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I’ve begun expanding my interest in the dispute resolution area to include research (I’ve been a practitioner and teacher). Along with my OU legal studies colleague, Professor Dan Ostas, I’m currently working on an arbitration article (readers, however, should take this post as expressing my views, and not necessarily his).  So, when the U.S. Supreme Court decided Lamps Plus, Inc., et al. v Frank Varela this past Wednesday, I immediately had some careful reading to do.           

Frank Varela was one of many Lamps Plus employees who upon beginning their employment with the company had signed an arbitration agreement and, as a result of a data breach, had had his tax information stolen.  After Varela’s information was used to file a false tax return, he filed a class action suit against Lamps Plus in a Federal District Court in California.  Lamps Plus motioned to compel bilateral arbitration, and to dismiss the suit.  The District Court dismissed Varela’s claims, ordered arbitration, and authorized it to proceed on a classwide basis.  Lamps Plus appealed.  The Ninth Circuit Court of Appeals affirmed (with one judge dissenting).  No language in the arbitration agreement explicitly addressed classwide procedures.  Nevertheless, the Ninth Circuit viewed the…

Last year, I had the privilege of participating in ILEP’s 24th Annual Symposium, Deconstructing the Regulatory State, where I served as a discussant on papers presented by Jill Fisch and Hillary Sale regarding the role of disclosure in the securities regulatory landscape.  Those papers, Making Sustainability Disclosure Sustainable and Disclosure’s Purpose have now been published by the Georgetown Law Journal. 

Georgetown has also published my remarks on the two papers as part of their online series.  The title for my commentary is Mixed Company: The Audience for Sustainability Disclosure, and there’s no formal abstract, but this is the introduction:

In their symposium articles, Professors Sale and Fisch offer mirror-image visions of the role of mandated disclosure. Professor Sale addresses information that is typically relevant to an investing audience and recognizes its importance to the wider public. Professor Fisch, by contrast, addresses information that is most relevant to a noninvestor audience but only contemplates its importance to corporate financial performance. The gulf between their approaches highlights one of the significant tensions in our system of securities regulation: the distance between its intended purpose and its current function.

Close readers of this blog will recognize that my comments follow a…

After soliciting initial comments, New Jersey has issued its draft fiduciary regulation.  The draft proposal makes clear that financial advisers will have duties of care and loyalty to clients and that mere disclosure may not be sufficient to satisfy the duty of loyalty.  This matters because many registered investment advisers now attempt to satisfy their fiduciary duties simply by disclosing conflicts and instances where they will act against client interests.

Consider the SEC’s recent share class disclosure settlement.  Firms had been steering client assets into more expensive share classes because those classes paid the firms more money than less expensive share classes.  The SEC deemed these practices “fair” so long as they were disclosed to clients:

“An adviser’s failure to disclose these types of financial conflicts of interest harms retail investors by unfairly exposing them to fees that chip away at the value of their investments,” said Stephanie Avakian, co-director of the SEC’s enforcement division.

The words “unfairly exposed” strain under their burden there.  It’s an odd notion of fairness which allows a fiduciary to fleece clients so long as some document contains the disclosure.  

New Jersey now looks to take a different approach.  Although disclosure makes sense…

It’s no secret to anyone paying attention to Delaware law that the Aruba decisions – both at the Chancery and Supreme Court levels – involved some apparently personal clashes, which have already been the subject of speculation from several quarters, and I can only assume there is more analysis to come.

I was going to weigh in on that as well but upon further reflection, I decided that it’s … boring.  And I’d rather talk about the substance of the law, because what we’re seeing here is the inevitable breakdown in appraisal actions given that no one knows why we even have them.

