Law Commons^™

Spac Mergers, Ipos, And The Pslra's Safe Harbor: Unpacking Claims Of Regulatory Arbitrage, Amanda M. Rose

Vanderbilt Law School Faculty Publications

Communications in connection with an initial public offering (IPO) are excluded from the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 (PSLRA). Unsurprisingly, IPO issuers do not share projections publicly-—the liability risk is too great. By contrast, communications in connection with a merger are not excluded from the safe harbor, and special purpose acquisition companies (SPACs) routinely share their merger targets’ projections publicly. Does the divergent application of the PSLRA’s safe harbor in traditional IPOs and SPAC mergers create an opportunity for “regulatory arbitrage” and, if so, what should be done about it? …

The Political Economy Of Wto Exceptions, Timothy Meyer

Vanderbilt Law School Faculty Publications

In a bid to save the planet from rising temperatures, the European Union is introducing a carbon border adjustment mechanism-essentially a levy on imports from countries with weak climate rules. The United States, Canada, and Japan are all openly mulling similar proposals. The Biden Administration is adopting new Buy American rules, while countries around the world debate new supply chain regulations to address public health issues arising from COVID-19 and shortages in critical components like computer chips. These public policy initiatives-addressing the central environmental, public health, and economic issues of the day-all likely violate World Trade Organization (WTO) rules governing …

Antitrust's High-Tech Exceptionalism, Rebecca H. Allensworth

Vanderbilt Law School Faculty Publications

American competition policy has four big problems: Amazon, Apple, Facebook, and Google. These companies each reign over a sector of the digital marketplace, controlling both the consumer experience and the possibility of competitive entry. This Essay argues that the conventional account of how antitrust law allowed this consolidation of market power - that it failed to evolve to address the market realities of the technology sector-is incomplete. Not only did courts fail to adapt antitrust law from its smoke-stack roots, but they gave big tech special dispensation under traditional antitrust doctrine. Swayed by prevailing utopic views about digital markets in …

Regulation And The Geography Of Inequality, Ganesh Sitaraman, Christopher Serkin, Morgan Ricks

Vanderbilt Law School Faculty Publications

We live in an era of widening geographic inequality. Around the country, the spread between economically and culturally thriving places and those that are struggling has been increasing. "Superstar" cities like New York, San Francisco, Boston, and Atlanta continue to attract talent and grow, while the economies of other cities and rural areas are left behind. Troublingly, escalating geographic inequality in the United States has arrived hand in hand with serious economic, social, and political problems. Areas that are left behind have not only failed to keep up with their thriving peers; in many ways, they have stagnated and seen …

A Revised Monitoring Model Confronts Today's Movement Toward Managerialism, Randall S. Thomas, James D. Cox

Vanderbilt Law School Faculty Publications

There are many lessons to be drawn from the sweep of history. In law, the compelling story repeatedly told is the observable co-movement of law on the one hand, and economic, social, and political changes on the other hand. Aberrations, however, do arise but generally do not persist in the long term. Contemporary corporate law seems to be on the cusp of such an abnormality as legal developments and proposed reforms for corporate law are currently conflicting with the direction in which the host environment is moving. This article identifies a series of contemporary judicial and regulatory corporate governance developments …

Do Founders Control Startup Firms That Go Public?, Brian Broughman, Jesse M. Fried

Vanderbilt Law School Faculty Publications

American competition policy has four big problems: Amazon, Apple, Facebook, and Google. These companies each reign over a sector of the digital marketplace, controlling both the consumer experience and the possibility of competitive entry. This Essay argues that the conventional account of how antitrust law allowed this consolidation of market power - that it failed to evolve to address the market realities of the technology sector- is incomplete. Not only did courts fail to adapt antitrust law from its smoke-stack roots, but they gave big tech special dispensation under traditional antitrust doctrine. Swayed by prevailing utopic views about digital markets …

Taking Antitrust Away From The Courts, Ganesh Sitaraman

Vanderbilt Law School Faculty Publications

A small number of firms hold significant market power in a wide variety of sectors of the economy, leading commentators across the political spectrum to call for a reinvigoration of antitrust enforcement. But the antitrust agencies have been surprisingly timid in response to this challenge, and when they have tried to assert themselves, they have often found that hostile courts block their ability to foster competitive markets. In other areas of law, Congress delegates power to agencies, agencies make regulations setting standards, and courts provide deferential review after the fact. Antitrust doesn’t work this way. Courts – made up of …

Investor-State Dispute Settlement: Human Rights And Regulatory Lessons From "Lilly V. Canada", Daniel J. Gervais

