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Full-Text Articles in Law
Structural Labor Rights, Hiba Hafiz
Structural Labor Rights, Hiba Hafiz
Michigan Law Review
American labor law was designed to ensure equal bargaining power between workers and employers. But workers’ collective power against increasingly dominant employers has disintegrated. With union density at an abysmal 6.2 percent in the private sector—a level unequaled since the Great Depression— the vast majority of workers depend only on individual negotiations with employers to lift stagnant wages and ensure upward economic mobility. But decentralized, individual bargaining is not enough. Economists and legal scholars increasingly agree that, absent regulation to protect workers’ collective rights, labor markets naturally strengthen employers’ bargaining power over workers. Existing labor and antitrust law have failed …
A Positive Dialectic: Beps And The United States, Reuven S. Avi-Yonah
A Positive Dialectic: Beps And The United States, Reuven S. Avi-Yonah
Articles
This essay addresses the interaction between the changes in the international tax regime identified by Mason and U.S. international tax policy. Specifically, I will argue that contrary to the general view, the United States actively implemented the Organisation for Economic Co-Operation and Development (OECD)/G20 Base Erosion and Profit Shifting (BEPS) recommendations through the Tax Cuts and Jobs Act of 2017 (TCJA). Moreover, the changes of the TCJA influenced the current OECD effort of BEPS 2.0. Thus, the current state of affairs can be characterized as a constructive dialogue: The OECD moves (BEPS 1), the United States responds (TCJA), the OECD …
Federal Forum Provisions And The Internal Affairs Doctrine, Dhruv Aggarwal, Albert H. Choi, Ofer Eldar
Federal Forum Provisions And The Internal Affairs Doctrine, Dhruv Aggarwal, Albert H. Choi, Ofer Eldar
Articles
A key question at the intersection of state and federal law is whether corpo- rations can use their charters or bylaws to restrict securities litigation to federal court. In December 2018, the Delaware Chancery Court answered this question in the negative in the landmark decision Sciabacucchi v. Salzberg. The court invalidated “federal forum provisions” (“FFPs”) that allow companies to select federal district courts as the exclusive venue for claims brought under the Secur- ities Act of 1933 (“1933 Act”). The decision held that the internal affairs doc- trine, which is the bedrock of U.S. corporate law, does not permit charter …
A New Urban Front For Shareholder Primacy, Anne Choike
A New Urban Front For Shareholder Primacy, Anne Choike
Michigan Business & Entrepreneurial Law Review
The hundredth anniversary of Dodge v. Ford marks an occasion to reflect upon what, if anything, has changed about shareholder primacy in a century. Seizing this opportunity, in this Article I analyze new local laws and ordinances that promote stakeholder governance and engagement, which seek to protect the interests of non-shareholder constituencies such as workers, the environment, and the communities in which corporations operate, among others. In doing so, I argue that such local laws meaningfully differ from traditional stakeholder protections, most significantly in the way that they weaken managerial accountability to shareholders. The emergence of these city laws challenges …
Golden Parachutes And The Limits Of Shareholder Voting, Albert H. Choi, Andrew C.W. Lund, Robert Schonlau
Golden Parachutes And The Limits Of Shareholder Voting, Albert H. Choi, Andrew C.W. Lund, Robert Schonlau
Articles
With the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, Congress attempted to constrain change-in-control payments (also known as “golden parachutes”) by giving shareholders the right to approve or disapprove such payments on an advisory basis. This Essay is the first to empirically examine the experience with the Say-on-Golden-Parachute (“SOGP”) vote. We find that unlike shareholder votes on proposed mergers, there is a significant amount of variation with respect to votes on golden parachutes. Notwithstanding the variation, however, the SOGP voting regime is likely ineffective in controlling golden parachute (“GP”) compensation. First, proxy advisors seem …
Fcpa Enforcement Against U.S. And Non-U.S. Companies, Michael S. Diamant, Christopher W.H. Sullivan, Jason H. Smith
Fcpa Enforcement Against U.S. And Non-U.S. Companies, Michael S. Diamant, Christopher W.H. Sullivan, Jason H. Smith
Michigan Business & Entrepreneurial Law Review
This Article explores how U.S. authorities have enforced the FCPA against non-U.S. companies and tests the perception that the FCPA disproportionately impacts U.S. businesses. After briefly discussing the FCPA, its enforcement, and its reach, this Article examines corporate FCPA enforcement activity since the statute’s enactment in 1977. It finds that foreign firms have actually fared worse under the FCPA despite the fact that DOJ and the SEC have brought more enforcement actions against domestic companies in absolute terms. The average cost of resolving an FCPA enforcement action to non-U.S. corporations of resolving an FCPA enforcement action has been more than …