As a warning, I’ll say that reading over what I wrote on this, I realize it’s probably pretty impenetrable unless you already are versed in Delaware appraisal jurisprudence.  I’ve previously posted about recent developments in Delaware appraisal litigation here, here, here, and here, so that might provide some background, but otherwise – you know, read at your own risk:

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Anthony Rickey and I recently posted a new paper focusing on the settlement approval process in securities class and stockholder derivative actions.   These settlements are a fascinating world. In most instances, plaintiffs’ counsel urge a judge to find that a settlement is reasonable, and defendants either stay silent or join in supporting the deal.  At this stage, plaintiff and defense interests often align. The defendant wants to get out of the case at the negotiated price.  Plaintiff’s counsel want to get paid. 

In many instances the settlement will be perfectly reasonable and a court should just approve it.  But there will also be times when a court should not approve a settlement or should do a bit more digging before deciding whether to approve the settlement and how to apportion the recovery between the class and its counsel.

How do courts identify these instances?  Courts generally excel at deciding disputes after adversarial briefing.  They may not have the institutional resources to slog through hundreds of pages in settlement disclosures or canvas other public records to determine whether to approve a settlement.  We suggest some possible reforms to the settlement approval process to help bring relevant information to the court’s attention.…

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Leadership “must be in the air” as co-blogger Joan Heminway recently wrote (here and here).  I agree.  Last week, I had a chance to connect with Dr. Laura Sicola, a close friend from my days as a UPenn PhD student, and the founder of Vocal Impact Productions.  She shared that her second book on leadership, Speaking To Influence: Mastering Your Leadership Voice, would be released this Tuesday, April 16.  Exciting news! 

Many good books have been written on leadership.  What’s unique about Sicola’s work is her focus on the role of voice in building one’s executive presence.  In a highly-insightful TedxPenn talk with over 5.5 million views, Sicola notes that executive presence is thought to consist of: appearance, communication skills, and gravitas.  However, she argues that there’s a “missing link” uniting these considerations.  That link, according to Sicola, is vocal executive presence.   How one delivers information can reinforce and establish executive presence or undermine it.  She explains what it means for the voice to have both a cognitive and an emotional impact on listeners.  In sum, “if you want to be seen as a leader, you have to sound like one.” 

Here’s a…

Every year, when we get to the section on shareholder voting in my Business Associations class, I assign this article about Netflix.  As it describes, Netflix has a staggered board and plurality voting and it takes a two-thirds vote of the stockholders to amend the bylaws.  Every year, shareholders submit proposals to change these matters; every year, a majority vote in favor, and every year, Netflix just ignores the vote and keeps on keeping on.

But now it seems there are some cracks in the wall. 

Last year, Netflix went on what I can only interpret as something of a charm offensive, publicizing what it claimed was unusually strong board oversight and transparency between the board and the management team.  I take this to mean that their shareholders had become sufficiently restive that the company felt it needed to respond.

But that apparently did not work as well as hoped.  This year, shareholders again submitted a series of governance reform proposals, seeking the right to call meetings, proxy access, the ability to act by written consent, the ability to amend bylaws by majority vote, and a bylaw amendment that would provide for director elections by majority rather than…

I want to follow in Haskell’s wake and also plug Ipse Dixit, a podcast on legal scholarship.  It recently featured the BLPB’s own Joshua Fershee.  It’s perfect for hearing authors that you’ve only read in the past.  Hearing them set out their ideas in their own voices is wonderful.  It’s also available on iTunes and a number of other streaming platforms.  It’s now up to about 212 episodes, and covers a broad range of ideas and scholars.  There should be something for everyone.

The podcast continues to evolve and expand.  It’s begun adding additional co-hosts to the podcast to help produce new episodes.  I’m one of them and suspect I’ll have a hard time keeping up with another new co-host, Luce Nguyen, a student at Oberlin College.  Luce interviewed Joshua for that episode and has already taken the lead in terms of co-host production.  Luce is the co-founder of the Oberlin Policy Research Institute, an undergraduate public policy organization based at Oberlin College.  You can also follow both Joshua and Luce on Twitter:

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