.3d at 527 (quoting Meyer, 211 S.W.3d at 306).

91.

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when a claimant seeks direct benefits under the contract that contains the arbitration agreement. 92 "Whether a claim seeks a direct benefit from a contract containing an arbitration clause turns on the substance of the claim, not artful pleading. 9 3 It is not enough, however, that the party's claim "relates to" the contract that contains the arbitration agreement. 94 Instead, the party "must seek 'to derive a direct benefit'-that is, a benefit that 'stems directly'from that contract." 95 The claim must depend on the existence of the contract,9 6 and be unable to "stand independently" without the contract.9 7 The alleged liability must "arise[] "solely from the contract or must be determined by reference to it."'98 But "when the substance of the claim arises from general obligations imposed by state law, including statutes, torts and other common law duties, or federal law," rather than from the contract, direct-benefits estoppel does not apply, even if the claim refers to or relates to the contract. 99

A.

In re Vesta Group, Inc.

Before the Texas Supreme Court had settled on the current iteration of the test for direct-benefits estoppel, it issued an opinion in In re Vesta Group, Inc. that appeared to espouse a very different test. 1° The facts of this case involve an insurance agent (James Cashion) who signed an agreement with States General Insurance Company (States General) that required the parties to arbitrate any dispute "under or with respect to" the agreement. 10 1 After States General terminated Cashion's contract, he sued States General's parent corporations (Vesta), two of Vesta's corporate officers, and several of States General's agents for tortiously interfering with Cashion's contract with States General. 10 2 Despite their status as nonsignatories to the agreement between Cashion and States General, Vesta 92.

Id. (citing In re Kellogg Brown & Root, Inc., 166 S.W.3d at 739).

93.

Id. (quoting In re Weekley Homes, L.P., 180 S.W.3d 127, 131-32 (Tex. 2005)).

94.

95.

Id. (citing In re Kellogg Brown & Root, 166 S.W.3d at 741).

Id. (quoting In re Kellogg Brown & Root, 166 S.W.3d at 741) (citing In re Morgan

Stanley & Co., 293 S.W.3d 182, 184 n.2 (Tex. 2009)).

96. Meyer, 211 S.W.3d at 307.

97.

98.

99.

See In re Kellogg Brown & Root, 166 S.W.3d at 739-40.

In re Weekley Homes, 180 S.W.3d at 132.

In re Morgan Stanley, 293 S.W.3d at 184 n.2; see also In re Kellogg Brown & Root,

166 S.W.3d at 740-41 (holding that a subcontractor's quantum meruit claim against the contractor did not justify direct-benefits estoppel to compel arbitration under a contract between the contractor and owner).

100. See In re Vesta Ins. Grp., Inc., 192 S.W.3d 759, 761-62 (Tex. 2006) (per curium).

101.

Id.at761.

102. Id.

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moved to compel arbitration under the doctrine of and the other defendants 10 3 equitable estoppel.

The Texas Supreme Court held that under the doctrine of equitable estoppel, a nonparty is required "to arbitrate a claim 'if it seeks, through the claim, to derive a direct benefit from the contract containing the arbitration provision." 1°4 The court noted that "[w]hile the boundaries of directbenefits estoppel are not always clear, nonparties generally must arbitrate claims if liability arises from a contract with an arbitration clause, but not if 10 5 However, the liability arises from general obligations imposed by law. court stated, "[t]ortious interference claims do not fall comfortably in either category."'1 °6 The obligation not to interfere with existing contracts is a general obligation imposed by law, but it is not imposed on the parties to that contract, as "a party cannot tortiously interfere with its own contract. 10 7 In other words, "a person must be a stranger to a contract to 10° 8 The court specifically held that Cashion tortiously interfere with it." "would not be required to arbitrate a tortious interference claim against a '10 9 complete stranger to his contract and its arbitration clause."

Ultimately, the court held that tortious interference claims between a signatory to an arbitration agreement and agents or affiliates of the other signatory arise more from the contract than general law, and therefore must be arbitrated.110 The court reasoned that corporations must act through human agents or corporate affiliates, and as a result, every contract claim against a corporation could be recast as a tortious interference claim against its agents."1 Accordingly, the court held that it must avoid any rule that makes it easier to avoid arbitration clauses than other clauses of a contract. 112 The court also reasoned that when contracting parties agree to arbitrate all disputes "under or with respect to" a contract, they generally intend to include disputes regarding their agents' actions because "[a]s a

103.

104. omitted).

105.

106.

107.

Id. Id. (quoting In re Kellogg Brown & Root, 166 S.W.3d at 741) (internal quotation mark Id. Id. Id. (quoting Holloway v. Skinner, 898 S.W.2d 793, 796 (Tex. 1995)) (internal quotation

marks omitted).

108.

179 (Tex. 109.

110.

111.

112.

Id. (emphasis added) (quoting Morgan Stanley & Co. v. Tex. Oil Co., 958 S.W.2d 178, 1997)) (internal quotation marks omitted).

Id. at 763.

Id. at 762.

Id. Id.

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general rule, the actions of a corporate agent on behalf of the corporation 1' 13 are deemed the corporation's acts."

If arbitration clauses only apply to contractual signatories, then this intent can only be accomplished by having every officer and agent (and every affiliate and its officers and agents) either sign the contract or be listed as a third-party beneficiary[,] [which] would not place such clauses on an equal footing with all other parts of a corporate contract.114 The Vesta opinion is important because the Texas Supreme Court recognized that equity does not require a signatory to an arbitration agreement to arbitrate a tortious interference claim against a complete stranger to the agreement. 115 Rather than holding that Cashion should be required to arbitrate his tortious interference claim against Vesta and the other defendants merely because he sought to derive a direct benefit from the contract containing the arbitration provision, the court reasoned that equity only required Cashion to arbitrate because of the relationship between the non-signatories (Vesta and the other defendants) and the signatory (States General). Cashion did not sue strangers-every defendant was a current or former owner, officer, agent, or affiliate of States General, 116 the party with whom he had agreed to arbitrate.

The Texas Supreme Court's holding in Vesta is consistent with the rationale of Judge Dennis's dissent in Grigson v. Creative Artists Agency, L.L. C. 117 Just as Judge Dennis contemplated, [U]nder ordinary state-law principles of equitable and promissory estoppel, a non-party to a contract containing an arbitration clause may invoke the clause and compel a signatory party to arbitrate when the signatory reasonably should have expected that, because of his statements or conduct, the non-signatory would be induced to rely justifiably on the contract and would be injured thereby if the signatory refused to recognize the non-signatory's rights or entitlements with respect to the contract.118 In Vesta, Cashion reasonably should have expected that, because of the relationship between States General and its agents and affiliates, his execution of a contract containing an arbitration clause with States General would have induced the agents and affiliates of States General to rely 113.

Id. (alteration in original) (quoting Holloway v. Skinner, 898 S.W.2d 793, 795 (Tex. 1995) (internal quotation marks omitted).

114.

Id. 115.

Id. at 763.

116.

Id at 763-64.

117.

Grigson, 210 F.3d at 532-33 (Dennis, J., dissenting) (explaining when the parties'

relationship may be grounds for compelling arbitration with a non-signatory).

118.

Id. at 532.

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justifiably on the contract. In essence, Cashion's execution of an arbitration agreement with States General created an "agreement implied in fact" 119 to arbitrate with States General's agents and affiliates-a result that was essential to avoid creating a rule that only signatories or third-party 120 Despite this holding, beneficiaries may enforce arbitration agreements. principals espoused the disregarded inexplicably Court the Texas Supreme in Vesta less than a year later.

B.

Meyer v. WMCO-GP, L.L.C.

Nine months after the Vesta decision, the Texas Supreme Court decided Meyer v. WMCO-GP, LLC, in which it compelled a signatory to an arbitration agreement to arbitrate claims against non-signatories who were 121 Co.) strangers to the agreement. In Meyer, a car dealer (Bullock Motor 122 The contracted to sell its dealership to a prospective buyer (WMCO).

Bullock required that clause arbitration purchase agreement contained an 123 and WMCO to arbitrate controversies arising out of the agreement. The purchase agreement also mentioned that Ford Motor Co. (Ford), the car manufacturer, had an assignable right of first refusal to acquire the dealership, and it gave Bullock the right to terminate the purchase 124 agreement if Ford exercised its right. Ford exercised its first-refusal right 125 and transferred its right to an assignee (Meyer). In accordance with the 1 26 right of first refusal, Bullock sold the dealership to Meyer. WMCO then sued Bullock, Meyer, and Ford, alleging that Bullock breached the purchase agreement, Meyer tortiously interfered with the purchase agreement, and Ford and Meyer conspired to violate the Texas Motor Vehicle Commission Code. 127 Pursuant to the doctrine of equitable estoppel, Meyer and Ford under the purchase agreement between moved to compel arbitration 28 Bullock.1 and WMCO The Texas Supreme Court compelled arbitration pursuant to the purchase agreement's arbitration clause even though Meyer and Ford were non-signatories. 29 The court quoted the majority's opinion from Grigson at

119.

120.

121.

122.

123.

124.

125.

Id. at 533.

See In re Vesta Ins., 192 S.W.3d at 762.

Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 305-06 (Tex. 2006).

Id. at 304.

Id. at 304-05.

Id. at 304.

Id.

126.

Id.

127.

Id.

128.

Id. at 304-05.

129.

Id. at 307.

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length, and stated that Grigson contains "a substantially correct statement of Texas law."'1 30 The court reasoned that the doctrine of equitable estoppel required WMCO to arbitrate its claims against Meyer and Ford because the claims depended upon the existence of the purchase agreement, which contained an arbitration clause. 131 The court also noted that WMCO had conceded that its damages could not be calculated without reference to the purchase agreement, and stated that "[w]hen a party's right to recover and its damages depend on the agreement containing the arbitration provision, 132 the party is relying on the agreement for its claims.'

As mentioned above, Meyer represents a substantial departure from the court's reasoning in Vesta. 133 Although the purchase agreement mentioned Ford's right of first refusal and gave Bullock the right to terminate the agreement if Ford exercised its right, Ford and Meyer (1) were not signatories to the purchase agreement, (2) they were not granted any rights under the agreement, and (3) they were not agents or affiliates of the signatories to the agreement. 134 Accordingly, Ford and Meyer were strangers to the purchase agreement in the same sense that the Texas Supreme Court used the term "stranger" in Vesta. 35 Despite Ford and Meyer's status as strangers to the purchase agreement, the court required WMCO to arbitrate its tortious interference and statutory claims against them because WMCO was seeking "to derive a direct benefit from the contract containing the arbitration provision., 136 WMCO, however, never consented to arbitrate any claims against Meyer and Ford, nor were any circumstances present that would justify the finding of an implied agreement to arbitrate pursuant to the traditional notions of promissory or 137 equitable estoppel.

In Meyer, the Texas Supreme Court disregarded the traditional notions of equity and solidified the test for direct-benefits estoppel. Under the Meyer holding, every signatory to a contract that contains an arbitration clause is now apparently required to arbitrate with any person or entityeven total strangers-who tortiously interfere with the contract. 138 Imposing arbitration on parties who did not agree to arbitrate-regardless of their desire to secure the benefits of an agreement that happens to contain 130.

131.

132.

133.

134.

135.

136.

137.

Id. at 306.

Id. at 307.

Id. See discussion supra Part I.A. See Meyer 211 S.W.3d at 304.

See In re Vesta Ins. Grp., Inc., 192 S.W.3d 759, 763 (Tex. 2006) (per curium).

Meyer, 211 S.W.3d at 305 (internal quotation marks omitted).

See Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524, 538 (5th Cir. 2000)

(Dennis, J., dissenting).

138.

See supranotes 131-34 and accompanying text.

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EQUITABLE ESTOPPEL

an arbitration clause-is not equitable. As Justice O'Neill stated in her dissent in Meyer, "even the exceptionally strong policy favoring arbitration cannot justify requiring litigants to forego a judicial remedy when they have not agreed to do SO. ' ' 139 Furthermore, as feared by Judge Dennis, the Meyer decision demonstrates that the "indeterminate precedent" unleashed by the Fifth Circuit in Grigson is truly "capable in its application of sweeping countless parties' disputes into arbitration without even a semblance of their agreement under ordinary state-law principles of contracts, agency or equitable estoppel."' 4 ° C.

In re Merrill Lynch Trust Co.

Eight months after the Meyer decision, the Texas Supreme Court 41 decided In re Merrill Lynch Trust Co. 1 Merrill Lynch did not involve a claim for tortious interference, but the court did confirm that the doctrine of equitable estoppel should be limited to the first prong of the Grigson testthe direct-benefits prong. 142 While the court did not expressly reject the second prong of the Grigson test (substantially interdependent and concerted misconduct), it stated that "we have never compelled arbitration 143 concerted misconduct., based solely on substantially interdependent and The court also stated, "[a]s other contracts do not become binding on nonparties due to concerted misconduct, allowing arbitration contracts to become binding on that basis would make them easier to enforce than other 44 contracts, contrary to the Arbitration Act's purpose."' With the exception 145 of one opinion from the Dallas Court of Appeals, Texas appellate courts have uniformly held that in Merrill Lynch, the Texas Supreme Court limited of the equitable estoppel doctrine to the direct-benefits the application 146 prong.

Meyer, 211 S.W.3d at 308 (O'Neill, J., dissenting).

139.

Grigson, 210 F.3d at 539 (Dennis, J., dissenting).

140.

In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185 (Tex. 2007).

141.

Id. at 191.

142.

Id. 143.

Id. at 194.

144.

See In re Cornerstone Healthcare Holding Grp., Inc., 348 S.W.3d 538, 544 (Tex. 145.

App.-Dallas 2011, no pet.).

See Glassell Producing Co. v. Jared Res., Ltd., 422 S.W.3d 68, 82 (Tex. App.146.

Texarkana 2014, no pet.); In re E. Rio Hondo Water Supply Corp., No. 13-12-00538-CV, 2012 WL 5377898, at *5 (Tex. App.-Corpus Christi Oct. 29, 2012, no pet.) (mem. op.); Inland Sea, Inc. v. Castro, 420 S.W.3d 55, 59 (Tex. App.-El Paso, 2012, pet. denied); In re James E. Bashaw & Co., 305 S.W.3d 44, 56 & n.5 (Tex. App.-Houston [1st Dist.] 2009, no pet.); Trammell v.

Galaxy Ranch Sch., L.P. (In re Trammell), 246 S.W.3d 815, 821 (Tex. App.-Dallas 2008, no pet.); In re Banc One Inv. Advisors Corp., No. 01-07-01021-CV, 2008 WL 340507, at *2 (Tex. App.-Houston [1st Dist.] Feb. 7, 2008, no pet.) (mem. op.).

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The Merrill Lynch court also cited the Second Circuit's test for equitable estoppel, discussed further below, and noted that "the concertedmisconduct test has no 'close relationship' component, and would sweep independent entities and even complete strangers into arbitration agreements.' 4 7 The court cited Vesta to support this proposition and included the following quote from Vesta in a parenthetical: "We agree with Cashion that he would not be required to arbitrate a tortious interference claim against a complete stranger to his contract and its arbitration clause."' 148 The court, however, merely used the close relationship component of the Second Circuit's test for equitable estoppel as a reason to reject the second prong of the Grigson test, and the court stopped short of actually incorporating a close relationship component into its test for directbenefits estoppel.149 The court's use of the quote from Vesta is even more perplexing because the court allowed strangers to compel arbitration in Meyer. 50 Since the Merrill Lynch decision, the Texas Supreme Court has articulated its test for direct-benefits estoppel on four occasions without mentioning the close relationship component of the Second Circuit's test or 151 the "stranger" language from Vesta.

IV. EQUITABLE ESTOPPEL IN THE SECOND CIRCUIT

The Second Circuit's approach to equitable estoppel is more nuanced than the Texas approach, and it incorporates the traditional elements of promissory estoppel, as was suggested by Judge Dennis in his dissent in 52 Grigson.1 The Second Circuit's approach also incorporates the key element of implied consent to arbitrate, which is conspicuously missing from the test espoused by the Texas Supreme Court. 5 3 The Second Circuit has bifurcated its law regarding equitable estoppel, and it imposes a different standard depending upon whether (1) a non-signatory is attempting to enforce an arbitration agreement against a signatory, or (2) a 147. In re MerrillLynch Trust, 235 S.W.3d at 193-94.

148.

Id. at 194 n.41 (quoting In re Vesta Ins. Grp. Inc., 192 S.W.3d 759,763 (Tex. 2006) (internal quotation marks omitted)).

149.

Id. at 193-94.

150.

Compare id. at 195 ("By contrast, the concerted misconduct test has no 'close relationship' component, and would sweep independent entities and even complete strangers into arbitration agreements."), with Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 305-06 (Tex. 2006).

151.

See generally G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 527 (Tex. 2015); Rachal v. Reitz, 403 S.W.3d 840, 846 (Tex. 2013); In re Morgan Stanley & Co., 293 S.W.3d 182, 184 n.2 (Tex. 2009); In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643-44 (Tex. 2009).

152.

See supra Part H.A. 153.

MAG Portfolio Consultant, GMBH v. Merlin Biomed Group LLC, 268 F.3d 58, 62 (2d Cir. 2001).

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signatory is attempting to enforce an arbitration agreement against a nonsignatory. 154 Both circumstances are discussed below.

A.

Non-signatoryAttempts to Enforce an Arbitration Clause Against a Signatory

The Second Circuit prohibits a signatory from avoiding arbitration with a non-signatory when the issues the non-signatory is seeking to resolve in arbitration are intertwined with the agreement that the estopped party has signed. 155 In this situation, a "signator[y] to an arbitration agreement can be compelled to arbitrate [its] claims with a non-signatory where 'a careful review of "the relationship among the parties, the contracts they signed .... and the issues that [have] arisen" among them discloses "that the issues the are intertwined with the nonsignatory is seeking to resolve in arbitration 15 6 signed.' has party agreement that the estopped This does not mean, however, "that whenever a relationship of any kind may be found among the parties to a dispute and their dispute deals with the subject matter of an arbitration contract made by one of them, that party will be estopped from refusing to arbitrate .... [I]n addition to the "intertwined" factual issues, there must be a relationship among the parties of a nature that justifies a conclusion that the party which agreed to arbitrate with another entity should be estopped from denying an obligation to adversary which is not a party arbitrate a similar dispute with 157the agreement."' to the arbitration Second Circuit courts have distilled these requirements and established a two-part "intertwined-ness" test, under which they "examine whether: (1) the signatory's claims arise under the 'subject matter' of the underlying agreement, and (2) whether there [is] a 'close relationship' between [the] ' 158 For example, in Sokol Holdings, signatory and [the] non-signatory party.

Inc. v. BMB Munai, Inc., the plaintiff (Sokol) entered into a contract (the

154.

155.

Id; Thomson-CSF, S.A. v. Am. Arbitration Ass'n, 64 F.3d 773, 778-79 (2d Cir. 1995).

Denney v. BDO Seidman, L.L.P., 412 F.3d 58, 70 (2d Cir. 2005) (quoting Contec Corp.

v. Remote Solution Co., 398 F.3d 205, 209 (2d Cir. 2005)); MAG Portfolio, 268 F.3d at 62 (quoting Thomson-CSF, 64 F.3d at 779).

156. Denney, 412 F.3d at 70 (quoting JLM Industries v. Stolt-Nielsen SA, 387 F.3d 163, 177 (2d Cir.2004)).

157. Ragone v. Atl. Video at the Manhattan Ctr., 595 F.3d 115, 127 (2d Cir. 2010) (alteration in original) (quoting Sokol Holdings, Inc. v. BMB Munai, Inc., 542 F.3d 354, 359 (2d Cir. 2008)).

158. Ragone v. At. Video at the Manhattan Ctr., No. 07 Civ. 6084(JGK), 2008 WL 4058480, at *8 (S.D.N.Y. Aug. 29, 2008), affid, 595 F.3d 115 (2d Cir. 2010) (emphasis added).

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Emir Contract) with Tolmakov Toleush Kalmukanovitch (Tolmakov). 159 The Emir Contract contained an arbitration clause that provided for the arbitration of all disputes arising from the contract.160 After Tolmakov breached the Emir Contract, Sokol sued the defendant (BMB Munai, Inc.) for tortiously interfering with the Emir Contract by inducing Tolmakov to breach.16' Although BMB did not have a contract with Sokol providing for arbitration, BMB moved to compel arbitration under the Emir Contract, contending that Sokol was equitably estopped from refusing to arbitrate.162 The court refused to compel arbitration, holding that there was no "close relationship" between the signatories and the non-signatories to the Emir Contract that would make it unfair for Sokol to refuse to arbitrate with BMB, even though BMB employed Tolmakov as a general manager of a BMB subsidiary. 163 Significantly, BMB only came into its alleged "close relationship with Tolmakov by wrongfully inducing Tolmakov to breach his contract with Sokol.' ' 164 The court reasoned that while Sokol had agreed to arbitrate with Tolmakov, it in no way consented to extend that agreement to BMB, an entity that tortiously subverted Sokol's rights under the Emir 65 Contract.1

The touchstone of the Second Circuit's opinion in Sokol is the lack of consent of the parties to arbitrate their claims against each other. The court examined a series of cases applying the doctrine of equitable estoppel and noted that "[w]hile in none of these cases did the court explain what it was that justified the estoppel, examination of the facts shows a pattern which is consistent with the basic principle that one does not give up one's right to court adjudication except by consent.' ' 166 The court held that "[t]he cases ...

are consistent with the black letter rule that the obligation to

arbitrate depends on consent. They simply extend its contours somewhat by establishing that the consent need not always be expressed in a formal contract made with the party demanding arbitration.' 16 7 The consent requirement is encompassed in the close relationship prong of the Second Circuit's test. 68 If there had been some close relationship between BMB and Tolmakov at the time Tolmakov executed the contract containing the arbitration agreement with Sokol, the court may have found that Sokol had 159.

160.

161.

162.

163.

164.

165.

166.

167.

168.

Sokol Holdings, 542 F.3d at 357.

Id. Id. Id. Id.at 362.

Id. Id. Id.at 361.

Id.at 361-62.

See id

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EQUITABLE ESTOPPEL

effectively "consented" to arbitrate its claims against BMB. But as it was, BMB was a stranger to Sokol's contract with Tolmakov, and it was therefore inequitable to force Sokol to arbitrate a tortious interference claim against BMB merely because Sokol sought to obtain the benefits of its contract with Tolmakov by suing BMB in tort.

B.

SignatoryAttempts to Enforce an Arbitration Clause Against a Nonsignatory

The Second Circuit's equitable estoppel theory also permits a signatory of an agreement containing an arbitration clause to compel a nonsignatory to arbitrate where the non-signatory knowingly exploits the benefits of an agreement containing an arbitration clause, and receives benefits flowing directly from the agreement. 169 "The benefits must be direct-which is to say, flowing directly from the agreement., 170 In contrast, the "benefit derived from an agreement is indirect," and is therefore insufficient to support estoppel, "where the nonsignatory exploits but does not exploit (and the contractual relation of parties to an17agreement, 1 thereby assume) the agreement itself.

This test is almost identical to the test for direct-benefits estoppel under Texas law, but the Second Circuit's limited application of this test to signatory attempts to enforce arbitration agreements against non-signatories is the distinguishing factor. 172 When a non-signatory knowingly exploits the benefits of an agreement containing an arbitration clause, the "equity" inherent in forcing the non-signatory to arbitrate a dispute arising from the agreement is conspicuous. A non-signatory that seeks the benefits of an agreement must also be bound by its burdens, including the duty to arbitrate disputes arising from the agreement. By seeking the benefits of an agreement it did not sign, the non-signatory "assumes" the entire agreement and impliedly "consents" to be bound by all of the provisions.171 Texas, however, applies direct-benefits estoppel even when a nonsignatory is attempting to enforce an arbitration agreement against a

MAG Portfolio Consult, GMBH v. Merlin Biomed Grp. LLC, 268 F.3d 58, 61 (2d Cir. 169.

2001); Life Techs. Corp. v. AB Sciex Pte. Ltd., 803 F. Supp. 2d 270, 273-74 (S.D.N.Y. 2011).

MAG Porfolio, 268 F.3d at 61; Life Techs., 803 F. Supp. 2d at 274.

170.

MAG Portfolio, 268 F.3d at 61; Life Techs., 803 F. Supp. 2d at 274.

171.

MAG Porfolio, 268 F.3d at 62 ("The second theory is not applicable in a situation like 172. the case before us, where the signatory to an arbitration clause seeks to enforce it against a nonsignatory. Thus, the only applicable estoppel theory here is the first one, requiring a direct benefit.").

See id. at 61; In re A2P SMS Antitrust Litig., 972 F. Supp. 2d 465, 491 (S.D.N.Y. 173.

2013); Life Techs., 803 F. Supp. 2d at 273-74; Ayco Co. v. Becker, No. 1:10-CV-0834 (GTS/RFT), 2011 WL 3651027, at *6 (N.D.N.Y. Aug. 18, 2011).

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signatory. 174 In this circumstance, while the signatory to an agreement containing an arbitration clause may have agreed to arbitrate disputes with the other signatory, it may not have expressly or impliedly agreed to arbitrate any disputes with the non-signatory. 175 An attempt by a signatory to secure the benefits of a contract-that happens to contain an arbitration clause-by suing a stranger in tort for interfering with the contract cannot be construed as consent to arbitrate with the stranger. 176 Thus, the lack of expressed or implied consent to arbitrate in this circumstance evidences a lack of equity. 177 Texas's indiscriminate application of direct-benefits estoppel to both circumstances described above is an excellent indication that its test is flawed.

V.

ANALYSIS AND RECOMMENDATION

Judge Dennis's dissent in Grigson and the Second Circuit's opinion in Sokol most efficiently expose the flaws in the Texas Supreme Court's current articulation of the test for equitable estoppel in the context of arbitration. While the Texas Supreme Court's direct-benefits test for equitable estoppel is easy to apply, the indiscriminate application of such a rule is anything but equitable. If the direct-benefits test had been applied in Sokol, Sokol would have been forced to arbitrate its tortious interference claims against BMB-a stranger whose only relationship to either signatory arose from its tortious conduct-merely because Sokol sought to secure the benefits of a contract that contained an arbitration clause.

The Vesta opinion evidences the Texas Supreme Court's initial (and justified) conflict over direct-benefits estoppel. While the Texas Supreme Court articulated its usual test for direct-benefits estoppel in Vesta, it actually applied a test that was closer to the Second Circuit's intertwinedness test, which is evidenced by its statement that Cashion would "not be required to arbitrate a tortious interference claim against a complete

174.

G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 527 (Tex. 2015); Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 305-06 (Tex. 2006); Cooper Indus., LLC v. PepsiCola Metro. Bottling Co., No. 14-14-00562-CV, 2015 WL 5025812, at *3-4 (Tex. App.Houston [14th Dist.] Aug. 25, 2015, no. pet.); Sabine Syngas, Ltd. v. Port of Port Arthur Navigation Dist., No. 09-09-00331-CV, 2011 WL 192756, at *4 (Tex. App.-Beaumont Jan. 13, 2011, no pet.) (mem. op.).

175.

Sokol Holdings, Inc. v. BMB Munai, Inc., 542 F.3d 354, 361 (2d Cir. 2008) ("The estoppel did not flow merely from x's agreement to arbitrate with someone (y) in disputes relating to the agreement. It flowed rather from the conclusion that the relationships among the parties developed in a manner that made it unfair for x to claim that its agreement to arbitrate ran only to y and not to yl.,).

176.

Id. at 361-62.

177. Id.

EQUITABLE ESTOPPEL

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stranger to his contract and its arbitration clause. 17 8 Rather than holding that Cashion was required to arbitrate his tortious interference claim against Vesta and the other defendants merely because he sought to secure a direct benefit from the contract containing the arbitration clause, the court reasoned that equity only required Cashion to arbitrate because of the relationship between the non-signatories (Vesta and the other defendants) and the signatory (States General). 79 Thus, the equity that justified the court's decision to compel Cashion's claim to arbitration emanated from the relationship between the signatories and the non-signatories to the arbitration agreement, not from Cashion's desire to secure the benefits of a contract (that happened to contain an arbitration clause) by filing a tortious interference claim against a non-signatory.

Similarly, the Sunkist court held that Sunkist should be equitably estopped from refusing to arbitrate its dispute with Del Monte not only because each claim "maintained by Sunkist [arose] out of and relate[d] directly to the license agreement," but also because of the existence of an "integral relationship between SSD and Del Monte."' 180 This reasoning exposes the flaw in the MS Dealer court's assertion that a compelled arbitration may be justified under the doctrine of equitable estoppel whenabsent any other factors-the signatory to a written agreement containing an arbitration clause "must rely on the terms of the written agreement in asserting its claims against the non-signatory." 1 81 As stated by Judge Dennis in Grigson, the principles of equitable estoppel set forth in MS Dealer were court actually never intended to a be a stand-alone test, and the MS Dealer facts. 1 2 based its decision on a set of highly specific material Unfortunately, the Grigson majority adopted the spurious test from MS Dealer at face-value, disregarding the close relationship component that, while ostensibly ignored in MS Dealer, was actually present in both MS Dealer and Sunkist (the case cited by the MS Dealer court in articulating its test). 183 To add insult to injury, the Texas Supreme Court has now apparently abrogated its Vesta opinion and adopted the test articulated by the MS Dealer court. 184 Accordingly, in Texas, the doctrine of equitable estoppel mandates a compelled arbitration whenever a claimant seeks to 178.

In re Vesta Ins. Grp., Inc., 192 S.W.3d 759, 763 (Tex. 2006) (per curium).

179.

Id

Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 758 (1 1th Cir. 1993).

180.

MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942,947 (11th Cir. 1999).

181.

Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524, 536, 538-39 (5th Cir. 2000) 182.

(Dennis, J., dissenting).

Id. at 527 (majority opinion).

183.

G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 527 (Tex. 2015); In 184. re Morgan Stanley & Co., 293 S.W.3d 182, 184 (Tex. 2009); Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 307 (Tex. 2006).

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secure direct benefits from a contract that contains an arbitration agreement. 1 85 The result of this miscarriage of justice is that until the Texas Supreme Court unequivocally revives and clarifies the relationship 18 6 component of the test for equitable estoppel that it mentioned in Vesta, cases involving a claim for tortious interference with a contract that happens to contain an arbitration clause are more susceptible to a compelled arbitration, especially in inequitable circumstances, where the traditional elements of promissory or equitable estoppel are absent and the claimantsignatory has not engaged in any conduct that would induce the nonsignatory to rely justifiably on the contract containing the arbitration clause.187 Texas maintains a strong public policy in favor of preserving the freedom of contract, 188 but it also maintains a strong public policy in favor of arbitration. 189 As Justice O'Neill stated in her dissent in Meyer, however, "even the exceptionally strong policy favoring arbitration cannot justify requiring litigants to forego a judicial remedy when they have not agreed to do so." 190 The FAA itself acknowledges the superiority of contractual rights over any presumption in favor of arbitration, stating that arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such 191 grounds as exist at law or in equity for the revocation of any contract."

Furthermore, the strong presumption favoring arbitration "arises only after

185.

GT.Leach Builders, LLC, 458 S.W.3d at 527; In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005).

186.

In re Vesta Ins. Grp., Inc., 192 S.W.3d 759, 763 (Tex. 2006) (per curium) ("We agree with Cashion that he would not be required to arbitrate a tortious interference claim against a complete stranger to his contract and its arbitration clause.").

187.

See Cooper Indus., LLC v. Pepsi-Cola Metro. Bottling Co., No. 14-14-00562-CV, 2015 WL 5025812, at *5-6 (Tex. App.-Houston [14th Dist.] Aug. 25, 2015, no. pet.) (compelling arbitration of a tortious interference claim where the non-signatory was a stranger to the agreement containing the arbitration clause at the time it was executed, and the claimant-signatory did not engage in any conduct that would induce the non-signatory to justifiably rely on the agreement); Sabine Syngas, Ltd. v. Port of Port Arthur Navigation Dist., No. 09-09-00331-CV, 2011 WL 192756, at *4 (Tex. App.-Beaumont Jan. 13, 2011, no pet.) (mem. op.) (relying on Meyer to compel a signatory to arbitrate tortious interference claims against non-signatories who were strangers to the contract containing the arbitration clause).

188.

TEX. CONST. art. I, § 16 ("No bill of attainder, ex post facto law, retroactive law, or any law impairing the obligation of contracts, shall be made."); see also Fairfield Ins. Co. v. Stephens Martin Paving, LP, 246 S.W.3d 653, 664 (Tex. 2008) ("This Court has long recognized Texas' strong public policy in favor of preserving the freedom of contract."); Churchill Forge, Inc. v.

Brown, 61 S.W.3d 368, 370 (Tex. 2001) (observing that competent parties in Texas "have the utmost liberty of contracting" (quoting Wood Motor Co. v. Nebel, 238 S.W.2d 181, 185 (Tex. 1951) (internal quotation marks omitted)).

189.

Am. Standard & the Trane Co. v. Brownsville Indep. Sch. Dist. (In re D. Wilson Constr. Co.), 196 S.W.3d 774, 782 (Tex. 2006).

190.

Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 308 (Tex. 2006) (O'Neill, J., dissenting).

191.

9 U.S.C. § 2 (2012).

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EQUITABLE ESTOPPEL

the party seeking to compel arbitration proves that a valid arbitration agreement exists, ' 92 and the presumption in favor of arbitration does not apply to "a state court's assessment of whether parties have entered into a valid and enforceable agreement to arbitrate under state contract law."' 93 At its heart, an arbitration clause is merely a contractual agreement to forgo the traditional dispute resolution process offered by Texas courts and engage in a private dispute resolution process involving an arbitrator.194 Thus, without agreements to arbitrate, arbitration would not exist.1 95 Because arbitration is dependent upon an agreement to arbitrate, the public policy in favor of preserving the freedom of contract must always remain the paramount policy consideration. 196 The Texas Supreme Court's test for direct-benefits estoppel, however, elevates arbitration above the freedom of contract because it forces parties to arbitrate when they have not expressly or impliedly agreed to do SO.197 Furthermore, "the fundamental purposes of [the] tort system [in Texas] are to deter wrongful conduct, shift losses to responsible parties, and fairly compensate deserving victims.' 98 "[T]he state of Texas has an obvious interest in providing a forum for resolving disputes involving its citizens, particularly disputes in which the defendant allegedly committed a tort in whole or in part in Texas."' 9 9 It is axiomatic that a tort victim's relationship J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003).

192.

In re Poly-Am., L.P., 262 S.W.3d 337, 347 (Tex. 2008).

193.

See First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 943 (1995) ("These two 194. answers flow inexorably from the fact that arbitration is simply a matter of contract between the parties; it is a way to resolve those disputes--but only those disputes-that the parties have agreed

to submit to arbitration.").

Stolt-Nielsen S. A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 682 (2010) ("Whether 195. enforcing an agreement to arbitrate or construing an arbitration clause, courts and arbitrators must give effect to the contractual rights and expectations of the parties. In this endeavor, as with any other contract, the parties' intentions control. This is because an arbitrator derives his or her

powers from the parties' agreement to forgo the legal process and submit their disputes to private dispute resolution." (citations omitted) (internal quotation marks omitted)).

196. See Wood Motor Co. v. Nebel, 238 S.W.2d 181, 185 (Tex. 1951) ("Therefore, you have this paramount public policy to consider-that you are not lightly to interfere with this freedom of contract." (quoting Printing & Numerical Registering Co. v. Sampson, (1875) L.R. 19 Eq. 462, 465 (Eng.) (internal quotation marks omitted)); see also In re Key Equip. Fin. Inc., 371 S.W.3d 296, 301 (Tex. App.-Houston [1st Dist.] 2012, no pet.) ("In light of the strong public policy favoring freedom of contract, contractual jury waivers deserve no more scrutiny than agreements to waive the judicial forum entirely and arbitrate any future dispute.").

197. G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 527 (Tex. 2015); In re Morgan Stanley & Co., 293 S.W.3d 182, 184 n.2 (Tex. 2009); Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 307 (Tex. 2006).

198. Ritchie v. Rupe, 443 S.W.3d 856, 889 (Tex. 2014) (quoting Roberts v. Williamson, 111 S.W.3d 113, 118 (Tex. 2003)).

199. Horizon Shipbuilding, Inc. v. BLyn H Holding, LLC, 324 S.W.3d 840, 851 (Tex. App.-Houston [14th Dist.] 2010, no pet.) (citing D.H. Blair Inv. Banking Corp. v. Reardon, 97 S.W.3d 269, 278 (Tex. App.-Houston [14th Dist.] 2002, pet. dism'd w.o.j.)).

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with a tortfeasor arises without the victim's consent. Accordingly, a tort victim has an acute interest in maintaining its ability to pursue its tort claim in the forum that is most likely to render a fair decision. 200 Permitting a tortfeasor to unilaterally dictate the forum in which the dispute is resolved-which is what occurs under the direct-benefits test for equitable estoppel-runs directly contrary to the interests of Texas in fairly compensating deserving tort victims.

To correct this problem and eliminate uncertainty surrounding this area of law, the Texas Supreme Court should follow the Second Circuit's approach and bifurcate its test for equitable estoppel. It should impose different standards depending upon whether (1) a non-signatory is attempting to enforce an arbitration agreement against a signatory, or (2) a signatory is attempting to enforce an arbitration agreement against a nonsignatory. 2 1 When a non-signatory is attempting to enforce an arbitration agreement against a signatory, the test for equitable estoppel must have two prongs: (1) the claimant-signatory must seek to secure the direct benefits of a contract that contains an arbitration agreement, and (2) there must be a close relationship between the signatory and non-signatory parties, such that the nature of the relationship justifies a conclusion that the claimantsignatory should be estopped from denying an obligation to arbitrate a dispute with the non-signatory.2 °2 The second prong of this proposed test incorporates an implied element of consent to arbitrate, which will ensure that arbitration remains a "matter of consent, not coercion," 20 3 that parties

200.

See Freis v. Canales, 877 S.W.2d 283, 284 (Tex. 1994) (per curiam) ("Likewise, a party who is compelled to arbitrate without having agreed to do so will have lost its right to have the dispute resolved by litigation."); Forex Capital Mkts., LLC v. Crawford, No. 05-14-00341-CV, 2014 WL 7498051, at *2 (Tex. App.-Dallas Dec. 31, 2014, pet. denied) (mem. op.) ("Absent an agreement to the contrary, a plaintiff generally has the right to have their claims resolved by litigation and to choose the venue in which to file suit.").

201.

See MAG Portfolio Consult, GMBH v. Merlin Biomed Grp. LLC, 268 F.3d 58, 62 (2d Cir. 2001); Thomson-CSF, S.A. v. Am. Arbitration Ass'n, 64 F.3d 773, 778-79 (2d Cir. 1995).

202.

To determine whether the nature of the relationship justifies the application of the doctrine of equitable estoppel, Texas courts should generally look to the three-prong test for promissory estoppel for evidence of an implied agreement to arbitrate with the non-signatory--( 1) a promise, (2) foreseeability of reliance by the promisor, and (3) substantial reliance by the promisee to its detriment. See Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524, 538 (5th Cir. 2000) (Dennis, J., dissenting). As Judge Dennis stated in Grigson, [A] non-party to a contract containing an arbitration clause may invoke the clause and compel a signatory party to arbitrate when the signatory reasonably should have expected that, because of his statements or conduct, the non-signatory would be induced to rely justifiably on the contract and would be injured thereby if the signatory refused to recognize the non-signatory's rights or entitlements with respect to the contract.

Id. at 532.

203.

Volt Info. Scis., Inc. v. Bd. of Trs., 489 U.S. 468, 469 (1989).

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EQUITABLE ESTOPPEL

will not be "require[d] [] to arbitrate when they have not agreed to do so,",204 will remain "as enforceable as other and that arbitration agreements 20 5 so." more not contracts, but VI. CONCLUSION

The test for equitable estoppel in Texas lacks an element of implied consent to arbitrate, and it apparently requires courts to compel arbitration of any dispute in which a plaintiff seeks to derive a direct benefit from a contract containing an arbitration clause. While the Texas Supreme Court's opinion in Vesta indicated that a signatory to a contract containing an arbitration clause should not be required to arbitrate a tortious interference claim against a stranger to the contract, the Meyer opinion disregarded this reasoning and solidified a test for direct-benefits estoppel that does not account for anything other than the signatory's desire to secure the benefits of the contract. To eliminate the uncertainty surrounding this area of law and ensure that the doctrine of equitable estoppel is applied in a manner that is consistent with historical equitable principles, the Texas Supreme Court should bifurcate its test for equitable estoppel, imposing different standards depending upon whether a signatory or a non-signatory is attempting to enforce the arbitration agreement. When a non-signatory is attempting to enforce an arbitration agreement against a signatory, the Texas Supreme Court should articulate a test for equitable estoppel that incorporates an implied element of "consent" to arbitrate.

EEOC v. Waffle House, Inc., 534 U.S. 279, 293 (2002) (quoting Volt, 489 U.S. at 478) 204. (internal quotation marks omitted).

Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395,404 n.12 (1967).

205.

CAPTIVE INSURANCE BUSINESS DEDUCTIONS: THE EVOLUTION FROM THE PARENT-SUBSIDIARY CAPTIVE STRUCTURE TO THE BROTHER-SISTER CAPTIVE STRUCTURE 1.

INTRODUCTION ............................................................................... 280

II.

THE POTENTIAL TAX BENEFITS OF CAPTIVE INSURANCE TRAN SA CTION S ..............................................................................

HI.

INSURANCE DEFINED: THE RISK SHIFTING AND RISK DISTRIBUTION STANDARD ............................................................. 287 THE PARENT-SUBSIDIARY CAPTIVE STRUCTURE: INSURANCE PREMIUMS NOT DEDUCTIBLE UNLESS THE CAPTIVE DOES BUSINESS OUTSIDE THE CORPORATE GROUP ................................ 288

IV.

281 from A. The Tax Benefit to the Captive: PotentialExclusion 282 Gross Income ......................................

B. The Tax Benefit to the Insured. DeductibleBusiness 282 Exp ense .................................................

283 ......

Premiums C. DistinguishingSelf-Insurancefrom Insurance

A. The Separate CorporateEntities Doctrine.............................

B. Revenue Ruling 77-316: The "One Economic Family" Doctrine ..................................................................................

1. Situation 1: TransactionsExclusively Between the Parentand the Captive......................................................

2. Situation 2: The Captive Reinsures the Risk of the P arent................................................................................

3. Situation 3: The Captive Transfers the Risk Outside the CorporateGroup...............................................................

C. Revenue Ruling 78-338: Spreading Out Ownership of the C aptive ....................................................................................

V.

THE BROTHER-SISTER CAPTIVE STRUCTURE: THE MOVE TOWARDS ALLOWING DEDUCTIBLE INSURANCE PREMIUMS ........

A. Sibling Corporations:The Balance Sheet Testfor Deductible InsurancePremiums .............................................

B. UnrelatedRisks: Enough UnrelatedEntities Will Achieve Risk Shifting and Risk Distribution.........................................

C. The HarperGroup Factors: The Captive Must Be Legitimately Organized...........................................................

D, The Safe-HarborRulings ........................................................

289 289 290 29 1 295 298 298 299 302 304 307

280

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1. Revenue Ruling 2002-89: UnderwritingSufficient UnrelatedR isks .................................................................

2. Revenue Ruling 2002-90: OperatingSubsidiariesMay Deduct Premium Payments ...............................................

V I.

C ON CLU SION ..................................................................................

I.

307 308 309

INTRODUCTION

A captive insurance company is a business entity organized for the primary purpose of providing insurance protection to related entities.1 Stated differently, a captive insurance company is formed by the entities whose risks it insures.2 The most common type of captive arrangement is within a consolidated group, whereby the captive provides coverage to the parent and its sister entities.3 Captive insurance offers both tax and non-tax benefits. Some of the non-tax benefits of forming a captive include obtaining insurance coverage when commercial insurers are unwilling to do so, reducing premium payments, gaining the potential to control certain risk, and accessing the reinsurance market. 4 Given the ability to obtain the same amount of coverage at a lower cost, captive insurance companies have reemerged as a popular business tool and have transformed the commercial insurance industry.5 Perhaps the most important benefit, however, is the potential tax deferral within a consolidated group of entities.6 In 2014, the Tax Court continued the trend of allowing businesses to deduct insurance premiums to a captive as a legitimate business expense. 7 Yet, in February of 2015, the Internal Revenue Service (the Service) placed certain small and abusive 1. See, e.g., Julie Goosman & Christine Lug, Captivating! Captive Insurance Arrangements Are Alive and Well, 35 CORP. TAX'N 25, 26 (2008).

2.

See, e.g., Stuart R Singer, When the Internal Revenue Service Abuses the System: Captive Insurance Companies and the Delusion of the Economic Family, 10 VA. TAX REV. 113,

117 (1990).

3. See Goosman & Lug, supra note 1, at 26 (explaining the four most common types of captive insurance arrangements).

4.

See, e.g., Randall L. Hahn & William Bailey, Captive Insurance Companies: More

Viable than Ever?, 29 CORP. TAX'N 12, 14-15 (2002) (providing an overview of the legitimate business reasons for forming a captive).

5.

See id at 14.

6. Goosman & Lug, supra note 1, at 29 (discussing the difference between insurance tax accounting and general corporate tax accounting).

7. Rent-A-Center, Inc. v. Comm'r, 142 T.C. 1, 23, 25 (2014) (holding that a parental guarantee did not vitiate risk shifting); Securitas Holdings, Inc. v. Comm'r, T.C. Memo 2014-225, at *25 (Oct. 29, 2014) (finding that a parental guarantee did not negate risk shifting).

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8 captive structures on its annual "Dirty Dozen" list of tax scams. To illustrate the type of captive arrangement scrutinized by the Service, the insured entity is generally allowed to deduct insurance premiums as a business expense. 9 In turn, these premiums are gross income to the captive subsidiary. 10 The captive, however, may elect to exclude $1,200,000 per 1 year in net written premiums from its taxable income, thereby paying 12 taxes only on its investment income. Essentially, the corporate group is income without ever making a able to substantially decrease its taxable 13 group. payment outside the corporate The purpose of this Comment is to aid the practitioner in forming a captive insurance company. As such, this Comment will present the relevant case law affecting the structure of captive insurance companies and distinguish legitimate captive structures from abusive ones. This Comment proceeds in five parts. Part II turns to the Internal Revenue Code to examine the potential federal income tax consequences of a captive insurance transaction. Part I will also provide an overview of the well-established principle that a taxpayer is not entitled to deduct payments made to a reserve fund. Part II briefly outlines the necessary elements of insurance for federal tax purposes. Part IV focuses on the deductibility of insurance premiums in a parent-subsidiary arrangement. Part V then shifts the focus to brother-sister captive arrangements. Finally, Part VI provides some concluding thoughts.

II.

THE POTENTIAL TAX BENEFITS OF CAPTIVE INSURANCE

TRANSACTIONS

Because the Service targeted certain small captive structures in its 14 "Dirty Dozen" list of tax scams, an overview of the tax consequences to

Abusive Tax Shelters Again on the IRS "Dirty Dozen" List of Tax Scams for the 2015 8.

Filing Season, IRS (Feb. 3, 2015), https://www.irs.gov/uac/Newsroom/Abusive-Tax-SheltersAgain-on-the-IRS-Dirty-Dozen-List-of-Tax-Scams-for-the-2015-Filing-Season.

9.

I.RC. § 162(a) (2012).

Insurance companies are treated separately under the Code. Except for life insurance 10. companies, a tax is imposed at the regular corporate rates on the taxable income of every insurance company. Id. § 831(a). An insurance company's gross income includes investment income, underwriting income, and gain from the disposition of property. Id.§ 83 1(b)(1).

11.

Id. § 831(b)(2).

Id § 831(b)(1).

12.

Donald Arthur Winslow, Tax Avoidance and the Definition of Insurance: The 13.

Continuing Examination of Captive Insurance Companies, 40 CASE W. RES. L. REv. 79, 81 (1990).

IRS, supranote 8.

14.

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the captive is warranted. 5 The remainder of this Comment, however, will primarily focus on the source of most captive insurance litigation: the tax consequences to the insured. The cases presented in this section stand for the proposition that a taxpayer may not establish a reserve fund and then 16 deduct payments made to that reserve.

A.

The Tax Benefit to the Captive: PotentialExclusionfrom Gross Income

Under section 831(a), a tax is imposed on the taxable income of any insurance company other than life insurance companies. 17 Section 832(b)(1) provides that an insurance company's gross income includes its investment income, underwriting income, and gains from the disposition of property.' 8 However, under section 831 (b), property and casualty insurance companies that receive annual net written premiums under $1,200,000 may elect to receive these premiums tax-free, 19 thereby being taxed only on its investment income.2 ° In other words, as long as the captive's business operations do not exceed $1,200,000 in annual net premiums, such premiums are received tax-free and the captive incurs no tax obligations.2' B.

The Tax Benefit to the Insured: Deductible Business Expense

Under section 162(a), a taxpayer is allowed to deduct "all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. 2 2 The regulations provide that a taxpayer may deduct insurance premiums as an ordinary and necessary business expense. 23 Hence, captive insurance is attractive at both ends of the transaction because of the potential tax deferral within a consolidated group

15.

See Beckett G. Cantley, Steering into the Storm: Amplification of Captive Insurance Company Compliance Issues in the Offshore Tax Crackdown, 12 HOus. Bus. & TAX L.J. 224, 229-32 (2012), for a general discussion on the potential tax advantages to the captive insurance company.

16.

E.g., Spring Canyon Coal Co. v. Comm'r, 43 F.2d 78, 80 (10th Cir. 1930).

17.

I.RC. § 831(a).

18.

Id. § 832(b)(1)(A)-(B); see also id.§ 832(b)(3) ("The term 'underwriting income' means the premiums earned on insurance contracts during the taxable year less losses incurred and expenses incurred.").

19.

20.

21.

22.

23. business losses in

Id.§ 831(b)(2).

See id.§ 831(b)(1).

See id.

Id.§ 162(a).

See Treas. Reg. § 1.162-1(a) (as amended in 1993) ("Among the items included in expenses are ... insurance premiums against fire, storm, theft, accident, or other similar the case of a business .... ").

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CAPTIVE INSURANCE BUSINESS DEDUCTIONS

of entities.2 4 On the one hand, the insured entity is allowed a deduction for 2 insurance premiums paid to the captive. ' The captive, on the other hand, may exclude from its taxable income a statutorily limited amount of net premiums received.26 Thus, assuming the insurance transaction is structured correctly, the corporate group uses captive insurance is able to decrease its taxable27 income without ever making a payment outside the corporate group.

C.

DistinguishingSelf-Insurancefrom InsurancePremiums

is To fully understand the income tax treatment of captive insurance, it 28 context. business the in insurer the important to understand the role of Companies face hazards on a day-to-day basis, which expose them to 29 uncertain financial consequences. A company's reaction to these risks is 30 The company essentially faces a decision known as risk management. between two alternatives: either retain the financial consequences of the 31 loss or transfer the financial consequences of the loss to another.

Retaining the risk is known as self-insurance, whereas transferring the risk is insurance.32 As the cases that follow illustrate, courts have limited the ability of businesses to deduct insurance premiums by distinguishing between self-insurance and insurance.

33 In Spring Canyon Coal Co. v. Comm 'r, the Tenth Circuit held that a self-insurer is not entitled to deduct, as a business expense, amounts 34 reserved to cover contingent liabilities. In that case, Utah's workers' compensation laws required certain employers to insure themselves against liability through either the state insurance fund, a private insurance 35 company, or by electing to become a self-insurer. The taxpayer elected to become a self-insurer, thereby setting aside, in a reserve account, an amount equal to that which would have been required as premiums if the taxpayer

See Goosman & Lug, supranote 1, at 29.

24. § 162(a).

25.

Id. § 831(b)(2).

26.

See Winslow, supra note 13, at 81.

27.

See William B. Barker, Federal Income Taxation and Captive Insurance, 6 VA. TAX 28. in the captive REv. 267, 270 (1986) (explaining the concept of risk management as applied insurance context).

See id 29.

See id 30.

Id. 31.

Id. 32.

Spring Canyon Coal Co. v. Comm'r, 43 F.2d 78 (10th Cir. 1930).

33.

Id. at 80.

34.

Id. at 78.

35.

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were insured with the state insurance fund.36 The taxpayer carried the balance of the reserve fund as an asset on its books, offset by contributions made to the fund for insurance. 7 The sole issue before the court was whether a taxpayer is entitled to deduct the sums paid into a reserve fund as a business expense.3 8 The court first addressed the potential manipulation of taxable income if such a deduction were allowed.3 9 In essence, the taxpayer argued that payments into the reserve fund should be treated as deductible expenses, and then charged to the taxpayer as income in the event the funds are not utilized.4 ° The court quickly disposed of this argument, reasoning that such a situation would permit taxpayers to distort their taxable income by "select[ing] the taxable year [in] which ...income shall be charged.' ' The court then looked to the substance over form doctrine.4 2 Although this doctrine is typically applied to determine what constitutes income, the court found that the same rule should apply to expenses.43 Accordingly, the court reasoned that setting aside a sum of money in a reserve fund is not an expense, but rather is a type of self-insurance against contingent losses. 4 Moreover, the court noted that the purpose of self-insurance is to avoid the expense of insurance premiums.45 Because the taxpayer elected not to expend premiums, and thereby becoming a self-insurer, the court viewed the taxpayer as merely moving funds from one corporate pocket to the other.46 Therefore, the court held that the taxpayer was not entitled to deduct as an expense amounts which it could have paid for insurance, but instead retained as self-insurance.47 In In re Ostheimer,48 the court addressed the issue of whether an accrual method taxpayer is entitled to deduct, from his gross income, amounts placed in a reserve account for the purpose of satisfying an anticipated liability.49 There, the taxpayer leased equipment for use in his restaurant business. 50 The lease agreement provided that the taxpayer 36.

