Business Organizations Law Commons^™

The Arbitration Web Ensnaring Every Consumer: The Next Evolution In Corporate Strategy To Compel Arbitration, Michael Conklin

Maine Law Review

This first-of-its-kind Article uses a novel hypothetical to explore the expanding role of compelled arbitration. The hypothetical involves numerous large corporations agreeing to cross-reference each other in their arbitration agreements, thus attempting to create a massive arbitration web ensnaring nearly every American and allowing corporations to compel arbitration against parties with whom they never interacted. This Article presents the case that courts might enforce such a scheme based on the judicial trend toward ever-expanding compelled arbitration jurisprudence, the docket-clearing incentives faced by judges, existing case law allowing some non-signatories to enforce arbitration agreements, the strong assumption in favor of arbitration, …

How Corporate Individualism Challenges Modern Tort Theory, Daniel Harris

University of Miami Business Law Review

According to the modern tort theory, that dominates in the legal academy, deep pocket entities that profit from facilitating harmful activity must compensate those foreseeably injured by that activity. The rationale is that allowing enterprises to externalize the costs they impose on others encourages excessively risky behavior. Therefore, cost internalization must be mandated to achieve the twin goals of tort law: compensation of tort victims and deterrence of potentially harmful conduct.

The thesis of this Article is that the academic model is misleading and incomplete. The concerns of the tort system are not limited to compensation and deterrence. Our legal …

Single-Owner Sociedades Within The Corporate Landscape Of Latin America, Nicolás José Muñiz Arias

University of Miami Inter-American Law Review

The concept of a sociedad in Latin America has undergone profound changes throughout this century. Following the example set by the French Code de commerce of 1807, the sociedad was initially viewed as a contractual arrangement between two or more partners who make contributions to a business for purposes of sharing in the resulting profit or loss, wherein a plurality of partners was an intrinsic component. Nonetheless, the notion of a sociedad has evolved to entail the establishment of a separate legal entity, making the plurality of partners requirement increasingly obsolete for its formation and/or operation.

This Article describes the …

Shareholder Expression In A Time Of Heightened Political Tension, Aaron A. Dhir

Seattle University Law Review

In this article, I provide context for my forthcoming research project on shareholder proposals and racial equity audits. Since the murder of George Floyd in May of 2020, progressive shareholder actors have increasingly used the proposal mechanism to advance diversity, equity, inclusion, and justice-related goals. These proposals have frequently gone beyond requesting the usual corporate fare of diversity trainings, intersectionality workshops, affinity groups, etc. Instead, a more ambitious type of proposal asks corporate America to conduct racial equity audits, defined as “an independent, objective and holistic analysis of a company’s policies, practices, products, services and efforts to combat systemic racism …

Artificial Fiduciaries, Zhaoyi Li

Washington and Lee Law Review

The rapid development of technology in the last decade has affected all levels of society. Corporate governance has not been immune to these changes. In the future, Artificial Intelligence (“AI”) fiduciaries may be technologically capable of serving as independent corporate directors. This could be an effective way to address the challenge of the absence of truly independent directors in the traditional governance framework. Artificial fiduciaries could also offer a way to mitigate agency costs and improve overall corporate governance. However, traditional corporate law lacks solutions for coping with the integration of AI into corporate governance.

Currently, there is little scholarship …

Unfairly Interchangeable: A Guide For Litigating The Alter Ego Doctrine And Proposal To Codify The Doctrine In California, Nazgole Hashemi

The Journal of Business, Entrepreneurship & the Law

This article details various aspects of the “alter ego” doctrine to promote a better and more thorough understanding amongst practitioners. Part II details the substantive aspects of the doctrine, i.e., the two prongs—unity of interest and ownership and whether a corporation’s separate existence would promote injustice or perpetuate fraud. It also analyzes whether and when reverse piercing is recognized in California. Part III describes the procedural aspects of the doctrine, including how and when to pursue it in litigation, while also providing practical litigation tips. Part IV sets forth the author’s proposal for the California legislature to codify the doctrine …

Esg, Sustainability Disclosure, And Institutional Investor Stewardship, Giovanni Strampelli

Washington and Lee Law Review Online

This Article sheds new light on the link between sustainability disclosure and institutional investors’ stewardship activities aimed at promoting improvements in the ESG performance of investee companies. On the one hand, sustainability disclosure is one of the information elements that may be relevant to institutional investors’ stewardship activities. On the other hand, improving the quality of sustainability reports provided by investee companies is often the ultimate goal of investor engagement initiatives. The role of climate and social disclosure is problematic from both perspectives. First, institutional investors, especially those with broadly diversified portfolios, are unable to use sustainability information directly and …

