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Proposed Changes to Stark Law and the Anti-Kickback Statute Highlight the Complexity of Compliance for Healthcare Providers

Stephanie Raborn

In October 2019, the Centers for Medicare and Medicaid (CMS) and the Department of Health and Human Services (HHS) announced several proposed changes to “modernize and clarify” existing complex regulations prohibiting physician self-referral.[1] These proposed changes to the Physician Self-Referral Law (“Stark”) and the Anti-Kickback Statute (“AKS”) could signal a welcomed relaxation of providers’ compliance burdens with regard to the HHS and the CMS. They further illustrate, however, the complexity and challenge healthcare providers of all sizes face in maintaining a compliant practice. HHS and CMS should continue to be responsive to providers’ feedback regarding the challenges of compliance and relieve some of the burden on the industry by providing a greater number of sample arrangements meeting the laws’ requirements. Although the comment period for these proposed changes closed on December 31, 2019,[2] providers should continue to engage with agencies during notice and comment periods and lobby regulatory bodies for simplification and clarification of an increasingly complex compliance burden.

There are two primary federal laws affecting health providers’ agreements: Stark and AKS. These fraud and abuse laws, enforced by the Department of Justice (DOJ), the Department of Health and Human Services Office of Inspector General (HHS OIG) and CMS, can present dangerous pitfalls for unwary providers. Stark prohibits physicians from referring patients seeking certain “designated health services,”[3] which are payable by Medicare and Medicaid to entities in which the physician has a financial relationship, unless an exception applies. The Anti-Kickback Statute is a criminal law that prohibits knowing and willful remuneration—payment of anything of value including not only money, but excessive compensation, expensive hotel stays, meals and more—to induce or reward patient referrals or business generation.[4] Penalties for violation of these laws can include monetary penalties of up to $15,000 and $50,000 per violation (for Stark and AKS respectively) plus the cost of the remuneration multiplied and in the case of the criminal statute potential imprisonment of up to five years per violation.[5] The AKS contains safe harbors that protect certain payment or business arrangements from implication, and Stark’s exceptions and AKS’s safe harbors have been the source of much inquiry and confusion.

Goals of Stark include “protecting patients from unnecessary services and being steered to less convenient, lower quality, or more expensive services because of a physician’s financial self-interest.”[6] Similarly, the goal of the AKS is to avoid overutilization, increased program costs, the adulteration of medical decisions and unfair competition.[7] Laudable and necessary as these goals are, ensuring compliance with these statutes contributes to the labyrinth of regulations that healthcare providers must navigate while simultaneously addressing patients’ healthcare needs. The Stark Law is a strict liability statute, meaning that enforcement officials need not even prove that the provider knowingly or willfully violated the statute in order to obtain a conviction.

HHS’s proposed changes to the AKS include new safe harbors and existing safe harbor modifications, specifically the introduction of new “Value-Based Enterprise” safe harbors, a Personal Services and Management Safe Harbor, and a Cybersecurity and Electronic Health Record Donation Safe Harbor.[8] CMS’s proposed Stark Law changes include the creation of new exceptions for value-based arrangements, including a Full Financial Risk exception, Value-Based Arrangements with Meaningful Downside Financial Risk to the Physician, and a Value-Based Arrangements exception.[9] The scope of these proposed changes is broad, and their publication by HHS and CMS precipitated a flurry of questions and conjecture from the healthcare industry. Potentially affected providers should respond by reviewing the CMS[10] and HHS[11] fact sheets and by consulting healthcare compliance attorneys about implications to their arrangements. Providers should also engage with both agencies by submitting inquiries when the finalized changes are announced, and HHS and CMS should create Q&As and dedicate additional staff to anticipate and respond to inquiries.

[1] HHS Proposes Stark Law and Anti-Kickback Statute Reforms to Support Value-Based and Coordinated Care, U.S. Dep’t of Health and Human Servs. (Oct. 9, 2019), https://www.hhs.gov/about/news/2019/10/09/hhs-proposes-stark-law-anti-kickback-statute-reforms.html.

[2] Modernizing and Clarifying the Physician Self-Referral Regulations Proposed Rules, Ctrs. for Medicare & Medicaid Servs. (Oct. 9, 2019), https://www.cms.gov/newsroom/fact-sheets/modernizing-and-clarifying-physician-self-referral-regulations-proposed-rule.

