Where we left things, Delaware Vice Chancellor Laster had just ruled in Sciabacucci v. Salzberg that Delaware corporate charters and bylaws may only govern matters of corporate internal affairs, including litigation related to internal affairs; they may not be used to govern external matters like securities litigation.  For that reason, forum-selection provisions purporting to require that Section 11 claims be filed in federal court were invalid.  The implication – though not part of his holding – was that a similar result would obtain for charter and bylaw provisions that purport to require individualized arbitration of securities claims. 

After that, the defendants, predictably, appealed to the Delaware Supreme Court, and we were all waiting (im)patiently to see how that would unfold when – alas! – a panel consisting of Strine, Vaughn, and Seitz dismissed the appeal as prematurely filed due to a pending attorneys’ fee petition in Chancery. 

Speaking as someone who once did in fact have to litigate the issue of whether a notice of appeal was prematurely filed, thus depriving the appellate court of jurisdiction, all I can say is – oof!  Then again, in my case, the matter wasn’t raised until it was too late to file a corrected notice; if we’d lost, the entire appeal would have been lost.  Happily for the Sciabacucci defendants, their situation is not nearly as dire; presumably they’ll just refile their notice once the fee petition is addressed.  But it does mean it will be a little while longer before the Delaware Supreme Court weighs in on this issue.

But that’s not all!

Hal Scott, a law professor at Harvard, has long been an advocate for using corporate charters and bylaws to mandate individualized arbitration of federal securities claims, and in November, he submitted a 14a-8 proposal to Johnson & Johnson to have shareholders vote to request that its Board adopt such a bylaw.

In the past, the SEC has taken the position that bylaws of this sort would violate federal law, specifically, the anti-waiver provisions of the securities laws, but the Supreme Court’s recent jurisprudence on arbitration has weakened that argument.  Professor Scott presumably figured the time was ripe to try again, especially since SEC Commissioners have been making noises about being more receptive to the idea.  And indeed, when J&J first submitted a request for no-action relief to the SEC, its grounds for exclusion was simply that the proposal would violate federal law.

(You can find the correspondence at this link.)

But then Sciabacucci happened.  Except, J&J is incorporated in New Jersey, not Delaware, raising the question whether the Sciabacucci decision would travel.  (I previously posted about New Jersey’s law back when they amended their corporate code to permit forum selection provisions.)

J&J quickly submitted an attorney opinion letter expressing the view that NJ law maps to that of Delaware, and therefore the proposal was excludable as violative of state law.   Professor Scott shot back with the argument that Sciabacucci was incorrectly decided (previewing, I assume, arguments we can expect to see in the Delaware Supreme Court).

And then J&J brought in a ringer: It submitted a letter by New Jersey’s Attorney General opining that Sciabacucci represents the law of New Jersey.

(There were some other documents submitted as well, not all of which are included with the No-Action materials on the SEC’s website – which raises a procedural question, btw, why some and not others?  For example, NASAA submitted its own letter in support of J&J, and so did the Council of Institutional Investors.)

Since no-action relief is typically granted when there “appears to be some basis” for the company’s view that the proposal is excludable under 14a-8, you would think that that J&J had by now gone above and beyond.

But you would be wrong.

Because while the SEC did grant the no-action request, it did so with, shall we say, a reluctant air.  The SEC’s letter said:

When parties in a rule 14a-8(i)(2) matter have differing views about the application of state law, we consider authoritative views expressed by state officials. Here, the Attorney General of the State of New Jersey, the state’s chief legal officer, wrote a letter to the Division stating that “the Proposal, if adopted, would cause Johnson & Johnson to violate New Jersey state law.” We view this submission as a legally authoritative statement that we are not in a position to question. In light of the submissions before us, including in particular the opinion of the Attorney General of the State of New Jersey that implementation of the Proposal would cause the Company to violate state law, we will not recommend enforcement action to the Commission if the Company omits the Proposal from its proxy materials in reliance on rule 14a-8(i)(2). To conclude otherwise would put the Company in a position of taking actions that the chief legal officer of its state of incorporation has determined to be illegal.  In granting the no-action request, the staff is recognizing the legal authority of the Attorney General of the State of New Jersey; it is not expressing its own view on the correct interpretation of New Jersey law. The staff is not “approving” or “disapproving” the substance of the Proposal or opining on the legality of it. Parties could seek a more definitive determination from a court of competent jurisdiction.

