Rodriguez v. FDIC: The Supreme Court's Federal Common Law Hostility & Its Effects on the Economic Substance Doctrine

George Washington Business & Finance Law Review (November 2020, Vol. 4, No. 1)

37 Pages Posted: 16 Jun 2021 Last revised: 17 Jun 2021

See all articles by Beckett Cantley

Beckett Cantley

Northeastern University

Geoffrey Dietrich

Cantley Dietrich LLC

Date Written: June 7, 2020

Abstract

On February 25, 2020, the U.S. Supreme Court in Rodriguez v. FDIC unanimously ruled that there should be no federal common law, including in the area of taxation, except in extraordinary circumstances. Some commentators have raised the concern that this hostility to federal common law may eventually extend to the judicial economic substance doctrine. The economic substance doctrine was codified in 2010; however, Congress made it clear that the new statute would not eliminate the judicial version of the doctrine. Although a case directly addressing the codified version of the economic substance doctrine has yet to be litigated, courts have continued to invoke the judicial doctrine in cases post-codification. In this article, we: (1) provide an overview of federal common law; (2) describe the judicial economic substance doctrine; (3) discuss the tension between the economic substance doctrine and textualism; (4) provide an overview of the Rodriguez case; (5) discuss how the U.S. Supreme Court’s hostility to federal common law in Rodriguez may eventually curtail the judicial economic substance doctrine; and (6) provide an example of how such a curtailment could potentially affect a current issue in Internal Revenue Service (“Service”) enforcement—syndicated conservation easement transactions.

Keywords: Taxation, Constitutional Law, Economic Substance Doctrine

Suggested Citation

Cantley, Beckett and Dietrich, Geoffrey, Rodriguez v. FDIC: The Supreme Court's Federal Common Law Hostility & Its Effects on the Economic Substance Doctrine (June 7, 2020). George Washington Business & Finance Law Review (November 2020, Vol. 4, No. 1), Available at SSRN: https://ssrn.com/abstract=3862043

Beckett Cantley (Contact Author)

Northeastern University ( email )

211 Seacrest Beach Blvd W
Rosemary Beach, FL 32461
United States
702-881-4849 (Phone)

Geoffrey Dietrich

Cantley Dietrich LLC ( email )

4514 Cole Ave. | Suite 600
Dallas, TX TX 75205
United States

HOME PAGE: http://www.cantleydietrich.com

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