Business Organizations Law Commons^™

Piercing The Shield Of U.C.C. Article 4a: Estate Of Levin V. Wells Fargo Bank’S, Implications For Terrorism Victims’ Attachment Of Blocked Electronic Wire Transfers Originating From State Sponsors Of Terrorism, Olivia Lu

University of Miami Business Law Review

This Piece examines how ambiguity in the property interests that would be subject to attachment under section 201 of the Terrorism Risk Insurance Act (“TRIA”) and section 1610(g) of the Foreign Sovereign Immunities Act (“FSIA”) has affected efforts by victims of terrorism to fulfill their monetary judgments, especially in light of courts’ use of Article 4A of the Uniform Commercial Code to fill the definitional gap. This Piece focuses on a recent D.C. Circuit decision, Estate of Levin v. Wells Fargo Bank, N.A., analyzing its implications for terrorism victims holding monetary judgments to attach blocked electronic funds transfers (“EFTs”) originating …

Tac Meeting Statements, Hilary J. Allen

Legislative Testimony & Comments

The Technology Advisory Committee will hold a meeting on January 8, 2024. At this meeting, the TAC will continue its discussion of issues relating to digital assets and blockchain technology, cybersecurity, and emerging and evolving technologies, here.

Bowlero Atlantic Station, Llc V. Regal Cinemas, Inc., Et Al., Order On Partial Motions To Dismiss, John J. Goger

Superior Court of Fulton County: Metro Atlanta Business Case Division Opinions

No abstract provided.

Bowlero Atlantic Station, Llc V. Regal Cinemas, Inc., Order On Motion To Compel Discovery, John J. Goger

Superior Court of Fulton County: Metro Atlanta Business Case Division Opinions

No abstract provided.

Business Lawyer Leadership: Valuing Relationships, Joan Macleod Heminway

Scholarly Works

Business lawyers are surrounded by relationships because of the nature of their work. Businesses are relational; business associations law is relational; business lawyering is relational. Business lawyering, in all its manifestations, is a practice steeped in the lawyer’s awareness and management of, as well as their participation in, the layered sets of relationships found in businesses and business associations law. This article recognizes these important connections between business law practice and relationships. It approaches each of them in turn. The substantial take-away is that a business lawyer can best lead by understanding the inherent value of relationships to business lawyering …

Enforcing International Law Against Corporations: A Stakeholder Management Approach, Kishanthi Parella

Scholarly Articles

There is an important but oft neglected relationship between the problems of corporate governance and international law. Corporate managers grapple with how to respond to society's demands that their enterprises do better when it comes to protecting people and the planet. These demands take many forms, including increased pressure for “sustainability” and “environmental, social, and governance” (“ESG”) measures. These demands are made in response to the economic, social, environmental, and political crises facing our world and a recognition of the responsibility of corporations and other business actors to contribute to their resolution. What is often unrecognized is that many of …

Lobbying By Brief: Unveiling The Dominance Of Amicus Lobbying In The Development Of Business Law, Tomer Stein, W.C. Bunting

Scholarly Works

This Article uncovers the pervasive and significant impact of business law Amicus Lobbying, a strategic tactic whereby lobby groups have commandeered the amicus curiae filing process in state courts to shape business law according to their interests.

The Article makes three primary contributions to the literature. First, it presents the only comprehensive dataset of amicus curiae filings in business law cases. This hand-collected dataset encompasses nearly all business law amicus curiae filings from 2005 to 2022 in the key jurisdictions of New York, California, Delaware, Texas, and Nevada. Second, it reveals a striking empirical finding: lobby groups account for 67% …

How A “Superstar” Ceo Exposes The Necessity For Third Party D&O Insurance, Angela N. Aneiros, Karen Woody

Scholarly Articles

he influence that “superstar” CEOs have over a company’s board of directors can be alarming. Among other things, Elon’s ability to skirt personal liability for seemingly obvious breaches of duty has raised concerns within the realm of corporate governance and corporate regulation. While much has been written on Elon’s influence on Tesla’s board of directors, one area of the law that often gets overlooked that has exacerbated Elon’s corporate governance issues, is that of directors and officers (D&O) liability insurance. While personally insuring board members seems like a very "Elon" move, it could have broader implications beyond Elon. Are “superstar” …

