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John P. Anderson

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Dean Anderson's scholarship focuses on securities enforcement, white-collar crime, and intersections of law and philosophy (e.g., business ethics, constitutionalism, problems of pluralism, and human rights).

His recent articles address the law and ethics of insider trading, the problem of how to build a just and enduring constitutional order in the face of increasing religious and cultural pluralism, and the theoretical underpinnings of our international human rights regime. Read More

As recounted by Jeff Edmonds, our high school’s track coach, Van Townsend:

would train runners from all the schools in the region over the summer, then relentlessly compete against them in the fall, then bring them back together to train in the winter. His world was the runner’s world, in which your rival is your greatest friend.

At the time, I did not really care much for training; I just liked winning. Van was easily the most knowledgeable coach in our region, and I remember being somewhat frustrated that he would share his expertise with our competitors.

With winning races as my ultimate goal, any assistance to other runners was counterproductive. For me, competition was zero-sum; if someone else won, I lost. Van saw competition differently. Van saw competition not as the end, but as a means to the greater ends of self-discipline, community, and true excellence.

Cormac McCarthy, in his 2007 Pulitzer Prize winning novel The Road, explores these competing views of competition. In this post-apocalyptic novel, an unnamed man and his son travel south over an ash-covered road, trying to outrun the harsh winter. Resources are scarce and many of the survivors have resorted to…

Happy holidays! Billions of people around the world are celebrating Christmas or Hanukah right now. Perhaps you’re even reading this post on a brand new Apple Ipad, a Microsoft Surface, or a Dell Computer. Maybe you found this post via a Google search. If you use a product manufactured by any of those companies or drive a Tesla, then this post is for you. Last week, a nonprofit organization filed the first lawsuit against the world’s biggest tech companies alleging that they are complicit in child trafficking and deaths in the cobalt mines of the Democratic Republic of Congo. Dodd-Frank §1502 and the upcoming EU Conflict Minerals Regulation, which goes into effect in 2021, both require companies to disclose the efforts they have made to track and trace “conflict minerals” — tin, tungsten, tantalum, and gold from the DRC and surrounding countries. DRC is one of the poorest nations in the world per capita but has an estimated $25 trillion in mineral reserves (including 65% of the world’s cobalt). Armed militia use rape and violence as a weapon of war in part so that they control the mineral wealth. The EU and US regulators believe that consumers…

    Hope everyone had some great holidays.  A couple of weeks ago I posted on the relationship between fiduciary duty and trade secret law.  https://www.businesslawprofessors.com/business_law/2018/12/the-relationship-between-fiduciary-duty-and-trade-secret-law-ive-got-some-questions-/.  I ran across a recent Fifth Circuit case (applying Louisiana law) that comes out the way I had hoped (at least in part), but that drops a footnote indicating that this resolution is far from uniform among the states.  In relevant part, the court noted the following:

LUTSA’s [Louisiana’s Uniform Trade Secret Act] preemption provision states:

  1. This Chapter displaces conflicting tort, restitutionary, and other laws of this state pertaining to civil liability for misappropriation of a trade secret.
  2. This Chapter does not affect:

(1) contractual or other civil liability or relief that is not based upon misappropriation of a trade secret, or

(2) criminal liability for misappropriation of a trade secret.

LA. STAT. ANN. § 51:1437. Official commentary to the statute explains that LUTSA “applies to duties imposed by law in order to protect competitively significant secret information.” Id. cmt. (1981) (Louisiana Official Revision Comments). But it does not apply to contractual duties or to “duties imposed by law that are not dependent upon the existence of competitively significant…

    As part of the duty of loyalty, a fiduciary of a company should not use confidential information belonging to the company for the fiduciary’s personal benefit.  See, e.g., Hollinger Intern., Inc. v. Black, 844 A.2d 1022, 1061 (Del. Ch. 2004).  In a recent Texas case, Super Starr Int’l, LLC v. Fresh Tex Produce, LLC, 531 S.W.3d 829 (Tex. App. 2017), a wrinkle on bringing such a breach of fiduciary duty claim was introduced — at least to me. 

    In December 2010, Kenneth Alford, Lance Peterson, and David Peterson created Tex Starr Distributing, LLC (the “LLC”).  Under the Tex Starr operating agreement, Fresh Tex Produce, LLC (the “Distributor”) and Super Starr International, LLC (the “Importer”) were the LLC’s only members.  Lance Peterson was associated with the Importer.

    In October 2016, the Distributor filed an original petition and application for injunctive relief individually and derivatively on behalf of the LLC. The defendants were the Importer, Lance Peterson, and others.  Among other claims, the Distributor brought an action for breach of fiduciary duty and for violation of the Texas Uniform Trade Secrets Act (“TUTSA”).  The Distributor’s breach of fiduciary duty claim alleged:  “By diverting [the LLC’s] accounts and business for [the…

CALL FOR PAPERS: Integrating Corporate Reporting

June 6, 2018

The Law Faculty of the Hebrew University of Jerusalem (HUJI)

Keynote Speaker — Prof. Baruch Lev (New York University)

Workshop submission deadline: April 10, 2018

The Hebrew University of Jerusalem (HUJI) is pleased to announce an interdisciplinary international workshop on corporate reporting to be held in Jerusalem on June 6, 2018.

