Legal Remedies Commons^™

Through A Glass Darkly: How Securities Disclosures Give A Distorted View Of The Economy, Gerald F. Davis

Seattle University Law Review

Our understanding of the American economy often relies on stylized facts derived from mandatory disclosures by listed corporations. Data vendors like Standard & Poor’s vacuum up 10Ks and proxy statements into databases, and scholars distill these into tentative maps. This may have been adequate for a postwar economy centered on asset-heavy manufacturers, but it is increasingly out of step with an information-based economy. Companies listed on the stock market are fewer in number and less representative than they were, light in tangible assets and people, and heavy on IP. Basic facts such as what industry they are in are increasingly …

Table Of Contents, Seattle University Law Review

Seattle University Law Review

Table of Contents

Corporate Scenarios: Drawing Lessons From History, Madison Condon

Seattle University Law Review

As corporations are increasingly pressed to reveal information about their exposure to climate-related risks, they are often asked to undertake and disclose the outcome of “scenario analysis.” In this exercise, corporations, including financial institutions, examine how their business would fare under different pathways the future may take. One oft-used scenario, for example, is the International Energy Agency’s “Net-Zero by 2050: A Roadmap for the Energy Sector.” This Essay presents a history of the use of scenarios as a corporate planning tool, particularly in the oil industry, arguing that it is key for understanding our present moment and the role of …

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 …

Corporate Governance Speech, Sarah C. Haan

Seattle University Law Review

The State has always regulated the intra-firm communications that make corporate governance possible, most commonly by mandating disclosures of information by a corporation to its shareholders. Some such laws are labeled “securities regulation,” but securities regulation is a broad category that extends to speech by actors who are outside the corporate enterprise as well. Also, the conventional securities regulation category does not capture all such laws; other examples, including informationforcing mandates, can be found in state corporate law. This Article uses the term “corporate governance speech” to describe the communications among shareholders, directors, and officers through which corporate governance is …

Dark Accounting Matter, Colleen Honigsberg

Seattle University Law Review

Physicists calculate that approximately 85% of the matter in the universe is composed of “dark matter” that “does not absorb, reflect, or emit electromagnetic radiation and is therefore difficult to detect.” The S&P 500 currently trades at a price-to-book value of 4.2, suggesting that book value accounts for less than 20% of the S&P 500’s market value. The remaining 80% appears nowhere in these firms’ balance sheets—it is invisible to contemporary accounting techniques and constitutes “dark accounting matter.”

Some “dark accounting matter” is composed of factors commonly described as components of “ESG.” Human capital, for example, is an intangible asset …

The Employees’ Dilemma: Balancing Internal Reporting, Whistleblowing, And Insider Trading Risks, Geeyoung Min

Seattle University Law Review

The Essay examines how recent developments in insider trading regulations and whistleblower reward programs can lead to unintended and counterproductive results of discouraging employees from using internal reporting channels within corporate compliance programs. While the presence of a robust and well-functioning corporate compliance program is a critical factor both in mitigating the level of public enforcement actions against companies and in protecting corporate managers from liability in private litigation, these programs often provide little incentive for employees to report potential misconduct internally.

Corporate compliance programs are designed to promote the upward information flow within the company, which is essential for …

How The Antidiscrimination Law Of Commercial Transactions Really Works, Helen Norton

Seattle University Law Review

A variety of businesses now cite 303 Creative when seeking First Amendment protection for their refusal to serve certain customers based on those customers’ protected class status. How this litigation will play out remains to be seen. But future courts need not, and should not, repeat the 303 Creative Court’s misunderstanding of how the antidiscrimination law of commercial transactions actually works.

Part I of this Essay explains the Court’s longstanding understanding of the antidiscrimination law of commercial transactions, and then describes the Court’s failure to engage with this precedent in 303 Creative. Part II then identifies the 303 Creative decision’s …

Green Dividends: A Case Study In Green Dividends And The Conditions For Private Ordering Solutions, Anne M. Tucker

Seattle University Law Review

This Essay introduces a novel private ordering solution to facilitate corporate investments in pro-social and environmental initiatives: Green dividends. Green dividends are an optional increase in shareholder dividends that are returned to the company to be reinvested in environmental initiatives or kept by a shareholder.

