Law Commons^™

Of Fine Lines, Blunt Instruments And Half-Truths: Business Acquisition Agreements And The Right To Lie, Jeffrey M. Lipshaw

ExpressO

In this article, I expand upon a happy coincidence (for scholars) in reconciling the overlap between contract and fraud. Both the recent book by Ian Ayres and Gregory Klass and the Delaware Court of Chancery in Abry Partners Acquisition V, L.P. v. F& W Acquisition, LLC addressed the issue of promissory fraud – the making of a contract as to which the promisor had no intention of performing. Each treatment, however, in focusing on fraudulent affirmative representations, falls short of (a) recognizing the fundamental aspect of deceptive promising in a complex deal, namely the half-truth, (b) articulating an appropriate doctrinal …

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.

Confidential Informants In Private Litigation: Balancing Interests In Anonymity And Disclosure, Ethan D. Wohl

ExpressO

Heightened pleading standards and limits on discovery in private securities fraud actions make confidential informants crucial in many cases. While courts have widely recognized the importance of confidential informants and the need to protect them from retaliation, they have not applied consistent standards for how informants must be identified in pleadings, and have failed to take into account substantial bodies of relevant caselaw when deciding whether to require that informants’ names be disclosed in discovery.

This article offers a framework for when and how confidential informants should be identified, taking into account the competing interests in anonymity and disclosure. It …

Whistleblower Protections Under The Sarbanes-Oxley Act: A Primer And A Critique, Valerie J. Watnick

ExpressO

In the wake of scandals involving Enron Corporation, Arthur Andersen and other corporations, Congress enacted the landmark Sarbanes-Oxley Act of 2002, the Corporate and Criminal Fraud Accountability Act of 2002 (hereinafter the “Act” or “Sarbanes-Oxley”).This article critically examines the whistleblower protections afforded employees under Sarbanes-Oxley. Part I of the article considers the statutory language, the legislative history, and the regulations pursuant to the Act. Part II of the article examines recent decisions by the U.S. Department of Labor in Sarbanes-Oxley whistleblower cases (cases under the Act are initially adjudicated by the Department of Labor) and the overall framework for implementation …

Corporations And The Lateral Obligations Of The Social Contract, Benedict Sheehy

ExpressO

Social contract theorists suggest that society at some level is based on the idea that human people surrender freedom for the privilege of participating in society. That participation implicitly requires more than mere minimal compliance with law. Each human person’s contribution to society above the legal baseline, permits humans to create a society that is at least tolerable. Corporations as non-human act without regard for these supra-legal obligations which results in society suffering injustice. Corporate participation in society has become increasingly unjust and has done so to the extent that we may speak of living in a post-ethical world.

China-Australia Free Trade Agreement New Icing On An Old Cake-An Opportunity For Fair Trade?, Benedict Sheehy, Jackson N. Maogoto

ExpressO

The on-going challenge in economic development and globalization, particularly for developing countries, is the issue of development and equality in society. The issue becomes particularly problematic when confronted in matters of international trade. Often misnamed anti-globalization activists and pro-globalization activists fail to take note of the underlying assumptions that lead them to conflict—namely, the actual costs and benefits to society that result from their particular positions. In essence, both activists are searching for ways to improve the lives of people in the domestic context and to minimize the damage to their society and environment. China’s impressive economic record is threatened …

Corporations And Social Costs: The Wal-Mart Case Study, Benedict Sheehy

ExpressO

This article examines the role of the corporate vehicle in the creation of social costs. The article identifies some of the political commitments and philosophies behind the differing notions of corporations. Social costs are those activities which result from business activity and cause uncompensated harm to society. The founding contribution to the law and economics discussion by Ronald Coase is given a thorough treatment. The paper next, turns to the dominant explanation of corporate structure, namely the law and economics model developed expounded by Easterbrook and Fischel. It then applies the theoretical discussion in a case study of the world’s …

Un-Fair Trade As Friendly Fire: The Australia-Usa Free Trade Agreement, Benedict Sheehy

