My recent article with Anthony Rickey, Uncovering Hidden Conflicts in Securities Class Action Litigation, discussed how a court-appointed special master investigating a securities class action settlement discovered a $4.1 million “referral fee” paid by Labaton Sucharow LLP (“Labaton”) to an attorney who did no work on the case but purportedly secured the Arkansas Teacher Retirement System (“ATRS”) as a client.  The bombshell revelation in Arkansas Teacher Retirement System v. State Street Bank and Trust Co. (“State Street”) undoubtedly stemmed from an email by Texas attorney Damon Chargois, who wrote:

We got you ATRS as a client after considerable favors, political activity, money spent and time dedicated in Arkansas, and Labaton would use ATRS to seek lead counsel appointments in institutional investor fraud and misrepresentation cases.  Where Labaton is successful in getting appointed lead counsel and obtains a settlement or judgment award, we split Labaton’s attorney fee award 80/20, period.

The State Street payment was not the first:  Labaton had paid a percentage of its total fee awards in at least seven other cases.  While scholars had discussed the role of “pay to play” in securities class actions for years, State Street revealed a referral agreement and raised questions about the extent of favors and political influence brought to bear.

Shortly after we published Uncovering Hidden Conflicts, Judge Wolf issued a blistering opinion in State Street, finding that “the submissions of Labaton and [the Thornton Law Firm] in support of the request for an award of $75,000,000 were replete with material false and misleading statements” and that the firms “in many respects violated Federal Rule of Civil Procedure 11(b) and related Massachusetts Rules of Professional Conduct.”  The opinion also described, in explicit detail, the origin of the relationship between Labaton, Chargois, and ATRS.  Ultimately, Judge Wolf cut the fee from approximately $75 million to $60 million (the lower end of the “presumptive reasonable range”) and referred his opinion to the Massachusetts Board of Bar Overseers.  An appeal is pending.

The State Street case prompted an exposé in the New York Law Journal, including extensive comments from Chargois’ former (now retired) law partner, Tim Herron, and a deep-dive into the history of the ATRS/Labaton relationship.  Some Arkansas lawmakers questioned ATRS’ decision to rehire Labaton during a public hearing in May.  As Professor Coffee put it, “The practices [the special master] uncovered is like turning over a rock in the field and finding some ugly things crawling around.” 

More, after the jump.

Continue Reading State Street, Public Sector Pension Funds, and In re Tesla: An Update on Uncovering Hidden Conflicts in Securities Class Action Litigation

The Mercer University School of Law seeks a candidate to fill the  Southeastern Bankruptcy Law Institute & W. Homer Drake Jr. Endowed Chair in Bankruptcy Law.  The faculty member will teach Bankruptcy Law and business related courses.  Candidates who will add to the diversity of our faculty are particularly encouraged to apply.  Mercer University is an AA/EEO/ADA employer.  Applicants should have a J.D. degree from an accredited university/college, a commitment to excellence in teaching, and demonstrated potential for excellence in research and scholarship.  Interested applicants will need to complete the brief online application at: http://hr.mercer.edu/jobs/ and attach a current CV with the names and contact information for three references.  For information contact Professor Stephen Johnson, Chair, Appointments Committee, Mercer University School of Law, Johnson_s@law.mercer.edu.

Decent amount of reading for a summer than seemed quite chaotic. Fairly eclectic . Always open to suggestions. 

The Plague – Albert Camus (1947) (Novel). French-Algerian town of Oran and its citizens deal with disease, death, and loneliness. Reflection here. 

God and Money – John Cortines and Gregory Baumer (2016) (Personal Finance). Two recent Harvard Business School graduates discuss thoughts on faith, finances, and giving. Less than 3% of American adults give away 10% or more of their income. Advocates for setting a floor of giving away at least 10% of gross income. In addition, the authors suggest setting an income and net worth cap and giving away the remainder. Reflection here (near the end of the post). 

How to get Filthy Rich in Rising Asia – Mohsin Hamid (2013) (Novel). Family, love, business, morality, and violence. Novel claims to be written in a self-help style (though it didn’t really capture the self-help voice, in my opinion). I greatly preferred Hamid’s The Reluctant Fundamentalist (2008) to this one, but still think Hamid is talented and worth reading. As a father and a son, I liked this quote near the end – “You feel a love [toward your son] you know you will never be able to adequately explain or express to him, a love that flows one way, down the generations, not in reverse, and is understood and reciprocated only when time has made a younger generation of an older one.” (222). 