Delegated Corporate Voting And The Deliberative Franchise, Sarah C. Haan

Scholarly Articles

Starting in the 1930s with the earliest version of the proxy rules, the Securities and Exchange Commission (SEC) has gradually increased the proportion of “instructed” votes on the shareholder’s proxy card until, for the first time in 2022, it required a fully instructed proxy card. This evolution effectively shifted the exercise of the shareholder’s vote from the shareholders’ meeting to the vote delegation that occurs when the share-holder fills out the proxy card. The point in the electoral process when the binding voting choice is communicated is now the execution of the proxy card (assuming the shareholder completes the card …

The Sec's (Ill-Fated) Stock Repurchase Transparency Reform: For Investor Protection, Lin (Lynn) Bai

Faculty Articles and Other Publications

In May 2023, the SEC adopted new transparency measures designed to improve oversight of corporate stock buybacks. However, the new regulation faced immediate and successful challenges in court, prompting the agency to suspend its implementation in November 2023 for further cost-benefit analysis. Critics contended that the new regulation would offer minimal additional benefit to investors given the current regulatory framework. Despite this legal setback, advocates for the re-proposal of the regulation persist. This article shows that the new regulation would open new avenues of legal recourse for investors, fortify their claims that might otherwise be dismissed, and unlock corporate records …

Tennessee's Dao Act: Positive Innovation Or Fringe Legislation, Joan Macleod Heminway

Scholarly Works

This essay responds to a recent development in unincorporated business associations law in the State of Tennessee. That legislative development is a 2022 amendment to Tennessee’s Revised Limited Liability Company Act, ostensibly creating a legal form of entity for the operation of decentralized autonomous organizations (the "DAO Act"). Remarkably, the DAO Act did not pass through the traditional channels for the review of business legislation in Tennessee, which include a review by members of the business bar (prototypically at least the Executive Council of the TBA Business Law Section) and the Business Services Division of the Tennessee Secretary of State. …

Delaware Beware, Anat Alon-Beck

Faculty Publications

This article conducts an in-depth exploration of the dynamic competition among states to attract businesses and determine the legal framework governing corporations. It adopts an innovative market-centric viewpoint, treating corporate law as a product within the broader context of charter competition among U.S. states. While the scholarly spotlight has predominantly shone on publicly traded giants, this article daringly delves into uncharted territory, unraveling the intricate incorporation and governance decisions of privately held “unicorns”—those elusive venture capital-backed behemoths that silently shape the economic landscape.

By unraveling the decision-making processes of where these economic powerhouses incorporate, the article challenges prevailing assumptions on …

Shareholder Primacy Versus Shareholder Accountability, William Wilson Bratton

Articles

When corporations inflict injuries in the course of business, shareholders wielding environmental, social, and governance ("ESG") principles can, and now sometimes do, intervene to correct the matter. In the emerging fact pattern, corporate social accountability expands out of its historic collectivized frame to become an internal subject matter-a corporate governance topic. As a result, shareholder accountability surfaces as a policy question for the first time. The Big Three index fund managers, BlackRock, Vanguard, and State Street, responded to the accountability question with ESG activism. In so doing, they defected against corporate legal theory's central tenet, shareholder primacy. Shareholder primacy builds …

Corporate Governance & International Law, Kishanthi Parella

Scholarly Articles

Stakeholder activism by nongovernmental organizations (NGOs), consumers, employees, and others can incentivize corporate managers to comply with international law on climate change, armed conflict, human rights, and access to medicine, among other issues. As such, stakeholder enforcement of international law has two distinct audiences: the corporation that is persuaded to change and fellow stakeholders who are persuaded to act. But familiar difficulties with collective action impede the success of stakeholder enforcement of international law. These challenges can compromise the ability of shareholders to monitor corporations; these same problems similarly jeopardize the ability of stakeholders to monitor corporate compliance with international …

A Roadmap To Nil And Taxation, Doron Narotzki, Yariv Brauner

American University Business Law Review

The landscape of college sports has dramatically changed in recent years. What was once considered a place for amateur athletes pursuing education now partially mirrors, at least for some student-athletes, the structure and financial dynamics of professional leagues such as the NFL, NBA, and MLB. However, the collegiate sports ecosystem still remains distinct, shaped by unique regulatory frameworks governed by the NCAA. This article reviews and analyses the implications of these changes, and focuses on the tax considerations surrounding Name, Image, and Likeness (NIL) rights and how the evolving nature of college sports also presents certain tax implications, some of …

Incorporating Unicorns: An Empirical Analysis, Anat Alon-Beck

Faculty Publications

There is a growing concern among regulators and academics about how to regulate unicorns - entities large enough to have a public impact yet remaining in the private domain. An examination of corporate charters within a selected sample of unicorn firms reveals an important finding: 97% of these entities are incorporated in Delaware. This concentration provides Delaware with significant leverage to shape regulatory frameworks, especially concerning the protection of parties who may lack the ability to safeguard their interests through contractual means.