ExpressO

Trade, economists and trade theorists advise, is a mutually beneficial exercise. Among this group, a particular set of advocates, claim that “Free Trade” is in the interest of all parties. As will be demonstrated, Free Trade is not truly “free” but an exercise of foreign policy and the implementation of policies favouring wealthy corporate interest groups. Free Trade is controlled by wealthy nations who have stacked the rules in favour of themselves, and in particular their corporate interests, and against the poor producers in poor nations. This control is used contrary to fairness, economic and ecological logic. Fair trade, by …

Explaining The Value Of Transactional Lawyering, Steven L. Schwarcz

ExpressO

This article attempts, empirically, to explain the value that lawyers add when acting as counsel to parties in business transactions. Contrary to existing scholarship, which is based mostly on theory, this article shows that transactional lawyers add value primarily by reducing regulatory costs, thereby challenging the reigning models of transactional lawyers as “transaction cost engineers” and “reputational intermediaries.” This new model not only helps inform contract theory but also reveals a profoundly different vision than existing models for the future of legal education and the profession.

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.

Entrenched Managers & Corporate Social Responsibility, Shane M. Shelley

ExpressO

A growing number of academics have suggested U.S. corporate governance laws bestow too much power on managers. Much of the research focuses on the relationship between corporate governance arrangements, which supply a means to managerial power, and the financial performance of corporations. This exclusive focus on financial performance may be misguided. Although profits serve as a proxy for the benefits corporations provide society, they do not always adequately reflect the costs of the activities that generated them. In this sense, financial performance may not give an accurate, or at least complete, picture of the real value of corporations. Whether managers …

Global Pharmaceutical Patent Law In Developing Countries- Amending Trips To Promote Access For All, Angela J. Anderson

ExpressO

This comment will analyze the need to amend and revise the current global pharmaceutical patent system under TRIPS to take into account the needs of developing countries and overall public health. This comment will emphasize that the current international trade rules, which although administered by the WTO, are dictated by developed country governments and powerful pharmaceutical companies, and therefore, without reform will further diminish the access of poor people in developing countries to vital medicines. Part II of this comment will provide a general overview of the international trade law governing patents on pharmaceuticals focusing specifically on the development of …

Before Competition: Origins Of The Internal Affairs Doctrine, Frederick Tung

ExpressO

To the modern corporate scholar and lawyer, the internal affairs doctrine seems in the natural order of things. Corporate law is state law. Each corporation is formed under the law of its chosen state of incorporation. To ensure consistency and predictability, that law must govern the corporation’s internal affairs. Yet the origin of such a doctrine is puzzling. Respecting the firm’s choice of corporate law, the doctrine forces state legislatures into competition to attract incorporations. But how did legislatures come to concede their traditional territorial regulatory authority, and instead agree to compete? This Article solves this puzzle, offering the first …

Global Pharmaceutical Patent Law In Developing Countries- Amending Trips To Promote Access For All, Angela J. Anderson

ExpressO

This comment will analyze the need to amend and revise the current global pharmaceutical patent system under TRIPS to take into account the needs of developing countries and overall public health. This comment will emphasize that the current international trade rules, which although administered by the WTO, are dictated by developed country governments and powerful pharmaceutical companies, and therefore, without reform will further diminish the access of poor people in developing countries to vital medicines. Part II of this comment will provide a general overview of the international trade law governing patents on pharmaceuticals focusing specifically on the development of …

Putting Regulation Before Responsibility: Towards Binding Norms Of Corporate Social Responsibility, Thomas F. Mcinerney

ExpressO

Globalization of business has heightened concerns regarding corporate conduct in developing countries. Critics have charged that multinational firms in particular have exported social harms involving labor, the environment, bribery, and human rights to jurisdictions outside of their home countries. Opportunities for regulatory arbitrage and the associated collective action problem such opportunities suggest, highlight the need for strong regulatory responses to these issues. Rather than prioritize the strengthening of national or international regulatory actors to address these social harms, voluntary corporate social responsibility initiatives have emerged as a favored response within the international community. This article undertakes a critical examination of …

Legislation And Legitimation: Congress And Insider Trading In The 1980s, Thomas W. Joo

