Law Commons^™

After Ftx: Can The Original Bitcoin Use Case Be Saved?, Mark Burge

Faculty Scholarship

Bitcoin and the other cryptocurrencies spawned by the innovation of blockchain programming have exploded in prominence, both in gains of massive market value and in dramatic market losses, the latter most notably seen in connection with the failure of the FTX cryptocurrency exchange in November 2022. After years of investment and speculation, however, something crucial has faded: the original use case for Bitcoin as a system of payment. Can cryptocurrency-as-a-payment-system be saved, or are day traders and speculators the actual cryptocurrency future? This article suggests that cryptocurrency has been hobbled by a lack of foundational commercial and consumer-protection law that …

Confidentiality Clauses In Settlement Agreements After The Consumer Review Fairness Act, Wayne Barnes

Faculty Scholarship

Online commerce has skyrocketed in recent years, and shoppers are purchasing goods or services online in greater numbers every year. The COVID-19 pandemic has only hastened the trend. One significant aspect of online shopping is the presence of consumer reviews posted by prior purchasers of goods or services, describing their experience with the products, the services and/or the selling merchant. A vast majority of online shoppers say that they rely on these reviews to help inform their purchasing decisions. Positive reviews can be tremendously beneficial to a business’ profitability, whereas negative reviews can be equally detrimental. Users of the internet …

Gamestopped: How Robinhood’S Gamestop Trading Halt Reveals The Complexities Of Retail Investor Protection, Neal Newman

Faculty Scholarship

Should brokers have the unfettered right to restrict investor trading? GameStop, a brick-and-mortar video game retailer, had been experiencing declining revenues since 2016. However, GameStop saw its share price climb almost 1000 percent in the span of a one- week period from January 21, 2021 to January 27, 2021 due to retail investors buying significant amounts of GameStop shares during that period. Melvin Capital, a hedge fund, ended up losing billions as they were betting that GameStop shares would lose value instead of increase—a practice referred to as short selling. On January 28, 2021, brokers inexplicably halted trading on GameStop …

The Failure Of Market Efficiency, William Magnuson

Faculty Scholarship

Recent years have witnessed the near total triumph of market efficiency as a regulatory goal. Policymakers regularly proclaim their devotion to ensuring efficient capital markets. Courts use market efficiency as a guiding light for crafting legal doctrine. And scholars have explored in great depth the mechanisms of market efficiency and the role of law in promoting it. There is strong evidence that, at least on some metrics, our capital markets are indeed more efficient than they have ever been. But the pursuit of efficiency has come at a cost. By focusing our attention narrowly on economic efficiency concerns—such as competition, …

Achieving Law Reform Sometimes Requires A Strong Defense, William H. Henning

Faculty Scholarship

In 2019, a joint drafting committee authorized by the Uniform Law Commission and the American Law Institute began work on a sweeping set of amendments to the official text of the Uniform Commercial Code (UCC) that address issues arising from emerging technologies. The amendments were approved by the sponsoring organizations at their 2022 annual meetings, and efforts are already underway to gain uniform nationwide enactment by state legislatures. The most significant changes to the UCC consist of a new Article 12 dealing with digital assets and amendments to Article 9 that facilitate the leveraging of these assets. Also in 2019, …

A Proposed Sec Cyber Data Disclosure Advisory Commission, Lawrence J. Trautman, Neal Newman

Faculty Scholarship

Constant cyber threats result in: intellectual property loss; data disruption; ransomware attacks; theft of valuable company intellectual property and sensitive customer information. During March 2022, The Securities and Exchange Commission (SEC) issued a proposed rule addressing Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure, which requires: 1. Current reporting about material cybersecurity incidents; 2. Periodic disclosures about a registrant’s policies and procedures to identify and manage cybersecurity risks; 3. Management’s role in implementing cybersecurity policies and procedures; 4. Board of directors’ cybersecurity expertise, if any, and its oversight of cybersecurity risk; 5. Registrants to provide updates about previously reported cybersecurity …

The Uniform Commercial Code Survey: Introduction, Jennifer S. Martin, Colin P. Marks, Wayne Barnes

Faculty Scholarship

The survey that follows highlights the most important developments of 2021 dealing with domestic and international sales of goods, personal property leases, payments, letters of credit, documents of title, investment securities, and secured transactions.