Startup Biases, Jennifer S. Fan

Articles

This Article provides an original descriptive account of bias in the startup context and explains why litigation is eschewed and what happens when it is used as a mechanism to combat bias in the venture capital ecosystem. Further, this Article identifies two particular phenomena in the startup context that exacerbate gender and racial bias. First, homophily—the idea that like attracts like—abounds and has been part of the DNA of venture capital since its inception. The thick networks that developed as venture capital made its way from the East Coast to the West Coast were limited to an elite group that …

Zooming In: Analyzing Annual Meeting Format Changes Amidst A Global Pandemic, Mark T. Wilhelm, Danielle Clifford

Washington and Lee Law Review Online

Beginning in March of 2020, public companies in the United States were forced to take unprecedented measures to observe corporate formalities while following the government-mandated health and safety measures resulting from the COVID-19 pandemic. Those measures made in-person activities and meetings either incredibly challenging or, in certain jurisdictions, illegal. Because “proxy season,” the time when public companies typically hold their annual meetings of stockholders, followed shortly after the mass implementation of COVID-19 lockdowns and quarantines, public companies that had historically held these meetings in-person were left scrambling to find an alternative means to meet. Nearly overnight, the pandemic caused an …

International Law In The Boardroom, Kishanthi Parella

Scholarly Articles

Conventional wisdom expects that international law will proceed through a “state pathway” before regulating corporations: it binds national governments that then bind corporations. But recent corporate practices confound this story. American corporations complied with international laws even when the state pathway broke down. This unexpected compliance leads to three questions: How did corporations comply? Why did they do so? Who enforced international law? These questions are important for two reasons. First, many international laws depend on corporate cooperation in order to succeed. Second, the state pathway is not robust, then or now. It is therefore vital to identify alternatives to …

#Metoo And The Corporation In Popular Culture, Brenda Cossman

Seattle University Law Review

#MeToo’s initial virtual explosion in the fall of 2017 was very much about Hollywood, with famous actresses speaking out against famous producers, media moguls and celebrities, exposing the ubiquity of sexual harassment and sexual violence in and around the entertainment industry. Since then, #MeToo has made its way into Hollywood representations without much irony. Films and television shows have explicitly taken up the #MeToo themes, exploring issues of sexual harassment and violence and its afterlives. Many television shows, from the relaunched version of Murphy Brown to Brooklyn Nine-Nine to The Good Fight have incorporated #MeToo themes into episodes exploring the …

Restraining The Heartless: Erosion Of Corporate Liability Under The Alien Tort Statute And The Path Forward For Victims Seeking Redress, Alexa M. Duffy

American University Law Review

The Alien Tort Statute (“ATS”) is a U.S. federal law dating back to 1789 that allows non-U.S. citizens to file civil lawsuits in federal courts against individuals or entities for alleged international law violations. While originally interpreted to address piracy and the safeguarding of foreign diplomats, the ATS gained new relevance in the late twentieth century when it was used to hold individuals and corporations accountable for human rights abuses committed abroad, making it a critical tool in seeking justice for human rights violations.

This Comment argues that there is no longer a realistic federal forum for ATS suits against …

A Contractual Relationship With Environmental Justice, Seema Kakade

American University Law Review

While corporations have long grappled with environmental issues, environmental justice is different. Corporations regularly manage compliance with environmental permits over a polluting facility’s long lifespan. Justice issues, however, are a fast-growing space for corporations as they wrestle with employee, government, customer, and public demands to step up for the communities that are directly impacted by the pollution their facilities produce. This Article explores the relationship between corporate polluters and impacted communities, with a focus on private-ordering tools like contracts. Such a focus enriches environmental justice law’s traditional focus on government decisionmakers, moving instead to corporate decision-making about where, how, and …

Penyampaian Informasi Mengenai Pemilik Manfaat Dari Korporasi Sebagai Upaya Pencegahan Tindak Pidana Pencucian Uang Dan Pendanaan Terorisme, Trisha Dayanara

"Dharmasisya” Jurnal Program Magister Hukum FHUI

Indonesia’s government makes some efforts to be FATF’s member in order to be more accepted in international business. Therefore, Indonesia should comply to The FATF Recommendations, international standards on combating money laundering, and the financing of terrorism and proliferation. One of the government’s focus is on Recommendation 24 and 25 about Transparency and Beneficial Ownership of Legal Persons and Legal Arrangements. The implementation of Recommendation 24 and 25 can be seen at some Indonesia’s regulations. This article’s aim is to explain the regulations about transparency of beneficial ownership of corporation, using normative legal research by literature review. The conclusion of …

