Law and Politics Commons^™

The Esg Information System, Stavros Gadinis, Amelia Miazad

Seattle University Law Review

The mounting focus on ESG has forced internal corporate decision-making into the spotlight. Investors are eager to support companies in innovative “green” technologies and scrutinize companies’ transition plans. Activists are targeting boards whose decisions appear too timid or insufficiently explained. Consumers and employees are incorporating companies sustainability credentials in their purchasing and employment decisions. These actors are asking companies for better information, higher quality reports, and granular data. In response, companies are producing lengthy sustainability reports, adopting ambitious purpose statements, and touting their sustainability credentials. Understandably, concerns about greenwashing and accountability abound, and policymakers are preparing for action.

In this …

Stakeholder Governance On The Ground (And In The Sky), Stephen Johnson, Frank Partnoy

Seattle University Law Review

Professor Frank Partnoy: This is a marvelous gathering, and it is all due to Chuck O’Kelley and the special gentleness, openness, and creativity that he brings to this symposium. For more than a decade, he has been open to new and creative ways to discuss important issues surrounding business law and Adolf Berle’s legacy. We also are grateful to Dorothy Lund for co-organizing this gathering.

In introducing Stephen Johnson, I am reminded of a previous Berle, where Chuck allowed me some time to present the initial thoughts that led to my book, WAIT: The Art and Science of Delay. Part …

The Structure Of Corporate Law Revolutions, William Savitt

Seattle University Law Review

Since, call it 1970, corporate law has operated under a dominant conception of governance that identifies profit-maximization for stockholder benefit as the purpose of the corporation. Milton Friedman’s essay The Social Responsibility of Business is to Increase Its Profits, published in September of that year, provides a handy, if admittedly imprecise, marker for the coronation of the shareholder-primacy paradigm. In the decades that followed, corporate law scholars pursued an ever-narrowing research agenda with the purpose and effect of confirming the shareholder-primacy paradigm. Corporate jurisprudence followed a similar path, slowly at first and later accelerating, to discover in the precedents and …

Stakeholder Capitalism’S Greatest Challenge: Reshaping A Public Consensus To Govern A Global Economy, Leo E. Strine Jr., Michael Klain

Seattle University Law Review

The Berle XIV: Developing a 21st Century Corporate Governance Model Conference asks whether there is a viable 21st Century Stakeholder Governance model. In our conference keynote article, we argue that to answer that question yes requires restoring—to use Berle’s term—a “public consensus” throughout the global economy in favor of the balanced model of New Deal capitalism, within which corporations could operate in a way good for all their stakeholders and society, that Berle himself supported.

The world now faces problems caused in large part by the enormous international power of corporations and the institutional investors who dominate their governance. These …

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

Seattle University Law Review

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 …

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 …

Lest We Be Lemmings, Claire Wright

Faculty Articles

Lest We Be Lemmings concerns global warming, which is the most grave threat facing humanity today. In this article, I first: (1) discuss how the U.S. Congress and the U.S. Executive Branch, for decades, have been aware of the existence of global warming and its main cause – the burning of fossil fuels and emission of CO₂ - but have consistently failed to regulate the fossil fuel industry, reduce the lucrative subsidies that they provide to the fossil fuel industry, and hold the fossil fuel industry responsible for global warming; (2) explain how the fossil fuel industry, for decades, …

Becoming A Doctrine, Allison Orr Larsen

Faculty Publications

On the last day of the 2021–22 Term, the Supreme Court handed down a decision on “the major questions doctrine” and granted certiorari to hear a case presenting “the independent state legislature doctrine”—neither of which had been called “doctrines” there before. This raises a fundamental and underexplored question: how does a doctrine become a doctrine? Law students know the difference between doctrinal classes and seminars, but how does an idea bantered about in a seminar (say, about agencies deciding major questions) become a “doctrine” complete with judicial tests, steps, and exceptions? Taking an analogy to medicine, when does …