We are also not expressing a view as to whether the Proposal, if implemented, would cause the Company to violate federal law. Chairman Clayton has stated that questions regarding the federal legality or regulatory implications of mandatory arbitration provisions relating to claims arising under the federal securities laws should be addressed by the Commission in a measured and deliberative manner.

That’s a lot of words!  I mean, literally, it’s a lot of words, considering that usually no-action relief is granted in a short paragraph. 

And it didn’t stop there.  SEC Chair Jay Clayton actually issued a statement on the matter, reiterating the importance of the Attorney General’s letter in the Commission’s decisionmaking, and emphasizing that the SEC itself was taking no position on the question whether such provisions violate federal law.  If anything, the statement went out of its way to signal that the SEC’s views on the federal legality of arbitration provisions have shifted; as Clayton put it, “Since 2012, when this issue was last presented to staff in the Division of Corporation Finance in the context of a shareholder proposal, federal case law regarding mandatory arbitration has continued to evolve.”

Such action is quite extraordinary as a matter of SEC procedure, especially the part where Clayton came close to inviting Professor Scott or a similarly-minded proponent to take the issue to court:

More generally, it is important to note that the staff’s Rule 14a-8 no-action responses reflect only informal views of the staff regarding whether it is appropriate for the Commission to take enforcement action.  The views expressed in these responses are not binding on the Commission or other parties, and do not and cannot definitively adjudicate the merits of a company’s position with respect to the legality of a shareholder proposal.  A court is a more appropriate venue to seek a binding determination of whether a shareholder proposal can be excluded.

Well.

It’s not clear where things go from here; the most obvious possibility would be to wait for the Delaware appeal (now, ahem, delayed) to shake out and/or find a state willing to break with Delaware on this issue (which then, I previously argued, might potentially tee up some constitutional questions about the scope of the internal affairs doctrine, though I think it also would depend a lot on how a case was brought.)

But according to news reports, Professor Scott may continue to pursue the matter at J&J, possibly by appealing to the full Commission (which seems unlikely to succeed, since we know where Clayton stands, and even Commissioner Peirce has said state law determines whether these bylaws are permissible). 

Either way, I’m sure I’ll be blogging about it, so watch this space.

Update: Prof. Scott did, in fact, request that CorpFin seek full Commission review of J&J’s request for no-action relief, arguing, among other things, that the New Jersey Attorney General conceded that there was no settled law in New Jersey on the issue and therefore his letter should not be taken as an authoritative interpretation of state law.  Prof. Scott also argued (as he did in his original correspondence) that if New Jersey law does prohibit his proposed bylaw, the Federal Arbitration Act would preempt it (an argument that I find quite unpersuasive, since the FAA only prohibits laws that disparately target arbitration; a rule that restricts charters and bylaws to matters of internal affairs does not single out arbitration, as the Sciabacucci case itself demonstrates). In a letter signed by the Director of CorpFin, the Division denied the request on the ground that, in light of the Attorney General’s letter, the issues presented were not “novel or highly complex” and therefore did not meet the standard for Commission resolution.  Correspondence available here.

When I was in house, the biggest compliment I could receive was “sometimes I forget that you’re a lawyer.” Of course, you don’t want to hear that from certain clients because that means that you haven’t clearly established your role and authority. But, when dealing with business people, they want to know that you understand business strategy and their pain points and not just the law. 