[3] A Roadmap for New Physicians: Fraud & Abuse Laws, U.S. Dep’t of Health and Human Servs. (last visited Mar. 27, 2020), https://oig.hhs.gov/compliance/physician-education/01laws.asp.

[4] Id.

[5] Comparison of the Anti-Kickback Statute and Stark Law, Health Care Fraud Prevention and Enf’t Action Team, Office of Inspector Gen. (last visited Mar. 27, 2020), https://oig.hhs.gov/compliance/provider-compliance-training/files/StarkandAKSChartHandout508.pdf.

[6] Ctrs. for Medicare & Medicaid Servs., supra note 2.

[7] U.S. Dep’t of Health and Human Servs., supra note 3.

[8] Billy Wynne et al., Proposed Stark Law, Anti-Kickback Reforms Aid to Facilitate Value-Based Care, HealthAffairs (Oct. 15, 2019), https://www.healthaffairs.org/do/10.1377/hblog20191014.13154/full/.

[9] Id.

[10] Ctrs. for Medicare & Medicaid Servs., supra note 2.

[11] HHS Office of Inspector General Fact Sheet, U.S. Dep’t of Health and Human Servs. (Oct. 2019), https://oig.hhs.gov/authorities/docs/2019/CoordinatedCare_FactSheet_October2019.pdf.

A Not-So-Silent Ending to the Silent Sam Saga

Manning Peeler

           After witnessing almost fifty years of vandalism and protests, Silent Sam fell from its pedestal at the University of North Carolina at Chapel Hill (“UNC-CH”) on August 20, 2018.  In the following months, much of the protest and debate surrounding the divisive statue subsided.  After the toppling, however, UNC-CH and the UNC Board of Governors (“UNC BOG”) still faced an important question: What to do with this fallen statue now? In a recent settlement with the Sons of Confederate Veterans (“SCV”), the UNC BOG sold the statue to the SCV and paid a significant sum of money to the SCV to limit potential future protests. On January 8, 2020, the Daily Tar Heel (“DTH”), the student newspaper at UNC-CH, sued the UNC BOG, claiming that it negotiated the settlement in violation of the Open Meetings Act and questioned the suspiciously silent ending to this saga.

            The North Carolina Open Meetings Act sets out standards under which public bodies of the state of North Carolina must conduct meetings to ensure that the public can access the information and discussions.[1] An exception to the open meetings requirement exists when a body consults with an attorney about a proposed settlement of a claim.[2] When meeting in closed session, the public body must keep an account of the discussion and reasonably later make it public record unless “public inspection would frustrate the purpose of a closed session.”[3]

            In a suit filed on January 8, 2020, the DTH sued the UNC BOG, claiming that the information regarding the SCV settlements was not properly released to the public as required by the Open Meetings Act.[4] In an open session, Chairman Harry Smith assigned five UNC BOG members to work with UNC-CH to revise the University’s plan for the monument. The Committee met almost entirely in closed session on November 27, 2019, and it approved a settlement of a lawsuit between the SCV, the UNC System, and the UNC BOG. This settlement included that (1) the monument would be transferred to the SCV, (2) the UNC BOG would create a $2.5 million trust for its preservation, and (3) the monument could not be located in any county containing a UNC constituent institution.

            The Committee members first released information about this settlement in a December 16, 2019 op-ed piece in the Raleigh News & Observer.[5] The op-ed also made the first public mention of another agreement with the SCV that limited the SCV’s ability to display banners on university campuses in exchange for $74,999 from the UNC BOG. The DTH argued that, because the Committee did not release any of its meeting’s contents until three weeks after the settlement’s completion, it violated the Open Meetings Act, and the Court should render the Committee’s actions void.

           Opponents of the settlement have been vocal. The UNC-CH faculty quickly expressed its opposition; students at UNC-CH began on-campus protests; and a group of eighty-eight prominent alumni and donors filed an amicus curiae brief urging the judge to set aside the settlement because it was a “misuse of university funds” that “seriously damages the reputation of the University, which should be committed to historical truth and opposed to modern-day white supremacy.”[6] A UNC-CH law professor noted that “[Judge Allen Baddour] clearly has been following what’s been going on in the public commentary about what he did a few weeks ago, and he appears to be somewhat concerned about it.”[7] After initially approving the settlement, Judge Baddour vacated the SCV-UNC BOG settlement on February 12, 2020 because of the SCV’s lack of standing to file suit and have a court-ordered settlement on this matter.[8] Without groups such as the DTH and the UNC-CH community questioning this settlement, the judge may not have reconsidered his initial approval. Now, the UNC BOG will have to find another solution under significantly increased criticism and scrutiny.


