In Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo Sec., LLC, 2015 U.S. App. LEXIS 12800 (2d Cir. July 24, 2015), the Second Circuit reversed the district court’s dismissal of state law fraud claims arising out of the sale of hybrid CDOs.  The court spent an extraordinary amount of time discussing the concept of loss causation, although to be honest, I’m not at all confident that the extended discussion actually clarifies matters, at least in those circuits that already follow Second Circuit law on the subject. 

(There is currently a circuit split on the definition of loss causation under the federal securities laws, and a newly-filed cert petition asking the Supreme Court to resolve it.  But I digress.)

What I actually was excited to see was the Second Circuit’s discussion of the conditions under which plaintiffs should be permitted to amend their pleadings.

As I previously posted, courts are all over the map about allowing amended pleadings in securities fraud cases.  Some courts are extremely permissive; others essentially grant plaintiffs only one bite at the apple (although that standard is usually more applicable to federal, rather than state, claims).  Many courts have held that if plaintiffs want the opportunity to replead their claims in order to meet particularity requirements, they must proffer their proposed amendments prior to the ruling on the motion to dismiss.  The theory is, plaintiffs should not be allowed to sit on relevant evidence, let the court make its ruling, and only then announce that they have new facts in their possession; instead, plaintiffs should promptly alert the court if they have additional facts that bolster their allegations.

That rule sounds logical but, as I argued in my prior post, is actually tremendously unfair in practice, because the particularity requirements for pleading securities fraud – whether under the federal rules or under the PSLRA – are so idiosyncratic that it is very difficult for plaintiffs to be able to tell, in advance, what deficiencies might exist in their complaint and what new facts might fill the holes.  Making matters worse, any newly-proffered facts offered prior to an initial ruling on the motion to dismiss would introduce extensive delays into the process.

Well, in Loreley, the Second Circuit agreed with me (vindication!!).  As the court wrote:

[T]he procedure by which the district court denied leave to amend was improper. The court required the parties to attend a pre-motion conference and to exchange, in preparation, letters of no more than three pages regarding Defendants’ anticipated motion to dismiss for failure to state a claim. The Federal Rules of Civil Procedure do not speak to the use of pre-motion conferences. Such conferences are not in themselves problematic, however, and indeed may in many instances efficiently narrow and/or resolve open issues, obviating the need for litigants to incur the cost of more extensive filings. The impropriety occurred not when the district court held the pre-motion conference but when, in the course of the conference, it presented Plaintiffs with a Hobson’s choice: agree to cure deficiencies not yet fully briefed and decided or forfeit the opportunity to replead. Without the benefit of a ruling, many a plaintiff will not see the necessity of amendment or be in a position to weigh the practicality and possible means of curing specific deficiencies.

Our opinion today, of course, leaves unaltered the grounds on which denial of leave to amend has long been held proper, such as undue delay, bad faith, dilatory motive, and futility—none of which were a basis for the denial here. No improper purpose is alleged. And while leave may be denied where amendment would be futile, the approach taken by the district court was not rooted in futility. Rather, the court treated Plaintiffs’ decision to stand by the complaint after a preview of Defendants’ arguments—in the critical absence of a definitive ruling—as a forfeiture of the protections afforded by Rule 15. This was, in our view, premature and inconsistent with the course of litigation prescribed by the Federal Rules…

I totally agree.

The internet has been abuzz this week with news that Netflix will now offer of “unlimited” maternity and paternity leave to its employees.

I place “unlimited” in scare quotes because, while Netflix uses that word, the announcement makes clear that the leave is unlimited….during the first year after a child’s birth or adoption.

Nonetheless, one year of paid maternity/paternity leave is extremely generous by U.S. company standards. 

Amid the praise, there has been a fair bit of skepticism. 

No good deed goes unpunished? As far as I could tell, the criticism boils down to the following:

  • Netflix (and other companies) may not be able to afford this massive benefit
  • The policy does not cover all Netflix employees
  • The policy may lead to jealousy and strained working relationships
  • Parents will have a hard time separating from their children after one year
  • Employees might actually take less time off, as seen with some of the unlimited vacation policies

The skepticism following Netflix’s announcement reminds me of the somewhat surprising blowback from Gravity Payment’s decision to raise its minimum salary to $70,000. More details on the Gravity Payment’s situation are nicely detailed by our friend Christine Hurt (BYU Law) at The Conglomerate. Decisions by both companies appear to warrant business judgment rule protection, even if they turn out badly. 