 

Last Saturday, Laura Zagustin, the General Counsel for Viacom International Media and the Americas, served as the keynote speaker for the Miami Law Symposium on doing business in Latin America. She told the audience that although she’s the general counsel, she tries not to be “too much like a lawyer.” She didn’t expand on this, but during the Q&A, a student asked about the tensions between the profit driven requests of the business people and the need to follow the law. Zagustin focused on the necessity to protect the company and secure revenue while educating internal clients. She’s actually become so business savvy that she’s been able to negotiate with a business counterpart without any of her company’s business people with her.

 

She advised students to learn how to develop solutions but most important, to act as a business partner and not just a lawyer. She has also told her outside counsel that they need to act as business partners too. 

 

As she spoke about business and political risks with foreign direct investment and doing business in politically volatile environments, I realized how little junior lawyers at law firms know about what their clients really deal with. It may not be as drastic as the potential or nationalization of company assets, but every business from 

a restaurant owner to a multinational conglomerate has a risk tolerance and counsel often don’t appreciate that sensitivity. Good lawyers know how to understand that and render advice accordingly. 

 

Whenever I teach a class on business or compliance issues, I teach from the perspective of the client because I was a client for so many years. The students don’t typically have the “aha” moment about what I’ve said until a guest speaker comes in and says the same thing. But that’s ok.

Below are a few suggestions for law schools/professors to prepare students for practice in the real world. 

 

  1. Teach students that business people care about tax implications, levels of control, mitigating risk,  and  legal liability, regardless of business type or size. Students must be able to advise through that lens or associate with others with appropriate specialties (such as tax) when needed. 
  2. Add more compliance coursework that includes skills-based work. The GC who spoke indicated that it’s a number one concern for US public companies. Private companies and those considering an IPO also have significant compliance obligations. 
  3. Encourage students to take courses in the business school. Sitting with business students will provide an entirely different perspective. Similarly, open more law school classes to business school students. 
  4. Weave in risk management issues into the curriculum. 
  5. Have as many business people speak to students as possible. Students will quickly learn how much the theory they learn does not correlate to the work that real-world clients face.  
  6. Add more business clinics. This allows students to meet with budding entrepreneurs. Their readings on entity selection will come to life. 
  7. Ensure that students have at least one course that deals with international issues. The business world is global and even the smallest businesses are often part of a global supply chain. 
  8. Have panels at the law school with in house lawyers, lobbyists, and  lawyers who don’t work for firms so that students can get another perspective on practicing law. Have them focus specifically on the realities of dealing with business clients. 
  9. Consider short courses on negotiation for business clients. Even better, have a full course on business negotiation. Most law schools focus on litigation, leaving students who want to practice transactional law underprepared. 
  10. I know that law students are focused on ABA requirements and bar passage rates, but encourage students to take coursework on employment law, tax, cybesecurity/data protection,  intellectual property, and administrative law.  Even if students take short courses in these topics, they will have an enormous advantage when starting out. 
  11. Ensure that transactional drafting courses include real world examples of risk allocation when discussing representations, warranties, and indemnities. 
  12. Encourage students to read comment letters on regulations. That will show students what business people really care about when laws and regulations are in the drafting stage. 
  13. Teach about emotional intelligence, resiliency, and grit. Lawyers aren’t usually known for their EQ but it’s important, especially when dealing with business owners. 

 

 

If you have additional suggestions or disagree with me, please post your comments below. 

 

The following comes to us from David Sorkin, Associate Dean, Academic Programs, The John Marshall Law School.

Full-Time Faculty Podium Visitors for 2019-2020

The John Marshall Law School in Chicago seeks two or more experienced faculty members to serve as full-time visiting professors for the 2019-2020 academic year (one or both semesters). We need coverage in the areas of Civil Procedure, Corporations, Employee Benefits, Estates & Trusts, Income Taxation, Legal Research and Writing, and Property. Candidates must have law school teaching experience. It is contemplated that the successful candidates will be current full-time faculty members at ABA-approved law schools, although others with extraordinary credentials may be considered.

