Law Commons^™

Criminal Trade Secret Theft Cases Against Judgment Proof Defendants In Texas And California, Michelle Evans, Kurt M. Saunders

William & Mary Business Law Review

Trade secret theft is a costly and ongoing risk to many businesses. As the two most populous states, California and Texas are home to numerous businesses that own trade secrets. Although civil remedies afford one source of relief when a trade secret has been stolen or disclosed, collecting on a judgment may be impossible due to the Homestead laws in both states, which effectively render the defendants judgment proof. In such cases, another alternative is to consider a criminal prosecution under the Federal Economic Espionage Act or state law. The same misconduct that results in civil liability can also violate …

Government Ownership Of Banks: A Curse Or A Blessing For The United States?, Yueh-Ping (Alex) Yang

William & Mary Business Law Review

During the Financial Crisis of 2007–2008, the Treasury injected an enormous amount of capital and held equity in 707 financial institutions to stabilize the U.S. financial system. The government’s large-scale ownership of banks alarmed the U.S. banking sector. The mainstream opinion in the United States strongly opposed this practice, mostly due to the distrust of the government and the fear that government intervention would jeopardize private shareholders’ interests. Later developments, including the Treasury’s quick exit from its holdings and the Dodd-Frank Act’s declaration of the end of bailouts, suggest that the U.S. government eventually succumbed to the mainstream opinion.

Such …

Snapshot Of Trade Secret Developments, Elizabeth A. Rowe

William & Mary Law Review Online

As we enter the second year of the DTSA, this Article presents a snapshot of developments to assess whether there appears to be any significant doctrinal changes afoot in trade secret litigation— including civil and/or criminal—during the past year. Professors David Levine and Christopher Seaman provided some empirical data and quantitative analysis of the case filings during the first year of litigation under the DTSA (from May 2016 to May 2017). This Article complements their excellent work by taking a qualitative look at some of the substantive rulings from the following year. My assessment based on this limited sampling is …

Interpreting Organizational "Contracts" And The Private Ordering Of Public Company Governance, Megan Wischmeier Shaner

William & Mary Law Review

Corporate law is undergoing an explosion of governance by private ordering. With increasing frequency and creativity, the charter and bylaws of public corporations are being used as tools for restructuring key aspects of corporate governance. The current focus of parties, courts, and scholars has been on the facial validity of these efforts. In light of courts’ willingness to uphold corporate governance contracting, legal battles will morph from validity challenges to interpretation disputes. Yet interpretation principles are a topic to which corporate scholars have devoted limited attention. With interpretation poised to take on an influential role in shaping corporate law and …

Untangling The Web Of Consignment Law: The Journey From The Common Law & Article 2 To Revised Article 9, Willa Gibson

William & Mary Business Law Review

This Article examines and analyzes the law of consignments from the common law through Revised Article 9 with a goal towards identifying and analyzing the uncertainties and confusion that have persisted throughout the transition from the common law to the UCC. The law of consignments has abounded with uncertainty since its genesis under common law. In an attempt to clarify the persistent confusion and disarray surrounding the law, the UCC enacted section 2-326; but the statute was not a model of clarity, engendering increased uncertainty and confusion. Courts wrestled with how to interpret the provision to be consistent with the …

The Value Of Insider Control, Benjamin Means

William & Mary Law Review

According to conventional wisdom, insider control of businesses is detrimental to the interests of noncontrolling investors. Family-run businesses, in particular, are seen as nepotistic and inefficient. Yet, commentators have overestimated the dangers of insider control and overlooked its potential benefits for all stakeholders. Controlling owners have a personal stake that gives them reason to identify with their business and to adopt responsible business practices capable of creating lasting value. A stewardship model of insider control helps explain the continuing vitality of family businesses as well as the success of recent public offerings by Facebook, Google, and Snapchat involving low-vote or …

Mutuals: An Area Of Legal Climate Change, Karl T. Muth, Andrew Leventhal

William & Mary Business Law Review

Underappreciated in its importance and often-misunderstood in its implications, the choice between a company limited by shares and a company organized as a mutual is an important decision in sectors ranging from agriculture to banking to insurance. Adding gravity to this particular decision is the difficulty and enormous cost of corporate metamorphosis between company types later in the company’s life. The authors examine the history of the mutual form, its popularity’s rise and fall during the twentieth century, and its advantages and disadvantages in today’s environment.