The Games They Will Play: Tax Games, Roadblocks, And Glitches Under The 2017 Tax Legislation, David Kamin, David Gamage, Ari Glogower, Rebecca Kysar, Darien Shanske, Reuven S. Avi-Yonah, Lily Batchelder, J. Clifton Fleming, Daniel Hemel, Mitchell Kane, David Miller, Daniel Shaviro, Manoj Viswanathan
The Games They Will Play: Tax Games, Roadblocks, And Glitches Under The 2017 Tax Legislation, David Kamin, David Gamage, Ari Glogower, Rebecca Kysar, Darien Shanske, Reuven S. Avi-Yonah, Lily Batchelder, J. Clifton Fleming, Daniel Hemel, Mitchell Kane, David Miller, Daniel Shaviro, Manoj Viswanathan
Articles
The 2017 tax legislation brought sweeping changes to the rules for taxing individuals and business, the deductibility of state and local taxes, and the international tax regime. The complex legislation was drafted and passed through a rushed and secretive process intended to limit public comment on one of the most consequential pieces of domestic policy enacted in recent history. This Article is an effort to supply the analysis and deliberation that should have accompanied the bill’s consideration and passage, and describes key problem areas in the new legislation. Many of the new changes fundamentally undermine the integrity of the tax …
The Suitability Of South Africa's Business Rescue Procedure In The Reorganization Of Small-To-Medium-Sized Enterprises: Lessons From Chapter 11 Of The United States Bankruptcy Code., Mikovhe Maphiri
Michigan Business & Entrepreneurial Law Review
South African small- to medium-sized enterprises (“SMEs”) are the bread and butter of our economy. Providing much-needed employment and developing the skills of historically disadvantaged persons formally and informally are some of the most significant benefits of SMEs in a developing country such as South Africa. However, despite these significant contributions to the socioeconomic development of the country, SMEs generally have the lowest survival rates in the world as compared to large enterprises globally, resulting in high rates of business failure and the loss of jobs which these entities create. The Companies Act of 2008 replaces the previous judicial management …
Does The United States Still Care About Complying With Its Wto Obligations?, Reuven S. Avi-Yonah
Does The United States Still Care About Complying With Its Wto Obligations?, Reuven S. Avi-Yonah
Articles
The Tax Cuts and Jobs Act of 2017 (“TCJA”) contains a provision that on its face appears to be a blatant violation of the WTO’s Subsidies and Countervailing Measures (SCM) rules. New IRC section 250 applies a reduced 13.125% tax rate to “foreign derived intangible income” (FDII), which is defined as income derived in connection with (1) property that is sold by the taxpayer to any foreign person for a foreign use or (2) services to any foreign person or with respect to foreign property. In other words, this category comprises exports for property and services, including royalties from the …
Humanizing The Corporation While Dehumanizing The Individual: The Misuse Of Deferred-Prosecution Agreements In The United States, Andrea Amulic
Humanizing The Corporation While Dehumanizing The Individual: The Misuse Of Deferred-Prosecution Agreements In The United States, Andrea Amulic
Michigan Law Review
American prosecutors routinely offer deferred-prosecution and nonprosecution agreements to corporate defendants, but not to noncorporate defendants. The drafters of the Speedy Trial Act expressly contemplated such agreements, as originally developed for use in cases involving low-level, nonviolent, noncorporate defendants. This Note posits that the almost exclusive use of deferrals in corporate cases is inconsistent with the goal that these agreements initially sought to serve. The Note further argues that this exclusivity can be attributed to prosecutors’ tendency to only consider collateral consequences in corporate cases and not in noncorporate cases. Ultimately, this Note recommends that prosecutors evaluate collateral fallout when …
Private Enforcement Of Company Law And Securities Regulation In Korea, Hwa-Jin Kim
Private Enforcement Of Company Law And Securities Regulation In Korea, Hwa-Jin Kim
Book Chapters
This chapter offers a brief overview of the private enforcement of corporate law and securities regulation in Korea, with particular reference to the current legislative efforts in the Korean National Assembly and recent court cases. This chapter also talks about Korea’s ill-fated and misguided adoption of the fraud-on-the-market theory in securities fraud litigation.
