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Vanderbilt Law Review

First Page

879

Abstract

If the instant case, rather than Northway, is to become the accepted rule in the area of discounting, consumers and state lenders will be protected while the national bank-lenders will be burdened only slightly, if at all. National banks located in states that permit state lenders to discount loans at the maximum rate, with-out regard to the actual yield, will not be affected. National banks located in states that permit state lenders to discount only to the extent that the actual yield is within the statutory maximum will need to change their practices merely by charging the statutory rate only when it becomes due, or by charging a lower rate in advance that yields an effective rate not in excess of the maximum. Furthermore, the impact of the instant decision on national banks will be practically limited to consumer loans, because of the usual exemption of corporations from usury laws and of section 85's higher alternative rate for business or agricultural loans. This limited restriction on the national banks will be justified by its beneficent effect on the borrower and on the competing state lenders, who have always been subject to the state restrictions.

Linda A. Bunsey

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With the instant decision, federal defamation law has advanced within the space of ten years from no constitutional privilege, even for the press in defending against a public person, to the realized prospect of a constitutional privilege so sweeping that it prevents recovery of an element of damages by a public person who has been defamed by an individual. Specifically, the instant court's holding completes a four-part scheme for liability and damages in defamation actions: under Supreme Court decisions, a private figure must prove negligence to receive compensatory damages and actual malice to receive punitive damages, and a public figure must prove actual malice to recover compensatory damages; under the instant decision, a public figure is almost totally precluded from recovering punitive damages. As the Sullivan Court in large measure adopted the minority position concerning fair comment and liability, so too the Maheu court in large measure adopted the minority position concerning punitive damages. Nevertheless, the instant decision was solidly based: the court fully considered the Supreme Court's prior concerns with encouraging debate and discouraging self-censorship, shielding reputation and privacy, and, most importantly, scrutinizing the need for punitive damages.

David M. Thompson

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In rejecting the State's reliance upon the stated rule of the Brady trilogy and Tollett, the instant Court noted the suggestion originally made in a McMann footnote that an exception might exist if the applicable state law permitted appeal from adverse pretrial rulings despite a subsequent guilty plea. Under New York procedure, a defendant who chooses to plead guilty does not deliberately by-pass state appellate review of certain constitutional claims, and the State acquires no legitimate expectation of finality in the ensuing conviction. As to these constitutional claims, the plea does not constitute a "break in the chain," but operates merely as a procedural device to secure review of the adverse pretrial ruling without the necessity of a time-consuming and expensive trial. The Court held that because the respondent's guilty plea was entered in reliance upon a guarantee of the availability of further appellate review of his constitutional claims, it was essentially different from guilty pleas entered in other states that result in an absolute conviction and a waiver of all further state review.

Charles K. Campbell, Jr.

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In determining whether the challenged statute met the procedural requirements of the fourteenth amendment, the instant Court looked to the statutory safeguards protecting the debtor's property interest in the absence of prior notice and hearing. Comparing the instant statute to the Fuentes statutes, the Court asserted that the same constitutional infirmities were present. Each statute allowed the seizure of property without prior notice and opportunity for a hearing by the issuance of a writ by a court clerk after the filing of an affidavit containing conclusory allegations. The instant Court restated its belief set forth in Sniadach and Fuentes that even a temporary deprivation of property does not put the seizure beyond scrutiny under due process requirements. The Court then asserted that the Georgia statute had none of the saving characteristics of the Louisiana sequestration statute upheld in Mitchell. According to the Court, the Mitchell statute survived challenge because of the presence of safeguards which imposed judicial control over the process of issuance of the writ; required the creditor's affidavit to contain factual allegations; and provided for an immediate post-seizure hearing at which the debtor could seek dissolution of the writ.

Keith B. Simmons

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The instant court rejected arguments based mainly on the vague wording of the statute and relied on two basic policies-(1)to compel pro rata distributions of unneeded funds that will be taxable to shareholders and (2) to avoid constructions that lead to inconsistent results in similar fact situations. Also, the court seemed to contemplate two theories of liability available to the Commissioner-first, that the corporation was "availed of" by permitting funds not used in the redemption to remain accumulated, and secondly, that the corporation was "availed of" through the redemption itself. The arguments based on the equivalency of the phrases"to accumulate" and "to remain accumulated", the purpose of Congress to reach any corporation with an undue accumulation, and the relevance of past accumulations, plus the remand for determination of whether an unreasonable accumulation actually occurred, relate to the first theory. Other arguments used by the court relate more to the second theory-the repeated idea that preferential distribution of unneeded funds is not a congressionally approved method of abating the penalty tax with respect to those funds, the mention of corporations formed for the proscribed purpose that may be liable without regard to actual accumulation, and especially the concluding statement that the judgment concerning 1967 made liability in 1968 apparent.

Thomas C. Hundley

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