[1] See N.C. Gen. Stat. § 143-318.9-18 (2019).

[2] Id. at § 143-318.11(a)(3).

[3] Id. at § 143-318.10(e).

[4] Complaint at 13, DTH Media Corp. v. University of N.C., https://s3.amazonaws.com/snwceomedia/dth/f9fab47e-67ae-4207-9a98-c2aa0ecff218.original.pdf.

[5] Jim Holmes et al., We Created a Trust to Pay a Confederate Group to Take Silent Sam. It was the Best Solution., News & Observer (Dec. 16, 2019), https://www.newsobserver.com/opinion/article238369068.html.

[6] Kate Murphy, Prominent UNC Alumni Want to Stop the $2.5M Silent Sam Deal with Confederate Group, News & Observer (Jan. 29, 2020), https://www.newsobserver.com/news/local/education/article239768938.html.

[7] Matthew Burns and Laura Leslie, Judge May Reconsider Approval of ‘Silent Sam’ Deal, WRAL (Dec. 20, 2019) https://www.wral.com/judge-may-reconsider-approval-of-silent-sam-deal/18845716/.

[8] Matthew Burns and Sarah Krueger, Judge Throws Out ‘Silent Sam’ Deal, WRAL (Feb. 12, 2020), https://www.wral.com/judge-throws-out-silent-sam-deal/18948287/.

Human Rights Violations: From the Runways of New York Fashion Week to the Fast-Fashion Companies of Today

Henna Shah

Christopher John Rogers, Fe Noel, and Area. Do these names ring a bell? How about Oscar de la Renta, Kate Spade, Cynthia Rowley, or Vera Wang? Last week, designers like these came from around the world to showcase their recent masterpieces on runways across The Big Apple. Welcome to New York Fashion Week!

New York Fashion Week (“NYFW”) is known for its allure, catwalks, and most importantly, clothes. However, in the past decade, the fashion industry has been anything but glamorous. Rather, it has become the center of human rights abuses and allegations.

In 2011, NYFW made the unprecedented decision of canceling a designer’s show.[1] That designer was Gulnara Karimova, the daughter of late Uzbekistan dictator Islam Karimov. As the former Uzbekistan ambassador to Spain and the United Nations, Karimova’s advocacy for her father’s policies, including those that “imprison[ed] and tortur[ed] political opponents and right activists,” created controversy in the international human rights arena.[2] Specifically, it was Karimov’s policy of “forc[ing] up to two million Uzbek children to leave school for two months each year to pick cotton – a fabric woven throughout Karimova’s designs” that distressed the fashion community.[3] By canceling her show, NYFW publicly denounced the designer and her father’s tyrannical regime, and it became one of the first showcases to advocate for human rights in the fashion industry.

However, as the leaders of high-end fashion made promises to ensure humane garment production, allegations of human rights abuse rampantly emerged in the fast-fashion industry. The term “fast-fashion” refers to the “contemporary fashion trends that change quickly each season”[4] that have “resulted in faster production with lower costs.”[5] Leaders of the fast-fashion movement include companies like Zara[6] and H&M.[7] Although fast-fashion has been able to grow its market presence by presenting more than forty collections annually and selling clothes at low prices to consumers, the massive demand has driven companies to utilize “sweatshop” factory models that violate the International Labour Organization’s (“ILO”) standards.[8] However, due to loopholes in national laws and widespread government compliance deficits, “sweatshop” factories are able to fulfill the demands of fashion’s consumer and capitalistic culture while avoiding legal repercussions.[9]

One of the fundamental labor standards set by the ILO is the basic human right to a living wage.[10] However, for fast-fashion industry workers, wages often do not meet the legal standards.[11] In fact, workers frequently face threats of wage cuts and dismissal from managers demanding overtime.[12] Unfortunately, workers have very few remedies to combat these abuses. In some factories, workers are forced to work in unsafe, cramped spaces and are beaten by managers for failing to meet unrealistically high quotas. For instance, in the infamous 2013 Rana Plaza garment factory incident, workers were trapped and forced to continue production as the building collapsed on them.[13] This tragedy is the deadliest disaster in the fashion industry’s history, as it killed over 1,000 workers and injured about 2,500 more.[14]

