January 2017

Tulane Law School invites applications for a one-semester visiting position in the Fall of 2017. Our specific needs for the Fall 2017 semester include basic income tax and corporate tax, criminal law, and professional responsibility. Applicants must possess a J.D. from an ABA-accredited law school, strong academic credentials, and at least three years of relevant law-related experience; prior teaching experience is strongly preferred. Applicants should submit a letter of interest, CV, and the names and contact information of three references through Interfolio at https://apply.interfolio.com/40060. For additional information, please contact Onnig Dombalagian at odombala@tulane.edu.

Tulane University is an equal employment opportunity/affirmative action employer committed to excellence through diversity. All eligible candidates are invited to apply for position vacancies as appropriate.

A couple of months ago, investors in Theranos filed a class action complaint seeking damages for fraud and negligent misrepresentation under California law.  Theranos is based in California; presumably, the plaintiffs intend to argue that any false statements emanated from California and therefore California law covers even out of state purchases.  See Diamond Multimedia Systems, Inc. v. Superior Court, 19 Cal. 4th 1036 (Cal. 1999). 

The reason this interests me is because it’s rare – not unheard of, of course, but rare – to see fraud-based securities class actions concerning securities that are not publicly traded.  SLUSA eliminated the possibility for most companies, but SLUSA alone isn’t the problem; the other hurdle is the difficulty of establishing reliance on a classwide basis, as even before SLUSA, fraud-on-the-market doctrine was largely limited to Section 10(b) claims. 

California law, however, is different from most states’, because California’s blue sky law explicitly permits claims for deceit based on price distortion.  See Mirkin v. Wasserman, 5 Cal. 4th 1082 (Cal. 1993); Cal. Corp. Code, §§ 25400, 25500. 

It will be interesting to see if that’s how the Theranos class plans to approach matters; the difficulty will be establishing that, for example, Investor A’s willingness…

Over at the Harvard Law School Forum on Corporate Governance and Financial Regulation, Rick Alexander has a post on benefit corporations. I plan to post some comments on Rick’s post next week, when I have a bit more time, but for now, I will just bring our readers’ attention to the post and include a small portion of his post below:

Benefit corporations dovetail with the movement to require corporations to act more sustainably. However, the sustainability movement often treats the symptom (irresponsible behavior), not the root cause—the focus on individual corporate financial performance. Proponents of corporate responsibility often emphasize “responsible” actions that increase share value, by protecting reputation or decreasing costs. Enlightened self-interest is an excellent idea, but it is not enough. As long as investment managers and corporate executives are rewarded for maximizing the share value of individual companies, they will have incentives to impose costs and risks on everyone else.

On Friday, I will present as part of the American Society of International Law’s two-day conference entitled Controlling Corruption: Possibilities, Practical Suggestions & Best Practices. The ASIL Conference is co-sponsored by the University of Miami School of Business Administration, the Business Ethics Program of the University of Miami School of Business Administration, UM Ethics Programs & the Arsht Initiatives, the Zicklin Center for Business Ethics Research, Wharton, University of Pennsylvania, Bentley University, and University of Richmond School of Law.

I am particularly excited for this conference because it brings law, business, and ethics professors together with practitioners from around the world. My panel includes:

Marcia Narine Weldon, St. Thomas University School of Law, “The Conflicted Gatekeeper: The Changing Role of In-House Counsel and Compliance Officers in the Age of Whistle Blowing and Anticorruption Compliance”

Todd Haugh, Kelley School of Business, Indiana University, “The Ethics of Intercorporate Behavioral Ethics”

Shirleen Chin, Institute for Environmental Security, Netherlands, “Reducing the Size of the Loopholes Caused by the Veil of Incorporation May lead to Better Transparency”

Edwin Broecker, Quarles &Brady LLP, Indiana,& Fernanda Beraldi Cummins, Inc, Indiana, “No Good Deed Goes Unpunished: Possible Unintended Consequences of Enforcing Supply Chain Transparency”

Stuart Deming, Deming PLLC…

The late December announcement of Carl Icahn as a special advisor overseeing regulation piqued my professional interest and raises interesting tension points for both sides of the aisle, as well as for corporate governance folks.  

