My law school, the University of Nebraska, has received quite a bit of favorable publicity because of its rise in the U.S. News and World Report rankings. We’re now 54th, having risen 35 places in the last two years.

The University and the Dean are publicizing our new ranking; the local newspaper has noted it; we even got a favorable mention in the Wall Street Journal’s Law Blog.

But, as people much smarter than me have pointed out (in more gentle language), the U.S. News rankings are crap. U.S. News takes a series of numbers that have little to do with the quality of legal education offered by a school, weights each of those numbers in a semi-random way, and produces a final number that’s as faulty as the inputs. But the mathematical mystery and precision lead some people to give it more credence than it deserves.

Those numbers were crap when my school was ranked significantly lower and they’re still crap now that my school’s ranking is higher. The reliability of an index doesn’t depend on how high or low one falls on that index.

I don’t blame my University or my Dean for promoting those numbers. We do have a great law school and they’re just trying to let people know that. Some potential students pay attention to those numbers, crap or not. I just wish there were some more reliable way to let people know how good my law school is—reading tea leaves or rolling dice, perhaps.

The “Conference on Multi-Jurisdictional Deal Litigation” will be held April 25, 2014.  Here is a brief introduction:

M&A litigation is increasingly filed in both the target’s state of incorporation and its headquarters state. It is the most important current development in corporate litigation. The leading plaintiffs’ and defendants’ deal litigators from Delaware and from Texas will discuss every aspect of this issue at our day-long conference. Chief Justice Strine of the Delaware Supreme Court and Justice Brown of the Texas Supreme Court will be panelists.

On Monday, the Supreme Court agreed to hear Public Employees’ Retirement System of Mississippi v. IndyMac MBS, Inc., No. 13-640, concerning American Pipe tolling of statutes of repose.  Depending on how the Court chooses to frame the issues, the holding could extend to countless class actions, or it could even be securities-specific, based solely on the PSLRA.

[Read more after the jump]

Continue Reading As long as the Supreme Court keeps granting cert in securities cases, I will have things to blog about

Jonathan Macey and Joshua Mitts have a new article, The Three Justifications for Piercing the Corporate Veil, forthcoming in the Cornell Law Review.  The article smartly employs empirical research of judicial opinions to shed light on the long-convoluted and “mysterious” doctrine of corporate veil piercing.  According to the abstract, the article:

[D]evelop[s] a new theoretical taxonomy which postulates that veil-piercing decisions fall into three categories: (1) achieving the purpose of a statutory or regulatory scheme, (2) preventing shareholders from obtaining credit by misrepresentation, and (3) promoting the bankruptcy values of achieving the orderly, efficient resolution of a bankrupt’s estate. We analyze the facts of several veil-piercing cases to show how the outcomes are explained by the three theories we put forth and show that undercapitalization is rarely, if ever, an independent grounds for piercing the corporate veil. In addition, we employ modern quantitative machine learning methods ….to analyze the full text of 9,380 judicial opinions. We demonstrate that our theories systematically predict veil-piercing outcomes, the widely-invoked rationale of “undercapitalization” of the business poorly explains these cases, and our theories most closely reflect the textual structure of the opinions.

-Anne Tucker

Passing on this announcement for those interested in teaching business and human rights or learning more about it. I had the opportunity to meet many of the professors who teach in this area at the UN Conference on Business and Human Rights in Geneva in December and they and outside counsel from around the world discussed the need for more law and business students to understand these issues so that graduates could advise clients of all sizes. Contact Anthony Ewing from Columbia Law for more information.
 
Teaching Business and Human RightsWorkshop
Thursday and Friday, May 15-16th, 2014
Columbia University, New York, NY
 
We are pleased to announce that the fourth annual Teaching Business and Human Rights Workshop will take place at Columbia University in New York on Thursday andFriday, May 15-16th, 2014.
 
History
The Columbia Teaching Business and HumanRights Forum is a unique platform for collaboration among individuals teaching business and human rights worldwide. The first Workshop, in 2011, led to the creation of an Online Forum that has grown to include more than 175 participants in twenty-five countries. Last year’s Workshop convened forty individuals teaching at thirty-one institutions in ten countries. Discussion Summaries of the first three Forum Workshops are available on the website of the Business and Human RightsResource Centre. 
 
