Rule of Law Commons^™

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 …

Redefining The Relevant Market: Abandonment Or Return To Brown Shoe, Daniel A. Hanley

Dickinson Law Review (2017-Present)

Defining a relevant market is arguably the most important requirement in antitrust litigation. Between the 1890s and the 1940s, defining a relevant market was a simple and generalized process, typically undertaken by courts as a cursory matter. However, in the 1960s, defining relevant markets became a centerpiece of antitrust litigation. The modern method originates from the Supreme Court’s landmark 1962 decision in Brown Shoe v. United States. The method commonly known as the Brown Shoe test requires judges to construct relevant markets by carefully analyzing accessible and understandable qualitative data, such as internal corporate documents and consumer surveys. Since the …

The Method Is The Message: Movement Law And The Social Change Commons, Raymond H. Brescia

Dickinson Law Review (2017-Present)

Legal scholars have long sought to understand the relationship between social movements and the law. A new group of such scholars has argued that to better understand this relationship, and to advance social change that is effective, sustainable, equitable, and just, they must engage in dialogue with such movements to generate ideas that will catalyze that change. For those interested in generating ideas that can spark meaningful and lasting social change, such developments in legal scholarship represent an exciting evolution in the relationship between legal scholarship, legal scholars, and social movements: a relationship that appears to be growing stronger, deeper, …

Dobbs V. Brown, Benjamin H. Barton

Dickinson Law Review (2017-Present)

Dobbs v. Jackson Women’s Health Organization1is the most important and impactful Supreme Court decision since at least Roe v. Wade, and potentially since Brown v. Board of Education. Past survey data show that most Americans can only name two Supreme Court opinions: Roe and Brown. Dobbs will surely join that list. This Article compares the history, drafting, and opinions of Dobbs and Brown to show what a missed opportunity Dobbs represents. Regardless of whether you agree or disagree with the opinion, it should be clear that Dobbs was one of those unique times (like that of Brown) where the Court …

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

The Enduring Relevance Of Congress Despite The Court's Shift To “Ordinary Reader” Statutory Interpretation, Abbe R. Gluck, Laila M. Robbins

Journal of Law and Policy

Has Congress become irrelevant to statutory interpretation? The dominant theoretical and doctrinal paradigm in American statutory interpretation has always been the conversation between Congress and the courts. Today, however, the Court’s new, second-generation textualists claim they have left Congress behind. They argue they have changed textualism’s perspective, from an “insider” perspective focused on Congress’s textual choices, to an “outsider” perspective based on how “ordinary people” read statutes. The Court’s self-professed shift away from a legiscentric approach, if true, would be a seismic shift in the conception of the judicial role. Whereas judges and scholars—including first-generation textualists—had for a century focused …

The Broad Church Of Modern Textualism, Nicole Steitz, Brian G. Slocum, Kevin Tobia

Journal of Law and Policy

Nearly thirty years ago, Justice Scalia’s Tanner lectures branded Holy Trinity Church v. United States (1892) as the anti-textualist archetype, a decision trumping the text’s plain meaning with a suspect judicial investigation of the law’s purpose or spirit. And so Holy Trinity seemed, until Gales and Solan’s groundbreaking empirical study supported an alternative reading of the key statutory term (“labor or service”) that would avoid this conflict between text and purpose. Taking inspiration from Gales and Solan, we reconsider Holy Trinity using the precepts of modern textualism, with its increased emphasis on context, pragmatics, anti-literalism, legal meaning, holistic meaning, non-compositionality, …

The Pet Fish Canon, William N. Eskridge Jr.

Journal of Law and Policy

Inspired by the work of the late Professor Larry Solan, this article proposes that judges recognize as one of the textualist canons of statutory construction a “pet fish” canon. Such a canon would posit that when an ordinary reader would understand two or more words to yield a meaning that is different than the sum of the two words defined separately, the statutory interpreter should not disaggregate them. The Roberts Court has already followed such a linguistic precept in some statutory cases, and this article proposes that the Court recognize this as a canon considered at least as seriously as …

Grammar & Syntax Arguments On The Roberts Court, Anita S. Krishnakumar

Journal of Law and Policy

In his excellent book, The Language of Judges, Professor Solan demonstrates how judges use grammatical or linguistic arguments to avoid acknowledging statutory ambiguity—and how they often get the grammar or linguistics wrong. Since his book was published, textualism has become the dominant interpretive approach on the U.S. Supreme Court—and we have seen increasingly prominent battles involving grammatical devices and rules. This comment takes Professor Solan’s analysis as a jumping off point to evaluate how grammar and linguistic arguments are employed on the modern Supreme Court, in the age of textualism. The comment offers a brief empirical and doctrinal assessment of …

Obstructing Precedent, Bill Watson

Northwestern University Law Review

Critics of the Supreme Court sometimes accuse the Justices of disrespecting or being unfaithful to precedent—of undermining certain precedents while leaving them formally in place. Yet it remains unclear what exactly these criticisms mean or why they point to anything objectionable. This Article proposes that critics are often drawing attention to a particular practice: obstructing precedent. A better grasp of what obstructing precedent is and when it is legitimate is important to understanding the Roberts Court’s treatment of precedent in a range of cases.

A court obstructs precedent when it refuses to cooperate with its prior self in building a …

Egypt’S Legal Modernism: Challenging The National Discourse, Mohamed A. El-Deeb

Theses and Dissertations

Egypt’s legal modernity is the story of the modern Egyptian state itself. Reforming the country’s judiciary in the late nineteenth century was meant to achieve ambitious aims beyond the functionality of a justice system. The utmost goal was the country’s independence from the suzerainty of the Ottoman Empire. The judicial reforms modernized the Egyptian state and built a judiciary and legal community like no other place. Egypt achieved its independent judiciary before gaining its political independence. That was a remarkable achievement of the judicial reform. That rich part of Egypt’s modern history is negated and disregarded from public awareness. Not …

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, …

Anglo-Saxon Res Judicata Culture For Civil Law Systems, Cesare Cavallini

Northwestern Journal of International Law & Business

One traditional aspect distinguishing the common law system from the civil law one lies in the perceived disparities in the inspiration of the law-making process. The Anglo-Saxon system typically grounds its rules in explicit and discernible policies spanning social, anthropological, and economic realms directly relevant to the circumstances. In contrast, the civil law tradition frequently necessitates a fixed conceptual framework, sometimes detached from the practical needs of society. Or, at least, this dynamic persisted until recent changes prompted by the “doing business” model, which has timidly ascended to the forefront of the State agenda, particularly across Europe, notably in Italy. …

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