March 2016

While we adjust to the departure of our long-time contributor (and friend) Steve Bradford and plan for the future, the Business Law Professor Blog editors seek interested guest bloggers willing to write one or more substantive posts on a business law topic (scholarship, doctrinal development, current event, etc.).  We are open to a variety of business law backgrounds with a particular interest in adding coverage of commercial law and related topics.  For questions or if you would like to nominate yourself or a colleague to guest blog between now and the end of summer 2016, please send an email to amtucker@gsu.edu with the subject line: “BLPB Guest Blogger”.  Our selection process will depend upon the volume and variety of responses.

-Anne Tucker

In my Energy Business: Law & Strategy course, I use Larry A. DiMatteo’s article, Strategic Contracting: Contract Law as a Source of Competitive Advantage, 47 Am. Bus. L.J. 727 (2010).  I have been using the article in the class since 2012 (this is the third time I have taught it), and I think it does a great job of providing a theoretical backdrop for practical application.  I teach the article in combination with a one-sided proposed Memorandum of Understanding to help students think about the contracting process and and the long-term implications of what might seem like a small-scale negotiation. I highly recommend the piece.  

In reading the article this time around, though, I was struck by how differently the piece treats limited liability companies (LLCs) and corporations and the way concerns about opportunistic behavior are raised in the context of the latter.   In one portion of the article, DiMatteo notes: 

Corporate strategy that fails to take account of the strategic use of law is likely to waste opportunities for competitive advantages. A corporate legal strategy can be used to gain competitive advantages both internally and externally.

I wholeheartedly agree, and this is part of the reason I teach my course.  Although I don’t think…

There once was a blogger named Steve.
A positive mark he did leave.
His witty, smart style
Kept us reading a while.
The loss of his posts we shall grieve.

So long from the blogosphere, friend.  We know, as you have promised, that you’ll never be far away.  But we shall, indeed, miss your byline here at the BLPB.

And everything that seemed possible at twenty-four, twenty-five, is now just such a joke, such a ridiculous fiction, every birthday an atrocity.
    -Dave Eggers, A Heartbreaking Work of Staggering Genius

Today is my 60th birthday. It’s also the end of my blogging here on the Business Law Prof Blog.

No, we don’t have a mandatory retirement program. I’ve just run out of interesting things to say. (Some of you would say that happened months ago.)

Having interesting things to say is not a requirement for blogging. The blogosphere is filled with writers who keep churning away even though they haven’t had a fresh thought in years. But I’m not motivated solely by the sound of my own voice. I don’t want to keep writing if I’m not contributing anything worthwhile. I’m stepping aside to make room for those younger than me with fresher ideas.

Thank you to my co-bloggers, all of whom are younger than me and have fresher ideas: Ann, Anne, Haskell, Joan, Josh, Marcia, and Stefan. They always have interesting things to say and I’ve learned a lot from them, both on and off the blog. I will continue to read their thoughtful posts, even though…

I’ve become interested in the proposal to require auditing firms to disclose the names of engagement partners, and other firms, involved in an audit of a public company. Though I can’t pretend to have waded through all the comments that have been submitted on this issue, I gather one of the concerns is that disclosure will increase potential liability under Section 10(b). I actually think that it will and it won’t, and as someone who feels that auditors should be held to more stringent standards than the law currently allows, I have mixed feelings about the proposal.

[More under the jump]

If you follow sports related news, you know that tennis star Maria Sharapova recently tested positive for a banned performance enhancing drug called Meldonium. Details here and here and here.  According to one source, over 60 athletes have tested positive for Meldonium this year; the drug was just recently added the banned substances list. Sharapova claims she was unaware that she was taking a banned substance. 

A number of Sharapova’s biggest sponsors have suspended or ended their relationship with her and/or delayed planned events. These sponsors include, Nike, Porsche, and TAG Heuer. Head and Evian appear to be sticking with her. Head chairman Johan Eliasch claimed that Sharapova simply made an “honest mistake.”

The companies that have cut ties with Sharapova have likely been able to do so through what is often called a morals clause or a morality clause in the endorsement contract. Some background on morals clauses can be found here and here and here. And here is an interesting contract law question from Eric Goldman that involves morals clauses. 

Some of our December graduates haven just taken the Florida bar exam. As always, I asked them about the business associations questions. Florida drastically changed its LLC rules in 2014, but still hasn’t asked any questions about LLCs, focusing instead on partnerships and corporations (at least according to the students). From a review of the released questions, the bar didn’t ask about LLCs before the amendments either.

I teach BA again next year and I’m struggling with what to emphasize. Business Associations is not required in many Florida law schools, but it is at St. Thomas, and many students enter the class with trepidation. Most will only take the one required course and won’t go on to advanced classes in securities regulation, corporate taxation, or other drafting courses. I try to focus the required BA class on skills that graduates will need in the workplace in addition to preparing them for the bar by using released test questions. Now I wonder how to balance the tension between the rise of LLCs and the many changes in laws related to securities regulation with the bar’s continued focus on partnerships and traditional corporations.

Yesterday the Obama administration added Miami to the list…

Last month, I published a post that promised subsequent posts on productive scholarly activity.  Specifically, that initial post focused on joy as a driver of scholarly productivity.  I noted there that the colleague who prompted me to start this series–my muse of sorts–thought readers might be interested in knowing about how I organize my research materials, among other things.  I pick up that idea here.

There is no single or simple answer to this question.  I am in a constant evolution in this part of my work, and the matter is complicated by the fact that research materials can be electronic, hard-copy, or orally conveyed.  I do now have some routines, however, and I have come to a few broadly applicable realizations along the way.  Most are likely obvious.  Nevertheless, I share them here today.

At the outset, it is critical to note that my work habits include mobility as a core value.  I work from wherever I am.  So, I have learned that my important research materials need to be captured in some way on my computer when possible.  

Fellow BLPB editor, Stefan Padfield, raised some insightful questions on the continued reach and impact of defacto corporation doctrines and corporation by estoppel in an earlier, offline conversation.  [Stefan uses my Business Organizations casebook offered on the electronic platform ChartaCourse and was graciously providing me some feedback].  The conversation raised two related groups of questions. First what is the continued import and application of defacto corporation doctrine in a world of standardized incorporation processes.  Long gone are the days of lost mail (lost Email maybe) and corrections can be made nearly instanteously and will relatively little cost in the event of typos or other defects.  To what extent does the de facto doctrine, long a staple of the survey law school course on corporations, still play a relevant role in practice. I understand all of the doctrinal reasons law professors may want to continue to teach it because it tests the outer limits of the substance over form debate in corporations and the begs the questions how fragile or strong is the legal fiction of separately incorporated entities.  It is nearly as fun as piercing the corporate veil!  But in [insert finger quotes here] “real life” or “practice” how relevant is…