37.

38.

39.

Id. at 78-79.

Id.at 79.

Id Id.

40.

Id.

41.

42.

43.

Id. See id.("Taxation is a practical matter, and form must give way to substance.").

Id.

44.

45.

46.

47.

48.

49.

50.

Id. Id.at 80.

Id. Id. In re Ostheimer, 1 B.T.A. 18 (1924).

Id.at 20.

Id.at 19.

CAPTIVE INSURANCE BUSINESS DEDUCTIONS

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maintain and redeliver to the lessor the assets in as good a condition as 51 when they were received by the taxpayer. In order to comply with this then condition, the taxpayer set up a reserve out of his earnings and 52 reserve. the to contributed amounts deducted from his gross income not The court disallowed the deduction, reasoning that the taxpayer did 53 Of incur a liability in the years in which deductions were claimed. importance to the court was the fact that the taxpayer used the accrual method of accounting. 54 Under the accrual method, a liability is incurredand thus deductible-in the taxable year in which: (1) all the events have occurred that establish the fact of the liability, (2) the amount of the liability can be determined with reasonable accuracy, and (3) economic performance 55 has occurred with respect to the liability. The court held that a liability to return an asset in as good a condition as when received when a lease is terminated at some indefinite time in the future is not the actual incurring of a present liability. 56 Moreover, although not directly stated, it is apparent that the court disallowed the deduction due to the fact that the amount of the liability could not be established with reasonable accuracy.

58 In In re Consolidated Asphalt Company, the court addressed the issue of whether a cash method taxpayer is entitled to 59deduct amounts set aside as a reserve for a future contractual liability. In that° case, the taxpayer was engaged in the business of paving asphalt streets. Under the pavement in terms of a contract, the taxpayer was required to maintain the 61 The taxpayer good condition for five years after completion of the work. set aside an estimated amount of the total sum received as payment on the contract that it believed would be necessary to maintain and repair the pavement.6 2 The taxpayer argued that it could deduct from its gross income the amount, which it set aside as a reserve to satisfy its future contractual obligation.63 In rejecting this argument, the court focused on the fact that the company used the cash method of accounting:

51.

Id.

52.

Id. at 19-20.

53.

54.

55.

56.

57.

58.

Id. at21.

See id See Treas. Reg. § 1.446-1(c)(1)(ii)(A) (as amended in 2011).

In re Ostheimer, 1 B.T.A. at 21.

See Id. at 20-21.

In re Consol. Asphalt Co., 1 B.T.A. 79, 81-82 (1924).

59.

Id.

60.

61.

Id. at 79.

Id. at 80.

62.

Id.

63.

Id. at81.

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The use of the cash basis means that net income must be determined by including all the gross income actually received and deducting only the amounts actually paid out. It would be an obvious distortion to return only the gross income actually received and deduct therefrom both the amounts paid out and the payments anticipated. 64 In Anesthesia Service Medical Group, Inc. v. Commissioner,6 5 the Ninth Circuit held that funds placed in an irrevocable trust to cover claims against the taxpayer are not a deductible business expense.66 The taxpayer in that case made payments to a trust to cover future medical malpractice claims against its employees.6 7 The taxpayer argued that the payments to the trust constituted a deductible business expense because the funds were not for the payment of claims against the taxpayer, but rather for the payment of claims against its employees.68 Citing the doctrine of respondeat superior, the court reasoned that by setting aside funds to pay claims against its employees, the taxpayer also set aside funds to satisfy malpractice claims for which it would be liable. 69 Accordingly, the court found that the taxpayer did not incur a deductible business expense because the funds remained available to satisfy obligations in future years.70 Thus, the Ninth Circuit held that amounts placed into an irrevocable trust are not a deductible business expense until a recognizable loss occurs.7 1 In sum, amounts reserved as self-insurance are not deductible business expenses under section 162(a) because the funds remain available to the taxpayer. Instead, the taxpayer must wait until a recognizable loss occurs to take the deduction.7 3 In reality, self-insurance and captive insurance present little substantive difference. 74 However, given the desirability of a current deduction, this distinction between deductible insurance premiums and nondeductible self-insurance is the central issue with captive insurance.

Accordingly, the remainder of this Comment will further explain the contours to determine whether payments to a captive are deductible business expenses, or whether such payments are nondeductible selfinsurance.

64.

65.

66.

67.

Id. at 82.

Anesthesia Serv. Med. Grp., Inc. v. Conm'r, 825 F.2d 241 (9th Cir. 1987).

Id. at 242.

Id.

68.

69.

70.

Id. Id. Id.

71.

72.

73.

74.

Id. at 242-43.

Id. at 242.

Id. See Barker, supra note 28, at 271.

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CAPTIVE INSURANCE BUSINESS DEDUCTIONS

III. INSURANCE DEFINED: THE RISK SHIFTING AND RISK DISTRIBUTION STANDARD

In order for a taxpayer to take a deduction under section 162(a) for insurance premiums, the underlying transaction must necessarily possess the basic characteristics of insurance.75 Neither the Code nor the regulations provide a definition of "insurance" for federal income tax purposes. Rather, the test for whether the underlying arrangement constitutes insurance developed through case law.76 For federal income tax purposes, insurance has two elements: risk shifting and risk distribution. 77 The insured entity and the captive will receive favorable tax treatment if both of these elements are met.

The Supreme Court provided the test to determine whether an arrangement represents "insurance" for federal tax purposes in Helvering v.

Le Gierse.78 There, an elderly woman executed a life-insurance policy a month before her death. 79 As a condition to the issuance of the lifeinsurance policy, the insurance company required the insured to also purchase an annuity contract. 80 Hence, the insurance company would not issue either contract without the other. 81 The insured died less than a month of the purchase of these policies. The question before the Court was whether the proceeds of the life insurance policy were insurance and thus exempt from the estate tax.83 To constitute insurance, the Court held that the underlying transaction must involve an actual "insurance risk" at the time the transaction was executed. 84 The Court reasoned that insurance risk requires both risk shifting and risk distribution.8 5 The Court further reasoned that, under these facts, the two contracts must be considered together because of their dependence on one another. 86 Applying this standard, the Court viewed the risk of each contract-longevity under the annuity contract and prompt death under the insurance contract-as neutralizing the risk inherent in the

75.

See Bobby L. Dexter, Rethinking "Insurance," Especially After AIG, 87 DENV. U. L.

REv. 59, 59 (2009).

76. Id. at64.

77. Helvering v. Le Gierse, 312 U.S. 531, 539 (1941).

78. Id. 79. Id. at 536.

80. Id. at 536-37.

81. Id. at 537.

82.

Id. at 536.

83.

84.

85.

86.

Id. at 537.

Id. at 539.

Id. Id. at 540.

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other. 87 Accordingly, the Court held that the underlying transaction failed the risk-shifting prong; therefore, the proceeds did not constitute 88 insurance.

While there must be both risk shifting and risk distribution for premiums paid to the captive to be deductible, the majority of the lower courts have focused on the risk-shifting prong of Le Gierse.89 Nevertheless, the lower courts have provided substance to both the risk-shifting prong and the risk-distribution prong. 90 Risk shifting involves the actual shifting of a real and identifiable risk of the insured to the insurer. 91 Thus, risk shifting focuses on the contract between the insured and the insurer. 92 Risk distribution, however, requires the shifting to a group of individuals the actual and identifiable risk of the insured.93 Here, the focus is on whether the risk insured against has been distributed over a large group of individuals, rather than to any single insured. 94 Stated differently, risk distribution focuses on the transaction from the viewpoint of the insurer and is achieved when the insurer has received enough premiums so that no one particular loss will exceed the amount of premiums received. 95 IV. THE PARENT-SUBSIDIARY CAPTIVE STRUCTURE: INSURANCE PREMIUMS NOT DEDUCTIBLE UNLESS THE CAPTIVE DOES BUSINESS OUTSIDE THE CORPORATE GROUP In the early development of captive insurance, the typical arrangement involved a subsidiary providing insurance protection to the parent. 96 In a parent-subsidiary transaction, the distinction between deductible premiums and nondeductible self-insurance is a hard one to make. On one hand, the substance of this type of transaction closely resembles the parent company reserving funds as self-insurance.97 On the other hand, courts must recognize the captive's separate corporate identity for federal income tax purposes.98 The cases presented in this section stand for two important structuring principles for parent-subsidiary arrangements. First, a parent company is 87.

88.

89.

Id. at 541.

Id at 542.

See e.g., Malone & Hyde, Inc. v. Comm'r, 62 F.3d 835, 838 (6th Cir. 1995).

90.

See id.

91.

92.

93.

Humana Inc. v. Comm'r, 881 F.2d 247, 251 (6th Cir. 1989).

Id. Id.

94.

Id.

95.

96.

97.

98.

See Hahn & Bailey, supra note 4, at 15.

See Goosman & Lug, supra note 1, at 26.

See, e.g., Spring Canyon Coal Co. v. Comm'r, 43 F.2d 78, 80 (10th Cir. 1930).

See Moline Props., Inc. v. Comm'r, 319 U.S. 436, 438-39 (1943).

CAPTIVE INSURANCE BUSINESS DEDUCTIONS

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not entitled to deduct payments to an unrelated insurance company to the 99 extent that the parent's risks are reinsured with its wholly-owned captive.

Second, a parent company may deduct payments to the captive if the ° captive also insures entities outside the corporate group.1 The Separate CorporateEntities Doctrine

A.

The primary argument in support of allowing a deduction for insurance premiums to a captive is the separate corporate entities doctrine. In Moline Props., Inc. v. Comm'r, the Supreme Court established the principle that, irrespective of the purpose for organizing a corporation or subsidiary, "so long as that purpose is the equivalent of business activity or is followed by the carrying on of business by the corporation, the corporation remains a separate taxable entity."' 01 Thus, under Moline Properties,Inc., courts must recognize the captive's separate corporate identity so long as the captive is formed for a legitimate purpose.1° Revenue Ruling 77-316: The "One Economic Family" Doctrine

B.

The Service announced its initial position on captive insurance in Revenue Ruling 77-316.1°3 In that Ruling, the Service took the position that premium payments to a wholly-owned subsidiary are not deductible as 10 4 ordinary and necessary business expenses under section 162(a). The core of the Service's disallowance argument was the "one economic family" doctrine, which provides that no amount has been paid or incurred to the extent such amounts remain within the economic family and under the practical control of the parent.'0 5 In other words, the Service took the position that when the insurer and the insured are related entities, there can of risks because "one economic be no economic shifting or distributing 06 family" ultimately bears the loss.

The Ruling addressed three separate situations in which a parent corporation and its subsidiaries entered into an insurance arrangement with a wholly-owned captive. 0 7 An outline of the facts of each situation and an

99.

Carnation Co. v. Comm'r, 71 T.C. 400, 409 (1978), affd, 640 F.2d 1010 (9th Cir.

1981).

100.

101.

102.

103.

104.

105.

106.

107.

Crawford Fitting Co. v. United States, 606 F. Supp. 136, 148 (N.D. Ohio 1985).

Moline Props., Inc., 319 U.S. at 439.

Id. Rev. Rul. 77-316, 1977-2 C.B. 53.

Id. at 54.

Id. Id. Id.at 53-54.

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explanation of the relevant case law will illustrate several important structuring principles.

1.

Situation 1: TransactionsExclusively Between the Parent and the Captive

The facts of Situation 1 are as follows: During the taxable year domestic corporation X and its domestic subsidiaries entered into a contract for fire and other casualty insurance with Si, a newly organized wholly owned foreign "insurance" subsidiary of X. S was organized to insure properties and other casualty risks of X and its domestic subsidiaries. X and its domestic subsidiaries paid amounts as casualty insurance premiums directly to SI. Such amounts reflect commercial rates for the insurance involved. Si has not accepted risks from parties other than X and its domestic subsidiaries.10 8 Although separate corporate entities under the Moline Properties doctrine, the Service viewed the parent, its subsidiaries, and the whollyowned captive as one economic family. Under these facts, the Service reasoned that those who ultimately bear the economic burden of the loss are the same entities that suffer the loss. 109 Thus, the amounts paid by X and its subsidiaries are retained entirely by Si, and therefore not deductible."10 In Stearns-Roger Corp. v. United States,"' the parent company designed and manufactured large industrial plants. 1 2 The parent was required to insure both itself and its clients in order to bid on projects." 3 Because of the large amount of coverage needed, the parent found it difficult to obtain insurance from traditional insurance companies. 114 As such, the parent formed a captive, which issued insurance policies only to the parent, its subsidiaries, and its clients.' 15 The parent provided the captive with $1,000,000 of capital at the outset and agreed to indemnify the captive for losses up to $3,000,000.116 The parent deducted as business expenses for insurance the premiums paid to the captive. 117

108.

109.

110.

111.

414 (10th 112.

113.

114.

115.

116.

117.

Id. Id. at 54.

Id. Steams-Roger Corp. v. United States, 577 F. Supp. 833 (D. Colo. 1984), affid, 774 F.2d Cir. 1985).

Id. at 834.

Id. Id. Id. Id. Id. at 834-35.

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CAPTIVE INSURANCE BUSINESS DEDUCTIONS

The parent argued that the arrangement was between two distinct corporate entities pursuant to Moline Properties.18 The government, however, relied on Spring Canyon Coal to argue that the premiums paid to the captive were essentially a self-insurance reserve.11 9 Thus, the government contended that the premium payments simply transferred funds 1 20 within the economic family since the parent wholly owned the captive.

The district court agreed with the government, holding that the parent was not entitled to deduct payments to the captive as insurance expenses. 21 The Tenth Circuit affirmed, reasoning that although the payments went from the parent.2 parent to the captive, the ultimate burden of losses was on the 2.

Situation 2: The Captive Reinsures the Risk of the Parent

The facts in Situation 2 are the same as those set forth in Situation 1, except: [D]omestic corporation Y and its domestic subsidiaries paid amounts as casualty insurance premiums to M, an unrelated domestic insurance company. This insurance was placed with M under a contractual arrangement that provided that M would immediately transfer 95 percent of the risks under reinsurance agreements to 123S2, the wholly owned foreign "insurance" subsidiary of Y. Under these facts, the Service reasoned that 95% of the amounts paid

by Y and its subsidiaries are retained by S2, and therefore not deductible under section 162(a).1 24 The Service, however, allowed as a deduction

by S2.1 25 amounts paid to the unrelated insurer, M, that are not reinsured Thus, the Service concluded that the parent and its subsidiaries could deduct 5% of the premiums since the requisite risk shifting 26and risk loss. 1 distribution occurred-M ultimately bears 5% of the risks of In Carnation Co. v. Commissioner,127 the tax court held that a parent company is not entitled to deduct payments to an unrelated insurance company to the extent that the parent's risks are reinsured with its wholly-

Id.at 835-36.

118.

Id. at 835.

119.

Id. 120.

Id. at 838.

121.

Steams-Roger Corp. v. United States, 774 F.2d 414, 415 (10th Cir. 1985), affg 577 F. 122.

Supp. 833 (D. Colo. 1984).

Rev. Rul. 77-316, 1977-2 C.B. 53, 53.

123.

124. Id. Id. 125.

126. Id. Carnation Co. v. Comm'r, 71 T.C. 400 (1978), aff'd, 640 F.2d 1010 (9th Cir. 1981).

127.

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owned captive. 128 In that case, the parent organized a foreign captive for the sole purpose of reinsuring the risks of the parent and its subsidiaries. 129 The parent agreed to contribute an initial $120,000 to the captive by purchasing 120,000 shares of the captive's common stock at $1 per share. 130 Under the terms of the same agreement, either the parent or the captive could demand that the parent purchase an additional 288,000 shares of the captive's common stock at $10 per share.'13 Hence, the captive had access upon 132 demand to $3,000,000 in capital contributions from the parent.

The parent purchased an insurance policy from a third-party insurance company, who then purchased a reinsurance policy from the captive, whereby the captive agreed to reinsure 90% of the liability from the parent's policy. 133 In other words, the third-party insurer was liable to pay

claims made by the parent under the original insurance policy, whereas the captive was required to indemnify the third-party insurer under the terms of their reinsurance agreement. 134 In addition, the third-party insurance company agreed to transfer 90% of the premiums received from the parent 135 to the captive.

In the tax year at issue, the parent paid $1,950,000 in premiums to the third-party insurer. 136 Pursuant to their reinsurance contract, the third-party insurer paid to the captive $1,755,000 of the premiums. 137 The parent deducted as an ordinary and necessary business expense the entire $1,950,000 of premiums paid to the third-party insurance company.' 38 The Commissioner determined that 90% of the premiums paid to the unrelated insurance company were not deductible business expenses. 139 Rather, the Commissioner characterized the $1,755,000 payment as a140contribution by the parent to the capital of its captive insurance subsidiary.

The Commissioner advanced four separate arguments in support of its determination that the parent could not deduct the entire amount paid to the third-party insurer. 14' First, the Commissioner argued that to the extent the parent's risk was reinsured by its own captive insurance subsidiary, no risk 128.

129.

130.

131.

132.

133.

134.

135.

136.

137.

138.

139.

140.

141.

Id.at 409-10.

Id. at 402.

Id. Id. Id. Id. at 402-03.

Id. at 403.

Id. Id. at 404.

Id. Id. Id. Id. Id. at 405.

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CAPTIVE INSURANCE BUSINESS DEDUCTIONS

shifting occurred. 142 Second, the Commissioner believed the transaction constituted nothing more than amounts reserved as self-insurance, and such amounts are not deductible. 143 Third, the Commissioner argued that 90% of the payments remained within the same economic family, and therefore that portion of the amount was not "paid or incurred" within the meaning of section 162(a). 144 Finally, the Commissioner alleged that in order to claim a deduction for any expenditure, something of value must be received in exchange for such expenditure.145 Because the parent ultimately bore the risk of loss, the Commissioner concluded that the146parent received nothing of value in exchange for a deductible expenditure.

Applying the standard set forth in Le Gierse, the Tax Court held that, risk. 4 7 taken together, the two agreements were void of any insurance Specifically, the court reasoned that the transaction failed the risk-shifting prong because the agreement by the parent to capitalize the captive with up to $3,000,000 on demand neutralized any risk assumed by the captive in the reinsurance arrangement. 148 Thus, no risk was shifted to the captive because the parent ultimately bore 90% of the lOSS. 14 9 The parent, therefore, was not allowed a deduction for amounts paid to the unrelated insurance company to the extent the captive reinsured the risk. 5 ° In sum, the court ruled that 10% of the amount paid to the third-party insurance company was a deductible business expense, while the remaining 90% of the payment was not deductible.' 5' In Clougherty Packing Co. v. Commissioner,152 the Tax Court considered a situation similar to Carnation,except the parent in Clougherty never agreed to contribute additional capital to the captive. 153 Instead, the of capital. 15 4 parent formed the captive by providing an initial $1,000,000 The parent negotiated coverage for its workers' compensation insurance liabilities with an unrelated insurance carrier. 155 The captive subsequently agreed to reinsure the first $100,000 of each claim insured by the unrelated 142.

143.

144.

145.

146.

147.

148.

149.

150.

151.

152.

1987).

153.

154.

155.

Id. Id. Id. Id. Id at 406.

Id. at 409.

Id. Id. Id.at409-10.

Id. Clougherty Packing Co. v. Comm'r, 84 T.C. 948 (1985), aft'd, 811 F.2d 1297 (9th Cir. Id. at 956.

Id. at 951.

Id. at 952.

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insurance company. 51 6 In addition, the unrelated insurance company agreed 57 to remit 92% of the premiums received from the parent to the captive.

But unlike Carnation, the parent neither agreed to provide additional capital, nor did the parent provide any assurance that158the captive would perform its obligation under the reinsurance agreement.

The parent advanced two arguments in support of allowing the entire amount of the premiums paid as a deduction.1 59 The parent first argued that disallowance of the premiums violates the Moline Properties doctrine, which recognizes the separate identity of each corporate entity in a legitimate business transaction. 160 The Tax Court disagreed, and affirmed its decision in Carnation to apply the Le Gierse method of viewing the two insurance agreements together irrespective of whether the parent and its captive insurance subsidiary are considered separate entities for tax 16

purposes. 1

Next, the parent argued that the rationale of Carnation should not be followed because the facts in Carnation are distinguishable from the facts before the court. 162 Specifically, the parent argued that, unlike Carnation, the captive subsidiary was adequately capitalized at the outset. 163 Also, unlike Carnation, the parent emphasized the fact that it never agreed to indemnify the third-party insurance company.1 64 The tax court disagreed and again affirmed its decision in Carnation.165 The court reasoned that "[t]he financial viability of the captive insurance subsidiary is not controlling."' 166 Instead, the controlling test "continues to be whether, considering all of the facts, the risk of loss was shifted away from the taxpayer who seeks to deduct insurance premiums.' ' 167 The court further defined the term "insurance premium" as "the cost of providing for the shifting of risk.', 168 Thus, payments do not constitute insurance premiums unless they are paid to shift the risk away from the taxpayer who seeks to deduct them. 169 Because 92% of the premiums paid to the third-party

156.

Id.at 953.

157.

158.

159.

Id. Id. Id.at 956.

160.

Id.

161.

162.

163.

164.

165.

166.

167.

168.

169.

Id.at 959.

Id.at 956.

Id Id. Id. Id.at 956-57.

Id.at 957.

Id.at 958.

Id.

CAPTIVE INSURANCE BUSINESS DEDUCTIONS

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insurance company were remitted to the captive, the court disallowed the deductions to that extent.17 ° 17 In Mobil Oil Corp. v. United States, ' the parent company found that its affiliates were not purchasing insurance efficiently and that the purchased policies were inadequate in light of the risks involved in their operations. 72 Concerned with these problems, the parent formed two 73 both captives' foreign captive insurance companies.1 The major portion ofits affiliates. 174 and parent the of risks of reinsurance of business consisted 75 The parent argued that the government's disallowance of the deductions separate corporate entities. violated the Moline Properties doctrine of The court first noted that "[i]t is well settled that tax consequences must turn upon the economic substance of a transaction and not upon the 176 Focusing on the substance of the sequence or form of the transaction., transaction, the court rejected the parent's argument that because the insured and the insurer were separate corporate entities, sufficient risk 177 Specifically, the court reasoned that transference had occurred. disallowing the insurance premiums paid to the captive did not disregard 1 78 the separate nature of the corporate entities. Rather, the court reclassified 79 affiliate, the transaction1 as insurance through a wholly owned insurance 1 80 Under this account. reserve a up setting as same the which is essentially approach, "[t]he risk of loss remains with the parent81and is reflected on the the parent.' balance sheet and income statements of 3.

Situation 3: The Captive Transfers the Risk Outside the Corporate Group In Situation 3, the facts are as follows: 170.

Id. at 960.

171.

172.

Mobil Oil Corp. v. United States, 8 Cl. Ct. 555 (1985).

Id. at 557.

Id. at 558.

173.

Id. at 561.

174.

Id. at 567.

175.

Id. at 566.

176.

Id. at 567-68.

177.

Id. at 567.

178.

See I.R.C. § 482 (2012) ("In any case of two or more organizations, trades, or 179. and businesses (whether or not incorporated, whether or not organized in the United States, the interests, same the by indirectly or directly controlled or owned affiliated) not whether or Secretary may distribute, apportion, or allocate gross income, deductions, credits, or allowances between or among such organizations, trades, or businesses, if he determines that such distribution, apportionment, or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades, or businesses.").

Mobil Oil Corp., 8 Cl. Ct. at 567.

180.

181.

Id.

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[D]omestic corporation Z and its domestic subsidiaries paid amounts as casualty insurance premiums directly to Z's whollyowned foreign "insurance" subsidiary, S3. Contemporaneous with the acceptance of this insurance risk, and pursuant to a contractual obligation to Z and its domestic subsidiaries, S3 transferred 90% of the risk through reinsurance agreements to an unrelated insurance company, W.182 Similar to Situation 2, the Service ruled that 10% of the amounts paid

by Z and its subsidiaries were retained by S3, and therefore, not deductible business expenses. 183 However, to the extent S3 transferred the risks to W through reinsurance, that portion of the amounts paid by Z and its subsidiaries were deductible insurance expenses. 184 Hence, the Service viewed 90% of the payments as deductible because that portion of the risk was transferred outside the corporate group. 185 The principal case that illustrates this type of transaction-wherein the captive transfers the risk outside the economic family-is CrawfordFitting Co. v. United States.'86 The facts in CrawfordFittingwarrant detail in order to fully understand the issue. In Crawford Fitting, the corporate structure consisted of two groups of companies-collectively the Crawford Companies. 187 The first group of companies included Crawford and three other companies, all of which manufactured valves and fittings. 188 The second group involved four separately incorporated regional warehouses, which purchased the manufacturing companies' products. 189 The Crawford Companies formed a captive insurance affiliate for the primary purpose of securing a larger amount of liability insurance at a lower price. 190 Each of the four regional warehouses owned 20% of the captive, with the remaining 20% owned by four Crawford employees.191 There were no additional contributions made after the captive's initial capitalization of $1,000,000.192 The captive issued a general liability policy covering 45 of the Crawford Companies, as well as and independent distributors. 193 The policy provided coverage of $1,500,000; however, the captive retained

182.

183.

184.

185.

186.

Rev. Rul. 77-316, 1977-2 C.B. 53.

Id Id. Id Crawford Fitting Co. v. United States, 606 F. Supp. 136 (N.D. Ohio 1985).

187.

Id at 137.

188.

Id.

189.

Id.

190.

191.

192.

193.

Id. at 138.

Id. Id. Id.

CAPTIVE INSURANCE BUSINESS DEDUCTIONS

20161

$100,000 of risk by reinsuring $1,400,000 with independent third-party insurers.194

The sole issue before the court was whether the payments made by Crawford to the captive were deductible insurance premiums, or whether 195 The court first noted they were nondeductible self-insurance reserves. that this case was unlike any of the then-decided captive insurance196cases The because Crawford was not the parent company of the captive. enjoyed gain any that underlying theory of the economic family doctrine is 97 or loss suffered by the captive affects the net worth of the parent.1 As a result, there is no risk shifting because any economic loss suffered by the captive lowers the value of the parent's assets. The court emphasized, however, that Crawford had "no ownership share in the captive insurance company. 198 Thus, the court found that the companies were "not so economically related that their separate financial transactions must be aggregated." 199 Moreover, the court noted that beyond the presence of nonaffiliated shareholders was the presence of nonaffiliated policyholders, enabling the distribution of risk.200 Considering these facts together, the court held that Crawford shifted the risk of economic loss to the captive, who then distributed the risk of loss among a group on nonaffiliated insured entities. 2 01 Accordingly, amounts paid by Crawford to the captive were 20 2 deductible as ordinary and necessary business expenses.

In sum, three important structuring principles come from the previously discussed cases. First, a parent company is not entitled to deduct payments to an unrelated insurance company to the extent that the parent's 20 3 Second, a parent risks are reinsured with its wholly-owned captive. company cannot deduct payments to the captive unless the captive also 2°4 insures entities outside the corporate group. Third, a parent can overcome the one economic family doctrine by spreading out ownership of the 205 captive.

194.

195.

196.

197.

198.

199.

200.

201.

202.

203.

Comn'r, 204.

205.

Id. at 139.

Id. at 140.

Id. at 145.

Id. at 146.

Id. (emphasis omitted).

Id. at 145.

Id.at 146-47.

Id. at 148.

Id. See Mobil Oil Corp. v. United States, 8 Ci. Ct. 555, 567 (1985); Carnation Co. v.

71 T.C. 400, 409-10 (1978), aff'd, 640 F.2d 1010 (9th Cir. 1981).

See CrawfordFitting Co., 606 F. Supp. at 148.

See id

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C.

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Revenue Ruling 78-338: SpreadingOut Ownership of the Captive

While it does not fit neatly within the parent-subsidiary captive structure, Revenue Ruling 78-338 should be considered at this juncture because the Service expressly distinguished Revenue Ruling 7 7 -3 1 6 .206 In addition, the facts closely resemble those in CrawfordFitting.20 7 In Revenue Ruling 78-338, the Service explained that amounts paid by a parent and its affiliates to a captive owned by numerous unrelated shareholders are deductible as ordinary and necessary business expenses under section 162(a).2 °8 The captive had one class of common voting stock, which was owned by the taxpayer and thirty unrelated companies. 209 No single shareholder owned a controlling interest in the captive.210 In addition, the captive provided insurance only to its shareholders and their subsidiaries.21 1 The Service began by distinguishing Revenue Ruling 77-316.212 The Service reasoned that the situations presented in Revenue Ruling 77-316 did not constitute insurance because no economic shifting or distributing of risks occurs when the insured entities are economically interrelated and the risks are retained by the wholly-owned captive.21 3 In contrast, the facts of Revenue Ruling 78-338 stipulate that the taxpayer and the other insured shareholders are not economically related.21 4 Therefore, the Service ruled that the economic risk of loss could be shifted and distributed among the shareholders who comprise the insured group.2 15 As such, the Service viewed the amounts paid by the taxpayer for insurance as deductible business expenses.216 V. THE BROTHER-SISTER

CAPTIVE STRUCTURE: THE MOVE TOWARDS ALLOWING DEDUCTIBLE INSURANCE PREMIUMS

As concluded in the previous section, a parent company is not entitled to deduct payments made to a wholly-owned captive because there is no

206.

207.

C.B. 107, 208.

209.

210.

211.

212.

213.

214.

215.

216.

Rev. Rul. 78-338, 1978-2 C.B. 107, 108.

Compare Crawford Fitting Co., 606 F. Supp. at 136, with Rev. Rul. 78-338, 1978-2 107.

Rev. Rul. 78-338, 1978-2 C.B. 107, 108.

Id. Id. Id. Id. ld.

Id. Id Id.

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CAPTIVE INSURANCE BUSINESS DEDUCTIONS

shifting of risk.217 If, however, the captive does enough insurance business outside the corporate group, there is considered to be risk shifting and risk distribution. 218 Thus, the parent is entitled to take a deduction for such payments to the captive.2 19 Like in the parent-subsidiary context, the captive in the brother-sister structure is organized for the primary purpose of providing insurance 220 However, unlike the parentprotection to the operating subsidiaries. subsidiary structure, deductions are typically allowed in the brother-sister arrangement because the taxpayer claiming a deduction under section 162(a) does not wholly own the captive. The cases that follow provide several important rules for structuring a brother-sister captive transaction.

A.

Sibling Corporations:The Balance Sheet Testfor Deductible Insurance Premiums

221 In Humana, Inc. v. Commissioner, the Sixth Circuit held that, under siblings 222 the balance sheet test, an arrangement between a captive and its162(a).

for purposes of section constituted deductible insurance expenses

The court described the balance sheet test as follows: The economic reality of insurance between a parent and a captive insurance company is that the captive's stock is shown as an asset on the parent's balance sheet. If the parent suffers an insured loss which the captive has to pay, the assets of the captive will be depleted by the amount of the payment. This will reduce the value of the captive's shares as an asset of the parent. In effect, the assets of the parent bear the true economic impact of the loss.

2 23

In Humana, a wholly-owned captive directly insured both its parent's and its siblings' risk.224 The parent made all the premium payments but then charged the sibling subsidiaries the premium payments it made on their behalf.225 Relying on Carnationand Clougherty, the Tax Court held that the premiums paid by the parent to its wholly owned captive subsidiary226did not constitute insurance premiums and therefore were not deductible. Next, Crawford Fitting Co. v. United States, 606 F. Supp. 136, 145 (N.D. Ohio 1985).

217.

See id at 147-48.

218.

See id. at 148; see also Rev. Rul. 78-338, 1978-2 C.B. 107, 107.

219.

Goosman & Lug, supranote 1, at 26.

220.

Humana Inc. v. Comm'r, 881 F.2d 247 (6th Cir. 1989), aff'g in part, rev'g in part 88 221.

T.C. 197 (1987).

Id. at 252.

222.

Id. at 253.

223.

Humana Inc. v. Comm'r, 88 T.C. 197, 201-02 (1987), afTd in part, rev'd in part, 881 224.

F.2d 247 (6th Cir. 1989).

Id. at 203.

225.

Id. at 207.

226.

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the court extended the rationale of Carnationand Clougherty to the brothersister captive structure.227 Hence, the Tax Court held that the premium payments between the brother-sister corporations were not deductible expenses.22 8 The court reasoned that allowing such a deduction would exalt form over substance and permit a taxpayer to circumvent the rules by simple corporate structural changes.229 The dissent, however, expressly rejected the application of the brothersister relationship to Carnation and Clougherty.230 The dissent found that the majority's balance sheet approach showed that risk transference occurred.23 1 In the dissent's view, the fundamental assumption of the balance sheet test is that the captive's stock is shown as an asset on the parent's balance sheet.232 If the parent suffers a loss, which the captive has to pay, the assets of the captive will be depleted by the amount of such payment. 3 In return, this will reduce the value of the captive's stock as an asset of the parent.234 Hence, the assets of the parent ultimately bear the economic loss. 2 3 5 Because the sibling subsidiaries owned no stock in the captive, the dissent reasoned that sibling subsidiaries' balance sheets and net worth would not be affected by the payment of a claim by the captive.236 Therefore, in the dissent's view, risk transference had occurred and the premiums paid by the sibling subsidiaries to the captive should be deductible.237 The Sixth Circuit reversed the Tax Court on the brother-sister issue.238 The court of appeals found that under the Moline Propertiesdoctrine, it was bound to recognize the separate corporate existence of the sibling subsidiaries and the captive.239 Moreover, the court found that risk transference occurs in the brother-sister captive relationship under the balance sheet test. 240 The court explained that the economic reality of 227.

228.

229.

230.

231.

232.

233.

234.

235.

Id. at 208.

Id. at 214.

Id. at 213.

Id at 220 (Korner, J., dissenting).

Id. at 222.

Id. at 221.

Id. Id. Id.

236.

Id. at 222.

237.

238.

Id. Humana Inc. v. Comm'r, 881 F.2d 247, 257 (6th Cir. 1989), aff'g in part, rev'g in part

88 T.C. 197 (1987).

239.

Id. at 252 ("[S]o long as [its] purpose is the equivalent of business activity or is followed by the carrying on of business by the corporation, the corporation remains a separate taxable entity." (alterations in original) (quoting Moline Props., Inc. v. Comm'r, 319 U.S. 436,

439 (1943)) (internal quotation marks omitted)).

240.

Id. at 253.

CAPTIVE INSURANCE BUSINESS DEDUCTIONS

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insurance between sibling subsidiaries and the captive, where the sibling subsidiaries own no stock in the captive and vice versa, is that when a loss occurs and is paid by the captive, the net worth of the siblings are not reduced accordingly.24 1 The court also found that the Tax Court misapplied the substance over form doctrine, which it described as "a distinct and limited exception to the general rule under Moline Properties that separate entities must be 242 Under the substance over form respected as such for tax purposes., doctrine, "a court cannot disregard a transaction in the name of economic reality and substance over form absent a finding of sham or lack of business purpose. '243 The Humana court quipped that the Tax Court found it undisputed that the siblings entered into a bona fide arms length contract with the captive, that the captive was formed for legitimate business purposes, that the captive and the siblings conduct legitimate businesses and are devoid of sham, and that no suggestion was made that the premiums 2 were overstated or understated. " Given these undisputed findings, the court held that the siblings were separate and distinct corporate entities from the parent, and, as such, they 24 5 Moreover, the court held that risk shifted their risk to the captive. distribution occurred because the captive insured several corporate entities within the affiliated group, which spread the risk of loss among the several 246 distinct corporate entities.

In Malone & Hyde v. Commissioner, the scheme of corporate 247 ownership was identical to Humana. However, the captive reinsured its parent's and its siblings' risk under a reinsurance agreement with a thirdparty insurance company.248 Malone & Hyde is an important case because 2 49 the Tax Court recognized its incorrect holding in Humana. The Tax Court explained the balance sheet test as applied to the brother-sister captive structure as follows: [I]n the brother-sister situation, the subsidiary that sustains the loss is made whole by receipt of the insurance proceeds from the 241.

242.

243.

293 U.S.

Id. Id. at 254.

Id. at 255 (citing Higgins v. Smith, 308 U.S. 473, 477 (1940); Gregory v. Helvering, 465, 469 (1935); Clougherty Packing Co. v. Comm'r, 811 F.2d 1297, 1302 (9th Cir.

1987)).

244.

245.

246.

247.

Id. at 253.

Id. at 257.

Id. Malone & Hyde, Inc. v. Comm'r, 66 T.C.M. (CCH) 1551 (1993), rev'd, 62 F.3d 835

(6th Cir. 1995).

248.

249.

Id.at 1551.

See id. at 1557.

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captive and does not have a corresponding decrease in its assets or net worth because it does not own any stock in the captive. That is to say, an insurance claim that the captive must pay would not adversely impact the assets of each insured affiliate because the wholly separate captive subsidiary, albeit a related corporation, has a pool of premiums from which to draw and is solely responsible for the loss. Therefore, upon payment of itspremiums, a subsidiary successfully shifts its risks to the captive.

Further, the court's decision in Malone & Hyde is important because the court provided some substance to the risk distribution standard.25 The court noted that risk distribution must accomplish one or more of the following: (1) spreading losses among insured entities, (2) providing an insurance company with a pool of premiums from which to pay losses, and (3) serving as a prerequisite to the application of the "law of large 252 numbers.g B.

UnrelatedRisks: Enough UnrelatedEntities Will Achieve Risk Shifting and Risk Distribution

In Gulf Oil Corp. v. Commissioner, the court addressed for the first time whether payments to a wholly-owned captive that insured unrelated third-party risks as well as those of its affiliated group are deductible expenses.253 The parent organized a wholly owned captive insurance subsidiary with an initial authorization of $10,000,000 of capital.25 4 However, only $120,000 was actually invested in the captive. 55 The parent and its affiliates entered into insurance contracts with third-party commercial carriers, which then reinsured the risks with the captive.256 While the parent and its affiliates paid premiums directly to the third-party carriers, such premiums were transferred to the captive to the extent the primary carriers reinsured the risks with the captive.257 The parent agreed to indemnify the primary carriers should the captive be unable to perform under the reinsurance agreement.25 8 In addition to reinsuring the risks of the

250.

251.

252.

253.

Id. Id. Id. Gulf Oil Corp. v. Comm'r, 89 T.C. 1010, 1023 (1987), affd, 914 F.2d 396 (3d Cir.

1990).

254.

255.

256.

257.

258.

(1987).

Id.at 1013.

Id Id. at 1014.

Id. Gulf Oil Corp. v. Commn'r, 914 F.2d 396, 412 (3d Cir. 1990), affg 89 T.C. 1010

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9 corporate group, the captive insured the risks of unrelated parties.

However, the captive's net premium income from the unrelated parties 2 60 represented roughly 2% of its total net premium income.

The Tax Court noted that Gulf Oil was the first case before the court in which a wholly-owned captive insured unrelated third-party risks as well as those risks of its corporate group. 261 Thus, the issue before the court was whether the existence of the unrelated risks allowed risk transferring and risk distribution to occur. 262 The court provided one of the first in-depth explanations of the risk distribution standard: If all of the insureds are related, the insurance is merely selfinsurance because the group's premium pool is used only to cover the group's losses. By adding unrelated insureds, the pool, from which losses are paid, no longer is made up of only the affiliated group's premiums. When a sufficient proportion of premiums paid by unrelated parties is added, the premiums of the affiliated group will no longer cover anticipated losses of all of the insureds; the members of the affiliated group must necessarily anticipate relying on the premiums of the unrelated insureds in the event that they are "the unfortunate few" and suffer more than their proportionate share of the anticipated losses.

Thus, when the aggregate premiums paid by the captive's affiliated group is insufficient in a substantial amount to pay the aggregate anticipated losses of the entire group, the affiliates and unrelated entities, the premiums paid by the affiliated group should be deductible as insurance premiums and should no longer be characterized as payments to a reserve from which to pay losses. Risk distribution and risk transfer would be present, and the arran ement is no longer in substance equated with selfinsurance.

The court declined, however, to provide guidance as to how much unrelated risk is necessary to achieve the aforementioned result. 264 In dicta, the court reasoned that if at least 50% of the captive's premiums come from unrelated present.2 65 entities, then sufficient risk transference would likely be Nevertheless, the court concluded that 2% of unrelated premiums is de

259.

260.

261.

262.

263.

264.

265.

GulfOil Corp., 89 T.C. at 1019.

Id. Id.at 1023.

Id. Id. at 1026-27 (footnotes omitted).

Id. at 1027 n.14.

Id.

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minimis, and therefore does not satisfy the risk transfer and risk distribution standard.2 66 Several important structuring principles come from the Gulf Oil decision. First, the captive cannot be undercapitalized at the outset.267 Second, premiums paid by the parent will not be deductible until the aggregate amount of the premiums is enough to cover the anticipated losses 268 Finally, a de minimis amount of net premiums of theunrelated affiliatedparties group.will from prevent risk transference and risk distribution.269 C.

The HarperGroup Factors: The Captive Must Be Legitimately Organized

The next major change in captive insurance litigation came in Harper Group v. Commissioner.210 In Harper, the captive was owned by two sibling subsidiaries. 271 The captive was liable for its insurance liabilities and the parents provided no guaranty with respect to the captive's insurance obligations.272 During the taxable years at issue, the captive received at a minimum 32% of its total premiums from unrelated parties.27 3 The Harper court announced a three-prong test to determine the propriety of claimed insurance deductions by a parent or affiliated company to a captive insurance company: (1) Whether the arrangement involves the existence of an "insurance risk"; (2) whether there was both risk shifting and risk distribution; and (3) whether the arrangement was for "insurance" in its commonly accepted sense.274 As to the first prong, the Tax Court stated, "[b]asic to any insurance transaction must be risk. An insured faces some hazard; an insurer accepts a premium and agrees to perform some act if or when the loss event occurs. If no risk exists, then insurance cannot be present., 275 This is a relatively easy 266.

Id.at 1028.

267.

Gulf Oil Corp. v. Comm'r, 914 F.2d 396, 412 (3d Cir. 1990), affg 89 T.C. 1010 (1987). But see Clougherty Packing Co. v. Comm'r, 84 T.C. 948, 956-57 (1985), affd, 811 F.2d 1297 (9th Cir. 1987) ("The financial viability of the captive insurance subsidiary is not controlling. The test continues to be whether, considering all of the facts, the risk of loss was shifted away from the taxpayer who seeks to deduct insurance premiums.").

268.

GulfOil Corp., 89 T.C. at 1027.

269.

Gulf Oil Corp., 914 F.2d at 412.

270.

Harper Grp. v. Comm'r, 96 T.C. 45 (1991), affd, 979 F.2d 1341 (9th Cir. 1992).

271.

Id at47.

272.

Id. at 50.

273.

Id.at 51-52.

274.

Id.at 58.

275.

Id.

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CAPTIVE INSURANCE BUSINESS DEDUCTIONS

burden for the taxpayer. The taxpayer simply has to show a real, nonillusory risk.276 The second prong is merely the risk shifting and risk distribution analysis required by Le Gierse.277 Risk shifting occurs when one party shifts his risk of loss to another party, whereas risk distribution occurs when the 2 78 party assuming the risk distributes his potential liability among others.

The Tax Court reiterated its validation in Gulf Oil that a sufficient number of unrelated insured entities could successfully allow a parent company to transfer its risk to the captive. 279 The Tax Court held that risk shifting occurred because the captive was not a sham, it conducted a bona fide insurance business, was regulated as an insurance company, and the insurance contracts were negotiated at arm's length. 280 Likewise, the court held that risk distribution occurred because a sufficient amount of the captive's business came from unrelated insured entities.28 1 The final prong requires the court to determine "whether the arrangement was for 'insurance' in its commonly accepted sense. 282 In this regard, the tax court announced that "the tax treatment of an alleged insurance payment by a parent or affiliated company to a captive" is analyzed according to "the facts and circumstances of the particular case." 283 Again, the court found that the captive was organized and regulated as an insurance company, was adequately capitalized, and the policies were issued in arm's-length transactions.28 4 Hence, the arrangements between the sibling subsidiaries and the captive constituted insurance in its commonly accepted sense; therefore, the court allowed a 285 deduction for the premiums.

In the previous cases, the presence of a parental agreement to indemnify third-party insurers for the captive's insurance losses was fatal to risk shifting.286 In two recent decisions, however, the tax court held that the 2 87 presence of a parental agreement did not negate a finding of risk shifting.

In Rent-A-Center, the parent formed a captive subsidiary for the primary Id. 276.

Id. 277.

Id. at 58-59.

278.

Id. at 59.

279.

Id. 280.

Id. at 59-60.

281.

Id. at 58.

282.

Id. at 57.

283.

Id. at 60.

284.

Id. 285.

See, e.g., Carnation Co. v. Comm'r, 71 T.C. 400, 409 (1978), affd, 640 F.2d 1010 (9th 286.

Cir. 1981).

Rent-A-Center, Inc. v. Comm'r, 142 T.C. 1, 22 (2014); Securitas Holdings, Inc. v.

287.

Comm'r, T.C. Memo. 2014-225, at *25 (Oct. 29, 2014).

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purpose of writing policies to the operating subsidiaries.2 88 The parent contributed $9.9 million of capital to the captive.2 89 The annual premium, which was completely paid for by the parent, was allocated to each operating subsidiary.2 9 ° While the parent was a listed policyholder, no premium was attributable to it because it did not own any stores or have any employees. 29' The operating subsidiaries deducted as a business expense the payments to the captive.29 2 The parent agreed to guarantee up to $25 million of the captive's liabilities.293 The Tax Court first addressed whether the captive was a bona fide insurance company.294 The court reasoned that absent a finding of sham or lack of business purpose, the separate corporate existence of the captive must be respected. 295 The court found that the parent formed the captive subsidiary "to reduce its insurance costs, obtain otherwise unavailable insurance coverage ... and more efficiently manage its insurance program., 296 Accordingly, the court held that the captive was not a sham, but rather was a bona fide insurance company. 9 7 Next, the Tax Court looked to the Harperfactors to determine whether insurance existed for federal tax purposes.298 The court quickly ruled in the taxpayer's favor on the first factor, finding that the arrangement between the parent and the captive addressed the risks faced by the operating subsidiaries. 299 Likewise, the court briefly addressed the third factor, reasoning that the agreement constituted insurance in the commonly accepted sense because the captive was adequately capitalized and regulated as an insurance company. 3°° The real issue in the case was whether the policies shifted the risk between the operating subsidiaries and the captive. 30 1 The Commissioner argued that the parental guaranty nullified any risk shifting between the captive and the operating subsidiaries.30 2 The court began its analysis by noting that risk shifting does not "look to the parent to determine whether 288.

289.

290.

291.

292.

293.

294.

295.

296.

297.

298.

299.

300.

301.

302.

Rent-A-Center,Inc., 142 T.C. at 4.

Id. Id. at 5.

Id. Id. Id. at 8.

Id. at 10.

Id. (citing Moline Props., Inc. v. Comm'r, 319 U.S. 436, 439 (1943)).

Id. at 11.

Id. at 11-12.

Id. at 13.

Id. at 14.

Id. at 24-25.

Id. at 14.

Id. at 22.

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CAPTiVE INSURANCE BUSINESS DEDUCTIONS

premiums paid by the subsidiaries... are deductible. 3 °3 Rather, the inquiry focuses on "the economic consequences of the captive insurance arrangement to the 'insured' party to see if that party has, in fact, shifted the risk. In doing so, we look only to the insured's assets. ' 3° Applying the balance sheet test, the Tax Court held that the parental guaranty did not affect the net worth of the operating subsidiaries insured by the captive.30 5 Specifically, the Court reasoned that any payment from the captive to the operating subsidiaries would not reduce the net worth of 306 the operating subsidiaries because they did not own stock in the captive.

Moreover, the court viewed the parental agreement as trivial because the captive was adequately capitalized.30 7 In short, the Rent-A-Center decision represents the Tax Court's recent trend towards greater acceptance of the captive insurance deduction. 30 8 In previous cases, the courts found the presence of a parental indemnification agreement as vitiating risk shifting.30 9 In two recent decisions, however, the Tax Court held that the presence of a parental agreement did not negate a finding of risk shifting between the operating subsidiaries and the captive. 310 D.

The Safe-HarborRulings

Since the Humana decision, the Service has issued several safe-harbor rulings to provide guidance in forming and operating a captive. 311 The two main safe-harbor rulings are considered below.

1.

Revenue Ruling 2002-89: UnderwritingSufficient UnrelatedRisks

The issue presented in Revenue Ruling 2002-89 was whether the captive underwrote a sufficient amount of risks of unrelated parties so that 303.

Id.at 20.

304.

Id. at 21 (quoting Clougherty Packing Co. v. Comm'r, 811 F.2d 1297, 1305 (9th Cir. 1987)) (internal quotation marks omitted).

305.

Id.at 22.

306.

Id.at 21-22.

307.

Id.at 23.

308.

Id.at 24.

See Kidde Indus., Inc. v. United States, 40 Fed. Cl. 42, 49-50 (1997) (holding that a 309. reinsurance arrangement lacked risk shifting because the parent indemnified the captive's obligation to pay an unrelated insurer); Carnation Co. v. Comm'r, 71 T.C. 400, 409 (1978) (holding that a reinsurance arrangement lacked risk shifting where the captive was undercapitalized and the parent agreed to provide additional capital on demand), affd, 640 F.2d 1010 (9th Cir. 1981).

310.

Rent-A-Center, Inc., 142 T.C. at 23; Securitas Holdings, Inc. v. Comm'r, T.C. Memo.

2014-225, at *25 (Oct. 29, 2014).

See Cantley, supra note 15, at 235.

311.

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the arrangement between the parent and the captive constituted insurance.312 The Service pointed out that no court has held that an insurance transaction between a parent and its wholly-owned captive satisfies the requirements of risk shifting and risk distribution when only the risks of the parent are insured.313 The Service, however, acknowledged that an arrangement between a parent and its captive subsidiary could constitute insurance when the parent's premiums are pooled with those of unrelated parties if the Harper factors are satisfied.314 Hence, the Service appears unwilling to challenge this type of captive structure.315 In Situation 1, the premiums the captive earns from its arrangement with the parent constitute 90% of the captive's "total premiums earned during the taxable year on both a gross and a net basis. 316 In other words, the liability coverage the captive provides to the parent accounts for 90% of the total risk borne by the captive. 317 Under these facts, the Service viewed the transaction as lacking "the requisite risk shifting and risk distribution to constitute insurance. 318 The Service, therefore, ruled that amounts paid by the parent to the captive are not deductible as insurance premiums under § 162(a).319 In contrast, Situation 2 provides that the premiums the captive earns from its arrangement with the parent "constitute less than 50% of the total premiums [captives] earned during the taxable year on both a gross and a net basis., 320 Thus, the liability coverage the captive provides to the parent accounts for less than 50% of the total risk borne by the captive. 321 Under these facts, the Service found the requisite risk shifting and risk distribution to be present. 322 Accordingly, the Service ruled that the amounts paid by the parent to the captive pursuant to the insurance arrangement are deductible business expenses for insurance premiums.323

312.

313.

Carnation 314.

315.

316.

317.

318.

319.

320.

321.

322.

323.

Rev. Rul. 2002-89, 2002-2 C.B. 984, 984.

Id (citing Stearns-Roger Corp. v. United States, 774 F.2d 414, 415 (10th Cir. 1985); Co. v. Comm'r, 640 F.2d 1010, 1013 (9th Cir. 1981)).

Id. See Cantley, supra note 15, at 235-36.

Rev. Rul. 2002-89, 2002-2 C.B. 984, 984.

Id. Id.at 984-85.

Id at 985.

Id.at 984.

Id. Id.at 985.

Id.

2016]

2.

CAPTIVE INSURANCE BUSINESS DEDUCTIONS

Revenue Ruling 2002-90: OperatingSubsidiariesMay Deduct Premium Payments

In Revenue Ruling 2002-90, the Service addressed the issue of whether amounts paid for liability coverage by domestic operating subsidiaries to a captive insurance subsidiary of a common parent corporation are deductible.32 4 The facts presented by the Service are analogous to those in Humana.325 The parent owned all of the stock of its twelve domestic subsidiaries. 326 The facts stipulate that for valid non-tax business purposes, the parent formed a wholly-owned captive. 327 The parent provided the captive with adequate capitalization. 328 The captive directly insured the liability risks of the operating subsidiaries. 329 "None of the operating subsidiaries have liability coverage for less than 5%, nor more than 15%, of the total risk insured by [the captive] .,,330 The captive retained the risks that it insured and no parental guarantees were made in favor of the captive.33 1 Under these facts, the Service viewed the risks of the operating subsidiaries as shifting to the captive.332 Moreover, the Service found that risk distribution occurred because the premiums of the operating subsidiaries were pooled together "such that a loss by one operating subsidiary is bore ...by the premiums paid" by the other subsidiaries.333 The Service reasoned that the parent's common ownership of the operating subsidiaries and the captive had no affect.334 Hence, the Service held that the amounts paid constituted insurance, and therefore were deductible business expenses for the sibling subsidiaries.3 35 VI. CONCLUSION

This Comment has traced the development of insurance as being a concept that requires the shifting of risk to the insurer and the subsequent distribution of that risk among the numerous policyholders. Accordingly,

Rev. Rul. 2002-90, 2002-2 C.B. 985, 985.