While the reactions have been mixed, Netflix has definitely been getting a lot of publicity. Perhaps the publicity will breathe new life into efforts to have the U.S. join the rest of the industrialize world in requiring paid maternity/paternity leave.

In any event, it will be interesting to see how Netflix’s policy plays out. To date, the stock market seems to be supporting the announcement (or at least fairly neutral on the announcement). If support continues, perhaps we will see this type of policy spread organically.

From an e-mail I received earlier today:

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University of South Carolina School of Law

Hiring Advertisement

The University of South Carolina School of Law invites applications for tenured, tenure-track, or visiting faculty positions to begin fall semester 2016. Candidates should have a juris doctorate or equivalent degree. Additionally, a successful applicant should have a record of excellence in academia or in practice, the potential to be an outstanding teacher, and demonstrable scholarly promise.  Although the School of Law is especially interested in candidates who are qualified to teach in the areas of taxation, clinical legal education, environmental law and small business, we are equally interested in candidates who can contribute to the diversity of our law school community whose teaching interests may fall outside of these areas. 

Interested persons should send a resume, references, and subject area preferences to Prof. Eboni Nelson, Chair, Faculty Selection Committee, c/o Kim Fanning, University of South Carolina School of Law, 701 S. Main St., Columbia, SC 29208 or, by email, to HIRE2016@LAW.SC.EDU (electronic The University of South Carolina is committed to a diverse faculty, staff, and student body.  We encourage applications from women, minorities, persons with disabilities, and others whose background, experience, and viewpoints contribute to the diversity of our institution. The University of South Carolina is an Equal Opportunity Employer and does not discriminate on the base of race, color, religion, sex, national origin, age, disability, genetics, sexual orientation, gender, or veteran status.

Earlier I posted a list of business schools hiring in legal studies.

This post includes a list of law schools that have listed business law as an area of interest.* I will use the PrawfsBlawg spreadsheet and other sources to update this list from time to time.

Feel free to send me any additions or leave additions in the comments.   

Updated Jan. 28, 2016

*Schools that have not listed any preferences, or that have provided open-ended language after preferences that do not include business law, are not included in this list. Also, given that I do not have access to the AALS ads, this list is likely incomplete and only includes schools that have posted their open positions online.  

For the purposes of this post, I include the following subject areas in the definition of “business law”: banking; business associations; corporate finance; corporate governance; financial institutions; international business transactions; law & economics; law & entrepreneurship; M&A; securities regulation; unincorporated entities .

We here in Tennessee took a strong interest in the decision in Obergefell v. Hodges, since one of the cases being decided was from Tennessee (Tanco v. Haslam). We at The University of Tennessee were especially interested. The plaintiffs in the Tanco case are University of Tennessee faculty members at the College of Veterinary Medicine, located on our adjacent sister campus (for The University of Tennessee Institute of Agriculture) here in Knoxville. As East Tennessee awaited the Supreme Court’s decision–and in the aftermath of the opinion’s release, the press sought for and found many angles on the case.

Of interest to me, as a business lawyer, was the interaction of the case with local business–existing and potential. As with most things, there were (and are) two sides to this coin. Locally, and nationally, both have gotten some play. For opportunistic business lawyers, both sides present advisory possibilities.

Some press time was spent on what I call the “Sweet Cakes” issue (covered by blogs as well as the traditional press, with my favorite law coverage coming from Eugene Volokh over at The Volokh Conspiracy, including this post). Sweet Cakes is, of course, the now-famous family-owned-and-run Oregon wedding cake purveyor that expressly refused to sell wedding cakes to same-sex couples. Eugene outlines a number of interesting legal issues in his posts, and regardless of whether you agree with his conclusions, you can see there is much lawyering involved in the business decisions of those who are intent on being conscientious objectors to same-sex marriage through their business activities. In Tennessee, the Obergefell decision has been famously followed with reports of anti-same-sex marriage signage, like this press item on a sign posted by the owner/proprietor of a hardware store.

