Babson College (near Boston, MA), well-known for their entrepreneurship program, recently posted a tenure track assistant or associate professor of business law position.
University of Wisconsin – Madison has posted two Clinical Assistant Professor positions in their Law & Entrepreneurship Clinic: Systems and Operations.
Professor Joan MacLeod Heminway (Tennessee) has a new article posted on SSRN entitled Investor and Market Protection in the Crowdfunding Era: Disclosing to and for the ‘Crowd.’ I look forward to reading the article this summer. The article abstract is posted below:
This article focuses on disclosure regulation in a specific context: securities crowdfunding (also known as crowdfund investing or investment crowdfunding). The intended primary audience for disclosures made in the crowdfund investing setting is the “crowd,” an ill-defined group of potential and actual investors in securities offered and sold through crowdfunding. Securities crowdfunding, for purposes of this article, refers to an offering of securities made over the Internet to a broad-based, unstructured group of investors who are not qualified by geography, financial wherewithal, access to information, investment experience or acumen, or any other criterion.
To assess disclosure to and for the crowd, this short symposium piece proceeds in three principal parts before concluding. First, the article briefly describes securities crowdfunding and the related disclosure and regulatory environments. Next, the article summarizes basic principles from scholarly literature on the nature of investment crowds. This literature outlines two principal ways in which the behavioral psychology of crowds interacts with securities markets. On the one hand, crowds can be “mad” — irrational, foolish, and even stupid. On the other hand, crowds can be “wise” — rational, sensible, and intelligent. After outlining these two strains in the literature on the behavioral attributes of crowds, the article assesses the possible implications of that body of literature for the regulation of disclosure in the securities-crowdfunding setting. The work concludes by asserting that, when considering and designing disclosure to and for the securities-crowdfunding crowd, the insights from this behavioral literature should be taken into account.
Tomorrow kicks off the 2014 Law & Society Annual meeting in Minneapolis, MN. Law & Society is a big tent conference that includes legal scholars of all areas, anthropologists, sociologists, economists, and the list goes on and on. A group of female corporate law scholars, of which I am a part, organizes several corporate-law panels. The result is that we have a mini- business law conference of our own each year. Below is a preview of the schedule…please join us for any and all panels listed below.
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Thursday 5/29 |
Friday 5/30 |
Saturday 5/31 |
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8:15-10:00 |
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0575 Corp Governance & Locus of Power U. St. Thomas MSL 458 Participants: Tamara Belinfanti, Jayne Barnard, Megan Shaner, Elizabeth Noweiki, and Christina Sautter |
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10:15-12:00 |
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1412 Empirical Examinations of Corporate Law U. St. Thomas MSL 458 Participants: Elisabeth De Fontenay, Connie Wagner, Lynne Dallas, Diane Dick & Cathy Hwang |
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12:45-2:30 |
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1468 Theorizing Corp. Law U. St. Thomas MSL 458 Participants: Elizabeth Pollman, Sarah Haan, Marcia Narine, Charlotte Garden, and Christyne Vachon |
1:00 Business Meeting Board Rm 3 |
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2:45-4:30 |
Roundtable on SEC Authority Participants: Christyne Vachon, Elizabeth Pollman, Joan Heminway, Donna Nagy, Hilary Allen |
1473 Emerging International Questions in Corp. Law U. St. Thomas MSL 458 Participants: Sarah Dadush, Melissa Durkee, Marleen O’Conner, Hilary Allen, and Kish Vinayagamoorthy |
1479 Examining Market Actors U. St. Thomas MSL 321 Participants: Summer Kim, Anita Krug, Christina Sautter, Dana Brackman, and Anne Tucker |
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4:45-6:30 |
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1474 Market Info. & Mandatory Disclosures U. St. Thomas MSL 321 Participants: Donna Nagy, Joan Heminway, Wendy Couture, and Anne Tucker |
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A New York Times article this weekend explained that many U.S. Supreme Court decisions are altered after they have been published, sometimes quickly and other times much later. Article author Adam Liptak explains:
The Supreme Court has been quietly revising its decisions years after they were issued, altering the law of the land without public notice. The revisions include “truly substantive changes in factual statements and legal reasoning,” said Richard J. Lazarus, a law professor at Harvard and the author of a new study examining the phenomenon.
The court can act quickly, as when Justice Antonin Scalia last month corrected an embarrassing error in a dissent in a case involving the Environmental Protection Agency.
But most changes are neither prompt nor publicized, and the court’s secretive editing process has led judges and law professors astray, causing them to rely on passages that were later scrubbed from the official record.
I have followed this particular change because of my interest in the EPA case, but I suspect this article is the first many people had heard of it. It makes some sense that articles would be fixed before going to final print, but the idea that opinions have been changed years later is rather remarkable to me, especially without some sort of formal notice. Now that we all know they can go back and fix opinions, though, I have one I’d like the court to revisit.
