January 2014

During my brief academic career, I have focused the majority of my research on social enterprise law.  While I have expressed my disagreement with various parts of the current social enterprise statutes, I have tried to make constructive suggestions for improvement, and am largely in favor of businesses that have a society-focused mission.

Lately, I have been thinking about whether my oral and written support of socially responsible businesses significantly impacts my purchasing behavior. 

Frankly and regrettably, the social responsibility of a given company is usually merely a “tie-breaker” in my purchasing decisions.  In my Social Enterprise Law seminar last spring, the class concluded, after doing case studies on a number of social enterprises, that for-profit social enterprises likely need a business plan that is just as good as a traditional for-profit company to be sustainable and successful.  Social enterprises that used their social responsibility as a crutch often failed or performed poorly. 

Patagonia is a socially responsible company that I have supported religiously — long before I started writing in the area.  You can see my worn out Patagonia shoes below.  While Patagonia’s products may be expensive, their value proposition is strong.  …

As I have mentioned before, there appears to be no official “meat market” for legal studies positions in business schools.  I found my current job through Higher Ed Jobs, and thought Higher Ed Jobs was the best source during my search.  Also, the Chronicle of Higher Education’s Vitae recently launched (though they have had a jobs board for quite some time) and is likely worth frequenting.

For those still on the market, I wanted to highlight two recent business law postings: Southeast Missouri State University and University of Alaska (Fairbanks).  Both positions appear to be tenure-track legal studies positions in business schools.  Also, both schools are AACSB-accredited.  (There are multiple accrediting bodies for business schools, and AACSB is the gold standard). 

I maintain that being a professor is the best job in the world (especially given that my childhood dream of becoming an NFL quarterback is looking less glamorous in light of all the talk about concussions and chronic traumatic encephalopathy (CTE)). 

Wishing success for our readers who are on the professor market. 

Professor Caroline Mala Corbin from University of Miami has written an interesting article on the Hobby Lobby and Conestoga Wood Specialites Corp. cases before the Supreme Court. Her abstract is below:

Do for-profit corporations have a right to religious liberty? This question is front and center in two cases before the Supreme Court challenging the Affordable Care Act’s “contraception mandate.” Whether for-profit corporations are entitled to religious exemptions is a question of first impression. Most scholars writing on this issue argue that for-profit corporations do have the right to religious liberty, especially after the Supreme Court recognized that for-profit corporations have the right to free speech in Citizens United. 

This essay argues that for-profit corporations should not – and do not – have religious liberty rights. First, there is no principled basis for granting religious liberty exemptions to for-profit corporations. For-profit corporations do not possess the inherently human characteristics that justify religious exemptions for individuals. For-profit corporations also lack the unique qualities that justify exemptions for churches. Citizens United fails to provide a justification as its protection for corporate speech is based on the rights of audiences and not the rights of corporate speakers. Second, as a matter of current…

I recently discovered that YouTube hosts a collection of content related to contracts. If you teach this first year course, it is at least worth browsing through the options to see if you can include something in class, a follow-up email to students, or linking through your course website.  These videos are silly and hard to believe that one could devote so much time to a task like “contracts” songs, but bless those who do.  

Collection of Contracts Songs #1: 

Collection of Contracts Songs #2: 

If you use other content in your first year contracts course, please leave a comment or send me an email. I will update the post with your suggestions.

-AT

Last week, after a post here, I received a call from a Charleston (WV) reporter seeking some background on veil piercing as it relates to the company (Freedom Industries) linked to a chemical spill that left 300,000 people without clean drinking water.  That conversation led to a rather long article, as newspapers go, on the concepts of veil piercing in West Virginia.  The article did a rather good job of relaying the basics (with a few nits), and I hope it at least informs people a little bit about the process to follow on that front. 

The article does reflect a little confusion over what I was trying to communicate about personal liability for the president of Freedom Industries. West Virginia law provides: (b)“Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation except that he may become personally liable by reason of his own acts or conduct.” W. Va. Code, § 31D-6-622 (emphasis added). I was trying (and I take responsibility for any lack of clarity) to reflect my view that it was conceptually possible that the company president could be…

The following call for papers comes to us from Janine Hiller (Virginia Tech):

I am pleased to announce a Call for Papers for a research colloquium focused on “Legal and Ethical Issues in Predictive Data Analytics.” The colloquium is co-organized and the resulting publication will be co-edited by Tonia Hap Murphy of  the University of Notre Dame. The colloquium of 8-10 scholars will be held at Virginia Tech, Blacksburg, Va. on June 19-20, 2014. Virginia Tech and the Center for Business Intelligence and Analytics are sponsoring the research meeting, and will pay for meals and lodging during the colloquium dates.