Carrot Or Stick? The Shift From Voluntary To Mandatory Disclosure Of Risk Factors, Karen K. Nelson, Adam C. Pritchard
Carrot Or Stick? The Shift From Voluntary To Mandatory Disclosure Of Risk Factors, Karen K. Nelson, Adam C. Pritchard
Articles
This study investigates risk factor disclosures, examining both the voluntary, incentive-based disclosure regime provided by the safe harbor provision of the Private Securities Litigation Reform Act as well as the SEC's subsequent mandate of these disclosures. Firms subject to greater litigation risk disclose more risk factors, update the language more from year to year, and use more readable language than firms with lower litigation risk. These differences in the quality of disclosure are pronounced in the voluntary disclosure regime, but converge following the SEC mandate as low-risk firms improved the quality of their risk factor disclosures. Consistent with these findings, …
To Touch And Concern The United States With Sufficient Force: How American Due Process And Choice Of Law Cases Inform The Reach Of The Alien Tort Statute After Kiobel, Karima Tawfik
Michigan Journal of International Law
This Note explores the post-Kiobel ATS cases and argues that the Fourth Circuit’s approach to considering claims that manifest a close connection to the United States as potentially entitling the plaintiff to relief under the ATS is preferable to approaches that categorically bar claims when the alleged conduct has occurred abroad. Part I describes the Kiobel decision in more depth and the subsequent ATS case law to outline the contours of recent circuit cases. Part II demonstrates how domestic personal jurisdiction and choice of law principles weigh in favor of a more expansive reading of the ATS, as adopted …
More Than Just A Potted Plant: A Court's Authority To Review Deferred Prosecution Agreements Under The Speedy Trial Act And Under Its Inherent Supervisory Power, Mary Miller
Michigan Law Review
In the last decade, the Department of Justice has increasingly relied on pretrial diversion agreements as a means of resolving corporate criminal cases short of prosecution. These pretrial diversion agreements—non-prosecution and deferred prosecution agreements—include substantive terms that a company must abide by for the duration of the agreement in order to avoid prosecution. When entering a deferred prosecution agreement, the Department of Justice files charges against the defendant corporation as well as an agreement outlining the variety of terms with which the company must comply. This delay in prosecution is permitted under the Speedy Trial Act, which provides an exception …
An Administrative Meter Maid: Using Inter Partes Review And Post-Grant Review To Curb Exclusivity Parking Via The "Failure To Market" Provision Of The Hatch-Waxman Act, Brian T. Apel
Michigan Law Review
Congress created the unique Hatch-Waxman framework in 1984 to increase the availability of low-cost generic drugs while preserving patent incentives for new drug development. The Hatch-Waxman Act rewards generic drug companies that successfully challenge a pharmaceutical patent: 180 days of market exclusivity before any other generic firm can enter the market. When a generic firm obtains this reward, sometimes drug developers agree to pay generic firms to delay entering the market. These pay-for-delay agreements give rise to exclusivity parking and run counter to congressional intent by delaying full generic drug competition. The Medicare Prescription Drug, Improvement, and Modernization Act created …
Lessons From Institutional Shareholder Services: Governing Benefit Corporations' Third-Party Standard, Tammi S. Etheridge
Lessons From Institutional Shareholder Services: Governing Benefit Corporations' Third-Party Standard, Tammi S. Etheridge