The Uniform Commercial Code Survey: Introduction, Jennifer S. Martin, Colin P. Marks, Wayne Barnes

Faculty Scholarship

The survey that follows highlights the most important developments of 2020 dealing with domestic and international sales of goods, personal property leases, payments, letters of credit, documents of title. investment securities, and secured transactions.

The Easterbrook Theorem: An Application To Digital Markets, Joshua D. Wright, Murat C. Mungan

Faculty Scholarship

The rise of large firms in the digital economy, including Amazon, Apple, Facebook, and Google, has rekindled the debate about monopolization law. There are proposals to make finding liability easier against alleged digital monopolists by relaxing substantive standards; to flip burdens of proof; and to overturn broad swaths of existing Supreme Court precedent, and even to condemn a law review article. Frank Easterbrook’s seminal 1984 article, The Limits of Antitrust, theorizes that Type I error costs are greater than Type II error costs in the antitrust context, a proposition that has been woven deeply into antitrust law by the Supreme …

Is Incorporation Really Better Than Central Management And Control For Testing Corporate Residency? An Answer To Corporate Tax Evasion And Inversion, Charles Edward Andrew Lincoln Iv

Student Scholarship

No abstract provided.

Consumer Preferences For Performances Defaults, Franklin G. Snyder, Ann M. Mirabito

Faculty Scholarship

Commercial law in the United States is designed to facilitate private transactions, and thus to enforce the presumed intent of the parties, who generally are free to negotiate the terms they choose. But these contracts inevitably have gaps, both because the parties cannot anticipate every situation that might arise from their relationship, and because negotiation is not costless. When courts are faced with these gaps in a litigation context, they supply default terms to fill them. These defaults usually are set to reflect what courts believe similar parties would have agreed to if they had addressed the issue. These "majoritarian" …

Drugs, Drugs Everywhere But Just Not For The Poor, Srividhya Ragavan

Faculty Scholarship

The objective for this article is to understand the legitimacy and limitations of US involvement in another country’s sovereign actions taken expressly in the public interest, or to protect public health, such as the compulsory licensing of pharmaceuticals.

Incentivizing Corporate America To Eradicate Transnational Bribery Worldwide: Federal Transparency And Voluntary Disclosure Under The Foreign Corrupt Practice Act, Peter Reilly

Faculty Scholarship

In 1977, it was discovered that hundreds of U.S. companies had spent hundreds of millions of dollars in bribes to improve business overseas. In response, Congress passed the Foreign Corrupt Practices Act (FCPA), thereby making it illegal to bribe foreign officials to obtain a business advantage. A major tension has emerged between the federal agencies charged with enforcing the FCPA (i.e., the DOJ and SEC), and the corporate entities trying to stay within the legal and regulatory bounds of the statute. Specifically, while the government appears to be trying to maximize discretion and flexibility in carrying out its enforcement duties, …

Too Clever By Half: Reflections On Perception, Legitimacy, And Choice Of Law Under Revised Article 1 Of The Uniform Commercial Code, Mark Edwin Burge

Faculty Scholarship

The overwhelmingly successful 2001 rewrite of Article 1 of the Uniform Commercial Code was accompanied by an overwhelming failure: proposed section 1-301 on contractual choice of law. As originally sent to the states, section 1-301 would have allowed non-consumer parties to a contract to select a governing law that bore no relation to their transaction. Proponents justifiably contended that such autonomy was consistent with emerging international norms and with the nature of contracts creating voluntary private obligations. Despite such arguments, the original version of section 1-301 was resoundingly rejected, gaining zero adoptions by the states before its withdrawal in 2008. …

Justice Deferred Is Justice Denied: We Must End Our Failed Experiment In Deferring Corporate Criminal Prosecutions, Peter Reilly

Faculty Scholarship

According to the U.S. Department of Justice (“DOJ”), deferred prosecution agreements are said to occupy an “important middle ground” between declining to prosecute on the one hand, and trials or guilty pleas on the other. A top DOJ official has declared that, over the last decade, the agreements have become a “mainstay” of white collar criminal law enforcement; a prominent criminal law professor calls their increased use part of the “biggest change in corporate law enforcement policy in the last ten years.”

