Law Commons^™

Total Return Meltdown: The Case For Treating Total Return Swaps As Disguised Secured Transactions, Colin P. Marks

Faculty Articles

Archegos Capital Management, at its height, had $35 billion in assets. But in the spring of 2021, in part through its use of total return swaps, Archegos sparked a $30 billion dollar sell-off that left many of the world's largest banks footing the bill. Mitsubishi UFJ Group estimated a loss of $300 million; UBS, Switzerland's biggest bank, lost $861 million; Morgan Stanley lost $911 million; Japan's Nomura lost $2.85 billion; but the biggest hit came to Credit Suisse Group AG, which lost $5.5 billion. Archegos itself lost $20 billion over two days. The unique characteristics of total return swaps and …

Contract Lore As Heuristic Starting Points, Colin P. Marks

Faculty Articles

What Professor Hillman labels as lore are better thought of as a series of heuristic starting points. I do not label them heuristics in and of themselves as they do not represent shortcuts to the ultimate answer. But, as I explain, all of the areas that Professor Hillman identifies as lore are actually quite nuanced, sometimes filled with exceptions; other times, they simply represent the first step in a long inquiry. Heuristics as a teaching device has been recognized in law and other disciplines as an effective tool in not only conveying information, but also prodding the student to conduct …

There Oughta Be A Law: What Corporate Social Responsibility Can Trach Us About Consumer Contract Formation, Colin P. Marks

Faculty Articles

The Restatement of Consumer Contracts has been a controversial project since its inception. Some have argued that the project is unnecessary as there is no separate law of consumer contracts. Others have argued that the project is more appropriate for a Principles of Law project than for a Restatement. Substantively, the project has also drawn criticism from both consumer and business advocates. Consumer advocates have argued that some of the sections, in particular section 2 which addresses standard terms, favor businesses and subject consumers to terms and conditions that they never truly assented to.9 Business advocates have argued, among other …

Online Terms As In Terrorem Devices, Colin P. Marks

Faculty Articles

Online shopping has quickly replaced the brick-and-mortar experience for a large portion of the consuming public. The online transaction itself is rote: browse items, add them to your cart, and check out. Somewhere along the way, the consumer is likely made aware of (or at least exposed to) the merchant's terms and conditions, via either a link or a pop-up box. Such terms and conditions have become so ubiquitous that most consumers would be hardpressed to find a merchant that doesn't try to impose them somewhere on their website.

Though such terms and conditions are pervasive, most consumers do not …

Piercing The Fiduciary Veil, Colin P. Marks

Faculty Articles

Limited partnerships (LPs) and limited liability companies (LLCs) permit formation with a unique management structure in that these entities may be managed by another limited liability entity, such as a corporation. Thus, the true managers are those individuals who manage the manager. It is well settled that the managing entity, such as a corporate general partner, owes default fiduciary duties, but what of these second-tier managers? Technically, it is the managing entity that owes the duties, not the managing entity’s owners, officers, and directors, yet courts have struggled with strict adherence to this separation when it would seem inequitable to …

Not What, But When Is An Offer — Rehabilitating The Rolling Contract, Colin P. Marks

Faculty Articles

To what degree are rolling, or layered, contracts binding? A number of courts, starting with the now infamous case of ProCD, Inc. v. Zeidenberg, have held that, rather than a contract for the sale of a good, such as a computer, being completed in-store, the contract is formed when deferred terms found inside the package are reviewed by the buyer and accepted by some act -- usually use of the good (or declining to return it). This approach, which has been called the rolling contract, has been widely criticized by commentators as an abomination of contract law that ignores a …

The Irony Of At&T V. Concepcion, Colin P. Marks

Faculty Articles

Irony is defined as, “the use of words to express something other than and especially the opposite of the literal meaning.” Though many other definitions of the word exist, in light of the Supreme Court’s majority opinion in AT&T v. Concepcion, this definition comes to mind. Read broadly, the decision strikes a blow to the ability of consumers to bring suits against companies, both inside and outside of arbitration. But that was not the intent behind the federal act which the Court relied upon to justify its decision.

In 1925, when Congress passed the Federal Arbitration Act (FAA), its intended …

Limited Partnership Status And The Imposition Of Fiduciary Duties In Texas, Colin P. Marks

Faculty Articles

To avoid liability, many investors in a partnership opt for the structure of a limited partnership. This structure insulates the limited partners from liability by creating a two-tier structure with a general partner and limited partners. The limited partners are at risk of losing only their investment so long as they are not acting as general partners.