Michigan Business & Entrepreneurial Law Review
Almost one hundred years ago, Henry Ford, as CEO of the Ford Motor Company, announced a plan to cease payment of special dividends to shareholders. Instead, the company would reinvest its profits to employ more workers and build more factories. Investing in new workers and factories would cut the cost of cars and make them affordable to more people. Ford publicly declared that his “ambition [was] to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting …
Cooperative Mineral Interest Development In The Lone Star State: It's Time To Mess With Texas, Matthew K. Trawick
Cooperative Mineral Interest Development In The Lone Star State: It's Time To Mess With Texas, Matthew K. Trawick
Michigan Journal of Environmental & Administrative Law
Since the early discoveries of the Spindletop, King Ranch, and East Texas oil fields, the oil and gas industry has dominated the Texas economy. The industry has also played an important role in shaping state politics and culture. The oil boom of the early 1900s created thousands of jobs for ordinary workers and immense wealth for a select few. Early Texas oil barons made headlines because of their lavish lifestyles and often extreme political beliefs. Legendary wildcatter H.L. Hunt typified this oil-fueled exuberance. Hunt became one of the eight richest individuals in the United States after securing mineral rights to …
Eliminating Arbitrary Age Descrimination In 401(K) And Pension Plan Eligibility Requirements: A Simple Fix To Encourage Younger Workers To Save For Retirement, Andrew J. Clopton
Eliminating Arbitrary Age Descrimination In 401(K) And Pension Plan Eligibility Requirements: A Simple Fix To Encourage Younger Workers To Save For Retirement, Andrew J. Clopton
University of Michigan Journal of Law Reform Caveat
Current federal law allows companies to exclude their youngest workers from participating in 401(k) and other pension plans. Public policy should encourage young workers to contribute to retirement as early as practicable, rather than impose obstacles to saving. Workers who begin saving even a few years earlier improve their retirement security and reduce the likelihood they will be dependent on the government later in life. While “age discrimination” is conventionally thought of as the mistreatment of older workers, this concept applies equally to employees who are differentiated based solely on their young age. Thus, Congress should amend the Internal Revenue …
Campbell At 21/Sony At 31, Jessica D. Litman
Campbell At 21/Sony At 31, Jessica D. Litman
Articles
When copyright lawyers gather to discuss fair use, the most common refrain is its alarming expansion. Their distress about fair use’s enlarged footprint seems completely untethered from any appreciation of the remarkable increase in exclusive copyright rights. In the nearly forty years since Congress enacted the 1976 copyright act, the rights of copyright owners have expanded markedly. Copyright owners’ demands for further expansion continue unabated. Meanwhile, they raise strident objections to proposals to add new privileges and exceptions to the statute to shelter non-infringing uses that might be implicated by their expanded rights. Copyright owners have used the resulting uncertainty …
Fighting Foreign-Corporate Political Access: Applying Corporate Veil-Piercing Doctrine To Domestic-Subsidiary Contributions, Ryan Rott
Michigan Law Review