Green dividends pose an alternative to the current gridlocked debate that corporations can’t, won’t, shouldn’t, and shouldn’t even try to act in pro-social or environmental ways. Turning the common refrains on their head converts each narrative into an element for a successful private ordering solution: authority, accountability, shareholder buy-in, and government- backed enforcement. With Green …

Does Climate Disclosure Work To Reduce Greenhouse Gas Emissions? Emerging Evidence Suggests Cautious Optimism, Cynthia A. Williams

Seattle University Law Review

Significant regulatory resources have been spent developing global, voluntary climate and sustainability disclosure standards, such as the TCFD, TNRD, and ISSB’s Sustainability and Climate Disclosure standards, or domestically required disclosures, such as in the EU and in the U.S. Thus, it is important to evaluate whether this disclosure, particularly voluntary, qualitative disclosure, will have the power to shift the allocation of capital, will have a significant effect on the management of climate risk within firms, and ultimately will reduce climate change risk and biodiversity loss.

In this Article, several interrelated questions will be discussed. First, what does the empirical evidence …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Voting Matters: Materiality Considerations And The Shareholder Vote, Renee M. Jones

Seattle University Law Review

For the shareholder franchise to have meaning, shareholders must have access to relevant information to inform their voting decisions. The securities laws’ disclosure requirements play an essential role in informing the shareholder vote.

This Essay focuses on the question of the materiality of information in the context of shareholder voting. It addresses the question of whether ESG-related information is material, positioning the materiality inquiry within the context of shareholders’ voting decisions. It explores the definition of materiality with a focus on the “reasonable investor” concept embedded within the definition. The Essay argues that the implicit expectations of many commentators that …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Understanding The Big Three’S Wavering Support Of Environmental And Social Shareholder Proposals, Jeff Schwartz, Jefferson Jensen

Seattle University Law Review

Because of their substantial equity portfolios, BlackRock, Vanguard, and State Street (the Big 3) are central players in corporate governance. It is, therefore, critical to understand how they vote. One puzzle is that their support for shareholder proposals on environmental and social matters appears to waiver. In 2020, for instance, BlackRock supported 11.1% of environmental proposals at S&P 500 firms. In 2021, it seemingly reversed course, supporting 55.2%. It then flipped again, supporting 32.1% in 2022. Such statistics suggest that the Big 3 are constantly changing their views on these topics. This Article seeks to better understand whether this is …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Untangling Bankruptcy’S Most Complex Web: Chapter 11 Rule 1111(B) And Subchapter V, Evan Sponder

Brooklyn Journal of Corporate, Financial & Commercial Law

The United States Code Section 1111(b) provides an equitable remedy to debt restructuring for both debtors and creditors in Chapter 11 bankruptcy by allowing the debtor to retain their income-producing assets and repay their creditor(s) through a mutually approved plan. However, section 1111(b) is difficult for courts to apply due to its complex nature, and infrequent application of the section has resulted in limited development of case law interpreting the section. Courts currently interpret 1111(b) elections in Chapter 11 Subchapter V cases to exclude interest accrual; this interpretation establishes an inequitable precedent whereby debtors’ procedural advantages bypass creditor protections during …

A New Governance Framework In Cross-Border Tax Policymaking, Tamir Shanan, Doron Narotzki, Noam Zamir

Brooklyn Journal of Corporate, Financial & Commercial Law

The first tax treaty can probably be traced to the end of the 19th century: the treaty between the Swiss Federal Council (on behalf of the Canton of Vaud) and Great Britain. However, most tax scholars refer to the period following World War I, including the work of the League of Nations, as the formative period in which the international tax regime was founded. In the 1920s, the League of Nations formed a committee of four renowned economists that was asked to formulate a set of rules that would assist states in allocating taxing rights of cross-border income and gains …

University Of The District Of Columbia Law Review, University Of The District Of Columbia Law Review

University of the District of Columbia Law Review

No abstract provided.

Nato Allies On The Brink Of War: The Cause For Implement-Ing A Dispute Resolution Mechanism Within The North Atlantic Treaty, Samantha Solomotis

Brooklyn Journal of International Law

NATO is the largest peacekeeping military alliance in the world and is not yet done growing. Recent events in Ukraine have reinforced the importance of NATO as a defensive alliance. New threats, both internal and external, are emerging. Intra-alliance conflicts over ideological agreements, border disputes, and member contributions put the fate of the organization at risk. To retain its strength as it grows, NATO must develop stronger cohesion between member states to ensure effectiveness and prevent dissolution. This Note uses the recently reignited conflict between Greece and Turkey—NATO members and belligerent neighbors—to demonstrate the pressing need and peacekeeping utility of …

No Need To Reinvent The Wheel: The Positive Relationship Between Green Technology And Patent Enforcement, Addison S. Fowler

Villanova Environmental Law Journal (1991 - )

No abstract provided.