The Early Eight And The Future Of Consumer Legal Activism To Fight Modern-Day Slavery In Corporate Supply Chains, Andrew G. Barna

William & Mary Law Review

No abstract provided.

Smith V. Van Gorkom And The Kobayashi Maru: The Place Of The Trans Union Case In The Development Of Delaware Corporate Law, Robert T. Miller

William & Mary Business Law Review

Although it is dangerous to attempt to say anything new about Smith v. Van Gorkom, the most controversial decision in the history of Delaware corporate law, this Article tries to do so by arguing that the extensive development of Delaware law since the time of the case allows us a perspective on Van Gorkom not available when the case was decided in 1985 or, indeed, for a long time thereafter. In particular, Van Gorkom had as important a role in the evolution of Delaware law as the three other outstanding cases decided by the Delaware Supreme Court in the …

Can Taxes Mitigate Corporate Governance Inefficiencies?, Noam Noked

William & Mary Business Law Review

Policymakers have long viewed tax policy as an instrument to influence and change corporate governance practices. Certain tax rules were enacted to discourage pyramidal business structures and large golden parachutes, and to encourage performance-based compensation. Other proposals, such as imposing higher taxes on excessive executive compensation, have also attracted increasing attention.

Contrary to this view, this Article contends that the ability to effectively mitigate corporate governance inefficiencies through the use of corrective taxes is very limited, and that these taxes may cause more harm than benefit. There are a few reasons for the limited effectiveness of corrective taxes. Importantly, the …

Corporate Directors In The United Kingdom, Stephen M. Bainbridge

William & Mary Law Review Online

In the United States, state corporation law uniformly provides that only natural persons may serve as directors of corporations. Corporations, limited liability companies, and other entities otherwise recognized in the law as legal persons are prohibited from so serving. In contrast, the United Kingdom allowed legal entities to serve as directors of a company. In 2015, however, legislation came into force adopting a general prohibition of these so-called corporate directors, albeit while contemplating some exemptions. This Article argues that there are legitimate reasons companies may wish to appoint corporate directors. It also argues that the transparency and accountability concerns that …

Distributed Governance, Carla L. Reyes, Nizan Geslevich Packin, Ben Edwards

William & Mary Law Review Online

Distributed ledger technology disrupts traditional business organizations by introducing new business entities without the directors and officers of traditional corporate entities. Although these emerging entities offer intriguing possibilities, distributed entities may suffer significant collective action problems and expose investors to catastrophic regulatory and governance risks. Our Article examines key considerations for stakeholders and argues that distributed entities must be carefully structured to function effectively. This Article breaks new ground by critically examining distributed entities. We argue that a distributed model is most appropriate when distributed ledger technology solves a unique corporate governance problem. We caution against ignoring the lessons painstakingly …

Rethinking Corporate Governance For A Bondholder Financed, Systemically Risky World, Steven L. Schwarcz

William & Mary Law Review

This Article makes two arguments that, combined, demonstrate an important synergy: first, including bondholders in corporate governance could help to reduce systemic risk because bondholders are more risk averse than shareholders; second, corporate governance should include bondholders because bonds now dwarf equity as a source of corporate financing and bond prices are increasingly tied to firm performance.

The Ethics Of Representing Founders, Paul R. Tremblay

William & Mary Business Law Review

Lawyers assisting entrepreneurial startups frequently work with individual founders before any formal organizational client materializes. In advising founders about such legal matters as whether to establish an entity, and if so, which entity best fits the needs of the enterprise, as well as how to arrange the owners’ relationships within the business, the lawyer necessarily has an attorney-client relationship with someone. The prevailing scholarship about startup representation pays surprisingly little attention to the posture of the lawyer and her founder-clients in the pre-organization context. This Article investigates the lawyer’s responsibilities and commitments in depth.