To apply, submit a current CV, cover letter, and three professional references to Associate Dean David Sorkin at 7sorkin@jmls.edu. The Committee will begin reviewing applications as they are received and will continue on a rolling basis until the positions are filled. We may conduct an interview via Skype or a similar platform or in person, and may request submission of teaching evaluations or other materials.

The John Marshall Law School is committed to diversity, access, and opportunity. Subject to the approval of our accreditors, JMLS is in the process of being acquired by the University of Illinois at Chicago, with an anticipated closing date in August 2019. For more information, visit www.jmls.edu and jmls.uic.edu.

The John Marshall Law School, finding any invidious discrimination inconsistent with the mission of free academic inquiry, does not discriminate in admission, services, or employment on the basis of race, color, sex, religion, national origin, ancestry, age, disability, veteran status, marital status, sexual orientation, gender identity, gender expression, genetic characteristics, or any other characteristic protected by applicable law.

I have been told there may be some flexibility on the March 1 deadline.

The UMKC Law Review is pleased to announce a call for submissions relating to the law surrounding distributed ledger (“blockchain”) technology. Selected papers will be published in the Special Topics Symposium, Summer 2019 edition of the UMKC Law Review. This symposium invites proposals for papers that explore the legal and regulatory issues involved in blockchain technology. Today, blockchain technology is used to build tools and infrastructure that help lawyers draft contracts, record commercial transactions, and verify legal documents. In general, investments in blockchain technology has surged over the past year, inviting both legitimate businesses and modern-day scammers. To date, regulatory agencies have yet to determine a consistent approach to the technology that protects the public while not stifling innovation. Issue 1 of UMKC Law Review’s 88th Volume will explore these and related topics with the goal of advancing awareness of blockchain technology and cryptoassets. Articles and essays of all lengths and papers by single authors or multiple authors are invited. Preference will be given to works between 5,000 and 25,000 words. To be accepted for publication in UMKC Law Review, articles must not have been previously published. Papers are due March 1, 2019.

Authors will have the opportunity to immediately publish submitted drafts to UMKC Law Review’s Special Topics Symposium webpage during the editing process. Proposals for papers should be submitted to the attention of

Ashley Crisafulli (ashleycrisafulli@mail.umkc.edu); and

Prof. Del Wright (wrightdc@umkc.edu).

Proposals should include the following information:

Name

Contact information

CV

Proposed title of paper

Anticipated length as either an article or essay

Abstract or brief description of the topic

Questions may be addressed to Ashley Crisafulli (ashleycrisafulli@mail.umkc.edu)

Posted by request. Looks like a good event:

—————————————

Law and Ethics of Big Data
Hosted and Sponsored by:
Washington and Lee University School of Law
Lexington, Virginia

Co-Hosted by:
Kenan Institute for Ethics, Duke University; The Virginia Tech Center for Business Intelligence Analytics; The
Department of Business Law and Ethics, Kelley School of Business, Indiana University Bloomington

Wednesday-Thursday, April 24-25, 2019

Abstract Submission Deadline: Friday, March 1, 2019

We are pleased to announce the annual research colloquium, “Law and Ethics of Big Data,” which will be held this
year at Washington and Lee University School of Law in Lexington, Virginia. This year’s colloquium is co-hosted
by Associate Professor Margaret Hu at Washington and Lee University School of Law and Kenan Visiting Professor
at Duke University’s Kenan Institute for Ethics, Associate Professor Angie Raymond of Indiana University, and
Professor Janine Hiller of Virginia Tech.

Due to the success of this multi-year event that now is in its sixth year, the colloquium will be expanded and we seek broad participation from multiple disciplines. Please consider submitting research that is ready for the discussion stage. Each paper will receive detailed constructive critique. We are targeting cross-discipline opportunities for colloquium participants.