324.

Compare Humana Inc. v. Comm'r, 88 T.C. 197, 197 (1987), aff'd inpart,rev'd in part, 325.

881 F.2d 247 (6th Cir. 1989), with Rev. Rul. 2002-90, 2002-2 C.B. 985, 985.

Rev. Rul. 2002-90, 2002-2 C.B. 985, 985.

326.

Id. 327.

Id. 328.

Id. 329.

Id. 330.

Id. 331.

Id.at 986.

332.

Id. 333.

Id. 334.

Id. 335.

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amounts contributed to self-insurance are not deductible insurance expenses. Hence, a taxpayer cannot simply foresee a contingency, set aside money for that contingency, and then deduct payments made to the contingency fund. Similarly, a parent cannot be the sole shareholder and insured of the captive, and then deduct payments to the captive as an ordinary and necessary business expense.

In addition, three important structuring principles come from the parent-subsidiary captive cases. First, a parent company is not entitled to deduct payments to an unrelated insurance company to the extent the parent's risks are reinsured with its wholly-owned captive. Second, a parent company cannot deduct payments to the captive unless the captive also insures entities outside the corporate group. Finally, a parent can overcome the one economic family doctrine by spreading out ownership of the captive.

In the brother-sister captive context, the following structuring principles should be kept in mind. First, lack of initial capitalization is fatal.

This is the primary reason why several captive structures fail to receive preferential tax treatment. Second, as illustrated by the court in Gulf Oil, a certain amount of unrelated risks will achieve risk shifting and risk distribution, and therefore premium payments to the captive are deductible.

Finally, after Harper,the courts primarily focus on whether the captive is a legitimately organized insurance company. This test shifts the focus to the actual workings of the captive and considers whether the captive actually operated like a bona fide insurance company.

Tyler J Cummings

BIG CITIES IN A BIGGER STATE: A REVIEW OF HOME RULE IN TEXAS AND THE CITIES THAT PUSH THE BOUNDARIES OF LOCAL CONTROL TEXAS, 0 TEXAS! YOUR FREEBORN SINGLE STAR, SENDS OUT ITS RADIANCE TO NATIONS NEAR AND FAR, EMBLEM OF FREEDOM!IT SET OUR HEARTS AGLOW, WITH THOUGHTS OF SAN JACINTO AND GLORIOUS ALAMO. I. II.

1

INTRODUCTION TO LOCAL CONTROL AND HOME RULE ................ 312 LOCAL CONTROL iN THEORY AND PRACTICE ................................ 313

314 316 317 M UNICIPALITIES IN ACTION ........................................................... 318 318 A. Fracking- Denton ..................................................................

320 ......................

B. Single Use Plastic Bag Ban-Austin 322 .....................

Plano C. Equal Rights Ordinances-Houstonand 325 ......................................

STATE OF REACTION 326 A . H ouse B ill 40 .........................................................................

327 B . H ouse B ill 2416 ......................................................................

329 .....................................

1556 C. House Bill 1911 and House Bill

A. History of Local Control in Texas ..........................................

B . Hom e R ule ...............................................................................

C. Preemp tion ..............................................................................

III.

IV.

V.

STATE CONSTITUTIONAL ANALYSIS .............................................. 331

331 334 336 338 ..............................................................

POLICY CONSIDERATIONS 338 ............................................

Implications A. Immediate Political 340 .......................................

Policy Public on B. Long Term Effects C ON CLU SION .................................................................................. 344

A . House Bill 40 ..........................................................................

B . House B ill 2416 ......................................................................

C. House Bill 1911 and House Bill 1556.....................................

VI.

V II.

William J. Marsh & Gladys Yoakum Wright, Texas State Song, TEX. STATE LIBRARY 1. & ARCHIVES COMMISSION, https://www.tsl.texas.gov/ref/abouttx/statesong.html (last updated Apr. 11, 2015).

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I. INTRODUCTION TO LOCAL CONTROL AND HOME RULE Texas is famously known for rugged individualism, small government, and an unwavering support for local control.2 Lawmakers have long repeated these maxims, elevating them to near-sacred status in the political psyche of Texas. The most quintessential form of local control is the city.

Indeed, the laws of Texas declare it such. "The municipality has full power of local self-government., 3 Texas boasts three of the top ten largest cities by population in the nation.4 Within these massive municipalities, and other cities big and small, the idea of local control lives on-impressive for a state that is larger than France and home to more people than Australia.6 Local control provides cities the freedom to make laws without the state looking over their shoulder 7-until now.

Local control at the city level is reflected in the concept of home rule.8 "[T]he principle is simple: home rule is the right of citizens at the grassroots level to manage their own affairs with minimal interference from the state.

Home rule assumes that governmental problems should be solved at the lowest possible level, closest to the people." 9 Recently, Texas cities have exercised home rule in banning or limiting single-use plastic bags, 10 protecting lesbian, gay, bisexual, transgender, queer/questioning (LGBTQ)1 1 people from discrimination, 12 and prohibiting 2.

TEX. CONST. art. I, § 1 ("Texas is a free and independent State, subject only to the Constitution of the United States, and the maintenance of our free institutions and the perpetuity of the Union depend upon the preservation of the right of local self-government, unimpaired to all the States.").

3.

TEX. LOC. GOv'T CODE ANN. § 51.072(a) (West 2008).

4.

2010 Census Interactive Population Search, U.S. CENSUS BUREAU, http://www.census.gov/2010census/popmap (last visited Mar. 2, 2016).

5.

Texas has 268,596 square miles compared to France's 212,935 square miles.

Environment Statistics Country Snapshot: France, UNITED NATIONS, http://unstats.un.org/unsd/environment/envpdf/CountrySnapshots Aug%202013/France.pdf (last visited Mar. 8, 2016); Facts, TEX. ALMANAC, http://texasalmanac.com/topics/facts-profile (last visited Feb. 8, 2016).

6.

Texas has a projected population of 27,695,284 compared to Australia's projected 23,781,200. 3101.0 - Australian Demographic Statistics, AUSTL. BUREAU STAT. (Sept. 9, 2015, 11:30 AM), http://www.abs.gov.au/ausstats/abs@.nsf/mf/3101.0; Texas Population, 2015 (Projections), TEX. DEP'T STATE HEALTH SERVS., https://www.dshs.state.tx.us/chs/popdat/ST2015.shtm (last updated Dec. 16, 2014).

7.

See TEX. CONST. art. XI, § 5.

8. Id. 9. Local Government in Texas, TEX. MUN. https://www.tml.org/pdftexts/HRHChapterl .pdf (last visited Mar. 2, 2016).

10.

16, 2015, 11. definition makes up

LEAGUE

8,

Tyler Whitson, City Orders Study on Bag Ban That State May Toss, KUT NEWS (Jan. 10:24 AM), http://kut.org/post/city-orders-study-bag-ban-state-may-toss.

The author uses the term "LGBTQ" in a spirit of inclusiveness. The author is aware this of sexuality and gender identity is incomplete and inexhaustive of the spectrum that the diversity of human experience.

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3 hydraulic fracturing (fracking) within city limits. These municipal actions have drawn criticism from state lawmakers, and numerous bills have been curtail the effects of these local filed, some becoming law, seeking to either 14 tracks. their in them ordinances or stop Section II, Local Control in Theory and Practice, will examine the origins of local control in Texas as it is embodied in home rule and the limitations on local control through state preemption. Then, in Section III, Municipalities in Action, it will chronicle some of the most recent and notable examples of cities exercising home rule. In Section IV, State of Reaction, this Comment will assess the types of bills filed in the recent 83rd and 84th Legislative Sessions, identify those that passed, and describe their approaches to limiting home rule. The Comment will then analyze the constitutionality of the various bills in Section V, Constitutional Analysis, and reflect on the political consequences of such legislation in Section VI, Policy Considerations. Finally, in Section VII, Conclusion, this Comment will make the case that home rule, as the ultimate embodiment of local control in Texas, is deserving of greater deference from state lawmakers and worthy of protection from fleeting ideological and political discord.

II.

LOCAL CONTROL IN THEORY AND PRACTICE

The origins of local control in Texas, and the United States more broadly, provide a greater understanding of how home rule is applied today and counterbalanced with state preemption. The historical tension between local control and state authority traces its origin to Iowan home rule jurisprudence.' 5 A review of Iowa case law sheds light on this struggle for power, long played out between the states and their cities. "In 1868, the Chief Justice of the Iowa Supreme Court, John F. Dillon, declared that municipalities were creatures of the legislature and had only those powers expressly granted by the legislature., 16 In so doing, Justice Dillon created what is now called Dillon's Rule: the limitation of municipal power by the state's authority over it as enforced by the state's explicit grant of power 12. Partnership Supports Proposition 1, GREATER http://www.houston.org/equalrights (last visited Mar. 2, 2016).

13.

HOUS.

PARTNERSHIP,

of Texas, Alex Dropkin, What a Ban on Fracking in Denton Could Mean for the Rest 4

NAT'L PUB. RADIO (Apr. 8, 2014, 9:13 AM), http://stateimpact.npr.org/texas/2014/0 /08/what-afracking-ban-in-denton-could-mean-for-texas.

14. Editorial: Good, Bad, Ugly in Austin, HOUS. CHRON. (Mar. 20, 2015, 10:20 PM), http://www.chron.com/opinion/editorials/article/Good-bad-ugly-6148919.php ("[T] he Legislature has no business trying to override cities when they decide to ban plastic bags (Senate Bill 1806).. . limit fracking (HB 40, SB 440 and others) . . .or pass non-discrimination ordinances (I3 1556).").

15. See Berent v. City of Iowa City, 738 N.W.2d 193, 196 (Iowa 2007).

16. Id.

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through statutes and constitutional frameworks, which are to be narrowly construed.17

Home rule amendments and statutes serve as "a compromise between those who desired unlimited home rule and those who favored continued legislative control of municipal affairs." 18 The laws of Texas seek to strike such a balance, but it is not a delicate balance as it leans clearly in favor of the state. 19 While it is true that "[t]he powers of home rule cities are subject to and may be limited only by their charters or by the Constitution or by general law, 2 ° the state always has the upper hand.

There can be little doubt that this is as it should be; municipalities should not be able to supersede their superior state, much like the states cannot supersede the federal government. A finger, after all, cannot exist without a hand. A finger derives its power of movement and its very existence from the hand to which it is bound. The hand's arteries provide sustenance to the fingers, and it is from the hand that the finger grew-not the contrary. However, the beauty of this arrangement is that the finger, or perhaps more importantly the fingers, can move independently of the hand and from one another. This is what allows the hand, and the human to whom it is bound, to do so many wondrous things. How could music, art, or the applied sciences be accomplished if all the fmgers moved in lockstep at the hand's control? It is their diversity in size, form, and function, coupled with their inherently autonomous nature, which allows them to achieve so much. Likewise, cities cannot supersede the state, but they should be provided with maximum freedom to accomplish that which our laws say they should. Cities should be free to allow the people to control their own affairs as locally as possible.

A.

History ofLocal Control in Texas

The history of local control in Texas extends back to the 1875 Texas Constitutional Convention in Austin and the journals of the Convention in early state history.2 1 The goal of this section is to provide a greater understanding of the origins of the principle of local control and selfgovernance in Texas from the perspective of the constitutional drafters. On 17.

See id.

18.

Id. 19.

TEx. CONST. art. XI, § 5. Home rule cities may pass any ordinance not "inconsistent with the Constitution of the State, or of the general laws enacted by the Legislature of this State."

Id. Thus, the state may always preempt a city ordinance by constitutional amendment or by general law. Id. 20.

Lower Colo. River Auth. v. City of San Marcos, 523 S.W.2d 641, 644 (Tex. 1975).

21.

JOURNAL OF THE CONSTITUTIONAL CONVENTION OF THE STATE OF TEXAS, CONST.

CONVENTION 693 (1875).

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2016]

November 16, 1875, the Committee on Municipal Corporations reported to the Constitutional Convention of the State of Texas for consideration of 22 what became Article XI of the Texas Constitution. The Committee did not recommend home rule, but instead recommended in Section 5 that "[c]ities having more than ten thousand inhabitants may have their charters granted or amended by special act of the Legislature," and also in Section 4 that "[c]ities and towns having a population of ten thousand inhabitants or less, 23 The Committee's may be chartered alone by general law.", XI of the Article recommendations were accepted as written and became 24 1876 Texas Constitution-the Constitution that we still use today.

Since that time, Article XI has been amended to allow for limited home rule balanced with the preemptive view of Dillon's Rule. The first alteration of note is the lowering of the threshold that differentiates cities which may be governed by the general laws of Texas and which may be governed by a municipal charter.25 In 1876, Article XI Section 4 allowed for cities of "ten thousand inhabitants or less" to be governed by the general laws of Texas.26 The Article also allowed in Section 5 for cities of "more than ten thousand inhabitants" to be governed under a charter granted or amended by the legislature.27 This number, which serves to separate home rule cities from those governed by the general laws of Texas, has since been 28 lowered in both Sections to five thousand. A lower threshold is a clear nod to the rise of home rule because it allowed smaller communities to form a municipal government under a charter. A second alteration in favor of home rule is the allowance for cities that attain a population of five thousand, but 29 later fall below this threshold number, to retain home rule powers.

Originally, cities that rose to, but subsequently fell below, five thousand 30 residents, lost their home rule powers along with their abundant citizens.

Both changes provide greater local control and self-governance to the people of Texas.

22.

23.

Id. TEX.CONST. art. XI, §§ 4, 5 (amended 1909, 1912, 1920, 1991, 2011).

Id.; JOURNAL OF THE CONSTITUTIONAL CONVENTION OF THE STATE OF TEXAS, 24.

CONST. CONVENTION 694.

Compare TEX. CONST. art. XI, §5 (amended 1909, 1912, 1991, 2011), with TEX. 25.

XI, § 5. art.

CONST. TEX. CONST. art. XI, § 4 (amended 1909, 1920).

26.

TEX. CONST. art. XI, § 5 (amended 1909, 1912, 1991, 2011).

27.

TEX. CONST. art. XI, §§ 4, 5.

28.

Compare TEX. CONST. art. XI, §5 (amended 1909, 1912, 1991, 2011), with TEX. 29.

CONST. art. XI, § 5.

See id 30.

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B.

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Home Rule

The framework of home rule is established in Article XI Section 5 of the Texas Constitution 31 and in Chapter 9 of the Texas Local Government Code. 32 Home rule cities may act in any manner they see fit so long as it is not "inconsistent with the Constitution of the State, or of the general laws enacted by the Legislature of this State. 33 The Texas Supreme Court has described home rule as: It was the purpose of the Home-Rule Amendment... to bestow upon accepting cities and towns of more than 5,000 population full power of self-government, that is, full authority to do anything the legislature could theretofore have authorized them to do. The result is that now it is necessary to look to the acts of the legislature not for grants of power to such cities but only for limitations on their powers.34 Today, cities with populations of 5,000 or more may adopt home rule and may form and amend their charter as often as every two years by a majority vote.35 If at any point, the population of a city that has adopted home rule drops below 5,000, it may continue to operate under home rule.36 The Texas Local Government Code declares that "[t]he municipality has full power of local self-government. The grant of powers to the municipality by this code does not prevent, by implication or otherwise, the municipality from exercising the authority incident to local selfgovernment. '3 7 This is a codification of the principle that cities are the ultimate embodiment of local control and that their authority is limited only by the express will of the legislature.38 Furthermore, "[a] governmental act or proceeding of a municipality is conclusively presumed, as of the date it occurred, to be valid and to have occurred in accordance with all applicable statutes and ordinances., 39 On their face, these statutes and constitutional provisions give deference to cities when the state does not act through preemption.

31.

32.

33.

34.

35.

36.

37.

38.

1993).

39.

TEx. CONST. art. XI, § 5.

TEx. Loc. Gov'T CODE ANN. §§ 9.001-008 (West 2008).

TEX. CONST. art. XI, § 5.

Forwood v. City of Taylor, 214 S.W.2d 282, 286 (Tex. 1948).

TEx. CONST. art. XI, § 5.

Id. Loc. Gov'T. § 51.072.

Dall. Merch.'s & Concessionaire's Ass'n v. City of Dallas, 852 S.W.2d 489, 491 (Tex.

LOG. GOV'T. § 51.003(a).

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2016]

C.

Preemption

The state reserves great authority over municipalities, allowing it to preempt any city ordinance. 40 A fuller understanding of the mechanisms of preemption will allow for a more complete constitutional analysis.

Majorities and dissenters on the Supreme Court agree on the settled 41 doctrine that cities may be preempted by their respective states.

Municipal corporations are political subdivisions of the State, created as convenient agencies for exercising such of the governmental powers of the State as may be entrusted to them....

The number, nature and duration of the powers conferred upon these corporations ...

rests in the absolute discretion of the

abridge and control ....

We know of no limitation on this right so

State.42 Iowa Supreme Court Justice John F. Dillon famously stated his opinion on the nature of the relationship between cities and their respective state governments: The true view is this: Municipal corporations owe their origin to, and derive their powers and rights wholly from, the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. If it may destroy, it may far as the corporations themselves are concerned. They are, so to 43 phrase it, the mere tenants at will of the legislature.

In Texas, any city ordinance that seeks to regulate the subject matter of a state statute is preempted to the extent that it conflicts with the state statute. 44 However, "the mere fact that the legislature has enacted a law addressing a subject does not mean that the subject matter is completely preempted. ' '45 Even when preemption is possible, there is a tradition of deferring to home rule as "a general law and a city ordinance will not be held repugnant to each other if any other reasonable construction leaving both in effect can be reached. '' 46 It is for this reason that "if the Legislature chooses to preempt a subject matter usually encompassed by the broad

TEx. CONST. art. XI, § 5.

40.

Lawrence Cnty. v. Lead-Deadwood Sch. Dist. No. 40-1, 469 U.S. 256, 270 (1985) 41.

(Rehnquist, J., dissenting).

42.

Hunter v. City of Pittsburgh, 207 U.S. 161, 178 (1907).

City of Clinton v. Cedar Rapids & Mo. River R.R. Co., 24 Iowa 455, 475 (1868), 43. overruled in part by Berent v. City of Iowa City, 738 N.W.2d 193 (Iowa 2007). Contra People ex rel. Le Roy v. Hurlbut, 24 Mich. 44, 108 (1871) ("[L]ocal government is [a] matter of absolute right; and the state cannot take it away.").

See City of Brookside Viii. v. Comeau, 633 S.W.2d 790, 796 (Tex. 1982).

44.

City of Richardson v. Responsible Dog Owners, 794 S.W.2d 17, 19 (Tex. 1990).

45.

City of Beaumont v. Fall, 291 S.W. 202, 206 (Tex. 1927).

46.

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powers of a home-rule city, it must do so with unmistakable clarity.' 7 In turn, the legislature has been unmistakably clear in its recent preemption of certain city ordinances, detailed in the following section.

HI. MUNICIPALITIES IN ACTION

In recent years, cities have passed a number of ordinances on highprofile issues which serve as examples of home rule. This Section will chronicle three issues on which cities have taken action: fracking, singleuse plastic bags, and LGBTQ equality.

A.

Fracking-Denton

Fracking has become a controversial environmental issue.48 While fracking is an increasingly used term, a simple definition is helpful: Fracking is the process of drilling down into the [E]arth before a high-pressure water mixture is directed at the rock to release the gas inside. Water, sand and chemicals are injected into the rock at high pressure which allows the gas to flow out to the head of the well. The process is carried out vertically or, more commonly, by drilling horizontally to the rock layer. The process can create new pathways to release gas or can be used to extend existing channels.49 Fracking has allowed energy companies to tap into gas formations previously inaccessible. 50 This relatively new technology has significantly increased domestic gas production, which in turn has led to lower energy prices. 5 1 Fracking is popular in Texas, which is not surprising as it is the leading state in the production of crude oil. 52 However, Texas has its environmental streak too; also unsurprising as "Texas leads the nation in ' 53 wind-powered generation capacity.

47.

Dall. Merch.'s & Concessionaire's Ass'n v. City of Dallas, 852 S.W.2d 489, 491 (Tex. 1993) (citing City of Sweetwater v. Geron, 380 S.W.2d 550, 552 (Tex. 1964)).

48.

What Is Fracking and Why Is it Controversial?, BBC NEWS (June 27, 2013), http://www.bbc.com/news/uk-14432401 ("The extensive use of fracking in the US, where it has revolutionised the energy industry, has prompted environmental concerns.").

49.

1d; see also Off. of Res. & Dev., Assessment of the Potential Impacts of Hydraulic Fracturingfor Oil and Gas on Drinking Water Resources: Executive Summary, U.S. ENVTL. PROTECTION AGENCY 1 (June 2015), http://www2.epa.gov/hfstudy/executive-summaryhydraulic-fracturing-study-draft-assessment-2015.

50.

BBC NEWS, supra note 48.

51.

Id. 52.

Texas State Energy Profile, U.S. ENERGY INFO. ADMIN., http://www.eia.gov/state/print.cfm?sid=TX (last updated Mar. 27, 2014).

53.

Id.

2016]

A REVIEW OF HOME RULE IN TExAS

Fracking is not without its critics. Leading environmental advocacy organizations, such as the National Resource Defense Council and the Sierra Club, cite numerous negative consequences from fracking, including: [D]angerous levels of toxic air pollution near fracking sites; and oil and gas extraction have caused smog in rural areas at levels worse than downtown Los Angeles. Oil and gas production have been linked to increased risk of cancer and birth defects in neighboring areas; as well as to a risk of increased seismic activity. Constant massive truck traffic associated with large-scale development disrupts communities and creates significant hazards. The millions of gallons of water used in fracking operations not only strain water resources, but end up as vast amounts of contaminated wastewater. Fracking has been reported as a suspect in polluted drinking water around the country. And methane-a potent climate change pollutant-leaks rampantly throughout the extraction, processing, and distribution of oil and gas. 4 "In November 2014, voters passed an outright ban on hydraulic fracturing within the city limits., 55 Denton was the first city in Texas to ban so. 56 fracking, and it remains the only city in the state to have done Denton's attempted regulation of the fracking industry is a direct result of the fact that "[t]here are nearly 300 wells in the city limits."57 All of them ceased drilling operations when Denton's fracking ban was passed by a 59% majority in a referendum. 58 The city's fracking ban emerged as the culmination of the efforts of an early anti-fracking grassroots movement,59 which formed in response to the fact that "[firacking matured in Denton, kicking off Texas' shale oil boom., 60 Specifically, drillers and oil

Unchecked Fracking Threatens Health, Water Supplies, NAT. RESOURCE DEF. 54.

CouNciL, http://www.nrdc.org/energy/gasdrilling (last visited Feb. 8, 2016); see also Why Move Beyond Natural Gas?, SIERRA CLUB, http://content.sierraclub.org/naturalgas/why-move-beyondnatural-gas (last visited Aug. 1, 2015).

Jake Rutherford, Comment, Don't "Frac" This Up: Denton's Frac Ban and the 55.

Appropriate State LegislativeResponse, 47 TEX. TECH L. REV. 843, 846 (2015).

Peggy Heinkel-Wolfe, Fracking Banned: Denton Voters Pass Proposition with 59 56.

Percent, DENTON RECORD-CHRON. (Nov. 5, 2014, 1:04 AM), http://www.dentonrc.com/localnews/local-news-headlines/20141105-fracking-banned.ece.

Aleem Maqbool, The Texas Town That Banned Fracking(andLost), BBC NEWS (June 57.

16, 2015) (internal quotation marks omitted), http://www.bbc.com/news/world-us-canada33140732.

See Jim Malewitz, Abbott Signs "Denton FrackingBill," TEX. TRIB. (May 18, 2015), 58. http://www.texastribune.org/2015/05/18/abbott-signs-denton-fracking-bill.

59.

Dylan Baddour, Texas Lawmakers Want to Ban Fracking Bans, HOUS. CHRON. (Mar. 31, 2015, 3:38 PM), http://www.chron.com/news/politics/texas/article/Texas-lawmakers-want-toban-fracking-bans-6170954.php.

Id. 60.

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companies sought to take advantage of the Barnett Shale. 6' Ultimately, the City of Denton "repeal[ed] the ordinance because it had been rendered unenforceable by House Bill 40, a law... that prohibited cities from adopting such bans. 62 The preemptive nature of House Bill 40 will be discussed later in this Comment.

B.

Single-Use Plastic Bag Ban-Austin

The City of Austin instituted a ban on single-use plastic bags at points of sale in grocery and retail stores on March 2, 2012, taking effect on March 1, 2013.63 In total, eleven municipalities have banned or placed limitations on the use of single-use plastic bags, including: Dallas, Austin, Brownsville, Laredo, South Padre Island, Laguna Vista, Freer, Port Aransas, Sunset Valley, Fort Stockton, and Kermit. 64 What these cities have in common are the motivations for banning or discouraging the use of single-use plastic bags. 65 These include, but are not limited to, adverse effects that plastic bags have on cities, including: forcing recycling facilities "to shut down their operations to disentangle bags from their equipment, [c]logging drainage systems which can cause floods," increasing the cost for litter pickup, urban blight, pollution within city limits, pollution of waterways and the ocean, and bioaccumulation of toxins in the environment. 66 With ths these considerations in mind, and with strong public support nearing 81% of the population, the Austin City Council banned single-use plastic bags.67

61.

See id; see also Barnett Shale Information, RAILROAD COMMISSION TEX., http://www.rrc.state.tx.us/oil-gas/major-oil-gas-formations/bamett-shale-information (last updated Jan. 8, 2016) ("The Barnett Shale is a hydrocarbon-producing geological formation .... It consists of sedimentary rocks and the productive part of the formation is estimated to stretch from the city of Dallas west and south, covering 5,000 square miles (13,000 km2) and at least 18 counties. Some experts say that the Barnett Shale is the largest onshore natural gas field in the United States.").

62.

Max B. Baker, Denton City Council Repeals FrackingBan, STAR-TELEGRAM (June 16, 2015, 11:10 AM), http://www.star-telegram.com/news/business/bamettshale/article24627469.htnl.

63.

Bring it Austin, Single-Use Carryout Bag Ordinance, CITY AUSTIN, http://bringitaustin.com/ordinance (last visited Mar. 2, 2016).

64.

Tom Benning, Bills That Would Sack Texas Bag Bans Left Hanging in Committees, DALL. MORNING NEWS (May 7, 2015, 10:26 AM),

http://www.dallasnews.com/news/politics/state-politics/20150507-bills-that-would-sack-texasbag-bans-left-hanging-in-committees.ece.

65.

Austin,

See, e.g., Aaron Waters, Environmental Effects of the Single Use Bag Ordinance in Texas, AUSTIN RESOURCE RECOVERY 3, 8 (June 10, 2015),

http://www.austintexas.gov/edims/document.cfm?id=232679.

66.

67.

Id. Id.at7.

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The story of Austin's bag ban did not begin and end with the ordinance itself. As early as 2007, "the City Council adopted a resolution directing the City Manager to evaluate and recommend strategies for limiting the use of non-compostable plastic bags and promoting the use of compostable and reusable bags." 68 In partnership with the Texas Retailers Association and Keep Austin Beautiful, the city launched an "awareness campaign to encourage the use of reusable bags., 69 The campaign took place from January 2008 to June 2009 and "included efforts to reduce bag consumption, issue free and sell low-cost reusable bags to patrons, and provide free plastic bag recycling to customers., 70 During this period the Texas Retailers Association provided data on "the pounds of bags purchased and recycled to serve as [a] baseline.",7' During this campaign the city focused on managing plastic bags while retailers focused on providing 72 opportunities for recycling and reducing overall plastic bag consumption.

The city then launched a pilot-recycling program for single-use plastic bags, for the purpose of evaluating "the feasibility of a curbside plastic bag recycling program. The program targeted a cross section of the Austin-area demographic incorporating 5,000 households., 73 Ultimately, the pilot program proved to be ineffective: At the conclusion of the pilot, the Department released a summary report. Based on low participation rates, increased collection costs, low volume of material per household, limited potential for an adequate return on investment, and presence of easily accessible recycling drop-off sites currently available to the community, the Department discontinued the pilot program, but continued to promote community-wide use of reusable shopping bags and recycling drop-off locations.

Beginning in 2010, the Austin City Council directed staff to pursue more in-depth evaluation of the impacts of plastic bags to the community and in 2011, directed staff to develop an ordinance regulating single-use plastic bags.74 Based upon the lackluster results from its original recycling campaign and pilot program, the city council came to the conclusion that it needed to act boldly and ban the bag. On August 4, 2011, "Austin City Council AUSTN CITY in Austin, Short History of Single-Use Bags 68. http://austintexas.gov/sites/default/files/files/Trash-and Recycling/ShortHistoryofSingleuse BagsinAustin.pdf (last visited Mar. 2, 2016).

69.

70.

Id. Id.

71.

72.

73.

74.

Id. Id. Id. Id.

1,

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adopted [a] resolution to regulate single-use bags at retail stores. 7 Subsequently, the city council voted in favor of the ordinance.7 6 The city continued to support widespread adoption through community and business outreach programs prior to the ordinance becoming effective.7 7 A June 2015 study found that "since the implementation of the single use bag ordinance, and all other considerations being the same, the City of Austin has reduced their yearly single use plastic bag consumption by more than 197 million bags per year., 78 In total, the ordinance led to a reduction of approximately 75% of plastic bag consumption.79 Although many Texas cities had passed similar ordinances prior to Austin's, it was Austin's action that finally drew the attention of state lawmakers. 80 In defiance of the dramatic success of the ordinance, the legislature filed a bill to preempt Austin's efforts to clean up its own waterways, streets, and recycling facilities.8' C.

Equal Rights Ordinances-Houstonand Plano

The issue of protecting LGBTQ people from discrimination has garnered much attention. This began in part due to the March 26, 2015 passage of Indiana's so-called "religious freedom" law (a type of Religious Freedom Restoration Act), which allows private business owners to stand on their religious beliefs to deny their services to LGBTQ people. a2 While such exemptions are not codified in twenty-eight states, including Texas, some cities are taking proactive steps to prevent this type of blatant discrimination. 83 The Houston City Council passed Houston's Equal Rights 75.

Bring it Austin, supra note 63.

76.

Id.("On March 2, 2012, the Austin City Council unanimously approved the Single-Use Carryout Bag Ordinance, which [took] effect on March 1, 2013.").

77.

Id. ("Austin Resource Recovery host[ed] free Carryout Bag Business Training[s] to help educate businesses about the ordinance.").

78.

Waters, supra note 65, at 12-13; see also Kate McGee, Has Austin Really Reduced Its Plastic Bag Consumption by 75 Percent?, KUT NEWS (June 19, 2015), http://kut.org/posthasaustin-really-reduced-its-plastic-bag-consumption-75-percent (explaining that Waters' study compared the number of plastic bags found in Austin with the number of plastic bags found in Fort Worth, "a city with a similar population that doesn't have a bag ban").

79.

McGee, supra note 78.

80.

Editorial, Bag Ban Is Austin's Show, Not Legislature's, STATESMAN (Mar. 9, 2013, 12:00 AM), http://www.statesman.com/news/news/opinion/bag-ban-is-austins-show-notlegislatures/nWmCj. 81.

See Tex. H.B. 2416, 83d Leg., R.S. (2013).

82.

Indiana Gov. Pence Defends Religious Objections Law: 'This Bill Is Not About Discrimination,' CHI. TRIB. (Mar. 26, 2015, 4:35 PM), http://www.chicagotribune.com/news/nationworld/chi-indiana-religious-freedom-bill-sblOl pence-20150326-story.html.

83.

Juan A. Lozano & David Crary, Showdown in Houston over LGBT Nondiscrimination Ordinance, ASSOCIATED PRESS (Oct. 25, 2015, 1:11 PM),

A REVIEW OF HoME RULE IN TEXAS

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Ordinance (HERO) on May, 14 2014 and protected LGBTQ people from of Plano The City discrimination in public and private places of business."

7 Austin,88 86 Worth, Fort Dallas, joining 2014,85 in measure similar a passed San Antonio, 89 and El Paso. 90 The passage of Houston's nondiscrimination ordinance was met with an immediate and aggressive opposition and a nationwide interest in the outcome of this political drama. 91 "Opponents contend[ed] the ordinance would infringe on their religious beliefs against homosexuality. Copying a tactic used elsewhere, they also have labeled it the 'bathroom ordinance,' alleging that it would open the door for sexual predators to go into women's restrooms. 92 Despite these claims, Houston legal experts agree93 that the bathrooms provision is not a real issue and is intended to mislead.

University of Houston Law Center professor Peter Linzer said the law does not mean someone can enter a bathroom with the intent to commit a crime, regardless of gender. 'It's a phony issue... [i]f you commit a crime in a bathroom, you're going to be prosecuted, and HERO is not a defense.94 http:/ibigstory.ap.org/article/1 72 lbd052b204c20b 14dl 714ba72fd62/showdown-houston-overlgbt-nondiscrimination-ordinance.

84.

GREATER HOuS. PARTNERSHIP, supra note 12. On November 3, 2015, "HERO was on the ballot for Houston voters," and it was defeated. City of Houston Anti-DiscriminationHERO BALLOTPEDIA, 2015), 1 (November Proposition Referendum, Veto

https://ballotpedia.org/Cityof_HoustonAntiDiscriminationHEROVetoReferendum,_Propositionl_(November_2015) (last visited Apr. 6, 2016).

85.

City

of

Piano

Council

Agenda

Item,

CITY

PLANO

(Dec.

8,

2014),

http://www.planotx.org/city-hall/agendas/councilagendas/agendaitems/cmgr 1208 14-61 .pdf.

86.

Sunnivie Brydum, Dallas Strengthens LGBT Protections, ADVOCATE.COM (Nov. 5,

2014, 5:25 PM), http://www.advocate.com/politics/election/2014/1l/05/dallas-strengthens-lgbtprotections.

87.

HUM.

Cities and Counties with Non-Discrimination Ordinances That Include Gender Identity, http://www.hrc.org/resources/entry/cities-and-counties-with-nonRTS. CAMPAIGN,

discrimination-ordinances-that-include-gender (last visited Feb. 12, 2016).

88.

89.

Id. Forrest Wilder, Updated: San Antonio Passes LGBT Non-DiscriminationOrdinance,

TEX. OBSERVER (Sept. 5, 2013, 9:28 PM), http://www.texasobserver.org/san-antonios-colossallgbt-rights-fight.

90.

Alexa Ura et al., Map: Comparing NondiscriminationOrdinances in Texas Cities, TEX.

(last TRIB., http://www.texastribune.org/2013/09/18/comparing-nondiscrimination-ordinances updated Dec. 9, 2014) ("El Paso's city charter lists protections against discrimination on the basis of sexual orientation or gender identity for city employees, but they are not sanctioned by city ordinance.").

Lozano & Crary, supranote 83.

91.

92.

Id. 93.

Katherine Driessen, Claims About Restroom Access Dominate HERO Debate, HOUS.

http://www.houstonchronicle.com/news/houston15, 2015), (Oct. CHRON. texasihouston/article/Claims-about-bathroom-access-dominate-ERO-debate-6572325.php.

94. Id.

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According to Houston College of Law professor Matthew Festa, "It's a little misleading to focus on bathrooms ....What the law really does is broaden the protected classes ....95 After the passage of HERO in May 2014, "opponents sued the city seeking to force a referendum on the ordinance .... The lawsuit eventually reached the Texas Supreme Court, which in July [2015] ruled the conservative activists should have succeeded in their petition drive to put the issue before voters. ' ' 96 In a city wide referendum, voters struck down Houston's equal rights ordinance on November 3, 2015.97 Ideally, the legislature should add broad protections for LGBTQ individuals to state anti-discrimination laws. Until then, cities ought to continue to have the freedom to try to create such protections. It remains unknown whether the state may succeed in a future effort to preempt equal rights ordinances now that Houston's failed ordinance has drawn so much statewide and national attention.

The likelihood that the state legislature may seek to preempt cities from creating equal rights ordinances, including protections for transgender people to access restrooms consistent with their gender identity, regardless of assigned sex (real or perceived) or gender expression, has increased due to national events. North Carolina recently passed a controversial law that preempts cities from creating equal rights ordinances and that prohibits transgender people from accessing restrooms consistent with their gender identities after the City of Charlotte passed an equal rights ordinance extending such transgender protections.98 In response, "[t]he Obama administration [issued] a sweeping directive telling every public school district in the country to allow transgender students to use the bathrooms that match their gender identity." 99 Notably, Fort Worth Independent School District adapted its policies to be consistent with the federal directive.1°° Lieutenant Governor Dan Patrick has since called for the resignation of the Fort Worth ISD superintendent, sent a letter to all Texas school districts

95.

Id.

96.

Lozano & Crary, supranote 83.

97.

BALLOTPEDIA, supra note 84.

98.

Tal Kopan & Eugene Scott, North Carolinagovernor signs controversialtransgender bill, CNN (Mar. 24, 2016), http://www.cnn.com/2016/03/23/politics/north-carolhna-genderbathrooms-bill/.

99.

Julie Hirschfeld Davis & Matt Apuzo, U.S. Directs Public Schools to Allow Transgender Access to Restrooms, N.Y. TIMES (May 12, 2016), http://www.nytimes.com/2016/05/13/us/politics/obama-administration-to-issue-decree-ontransgender-access-to-school-restrooms.html? r-0.

100.

Patrick Svitek, Patrick Suggests Legislature Might Step In on Bathroom Guidelines, TEX. TRIB. (May 31, 2016), https://www.texastribune.org/2016/05/31/patrick-escalates-battleagainst-transgender-guide.

A RE VIEW OF HOME RULE IN TEXAS

20161

advising them to ignore the federal directive, and has suggested that the legislature may take up the issue in a future session, saying "this fight is just beginning."'' 1 Attorney General Ken Paxton has also filed a lawsuit against the federal government over the directive seeking a nation-wide injunction. 102 These events make it increasingly likely that bills will be filed in the upcoming legislative session with the intent to preempt cities from passing LGBTQ nondiscrimination ordinances, much like in North Carolina.

IV.

STATE OF REACTION

The Texas State Capitol is a curious place. In a single moment it manages to portray adulation for local control and traditional, small-town values, yet it also presides over some of the largest cities in the United States and sets the rules for one of the most dynamic economies in the world. While some say that Austin is "[t]he blue dot in the red sea,"'0 3 they ignore a more important fact: there is a bright red dot in the middle of that blue dot-the Capitol. Yet, there are many larger blue dots scattered across the state that go by the names of Dallas, Houston, San Antonio, El Paso, and the Rio Grande Valley. 0 4 The sheer size and ambition of these cities and regions encourage local governments to flex their home rule muscle.

Inevitably though, many of the progressive ordinances passed by Texas cities face scrutiny from conservative state legislators. The result is a body of legislation that provides ample opportunity to study the efforts of state lawmakers to preempt local control in public policy ranging from environmental protection, public health, civil rights, and waste management. This section will chronicle recent bills that were filed or passed during the 83rd and 84th Legislative Sessions with this very purpose.

The preemptive mechanisms of each bill will also be analyzed.

101.

Id.

102. Alexa Ura, Paxton Ramps Up Fight Against Transgender Policy, TEX. TRIB. (Jul. 6, 2016), https://www.texastribune.org/2016/07/06/texas-seeks-nationwide-halt-obama-transgenderpoli/.

Kelli Ainsworth et al., What Draws People to Austin (and What Drives Them Away), 103.

KUT NEWS (Oct. 11, 2012), http://kut.org/post/what-draws-people-austin-and-what-drives-them-

away.

Andrea Grimes, Shades of Blue in Texas' Rio Grande Valley, As Wendy Davis 104.

AM), 10:20 2013, 18, (Oct. REWIRE Campaign, Her Launches https://rewire.news/article/2013/10/18/shades-of-blue-in-texas-rio-grande-valley-as-wendy-davis-

launches-her-campaign.

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House Bill 40

Denton, through its ban on hydraulic fracturing, has become the poster-child for a city unafraid to challenge the power of the state. So too has the 84th Legislature's response become an iconic example of preemption. 105 What was once a David versus Goliath story has now become a cautionary tale on the power of preemption. The legislature passed, and Governor Abbot signed, HIB 40 into law, which "expressly preempt[s] the regulation of oil and gas operations by municipalities and other political subdivisions." 10 6 The law took immediate effect.10 The law passed with overwhelming support, receiving over a two-thirds vote of approval in both chambers. 10 8 The language of the law casts a wide net, broadly prohibiting municipal regulation of "oil and gas operations.' ' 10 9 The only allowances for municipal regulation of oil and gas operations still permitted include the creation of setbacks from drilling sites and certain buildings, "fire and emergency response, traffic, lights, and noise-but only if such rules [are] 'commercially reasonable.""' 0 These allowances are a shadow of the regulatory powers once claimed by Denton.

The requirement that municipal regulations of oil and gas operations must be commercially reasonable indicates a clear preference of the state legislature. The legislature has created a hierarchy in which the commercial well-being of oil and gas operations in Texas is valued over, what municipalities believe to be, sound regulations. It is not difficult to imagine a city ordinance that, although entirely reasonable in protecting public health, would fall to preemption if it is found by the state to be commercially unreasonable. Put simply, this places an emphasis on oil and gas industry profits over the local control of this industry.

The legislation was celebrated by industry lobbyists and bemoaned by others, including city officials, environmentalists, and their respective lobby organizations."' Governor Abbott emphasized the protection of private property rights during the passage of the law, stating: We have sued the federal government multiple times because of the heavy hand of regulation from the federal government-trying to run individuals' lives, encroaching upon individual liberty ....

At the same time, we are ensuring that people and officials at the 105.

See Malewitz, supra note 58.

106.

Act of May 18, 2015, 84th Leg. R.S., H.B. 40, § 1 (b), (c) (to be codified at TEX. NAT. RES. CODE ANN. § 81.0523).

107.

Malewitz, supra note 58.

108.

Id. 109.

Id. 110.

Id. 111.

Id.

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to be encroaching upon individual liberty local level are not going 12 rights.' individual or In no uncertain terms, HB 40 expressly preempts municipal regulation of oil and gas operations. 113 With the stroke of the Governor's pen, the City of Denton's experiment in home rule banning fracking came to an end. "[T]he City Council was forced to take it off the books because of a new 14 state law and pending lawsuits."' The city repealed the ordinance in order to prevent potential litigation and to eliminate any perceptions of 15 discrepancies between the ordinance and the new state law.' Denton now serves as a warning to other cities not to wake the sleeping giant that is the Texas legislature. When Denton lost its power to regulate the oil and gas industry, so too did every other Texas city. While the legislature has succeeded in preempting cities from regulating fracking, it has failed to stop cities from banning single-use plastic bags and from expanding protections for LGBTQ people.

B.

House Bill 2416

Despite the fact that cities in Texas have been banning or discouraging single-use plastic bags for years, it was Austin's ban that finally pushed the 1' 16 legislature to react with the so-called "Shopping Bag Freedom Act." The office of State Representative Drew Springer, who authored the bill, said in a press release that the bill aimed to "give retailers and consumers the freedom to give and receive plastic and paper bags across the state and stop '17 the overreach of big government." The bill also stated it was an effort to 8 stop "' government elites' and 'a misguided nanny-state agenda.""

Interestingly, when Brownsville was the first Texas city to pass an 9 ordinance banning single-use plastic bags, the legislature remained silent."

Austin however, draws a particular ire from the legislature it hosts.

"Springer's bag ban bill fits the classic mold of conservative lawmakers 2° annoyed with Austin's liberal ways."' HB 2416 joined the legislature's other numerous attempts, some successful and some not, to dictate to 12 Austin how it should run its local affairs. ' These efforts have targeted the 112.

113.

114.

Id. Baker, supra note 62.

Id.

115.

Id.

116.

117.

Editorial, supra note 80.

Id. (internal quotation marks omitted).

118.

119.

Id. Id.

120.

121.

Id. Id.

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city's ability to regulate construction in order to protect endangered species; the manner in which Austin Independent School District board members are elected; the city's operation of its publicly-owned utility company; the city's restrictions on cutting down historic trees; and the city's management of downtown traffic patterns at the threat of appropriating the streets if changes were implemented. 22 Although the 83rd Legislature's attempt to ban bag bans made it out of committee, it died in the Calendars Committee.123 Much like single-use plastic bags found hanging in trees and on chain-link fences, the bill, which sought to ban the bag bans, proved to be disposable. The "Shopping Bag Freedom Act" was discarded and left hanging in committee.

The notion that state law preempts local bag bans is not a new concept.

Governor Abbott wrote that state law might preempt single-use plastic bag prohibitions or fees when he was Attorney General in 2014.124 Citing section 361.0961 of the Texas Health and Safety Code, 125 he wrote that state law "likely prohibit[s] a city ordinance adopted for solid waste management purposes that prohibited single-use plastic bags," and that "a court would also likely conclude that a city is prohibited from assessing a fee on the sale or use of a [single-use or] replacement bag."'126 As governor, Abbot has criticized "such municipal rules in a major speech before the session as prime examples of Texas being 'California-ized' by 'ridiculous, unnecessary' regulations.' 27 Governor Abbott has also cited bag bans in a major policy speech as examples of the "patchwork quilt of bans and rules and regulations that are eroding the Texas model.' 28 He also urged that "[u]nchecked overregulation by cities will turn the Texas miracle into the California nightmare.,, 129 Despite the Governor's insistence that only a Californian would support bag bans, many Texans have supported city ordinances regulating single-use plastic bags. 30 Many Texans also support the expansion of protections afforded to LGBTQ people, as evidenced by 122.

Id.; see also Andrew Weber & Wells Dunbar, How Many 'Austin Bashing' Bills Made It out of the Lege? (Update), KUT NEWS (May 24, 2013), http://kut.org/post/how-many-austinbashing-bills-made-it-out-lege-update.

123.

Bill: HB 2416-History, TEX. LEGISLATURE ONLINE,

http://www.capitol.state.tx.us/BilILookup/History.aspx?LegSess=83R&Bill=HB2416 (last visited Mar. 1, 2016).

124. Neena Satija, Abbott Opinion Murky on PlasticBag Bans, TEX. TRIB. (Aug. 29, 2014), http://www.texastribune.org/2014/08/29/abbott-opinion-murky-plastic-bag-bans.

125.

TEx. HEALTH & SAFETY CODE ANN. § 361.0961 (West 2010).

126.

Tex. Att'y Gen. Op. No. GA-1078 (2014).

127.

Berming, supra note 64.

128.

Id. 129.

Id 130.

See id. (stating that half of Dallas residents oppose the bag rules, meaning half approve).

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of equal rights ordinances and corresponding bills seeking to the multitude 131 stop them.

C.

House Bill 1911 andHouse Bill 1556

Plano-area state representatives introduced HB 1911,132 and Houstonarea representatives introduced House Bill 1556.133 Each was filed in direct response to the passage of LGBTQ nondiscrimination ordinances in Plano and Houston. 134 Both bills would have preempted municipalities from ordinances. 135 including LGBTQ individuals in nondiscrimination 136 Committee.

However, both bills died in the Urban Affairs State Representative Jeff Leach described his bill, in a statement released by his office, as an effort to stop "ordinances that needlessly create an undue burden for business owners and recklessly infringe on the rights of Texans" and "to prevent state agencies and local governments from 1' 37 on Texas citizens." unjustly imposing overreaching laws and ordinances In explaining his beliefs in why the bill was necessary, joint author State Representative Matt Shaheen stated, "Several of our Texas cities are abusing their power by promoting inappropriate policies that have nothing to do with day-to-day city governance and are harmful to the very constituents they we are [sic] elected to serve. This legislation helps to ' 1 38 ensure cities focus on their core responsibilities." Despite the gloom and doom predicted by these state legislators if equal rights ordinances are allowed to stand, the City of Plano explains why it believes a nondiscrimination ordinance is the right thing to do: Cities thrive when all citizens and visitors feel respected, welcomed and have the ability to experience the full enjoyment of civil, religious and human rights. To this end, we are committed to Cf Wendy Hundley, Bills Take Aim at LGBT Protections, DALL. MORNING NEWS 131.

(Mar. 4, 2015, 3:45 PM), http://planoblog.dallasnews.com/2015/03/bills-take-aim-at-lgbtprotections.html.

ONLINE, LEGISLATURE TEX. 1911-History, HB Bill: 132.

4 http://www.capitol.state.tx.us/BilLookup/History.aspx?LegSess=8 R&Bill=HB1911 (last visited Mar. 1, 2016); Hundley, supra note 125.

ONLINE, LEGISLATURE TEX. 1556-History, HB Bill: 133.

84 R&Bill=HB 1556 (last visited http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess= Mar. 1, 2016); Hundley, supra note 125.

Hundley, supra note 125.

134.

Id. ("[T]wo bills have been introduced by Texas lawmakers that would nullify LGBT 135. protections created by ordinances in Plano, Dallas, Fort Worth and other cities.").

See HB 1911-History,supra note 126; HB 1556-History,supra note 127.

136.

Jeff Leach, State Representative Jeff Leach Files Legislation Ensuring Uniformity in 137.

HOUSE REPRESENTATIVES (Mar. 2, State Law & Protecting Citizens & Business Owners, TEx. d= 53 23 .

2015), http://www.house.state.tx.us/news/press-releases/?i Id. 138.

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ensuring every Piano citizen's and visitor's rights are protected.

The City of Plano's Equal Rights Ordinance depicts our commitment to ensuring equality and inclusion for all citizens and visitors in the areas of employment, housing, public accommodations and city contracting. 139 Houston and Plano are also motivated to support LGBTQ equality because the business community largely supports such efforts, despite the legislators' claims that equality is bad for business. 140 This runs counter to Representative Leach's assertion that, "[t]he legislation is designed to ensure a more predictable business climate. 141 Houston is home to half of the Fortune 500 companies in Texas, 142 and Plano "is home to many leading global corporations., 143 The Greater Houston Partnership, a pro-business organization, explains why it supports the Houston Equal Rights Ordinance for economic reasons: Houston is well-known for its business climate and for its diverse, multicultural community.... [W]e believe Houston's reputation as a great place to live, work and build a business has helped drive our economic growth and create jobs. The Partnership supports [HERO] because we know that there is a strong connection between Houston's community spirit and growing our businesses and creating jobs.'44 What makes JB 1911 and HB 1556 unique is that the intended effect is to nullify certain rights and protections given to individuals by cities. 145 Unlike Denton's fracking ban or the multiple single-use plastic bag ordinances, which are largely environmental and public health ordinances, LGBTQ nondiscrimination ordinances create new individual rights. 146

139.

Equal Rights Ordinance, CITY PLANO, http://www.plano.gov/2526/Equal-RightsOrdinance (last visited Mar. 2, 2016).

140.

GREATER Hous. PARTNERSHIP, supra note 12 (internal quotation marks omitted) ("As we work to attract businesses and talented professionals to our region, they have made clear that they are seeking a community that is welcoming, diverse and inclusive. Ensuring such an environment is critically important to the continued success of the region's economy.").

141.

Leach, supra note 131.

142.

Katherine Feser, Houston Is Home to Half of the Fortune 500 Companies in Texas, Hous.

CHRON. (June 2, 2014), http://www.houstonchronicle.com/bnusiness/economy/article/Houston-is-home-to-half-of-theFortune-500-5523181.php.

143.

2015 Economic Development Community Profile, CITY PLANO (2015), http://txplanoed.civicplus.com/DocumentCenter/Home/View/587.

144.

GREATER HOus. PARTNERSHIP, supra note 12.

145.

See supranote 129 and accompanying text.

146.

Houston, Tex., Ordinance 2014-530 (May 28, 2014) ("WHEREAS, the City Council finds that all persons living in, working in or visiting the City are entitled to be treated with equal dignity and respect and have the right to be free from discriminatory and unequal treatment; and

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According to Governor Abbott, individual rights and liberties (such as property rights) justify the necessity of the state to step in and preempt own borders. 147 cities from regulating the oil and gas industry within their Consistency requires that if the protection of individual rights is held up as justification for the use of preemption, then the state should not preempt equal rights ordinances as they protect individual rights. The state should lay the floor on minimum civil rights protections, guaranteed for citizens and cities should be encouraged to raise the ceiling on such rights through the unbridled imagination of home rule. In this manner, cities would not simply adequately protect individual rights, but have the opportunity to strengthen and discover new civil rights yet unknown through home rule and local control.

V.

STATE CONSTITUTIONAL ANALYSIS

The only bill considered in this Comment that has actually become law is HB 40, the Denton fracking law. 148 Along with the selected proposed legislation, which sought to preempt municipal ordinances banning singleuse plastic bags and those strengthening LGBTQ equality, there is an opportunity to analyze the legislature's attempt to quell home rule within a preemptive framework.

A.

House Bill 40

The caption of HB 40 makes clear the intent of the legislature, as it states the bill is "relating to the exclusive jurisdiction of this state to regulate oil and gas operations in this state and the express preemption of local regulation of those operations.' ' 149 The bill's preamble lays out the broad policies in support of preemption: The legislature finds that the laws and policy of this state have fostered successful development of oil and gas resources in concert with the growth of healthy and economically vibrant communities for over 100 years. The legislature acknowledges this cooperative progress and that mutual benefit is derived from the statutes already in effect, which provide effective and environmentally sound regulation of oil and gas operations that is so comprehensive and pervasive that the regulation occupies the WHEREAS, the City of Houston seeks to provide an environment that is free of any type of discrimination based on... sexual orientation... [or] gender identity .....

See Malewitz, supra note 58.

147.