A lawyer working with a solo …

Regulating Culture: Improving Corporate Governance With Anti-Arbitration Provisions For Whistleblowers, Nizan Geslevich Packin, Ben Edwards

William & Mary Law Review Online

A focus on corporate culture, especially at financial institutions, has emerged as a regulatory, public, and media priority in the aftermath of the 2008 financial crisis. With Dodd-Frank, Congress embraced whistleblower statutes as a key instrument to improve corporate culture and governance, and to extirpate undesired and unethical business practices. Despite the clear policy goals, Dodd- Frank’s unclear statutory text has created interpretative controversies. Although Dodd-Frank adds anti-arbitration provisions to preexisting whistleblower statutes, it does not include a dedicated, standalone anti-arbitration provision for Dodd-Frank’s new whistleblower cause of action. This Article argues that courts should not allow employers to use …

Corporate Governance In An Era Of Compliance, Sean J. Griffith

William & Mary Law Review

Compliance is the new corporate governance. The compliance function is the means by which firms adapt behavior to legal, regulatory, and social norms. Formerly, this might have been conceived as a typical governance matter to be handled at the discretion of the board of directors. Compliance, however, does not fit traditional models of corporate governance. It does not come from the board of directors, state corporate law, or federal securities law. Compliance amounts instead to an internal governance structure imposed upon the firm from the outside by enforcement agents. This insight has important implications, both practical and theoretical, for corporate …

Lack Of Marketability And Minority Discounts In Valuing Close Corporation Stock: Elusiveness And Judicial Synchrony In Pursuit Of Equitable Consensus, Stephen J. Leacock

William & Mary Business Law Review

This Article discusses the often subtle tasks faced by the courts in construing close corporations law, which is state law. The judiciary in individual states has skillfully managed the invention, continuing development and ongoing evolution of lack of marketability and minority discounts as it strives to honor its constitutional mandate to resolve controversies between minority and majority shareholders in close corporations relating to valuing close corporations’ stock. These controversies arise in the context of share transactions in such corporations. Close corporations are traditionally not listed on stock exchanges, and the legislatures in some states have, in some instances, helped to …

Walking On Thin Ice: Does The Revenue Procedure 2013-13 Signify The Demise Of Leveraged Spin-Offs?, Natalia Caruso

William & Mary Business Law Review

Corporate taxpayers, when weighing leveraged spin-off transactions, have long relied on the comfort of Internal Revenue Service rulings to “bless” the deals. These transactions, when structured properly, are not subject to tax under section 355 of the Internal Revenue Code (“I.R.C.”) and can potentially provide great monetizing opportunities to public companies. Recent developments in the Internal Revenue Service’s ruling policy, however, removed the safety blanket companies had relied upon, as the Internal Revenue Service announced its decision to cease the issuance of the rulings addressing the deals’ qualification for tax-free treatment.

This Note will examine the history and the complex …

U.S. V. Esquenazi: U.S. Appellate Court Defines “Instrumentality” Under The Foreign Corrupt Practices Act For The First Time, Jon Jordan

William & Mary Business Law Review

No abstract provided.

The Derivative Nature Of Corporate Constitutional Rights, Margaret M. Blair, Elizabeth Pollman

William & Mary Law Review

This Article engages the two-hundred-year history of corporate constitutional rights jurisprudence to show that the Supreme Court has long accorded rights to corporations based on the rationale that corporations represent associations of people from whom such rights are derived. The Article draws on the history of business corporations in America to argue that the Court’s characterization of corporations as associations made sense throughout most of the nineteenth century. By the late nineteenth century, however, when the Court was deciding several key cases involving corporate rights, this associational view was already becoming a poor fit for some corporations. The Court’s failure …

Corporate Social Responsibility & Concession Theory, Stefan J. Padfield

William & Mary Business Law Review

This Essay examines three related propositions: (1) Voluntary corporate social responsibility (CSR) fails to effectively advance the agenda of a meaningful segment of CSR proponents; (2) None of the three dominant corporate governance theories—director primacy, shareholder primacy, or team production theory—support mandatory CSR as a normative matter; and, (3) Corporate personality theory, specifically concession theory, can be a meaningful source of leverage in advancing mandatory CSR in the face of opposition from the three primary corporate governance theories. In examining these propositions, this Essay makes the additional claims that Citizens United: (A) supports the proposition that corporate personality theory matters; …

A Concept-Sensitive Managerial Analysis With Law: Applying A Business Concept To A Legal Rule To Identify The Domain Of Business Situations, James E. Holloway