Examples of topics appropriate for the colloquium include: Ethical Principles for the Internet of Things, Intellectual Property and Data Intelligence, Bribery and Algorithms, Ethical Use of Big Data, Health Privacy and Mental Health, Employment and Surveillance, National Security, Civil Rights, and Data, Algorithmic Discrimination, Smart Cities and Privacy, Cybersecurity and Big Data, and Data Regulation. The organizers have a special interest in papers focused on the law and ethics of Artificial Intelligence. We seek a wide variety of topics that reflects the broad ecosystem created by ubiquitous data collection and use, as well as its impacts on society.

TENTATIVE Colloquium Details:
• The colloquium begins at 9:00 am with breakfast on April 24 and concludes at ~1:00 pm at the conclusion of lunch on April 25. The University will host a research colloquium dinner on April 24. Breakfast and lunch will be provided at Washington and Lee University on April 24-25.
• Approximately 40 minutes is allotted for discussion of each paper presentation; 5-10 minutes for an introductory presentation by the discussant, followed by 30-35 minutes of group discussion. Authors will not present their own papers to the group; rather, a paper discussant presents the work and leads the group dialogue that follows.
• Manuscripts will be circulated among participants only.
• Participants agree to read and be prepared to participate in the discussion of all papers. Each author may be asked to lead discussion of one other submitted paper.
• A limited number of participants will be provided with lodging, and all participants will be provided meals during the colloquium. Travel and all other expenses will be individually assumed by each participant.

Submissions: To be considered, please submit an abstract of 500-750 words to Margaret Hu at hum@wlu.edu no later than Friday, March 1, 2019. Abstracts will be evaluated based upon the quality of the abstract and the topic’s fit with the theme of the colloquium and other presentations. Questions may be directed to Margaret Hu (hum@wlu.edu), Angie Raymond (angraymo@indiana.edu), or Janine Hiller (jhiller@vt.edu). If you are interested in being a discussant, but do not have a paper to present, please send a statement of interest to the same.

Authors will be informed of the decision by Friday, March 8, 2019. If accepted, the author agrees to submit a discussion paper by Friday, April 12, 2019. While papers need not be in finished form, drafts must contain enough information and structure to facilitate a robust discussion of the topic and paper thesis. Formatting can be either APA or Bluebook. In the case of papers with multiple authors, only one author may present at the colloquium.

The Harvard Law School Program on Corporate Governance invites applications for Post-Graduate Academic Fellows in the areas of corporate governance and law & finance. Qualified candidates who are interested in working with the Program as Post-Graduate Academic Fellows may apply at any time and the start date is flexible.

Candidates should be interested in spending two to three years at Harvard Law School (longer periods may be possible). Candidates should have a J.D., LL.M., or S.J.D. from a U.S. law school, or a Ph.D. in economics, finance, or related areas by the time they commence their fellowship. Candidates still pursuing an S.J.D. or Ph.D. are eligible so long as they will have completed their program’s coursework requirements by the time they start. During the term of their appointment, Post-Graduate Academic Fellows work on research and corporate governance activities of the Program, depending on their skills, interests, and Program needs. Fellows may also work on their own research and publishing in preparation for a career in academia or policy research. Former Fellows of the Program now teach in leading law schools in the U.S. and abroad.

Interested candidates should submit a CV, transcripts, writing sample, list of references, and cover letter to the coordinator of the Program, Ms. Jordan Figueroa, at coordinator@corpgov.law.harvard.edu. The cover letter should describe the candidate’s experience, reasons for seeking the position, career plans, and the kinds of projects and activities in which he or she would like to be involved at the Program. The position includes Harvard University benefits and a competitive fellowship salary.

 

Sometimes, LLC cases are a mess. It is often hard to tell whether the court is misstating something, whether the LLCs (and their counsel) are just sloppy, or both.  My money, most of the time is on “both.” 