TEX. NAT. REs. CODE ANN. § 81.0523 (West Supp. 2015).

148.

Act of May 18, 2015, 84th Leg. R.S., H.B. 40 (to be codified at TEX. NAT. RES. CODE 149.

ANN. § 81.0523).

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field, while facilitating the overriding policy objective of this state of fully and effectively exploiting oil and gas resources while protecting the environment and the public's health and safety. The legislature recognizes that in order to continue this prosperity and the efficient management of a key industry in this state, it is in the interest of this state to explicitly confirm the authority to regulate oil and gas operations in this state. The legislature intends that this Act expressly preempt the regulation of oil and gas operations by municipalities and other political subdivisions, which is impliedly preempted by the statutes already in effect. 5 0 The bill cites the state's symbiotic relationship with the oil industry and the tradition of state regulation as the bases for preemption. 5' The bill also makes mention of public health and environmental regulation, perhaps as a token acknowledgment of the concerns which inspired the Denton 152 fracking ban.

The two types of preemption, which are mentioned in the bill include express (when the preemption is stated in the text explicitly) and implied (usually found in one of three subtypes which include field, impossibility, or obstacle) preemption.153 The only subtype of implied preemption mentioned in the bill is field preemption. 154 Typically, field preemption occurs when a superior government decides it will control an entire sphere, 155 so that there is no additional room for an inferior government to govern.

Examples of field preemption at the national level include foreign affairs and immigration. 156 Here, the State of Texas is seeking to occupy the field of oil and gas regulation so that no room is left for municipal corporations to govern.

This laundry list of preemption-types suggests that the state sought to cover all of its bases, as it were, to ensure that there could be no question as to the fact that state law preempts Denton's fracking ordinance and any would-be copycat ordinances. As any city ordinance purporting to regulate the subject matter of a state statute is preempted to the extent that it conflicts with the state statute, 157 House Bill 40 makes evident that Denton's fracking ban did not actually conflict with a preexisting state law; otherwise, HB 40 would not have been necessary at all. While "the mere 150.

151.

152.

153.

154.

Id. Id. Id. Id. See id.

155.

CHARLES W. "ROcKY" RHODES, THE TEXAS CONSTITUTION IN STATE AND NATION 45

(2014).

156.

157.

Id.at 55.

See City of Brookside Viii. v. Comeau, 633 S.W.2d 790, 796 (Tex. 1982).

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fact that the legislature has enacted a law addressing a subject does not 158 here, RB 40 has mean that the subject matter is completely preempted,' perhaps changed the game. Prior to IB 40, cities like Denton were free to pass ordinances concerning the oil and gas industry, but now it seems they may not, except in very limited circumstances that the state has left open.

Although Texas regulated the oil and gas industry, the simple fact that it did so did not bar cities from regulating the industry as well. Now, Texas has declared this no longer to be the case, because its regulation of the oil and gas industry "is 1so59 comprehensive and pervasive that the regulation occupies the field.

Before HB 40, there was a presumption in favor of Denton's fracking though the state regulates the same industry, because "a general even ban law and a city ordinance will not be held repugnant to each other if any 16 ° other reasonable construction leaving both in effect can be reached." It is this deference to local control and to home rule that created the policy recognized by the courts of this state that "if the Legislature chooses to preempt a subject matter usually encompassed by the broad powers of a 1 61 Now, Texas has home-rule city, it must do so with unmistakable clarity. chosen to be unmistakably clear: (b) An oil and gas operation is subject to the exclusive jurisdiction of this state. Except as provided by Subsection (c), a municipality or other political subdivision may not enact or enforce an ordinance or other measure, or an amendment or revision of an ordinance or other measure, that bans, limits, or otherwise regulates an oil and gas operation within the boundaries or extraterritorial jurisdiction of the municipality or political subdivision. (c) The authority of a municipality or other political subdivision 162 to regulate an oil and gas operation is expressly preempted .... all the of preemption state of This bill arguably provides the best example of types bills analyzed in this Comment. The bill utilizes multiple preemption, although only express exemption is necessary to achieve the goals of the bill. 163 Also, the bill has actually become law and gone into 158.

159.

City of Richardson v. Responsible Dog Owners, 794 S.W.2d 17, 19 (Tex. 1990).

Act of May 18, 2015, 84th Leg. R.S., H.B. 40, § 1 (to be codified at TEX. NAT. RES.

CODE ANN. § 81.0523).

City of Beaumont v. Fall, 291 S.W.202, 206 (Tex. 1927).

160.

Dall. Merch.'s & Concessionaire's Ass'n v. City of Dallas, 852 S.W.2d 489, 491 (Tex. 161.

1993) (citing City of Sweetwater v. Geron, 380 S.W.2d 550, 552 (Tex. 1964)).

TEX. NAT. RES. CODE ANN. § 81.0523 (West Supp. 2015).

162.

Dall. Merch.'s & Concessionaire's Ass'n, 852 S.W.2d at 491 (explaining that to 163. preempt local law, the state legislature must be unmistakably clear, which can be accomplished by express preemption).

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effect, not only preempting the ordinance it was created in response to, but inspiring its total repeal.' 64 By studying House Bill 40, local politicians and city council members can learn from the pitfalls of Denton's fated efforts to ban fracking. Conversely, it is also an example to wily state lawmakers who wish to preempt city ordinances they find either inconvenient or entirely intolerable. Like Icarus, the City of Denton reached as high as it could with its fracking ban. Many, including the author of this Comment, consider the ordinance to be a valiant and worthwhile effort to which deference should have been given. Municipal ordinances, however, are like feathers and wax-they cannot withstand the bright and searing power of state preemption.

B.

House Bill 2416

Although it never became law, HB 2416 is often noted as an example of state legislators trying to supersede the will of a city to manage its own affairs. The self-styled "Shopping Bag Freedom Act" sought to preempt city ordinances banning or restricting single-use plastic bags.

In its entirety, House Bill 2416 states: A BILL TO BE ENTITLED AN ACT relating to the provision of bags to customers of a business at the point of sale.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. (a) This Act shall be known and may be cited as the "Shopping Bag Freedom Act." SECTION 2. Title 6, Business & Commerce Code, is amended by adding Chapter 205 to read as follows: CHAPTER 205. RIGHT OF BUSINESSES TO PROVIDE BAG TO CUSTOMER Sec. 205.001. PROVISION OF BAG AUTHORIZED. A business that sells an item to a customer may provide to the customer at the point of sale a bag, package or other container made from any material.

Sec. 205.002. GENERAL PROHIBITIONS INVALID. (a) An ordinance or regulation adopted by a local government purporting to prohibit or restrict a business from providing to a customer at

164.

Baker, supra note 62.

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the point of sale a bag, package or other container made from any material is invalid and has no effect.

SECTION 3. Beginning September 1, 2013, a local government may not enforce any ordinance or regulation adopted by the local government before that date that prohibits or restricts a business, other than a business serving only residents of that local government's territory, from providing to a customer at the point of sale a bag, package or other container made from any material.

SECTION 5. This Act takes effect September 1, 2013.165 Section 205.001 creates an implied exemption with regard to the provision of bags. 166 This is because ordinances may not conflict with a state statute or the state constitution. 167 It is difficult, in this instance, to determine if this section of the bill would be properly classified as an exercise of impossibility implied preemption (when a superior law and an inferior ordinance would be impossible to co-exist) or obstacle-implied preemption (when the inferior ordinance is an obstacle to the superior law or policy). 168 Both of these subtypes, unlike field-implied preemption, 169 are defined by the fact that a conflict between state and local law is created, which is impermissible under the Texas Constitution. 170 The legislature could have stopped here by affirming the ability of business to provide bags and thus preempting conflicting ordinance through impossibility or obstacle implied preemption, but instead, it chose to make clear that cities would lack the ability to prohibit or restrict the provision of bags. 71 This part of the bill would likely be considered an express preemption, however it does not actually use the word "preemption" at any point. 72 It may have been wise to leave no doubts as to its scope.

What remains unanswered is whether this bill would have been effective at preempting taxes levied on single-use plastic bags. The language of the bill says it relates to any city ordinance "purporting to 165.

Tex. H.B. 2416, 83d Leg., R.S. (2013).

See id § 205.001.

166.

Hunter v. City of Pittsburgh, 207 U.S. 161, 178 (1907).

167.

168.

RHODES, supra note 149, at 45 (citing Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 98 (1992)) ("Express preemption requires explicit preemptive language, whereas implied preemption occurs if Congress has wholly occupied the field, compliance with both the federal and state regulations is impossible, or the state law impedes the accomplishment of Congress'

objectives.").

169.

Id. TEx. CONST. art. XI, § 5 (allowing home rule cities to act in any manner which they see 170. fit so long as it is not "inconsistent with the Constitution of the State, or of the general laws enacted by the Legislature of this State").

Tex. H.B. 2416, 83d Leg., R.S. (2013).

171.

172.

See generally id.

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prohibit or restrict" single-use plastic bags. 173 While the use of the word "restrict" seems to be an attempt to prevent fees from being placed on single-use plastic bags, it is not clear if such a tax is a restriction. Unlike Austin and Brownsville, Dallas passed an ordinance that placed a five-cent fee on all single-use plastic bags; however, the ordinance has since been repealed. 174 "Plastic bag makers opposed the Dallas [fee] and filed a suit... over the ordinance. City staff had advised the council that the fee would not survive the legal challenge," noting Governor Greg Abbott's opinion on bag bans issued as attorney general. 175 After all, simply because the state regulates something, it does not prevent cities from also doing SO.176 This demonstrates the importance of state legislatures acting with unmistakable clarity when preempting local ordinances, because even when preemption is possible, "a general law and a city ordinance will not be held repugnant to each other if any other reasonable construction leaving both in effect can be reached. 1 77 In other words, home rule is the default construction.

C.

House Bill 1911 andHouse Bill 1556

Twin bills from the Dallas-Fort Worth Metroplex and the greater Houston area possessed the singular goal of preventing Texas cities from protecting LGBTQ individuals and families from discrimination in public accommodations. 178 After the landmark equal marriage decision of Obergefell v. Hodges,179 it not only seems passe, but downright backwards to advocate for such a position, but nobody has ever been accused of calling the Texas legislature cutting edge. Nonetheless, while both bills sought the same outcome, there are slight distinctions in their approach to preemption.

House Bill 1911 provides in relevant part: AN ACT relating to regulation of discrimination by political subdivisions and certain state agencies.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 173.

Id. 174.

Joe Simnacher, Some Shoppers Hail End of Dallas Bag Fee, but Many See Need to PM), Litter, DALE. MORNING NEWS (June 7, 2015, 11:35 Fight http://www.dallasnews.com/news/local-news/20150607-end-of-dallas-shopping -bag-fee-praised-but-some-still-point-to-need-to-control-litter.ece.

175. Id. City of Richardson v. Responsible Dog Owners, 794 S.W.2d 17, 19 (Tex. 1990).

176.

177.

City of Beaumont v. Fall, 291 S.W. 202, 206 (Tex. 1927).

178.

See Tex. H.B. 1911, 84th Leg., R.S. (2015); Tex. H.B. 1556, 84th Leg., R.S. (2015).

179.

Obergefell v. Hodges, 135 S. Ct. 2584, 2603 (2015) ("[T]he Court has recognized that new insights and societal understandings can reveal unjustified inequality within our most fundamental institutions that once passed unnoticed and unchallenged.").

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SECTION 1. Subtitle A, Title 2, Labor Code, is amended to read as follows: Sec. 21.151. ENFORCEMENT BY ORDINANCE. (a) The prohibitions on discrimination in this chapter and other state law are intended to occupy the field of discrimination law in Texas. A political subdivision may not adopt or enforce an order, ordinance, or other measure that prohibits a practice that is not unlawful under this chapter or another state law. (b) An order or ordinance adopted by a county, municipality or political subdivision before the date this provision becomes law and that violates subsection (a) is null and void." 0 House Bill 1556 provides in relevant part: AN ACT relating to prohibition of certain regulations by a county, municipality, or other political subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. SHORT TITLE. This Act may be cited as the Intrastate Commerce Improvement Act. BY REGULATIONS PROHIBITED 250.007.

Sec. POLITICAL SUBDIVISIONS. (a) In this section, "local law" means a law, ordinance, order, resolution, rule, policy, or similar measure adopted by a county, municipality, or other political subdivision. (b) A county, municipality, or other political subdivision may not adopt or enforce a local law that creates a protected classification or prohibits discrimination on a basis not contained in the laws of this state. (c) A local law that is adopted by a political subdivision before the date this section becomes law and that violates Subsection (b) is null and void.181 House Bill 1911 utilized both field-implied preemption and what is arguably express preemption. 182 It utilizes field-implied preemption by

180.

181.

182.

Tex. H.B. 1911, 84th Leg., R.S. (2015).

Tex. H.B. 1556, 84th Leg., R.S. (2015).

See Tex. H.B. 1911.

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declaring that the regulation of discrimination is fully occupied by the state, leaving no room for cities or other political subdivisions.' 8 3 The bill utilizes express preemption by stating that cities may not adopt or enforce ordinances that create new classes of protected individuals. 184 Here, this general prohibition would likely have been enough to preempt local laws, as it would have created a conflict with state law.1 85 In the pursuit of due diligence however, this bill adds implied field preemption for good measure. This bill, by utilizing two types of preemption, excels in using "unmistakable clarity" to achieve its means.186 House Bill 1556 relies only on express preemption.187 However, like HB 1911, it makes no mention of the word "preemption" in its text. 188 The text of both bills demonstrates serious legislative effort to achieve unmistakable clarity in the effort to preempt local equal rights ordinances.

VI. POLICY CONSIDERATIONS The significant number of bills filed in the past two legislative sessions seeking to preempt home rule is indicative of a state not hesitant to use its power to set public policy. As the partisan political landscape in Texas is likely to become more competitive, what effect will this have on future exercises of home rule? Will the state legislature continue to fight-or perhaps even embrace-municipal ordinances that push the limits of local control? Will we see a state that takes the lead in the areas of environmental protection, civil rights, and responsible waste management, leaving little work for cities to do? Or will we see cities march forward with the mandates handed down to them by their local constituents? Ultimately, political influences could hold the answers to these questions.

A.

Immediate PoliticalImplications

Both liberal and conservative Texans alike find themselves in a curious position. In the most generalized sense, liberals are typically in favor of allowing larger government bodies to create public policy while

183.

Id. 184.

Id. 185.

Hunter v. City of Pittsburgh, 207 U.S. 161, 178 (1907); see also supra Part HC. 186.

Dali. Merch.'s & Concessionaire's Ass'n v. City of Dallas, 852 S.W.2d 489, 491 (Tex. 1993) (citing City of Sweetwater v. Geron, 380 S.W.2d 550, 552 (Tex. 1964)).

187.

Tex. H.B. 1556, 84th Leg., R.S. (2015).

188.

See id.

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conservatives favor a more local-control approach. 189 Within the context of home rule and preemption, liberals and conservatives have found themselves in unfamiliar territory with regard to fracking regulation, nondiscrimination ordinances, and single-use plastic bag bans. "More than a few longtime legislative observers have remarked on the glaring contradiction of conservative champions of local control seeking to override municipal ordinances they don't like."' 19 The municipal actions and state reactions set forth in this Comment demonstrate that, at least to some degree, progressives now carry the banner of local control while conservatives are insisting upon the power of the state--odd times indeed.

Perhaps the person in the most curious position of all is Governor Greg Abbott. Governor Abbott recently called on other state lawmakers across the country to support his proposal for a constitutional convention to radically limit the powers of the federal government. 191 Indeed, under the Governor's proposed plan "[t]he people, acting through their state legislatures, would be given the right to overturn any decision by the Supreme Court, or act passed by Congress. They would need merely twothirds of the states to agree.' 92 Simply put, this flies in the face of the most fundamental principles of the U.S. Constitution, the concept of federalism, and even a sense of what America is. The plan more strongly resembles a mere association of states rather than a united states. One can only imagine the detrimental effects on the great progress our nation has made had states possessed the powers Governor Abbott would seek to give them. 19 Governor Abbott's proposal sheds light on a glaring inconsistency within many Texas state lawmakers' purported support for local control. Our state leaders too often demand greater autonomy from the federal government yet simultaneously deny such autonomy to cities. The flow of local control should not be damned up at the state level. Instead, to the extent possible, it should be permitted to reach its natural ends: the city, the neighborhood, the 189.

State Governments Viewed Favorably As Federal Rating Hits New Low, PEW RES. CENTER (Apr. 15, 2013), http://www.people-press.org/2013/04/15/state-govermnents-viewedfavorably-as-federal-rating-hits-new-low.

190.

Hous. CHRON., supra note 14.

191.

Editorial: Why Abbott's Call for a Constitutional Convention Sets a Dangerous Precedent, DALL. MORNING NEWS (Jan. 8, 2016, 5:59 PM), http://www.dallasnews.com/opinion/editorials/20160108-editorial-abbotts -overreach-sets-a-dangerous-precedent.ece.

192.

Id; Greg Abbott, Restoring the Rule of Law with States Leading the Way, TEX. OFF. GOVERNOR 47 (Jan. 6, 2016), http://gov.texas.gov/files/pressoffice/Restoring_The_RuleOf Law_01082016.pdf.

193. DALL. MORNING NEWS, supra note 184 ("[F]or all its disappointments, the federal government has too often in our nation's history emerged as the only force capable of protecting the environment, ensuring the rights of minorities and others, and countering excesses among our

biggest corporations.").

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family, and the individual. While the Governor's proposal is highly unlikely to ever become a reality, the state's preemption of Denton's fracking ban is real.

The state's preemptive approach to fracking is now law 194 and thus will have both immediate political implications and long-term effects on public policy. Although the City of Denton regulated fracking for a brief period of time, it has for all intents and purposes lost the ability to do so, and along with it, so too have all other Texas cities. While earthquakes occur with alarming frequency in North Texas, 195 state preemption remains on solid ground. Nevertheless, even preemption has its limits. A state legislator must at least secure adequate support in her chamber for any bill seeking to preempt a municipal ordinance to become law. It is this most basic and fundamental legislative process that stops many would-be preemptive laws. Consequently, cities may continue to enact and enforce ordinances protecting LGBTQ people from discrimination. Cities may also continue to ban single-use plastic bags. Despite this lack of preemption, at least one city has proven to be weak in applying home rule on the issue of bag bans. 196 Even though other cities had no problem banning bags, Dallas caved. 197 The city repealed its tax on bags in the face of an unbinding attorney general opinion. 198 When cities shake in their boots, and dismantle their own ordinances, the political implications are such that the state no longer needs to bother preempting them. Instead, it has created a political climate where cities are willing to self-censor their own home rule powers in deference to the state. This runs counter to the state constitutional principle of local control.' 99 B.

Long Term Effects on Public Policy

Perhaps the most concerning side effect of preemption is numbing uniformity. Such legislatively-mandated sameness could chill the 194. Act of May 18, 2015, 84th Leg. R.S., H.B. 40, § 1 (b), (c) (to be codified at TEX. NAT. RES. CODE ANN. § 81.0523).

195.

See Chris Lett & Jason Morris, What's Causing Texas Earthquakes?Fracking 'Most Likely,' Report Says, CNN (May 11, 2015, 9:13 AM), http://www.cnn.com/2015/O5/O9/us/texasearthquakes-fracking-studies.

196.

See Simnacher, supra note 168.

197.

198.

Id. Id.

199.

See TEX. CONST. art. I, § 1 ("[T]he maintenance of our free institutions and the

perpetuity of the Union depend upon the preservation of the right of local self-government, unimpaired .... "); see also TEX. LOC. GOV'T CODE ANN. § 51.072(a)-(b) (West 2008) ("The municipality has full power of local self-government. The grant of powers to the municipality by this code does not prevent, by implication or otherwise, the municipality from exercising the authority incident to local self-government.").

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willingness of cities to experiment in order to find new and creative solutions to problems facing many Texas cities. This is problematic 200 because, "[t]he science of government ...is the science of experiment."

While typically mentioned in the framework of protecting state autonomy, the states serve as laboratories of democracy Justice Brandeis's belief that 20 1 can be applied to the city.

The discoveries in physical science, the triumphs in invention, attest the value of the process of trial and error. In large measure, these advances have been due to experimentation. In those fields experimentation has, for two centuries, been not only free but encouraged. Some people assert that our present plight is due, in part, to the limitations set by courts upon experimentation in the fields of social and economic science; and to the discouragement to which proposals for betterment there have been subjected otherwise. There must be power in the States ...to remould [sic], through experimentation, our economic practices and institutions to meet changing social and economic needs.20 2 Indeed, cities may act as laboratories when empowered with unencumbered home rule. From this experimentation, powerful solutions to problems that stifle cities across the state can emerge. What may appear as mad science one day could become commonplace the next. A "[d]enial of the right to experiment may be fraught with serious consequences" to the state, because ultimately the state may then be forced to pick up the burden of innovation which cities may have already had the wherewithal to carry.203 Although distinct, there are sufficient similarities between the state-city relationship and the federal nation-state relationship upon which to draw the conclusion that experimentation at the local level is beneficial to the whole of the state. In describing the states as laboratories of democracy, Justice Brandies wrote that "[i]t is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.''204 Much like the Supreme Court of the United States which possesses "the power to prevent an experiment." the state legislature wields the power of preemption over cities.20 5 In using that power, the state should yield the advice Justice Brandeis gave to his fellow justices regarding experimentation when he wrote, "[W]e must be ever on 200.

Anderson v. Dunn, 19 U.S. (6 Wheat.) 204, 226 (1821).

201.

See New State Ice Co. v. Liebmann, 285 U.S. 262, 310-11 (1932) (Brandeis, J., dissenting).

202.

Id. 203.

See id.at 311.

204.

Id.

205.

Id.

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our guard, lest we erect our prejudices into legal principles. If we would guide by the light of reason, we must let our minds be bold. 20 6 Our state legislators have immense power when they go to Austin. They have the power to preempt any city ordinance they so choose, but it is a deliberate restraint-and not action-which often demonstrates a truer understanding and commitment to the concept of local control.

Aside from the inherent limitations of preemption, some critics argue that experimentation at the local level through home rule will remain at a suboptimal level for two reasons.2 °7 First, the costs of policy experimentation, such as research, risk, and political capital, may be too great. 208 Essentially, this first argument presupposes that cities will attempt to "free ride" on the experiments of others, or that cities will not concern themselves with the external benefits of policy experimentation. 0 9 Second, the incumbents who run cities are able to win reelection without the implementation of policy experiments and are hesitant to do so because of the risk involved.2 10 As a general policy matter, the state ought to ignore these critiques and allow cities to experiment. With regard to the issues analyzed in this Comment, the free-rider problem does not seem to prevent cities from innovating. Houston, when it followed Dallas, Austin, Fort Worth, San Antonio, and El Paso, in passing its own equal rights ordinance was a freerider like many of the cities before it. 2 1' This did not stop the earlier cities from acting, nor did it stop Houston, as Plano followed suit soon after and there will undoubtedly be more cities to follow. Similarly, there is no evidence that Brownsville fretted over the possibility of Austin copying its bag ban when it spent the resources necessary to research and implement the first bag ban in Texas history.212 To the contrary, these issues demonstrate that cities all but encourage others to copy their policies. If an idea is worthwhile and beneficial, what end is served by hiding it? If the state refuses or fails to act, cities can serve as the kindling for the fire of good ideas to spread across Texas. After all, if San Luis Obispo, California,

206.

Id. 207.

Susan Rose-Ackerman, Risk Taking and Reelection: Does Federalism Promote Innovation?, 9 J. LEGAL STUD. 593, 594 (1980).

208.

Id. 209.

See id.

210.

Id. 211.

See supra Part III.C. 212.

Editorial, supra note 80 ("Brownsville was the first Texas city to ban plastic bags, in January 2011.").

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had not taken the bold step of banning smoking in restaurants and bars in 1990, we might all still be up in smoke.21 3 Like any systems of government, local control and home rule are not perfect. There is a dark and ugly side of local control. It was not local control that desegregated public schools 214 or ended the senseless discrimination against LGBTQ persons, which prevented them from equal 2 16 marriage .215 It was the Supreme Court and the President that did that. It was not local control that ended once and for all Jim Cr:w laws and ushered in a new era of Civil Rights, it was the President and Congress that did that.21 7 Sometimes it takes the power and resources of a larger government body to drive out some of the most pernicious and backwards 218 While this laws from every comer of our country and our states.

Comment has argued for local control as means for cities in Texas to achieve forward-thinking solutions to the issues facing modem municipalities, one must remain on guard that cities do not use local control to achieve less desirable ends.

Texas is a diverse state. 21 9 The increase in ethnic diversity will likely shift the politics in this state from solidly Republican to politically competitive.22 ° When this occurs, some cities may react against liberal state policies by using home rule to maintain regressive public policy. However, this is not reason enough to hold back so many other cities, indeed metropolises, from accomplishing great progress. Local control as embodied in home rule is a timeless Texan value, which must be embraced responsibly and for the benefit of everyone. After all, "[c]ities have the capability of providing something for everybody, only because, and only See Paul A. Diller, Why Do Cities Innovate in Public Health?Implications of Scale and 213.

Structure, 91 WASH. U. L. REV. 1219, 1229-31 (2014).

See Brown v. Bd. of Educ., 347 U.S. 483, 495 (1954) ("We conclude that in the field of 214. public education the doctrine of 'separate but equal' has no place.").

See Obergefell v. Hodges, 135 S.Ct. 2584, 2605-07 (2015).

215.

Brown, 347 U.S. at 495; see Exec. Order No. 10730, 22 Fed. Reg. 7628 (Sept. 24, 216.

1957).

Civil Rights Act of 1964, Pub. L. No. 88-352, 78 Stat. 241 (codified as amended in 217. scattered sections of 12 U.S.C., 28 U.S.C., and 42 U.S.C.).

The author notes the federal government enacted civil rights laws as a result of the 218. persistent (and ongoing) efforts of community organizers, grassroots activists, and countless individuals who called on their elected leaders to act.

Allan Van Fleet & Nicholas Grimmer, Amicus Curiae Brief of the Family of Heman 219.

Sweatt in Support of Appellees in Fisher v. University of Texas, 39 T. MARSHALL L. REv. 119,

132 (2013).

See Micah Cohen, Can Democrats Turn Texas and Arizona Blue by 2016?, N.Y. TIMES 220.

(Mar. 1, 2013, 7:47 AM), http://fivethirtyeight.blogs.nytimes.com/2013/03/01/can-democrats-

tum-texas-and-arizona-blue-by -2016 (noting non-Hispanic whites will decrease from 56% of the eligible voting population in Texas in 2012 to 52%).

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when, they are created by everybody. 2 21 In this regard home rule will continue to be of immense benefit to the people of Texas. Local control is neither a conservative nor a progressive value-it is a Texan value.

VII. CONCLUSION Home rule is the ultimate embodiment of local control in Texas. As such, this fundamental principle of Texas government deserves greater deference from state lawmakers and should be shielded from fleeting ideological and political discord. Texas is big, its people diverse, and its tradition free. This tradition has been long-served by a dogged devotion to local control through home rule. Public policy and the Constitution of this state dictate that the people have a right to self-governance through local control.222 In order to remain true to their professed exhalation of local control, conservative state legislators should resist the impulse to engage in an unending game of preemption whack-a-mole, slapping down progressive city ordinances as soon as they pop up. If there is anything certain about politics, it is that nothing about politics is certain. When the political winds in Texas change course, conservatives may find themselves at the opposite end of the mallet. Therefore, a reasonable deference to home rule would serve all Texans well.

There is and will always remain a strong position for state preemption on a myriad of issues-this Comment does not dispute that nor argue to the contrary. Indeed, preemption is both an inherent and integral power of the state, but preemption should be based upon the genuine needs and policy interests of the people. Preemption should not be based upon political convenience or prejudice alone. City leaders should be empowered by home rule to dream boldly and work tirelessly for solutions to the most challenging of problems. Home rule gives cities the power to act first and to act with authority. While this power is no doubt limited, state lawmakers should take to reflection before utilizing preemption. Texas is a place that celebrates individualism, finding one's own path, and being true to oneself.

This is why it is the Lone Star State. The state ought to continue to allow its people the liberty to pursue this most noble task of self-governance through home rule.

GarrettMize

221.

JANE JACOBS, THE DEATH AND LIFE OF GREAT AMERICAN CITIES 238 (1961).

222.

See TEx. CONST. art. I, § 1.

WILL THIS DOG HUNT?: AN ATTORNEY'S GUIDE TO PREDICTIVE CODING "[Y]ou must never let the tail (the software) wag the dog (legal search). Attorneys must at all times remain in control and not abdicate their responsibility as legal advisers .... In other words, ' even the best software is only as good as the lawyers who use it."

1.

II.

Il.

346 IN TRODUCTION ...............................................

348 COMPUTER-ASSISTED REVIEW (CAR) ................................ to Moderate for A. Why Keyword Search Is Not Efficient 348 L arge Cases ..............................................

Keyword of Problem the B. How Predictive Coding Solves 35 1 Search .................................................

357 CASES DEALING WITH PREDICTIVE CODING .................................

358 A. The First CAR: Da Silva Moore .................................

Global Objection: over B. Predictive Coding Ordered 362 A erospace...............................................

364 .......

Biomet Re In Search: Keyword C. Predictive Coding After IV.

PRACTICAL UNDERSTANDING OF PREDICTIVE CODING: AN

367 F .A .Q ..........................................................

How Do I Decide Whether to Apply Predictive Coding in 368 My ParticularCase?........................................

Oppose Firm, Party's Other the or Firm, B. Why Might My 369 Predictive Coding?.........................................

370 ............................

Coding?

Predictive C. Who May Request 371 ................................

Coding?

Predictive for D. Who Pays A.

Ralph Losey, Predictive Coding Based Legal Methods for Search and Review, E1.

DISCOVERY TEAM (Mar. 25, 2012), http://e-discoveryteam.com/2012/03/25/predictive-codingbased-legal-methods-for-search-and-review.

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E. Is the Court Likely to Oppose Predictive Coding,and How Do I Educate My Judge?.........................................................

F. Who Chooses the Vendor? ......................................................

G. How Should I Choose a Vendor? ............................................

H. How Much CooperationBetween the PartiesIs Desirable with Predictive Coding? .........................................................

I. Is It Desirableto Cull the Document Corpus Using Keywords Before Applying Predictive Coding? .....................

J. How Should I Compose the Seed Set and Subsequent TrainingSets? .........................................................................

K Which Learning Method Is Superior?.....................................

L. What Kind of Quality Control Should Be Done on the R esults? ...................................................................................

M Statistically,How Can I DefendMy Results with Predictive CodingIf the Requestor Is Not Satisfied?...............................

N. If a Party Objects to the Protocol,Will a Daubert Hearing 0.

372 373 373 374 376 377 381 383 384

B e N eeded?..............................................

3 88

What Other ConsiderationsMay Be Necessary to Satisfy R ule 2 6(g)? .............................................................................

39 1

C ON CLU SION .................................................................................. 393

V.

I. INTRODUCTION

Electronic information often requires extra steps to sample and analyze because of the medium and volume of data involved. Like any other discovery process, an attorney must first identify potential sources of data, then take steps to preserve, collect, process, review, analyze, and produce it to the requesting party. 3 In addition to discussing the types of computer and software technology used by the producing party's client, additional meet and confers may be required to agree upon the methods that will be used to search the information, such as keyword search or predictive coding. 4 Parties may also discuss the measure(s) by which they will know that the search is complete, such as when the requested key terms have been searched in the database. Finally, the producing party may need to retrieve

2.

George L. Paul & Jason R. Baron, Information Inflation: Can the Legal System Adapt?, RICH. J.L. & TECH., 2007, at 1, 10-13, 30-31 (discussing e-discovery's rise, from the Iran Contra scandal through the famous Tobacco lawsuits).

3.

EDRM Stages, EDRM, http://www.edrm.net/resources/edrn-stages-explained (last

visited Oct. 23, 2015).

4.

5.

Paul & Baron, supra note 2, at 33.

Id. at 33-34.

GUIDE TO PREDICTIVE CODING

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154/

documents that were erroneously produced if the documents were protected by a clawback agreement. 6 In 2006,7 the federal courts updated their discovery rules to accommodate electronically- stored information but did not provide specific guidelines on how to sort through the increasingly large amounts of electronic data.8 In the past, attorneys had reviewed documents manually, but then sophisticated attorneys began to use technology to assist in their document review. They fashioned keywords to search the other side's records in order to speed up, simplify, and reduce the cost of document request and review. However, keyword searches often amount to a game of fetch where the requesting attorney guesses which keywords might summon useful trial evidence with little, if any, knowledge of the terminology used by the responding party's custodians. In fact, responding counsel may not even know what format of document their client uses. As a result, this is a game of fetch in which the poor dog is unlikely to bring back the right balls. 9 More recently, technology became sophisticated enough to create a virtual attorney reviewer to assist in sifting through the large amount of electronic data. In the predictive coding method, a sample set of documents is reviewed both manually and by a computer algorithm.' The results are compared and the algorithm is retrained. Once the algorithm is accurate enough, it can cut through millions of documents so that a real attorney need only review thousands of documents. The process results in more savings of time and money 1 and, hopefully, more accurate discovery.

6.

Id. at38.

Adoption and Amendments to Civil Rules, 234 F.R.D. 219, 227-28 (2006).

7.

Kenneth J. Withers & Monica Wiseman Latin, Living Daily with Weekley Homes, 51 8.

ADVOC. 23, 24 (2010) ("According to the respected technology research firm Radicati Group, 247 billion email messages were sent per day in 2009, and that number will double by 2013." (citing Press Release, Lauren Reardon, The Radicati Group, Inc., The Radicati Group Releases "Email Statistics Report, 2009-2013" (May 6, 2009), http://www.radicati.com/?p=3237)). Further, the average worker could accumulate 25,000 messages in a year. Id. See Moore v. Publicis Groupe, 287 F.R.D. 182, 191 (S.D.N.Y.) (citing Ralph Losey, 9.

Child's Game of "Go-Fish" Is a Poor Model for e-Discovery Search, E-DISCOVERY TEAM (Oct. 4, 2009), http://e-discoveryteam.com/?s=go+fish) (analogizing keyword discovery to a game of "Go Fish"), adopted sub nom. Moore v. Publicis Groupe SA, No. 11 Civ. 1279(ALC)(AJP), 2012 WL 1446534, at *2 (S.D.N.Y. Apr. 26, 2012).

Eric J. Mayer, Predictive Coding and Computer-Assisted Document Review, in 10.

EssENTIALS OF E-DISCOVERY 151 (Xavier Rodriguez ed., 2014).

E-discovery costs ranged from $17,000 to $27 million, with a median of $1.8 million.

11.

Nicholas M. Pace & Laura Zakaras, Where the Money Goes: UnderstandingLitigantExpenditures JUST. 17 C1v.

FOR INST. RAND Discovery, Electronic Producing for (2012), http://:www.rand.org/content/dam/rand/pubs/monographs/2012/RAND-MG1208.pdf.

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This Comment will provide a case law overview for the practitioner to guide the predictive coding process, or in other words, so that the tail will not wag the dog. Part II provides an introduction to the limitations of keyword search and how predictive coding solves those problems. Part IIn provides the leading cases dealing with predictive coding in detail, as substantive examples of predictive coding in actual practice. Part IV addresses practical questions that an attorney faced with a discovery request would want to know.

II.

A.

COMPUTER-ASSISTED REVIEW (CAR)12

Why Keyword Search Is Not Efficientfor Moderate to Large Cases

Thanks to the ubiquity of Google, everyone is familiar with some of the strengths and weaknesses of keyword searching. If one can think of the right words, one can quickly find the relevant result. However, if one has to go beyond the first page of search results, one is quickly overwhelmed by the hundreds of irrelevant results. In addition, thinking of the right words is not easy, because different authors or communities use different words to refer to the same subject, may use code words or idiosyncratic jargon, or may simply misspell or abbreviate words.' 3 In spite of this common frustration with everyday keyword searches online, many attorneys expect to find discovery results by "incant[ing] magic keywords like Harry Potter.

Documentum Relevantus !,,' The reality is that keyword searches of dense contracts or unstructured, stream-of-consciousness e-mails are not the same as searching curated indices, such as Google or Westlaw. 15 In fact, several studies have shown that keyword searches only return between 20-24% of

12. Ralph Losey, e-discovery expert, prefers CAR over TAR (Technology-Assisted Review) because he likes to make car analogies to aid understanding. Ralph Losey, CAR, EDISCOVERY TEAM, http://e-discoverytearn.com/car (last visited Oct. 21, 2015).

13. Maura R Grossman & Terry Sweeney, What Lawyers Need to Know About Search Tools: The Alternatives to Keyword Searching Include Linguistic and Mathematical Models for Concept Searching NAT'L L.J. (Aug. 23, 2010), http://www.ned.uscourts.gov/intemetDocs/cle/201101/National%2OLaw/o2OJournal%20(Aug%202010).pdf.

14.

Craig Ball, The Streetlight Effect in Electronic Discovery, in MUSINGS ON TECHNOLOGY ASSISTED REVIEW, CRAIG D. BALL, P.C. 14 (2012) (emphasis omitted), http://www.craigball.com/Ball,%20Essays%20on%20TAR.pdf.

15.

See Gary Wiener, Technology-Assisted Review: What Is It and W'hy Should You Care?, HOUS. LAW., July/Aug. 2012, at 24, 27.

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GUIDE TO PREDICTIVE CODING

the attorneys think they have retrieved 75% relevant documents, even when 16 documents. of the relevant The sloppy "Documentum Relevantus" method wastes time and money and may earn the ire of the judge. Magistrate Judge Peck, ediscovery pioneer, admonished parties for "designing keyword searches in the dark, by the seat of their pants, without adequate (indeed, here, 17 apparently without any) discussion with those who wrote the emails." In Gross Construction v. Mutual Insurance, the parties to the suit sought the construction manager's e-mails in a dispute over the building of the Bronx Criminal Court Complex. The State of New York, the discovery producer, proposed a limited set of terms, such as the names of the parties in the action, "Court! in connection with Bronx," "Hall of Justice," and "Bronx but not Zoo."1 8 The requestors of the discovery sought thousands of 19 additional generic search terms, such as "sidewalk" or "change order."

Neither party consulted with the construction manager to determine what 2° keywords would find the "smoking gun" e-mails. In other words, to return to the game of fetch for a moment, both parties could have investigated the kind of balls they sent their dogs to retrieve, but neither did.

In working with the parties to narrow their terms, the court further admonished the parties that a keyword search requires "advance[d] planning," has "well-know[n] limitations," and requires a person knowledgeable in the "sciences of computer technology, statistics and linguistics.",21 For lawyers and judges to "opine that a certain search term or terms would be more likely to produce information than terms that were used is truly to go where angels fear to tread., 22 Crafting keywords requires the records cooperation among the parties and input from the custodians of 23 along with quality control testing to eliminate false positives. Otherwise,

Grossman & Sweeney, supra note 13.

16.

William A. Gross Constr. Assocs., Inc. v. Am. Mfrs. Mut. Ins. Co., 256 F.R.D. 134, 17.

135 (S.D.N.Y. 2009).

Id.at 134.

18.

19.

Id.

Id.at 134-35.

20.

Id.at 135 (quoting Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251, 260, 262 21.

(Grimm, Mag.); United States v. O'Keefe, 537 F. Supp. 2d 14, 24 (D.D.C. 2008) 2008) (D. Md. (Facciola, Mag.)); accord Equity Analytics, LLC v. Lundin, 248 F.R.D. 331, 333 (D.D.C. 2008) (Facciola, Mag.); see also, e.g., In re Seroquel Prods. Liab. Litig., 244 F.R.D. 650, 662 (M.D. Fla. 2007) (Baker, Mag.).

William A. Gross Constr. Assocs., 256 F.R.D. at 135 (quoting O'Keefe, 537 F. Supp. 2d 22. at 24); accordEquity Analytics, 248 F.R.D. at 333.

William A. Gross Constr. Assocs., 256 F.R.D. at 136.

23.

A -- A

350

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relevant documents will be missed, time and money will be wasted,2 4 and the party's methodology may be challenged under the rules of evidence.

Keyword searches were the best technology until reviewing attorneys became frustrated enough to seek something better.26 Keyword searches are no longer the gold standard for larger discovery searches.2 7 A court may admonish the parties and make them re-run their poorly designed searches that use outdated technology. 28 A court may even let the producing party add on manual review after the keyword search, even with a short discovery timeline, in case a keyword search alone might accidentally disclose privileged information.2 9 Moreover, if one begins with a keyword search, one may be stuck with it, even when it has already proven inefficient or impossible. In Progressive Casualty Insurance v. Delaney, the parties agreed to a joint Electronically Stored Information (ESI) protocol, requiring Progressive to keyword search through 1.8 million files for information requested by the defendants. 3 ° Progressive found keyword review to be too intensive and expensive and paused the process to explore predictive coding. 31 A series of conferences later, Progressive asked the court for the inclusion of predictive coding, but the defense moved to compel Progressive to continue with keyword search.32 The court granted the defendant's motion because it felt that the

24.

See Progressive Cas. Ins. Co. v. Delaney, No. 2:11 -cv-00678-LRH-PAL, 2014 WL 3563467, at *3 (D. Nev. July 18, 2014).

25.

See Wiener, supra note 15, at 27 (citing Equity Analytics, 248 F.R.D. at 333).

26.

Paul & Baron, supra note 2, at 12 ("The approach taken by the government in Philip Morris most charitably represented a stopgap set of measures put in place to deal with a burdensome search request which placed strains on administrative resources.").

27.

Moore v. Publicis Groupe, 287 F.RD. 182, 185 (S.D.N.Y.), adoptedsub nom.Moore v.

Publicis Groupe SA, No. 11 Civ. 1279(ALC)(AJP), 2012 WL 1446534, at *2 (S.D.N.Y. Apr. 26,

2012); accord FDIC v. Bowden, No. CV413-245, 2014 WL 2548137, at *13 (S.D. Ga. June 6, 2014).

28.

Nat'l Day Laborer Org. Network v. U.S. Immigration & Customs Enforcement Agency, 877 F. Supp. 2d 87, 111 (S.D.N.Y. 2012) (admonishing the government "to use twenty-first century technologies to effectuate congressional intent" for one of the largest Freedom of Information Act requests in history).

29.

Zeller v. S. Cent. Emergency Med. Servs., Inc., No. 1:13-CV-2584, 2014 WL 2094340, at *7-8 (M.D. Pa. May 20, 2014).

30.

Progressive Cas. Ins. Co. v. Delaney, No. 2:11-cv-00678-LRH-PAL, 2014 WL 3563467, at *1 (D. Nev. July 18, 2014).

31.

Id.at *2. While the court indicates that it began the predictive coding process, Ralph Losey argues that it needed to go far enough to prove the old method wasn't working; Progressive had only begun the predictive coding process. Ralph Losey, The "If-Only" Vegas Blues - Part Two, E-DISCOVERY TEAM (June 15, 2014, 6:07 PM), http://e-discoveryteam.com/2014/06/15/theif-only-vegas-blues-part-two.

32.

Delaney, 2014 WL 3563467, at *4-5.

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GUIDE TO PREDICTIVE CODING

351

discovery would be unduly delayed in this old and contested case and that Progressive's self invented "do-over... lack[ed] transparency and cooperation. 33 Progressive was stuck using the original keyword search protocol.34 In spite of all the problems with keyword searches, they may work alone "on small volumes of data or on data that must be collected and reviewed on a[n] [ongoing] basis" or when there are few of the sought-for documents in the document collection. 35 However, even then, keyword search could be used less frequently and more appropriately. Predictive coding tools are getting cheaper and more efficient and may soon be incorporated into other tools for small practitioners, making this approach more feasible even for smaller document sets.36 B.

How Predictive Coding Solves the Problem of Keyword Search

If you have a smartphone or listen to music, you have probably encountered predictive coding. IPhone's Siri, Android's Voice Search, and Microsoft's Cortana all use some aspects of predictive coding. 37 That is, they all require a little training or input from contact lists and search histories in order to provide customized suggestions. 38 Similarly, music programs like Beats and Pandora get better at suggesting what music you would like to hear based on your "likes" and channel selections over time.3 9

33. Id.at *10-12 (internal quotation marks omitted).

34. Id. at *12. But see Bridgestone Ams., Inc. v. Int'l Bus. Machs. Corp., No. 3:13-1196, 2014 WL 4923014, at *1 (M.D. Tenn. July 22, 2014) (allowing the switch to predictive coding from a keyword search in similar circumstances).

35. Grossman & Sweeney, supra note 13; see also EORHB, Inc. v. HOA Holdings LLC, No. 7409-VCL, 2013 WL 1960621, at *1 (Del. Ch. May 6, 2013) (approving the parties' agreement that predictive coding would not be beneficial for the plaintiffs due to the small number of relevant documents).

See Craig Ball, E-Discoveryfor Everybody: The EDna Challenge, CRAIG D. BALL, P.C. 36.

(2009), http://www.craigball.com/E-Discovery/20for/o20Everybody.pdf (discussing low cost options for solo practitioners under $1,000 for the entire setup); Telephone Interview with Craig Ball, Adjunct Professor at the University of Texas (July 18, 2014) (mentioning some suites as cheap as $100 per year).

37. See Robert Gavin, Computer: Tell Me About Speech Recognition, SPARE TIME SCI. (Jan. 25, 2014), https://sparetimescience.wordpress.com/2014/01/25/the-future-is-now-speechrecognition.

See In re Biomet M2a Magnum Hip Implant Prods. Liab. Litig. (MDL 2391), No. 3:1238.

MD-2391, 2013 WL 1729682, at *1 (N.D. Ind. Apr. 18, 2013) ("Under predictive coding, the software 'learns' a user's preferences or goals; as it learns, the software identifies with greater accuracy just which items the user wants, whether it be a song, a product, or a search topic.").

39. Id.

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While new to courtroom applications, this technology is already used in other areas of our lives.

Predictive coding has more recently been defined as "[a]n industryspecific term generally used to describe a Technology-Assisted Review process involving the use of a Machine Learning Algorithm to distinguish Relevant from Non-Relevant Documents, based on Subject Matter Expert(s)' Coding of a Training Set of Documents. ' 4° To put it simply, predictive coding suggests relevant results after being trained. Unlike keyword searching, predictive coding software can also search through metadata to build a more complete picture of relevance.

Sometimes when something happens is just as important as the event in question. For example, say forensic analysis showed that a file owned by HealthCorpA was copied at 10:37 a.m. On that same day a flash drive was plugged into the computer at 10:32 a.m. and unplugged at 10:39 a.m. Logically, it would seem that the copied file went to the flash drive. Metadata can show who accessed the computer that morning, building a significant 41circumstantial relationship between the copied file and the defendant.

Because the algorithm is trainable and looks at different aspects of the documents at the same time, predictive coding can be more efficient and cheaper than manual document review.42 Like attorneys, predictive coding programs read and interpret rules, but unlike attorneys, they look at language as a series of symbols and positions.4 3 In other words, a program does not think of the word "dog" and

40.

Maura R. Grossman & Gordon V. Cormack, The Grossman-Cormack Glossary of Technology-Assisted Review, 7 FED. CTS. L. REv. 85, 104 (2014) [hereinafter Grossman & Cormack, Glossary].

41.

John Burchfield, 3 Rules for Using Metadata in Litigation; From the Experts, CORP. CouNs. (July 2, 2014) (LEXIS) (first emphasis added).

42.

See, e.g., Maura R. Grossman & Gordon V. Cormack, Technology-Assisted Review in E-Discovery Can Be More Effective and More Efficient than Exhaustive Manual Review, RICH. J.L. & TECH., Spring 2011, at 1, 43 (2011) [hereinafter Grossman & Cormack, Technology Assisted Review] ("[T]echnology-assisted reviews require, on average, human review of only 1.9% of the documents, a fifty-fold savings over exhaustive manual review."); The Sedona Conference, The Sedona Conference Best Practices Commentary on the Use of Search & Information RetrievalMethods in E-Discovery, 15 SEDONA CONF. J. 217,260 (2014); The Sedona Conference, The Sedona Conference Best Practices Commentary on the Use of Search and Information Retrieval Methods in E-Discovery, 8 SEDONA CONE. J. 189, 209 (2007); see also Pace & Zakaras, supranote 11, at 61-63, 66, 69.

43.

Joseph H. Looby, E-discovery - Taking Predictive Coding Out of the Black Box, FTI J. (Nov. 2012), http://ftijournal.com/article/taking-predictive-coding-out-of-the-black-box-deleted.

Alternatively, the computer thinks in terms of the geometry of a photograph instead of instantly recognizing a dog. Telephone Interview with Craig Ball, supranote 36.

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GUIDE TO PREDICTIVE CODING

automatically cross-reference conceptually similar words, such as "leash" and "collar."" Imagine that an attorney who does not speak Arabic is placed in a library and tasked with reviewing all of the Arabic texts and mapping how the symbols of the language relate to one another. The attorney could piece together the frequency of certain symbols and their time and training. 45 This is one way patterns on the page, but it would take 46 think. predictive coding algorithms More concretely, predictive coding machines elementalize language the way attorneys elementalize statutes, by tokenizing or grouping them into single words or phrases called n-grams.4 7 Returning to the Arabic analogy, imagine if the attorney cut out strips of paper that only showed one (unigram), two (bigram), or three (trigram) words at a time. Each of these words and phrases is assigned a unique ID and then given a weight based upon how likely the n-gram will be found in relevant or irrelevant documents.4 8 The combined weight of all words and phrases in a document determines its relevancy score. 49 The weights are corrected when the computer guesses rightly or wrongly. 50 Metadata and other dimensions of the document can be considered at the same time. Each vendor will, of course, have his or her own secret sauce."

Predictive coding may be more easily understood by an analogy to dog training, followed by an analysis of each step of the predictive coding process.

44. See Looby, supra note 43.

45. Telephone Interview with Craig Ball, supra note 36. This scenario was discussed with Mr. Ball. Id.Any errors in explanation are the author's, not Mr. Ball's.

46. See Maura R. Grossman & Gordon V. Cormack, Continuous Active Learningfor TAR, 2016), 33-34 (Apr./May BULL. L.: E-DISCOVERY PRAC. (mentioning http://cormack.uwaterloo.ca/cormack/caldemo/AprMayl6 EdiscoveryBulletin.pdf effective (support vector machines and logistic regression) and less effective (nearest neighbor and naive Baysian) TAR algorithms) [hereinafter Grossman & Cormack, CALfor TAR].

47. See Looby, supranote 43.

48. Id.(providing an example of how a sentence could be converted and weighted through the predictive coding process).

49. Id. 50.

Nat'l Day Laborer Org. Network v. U.S. Immigration & Customs Enforcement Agency, 877 F. Supp. 2d 87, 109 (S.D.N.Y. 2012) ("Through iterative learning, these methods (known as 'computer-assisted' or 'predictive' coding) allow humans to teach computers what documents are and are not responsive to particular FOIA or discovery request and they can significantly increase the effectiveness and efficiency of searches.").

51.

Telephone Interview with Craig Ball, supra note 36; see infra Part IV.

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A dog owner wants to train her dog to fetch striped balls so the dog can pick all of the striped balls out of a ball pit in a dog show contest.5 2 She sets up the ball pit with an assortment of balls with various patterns. She then pulls out a few balls to show to the dog and explains that he should fetch the striped ones. She then tells the dog to go fetch in the ball pit. He returns with balls with no lines, wavy lines, and crosshatched lines as well as striped ones. She corrects the dog each time and continues playing fetch until the dog can reliably tell which balls are striped. The dog is now ready for the competition. This analogy will come up again in a moment.

The steps classically involved in predictive coding are setting the goals and protocol, sorting the documents, preparing a seed set, training the software to find the proper documents, checking the results, and completing the final review and production.53 To set the goals and protocol, the producing party meets and confers with opposing counsel regarding the scope of the discovery request (custodians, format types, etc.), 54 and any subcategories the documents will be grouped or labeled with (issue/concept tags).55 The producing party then begins the hard work of processing the documents. In the first step, the producing party sorts discovery files by custodian, location, date, file types, etc., to generate the document set to examine for production.56

52.

Dogs can see colors. Stanley Coren, Can Dogs See Colors?, PSYCHOL. TODAY (Oct. 20, 2008), http://www.psychologytoday.com/blog/canine-comer/2008 10/can-dogs-see-colors.

53.

See, e.g., Computer Assisted Review Reference Model (CARR*, EDRM, http://www.edrm.net/resources/carrm (last visited Oct. 21, 2015) (assembling model steps from the major vendors); Ralph Losey, Predictive Coding, ELECTRONIC DISCOVERY BEST PRACS., http://www.edbp.com/search-review/predictive-coding (last visited Oct. 21, 2015); Andrew Peck, Search, Forward; Will Manual Document Review and Keyword Searches Be Replaced by Computer-Assisted Coding?, LAW TECH. NEWS (Oct. 1, 2011) (LEXIS).

54.

FED. R. Civ. P. 26(f)(2).

55.

EDRM, supra note 53; see Warwick Sharp, Ten Essential Best Practicesin Predictive

Coding, TODAY'S GEN. COUNS. (May 2013), http://www.todaysgeneralcounsel.com/ten-essential-

best-practices-in-predictive-coding-2.

56.

Telephone Interview with Craig Ball, supra note 36.

