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Coercive Settlements

Can civil settlements be coercive? Conventional wisdom suggests they generally cannot, as the inherent power dynamic of private law is accepted as inevitable. This Article challenges these conventions, arguing that some private settlements—which it labels “high-risk civil settlements”—might be coercive. Using confidential settlements as an example, this Article contends that acquiescence to a defendant’s demand for silence in exchange for forgoing a legal claim can reflect coercion when additional factors are present. The Article builds on psychological research to show how a plaintiff’s voluntariness can be negated by using subtle methods of social influence. Recognizing the coercive power that stronger parties wield in some private disputes, this Article urges the legal system to step up to assure that civil settlement agreements are in fact mutually desirable deals.

Taxing Litigation Finance

The emerging litigation finance industry has the capacity to expand access to justice but also raises important legal and ethical questions. The problem arises in classifying litigation finance contracts as either a nonrecourse loan, immediate sale, or variable prepaid forward contract, all of which discretely impact the timing and character of income. The consequences are tax uncertainty and an opportunity for taxpayers to engage in aggressive tax planning by structuring transactions to obtain favorable tax treatment without altering their economic position. This Article proposes a customized, multifactor analysis to identify the true nature of litigation finance transactions and impose proper tax treatment. The bedrock of the proposal is the concept of tax ownership, which in the litigation finance context can be streamlined into two key factors: economic risk and legal control of the claim.

The Judicial Administrative Power

Article III of the Constitution confines the “judicial Power of the United States” to the adjudication of “cases” and “controversies.” In practice, however, federal judges exercise control over, and spend their scarce time on, a wide range of activities that traverse far beyond any individual adjudication. Typically classified as a form of “judicial administration,” these activities span everything from promulgating the rules of the various federal courts to overseeing federal pretrial detention services or choosing federal public defenders. This Article describes how judges became involved in these nonadjudicatory Article III activities, clarifies the activities’ relationship to Article III adjudication, and considers the role the activities play for the modern federal judiciary. We argue that the judicial administrative power has profound consequences that carry us far beyond baseline questions of whether or to what extent judicial administration facilitates or improves federal adjudication. We conclude with a set of proposed reforms that would respond to these challenges by treating the judicial administrative power as administrative first and judicial second—and not the other way around.