This groundbreaking discovery on the dominance of Delaware showcases a substantial deviation from incorporation trends in other business …

The Theories Of Corporate Pershonhood And Their Three False Choices: Developing A Framework For Corporate Rights, Katharine Jackson

Faculty Articles and Other Publications

Scholars often use the theories of corporate personhood—aggregation theory, concession theory, and real entity theory—to justify corporate rights through analogy. That is, theories of corporate personhood attempt to explain what rights corporations ought to have based on what kind of person the corporation is like. If corporations are like individual human beings, then corporations should enjoy all the same rights that human beings do. If corporations are like states, then corporations should owe the same obligations that a state owes its citizens. Of course, many scholars have addressed the weaknesses of this kind of analogical reasoning. As Dewey argued long …

The Harm In The Fiduciary Myth, Kelli Alces Williams

Scholarly Publications

Fiduciary law has become the doctrine of choice in scholarship aiming to protect vulnerable parties from powerful decisionmakers. But fiduciary law cannot fill all the gaps in those impersonal, public relationships because the beneficiary class is large, disparate, and widely dispersed. Public leaders and decision makers cannot zealously pursue the interests of all parties vulnerable to their decision making and they are often driven by various personal interests in choosing which set of beneficiary interests to prioritize. The persistent myth that leaders of large groups are fiduciaries and that fiduciary obligation is the answer to all power imbalance problems harms …

Algorithmic Financial Regulation: Limits Of Computing Complex Adaptive Systems, Shuping Li

American University Business Law Review

This article examines the potential of and limits to the use of machine learning for financial regulation. Ideally, if we could fully understand the financial system and agree on long- and short-term regulatory goals, we would be able to write code that carries out the computation that extracts proper representations from the data and makes correct regulatory decisions. We cannot do this yet because of limited sources of data, the bias brought by human beings and algorithmic models, and the difficulty of improving uninterpretable models. Furthermore, since law is a combination of merits and facts, there are difficulties in establishing …

The Secret's Out: The Role Of Restrictive Covenants In Trade Secret Law, Magdalene Eallonardo

American University Business Law Review

Trade secrets derive economic value from their classified nature, which leads companies to implement legal measures to prevent the spread of their confidential company information to the public. Restrictive covenants within employment agreements are a common form of these legal measures. However, because of employers’ restrictive terms, states are placing regulations on the scope of these agreements. With limited ability to contract their employees away from sharing their confidential information with direct competitors, companies utilize alternate methods to protect their trade secrets.

Charter Schools And Emos: Who's In Charge, Brendan Glynn

American University Business Law Review

Charter schools are a popular sight in the educational field today. For the IRS to consider a charter school a 501(c)(3) organization, nonprofit charter schools must be organized and operated exclusively for educational purposes, meaning purposes relating to the instruction of individuals to improve their capabilities. To be organized for educational purposes, the articles of the organization must limit the entity to educational purposes while also preventing the organization from engaging in substantial noneducational activities. To operate exclusively for educational purposes, an organization’s activities must be substantially in furtherance of educational purposes while also not substantially benefitting a private individual. …

Constructing Solutions: Addressing Liability And Ownership Risks Associated With Business Information Modeling, Connor Sheehy

American University Business Law Review

This Comment will first discuss the background of BIM, including its technological characteristics and implementation into a complex construction project, as well as the potential benefits that incentivize parties to utilize BIM in a project. Next, this Comment will discuss the legal risks and uncertainty associated with BIM, particularly regarding ownership and liability. Specifically, this Comment will focus on ownership of the intellectual property and designs within an overall model and will contrast liability in traditional construction projects with liability in a construction project utilizing BIM. Lastly, this Comment will discuss potential solutions to these risks and uncertainties. The analysis …

Finding Rights In The Fine Print: How Terms Of Services Agreements Can Turn Consumer Search History Into Digital Property, Dalia Wrocherinsky

American University Business Law Review

On October 16, 2023, the Colorado Supreme Court handed down the country’s first court opinion on the constitutionality of reverse keyword warrants. It found that Google’s Terms of Service created a Fourth Amendment property interest in a user’s search history such that police copying this data constituted a seizure. This was a completely novel contention that implicates basic, yet increasingly relevant and unsettled principles of property, contracts, and Fourth Amendment law.