In 1992, the court heard Quill v. North Dakota, 504 U.S. 298, deciding that a state may not impose a tax collection obligation on a business that lacks a physical presence in the state. The court noted, though, that Congress could change that reality with legislation. In Quill, in declining to apply a bright-line rule, the court referred to an energy law case, Public Utils. Comm’n of R.I. v. Attleboro Steam & Elec. Co., 273 U.S. 83 (1927).
In Attleboro, that Court determined that a Rhode Island Commission order allowing an electricity seller to increase its price in a wholesale electric requirements contract between a Rhode Island utility (seller) and a Massachusetts utility (buyer) “place[d] a direct burden upon interstate commerce.” Id. at 84. The Court stated that neither state could regulate the interstate transaction because such regulation was only permissible at the federal level. This decision led Congress to pass the Federal Power Act (FPA), which was created (in part) to close what was dubbed the “Attleboro Gap.”
The U.S. Supreme Court has confirmed this more than once:
[T]he original FPA did a great deal more than close the gap in state power identified in Attleboro. The FPA authorized federal regulation not only of wholesale sales that had been beyond the reach of state power, but also the regulation of wholesale sales that had been previously subject to state regulation.”
New York v. FERC, 535 U.S. 1, 20-21 (2002) (citing Attleboro).
Similarly, in another case, the Court stated that the FPA
intended to “fill the gap”—the phrase is repeated many times in the hearings, congressional debates and contemporary literature—left by Attleboro in utility regulation. Congress interpreted that case as prohibiting state control of wholesale rates in interstate commerce for resale, and so armed the Federal Power Commission with precisely that power.
United States v. Public Utils. Comm’n of Cal., 345 U.S. 295, 307-08 (1953). (For a detailed description of Attleboro’s history, see Frank R. Lindh & Thomas W. Bone Jr.’s Energy Law Journal article, State Jurisdiction Over Distributed Generators (pdf here).
Returning to the Quill case, there Court stated:
Attleboro distinguished between state regulation of wholesale sales of electricity, which was constitutional as an “indirect” regulation of interstate commerce, and state regulation of retail sales of electricity, which was unconstitutional as a “direct regulation” of commerce.
Id. at 317. As I see it, this statement is wrong, though I admit I find this exerpt useful for getting students to discuss these concepts in Energy Law. Again, Attelboro held that direct regulation of retail sales was permissible, but that the regulation of interstate wholesale rates was not permissible by either state. As the cases above show, Quill did not change the state of the law, but Quill still mischaraterizes the law of Attleboro. So, this is my request: Should any Supreme Court Justices or their clerks (or others who can help) be reading the Business Law Prof Blog, please consider putting pen to paper and cleaning up Quill. Or, as Oscar Rogers likes to say, “Fix it!“
I love books. I have been buying and collecting books since I was a kid. But I have decided it’s finally time to change. E-readers have finally arrived. I know that electronic books and readers have been around for a long time now, but they’re finally good enough to satisfy even bibliophiles like me.
I have been reading everything from law review articles to law school memos on my laptop for some time now. But, until recently, that hasn’t extended to books, either the books I read for work or the books I read for pleasure.
It wasn’t for lack of interest. I looked at the earliest e-readers when they came out, but decided they wouldn’t allow me to do everything I could do with a physical book in hand. A few years ago, I bought a Nook from Barnes and Noble, but it’s been in a drawer for quite a while. The image was excellent; reading on it was a pleasant experience. But it just didn’t allow me to move around in the book, highlight, and take notes as well as I wanted to.
Six months ago, I bought a Kindle from Amazon. Not the Kindle Fire, with the full-color Internet browser. I’m perfectly happy with my smartphone for Internet browsing when I’m not on my computer. I bought the Kindle Paperwhite, a dedicated e-reader. And that, in the words of Robert Frost, has made all the difference.
I love my Kindle. (To be fair, I have heard that the latest edition of the Nook is also much better than the earlier version I bought.) I can do everything I would do with a physical book and more.
The print is incredibly easy to read. I can change the backlighting to accommodate where I’m reading. I can change the font to accommodate my aging eyes.
I can navigate within the book easily using a pull-down menu. For most new books, I can go to footnotes simply by clicking on them. I can easily see how much I have left to read in a chapter, without even having to turn a page.
I can highlight. I can take notes. I can easily access all of those highlights and notes in a single location, but quickly go to the particular page to see the full context. I can instantly look up words I don’t know. (I always did this as a student, with a dictionary sitting on my study desk, but I seldom have a dictionary handy when I’m sitting on the couch reading casually.)
Finally, I can get any book immediately, whenever I want it. No more checking to see if the local library or bookstore has it. No more waiting several days for Amazon to deliver it. And my carry-on baggage is suddenly several pounds lighter!
I know many of you have already made the jump to e-readers. But if you haven’t yet, now’s the time. (To be completely honest, I must admit I still haven’t convinced my wife the law librarian. She stubbornly clings to her three-foot-high pile of books in our living room. But, if you, unlike her, haven’t sworn to go to your grave with a physical book in your hand, check out the newest generation of e-readers.)
