Law Commons^™

Introduction: Professor Randall Thomas’S Depolarizing And Neutral Approach To Shareholder Rights, James D. Cox, Frank Partnoy

Vanderbilt Law Review

Like Gaul, corporate law scholarship can be divided into three overflowing buckets: pro-manager, pro-shareholder, and empirical. We classify empirical scholarship as a separate category, in significant part because of Professor Randall Thomas. In the pre-Thomas era, much of the literature fell into the first two buckets, with empirical researchers deploying data collection and analysis to support their particular bent. Then Professor Thomas emerged as a distinctive empiricist. Throughout his career, he has published scores of path breaking studies while maintaining relative neutrality as to the normative implications. He does not deploy data and its analysis to advocate for particular positions, …

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 …

Lead Plaintiff Incentives In Aggregate Litigation, Charles R. Korsmo, Minor Myers

Vanderbilt Law Review

The lead plaintiff role holds out considerable promise in promoting the deterrence and compensation goals of aggregate litigation. The prevailing approach to compensating lead plaintiffs, however, provides no real incentive for a lead plaintiff to bring claims on behalf of a broader group. The policy challenge is to induce sophisticated parties to press claims not in their individual capacity but instead in a representative capacity, conferring a positive externality on all class members by identifying attractive claims, financing ongoing litigation, and managing the work of attorneys. We outline what an active and engaged lead plaintiff could add to the civil …

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

Vanderbilt Law Review

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 …

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 …

After Corwin: Down The Controlling Shareholder Rabbit Hole, Ann M. Lipton

Vanderbilt Law Review

As Delaware has developed its doctrine with respect to controlling shareholders, its view of their relationship to directors has evolved. This evolution has produced some pronounced inconsistencies with respect to the weight placed on director approval of controlling shareholder action. The recent Delaware Supreme Court decisions in Corwin v. KKR Financial Holdings LLC, Kahn v. M & F Worldwide Corp., and C & J Energy Services, Inc. v. City of Miami General Employees’ and Sanitation Employees’ Retirement Trust introduced further uncertainty into the mix by making the determination as to whether a transaction involves a controlling shareholder practically outcome determinative …

Calculating Sec Whistleblower Awards: A Theoretical Approach, Amanda M. Rose

Vanderbilt Law Review

The Dodd-Frank Act provides that Securities and Exchange Commission (“SEC”) whistleblower awards must equal not less than ten and not more than thirty percent of the monetary penalties collected in the action to which they relate; SEC Rule 21F-6 provides criteria that the SEC may consider in determining the award percentage within the statutory bounds. When applying the Rule 21F-6 criteria, the SEC is required to think only in percentage terms, ignoring the dollar payout the award will actually yield. Last June, the SEC proposed to change this, at least in cases where the existing methodology would yield an award …

The Case For Individual Audit Partner Accountability, Colleen Honigsberg

Vanderbilt Law Review

Despite repeated regulatory interventions, accounting failures continue to persist in companies around the world. In this Article, I explain why regulatory oversight, private enforcement, and firm-level reputational sanctions are unlikely to induce accountants to take optimal levels of care when auditing corporate financials. Instead, our best chance for improving audit quality lies in establishing a market for individual audit partners’ brands—a market that can hold individual auditors responsible for their mistakes.

The Article begins by identifying four key benefits to this approach. First, forcing auditors to be publicly associated with any audit failures occurring on their watch will induce them …

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 …

Has The "M" Word Been Framed? Marijuana, Cannabis And Public Opinion, Robert A. Mikos, Cindy D. Kam

Vanderbilt Law School Faculty Publications

Over the past two decades, a growing cadre of US states has legalized the drug commonly known as “marijuana.” But even as more states legalize the drug, proponents of reform have begun to shun the term “marijuana” in favor of the term “cannabis.” Arguing that the “M” word has been tainted and may thus dampen public support for legalization, policy advocates have championed “cannabis” as an alternative and more neutral name for the drug. Importantly, however, no one has tested whether calling the drug “cannabis” as opposed to “marijuana” actually has any effect on public opinion. Using an original survey …

The Supreme Court And Refugees At The Southern Border: 5 Questions Answered, Karla Mckanders

Vanderbilt Law School Faculty Publications

I sat in a small room in Tijuana, Mexico with a 13-year-old indigenous Mayan Guatemalan girl.

She left Guatemala after a cartel murdered her friend and threatened to rape her. Her mother wanted her to live and believed the only way for her to survive was to send her daughter alone to the U.S., to apply for asylum Now she was alone and stuck in Mexico. Every morning, the Guatemalan girl, along with other asylum seekers, would frantically gather at the Tijuana-U.S. border where they waited to hear their name or their number called so the Mexican government could escort …

Antitrust In Digital Markets, John M. Newman

Vanderbilt Law Review

Antitrust law has largely failed to address the challenges posed by digital markets. At the turn of the millennium, the antitrust enterprise engaged in intense debate over whether antitrust doctrine, much of it developed during a bygone era of smokestack industries, could or should evolve to address digital markets. Eventually, a consensus emerged: although the basic doctrine is supple enough to apply to new technologies, courts and enforcers should adopt a defendant-friendly, hands-off approach.