This Comment will argue that fundamental principles of property, contracts, and Fourth Amendment law support the Colorado Supreme Court’s theory. It will explore how property rights are created and …

Henderson And The Objective Observer Standard: The Future Of Race-Conscious Standards Post-Students For Fair Admissions, Gabriela Dionisio

Seattle University Law Review

On June 29, 2023, the Supreme Court of the United States decided Students for Fair Admissions v. President & Fellows of Harvard College, which struck down race-conscious admissions policies. Within just a year after its ruling, Students for Fair Admissions has already had a sweeping impact, reaching beyond higher education. Although the Supreme Court did not indicate whether Students for Fair Admissions applies to sectors beyond higher education, law firms, and other employers have already modified their diversity policies and initiatives, erasing race and company diversity considerations. Given those dramatic changes, there is growing fear that Students for Fair Admissions …

Same Crime, Different Time: Sentencing Disparities In The Deep South & A Path Forward Under The Fourteenth Amendment, Hailey M. Donovan

Seattle University Law Review

The United States has the highest incarceration rate of any country in the world. The American obsession with crime and punishment can be tracked over the last half-century, as the nation’s incarceration rate has risen astronomically. Since 1970, the number of incarcerated people in the United States has increased more than sevenfold to over 2.3 million, outpacing both crime and population growth considerably. While the rise itself is undoubtedly bleak, a more troubling truth lies just below the surface. Not all states contribute equally to American mass incarceration. Rather, states have vastly different incarceration rates. Unlike at the federal level, …

Non-State Actors For Profit: Revisiting Transnational Corporations' Personhood And Responsibility Under International Law, Katayoon Beshkardana, Faraz Shahlaei

Northwestern Journal of International Law & Business

The growing impact of Transnational Corporations (TCs) on international trade, investment, and human rights raises the question of international corporate responsibility. For international responsibility, TCs must be recognized as subjects of international law with legal personality. Apart from states as the primary subjects of international law, such status has been granted to inter-governmental organizations (IGOs). The factors that contributed to the IGOs’ recognition as international law subjects seem to be present for TCs today. While the International Court of Justice granted such legal status to IGOs, for TCs, the best path to recognition would be to establish a global authority …

Disclosure, Greenwashing, And The Future Of Esg Litigation, Jason J. Czarnezki, Barbara Ballan

Elisabeth Haub School of Law Faculty Publications

The Environmental, Social, and Governance (“ESG”) disclosure movement is expanding both voluntarily, as businesses choose to disclose this information, and mandatorily, as government agencies impose disclosure requirements. As ESG disclosure expands, so do the litigation risks. “Greenwashing” refers to presenting false or misleading environmental or sustainability (i.e., “green”) qualities of products, services, or practices. Businesses may greenwash consumers as well as investors with false and misleading ESG disclosures in advertising, securities filings, or other public statements activating greenwashing litigation from investors and consumers. This Article addresses (1) the laws and regulations that cover consumer and securities greenwashing litigation, (2) how …

A Catholic Defense Of Corporate Law And Practice, Julian Velasco

Journal Articles

In this essay, I provide a defense of corporate law and of pursuing a career therein from the perspective of Catholic teaching. I argue that Catholicism is not incompatible with the pursuit of wealth as such, but rather insists upon the appropriate use of wealth. I also argue that it is appropriate for corporate actors to pursue the interests of shareholders, provided that they do not break the law or otherwise sin in doing so. I also explain why I found transaction practice personally fulfilling.

Decentralized Autonomous Organizations And Regulatory Competition: A Race Without A Cause, Matt Blaszczyk

Fellow, Adjunct, Lecturer, and Research Scholar Works

Several states have enacted specialized limited liability company legislation in an attempt to attract decentralized autonomous organizations. In this way, the regulatory competition debate surrounding states such as Wyoming, Tennessee, and Vermont, attempting to dethrone Delaware, has found a new battleground. According to Professor Lynn LoPucki, this will entail a regulatory race to the bottom, that is, a race to “laxity.” I disagree. In fact, deregulation has already been achieved in the traditional limited liability company form. The decentralized autonomous organization limited liability company is no laxer or more attractive to investors, who will likely prefer the traditional limited liability …

Public Primacy In Corporate Law, Dorothy S. Lund

Seattle University Law Review

This Article explores the malleability of agency theory by showing that it could be used to justify a “public primacy” standard for corporate law that would direct fiduciaries to promote the value of the corporation for the benefit of the public. Employing agency theory to describe the relationship between corporate management and the broader public sheds light on aspects of firm behavior, as well as the nature of state contracting with corporations. It also provides a lodestar for a possible future evolution of corporate law and governance: minimize the agency costs created by the divergence of interests between management and …