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On Saturday, January 9, 2016, I will be spending the day at the AALS Section on Socio-Economics Annual Meeting at the Sheraton New York Times Square Hotel.  Among other things, I will be part of a panel discussion from 9:50 – 10:50 AM, Death of the Firm: Vulnerabilities and the Changing Structure of Employment.  My co-panelists will be June Carbone and Katherine Stone (I am very tempted to give up my 15 minutes and just sit back and listen to these two great scholars, but please don’t use the comments section to encourage me to do that).  As I understand it, the gist of the discussion will be that while firms once supported a significant part of the safety net that provided employee health and retirement benefits, they have recently abdicated more and more of these responsibilities.  At the same time, however, what may be described as subsidies granted by the state to firms — particularly corporations — as part of a social contract whereby these firms provided the aforementioned benefits, have not been correspondingly reduced.  In fact, the rights of corporations have been expanded by, for example, cases like Citizens United and Hobby Lobby — suggesting a possible windfall…

UPDATE: The deadline for submissions has been extended to July 21.

[The following is a copy of the official workshop announcement.  I have moved the “Guiding Questions” to the top to highlight the business law aspects.  Registration and submission details can be found after the break.]

A Vulnerability and the Human Condition Initiative Workshop at Emory Law

Guiding Questions:

This workshop will use vulnerability theory to explore the implications of the changing structure of employment and business organizations in the new information age. In considering these changes, we ask:

• What kind of legal subject is the business organization?
• Are there relevant distinctions among business and corporate forms in regard to understanding both vulnerability and resilience?
• What, if any, should be the role of international and transnational organizations in a neoliberal era? What is their role in building both human and institutional resilience?
• Is corporate philanthropy an adequate response to the retraction of state regulation? What forms of resilience should be regulated and which should be left to the ‘free market’?
• How might a conception of the vulnerable subject help our analysis of the changing nature of the firm? What relationships does it bring into relief?
• How have discussions about market vulnerability shifted over time?
• What forms of resilience are available for institutions to respond to new economic realities?
• How are business organizations vulnerable? How does this differ from the family?
• How does the changing structure of employment and business organization affect possibilities for transformation and reform of the family?
• What role should the responsive state take in directing shifting flows of capital and care?
• How does the changing relationship between employment and the family, and particularly the disappearance of the “sole breadwinner,” affect our understanding of the family and its role in caretaking and dependency?
• How does the Supreme Court’s willingness to assign rights to corporate persons (Citizen’s United, Hobby Lobby), affect workers, customers and communities? The relationship between public and private arenas?
• Will Airbnb and Uber be the new model for the employment relationships of the future?

Public opinion polls often make news, but they don’t necessarily improve discourse or policy decisions.  This is true in business and politics, at least where the polls are created primarily for news purposes. Not all polls are bad, of course, and groups like Pew and some others can offer useful starting points for policy discussions. Still we should be skeptical of public opinion polls. 

A new poll released today provides a good example of how unhelpful polls can be. Robert Morris University (RMU) today issued a press release (about a new poll) that says Pennsylvanians “expressed both overwhelming support and strong environmental misgivings, about” hydraulic fracturing (fracking). This framing of the poll does not seem to reveal any inherent inconsistencies. It would be entirely reasonable for people to recognize the potential value fracking for oil and gas can have, while at the same time being worried about the environmental risks that come with fracking (or any other industrial process).  

In fact, I have argued that this is the proper way to consider risks and benefits to help ensure oil and gas operations are as environmentally sound as possible to ensure sustainable development. Unfortunately, the poll indicates some internal inconsistencies among…

Last week, the Deal Professor, Steven Davidoff Solomon, wrote an article titled, The Boardroom Strikes Back. In it, he recalls that shareholder activists won a number of surprising victories last year, and more were predicted for this year. That prediction made sense, as activists were able to elect directors 73% of the time in 2014.  This year, though, despite some activist victories, boards are standing their grounds with more success.  

I have no problem with shareholders seeking to impose their will on the board of the companies in which they hold stock.  I don’t see activist shareholder as an inherently bad thing.  I do, however, think  it’s bad when boards succumb to the whims of activist shareholders just to make the problem go away.  Boards are well served to review serious requests of all shareholders, but the board should be deciding how best to direct the company. It’s why we call them directors.  

As the Deal Professor notes, some heavy hitters are questioning the uptick in shareholder activism: 

Some of the big institutional investors are starting to question the shareholder activism boom. Laurence D. Fink, chief executive of BlackRock, the world’s biggest asset manager, with $4 trillion, recently issued a well-publicized letter that criticized some of the strategies pushed by hedge funds, like share buybacks and dividends, as a “short-termist phenomenon.” T. Rowe Price, which has $750 billion under management, has also criticized shareholder activists’ strategies. They carry a big voice.

I am on record being critical of boards letting short-term planning be their primary filter, because I think it can hurt long-term value in many instances.  I don’t, however, think buybacks or dividends are inherently incorrect, either.  Whether the idea comes from an activist shareholder or the board doesn’t really matter to me.  The board just needs to assess the idea and decide how to proceed.  

[Please click below to read more.]

In North Dakota, the state has seen drastically falling revenues due to low oil prices.  Lower revenues makes it more challenging for the communities in that state that are still trying to provide the necessary infrastructure and services that remain a challenge due to the enormous growth over the last several years.  The response from some in the North Dakota legislature? Cut taxes. 