ExpressO

Legislation and Legitimation:

Congress and Insider Trading in the 1980s

Abstract

Orthodox corporate law-and-economics holds that American corporate and securities regulation has evolved inexorably toward economic efficiency. That position is difficult to square with the fact that regulation is the product of government actors and institutions. Indeed, the rational behavior assumptions of law-and-economics suggest that those actors and institutions would tend to place their own self-interest ahead of economic efficiency. This article provides anecdotal evidence of such self-interest at work. Based on an analysis of legislative history—primarily Congressional hearings—this article argues that Congress had little interest in the economic policy …

Law As Rationalization: Getting Beyond Reason To Business Ethics, Jeffrey Marc Lipshaw

ExpressO

Embedded in the way we use the law is the tendency of human reason to justification, in the words of one philosopher, “the thirst for rationality that creates lies.” I contend that this tendency is exacerbated by the conflation of what is knowable as a matter of science, and that which we might believe is normative. I rely on Kant’s critique of theoretical and practical reason to assess claims to objectivity in social science approaches to law, and to suggest it is not surprising that the operation of theoretical and practical reason would tend to the conflation of the descriptive …

Implementation Of Sarbanes-Oxley: New Rules For Lawyers And What Lawyers Think, Olga Yevglevskaya-Wayne

ExpressO

This paper discusses practical implications of Sarbanes-Oxley for lawyers. Emphasis is on the new federal rules of professional responsibility the Act sets up. The paper includes the views of various renowned practitioners interpreting and using these rules. The paper also contains suggestions for how the Securities and Exchange Commission could potentially improve those areas that are proving problematic for attorneys so as to better effectuate the purpose of this major new law, in light of its legislative history and intent, which are also discussed in the paper.

Breaking The Bank: Revisiting Central Bank Of Denver After Enron And Sarbanes-Oxley, Celia Taylor

ExpressO

No abstract provided.

Controlling Conflicts Of Interest: A Tale Of Two Industries, Ahmed E. Taha

ExpressO

Large corporate conglomerates are being formed in many industries. Although a conglomerate may be able to use its multiple businesses to offer better products or services or lower prices, conglomeration can also create conflicts of interest within a corporation, harming consumers. Other researchers and observers have long been aware of these conflicts of interest, however, this Article’s empirical analyses identify what specific characteristics of a conglomerate cause conflicts of interest to actually result in harm to consumers. In doing so, the Article also guides policymakers regarding how to regulate conflicts of interest.

This Article examines two industries – financial services …

The Semi-Sovereign Corporation, Daniel J.H. Greenwood

ExpressO

For at least a generation, corporate law scholars have worked within a paradigm of the corporation as a nexus of contracts, using metaphors drawn from contract, property, agency and trust to describe the relationships between shareholders and the firm as something like those of strangers in a market.

But historically, corporations were understood to be political organizations much like a miniature state or sovereign. The political view emphasizes that the participants in a firm include more than the public shareholders, that they have relationships with each other that extend beyond the momentary contact of strangers in a spot-market, and most …

Harmonizing Business Laws In Africa: Ohada Calls The Tune, Claire M. Dickerson

ExpressO

OHADA (in English, “Organization for Harmonization in Africa of Business Laws”) is a system of business laws and implementing institutions. Sixteen West African nations adopted this regime in order to increase their attractiveness to foreign investment. Because most of the member-states are former French colonies, the OHADA laws are based on the French legal system. Despite certain economists’ recent, well-publicized assertions that any French-based legal system is incompatible with development, other studies challenge those claims and in doing so outline characteristics that a pro-development system of business laws should possess. A review of selected provisions from OHADA’s corporate law and …

Markets & Democracy: The Illegitimacy Of Corporate Law, Daniel J.H. Greenwood

ExpressO

Corporate law does not conform to ordinary democratic norms. Unlike human citizens, corporations may decide which law will govern their most fundamental acts of self-governance. The corporate law corporation choose in turn influences the corporate goals and decision-making processes that determine what the corporation looks for in corporate law in a reflexive system independent of ordinary political processes.