Vanderbilt Law School Faculty Publications

The triangular interface between trade, intellectual property (IP) and human rights has yet to be fully formed, both doctrinally and normatively. Adding investor-state dispute settlement (ISDS) to the mix increases the complexity of the equations to solve. Two resultant issues are explored in this Article. First, the Article considers ways in which broader public policy objectives—in particular the protection of human rights—can and should be factored into determinations of whether a state’s action is compatible with its trade obligations and commitments in the state-to-state dispute settlement context. Second, the Article examines whether doctrinal tools used in state-to-state, trade-dispute settlement to …

Foxes At The Henhouse: Occupational Licensing Boards Up Close, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

The dark side of occupational licensing-its tendency to raise prices to consumers with dubious effects on service quality, its enormous payout to licensees, and its ability to shut many willing workers out of the workforce-has begun to receive significant attention. But little has been said about the legal institutions that create and administer this web of professional entry and practice rules. State-level licensing boards regulate nearly one-third of American workers, yet, until now, there has been no systematic attempt to understand who serves on these boards and how they operate. This Article undertakes an ambitious and comprehensive study of all …

Ceo Side Payments In Mergers And Acquisitions, Brian Broughman

Vanderbilt Law School Faculty Publications

In addition to golden parachutes, CEOs often negotiate for personal side payments in connection with the sale of their firms. Side payments differ from golden parachutes in that they are negotiated ex post in connection with a specific acquisition proposal, whereas golden parachutes are part of the executive’s employment agreement negotiated when she is hired. While side payments may benefit shareholders by countering managerial resistance to an efficient sale, they can also be used to redistribute merger proceeds to management. This Article highlights an overlooked distinction between pre-merger golden parachutes and merger side payments. Similar to a legislative rider attached …

Justice Scalia And Class Actions, Brian T. Fitzpatrick

Vanderbilt Law School Faculty Publications

I have been asked to write an essay on Justice Scalia's class action jurisprudence and although I suspect many readers will find this surprising because the Justice is so often linked to constitutional law, I actually think that his class action jurisprudence may be where his opinions leave some of the biggest marks. To be as blunt about it as the Justice himself would have been: for better or for worse, I am not sure any other Justice of the Supreme Court in American history has done more to hinder the class action lawsuit than Justice Scalia did.

The Justice …

The Failure Of Liability In Modern Markets, Yesha Yadav

Vanderbilt Law School Faculty Publications

In April 2015, the Department of Justice charged Navinder Sarao for his role in causing the Flash Crash-the near-1,000-point drop-and- rebound in the Dow Jones Index that roiled markets in May 2010. Sarao, a small-time British trader operating out of his parents' suburban basement, stood accused of putting together a string of illusory, fake orders that fooled markets enough to spark the largest single-day drop in the index's history. Commentators rightly contest whether a bit-player like Sarao could have unleashed a near-catastrophe on U.S. securities markets single-handedly. Yet, the complaint-and its causal account- point to a troubling dilemma facing scholars …

The New Antitrust Federalism, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

"Antitrust federalism, " or the rule that state regulation is not subject to federal antitrust law, does as much as-and perhaps more than-its constitutional cousin to insulate state regulation from wholesale invalidation by the federal government. For most of the last century, the Court quietly tinkered away with the contours of this federalism, struggling to draw a formal boundary between state action (immune from antitrust suits) and private cartels (not). But with the Court's last three antitrust cases, the tinkering has given way to reformation. What used to be a doctrine with deep roots in constitutional federalism is now a …

Antitrust Scrutiny For The Occupations: "North Carolina Dental" And Its Impact On U.S. Licensing Boards, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

The American system of occupational licensing is under attack. The current regime – which allows for almost total self-regulation – has weathered sustained criticism from consumer advocate groups, academics, politicians, and even the White House itself. But the recent U.S. Supreme Court opinion in North Carolina Board of Dental Examiners v. FTC,1 portends a sea change in how almost a third of American workers are regulated. The case has made it possible for aggrieved individuals and government enforcers to bring suits against most state licensing boards, challenging their restrictions as violating federal competition law. The case has prompted two responses: …

The Commensurability Myth In Antitrust, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

Modern antitrust law pursues a seemingly unitary goal: competition. In fact, competition—whether defined as a process or as a set of outcomes associated with competitive markets—is multifaceted. What are offered in antitrust cases as procompetitive and anticompetitive effects are typically qualitatively different, and trading them off is as much an exercise in judgment as mathematics. But despite the inevitability of value judgments in antitrust cases, courts have perpetuated a commensurability myth, claiming to evaluate “net” competitive effect as if the pros and cons of a restraint of trade are in the same unit of measure. The myth is attractive to …