Consider this recent Louisiana opinion (my comments inserted): 

The defendant, Riverside Drive Partners, LLC (“Riverside”) appeals the district court judgment denying its motion for a new trial related to its order of January 8, 2018, dismissing all pending claims against three parties in this multiparty litigation: (1) CCNO McDonough 16, LLC (“CCNO”); (2) R4 MCNO Acquisition LLC (“R4”); and (3) Joseph A. Stebbins, II. After review of the record in light of the applicable law and arguments of the parties, the district court judgment is affirmed. . . .

This litigation arises out of a dispute among partners in a real estate development related to the conversion of an existing historic building into an affordable housing complex. Pursuant to the Operating Agreement signed on September 30, 2013, McDonough 16, LLC, was formed to acquire, rehabilitate, and ultimately lease and operate a multi-family apartment project consisting of the historic building and a new construction building. In turn, McDonough 16, LLC had two members, also limited liability entities: (1) the “Managing Member,” CCNO [an LLC] and (2), the “Investor Member,” R4, a Delaware limited liability company with its principal place of business in New York. [Who cares? Jurisdiction of the LLC is based on the citizenship of the LLC member(s).] Likewise, CCNO had two limited liability partnerships as members: (1) CCNO Partners 2, LLC, [thus not an LLP, but and LLC] which was formed by two members who were residents of and domiciled in Orleans Parish: Mr. Stebbins and Michael Mattax; and (2) the appellant, Riverside, a Florida limited liability company [also not an LLP] with its principal place of business in Florida whose sole member, Jack Hammer, is a resident of and domiciled in Georgia. Iberia Bank was lender for the project.

CCNO McDonough 16, LLC v. R4 MCNO Acquisition, LLC, 2018-0490 (La. App. 4 Cir. 11/14/18), 259 So. 3d 1077, 1078 (comments and emphasis added)

The issue was whether Riverside, LLC, as a member of CCNO, was needed to agree for CCNO to enter a settlement agreement. The court noted,

Section 3. 13 of the CCNO Operating Agreement provides:
Overall Management Vested in Members and Managers. Except as expressly provided otherwise in this Operating Agreement or otherwise agreed in writing at a meeting, management of the Company is vested in the Members in proportion to their initial Capital Contributions, and every Member is hereby made a Manager. All powers of the Company are exercised by or under the authority of the Managers and Members and the business and affairs of the Company are managed under the direction of the Members and Managers. The Managers may engage in other activities of any nature. (Emphasis added).
CCNO McDonough 16, LLC v. R4 MCNO Acquisition, LLC, 2018-0490 (La. App. 4 Cir. 11/14/18), 259 So. 3d 1077, 1079.  One thing not clear from the case is the CCNO is a Louisiana LLC, which I was able to find out via a Louisiana commercial entity search. Louisiana LLC law, by default, provides that members manage the business unless the operating agreement says otherwise.  The operating agreement appears to confirm the members as managers. My read of this provision would be that this provision makes management subject to a vote. That is, I read “management of the Company is vested in the Members in proportion to their initial Capital Contributions” to mean management is decided by a vote in proportion to capital contributions.  It is not intended to mean, I don’t think, that actual management is divided by voting rights (e.g., that Member A with 60% voting interest makes 60% of the decisions and Member B with 40% makes 40% of the decisions). If management is by vote, it would appear that CCNO, with at least 60% of the voting interest, could proceed to settlelment without Riverside, LLC. 
 
However, the opinion goes on to explain:
In addition, the CCNO Operating Agreement defines “Majority in Interest” as “any referenced group of Managers, Members or persons who are both, a combination who, in aggregate, own more than fifty percent (50%) of the Membership Interests owned by all of such referenced group of Managers and Members.” Notably, Section 2.05 of the CCNO Operating Agreement specifically provides that any amendment to the agreement requires the approval of the beneficiary of any mortgage lien, i.e., Iberia Bank.
Riverside does not dispute that it owns less than fifty per cent of the CCNO shares or that CCNO Partners 2, of which Mr. Stebbins is a member, owns proportionally more of the membership interest in CCNO. Rather, Riverside asserts that this does not matter because, although the CCNO Operating Agreement clearly established CCNO Partners 2 owned 66.67% of CCNO (and, concomitantly, that Riverside only 33.33%), a subsequent amendment altered the proportion of ownership to 60% (CCNO Partners 2) and 40% (Riverside) and redefined “Majority in Interest” to mean “more than 60%,” thereby making any settlement agreement reached without the appellant’s consent invalid.
CCNO McDonough 16, LLC v. R4 MCNO Acquisition, LLC, 2018-0490 (La. App. 4 Cir. 11/14/18), 259 So. 3d 1077, 1079–80.
 
