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Benjamin P. Edwards

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Benjamin Edwards joined the faculty of the William S. Boyd School of Law in 2017. He researches and writes about business and securities law, corporate governance, arbitration, and consumer protection.

Prior to teaching, Professor Edwards practiced as a securities litigator in the New York office of Skadden, Arps, Slate, Meagher & Flom LLP. At Skadden, he represented clients in complex civil litigation, including securities class actions arising out of the Madoff Ponzi scheme and litigation arising out of the 2008 financial crisis. Read More

Missouri’s president recently resigned amid protests about how his institution responded to racist and other deplorable acts on his campus.  A graduate student staged a hunger strike, and players from the Missouri football team threatened to sit out their next game if the president did not resign. 

Some have worried that the threat sets bad precedent, in that they think now a president can be forced to resign based on the racist acts of someone beyond his or her control. I don’t buy that, but more on that later.  Others are upset that it took the football team to make the protests have legs.  I don’t buy this one, either, though I give this one more credence. 

As someone working in an academic environment, I will say that I would be sympathetic if the resignation really happened because of things that were out of the control of the university president. That is, if he were really being held accountable for what was said by an idiot racist student, I’d be supportive of him and think it was wrong he was being forced out. Based on what I have seen, though, the criticisms were valid about the institution’s response…

The Georgia Attorney General’s (AG) office is trying to make the case that the Georgia Pipeline Act does not allow any entity other than a corporation to use the statute’s eminent domain power.  Palmetto Pipeline is seeking a certificate for authorization to use that power, provided in GA Code § 22-3-82 (2014): 

(a) Subject to the provisions and restrictions of this article, pipeline companies are granted the right to acquire property or interests in property by eminent domain for the construction, reconstruction, operation, and maintenance of pipelines in this state . . . .

The state AG has argued that a pipeline company must be a corporation, and thus a limited liability company (LLC)  cannot use the statutory power.  The AG is right.  In the Pipeline Act’s definitions section, it provides, at GA Code § 22-3-81 (2014), 

As used in this article:

. . . .

(2) “Pipeline company” means a corporation organized under the laws of this state or which is organized under the laws of another state and is authorized to do business in this state and which is specifically authorized by its charter or articles of incorporation to construct and operate pipelines for the

…

So, my rants about the problem of courts (and others) conflating LLCs and corporations are not new.  Unfortunately for the proper evolution of the law, but good fodder for my posts, I continue to get examples.  We now have a new one that raises the bar a bit.

 A recent case from the United States District Court for the Western District of Pennsylvania continues the trend. The beauty, if one can call it that, of the case is that there are failures to recognize the difference between LLCs and corporations at multiple levels. 

 First, though, let’s recap what LLCs are.  LLCs are limited liability companies, and they are creatures of statute. See, e.g., 6 Del. C. § 18-101, et seq.  As such, they are not corporations, which are creatures of other statutes. Cf., e.g., 8 Del. Code § 101, et. seq. In contrast, LLCs, like corporations and other associations, can be people.  See, e.g.,  Dictionary Act, 1 U.S. Code § 1 (“[The wor[d] ‘person’ . . . include[s] corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.”).

Back to our newest example, which I think of as a…

From potential employers to faculty, I hear a common mantra that students are “no longer able to write.” Thus, we need to get them practice ready in a way that apparently we, as law schools, used to do. 

I, too, share frustration with poorly written materials and poor performance generally. I also worry about the practice-ready nature of some of our students. Still, I find myself compelled to say that, in my experience, the vast majority of our students are thoughtful, intelligent, and capable.

I also can say that many of our students do not push themselves to deliver the high-quality work product of which they are capable.  I long for the self-motivated student, the same way I have (at times) longed for the self-motivated employee.  Some people have it, and some people don’t.  Like height, one can’t really teach motivation, but we can try to help students find their own motivation from within.  And we can set expectations high enough that failure is, in fact, an option. 

I have come in contact with quite a few students, and I don’t think we have an actual literacy problem with the students I have taught over the years (a few stark…

Readers of this blog know how much I hate courts that call LLCs “corporations.” (If you’re a new reader, welcome. And now you know, too.)  I am also one who likes to remind people that entity choices come with both rights and obligations, as do choices about whether to have an entity at all. Recent events in Illinois touch on both of these issues. 

A recent news story from Chicago’s NBC affiliate laments a recent court decision in Illinois that requires entities to have counsel if they are to make an appeal, even in the administrative process related to a parking ticket.  The story can be found here.  The short story is this: if one registers a vehicle in the name of a corporation, then the corporation must be represented by counsel to contest the ticket.  The reason for this determination comes from a non-parking related decision from 2014. 