Despite the popularity of the limited partnership structure, though, it remains unclear what duties are owed between the various partners. In a general partnership, all partners are fiduciaries to each other. The statutes governing limited partnerships make clear that general partners in a …

The Anticipation Misconception, Colin P. Marks

Faculty Articles

Many commentators and courts have cited to the Supreme Court decision of Hickman v. Taylor as the genesis of the work product doctrine and the requirement that, to be afforded protection, the material in question must be generated “in anticipation of litigation.” The oft quoted policy justification for the protection afforded is that attorneys should be allowed a “zone of privacy” within which to prepare their case for the client. This justification supports limiting protection only to work generated “in anticipation of litigation,” because, presumably, outside of this context there is no need for the “zone of privacy.” However, a …

Plato, The Prince, And Corporate Virtue: Philosophical Approaches To Corporate Social Responsibility, Colin P. Marks, Paul S. Miller

Faculty Articles

Corporate Social Responsibility (“CSR”) has been a topic of discussion within corporate law and policy for over 40 years. CSR, in its broadest sense, explores what obligations a corporation should or can undertake to further the goals of society. Business academics have described four social responsibilities that any company has to society: economic, legal, ethical, and philanthropic. The progressive advocates within the legal academic debate surrounding CSR argue that a corporation should seek to do more than just turn a profit; it should seek to make society “better.” However, by seeking to make society “better,” the corporation begins to act …

The Corporate Lawyer's Role In A Contemporary Democracy, Colin P. Marks, Nancy B. Rapoport

Faculty Articles

In this paper, we review the traditional arguments for corporate social responsibility and ask the question of what corporate lawyers should do to help their clients do the right thing ethically. We also set out a test - the technically test -- that highlights when something is usually on the wrong side of the ethical line. (If you have to give legal advice starting with Well, technically..., you're on the wrong side of the line.)

Jiminy Cricket For The Corporation: Understanding The Corporate 'Conscience', Colin P. Marks

Faculty Articles

Historically, the corporation has evolved since the late eighteenth century from a relative few, specially chartered associations, generally organized to complete projects for the public good to the modern profit-making behemoths of modern America. Along the way, corporations have been subjected to regulation, often in response to public outcry against perceived abuses of power. This corporate evolution has also resulted in a general separation of ownership and control, though that is not to say that corporate managers act completely free from external pressures such as to make a profit. With regard to the corporate "conscience," though corporations do not have …

Thompson/Mcnulty Memo Internal Investigations: Ethical Concerns Of The Deputized Counsel, Colin P. Marks

Faculty Articles

Outside counsel who conduct internal investigations for corporate clients have always faced ethical concerns, especially when interviewing employees. Generally, a carefully crafted blanket statement at the beginning of the interview explaining outside counsel's role was sufficient to address these concerns. However, recent charging policies adopted by the Department of Justice ("DOJ") have drastically changed the rules. These policies, articulated in what is now commonly referred to as the "Thompson Memo," after the author and then Deputy General Larry Thompson, allowed prosecutors to consider factors such as waivers of the attorney-client privilege and work-product protections and whether the company provides legal …

The Limits Of Limiting Liability In The Battle Of The Forms: U.C.C. Section 2-207 And The “Material Alteration” Inquiry, Colin P. Marks

Faculty Articles

The “surprise or hardship” approach to UCC section 2-207 is the approach courts should use to determine the applicability of liability clauses in the battle of the forms. However, courts use varying approaches to decide whether clauses limiting liability materially alter the contract under UCC section 2-207. Courts have adopted three different approaches: (1) the per se material alternation approach; (2) the per se not material alternation approach; and (3) the “surprise or hardship” approach.

The per se material alteration approach focuses on the surprise or hardship factors found in comment 4 of section 2-207; however, that approach is flawed …

Corporate Investigations, Attorney-Client Privilege, And Selective Waiver: Is A Half-Privilege Worth Having At All?, Colin P. Marks

Faculty Articles

As the title suggests, this article is an analysis of the selective waiver doctrine, which allows a party to disclose materials protected by the attorney-client and work product privileges to the government during investigations without waiving the privilege as to third-party litigants. Specifically, the article analyzes the development of the selective waiver doctrine and why recent policies adopted by governmental agencies, specifically the Department of Justice and SEC, have made this doctrine a forefront of conversation amongst litigators, legislators and academics. But is a blanket adoption of the selective waiver doctrine wise?

Courts have taken a variety of approaches to …

Opening The Door To Business Methods: State Street Bank & Trust Co. V. Signature Financial Group, Inc. (Note), Colin P. Marks

Faculty Articles

Business method patents require further litigation to answer many lingering questions. The decision of the United States Court of Appeals for the Federal Circuit in State Street Bank & Trust Co. v. Signature Financial Group, Inc. eliminated the "business method" exception. The business method exception used a skeptical approach asking "why should a patent be granted." The skepticism inherent in this approach may explain why the doctrine was recognized for so many years.

Since the time of Hotel Security Checking Co. v. Lorraine Co., advances in the field of science and the advent of computers have forced courts to constantly …