When Breath Becomes Air – Paul Kalanithi (2016) (Memoir). Dr. Paul Kalanithi is diagnosed with metastatic lung cancer as a 35-year old nonsmoker. Paul’s diagnosis came just as he was finishing his training as a neurosurgeon at Stanford. Faith, family (including a newborn daughter), and work all provide purpose. Reflection here. 

The Coddling of the American Mind – Greg Lukianoff and Jonathan Haidt (2018) (Social Psychology and Culture). Argues that privileged, upper/middle class children and students are overprotected. Children need more free play. Students need more exposure to differing viewpoints, learning civil discourse, and building well-supported arguments. 

Let Your Mind Run – Deena Kastor (2018) (Memoir). History of a top professional runner and the role of positive thinking. 

The Road – Cormac McCarthy (2006) (Novel). Story of survival, family, purpose, and treatment of others. Reflection here. 

Love in the Ruins – Walker Percy (1999) (Novel). Satire, politics, religion, relationships, and the end of the world. 

Amusing Ourselves to Death – Neil Postman (1985) (Cultural Commentary). Thesis – “Orewell warns that we will be overcome by an externally imposed oppression. But in Huxley’s vision, no Big Brother is required to deprive people of their autonomy, maturity, and history. As he saw it, people will come to love their oppression, to adore the technologies that undo their capacities to think.” (Preface).

Midlife and the Great Unknown – David Whyte (2003) (Poetry). Poetry and musing on midlife, death, work, love, and the environment. (Audiobook format). Reflection here.

I recently received word from one of our former guest bloggers, Marcos Mendoza (whom I introduced here and who posted here, here, here, here, and here), that his most recent insurance article, The Limits of Insurance as Governance: Professional Liability Coverage for Civil Rights Claims Against Public School Districts, has been published in the Quinnipiac Law Review.  It is available on SSRN here.  The abstract follows.

Insurance intersects with people throughout their lives, sometimes with elements that are unobserved or misunderstood. That is often the case with “insurance as governance,” a form of private contractual regulation. This theory assumes that insurers, to minimize their financial losses, attempt to shape policyholder conduct by employing private regulatory measures, primarily through underwriting and contractual loss prevention methods. Insurance as governance is about risk reduction.

This article addresses a question regarding civil rights—do insurers influence the civil rights policies of public school districts? A broad legal arc encompasses civil rights litigation against schools, from freedom of speech complaints to sex-based claims involving students. School boards purchase professional liability insurance to defend their operational policies and actions. Previous research has not examined whether insurers attempt to shape school officials’ conduct to reduce these claims. This article finds that insurer influence is surprisingly minimal despite the financial and potential societal benefits.

Landmark scholarship (Rappaport, Harvard Law Review, 2017) established that insurers could positively influence police officer conduct, resulting in fewer civil rights claims against police entities. But this school environment research determines that insurers of public schools do not employ assertive loss prevention methods to limit civil rights claims. This lack of private regulation is because school boards want and exercise significant local control authority, and the administrators of interlocal risk pools—the leading type of insurer discussed within—have political concerns about membership stability, leading to regulatory hesitation.

This empirical study makes two main contributions. First, it involves a discussion of why insurer private regulation does not linearly increase when school district civil rights exposures rise. This contribution includes a review of the school districts’ mutual ownership of the predominant school insurer, the interlocal pool; an examination of the strong local control desires of school boards; and an analysis of the attendant political concerns of the interlocal pool administrators. Second, it reviews the policy adoption process of school boards, notes how school officials interact with and tend to resist insurers, and documents how this sociolegal setting creates insurers’ reluctance to attempt conduct-shaping with school districts regarding civil rights. This article will further private regulation scholarship regarding governmental entities and allow scholars to reassess the reach of insurance as governance.

Both this article and an earlier piece written by Marcos are cited in the new edition of Kenneth Abraham and Dan Schwarcz’s Insurance Law and Regulation casebook.

I took a quick peak into the article, even though insurance is not my legal “thing.”  (I come from a line of insurance brokers and underwriters, but I went a different way . . . .)  The article is well written and covers a lot of interesting ground.  It is a tale of private ordering and regulation–or, rather, the absence thereof.  On a macro level, the piece asks and answers the question: why, if insurance contracts incentivize policyholder behavior in some circumstances or with some insureds, do they not incentivize behavior in or with others?  Its focus is, as the article title suggests, on public school districts as policyholders and civil rights claims as insured risks. 