The other side of the coin is, of course, the new opportunities that same-sex marriage creates for existing businesses and entrepreneurs. In the run-up to the Supreme Court’s ruling, The Tennessean reported that “[o]pening marriage to same-sex couples would yield an additional $36.7 million in spending in Tennessee in three years as more than 5,400 same-sex weddings are expected to be held in the state during that period, according to estimates from the Williams Institute, a think tank at UCLA Law dedicated to sexual orientation and gender identity research.” And after the decision, the Nashville Business Journal reiterated the message. New businesses formed to take advantage of this new market for marriages in the state will need–you guessed it–lawyers!  Since Gatlinburg–in the Smoky Mountains just a stone’s throw from Knoxville–is a wedding destination, our end of the state should see its fair share of that “action,” assuming the business environment is welcoming . . . .  This article indicates there may be some businesses in that part of the state that are willing to participate in same-sex weddings.

So, as with other legal changes of any magnitude, we may conceptualize Obergefell as a full-opportunity-for-lawyers act, and those opportunities will likely enure to business lawyers as well as others.

 

Harris Adams

Judge A. Harris Adams (Georgia Court of Appeals 2002-2012) died on Monday night at age 67. According to the Daily Report: “Visitation is planned for 5-7 p.m. Thursday at Mayes Ward-Dobbins Funeral Home, 180 Church St., Marietta. Funeral services are scheduled for 10:30 a.m. Friday at the Church of the Apostles in Atlanta.”

Until my family moved after my eighth grade year, I lived just a few blocks from Judge Adams, his wife (who was one of my mother’s dearest friends), and his three children in Marietta, GA. His oldest child, Lanier, attempted to teach me piano, and his youngest, Zach, was a childhood friend of mine.

Judge Adams had an infectious laugh. He was a talented storyteller. He was bright and well-respected, but stayed humble and never seemed to take himself too seriously. I have some vivid memories of him shooting baskets with Zach and me, in his dress clothes. He will be missed by many. My thoughts and prayers go out to his family.   

I received this position posting today via e-mail (emphasis added):

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The University of Maryland School of Law invites applications for a tenure-track faculty position to teach in the area of business law, potentially including an appropriate combination of the following courses: Business Associations, Corporate Finance, Secured Transactions, along with other core classes in the business curriculum.  We will consider both entry level and lateral candidates.  The University of Maryland has a strong commitment to diversity.  We welcome applications from persons of color, women, and other members of historically disadvantaged groups.  Contact: Professor Leigh Goodmark, University of Maryland Francis King Carey School of Law, 500 W. Baltimore Street, Baltimore, MD 21201.  Email: lgoodmark@law.umaryland.edu.  Phone: (410) 706-3549.

The University of Maryland, Baltimore is an Equal Opportunity/Affirmative Action Employer.

Minorities, women, veterans and individuals with disabilities are encouraged to apply.

I am not sure if we have any readers with doctorates in accounting, but, if so, see the hiring announcement from Eastern Illinois University below. I have included this announcement because they are also considering applicants with a J.D. and a CPA or LLM (or other masters) in tax.

—-

Eastern Illinois University invites applicants for two 9-month tenure track positions at the Assistant level in Accountancy. The positions begin in Fall 2016 and hiring will ultimately depend on the availability of funding. Evidence of strong instructional effectiveness is essential as are strong communication and interpersonal skills.  Demonstrated commitment to diversity and experience with promoting inclusive excellence is required.  The successful candidate will also be expected to provide evidence (or potential) to engage in related research and service activities.  Professional certification, business experience, and experience or willingness to teach in an online format are desirable.

For one position, a PhD or DBA in Accountancy, or a JD with CPA or specialized masters’ in tax, is preferred, although ABDs close to completion will be considered. Candidate should possess expertise and teaching experience in Tax and a secondary area such as managerial, governmental & not-for-profit, accounting information systems, or audit.

For the second position, a PhD or DBA in Accountancy is preferred, although ABDs close to completion will be considered. Candidates should possess expertise and teaching experience in Managerial Accounting. An interest in teaching in a secondary area such as governmental & not-for-profit, or accounting information systems is desirable.

Dr. Denise Smith, Chair of the Search Committee, will be interviewing during the American Accounting Association Annual Meeting in August 2015. All applicants must submit a letter of interest, a current curriculum vita, evidence of teaching effectiveness, and names and contact information (including phone numbers and email addresses) for three references.  Applications for the tax accounting position must be submitted electronically to Interfolio at apply.interfolio.com/30692 while application for the managerial accounting position must be submitted electronically to Interfolio at apply.interfolio.com/30734.

Finalists will be asked to provide transcripts. Review of all applications will begin on September 2, 2015, and will continue until all campus interviews are scheduled.