Campaign finance regulations limit speech. The laws preclude foreign nationals, including foreign corporations, from participating in U.S. politics via campaign contributions. The unusual characteristics of corporations, however, may allow foreign corporations to exploit a loophole in the regulatory regime. A foreign corporation may contribute to political campaigns by acquiring a domestic subsidiary and dominating it. This Note addresses how these unusual corporate behaviors enable foreign corporations to illegally corrupt the political process. This Note concludes that to close the loophole without violating the free speech rights of domestic subsidiaries, Congress should enact legislation which would apply corporate veil-piercing theory to …
Enforceability Of Mandatory Arbitration Clauses For Shareholder-Corporation Disputes, Garry D. Hartlieb
Enforceability Of Mandatory Arbitration Clauses For Shareholder-Corporation Disputes, Garry D. Hartlieb
Michigan Business & Entrepreneurial Law Review
Investor litigation is an increasingly vexatious field of law. Nearly every time a significant change of control or corporate ownership occurs, plaintiffs’ attorneys file standardized complaints to set in motion class action suits. Ultimately, the settlements shareholders receive fail to achieve the practical effects that parties on both sides desire. Shareholders may receive pennies on the dollar of what they allege was lost by corporate wrongdoing, and, in some cases, shareholders may not receive monetary recovery as the settlement requires only that the corporation to make changes to its governing documents. These suits distract directors and management from the core …
Protecting Whistleblower Protections In The Dodd-Frank Act, Samuel C. Leifer
Protecting Whistleblower Protections In The Dodd-Frank Act, Samuel C. Leifer
Michigan Law Review
In 2008, the United States fell into its worst economic recession in over seventy years. In response, Congress enacted the near-comprehensive Dodd–Frank Wall Street Reform and Consumer Protection Act. Section 922 of Dodd–Frank, in particular, includes specific provisions designed to incentivize and protect corporate whistleblowers. These provisions demonstrated Congress’s belief that a comprehensive and robust whistleblower protection scheme was essential to preventing many of the abuses that caused the financial crisis. Unfortunately, this section’s inconsistent language has produced conflicting decisions within the federal judiciary. In accordance with the Securities and Exchange Commission (“SEC”)’s own reading of Section 922, several district …
Back From The Dead: Reviving Transfer Pricing Enforcement, Reuven S. Avi-Yonah
Back From The Dead: Reviving Transfer Pricing Enforcement, Reuven S. Avi-Yonah
Articles
The OECD has recently come to recognize that the transfer pricing system does not work as intended. In its report on base erosion and profit shifting 2013 WTD 140-17: Other Administrative Documents, the OECD recognizes that BEPS results in revenue losses that affect all states, especially poorer ones; that systematic tax avoidance by the richest and most powerful companies in the world undermines the general legitimacy of taxation; that it gives MNEs significant competitive advantages over purely domestic firms, resulting in inefficient allocations of investment and major distortions to economic activity; and that it skews the decisions of the MNEs …
The Jobs Act Trojan Horse: A Gift To Startups With Something Else Inside?, Erik Gordon
The Jobs Act Trojan Horse: A Gift To Startups With Something Else Inside?, Erik Gordon
Michigan Business & Entrepreneurial Law Review
This Comment will analyze which provisions of the Act are consistent with the purpose that sponsors would have the public believe, that emphasized by the name “JOBS Act,” and distinguish them from those provisions that serve as menacing soldiers hidden under the cover of a name that diverts attention from the Act’s true purpose.