Although The University of Tennessee recently faced significant exposure for alleged Title IX violations (settled four years ago), I admit I hadn’t thought much about the exposure of school districts to civil rights litigation.  Of course, that exposure includes more than Title IX litigation.  As the article notes, Section 1983 claims, Title VI claims, Title VII claims, and disability claims under the Individuals with Disabilities Education Act and Section 504 of the Rehabilitation Act of 1973 also represent potential liability threats.  Overall, the level of risk is reasonably high.

Yet, perhaps not high enough . . . .  In the introductory portion of the article, Marcos contrasts the regulation of public police through insurance policies (evidenced in prior literature) with the lack or failure of similar regulation of public school districts.  In the conclusion, he notes, among other things, that “it seems that assertive regulation happens with public actors only when the risk exposures become extreme, and not before.”  He also observes that insurer, as well as insured, behaviors contribute to the creation of regulatory power through insurance arrangements.  All in all, the article is an instructive read with analogies to many other areas in which common types of contracts are entered into by repeat players in a commercial or other context.

This announcement landed in my “in box” courtesy of friend-of-the-BLPB ad compliance law expert Veronica Root Martinez at Notre Dame:

Notre Dame Law School Hiring Announcement

Notre Dame Law School may have one or more tenured or tenure-track faculty positions that will begin in Fall 2021. At the heart of a Catholic university, Notre Dame Law School aims to educate lawyers and sustain a community of scholars who understand law as a vocation—a way to serve God and humankind. Our Catholic mission also moves us to be open and welcoming to people of all viewpoints and religious traditions. The Law School’s interest is not limited to any particular subject or subjects. Applicants for these positions should possess excellence in academic background and either demonstrated excellence in scholarship and teaching or the potential for such excellence. Notre Dame is an Equal Opportunity/Affirmative Action Employer of all protected classes including veterans and individuals with disabilities. We welcome applications from women and people of color who will enrich and diversify our faculty. The University of Notre Dame supports the needs of dual career couples and has a Dual Career Assistance Program in place to assist relocating spouses and significant others with their job search. The University is also a member of the Greater Chicago Midwest Higher Education Recruitment Consortium. Contact: Professor Jeff Pojanowski, Vice Chair, Faculty Appointments Committee, via email at jpojanow@nd.edu or by mail at Notre Dame Law School, P.O. Box 780, Notre Dame, IN 46556.
 
Although the announcement is not specifically for a business law opening, Notre Dame is a vibrant intellectual and academic institution with a new provost and a relatively new law dean.  Veronica classifies it as “an [e]xciting time to be at Notre Dame!”

Some information for legal studies in 2019 and 2020. Please feel free to e-mail me with more information

New Hires (from the ALSB Newcomer List)

Michael Bell (New Jersey City)

Emma Best (Wake Forest)

Ilisabeth Bornstein (Bryant)

Amy Criddle (NAU)

Rustin Diehl (Weber State)

Terrence Dwyer (Western Connecticut State)

Sam Ehrlich (Boise State)

Mark Feigenbaum (Ryerson)

Valerie Flugge Goyer (California State-Northridge)

Laura Grow (Indiana)

Lindsay Jones (UGA)

Jeff Lingwall (Boise State)

Goldburn Maynard (Indiana)        

Sharlene McEvoy (Fairfield)

Thomas Miller (Western Connecticut State)

Eric Sader (Indiana)

Sejal Singh (St. John’s)

Christina Skinner (Penn)

Lateral Moves

Justin Pace from Western Michigan to Western Carolina (2020)

Jennifer Pacella from CUNY/Baruch to Indiana University/Kelley (2019)

Mike Schuster from Oklahoma State to University of Georgia (2020)

Promotions

Charlotte Alexander – appointed Connie D. and Ken McDaniel WomenLead Associate Professor of Law and Analytics

Gerlinde Berger-Walliser (UConn) – promoted to Associate Professor (with tenure)

Cristen Dutcher (Kennesaw) – promoted to Clinical Associate Professor

Kelly Eskew (Indiana) – promoted from Associate Clinical Professor to Clinical Professor

Todd Haugh (Indiana) – appointed Weimer Faculty Fellow and promoted from Assistant Professor to Associate Professor with tenure

Jessica Magaldi (Pace) – appointed Ivan Fox Scholar and Professor of Business Law