Furthermore, the fast-fashion industry perpetuates gender discrimination.[15] Since women constitute the majority of the workforce in the garment industry, they are disproportionally affected by production-related human rights violations.[16] A survey by the German Institute for Human Rights found that fourteen percent of women workers in Bangalore reported previous incidents of sexual harassment or rape.[17] Additionally, sixty percent reported being intimidated or threatened with violence and forty to fifty percent reported experiences of humiliation and verbal abuse.[18]

Likewise, child labor remains a problem within the fashion industry. It is estimated that 16.7 million children in South Asia produce clothing.[19] The dismal working conditions of “sweatshops” have negatively affected these children’s development and health.

Fashion may not be everyone’s forte and we may not all agree with style icon Blair Waldorf when she says, “Fashion is art and culture and history and everything I love combined.”  Nevertheless, as the fashion industry continues to grow, it is paramount that we, as consumers, keep it socially conscious and accountable for its human rights abuses.


[8] The ILO highlighted eight fundamental labor standards: (1) 1948 Freedom of Association and Protection of the Right to Organise Convention; (2) 1949 Right to Organise and Collective Bargaining Convention; (3) 1930 Forced Labour Convention; (4) 1957 Abolition of Forced Labour Convention; (5) 1973 Minimum Age Convention; (6) 1999 Worst Forms of Child Labour Convention; (7) 1951 Equal Remuneration Convention; and (8) 1985 Discrimination (Employment and Occupation) Convention.

[12] A report found that ninety-four percent of Cambodian factories violated overtime regulations and dismissed workers who refused to work overtime.

Symposium Agenda – Right to Try Laws: The Benefits and Burdens

The 2019 Fall Symposium is right around the corner; check out our schedule of speakers and learn more about their backgrounds below.

November 1, 2019

9:15-9:45am—Breakfast and Registration

9:45-9:50am—Welcome by Dean Jane Aiken, Assoc. Dean Jonathan Cardi, Chris Coughlin & Melissa Temple Malone

9:50am-10:20am—Setting the Stage: Fifty Years of End-of-Life Care Debates

by Dr. John Moskop, Wake Forest University School of Medicine

Moderator:  Dr. Pat Lord, Wake Forest University, Department of Biology

10:25-10:55am—Keynote: Informed Consent in Right to Try:  A Dubious Assumption by Professor Rebecca Dresser, Daniel Noyes Kirby Professor Law Emeritus, Washington University in Saint Louis School of Law

Moderator:  Prof. Mark Hall, Director of the Wake Forest Health Law and Policy Program, Fred D. & Elizabeth L. Turnage Professor of Law

11:00-11:45am—Panel Discussion: Right to Try Issues in Pediatric Medicine and GeneticsDr. Ana Iltis, Professor, Carlson Professor of University Studies, Philosophy; Director, Center for Bioethics, Health and Society, Dr. Michael Kappelman ; Dr. Sumy Joseph

Moderator:  Wake Forest 2L, Madison Alligood, Wake Forest Journal of Law & Policy

11:50-12:25pm—Performable Case Study and Discussion on Pediatrics, Genetics, and the Right to Try by Prof. Richard Robeson, Wake Forest University, Communication and Center for Bioethics, Health & Society; and various members of the Wake Forest School of Law Journal of Law and Policy

Moderator:  Prof. Steve Friedland, Elon University School of Law

12:30-1:30pm—Lunch

1:30-2:05 pm— Perspectives on the Role of the Patient Advocate in FDA Regulation by Prof. Jordan Paradise, Georgia Reithal Professor of Law, Loyola University of Chicago School of Law

Moderator:  Prof. Bethany Corbin, Director of the Wake Forest Master of the Study in Law Program, LLM Health Law, Loyola University of Chicago School of Law

2:10-2:40—Payment Models for Access to Unapproved Drugs by Prof. Christopher Robertson, Associate Dean for Research and Innovation, University of Arizona, James E. Rogers College of Law