“The Role of Tort Law in Disrupting Corporate Manipulation of Societal Cognition” http://t.co/CTvp4iwKEd
— Stefan Padfield (@ProfPadfield) May 19, 2014
“management of distressed companies often bury their heads in the sand until it is too late” http://t.co/X3SFyrTEYx #corpgov
— Stefan Padfield (@ProfPadfield) May 20, 2014
Critiquing Cost-Benefit of Financial Regulation event background readings are posted here http://t.co/2TgZVd39P1 #cbaf
— Martha McCluskey (@MarthaMcCluskey) May 20, 2014
“This paper..argues that the self-regulation of investment bankers offers no credible deterrence against misconduct.” http://t.co/mueTlSRi8d
— Stefan Padfield (@ProfPadfield) May 22, 2014
Rebellious Economics Students Have a Point : The New Yorker – http://t.co/XlSi12MelE
— Pavlina R Tcherneva (@ptcherneva) May 15, 2014
Following up on Steven Bradford’s post regarding the Fourth Circuit’s interpretation of Janus Capital Group v. First Derivative Traders (2011):
The SEC recently announced that it intends to pursue more cases under Section 20(b) of the Exchange Act, which prohibits people from violating the Exchange Act “through or by means of any other person.” I suspect this move will have serious implications for private cases under Section 10(b).
[read more]
Brett McDonnell (Minnesota) recently posted a new article entitled Committing to Doing Good and Doing Well: Fiduciary Duty in Benefit Corporations. I have not read the article yet, but it is printed and in my stack for the summer. The abstract is below.
Can someone running a business do good while doing well? Can they benefit society and the environment while still making money? Supporters of social enterprises believe the answer is yes, as these companies aim at both making money for shareholders while also pursuing other social benefits. Since 2010, states have begun to enact statutes creating the “benefit corporation” as a new legal form designed to fit social enterprises. Benefit corporations proclaim to the world that they will pursue both social good and profits, and those who run them have a fiduciary duty to consider a broad range of social interests as they make their decisions rather than a duty to focus solely on increasing shareholder value. Does this novel fiduciary duty effectively commit these businesses to doing good? How will courts actually apply this duty in practice? Will this new duty accomplish its goals without unduly high costs?
This article is among the first to analyze in detail the fiduciary duty provisions in several versions of these new benefit corporation statutes. It compares duties in benefit corporations to duties in traditional corporations in the leading categories of fiduciary duty cases. It argues that there is likely to be a modest “flattening” in the risk of liability for directors and officers of benefit corporations. That is, as compared to the level of risk in ordinary corporations, the risk of being held personally liable will be bigger for decisions where that risk is weakest in ordinary corporations, while the risk of liability will be smaller for decisions where that risk is highest in ordinary corporations.
The article then asks whether the statutes strike the proper balance in holding directors and officers accountable. The statutes could be too strong if they scare off investors and managers. They could be too weak if they allow managers to proclaim their virtue while ignoring their duties with no fear of legal sanctions. Neither possibility can be dismissed, but this paper argues that the statutes have got it just right. They create enough risk of liability that managers must pay attention to their legal duties, allowing courts to help shape norms of appropriate behavior, while not imposing such high risk that this promising new business form becomes unattractive.
Much has been written about the protests at various schools over proposed commencement speakers. I am not sure I have much original to add to the many thoughts that have been shared on the issue (See, e.g., Jonathan Adler (Case Western), The Volokh Conspiracy; Stephen Carter (Yale), Bloomberg; Glenn Harlan Reynolds (Tennessee), USA Today; Editorial Board, Washington Post), but the controversy did make me think of the dystopian society in The Giver where “Sameness” rules.
One of my younger sisters recently accepted a job with Walden Media, which is producing the upcoming film version of The Giver with The Weinstein Company (shameless plug – in theatres August 15, 2014). My sister was amazed that I hadn’t read The Giver, as it is supposedly regular middle school reading, but it looks like the book (published in 1993) was not in the curriculum in time for me. Yes, I feel older every day.
Anyway, in a single day a few weeks ago, I read a borrowed copy of The Giver, which was a nice break from legal treatises and law review articles. While I understand the “Elders” in The Giver were trying to protect people by ridding the community of differences, pain, conflict, and ridicule, it made for a shallow existence.
Some of my most valuable moments in school occurred when I faced views I disagreed with and had to grapple with them. As a professor, the most valuable conversations are often those with knowledgeable people with opposing opinions and ideas. Going forward, I hope we will encourage engagement with those who see things differently than we do and continue the search for a more nuanced understanding of complex issues.
Two of my former colleagues at King & Spalding LLP, Jaron Brown and Tyler Giles, sent me their recently published book, Stock Purchase Agreements Line by Line. Jaron Brown made partner in King & Spalding’s M&A group before moving in-house to Novelis, Inc. Tyler Giles moved in-house earlier in his career (to Equifax, Inc.) and has since moved back to law firm life as a partner at FisherBroyles LLP.
The book appears aimed at practitioners, but it could also be a valuable resource for those who teach M&A or drafting courses. The book includes various practical pointers for drafting typical provisions in a stock purchase agreement and, as the title suggests, goes through an SPA line by line. The authors are true experts in their subject matter, and I look forward to using the book.
