Business Organizations Law Commons^™

Why U.S. States Need Their Own Cannabis Industry Banks, Christoph Henkel, Randall K. Johnson

Faculty Works

The legal cannabis trade is the fastest growing industry in the United States. In 2019, about 48.2 million Americans used the drug at least once. As such, it is easy to see why the legal cannabis trade may generate annual revenues exceeding $30 billion in Fiscal Year 2022 alone.

One inconvenient truth, however, is that the parties to any cannabis trade may face a range of difficulties due to conflicts between federal and state laws. These difficulties include the fact that many financial institutions are reluctant to handle cannabis proceeds. One reason is that a lack of alignment in terms …

Disaggregating Corpus Christi: The Illiberal Implications Of Hobby Lobby's Right To Free Exercise, Katharine Jackson

Katharine Jackson

This paper first examines and critiques the group rights to religious exercise derived from the three ontologies of the corporation suggested by different legal conceptions of corporate personhood often invoked by Courts. Finding the implicated groups rights inimical to individual religious freedom, the paper then presents an argument as to why a discourse of intra-corporate toleration and voluntariness does a better job at protecting religious liberty.

In Defense Of Corporate Persons, Kent Greenfield

Kent Greenfield

This essay is a critique of this attack on corporate personhood. It explains that the corporate separateness - corporate “personhood” - is an important legal principle as a matter of corporate law. What’s more, as a matter of constitutional law, corporate “personhood” deserves a more nuanced analysis than has been typically offered in arguing in favor of an amendment to overturn Citizens United. Indeed, the concept of corporate “personhood” can in fact be marshaled in arguments against corporations being able to assert constitutional rights. In the nascent category of cases brought by corporations asserting rights of religious freedom, for example, …

After Citizens United: Extending The Liberal Revolution To The Multinational Corporation, Daniel J.H. Greenwood

Daniel J.H. Greenwood

This Article proposes several routes to reverse Citizens United, the Supreme Court case holding that corporate campaign spending is “speech” protected by the First Amendment.

The core problem of Citizens United is that corporations are illegitimate participants in our politics. Corporate law requires corporate officers to pursue the corporate interest. They are thus disqualified from considering the central political questions of a democratic capitalist country: defining the rules of the market (which define corporate interests) and balancing profit against other, more important, values.

The high road to fixing Citizens United is a constitutional amendment to extend the fundamental insights …

The Associational Hoax: Corporate Personhood & Shareholder Rights After Hobby Lobby And Citizens United, Jaimie K. Mcfarlin

Jaimie K. McFarlin

No abstract provided.

Law, Fugitive Capital, And Karl Polanyi's The Great Transformation, Walter J. Kendall Lll

Walter J. Kendall lll

No abstract provided.

Nothing To Do With Personhood: Corporate Constitutional Rights And The Principle Of Confiscation, Paul Kens Dr.

Paul Kens Dr.

In its 2010 decision Citizens United v. Federal Election Commission the Supreme Court overruled a federal statute that limited a corporation’s ability to pay for political advertising out of its general treasury funds. Those limits, it ruled, violated the corporation’s right to freedom of speech. The case has since become notorious for the widely held belief that, in doing so, the Court declared that corporations are “persons,” possessing the same constitutional rights as flesh and blood human beings. Four years later the Court seemed to expand on this conclusion when it ruled in Burwell v. Hobby Lobby that a general …

Why Personhood Matters, Tamara R. Piety

Tamara R. Piety

One of the most controversial aspect of the Supreme Court's decisions in Citizens United and Hobby Lobby is its treatment of corporate personhood. Many members of the public object to the notion that corporations should have the same rights as human beings. Yet many scholars claim that this concern is misplaced. In this article I argue that concern about corporate personhood is not misplaced because the personhood metaphor conceals the degree to which there has not been an adequate justification given for extending fundamental rights to corporations. Focusing on personhood allows us to push on the metaphor to ask whether …

Religious Freedom & Closely Held Corporations: The Hobby Lobby Case & Its Ethical Implications, Corey A. Ciocchetti

Corey A Ciocchetti

Hobby Lobby and its quest for religious freedom captured the attention of a nation for a few moments in late June 2014. The country homed in on the Supreme Court as the justices weighed the rights of an incorporated, profit-making entity run by devout individuals that objected to particular entitlements granted to women under the Affordable Care Act. The case raised important legal issues such as whether the law allows for-profit corporations to exercise religion (yes!) and whether protection for religious freedom trumps the rights of third parties to cost free preventive care (sort of!). The Supreme Court’s decision also …

Against Regulatory Displacement: An Institutional Analysis Of Financial Crises, Jonathan C. Lipson

Jonathan C. Lipson

This paper uses “institutional analysis”—the study of the relative capacities of markets, courts, and regulators—to make three claims about financial crises.