Penyampaian Informasi Mengenai Pemilik Manfaat Dari Korporasi Sebagai Upaya Pencegahan Tindak Pidana Pencucian Uang Dan Pendanaan Terorisme, Trisha Dayanara

"Dharmasisya” Jurnal Program Magister Hukum FHUI

Indonesia’s government makes some efforts to be FATF’s member in order to be more accepted in international business. Therefore, Indonesia should comply to The FATF Recommendations, international standards on combating money laundering, and the financing of terrorism and proliferation. One of the government’s focus is on Recommendation 24 and 25 about Transparency and Beneficial Ownership of Legal Persons and Legal Arrangements. The implementation of Recommendation 24 and 25 can be seen at some Indonesia’s regulations. This article’s aim is to explain the regulations about transparency of beneficial ownership of corporation, using normative legal research by literature review. The conclusion of …

Caremark's Butterfly Effect, Angela N. Aneiros, Karen E. Woody

American University Law Review

In 1996, the Delaware Court of Chancery detailed the minimum standard for corporate boards of directors (“board”) with regard to corporate compliance programs and monitoring protocols. The landmark Caremark decision held that directors would not face liability for a breach of fiduciary duties unless they failed to implement a system of controls and compliance, or knowingly failed to monitor that system. In order to bring a successful Caremark claim, plaintiffs must prove that the board operated in bad faith by failing to exercise oversight in a sustained or systemic way. The Delaware Court of Chancery opinion noted that the theory …

Locking Down 'Reasonable' Cybersecurity Duty, Charlotte A. Tschider

Faculty Publications & Other Works

Following a data breach or other cyberattack, the concept of “reasonable” duty, broadly construed, is essential to a plaintiff’s potential causes of action, such as negligence, negligence per se, breach of contract, breach of fiduciary duty, and any number of statutory claims. The impact of an organization’s discretionary choices, such as whether to take specific security steps for a system, may result in potential risk to an individual, another organization, or the organization itself. Although organizations regularly engage in cybersecurity risk analysis, they may not understand what practices will be considered reasonable in a court of law and are therefore …

Corporate Criminal Liability: End It, Don’T Mend It, Stephen F. Smith

Journal Articles

From the Author

In this Article, I make the case in favor of abolishing corporate criminal liability. Criminal liability for corporations is peculiar, given that “entity liability” does not otherwise exist in criminal law. The legal system appropriately deals with law-breaking within other entities (such as police departments and labor unions) solely through criminal prosecutions of the individual offenders and civil suits against the entities within which criminality occurred. Corporate criminal liability is another example of overcriminalization, in which criminal law is unjustifiably used to address problems better dealt with through other means. Finally, corporate criminal liability is fundamentally incompatible …

Shareholder Wealth Maximization: A Schelling Point, Martin Edwards

St. John's Law Review

(Excerpt)

Imagine a reality television game show where two contestants begin the game in two different places in New York City. The object of the game is for the two contestants to find each other, but they do not know anything about each other and they have no way of communicating. If they succeed, both contestants win a prize. If they fail, they get nothing. With no ability to explicitly bargain over the meeting, the parties have to make an educated guess about what the other person is most likely to do. Most people, confronted with this sort of tacit …

Sacred Corporate Law, Giancarlo Anello, Sergio Alberto Gramitto Ricci, Mohamed Arafa

Faculty Works

This Article investigates the sacred origins of the corporate form. It sheds light on the sacred rituals performed to establish Ancient Roman cities as legal entities. It discusses the role of the Roman Catholic Church in developing the corporate form and in giving birth to a systemized set of rules regulating corporations, which we commonly call corporate law. It analyzes the limitations to the use of the corporate form in Islamic law as well as the streams of Islamic law jurisprudence that recognize legal capacity to specific entities with religious, social, or charitable purposes. It surveys the characteristics of two …

The Corporate Contract And The Internal Affairs Doctrine, Mohsen Manesh

American University Law Review

In the landmark case Salzberg v. Sciabacucchi, the Delaware Supreme Court upheld the validity of a corporate charter provision restricting the rights of shareholders to bring federal securities law claims. Although rights arising under federal securities law lie beyond the internal affairs doctrine, which has traditionally defined the boundaries of state corporate law, the Salzberg court ruled that such rights may be regulated by the “corporate contract,” created by state corporate law and comprised of a corporation’s charter and bylaws. Embracing contractarian precepts, the Salzberg court rejected the lower Chancery Court’s concession theory of the corporate contract as inextricably bound …