Icahn’s deregulatory agenda has the SEC in his sights.  Deregulation, especially of business, is a relatively safe space in conservative ideology.  Several groups such as the Chamber of Commerce and the Business Roundtable may be pro-deregulation in most areas, but, and this is an important caveat– be at odds with Icahn when it comes to certain corporate governance regulations.  Consider the universal proxy access rules, which the SEC proposed in October, 2016.  The proposed rules would require companies to provide one proxy card with both parties’ nominees–here we don’t mean donkeys and elephants but incumbent management and challengers’ nominees.  Including both nominees on a single proxy card would allow shareholders to “vote” a split ticket—picking and choosing between the two slates.  The split ticket was previously an option only available to shareholders attending the in-person meeting, which means a very limited pool of shareholders.  “Universal” proxy access– a move applauded by Icahn–is opposed by House Republicans, who passed an appropriations bill – H.R. 5485 –that would eliminate SEC funding…

I am happy to say I just received my new article, co-authored with a former student, S. Alex Shay, who is now a Trial Attorney in the Office of the United States Trustee, Department of Justice. The article discusses property law challenges that can impeded business development and negatively impact landowners and mineral owners in shale regions, with a focus on the West Virginia portion of the Marcellus Shale. The article is Horizontal Drilling Vertical Problems: Property Law Challenges from the Marcellus Shale Boom, 49 John Marshall Law Review 413-447 (2015). 

If you note the 2015 publication date, you can see the article has been a long time coming.  The conference it is linked to took place in September 2015, and it has taken quite a while to get to print. On the plus side, I was able to do updates to some of the issues, and add new cases (and resolutions to cases) during the process.  I just received my hard copies yesterday — January 9, 2017 — and I received a notice it was on Westlaw as of yesterday, too.

I always find it odd when law reviews use a specific year for an issue, as opposed to the actual publication year.  I…

RESEARCH COLLOQUIUM: CALL FOR PAPERS

Law and Ethics of Big Data

Hosted and Sponsored by:

The Carol and Lawrence Zicklin Center for Business Ethics Research

The Wharton School of the University of Pennsylvania

Co-Hosted by:

Virginia Tech Center for Business Intelligence Analytics

The Department of Business Law and Ethics, Kelley School of Business

Washington & Lee Law School

April 21st and 22nd 2017

at the

Wharton School of the University of Pennsylvania, Philadelphia, Pennsylvania

Abstract Submission Deadline: February 24, 2017

We are pleased to announce the research colloquium, “Law and Ethics of Big Data,” at The Wharton School of the University of Pennsylvania, Philadelphia, Pennsylvania, co-hosted by Professor Philip M. Nichols, Assistant Professor Angie Raymond of Indiana University and Professor Janine Hiller of Virginia Tech.

Due to the success of this multi-year event that is in its fourth year, the colloquium will be expanded and we seek broad participation from multiple disciplines; please consider submitting research that is ready for the discussion stage. Each paper will be given detailed constructive critique. We are targeting cross-discipline opportunities for colloquium participants, and the Wharton community has expressed interest in sharing in these dialogues.

A non-inclusive list of topics that are appropriate …

    If you haven’t yet heard, the 2016 revision of the Model Business Corporation Act has been released.  A memorandum from the Corporate Laws Committee describes the evolution of the recent revision:

    Sixty-six years ago the Committee on Corporate Laws of the ABA’s Business Law Section (the Committee) published the Model Business Corporation Act (the Act or the Model Act). Now substantially adopted by a majority of the States, the Act has strongly influenced the law governing U.S. corporations. Like corporate law, however, the Act has not been static: the Committee approved a substantial revision of the Act in 1969, less than 20 years after its initial publication; and just 15 years later, in 1984, the Committee adopted what was then called the Revised Model Business Corporation Act, a top to bottom revision of the original Act.

    Through periodic amendments, the Act has continued to evolve in significant ways since 1984, as further described below. Until recently, however, the Committee has not undertaken a comprehensive revision of the Act in a form that could be adopted by state legislatures as a means to capture all of the changes to the Act since 1984. Nor has there been any systematic attempt to…

The members of Friday’s AALS discussion group about which I wrote last week came to an inescapable–if unsurprising–overall conclusion: the U.S. Supreme Court’s opinion in the Salman case does little to address major unresolved questions under U.S. insider trading law.  That having been said, we had a wide-ranging and sometimes exciting discussion about the Court’s opinion in Salman and what might or should come next.  I found the discussion very stimulating; a great way to start a new semester–especially one in which I am teaching Securities Regulation and Advanced Business Associations, both of which deal with insider trading law.  I will offer brief outtakes from the proceedings here for your consideration and (as desired) comment.

John Anderson and I framed three questions around which we structured the formal part of the discussion session (which commenced after brief introductory comments from each participant).

  • What, if anything, does the Court’s Salman opinion say by its silence?
  • What, if anything, is left of the Second Circuit opinion in the Newman case after Salman?
  • Is law reform needed after Salman, and if so, should we continue to permit it to occur through further, incremental judicial developments or should reform be undertaken through legislation or regulatory rule-making or guidance?

The…