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, …

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 …

Robo-Voting: Does Delegated Proxy Voting Pose A Challenge For Shareholder Democracy?, John Matsusaka, Chong Shu

Seattle University Law Review

Robo-voting is the practice by an investment fund of mechanically voting in corporate elections according to the advice of its proxy advisor— in effect fully delegating its voting decision to its advisor. We examined over 65 million votes cast during the period 2008–2021 by 14,582 mutual funds to describe and quantify the prevalence of robo-voting. Overall, 33% of mutual funds robo-voted in 2021: 22% with ISS, 4% with Glass Lewis, and six percent with the recommendations of the issuer’s management. The fraction of funds that robo-voted increased until around 2013 and then stabilized at the current level. Despite the sizable …

The Limits Of Corporate Governance, Cathy Hwang, Emily Winston

Seattle University Law Review

What is the purpose of the corporation? For decades, the answer was clear: to put shareholders’ interests first. In many cases, this theory of shareholder primacy also became synonymous with the imperative to maximize shareholder wealth. In the world where shareholder primacy was a north star, courts, scholars, and policymakers had relatively little to fight about: most debates were minor skirmishes about exactly how to maximize shareholder wealth.

Part I of this Essay discusses the shortcomings of shareholder primacy and stakeholder governance, arguing that neither of these modes of governance provides an adequate framework for incentivizing corporations to do good. …

The Pioneers, Waves, And Random Walks Of Securities Law In The Supreme Court, Elizabeth Pollman

Seattle University Law Review

After the pioneers, waves, and random walks that have animated the history of securities laws in the U.S. Supreme Court, we might now be on the precipice of a new chapter. Pritchard and Thompson’s superb book, A History of Securities Law in the Supreme Court, illuminates with rich archival detail how the Court’s view of the securities laws and the SEC have changed over time and how individuals have influenced this history. The book provides an invaluable resource for understanding nearly a century’s worth of Supreme Court jurisprudence in the area of securities law and much needed context for …

Three Stories: A Comment On Pritchard & Thompson’S A History Of Securities Laws In The Supreme Court, Harwell Wells

Seattle University Law Review

Adam Pritchard and Robert Thompson’s A History of Securities Laws in the Supreme Court should stand for decades as the definitive work on the Federal securities laws’ career in the Supreme Court across the twentieth century.1 Like all good histories, it both tells a story and makes an argument. The story recounts how the Court dealt with the major securities laws, as well the agency charged with enforcing them, the Securities and Exchange Commission (SEC), and the rules it promulgated, from the 1930s into the twenty-first century. But the book does not just string together a series of events, “one …

On The Value Of History: A Review Of A.C. Pritchard & Robert B. Thompson’S A History Of Securities Law In The Supreme Court, Joel Seligman

Seattle University Law Review

A.C. Pritchard and Bob Thompson have written a splendid history of securities law decisions in the Supreme Court. Their book is exemplary because of its detailed use of the long unpublished papers of Supreme Court justices, including those of Harry Blackmun, William O. Douglas, Felix Frankfurter and Lewis F. Powell, primary sources which included correspondence with other Justices and law clerks as well as interviews with law clerks. The use of these primary sources recounted throughout the text and 67 pages of End Notes deepens our understanding of the intentions of the Justices and sharpens our understanding of the conflicts …

Table Of Contents, Seattle University Law Review

Seattle University Law Review

Table of Contents

Memories Of An Affirmative Action Activist, Margaret E. Montoya

Seattle University Law Review

Some twenty-five years ago, the Society of American Law Teachers (SALT) led a march supporting Affirmative Action in legal education to counter the spate of litigation and other legal prohibitions that exploded during the 1990s, seeking to limit or abolish race-based measures. The march began at the San Francisco Hilton Hotel, where the Association of American Law Schools (AALS) was having its annual meeting, and proceeded to Union Square. We, the organizers of the march, did not expect the march to become an iconic event; one that would be remembered as a harbinger of a new era of activism by …