Problems Of Liability Of Controllers Of Corporations To Creditors In Uzbek Law, Utkirbek Kholmirzaev

Review of law sciences

This article discusses the distribution of liability risks of shareholderss and other controlling persons on corporate liabilities. Given the analysis of ex post and ex ante model of control over distribution of risks of civil turnover participants in common law and continental legal traditions. Also, considered problems of shareholders' liability on obligations of corporations in the Republic of Uzbekistan. A shareholder shall be held liable on a subsidiary basis for the obligations of the legal entity in case of insolvency, as a result of the member's wrongful acts. However, some mechanisms of such liability do not allow to resolve the …

The Lost Lessons Of Shareholder Derivative Suits, Jessica Erickson

Washington and Lee Law Review

Merger litigation has changed dramatically. Today, nearly every announcement of a significant merger sparks litigation, and these cases look quite different from merger cases in the past. These cases are now filed primarily outside of Delaware, they typically settle without shareholders receiving any financial consideration, and corporate boards now have far more ex ante power to shape these cases. Although these changes are often heralded as unprecedented, they are not. Over the past several decades, derivative suits experienced many of the same changes. This Article explores the similarities between the recent changes in merger litigation and the longer history of …

Artificial Entities With Natural Rights: Pursuing Profits At The Expense Of Human Capital, Loren M. Findlay

Washington and Lee Journal of Civil Rights and Social Justice

This Note explores the legal and constitutional rights granted to corporations and highlights how these corporate benefits are often at the expense of individuals. Over the past century, the corporation has evolved, taking on human-like characteristics. While many statutes and the Constitution use the word “person,” courts have inconsistently interpreted the definition of “person” in determining when it expands to corporations. In courts’ ad hoc analysis and interpretation, individuals get the metaphorical short-end of the stick.

The First Amendment of the Constitution was interpreted by the U.S. Supreme Court to afford the right of free speech to corporations in the …

Ministries Of Truth: Free Speech And The Tech Giants, Clayton Calvin

The Journal of Business, Entrepreneurship & the Law

As the tech giants’ influence has grown, they have increasingly become arbiters of truth. This comment explores three methods for lessening their authority over digital speech. Antitrust, adjustment of the companies’ “neutral platform” status, and even creative use of First Amendment could each serve its role. At the same time, the First Amendment rights of the companies themselves pose a barrier, justifiably, to each method. To remain true to its founding ideals, America must lessen this private grip on civic discourse without expanding the government’s dominion over it.

Gender Diversity In Corporate Boardrooms: Do Equal Seats Mean Equal Voices?, Nicolena Farias-Eisner

The Journal of Business, Entrepreneurship & the Law

This paper will first trace the history and evolution of gender diversity on boards. It then will assess why the growing trend toward greater gender diversity has become prevalent in recent years and the effects of this trend. Third, the paper will address the social impacts that increasing gender diversity on boards will place on companies. Lastly, this paper will conclude by discussing and suggesting policy implications that would enhance boardroom gender diversity and ultimately achieve gender equality.

Notice Risk And Registered Agency, Andrew K. Jennings

Faculty Articles

To sue a firm is to sue an artificial person, making the most reliable service method—physically handing papers to the defendant—unusable. This problem illustrates notice risk: if a plaintiff’s service obligations are loose, it is advantaged (because the defendant may never receive notice), whereas if they are strict, the defendant is advantaged (because the plaintiff may struggle to effect service). For litigation involving corporate defendants, civil procedure and corporate law mitigate this problem through a technology for managing notice risk: registered agency. A firm using this technology, because it cannot be served directly, appoints an agent who will accept papers …

Crashing The Boards: A Comparative Analysis Of The Boxing Out Of Women On Boards In The United States And Canada, Diana C. Nicholls Mutter

The Journal of Business, Entrepreneurship & the Law

This paper will first provide a critical, comparative look at the Canadian and the federal American responses to the under-representation of women on boards of large, publicly traded corporations. There will be a discussion about the competing conceptions which emerge in addressing the regulation of women on boards in the United States and Canada and why each jurisdiction implemented its policy when it did. The conceptions arising out of questions about under-representation of women on boards tend to fall within two categories: business case rationales and normative rationales. Given the competing conceptions of this issue, this paper will attempt to …

Law School News: Throw Out The Old Thinking 9-30-2019, Michael M. Bowden

Life of the Law School (1993- )

No abstract provided.

The Professor Anthony J. Santoro Business Law Lecture Series Presents Becoming A Valued Business Lawyer, Roger Williams University School Of Law, Michael M. Bowden

School of Law Conferences, Lectures & Events

No abstract provided.