Keep Charitable Oversight In The Irs, Philip Hackney

Articles

Critics are increasingly calling for Congress to remove charity regulation from the IRS. The critics are wrong. Congress should maintain charity regulation in the IRS. What is at stake is balancing power between the state, charity as civil society, and the economic order. In a well-balanced democracy, civil society maintains its independence from the state and the economic order. Removing charitable jurisdiction from the IRS would blind the IRS to dollars placed in charitable solution increasing tax and political shelters and wealthy dominance of charities as civil society. A new agency without understanding of, or jurisdiction over, tax cannot act …

Capitalism Stakeholderism, Christina Parajon Skinner

Seattle University Law Review

Today’s corporate governance debates are replete with discussion of how best to operationalize so-called stakeholder capitalism—that is, a version of capitalism that considers the interests of employees, communities, suppliers, and the environment alongside (if not before) a company’s shareholders. So much focus has been dedicated to the question of capitalism’s reform that few have questioned a key underlying premise of stakeholder capitalism: that is, that competitive capitalism does not serve these various constituencies and groups. This Essay presents a different view and argues that capitalism is, in fact, the ultimate form of stakeholderism. As such, the Essay urges that the …

The Federal Question Jurisdiction Under Article Iii: “First In The Minds Of The Framers,” But Today, Perhaps, Falling Short Of The Framers’ Expectations, Arthur D. Hellman

Articles

As Chief Justice Marshall explained, “the primary motive” for creating a “judicial department” for the new national government was “the desire of having a [national] tribunal for the decision of all national questions.” Thus, although Article III of the Constitution lists nine kinds of “Cases” and “Controversies” to which the “judicial Power” of the United States “shall extend,” “the objects which stood first in the minds of the framers” were the cases “arising under” the Constitution, laws, and treaties of the United States. Today we refer to this as the federal question jurisdiction.

Of all federal question cases, the Framers …

The United States Supreme Court’S Interpretation Of The “Establishment Clause” And How It Has Impacted Texas Politics Today, Rebecca H. Castro

Honors Program Theses and Research Projects

The Establishment Clause, since its creation in 1787, has worked towards creating a separation of church and state rooted in religious liberty after colonists fled England and the Church of England. In the centuries that have passed, the judiciary branch of the United States has been creating lasting precedents for how the Establishment Clause should be illustrated in the National Government and in the states. However, the long-lasting division between church and state has been decreasing, especially following a recent Supreme Court decision: Kennedy v. Bremerton School District (2022). The ramifications of entangling church and the state include, but are …

Freedom On Paper: Reforms To Women’S Rights In Saudi Arabia Will Not Be Effective Until Male Guardianship Is Abolished, Mackenzie Kramer

Brooklyn Journal of International Law

Male guardianship, a societal custom derived from Islamic law, renders women in Saudi Arabia second class citizens. The country’s preservation of male guardianship has broken its agreement to adhere to the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), the leading international women’s rights treaty. Throughout the past decade the country’s Crown Prince, Mohammed bin Salman al Saud (“MbS”), has issued rulings that work to slowly dismantle the apparatus of male guardianship. These developments have been both meaningful and restrained; MbS attempts to tread lightly into human rights reforms to garner the support of western allies, …

The Gospel Of Federalism: How The Deification Of Political Ideology Impedes The United States’ Abortion Law Scheme, Nicole Jakobson

Brooklyn Journal of International Law

In 2022, the United States Supreme Court decided Dobbs v. Jackson Women’s Health Organization, which ended the federal abortion protection established under Roe v. Wade. The Court reasoned that abortion restriction is properly regulated by state governments, and thus a federal abortion law scheme is unconstitutional. In substance, the Court was safeguarding the enduring political and legal principle of federalism. This Note draws a comparison between the United States’ treatment of federalism and foreign jurisdictions’ treatment of religion within the context of abortion. This Note argues that the United States’ preoccupation with federalism is analogous to appeals to religion in …