Agenda
This year’s agenda based on Forum participant suggestions, covers a range of topics, both practical and thematic. Our goal is to provide an opportunity for teachers in various disciplines to share strategies and discuss issues of common concern. Each agenda item will be moderated with one or two participants asked to make brief presentations to kick off discussion. We are also inviting a limited number of practitioners from business and advocacy organizations in order to increase interaction between the classroom and the field of practice. 
 
The Workshop will open on Thursday afternoon,and feature a discussion with corporate responsibility leaders. More details on Thursday’s venue, the informal dinner, and session speakers to come.
 
Registration
If you will attend the Workshop, please provide the information in the attached registration formand e-mail it by Friday, May 2nd to: Greta Moseson (Program Manager, Columbia Law School Human Rights Institute).
We can accommodate up to forty participants. In the event we reach capacity before the RSVP date, we will send out a notification that registration has closed. We are exploring some form of video streaming capacity for Forum participants unable to attend in person.
 
There is no cost to attend the Workshop. Participants must cover their own travel costs. (Information on area hotels is available here.)
 
Online Forum
If you would like to participate in the online Forum and have not received login information, let us know so we can generate an automated invitation (from “basecamphq.com”).
 
Syllabi Bank
A valuable feature of the Forum and Workshop is the exchange and discussion of course syllabi. There are currently thirty-five syllabi available to participants who have submitted their own, on a password-protected site. If you would like to submit, replace, or remove your syllabus, please contact Greta Moseson.
We look forward to seeing many of you in May.
 
Sincerely,
 
Anthony Ewing                                             Joanne Bauer
aewing@law.columbia.edu                             jjb71@columbia.edu
Lecturer in Law                                             Adjunct Professor
Columbia Law School                                    SIPA/School of Continuing Education, Columbia University

 

Emory is hosting its Teaching Transactional Law and Skills Conference on June 6-7th.  The theme is “Educating the Transactional Lawyer of Tomorrow.”  Proposals are being accepted through March 17th, and additional information about the conference is available here:  Download 2014.Emory.Conf.CFP. 

I attended this conference about 18 months ago and found it to be an incredibly rich dialogue about teaching business related courses.  I walked away with aspirational ideas for  future development as well as concrete elements to implement in Contracts, Corporations and Unincorporated Business Associations (our small business planning class).

-Anne Tucker

Stanford Law School is looking for a full-time teaching fellow in the corporate governance area.
 
The teaching fellow will teach two courses, and a two-year commitment is required, with the possibility of a third year.  The position is intended for people who plan to go on the academic job market following the fellowship.  The application deadline is April 15, 2014. 
 
More details are available after the break for those who are interested.
 

Continue Reading Stanford Law School – Teaching Fellowship, Corporate Governance

I study both business law issues and shale oil and gas regulation, and I see a lot of overlaps between the two. Big business, is after all, big business.

The political intensity related to shale oil & gas development, is a concentrated version of many other types of regulation, such as we related to securities and publicly traded corporations.  I am currently finalizing an article regarding the Pennsylvania Supreme Court’s decision in Robinson Township v. Commonwealth, which overturned Act 13, the state’s law designed to promote hydraulic fracturing and horizontal drilling.  In major part, Act 13 largely eliminated local zoning of oil & gas development.  

David B. Spence’s article, Responsible Shale Gas Production: Moral Outrage vs. Cool Analysis, provided one good source for analyzing the regulatory backdrop of shale law and regulation.  I recommend it highly. 