However, despite deferred prosecution’s apparent rise in popularity among law enforcement officials, the article sets forth the argument …

The (Misunderstood) Genius Of American Corporate Law, Robert B. Ahdieh

Faculty Scholarship

In this Reply, I respond to comments by Bill Bratton, Larry Cunningham, and Todd Henderson on my recent paper - Trapped in a Metaphor: The Limited Implications of Federalism for Corporate Governance. I begin by reiterating my basic thesis - that state competition should be understood to have little consequence for corporate governance, if (as charter competition's advocates assume) capital-market-driven managerial competition is also at work. I then consider some of the thoughtful critiques of this claim, before suggesting ways in which the comments highlight just the kind of comparative institutional analysis my paper counsels. Rather than a stark choice …

Trapped In A Metaphor: The Limited Implications Of Federalism For Corporate Governance, Robert B. Ahdieh

Faculty Scholarship

Trapped in a metaphor articulated at the founding of modern corporate law, the study of corporate governance has - for some thirty years - been asking the wrong questions. Rather than a singular race among states, whether to the bottom or the top, the synthesis of William Cary and Ralph Winter’s famous exchange is better understood as two competitions, each serving distinct normative ends. Managerial competition advances the project that has motivated corporate law since Adolf Berle and Gardiner Means - effective regulation of the separation of ownership and control. State competition, by contrast, does not promote a race to …

The Dialectical Regulation Of Rule 14a-8: Intersystemic Governance In Corporate Law, Robert B. Ahdieh

Faculty Scholarship

In recent years, Rule 14a-8 of the Securities Exchange Act - first adopted more than sixty years ago to increase shareholder participation in corporate governance - has been the subject of a flurry of litigation, scholarly analysis, and SEC rulemaking. Most recently, following several years of debate, the SEC issued a significant clarification of the rule, reversing the Second Circuit's hotly contested interpretation of it in AFSCME v. AIG. For the most part, the debates surrounding Rule 14a-8 - including in the latter case - have focused on the scope of the rule's exceptions. This paper, selected for reprinting in …

Dialectical Regulation, Robert B. Ahdieh

Faculty Scholarship

While theories of regulation abound, woefully inadequate attention has been given to growing patterns of "intersystemic" and "dialectical" regulation in the world today. In this rapidly expanding universe of interactions, independent regulatory agencies, born of autonomous jurisdictions, nonetheless face a combination of jurisdictional overlap with, and regulatory dependence on, one another. Here, the cross-jurisdictional interaction of regulators is no longer the voluntary interaction embraced by transnationalists; it is, instead, an unavoidable reality of acknowledgement and engagement, potentially culminating in the integration of discrete sets of regulatory rules into a collective whole.

Such patterns of regulatory engagement are increasingly evident, across …

From "Federalization" To "Mixed Governance" In Corporate Law: A Defense Of Sarbanes-Oxley, Robert B. Ahdieh

Faculty Scholarship

Since the very moment of its adoption, the Sarbanes-Oxley Act of 2002 has been subject to a litany of critiques, many of them seemingly well-placed. The almost universal condemnation of the Act for its asserted 'federalization' of corporate law, by contrast, deserves short shrift. Though widely invoked - and blithely accepted - dissection of this argument against the legislation shows it to rely either on flawed assumptions or on normative preferences not ordinarily acknowledged (or perhaps even accepted) by those who criticize Sarbanes-Oxley for its federalization of state corporate law.

Once we appreciate as much, we can begin by replacing …

Between Mandate And Market: Contract Transition In The Shadow Of The International Order, Robert B. Ahdieh

Faculty Scholarship

Boilerplate in sovereign debt contracts issued in the United States has long dictated the unanimous consent of bondholders to any debt restructuring. This requirement persisted for decades, notwithstanding wide consensus that such unanimous action provisions increased transaction costs, produced inefficient delays in debt restructuring, enhanced the moral hazards of the sovereign debt market, and otherwise encouraged collective action failures. Yet the sovereign debt markets has recently made an about-face, replacing the unanimity requirement for debt restructuring with a less demanding provision for collective, or majority, action by creditors. Completed over the course of just a few months in 2003, this …

Perspectives Of A New Executive Director, William H. Henning

Faculty Scholarship

Article Extract:

It goes without saying that a national economy cannot function efficiently without a core set of commercial laws to provide a stable base. Can you imagine the added costs of doing business if common transactions were governed by truly idiosyncratic laws in the various states? We had just such a situation in secured-finance law before the widespread adoption of Article 9 of the Uniform Commercial Code. Creditors seeking to use personal property as security faced a bewildering array of devices-pledge, chattel mortgage, conditional sale, assignment of accounts receivable, trust receipt, equipment trust, factor's lien, etc. Some of the …