First, financial crises are increasingly a problem of “regulatory displacement.” Through the ad hoc rescues of 2008 and the Dodd-Frank reforms of 2010, regulators displace market and judicial processes that ordinarily prevent financial distress from becoming financial crises. Because regulators are vulnerable to capture by large financial services firms, however, they cannot address the pathologies that create crises: market concentration and complexity. Indeed, regulators may inadvertently aggravate these conditions through resolution tactics that consolidate firms, and the volume and …

Corporations And Religious Freedom: Hobby Lobby Stores - A Missed Opportunity To Reconcile A Flawed Law With A Flawed Health Care System, Matthew A. Melone

Matthew A. Melone

On June 30, 2014, the Supreme Court held, in Burwell v. Hobby Lobby Stores, Inc., that the requirement imposed on employer group health insurance plans to provide coverage for certain contraceptives unduly burdened the free exercise rights of three closely-held corporations in violation of the Religious Freedom Restoration Act of 1993 ( RFRA ). The contraception mandate was imposed by regulations implementing the Patient Protection and Affordable Care Act, itself a very controversial piece of legislation a part of which was upheld recently by the Court in a perhaps a case more controversial than Hobby Lobby Stores. RFRA was enacted …

State “Subsidies” And Unnecessary Public Funding: The Texas Legislature’S Successful Restriction Of Constitutional Rights In Department Of Texas V. Texas Lottery Commission, Tyler A. Dever Ms.

Tyler A Dever Ms.

This Note argues that the Act’s political advocacy restrictions are unconstitutional as applied to the Plaintiffs in Texas Lottery. This Note discusses government subsidies, occupational licenses, and the doctrine of unconstitutional conditions. It then analyzes the charitable organizations’ First Amendment rights in light of the challenged Act. Although this Note argues against the majority’s upholding of the Act, it will also present flaws in the plaintiffs’ argument for injunction and explain why the court may have ruled in favor of the state.

The Evolution Of The Digital Millennium Copyright Act; Changing Interpretations Of The Dmca And Future Implications For Copyright Holders, Hillary A. Henderson

Hillary A Henderson

Copyright law rewards an artificial monopoly to individual authors for their creations. This reward is based on the belief that, by granting authors the exclusive right to reproduce their works, they receive an incentive and means to create, which in turn advances the welfare of the general public by “promoting the progress of science and useful arts.” Copyright protection subsists . . . in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or …

The Uneasy Relationship Of Hobby Lobby, Conestoga Wood, The Affordable Care Act, And The Corporate Person: How A Historical Myth Continues To Bedevil The Legal System, Malcolm J. Harkins Iii

Malcolm J Harkins III

On November 26, 2013, the Supreme Court of the United States agreed to hear two cases — Sebelius v. Hobby Lobby Stores, Inc., and Conestoga Wood Specialties v. Sebelius — challenging the validity of the Affordable Care Act’s (“ACA”) mandate that employer-sponsored health plans cover all FDA-approved contraceptives (the “Contraceptive Mandate”). In each case, closely held plaintiff corporations contend that the Contraceptive Mandate illegally infringed upon the corporations’ freedom to exercise religion.

The problem confronting the Supreme Court as it takes up the Hobby Lobby and Conestoga Wood cases is that the concept of corporate personhood did not develop gradually …

The Commons, Capitalism, And The Constitution, George Skouras

George Skouras

Thesis Summary: the erosion of the Commons in the United States has contributed to the deterioration of community and uprooting of people in order to meet the dynamic demands of capitalism. This article suggests countervailing measures to help remedy the situation.