The workshop will focus on corporate reporting and aims to bring together researchers in law, finance, economics, accounting and political science, whose research interests include corporate reporting and corporate regulation in general.

Abstract: Corporations are involved in vital aspects of the modern social order. From capital allocation by publicly traded companies, through the supply of essential commodities such as water and electricity by state and municipal corporations, to local government corporations that design local governance and administrative structures. Consequently, the implementation of many social policies—from levying fair taxation to ensuring equal employment opportunities and fair trade—Involve corporate regulatory issues. As regulatory regimes become more and more dependent on the information provided by corporations and their managers, corporate reporting has become important for objectives other than mere capital allocation.

Thus, in recent years, alongside “classic” reporting to investors and…

    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…

    Does a partner have actual authority, simply as a matter of his “partner” status, to bind the partnership to an ordinary business transaction?  On the one hand, RUPA § 401(j) states that “[a] difference arising as to a matter in the ordinary course of business of a partnership may be decided by a majority of the partners.”  That suggests that a partner is not authorized to act absent a majority vote.  On the other hand, RUPA § 301(1) states that “[e]ach partner is an agent of the partnership,” and comment 2 states that “[t]he effect of Section 301(1) is to characterize a partner as a general managerial agent having both actual and apparent authority co-extensive in scope with the firm’s ordinary business” (emphasis added)).

    The comment to § 301 has always struck me as an odd place for discussing actual authority.  Actual authority is based on a partner’s relationship to the other partners and the partnership.  Section 301, however, is in the Article dealing with a partner’s relationship to non-partner outsiders.  Section 301(1) in particular is about apparent authority.  What supports the assertion in the comment, therefore, that a partner has ACTUAL authority co-extensive in scope with the firm’s ordinary business?

 

    Every year I teach RUPA (1997) § 404(e), and every year I am confused.  That section states that “[a] partner does not violate a duty or obligation under this [Act] or under the partnership agreement merely because the partner’s conduct furthers the partner’s own interest.”  The comment makes the following observations (emphasis added):

    Subsection (e) is new and deals expressly with a very basic issue on which the UPA is silent.  A partner as such is not a trustee and is not held to the same standards as a trustee.  Subsection (e) makes clear that a partner’s conduct is not deemed to be improper merely because it serves the partner’s own individual interest.

    That admonition has particular application to the duty of loyalty and the obligation of good faith and fair dealing.  It underscores the partner’s rights as an owner and principal in the enterprise, which must always be balanced against his duties and obligations as an agent and fiduciary.  For example, a partner who, with consent, owns a shopping center may, under subsection (e), legitimately vote against a proposal by the partnership to open a competing shopping center.

 I have always found this shopping center example to be…

    First of all, I want to thank the editors of the Business Law Prof Blog for allowing me to guest blog over the summer.  I thoroughly enjoyed my stay here and they have been kind enough to let me continue posting from time to time as a contributing editor.  Thanks again to all of you.

    The National Conference of Commissioners on Uniform State Laws (“NCCUSL”) (also known as the “Uniform Law Commission”) promulgates several influential business organization statutes:  the Revised Uniform Partnership Act (1997), the Revised Uniform Limited Partnership Act (1985), the Uniform Limited Partnership Act (2001), and the Revised Uniform LLC Act (2006), to name a few.  Some of these statutes have been widely adopted.  The Revised Uniform Partnership Act, for example, has been adopted by 38 states (as well as the District of Columbia and the Virgin Islands) according to the Uniform Law Commission’s website.  As another example, the Uniform Limited Partnership Act (2001) has been adopted by 19 states (as well as the District of Columbia) according to the same website.

    From 2009-2013, NCCUSL engaged in an intensive effort to harmonize all of the uniform acts covering unincorporated business organizations.  The “Harmonization Project”…

    When a law professor receives student feedback that his class is boring, should he care?  I once had a discussion with a colleague about this topic who was insistent that students care too much about being “entertained” in class and too little about actually learning the material that is conveyed to them.  While I agree that the ultimate measure of a successful class should be whether the students have learned (and can apply) the material, we shouldn’t downplay the importance of entertainment in facilitating that learning.  Indeed, I think it is wrong to think that our job description does not include “entertainer” almost as much as it does “teacher.”  (If you don’t believe me, try sitting through a colleague’s 75-minute class, as I recently had to do for evaluation purposes.  While time seems to fly as the professor, it moves at a decidedly slower pace when you are in the student’s shoes.)      

    But what does it mean to be an entertainer in class?  Must the professor tell jokes, sing songs, or swallow fire?  While I have no doubt that this would help, of course not.  Students will learn the material better when they are interested and engaged, and being…