Though this lacks some context, it appears that the court is saying that in defining “Majority in Interest,” the operating agreement was telling us what vote was needed to “manage” the LLC.  That might make sense, in that initially the agreement gave CCNO the power to manage because it had more than 50% of the voting interest. Then, apparently, there was an amendment to make a majority vote 60%+1, if properly executed, would have required Riverside’s consent to settle. However, the operating agreement also required the mortgage lien beneficiary to approve any amendment, which was not apparently done.  
 
This all seems like it is likely the right outcome, but it sure is hard to piece together. Perhaps all LLC cases should require the court to attach the operating agreement to the opinion. After all, LLC decisions are largely driven by the operating agreement, so it would be helpful for all of us trying to learn from the case to have the full context.  

Two closing thoughts:

  1. Jack Hammer as an LLC member of a construction-focused entity sounds like one of my exam characters. Awesome. 
  2. Westlaw’s synopsis states: “Managing member of limited liability corporation (LLC) brought action against investor member to enjoin removal as manager.”  No. An LLC is a limited liability company, not a corporation. (Regular readers had to see that coming.)
  3. LLCs are not limited partnerships, either, even if they are structured similarly or even use the term “partner.”  An LLC is a separate and unique entity.  Really. 

Yoga(Me&Jordan)

A bit over three years ago, I publicly noted in this space that I am an active yoga practitioner.  In a post on “Mindfulness and Legal Drafting for Business Lawyers (A Yoga Analogy),” I wrote about common touchpoints in an asana practice (what many folks just call “yoga”) and contract drafting, sharing thoughts that had first come to me after a yoga class one weekend.  In my three-part 2017 series of “Traveling Business Law Prof” posts on packing for business travel, I also mentioned my asana practice here and here.

Today, I set out to start posting a bit more on the intersections of yoga and business law teaching and practice.  I will have help from BLPB co-blogger Colleen Baker, a fellow yogi.  In fact, it is Colleen who has spurred this on.  We have shared a bunch of ideas on things to write about.

I begin with the news that I now am a Registered Yoga Teacher with a 200-hour certification.  I set out to achieve that goal about 18 months ago, after a discussion (at the wedding of a former student) with the life partner of a UT Law alum who is about 30 years my junior.  She got me really excited about the prospect by mentioning an upcoming training program that she had investigated.  We became Facebook friends, and the rest is, as they say, history.  That’s us in the picture above, on on graduation day.  (Please don’t criticize the form!  My arms should be perpendicular to the floor.  We were having fun goofing around after passing our exams, as you can see from my attention to the camera!)

My desire to complete a teacher training program was borne in part from a desire to deepen my practice.  But the core impetus came from wanting to share yoga practice with others–in particular, my faculty and staff colleagues and students at UT Law.  The benefits I get from my yoga practice are substantial.  They include participation in a more active lifestyle, self care, stress management and relief, increased focus, and other things that I know are useful to those who inhabit law schools.  Of course, I understood that I could share my yoga practice with others without the teacher certification.  However, I knew that my credibility–with my Dean and others–would be greater with the 11 months of training capped off by a written and practical exam.

