UCLA Law Review Volume 54, Issue 1

Reaching Backward While Looking Forward: The Retroactive Effect of California's Domestic Partner Rights and Responsibilities Act

In 1999, California enacted domestic partnership legislation for the first time. In its initial stages, registration of a domestic partnership offered few rights and no responsibilities to partners. Subsequent legislation added greater rights and responsibilities to the skeleton of the registry, culminating in the Domestic Partner Rights and Responsibilities Act of 2003, which conferred upon registrants nearly all the benefits and obligations of marriage. Although the 2003 Act took effect on January 1, 2005, the California Legislature amended the Act in the interim, applying community property law back to the date of registration under the 1999 law. In doing so, it effectively created a period of retroactivity of up to five years. This Comment examines the permissibility of retroactively applying the Act to conduct occurring before the legislation was enacted. It ultimately concludes that the retroactive portions of the Act violate the Takings Clause of the U.S. Constitution, as well as the Due Process Clause of the California Constitution. While the Comment aims to expose the constitutional infirmity of the Act’s retroactivity, its ultimate goal is more prescriptive: It suggests ways in which other states may avoid the pitfalls of California’s statute when tailoring their own domestic partnership legislation.

Fiduciary Foundations of Administrative Law

An enduring challenge for administrative law is the tension between the ideal of democratic policymaking and the ubiquity of bureaucratic discretion. This Article seeks to reframe the problem of agency discretion by outlining an interpretivist model of administrative law based on the concept of fiduciary obligation in private legal relations such as agency, trust, and corporation. Administrative law, like private fiduciary law, increasingly relies upon a tripartite framework of entrustment, residual control, and fiduciary duty to demarcate a domain of bounded agency discretion. To minimize the risk that agencies will abuse their entrusted discretion through opportunism or carelessness, administrative law empowers the political branches to exert limited residual control over agencies and subjects agencies to nonderogable duties of care and loyalty. As an interpretivist theory, this fiduciary model helps to explain controversial features of administrative law such as the contemporary nondelegation doctrine, Chevron deference, and the limits of presidential control over agency action. By clarifying administrative law’s internal dynamics and implicit ambitions, the fiduciary model also provides a blueprint for reform in critical areas such as the standing doctrine and the due process restraints on agency discretion.

Venture Capital, Agency Costs, and the False Dichotomy of the Corporation

An implicit dichotomy of the corporation exists in legal scholarship. On one side of the dichotomy rests the publicly held corporation suffering from a significant conflict of interest between its managers and dispersed shareholders; on the other side, the closely held corporation plagued by intershareholder conflict. This Article argues that understanding the agency problems that can exist within a firm demands a rejection of this traditional dichotomy and the theories of the firm built upon it. Using venture capital (VC) finance, this Article demonstrates how this dichotomy obscures how all firms—public and private—often face the same agency problems. Start-up companies receiving VC investment are uniquely situated to examine this dichotomy, as they represent closely held firms structured to transition quickly to public equity markets. Additionally, by separating investment from company management, VC investment creates many of the investor-manager conflicts inherent in public companies. By analyzing VC investment contracts, this Article reveals that start-up companies are indeed plagued by both vertical agency problems between investors and managers and horizontal agency problems among VC investors themselves. Significantly, academic scholarship has ignored the potential for interinvestor conflicts, using instead an analytical framework associated with public corporations that focuses exclusively on investor-manager agency problems. In so doing, VC scholarship provides a clear example of how the dichotomy of the corporation forces scholars to wear blinders in analyzing the agency problems in firms. To understand the full scope of these problems—and their implications for corporate investors—a new model of the firm is required that applies to all firms, public and private. This Article outlines this dynamic agency cost model and articulates its implications for corporate investors, corporate scholars, and corporate law in general.

The Perversity of Limited Civil Rights Remedies: The Case of "Abusive" ADA Litigation

In the past two decades, business groups and their political allies have often criticized broad civil rights remedies—particularly the availability of money damages—as encouraging abusive and extortionate litigation practices. In its decision in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, the U.S. Supreme Court seemed to heed those arguments when it rejected the catalyst theory for recovery of statutory attorneys’ fees. As many commentators have pointed out, these limits on remedies are likely to undermine the enforcement of civil rights laws. That criticism is correct as far as it goes, but it ignores an important part of the story. Limitations on civil rights remedies do not simply reduce the number of cases that get brought. They also change the character of the cases that get brought. In particular, limitations on remedies may themselves create an incentive for conduct that appears to defendants as abusive. Civil rights advocates may even confront a vicious cycle: Concern with abusive litigation motivates the adoption of limitations on remedies; those limitations lead plaintiffs’ lawyers to engage in litigation conduct that appears even more abusive; the newly energized perception of abuse motivates adoption of even more limitations; and so on. This Article illustrates these points by examining an important ongoing issue: the controversy over serial Americans with Disabilities Act (ADA) public accommodations litigation. The ADA’s public accommodations title is massively underenforced, and the limitations on remedies for violations of that title are the most likely culprit. But the litigation conduct that courts, members of the U.S. Congress, and business groups have labeled abusive also grows out of the statute’s remedial limitations.