Here’s the abstract:      

The relatively sudden boom in shale gas production in the United States using hydraulic fracturing has provoked increasingly intense political conflict. The debate over fracking and shale gas production has become polarized very quickly, in part because of the size of the economic and environmental stakes. This polarized debate fits a familiar template in American environmental law, pitting “cool analysis” against “moral outrage.” Opponents of fracking have generally framed their arguments in moral or ethical terms, while systematic research is beginning to build a more careful and nuanced understanding of the risks associated with shale gas production (though the record is far from complete). All of which makes the question of how to produce shale gas “responsibly” – corporate social responsibility being the focus of this symposium – very difficult to answer. This essay argues that: (i) because shale gas production entails difficult to measure and unevenly distributed costs and benefits, there is no clear responsible (read: ethically preferable) set of limitations that we ought to impose on shale gas production; and (ii) moral outrage is obscuring (or influencing perceptions of) empirical facts in the shale gas policy debate. More specifically, well-established behavioral heuristics – particularly, confirmation biases and the cultural cognition of risk – are impeding the development of a common understanding of the empirical facts necessary to guide policymaking. Recognizing this, policymakers must resist political pressures and work that much harder to ground their decisions in empirically-demonstrated facts – namely, those produced by sources that are less susceptible to these heuristics and biases. Thus, information generated by rigorous, empirical analyses performed by academic or government sources ought to be credited over anecdotes or studies associated with industry or NGOs that have staked out a clear pro or con position in the fracking debate. Indeed, responsible fracking decisions ought to consider all of the consequences of permitting, regulating or banning shale gas production, including the relative risks of shale gas production compared with the relevant energy alternatives.

On Friday (March 7, 2014), the Delaware Court Chancery issued Vice Chancellor Laster’s 91-page post-trial opinionin In re Rural Metro Corp. S’holders Litig. 

The decision holds the investment bank defendant, RMC Capital Markets LLC, liable for aiding and abetting breaches of fiduciary duty by the directors.  I have not finished the entire opinion yet, but interested readers can access the full opinion here.

The opinion is sure to be one of the most carefully read Chancery opinions of the year – especially by those in the M&A area – and has already generated a fair bit of commentary.  For now, I will outsource to the following:

The federal restrictions on offering securities are a mess. Section 5, even with the recent additions of subsections (d) and (e), is short—less than 600 words by my count. However, as every Securities Regulation student comes to appreciate, that brevity is deceptive. Section 5 is incredibly complex. The SEC regulations increase that complexity: almost everything in Section 5 has been modified or displaced by SEC regulations.

Consider just the question of what an issuer may say before filing its registration statement. Section 5(c) says the issuer may not make an offer to sell the securities. But the SEC says “offer to sell” means more than just asking people to buy the securities. It includes any communication, even if you don’t mention the offering, that might generate public interest in buying the security, what the SEC calls conditioning the market. But, if it’s more than 30 days prior to when you’re going to file your registration statement, see Rule 163A. After that, see Rule 163, Rule 168, or Rule 169, depending on what type of company you are. But don’t mention the offering in any of those communications, unless, of course, you fit within Rule 135.

Or consider section 5(b)(1)’s bar on transmitting a written offer to sell. Rule 433, the free-writing prospectus rule, has rewritten that statutory prohibition so extensively that the Rule 433 tail now wags the section 5(b)(1) dog. And then there’s Rules 172 and 173, which almost completely displace the final prospectus delivery requirements of sections 5(b)(1) and 5(b)(2).

Many of these regulations improve the statutory scheme, although simpler rules would be even better. But isn’t it about time to revise the statute, instead of constantly engrafting regulatory exceptions and rewrites on to the aging, obsolete statutory structure?

A statute that says “x” and a rule that says “but not x” don’t exactly promote public respect for the rule of law. Consider the way Rule 172(b) is written—it essentially says that any obligation under section 5(b)(2) to deliver a prospectus is satisfied if you don’t deliver a prospectus.

Wouldn’t it be better to have the rules assembled in an organized, coherent whole, instead of having to jump from place to place to figure out what’s allowed and what isn’t? If the SEC’s approach makes more sense, and in many cases I think it does, then let’s change the statute to reflect the SEC’s approach. In many cases, all the existing statute does is complicate the SEC’s rulemaking task.

It’s against my interest to suggest this. I teach two securities law classes, and statutory changes just mean more work for me. But I think it’s time we rewrote the Securities Act.