Victor Lopez (Hofstra) – appointed Cypres Family Distinguished Professor in Legal Studies in Business

Josh Perry (Indiana) – appointed Graf Family Professor and Department Chair

Angie Raymond (Indiana) – appointed Weimer Faculty Fellow

April Sellers (Indiana) – promoted from Associate Clinical Professor to Clinical Professor

 

 

The Academy of Legal Studies in Business is in the midst of its annual conference.  And, not surprisingly, it’s completely online.  Although we aren’t able to meet in person this year, the event has been a really great, remarkably smooth experience.  Pre-pandemic, the Program Chair, Professor Robert Bird, at the University of Connecticut School of Business, presciently selected the theme of “Managing Disruption.”

For me, one highlight of the conference thus far has been the opportunity to hear guest speaker Lee Buchheit’s remarks to the ALSB’s International Section on the “State of the Art of Sovereign Debt Restructuring.”  Buchheit is arguably the world’s leading expert on sovereign debt restructuring.  As an FT Alphaville piece put it: Buchheit “has represented nearly every country that has gone bankrupt since the 1980s, sparring with aggrieved creditors and cajoling stricken governments back to fiscal health — and in the process almost single-handedly building up an entire field of international law.”  He didn’t disappoint, giving us a fascinating overview of the major disruption the pandemic is causing in the sovereign debt arena, and the likely challenges that lie ahead, including the risk of a systemic sovereign debt crisis such as happened in the 1980s.  For readers interested in learning more about Buchheit’s perspectives on the impending issues in sovereign debt markets, a few places to start are here and here.

Afterwards, the International Section elected a new officer, Professor Justin Evans, to serve the Section, along with Professor Kevin Fandl (President) and myself (Vice-President).  A total, but quick, fun digression: Fandl has led several faculty development trips in international business to Chile to study innovation in Chile focused on wine.  Watch out for the next iteration! 

Our Section meeting was followed by presentations for the ALSB Ralph Bunche Award for Best International Paper.  This Award aims to recognize excellent, unpublished research in the area of international business law.  There were many exceptional submissions, and it was difficult to select the finalists.  Professor Abbey Stemler presented Regulation of Sharing Economy Platforms: A Multi-Country Comparative Study.  Professors Brian Feinstein and Kevin Werbach discussed The Impact of Regulation on Global Cryptocurrency Trading (here).  Professor Tim Samples, the winner of the Award for 2020, spoke about Investment Disputes and Federal Power in Foreign Relations (here).

Finally, I want to send a big THANK YOU to outgoing President Professor Stephen Park!  With his tireless work for, and commitment to, the Section, he did a great job of modeling for future officers excellence in this role.         

Cynthia Dahl has posted “When Standards Collide with Intellectual Property: Teaching About Standard Setting Organizations, Technology, and Microsoft v. Motorola” on SSRN (here).  The paper provides “a Teaching Guide to a plug and play module designed to easily allow professors to insert teaching about SEPs into their IP or other commercial courses.”  I have provided the abstract below.

Technology lawyers, intellectual property (IP) lawyers, or even any corporate lawyer with technology clients must understand standard essential patents (SEPs) and how their licensing works to effectively counsel their clients. Whether the client’s technology is adopted into a voluntary standard or not may be the most important factor in determining whether the company succeeds or is left behind in the market. Yet even though understanding SEPs is critical to a technology or IP practice, voluntary standards and specifically SEPs are generally not taught in law school.

This article aims to address this deficiency and create more practice-ready law school graduates. The article is a Teaching Guide to a plug and play module designed to easily allow professors to insert teaching about SEPs into their IP or other commercial courses. It is particularly designed for professors who are unfamiliar with (or even intimidated by) the technical subject matter of SEPs. The Teaching Guide unlocks a number of helpful resources, available at the Penn Program on Regulation website (direct link on page 4). The resources together encompass a complete plan for the professor, using the recent seminal case of Microsoft v. Motorola – where licensing some SEPs went horribly wrong – to illustrate themes. Besides the Teaching Guide, the resources include a business school-style Case Study for students to read on the Microsoft case, recorded video interviews with the lead counsel for each party, the federal court judge for the case and his clerk, and other supporting materials. The Teaching Guide provides contextual background for the professor to explain SEPs and particularly this case, suggests a class discussion outline, lists discussion points and proposed “answers,” includes prompts to spark public policy debates, and offers an extensive resources library for further study, including cases as well as articles. It even helps the professor accommodate longer or shorter sessions, calibrate to more or less outgoing classes, and adapt the module for use in many different kinds of classes, including IP classes, but also classes in remedies, contracts, federal courts and licensing, among others. By offering guidance but much flexibility, the Teaching Guide aspires to make incorporating this critical SEP subject matter into the law school curriculum straightforward and accessible.