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Fill a ball pit with balls of various colors and patterns (Establish document set)

O

Pull out a few of the balls (Prepare seed set)

06O90

Show the dog those few balls and tell him to fetch the striped ones (Update programming)

Check the returned balls and

O

correct the dog's behavior (Check a portion of the results and correct

th~e sf

'0

M

Have the dog fetch from the ball pit (Have software review all documents)

Go to dog show (Complete final review and production)

e

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In the second step, the producing party creates a seed set and control set.5 7 The seed set composes the initial training documents from which the computer leams. 8 The control set is a different sample of documents used to measure the consistency and effectiveness of the computer when training is over; it functions as a yardstick or baseline. 59 Based upon the intended search accuracy of the control set, e.g., 95% confidence level 60 +/- 2% margin of error, 61 the producing party determines how many documents to randomly pull from the document set; e.g., 2,400 documents. The Subject Matter Expert (SME), 62 aka senior attorney, 63 manually reviews the documents to determine what percentage is relevant. The attorney now has an idea of the total number of relevant documents in the full document collection as long as they properly segregate this control set from the rest of the search process. 64 Some extremely experienced experts may forgo creating a control set.65 The seed set documents, conversely, may be chosen randomly, analytically (computer judgment), judgmentally (human judgment), or by a combination thereof. Before the seed set can be used, the senior attorney reviews the seed set, with the help of a vendor/software expert if they are not also a software expert, to determine responsive and non-responsive documents.

Training the software includes two additional steps. In step three, the senior attorney updates the computer's index according to his selections

57.

The most newly popular predictive coding protocols may eliminate the need or reduce the importance of a distinct seed set and control set. Rio Tinto PLC v. Vale S.A., 306 F.RD. 125, 128 (S.D.N.Y. 2015); Ralph Losey, Predictive Coding 3.0, E-DISCOVERY TEAM (Oct. 11, 2015, 7:47 PM), http://e-discoveryteam.com/2015/10/1 1/predictive-coding-3-0.

58.

Grossman & Cormack, Glossary, supranote 40, at 107-08.

59.

Id. at 91.

60.

Id. at 90-91.

61.

Id. at 101.

62.

Id. at 109.

63.

Contra Matthew Nelson, Q&A with Predictive Coding Guru, Maura R. Grossman, Esq., VERITAS (Nov. 13, 2012), http://www.veritas.com/community/blogs/qa-predictive-codingguru-maura-r-grossman-esq (a senior attorney may not be necessary).

64.

Maura R. Grossman & Gordon V. Cormack, A Tour of Technology-Assisted Review, in PERSPECTIVES ON PREDICTIVE CODING AND OTHER ADVANCED SEARCH METHODS (J. R. Baron

et al. eds., forthcoming 2016) (manuscript at 1, 7, 9) (on file with author) [hereinafter Grossman & Cormack, A Tour of TAR].

65.

Ralph Losey, Document Review and Predictive Coding: An Introductory Course with 7 Videos and 2,982 Words, E-DISCOVERY TEAM (Mar. 25, 2016), https://ediscoveryteam.com/2016/03/25/document-review-and-predictive-coding-an-introductory-coursewith-7-videos-and-2982-words (Video 4 at 4:39).

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from the seed set. In step four, the computer ranks the relevancy of the entire document set from 0% to 100%.

Then, in step five, to check the results, the attorney compares the relevancy ranking to a sample of the actual documents and corrects the computer's misinterpretations, if any. These steps-three through five-are repeated until the rankings are accurate enough.

Finally, the producing party performs quality assurance tests, such as randomly sampling the discarded documents for missed hot documents. If the tests fail, then iterations begin again and repeat until they pass.

To review and produce the documents, the attorney reviews the much smaller document pool for responsiveness, privilege, and confidentiality before the documents are tendered to the other side.

Or to review in dog training terms: 1. Where will the dog be looking?

2. What is the dog owner training the dog to find?

3. Show the dog exactly what to look for.

4. Have the dog go fetch.

5. Is the dog trained? If not, repeat until he is.

6. Go to the dog show.

III. CASES DEALING WITH PREDICTIVE CODING The following section presents cases that have been significant in the short history of predictive coding. Rather than providing a general overview, which is available in numerous other publications, 66 this Comment provides a great deal of detail in the process and the protocol of predictive coding in each case. The purpose of this is to illustrate for the reader, through several salient examples, what the application of predictive coding looks like in actual legal practice. Note that this Comment focuses in Ireland and on domestic, not foreign law, despite recent decisions 67 made the United Kingdom dealing with predictive coding.

E.g., Mayer, supra note 10, at 157-59 (discussing Moore and Global Aerospace); L. 66.

Casey Auttonberry, Comment, Predictive Coding: Taking the Devil Out of the Details, 74 LA. L. REv. 613, 632-641 (2014) (comparing protocols from Moore to those in In Re Actos); Paul E. Burns & Mindy M. Morton, Technology-Assisted Review: The Judicial Pioneers, 15 SEDONA CONF. J. 35, 37-41,43-44,46-48 (2014) (discussing Moore, Global Aerospace, and Biomet); Elle Byram, The Collision of the Courts and Predictive Coding: Defining Best Practices and Guidelines in Predictive Codingfor Electronic Discovery, 29 SANTA CLARA COMPUTER & HIGH TECH. L.J. 675, 685-690 (2013) (discussing Moore and GlobalAerospace).

67.

See, e.g., Pyrrho Invs. Ltd. v. MWB Prop. Ltd., [2016] EWHC (Ch) 256 (Eng.); Irish Bank Resolution Corp. v. Quinn, [2015] IEHC 175, 71-75 (H. Ct.), aftfd, [2016] IECA (C.A.) (Ir.) (first European case allowing predictive coding over the objection of the requesting party);

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For those already familiar with these cases and protocols, flip to Appendix A, which includes a straightforward protocol from Edwards v.

National Milk Producer'sFederationto serve as a shell for negotiations.68 A.

The First CAR: Da Silva Moore Da Silva Moore v. Publicis Groupe is significant because it was the

first judicial

decision

explicitly addressing

predictive

coding-and

evangelizing it.69 Judge Peck summarized his advice as, "[wihat the Bar

should take away from this Opinion is that computer-assisted review is an available tool and should be seriously considered for use in large-datavolume cases where it may save the producing party (or both parties)

significant amounts of legal fees in document review., 70 When revisiting this case in 2015, Judge Peck said that case law now permits the producing party to use predictive coding for document review, but has not yet forced 71 them to do so.

Otherwise, Da Silva Moore is a good example of a predictive coding protocol that should have delivered extensive cooperation between the parties and substantial transparency, although, ultimately, the process reverted to motion practice and only the latter was realized.72 The

What's New? Changes to the Rules of Civil Procedure, ONT. MINISTRY ATT'Y GEN., http://www.attorneygeneral.jus.gov.on.ca/english/courts/civil/changes to rules of civilprocedur e.php (last updated Oct. 29, 2015) (adopting the Sedona Canada Principles into Canada's rules of civil procedure).

68.

Joint Stipulation & Order Re the Use of Predictive Coding Technology at 1-3, Edwards v. Nat'l Milk Producers Fed'n, No. 3:11-cv-04766-JSW, 2014 WL 4643639 (N.D. Cal. Apr. 16, 2013) [hereinafter Joint Stipulation]; see also Jason Krause, Courts and Judges Embrace Predictive Coding, but Is It Really Fixing Discovery?, A.B.A. J. (Feb. 1, 2015, 1:40 AM), http://www.abajournal.com/magazine/article/courts-andjudges-embrace-predictive-coding-but is it really_fLxingdiscove (describing the case as a straightforward process).

69.

Moore v. Publicis Groupe, 287 F.R.D. 182, 182, 187, 192-93 (S.D.N.Y.), adopted sub nom. Moore v. Publicis Groupe SA, No. 11 Civ. 1279(ALC)(AJP), 2012 WL 1446534 (S.D.N.Y. Apr. 26, 2012).

70.

Id.at 193.

71.

See Rio Tinto PLC v. Vale S.A., 306 F.R.D. 125, 127 & n.1 (S.D.N.Y. 2015) (citing In re Biomet M2a Magnum Hip Implant Prods. Liab. Litig. (MDL 2391), No. 3:12-MD-2391, 2013 WL 6405156 (N.D. Ind. Aug. 21, 2013); Kleen Prods. LLC v. Packaging Corp. of Am., No. 10 C 5711, 2012 WL 4498465 (N.D. Ill. Sept. 28, 2012)).

72.

See Moore v. Publicis Groupe SA, No. 11 Civ. 1279(ALC)(AJP), 2012 WL 1446534, at *1, *3 (S.D.N.Y. Apr. 26, 2012) (upholding J.Peck's Order over Moore's objections); Moore v.

Publicis Groupe, 868 F. Supp. 2d 137, 140 (S.D.N.Y. 2012) (denying J.Peck's recusal on the basis of bias towards MSL and that J. Peck "coerced plaintiffs into assenting to the concept of predictive coding").

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description below follows both the protocol and the parts of the protocol initially disputed between the parties.

The case concerned "systemic, company-wide gender discrimination against female PR employees. ' 3 Employees' counsel did not object to the public relations agency using predictive coding on the more than three million e-mails that were plausibly relevant to the case, but they requested clarifications on the proposed protocol.74 After those clarifications, the main disputes concerned which custodians' records and which folders would be included in the predictive coding process, as well as how many iterations were required to make the seed set reliable enough to produce the documents, and, finally, how many documents the defendant would review at the end of the protocol.

The protocol proposed by the defense began by stating that the scope of the discovery was the Electronically Stored Information (ESI) held by MSLGROUP Americas, Inc. (MSL) from January 1, 2008 through February 24, 201L. 7" The protocol went on to preserve the privileges and 76 appellate rights of the parties. Next was a table of available data sources, 77 their status, and when they were to be examined. The examination was 7 divided into Phase I and a later, if necessary, Phase I. Finally came a list of custodians and their roles.79 The parties had three disputes over which records should be examined by the predictive coding protocol. First, MSL proposed a list of custodians composed of executives and managing directors, while the employees' counsel wanted to also include men in jobs comparable to the women plaintiffs to show how the men were given better assignments and greater client contact than the women. 80 However, the court denied this request because it deemed depositions to be a more appropriate means of getting request was so that information 8' and because it believed that the additional 82 first. the with combined be not different that it should

73.

74.

75.

76.

Moore, 287 F.R.D. at 183 (internal quotation marks omitted).

Id.at 184-185.

Id.at 193-94.

Id.

77.

78.

Id.at 194-98.

Id.at 194.

79.

80.

Id.at 198-99.

Id.at 185.

81.

82.

Id Id.

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Second, the plaintiffs wanted to include certain HR shared folders in the search.83 Neither side could explain whether the folders contained working documents or merely forms and templates. 84 Therefore, the court set these documents for Phase II of the discovery process.85 Third, the plaintiffs wanted to include e-mails from one of MSL's French executives in Phase I, but the court denied the request in deference to French privacy law.86 Despite disputing what to include in the document set, the parties did not dispute how to prepare the documents. 87 Again, objections for appeal were preserved, software choice was listed, and meet-and-confer clauses were sprinkled throughout the protocol in the event of future disagreements.88 The parties tried hard to provide for transparency in the seed set and quality control processes.8 9 They also agreed to a list of "issue tags" that would be coded to the initial random sample, seed set, and all trainings. 90 These issue tags are non-exclusive labels specific to the project that are used, like hashtags on Twitter or on blog posts, to organize the documents into categories such as "Work/Life Balance" or 91 "Matemity/Pregnancy."

The parties agreed to use a 95% confidence level +/-2% to create a preliminary random sample of 2,399 documents to estimate the number of relevant documents.92 This sample was ultimately included in the seed set.93 While MSL generated the complete seed set, the employees' counsel thought of two new issue tags, which MSL agreed to incorporate into the later coding. 94 "The remainder of the seed set was created by MSL reviewing 'keyword' searches with Boolean connectors (such as 'training and Da Silva Moore,' or 'promotion and Da Silva Moore') and coding the top fifty hits from those searches." 95 All of the non-privileged documents were produced to the plaintiff to review the coding. 96 After the employees'

83.

Id.at 186.

84.

Id.

85.

Id.(finding authority for phasing in the proportionality of FED. R. Civ. P. 26(b)(2)(C)).

86.

Id.

87.

88.

89.

90.

91.

92.

93.

94.

95.

96.

See id.at 186-87.

E.g., id.at 199.

See supraPart H.B providing an overview of the predictive coding process.

Moore, 287 F.R.D. at 200.

Grossman & Cormack, Glossary,supra note 40, at 98.

Moore, 287 F.R.D. at 200 Id at 186.

Id. Id.at 187.

Id.

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senior counsel reviewed the documents, the employees' counsel provided MSL with additional keywords, resulting in MSL reviewing and coding 4,000 additional documents. 97 The employees' counsel reviewed and returned those documents. 98 The result was that both relevant99and irrelevant to review. documents were produced for employees' counsel The next point of contention was the number of iterations to perform.

MSL proposed seven iterative rounds in which they would review 500 documents of each issue cluster for relevancy unless the relevant document amounts became less than 5% and no new significant, "smoking gun" documents were produced. 10 0 The employees' counsel would review the resulting scores, relevant and irrelevant documentation, and make suggestions for changes.101 After the seventh round, they would use a random sample of 2,399 from the discarded non-relevant documents as a control set to check their work. 10 2 The random sample would again be handed over to the employees' counsel for review and response. 1O' However, the court contemplated that the seed set might not stabilize at seven iterations) °4 Thus, the court ruled that the parties would have to come in with appropriate quality control information and perform additional 05 iterative rounds until the set produced reliable results. After stabilization, MSL would manually review the documents that the algorithm found relevant. 10 6 If manual review produced any additional relevant non10 7 However, this privileged documents, they would also be turned over. final application of the algorithm would not be applied until the employees' counsel's objections to the process, if any, were resolved by party agreement or court adjudication. 0 8 MSL did not need to certify the response as complete and correct, merely proportional: meaning that the 109 cost of production was not greater than the case required.

97.

98.

99.

100.

101.

102.

103.

104.

105.

106.

107.

108.

109. complete

Id. Id. Id. Id.at 187, 189, 202.

Id. at 201-02.

Id. at 202.

Id. Id. at 187 ("[T]he computer is still doing weird things ... .

Id Id. at 200.

Id. at 202.

Id at 202-03.

Id. at 188 (holding that FED. R. CW. P. 26(g)(1)(B) requires that discovery not be per FED. R. CIV. P. 26(g)(1)(A), but proportional per FED. R. Civ. P. 26(b)(2)(C)).

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MSL initially proposed reviewing only the top 40,000 most relevant documents at a cost of $5 per document, totaling $200,000 in costs.110 However, the court rejected this proposal because "[p]roportionality requires consideration of results as well as costs."1 1' The court decided that the line would be drawn by the statistical results, not by a pre-defined 1 12 document number.'

The protocol ended with a discussion of when costs should shift, production file format, medium of production, timing, general provisions, the clawback provision, and the employees' counsel's general objection to the entire predictive coding process. 113 B.

Predictive Coding OrderedOver Objection: Global Aerospace

The judge in Global Aerospace Inc. v. Landow Aviation made predictive-coding history as the first state court order approving its use over the objection of the requesting party, while preserving their right to complain as to the completeness, contents, or the ongoing use of predictive coding. 14 The case ultimately settled following the judge's ruling. 15 Discovery concerned the construction, operation, and collapse of three hangers at the Dulles Jet Center during a snowstorm.1 6 By grouping the 250 gigabytes of documents (estimated at 2,000,000 documents), Landow Aviation determined that it would need to cull the document corpus prior to responding to discovery. 117 Since reviewing the 2,000,000 documents manually would take 20,000 hours or ten years of billable time, they proposed to use predictive coding to narrow the documents to be 8 reviewed. 1

110.

Id. at 185.

111.

Id.(internal quotation marks omitted).

112.

Id 113.

Id. at 203-04.

114.

Global Aerospace Inc. v. Landow Aviation, L.P., No. CL 61040, 2012 WL 1431215, at *1 (Va. Cir. Ct. Apr. 23, 2012).

115.

Karl Schieneman, Global Aerospace Case Highlights Need for Predictive Coding Education, REv. LESS, LLC (Feb. 11, 2013), http://docreviewmd.com/?p=130.

116.

Memorandum in Support of Motion for Protective Order Approving the Use of Predictive Coding at 2, GlobalAerospace,2012 WL 1431215 (No. CL 61040), 2012 WL 1419842 [hereinafter Memorandum in Support of Protective Order].

117.

Id.at3.

118.

Seeid at5.

GUIDE TO PREDICTIVE CODING

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While the requesting party had no objection to Landow using keyword 11 9 searches, they objected to the predictive coding protocol. They accused Landow of artificially inflating the files by lumping the files of all the 120 custodians together and then "thr[owing] up their hands."' They said that 121 the files could easily be separated by custodian or e-mail address. They expected Landow to produce all responsive documents located upon 122 as Landow proposed. reasonable inquiry, not just 75% of the documents, They reminded the court that, "[a]t its core, the production of documents is not a complicated concept. Talk to the client. Locate the files that might reasonably contain responsive documents. Look at the documents. Select ' 123 The the ones that are responsive and not privileged. Produce them." requesting party argued that Landow did not need to use predictive coding to accomplish their task. 124 The court approved Landow Aviation's protocol, but did not explain why. 125 The court only preserved objections and required the entire project be done within sixty days, with sixty additional days to produce discovery.

126

Unlike Da Silva Moore, the requesting parties did not frequently interject themselves into the process, or request alterations after the coding was initially completed. 127 Landow identified seed set documents and 128 Only then did stabilized the results through all the training iterations.

Landow allow the requesting parties to review their coding decisions and resulting documents, excepting any privileged or irrelevant sensitive 129 documents, and a log for the non-submitted documents. The requesting 0 party was then allowed to comment. 3 The algorithm was then applied until retrieved. 131 were a majority of the relevant documents

Opposition of Plaintiffs, Global Aerospace, 2012 WL 1431215 (No. CL 61040), 2012 119.

WL 1419848.

Id. 120.

See id.

121.

Id. 122.

Id. 123.

See id.

124.

See Global Aerospace Inc. v. Landow Aviation, L.P., No. CL 61040, 2012 WL 125.

1431215, at *1 (Va. Cir. Ct. Apr. 23, 2012).

Id. 126.

Memorandum in Support of Protective Order, supranote 116, at 5-6.

127.

Id. at 5.

128.

Id 129.

Id. at 5-6.

130.

Id. at 12.

131.

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Unlike Da Silva Moore, where recall was not pre-determined, Landow had proposed that it would conclude its predictive coding process when 75% recall was achieved, because manual review averages around 59.3% recall. 132 "Recall is the fraction of relevant documents identified [as relevant] during [a search or review effort], 133 indicating completeness.134 The fmal analysis showed that the recall rate was 81%. 135 To check their work, Landow took random samples from both relevant and irrelevant documents. 136 The sample size was determined after the application of the algorithm. 137 The requesting party was then allowed to object to the quality control sample size. Landow then manually reviewed the sample sets for relevance and recall. 138 Unlike Da Silva Moore, where the requesting party reviewed the entire set of documents, the requesting party reviewed sample sets minus the privileged and irrelevant sensitive 39 documents. 1 Upon completion of the process, the documents pulled by the predictive coding process were manually reviewed and prepared for production. 140 While the case settled, a consulting expert later stated that 14 1 they culled out 87% of the data using predictive coding.

C.

Predictive CodingAfter Keyword Search: In Re Biomet

In In re Biomet M2a Magnum Hip Implant Products Liability Litigation, the court allowed, over the requestor's objection, a keyword search that was undertaken before predictive coding took place and which 142 permitted little participation from the requestor.

The court-appointed Plaintiff Steering Committee (PSC) in a mass tort case sought discovery from Biomet regarding metal-on-metal hip

132.

Id. 133.

Grossman & Cormack, Glossary, supra note 40, at 106.

134.

Peck, supra note 53.

135.

Letter from Gordon S. Woodward, Counsel for Landow, to All Counsel, Schnader Harrison Segal & Lewis LLP (Nov. 30, 2012) (on file with the South Texas Law Review).

136.

Memorandum in Support of Protective Order, supra note 116, at 12.

137.

Id. 138.

Id. 139.

Id.at 13.

140.

Id. 141.

Schieneman, supra note 115.

142.

In re Biomet M2a Magnum Hip Implant Prods. Liab. Litig. (MDL 2391), No. 3:12MD-2391, 2013 WL 1729682, at *2 (N.D. Ind. Apr. 18, 2013).

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365

replacements.1 43 Unlike in the two prior cases, the discovery producer, Biomet, unilaterally decided to keyword cull the entire document corpus of 19.5 million documents to 3.9 million documents using broad keywords 144 Biomet removed duplicates (2.5 like "metal," "cancer," and "revision."' million documents),145 then went through46the predictive coding process and 1 reviewed the documents for production.

While Biomet was willing to let PSC suggest additional keywords and 47 million documents, to produce the remaining non-privileged of the 2.5 unlike in the prior two cases, they were unwilling to identify the produced documents used in the seed set. 148 However, Biomet offered to let PSC provide 149documents to retrain the predictive coding software going forward.

PSC objected to the use of keyword culling before applying the predictive coding algorithm. 5 ° However, the court held that Biomet's 5 procedure satisfied its discovery obligations.' ' PSC argued that Biomet "tainted the process" by using keyword culling prior to predictive coding, because the former would identify only 20% of the responsive documents,' 5 2 such that the predictive coding could return only 75% of the 13 document corpus. responsive documents within 20% of the original However, the court held that additional relevant documents would be modest number of outweighed by the cost because only "a 15comparatively 4 found.', be would documents [additional]

Biomet's Submission in Support of Its Discovery Efforts at 4, In re Biomet, 2013 WL 143.

1729682 (No. 3:12-MD-2391), ECF No. 346 [hereinafter Biomet's Submission].

Id. at5;InreBiomet,2013 WL 1729682, at *I. 144.

William Webber, What Is the Maximum Recall In re Biomet?,8 EVALUATING E145. (suggesting that DISCoVERY (Apr. 24, 2013, 10:00 AM), http://blog.codalism.com/?p=180 documents were responsive the of 40% errors, math to due and, recall on parties should focus excluded from the document corpus sent to review).

In re Biomet, 2013 WL 1729682, at *1.

146.

Id. 147.

In re Biomet M2a Magnum Hip Implant Prods. Liab. Litig. (MDL 2391), No. 3:12148.

MD-2391, 2013 WL 6405156, at *1 (N.D. Ind. Aug. 21, 2013).

Biomet's Submission, supra note 143, at 1.

149.

In re Biomet, 2013 WL 1729682, at *1.

150.

See id at *2.

151.

Id. 152.

See id.; Plaintiff's Memorandum in Support of Collaborative Predictive Coding at 8, In 153. re Biomet, 2013 WL 1729682 (No. 3:12-MD-2391), ECF No. 335.

In re Biomet, 2013 WL 1729682, at *1-2 ("[B]etween 1.37 and 2.47 percent [(for 154. consistency)] of the original 19.5 million documents were responsive" and "between .55 and 1.33 percent of the unselected [by keywords] documents would be responsive."). But see Maura R. Grossman & Gordan V. Cormack, In re: Biomet - Doing the Math on CourtApproved Multimodal Review, IT-LEX TECH. L. (Apr. 22, 2013), http://it-lex.org/in-re-biomet-doing-the-math-on-court-

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PSC also failed in its efforts to compel Biomet to identify the seed set documents. The court held that it had no authority to order Biomet to comply, though the court was troubled by Biomet's position. 5 5 PSC wanted Biomet to identify how it chose the discoverable seed set so that PSC could suggest additional search terms. 156 However, Biomet would not identify the documents, beyond stating that they were with the rest of the discoverable documents already provided. 157 The court held that Biomet need not disclose how certain documents were used before disclosing them, because PSC provided no authority otherwise. 158 However, this holding may be incorrect, because Da Silva Moore suggested that surrendering the unprivileged seed set documents is part of the predictive coding process. 159 Hon. John M. Facciola and Philip J. Favro, an e-discovery expert, have similarly argued seed sets composed by attorney judgment are entitled to work product protection, but randomly created seed sets are not.160 This debate on how much cooperation and transparency is required by predictive 61 coding remains an outstanding question.1 In summary, predictive coding in these cases followed (or was intended to follow) the pattern outlined supra Part II.B, with minor variations. One party made a production request, and the producing party sorted the documents by custodian, location, or other options allowed by the software. Designated attorneys trained the computer using a seed set and iterative review of the document corpus until results reached an accuracy

approved-multimodal-review (calculating that recall for the keyword search was 50% combined with a predictive coding recall of 70% means that only 35% of the relevant documents from the original 19.5 million were identified and suggesting that Judge Miller may not have been aware of this result).

155.

See In re Biomet M2a Magnum Hip Implant Prods. Liab. Litig. (MDL 2391), No. 3:12MD-2391, 2013 WL 6405156, at *2 (N.D. Ind. Aug. 21, 2013).

156.

Id 157.

See id at *3.

158.

Id. at *1-3; Plaintiff's Memorandum in Support of Collaborative Predictive Coding at 2 n.5, In re Biomet, 2013 WL 1729682 (No. 3:12-MD-2391), ECF No. 335 (citing only to the Sedona CooperationProclamationand Seventh Circuit's endorsement to cooperation).

159.

See Moore v. Publicis Groupe, 287 F.R.D. 182, 185, 191 (S.D.N.Y.) ("If you do predictive coding, you are going to have to give your seed set, including the seed documents marked as nonresponsive[,] to the plaintiffs counsel so they can say, well, of course you are not getting any [relevant] documents, you're not appropriately training the computer." (alteration in original)), adopted sub nom. Moore v. Publicis Groupe SA, No. 11 CIV. 1279(ALC)(AJP), 2012 WL 1446534 (S.D.N.Y. Apr. 26, 2012)).

160.

John M. Facciola & Philip J. Favro, Safeguarding the Seed Set: Why Seed Set Documents May Be Entitled to Work Product Protection, 8 FED. CTS. L. REv. 1, 16-22 (2015) [hereinafter Facciola & Favro, Safeguardingthe Seed Set].

161.

See, e.g., Rio Tinto PLC v. Vale S.A., 306 F.R.D. 125, 128 (S.D.N.Y. 2015) (summarizing the decisions split).

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threshold. The result was double-checked and the final document set was reviewed for responsiveness, privilege, and confidentiality before final production to the requesting party. Newer or newly popular predictive coding protocols may eliminate162 the need or reduce the importance of a distinct seed set and control set.

For one final "blow-by-blow" examination, e-discovery expert Ralph Losey has published a predictive coding narrative that uses the Enron documents. 163 Alternatively, Grossman and Cormack have provided an interactive predictive coding demonstration online that uses thousands of Jeb Bush's e-mails. 164 IV. PRACTICAL UNDERSTANDING OF PREDICTIVE CODING: AN F.A.Q.

Disputes may arise concerning document sorting or culling, iterations, accuracy threshold, transparency, and cooperation throughout the process.

These disputes give rise to questions such as who must request predictive coding, when it might be forced upon an attorney, when an attorney should refuse or accept it, how the client fits in, and practical considerations such as how to decide how many documents to review in the seed set. Part IV attempts to address these issues in a question-and-answer format, in part with feedback obtained from attorneys and judges experienced in this area. 165

162.

Id; Ralph Losey, Predictive Coding 3.0, E-DISCOVERY TEAM (Oct. 11, 2015, 7:47 PM), http://e-discoveryteam.com/2015/10/1 1/predictive-coding-3-0.

163.

Ralph Losey, A Modest Contribution to the Science of Search: Report and Analysis of Inconsistent Classificationsin Two Predictive Coding Reviews of 699,082 Enron Documents, EDISCOVERY TEAM (June 11, 2013, 9:13 AM), http://e-discoveryteam.com/2013/06/11/a-modestcontribution-to-the-science-of-search-report-and-analysis-of-inconsistent-cassifications-in-twopredictive-coding-reviews-of-699082-enron-documents [hereinafter Losey, Enron Analysis] (providing analysis in graphs, whitepaper, and video); see also Andrew John Sutton, Note, Discovering Discovery Technology! A Model Order and Pilot Program for Implementing Predictive Coding and Other New Technologies in Document Review, 42 AIPLA Q.J. 459, 462 (2014) (detailing a predictive coding protocol and testing ground for predictive coding in intellectual property cases).

164.

Grossman & Cormack, CALfor TAR, supra note 46 (providing their demonstration at http://cormack.uwaterloo.ca/cal and a walkthrough of how to use it in the article).

165.

For an additional supply of questions and considerations, see William P. Butterfield et al., Reality Bites: Why TAR's Promises Have Yet to Be Fulfilled,DESI V WORKSHOP 13-16 (June 14, 2013), http://www.umiacs.umd.edu/-oard/desi5/additional/Butterfield.pdf.

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How Do I Decide Whether to Apply Predictive Coding in My ParticularCase?

An attorney should consider the size of the document collection, the

time to production, how much time they have to train the system, and the pricing model for their vendor. Predictive coding is the most efficient way to conduct discovery for large collections of text-heavy documents, such as Word documents, e-mail, or PDFs. 166 Experts disagree as to the minimum number of documents that should trigger consideration of predictive coding, but many suggest if the data consists of 100,000 or more files that are primarily text, predictive coding may be appropriate. 167 An attorney should

also consider how much time they have to review the documents and whether an experienced attorney has the time to go through several rounds of training with the system. The less time to production and the more time an experienced attorney can spend training, the more predictive coding may be appropriate. 16 More critical, however, may be the pricing model;

specifically, whether the pricing model is per case or an "all-you-can-eat" plan across multiple matters.

Understanding the universe of evidence in the case is considered one of the most important e-discovery management factors. 169 With this knowledge, an attorney can assess the value of the case and determine the

right strategy. Iv° Note that it is permissible to ask the other side for more time to consider one's options before the discovery meeting." 1 While it is

166.

Telephone Interview with Chad Schwarz, VP & e-Discovery Manager at AlixPartners, LLP (July 29, 2014). For non-text and collections below 100,000, he would look at e-mail threading, custom sorting, clustering, advanced keyword searching, and categorization. Id. 167.

Id. But see Nelson, supra note 63 ("Myth #7: TAR does not work for short documents, spreadsheets, foreign language documents, or OCR'd documents."). At least one expert anonymously admitted that they could use predictive coding on very small document collections, but only because they knew their own algorithm so well.

168.

Telephone Interview with Chad Schwarz, supranote 169.

169.

InauguralInside E-Discovery Survey by BDO Consulting: Executive Report, BDO 2 (2014), https://www.bdo.com/getattachment/af620fbc-e3c4-46b9-a642e9332eab5692/attachment.aspx. In the BTI survey, 48.4% of Respondents ranked "understanding the universe of potentially responsive evidence early in the case" as the most important ediscovery management factor. Id.Predicting the total cost early or reducing review fees ranked a far lower 15.6% and 14.1%, respectively. Id. 170.

Julie Grantham, ManagingE-Discovery Costsfrom the Vendor Perspective, 51 ADVOC. 57, 57 (2010).

171.

Andrew J. Peck, Magistrate Judge, S.D.N.Y., Where is the Law Taking Us with Technology-Assisted Review?, Speaking from the Floor at Georgetown EDI (Nov. 20, 2014), https://georgetown.inreachce.com (follow "eDiscovery" hyperlink; then select page "3"; then scroll to item number 25 to find presentation for purchase) (concerning a hypothetical case where predictive coding is involved).

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not uncommon for predictive coding to be1 72suggested only after other methods have failed, that is not a best practice.

Unfortunately, the main drivers of predictive coding adoption are usually tight deadlines and overwhelming volumes of data, leaving predictive coding as the only choice. As a result, however, per a 2015 survey by Greg Buckles, predictive coding is now an accepted tool in the ediscovery toolbox in such situations. 73 Additionally, some firms have started to use predictive coding for an alternative perspective and/or for quality control alongside manual document review.174 Why Might My Firm, or the OtherParty'sFirm, Oppose Predictive Coding?

B.

In a 2014 survey by BDO Consulting, 82% of surveyed in-house counsel agreed that computer-assisted review was the future of review, but 1 75 55.4% were late adopters of new tools and technologies generally.

According to another 2014 survey by Greg Buckles, law firms are reluctant to use predictive coding for a variety of other reasons: a perception that it will incur higher initial costs that will be wasted if the case settles before trial; fear that it may cause overproduction of non-relevant documents and disclosure of non-privileged documents used in the training of the seed set, increasing costs and needlessly exposing their clients; and a preference for the high margins of manual document review. 76 According to Buckles' 2015 survey, counsel and management often do not understand predictive coding's capabilities, limitations, costs, and applications, resulting in "livefire education[al] experience[s]" that cancel cost savings. 177 Finally, as in the Moore case, failure to assess the zealousness of opposing counsel could

Stacey Blaustein et al., The Ethics of Predictive Coding, ACEDS 11 (July 16, 2014), 172. http://www.aceds.org/wp-content/uploads/2014/06/Ethics-of-Predictive-Coding-2014-07-16FINAL.pdf; Greg Buckles, 2015 PC-TAR Focus Report, EDJ GROUP 7-8 (2015), http://edjgroupinc.com/research (pdf available after free registration) (providing survey by industry consultant; not a vendor).

Buckles, 2015 PC-TAR Focus Report, supra note 172, at 7.

173.

Id. at 5, 6.

174.

BDO, supra note 169, at 1 (ranking the overall e-discovery effectiveness at 6.5 out of 175.

10); Stephanie L. Giammarco & Steve Buddell, What Matters Most to CorporateCounsel in EDiscovery Management, ACEDS (Oct. 2014), http://www.aceds.org/what-matters-most-tocorporate-counsel-in-e-discovery-management.

See Greg Buckles, Analytic Adoption: 2014 Market Report, EDJ GROUP 10, 13-14, 18, 176.

(Nov. 11, 2014), http://edjgroupinc.com/research (pdf available for download after free

registration).

177.

Buckles, 2015 PC-TAR Focus Report, supra note 172, at 6.

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make predictive coding yet another opportunity for motion practice delays 178 before the court.

For these and other reasons, 2014 and 2015 surveys confirmed BDO's initial results stating that predictive coding is so far used infrequently. A 2015 update to the BDO survey found less than half of in-house counsel were implementing predictive coding, with even less if the subjects were limited to middle-market corporations of between $100 million to $1 billion in revenues. 179 A broader survey of 2014 trends by Kroll Ontrack found that 47% of law firms and 35% of corporations had used predictive coding in at least one case, predominantly either in discovery production or early case assessment.180 Conversely, another 2014 survey by Greg Buckles found that while analytics in general, such as keyword search, are on the rise, only 5-7% of cases that get to the discovery review stage use TAR. 181 A 2015 survey also by Buckles confirmed the 2014 statistic in that 50% of users 82 used TAR on fewer than 10% of matters.

C.

Who May Request Predictive Coding?

While either side could theoretically request that predictive coding be used, the producing party traditionally elects the search method, the search strategy, and what, if anything, to reveal about it. 183 Judges have

encouraged predictive coding through required conferences and through cost shifting, but they often lack the technical expertise to advise on the minutia of the protocols. 1 4 While a party might choose not to reveal their

178.

See supra Part ilA. 179.

Stephanie Giammarco, Inside E-Discovery: A Q&A Session with Stephanie Giammarco,Forensic Technology Services PracticeLeader, BDO Consulting, BDO (Dec. 2015), https://www.bdo.com/getattachment/088983a5-4ec8-479c-80d0-b95fcc52bac5/attachment.aspx.

180.

2014 Ediscovery Trends: Industry Survey Results, KROLL ONTRACK 4-5 (Oct. 2014), http://www.ediscovery.com/2014-ediscovery-trends (pdf available for download after free registration) (finding discovery productions at 72.6%, early case assessment at 46.5%, and both at 26%).

181.

Buckles, Analytic Adoption: 2014 Market Report, supra note 176, at 11, 16, 21.

182.

Buckles, 2015 PC-TAR Focus Report, supranote 172, at 6.

183.

Rio Tinto PLC v. Vale S.A., 306 F.R.D. 125, 127-28, 127 n.2 (S.D.N.Y. 2015) (suggesting predictive coding should follow normal discovery rules and the producing party is in the best position to determine the manner of preservation and production (citing The Sedona Principles, SEDONA CONF., at i (Jan. 2004), https://thesedonaconference.org/download-pub/99 (Principle 6))).

184.

E.g., id at 128 n.4 (requiring the parties to show cause why they should not use predictive coding in EORHB, 10/15/12 Conf. Tr. at 66 and subsequent order at EORHB, Inc. v.

HOA Holdings LLC, No. 7409-VCL, 2013 WL 1960621, at *1 (Del. Ch. May 6, 2013)); Hinterberger v. Catholic Health Sys., Inc., No. 08-CV-380S(F), 2013 WL 2250603, at *3 (W.D.N.Y. May 21, 2013) (requiring the parties meet and confer after an initial fight over which

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search methodology at all, 185 as a practical matter, a case using predictive coding may, depending upon workflow, take more than the allotted thirty days for production, forcing them to reveal that much in their request for an extension.186 D.

Who Paysfor PredictiveCoding?

Initially, parties bear their own discovery costs, and predictive coding is no different in that regard. 187 Parties can, however, shift costs by agreement, as authorized by statute, or as ordered by a judge. 188 For example, in Independent Living Center v. City of Los Angeles, the court ordered the city to produce the more relevant 10,000 documents, and the requesting party would likely bear the cost of additional documents. 189 The court also allowed the requesting party to require quality assurance tests if they paid one-half of the city's costs and attorney's fees for that step. 190 Additionally, if the producing party can demonstrate that the process has become unduly burdensome given proportionality, the court may allocate some portion of the costs to the requesting party. 191 For example, in General Protecht Group, Inc. v. Leviton Manufacturing Co., the court agreed that the costs of the technical experts could be awarded as attorney's fees, on the basis that "[t]here is no sound reason to pay paralegals for

of plaintiffs' experts could attend and what aspects of the protocol would be disclosed); James C. Francis IV, Judicial Modesty: Not an Oxymoron; The Casefor Restraint in the Electronic Age, LAW TECH. NEWS (Feb. 1, 2013) (LEXIS) (arguing that judges frequently lack technical knowledge to specifically advise on minutia such as inclusion of specific search terms or construction of a seed set).

185. See FED. R. Civ. P. 26(f) (referring to "issues about disclosure or discovery of electronically stored information[,]" but not specifically to the means); In re Biomet M2a Magnum Hip Implant Prods. Liab. Litig. (MDL 2391), No. 3:12-MD-2391, 2013 WL 6405156, at *1-2 (N.D. Ind. Aug. 21, 2013) (holding that the court lacked authority to force the producing party to reveal the identity of documents used in the seed set).

186. Karl Schieneman & Thomas C. Gricks III, The Implications of Rule 26(g) on the Use of Technology-Assisted Review, 7 FED. CTS. L. REV. 239, 257 (2013) (citing to FED. R. CIV. P. 34 requiring production within 30 days); Blaustein et al., supra note 172.

187. See Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 358 (1978) ("Under [discovery] rules, the presumption is that the responding party must bear the expense of complying with discovery requests..."); Xavier Rodriguez & Julia W. Mann, Cost Shifting, in ESSENTIALS OF EDISCOVERY 191, 192 (Xavier Rodriguez ed., 2014).

188. Rodriguez & Mann, supra note 187, at 192 (citing Alyeska Pipeline Serv. Co. v.

Wilderness Soc'y, 421 U.S. 240, 247 (1975) for the statutory authorization concept).

189. Civil Minutes-General at 3, Indep. Living Ctr. of S. Cal. v. City of L.A., No. 2:12-cv005 l-FMO-PJW (C.D. Cal. June 26, 2014), ECF No. 375.

190. Id. 191.

Rodriguez & Mann, supra note 187, at 191, 193 (discussing both federal and Texas methods of recovering costs).

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document work in the 1980s and 1990s, but not technology specialists 192 doing similar work in 2015 just because their job titles are different."'

EDRM offers a number of online calculators to assist those who are trying to estimate the costs of e-discovery.193 E.

Is the CourtLikely to Oppose Predictive Coding,and How Do I Educate My Judge?

So far, in every case where the producing party has requested predictive coding before discovery has gone too far, the court has allowed it.19 4 As previously mentioned in Progressive,a judge may be substantially 195 less receptive to predictive coding if discovery has already begun.

Conversely, where the requesting party has tried to force predictive coding on the producing party, courts have refused.'9 6 In the discovery meeting, the judge's primary concern is often that poor planning or lack of cooperation between the parties might cause the case to grind to a halt. It is important, therefore, to address how predictive coding might impact the case's timeline. An attorney should "bring [their] geek" to court to explain any technical aspects of the process that they cannot.' 97 Resources to recommend to a judge are Sedona Conference's judicial reference book and the recent bar publication edited by Federal District 198 Judge Xavire Rodriguez entitled Essentials of E-Discovery.

192.

Gen. Protecht Grp., Inc. v. Leviton Mfg. Co., No. CIV. 10-1020 JB/LFG, 2015 WL 4988635, at *33 (D.N.M. Aug. 3, 2015); see also Mobile Telecomms. Techs., LLC v. Samsung Telecomms. Am., LLC, No. 2:13-CV-259-RSP, 2015 WL 5719123, at *3 (E.D. Tex. Sept. 28, 2015) (allowing the prevailing party to recover copying costs).

193.

Budget Calculators, EDRM, http://www.edrm.net/projects/metrics/budget-calculators (last visited Dec. 21, 2015).

194.

See Rio Tinto PLC v. Vale S.A., 306 F.R.D. 125, 127 (S.D.N.Y. 2015); Peck, supra note 171.

195.

Progressive Cas. Ins. Co. v. Delaney, No. 2:11-cv-00678-LRH-PAL, 2014 WL 3563467, at *10-11 (D. Nev. July 18, 2014).

196.

Rio Tinto, 306 F.R.D. at 127 n.1 (noting that current case law does not address a situation where a producing party requests the court to order predictive coding before the producing party has spent any money).

197.

Moore v. Publicis Groupe, 287 F.R.D. 182, 193 (S.D.N.Y.), adoptedsub nom. Moore v.

Publicis Groupe SA, No. 11 Civ. 1279(ALC)(AJP), 2012 WL 1446534 (S.D.N.Y. Apr. 26, 2012).

198.

Rodriguez & Mann, supra note 187, at 191; The Sedona Conference Cooperation Proclamation: Resources for the Judiciary, SEDONA CONF., at ii (Dec. 2014), https://thesedonaconference.org/download-pub/3968; see also Craig Ball, E-Discovery: A Special Master's Perspective, CRAIG D. BALL P.C. 1-2 (2010), http://www.craigball.com/EDDSM-PERSP.pdf (discussing the role of the special master in ediscovery in Texas).

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Judicial preferences concerning transparency and Daubert challenges are discussed below in the appropriate questions.

Who Chooses the Vendor?

F.

The producing party chooses the vendor, because each party initially bears its own discovery costs.1 99 The producing party can choose to involve the requesting party in this choice if they want to build goodwill or if they believe in greater transparency for the process.

G.

How Should I Choose a Vendor?

In predictive coding, the vendor is the attorney's best ally and most important resource, along with any e-discovery experts the attorney may have separately retained. Although understanding the information contained within this comment is important, an attorney may be reassured that the vendor will assist with the entire process and all of the technical details.

For this and other reasons, when it comes to choosing vendors, a survey of in-house and corporate counsel found that quality was twice as important as cost. 0 "Quality" was understood to include the vendor's project management, workflows, tools, documentation, communication procedures, and ability to understand the goals of the litigation.20 1 As with any other vendor evaluation, an attorney should review reports and 20 demonstrations before signing a contract. 202 Some factors to consider in evaluating a tool are: 9 The product's ability to handle data in various formats

199. See FED. R. Civ. P. 26; Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 358 (1978).

200. BDO, supra note 169, at 5 (quality 47.6% vs. cost 23.8%).

201.

Grantham, supra note 170, at 58; BDO, supra note 169, at 5 (reporting that over half of those surveyed have designated one in-house individual to be responsible for e-discovery issues, though other parts of the litigation team may spend up to eleven hours per week working on them); Giammarco & Buddell, supra note 179 (reporting that over half of the respondent companies handled ten or more e-discovery issues with 45% of litigation of employment/breach of contract disputes, 17.5% for IP disputes, and while securities litigation was rarely litigated, when it is, it comprises a significant e-discovery expense).

202.

Magic

See generally Budget Calculators,EDRM, supra note 193; Jie Zhang & Garth Landers, 2015), 18, GARTNER (May Software, E-Discovery Quadrant for

http://www.gartner.com/technology/reprints.do?id=I -IVPKMKO&ct-140620&st-sg

(providing

yearly evaluation of leading vendors). But see Chris Dale, Looking Beyond the Gartner Magic Quadrant for eDiscovery Software, EDISCLOSURE INFO. PROJECT (June 27, 2014),

https://chrisdale.wordpress.com/2014/06/27/looking-beyond-the-gartner-magic-quadrant-forediscovery-software (discussing inherent flaws of the Gartner Magic Quadrant).

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* The type and scope of searching capabilities (linear versus conceptual) " The time necessary for culling and review of the volume of the volume of information " The level of expertise and location(s) of the review team " Training on and support of the product " The budget established during early case assessment, including a realistic expectation of whether the case is likely to settle, and if so, when.20 3 Note that at least one vendor, Catalyst, is now offering a money-back guarantee on their predictive coding results. 2° H.

How Much CooperationBetween the PartiesIs Desirable with Predictive Coding?

Because of the spirit of cooperation endorsed by the courts and the Sedona principles, 2°5 an attorney's disclosure of the existence or part of the predictive coding protocol may encourage the opposing party or the courts to involve themselves in the process. While some transparency may allay technophobia concerning predictive coding, some corporate counsel have suggested that too much transparency may lead to further motion practice or provide ammunition for future litigation because predictive coding provides access to documents that would not otherwise be discoverable.2 6 Additionally, if a requesting party, such as a plaintiff in class-action litigation, is known to use discovery burdens to leverage defendants to settle, involving that party in the predictive coding process could be disastrous. 0 7 No other discovery method currently in use requires the disclosure of non-responsive documents to validate search results. Manual search has not elicited demands for disclosure of how the documents were searched.20 8 Keyword search, although also a technological method, has not been

203.

Grantham, supra note 170, at 58.

204.

Erin E. Harrison, Catalyst Offers Money-Back Guarantee for TAR Platform, LEGALTECH NEWS (Oct. 14, 2015), http://www.legaltechnews.com/printerfriendly/id= 120273977137 1#ixzz3oatqLurP. 205.

SEDONA CONF., supra note 198, § 2, at 3 (citing to SEDONA CONF., supra note 183).

206.

Peck, supranote 171.

207.

See Butterfield et al., supra note 165, at 12; see also Blaustein et al., supra note 172.

208.

Dynamo Holdings L.P. v. Comm'r, 143 T.C. 183, 188-89 (2014) (noting that a court in manual review does not dictate "the manner in which [the responding party] should review documents for responsiveness or privilege").

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2 °9 questioned in the same way that predictive coding has been questioned.

Nor do culling techniques, such as categorization, de-duplication, or DeNisting, face the same scrutiny.210 While the producing party may have to defend their process if it proves to be deficient, that is not the same as inviting the court or opposing party into their search process at the 211 beginning.

Extremely cooperative protocols, such as those in Da Silva Moore and In re Actos, involve extensive motion practice, draining away predictive coding's cost savings. While ultimately upheld, the plaintiff in Da Silva Moore appealed the decision to allow the producer to use predictive coding, 2 12 resulting in more costs and delay in the case. In re Actos was an even more cooperative protocol, where plaintiff and defendant each nominated a number of members to a reviewing panel that saw all non-privileged documents.213 While the predictive coding process was initially cooperative, it ultimately ground to a halt.214 The plaintiff had to file motions to compel discovery and eventually requested sanctions against the defendant who "lost" some of the discovery. 215 Alternatively, in the defendant's view, the plaintiff went on a fishing expedition when predictive coding did not 216 produce the documents the plaintiff wanted to find.

While some cases required a great deal of cooperation or devolved into competitive motions, parties need not structure the protocol that way. The requestor need only explain the scope of their request, along with any sub-

Craig Ball, Imagining the Evidence, in MUSINGS ON TECHNOLOGY ASSISTED REVIEW, 209.

CRAIG D. BALL, P.C. 7-9 (2012), http://www.craigball.com/BaU,%20Essays%20on%20TAR.pdf.

Buckles, Analytic Adoption: 2014 Market Report, supra note 176, at 20.

210.

See Dynamo Holdings, 143 T.C. at 188-89; Blaustein et al., supra note 172.

211.

Moore v. Publicis Groupe SA, No. 11 Civ. 1279(ALC)(AJP), 2012 WL 1446534, at *3 212.

(S.D.N.Y. Apr. 26, 2012) (upholding J. Peck's Order over Moore's objections); Moore v. Publicis Groupe, 868 F. Supp. 2d 137, 140 (S.D.N.Y. 2012) (denying J. Peck's recusal on the basis of bias towards MSL and that J. Peck "coerced plaintiffs into assenting to the concept of predictive coding").

Auttonberry, supra note 66, at 630, 634 (citing In re Actos (Pioglitazone) Prods. Liab.

213.

Litig., No. 6:1 1-MD-2299, 2012 WL 7861249, at *4-5 (W.D. La. July 27, 2012)).

Plaintiffs' Steering Committee's Motion to Compel Production of Documents and 214.

Memorandum in Support at 8-9, In re Actos, 2012 WL 7861249 (No. 6:11-MD-2299), ECF No. 2871.

Id. at 1 (concerning halt to discovery production); Plaintiffs' Steering Committee's 215.

Opposition to Defendants' Motion for Protective Order at 1, In re Actos, 2012 WL 7861249 (No. 6:1 1-MD-2299), ECF No. 2943 (concerning destroyed records); Ruling on Motion at 9-10, In re Actos, 2012 WL 7861249 (No. 6:1 1-MD-2299), ECF No. 2992.

See Defendants' Opposition to Plaintiffs' Motion to Compel Production of Documents 216. at 1-2, In re Actos, 2012 WL 7861249 (No. 6:11-MD-2299), ECF No. 2887.

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issues, and the responder can convert their request into a search protocol.2 17 In manual review, the responder would not have the requester looking over its shoulder as it flips through boxes of paper, and likewise it need not have the requester looking over its shoulder as it encodes the documents in predictive coding.2 18 In some predictive coding methodologies, the seed set, precision, or recall statistics may even be entitled to work product protection. 2 19 Additionally, as with any discovery, if the requestor feels that the discovery is conducted in bad faith, they can so move, and the other party will defend their process.22 ° L

Is It Desirableto Cull the Document Corpus Using Keywords Before Applying Predictive Coding?

In the past, predictive coding vendors often charged per gigabyte or per document, so operating on the subset of documents culled by keyword was common. 221 Today, vendors are more commonly rolling predictive coding into the cost of their analytics. 222 Whether per gigabyte or costbundled, like breeds of hunting dogs, not all predictive coding tools are optimized for each approach or type of data.223 To avoid paying twice for the same preparation, an attorney should ask the vendor how to preserve the intelligence used in the keyword searches for a later predictive coding protocol, even if the attorney does not anticipate using a predictive coding protocol.22 4

217.

Dynamo Holdings L.P. v. Comm'r, 143 T.C. 183, 188 (2014) ("[Unless abused,] the Court is not normally in the business of dictating to parties the process that they should use when responding to discovery.").

218.

See id.at 188-89.

219.

See Rio Tinto PLC v. Vale S.A., 306 F.R.D. 125, 128 (S.D.N.Y. 2015) (summarizing cases and experts on the debate); Butterfield et al., supra note 165, at 11 (suggesting that parties commonly conceal their statistics, which may impede predictive coding adoption); Facciola & Favro, Safeguarding the Seed Set, supra note 160, at 16-17 (judgmental seed sets are entitled to work product protection).

220.

See Dynamo Holdings, 143 T.C. at 189, 194 (holding that completeness could be considered after production).

221.

Blaustein et al., supra note 172; Buckles, Analytic Adoption: 2014 Market Report, supra note 176, at 18; Peck, supra note 171.

222.

Buckles, 2015 PC-TAR Focus Report, supra note 172, at 8.

223.

Zhang & Landers, supra note 202.

224.

Craig Ball, Train, Don't Cull, Using Key Words, in MUSINGS ON TECHNOLOGY AsSISTED REvrEw, CRAIG D. BALL, P.C. 12 (2012), http://www.craigball.com/Ball,%20Essays%20on%20TAR.pdf.; Telephone Interview with Craig Ball, supra note 36. Mr. Ball suggests that doing keyword searches without planning predictive coding often means paying twice for some of the same data preparation. Telephone Interview with Craig Ball, supra note 36. Rather, it is better to start with predictive coding first. Id

mm

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Additionally, some information experts feel that keywords should be used to train, not cull, the data.225 Professor Craig Ball suggests that attorneys should use carefully selected keywords to help discover some of the training documents, but not to cull the universe of data, to avoid a garbage in, garbage out result. He argues that predictive coding should be applied to the entire data set because "no search technology can find a responsive document that's not in the collection searched, and keyword 226 search leaves most of the responsive documents out of the collection., A precise keyword search can, however, more "rapidly identify some responsive documents than using random sampling alone," which can increase the speed and likelihood of finding other responsive documents with predictive coding.22 7 It is better to use predictive coding on the entire 228 data set for a "more trusted and accurate outcome.

J.

How Should I Compose the Seed Set and Subsequent Training Sets?

One of the controversies between experts and vendors in predictive coding surrounds how to compose the initial and subsequent training sets.