Financial Armageddon Routs Law Again, Nicholas L. Georgakopoulos

Nicholas L Georgakopoulos

This essay, after highlighting the unique aspects of financial markets, offers a mostly rational account for financial crises, centering on the 2008 crisis as an example. The thesis is that market participants overestimate the duration of high productivity growth due to new technologies and produce occasional—and likely unavoidable—bubbles. Considering potential changes in the regulation of financial markets, the conclusion is grim. Regulators appear to have exhausted the effective legal levers against overestimations of continued high growth. The legislative responses to the last few crises were likely unproductive. The sole (but still unrealistic) effective protection would be the constitutional development of …

A Corporation Has No Soul - The Business Entity Law Response To Challenges To The Contraceptive Mandate Under The Ppaca, Thomas E. Rutledge

Thomas E. Rutledge

The most contentious matter in the implementation of the Patient Protection and Affordable Care Act (the “PPACA”) is not a question of health care, but rather one of the law of business organizations. The dispute has been over the requirement that group health insurance plans provide, on a no-cost sharing basis, coverage for a variety of procedures and prescription medicines involving contraception and what are described as “abortificants.”

The class of suits subject to this discussion were filed by what are not religious organizations but rather for-profit business ventures, asserting that they should be exempt from the requirements of the …

Tactics, Strategies & Battles—Oh My!: Perseverance Of The Perpetual Problem Regarding Preaching To Public School Pupils & Why It Persists, Casey S. Mckay

Casey Scott McKay

After reviewing the history of the religious war on Darwin’s Theory of Evolution, my article, “Tactics, Strategies & Battles—Oh My!: Perseverance of the Perpetual Problem Regarding Preaching to Public School Pupils & Why it Persists,“ examines why such a seemingly well-settled issue survives and, to some extent, succeeds.

First, by exploiting common misconceptions among the American public, lawmakers are able to take advantage of ignorance driven by strong emotions. Next, religious special interests groups, with seemingly unlimited funds, thrust propaganda supported by worldwide media reinforcement on an already vulnerable American public. Thus, irresponsible state legislators, caught between a rock and …

Janus Capital Group, Inc. V. First Derivative Traders: The Culmination Of The Supreme Court’S Evolution From Liberal To Reactionary In Rule 10b-5 Actions, Charles W. Murdock

Charles W. Murdock

“Political” decisions such as Citizens United and National Federation of Independent Business (“Obamacare”) reflect the reactionary bent of several Supreme Court justices. But this reactionary trend is discernible in other areas as well. With regard to Rule 10b-5, the Court has handed down a series of decisions that could be grouped into four trilogies. The article examines the trend over the past 40 years which has become increasingly conservative and finally reactionary.

The first trilogy was a liberal one, arguably overextending the scope of Rule 10b-5. This was followed by a conservative trilogy which put a brake on such extension, …

The Naked Private Square, Ronald J. Colombo

Ronald J Colombo

In the latter half of the twentieth century, America witnessed the construction of a “wall of separation” between religion and the public square. What had once been commonplace (such as prayer in public schools, and religious symbols on public property) had suddenly become verboten. This phenomenon is well known and has been well studied.

Less well known (and less well studied) has been the parallel phenomenon of religion’s expulsion from the private square. Employment law, corporate law, and constitutional law have worked to impede the ability of business enterprises to adopt, pursue, and maintain distinctively religious personae. This is undesirable …

Tricky Business: A Decision-Making Framework For Legally Sound, Ethically Suspect Business Tactics, Corey A. Ciocchetti

Corey A Ciocchetti

TRICK: “a crafty or underhanded device, maneuver, stratagem, or the like, intended to deceive or cheat.” Tricks are designed to outwit others in a cunning and skillful manner. Despite well-written, philosophically sound codes of ethics and core values, businesses are not above employing tricky tactics to suit their pecuniary interests. These strategies often involve the legal system as the outwitted ask courts to vindicate their rights. However, the most successful tricks are skillfully crafted to survive legal scrutiny. This article evaluates three tricky business tactics found lawful by United States Supreme Court during its most recent term. The story begins …

The Constitution, The Roberts Court & Business: The Significant Business Impact Of The Supreme Court's 2011-2012 Term, Corey A. Ciocchetti

Corey A Ciocchetti

The 2011-2012 Supreme Court term created quite the media buzz. The Affordable Care Act cases and the controversial Arizona immigration law dominated the headlines. But the term also included other fascinating yet less sensationalized cases. The Court heard its fair share of criminal law controversies involving derelict defense attorneys and prosecutors as well as civil procedure disputes involving qualified immunity for witness in grand jury proceedings and private parties assisting the government in litigation. The justices also entertained arguments on a federal law allowing United States citizens born in Jerusalem to have “Israel” stamped as their birthplace on a passport. …