Predictive data analytics are used in a variety of settings and applications,  including personalized marketing, crime prevention, insurance, health care, and increasingly in the legal profession itself. Within the next few years, the sale of predictive analytics business software alone is forecast to reach billions of dollars and to be utilized in a wide variety of industries. In contrast to the growth of data analytics and predictive modeling, legal and ethical considerations have not been widely identified or discussed in academic literature. The goal of the colloquium is to provide leadership for research about these issues and

…

As Anne Tucker noted, last week was the fourth anniversary of the Supreme Court’s Citizens United decision, striking down as unconstitutional a ban on electioneering expenditures by corporations.

I don’t want to discuss the merits of that decision. I’m not a constitutional expert and many people much more qualified than I have chimed in. Instead, I want to talk about the public reaction to the decision. In my (admittedly limited) experience, non-lawyers react to Citizens United very differently from lawyers.

The Reaction of the Lay Public

The reaction of many non-lawyers is, “Are you nuts? Only people have constitutional rights and corporations aren’t people.” The mere idea that corporations should be treated like natural persons with similar constitutional rights is both hilarious and outrageous. Corporations aren’t people, and only an idiot would think otherwise.

The Reaction of Lawyers

The reaction of many lawyers is quite different. (I’m excluding those lawyers who appear as pundits on talk shows and are expected to overreact.) Many lawyers disagree with the Citizens United decision, but most lawyers don’t consider the idea of giving corporations the same rights as natural persons as completely beyond the pale of reason. The focus of the debate among…

Go here for the January 16, 2014 testimony of Mercer E. Bullard before the Committee on Small Business, United States House of Representatives, on the SEC’s Crowdfunding Proposal.  Here is a brief excerpt (comment deadline is February 3):

The overriding issue for crowdfunding is likely to be how the narrative of investors frequently losing their entire investment plays out. If investors are perceived as losing only a small part of their portfolios because of business failures rather than fraud, or if their crowdfunding losses are set off by gains in other investments through diversification, the crowdfunding market could weather large losses and thrive. However, if fraudsters are easily able to scam investors under the cover of a crowdfunding offering, or stale financial statements routinely turn out to have hidden more recent, undisclosed financial declines, or there are investors who can’t afford the losses they incur, resulting in stories of personal financial distress – then crowdfunding markets will never become a credible tool for raising capital.

John A. Pearce II & Jamie Patrick Hopkins have posted “Regulation of L3Cs for Social Entrepreneurship: A Prerequisite to Increased Utilization” on SSRN.  Here is the abstract:

One new business model is the low-profit, limited liability company (L3C). The L3C was first introduced in Vermont in 2008 and has since been adopted by several other states. The L3C is designed to serve the for-profit and nonprofit needs of social enterprise within one organization. As such, it has been referred to as a “[f]or-profit with [a] nonprofit soul.”

In an effort to efficiently introduce the L3C business model, states have designed L3C laws under existing LLC regulations. The flexibility provided by LLC laws allows an L3C to claim a primary social mission and avail itself of unique financing tools such as tranche investing. Specifically, the L3C statutes are devised to attract the program related investments (PRIs) of charitable foundations. Despite these successes, adoption of the L3C form has been slower than proponents expected.

A similar business initiative has found great success in the United Kingdom (U.K.), where numerous proponents supported legislation designed to create hybrid business models that would promote social entrepreneurship. As a result, the U.K. created…

Information about the annual Academy of Legal Studies in Business (“ALSB”) conference is available here. 

Supposedly, the conference hotel, the Hyatt Olive 8, is already booked.  (Who knew that you had to book earlier than January 24 for an early August academic conference).  I hear that the conference organizers are negotiating for reduced rates at the nearby hotels, or perhaps more rooms will come available (at the conference rate of $159/night) at the Hyatt Olive 8.

This will be my first ALSB conference and my first trip to Seattle.  I am looking forward to it.  The ALSB conference is the annual, national conference for legal studies professors in business schools.  Last fall I attended, presented, and enjoyed the SEALSB regional conference in Tampa.  I am told that ALSB will be similar, but on a much larger scale.

If you are interested in this conference and/or are interested in teaching law in business schools, it might be worth joining ALSB.  The new member rate is only $30. 

Hope to see some of our readers in Seattle in August.