In July of 2014, Maura R. Grossman and Gordon V. Cormack, e-discovery experts, published a paper in a peer-reviewed journal addressing the question of whether training samples should be chosen at random or by less random methods, such as keyword search or active learning, either 2 individually or in combination. 29 This paper was presented to information retrieval scientists at the Association for Computer Machinery's Special 230 The publication caused a blog Interest Group on Information Retrieval. whose positions in the vendors war among others in the industry, primarily 231 marketplace were either hurt or helped.

Ball, Train,Don't Cull, supra note 224, at 10-13.

225.

226. Id. at 11 (citing Grossman & Cormack, Technology Assisted Review, supra note 40).

227. Id. at 11, 13 ("[P]lease don't interpret the line leading from keyword search to TAR as suggesting that the usual guesswork approach to keyword search is contemplated and you'll just dump keyword results into the tool. That's like routing the exhaust pipe into the passenger

compartment.").

Id. at 13.

228.

Gordon V. Cormack & Maura R. Grossman, Evaluation of Machine-Learning 229.

Protocols for Technology-Assisted Review in Electronic Discovery, SPECIAL INT. GROUP ON 2014), 3, (July 153 RETRIEVAL INFORMATIONAL 2 3339 [hereinafter .14.pdf http://www.wlrk.com/webdocs/wlrknew/AttomeyPubs/WLRK. Cormack & Grossman, Evaluation of Machine-LearningProtocols].

(2015), Special Interest Groups, ASS'N FOR COMPUTING MACHINERY 230. http://www.acm.org/sigs/panel#016.

For some of the debate leaders, see Gordon V. Cormack & Maura R. Grossman, Guest 231.

Blog: Talking Turkey, E-DISCOVERY TEAM (Sept. 7, 2014, 7:11 PM), http://e-

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The debate centered on how to most efficiently direct the CAR algorithm to fred documents: should attorneys look where they think the documents are, or do they need extra protections against that type of bias?

Proponents of the former approach, that of applied knowledge, phrase the questions like this: If a law student loses their keys at school, should the law student first look where they last had them or should they check rooms at random? As another analogy, if the algorithm were a GPS, a driver would feed information into the GPS so they would not be forced to wander the 2 32 city.

Applied knowledge proponents feel that the debate should center around which method is the most efficient use of an attorney's time and efforts.233 Additionally, random search tends to find what is common, but not what is rare.234 Non-random training methods can correct for this trend by providing rare documents as training samples.23 5 The proponents of the random sample methodology believe that by giving only random samples to the reviewing attorney, the attorney avoids unconscious bias.236 Also, the attorney loses the ability to directly manipulate the system to conceal hot documents. 7 Finally, because an attorney does not know what they do not know about the data set, training by sample documents may cause the algorithm to miss important

discoveryteam.com/2014/09/07/guest-blog-talldng-turkey;

Ralph Losey, Latest Grossman and

Cormack Study Proves Folly of Using Random Search for Machine Training - Part One, E-

DISCOvERY TEAM (July 6, 2014, 9:16 PM), http://e-discoveryteam.com/2014/07/06/latestgrossman-and-cormack-study-proves-efeacy-of-multimodal-search-for-predictive-codingtraining-documents-and-the-folly-of-random-search-part-one; Herbert L. Roitblat, Random Sampling as an Effective Predictive Coding Training Strategy, ORCATEC (May 20, 2014),

https://web.archive.org/web/20140521140441/http://orcatec.com/2014/05/20/random-sampling-

as-an-effective-predictive-coding-training-strategy (accessed by searching the Internet Archive index); John Tredennick, Measuring Recall in E-Discovery Review: A Tougher Problem than You Might Realize, Part One, CATALYST 1 (Oct. 15, 2014), http://www.catalystsecure.coff/blog/2014/10/measuring-recall-in-e-discovery-review-a-tougher-

problem-than-you-might-realize-part-1

(providing a summary of recall confirmation methods

reviewed by five leading experts).

232. See Maura R. Grossman & Gordon V. Cormack, Comments on "The Implications of Rule 26(g) on the Use of Technology-Assisted Review", 7 FED. CTS. L. REv. 285, 299 (2014) [hereinafter Grossman & Cormack, Comments].

233. See Cormack & Grossman, Evaluation of Machine-LearningProtocols, supra note 229, at 153, 161.

234. Id. at 160.

235.

Id.

236.

237.

See Losey, supra note 231.

See Roitblat, supranote 231.

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238 documents that do not resemble the selections made by the attorney. to create a defensible and trustworthy process is to Therefore, the only way 239 use random sampling. to The proponents of applied knowledge argue that the proper way around it. 240 algorithm training the design to is bias unconscious control for Because attorneys will be making the final call on relevance, 241 but an confidentiality, and privilege, unconscious bias is unavoidable, attorney's conscious bias is tempered by an ethical duty, not to mention potential sanctions.24 2 Additionally, any bias will not transfer from algorithm to algorithm, just as a driver enters new directions into a GPS each time. Furthermore, if an attorney fails to guide the computer's process, then the attorney will be guilty of the "streetlight" effect; i.e., searching for something where it is easiest, but not necessarily where it is most likely to be found.2 43 Grossman and Cormack tested three sampling methods referred to as continuous active or relevance feedback (CAL), simple active or uncertainty sampling (SAL), and simple passive or random learning (SPL). 244 The test consisted of 100 total training rounds with sample sizes

Jeremy Pickens, Predictive Ranking: Technology Assisted Review Designed for the 238.

Real World, EDRM 2 (Feb. 1, 2013), http://www.edrm~net/resources/edrm-white-paperseries/predictive-ranking.

See id.

239.

Losey, supra note 231.

240.

Id. 241.

Id. 242.

Id. Here is a 13th century joke explaining the streetlight effect: 243.

One late evening Nasreddin found himself walking home. It was only a very short way and upon arrival he can be seen to be upset about something. Alas, just then a young man comes along and sees the Mullah's distress.

"Mullah, pray tell me: what is wrong?"

"Ah, my friend, I seem to have lost my keys. Would you help me search them? I know I had them when I left the tea house."

So, he helps Nasreddin with the search for the keys. For quite a while the man is searching here and there but no keys are to be found. He looks over to Nasreddin and finds him searching only a small area around a street lamp.

"Mullah, why are you only searching there?"

"Why would I search where there is no light?"

Id. Grossman & Cormack, A Tour of TAR, supra note 64, at 26-29; see also William 244.

Webber, Random vs Active Selection of Training Examples in E-Discovery, EVALUATING EDISCOVERY (July 17, 2014, 4:02 p.m.), http://blog.codalisnLcom/index.php/random-vs-activeselection-of-training-examples-in-e-discovery (referring to CAL as Relevance, SAL as Uncertainty, and SPL as Random, though the industry generally does not use relevance, uncertainty, and random).

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of 1,000.245 The point of the experiment for a practitioner is to determine which method is the best to meet their burden of proportionality for the 2 46

least amount of time and cost.

With both relevance feedback and uncertainty sampling, a computer randomly picks 1,000 documents that contain keywords chosen by an attorney, to form the seed set.247 Thereafter, in relevance feedback, the computer creates subsequent training sets by selecting the 1,000 most relevant documents, learning as it gets feedback from the attorney. 248 For uncertainty sampling, the computer creates subsequent training sets by selecting the 1,000 most uncertain or middle-ranked documents,249 learning as it gets feedback from the attorney. In uncertainty sampling, the highranked documents are generally not reviewed until the system achieves "stabilization," typically measured in terms of metrics such as recall or F1.250 In methods that use random selection, for the purpose of training, both the initial and subsequent training sets of 1,000 documents are chosen randomly.25 1 Finally, Grossman and Cormack created a baseline manual review of the same documents.

Generally, both active learning methods required substantially less human review to achieve the same level of recall as random learning. 3 To return to the GPS analogy, when the attorney puts keywords into the CAR algorithm, it is like the driver putting some of the address information into the GPS. To test the importance of keywords, Grossman

245.

Ralph Losey, Latest Grossman and Cormack Study Proves Folly of Using Random Searchfor Machine Training- Part Two, E-DISCOvERY TEAM (July 20, 2014, 3:31 PM), http://ediscoveryteam.com/2014/07/20/latest-grossman-and-conmack-study-proves-efficacyofmultimodal-search-for-predictive-coding-tmining-documents-and-the-folly-of-random-searchpart-two [hereinafter Losey, Folly ofRandom Search: Part2].

246.

Cormack & Grossman, Evaluation of Machine-LearningProtocols, supra note 229, at 153.

247.

Losey, Folly ofRandom Search: Part2, supra note 245.

248.

Id. 249.

Id. (the 40-60% probability range).

250.

Id. (describing his Borg approach as roughly SAL).

251.

Id. 252.

Id. 253.

Cormack & Grossman, Evaluation of Machine-LearningProtocols, supra note 229, at

153, 156, 159-60.

The results presented here do not support the commonly advanced position that seed sets, or entire training sets, must be randomly selected. Our primary

implementation of SPL, in which all training documents were randomly selected, yielded dramatically inferior results to our primary implementations of CAL and SAL, in which none of the training documents were randomly selected.

Id. at 159.

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and Cormack conducted secondary experiments by adding keywords to random learning seed sets and removing keywords from uncertainty 254 The secondary sampling seed sets and relevance feedback seed sets. experiments showed that adding keywords to random learning software generally improved performance.2 55 Using randomly created seed sets in the 256 Using other two types of training sets, however, harmed performance.

257 keywords kickstarted all three CAR algorithms.

Note that e-discovery experts use "active" and "passive" in two senses.258 The first sense describes the algorithm and whether it is learning actively or passively; i.e., choosing training documents to examine or being supplied with documents. 259 The second describes the attorney/trainer and whether he or she is training the algorithm actively or passively; i.e., whether the trainer is choosing documents for training or whether they are chosen in some other way. 6 ° Many vendors, however, will use the term "active" to mean that the selection of training sets incorporates prior training decisions and "passive" to mean that the training sets are assembled by pure random statistical sampling. 261 An attorney would be wise to know the terminology as it is used by both experts and vendors.262 K.

Which Learning Method Is Superior?

Overall, relevance feedback achieved superior recall to uncertainty sampling until the uncertainty system was stabilized.263 Because relevance feedback software is continually learning, it avoids "the vexing issue of 'stabilization' - determining when training is adequate, and therefore may stop.''264 Relevance feedback can also quickly find the highly relevant documents that affect legal strategy, and it can adapt to new issues or interpretations of relevancy as the case develops.265

Id.at 159.

254.

Id. 255.

Id. 256.

See id.

257.

Grossman & Cormack, A Tour of TAR, supra note 64, at 22-23.

258.

Id. at 22.

259.

260. Id.at 22-23.

Buckles, Analytic Adoption: 2014 Market Report, supra note 179, at 8.

261.

Id. ("More important to most buying decisions is whether the training process can 262. accommodate multiple relevance categories and rolling collections.").

Cormack & Grossman, Evaluation of Machine-LearningProtocols, supra note 229, at 263.

156.

Id.at 153.

264.

Id.at 160-61.

265.

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Because relevance feedback and uncertainty sampling are both capable of delivering the desired results, which tool produces better returns for an attorney's effort? Relevance feedback focuses on reviewing as many of the responsive documents as quickly as possible, while uncertainty sampling is focused on developing the best algorithm possible by perfecting its understanding of relevant and irrelevant. 66 The difficulty with uncertainty sampling is that a reviewing attorney has to review large samples to achieve the bright line, and the algorithm may not pivot quickly if the theory of the case changes.267 Relevance feedback, however, skims the cream of the most relevant documents and uses those exemplars in later training sessions to more quickly locate the most next relevant document set.268 With relevance feedback, if the attorney has to train and review again because of later case development, they will more quickly find those new responsive documents.269 So, while chasing that bright line in uncertainty sampling might achieve a more perfect algorithm, insofar as the rule of discovery production is proportionality, not completeness, and time is money, then the bottom line that many vendors have hyped is that relevance feedback can achieve more relevant documents faster and thus with less expense.2 7 ° While that assertion is a matter of debate between experts and vendors, the discussion has not branched deeply into the broader legal community. 271 This may be, in part, because most search experts use these and other search methodologies in combination according to the needs of the particular 272 case.

266.

Id. at 160.

267.

See id. at 156, 159-60 (discussing the inflection point in the graph where SAL runs out

of mid-ranking documents and is now providing high-ranking documents); Grossman & Cormack, A Tour of TAR, supra note 64, at 24 (the algorithm does not continue to improve after

stabilization).

268.

Cormack & Grossman, Evaluation of Machine-Learning Protocols, supra note 229, at 160.

269.

Id. at 160-61.

270.

Ralph Losey, Latest Grossman and Cormack Study Proves Folly of Using Random Search for Machine Training - Part Three, E-DISCOVERY TEAM (July 27, 2014, 8:11 PM), http://e-discoveryteam.com/201 4 /0 7 / 2 7 /latest-grossman-and-cormack-study-proves-efficacy-ofmultimodal-search-for-predictive-coding-training-documents-and-the-folly-of-random-searchpart-three.

271.

Buckles, Analytic Adoption: 2014 Market Report, supra note 172, at 8.

272.

See Losey, Folly ofRandom Search: Part 2, supra note 245.

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What Kind of Quality Control Should Be Done on the Results?

After the vendor has been through enough iterations to verify the machine's predictions and that the machine has classified most documents and that any new documents are more of the same, they can move on to quality control sampling. As during training, an attorney is trying to get an idea of what documents were missed and how the algorithm missed them, with the caveat that all document productions miss some documents."'

Statistical guideposts, such as the control set's recall estimate or subsequent sampling, can be misleading, so an attorney should also be sure qualified individuals are applying a scientifically proven algorithm.274 To get an idea of what documents were missed and how, the attorney should now look for the relevant documents that were miscoded as irrelevant.275 First, an attorney can run similarity searches to match those documents with relevant documents an attorney knows of to verify that all variations of a document are coded consistently. 76 To avoid later surprises, an attorney wants to find each and every highly relevant document.

Second, to find dissimilar relevant documents, an attorney can either sample the entire data set or only the discard pile.277 Because a lowprevalence data set requires larger samples to find rare documents, 278 an attorney should resample the entire data set to allow better comparison with the first sample, unless doing so would not be economically feasible. 279 In a higher-prevalence sample, a larger percentage of the sample will be wasted.280 Thus, in a higher-prevalence sample, only the documents from

Grossman & Cormack, Comments, supra note 232, at 313.

273.

274.

Id. at 310-13.

275.

Ralph Losey, Visualizing Data in a Predictive Coding Project - Part Three, Ehttp://ePM), 2014, 10:13 30, (Nov. TEAM DISCOVERY discoveryteam.con/2014/11/30/visualizing-data-in-a-predictive-coding-project-part-three [hereinafter Losey, Visualizing Data].

276.

Id. Grossman & Cormack, Glossary, supra note 40, at 103 ("Null Set: The set of 277.

Documents that are not returned by a search process, or that are identified as Not Relevant by a review process.").

Grossman & Cormack, Comments, supra note 232, at 307 n.79.

278.

Grossman & Cormack, Glossary, supra note 40, at 91 (explaining how to use a 279. confusion matrix to compare data sets). But see Grossman & Cormack, Comments, supra note 232, at 290, 295 ("CAL consistently achieves high recall from low-prevalence collections.").

280.

Losey, Visualizing Data, supra note 275 (noting that some information scientists prefer to use a confusion matrix regardless).

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the discard pile should be sampled, with the caveat that if any new highly 2 81 relevant documents are found, the quality test fails.

For example, if a party takes another sample of 1,534 documents and finds that 1,519 documents were correctly coded as irrelevant, then there were only fifteen mistakes, for a total of a .01% error rate.282 While that error rate is good, the important fact is that none of the errors were highly relevant documents.283 For a CAL or relevance feedback algorithm specifically, the attorney would follow these steps: (1) count the number of relevant documents found by the system; (2) estimate the number of missed documents by sampling the discards; (3) add the number of relevant documents found to the estimate of the missed documents; and (4) divide the number of relevant documents found by the total number of relevant documents.28 4 So, if 270 relevant documents were found and an estimated thirty were not, then finding 270 out of a total of 300 possible relevant documents yields a recall of 90%.285

Any measure an attorney uses should account both for the number of relevant documents found and the number missed.286 Certain other measures could achieve statistical success while failing to find any relevant documents. 287 Measures to avoid include: accuracy (the proportion of documents correctly classified), elusion (the proportion of discards that are relevant), and overturns (the number of documents which the algorithm incorrectly classified but which the attorney corrected).288 M

Statistically,How Can I Defend My Results with Predictive Coding If the Requestor Is Not Satisfied?

The best claim is that the search was "reasonable," as evidenced by one's choices and by the statistics coming out of the process.289 Choices

281.

Grossman & Cormack, Glossary, supra note 40, at 94 ("Elusion is estimated by taking a Random Sample from the Null Set and determining how many (or what Proportion of) Documents are actually Relevant.").

282.

Losey, Visualizing Data,supra note 275.

283.

Id. 284.

Grossman & Cormack, CALfor TAR, supra note 46, at 37.

285.

Id. 286.

Id 287.

Id. 288.

Id. 289.

The law requires reasonable efforts proportional to the value of the case and the value of the evidence. FED. R. COv. P. 26(b)(1). It does not require perfection. FED. R. CIV. P.

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include the predictive coding tool, the expert applying it, and the processes used. Statistics, which will be discussed in this answer, represent an idea of how mathematically successful search protocols are. In reality, an attorney cannot make an exact calculation without knowing how many responsive documents are in the collection. Note, however, that even if the requestor accuses the producer of missing a hot document, the absence of a few documents does not indicate the entire production is skewed. 290 Also, the odds are that manual or linear review would be no more effective.29' Many experts have warned that these statistics should be regarded with caution because the attorney does not know how many relevant documents are present. 292 If there is a hyper-focus on metrics, the attorney may end up teaching to the test, so to speak, rather than discovering enough relevant documents.293 Furthermore, the goals of discovery may change as the case develops.

So, presuming that Party A has 1,000,000 documents to evaluate, 94 how good is good enough?

This answer varies depending upon whether it is a CAL (relevance), SAL (uncertainty), or SPL (random) system. For relevance feedback, training stops when enough relevant documents have been found as measured by a sudden drop-off in precision and verified by calculating recall at the end of the review process as discussed above in section K.295 For random and uncertainty sampling, "good enough" is the stabilization point, which is typically measured by the recall, precision, or F, of the algorithm.296 The remaining steps below primarily concern uncertainty or random systems.

The desired confidence level and interval determine the sample 29 size. 7[statement may be wrong] Confidence levels are usually set at 95%

26(g)(1)(B) requires that discovery not be complete per FED. R. Civ. P. 26(g)(1)(A), but proportional per FED. R. Civ. P. 26(b)(2)(C).

290.

Nelson, supra note 63 ("Myth #10: Small changes to the seed or training set can cause large changes in the outcome" providing the opposite example).

Grossman & Sweeney, supra note 13 (unreliability of manual review).

291.

292.

Losey, Enron Analysis, supra note 163 (suggesting that the focus of discovery should be to find the hot documents that will make or break your case).

293.

See Grossman & Cormack, Glossary, supra note 40, at 96 ("Goodhart's law: When a measure becomes a target, it ceases to be a good measure." (internal quotation marks omitted)).

294.

Nelson, supra note 63 ("Myth #4: Thousands of documents must be reviewed as a prerequisite to employing TAR, therefore, it is not suitable for smaller matters.").

295.

Grossman & Cormack, A Tour of TAR, supra note 64, at 24.

296.

Id. A calculator that can determine either the sample size based upon the desired 297. confidence level and interval or to find the confidence level from sample size, population, and

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or 99% +/- 2% to 5% and most commonly around 95% +/-2%.291 This means that 95% of the time, the confidence interval will contain the true number of relevant documents, and 5% of the time it will fail to do so. The +/-2 is the confidence interval, which represents the error rate, or how confident one can be of the results in terms of a numerical range. 299 If 250,000 relevant documents exist, the sample's confidence interval might suggest the number of relevant documents ranges from 225,000-275,000. 300 If the confidence interval is a larger number, then the range will increase.3 ' Because the actual number of responsive documents in the collection is unknown, the function of the statistics is to show that the estimate as to the number of relevant documents may be reasonable.30 2 Let's say that Party A will review a sample of 1,534 documents for a 95% +/-2.5% confidence 33 statistic.

After reviewing the sample, the attorney can estimate the prevalence of responsive and non-responsive documents in the data. Party A spends around $1,000-$2,000 to review a 1,534 document sample.3 °4 They find 384 relevant and 1,150 irrelevant documents within the sample.30 5 Extrapolating this to the documents, Party A can estimate that a high 25% or 250,000 documents will likely be relevant,30 6 or applying the confidence interval (25% +/-2.5%), between 22.5%-27.5% or 225,000-275,000

expected

prevalence

is

available

at

Random

Sample

Calculator, FLA.

L.

FIRM,

http://www.floridalawfirm.com/calculate.html (last visited Dec. 21, 2015).

298. Telephone Interview with Chad Schwarz, supranote 169.

299. Grossman & Cormack, Glossary, supra note 40, at 90-91; Losey, Visualizing Data, supranote 275.

300.

Ralph Losey, In Legal Search Exact Recall Can Never Be Known, E-DISCOVERY TEAM

(Dec. 18, 2014, 9:48 AM), http://e-discoveryteam.com/2014/12/18/in-legal-search-exact-recallcan-never-be-known-part-one [hereinafter Losey, Exact Recall] 301. Id. 302. Id. 303. Id. (borrowing his numbers and analysis which have been vetted by both William Webber and Gordon Cormack); Losey, Visualizing Data, supra note 275; see also Looby, supra note 43 (walking through a 99% +/-l example).

304. Losey, Visualizing Data, supra note 275 (noting that most costs go to the "SME expense, not the contract reviewer expense").

305.

Id. 306.

Id.; Cormack & Grossman, Evaluation of Machine-LearningProtocols,supra note 229, at 161 (noting that a much lower prevalence of .25% to 3.92% is typical). Where the prevalence is low, the confidence interval can be improved by using a Binomial calculation instead, to a range of 22.88%-27.28%. Losey, Visualizing Data, supra note 275. Use this calculator for the binomial calculations: Exact Binomial and Poisson Confidence Intervals, STATPAGES, http://statpages.org/confint.htmil (last updated May 25, 2009).

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relevant documents.3 °7 Applying the confidence level, in ninety-five of 100 random samples of 1,534 documents, the percentage range would include the true value, or actual number of relevant documents, even though they might fred a few more or less than 384 relevant documents in any given sample.3 °8 The prevalence estimation provides only an idea of how many in the collection, not an estimation of how complete relevant documents 30are 9 is. search actual the One way an attorney can estimate the completeness of their search is by calculating recall. Recall can be calculated by dividing the number of relevant documents found by the projected total number of relevant documents; 310 e.g., finding nine out of the ten relevant documents produces a 90% recall.3 1 A 75% recall is often the baseline in scientific studies.312 As above, CAL or relevance feedback achieves the projection by adding the number of found relevant documents with an estimate of those missed from the discard pile.31 3 For other learning protocols, a variety of methods 3to 14 calculating recall exist, but will not be fully explored in this article.

Presuming that Party A found precisely 210,000 relevant documents, the recall would be 84%, or more specifically, between 76.36%-93.33% to a 95% +/-2.5% confidence level.315

Losey, Exact Recall, supra note 300 (presuming a nominal or a normal distribution for 307. ease of explanation). Binomial takes actual prevalence into consideration and is the preferred calculation).

Id. (noting that 95% of the time the reviewing attorney will find between 346-421 308. relevant documents).

Grossman & Cormack, Comments, supra note 232, at 304 ("The bottom line is that 309. inconsistencies in responsiveness determinations limit the ability to estimate recall."); Grossman & Cormack, Glossary, supra note 40, at 96 (Goodhart's Law). See generally Herbert L. Roitblat, The Schlemiel, Schlimazel and Psychology ofReasonableness, LAW TECH. NEWS (Jan. 10, 2014) (LEXIS) (detailing psychological biases that effect discovery).

Losey, Exact Recall, supra note 300.

310.

Losey, Visualizing Data,supra note 275.

311.

Civil Minutes-General at 3, Indep. Living Ctr. of S. Cal. v. City of L.A., No. 2:12-cv312.

0051-FMO-PJW (C.D. Cal. June 26, 2014), ECF No. 375 (regarding statistical analysis); see Cormack & Grossman, Evaluation of Machine-LearningProtocols, supranote 229, at 156, 159.

Grossman & Cormack, CALfor TAR, supra note 46, at 37.

313.

Grossman & Cormack, Comments, supra note 232, at 306-08 ("[The Direct Method 314. samples] until 385 responsive documents are identified .... [t]he Basic Ratio Method samples the production and the collection; the Global Method samples the production and the null set, while eRecall samples the null set and the collection.");see also Ralph Losey, Introducing "ei-Recall" A New Gold Standardfor Recall Calculations in Legal Search - Part One, E-DISCOVERY TEAM (Jan. 4, 2015, 9:58 PM), https://e-discoveryteam.com/2015/01/04/introducing-ei-recall-a-newgold-standard-for-recall-calculations-in-legal-search-part-one (introducing another recall formula).

Losey, Exact Recall, supra note 300 (noting that the range is between 93.33% 315.

(210,000/225,000) and 76.36% (210,000/275,000)).

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An attorney may learn how accurate their search algorithm is by calculating precision. Precision is "how well a process retrieves only relevant documents. 3 16 Precision is calculated by dividing the relevant documents by total relevant documents found plus the documents originally thought relevant, but not actually relevant.317 So, if only 160,000 of the 210,000 documents were actually relevant, then Party A's precision would be 76% without the confidence interval.

As precision goes up, recall typically goes down, but both are typically higher than other forms of review. 318 The larger the recall, conversely, the lower the precision. 319 The "F 1 score" is the harmonic mean of recall and precision. It varies from an arithmetic mean in that both scores must be high to achieve a high score. 320 F1 is used to help determine when the trade-offs between precision and recall occur to allow for the highest scores of each.321 Here, since both recall and precision are high, the F1 score will be high: Party A's F1 score is 79.8% without the confidence interval.322 Recall is currently considered more important than precision, because discovery is currently more focused on completeness.32 3 N. If a Party Objects to the Protocol, Will a Daubert HearingBe Needed?

When one party objects, judges must decide whether a proposed or completed e-discovery protocol is or was sufficient. 324 Despite Judge Peck's admonishment in Da Silva Moore that discovery should be proportional, not complete,325 the courtroom debate around the 75% recall rate in Global

316.

Looby, supra note 43; Grossman & Cormack, Glossary, supra note 40, at 104 ("The fraction of Documents identified as Relevant by a search or review effort, that are in fact Relevant.").

317.

Grossman & Cormack, Glossary, supra note 40, at 91 (discussing True Positives/(True Positives + False Positives).

318.

Id.at 92; Looby, supra note 43.

319.

Grossman & Cormack, Glossary, supra note 40, at 97.

320.

Id. 321.

Id.at 95.

322.

Harmonic-Mean Calculator, EASYCALCULATION.COM, https://www.easycalculation.com/statistics/harmonic-mean.php (last visited Dec. 21, 2015).

323.

Losey, Visualizing Data, supra note 275 (noting that the law is currently focused on the whole truth, but may eventually adopt a Googlesque approach).

324.

SEDONA CONF., supra note 198, § 9.2.3, at 36 ("Moreover, there is no accepted definition of reasonablenessof automated search.").

325.

Moore v. Publicis Groupe, 287 F.RD. 182, 188 (S.D.N.Y.), adopted sub nom. Moore v.

Publicis Groupe SA, No. 11 Civ. 1279(ALC)(AJP), 2012 WL 1446534 (S.D.N.Y. Apr. 26, 2012)

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Aerospace326 begged the question: Should the measure of predictive coding be scientific analysis, or proportionality sufficiency? Judge Peck did not require a full Daubert hearing, while Judge Waxse seems to require a full Dauberthearing. 327 This Comment adopts Judge Grimm's middle position, protocol is scientific which is that a judge can evaluate whether a discovery328 and reliable in a streamlined but Daubert-likehearing.

In Da Silva Moore, Judge Peck held that Daubert would apply to the introduction of the ESI protocol into evidence, but not to how the documents were found. 329 That is, the admissibility of e-mails found was dependent upon each e-mail itself, not how it was found.330 While the judge

did listen to ESI experts, he did not swear them in, qualify them, or receive any affidavits. 33 1 The district court upheld the magistrate judge's decision in depth and the protocol itself had because he considered the protocol 332 built-in measures of reliability.

Magistrate Judge David Waxse, of the District of Kansas, believes Federal Rule of Evidence 702, which governs expert testimony, provides "no exception for discovery., 334 The goal of the rule is to set standards in making factual determinations concerning disputed areas of specialized

(holding that FED. R. CIV. P. 26(g)(1)(B) requires that discovery not be complete per FED. R. Civ. P. 26(g)(1)(A), but proportional per FED. R. CIV. P. 26(b)(2)(C)).

326.

Opposition of Plaintiffs, supra note 119.

327.

Compare Moore, 287 F.R.D at 189 (holding that Daubert is not applicable to every piece of evidence in a trial nor to how documents are found in discovery), with Tera E. Brostoff, BNA 3 (Dec. 5, 2013), & e-Evidence, BLOOMBERG Digital Discovery (explaining http://www.law.georgetown.edu/continuing-legal-education/upload/TARRprt.pdf Judge Waxse's view that Dauberthearings apply fully to expert testimonies and discovery).

328.

Craig B. Shaffer, "Defensible" by What Standard?, SEDONA CONF. 1 (2012) ("In the final analysis, a debate over the literal applicability of Rule 702 may be more distracting than helpful."); Symposium on the Challenges of Electronic Evidence, 83 FORDHAM L. REV. 1163, 1239 (2014).

329.

Moore, 287 F.R.D. at 189.

Id.at 188-89 (citing Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 585 (1993)).

330.

331.

Id.at 188 n.8.

Moore v. Publicis Groupe SA, No. 11 Civ. 1279(ALC)(AJP), 2012 WL 1446534, at *2 332.

(S.D.N.Y. Apr. 26, 2012).

FED. R. EvID. 702 (regulating the qualifications required for a witness to testify as an 333. expert).

Brostoff, supra note 327, at 3.

334.

Federal Rule of Evidence 1101(d), however, also sets out the specific proceedings in which the Federal Rules of Evidence do not apply. Discovery hearings are not on the list of exempted proceedings. Nor does any language in Rule 702 limit its applicability to trial testimony by experts or exempt testimony by expert witnesses offered for discovery-related purposes.

David J. Waxse & Brenda Yoakum-Kriz, Experts on Computer-Assisted Review: Wh Federal Rule of Evidence 702 Should Apply to Their Use, 52 WASHBuRN L.J. 207, 220 (2013).

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information.335 Challenges to search and review methods are necessarily technical and scientific subjects, which require either affidavits or testimony of experts.33 6 Further, the Sedona Conference's Practice Point 7 advises parties that they will need to explain their search methodology choice and that they may need an expert to do So.33 7 A court338should not ignore an expert's lack of qualifications or poor methodology.

But District Judge Grimm of the U.S. District of Maryland,339 on whom Judge Waxse heavily relies, 340 recently clarified that a judge should conduct a Daubert-like hearing but need not conduct a multi-day, expensive intensive hearing.34 1 In response to the question concerning whether Sedona Practice Point 7 and Federal Rule of Evidence 702 apply to pretrial discovery, Judge Grimm said that Daubert is based upon the garbage in, garbage out principle.342 To argue that one has done what was necessary to produce the evidence is to argue that one's process was scientific and reliable, which is Federal Rule of Evidence 702.343 "Perhaps the conceptual problem is that Daubert has acquired a secondary meaning of this very expensive, four-day hearings, experts that you can't figure out what they're saying, bring them in and bet the ranch on the costs."' 344 The judge can, however, as Judge Peck did, have a more streamlined process where they hear the facts they need to determine proportionality.345

335.

Daniel K. Gelb, The Court As Gatekeeper: Preventing Unreliable PretrialEdiscovery from Jeopardizing A Reliable Fact-FindingProcess, 83 FORDHAM L. REV. 1287, 1288 (2014); Waxse & Yoakum-Kriz, supra note 334, at 218 ("The goal of the Rule to 'set standards to determine whether information is "helpful" to those who must make factual determinations involving disputed areas of science, technology or other specialized information."' (citing Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251, 261 n.10 (D. Md. 2008) (Grimm, Mag.))).

336.

Waxse & Yoakum-Kriz, supranote 334, at 218-19.

337.

Id.at 219 (citing The Sedona Conference, supra note 43, at 195).

338.

Id.at 220 (citing Victor Stanley, 250 F.R.D. at 260-61 n.10).

339.

Judge Grimm serves on the Advisory Committee for the Federal Rules of Civil Procedure. District Judge Paul W. Grimm, U.S. DISTRICT CT. FOR DISTRICT MD., http://www.mdd.uscourts.gov/publications/JudgesBio/grimmbio.pdf (last visited Dec. 21, 2015).

340.

Waxse & Yoakum-Kriz, supranote 334, at 220-21.

341.

Symposium, supra note 328, at 1239-40.

342.

Id at 1239.

343.

Id. 344.

Id. 345.

Id; Shaffer, supra note 328, at 11 ("There is less need for the gatekeeper to keep the gate when the gatekeeper is keeping the gate only for himself." (citing United States v. Brown, 415 F.3d 1257, 1269 (1 1th Cir. 2005))).

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What Other ConsiderationsMay Be Necessary to Satisfy Rule 26(g)?

Rule 26(g) provides that the attorney must certify that discovery is complete, correct, and proportional, and imposes sanctions for improper certification.346 When applying predictive coding, what determines whether this burden has been met?

E-discovery experts Karl Schieneman and Thomas Gricks III, and in a response, Maura Grossman and Gordon Cormack, have written about the implications of FRCP 26(g).347 Schieneman & Gricks explain how 26(g) applies at each step of a predictive coding process, focusing on achieving an "acceptable level of recall and precision, in light of proportionality 348 Grossman considerations, based on a statistical quality control analysis., & Cormack find this focus on statistics inadequate and suggest that the review process should also include factors such as the reliability of the tool, 34 9 the expertise of those applying it, and the processes used.

Both sides suggest that the totality of the circumstances must be considered. 350 However, Schieneman & Gricks propose that there are two principal factors for validation: (1) the measure to be evaluated and (2) the 351 They extent the sample is representative of the entire collection. recommend using recall and precision for these purposes, albeit with the caveat that there is no specific standard that will satisfy 26(g) and that proportionality still governs. 352 On the other hand, Grossman & Cormack propose an end-to-end review that consists of everything from the collection of the data to the production of discovery.353 They claim adhering too closely to statistical 354 outcomes makes the numbers the goal, not effective production. More specifically, over-focus on statistical outcomes begs the question of when 355 the final measurement of effectiveness should be made.

FED. R. Civ. P. 26(g)(l)-(3).

346.

Grossman & Cormack, Comments, supra note 232, at 285, 312 ("Any effort to codify 347. what is reasonable-under Rule 26(g) or otherwise-is necessarily limited by the difficulty of anticipating the unintended consequences of such prescriptions."); Schieneman & Gricks, supra note 189, at 239.

Schieneman & Gricks, supra note 186, at 269.

348.

Grossman & Cormack, Comments, supra note 232, at 285.

349.

Id.at 288; Schieneman & Gricks, supra note 186, at 266.

350.

Schieneman & Gricks, supra note 186, at 270.

351.

Id.at 269, 274 (noting the proportionality concerns of FED. R. CIV. P. 26(b)(2)(C)(iii)).

352.

Grossman & Cormack, Comments, supra note 232, at 300.

353.

354. Id. at 287 ("When a measure becomes a target, it ceases to be a good measure." (citing Goodheart's Law)).

See id. at 300.

355.

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If the measurement is taken at the completion of the CAR protocol, but the attorney then has his contractors make one final independent review, the measurement cannot account for the effect the subsequent human reviewer might have had on the production.35 6 The production may appear better than 357 it is.

The same effect can occur when a document collection is culled before CAR. Grossman & Cormack provide the following example: Let us suppose in our hypothetical matter that the [culling] process were to discard 30% of the relevant documents (i.e., were to have a recall of 70%), the TAR process were to have a recall of 75%, and the final human review were to have a recall of 70%. These numbers, in isolation, might be considered reasonable, but consider the combined effect of all three phases on our example. Of 10,000 responsive documents in the original collection, 7,000 (i.e., 70%) would be retained in the enriched collection. Of the 7,000 responsive documents in the enriched collection, 5,250 (i.e., 75%) would be retained in the review set. Of the 5,250 responsive documents in the review set, assuming that none were withheld as privileged, 3,675 (i.e., 70%) would be identified for production. Accordingly, the recall of the end-to-end review effort would be 36.75% (i.e., 3,675 of the original 10,000 responsive documents). This is a far cry from the end-to-end recall results demonstrated at [scientific conferences].' 5 Regardless, validation should estimate the number of "responsive documents in the originalcollection are being produced,not how many of the responsive documents in the [culled] collection are being reviewed. 359 Note that Grossman & Cormack found other limitations on the concept of recall, such as the disproportionate expense and effort for measures required for scientific publication, the difficulty of defining a unit of "document," the problem of inconsistent coding by and between reviewers, and differing responsiveness definitions between parts of or simultaneous requests for production. 360 Furthermore, they emphasized the fact that many estimation measures used during or after the process are either statistically 3 61 unsound or disproportionately burdensome.

As a solution to these problems, Grossman & Cormack borrow from Daubert to say that an examination should include (a) a good reason to

356.

Id. 357.

Id. 358.

Id. (demonstrating that a protocol using prior enrichment, e.g. culling, is unnecessary and independent subsequent human review will introduce additional error).

359.

Id.at 301.

360.

Id.at 302-05.

361.

Id.at 306-12.

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393

believe the tool works, (b) proper process and oversight, and (c) appropriate 362 A confirmation sampling (but not costly industrial-strength measures). good reason to believe that the tool works is that it has passed scientific muster.36 3 A sufficiently qualified individual can apply the tool with sufficient oversight. 364 Confirmation sampling should be proportional and combined with the totality of the evidence to prove that the tool is performing as expected.3 65 Grossman & Cormack go on to say that confirming that discovery is done is like cooking a turkey.3 66 The cook can tell whether the turkey is done in a myriad of ways.367 The weight of the turkey and the temperature of the oven should be considered, and afterwards, the cook can check the temperature with a thermometer or simply use the popper that comes in many store-bought turkeys. 368 Like any good cook, an e-discovery practitioner can use many means to confirm that the turkey is done-that production is reasonable.369 V.

CONCLUSION

The goal of this Comment was to ensure that the tail (of predictive coding software) did not wag the dog (of legal search). As demonstrated,

362. Id. at 289.

363. Id. at 311-12 ("[A]ccepted scientific standards, the applicability of the method to the task at hand, its potential error rate, and standards controlling its operation.").

364. Id. at 312.

365. Id. at 301,312.

366. Id. at 301-02.

When cooking a turkey, one can be reasonably certain that it is done, and hence free from salmonella, when it reaches a temperature of at least 165 degrees throughout. One can be reasonably sure it has reached a temperature of at least 165 degrees throughout by cooking it for a specific amount of time, depending on the oven temperature, the weight of the turkey, and whether the turkey is initially frozen, refrigerated, or at room temperature. Alternatively, when one believes that the turkey is ready for consumption, one may probe the turkey with a thermometer at various places. Both of these approaches have been validated by biological, medical, and epidemiological evidence. Cooking a turkey requires adherence, by a competent cook, to a recipe that is known to work, while observing that tools like the oven, timer, and thermometer appear to behave properly, and that the appearance, aroma, and texture of the turkey turn out as expected. The totality of the evidence-vetting the method in advance, competently and diligently applying the method, and monitoring observable phenomena following the application of the method-supports the reasonable conclusion that dinner is ready.

Id. 367. Id. 368. Id at 302.

369. Id.; see also Cormack & Grossman, Guest Blog: Talking Turkey, supra note 231, at 10.

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predictive coding is clearly a more efficient method of sorting collections of text-rich documents depending upon workflow and pricing model. Even the technophobia of the legal profession has not managed to prevent its adoption by lawyers and judges. There is no question that this dog can hunt.

Nevertheless, attorneys must be aware of the terminology surrounding predictive coding, the statistics that may play into it, and the strategy involving when and what to disclose concerning the process to the opposing counsel. Finally, an attorney must know how to defend their discovery production.

As we move into an era where all of our devices are connected and communicating, the amount of data that attorneys must process will continue to balloon. Manual review will no longer keep up with future discovery by even the most eager associate. An attorney must keep abreast of changes with this and other technology so they may do the wagging.

Benjamin L. S. Ritz*

* J.D. 2015, South Texas College of Law, B.A. 2000, Colby College. I would like to thank the members of the judiciary and e-discovery community who helped me to avoid many research pitfalls and enriched my understanding. Especially, I would like to thank Maura Grossman, Craig Ball, and Chad Schwarz for pointing out issues with my draft, providing explanations, and pointing me to sources. I would like to thank my colleagues on the South Texas Law Review for their excellent editing. Finally, I would like to thank my advisors Dean Elizabeth Dennis and Professor Josh Blackman for their insight into the writing process. Opinions expressed and any errors that remain are the authors'.

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APPENDIX JOINT STIPULATION AND [PROPOSED ORDER RE370 THE USE OF PREDICTIVE CODING TECHNOLOGY Plaintiffs and Defendant Land O'Lakes, Inc. (collectively "the Parties" and each, individually, a Party) hereby stipulate, agree, and propose as follows: I. DEFINITIONS A. "Document review corpus" refers to the body of documents remaining after the exclusion of known system files, incompatible file types (e.g., database files), duplicates, and documents that fall outside the agreed date range.

B. "Confidence level" means the statistical reliability of a result and in this instance refers to the likelihood that a measurement reached through sampling is accurate.

C. "Estimation interval" refers to the statistical error rate of a measured confidence level.

II. PROTOCOL The Parties have discussed the methodologies or protocols for the search and review of documents collected from Land O'Lakes and have agreed that Land 0' Lakes will utilize Recommind's Axcelerate software for its review workflow and production in this case. Axcelerate incorporates predictive coding (also known as technology-assisted review) functionality, which Land O'Lakes will leverage for a more cost efficient and higher quality review. The Parties agree that the following protocol will be followed to identify potentially responsive documents for review:

370.

Joint Stipulation, supra note 68, at 1-9.

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Step One - Document Collection:

Land O'Lakes will collect documents in the possession, custody, or control of each custodian agreed upon by the Parties and in additional locations under the possession, custody, or control of Land O'Lakes (such as shared drives or departmental files) immediately upon entry of this order and isolate the document review corpus.

2.

Step Two - Control Set:

After loading the document review corpus into Axcelerate, Land O'Lakes will generate an initial control set of documents. The control set will be a random, statistically valid sampling of documents to estimate the number of responsive documents in the corpus. The control set sample shall be determined using a 95% confidence level and 2% estimation interval.

The control set sample will then be reviewed for responsiveness and privilege, and Land O'Lakes will provide Plaintiffs with a tracking report of the results of the control set generation and review. At any point during the predictive coding process, Land O'Lakes' e-discovery liaison will meet and confer at Plaintiff's request to discuss the results and method of the process.

Land O'Lakes agrees to confer in good faith regarding the incorporation of any input from Plaintiffs on the application process.

3.

Step Three - Seed Set and Initial Training:

All responsive documents identified during review of the control set will be included in an initial seed set, which will be used to train Axcelerate to identify other potentially responsive documents in the document review corpus. The seed set also will include responsive documents identified by Land O'Lakes through the use of search and analytical tools, which will include the following: (a) Approximately 400 documents already identified as responsive by Land O'Lakes; (b) The 500 most highly ranked371 responsive documents hit upon by an application of the Boolean search terms selected by

371.

Axcelerate ranks returned documents in order of responsiveness to search terms.

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Land O'Lakes (listed in Appendix A), excluding documents already contained in (a), above; and (c) The 500 most highly ranked responsive documents hit upon by application of Boolean search terms selected by Plaintiffs (listed in Appendix A), excluding documents already contained in (a) and (b), above.

Land O'Lakes will provide Plaintiffs with a search hit count of all searches conducted and will produce all non-privileged documents included in the seed set.

4.

Step Four - Iterative Review and Further TraininM:

Once Axcelerate has identified and prioritized potentially responsive documents based on the initial training, Land O'Lakes will review a sample set of those documents for responsiveness. The sample set will consist of at least the 500 documents ranked most highly by Axcelerate in order of relevance. After this second round of review, the system will be trained again based on reviewer feedback to identify and prioritize more potentially responsive documents. Land O'Lakes will provide Plaintiffs with tracking data for this round of review.

5.

Step Five - Review:

Land O'Lakes will then conduct a manual review of all documents identified by Axcelerate as potentially responsive. During this review, the iterative process will continue; as more responsive documents are reviewed and coded, they will be used to further hone the system's ability to identify and prioritize other potentially responsive documents among the remaining, unreviewed portion of the document review corpus. Newly identified documents also will be subject to manual review. Review and iterative training will proceed until all identified documents have been reviewed and the system indicates that the remainder of the document review corpus is not likely to be responsive. Land O'Lakes will continue to provide tracking data to Plaintiffs, and all responsive, non-privileged documents will be produced.

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Step Six - Validation:

After Land O'Lakes has conducted enough rounds of iterative review and training to generate a conclusion from Axcelerate that the remaining documents in the document review corpus are not likely to be responsive, Land O'Lakes will perform a validation test by reviewing a statistically valid and random sampling of unreviewed documents to confirm that the number of potentially responsive documents in the unreviewed corpus is statistically insignificant. Using a 99% confidence level and a 1% estimation interval, a random sampling of the unreviewed documents will be reviewed for responsiveness. If the number of responsive documents in the validation sampling results in higher than a 1% responsiveness rate, the review process will continue until the validation test achieves a 1% or less responsiveness rate. All tracking data regarding the validation process will be provided to the plaintiffs, and any responsive, non-privileged documents identified during the process will be produced.

THE PARTIES HEREBY STIPULATE AND AGREE TO THE ABOVE TERMS. Search Terms Land O'Lakes' Search Terms "cooperatives working together" nmpf OR "national milk producers federation" herd /10 retir* cow /10 retir* cwt AND retir* "self help" "herd buyout" "milk diversion program" cwt AND beef cwt /5 program export /10 assistance cwt /5 ambassador cwt AND (independent /5 producer) cwt AND (independent /5 farmer) cwt AND (target /10 remov*) cwt AND cull* cwt AND slaughter* cwt AND "field staff' cwt AND assessment cwt AND delegate cwt AND (milk /5 suppl*) cwt AND (price /10 increas*) cwt AND contribut*

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cooperative /10 individual cwt AND (cow /5 numbers) cwt AND "farm id" cents /5 hundredweight amount /10 checks cwt AND bid* cwt AND "leadership council" cwt /10 member* cwt /10 summary cwt AND presentation Plaintiffs' Search Terms buyout reentry re-entry reenter re-enter rejoin re-join join /10 again price /10 increase price /10 rise price /10 raise price /10 hike price /10 stabiliz* price /10 maintain price /10 maintenance

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REVISITING GARNER WITH GARNER: A LOOK AT DEADLY FORCE AND THE USE OF CHOKEHOLDS & NECK RESTRAINTS BY LAW ENFORCEMENT 1.

II.

I1.

IV.

INTRODU CTION ...............................................................................

402

SUPREME COURT JURISPRUDENCE: USE OF FORCE UNDER THE

FOURTH AMENDMENT ....................................................................

A. Use of Force: FourthAmendment Reasonableness Standard.........................................................................................

B. Deadly Force Under Tennessee v. Garner .............................

"I CAN'T BREATHE:" WHAT A CHOKEHOLD IS AND WHY IT IS

405

D EA D LY ..........................................................................................

408

40 5 406

A. Medical Risk of Serious Bodily Injury or Death ..................... 409 B. Strangulation,No Matter the Context, Is Capableof 4 12 CausingDeath ........................................................................

RESPONSES TO POLICE USE OF CHOKEHOLDS ............................... 413 A. JudicialResponse: Reasonablenessand Chokeholds ............. 413 1. Supreme Court Limitation on Injunctive Relief in City 414 of Los Angeles v. Lyons ...................................................

415 a. Lyons M ajority ............................................................

416 b. Lyons D issent .............................................................. c. Injunctive Relief Denied: Deaths from Chokeholds 418 A fter Lyons .................................................................

2. Post-Lyons: Decisions Holding Chokeholds to Be 4 19 R easonable........................................................................

3. Post-Lyons: Decisions Holding Chokeholds to Be 422 Unreasonable...................................................................

B. Legislative Response: Ban or Limit Chokehold Use ............... 426 1. LegislationRestricting Chokeholds to the Use of 427 Deadly Force.....................................................................

2. Legislative Limitations on Certain Types of Neck 428 R estraints ..........................................................................

3. Legislation Placinga Total Ban on Use of Chokeholds ... 428

C. DepartmentalResponse: Police Policyfrom Departmentto Dep artment .............................................................................

1. Publically UnavailablePolice Use of Force Policy .........

2. Use of Force Policies That Are Disclosed........................ a. Sample of Department Policy Not Mentioning C hokehold Use ........................................................... b. Sample of Department Policy Prohibiting or Limiting Chokehold Use ............................................

430 431 432 432 433

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Sample of Department Policy Allowing Chokehold Use ..........................................

4 35

LIMITATIONS OF EFFECTIVENESS OF CURRENT RESPONSES TO

POLICE USE OF CHOKEHOLDS .................................

438 A. Limitations of the DepartmentalResponse ......................

438 B. Limitations of the Legislative Response........................

441 C. Limitations of the JudicialResponse ..........................

441 PROPOSED ACTION ........................................

442 C ONCLU SION ............................................

447 I.

INTRODUCTION

A police officer will never employ unnecessaryforce or violence and will use only such force in the discharge of duty as is reasonable in all circumstances.Force should be used only with the greatest restraintand only after discussion, negotiation and persuasion have been found to be inappropriateor ineffective. While the use offorce is occasionally unavoidable, every police officer will refrainfrom applying the unnecessary infliction ofpain or suffering andwill never engage in cruel, degradingor inhuman treatment of any person.

"I can't breathe." 2 The fmal words of Eric Garner haunted many people across America, and the world, as they watched the video of Eric Garner being choked to death.3 What made the death of Eric Garner even more unsettling is that he died at the hands of law enforcement officers. It 4 left a lingering question in many minds: Could I be next?

On July 17, 2014, Eric Garner died from a chokehold in Staten Island, New York, after he was wrestled to the ground by police officers attempting to arrest him for selling loose cigarettes.5 The encounter between New York 1.

Law Enforcement Code of Ethics (1989), INT'L ASS'N CHIEFS POLICE (Oct. 17, 1989), http://ethics.iit.edu/ecodes/node/3353.

2.

See Ben Zimmer, The Linguistic Power of the ProtestPhrase 'I Can't Breathe', WIRED (Dec. 15, 2014, 8:19 AM), http://www.wired.com/2014/12/ben-zimmer-on-i-cant-breathe.

3.

'1 Can't Breathe': Eric GarnerPut in Chokehold by NYPD Officer - Video, GUARDIAN (Dec. 4, 2014, 2:46 PM), http://www.theguardian.com/us-news/video/2014/dec/04/i-cant-breatheeric-garner-chokehold-death-video.

4.

"Am I Next?" became a phrase used by people in protest of police use of deadly force in America beginning in 2014 with the deaths of Michael Brown and Eric Garner. See Jeremy Levine & Nicholas Weissman, 'Am I Next?': Ferguson's Protests Through the Eyes of a Teenager, BROOKLYN FILMMAKERS COLLECTIVE, http://brooklynfilmmakerscollective.com/ourwork/am-i-next-ferguson-s-protests-through-the-eyes-of-a-teenager (last visited May 5, 2016).

5.

J. David Goodman & Al Baker, Wave of Protests After Grand Jury Doesn't Indict Officer in Eric Garner Chokehold Case, N.Y. TIMES, Dec. 3, 2014, http://www.nytimes.com/2014/12/04/nyregion/grand-jury-said-to-bring-no-charges-in-statenisland-chokehold-death-of-eric-gamer.htnl.

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police officers and forty-three-year-old Eric Garner was captured on video and seen all around the world.6 The video, which clearly depicted the chokehold used on Eric Garner, was an anomaly in what is usually a factually intense analysis of situations involving a police officer's use of force. 7 Without video, there may exist many differing versions of the incident.8 Use of force determinations are usually established by officer's testimony, the account of the person injured or upon whom the force was used, or by witnesses to the incident. 9 But, where a videotape of the use of force incident exists, the facts can be viewed in light of what is depicted on the videotape.10 The incident captured on video of Eric Gamer showed officers and Mr. Garner verbally arguing about whether he was selling untaxed cigarettes.11 Mr. Gamer told the five police officers surrounding him that he had done nothing, to leave him alone, and to not touch him.12 Though Eric Garner was verbally resistant, he was not physically combative.13 Nevertheless, Officer Daniel Pantaleo wrapped his arms around Mr. Gamer's neck from behind, using a chokehold. 14 Eric Garner fell to the ground while the officer continued to choke Mr. Garner until his body went limp. 15

While Eric Garner was being held on the ground, he stated repeatedly: "I can't breathe, I can't breathe." 16 He lost consciousness, and subsequently died with his face on the pavement. 7 The city's medical examiner ruled Eric Gamer's death a "homicide," 1 resulting from the chokehold. 19 The use

6. See id.

7. See Scott v. Harris, 550 U.S. 372, 381 (2007) (stating that when a videotape exists, the factual issues should be viewed "in the light depicted by the videotape").