William & Mary Business Law Review

The traditional fact-sensitive managerial analysis with law analyzes business situations to identify legal issues and applies legal rules to facts to make judicial decisions. The fact-sensitive managerial analysis takes decades to identify a family of business situations and lacks the analytical capacity to use business knowledge (concepts) and analytical methods to identify business situations. Alternatively, a concept-sensitive managerial analysis with law increases factual sensitivity by applying a business concept to a legal rule to shorten the duration of identifying an extensive family of business situations. All situations are not useful or effective when making business decisions or managing a business. …

The Federal Common Law Of Successor Liability And The Foreign Corrupt Practices Act, Taylor J. Phillips

William & Mary Business Law Review

In recent years, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have vigorously enforced the Foreign Corrupt Practices Act (FCPA). The FCPA prohibits bribery of foreign government officials, and the statute provides for significant civil and criminal sanctions. Settling and remediating violations can cost corporate defendants millions, with several corporate enforcement actions exceeding $100 million in sanctions. Moreover, enforcement actions related to the FCPA often are not brought until many years after the alleged violations.

Because the massive potential liabilities associated with an FCPA violation may not manifest themselves until years after the violation occurred, prospective …

Women In The Crowd Of Corporate Directors: Following, Walking Alone, And Meaningfully Contributing, Joan Macleod Heminway

William & Mary Journal of Race, Gender, and Social Justice

No abstract provided.

Major League Baseball And The Green Revolution: A Market-Based Approach To Maintaining Competitive Balance In The Face Of Environmental Regulations, John Loughney

William & Mary Environmental Law and Policy Review

No abstract provided.

Sensible Bytes: States Need A New Approach To Justify Their Recruitment Of Internet Data Centers, Michael F. Kaestner

William & Mary Environmental Law and Policy Review

No abstract provided.

The Social Enterprise Revolution In Corporate Law: A Primer On Emerging Corporate Entities In Europe And The United States And The Case For The Benefit Corporation, Robert T. Esposito

William & Mary Business Law Review

Remarkably, in the face of a global recession, the social enterprise sector continued to experience extraordinary growth in both financial support and the number of newly authorized corporate entities aimed at social entrepreneurs who seek to use the power of business to simultaneously achieve profit and social or environmental benefits. This Article highlights recent developments in the social enterprise movement in Europe and the United States and focuses on the emergence of a surprisingly broad range of newly authorized corporate entities on both continents in response to the needs of social entrepreneurs. These include social cooperatives and the community interest …

The Business Judgment Rule As An Immunity Doctrine, Lori Mcmillan

William & Mary Business Law Review

The business judgment rule is a judicially created doctrine that protects directors from personal civil liability for the decisions they make on behalf of a corporation. In today’s era of corporate scandals, global financial meltdowns, and directorial malfeasance, it has become especially important in setting the bar for when directors are appropriately responsible to shareholders for their actions. Traditionally the business judgment rule has been regarded as a standard of liability, although it has never really been explored or enunciated as such. This view determines eligibility for business judgment rule protection of a directorial decision after an examination of certain …

Nonmarket Values In Family Businesses, Benjamin Means

William & Mary Law Review

Despite the economic importance of family businesses, legal scholarship has often overlooked their distinctive character. Instead, scholars focus on the chosen form of business organization— partnership, corporation, LLC—and assume that the participants are economically rational actors who seek to maximize their individual preferences. This Article contends that family businesses are extensions of family relationships and that nonmarket values affect their goals and governance choices.

Just as family law scholars have shown that contract principles can be applied to regulate intimate relationships, corporate law scholars should recognize that the intimacy of family life often substitutes for arm’s length bargaining in family …

New Corporate Forms And Green Business, Antony Page

William & Mary Environmental Law and Policy Review

You want to start a business: not just an ordinary business, producing ordinary social benefit, but a dual-mission business that will both make a profit and benefit the environment. This green business, you expect, will sometimes face trade-offs between the missions, in the sense that sometimes owners’ wealth and profit will have to be sacrificed to pursue environmental benefits. You’re optimistic, in that you hope the business will find outside investors and will scale up easily. Moreover, you don’t want to lie or even dissemble about your motives or about the business’s actions. You want to be both authentic and …