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This article popped up from the local paper (home of internet sensation Marilyn Hagerty) serving the area of my prior instituion: 

Committee recommends no liquor license for Rumors bar in Grand Forks

The Grand Forks City Council Service/Safety Committee recommended Tuesday that the city deny a liquor license transfer for Rumors bar in Grand Forks.

The committee originally recommended the full council deny the license earlier this month because of the previous felony charges against Blake Bond, Jamestown, N.D., one of the partners in Sin City LLC, the applicant of the license.

The council then sent the issue back to the committee, but when representatives from Sin City failed to show up at Tuesday’s meeting, the committee voted to recommend denying the license again. . . . .

A quick note for the reporter, who wouldn’t necessarily know this:  LLCs don’t have partners. They have members.  So, the more accurate statement would be that Mr. Bond “is one of the members of Sin City, LLC.”  The North Dakota Limited Liability Company Act definitions provision explains that:

“Member” means a person, with or without voting rights, reflected in the required
records of a limited liability company as the owner

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Last week, I had an enjoyable conversation with Joseph Yockey (Iowa) about his new article:  “Does Social Enterprise Law Matter?”  I am glad to see more people entering the social enterprise law conversation and have included the abstract of his interesting new article below: 

Social enterprise laws are sweeping through the nation. Entrepreneurs can now organize under one of several new legal forms, including the “benefit corporation” form. In theory, these options will make it easier for socially minded firms to pursue a double bottom line of profit and public benefit — that is, to do well while doing good.

This Article tests that theory. In asking whether social enterprise laws matter, I find that the answer is yes, but not for the reasons most people think. The traditional rationale for social enterprise laws is that they free managers from the “duty” to put profits ahead of social objectives. But that’s wrong; existing corporate law is already flexible enough to permit most social/economic tradeoffs. However, by drawing on insights from new governance theories of regulation, I argue that social enterprise laws add value in other ways. Specifically, they provide a catalyst for entrepreneurs, investors, and stakeholders to develop the

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CVS/Caremark announced, on Feb. 5, 2014, that that the company would cease selling tobacco products in its 7,600 U.S. pharmacies.  Given that the entity estimated that it would lose about $2 billion in revenues from the decision, the world took notice.  CVS has managed the announcement well, and the company has received generally good press about the whole idea.

 Personally, I applaud the decision, both because I think it’s a sensible choice and because I think the board properly exercised its authority to set CVS stores up for long-term success. The company tried to maximize the feel-good story of the decision, but I think that message was tempered by the necessity that CVS explain the profit-seeking role of the decision with the announcement. Clearly, CVS’s counsel read eBay v. Newmark.

The CVS announcement had two components.  First, the media spin – for the aren’t-they-great? response:

“We have about 26,000 pharmacists and nurse practitioners helping patients manage chronic problems like high cholesterol, high blood pressure and heart disease, all of which are linked to smoking,” said Larry J. Merlo, chief executive of CVS. “We came to the decision that cigarettes and providing health care just don’t go together in

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I just received notice that Virginia Harper Ho’s article “Of Enterprise Principles & Corporate Groups: Does Corporate Law Reach Human Rights?” has been published in 52 Colum. J. Transnat’l L. 113.  Here is the abstract:

In recent years, a number of international and cross-sectoral initiatives have attempted to respond to the human rights impacts of corporations. Foremost among these is the United Nations’ 2008 “Protect, Respect, and Remedy” Framework and its Guiding Principles on Business and Human Rights, adopted in March, 2011. The Framework is noteworthy, in part, because it considers the potential intersections of corporate law and human rights. Conventional wisdom, however, maintains that corporate law is largely irrelevant to questions of human rights. It is generally viewed to be enabling, rather than prescriptive, and concerned with private contracting rather than the public interest. From a practical standpoint, human rights impacts often involve conduct by remote affiliates and business partners of vast multinational corporate organizations. Corporate law, in contrast, governs the “internal affairs” of discrete legal entities within a given jurisdiction, each protected by a limited liability shield. Questions of global corporate accountability for human rights practices have therefore been viewed as beyond its reach.

This…

14 UST logo (2)

On April 24, 2014, the University of Saint Thomas (Minnesota) will host a conference on social enterprise.  The conference will be interdisciplinary, engaging experts in Catholic studies, entrepreneurship, law, management, and public policy.

The first session will address issues surrounding using business as an agent for social change, with a focus on social entrepreneurship and benefit corporations.  The first session will run from 3:00 p.m. to 5:00 p.m. in the Atrium at the University of St. Thomas, School of Law and is approved for 2.0 hours of CLE credit (Minnesota).  Speakers are listed below:

  • Elizabeth K. Babson, Attorney with Drinker, Biddle and Reath LLP and a co-author of the Benefit Corporation White Paper
  • Lyman P. Q. Johnson, LeJeune Distinguished Chair in Law, University of St. Thomas, School of Law, and Robert O. Bentley Professor of Law at Washington and Lee University
  • John F. McVea, Associate Professor of Entrepreneurship, University of St. Thomas, Opus College of Business
  • J. Haskell Murray, Assistant Professor of Management and Business Law, Belmont University
  • Michael J. Naughton, Director, John A. Ryan Institute for Catholic Social Thought, University of St. Thomas, Center for Catholic Studies
  • Elizabeth R. Schiltz (moderator), Thomas J. Abood

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One of my favorite professors/bloggers, Mike Koehler has an interesting post describing how and why the former DOJ FCPA Enforcement Chief criticized the SEC’s handling of the FCPA. I used to read Mike’s blog daily during my in-house days, and I share his views on the FCPA enforcement regime. 

