Current Affairs

Subscribe to Current Affairs via RSS

In my article, “The Silent Role of Corporate Theory in the Supreme Court’s Campaign Finance Cases,” 15 U. Pa. J. Const. L. 831, I criticized the Supreme Court justices for failing to acknowledge the role of competing conceptualizations of the corporation in their corporate political speech cases.  I noted, however, that former Chief Justice Rehnquist was arguably the lone modern justice to deserve at least some praise in this area.

Justice Rehnquist’s stand-alone dissent in Bellotti provides arguably the sole example in these opinions of a Justice affirmatively adopting a theory of the corporation for purposes of determining the constitutional rights of corporations–though not via the express adoption of one of the traditionally recognized theories. Specifically, Justice Rehnquist relied on Justice Marshall’s Dartmouth College opinion to conclude that: “Since it cannot be disputed that the mere creation of a corporation does not invest it with all the liberties enjoyed by natural persons . . . our inquiry must seek to determine which constitutional protections are ‘incidental to its very existence.”’ Thus, while it may be true that “a corporation’s right of commercial speech . . . might be considered necessarily incidental to the business of a commercial corporation[…

I wonder how many people are boycotting Hobby Lobby because of the company’s stance on the Affordable Health Care Act and contraception. Perhaps more people than ever are shopping there in support. Co-blogger Anne Tucker recounted the Supreme Court’s oral argument here in the latest of her detailed posts on the case. The newspapers and blogosphere have followed the issue for months, often engaging in heated debate. But what does the person walking into a Hobby Lobby know and how much do they care?

I spoke to reporter Noam Cohen from the New York Times earlier today about an app called Buycott, which allows consumers to research certain products by scanning a barcode. If they oppose the Koch Brothers or companies that lobbied against labels for genetically modified food or if they support companies with certain environmental or human rights practices, the app will provide the information to them in seconds based on their predetermined settings and the kinds of “campaigns” they have joined. Neither Hobby Lobby nor Conestoga Woods is listed in the app yet. 

Cohen wanted to know whether apps like Buycott and GoodGuide (which rates products and companies on a scale of 1-10 for their health, environmental…

A little more than six weeks ago The Lego Movie hit theaters. Without getting into too much detail for those of you who have not yet seen the movie or who will never get around to seeing the movie, in essence it’s about an ordinary guy who’s mistakenly identified as an extraordinary “MasterBuilder”. He is recruited to fight against a Lego villain (President Business-we can call him P.B.) who is intent on gluing everything together. The anti-PB crusaders like having the freedom to dismantle, break, and re-make their Lego creations and shudder at the thought of having everything permanently fixed in place. PB, on the other hand, is intent on perma-gluing the Lego bricks together because he likes the certainty and control of knowing where everything is, and he is wary of innovation or change. Hence, his admonition- “EVERYTHING MUST STAY IN PLACE.”

Now as I watched this battle unfold between President Business’ pro-gluing supporters on one hand, and the pro-change supporters on the other, I could not help but see some similarities between the Lego people’s contested views on the purpose of Legos and our society’s contested views on the purpose of corporations. In The Lego Movie…

It’s proxy season and the Conference Board has released a series of reports on investor engagement and corporate governance. In “The Conference Board Governance Center White Paper: What is the Optimal Balance in the Relative Roles of Management, Directors, and Investors in the Governance of Public Corporations?” the authors provide a 76-page overview of the evolution of US corporate governance, describing key trends and issues.

The report begins by discussing the history of the allocation of roles and responsibilities for governance of public companies. If I thought my law students would read it, I would assign this section to them.  The second part of the paper addresses the legal, social and market trends that have influenced the historical allocation of rights. Specifically, it reviews:

a) the increasing influence of institutional investors resulting from the concentration of ownership in institutional investment, changes in voting rules and practices and more assertive shareholder activism;

b) shifting conceptions about the purpose of the corporation and the duty to maximize corporate value, with a strong emphasis on shareholder wealth maximization;

c) decreased public trust of business leaders following the corporate scandals of 2001-2002 and 2007-2008;

d) federal regulation intended to enhance the influence of shareholders…

A hearing in the Delaware Court of Chancery highlights the question raised in my earlier post of institutional shareholder activism and provides a timely example of one brand of shareholder activism:  issue activism.

Yesterday, Vice Chancellor J. Travis Laster denied Hershey’s motion to dismiss a books-and-records suit brought by shareholder Louisiana Municipal Police Employees’ Retirement System. The suit seeks inspection of corporate books to investigate claims that the chocolate company knowingly used suppliers violating international child labor laws.  A full description of the hearing is available here.