This system seems on its face to violate the most fundamental principle of popular sovereignty–all non-Delaware citizens of the United States are excluded from even formal participation in the process of determining American corporate law, and even Delaware citizens are reduced to …

Price, Path & Pride: Third-Party Closing Opinion Practice Among U.S. Lawyers (A Preliminary Investigation), Jonathan C. Lipson

ExpressO

This article presents the first in-depth exploration of third-party closing opinions, a common but curious – and potentially troubling -- feature of U.S. business law practice. Third-party closing opinions are letters delivered at the closing of most large transactions by the attorney for one party (e.g., the borrower) to the other party (e.g., the lender) offering limited assurance that the transaction will have legal force and effect.

Hundreds, if not thousands, of legal opinions are delivered every week. Yet, lawyers often complain that they create needless risk and cost, and produce little benefit. Closing opinions thus pose a basic question: …

Patterns In A Complex System: An Empirical Study Of Valuation In Business Bankruptcy Cases, Bernard Trujillo

ExpressO

This Article applies complex systems research methods to explore the characteristics of the bankruptcy legal system, presenting the results of an empirical study of twenty years of bankruptcy court valuation doctrine in business cramdown cases. These data provide solid descriptions of how courts exercise their discretion in valuing firms and assets.

This Article accomplishes two objectives: First, using scientific methodology, this Article explains the content of bankruptcy valuation doctrine. Second, this Article uses doctrine as a variable to explore system dynamics that govern the processes of change over time.

Significant findings include (i) courts tend to “split the difference” in …

Organizational Misconduct: Beyond The Principal-Agent Model, Kimberly D. Krawiec

ExpressO

This article demonstrates that, at least since the adoption of the Organizational Sentencing Guidelines in 1991, the United States legal regime has been moving away from a system of strict vicarious liability toward a system of duty-based organizational liability. Under this system, organizational liability for agent misconduct is dependant on whether or not the organization has exercised due care to avoid the harm in question, rather than under traditional agency principles of respondeat superior. Courts and agencies typically evaluate the level of care exercised by the organization by inquiring whether the organization had in place internal compliance structures ostensibly designed …

The Corporation As God, Douglas Litowitz

ExpressO

No abstract provided.

The Economics Of Limited Liability: An Empirical Study Of New York Law Firms, Scott Baker, Kimberly D. Krawiec

ExpressO

Since the rapid rise in organizational forms for business associations, academics and practitioners have sought to explain the choice of form rationale. Each form contains its own set of default rules that inevitably get factored into this decision, including the extent to which each individual firm owner will be held personally liable for the collective debts and obligations of the firm. The significance of the differences in these default rules continues to be debated. Many commentators have advanced theories, most notably those based on unlimited liability, profit-sharing, and illiquidity, asserting that the partnership form provides efficiency benefits that outweigh any …

Evaluating Work: Enforcing Occupational Safety And Health Standards In The United States, Canada And Sweden, Daniel B. Klaff

ExpressO

The United States’ occupational safety and health enforcement system is breaking down. Klaff argues that much of this breakdown has to do with a fundamental lack of worker participation in the United States’ safety and health system. Klaff makes his case by comparing and contrasting the history and enforcement schemes of the United States, Canada, and Sweden. After arguing for economic rights as human rights, Klaff concludes by offering a set of recommendations for the United States’ occupational safety and health system based upon his value-centered analysis.

Gentleman's Agreement: The Antisemitic Origins Of Restrictions On Stockholder Litigation, Lawrence E. Mitchell

ExpressO

A deeply ingrained, seemingly ineradicable, hostility to plaintiffs’ lawyers and especially to plaintiffs’ lawyers in stockholder suits seems to have existed for most of the past century. This hostility is manifest not only in the tone of judicial opinions but in law review articles, the popular press, and, often, in legislation. This article analyzes the circumstances under which the first security-for-expense statute was adopted in New York in 1944, including the contemporaneous justification for the statute, focusing on the demographics of the New York bar at the time and the ethnic sociology of New York. In so doing, it concludes …