Insider Trading In Derivatives Markets, Yesha Yadav

Vanderbilt Law School Faculty Publications

The prohibition against insider trading is becoming increasingly anachronistic in markets where derivatives like credit default swaps (CDS) operate. Lenders use these instruments to trade the credit risk of the loans they extend. By design, CDS appear to subvert insider trading laws, insofar as lenders rely on what looks like insider information to transfer or externalize the risk of a loan to another institution. At the same time, the harm caused by using insider information in CDS markets can depart radically from the harms envisioned under existing case law. In the traditional account of insider trading, shareholders systematically lose against …

The Influence Of The Areeda-Hovenkamp Treatise In The Lower Courts And What It Means For Institutional Reform In Antitrust, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

It is often pointed out that while the United States Supreme Court is the final arbiter in setting antitrust policy and promulgating antitrust rules, it does so too infrequently to be an efficient regulator. And since the antitrust agencies, the Federal Trade Commission ("FTC") and the Antitrust Division of the Department of Justice ("DOJ"), rarely issue guidelines, and even more rarely issue rules or regulations, very little antitrust law is handed down from on high. Instead, circuits split, and lower courts must muddle through new antitrust problems by finding analogies in technologically and socially obsolete precedents. When faced with this …

Cartels By Another Name: Should Licensed Occupations Face Antitrust Scrutiny?, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

It has been over a hundred years since George Bernard Shaw wrote that “[a]ll professions are a conspiracy against the laity.” Since then, the number of occupations and the percentage of workers subject to occupational licensing have exploded; nearly one-third of the U.S. workforce is now licensed, up from five percent in the 1950s. Through occupational licensing boards, states endow cosmetologists, veterinary doctors, medical doctors, and florists with the authority to decide who may practice their art. It cannot surprise when licensing boards comprised of competitors regulate in ways designed to raise their profits. The result for consumers is higher …

Delay And Its Benefits For Judicial Rulemaking Under Scientific Uncertainty, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

The Supreme Court’s increasing use of science and social science in its decision-making has a rationalizing effect on law that helps ensure that a rule will have its desired effect. But resting doctrine on the shifting sands of scientific and social scientific opinion endangers legal stability. The Court must be be responsive, but not reactive, to new scientific findings and theories, a difficult balance for lay justices to strike. This Article argues that the Court uses delay — defined as refusing to make or change a rule in light of new scientific arguments at time one, and then making or …

Interpreting Regulations, Kevin M. Stack

Vanderbilt Law School Faculty Publications

The age of statutes has given way to an era of regulations, but our jurisprudence has fallen behind. Despite the centrality of regulations to law, courts have no intelligible approach to regulatory interpretation. The neglect of regulatory interpretation is not only a shortcoming in interpretive theory but also a practical problem for administrative law. Canonical doctrines of administrative law ” Chevron, Seminole Rock/Auer, and Accardi ” involve interpreting regulations, and yet courts lack a consistent approach. This Article develops a method for interpreting regulations and, more generally, situates regulatory interpretation within debates over legal interpretation. It argues that a purposive …

Adversarial Economics In Antitrust Litigation: Losing Academic Consensus In The Battle Of The Experts, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

The adversarial presentation of expert scientific evidence tends to obscure academic consensus. In the context of litigation, small, marginal disagreements can be made to seem important and settled issues can be made to appear hopelessly deadlocked. This Article explores this dynamic's effect on antitrust litigation. Modem antitrust law is steeped in microeconomics, and suits rely heavily on economic expert witnesses. Indeed, expert testimony is often the "whole game" in an antitrust dispute because experts testify about dispositive issues such as the competitive effect of a business practice or the relevant boundaries of a market. And the Supreme Court has encouraged-even …

The Landscape Of Collective Management Schemes, Daniel J. Gervais

Vanderbilt Law School Faculty Publications

Collective management comes in many shapes and sizes. There is, however, an interesting definition proposed by WIPO: [T]he term “collective management” only refers to those forms of joint exercise of rights where there are truly “collectivized” aspects (such as tariffs, licensing conditions and distribution rules); where there is an organized community behind it; where the management is carried out on behalf of such a community; and where the organization serves collective objectives beyond merely carrying out the tasks of rights management . . . . In contrast, “rights clearance organizations” are those which perform joint exercise of rights without any …

Amicus Briefs And The Sherman Act: Why Antitrust Needs A New Deal, Rebecca Haw Allensworth

Vanderbilt Law School Faculty Publications

Power to interpret the Sherman Act, and thus power to make broad changes to antitrust policy, is currently vested in the Supreme Court. But reevaluation of existing competition rules requires economic evidence, which the Court cannot gather on its own, and technical economic savvy, which it lacks. To compensate for these deficiencies, the Court has turned to amicus briefs to supply the economic information and reasoning behind its recent changes to antitrust policy. This Article argues that such reliance on amicus briefs makes Supreme Court antitrust adjudication analogous to administrative notice-and-comment rulemaking. When the Court pays careful attention to economic …