His post is below and reiterates what I wrote about here about the number of enforcement officers who leave office and question the way in which the FCPA is prosecuted:

This post has a similar theme to this prior post.  The theme is – all one has to do is wait for former DOJ and SEC FCPA enforcement officials to blast various aspects of the current FCPA enforcement climate. Touching upon the same issues I first highlighted in this August 2012 post titled “The Dilution of FCPA Enforcement Has Reached a New Level With the SEC’s Enforcement Action Against Oracle,” as well as prior posts here, here and here, a former Assistant Chief of the DOJ’s FCPA Unit (William Stuckwisch – currently a partner at Kirkland & Ellis) blasts certain aspects of SEC FCPA enforcement inthis recent article published in Criminal Justice.

The article begins:

“Imagine the following scenario: You

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If you practiced as a transactional attorney before law teaching, chances are that you looked at form agreements provided in treatises, saved on your law firm database, handed to you by partners from past deals, or saved in your own template archives.  This is no different from what litigators do either—they look for model existing memos, complaints, document requests, etc. that guide the first draft and let you start somewhere past “zero”.  The rapidly changing legal environment and unique needs of each client in each deal limits the shelf life of form agreements and saddles them with all sort of potential downsides if they aren’t used thoughtfully, verified by research, or tailored to the specific deal.  This disclaimer aside, I am curious about how we teach students about the role of exemplars, and as a starting point, where to find exemplars.  Students and junior attorneys, if not given the right tools to find the best models, will use bad model forms.  If you don’t believe me, see what you get when you search for “standard asset purchase agreement”. 

This raises the question of where should students, attorneys, law professors wanting to incorporate experiential learning exercise modules into their courses look…

Right? 

I understand that I may be one of the few people who seems to actually care about such a thing, but it seems to me courts really should be careful about their descriptions of limited liability entities.  I have written about this before (here, here, and here), but it continues to frustrate me.  

One of the things that got me thinking about this again (but let’s be honest, it seems I am always thinking about this) is a post over at The Conglomerate.  There, Christine Hurt (who, to be clear, is a lot smarter and more knowledgeable than I) discusses the Illinois governor’s interest in generating more jobs by shifting to “the $39 limited liability company.”  In her post, she makes a couple references to incorporation in the context of LLC formation.  But, in fairness, that’s a blog post, and I can’t claim that I have always been as precise as I should be in my blog writing, either.  

Courts, however, should be more careful.  The U.S. Court of Appeals for the Ninth Circuit, for example, loves to call limited liability companies “limited liability corporations” in their cases.  Take, for example, CarePartners, LLC v. Lashway, 545 F.3d…

A friend and current Delaware attorney just sent me this article from Delaware Online:  Bouchard seen as Chancery candidate.  

Interestingly, Andre Bouchard had been the chairman of the Delaware Judicial Nominating Commission since 2011, and he recently resigned from that position.  Bouchard is currently the managing partner of Bouchard Margules & Friedlander, P.A. in Wilmington, Delaware.   

From what I hear from my friends who practice in Delaware, Bouchard is well-respected and would make an excellent Chancellor.  

According to the article, and as I suspected here, current Vice Chancellor Travis Laster is also in the conversation regarding the next Chancellor.  Superior Court Judge Jan Jurden is being mentioned as a possibility as well.  Previously, Judge Jurden had been considered a serious contender for the Chief Justice of the Supreme Court of Delaware position that ultimately went to Chancellor Strine.

Stay tuned. 

Frederick Mark Gedicks & Rebecca G. Van Tassell recently posted “RFRA Exemptions from the Contraception Mandate: An Unconstitutional Accommodation of Religion” on SSRN (HT: Robert Esposito).  Here is excerpt of the abstract:

Litigation surrounding use of the Religious Freedom Restoration Act to exempt employers from the Affordable Care Act’s “contraception mandate” is moving steadily towards resolution in the U.S. Supreme Court. Both opponents and supporters of the mandate, however, have overlooked the Establishment Clause limits on such exemptions.

The heated religious-liberty rhetoric aimed at the mandate has obscured that RFRA is a “permissive” rather than “mandatory” accommodation of religion — a government concession to religious belief and practice that is not required by the Free Exercise Clause. Permissive accommodations must satisfy Establishment Clause constraints, notably the requirement that the accommodation not impose material burdens on third parties who do not believe or participate in the accommodated practice.

While it is likely that RFRA facially complies with the Establishment Clause, it violates the Clause’s limits on permissive accommodation as applied to the mandate. RFRA exemptions from the mandate would deny the employees of an exempted employer their ACA entitlement to contraceptives without cost-sharing, forcing employees to purchase…