But this pro-defendant position is deeply-and dangerously-flawed. Economic theory, empirical research, and extant judicial and regulatory authority all contradict the prevailing views regarding power, conduct, and …

Taking Laughter Seriously At The Supreme Court, Tonja Jacobi, Matthew Sag

Vanderbilt Law Review

Laughter in Supreme Court oral arguments has been misunderstood, treated as either a lighthearted distraction from the Court's serious work, or interpreted as an equalizing force in an otherwise hierarchical environment. Examining the more than nine thousand instances of laughter witnessed at the Court since 1955, this Article shows that the Justices of the Supreme Court use courtroom humor as a tool of advocacy and a signal of their power and status. As the Justices have taken on a greater advocacy role in the modern era, they have also provoked more laughter.

The performative nature of courtroom humor is apparent …

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 …

Reestablishing A Knowledge Mens Rea Requirement For Armed Career Criminal Act "Violent Felonies" Post-Voisine, Jeffrey A. Turner

Vanderbilt Law Review

Until 2016, federal courts unanimously concluded that predicate offenses for the Armed Career Criminal Act ('ACCA") required a knowledge mens rea. Therefore, any state law crimes that could be com- mitted with a reckless mens rea were not "violent felonies" and could not serve as ACCA predicates. In 2016, however, the U.S. Supreme Court's opinion in Voisine v. United States disrupted that lower court consensus. The Court stated that a reckless mens rea was sufficient to violate 18 U.S.C. § 922(g)(9), which bars individuals convicted of misdemeanor domestic violence offenses from possessing firearms.

The ACCA's language is similar to § …

You Get What You Pay For: An Empirical Examination Of The Use Of Mturk In Legal Scholarship, Adriana Z. Robertson, Albert H. Yoon

Vanderbilt Law Review

In recent years, legal scholars have come to rely on Amazon's Mechanical Turk ("MTurk') platform to recruit participants for surveys and experiments. Despite MTurk's popularity, there is no generally accepted methodology for its use in legal scholarship, and many questions remain about the validity of data gathered from this source. In particular, little is known about how the compensation structure affects the performance of respondents recruited using MTurk.

This Essay fills both of these gaps. We develop an experiment and test the effect of various compensation structures on performance along two dimensions: effort and attention. We find that both the …

Can And Should Universal Injunctions Be Saved?, Szymon S. Barnas

Vanderbilt Law Review

The practice of a federal district court judge halting the government's enforcement of an executive action against not only the parties before the court but against anyone, anywhere, may be coming to an end. Multiple Supreme Court Justices have expressed their skepticism in the propriety of universal injunctions. The growing scholarly consensus is that there should be a brightline rule against them. If the universal injunction's demise is impending and the class action's demise continues unabated, obtaining systemwide relief may be difficult when such relief may be most needed.

This Note considers whether universal injunctions can and should be saved. …

Pregnant People?, Jessica A. Clarke

Vanderbilt Law School Faculty Publications

In their article Unsexing Pregnancy, David Fontana and Naomi Schoenbaum undertake the important project of disentangling the social aspects of pregnancy from those that relate to a pregnant woman’s body. They argue that the law should stop treating the types of work either parent can do — such as purchasing a car seat, finding a pediatrician, or choosing a daycare — as exclusively the domain of the pregnant woman. The project’s primary aim is to undermine legal rules that assume a gendered division of labor in which men are breadwinners and women are caretakers. But Fontana and Schoenbaum argue their …

The Diversity Imperative Revisited: Racial And Gender Inclusion In Clinical Law Faculty, G. S. Hans, D. N. Archer, Et Al.

Vanderbilt Law School Faculty Publications

The demographics of clinical law faculties matter. As Professor Jon Dubin persuasively argued nearly twenty years ago in his article Faculty Diversity as a Clinical Legal Education Imperative, clinical faculty of color entering the legal academy in the 1980s and 1990s expanded the communities served by law school clinics and the lawyering methods used to serve clients in significant ways that enriched legal education and the profession. They also broadened clinical scholarship to include deconstructions and reconstructions of clinical teaching, offered crucial role modeling and mentorship to students of color, and helped to elevate cross-cultural communication and multiracial collaboration as …

Salary History And Pay Parity, Jennifer Safstrom

Vanderbilt Law School Faculty Publications

Inquiries about a prospective applicant's salary history are controversial because of the role such inequities play in the broader gender pay equity debate. The use of prior salary to determine compensation can perpetuate pay discrimination for women, especially women of color, and lock them into cycles of underpayment when these inequities are carried over from job to job. Reliance on salary history perpetuates historical discrimination and is antithetical to the language and purpose of Title VII and the Equal Pay Act. The purpose of this paper is to critically analyze the legal reasoning relied upon to interpret these laws, especially …

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 …

The Law Of Genetic Privacy: Applications, Implications, And Limitations, Ellen Wright Clayton, Barbara J. Evans, James W. Hazel, Mark A. Rothstein