UPDATE, Kent Greenfield who has been involved in the case, provided me with a copy of the Hershey hearing & ruling ( Download Hershey Ruling) as well as some context for the case.  Yesterday’s hearing did two things. First, it clarified the standard of review for motions to dismiss section 220 books and records demands. Citing to Seinfeld v. Verizon Commc’ns, Inc., 909 A.2d 117, 118 (Del. Supr. 2006), the proper standard is whether a shareholder has provided “some evidence to suggest a ‘credible basis’ from which a court can infer that mismanagement, waste or wrongdoing may have occurred.”    Second, the books and record request was brought on …

Professor Jennifer Pacella (CUNY-Baruch) recently posted an article entitled Bounties for Bad Behavior: Rewarding Culpable Whistleblowers under the Dodd-Frank Act and Internal Revenue Code.  The abstract is posted below:

In 2012, Bradley Birkenfeld received a $104 million reward or “bounty” from the Internal Revenue Service (“IRS”) for blowing the whistle on his employer, UBS, which facilitated a major offshore tax fraud scheme by assisting thousands of U.S. taxpayers to hide their assets in Switzerland. Birkenfeld does not fit the mold of the public’s common perception of a whistleblower. He was himself complicit in this crime and even served time in prison for his involvement. Despite his conviction, Birkenfeld was still eligible for a sizable whistleblower bounty under the IRS Whistleblower Program, which allows rewards for whistleblowers who are convicted conspirators, excluding only those convicted of “planning and initiating” the underlying action. In contrast, the whistleblower program of the Securities and Exchange Commission (“SEC”) under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), which was modeled after the IRS program, precludes rewards for any whistleblower convicted of a criminal violation that is “related to” a securities enforcement proceeding. Therefore, because of his conviction, Birkenfeld would not have been

…

The “Conference on Multi-Jurisdictional Deal Litigation” will be held April 25, 2014.  Here is a brief introduction:

M&A litigation is increasingly filed in both the target’s state of incorporation and its headquarters state. It is the most important current development in corporate litigation. The leading plaintiffs’ and defendants’ deal litigators from Delaware and from Texas will discuss every aspect of this issue at our day-long conference. Chief Justice Strine of the Delaware Supreme Court and Justice Brown of the Texas Supreme Court will be panelists.

Passing on this announcement for those interested in teaching business and human rights or learning more about it. I had the opportunity to meet many of the professors who teach in this area at the UN Conference on Business and Human Rights in Geneva in December and they and outside counsel from around the world discussed the need for more law and business students to understand these issues so that graduates could advise clients of all sizes. Contact Anthony Ewing from Columbia Law for more information.
 
Teaching Business and Human RightsWorkshop
Thursday and Friday, May 15-16th, 2014
Columbia University, New York, NY
 
We are pleased to announce that the fourth annual Teaching Business and Human Rights Workshop will take place at Columbia University in New York on Thursday andFriday, May 15-16th, 2014.
 
History
The Columbia Teaching Business and HumanRights Forum is a unique platform for collaboration among individuals teaching business and human rights worldwide. The first Workshop, in 2011, led to the creation of an Online Forum that has grown to include more than 175 participants in twenty-five countries. Last year’s Workshop convened forty individuals teaching at thirty-one institutions in ten countries. Discussion Summaries of the first three Forum Workshops are available on the website of the Business and Human RightsResource Centre. 
 
Agenda
This year’s agenda based on Forum participant

…

I study both business law issues and shale oil and gas regulation, and I see a lot of overlaps between the two. Big business, is after all, big business.

The political intensity related to shale oil & gas development, is a concentrated version of many other types of regulation, such as we related to securities and publicly traded corporations.  I am currently finalizing an article regarding the Pennsylvania Supreme Court’s decision in Robinson Township v. Commonwealth, which overturned Act 13, the state’s law designed to promote hydraulic fracturing and horizontal drilling.  In major part, Act 13 largely eliminated local zoning of oil & gas development.  

David B. Spence’s article, Responsible Shale Gas Production: Moral Outrage vs. Cool Analysis, provided one good source for analyzing the regulatory backdrop of shale law and regulation.  I recommend it highly. 

Here’s the abstract:      

The relatively sudden boom in shale gas production in the United States using hydraulic fracturing has provoked increasingly intense political conflict. The debate over fracking and shale gas production has become polarized very quickly, in part because of the size of the economic and environmental stakes. This polarized debate fits a familiar template in American

…