The Supreme Court As Prometheus: Breathing Life Into The Corporate Supercitizen, Robert Sprague, Mary Ellen Wells

Robert Sprague

This article examines the legal status of the corporation in light of the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission that corporations have political free speech rights equivalent to natural persons. In Citizens United, Justice Kennedy wrote that corporations were disadvantaged persons because the government had intruded upon their freedom of speech. The Citizens United majority portrays a misleading image of corporations. It is true most corporations are owned by small groups of individuals, managed by their owners, and limited in size and revenues. But what the Citizens United majority conveniently ignores is one particular attribute …

Consensual Amorous Relationships Between Faculty And Students: The Constitutional Right To Privacy, Elisabeth A. Keller

Elisabeth Keller

Surveys of college students in the United States revealed that a significant number of students thought they had been victims of some form of sexual harassment. Growing awareness of the magnitude, dimensions, and effects of sexual harassment at educational institutions and the potential for institutional liability have prompted educators to adopt policies to avert such problems. The policies typically prohibit sexual harassment of employees and students and alert the university community to the serious effects of sexual harassment and the potential for student exploitation. Some universities have gone beyond establishing regulations directed at widely litigated problems of sexual harassment and …

To Be Or Not To Be? Citizens United And The Corporate Form, Reuven S. Avi-Yonah

Law & Economics Working Papers

In Citizens United vs. FEC, the Supreme Court struck down a Federal ban on direct corporate expenditures on political campaigns. The decision has been widely criticized and praised as a matter of First Amendment law. But it is also interesting as another step in the evolution of our legal views of the corporation. The thesis of this Article is that by viewing Citizens United through the prism of theories about the corporate form, it is possible to understand why both the majority and the dissent departed from previous Supreme Court cases on the First Amendment rights of corporations, and to …

Pearson, Iqbal, And Procedural Judicial Activism, Goutam U. Jois

Goutam U Jois

In its most recent term, the Supreme Court decided Pearson v. Callahan and Ashcroft v. Iqbal, two cases that, even at this early date, can safely be called “game-changers.” What is fairly well known is that Iqbal and Pearson, on their own terms, will hurt civil rights plaintiffs. A point that has not been explored is how the interaction between Iqbal and Pearson will also hurt civil rights plaintiffs. First, the cases threaten to catch plaintiffs on the horns of a dilemma: Iqbal says, in effect, that greater detail is required to get allegations past the motion to dismiss stage. …

A Complete Property Right Amendment, John H. Ryskamp

ExpressO

The trend of the eminent domain reform and "Kelo plus" initiatives is toward a comprehensive Constitutional property right incorporating the elements of level of review, nature of government action, and extent of compensation. This article contains a draft amendment which reflects these concerns.

Privatizing Eminent Domain: The Delegation Of A Very Public Power To Private, Non-Profit And Charitable Corporations, Asmara Tekle Johnson

ExpressO

In an age of privatization of many governmental functions such as health care, prison management, and warfare, this Article poses the question as to whether eminent domain should be among them. Unlike other privatized functions, eminent domain is a traditionally governmental and highly coercive power, akin to the government’s power to tax, to arrest individuals, and to license. It is, therefore, a very public power.

In particular, the delegation of this very public power to private, non-profit and charitable corporations has escaped the scrutiny that for-profit private actors have attracted in the wake of the U.S. Supreme Court’s decision in …

Bond Repudiation, Tax Codes, The Appropriations Process And Restitution Post-Eminent Domain Reform, John H. Ryskamp

ExpressO

This brief comment suggests where the anti-eminent domain movement might be heading next.

Corporate Form And Substantive Consolidation, William H. Widen

ExpressO

This Article reformulates substantive consolidation doctrine in light of modern financing techniques. Building upon the author's research showing the prevalence of substantive consolidation in large public bankruptcies, it offers an economic account (based on Coase's theory of firm size) to explain why we should expect that the circumstances giving rise to substantive consolidation should be common (rather than rare as suggested by the rhetoric of case law). Extending the asset partitioning theory developed by Professors Hannsmann and Kraakman, it offers a model for looking at the corporate form within corporate groups, particularly in the insolvency context. The recent Third Circuit …