8.

Id.

9.

10.

See id. at 383-84.

Id. at 381; see also Plumhoffv. Rickard, 134 S. Ct. 2012, 2021 (2014).

11.

GuARDtAN, supra note 3.

12.

13.

14.

Id. Id. Id.

15.

Id.

16. Id. 17. Id. 18. The term "homicide" is "one of five categories medical examiners use to label cause of death and it indicates that 'someone's intentional actions led to the death of another person' .... " Massimo Calabresi, Why a Medical Examiner Called Eric Garner'sDeath a 'Homicide', TIME

(Dec. 4, 2014), http://time.com/3618279/eric-garner-chokehold-crime-staten-island-danielpantaleo/ (quoting the president of the National Association of Medical Examiners).

19. Id. (noting that the cause of death was found to be a homicide from the neck compressions by the officer's chokehold and the compression of the chest while being restrained by the police). Medical examiners ruled Garner's death a homicide, but said that his poor healthobesity and asthma-were also contributing factors to his death. See Nia-Malika Henderson, Peter King Blames Asthma and Obesity for Eric Garner'sDeath. That's a Problemfor the GOP, WASH.

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of the chokehold against Eric Garner was deadly, and it was applied intentionally.

In 1985, the Supreme Court held in Tennessee v. Garnerthat deadly force may not be used unless the suspect poses a significant threat of death or serious physical injury to officers or others.20 Revisiting Garnerwith the death of Eric Garner in mind, this Comment argues that all types of neck restraints used by law enforcement should be categorized as deadly force.

The Eric Garner incident raises two questions: (1) Should "chokeholds and neck restraints, 21 be used by law enforcement? and (2) Under what circumstances are chokeholds and neck restraints reasonable under the Fourth Amendment to the United States Constitution? 22 These are questions23 of "vital concern to those interested in effective and humane policing., This Comment argues that all types of neck restraints should be limited in use to circumstances where deadly force is necessary. Part I looks at Supreme Court jurisprudence on the use of force by law enforcement under the Fourth Amendment. Part II explains what the neck restraints used by law enforcement are, and why they are dangerous. Part III discusses the responses by the judiciary, legislatures, and police departments to the use of chokeholds in law enforcement. Part IV analyzes the limitations on the effectiveness of these responses to the use of chokeholds. Part V, in light of the limits of current responses, proposes what actions should be taken to stop the use of chokeholds by police officers. Part VI concludes that all types of neck restraints used by law enforcement should be categorized as deadly force.

POST (Dec. 4, 2014), http://www.washingtonpost.com/blogs!the-fix/wp/2014/12/04/peter-kingblames-asthma-and-obesity-for-eric-garners-death-this-is-a-problem-for-the-gop.

20. Tennessee v. Garner, 471 U.S. 1, 11-12 (1985).

21. Throughout this Comment the terms referring to chokeholds and neck restraints will be used interchangeably, with the ultimate conclusion that all types of compression to the neck no matter what the name of the restraint-chokehold, carotid hold, lateral vascular neck restraint, vascular neck restraint, etc.-are a use of deadly force.

22. See U.S. CONST. amend. IV ("The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures."). The Supreme Court has a line of case precedent establishing the constitutional standard of reasonableness used to analyze 'seizures"--uses of force by law enforcement to detain people. See Garner, 471 U.S. at 3; see also Plumhoff v. Rickard, 134 S. Ct. 2012, 2024 (2014); Scott v. Harris, 550 U.S. 372, 383-84 (2007); Graham v. Connor, 490 U.S. 386, 394 (1989).

23. James J. Fyfe, Enforcement Workshop: The Los Angeles Chokehold Controversy, 19 CRIM. L. BULL. 61, 65 (1983) ("[Clhokeholds should be classified as a means of deadly force... [and] as carefully regulated by police departments as is the use of firearms and other means of deadly force.").

REVISITING GARNER WITH GARNER

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I1. SUPREME COURT JURISPRUDENCE: USE OF FORCE UNDER THE FOURTH AMENDMENT

The Fourth Amendment regulates all types of force used by law enforcement. One guarantee of the Fourth Amendment is the right of the people to be secure in their persons against unreasonable seizures.24 Whenever a police officer restrains a person's freedom to walk away, that person has been seized. 25 Arrests, investigatory stops, or other "seizures" of persons are properly analyzed under the Fourth Amendment's objective reasonableness standard.26 Any use of force by law enforcement, including the use of deadly force, is analyzed as a seizure and subject to reasonableness under the Fourth Amendment.2 7 If force is found to be unreasonable, it is excessive and unconstitutional.28 A.

Use of Force: FourthAmendment ReasonablenessStandard

Claims that law enforcement officers used excessive force are analyzed under the Fourth Amendment's reasonableness standard. 29 The reasonableness of the manner of force used to apprehend a person by law enforcement is analyzed by balancing the extent of the intrusion upon the person's Fourth Amendment right with the government's interest justifying the intrusion. 30 The Court looks at the totality of the facts and circumstances surrounding each case to determine whether the use of force is reasonable.3 1 Facts and circumstances that courts consider in analyzing the reasonableness of force include: severity of the crime, whether the suspect poses a threat to the safety of the officers or others, and whether the suspect is actively resisting or attempting to evade arrest.32 The reasonableness of the use of force is "judged from the perspective of a reasonable officer on the scene, rather than with the 20/20 vision of hindsight." 33 The Court acknowledges that officers must make split second decisions in circumstances that are "tense, uncertain, and rapidly evolving" about what amount of force is necessary in the situations which they face.34 The inquiry into reasonableness looks at whether the force used was objectively 24. U.S. CONST. amend. IV. 25. Garner,471 U.S. at 7.

26. Graham, 490 U.S. at 388.

27. Garner, 471 U.S. at 7.

28. See id at 6, 11.

29. Graham, 490 U.S. at 388.

30. Garner,471 U.S. at 7-8.

31. Graham, 490 U.S. at 396.

32. Id. 33. Id. 34. Id.at 397.

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reasonable in light of the circumstances, without regard to any underlying motivations of the officer.35 Whether an officer had evil or good intentions is not relevant as part of the reasonableness inquiry.36 The Fourth Amendment recognizes that in conjunction with a police officer's right to seize a person in the form of an investigatory stop or an arrest, there is a right to use "some degree of coercion or threat thereof to effect it."37 The use of a particular type of force in a specific situation is analyzed circumstantially to determine whether or not it was reasonable. 38 When force is justified, an officer need not stop using the force deemed necessary until the threat is no longer present. 39 The type and amount of force used must be appropriately reasonable under the circumstances.4 ° B.

Deadly Force Under Tennessee v. Garner

The use of deadly force to apprehend a person requires that there be an immediate threat of physical harm to the officer or another person. 4' Deadly force is defined as "force which a reasonable person would consider likely to cause death or serious bodily harm., 42 In Tennessee v. Garner, the Supreme Court analyzed an officer's use of a firearm to shoot an unarmed suspect.43 The Court found that the use of a firearm to shoot a suspect was a use of deadly force and unconstitutional when used against a suspect who 44 posed no threat of serious injury or death to officers or others.

On October 3, 1974, Memphis police officers received a call reporting a burglary.4 5 Edward Garner was seen fleeing from the scene of the burglary toward the fence at the edge of the yard.46 Officers could see Edward Garner's face and hands with their flashlights, saw no weapon, and were reasonably sure that he was unarmed.47 One officer yelled "police, halt,"

35. Id.

36. Id. 37. Id. at 396.

38. Tennessee v. Garner, 471 U.S. 1, 8 (1985).

39. Plumhoff v. Rickard, 134 S. Ct. 2012, 2022 (2014) (reasoning that if police officers were justified in shooting at a suspect to end a severe threat to public safety, then they were justified to keep shooting until the threat had ended).

40. See id at 2020.

41. Garner,471 U.S. at 11.

42. 10 C.F.R. § 1047.7 (2015). Both federal law and model laws define "deadly" similarly, using the reasonable person standard in the force decision when one is faced with serious bodily injury or death. Id.; MODEL PENAL CODE § 3.11 (1964).

43. See Garner,471 U.S. at 3.

44. Id. 45. ld.

46. Id. 47. Id.

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48 and as he stepped forward, Edward Garner began to climb the fence. One officer reasoned that if Edward Garner made it over the fence he would not 49 be captured, so the officer shot him, hitting the back of his head. Edward 50 Garner had stolen ten dollars and a purse from the home. After being shot 51 by the officer, he was taken to the hospital and pronounced dead. At the time, both Tennessee statute and police department policy permitted this use of deadly force.52 When the Court decided Tennessee v. Garner, there were similar statutes across the country which allowed officers to use "all necessary means to effect [an] arrest," on suspects who were fleeing or forcibly resisting.5 3 States at the time followed the common law rule that allowed for the "use of whatever force was necessary to effect the arrest of a fleeing felon., 5 4 Officers at this time were allowed to use deadly force against 55 apparently unarmed and fleeing felony suspects. In addition to the state statute in Tennessee at the time of this case, the Memphis Police Department policy also allowed the use of deadly force in cases of burglary. 6 Memphis was in the minority of police departments, as the that time prohibited the use of deadly majority of police departments at 57 force against nonviolent suspects.

The Court in Garner examined the seizure of the suspect by use of a firearm, balancing the extent of the intrusion caused by the force with the need for itY8 The Court reasoned that the intrusion caused by deadly force on a suspect is unmatched because it takes away the "suspect's fundamental interest in his own life."5 9 Additionally, deadly force also deprives society 60 of the judicial determination of guilt or innocence. The intrusion caused by deadly force was balanced against the government's interest in effective law enforcement. 61 The Court was "not convinced that the use of deadly

48.Id.at4.

49. Id.

50. Id. 51. Id. 52. Id.(citing TENN. CODE ANN. § 40-4-108 (1982)).

53. Id. (emphasis added).

54. Id. at 12. The Court explained that the common law rule arose during a time when most felonies were punishable by death and thus the use of deadly force against a fleeing felon was not considered excessive. Id. at 13.

55. See id. at 12-13.

56.Id. at5.

57.Id. at 11.

58.Id. at7.

59. Id. 60.Id. at9.

61. Id. (describing the government interest in "overall violence . . . be[ing] reduced by encouraging the peaceful submission of suspects who know that they may be shot if they flee").

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force [was] a sufficiently productive means of accomplishing [the goals of 62 effective law enforcement] to justify the killing of nonviolent suspects., The Court stated that a police officer may not seize an unarmed, nondangerous suspect by shooting him dead and found the Tennessee statute to be unconstitutional "insofar as it authorize[d] the use of deadly force against such fleeing suspects." 63 The Court stated in Garner, that deadly force to prevent the escape of all felony suspects, no matter what the circumstances are, is unreasonable and thus unconstitutional. 64 Deadly force may not be used unless "the officer has probable cause to believe that the suspect poses a significant threat of death or serious bodily injury to the officers or others."6 5 The same reasoning that the Court used in Garner,with respect to the use of firearms against nonviolent unarmed suspects, should be used in analyzing the use of all types of neck restraints by law enforcement. Neck restraints, like firearms, are force that is reasonably likely to cause serious injury or death.

III. "I CAN'T BREATHE:" WHAT A CHOKEHOLD IS AND WHY IT Is DEADLY The arm bar or "chokehold," the carotid restraint or "sleeper hold," and the lateral vascular neck restraint are names for different types of neck restraints used by law enforcement. 66 All types of neck restraints have the potential to cause death, and have caused death in various incidents.67 No matter the name or technique used, each neck restraint involves either the restriction of air, or the restriction of blood flow to the brain with the goal of controlling a person by rendering that person unconscious.6 8 "It is undisputed that chokeholds pose a high and unpredictable risk of serious injury or death. ' , 69 Depending on the position of the officer's arm when the neck restraint is implemented, the reaction of the person being 62. Id at 10.

63.Id. at 11.

64. Id. 65. Id.at3.

66. See Complaint at

2, Boone v. City of Las Vegas, 2:10-cv-00759-JCM-PAL (D. Nev.

June 30, 2011), available at http://www.aele.org/law/Boone-v-LVMPDcomplaint.pdf.

67. See Nava v. City of Dublin, 121 F.3d 453, 458-59 (9th Cir. 1997), overruled on other grounds by Hodgers-Durgin v. de la Vina, 199 F.3d 1037 (9th Cir. 1999) (analyzing the death caused by the use of a carotid restraint or "sleeper hold"); see also Drummond ex rel. Drummond v. City of Anaheim, 343 F.3d 1052, 1056-60 (9th Cir. 2003) (analyzing the death caused by use of a chokehold); Complaint, supra note 65 at 2 (complaining of the death caused by use of a lateral

vascular neck restraint).

68. See City of Los Angeles v. Lyons (Lyons II), 461 U.S. 95, 116 (1983); Donald T. Reay, Death in Custody, 18 CLINICS LABORATORY MED. 1, 9 (1988).

69. Lyons II, 461 U.S. at 116.

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choked, and the health condition of the person being choked, an officer may crush the larynx, trachea, or thyroid, which can result in death by asphyxiation or cardiac arrest. 70 Despite the unpredictable risk of serious injury or death, law enforcement still uses neck restraints in situations that do not require the use of deadly force. Chokehold and neck restraint the years, resulting in minor and severe incidents have continued through 71 and even deaths. 72 injuries, In light of the risk and reality of death, chokeholds and neck restraints of any type should be classified as deadly force. "Deadly force is force '' 73 capable of killing or likely to kill, but it does not always kill. Chokeholds and other neck restraints are unpredictable and pose a high risk of serious injury and death associated with their use, thus they are rightly classified as deadly force.

A.

MedicalRisk of Serious Bodily Injury or Death

Although there are many types of neck restraints, they are generally separated into two categories: respiratory neck restraints and vascular neck restraints.7 4 The respiratory neck restraint, which puts pressure on the 70.Id. at 117.

71. Werner v. City of Poulsbo, 548 F. App'x 381, 382 (9th Cir. 2013) (analyzing an officer's use of a chokehold upon Leif Werner, causing him difficulty of breathing); Barnard v. Theobald, 721 F.3d 1069, 1073 (9th Cir. 2013) (analyzing an officer's use of a chokehold during the arrest of Charles Barnard resulting in multiple spinal surgeries due to collapsed vertebrae in his spine); 516 F. App'x 899, 900 (11 th Cir. 2013) (per curiam) Williams v. Miami-Dade Cnty. (Williams 11), detaining Tiandre Williams which caused him to in a chokehold of (analyzing an officer's use have a seizure and pass out); Crutcher v. Athens Police Dep't, No. CV-10-S-l 176-NE, 2014 WL 5521944, at *3-4 (N.D. Ala. Oct. 31, 2014) (analyzing an officer's use of a chokehold to detain Courtney Crutcher, who refused to sign a traffic citation and suffered a muscle sprain in the neck).

72. See Griffith v. Coburn, 473 F.3d 650, 653 (6th Cir. 2007) (analyzing the death of Arthur Partee, who died while arrested by two officers who used a chokehold to wrestle Partee to the ground); Thompson v. City of Chicago, 472 F.3d 444, 448 (7th Cir. 2006) (analyzing the death of James Thompson following a struggle with police officers after being detained using a chokehold); Drummond, 343 F.3d at 1054 (analyzing the death of Brian Drummond, who died when one officer put his knee on Drummond's neck while he repeatedly told officers that he could not breathe); United States v. Livoti, 196 F.3d 322, 324-35 (2d Cir. 1999) (analyzing the death of Anthony Baez after being put in a chokehold by Officer Livoti); Nava, 121 F.3d at 454 (analyzing the death of Randolph Bennett, a man subdued by an officer using a carotid hold); Lewis v. City of Chicago, No. 04 C 3904, 2005 WL 947195, at *2 (N.D. Ill. Apr. 11, 2005) (analyzing the death of Christopher Hicks during his arrest where he was detained using a chokehold); McQurter v.

City of Atlanta, Ga., 572 F. Supp. 1401, 1407 (N.D. Ga. 1983) (analyzing the death of Bennie McQurter after he was detained with the use of a chokehold by an officer putting pressure to the front of his throat with a flashlight and later adjusting the hold to the sides of McQurter's neck).

73. Fyfe, supra note 23, at 61.

74. Grand Junction Police Dep't, LVNR Staff Study: An AppropriateForce Option?, NAT'L L. ENFORCEMENT TRAINING CTR. 1 (Sept. 29, 2010), http://www.nletc.com/files/GJPD--LVNRStaff-Study.pdf.

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trachea and larynx, is commonly known as a chokehold, and causes unconsciousness by depriving the lungs of oxygen.75 It can cause asphyxia and fractures to the internal structure of the neck.76 Proponents of the use of neck restraints acknowledge the hazards of respiratory neck restraints.77 Thus, most law enforcement agencies in the United States prohibit the use of what are considered technical chokeholds.78 Vascular neck restraints cause unconsciousness not by restricting the flow of oxygen, but by restricting blood flow to the brain. 79 The vascular neck restraint puts pressure on the carotid arteries on the sides of the neck.80 Unconsciousness can occur in less than 15 seconds. 8 1 However, unlike chokeholds, vascular neck restraints typically result in a relatively quick recovery to consciousness. Thus, advocates of neck restraints emphasize the safety of properly applied vascular neck restraints.83 Law enforcement officers typically employ vascular neck restraints to quickly gain control of the person being detained through pain compliance or during the period of the suspect's temporary unconsciousness. 84 The inherent risk of using any type of neck restraint in the law enforcement context is that a vascular restraint can turn into a respiratory chokehold while the suspect is struggling, leading to fatal consequences.85 A natural response to being unable to breathe, or to losing consciousness, is trying to free oneself from the neck restraint. Moreover, an officer cannot distinguish an involuntary reaction to compression of the neck from voluntary resistance to the detention.86 In either case, this struggle could increase the force used on the neck by the officer trying to detain the struggling person, which then would increase the chances of death.87 Medical research confirms that when officers employ neck restraints to subdue suspects, death can ensue without the officer intending to cause

75.Id. at3.

76. City of Los Angeles v. Lyons (Lyons fl), 461 U.S. 95, 117 n.7 (1983).

77. Donald T. Reay & John W. Eisele, Death from Law Enforcement Neck Holds, 3 AM. J. FORENsIc MED. & PATHOLOGY 255, 256 (1982).

78. NAT'L L. ENFORCEMENT TRAINING CTR., supra note 74, at 3.

79. Id. 80. Id. 81. Id.; see also AELE Law Enforcement Legal Ctr., Civil Liability for the Use of Neck Restraints (pt.

1), 2013 (12) AELE MO. L.J. 101, 101 (Dec. 2013), http://www.aele.orglaw/2013all12/2013-12MLJ101 .pdf [hereinafter AELE Civil Liability Pt. 1].

82. AELE CivilLiabilityPt. 1, supra note 81, at 101-02.

83. Id at 101 (emphasis added).

84. Reay, supra note 68, at 9-10.

85. Id. at 10.

86. City of Los Angeles v. Lyons (Lyons I1), 461 U.S. 95, 117 n.7 (1983).

87. Id.

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death.88 Indeed, there are documented cases where law enforcement officers used vascular neck restraints, which inadvertently turned into a respiratory chokehold and caused death. 89 Thus, proper application of vascular neck restraints is not realistic in the context of law enforcement.

Additionally, the condition of the person being restrained may increase the possibility of death from neck restraints that might otherwise have proved "non-lethal." 90 Conditions that increase the risk of sudden death include intoxication from alcohol and drugs, physical exhaustion, and obesity. 9' Pre-existing diseases, such as cardiovascular or respiratory disease, also increase the likelihood of death even when neck restraints are properly applied.92 Accordingly, neck restraints cannot be recommended medically because, although they may be safely used on some people, they are not safe on all people.93 In a study of civil liability arising from the use of neck restraints, the AELE Law Enforcement Legal Center recommends that officers should be trained to restrict the use of neck restraint techniques to circumstances 94 where officers or third parties are at risk of physical injury. Dr. Reay and Dr. Eisele, writing in the American Journal of Forensic Medical Pathology, state that neck restraints should be viewed in the same light as firearms because both have the potential for fatal outcomes each time they are used.

95

Pressure upon the neck is potentially lethal and should only be used when there is no other alternative. 96 All types of neck restraints are deadly due to the inherent risk of "death or permanent disability" associated with respiratory chokeholds and the risk that, when vascular neck restraints are not properly applied or are misused, they can turn into respiratory 97 chokeholds and restrict the airway. Therefore, all types of neck restraints should be considered deadly force and used only in circumstances that require the use of deadly force.

88. DR.

DEAN

HAWLEY,

DEATH

BY

STRANGULATION

http://www.markwynn.com/wp-content/uploads/death-by-strangulation.pdf 2016).

89. Reay & Eisele, supra note 77, at 255.

90. Reay, supra note 68, at 19.

1,

available

at

(last visited Feb. 12,

91. Id. 92. Reay & Eisele, supra note 77, at 256.

93. NAT'L L. ENFORCEMENT TRAINING CTR., supra note 74, at 12.

2), 94. AELE Law Enforcement Legal Ctr., Civil Liabilityfor the Use of Neck Restraints (Pt. 4 2 01 http://www.aele.org/law/2014allOl/ 2014), (Jan. 106 101, L.J. 2014 (1) AELE Mo. 01MLJ10l.pdf [hereinafter AELE Civil Liability Pt. 2].

95. Reay & Eisele, supranote 77, at 256.

96. Id. 97. AELE CivilLiability Pt. 1, supra note 81, at 102.

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Strangulation,No Matter the Context, Is Capable of CausingDeath

Although disagreement exists about the risks associated with the use of different types of neck restraints in policing, there is national consensus about the dangers inherent in criminal choking assaults within the context of domestic violence. 98 The link between the restriction of breath and deaths in domestic violence situations has resulted in states across the nation revising their criminal statutes that deal with acts which impede breathing, such as asphyxiation, choking, smothering, and suffocation. 99 In jurisdictions across the nation, a defendant can now be charged with felony strangulation, or misdemeanor obstruction of breathing, rather than a simple assault upon proof of intent to obstruct breathing or blood circulation.' 0 These offenses were created to address situations in domestic violence contexts where it was difficult to prove that an assault had occurred due to the lack of visible injury sustained by victims whose breathing had been impaired by choking or other means of restricting air. 01 As of November 2014, forty-four states, the District of Columbia, the Federal government, and two territories have some form of strangulation or impeding breathing statute. 102 The most recent was House Bill 911, which was signed into law in Georgia, adding language that penalizes strangulation as a felony to the existing aggravated assault statute. 10 3 It describes strangulation as "impeding the normal breathing or circulation of blood of another person by applying pressure to the throat or neck of such person."' 1 4 House Bill 911 is similar to legislation in thirty-eight other states. The Senate Bill report from Washington State's similar legislative changes stated that assaults by strangulation are "among the most serious crimes in the criminal justice system."' 0 5 The impetus behind legislative changes in the area of criminal assaults highlights the inherent risks associated with neck restraints and the severity of the hazards associated with the use of them. The underlying risks 98. See Criminal Strangulation/ImpedingBreathing, NAT'L DISTRICT ATT'Ys ASS'N 1 (Nov. 2014), http://www.ndaa.org/pdf/strangulationstatutorycompilation 11_7 2014.pdf.

99. See id.; see also, e.g., H.B. 911, 2013-14 Gen. Assemb., Reg. Sess. (Ga. 2014).

100. Rory I. Lancman & Daniel Pearlstein, Clamping Down on Chokeholds, 17 N.Y. L.J. 252 (2014), availableat LexisNexis.

101. Id. 102. NAT'L DISTRICT ATr'ys ASS'N, supranote 98, at 1.

103. Georgia is the thirty-eighth state to adopt legislation making strangulation a felony in the context of domestic violence. Ga. H.B. 911 (passing unanimously in the Georgia house and senate in 2014.).

104. Id. (emphasis added).

105. S. 5953-60, 2007 Reg. Sess., at 2 (Wash. 2007) (describing strangulation as occurring when the arteries in the neck are compressed, stopping blood flow to the brain and causing the

victim to lose consciousness).

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associated with neck restraints do not change simply because a police officer is the person applying the neck restraint to another person. When a neck restraint is applied in any context it is done so with the intent to restrict air or blood flow by placing pressure on the neck and as a result death can occur from restricting a person's normal breathing or blood 106 The same risk concerns reflected in assault legislation exist in the flow. area of policing. 107 The danger of strangulation does not go away simply because the neck restraint is being used in the context of law enforcement.

Regardless of whether the intent to use a neck restraint is to harm a victim or the intent is to restrain a suspect for an arrest, the underlying risk of death from restricting oxygen and blood flow remain the same whether neck restraints are used within the civilian or the law enforcement population.

IV. RESPONSES TO POLICE USE OF CHOKEHOLDS Within the context of law enforcement, there have been judicial, legislative, and police department policy responses to the injury and death caused by the use of neck restraints. The judicial response involves the application of reasonableness to the use of neck restraints and the determination of the type of relief that is available to people who have been choked by police officers. For some states, the legislative response has been, and currently is, to create bans or limits upon the use of neck restraints by law enforcement. 10 8 Police departments that address the use of neck restraints across the country have varying approaches to neck restraints in their use of force policies.

A.

JudicialResponse: Reasonablenessand Chokeholds

A chokehold or neck restraint used by law enforcement to apprehend a person is a seizure under the Fourth Amendment and is therefore subject to the requirement of reasonableness. 10 9 Courts across the country have looked at the use of neck restraints by law enforcement and found the use to be 110 reasonable in some circumstances and unreasonable in others. When neck restraints are found to be unreasonable the courts are limited in the remedies that are available to people who have suffered injury or death. The 106. Reay & Eisele, supra note 77, at 255.

107. Wash. S. 5953-60, at 2.

108. See D.C. CODE § 5-125.01; see also NEV. REV. STAT. ANN. § 289.810.1(a)-(b) (LexisNexis 2008); see also TENN. CODE ANN. § 38-3-121 (2010).

109. See Graham v. Connor, 490 U.S. 386, 395 (1989); see supra Part I.A. for a discussion on the Supreme Court's standard of reasonableness.

110. See infra Part 1HI.

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limitation on judicial relief for unconstitutional uses of force by law enforcement is due to the Supreme Court's decision in City of Los Angeles v. Lyons.'1

1.

Supreme CourtLimitation on Injunctive Relief in City of Los Angeles v. Lyons

In Los Angeles v. Lyons, Adolph Lyons sought damages for the harm caused to his larynx from a chokehold used by police to detain him on a traffic stop, an injunction against the city to ban the use of neck restraints, and declaratory relief against the city to make the use of chokeholds, absent the threat of deadly force, aperse violation of constitutional rights.1 12 Adolph Lyons was placed in a chokehold by Los Angeles police during a traffic stop on October 6, 1976, which rendered him unconscious and caused damage to his larynx. 1 3 Mr. Lyons was pulled over due to a burned out tail light, told to exit his vehicle, slammed on the hood of the police car and when Mr. Lyons complained of pain, the officer put his forearm around his throat and began to choke him. 1 4 The chokehold was applied to Mr. Lyons until he blacked out."l5 When Mr. Lyons regained consciousness he was on the ground, gasping for air, spitting up blood and dirt, and had urinated and defecated on himself."16 After Mr. Lyons regained consciousness, police issued him a traffic citation and he was 7 released."l A preliminary injunction was ordered by the United States District Court for the Central District of California, "enjoining the use of both the carotid artery and bar arm holds under circumstances which do not threaten death or serious bodily injury." ' 1 8 The Ninth Circuit affirmed the district court's preliminary injunction forbidding police officers from using all types of chokeholds under circumstances that did not threaten serious bodily injury or death to the officer.' 19 The Ninth Circuit held that there was a "sufficient likelihood that Adolph Lyons would again be stopped and subjected to the unlawful use of force to constitute a case and controversy

111. See City of Los Angeles v. Lyons (Lyons fl), 461 U.S. 95, 105 (1983).

112. Id. at 97-98.

113. Id. 114. Id. at 114-15.

115. Id. at 115.

116. Id. 117. Id. 118. Id. at 100. The injunction also ordered improved training that would characterize chokehold use as deadly force and improved record-keeping of force incidents. Id. 119. Lyons v. City of Los Angeles (Lyons 1), 656 F.2d 417, 418 (9th Cir. 1981) (per curiam),

rev'd,461 U.S. 95 (1983).

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and to warrant the issuance of an injunction." 120 But, in a split five-to-four decision, the Supreme Court of the United States reversed the Court of standing to seek injunctive relief Appeals, holding that Mr. Lyons lacked 12 against the city's use of chokeholds. 1 a.

Lyons Majority

Around the time that the Supreme Court granted certiorari in Lyons, deaths resulting from the use of chokeholds in Los Angeles were continuing to occur on a consistent basis. 122 On May 6, 1982, the Chief of Police in Los Angeles prohibited the use of chokeholds under any circumstances, and on May 12, 1982, a six-month moratorium was placed upon the use of carotidartery holds except where deadly force was authorized. 12 The Court's majority opinion in Lyons, written by Justice White, and joined by Justices Burger, Powell, Rehnquist, and O'Connor, held that "the federal courts are without jurisdiction to entertain Lyons' claim for injunctive relief."1 24 The Court found that "a federal court may not entertain a claim by any or all that certain practices of law enforcement citizens who no more than assert ' 125 officers are unconstitutional."

The Court reasoned that Lyons had not met the threshold requirement of standing to assert a claim because he failed to allege an actual case or controversy with the city that would justify equitable relief. 126 The Court found that for Lyons to have "standing to seek the injunction requested depended on whether he was likely to suffer future injury from the use of chokeholds by police officers."' 127 The majority acknowledged that "Lyons may have been illegally choked by the police," which would give him a cause for damages against the officers, and possibly the city, but not the ability to seek an injunction on the future practices of Los Angeles police officers. 128 To establish an actual controversy Lyons would have had to show: (1) all police officers in Los Angeles always choke citizens for the purpose of arrest during questioning or issuance of a citation, or (2) that the

120. Lyons 11, 461 U.S. at 99.

121. Id. at 113 (instructing that while injunctive relief was not proper in this case, a civil action for deprivation of rights under Title 42 Section 1983 of the United States Code could succeed).

122. Id.at 100.

123. Id. 124. Id.at 101.

125. Id. at 11.

126. Id.at 105.

127. Id. 128. Id.

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city ordered or authorized police to act in such a manner. 129 Although Lyons had alleged that the city authorized the use of chokeholds in situations where deadly force was not merited, he failed to show how he continued to be threatened by the use of chokeholds. 130 The Court found that Lyons could not show that he was "realistically threatened by a repetition of his experience," that he would again be subjected to the use of chokeholds, and thus his assertion was speculative and conjectural, not sufficient to make out a federal claim for equitable relief.131 The Court noted in its conclusion that state courts did not need to impose the same standing and remedial requirements that govern federal courts, that individual states could permit the use of injunctive relief to oversee the conduct of state law enforcement agencies. 132 But, that "this is not the role of a federal court, absent far more ' 13 3 justification than Lyons has proffered in this case." b.

Lyons Dissent

In the Court's dissent, Justice Marshall, joined by Justices Brennan, Blackmun, and Stevens, criticized the majority for taking away the federal court's power to enjoin enforcement of the city of Los Angeles's policy regardless of how "flagrantly unconstitutional it may be." 13 4 Justice Marshall stated, We now learn that wrath and outrage cannot be translated into an order to cease the unconstitutional practice, but only an award of damages to those who are victimized by the practice and live to sue and to the survivors of those who are not so fortunate ... the federal judicial power is now limited to levying a toll for such a systematic 135 constitutional violation.

The dissent expressed that no one would be able to show they would be choked in the future, and therefore not even someone like Lyons who has nearly been choked to death would have standing to challenge the

129. Id. at 105-06. The Court found it "untenable to assert... that strangleholds are applied by the Los Angeles police to every citizen who is stopped or arrested regardless of the conduct of the person stopped." Id. at 108.

130. Id. at 106 n.7, 107.

131. Id. at 108-09 ("Lyons' lack of standing does not rest on the termination of the police practice but on the speculative nature of his claim that he will again experience injury as a result of the practice even if continued.").

132. Id. at 113.

133. Id. 134. Id. at 114 (Marshall, J., dissenting) (stating that there was a case and controversy regarding the constitutionality of the city's chokehold policy which was directly implicated by Mr. Lyons' damages claim).

135. Id. at 137.

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continuation of a use of force chokehold policy. 136 The dissent declared that "[t]he city is free to continue the policy indefinitely as long as it is willing to pay damages for the injuries and deaths that result" and that the majority's approach to standing was unprecedented and unwarranted. 137 The dissent further found that Lyons had established a case or controversy concerning the constitutionality of the city's policy because the constitutionality of the policy was implicated by his claim for damages, alleging that officers who used the chokehold on Lyons were carrying out an official policy. 138 Lyons was choked "without provocation pursuant to an unconstitutional city policy," thus Lyons had established injury from the policy itself and the risk of serious injury to other citizens, supporting the district court's grant of injunctive relief. 139 The dissent reasoned that standing depends on the plaintiff's personal stake in the outcome of the controversy, not on the precise nature of the relief sought.14 ° By not allowing Lyons standing to challenge the chokehold policy, the dissent stated that "[t]he Court's decision removes an entire class of constitutional violations from the equitable powers of a federal court."'14 ' By not allowing relief the Court effectively "immunizes from prospective equitable relief any policy that authorizes persistent deprivations of constitutional rights as long as no individual can establish with142substantial certainty that he will be injured, or injured again, in the future."'

An officer placed his forearm around Adolph Lyon's neck and against his throat, nearly choking him to death, pursuant to police policy that at that time authorized the use of chokeholds. 143 During the time of the Lyons case, the Court recorded that there had been no less than sixteen persons that had died due to the use of chokeholds by the Los Angeles Police Department. 144 It was also reported that Los Angeles Police Department officers used than any other means of physically restraining chokeholds more frequently 145 time. the at people

136. Id. at 113.

137. Id. 138. Id at 113-14.

139. Id. at 135-36.

140. Id at 114 (stating that Lyons had standing to challenge the city's chokehold policy and to obtain whatever relief a court may deem appropriate, because he has a "personal stake in the outcome" of the controversy (quoting Baker v. Carr, 369 U.S. 186, 204 (1962))). at 137.

141. Id. 142. Id. 143. See id. at 113, 115.

144. Id. at 115-16.

145. Id. at 116 (noting that officers applied chokeholds on at least 975 occasions, which made up three-quarters of the reported uses of force at the time).

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Injunctive Relief Denied: Deaths from Chokeholds After Lyons

The Supreme Court had the opportunity to address the reasonableness of chokeholds when it granted certiorari in Lyons. 146 The Court could have addressed this use of force on the merits and found that the use of chokeholds "where neither death nor serious bodily injury is threatened... [is] unconscionable in a civilized society, ' 147 that police officers "may not apply life threatening strangleholds to persons stopped in routine police work unless the application is necessary to prevent serious bodily harm to an officer., 148 But instead, the Court reversed the decision of the lower courts on the issue of standing49 in Lyons and did not address the constitutionality of neck restraints.

Since Lyons, courts have been constrained in their ability to address and remedy unconstitutional uses of chokeholds and other unconstitutional police practices. Shortly after police in Los Angeles choked Adolph Lyons, Bennie McQurter was choked and killed by officers in Atlanta, Georgia. 50 Officers brought a combative Bennie McQurter under control initially by using a chokehold until he could be handcuffed. 151 One officer continued to use the chokehold even after Mr. McQurter was handcuffed.1 52 In the court's analysis, it stated that neither officer could have reasonably believed that the "use of deadly force was necessary to prevent death or serious bodily injury to themselves or a third party" once Mr. McQurter was effectively restrained. 153 The court in McQurter noted that the officers had been trained in the chokehold, "a defensive tactic capable of causing death or serious bodily injury."' 5 4 In addition to damages, the plaintiff in McQurter sought an injunction against the Atlanta Bureau of Police Services, but pursuant to the Court's decision in Lyons, the injunction prohibiting the use of chokeholds was denied. 55 Once again a federal district court in the 1980's qualified the use of a chokehold as deadly force,

146. Id.at 99-100.

147. See id.at 99.

148. Lyons v. City of Los Angeles (Lyons 1), 656 F.2d 417, 418 (9th Cir. 1981) (per curiam), rev'd, 461 U.S. 95 (1983) ("This relatively innocuous interference by the judiciary with police practice can hardly be characterized as an abuse of discretion when the record reveals that nine suspects . . . who have been subdued by the use of carotid and bar arm control holds have subsequently died ...").

149. Lyons 1, 461 U.S. at 100.

150. McQurter v. City of Atlanta, Ga., 572 F. Supp. 1401, 1406-07 (N.D. Ga. 1983).

151. Id.at 1414.

152. Id. 153. Id. 154. Id.at 1418.

155. Id.at 1423.

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as the district court had done in Lyons, but the court was powerless to 15 6 enjoin and stop the use.

In 1992, Randolph Bennett died after he was detained by a California Highway Patrol (CHP) officer using a carotid neck restraint. 157 Randolph Bennett's son, Scott Nava, filed an action in the federal district court seeking damages and an injunction. 158 The Ninth Circuit in Nava stated: If we were unencumbered by controlling Supreme Court precedent, we might be inclined, as was the district court, to allow Nava access to federal courts on the basis of his damages claims and to uphold the entry of injunction in this case on the basis of the jury's finding that Nava's father was choked to death pursuant to CHP policy. We must, 59 however, follow the law as it is construed by the Supreme Court.

In Nava, the court found that there was a constitutional violation, and that there was substantial evidence that the carotid neck restraint authorized 160

by CHIP policy was deadly force.

The Lyons decision has done harm to the courts' ability to stop or deter the use of neck restraints by law enforcement. 161 The continued occurrences of deaths from use of neck restraints year after year beg the question: if Lyons had been decided differently could more deaths from neck restraints have been prevented? One can only wonder. Under Lyons, the federal courts remain powerless to enjoin state law enforcement policies and practices regardless of how unconstitutional they may be. 162 Since Lyons was decided in 1983, the lower courts have continued to deal with injuries and deaths caused by law enforcement use of neck restraints and police officers still continue to use them as a restraint technique.

2.

Post-Lyons: Decisions Holding Chokeholds to be Reasonable

Uses of chokeholds have been found to be reasonable by various courts under circumstances where the person being placed under arrest is actively resisting arrest by a police officer. 163 Courts have looked at the 156. Id. at 1415.

157. Nava v. City of Dublin, 121 F.3d 453, 454 (9th Cir. 1997), overruledon other grounds by Hodgers-Durgin v. de la Vina, 199 F.3d 1037 (9th Cir. 1999).

158. Id. 159. Id. at 460.

160. Id.at 454, 458.

161. See supra notes 149-59 and accompanying text; see also City of Los Angeles v. Lyons (Lyons II), 461 U.S. 95, 113 (noting that without sufficient justification, only state courts, not federal courts, are permitted to oversee the conduct of law enforcement authorities through the use

of injunctions).

162. Id. at 113 (Marshall, J., dissenting).

163. Gassner v. City of Garland, Tex., 864 F.2d 394, 400 (5th Cir. 1989), abrogatedon other grounds by Devenpeck v. Alford, 543 U.S. 146 (2004); see also Burdine v. Sandusky Cnty., Ohio,

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resistance of the suspect, both physical and verbal, the suspect's history of violent encounters with the police, and whether the chokehold caused injury as factors in determining the reasonableness of the force.

Courts have held that chokeholds were reasonable when there was resistance to arrest by the suspect and the injury to the suspect was minor.

In Crutcher v. Athens, the Northern District of Alabama, relying on precedent from the Eleventh Circuit Court,1 64 found that the use of a chokehold under the circumstances of active resistance from a suspect that results in minor, non-permanent injuries was reasonable. 165 In this case, an officer used a chokehold to put a suspect under arrest for driving with a revoked license and speeding. 166 The suspect was actively resisting arrest, cursing at the officer, and threatening the officer with future harm when the officer used a chokehold on the suspect, causing the suspect to pass out and sustain a muscle sprain to his neck.1 67 The court held that the use of the chokehold under these circumstances was reasonable and necessary, and the suspect only suffered minor injury.1 68 The court clarified that the chokehold was reasonable even if it was not considered a de miminis use of force; under these circumstances it still would have been reasonable force due to 69 the active resistance of the suspect.1 Courts have also found that the use of chokeholds were reasonable in circumstances of active resistance, even when the chokehold caused the death of the suspect. In 2000, James Thompson died following a struggle with police after leading them on a high-speed car chase, actively resisting arrest, being restrained with a chokehold, and dying "at least in part from

524 F. App'x 164, 167-68 (6th Cir. 2013) (finding the officer's conduct to be reasonable due to the active, violent resistance of the suspect); Eggleton v. Jackson, No. 09-CV-81292Dimitrouleas, 2011 WL 379186, at *12 (S.D. Fla. Jan. 13, 2011) (finding that using a chokehold to remove a suspect who was known to have an extensive criminal history and to be an escape risk constitutes a de minimis use of force and was insufficient to prevail on a Fourth Amendment claim of excessive force); Wasserman v. Bartholomew, 38 P.3d 1162, 1170 (Alaska 2002) (holding that officers' belief that the suspect might be armed and dangerous coupled with the suspects resistance to officers' attempts to control him rendered the officers' actions objectively reasonable).

164. Post v. City of Fort Lauderdale, 7 F.3d 1552, 1556, 1559 (11th Cir. 1993), modified per curiam, 14 F.3d 583 (1 1th Cir. 1994) (holding that officers were reasonable when they used a five second chokehold to detain a suspect who was known for violently resisting arrest in the past, was repeatedly defying the instructions of the officers, and threw his hands in the air, which officers interpreted as a further act of defiance).

165. Crutcher v. Athens Police Dep't, No. CV-10-S-1176-NE, 2014 WL 5521944, at *5 (N.D. Ala. Oct. 31, 2014).

166. Id. at *2 (finding that the suspect refused to sign the citations and began verbally threatening the police officer).

167. Id.at *5.

168. Id. 169. Id.

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[the] chokehold."' 17 Officers were attempting to stop Thompson in a high drug trafficking area for behavior consistent with drug trafficking when he sped away from officers and a car chase ensued. 171 Thompson crashed his car during the chase, exited his vehicle and began trying to fist fight two officers while they attempted to restrain him.17 2 As the two officers wrestled with Thompson and tried to handcuff him, a third officer arrived and placed his arm around Thompson's neck until the other officers were able to handcuff him. 173 Thompson continued to struggle with officers even after he was handcuffed. 174 It was then that Thompson complained of having trouble breathing. 175 Officers rolled him on his side to get air but he continued to complain that he was having trouble breathing and officers called for an ambulance. 176 Thompson had blood blocking his airway and was pronounced dead upon his arrival to the hospital.' 77 The Sixth Circuit Court affirmed the decision of the district court in Thompson, finding the use of the chokehold was reasonable due to the facts that the suspect attempted to on a high speed chase, crashed his car, then evade arrest, led officers 78 actively resisted arrest.1 In cases where chokehold use was found to be reasonable, the subject of the chokehold was actively resisting arrest when the chokehold was used 179 and usually the suspects had a background of violent resistance to arrest.

But, in the case of Tiandre Williams, out of the Southern District of Florida, the appellate court found that because there was no active resistance by Williams the use of the chokehold could be found unreasonable by a jury.iS° The district court had found that an officer's use of the "lateral vascular neck restraint" was reasonable when officers were approached by sixteenyear-old Tiandre Williams, whom officers knew to have a "temper problem," when they were attempting to arrest Williams' brother after a street fight. 181 The district court held that officer's application of the neck 170. Thompson v. City of Chicago, 472 F.3d 444, 446 (7th Cir. 2006).

171. Id. at 447.

172. Id. at 448.

173. Id. 174. Id. 175. Id. 176. Id. 177. Id. 178. Id. at 455, 458.

179. See, e.g., Post v. City of Fort Lauderdale, 7 F.3d 1552, 1559 (11th Cir. 1993), modified per curiam, 14 F.3d 583 (11th Cir. 1994); Watts v. Williams, No. Civ.A. 01-0284(RJL), 2006 WL 3734169, at *2 (D.D.C. Dec. 15, 2006).

180. Williams v. Miami-Dade Cnty. (Williams I1), 516 F. App'x 899, 900 (11th Cir. 2013) (per curiam).

181. Williams v. Miami-Dade Cnty. (Williams 1), 859 F. Supp. 2d 1297, 1300 (S.D. Fla. 2012), affd in part,rev'd in partper curiam, 516 F. App'x 899 (1 lth Cir. 2013) (reasoning that officers

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restraint on Williams was reasonable "in light of the tense and potentially dangerous situation surrounding [the officers], 182 and granted summary 183 judgment in favor of the officers.

However, on appeal the Eleventh Circuit Court concluded that if William's version of the events of that night were true, then a reasonable juror could conclude that the officer's use of the neck restraint on Williams was unreasonable. 184 Williams' account of the events was that officers "subjected him to a chokehold, which he contends caused him to have a seizure and pass out."'1 85 Officers had "previous contact with [Williams] and 186 believed [him] to have a temper problem," not a history of violent arrest.

Also, Williams was not physically resisting arrest. 187 He was "unarmed, holding his palms open and upward in a posture of supplication" when officers grabbed him and put him in a neck restraint.1 88 The Eleventh Circuit Court remanded the case back to the district court to determine 189 whether the officer's use of the neck restraint was reasonable or not.

Under the precedent for finding chokeholds reasonable it appears from the facts of Williams that the use of a neck restraint was unreasonable because the encounter with Williams lacked the factors of the suspect's active resistance and the suspect's violent history of encounters with the police which are typically relied upon by the courts to find reasonableness.

3.

Post-Lyons: DecisionsHolding Chokeholds to be Unreasonable

Courts have found chokeholds to be an unreasonable use of force when the crime that is the subject of the arrest is not serious, the suspect poses no threat to officers or others, and the suspect is not actively resisting arrest.

The Eleventh Circuit in Thornton v. Macon, found that the use of a chokehold was unreasonable when used upon suspects who: (1) did not commit a serious crime; (2) did not pose an imminent threat to anyone; and (3) were not actively resisting arrest.' 90 Officers arrived to a civil dispute acted reasonably in using a neck restraint on Williams because officers were being surrounded by a crowd of about 100 people, and Williams, who officers had previous encounters with, approached them asking why they were arresting his brother).

182. Id. at 1303.

183. Id. at 1304.

184. Williams 1I, 516 F. App'x at 900.

185. Id. 186. Williams I, 859 F. Supp. 2d at 1300.

187. Id. 188. Id. 189. Williams I, 516 F. App'x at 899.

190. Thornton v. City of Macon, 132 F.3d 1395, 1400 (11th Cir. 1998) (per curiam). This case is distinguished from the Eleventh Circuit decision in Post v. City of Ft. Lauderdale where the suspect verbally and physically resisted the directives of officers and had a history of violently

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19 between Thornton and Mullis who had previously lived together. ' Mullis wanted officers to go to Thornton's home, return his keys and to get 192 When officers persuaded Mullis's mattress from Thornton's home.

Thornton to open his screen door so he could take his keys, officers charged 193 into his home and one grabbed him around the neck. The court reasoned that the officers had no probable cause to arrest Thornton, and that there was no indication that Thornton had threatened Mullis or the officers with physical violence. 94 The court held the officers were not justified in using any force upon Thornton, and thus, the use of the chokehold was unreasonable. 195 The Fifth Circuit, in Williams v. Bramer, held that the chokehold used by the officer was in a manner that was excessive and objectively unreasonable. 96 Officers began using a chokehold against Williams when they were searching his mouth for contraband, after patting him down and searching his car. 197 Williams alleged that he was choked on two occasions by officers and while being choked he could not breathe, was unable to swallow, and became dizzy. 198 The court stated that the objective reasonableness of a chokehold depends on the suspect's level of resistance and in this case, because the resistance was minimal, the chokehold was unreasonable. 99 Texas courts "have found that the use of force against a suspect who is already physically restrained, or who is not actively resisting ' ° an officer's commands, is objectively unreasonable."

Similarly in the Sixth Circuit, in Griffith v. Coburn, the court held that people who pose no safety risk to officers should be free from unwarranted violence during arrest.2' In Griffith, Arthur Partee died during his arrest 20 2 when officers used a neck restraint to detain him. Partee was sitting on 20 3 his couch when officer's informed him that he had a traffic warrant.

resisting arrest. Post v. City of Fort Lauderdale, 7 F.3d 1552, 1559 (11th Cir. 1993), modifled per curiam, 14 F.3d 583 (1 lth Cir. 1994).

191. Thornton, 132 F.3d at1398.

192. Id 193. Id. 194. Id. at 1400.

195. Id. 196. Williams v. Bramer, 180 F.3d 699, 704 (5th Cir. 1999).

197. Id.at 701.

198. Id.at 702.

199. Id. at704.

200. See, e.g., Callaway v.City of Austin, No. A-15-CV-00103-SS, 2015 WL 4323174, at *13 (W.D.Tex. July 14, 2015).

201. Griffith v.Coburn, 473 F.3d 650, 659 (6th Cir. 2007).

202. Id.at 652.

203. Id.

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Partee ignored the officers but did not resist them. 20 4 The officers grabbed and struggled with Partee, pulled him to the ground, and placed him in a neck restraint.205 When the medics were called and arrived at Partee's home he was not breathing, had no pulse, and was pronounced dead at the hospital. 0 6 The court reasoned in Griffith that if a jury concluded the officer "used the neck restraint without an objectively reasonable belief that Partee posed a threat of serious bodily injury" that it was "obvious" that "no reasonable officer could believe that such [use of force] would not violate another's constitutional rights. 20 7 Additionally, the Ninth Circuit Court of Appeals has written a series of scathing opinions on the use of neck restraints by law enforcement. 20 8 The court's condemnation of neck restraints, post-Lyons, began in Nava v. City of Dublin, where the court stated that "the application of the carotid hold constitutes deadly force., 20 9 The Ninth Circuit spoke again in Drummond v.

City ofAnaheim, where the court held that under the circumstances of Brian Drummond's arrest, the use of a neck restraint was severe force and was constitutionally excessive.210 On March 26, 1999, Brian Drummond, a man with a history of mental illness, was detained by officers for his own safety, and after the officers used a neck restraint to detain him, fell into a coma and suffered brain damage that left him in a vegetative state. l l Officers had pressed weight upon Drummond's neck while ignoring him repeatedly telling them that he could not breathe.2 12 The court's analysis in Drummond, looked at whether the officer's conduct violated the Constitution by assessing: (1) the severe nature of the force applied, (2) the minimal need for force, and (3) by balancing the severe nature force against the minimal need for force.2 13 The Ninth Circuit classified the neck restraint as deadly force stating that, "although the officers in this case did not shoot or beat Drummond, the force allegedly employed was severe and, under the circumstances, capable of causing death or serious injury., 2 14 The court determined that the need for the force 204. Id. 205. Id. at 653.

206. Id.at 652.

207. Id at 660 (alterations in original) (emphasis added) (internal quotation marks omitted).

208. See Barnard v. Theobald, 721 F.3d 1069 (9th Cir. 2013); Drummond ex rel. Drummond v.

City of Anaheim, 343 F.3d 1052 (9th Cir. 2003); Nava v. City of Dublin, 121 F.3d 453 (9th Cir. 1997), overruled on other grounds by Hodgers-Durgin v. de la Vina, 199 F.3d 1037 (9th Cir. 1999).

209. Nava, 121 F.3d at 458; see supra notes 145-62 and accompanying text.

210. Drummond,343 F.3d at 1060.

211. Id.at 1054-55.

212. Id. 213. Id.at 1056-60.

214. Id.at 1056.

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did not exist because: (a) there was no underlying crime at issueDrummond was emotionally disturbed and potentially a danger to himself not others; (b) even if Drummond was a threat to himself or others, once he was handcuffed he was no longer a threat; and (c) once Drummond was on 15 the ground he was not resisting arrest, according to eyewitnesses.

The court further noted that Drummond had mental illness, which must 216 be a factor in determining the reasonableness of the force used. When balancing the use of the neck restraint against the minimal need for the force, the court found that "[o]nce on the ground, prone and handcuffed, Drummond did not resist the arresting officers .... Drummond was not sufficiently dangerous to others to warrant the use of the severe force applied. 2 17 Officers squeezed the breath from Drummond while he was on 218 the ground, handcuffed, pleading for air. The court found that the neck restraint used under these circumstances was a degree of force greater than 219 The court noted that the use of reasonable, and thus an unconstitutional. chokeholds is not only severe but "wholly unwarranted" and that this type of force "appears with unfortunate frequency in the reported decisions of and presumably occurs with even greater frequency on the federal 22courts, 0 the street.,

Again, on July 1, 2013, the Ninth Circuit delivered an opinion in Barnardv. Theobald regarding excessive force by law enforcement using a chokehold on Charles Barnard. 221 The analysis in Barnardstated that an officer's mistaken belief that the suspect was resisting is not relevant to 2 whether an officer's use of a chokehold was reasonable or not. Barnard sustained five collapsed cervical vertebrae after an officer used a chokehold to detain him. 223 While Barnard was obeying police officers' orders and handcuffed, one officer tripped and all three men fell down, with Barnard landing on top of one officer.224 Another officer came over to Barnard and put him in a chokehold, lifted him up and off of the ground, and flipped him 225 onto his hands and knees, at which point Barnard's legs went numb. The 215. Id. at 1057-58.