Eastern Illinois University is a public university that places priority on teaching excellence for a student body in a rural setting. Eastern is consistently named one of the top Midwestern public universities in our class by U.S. News & World Report. Approximately 9,000 students are enrolled in undergraduate and graduate programs. Charleston is located in east central Illinois and combines the benefits of a community of 20,000 with access to several large cities, including Chicago, St. Louis, and Indianapolis. The University is accredited by North Central Association of Colleges and Schools. The School of Business and the Accountancy Program are fully accredited by AACSB International.  The School of Business offers six undergraduate majors, eight minors, and an MBA. There are approximately 1,100 declared undergraduate business majors and 100 MBA degree candidates. For more information about the School of Business and the university, visit this web site: http://www.eiu.edu/business/.

Eastern Illinois University is an Affirmative Action/ Equal Opportunity Employer – minority/female/disability/veteran – committed to achieving a diverse community.

I am sure that many of you, like me, are deluged with email messages at this point in the year from well-meaning students taking your fall courses who ask whether a particular text–or version of a text–marked as “required” on the book list is really required. There are many ways to respond to these requests.  A number of my my Facebook friends–including former students–suggest a simple response, something akin to: “What part of required do you not understand?”

While that kind of a response sometimes is very appealing (especially when I get two emails asking about this kind of thing on the same day), I have decided to use these interactions as a teaching moment–of sorts. Set forth below is a version of a message that I send, in case it is of some use to you in this or another similar context. The specific inquiry to which I am responding relates to a student’s question about using a 2013 “statutory supplement” in my Fall 2015 Business Associations course.

Hey, [name of student]. Thanks for reaching out to me. This is a common question. It has an easy (although perhaps unpalatable) answer. I marked the 2015 statutory resource book (not really a supplement, but the core of our work in this course) as required for the course. I will be working from the 2015 version in and outside class. I cannot ensure that the 2013 version—or even the 2014 version—will have everything you need. While I know the authors, I do not control and am not privy to what they include and exclude every year. So, I cannot recommend your use of the 2013 version, and if you use it, you will be responsible for noting where the gaps or changes are. There may be none, but I cannot guarantee that.

I regret making students pay the money for a new paperback every year. But I have come to consider it an investment. Of course, as you already know, lawyers should never use an outdated version of the law for their research. It can be the basis of a claim of malpractice or sanctions on the basis of incompetence or a lack of diligence. So, my required use of a current version of the restatement provisions, statutes, rules, and other materials in the statutory resource book is also a way of encouraging professionally responsible, low-risk legal practice.

I will not be policing the use of outdated or other supplements—or even online versions of the statutes, rules, and other materials (which include a sample corporate charter and bylaws, for example)–instead of the assigned statutory resource book for class. So, it’s all up to you. Others have used outdated or online or photocopied versions of the materials in the statutory resource book in the past and done very well in the course. But they typically put in significant work on their own to ensure they had what they needed for the exams and assignments.

See you in a few weeks. I will look forward to having you in class. You already have exhibited professionally responsible behavior in contacting me in advance and asking about the resource book. That’s a great start to the semester.

Joan Heminway

Incidentally, in case you wondered, most students respond to my email thanking me and noting they will acquire the 2015 edition.  Many students do not contact me at all about this issue and just go ahead and use outdated materials.  Some of these non-communicative students have later admitted to me they regretted that decision.

Also, I have tried in the past to just assign online versions of the restatement provisions, statutes, and rules.  There are two main disadvantages that I identified to this approach.  First, I found that students did not bring the necessary legal provisions to class with them in electronic or hard-copy form or did not bring a computer to access rules that come up in class in an unplanned manner.  Relatedly, it is important to note that, when the students take my open-book midterm (oral) and final (written) exams, they really need to have hard copies of the relevant rules with them, which means printing them out and collecting them in a book or folder anyway (since I do not allow electronic devices, other than ExamSoft-modified computers, in my examinations). Second, my statutory resource book has materials other than restatement, statutory, and regulatory provisions in it.  If the book is not required, I must supplement the text with these additional materials, where necessary or desired.  

Let me know your thoughts and share comments for improvement.  Or tell me I am being too nice and should push back harder at my students.  The type of response I have included above is generally consistent with my overall communication style with my students, which could be characterized as compassionate but direct.  Others may have very different approaches to instructor-student communications or course objectives that make my response undesirable or even counterproductive.  Please do share those kinds of reactions in the comments.