Cathy Hwang, Carliss Chatman, and I put together this statement recognizing that race and racism are important to the study of business law. The statement focuses on business law, but all law faculty are welcome to sign. If you agree, you can sign on here:  https://forms.gle/5rvj24XMs4xSBRTV9. Signatures will be published here on the Business Law Prof Blog on Tuesday, September 1, and periodically updated with additional signatures thereafter.

We are law professors, and many of us write and teach about business law.

 

We think race and racism are important to the study of business law, just as they are important to the study of any area of law. From slavery and redlining to lack of opportunity in the workplace and limited access to capital, race and racism have always been part of business and business law.

 

To our colleagues and our students: we welcome the opportunity to engage in these discussions and commit to thinking hard about how to incorporate them into our research and our teaching.

When the Delaware Supreme Court decided Marchand v. Barnhill, a lot people wondered – including, ahem, me – whether it heralded a new approach to Caremark claims.  Among other things, Caremark claims tend to be successful – if at all – upon a showing that the Board either participated in, or simply disregarded, illegality (in Elizabeth Pollman’s phrasing, were disobedient).  Claims that the Board simply did not monitor sufficiently tend to be more of a theoretical possibility than a lived reality, or at least, that was the case until Marchand.  Given the facts of Marchand, I speculated at the time that the choice to find potential liability on the basis of lack of monitoring was motivated by some desire to beef up the law in this area.

Which is why I found the decision in Teamsters Local 443 Health Services & Insurance Plan v. John G. Chou interesting, because to me, it reads like VC Glasscock, at least, plans to tread gingerly.

The plaintiffs alleged that AmerisourceBergen (“ABC”) violated the law in connection with its pharmaceutical business.  For those keeping score, I must clarify that the allegations do not involve ABC’s violations of law in connection…

The “expungement” process stockbrokers use to delete complaints from their records has been drawing more and more attention.  Colleen Honigsburg and Mathew Jacob found that brokers who win “expungements are 3.3 times as likely to engage in new misconduct as the average broker.”  As I wrote before, this result may indicate that the process suppresses the investor protection signals sent by customer complaints.  In a paper forthcoming in the Washington and Lee Law Review, I dug into why the purportedly adversarial process for expungements generates these results.  (Shameless plugs: the paper has also been covered by the Business Scholarship Podcast and Ipse Dixit.)  In essence, many of the arbitrations underlying expungements cannot be fairly characterized as approaching adversarial.  A report from the PIABA Foundation found that about 98% of the time, the brokerage firm respondents in these cases did not oppose the request.  This raises real questions about whether we have any reason to believe that the expungement hearings reliably surface information relevant to deciding whether to recommend that a customer complaint be expunged.

Many of these expungement proceedings follow a similar pattern now.  A stockbroker will sue a current or former employer alleging that a customer (who is…

Submissions and nominations of articles are being accepted for the eleventh annual Fred C. Zacharias Memorial Prize for Scholarship in Professional Responsibility.  To honor Fred’s memory, the committee will select from among articles in the field of Professional Responsibility with a publication date of 2020.  The prize will be awarded at the 2021 AALS Annual Meeting.  Please send submissions and nominations to Professor Samuel Levine at Touro Law Center: slevine@tourolaw.edu.  The deadline for submissions and nominations is September 1, 2020.

            Welcome to the 2^nd in a series of 5 guest blogs discussing the work that I have done as a reporter for the ULC study committee on coercive labor practices in supply chains. In the last blog, I provided some context for why the study committee was adopted. In this blog, I want to provide a deeper dive into one of the regulatory options the study committee is reviewing: the use of corporate disclosures.

More after the jump…

This week, I want to call attention to two recent Delaware decisions involving disputes over the meaning of contractual language in merger agreements, because I find the purity of the interpretive questions posed to be aesthetically pleasing. 

First up, we have Schneider National Carriers v. Kuntz, where the court denied cross motions for summary judgment on the grounds that the contract was ambiguous.  Schneider acquired all of the stock of W&S in exchange for upfront cash payments and earnouts pegged to meeting certain annually-increasing EBITDA targets over the following three years.  As is common in earnout arrangements, Schneider agreed to certain operating covenants, the most critical of which was a covenant that Schneider would, during each Measurement Period, “cause one or more of the Acquired Companies to acquire, in the aggregate, not less than sixty (60) class 8 tractors.”

The question for the court was whether this language meant that Schneider should actually grow the total number of tractors by 60, or could those 60 include replacements for tractors that were retired?  If the latter, Schneider was in compliance; if the former, not so much, because Schneider retired more tractors than it acquired.  In the end – as one…