216. Id. at 1058 (explaining that tactics used against individuals who are emotionally disturbed are different from "those involved in law enforcement efforts to subdue an armed and dangerous criminal who has recently committed a serious offense." (quoting Doerle v. Rutherford, 272 F.3d 1272, 1282-83 (9th Cir. 2001))).

217. Id. at 1059.

218. Id. 219. Id. at 1059-60.

220. Id. at 1063.

221. Barnard v. Theobald, 721 F.3d 1069, 1072 (9th Cir. 2013).

222. Id. at 1076.

223. Id. at 1073.

224. Id. at 1072.

225. Id.

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Ninth Circuit affirmed the district court's finding that Barnard's resistance, or the perception of resistance, did not entitle the police to use any amount of force to restrain Barnard and thus the chokehold was unreasonable.226 The chokehold used by officers was found by a jury to be unreasonable even in light of the officer's mistaken belief that Barnard was resisting arrest. 227 The mistaken belief of the officer, whether with good or evil intention, is not relevant in the objective reasonableness analysis of the force used.228 Even though some circuit courts have found the use of neck restraints to be an unreasonable severe use of force, neck restraints and chokeholds are still used to detain suspects who give minimal or no resistance to law enforcement. People continue to get injured and some, like Eric Garner, die. 229 In 1983, the Supreme Court had an opportunity to classify chokeholds as deadly force and to allow federal courts to bar the use of neck restraints in Los Angeles through an injunction. 230 The ability of the federal courts to stop the use of neck restraints through injunctive relief came and went with the Supreme Court's decision in City of Los Angeles v.

23 1

Lyons.

The Court noted that while federal courts could not enjoin state law enforcement, absent more justification than the Court found in Lyons, "[tlhe individual States may permit their courts to use injunctions to oversee the conduct of law enforcement authorities on a continuing basis., 232 Some states have begun to respond to the use of chokeholds by enacting legislation prohibiting or limiting the use by law enforcement instead of seeking injunctive relief in the courts.

B.

Legislative Response: Ban or Limit Chokehold Use

Although majority of states have not addressed the use of chokeholds by law enforcement through legislation, there are some that have. Currently, there are a few states that have laws addressing law enforcement use of chokeholds.233 State legislative responses can be categorized into three 226. Id. at 1076. The Ninth Circuit similarly held in Werner v. City of Poulsbo that using a chokehold was unlawful and unreasonable when it was applied to the suspect before the suspect engaged in any conduct justifying the use of force. Werner v. City of Poulsbo, 548 F. App'x 381, 382 (9th Cir. 2013).

227. Barnard,721 F.3d at 1076.

228. Graham v. Connor, 490 U.S. 386, 397 (1989).

229. See discussion supra Part I (discussing Eric Garner's death in 2014).

230. See City of Los Angeles v. Lyons (Lyons II), 461 U.S. 95, 97-98 (1983).

231.Seeid. at 113.

232. Id. 233. D.C. CODE § 5-125.01 (2001); NEV. REV. STAT. ANN. § 289.810.1(a)-(b) (LexisNexis 2008); TENN. CODE ANN. § 38-3-121 (2010).

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types: (1) legislation restricting the use of chokeholds to situations that require the use of deadly force; (2) legislative limitations placed upon the use of certain types of neck restraints; and (3) total bans on the use of chokeholds.

1.

LegislationRestricting Chokeholds to the Use to Deadly Force

The first jurisdiction to enact legislation pertaining to law enforcement use of chokeholds was the District of Columbia on January 25, 1985. This legislation is called the "Limitation on the Use of the Chokehold Act of 1985."234 The intent of this legislation was to declare the "use of restraints generally known as chokeholds by law enforcement officers" as lethal force because "unrestricted use of force present[ed] an unnecessary danger to the ' The enactment of this legislature was in response to two deaths public."235 caused by the use of chokeholds and the Act served to "classify the chokehold as a service weapon., 236 The Act states that, The use of the trachea hold by any police officer shall be prohibited under any circumstances and the carotid artery hold shall be prohibited except under those circumstances and conditions under which the use of lethal force is necessa7r to protect the life of a .... civilian or a law enforcement officer The District of Columbia's Act is currently the only statute of its kind, but since the death of Eric Garner in 2014, other state legislatures have proposed bills similar to the D.C. statute attempting to limit the use of neck restraints to situations where deadly force is required. Colorado legislators proposed a bill that would prohibit the use of chokeholds unless the officer's life is in danger.238 Illinois legislators also introduced bills into both the house and senate that would prohibit the use of chokeholds by 2 39 police officers unless deadly force is justified.

Similarly, in New Jersey, State Assemblyman Charles Mainor proposed a bill that would classify chokeholds and carotid holds as deadly force. 240 Mr. Mainor served as a New Jersey police detective for twenty-five

234. D.C. CODE § 5-125.01.

235. Id. 236. Id. 237. Id.§ 5-125.03(a).

238. H.B. 15-1291, 70th Gen. Assemb., 1st Reg. Sess. (Colo. 2015).

239. H.B. 1394, 99th Gen. Assemb., Reg. Sess. (111.2015); S.B. 0065, 99th Gen. Assemb., Reg. 2015).

Sess. (Ill. 240. Assemb. No. 4081, 216th Leg. (N.J. 2015).

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years. 24 1 His intent in proposing this bill was to bring consistency to police policies addressing the use of neck restraints across all police departments throughout New Jersey.242 His proposed bill classified pressure on the throat, windpipe, or carotid artery which prevents the ability to breath or interferes with the flow of blood to the brain as deadly force.243 2.

Legislative Limitations on Certain Types of Neck Restraints

Tennessee enacted legislation that classifies and limits certain types of neck restraints. 244 This Tennessee legislation was enacted in 1994, and prohibits the use of chokeholds and other similar restraints "unless other methods of restraint are ineffective. 245 This legislation makes respiratory neck restraints a force of last resort but does not categorize the force as lethal or deadly. 246 Although while limiting the use of some neck restraints, the Tennessee legislation allows for other types of neck restraints by stating that, "[n]othing in this section shall be construed to prohibit the use of the 247 lateral vascular maneuver., Another state that has legislation that limits how and when law enforcement can use chokeholds is Nevada. Nevada legislation delegates the classification and training on use of chokeholds to the individual police agencies. 248 Nevada allows for the use of chokeholds only when the "agency employing the peace officer authorizes the use of the choke hold, 249 and when "the peace officer has successfully completed training in the proper use of the choke hold and holds [a] current certification., 250 The Nevada statute also mandates that the individual police agencies adopt a policy that determines whether or not the use of chokeholds is authorized.251 3.

LegislationPlacing a Total Ban on Use of Chokeholds

Hawaii legislators introduced a bill in 2015 that would place a total ban on law enforcement use of both respiratory and vascular neck restraints 241. See Mark Bonamo, Mainor Moving Forwardwith Choke Hold Bill, POLITICKERNJ (Feb. 6, 2015, 10:34 AM), http://politickemj.com/2015/02/mainor-moving-forward-with-choke-hold-

bill.

242. See id.

243. N.J. Assemb. No. 4081.

244. TENN. CODE ANN. § 38-3-121 (2010).

245. Id. 246. See id 247. Id. 248. NEV. REv. STAT. ANN. § 289.8 10.1(a)-(b) (LexisNexis 2008).

249. Id. § 289.810.1(a).

250. Id. § 289.810.1(b).

251. Id. § 289.810.3.

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as methods of force application. 5 2 The Hawaii bill, as proposed, bans the use of any type of neck restraint including pressure over the trachea, 253 compression of the carotid arteries, jugular veins, or the sides of the neck.

The bill's rationale for the banning of law enforcement use of neck restraints is that "respiratory ... and vascular neck restraints... sometimes used by law enforcement officers to restrain a person ... [are] a type of 2 54 This bill force [that] ha[ve] led to deaths of suspects around the nation.' reasons that the prohibition is necessary to safeguard the health of suspects by banning neck restraints as a method of force that officers may use to detain a person.2 55 A proposed New York bill takes banning the use of chokeholds further by proposing to criminalize the use of chokeholds by officers. The New York bill makes the use of chokeholds punishable as a crime for 256 The bill not only "obstruction of breathing or blood circulation." proposes to make obstruction of breathing or blood circulation a misdemeanor offense, but also proposes to aggravate the offense to a felony when a person "disregards any procedures banned by his or her employment and commits the crime of criminal obstruction of breathing or blood circulation., 257 The New York bill makes note of "evidence that the penalties for using a chokehold have resulted in little more than a loss of vacation time ... that the NYPD is either unable or unwilling to enforce its 258 The justification own employee manual" as justification for the bill. section of this bill emphasizes that "NYPD's ban on the use of chokeholds using this method to [was] not sufficient to prevent police officers from 259 restrain individuals whom they are trying to arrest.', The United States Congress also introduced a bill that proposed a total ban on the use of chokeholds. On April 28, 2015, this bill, called the "Excessive Use of Force Prevention Act," was introduced by New York Representative Hakeem Jeffries. 260 This proposed bill sought to amend 18

252. S.B. 185, 28th Leg., Reg. Sess. (Haw. 2015).

253. Id. 254. Id. 255. Id.

256. B. A10170, 2013-14 Gen. Assemb. (N.Y. 2014).

257. Id. 258. Id. 259. Id. (referring to the incident of the use of a chokehold that was in violation of NYPD policy that caused the death of Eric Garner in 2014).

260. Excessive Use of Force Prevention Act of 2015, H.R 2052, 114th Cong. (2015).

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U.S.C. § 242,261 to penalize "the application of any pressure to the throat or windpipe which may prevent or hinder breathing or reduce intake of air., 262 The flaw in the "Excessive Use of Force Prevention Act," and other legislation that proposes total bans and criminalization of the use of chokeholds, is that these laws would not allow officers the ability to use the chokehold as a valid use of deadly force even when they, or others, are faced with the risk of serious bodily injury or death.263 By putting a statutory ban on chokeholds, officers' actions would automatically be criminalized whether the officers' actions were reasonable or not. A total ban is an extreme response that is not practical in the context of policing where the use of lethal force is constitutionally reasonable under circumstances where officers are faced with imminent serious bodily injury or death. 264 Thus, legislation that limits the use of chokeholds to situations where deadly force is required are the more practical, and constitutionally sound, legislative attempts at addressing law enforcement use of neck restraints.

Legislation of neck restraints that categorizes and limits the use to situations where deadly force is required would be effective to bring some continuity in police practice and policy with regard to the use of neck restraints. Because police policy is different throughout the country, among the various states, and differs from one department to another, even within the same state, the public in one area of the country or state may be more susceptible to being choked by law enforcement than others.

C.

DepartmentalResponse: PolicePolicyfrom Departmentto Department

By looking at the use of force policy for some of the larger police departments in the United States one can get an idea of how police departments respond to the use of neck restraints through police policy.

Some police departments have their use of force policies, and others, available on the Internet for the public to see. There are other departments that make their policies viewable but with certain portions redacted, while others do not make their policies available to the public at all under exceptions to various state public information acts.

261. This federal statute criminalizes the willful deprivation of rights of persons by those acting "under the color of law." 18 U.S.C. § 242 (2012).

262. H.R. 2052.

263. See id.

264. See supra Part Il.B for a discussion of the circumstances under which the use of deadly force by law enforcement is reasonable under the Fourth Amendment.

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Publically UnavailablePolice Use of Force Policy

Police department's that make their use of force policies available online in full do so on their own initiative.165 Exceptions to public requests under freedom of information requests would likely exempt law enforcement from having to disclose their use of force policy.

266

The federal

Freedom of Information Act does not apply to state governments and thus each state will have its own laws governing disclosure of records held by government bodies such as police departments. 267 For example, under the Texas Public Information Act 26 8 there is an exception to the public's right of access to "information held by a law enforcement agency ...that deals with the detection, investigation, or prosecution of crime. 269 Specifically, Texas law enforcement agencies are not required to disclose detailed guidelines of their use of force policy. 270 The rationale for not disclosing police use of force policy is that "the release of the detailed guidelines would impair an officer's ability to arrest a suspect and would place individuals at an advantage in confrontations with police. 271 Even though public information request statutes may not require law enforcement to make use of force policies publically available, there are agencies nationwide that voluntarily make their policy manuals available in full online for public access.

265. See generally Memorandum for the Heads of Executive Departments and Agencies: Transparency and Open Government, 74 Fed. Reg. 4685 (Jan. 21, 2009), available at http://www.gpo.gov/fdsys/pkg/FR-2009-01-26/pdf/E9-1777.pdf. This memorandum issued by President Barack Obama focused on encouraging government agencies to commit to publishing information on its own initiative, rather than on government responses to public information requests. Id. 266. See Memorandum for Heads of Executive Departmentsand Agencies, OFF. ATT'Y GEN. 1 (Mar. 19, 2009), http://www.justice.gov/sites/default/files/ag/legacy/2009/06/24/foia-memomarch2009.pdf ("The [Freedom of Information] Act provides exemptions to protect, for example, national security, personal privacy, privileged records, and law enforcement interests.").

267. The Freedom of Information Act: A User's Guide, FREEDOM INFO. CLEARINGHOUSE (Nov. 2005), http://www.citizen.org/documents/FOLABrochureWEB.pdf (referring to 5 U.S.C. § 552 (West 2012) as "the Freedom of Information Act").

268. TEX.GOv'T CODE ANN. § 552.001 (West 2012).

269. Id.§ 552.108.

270. Public Information Handbook 2014, OFF. ATT'Y GEN. TEX. 98 (2014), https://www.texasattomeygeneral.gov/files/og/publicinfo hb.pdf.

271. Id. ("[D]etailed guidelines regarding a police department's use of force policy may be withheld, but not those portions of the procedures that restate generally known common-law rules, constitutional limitations, or Penal Code provisions; the release of the detailed guidelines would impair an officer's ability to arrest a suspect and would place individuals at an advantage in available at (citing Tex. Att'y Gen. OR1989-531, confrontations with police." http://www.texasattomeygeneral.gov/opinions/openrecords/47mattox/ord/1989/htm/ord19890531.

txt)).

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Use of Force Policiesthat Are Disclosed

Typically, police departments will set forth police procedure in the form of policy manuals or operating procedures. Use of force policies will vary from department to department depending on how that particular state or police department views the use of neck restraints as force. Police departments across the nation address the use of chokeholds or neck restraints as varying levels of force. Chokeholds are typically distinguished from other "types" of neck restraints by departments that continue to allow the use of some form of neck restraint by officers.2 72 According to a 2007 survey, forty-six percent of police departments serving populations of one million or more people authorized some form of hold or neck restraint.273 a.

Sample of Department Policy Not Mentioning Chokehold Use

There are some law enforcement agencies that do not mention chokeholds or neck restraints in their use of force policies. By remaining silent on the categorization of this type of force it is not discernable whether or not the particular department prohibits or condones the use. Silence also begs the question as to whether an officer would be punished for using a neck restraint and causing harm to a person within these police departments who do not address the use in policy.

For example, the Austin Police Department in Texas does not address the use of neck restraints, but does address the use of pain compliance techniques stating that these techniques should be "discontinued once the officer determines that compliance has been achieved or other more appropriate alternatives can reasonably be utilized., 274 Austin Police Department policy does not define what is specifically considered a pain compliance technique. 275 As a general note, neck restraints could be categorized as pain compliance techniques.276 Because the Austin Police

272. Id. 273. Bureau of Justice Statistics, Local Police Departments, 2007, U.S. DEP'T JUST. 38 (Dec. 2010), http://www.bjs.gov/content/pub/pdf/lpd07.pdf.

274. Austin PoliceDepartmentPolicy Manual, AUSTIN POLICE DEP'T § 206.6(b), at 61 (June 1, 2013), http://austintexas.gov/sites/default/files/files/Police/APDPolicy.2013-2 Effective_6-1 2013.pdf.

275. See id.(stating when pain compliance techniques could be used by officer, but not specifying what types of pain compliance techniques are authorized to be used).

276. Generally, neck restraints could be considered pain compliance techniques. Personal Protections Systems defines one type of neck restraint, the bar-arm hold, as a pain compliance technique, stating that "[tjhe intent of a bar-arm choke is to achieve subject control through either: 1. Pain compliance: when pressure is applied directly to the trachea, extreme pain is exhibited, or experienced, or; 2. Closure of the airway, which induces unconsciousness through suffocation."

Neck Restraints As a Use of Force, PERS. PROTECTION SYS. INC. 4,

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Department does not mention neck restraints in its policy, it cannot be discerned if this method of force is prohibited or not.

The Los Angeles Police Department also does not discuss the use of neck restraints in the policy manual that is available online to the public, but has been quoted in the media as stating that it forbids chokeholds, but allows officers to use carotid neck restraints in situations requiring deadly force. 277 Likewise, the Miami-Dade Police Department does not specifically address the use of neck restraints in its publically available Law Enforcement Handbook. 278 Because a law enforcement agency either does not mention neck restraints at all in a use of force policy, or lists types of force such as pain compliance but does not define the acceptable types of pain compliance, it can be difficult for the public and for officers to know whether neck restraints are authorized as a proper use of force by that agency. b.

Sample of Department Policy Prohibiting or Limiting Chokehold Use

There are police departments across the country that limit the use of various types of neck restraints to situations where the use of deadly force is necessary. 279 The Cincinnati Police Department classifies "[a]ll uses of a carotid" chokehold to be a use of deadly and serious force. 280 The Denver Police Department also limits the use of the carotid compression technique http://www.personalprotectionsystems.ca/books/articles/neck-restraints

as a useof.pdf

(last

visited Feb. 12, 2016).

277. Javier Panzar, Police Wrestle with Definition of Chokehold, L.A. TIMES (Dec. 9, 2014, 8:15 PM), http://www.latimes.com/nation/la-na-chokehold-20141210-story.html; Kaveh Waddell, Why Many Large Police Departments Tolerate Their Officers Using Neck Holds, NAT'L J. (Dec. 10, 2014), http://www.nationaljournal.com/congress/2014/12/10/why-many-large-policedepartments-tolerate-their-officers-using-neck-holds.

278. See 2014 Florida Law Enforcement Handbook: Miami-Dade County Edition, MIAMIDADE POLICE DEP'T (2014), http://www.miamidade.gov/police/library/mdpd-handbook.pdf.

279. In addition to those listed in this section, there are other police departments that limit neck restraints to deadly force. For example, El Paso County Sheriffs department in Colorado also categorizes neck restraints as a use of deadly force. Policy and Procedure Manual: Policy 501, EL PASO COUNTY SHERIFF'S OFF. 1 (Mar. 12, 2015),

http://shr.elpasoco.com/sites/default/files/assets/Documents/Policy/500/501Use of Force.pdf.

The Madison Police Department in Wisconsin states that "blocking or restricting the carotid neck arteries creates a substantial likelihood of death or great bodily harm and is therefore considered deadly force." Madison Police Policy Manual, MADISON POLICE DEP'T § 6-100, at 133,

http://mavweb.mnsu.edu/robbiml/madison.pdf (last visited Feb. 12, 2016). The Peoria Police Department, near Phoenix, Arizona, limits use of "carotid neck restraint or other types of neck restraints" to situations involving deadly force. Policy and ProcedureManual: Policy 1.03, PEORIA POLICE DEP'T pt.

V, at 4,

http://www.peoriaaz.gov/PoliceDepartment/administration/docs/policymanual/l.03_UseForce_G eneralPolicyReporting.pdf (last updated Mar. 12, 2007).

280. CincinnatiPolice Department ProcedureManual, CINCINNATI POLICE DEP'T § 12.545, at

9 (May 14, 2015), http://www.cincinnati-oh.gov/police/assets/File/Procedures/12545.pdf.

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to situations rising to a level of an "[a]ggravated [a]ctive [a]ggression[d]eadly force encounter., 281 The Denver Police Department further limits the use of the carotid compression technique by only allowing officers who receive training from the Denver Police Department on the technique to use it. 282 This policy further emphasizes that officers should be "mindful not to apply direct pressure to either the front of the throat, back of the neck or head area either through compounded body weight, or direct pressure... [as] application of such pressure can cause unintended serious bodily injury or even death. 283 There are police departments that go beyond just limiting carotid restraints and chokeholds and categorize all types of neck restraints as the use of deadly force. The Seattle Police Department policy states that, "[o]fficers may only use neck and carotid restraints when deadly force is justified., 28 4 The New Orleans Police Department (NOPD) use of force policy restricts the use of all types of neck restraints, qualifying them as lethal force.285 The NOPD policy is clear in its restriction by naming the types of neck restraints and categorizing them all together as neck holds.

The NOPD defines neck holds to include arm-bar control holds, carotid restraint holds, lateral vascular neck constraint, and holds where officers use a knee or another object to the back of a prone suspect's neck.286 The policy declares that, "[a] neck hold shall be considered lethal force. 287 Short of banning the use of neck restraints entirely, the District of Columbia, Metropolitan Police policy limits neck restraints as a last resort of deadly force. The Metropolitan Police General Order states, "[m]embers shall not employ any form of neck restraint except when an imminent threat of death or serious bodily injury exists, and no other option is available. 288

281. Denver Police Department OperationsManual, DENVER POLICE DEP'T § 2-15, at 105-15, http://www.denvergov.org/portals/720/documents/operationsmanual/105.pdf.

282. Id. 283. Id. 284. Seattle Police Department Manual, SEATTLE POLICE DEP'T § 8.300-POL-10 (Sept. 1, 2015), http://www.seattle.gov/police-manual/title-8---use-of-force/8300--use-of-forcetools#Neck%20and%2OCarotid%20Restraints.

285. Policy Manual, NEW ORLEANS POLICE DEP'T § 300.1.1, at 97 (Sept. 15, 2013), http://nola.gov/nopd/publications/documents/new-orleans-police-department-policy-manual-20 14-

1.

286. Id. 287. Id. 288. General Order GO-RAR-901.07: Use of Force, D.C. METROPOLITAN POLICE 8 (Oct. 7, 2002), https://go.mpdconline.com/GO/GO_901_07.pdf.

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Sample of Department Policy Allowing Chokehold Use

Though there are police departments that expressly categorize neck restraints as deadly force and limit their use as such, there are other police departments that allow their use and do not consider it to be deadly force.

Many of the police departments that allow the use of neck restraints will distinguish neck restraints from chokeholds. The Chicago Police Department categorizes chokeholds as "[a]ctions ... likely [to] cause death or serious physical injury. ' ,289 It further defines chokeholds as direct pressure to the trachea or windpipe with intention of reducing the intake of air, and declares, "[c]hokeholds are only justified as a use of deadly force.,, 290 But, the policy distinguishes chokeholds from "[h]olding and control techniques involving contact with the neck.., not intended to reduce the intake of air,",291 thus allowing for some types of neck restraints to be used.

Las Vegas Police Department allows the use of the "Lateral Vascular Neck Restraint®" (LVNR) defining it as "a specific method of applying pressure onto the side of a subject's neck to overcome resistance and allow for safe control," to be used only according to department policy and training certification. 292 The policy describes the LVNR as "a control technique in which the carotid arteries on the sides of the neck are compressed, restricting blood flow to the brain, causing the subject to pass out. '293 The Las Vegas Police Department prohibits the use of "any other

arm bar technique that involves a neck restraint., 294 Their policy categorizes this neck restraint as a low to intermediate level of force.295 Like the Las Vegas Police Department, the Honolulu Police Department also categorizes neck restraints as an intermediate use of force.

The Honolulu Police Department groups vascular neck restraints with intermediate weapons and conducted electrical weapons (i.e. the TASER®).2 96 The Honolulu Police Department calls the vascular neck restraint a "submission hold., 297 The qualification is that officers are only 289. General Order G03-02-02: Force Options, CHI. POLICE DEP'T 4 (Mar. 11, 2015), http://directives.chicagopolice.org/lt2015/data/a7a57be2-128ff3f0-ae912-90011d970b87782d543f.html.

290. Id. 291. Id. 292. General Order GO-005-14: Use of Force, LAS VEGAS METROPOLITAN POLICE DEP'T 4 (Jan. 29, 2014), http://www.lvmpd.com/Portals/0/OIO/GO-005-14_Use of Force.pdf.

293. Id. at 23.

294. Id. 295. Id. 296. Policy No. 1.04: Use of Force, HONOLULU POLICE DEP'T 6 (Apr. 24, 2015), http://www.honolulupd.org/information/pdfs/UseofForce-05-01-2015-08-05-48.pdf.

297. Id.

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allowed to use vascular neck restraints after completing department training. 298 The section in this policy, dated April 24, 2015, is available online except that the section detailing vascular neck restraints is redacted pursuant to the government records exception to Hawaii's Uniform Information Practices Act.299 Although allowed by police policy, legislators in Hawaii proposed a Senate Bill that would prohibit the use of respiratory neck restraints and vascular neck restraints entirely in Hawaii. 300 Despite the controversy surrounding deaths caused by the use of chokeholds in Los Angeles in the late 1970's and early 1980's during the time that the Supreme Court decided City of Los Angeles v. Lyons, 30 1 the Los Angeles County Sheriffs Department still allows the use of carotid neck restraints.3 °2 The Sheriffs Department while permitting the use, does acknowledge the risk associated with the use of neck restraints by mandating that the suspect must be transported to a medical facility and treated by medical staff when an officer uses any kind of30 3neck or throat restraint, even if the use does not result in unconsciousness.

Notwithstanding the Ninth Circuit Court's expressed disdain regarding the use of neck restraints 30 4 and lawsuits surrounding the use of neck restraints, police departments in California, including the Los Angeles County Sheriff s Department, continue to also allow neck restraint use. The San Diego Police Department's Use of Force Matrix authorizes the use of a carotid neck restraint when the officer is faced with active resistance behavior.30 5 This force matrix classifies the carotid neck restraint as a "greater controlling force," the same category as chemical agents, takedown pressure point techniques, and conducted electrical weapons. 3°6 Thus, in San Diego, police use of a carotid neck restraint is not deadly force, but rather some form of intermediate use of force, despite the Ninth Circuit's categorization of carotid neck restraints as deadly force.30 7 In Northern California, the San Francisco Police Department states that "choking by means of pressure on a subject's trachea is a prohibited practice" but "rendering a subject unconscious by applying pressure to the

298. Id. 299. HAw. REV. STAT. ANN. § 92F-13(3) (LexisNexis 2012).

300. See supra note 252.

301. See supra note 122 and accompanying text.

302. Use of Force Policy, L.A. COUNTY SHERIFF'S DEP'T § 3-10, at 17, 50, 61, http://shq.lasdnews.net/content/uoa/EPC/force-policy.pdf (last visited Feb. 12, 2016).

303. Id. at 17.

304. See supra notes 208-26 and accompanying text.

305. Policy No. 1.04 - Admin: Procedural Change, SAN DIEGO POLICE DEP'T 8, http://www.sandiego.gov/police/pdf/forattach.pdf (last visited Feb. 12, 2016).

306. Id. 307. See supra note 209, 214 and accompanying text.

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carotid artery is permissible... when lesser types of restraint would be ineffective. 3 °8 But, San Francisco does emphasize that the carotid hold is acceptable only when "the officer is physically attacked, to stop physical attack on another person, or when a lesser use of force has already been attempted and found to be ineffective. 3 °9 San Francisco also admonishes officers to use a liquid chemical agent (i.e. 'pepper spray') rather than 3 10 batons or carotid restraint when it is practical for the officer to do so. San Francisco policy has a long description of when and how to use a carotid restraint. The policy qualifies the restraint "when properly applied, [as] a very effective means of subduing violent subject[s]; however, caution must be used in its application., 311 The San Francisco policy directs that officers who use the carotid hold "must attempt to ensure the hold does not slip into a bar arm trachea choke. 31 2 Officers who use the carotid hold must "monitor the subject's vital signs closely," call paramedics immediately if the person has lost consciousness, and in all cases must have the subject medically evaluated as well as inform the jail on the booking form that a carotid restraint was used.313 Although the San Francisco police policy allows the use of the carotid hold, it seems that it is not a preferred method of restraint as the department uses a great amount of cautionary language surrounding its use and expresses an explicit preference that other types of force be used instead of it. 314 This policy reads as if San Francisco wants to prohibit the use of the carotid hold except as a use of deadly force, but does not do so expressly.

By looking at the various police department policies on neck restraints it is clear that there is a need for uniformity regarding the use and classification of neck restraints in law enforcement. The use should not differ from department to department, city to city, and state to state. If neck restraints are not a reasonable force option for one police department then they should not be reasonable for another police department in a different geographic context. The limitation on the effectiveness of police department policy response to the use of neck restraints is illustrated by the fact that there are differences in the use of neck restraints and the categorization of the level of force that these are qualified as across the country.

308. General Order 5.01: Use of Force, S.F. POLICE DEP'T 4 (Oct. 4, 1995), http://sfpolice.org/Modules/ShowDocument.aspx?documentid=14790.

309. Id.at6.

310. Id.at5.

311. Id. at 6.

312. Id. 313. Id. 314. Id.

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LIMITATIONS OF EFFECTIVENESS OF CURRENT RESPONSES TO POLICE USE OF CHOKEHOLDS

Current judicial, legislative, and police policy responses have had limitations in effectuating change in the area of neck restraint use by law enforcement. The judiciary is limited in effectiveness because it cannot enjoin what may be considered unconstitutional police practices.

Legislative and police policy attempts to address neck restraint use in law enforcement are limited in scope and have not taken a consistent stance.

Even when police departments, or the legislature, ban the use of respiratory chokeholds, some still authorize the use of different types of holds such as the carotid hold and other types of vascular neck restraints. As discussed in Part II of this Comment, a vascular neck restraint may easily become a respiratory chokehold in the context of policing.3 15 Ultimately, all types of neck restraints should receive formal classification as a use of deadly force.3 16 This deadly force classification responsibility cannot rest solely upon police departments. There are limits to the effectiveness of department policy and procedures alone. Even when the use of chokeholds is prohibited by police department policy, chokeholds are still used in situations where officers are not threatened with serious bodily injury or death, as demonstrated by the Eric Gamer incident in 2014.

A.

Limitations of the DepartmentalResponse

Even when a police department policy exists that prohibits chokeholds, this type of force has still been used. The incident with Eric Garner highlighted the ineffectiveness of police policy to control the use of chokeholds. The New York City Police Department (NYPD) limited the use of chokeholds since 1985, qualifying them as "potentially lethal and unnecessary, ' '3 17 only to be used if the officer or another person's life is in danger.318 In 1993, NYPD banned the use of chokeholds entirely following the in-custody death of Frederico Pereira.319 In 1993, former police 315. See supra Part II. 316. Fyfe, supra note 23, at 67.

317. Interim Order No. 29, N.Y.C. POLICE DEP'T (Apr. 23, 1985), https://www.prisonlegalnews.org/media/publications/nyc-police-dept-taserinterim-order-2008. pdf.

318. Lancman & Pearlstein, supra note 100, at 252 (discussing the April 23, 1985 NYPD Interim Order No. 29 issued by police commissioner Benjamin Ward).

319. In 1991, Frederico Pereira was choked by a New York police officer while being detained as a suspect in a car theft and died in police custody. Ian Fisher, Kelly Bans Choke Holds by Officers, N.Y. TtIES, Nov. 24, 1993, http://www.nytimes.com/1993/ll/24/nyregion/kelly-banschoke-holds-by-officers.html. One of the officers in the arrest of Pereira was tried for criminally negligent homicide, but was acquitted in 1992. Id.

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commissioner John F. Timoney of the New York Police Department, when asked about the NYPD's chokehold ban, did not distinguish between any types of neck restraints but plainly stated, "[b]asically, stay the hell away from the neck. 3 20 Even with a complete ban on chokeholds by police policy in New York, the use of such force did not stop and deaths still occurred.

On December 22, 1994, while playing football in the street, Anthony 32 Baez was put in a chokehold by then-officer Francis Livoti. ' Anthony Baez was choked to death while his father pleaded with the officer to stop choking his son.322 A district court trial jury convicted Livoti of 323 manslaughter and several civil rights violations. Livoti was aware at the time he choked Baez that NYPD prohibited the use of chokeholds and had 324 trained officers on the danger of their use. Livoti "not only disregarded a '325 The known risk, he also flouted direct orders and department policy. court looked at various factors, namely that: Livoti created the violent situation that led to Baez's death, he lacked probable cause to arrest Baez for any offense, and Livoti was aware of the policy regulations prohibiting chokeholds.32 6 Notwithstanding NYPD policy, Eric Garner was killed by a chokehold, however the punishment for the officer was much less than what resulted in Livoti.32 7 Unlike Livoti, the officer that choked Eric Garner was not indicted on criminal charges by a grand jury and was still employed by the NYPD after the incident. 328 Punishment for violation of NYPD policy "can be: a warning and admonishment, loss of vacation days, suspension without pay, 329 It is evident from a a dismissal probation, or termination from NYPD. look at the history of NYPD's chokehold ban, coupled with incidents of 320.

321.

322.

323.

324.

325.

326.

327.

TIMES,

Id.(discussing NYPD's categorical ban on the use of chokeholds in 1993).

United States v. Livoti, 196 F.3d 322, 324 (2d Cir. 1999).

Id.at 325.

Id. Id.at 329.

Id. Id. J. David Goodman, Eric Garner Case Is Settled by New York City for $5.9 Million, N.Y. July 13, 2015, http://www.nytimes.com/2015/07/14/nyregion/eric-gamer-case-is-settled-

by-new-york-city-for-5-9-million.html.

328. The officer that used a chokehold on Eric Garner is still employed by NYPD working a desk job. Margaret Hartmann, Officer Who Put Eric Garnerin FatalChoke Hold Would Like His AM), 1:26 2015, 13, (July NYMAG.COM Back, Job Old http://nymag.com/daily/intelligencer/2015/07/offcer-in-eric-garner-case-wants-old-job-back.html.

329. A Mutated Rule: Lack of Enforcement in the Face of Persistent Chokehold Complaints in (2014), 59 BOARD REv. COMPLAINT CIVILIAN City, N.Y.C. York New http://www.nyc.gov/html/ccrb/downloads/pdf/Chokehold%20Study_20141007.pdf ("The Police Commissioner retains the authority under all circumstances to decide the level and degree of discipline.").

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chokehold deaths, that police policy alone is not enough to stop the use of chokeholds by police officers. The New York Citizen Complaint Review Board found that "there was a systemic failure of the NYPD disciplinary process which resulted from the failure to define properly chokehold cases which, in turn, resulted in virtually total failure to discipline chokehold violations., 330 Between 2009 and 2013, the New York Citizen Complaint Review Board received over 1,000 chokehold complaints, fully investigated 462, and found the claims to be substantiated in nine of the complaints.3 3' Of the nine complaints where the unlawful use of a chokehold was found, 332 the most serious punishment for the officers was a loss of vacation days.

The use of department policy is generally limited to internal police department punishment and job evaluation.3 33 Police policy is not a determining factor for the judiciary in determining whether or not the use of force would be reasonable under the Constitution. 334 "The violation of police regulations or even state law is completely immaterial as to the question of whether a violation of the federal constitution has been established. 33 5 Department policy does serve to inform officers of the risks associated with certain forms of force but alone does not determine whether the force is reasonable.33 6 In Whren v. United States, the Supreme Court addressed the use of police policy manuals in evaluating reasonableness under the Fourth Amendment.337 The Court found that because police policy and procedure varies from "place to place and from time to time," it is not a reliable gauge by which to measure a police officer's conduct under the Fourth Amendment.3 38 Courts could consider police policy in their analysis of a use of force, but it is not dispositive on the issue of reasonableness.339

330. Id. at 57.

331. Lancman & Pearlstein, supra note 100, at 253.

332. Id. 333. See Thompson v. City of Chicago, 472 F.3d 444, 454 (7th Cir. 2006).

334. See Graham v. Connor, 490 U.S. 386, 396 (1989) (listing factors to determine whether a seizure is reasonable such as severity of the crime at issue, whether the suspect poses an immediate threat, and whether the suspect is actively resisting).

335. Thompson, 472 F.3d at 454.

336. See United States v. Livoti, 196 F.3d 322, 329 (2d. Cir. 1999).

337. Whren v. United States, 517 U.S. 806, 815 (1996).

338. Id. 339. Drummond ex rel. Drummond v. City of Anaheim, 343 F.3d 1052, 1059 (9th Cir. 2003) ("[Tiraining materials are not dispositive .... '[I]t may be difficult to conclude that the officers acted reasonably if they performed an action that had been banned by their department . (quoting Gutierrez v. City of San Antonio, 139 F.3d 441,449 (5th Cir. 1998))).

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Limitations of the Legislative Response

Similar to the limitation of the effectiveness of department policy is that of the limitations of legislation. First, each state would need to adopt its own law through the legislative process. Once a law is passed, each state's 3 40 could be different. law regarding neck restraint use by law enforcement Thus, the situation is presented that some people in the United States could lawfully be choked by police officers, and in other states it would be unlawful. Also, once a law passes through the legislature, the governor of 341 the state or mayor of the city could ultimately veto the law. For example, Mayor De Blasio of New York City promised to veto the City Council bill that proposed to criminalize the use of chokeholds by police officers if the bill came across his desk.342 C.

Limitations of the JudicialResponse

The inability of federal courts to enjoin law enforcement agencies when practices and procedures are found to be unconstitutional limits the overall effectiveness of judicial remedies for chokeholds. Experience has 34 3 borne out the truth of Justice Marshall's statement in his Lyons dissent.

His frustration was that the only remedy that available to people who suffered from neck restraint use by law enforcement would be monetary damages. 34 Justice Marshall stated that, without the availability of injunctive relief for people subjected to unconstitutional force by law enforcement, there only exists an "award of damages to those who are victimized by the practice and live to sue and to the survivors of those who are not so fortunate. 34 5 Even after all of the death cases involving neck restraints, people are still being choked and damages are being paid absent a possible remedy of injunctive relief against the police practice of using neck restraints. For example, during the time that City of Los Angeles v. Lyons was being decided by the Court, another man named James Mincey, Jr. was choked by

340. See supra Part III.B. 341. Every state constitution empowers the executive branch to veto bills passed by the legislature. Separation of Powers-Executive Veto Powers, NAT'L CONF. STATE LEGISLATURES, http://www.ncsl.org/research/about-state-legislatures/separation-of-powers-executive-veto-

powers.aspx (last visited Feb. 12, 2016).

342. J. David Goodman, Mayor de Blasio Vows to Veto Chokehold Bill, N.Y. TIMES, Jan. 13, http://www.nytimes.com/2015/01/14/nyregion/mayor-de-blasio-vows-to-veto-chokehold2015,

bill.html.

343. See supra Part III.A. 1.b.

344. City of Los Angeles v. Lyons (Lyons fl), 461 U.S. 95, 137 (1983).

345. Id.

442

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Los Angeles police and his family brought suit for his chokehold death. 34 After a long lawsuit, Mincey's father received $450,000 and an additional $1.1 million went to four other relatives.347 In 2011 in Las Vegas, Dustin Boone died after an officer put him in a "lateral vascular neck restraint," and he lost consciousness and stopped breathing. 348 The Las Vegas Metro Police Department paid $1 million to the surviving family of Dustin Boone. 349 The family members of Anthony Baez were awarded $2.94 million for his chokehold death case in New York.350 The dissent in City of Los Angeles v. Lyons was correct in saying a "city is free to continue the policy indefmitely as long as it is willing to pay damages for the injuries and deaths that result."'35' Years after the death of Baez in New York, Eric Garner's family received a settlement of $5.9 million in their wrongful death claim against the City of New York for Eric Gamer's 2014 chokehold death."' Even though damages are assessed in these cases, neck restraints are still used by law enforcement. Thus, damages alone have not been a sufficient deterrent to the use of neck restraints by law enforcement and the deaths resulting therefrom.

VI. PROPOSED ACTION

Deterrence against the use of neck restraints by law enforcement can be accomplished through a uniform stance with regard to the permissibility of their use. Without a consistent stance on what level of force neck restraints are, their use will continue. As neck restraint use proceeds, people will continue to be unnecessarily injured and die from neck restraint use.

Because neck restraints pose a substantial and unpredictable risk of death, the only proper force categorization for them is deadly force.353 The use of neck restraints by law enforcement has been under scrutiny since City of Los Angeles v. Lyons, and controversy continues regarding the use of neck restraints as the issue resurfaced again on a national level after the death of 346. James Rainey, FinalSuit over LAPD's Use of Chokehold Settled, L.A. TIMES, Sept. 29, 1993, http://articles.latimes.com/1993-09-29/local/me-40159_1jolice-officer (discussing the death of James Mincey, Jr. who was the sixteenth chokehold death in Los Angeles over the seven years that the Lyons Icase was being litigated).

347. Id. 348. AELE Civil Liability Pt. 1,supranote 81, at 107.

349. Id.

350. Id.at 104.

351. City of Los Angeles v. Lyons (Lyons 11),461 U.S. 95, 114 (1983)

(Marshall, J.,

dissenting).

352. Goodman, supranote 327.

353. See Lyons 11, 461 U.S. at 117 n.7 (Marshall, J., dissenting) (quoting Appellate Record at 364-67) (describing the reasons that neck restraints are "extremely dangerous in an unpredictable fashion").

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Eric Garner in 2014. As people die from the use of neck restraints, there is still no consensus regarding when neck restraints should and should not be used. If the judiciary, legislature, and police departments across the nation would declare that all types of neck restraints are categorically a use of deadly force, this would establish a uniform stance on this force technique that has been a subject of controversy all over the nation since the late 1970s and early 1980s.

First, judicially, and if enacted legislatively, all types of neck restraints should be categorically deemed a use of deadly force and only found reasonable in situations that merit the use of deadly force. Neck restraints should be assessed in the same manner as the use of firearms. Not only do neck restraints pose a high risk of death like firearms, unlike firearms this risk is unpredictable.354 The lethal nature and unpredictable risk of causing serious bodily injury or death inherent in restricting air and blood flow by compressing a person's neck should only be used in situations where the use of deadly force is necessary. To protect people from law enforcement misconduct or misuse of neck restraints as force, there must be a categorical classification of all types of neck restraints as deadly force.

Second, if neck restraints are categorically deemed to be a use of deadly force then Tennessee v. Garnershould apply to cases involving neck restraints. Garner determined that deadly force cannot be used unless "the suspect poses a significant threat of death or serious physical injury to the officer or others. '3 55 If neck restraints were categorized as deadly force, under Garner,the use of a neck restraint against unarmed suspects who do not pose a threat of death or serious bodily injury to the officers would be 356 unlawful under the Fourth Amendment. The reasonableness of the use of the neck restraint would be determined under the circumstances of the use, and whether the officer or someone else was threatened with serious bodily injury or death.357 If the federal courts followed Garner, neck restraints used on an unarmed suspect posing no threat of serious bodily injury or death would be an unconstitutional use of force and could serve to deter unlawful uses of neck restraints by law enforcement. This could prevent incidents such as Eric Gamer's death from occurring in situations where the suspect is not armed and not posing a serious threat to officers or others.

354. See id. at 116 ("It is undisputed that chokeholds pose a high and unpredictable risk of serious bodily injury or death."); Fyfe, supra note 23, at 66.

355. Tennessee v. Garner, 471 U.S. 1, 3 (1985).

356. Id.at 11.

357. See Graham v. Connor, 490 U.S. 386, 396 (1989).

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Third, City of Los Angeles v. Lyons should be overruled.358 When an ongoing, unconstitutional practice of police use of force results in death, the federal courts should have the power to stop it through the ability to enjoin and scrutinize the potentially unconstitutional practice.3 59 Injunctions against ongoing systematic constitutional violations should be allowed as a remedy in federal and state courts against unconstitutional uses of force.36 ° Lyons is a seemingly impossible barrier to many suits seeking to challenge on-going harmful police practices through injunctive relief; therefore, Lyons hinders legitimate challenges to unconstitutional practices committed by law enforcement. Because of Lyons, private citizens do not have standing to challenge systematic unconstitutional practices by law enforcement in federal court.361 Even if Lyons is not overruled, or until it is overruled, the Department of Justice has the ability to deter unconstitutional practices by law enforcement. The Department of Justice, under 42 U.S.C. § 14141, has the potential ability to stop unconstitutional practices by law enforcement agencies through federal civil enforcement.362 Under 42 U.S.C. § 14141, it is "unlawful for any government authority... to engage in a pattern or practice of conduct by law enforcement officers ... that deprives persons of rights... protected by the Constitution or laws of the United States. 363 When the Attorney General has "reasonable cause to believe that a violation., has occurred, the Attorney General... may in a civil action obtain appropriate equitable and declaratory relief to eliminate the pattern or practice.9 364 The "pattern or practice" requirement is not satisfied by individual incidents of unconstitutional police conduct, but rather by "police agency policies that violate the Constitution, or multiple incidents that amount to a 'pattern or practice' that deprives people of their Constitutional rights., 365 Police use of excessive force is one type of conduct covered by this law.366 Only the Department of Justice may file suit 358. See supra Part EI.A.I.b., for a discussion of the dissenting opinion in City of Los Angeles v.Lyons (Lyons 11), 461 U.S. 95 (1983).

359. See Lyons 11, 461 U.S. at 114 (Marshall, J., dissenting).

360. See id at 137.

361. Id.at113.

362. Civil Rights Division, Addressing Police Misconduct Laws Enforced by the Departmentof Justice, U.S. DEP'T JUST., http://www.justice.gov/crt/addressing-police-misconduct-lawsenforced-department-justice (last updated Aug. 6, 2015).

363. 42 U.S.C. § 14141(a) (2012).

364. ld § 14141(b).

365. Civil Rights Investigationsof Local Police: Lessons Learned, POLICE EXECUTIVE RES. F. 4 (July 2013), http://www.policeforum.org/assets/docs/Critical-Issues-Series/civi%20rights%20investigations % 2 0ot/o 2 Olocal%20poice%20-%201essons%201eamed%202013.pdf.

366. Civil Rights Division, supra note 361.

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367 The remedy under for violations of the "Police Misconduct Provision., this provision is injunctive relief, "such as orders to end the misconduct and policies and procedures that resulted in or allowed changes in the agency's 368 the misconduct., The Department of Justice has made comments and given guidance to various police departments regarding the use of neck restraints through their statutory authority to address patterns of unconstitutional practice by law enforcement. For example, recently the Department of Justice published an assessment of the use of force in the Philadelphia Police Department (PPD).369 The report stated that, since "PPD is in the minority of large [police] departments that train on the use of neck restraint maneuvers, and.., officers do not regularly train on such tactics after the academy, 3 70 The special attention should be given to this particular tactic., "discontinue to was PPD to Justice of Department the by recommendation training on the use of neck restraints and eliminate its use from the field except in exigent circumstances when life or grave bodily harm are at risk., 37 1 This assessment of Philadelphia police practice was part of a collaborative reform initiative between PPD and the Department of Justice that focused on evaluating the use of force by PPD and recommending changes to policies and practices.372 This assessment of PPD was initiated

by Philadelphia Police Commissioner Charles Ramsey, requesting assistance from the Department of Justice's Office of Community Oriented Policing in response to an increase of officer-involved shootings in Philadelphia. 373 The assessment prescribed ninety-one recommendations to enhance and improve the policies and procedures of PPD with respect to 374 use of force, with the goal of implementing industry best practices. From this Department of Justice assessment of PPD, the general position of the Department of Justice appears to be that neck restraints should not be used

367. 42 U.S.C. § 14141.

368. Civil Rights Division, supra note 361.

369. Department of Justice Releases Report on Philadelphia Police Department's Use of Deadly Force, U.S. DEP'T JUST. (Mar. 23, 2015), http://www.justice.gov/opa/pr/departmentjustice-releases-report-philadelphia-police-departments-use-deadly-force370. George Fachner & Steven Carter, Collaborative Reform Initiative: An Assessment of Deadly Force in the PhiladelphiaPolice Department, U.S. DEP'T JUST. 69 (2015), http://ric-zaiinc.com/Publications/cops-w0753-pub.pdf.

371. Id. 372. Mary Brandenberger, U.S. Department of Justice Releases Report on PhiladelphiaPolice 2015), 23, (Mar. DEP'T JUST. Department's Use of Deadly Force, 7U.S. 27 8 . http://www.cops.usdoj.gov/Default.asp?Item-373. Id. 374. Id.

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in any situation other than where deadly force would reasonably be used to protect against serious injury or death of the officer or another person.375 With the Department of Justice's ability to investigate systematic excessive use of force by law enforcement, and either bring civil suit under 42 U.S.C. § 14141 or negotiate a resolution such as an injunction or "consent decree, 376 there is a discemable best practice that has developed with regard to neck restraints and how they should be addressed in police policy. The language of Department of Justice consent decrees regarding neck restraints defines, neck hold[s] [to] mean[] one of the following types of holds: (1) armbar control hold, a hold that inhibits breathing by compression of the airway in the neck; (2) carotid restraint hold, a hold that inhibits blood flow by compression of the blood vessels in the neck; (3) a lateral vascular neck constraint; or (4) a hold with a knee or other object to the back of a prone subject's neck.377 The Department of Justice consent decrees specifically state that "a neck hold shall be considered lethal force. 378 The limit to the consent decree is that it only addresses police practice and the use of neck restraint one police department at a time.379 Perhaps, in order to provide guidance to law enforcement agencies as a whole, the Department of Justice could issue a general statement of best practices, or general guidelines regarding its stance on law enforcement use of neck restraints and other types of force.

The best practice regarding neck restraint use that is gleaned from published consent decrees should be considered and followed by police departments across the nation. The language of these consent decrees should be implemented in all police policies, and police departments should train officers according to this best practices definition of neck restraints and

375. See Fachner & Carter, supra note 370, at 69.

376. POLICE EXECUTIVE RES. F., supra note 365, at 11.

377. Settlement Agreement at 101-02, United States v. City of Cleveland, No. 1:15-cv-01046 (N.D. Ohio May 26, 2015) [hereinafter City of Cleveland Settlement Agreement], available at

http://www.justice.gov/sites/default/files/crt/legacy/2015/05/27/cleveland-agreement_5-2615.pdf, Settlement Agreement at 12, United States v. City of Albuquerque, No. 1:14-cv-01025 (D.N.M. Nov. 10, 2014) [hereinafter City of Albuquerque Settlement Agreement], available at http://www.justice.gov/sites/default/files/usao-nm/legacy/2015/01/20/DOJABQ%20Settlement/o2OAgreement/2EXECUTED.pdf; Consent Decree Regarding the New Orleans Police Department at 8, United States v. City of New Orleans, No. 2:12-cv-01924-SMJCW (E.D. La. July 24, 2012) [hereinafter City of New Orleans Consent Decree], available at http://www.nola.gov/getattachment/NOPD/About-Us/NOPD-Consent-Decree/NOPD-ConsentDecree-7-24-12.pdf.

378. City of Albuquerque Settlement Agreement, supra note 377, at 12; City of New Orleans Consent Decree, supra note 377, at 8; see also City of Cleveland Settlement Agreement, supra note 377, at 13 (defining neck holds and stating that "officers will not use neck holds").

379. See POLICE ExECUTIVE RES. F., supra note 365.

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their categorization as deadly force. 380 A consistent stance on the use of neck restraints across the nation's law enforcement agencies would help to deter future tragedies surrounding law enforcement use of neck restraints.

VII. CONCLUSION

This Comment is written to bring light to the prevalence of deaths that have been related to the use of neck restraints by law enforcement, with the hope to help prevent another incident like Eric Garner's death from occurring. As a matter of public policy, the judiciary, state and federal legislators, the nation's police departments and the Department of Justice should revisit and reflect upon the tragedy of the death of Eric Garner and the many other people throughout the nation's history who have been harmed and killed by the use of neck restraints. People have been harmed and killed by neck restraints for decades. Adolph Lyons attempted to stop the use of neck restraints by law enforcement back in 1976 when he began litigating to prohibit the use of neck restraints by law enforcement in Los Angeles. 38' History reflects the need for neck restraint use by law enforcement to be addressed on a national level. By revisiting the Supreme Court's decision in Tennessee v. Garner with the recent death related to neck restraints of Eric Garner, the same stance against neck restraints should be made as it was against the use of firearms when their use had previously been allowed against unarmed, non-dangerous suspects before Garner was decided.382 Neck restraints should be categorized as deadly force like the use of firearms.

This Comment is meant to be an encouragement to law-makers to continue to push for legislation that classifies neck restraints as deadly force. It commends police agencies that have restricted the use of neck restraints to deadly force, and it also commends the Department of Justice for pushing to stop the systematic use of all types of neck restraints absent the need to use deadly force. Lastly, this Comment is written in support of the judiciary to continue to find the use of neck restraints absent the threat

380. See supra note 377-78.

381. City of Los Angeles v. Lyons (Lyons fl), 461 U.S. 95, 98 (1983).

382. Tennessee v. Garner, 471 U.S. 1, 3 (1985).

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of serious bodily injury or death an excessive, unconstitutional use of force by law enforcement.

Anna Swanson*

* J.D. 2016, Houston College of Law, sumna cum laude; B.A. 2003, University of California, Los Angeles. Licensed attorney, State Bar of Texas. Police Officer, Houston Police Department, licensed in June, 2008. The opinions in this writing do not reflect those of the Houston Police Department but rather they are solely the research, opinions, and conclusions of the author. Thank you to Professor Tobin Sparling, Houston College of Law, for his valuable input and guidance in developing this Comment. Thank you to my pastor, Dr. Dana Carson, who inspires me to be a voice for disenfranchised people, and to speak truth even when truth may be unpopular. This Comment is written in memory of Eric Garner and others who have died from excessive uses of force.