September 2017

Earlier this week, the Wall Street Journal reported that many institutional investors – including large mutual fund complexes like BlackRock and State Street – have become concerned about “overboarding,” namely, the phenomenon where corporate directors sit on multiple boards.

There are good reasons to be concerned.  Researchers have found that in many, though perhaps not all, cases when corporate directors are “overboarded” – and thus presumably unable to devote their full attention to governance at particular companies – companies are less profitable and have a lower market to book ratio.  (Similarly effects are found for distracted directors.)

That said, there’s a particular irony in seeing mutual fund companies, of all investors, leading the charge.  Most mutual fund companies employ a single board – or a few clusters of boards – to oversee all of the funds in the complex.  This can result in directors serving on over 100 boards in extreme cases.  State Street’s Equity 500 Index Fund, for example, reports trustees who serve on 72 or 78 boards within the complex.  BlackRock’s Target Allocation Funds have trustees who serve on either 28 and 98 different boards (depending on how you count).

I’ll admit this…

I recently finished Elizabeth Pollman and Jordan Barry’s article entitled Regulatory Entrepreneurship. The article is thoughtfully written and timely. I highly recommend it. 

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This Article examines what we term “regulatory entrepreneurship” — pursuing a line of business in which changing the law is a significant part of the business plan. Regulatory entrepreneurship is not new, but it has become increasingly salient in recent years as companies from Airbnb to Tesla, and from DraftKings to Uber, have become agents of legal change. We document the tactics that companies have employed, including operating in legal gray areas, growing “too big to ban,” and mobilizing users for political support. Further, we theorize the business and law-related factors that foster regulatory entrepreneurship. Well-funded, scalable, and highly connected startup businesses with mass appeal have advantages, especially when they target state and local laws and litigate them in the political sphere instead of in court.

Finally, we predict that regulatory entrepreneurship will increase, driven by significant state and local policy issues, strong institutional support for startup companies, and continued technological progress that facilitates political mobilization. We explore how this could catalyze new coalitions, lower the cost of political participation, and improve policymaking. However, it…

You couldn’t pay me enough to be the owner of an NFL team right now. I almost feel sorry for them. Even if you’re not a  fan, by now you’ve heard about the controversy surrounding NFL free agent Colin Kaepernick, and his decision to kneel during the national anthem last year. You’ve also probably heard about the President’s call for NFL owners to fire players who don’t stand while the anthem is played and his prediction of the league’s demise if the protests continue. Surprisingly, last Sunday and Monday, some of the same owners who made a business decision to take a pass on  Kaepernick despite his quarterback stats (citing among other things, the potential reactions of their fans) have now themselves made it a point to show solidarity with their players during the anthem. The owners are locking arms with players, some of whom are now protesting for the first time.

Football is big business, earning $13 billion last year, and the owners are sophisticated businessmen with franchises that are worth on average $2.5 billion dollars each. They care about their fans of course, and I’m sure that they monitor the various boycotts. They are also reading about…

The United States District Court for the Northern District of Mississippi seems to understand that LLCs are different than corporations, but they don’t really want to keep them separate. See this passage, to which I have added notes: 

Regarding complete diversity, the citizenship of a limited liability corporation [no, limited liability company]  is determined by the citizenship of all its members. Tewari De-Ox Sys., Inc. v. Mtn. States/Rosen, Ltd. Liab. Corp., 757 F.3d 481, 483 (5th Cir. 2014). The “citizenship of an unincorporated [yes!] association must be traced through each layer of the association, however many there may be.” Deep Marine Tech., Inc. v. Conmaco/Rector, L.P., 515 F.Supp.2d 760, 766 (S.D. Tex. 2007). Further, “§ 1332(c)(1), which deems a corporation [wait, what?] of ‘every State and foreign state’ in which it is incorporated and the ‘State or foreign state’ where it has its principal place of business, applies to alien corporations.” Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535, 537 (5th Cir. 2014). The defendants submitted an upstream analysis of their organizational structure, tracing through each layer of association, to properly allege the citizenship of each member, ultimately establishing that they and Tubwell are citizens

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Belmont University’s College of Law is hiring for two professor position. I am in Belmont’s College of Business, and have taught in our College of Law, so I selfishly hope they make some great hires across campus. My family loves Nashville and Belmont University is a great place to work.