The Sword, The Shield, And The Jab: How Nato Can Bypass The Un And World Health Organization To Help Control And Prevent Future Pandemics, Aaron Earlywine

Brooklyn Journal of International Law

An autopsy of the world’s response to the COVID-19 pandemic reveals many preexisting conditions that only exacerbated the crisis. Chief among them are the failures and obfuscations of the World Health Organization (WHO). The WHO is sick with corruption, incompetence, or at very least riddled with dysfunction. This is not the first time the WHO has proven itself unable to meet the demands of global health initiatives, let alone global health crises. Not only is this dysfunctional organization proving itself to be a money-consuming abscess, but hostile powers, namely China, have used it to covertly wield influence and shield themselves …

Whom Is Corporate Esg Integration For?, Ryan Brennan

Brooklyn Journal of International Law

Notions of corporate social responsibility (CSR) and more recently, environmental, social, and governance (ESG) have found their way into the boardrooms of the world’s largest corporations. The prominence of this trend has revived the timeless debate over the true function of for-profit business. Traditional theory calls for a corporation to maximize shareholder’s profits—a view known as “shareholder primacy.” A competing contemporary school of thought finds that corporate purpose naturally extends beyond generating return on the investment of a given shareholder to reflect social objectives and the many dependent constituents of a business. As it stands, US corporate law tracks the …

Written Testimony Of Philip Hackney For The Hearing On Growth Of The Tax-Exempt Sector And The Impact On The American Political Landscape (U.S. House Ways & Means Subcommittee On Oversight, December 13, 2023), Philip Hackney

Testimony

In written testimony before the House Ways & Means Subcommittee on Oversight on December 13, 2023, Professor Hackney emphasized three points about tax-exempt organizations and politics: (1) a diverse nonprofit sector that fosters civic participation and engagement is a gem of the United States -- we should maintain that; (2) the IRS budget for Exempt Organizations continues to NOT be sufficient to ensure the laws are equally and fairly enforced; and (3) there are simple things the IRS could do to enforce the law that it is not doing.

Blue State Exodus?, Jon D. Michaels, David L. Noll

Pepperdine Law Review

American businesses and families are leaving Blue states in record numbers for destinations like Texas, Florida, and Georgia. This migration of people, businesses, and tax dollars has prompted claims of a “Blue state exodus” prompted by “leftist politicians imposing leftist ideology.” As expressed by Utah’s Senator Mike Lee, the “exodus” proves that “the Left’s policies don’t work.” But does the movement of taxpayers from Blue to Red states really signal a rejection of progressive policies? This Essay argues that, before accepting that interpretation, we should consider another possibility. Perhaps Blue states aren’t overly progressive, but insufficiently so. Paralyzed by political …

Political Polarization In America: Its Impact On Industrial Democracy And Labor Law, Leonard Bierman, Rafael Gely

Brooklyn Law Review

By virtually all accounts, American society has become increasingly polarized during the past couple of decades. Indeed, the degree of political polarization on issues such as voting rights, gun control, abortion rights, and COVID vaccines has been so extreme that political scientists have worried about whether the conditions necessary for the United States to maintain a democratic society have broken down. This article examines this issue in the context of federal labor law and labor relations. It argues that American labor law is framed around an "industrial democracy narrative" that is today being sharply threatened by extant political polarization. It …

Economic Extraterritorial Regulation Amongst The American States, Michael Mischley

School of Professional Studies

By analyzing historical and contemporary examples, this study demonstrates the reality of extraterritorial regulation and how concepts of federalism and political representation shape legal precedents that allow this practice to occur. Second, using a case study focused on the State of California, the State of Texas, and the State of New York, this study looked for pending or promulgated legislation with extraterritorial effect outside of environmental regulation and where the Congress preempts state law.

Conclusively, the practice of economically-powerful American states regulating extraterritorially exists in other policy areas and occurs as a means of national influence outside of federal channels. …