Drake University invites applications from entry level and lateral candidates for a tenure-track Assistant/Associate Professor of Law position beginning in the 2021-22 academic year.  We are interested in candidates with demonstrated interest or experience in Technology Law. Applicants must hold a J.D. degree (or the equivalent) and should have a record of academic excellence, substantial academic or practice experience, and a passion for teaching. Appointment rank will be determined commensurate with the candidate’s qualifications and experience.

In addition to service and scholarship, this position involves teaching courses such as Legal/Ethical Issues in Technology, Technology Law, Privacy Law, and related areas in both the Law School and the College of Arts & Sciences as well as advising law and undergraduate students and serving as a University resource on technology legal issues.

Drake University sustains a vibrant intellectual culture, and Des Moines has been recognized as the Best Place to Live (US News), the Best Place for Young Professionals (Forbes), and as the #1 Best U.S. City for Business (MarketWatch).

Drake University is an equal opportunity employer and actively seeks applicants who reflect the nation’s diversity.  No applicant shall be discriminated against on the basis of race, color, national origin, creed, religion, age, disability, sex, gender identity, sexual orientation, genetic information or veteran status. Diversity is one of Drake’s core values and applicants need to demonstrate an ability to work with individuals and groups of diverse backgrounds.

Confidential review of applications will begin immediately. Applications (including a letter of interest, a complete CV, teaching evaluations (if available), a diversity statement, and the names and addresses of at least three references) should be sent to Professor Ellen Yee, Chair, Faculty Appointments Committee, Drake University Law School, 2507 University Ave., Des Moines, IA 50311 or e-mail: ellen.yee@drake.edu.

+++++

Drake University Law School invites applications from entry level and lateral candidates for a tenure-track or tenured Assistant/Associate/Professor of Law position beginning in the 2021-22 academic year.  We are especially interested in candidates with demonstrated interest or experience in Contracts, Sales, Tax, Intellectual Property, and Family Law. Applicants must hold a J.D. degree (or the equivalent) and should have a record of academic excellence, substantial academic or practice experience, and a passion for teaching. Appointment rank will be determined commensurate with the candidate’s qualifications and experience.

Drake University Law School sustains a vibrant intellectual culture, and Des Moines has been recognized as the Best Place to Live (US News), the Best Place for Young Professionals (Forbes), and as the #1 Best U.S. City for Business (MarketWatch). The Law School features innovative and nationally recognized programs in agricultural law, constitutional law, legal research and writing, and practical training.

Drake University is an equal opportunity employer and actively seeks applicants who reflect the nation’s diversity.  No applicant shall be discriminated against on the basis of race, color, national origin, creed, religion, age, disability, sex, gender identity, sexual orientation, genetic information or veteran status. Diversity is one of Drake’s core values and applicants need to demonstrate an ability to work with individuals and groups of diverse socioeconomic, cultural, sexual orientation, disability, and/or ethnic backgrounds.

Confidential review of applications will begin immediately. Applications (including a letter of interest, a complete CV, teaching evaluations (if available), a diversity statement, and the names and addresses of at least three references) should be sent to Professor Ellen Yee, Chair, Faculty Appointments Committee, Drake University Law School, 2507 University Ave., Des Moines, IA 50311 or e-mail: ellen.yee@drake.edu.

The University of Utah S.J. Quinney College of Law invites applications for faculty positions at the rank of associate professor (tenure track) beginning academic year 2021-2022. Candidates should be aspiring law faculty or junior lateral candidates. Qualifications for the positions include a legal degree, an exemplary academic record, demonstrated scholarly merit, and proven or potential teaching distinction, and a demonstrated commitment to diversity, equity, and inclusion. Although all qualified candidates will be considered, the College of Law seeks candidates with teaching interests primarily in the areas of administrative law, business associations, civil procedure, commercial law, constitutional law, contracts, clinics/experiential learning, and federal courts, and secondarily in the areas of environmental law, property, and torts. Candidates should submit an application to the University of Utah Human Resources website: https://utah.peopleadmin.com/postings/106394.