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The Belmont University College of Law, located in vibrant Nashville, Tennessee, invites applications from entry-level and experienced candidates for two anticipated tenure-track faculty positions to begin in 2018-2019.  For the first tenure-track position, our primary areas of recruiting interest include business associations, secured transactions and family law. The second tenure-track position is in Belmont’s legal writing, research and advocacy program. Belmont is an EOE/AA employer under all applicable civil rights laws.  Women and minorities are encouraged to apply. 

Applicants for both positions must have an exemplary academic record and possess a J.D. or equivalent degree. They should demonstrate outstanding achievement or potential in teaching and scholarship, and also share the University’s values and support its mission and vision of promoting Christian values by example. Our goal is to recruit dynamic, bright, and highly motivated individuals who are interested in making significant contributions to our law school and its students. Practice experience is preferred…

 RockyTopPride

A recent Knoxville New Sentinel article (as well as articles and other press coverage, including stories on local television outlets like this one) noted the golden anniversary of The University of Tennessee’s unofficial* fight song (also a Tennessee state song), Rocky Top.  Any of you who have been to Neyland Stadium–or to Thompson-Boling Arena or any other venue at which the Vols are accompanied by the Pride of the Southland Marching Band or one of the pep bands–are familiar with the tune.  Many of our opponents just despise it.  It’s catchy, and it’s country.

And it has led to merch in which The University of Tennessee has an interest.  Rocky Top hats, t-shirts, etc. abound.  Lyrics from the song (especially “Home sweet home to me”) adorn the same.  That little song has become a big (read: commercially successful) deal.

But it also has been involved in some recent intellectual property law controversies involving a town just North of us here in Knoxville–a town formerly known as Lake City, Tennessee and now known as (you guessed it) Rocky Top, Tennessee.  It will take me two posts to cover this without boring you all, but I will start with…

States frequently compete with each other to attract businesses.  They’ll offer tax credits, subsidies, and regulatory waivers to persuade corporations to set up shop locally.  (Right now, Amazon is asking cities to compete to host its second headquarters.)  These incentives may or may not work out well for the state; it’s not uncommon for the promised jobs to disappear.  Meanwhile, competition among states can promote a race to the bottom, with states offering increasingly generous – and unaffordable – financial packages in exchange for a temporary boost in economic activity.

Wisconsin’s new deal with Foxconn represents a striking new frontier in these wars between the states.  Foxconn is a Taiwanese company with a history of reneging on its promises to establish manufacturing plants in exchange for rich government incentives.  Nonetheless, Wisconsin has promised it $2.85 billion over 15 years if it will build a $10 billion plant and hire 13,000 workers.   And to sweeten the deal, Wisconsin has also promised Foxconn preferential treatment in the Wisconsin court system.

Apparently concerned that its grant of certain environmental waivers may prompt local lawsuits, Wisconsin has promised Foxconn an expedited litigation process, including automatic stays of trial…

Below are a few wellness tips, with a focus on student life. I didn’t do all, or even many, of these things consistently well when I was in school, but I was better off when I did, and I paid for it when I didn’t. Many of these things are obvious, but many are also ignored.

Consistent Sleep. Sleep is incredibly important. So many of the things we do during waking hours depend on getting good sleep. Shoot for going to bed at a consistent time and waking up at a consistent time. This might be difficult with roommates and you may need to request new roommates. All-nighters, either from studying or social events, are relatively common in college and law school, but all-nighters almost always produce more poor results than if the studying or social events were more evenly distributed across the semester. Sadly, I see too many students sleep walking through the day, armed with caffeine to self-medicate.

Eat Well. I am always in search of fast, healthy, and inexpensive meals. The options are not plentiful, but I can really feel it when the quality of my food slips. Thankfully, most colleges…