Somewhat less than three weeks ago, with permission from my Dean, I started leading a regular early Friday morning yoga practice at UT Law for faculty, staff, and students.  I lead the sessions free of charge.  We have had three sessions so far.  I move  some furniture around to create space for our regular sessions in a common area of the law school.  I also plan to lead some pop-up sessions from time to time (perhaps in other areas of the law school building or even outside once the weather improves) to reach folks who cannot make the early Friday classes.  My focus so far has been slow, controlled, thoughtful movement through basic poses (asanas) and breath work (pranayama)–two of the eight limbs of yoga.

I am far from the first person to engage folks in yoga practice in a law school setting.  I read with interest this article from several years ago on yoga instruction at my law alma mater (and how yoga practice can help develop professional skills).  A quick Google search reveals yoga recently being offered at Chicago and Columbia and having been offered in the past at Harvard and Marquette.  I sense there is more out there . . . .  I am sure that Colleen and Haskell have information about yoga in the business school setting, too.  I know our campus offers a Yoga Fest in the fall.  And I will be teaching two free classes to campus faculty at the request of the Faculty Senate over the next month.

In future posts, Colleen and I hope to cover other topics near and dear to business law profs and our friends, including potentially posts focusing on yoga and lawyers, lawyering, legal analysis, law firms, business, teaching, mental health, and injury prevention. (What am I missing from our conversation, Colleen?)  Readers should feel free to share their interests and add to the list.

On Friday, I read several recent pieces on domestic and global financial market developments that I thought worth highlighting for readers.  Enjoy!

In America faces a battle to find buyers for its bonds, the Financial Times’ Gillian Tett notes important buying shifts in the market for U.S. Treasury bonds and the need to think about who “will buy this looming mountain of Treasuries” in the coming years.  The Treasury Borrowing Advisory Committee estimates that the U.S. will need to sell $12tn of bonds in the next ten years (an amount greater than in the past decade).  China’s holdings of U.S. Treasuries have been declining (from about $1.25tn three years ago to approximately $1.12tn in November 2018), but domestic savers have increased their holdings of U.S. Treasuries (from about $1.9tn in January 2018 to $2.3tn in November 2018).  As “the US need for debt is steadily increasing,” Tett’s article invites readers to think about a really critical issue.

Several years ago in my article on The Federal Reserve’s Use of International Swap Lines, I wrote about the Bank of England becoming the first major central bank to establish a central bank swap line with the People’s Bank of China.  Today, London’s renminbi trading eclipses pound-euro.  As the article notes, the U.K. is “the world’s largest currency dealing hub” with recent daily volumes of about $2.6tn and “Trading volumes in the renminbi against the US dollar were $73bn a day in October…”  The U.K.’s proactive approach or “charm offensive” has worked and explains How London won the race for the renminbi.  In October 2013, the Federal Reserve established standing central bank swap lines with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank.  With recent increases in renminbi trading volumes, including US dollar-renminbi trades, the global architecture of central bank swap lines arrangements is likely to become increasingly important and worth watching.     

Finally, in Private versus public markets is the battle to watch, Robin Wigglesworth focuses on the significant shift in the U.S. of capital from public to private markets (“rarely or never-traded investments…like farmland, real estate, infrastructure, venture capital, direct lending and private equity”) and potential implications of this trend, largely driven by investors’ search for higher returns.  In fact, so much capital has “rolled in” to private markets recently, that instead of there being an “illiquidity premium” (an expectation of a greater return because of an investment’s lack of liquidity, which makes exit more difficult) there appears to now be an “illiquidity discount.”  This investment trend also has a host of additional, critical implications such as: decreased amounts of capital invested in public markets; increased amounts of capital in less regulated markets; and, the potential for serious financial stability issues because “if there’s a sudden dislocation in markets, a profound dislocation, people who need the money to pay pensions or to pay other obligations are going to have to sell the public stuff quite rapidly.” (Wigglesworth is quoting Mark Machin, chief executive of the Canada Pension Plan Investment Board).  Unfortunately, the destabilizing potential of asset fire sales in financial markets is already well-known.