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We here at the BLPB are thrilled to have Joan Heminway, W.P. Toms Distinguished Professor of Law at the University of Tennessee College of Law, join our team of weekly contributing editors. For most of our readers, no introduction will really be necessary because Joan is one of the most highly regarded and visible members of the corporate law community. In fact, I still harbor some suspicions that she may actually have figured out a way to clone herself — but that is likely just to make myself feel better when I review her productivity. Not only is she a tremendous scholar, but I know I am one of many who consider her a mentor, and her willingness to give of her time is truly inspirational. I will, as usual, leave the bulk of the introduction to her, but here is a brief excerpt from Prof. Heminway’s bio (you can read the full bio here):

Professor Heminway brought nearly 15 years of corporate practice experience when she joined the faculty of the UT College of Law in 2000. She was an attorney in the Boston office of the firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1985

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A couple of weeks ago, I posted about the Delaware Supreme Court’s recent decision in ATP Tour, Inc., et al. v. Deutscher Tennis Bund, et al., which held that nonstock corporations may adopt bylaws that require unsuccessful plaintiffs engaged in intracorporate litigation to pay the defense’s attorneys fees.  Though the decision did not technically apply to stock corporations, nothing in the decision suggested the analysis for stock corporations would be any different.

The decision prompted an immediate, somewhat panicked response from the Delaware plaintiffs’ bar, while some defense attorneys counseled their clients to adopt such bylaws to discourage merger litigation.

Though, as the previous link shows, Steven Davidoff, at least, is skeptical that these provisions would become popular with publicly traded corporations, there has been a quick push to have the Delaware legislature amend the DGCL to overrule ATP.  The Delaware Corporation Law Council has proposed new legislation that will be considered by the Delaware legislature by June 30.

I love books. I have been buying and collecting books since I was a kid. But I have decided it’s finally time to change. E-readers have finally arrived. I know that electronic books and readers have been around for a long time now, but they’re finally good enough to satisfy even bibliophiles like me.

I have been reading everything from law review articles to law school memos on my laptop for some time now. But, until recently, that hasn’t extended to books, either the books I read for work or the books I read for pleasure.

It wasn’t for lack of interest. I looked at the earliest e-readers when they came out, but decided they wouldn’t allow me to do everything I could do with a physical book in hand. A few years ago, I bought a Nook from Barnes and Noble, but it’s been in a drawer for quite a while. The image was excellent; reading on it was a pleasant experience. But it just didn’t allow me to move around in the book, highlight, and take notes as well as I wanted to.

Six months ago, I bought a Kindle from Amazon. Not the Kindle Fire, with the…

Following up on Steven Bradford’s post regarding the Fourth Circuit’s interpretation of Janus Capital Group v. First Derivative Traders (2011):

The SEC recently announced  that it intends to pursue more cases under Section 20(b) of the Exchange Act, which prohibits people from violating the Exchange Act “through or by means of any other person.”  I suspect this move will have serious implications for private cases under Section 10(b).

[read more]

OK, where were we before the disruption of the blog?

Howard Wasserman at PrawfsBlawg has posted a comment on Justice Scalia’s recent commencement address at William & Mary. Justice Scalia argued against the proposals many have made for a two-year law degree, and argued in favor of more required courses in the second and third years. (Professor Wasserman links to the full text of Scalia’s address, if you want to read it.)

Professor Wasserman supports the general idea, but argues that enacting such reforms would put schools at a competitive disadvantage. A school with upper-level requirements would lose out to a school that offered students more flexibility. All else being equal, prospective students would choose flexibility over rigid requirements.

Professor Wasserman is probably correct. At least at the margin, students would probably prefer fewer requirements. I’m not sure how much this would affect law schools with stricter requirements, given the many other factors students consider in choosing a law school. But assume for the sake of argument that stricter curriculum requirements would put a law school at a competitive disadvantage. I don’t think that’s a legitimate reason to oppose upper-level requirements or any other reform of the curriculum.…

Our apologies to those of you who were unable to access the blog yesterday. Our blog is hosted by Typepad, and Typepad was down all day yesterday. This had absolutely nothing to do with an alien invasion force from another galaxy. To repeat, they want us to tell you that THIS HAD ABSOLUTELY NOTHING TO DO WITH AN ALIEN INVASION FORCE FROM ANOTHER GALAXY. Please return to your daily business, earthlings.

Reuven S. Avi-Yonah recently posted Just Say No: Corporate Taxation and Corporate Social Responsibility.

He poses the question whether corporations are obligated to engage in strategic transactions solely for the purpose of avoiding taxes.  His conclusion is basically that under any theory of the firm – aggregate, real entity, or artificial entity – corporations have an affirmative obligation not to engage in overly-aggressive tax planning.

His thesis is attractive, though I’m not sure it’s entirely convincing.  He basically posits that taxes are the means by which we ensure a peaceful and civilized society, and no matter what theory of the firm one endorses, it is therefore proper for corporations to shoulder that burden.  The argument, however, would seem to encompass any form of strategic behavior – i.e., the argument would apply to all behaviors in which corporations can engage that evade the spirit of various regulations intended for the greater good of society.  If so, then it’s not clear that the argument gets us very far in terms of determining the legitimate boundaries of corporate behavior.

Rule 10b-5(b) makes it unlawful to make false or misleading statements in connection with the purchase or sale of a security. In Janus Capital [Janus Capital Group, Inc. v. First Derivative Traders, — U.S. –, 131 S. Ct. 2296 (2011)], the Supreme Court limited the scope of 10b-5(b) by narrowly defining the term “make.” According to the court, a “maker” for purposes of 10b-5 liability “is the person or entity with ultimate authority over the statement, including its content and whether and how to communicate it.” One is not liable under Rule 10b-5(b) merely because one drafts or publishes a statement for someone else or even if, as in Janus, one posts that other person’s statement on one’s own web site.

Last week, in Prousalis v. Moore, a panel of the Fourth Circuit held that Janus applies only to private rights of action, not to criminal enforcement actions by the government. This interpretation of Janus is wrong. There’s no justifiable reason not to apply the Janus Capital interpretation in criminal cases.

The Fourth Circuit begins by pointing out that Janus involved a private right of action, not a criminal action and the court’s holding is therefore limited to…