Was an Action against Goldman Sachs Inevitable?

While reading through news on the SEC’s case against Goldman Sachs, I can’t help but wonder if the charge would have been brought regardless of what happened in the market.

The action against Goldman Sachs comes from their arrangement and sale of mortgage backed collateralized debt obligations (CDOs).  In 2006, John Paulson, approached Goldman Sachs with an interest to short housing prices.  Paulson clearly believed at the time, correctly, that housing prices were at unsustainable levels; he believed that there was a bubble in the market, and he wanted to make a bet that prices would decrease.  In order for Paulson to make a bet against housing prices, there needed to be somebody on the other end to make a bet that housing prices were going to increase.  The very essence of a CDO is that there necessarily must be two opposing parties to take different views on a future direction of a product or market. 

Continue ReadingWas an Action against Goldman Sachs Inevitable?

Debating Christian Legal Society v. Martinez

Earlier this week, I had the pleasure of making a quick visit to the University of San Diego Law School to engage in a debate on the case of Christian Legal Society v. Martinez, which was argued before the United States Supreme Court on Monday. The event was made possible by a grant from the Templeton Foundation and sponsored by the USD chapters of the Federalist Society, Christian Legal Society and PrideLaw.

I was on the ground for less than 24 hours, but San Diego is beautiful (although I think I picked the one day in the last ten years when the weather in Milwaukee in April was just as nice) and the USD campus is exquisite. My opponent (Professor Shaun Martin), the moderator (Dean Michael Kelley) and the student hosts were gracious. The lunch at La Gran Terraza was very good. What about the debate?

Continue ReadingDebating Christian Legal Society v. Martinez

Being Fair to Church Autonomy After Smith

Stuart McPhail makes an interesting observation in his short essay “Being FAIR to Religion: Rumsfeld v. FAIR’s Impact on the Associational Rights of Religious Organizations,” 3 Harv. L. & Pol’y Rev. 221 (2009), which was recently brought to my attention by the Alliance Defense Fund’s excellent “Alliance Alert” daily email (a must-read for scholars and activists interested in religious liberty, marriage, or life issues). In the essay, McPhail looks at the freedom of expressive association doctrine as an alternative grounding for the rights of religious organizations. He does so because he questions whether the traditional protection for such rights, the church autonomy doctrine, has survived the Supreme Court’s decision in Employment Division v. Smith, 494 U.S. 872 (1990).

McPhail asks “whether or not the church autonomy doctrine has survived Smith.” He acknowledges that courts which have considered the matter, including five federal circuit courts, have held that it did so. However, he questions whether “Smith ended religious organizations’ unique associational rights, leaving only the protections for expressive associations and any limitations to them, upon which all other organizations must rely.” 

Continue ReadingBeing Fair to Church Autonomy After Smith