Vanderbilt Law School Faculty Publications

Recent advances in technology have significantly improved the accuracy of genetic testing and analysis, and substantially reduced its cost, resulting in a dramatic increase in the amount of genetic information generated, analysed, shared, and stored by diverse individuals and entities. Given the diversity of actors and their interests, coupled with the wide variety of ways genetic data are held, it has been difficult to develop broadly applicable legal principles for genetic privacy. This article examines the current landscape of genetic privacy to identify the roles that the law does or should play, with a focus on federal statutes and regulations, …

David Williams Ii, "In Memoriam" 1948-2019, Nicholas S. Zeppos

Vanderbilt Law Review

On February 15, 2019, hundreds of people gathered at the Temple Church in Nashville to celebrate the life and impact of David Williams II.

The Arbitration-Litigation Paradox, Pamela K. Bookman

Vanderbilt Law Review

The Supreme Court's interpretation of the Federal Arbitration Act is universally touted as favoring arbitration. Its arbitration cases and decisions in other areas are also viewed as supporting the Court's more general hostility to litigation. These pro-arbitration and anti-litigation policies can be mutually reinforcing. Moreover, they appear to be mutually consistent, in part because the Court describes the essential features of arbitration as being "informal," "speedy," "efficient"-in short, the categorical opposite of litigation.

This Article contends that the Court's approach is not as "pro- arbitration" as it appears. On the contrary, the Court's pro-arbitration and anti- litigation values sometimes conflict. …

Reconceptualizing The Role Of Intellectual Property Rights In Shaping Industry Structure, Peter Lee

Vanderbilt Law Review

Technological and creative industries are critical to economic and social welfare, and the forces that shape such industries are important subjects of legal and policy examination. These industries depend on patents and copyrights, and scholars have long debated whether exclusive rights promote industry consolidation (by shoring up barriers to entry) or fragmentation (by promoting entry of new firms). Much hangs in the balance, for the structure of these IP- intensive industries can determine the amount, variety, and quality of drugs, food, software, movies, music, and books available to society. This Article reconceptualizes the role of patents and copyrights in shaping …

Public Relations Litigation, Kishanthi Parella

Vanderbilt Law Review

Conventional wisdom holds that lawsuits harm a corporation's reputation. So why do corporations and other businesses litigate even when they will likely lose in the court of law and the court of public opinion? One explanation is settlement: some parties file lawsuits not to win but to force the defendant to pay out. But some business litigants defy even this explanation; they do not expect to win the lawsuit or to benefit financially from settlement. What explains their behavior?

The answer is reputation. This Article explains that certain types of litigation can improve a business litigant's reputation in the eyes …

The Authorization Continuum: Investigating The Meaning Of "Authorization" Through The Lens Of The Controlled Substances Act, Breanna C. Philips

Vanderbilt Law Review

Federal prohibitions are ubiquitous in society. These prohibitions may be absolute, providing no exceptions, or they may be qualified, providing exemptions that allow specified parties to avoid a law's reach. The power to exempt parties from a prohibition is not limited to the federal government; it may be delegated to states or smaller polities as well. This is the structure that Congress employed when enacting the Mail Order Drug Paraphernalia Control Act: the Act bans, among other things, the sale and distribution of drug paraphernalia but provides an exemption for "any person authorized by local, State, or Federal law."

While …

Winding Back "Wayfair": Retaining The Physical Presence Rule For State Income Taxation, Nathan Townsend

Vanderbilt Law Review

In 2018, the U.S. Supreme Court decided South Dakota v. Wayfair, Inc., a case abrogating the physical presence rule from Quill Corp. v. North Dakota. The physical presence rule barred a state from forcing a retailer to collect sales taxes on the state's behalf if the retailer lacked a physical presence within the state. The decision came after a decades-long effort by the states to reach sales-tax revenue effectively pushed beyond their reach by the physical presence rule. While enabling states to reach a new revenue source, the Court failed to take full account of the reliance interests dependent on …

Standing For Nothing, Robert Mikos

Vanderbilt Law School Faculty Publications

A growing number of courts and commentators have suggested that states have Article III standing to protect state law. Proponents of such "protective" standing argue that states must be given access to federal court whenever their laws are threatened. Absent such access, they claim, many state laws might prove toothless, thereby undermining the value of the states in our federal system. Furthermore, proponents insist that this form of special solicitude is very limited-that it opens the doors to the federal courthouses a crack but does not swing them wide open. This Essay, however, contests both of these claims, and thus, …

Law And Neighborhood Names, Nestor M. Davidson, David Fagundes

Vanderbilt Law Review

This Article provides a novel investigation of how law both enables and constrains the ability of city residents to claim, name, and often rename their neighborhoods. A rich interdisciplinary dialogue in fields such as geography and sociology has emerged on the significance of place names, but this literature has largely ignored the legal dimensions of the phenomenon and its implications for urban governance, belonging, and community conflict. This Article's empirical exploration of the role of law in change and conflict regarding neighborhood identity thus advances the discourse both for legal scholars focused on urban dynamics and across disciplines.

From gentrification …