The Trojan Horse Of Electric Power Transmission Line Siting Authority, Jim Rossi

Vanderbilt Law School Faculty Publications

Reform proposals pending in the U.S. Congress would increase federal and regional power to preempt states in siting transmission lines on order to allow the development of a high-votage transmission grid for renewable resources. This Article recognizes the inadequacy of existing state siting authority over transmission, but takes a skeptical approach to expanding federal siting jurisdiction as a solution to the problem and argues that the over-attention to transmission line siting authority is a bit of a Trojan horse in the climate change debate. Specifically, because it ignores the more difficult issues of how the costs and benefits of transmission …

Why The Filed Rate Doctrine Should Not Imply Blanket Judicial Deference To Regulatory Agencies, Jim Rossi

Vanderbilt Law School Faculty Publications

The filed rate doctrine is a venerable doctrine of public utility regulation. Federal courts applying the doctrine frequently defer to the regulatory agency and refuse to consider the merits of alleged violations of antitrust, tort or contract claims where resolution would require a departure from a filed rate. For over a century, the filed rate doctrine has served many important purposes. However, with increased attention to market-based approaches to electric power, natural gas and telecommunications regulation, there is reason to question both the doctrine's continued applicability and usefulness. This short essay argues that, as regulators implement competitive markets in utility …

Antitrust Process And Vertical Deference: Judicial Review Of State Regulatory Inaction, Jim Rossi

Vanderbilt Law School Faculty Publications

Courts struggle with the tension between national competition laws, on the one hand, and state and local regulation, on the other--especially as traditional governmental functions are privatized and as economic regulation advances beyond its traditional role to address market monitoring. This Article defends a process-based account of the antitrust state-action exception against alternative interpretations, such as the substantive efficiency-preemption approach that Richard Squire recently advanced, and it elaborates on what such a process-based account would entail for courts addressing the role of state economic regulation as a defense in antitrust cases. It recasts the debate as focused around delegation issues …

In Defense Of Regulatory Peer Review, J.B. Ruhl, James Salzman

Vanderbilt Law School Faculty Publications

The debate over application of peer review to the regulatory decisions of administrative agencies has heated up in the last year. Part of the larger and controversial sound science movement, mandating peer review for certain types of agency decisions has recently been championed by the White House and proponents in Congress. Indeed, this past January the Office of Management and Budget finalized guidelines requiring peer review for large classes of agency activities. These initiatives have not gone unchallenged, and a fierce debate has resulted between those who claim peer review will strengthen the scientific basis of agency decisions and those …

In Search Of A Unifying Principle For Article V Of The Uniform Trust Code: A Response To Professor Danforth, Jeffrey Schoenblum

Vanderbilt Law School Faculty Publications

Professor Robert Danforth's exploration of spendthrift trusts in Article Five of the UTC and the Future of Creditors 'Rights in Trusts is a superb piece of work. Professor Danforth analyzes with considerable acuity the ins and outs of the specific rights creditors and beneficiaries of trusts have under the Uniform Trust Code (UTC). His article clearly represents the most detailed analysis of the new Code's approach to spendthrift trusts. Professor Danforth is determined to establish that Article V is not as creditor-friendly as its critics claim.2 His article is essentially an apologia, coupled with some proposed modifications so as to …

Political Bargaining And Judicial Intervention In Constitutional And Antitrust Federalism, Jim Rossi

Vanderbilt Law School Faculty Publications

Federal judicial deference to state and local regulation is at the center of contentious debates regarding the implementation of competition policy. This Article invokes a political process bargaining framework to develop a principled approach for addressing the appropriate level of judicial intervention under the dormant commerce clause and state action immunity from antitrust enforcement. Using illustrations from network industries, it is argued that, at core, these two independent doctrines share a common concern with political (not only market) failure by focusing on the incentives faced by powerful stakeholders in state and local lawmaking. More important, they share the common purpose …

Moving Public Law Out Of The Deference Trap In Regulated Industries, Jim Rossi

Vanderbilt Law School Faculty Publications

This Article argues that public law has fallen into what I call a deference trap in addressing conflicts in deregulated industries, such as telecommunications and electric power. The deference trap describes a judicial reluctance to intervene in disputes involving political institutions, such as regulatory agencies and states. By reassessing the deference trap across the legal doctrines that are effecting emerging telecommunications and electric power markets, public law can deliver much more for deregulated markets. The deference trap poses a particular cost as markets are deregulated, one that may not have been present during previous regulatory eras in which public and …