Moderator:  Professor Simone Rose, Associate Dean for Innovation and Entrepreneurship, Wake Forest University School of Law

2:45-3:25 pm—Panel Discussion: The Terms of Trying by Professor Nancy M. P. King, JD. Professor, Department of Social Sciences & Health Policy and Wake Forest Institute for Regenerative Medicine, Wake Forest School of Medicine; Co-Director, Center for Bioethics, Health, & Society and Graduate Program in Bioethics, Wake Forest University, & William Zoffer, JD, industry consultant, former Senior Vice President, U.S. Pharmaceuticals Legal Operations, GlaxoSmithKline and U.S. Department of Justice

Moderator: Suzanne F. Cook, Ph.D, Principal, Epidemiology Associates, LLC 

3:30-4:00—The Right to Try Debate by Wake Forest University Debate Team—consistently ranked one of the top debate teams in the country, the students will be performing a debate that will bring out many of the different arguments relevant to the Right to Try debate.  

4:00 pm—Closing by Prof. Chris Coughlin & Melissa Temple Malone

All registrants will receive a link to the footage from the event whether or not they are able to attend; register now!

Women’s Reproductive Rights: One Step Forward, Two Steps Back?

Women’s Reproductive Rights: One Step Forward, Two Steps Back?

Briana Whalin

The day Justice Kennedy announced his retirement, a sadness washed over many Americans. Kennedy’s retirement, for those who are not politically conservative, felt like the last pillar of hope falling. After losing the White House to our current administration, moderates and liberals looked more than ever to the Supreme Court to be the voice of reason; a saving grace. Now, Kennedy’s retirement threatens to transport America’s public policy back decades.

Kennedy was initially nominated as President Reagan’s second choice. Reagan’s first nomination, Robert H. Bork, was rejected during his Senate confirmation hearing after his personality and ideology became too divisive in the eyes of the Senate. Justice Kennedy stood juxtaposed to Bork as the less conservative and more amenable choice. Soon after his nomination, he was sworn in as a Supreme Court Justice on February 18, 1988.[1]

Throughout his years on the Court, Kennedy gained the reputation as the “swing-vote” Justice.[2] His record stands as a pattern of siding with liberal Justices on individual rights questions and with conservative Justices on everything else. For example, he voted with conservative Justices on issues concerning campaign finance restrictions and gun-ownership rights.[3] However, he sided with liberal Justices on more than one occasion and often on landmark and divisive individual rights cases. These cases include, but are not limited to, decisions such as Obergefell v. Hodges and Planned Parenthood of Southeastern Pennsylvania v. Casey. Kennedy’s decision in these particular cases made him into a personified judicial barrier and voice or reason in the Court for liberal­-leaning Americans by ensuring protections for LGBTQ and Women’s Reproductive rights.

Now, looking forward, we await a new appointee from an administration bent on appointing an ultra-conservative Justice who will help overturn Roe v. Wade and restrict individual rights in the name of conservative beliefs and religious freedom. As a result, many women are seriously concerned that the Casey “undue burden” standard[4] will be restricted to the point of a virtual ban on abortion or a true overturning of Roe. These fears are fully justified as Pro-Life outlets are praising Kennedy’s retirement as an opportunity to overturn Roe[5] until the Court becomes a liberal majority again, which in the context of the Supreme Court could mean decades.

Further, let us remember: reproductive rights issues are public health issues. I have been fortunate to meet one of the plaintiffs in Roe and their experience makes it clear that overturning a woman’s right to a safe and legal abortion means forcing women to have dangerous and life-threatening abortions. The plaintiff in Roe that I met was forced to go out of the country, to a place where they did not speak the language, with a piece of paper with an address scribbled on it, to meet a doctor they had never met, in a place they had never been. Forcing women into this position is dangerous and again, is a public health issue. Abortions will happen regardless of its legal status in the United States as it did before Roe. Regardless of whether it is a virtual ban or full ban that may happen, all we can hope for is that the Justices see this as a public health issue to protect women and not a religious or political crusade.

[1] Anthony M. Kennedy, Oyez, (July 1, 2018), https://www.oyez.org/justices/anthony_m_kennedy.