In that decision, Stone Street Partners LLC v. City of Chicago Department of Administrative Hearings, the court determined that “the City’s administrative hearings, like judicial proceedings, involve the admission of evidence and examination and cross-examination of sworn witnesses–all of which clearly constitute the practice of law.” 12 N.E.3d…

As a life-long Detroit Lions fan, last night’s loss to the Seattle Seahawks was largely expected.  How they lost was new, though the fact that the Lions lost in a creative way, was also to be expected.  As actor Jeff Daniels said, being a Lions fan is more painful than being a Cubs fan.

In recent years, there is ample evidence that random and uncommon rules have shown up to hurt my already mediocre team. This got me to thinking, though, of the old adage, bad facts make bad law. For the Lions, I think that’s not necessarily apt.  It may be that bad football makes for better football later.   

To understand how one might get there, one needs to know a little what it’s like to be a Lions fan, so here’s a little insight into how life as a Lions fan works: 

I watched the start of the game last night with my ten-year-old son.  Part of the pre-game programming is all of the announcers and studio people make their pick for the game.  The ten or so predictions were unanimously for the Seahawks.  I turned to my son and said, “Well, the Lions will probably…

The ABA has recommend amendment of 28 U.S.C. § 1332 through Resolution 103B, which 

urges Congress to amend 28 U.S.C. § 1332, to provide that any unincorporated business entity shall, for diversity jurisdiction purposes, be deemed a citizen of its state of organization and the state where the entity maintains its principal places of business.

I’m on record as saying a legislative fix is how this should happen because I don’t think courts should read “incorporated” in the act to include any entities other than corporations.  I still believe that.  However, I have come up with an argument that supports the idea in a way I had not thought of.  I still disagree with the idea of a court adding entities other than corporations to 1332 absent legislative action, so I disagree with what follows, but I thought of an interesting argument that I almost find compelling , so I am putting it out there anyway.  

In Hobby Lobby decision, Justice Alito stated:

No known understanding of the term “person” includes some but not all corporations. The term “person” sometimes encompasses artificial persons (as the Dictionary Act instructs), and it sometimes is limited to natural persons. But no conceivable

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Haskell Murray had an interesting post on Friday about businesses buying fake reviews, followers, or friends online.  That post led me to think about another issue—if a company did that, could it be liable under Rule 10b-5 for securities fraud?

Consider this scenario: An investor is thinking about investing in a company called Ebusiness, Inc. She carefully reviews the company’s online presence and sees that Ebusiness has more followers and friends than anyone else in the industry. The reviews of its products are overwhelmingly positive. She concludes that Ebusiness is destined for greatness and buys its stock.

Later, the press discloses that most of Ebusiness’s followers and friends, and most of its online product reviews, are fake. Ebusiness paid someone else to produce them. The price of Ebusiness’s stock drops precipitously. Would Ebusiness be liable under Rule 10b-5?

Rule 10b-5 makes it unlawful “to make any untrue statement of a material fact . . . in connecton with the purchase or sale of any security. There’s no question that Ebusiness, through its paid agent, made fraudulent statements. There’s also no question that the investor relied on those fraudulent statements and suffered a loss when the truth became known. The…

A student of mine studying peer-to-peer lending ran across an interesting provision in the securities filings of Prosper Marketplace,  one of the two main peer-to-peer lending sites. (The other is Lending Club.) 

Here is one of the risk factors in Prosper’s filings:

In the unlikely event that PFL receives payments on the Borrower Loan corresponding to an investor’s Note after the final maturity date, such investor will not receive payments on that Note after maturity.

Each Note will mature on the initial maturity date, unless any principal or interest payments in respect of the corresponding Borrower Loan remain due and payable to PFL upon the initial maturity date, in which case the maturity of the Note will be automatically extended to the final maturity date. If there are any amounts under the corresponding Borrower Loan still due and owing to PFL on the final maturity date, PFL will have no further obligation to make payments on the related Notes, even if it receives payments on the corresponding Borrower Loan after such date.

To understand how this works, you need to understand a little about how the Prosper site works. When a loan is funded by the peer-to-peer lenders…

Today’s Labor Day, and what better topic to discuss on Labor Day than law teaching jobs?

A candidate for a law school teaching position recently asked if I would post advice on the interview process. That’s like asking the Tasmanian Devil for advice on coping with ADHD. I didn’t exactly tear up the interview scene when I was interviewing thirty years ago. But I have seen a great deal of the process from the other side since then, including two stints on our Appointments Committee.

I can’t tell you how to ace the law teaching interview process, but I do have a good idea of what doesn’t work. I have seen a number of candidacies ruined by incredibly bad interviews and job talks. If you have the credentials to get in the door, but you don’t really want the job, here, in no particular order, are eleven easy ways to sabotage your search.

1. Don’t change the names when you send out that form letter.

“I would really like to teach at Nebraska because I love the Southeast. Go Dawgs!” Believe it or not, I have actually seen letters like this. (Not with “Go Dawgs.” No one in his right…