December 2024

First, the Supreme Court DIG’d the NVIDIA case. I previously blogged about that case here; it, along with the Facebook case (which was also DIG’d), was a spectacularly bad grant resulting from disgruntled defendants who successfully made it appear that their extraordinarily fact-specific pleading-stage losses presented grand overarching legal questions that necessitated Supreme Court guidance. Belatedly, the Supreme Court realized they did not. Would that it had done so for other securities cases.

Second, the 2024 DGCL proposed amendments are out. As far as I can tell, the big change concerns litigation limiting bylaws and forum selection provisions (a subject I have addressed … frequently). The backstory here is, after a pair of decisions – Boilermakers Local 154 Retirement Fund v. Chevron Corp, 73 A.3d 934 (Del. Ch. 2013) and ATP Tour Inc. v. Deutscher Tennis Bund, 91 A.3d 554 (Del. 2014) – Delaware amended its code to address charter or bylaw provisions that govern internal-affairs-like state law stockholder claims. Specifically, corporations may require all such claims be brought in a particular forum, as long as plaintiffs retain access to the Delaware Superior Court or the Delaware Court of Chancery, but they…

Ferdinand Bratek, April Klein, and Yanting (Crystal) Shi have recently posted to ssrn The Market Value of Pay Gaps: Evidence from EEO-1 Disclosures.

Most companies are required to file reports with the EEOC regarding the diversity of their workforce, however, these EEO-1 reports are confidential unless the companies choose to release them. In 2023, a FOIA lawsuit forced the public release of EEO-1 reports for government contractors. The authors use this newly-released granular workforce data to confirm that women and people of color are paid less than white men in a variety of positions, and also that firms financially benefit by having more women and people of color in their workforce. In general, analysts often tout the purported financial benefits that diversity brings to a firm, but these authors suggest the disturbing possibility that diversity benefits a firm by lowering its labor costs.

Most strikingly, the authors find that when this particular EEO-1 data became public, the firms with greater pay gaps experienced more positive shareholder returns. In other words, the market, as well, recognized the value of underpaying women and people of color.

From a ruthless shareholder wealth maximization perspective, that makes perfect sense. But I note that…

Yesterday, Judge Badalamenti denied Target’s motion to dismiss a securities fraud claim against it arising out of its decision to run a pride campaign. The securities fraud claim was brought by America First Legal and other firms. They issued the following statements after the decision:

Statement from Reed D. Rubinstein, America First Legal Senior Vice President:

“Today’s decision is a warning to publicly traded corporations’ boards and management: Our federal securities laws mandate fair and honest disclosure of the market risk created by management when it uses shareholder resources, including consumer goodwill, to advance idiosyncratic and extreme social or political preferences. The risk of ESG mandates and DEI initiatives, such as Target’s “Pride Month” that targeted young children, cannot be whitewashed with boilerplate language or ignored,” said Reed Rubinstein.

Statement from Jonathan Berry, Managing Partner of Boyden Gray PLLC:

“Today’s ruling is an important win for our clients; we look forward to continuing to litigate this case to obtain relief for our clients and hold Target accountable for their actions,” said Jonathan Berry.

The decision certainly sends a message to corporations about what to expect. Candidly, the decision surprised me. After the initial complaint in the matter, I expected…

As many already know, earlier this week, a Texas federal district court issued a nationwide preliminary injunction against enforcement of the Corporate Transparency Act (“CTA”). Many questions are being raised by the court’s memorandum opinion and order, which can be found here. In addition, law firm memos and newsletter articles have become available and are being circulated, including this one from Stoll Keenon sent to me by friend-of-the-BLPB Tom Rutledge and this one from Wilson Sonsini (which included the opinion link provided above).

Also, members of the American Bar Association’s LLCs, Partnerships and Unincorporated Entities Committee are hosting a free Webinar tomorrow on the Texas opinion. The program, The Corporate Transparency Act Update: Texas Decision, is scheduled for Friday, December 6, 2024, 3:30 p.m. E.T. Program information is included below. I registered and plan to be there!

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On Tuesday, December 3, 2024, a Texas Federal District court issued a preliminary injunction against the Corporate Transparency Act. Please join in this discussion and gain a head start on drafting client communications of this significant development. The panel will review the best information available as to what this means for you and your clients. The LLCs, Partnerships…

Dear Readers:

“The Department of Insurance, Legal Studies and Real Estate in the Terry College of Business at The University of Georgia invites applications for a full-time non-tenure-track faculty position in Legal Studies at the lecturer level, beginning in fall semester 2025, with an employment start date of August 1, 2025.

Candidates must hold a juris doctorate or equivalent degree. Strong communication skills and demonstrated potential for excellent teaching are required. The position is renewable based on performance and promotion to Senior Lecturer is possible after six years of service. For information regarding the requirements for each faculty rank, please see the University of Georgia Guidelines for Appointment and Promotion of Lecturers (https://provost.uga.edu/policies/appointment-promotion-andtenure/guidelines-for-appointment-and-promotion-of-lecturers/).

Participation in service activities appropriate to the rank is expected. Salary is competitive and commensurate with qualifications.”

The complete announcement regarding this position is here: UGA Legal Studies Lecturer – Start Fall 2025

Dear Readers:

“The Midwest Academy of Legal Studies in Business (MALSB) Annual Conference is held in
conjunction with the MBAA International Conference. MBAA International draws hundreds of academics from business-related fields such as accounting, business/society/government, economics, entrepreneurship, finance, health administration, information systems, international business, management, and marketing. The MALSB has its own program track on Legal Studies and attendees may take advantage of the multidisciplinary nature of this international conference and attend sessions held by the other program tracks.

Presentations in 2025 will have the option of in person or live online delivery. Tentatively MALSB paper and panel in person/live online presentations are scheduled to begin Thursday morning (April 10, 2025) and conclude Friday afternoon (April 11, 2025). If registration numbers require additional sessions, they will be held Wednesday afternoon (April 9, 2025).”

Note that the registration/submission deadline is January 26, 2025.  The complete call for conference participation is here.”