[2] Brent Kendall & Jess Bravin, Justice Anthony Kennedy Defined His Career at Center of Biggest Decisions, Wall St. J., (July 1, 2018), https://www.wsj.com/articles/supreme-court-justice-anthony-kennedy-announces-retirement-1530122570. (Kennedy himself has said that he hates this moniker, commenting at a Harvard Law School graduation that, “[t]he cases swing. I don’t.”).

[3] Id.

[4] Planned Parenthood of Se. Pa. v. Casey, 505 U.S. 833 (1992).

[5] In an interview with NPR, the President of Students for Life, Kristan Hawkins, praised Justice Kennedy’s retirement as “a day that we’ve been waiting for” and further commented that “[o]ur goal in the pro-life movement has always been to make abortion illegal and unthinkable.” Sara McCammon, What Kennedy’s Retirement Means For Abortion Rights, Nat’l Pub. Radio, (July 1, 2018), https://www.npr.org/2018/06/28/624319208/what-justice-kennedy-s-retirement-means-for-abortion-rights.

Thank You, Justice Kennedy

Thank You, Justice Kennedy

Heather Stinson

Justice Kennedy is in the news due to his recent retirement announcement. Once again, many of those speaking or writing about him will mischaracterize his jurisprudence. To most, his voting patterns seem erratic and unpredictable. Yet, after all these decades, more than anyone else on the Court, Justice Kennedy has been uber-consistent and reliable. You would think that more people would better understand him, although a few seem to get it, as evidenced in the titles of some books regarding his jurisprudence. See, here, here, and here.

I became familiar with Justice Kennedy, like many law students, during the first few weeks of Constitutional Law. My professor introduced him to us by saying, “now for all of you libertarians and freedom lovers in the room, you are going to love Justice Kennedy,” and love him I did. His votes were on point with how I would have personally sided on each issue. More than that though, his words swept me up and for the time it took to read his opinion(s), I felt a sense of hope and optimism in the overall good of people. He made me love our Constitution, giving me a feeling that the structure and order it provided existed in perfect harmony, so as to preserve as much freedom as possible.

Many become confused over Justice Kennedy’s voting patterns; one minute he is authoring opinions that make him appear reliably conservative, and the next minute he is penning prose that would make most conservative voters cringe. I must admit, I too cringed when I first read the language he used in Obergefell v. Hodges: what he referred to as “Principles”. While I agreed with his vote, I was confused by his method of Constitutional Law and wondered if I had inadvertently wandered into a philosophy class. While I still have reservations about his methods, I can at least appreciate that to Justice Kennedy there is a point to the Constitution. There are, of course, the words and their dictionary definitions (where most conservatives begin and end), but there is also meaning behind the words chosen, the purpose of crafting the whole document in the first place. To Justice Kennedy, it’s not that the Constitution is ‘alive,’ as many on the left like to view it-subject to modern interpretation, with an updated dictionary. Rather, it is more like the original words and structure point to the Founders hope in penning it. Justice Kennedy simply showed us the fine tension that must exist between federal and state, and between state and person, to ensure that enough space exists in the in-between for breathing, which is a necessary requirement for life, and liberty.

It is ironic, that so many conservatives now feel excitement about the chance to get a true Constitutionalist onto the bench in his stead. Justice Kennedy is nothing but a Constitutionalist. It is also interesting that his votes are tracked, as if the Court has sportscasters, always trying to figure out his next move. I can hear them now saying, “this season he is batting conservative, with only two fly balls out in Left-field.” I can’t imagine how frustrating it has been to be known as some sort of watered-down, unreliable conservative, whose only purpose on the Court is to be persuaded to swing one way or the other. As it is, no one seems to know how to mention his name without also calling him the “swing vote.” See here and here, for a few recent examples.

History should not remember Justice Kennedy as a swing voter, a moderate, or a centrist. All of those descriptions fail to see him for what he has been, a major disappointment. He spent his career disappointing some side of the aisle every day. What I wouldn’t give to have another disappointment of a jurist put on the Court to take his place! We need jurists who have no cause, but the cause of liberty, as defined by the Constitution. Jurists whose personal beliefs and opinions are left at home while they handle the one piece of paper that we must all share. Justice Kennedy showed me that the structure of the Constitution whispers its function. He heard the whispers and shared them with us, and for that, I am grateful. As for the future appointment to the Court, all we can hope for are a few Congress men and women who will follow Justice Kennedy’s example, and be disappointments.