Law Commons^™

The Other Janus And The Future Of Labor’S Capital, David H. Webber

Vanderbilt Law Review

Two forms of labor’s capital—union funds and public pension funds— have profoundly reshaped the corporate world. They have successfully advocated for shareholder empowerment initiatives like proxy access, declassified boards, majority voting, say on pay, private fund registration, and the CEO-to-worker pay ratio. They have also served as lead plaintiffs in forty percent of federal securities fraud and Delaware deal class actions. Today, much-discussed reforms like revised shareholder proposal rules and mandatory arbitration threaten two of the main channels by which these shareholders have exercised power. But labor’s capital faces its greatest, even existential, threats from outside corporate law. This Essay …

Automating Securities Class Action Settlements, Jessica Erickson

Vanderbilt Law Review

This Article argues that the time has come to modernize the distribution of settlement funds in securities class actions. There are two possible ways to modernize this process. The first approach relies on market innovation, proposing an automated system that collects the relevant transaction data from individual banks and brokers. Claims administrators could then use this data to calculate every class member’s pro rata share of the settlement and send them their money. The second approach relies on regulatory innovation using the SEC’s Consolidated Audit Trail, which, once it is up and running, will contain a complete record of nearly …

Corporate Oversight And Disobedience, Elizabeth Pollman

Vanderbilt Law Review

This Article explores the public-regarding purpose of the obedience and oversight duties in corporate law and provides a descriptive account of how they are applied in practice. The Article argues that the fidelity to external law required by the duty of good faith largely serves a legitimizing role for corporate law. Expressing obligations of legal compliance and oversight within corporate law acknowledges societal interests in the rule of law and preserves the ability of courts to flexibly respond to particularly salient and egregious violations of public trust, should they arise, without upending case law developed over decades.

Further, this Article …

The Missing Regulatory State: Monitoring Businesses In An Age Of Surveillance, Rory V. Loo

Vanderbilt Law Review

An irony of the information age is that the companies responsible for the most extensive surveillance of individuals in history-large platforms such as Amazon, Facebook, and Google-have themselves remained unusually shielded from being monitored by government regulators. But the legal literature on state information acquisition is dominated by the privacy problems of excess collection from individuals, not businesses. There has been little sustained attention to the problem of insufficient information collection from businesses. This Article articulates the administrative state's normative framework for monitoring businesses and shows how that framework is increasingly in tension with privacy concerns. One emerging complication is …

Guarantor Of Last Resort: Is There A Better Alternative?, Morgan Ricks

Vanderbilt Law School Faculty Publications

What should the government’s financial-crisis-response toolkit consist of? How should we think about its optimal scope and design? In Kate Judge offers a novel perspective on these questions. At a high level she agrees with Summers, Bernanke, Paulson, and Geithner that the existing toolkit is inadequate. In this respect she joins a number of other legal scholars and commentators. . .

The day after Lehman’s bankruptcy, Ken Rogoff—among the world’s leading experts on financial crises—wrote an op-ed titled “No More Creampuffs.” He applauded regulators for letting Lehman fail and “forc[ing] some discipline onto the system.” (To be fair, Rogoff acknowledged …

Incapacitating Criminal Corporations, W. Robert Thomas

Vanderbilt Law Review

If there is any consensus in the fractious debates over corporate punishment, it is this: a corporation cannot be imprisoned, incarcerated, jailed, or otherwise locked up. Whatever fiction the criminal law entertains about corporate personhood, having a physical "body to kick"-and, by extension, a body to throw into prison-is not one of them. The ambition of this project is not to reject this obvious point but rather to challenge the less-obvious claim it has come to represent: incapacitation, despite long being a textbook justification for punishing individuals, does not bear on the criminal law of corporations.

This Article argues that …

Mootness Fees, Randall S. Thomas, Matthew D. Cain, Jill E. Fisch, Steven D. Solomon

Vanderbilt Law School Faculty Publications

In response to a sharp increase in litigation challenging mergers, the Delaware Chancery Court issued the 2016 Trulia decision, which substantively reduced the attractiveness of Delaware as a forum for these suits. In this Article, we empirically assess the response of plaintiffs'attorneys to these developments. Specifically, we document a troubling trend-the flight of merger litigation to federal court where these cases are overwhelmingly resolved through voluntary dismissals that provide no benefit to the plaintiff class but generate a payment to plaintiffs'counsel in the form of a mootness fee. In 2018, for example, 77% of deals with litigation were challenged in …

Understanding The (Ir)Relevance Of Shareholder Votes On M&A Deals, Randall S. Thomas, James D. Cox, Tomas J. Mondino

Vanderbilt Law School Faculty Publications

Has corporate law and its bundles of fiduciary obligations become irrelevant? Over the last thirty years, the American public corporation has undergone a profound metamorphosis, transforming itself from a business with dispersed ownership to one whose ownership is highly concentrated in the hands of sophisticated financial institutions. Corporate law has not been immutable to these changes so that current doctrine now accords to a shareholder vote two effects: first, the vote satisfies a statutory mandate that shareholders approve a deal, and second and significantly, the vote insulates the transaction and its actors from any claim of misconduct incident the approved …

Catching Up Is Hard To Do: Undergraduate Prestige, Elite Graduate Programs, And The Earnings Premium, Joni Hersch, W. Kip Viscusi

Vanderbilt Law School Faculty Publications

A commonly held perception is that an elite graduate degree can "scrub" a less prestigious but less costly undergraduate degree. Using data from the National Survey of College Graduates from 2003 through 2017, this paper examines the relationship between the status of undergraduate degrees and earnings among those with elite post-baccalaureate degrees. Few graduates of nonselective institutions earn post-baccalaureate degrees from elite institutions, and even when they do, undergraduate institutional prestige continues to be positively related to earnings overall as well as among those with specific post-baccalaureate degrees including business, law, medicine, and doctoral. Among those who earn a graduate …

Regulating Offshore Finance, William J. Moon

Vanderbilt Law Review

From the Panama Papers to the Paradise Papers, massive document leaks in recent years have exposed trillions of dollars hidden in small offshore jurisdictions. Attracting foreign capital with low tax rates and environments of secrecy, a growing number of offshore jurisdictions have emerged as major financial havens hosting thousands of hedge funds, trusts, banks, and insurance companies. While the prevailing account has examined offshore financial havens as "tax havens" that facilitate the evasion or avoidance of domestic tax, this Article uncovers how offshore jurisdictions enable business entities to opt out of otherwise mandatory domestic regulatory laws. Specifically, recent U.S. Supreme …