From Revolutionary To Palace Guard: The Role And Requirements Of Intermediaries Under Proposed Regulation Crowdfunding, Andrew D. Stephenson, Brian R. Knight, Matthew Bahleda
From Revolutionary To Palace Guard: The Role And Requirements Of Intermediaries Under Proposed Regulation Crowdfunding, Andrew D. Stephenson, Brian R. Knight, Matthew Bahleda
Michigan Business & Entrepreneurial Law Review
Intermediaries in securities crowdfunding face significant requirements as a result of the statutory mandates of Title III of the JOBS Act. The SEC, in its proposed rules, provided structure to these requirements. The proposed rules would create strict requirements for intermediaries regarding their relationships with investors and how they undertake crowdfunding transactions under Section 4(a)(6) of the Securities Act. The proposed rules would also create and establish the guidelines for funding portals, a new type of limited purpose securities broker. While some commentators decry the SEC for placing undue burdens and legal liabilities on intermediaries in securities crowdfunding, the SEC …
Toward Greater Guidance: Reforming The Definitions Of The Foreign Corrupt Practices Act, Matthew W. Muma
Toward Greater Guidance: Reforming The Definitions Of The Foreign Corrupt Practices Act, Matthew W. Muma
Michigan Law Review
The Foreign Corrupt Practices Act of 1977 is the cornerstone of the United States’ efforts to combat the involvement of U.S. companies and individuals in corruption abroad. Enforced by both the Securities and Exchange Commission (“SEC”) and the Department of Justice (“DOJ”), the Act targets companies and individuals that pay bribes to “foreign officials,” a nebulous category of persons that includes everyone from foreign cabinet members to janitors at companies only partially owned by a foreign state. After only sporadic enforcement in the early years of the Act’s existence, the SEC and DOJ now bring many cases annually. This increased …
Recent Changes In U.S. And U.K. Overseas Anti-Corruption Enforcement Under The Fcpa And The U.K. Bribery Law: Private Equity Compliance, Isaac A. Binkovitz
Recent Changes In U.S. And U.K. Overseas Anti-Corruption Enforcement Under The Fcpa And The U.K. Bribery Law: Private Equity Compliance, Isaac A. Binkovitz
Michigan Business & Entrepreneurial Law Review
The following discussion provides a preliminary guide for those tasked with steering private equity firms through the shifting obstacle course of overseas anti-corruption compliance. Section I briefly reviews the centrality of overseas anti-corruption enforcement and its role in creating a more hospitable business climate in emerging markets. Section I also examines the American and British enforcement regimes in general before analyzing the most recent changes–specifically, changes as to the scope of liability and expansion of their jurisdiction. This section is designed to help determine whether investments or acquisitions fall within the purview of either enforcement regime. Section II discusses various …
Revisiting 'Truth In Securities Revisited': Abolishing Ipos And Harnessing Private Markets In The Public Good, Adam C. Pritchard
Revisiting 'Truth In Securities Revisited': Abolishing Ipos And Harnessing Private Markets In The Public Good, Adam C. Pritchard
Articles
My thesis is that the transition between private- and public-company status could be less bumpy if we unify the public-private dividing line under the Securities Act and Exchange Act. The insight builds on Cohen's thought experiment where Congress first enacted the Exchange Act. My proposed public-private standard would take the company-registration model to its logical conclusion. The customary path to public-company status is through an IPO, typically with simultaneous listing of the shares on an exchange. There is nothing about public offerings, however, that makes them inherently antecedent to public-company status. What if companies became public, with required periodic disclosures …
Addressing Gaps In The Dodd-Frank Act: Directors' Risk Management Oversight Obligations, Kristin N. Johnson
Addressing Gaps In The Dodd-Frank Act: Directors' Risk Management Oversight Obligations, Kristin N. Johnson
University of Michigan Journal of Law Reform
In the years leading to the recent financial crisis, finance theorists introduced innovative methods, including quantitative financial models and derivative instruments, to measure and mitigate risk exposure. During the financial crisis, financial institutions facing insolvency revealed pervasive misunderstandings, misapplications, and mistaken assumptions regarding these complex risk management methods. As losses in financial markets escalated and caused liquidity and solvency crises, commentators sharply criticized directors and executives at large financial institutions for their risk management decisions. By adopting the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress directly and indirectly addresses certain risk management oversight concerns at large, complex financial …
Money On The Table: Why The U.S. Should Tax Inbound Capital Gains, Reuven S. Avi-Yonah
Money On The Table: Why The U.S. Should Tax Inbound Capital Gains, Reuven S. Avi-Yonah
Articles
On March 21, 2011, AT&T announced that it will buy T-Mobile from Deutsche Telekom for $39 billion. This transaction will be tax free to Deutsche Telekom (DT) not because it qualifies as a reorganization, but because DT is a foreign corporation and capital gains of nonresidents are generally not subject to U.S. taxation because they are deemed to be foreign source. Also, DT is protected from taxation by article 13(5) of the Germany-U.S. tax treaty, which provides that capital gains are generally taxable only by the country of residence.