Oil companies always seek lower taxes because they are rational actors.  Lower taxes means higher revenues. This was true with sky high oil prices and is even more true with lower prices. From a company perspective, the position makes sense.  From a legislative perspective, the position should be more nuanced. 

(Please click below to read more.)

Energy is big business, and there is evidence that renewables are starting to play along with the more traditional big-time players.  The Economist recently published the article, Renewable Energy: Not a Toy, which reports that renewable energy installations are continuing to increase even as subsidies fall because prices are continuing to drop. The energy sector is likely to continue to diversify, in part because diversification is good for resilience and for financial management.  The Economist article notes:

Nearly half of last year’s investment was in developing countries, notably China, whose energy concerns have more to do with the near term than with future global warming. It worries about energy security, and it wants to clean up its cities’ air, made filthy partly by coal-burning power plants.

Sometimes lost in the discussion about cleaner energy is that climate concerns are not the only reasons to consider other resources. Cleaner air, more stable prices, and locally sourced energy can all be good reasons to consider renewable energy sources along side more traditional resources. Prices, are the big one, of course, but when it’s close, other considerations can more easily be part of the analysis.  It appears we’re approaching that point…

So, Duke is the 2015 NCAA Men’s Basketball champion. As a Michigan State basketball fan, this was at least mildly gratifying because the Spartans final losses the past two seasons have been to the eventual champion. (MSU’s final two losses this season: Wisconsin and Duke.) Hardly the same as winning the whole thing, but after a loss, one takes what one can get. 

This semester I am teaching Sports Law for the first time, and it has been an interesting and rewarding experience. As our recent guest, Marc Edelman, recently noted, there is a lot going on right now in college sports (there probably always is), with questions about paying NCAA players and players’ rights to unionize, among other things, leading the way.  

I am a big fan of college sports, and I generally prefer college sports to professional sports. I don’t, however, have any illusion that big-time college sports are, in any real sense, pure or amateur. (For that matter, I don’t know what “pure” means, but I hear complaints that colleges sports are “no longer pure,” so it appears there is some benchmark somewhere.)  College sports are a modified form of professional sports or, as the term I used to hear from time to time in other contexts, semi-pro sports.

What College Sports Are

College sports, in the simplest sense, are highly talented young people competing on behalf of educational institutions in exchange for the opportunity to pursue a mostly funded college education, if they so choose and can make it fit in with their athletic obligations.  The athletes are compensated for their efforts with opportunities that are varied and wide ranging, depending on the athlete and the institution for which they compete.  

Obviously, the experience for the high-profile college athlete — generally football and men’s and women’s basketball — is different from that of the less-watched sports, such as gymnastics, track, and golf.  But in all instances, the athletes represent their institution on and off the field, and they all have significant obligations that come along with their participation on their team. (Not all athletes have full or even partial scholarships, which can vary the obligations, though often all athletes have similar requirements.)

(To read more, please click below)

West Virginia (like Michigan and New Jersey, among others) has decided to follow other states in limiting options for Tesla sales.  As the Charleston Gazette reports: 

On the floor later Friday evening, the House put an amendment in a bill designed to shore up car dealers’ legal standings in dealings with auto manufacturers that effectively blocks innovative electric car manufacturer Tesla from doing business in the state.

The floor debate is best left forgotten: Several delegates played the crony capitalism card, talking about how their local car dealers are generous in sponsoring Little League teams and community events (not to mention campaign contributions), while other sneered about the company being owned by California billionaire Elon Musk (some called him “Monk,” but fortunately no one referred to him as “Elton”), and claiming the company relies on federal subsidies.

Never mind that it was stated that fewer than a dozen West Virginians own Teslas, or that a boom in demand for electric-powered cars might just be a good thing for a state that provides coal for electric power plants.

If you’re about a free (or at least more free) markets, why stop a competitor from competing?  Sorry, but the federal subsidy…

President Obama just vetoed the bill approving construction of the Keystone XL pipeline.  The President has said the veto is not about the value of the pipeline, but that it represents the President’s view the pipeline should not go around the State Department evaluation process. 

The veto comes at a time when oil transportation is a increasingly an area of concern, especially in light of recent rail accidents in Quebec and West Virginia.  I was recently part of a news story discussing the rail safety concerns in my part of country — here — and pipeline transportation tends to be much safer for human safety, though it raises other environmental concerns.

It’s not clear whether Keystone XL would be built any time soon, in light of low oil prices, but the veto will certainly keep people talking.  More on this soon.  

Business law is filled with a wide range of regulation and regulatory issues, and one of the main areas of business law for my research is energy law.  Regulation impacts energy businesses at many levels. Energy companies have to deal land use regulations, air and water quality regulations, work place regulations, and (often) securities regulations.  

On the land use and permitting side of things, oil and gas law has long been considered primarily a state issue, making such regulations relatively local (i.e., not federal).  In recent years, with the increased use of high-volume hydraulic fracturing, many local governments have decided to restrict the process in their localities, splitting from state regulatory regimes that would allow the process. Interesting cases related to fracking bans from New York, Colorado, and Pennsylvania provide good examples of this process. 

Texas Professor David B. Spence’s article about local hydraulic fracturing bans: The Political Economy of Local Vetoes, 93 Texas L. Rev. 351 (2015), discusses the debate about whether local governments should be ale to overrule the state law on oil and gas operations.  Here’s the abstract:

As the controversy over fracking continues to sweep the nation, many local communities have enacted ordinances

…