Wednesday, November 22, 2017
Greetings from Barcelona. Perhaps it’s the time diference and it’s still early in the U.S. but for the first time in days I haven’t been overwhelmed with text messages from news outlets about another senator, congressman, policial candidate, actor, talk show host, porn star, or other public figure being accused of sexual harassment by multiple women.
I spent twenty years in the employment law field investigating and defending harassment claims both as outside counsel and in house. None of what I’m hearing now surprises me. I am surprised by some of the jaw dropping settlement amounts for some single-plaintiff cases.
I agree with the sentiments in this recent NPR story. Sexual harassment training often fails because employees believe it’s a check the box exercise, especially, I would imagine in states like California where it’s mandatory for certain employers every two years. More important, it fails because until now, very few men in power paid any consequences for their actions. Dov Charney of American Apparel was a notable exception of a CEO who cost the company so much in settlements that the board had to oust him.
When I conducted training, I told employees that if they didn’t want someone saying or doing the same thing to their wife, sister, or daughter as they were about to say or do in the workplace then they should know it’s wrong. That common sense lecture took about 5 minutes in training that usually lasted a few hours (covering other kinds of harassment and discrimination as well).
Unconscionable behavior will persist, however, as long as companies turn a blind eye to it. In the current environment, that will be nearly impossible. Companies are now terminating contracts with accused public figures even before they have had a chance to do a thorough investigation and even when the accused denies the wrongdoing.
Companies lose talented women or potential recruits because of perceptions of a culture that ignores harassment and discrimination. They pay astronomical settlements because they choose to retain superstars who repeatedly violated company policy and/or the law. Boards and shareholders must therefore pay closer attention to what has always been but is now becoming a steep financial, and more important, high human capital cost.
Tuesday, November 21, 2017
Hardesty on Law Students as Future Leaders: Using Neutral Facilitation Techniques to Teach Leadership Skills
I have had the pleasure to work with a diverse and impressive group of people on the law faculties upon which I have had the privilege to serve. One of those people is David C. Hardesty, Jr., President Emeritus of West Virginia University and Professor of Law at the WVU College of Law. President Hardesty holds degrees from West Virginia University, Oxford University (which he attended as a Rhodes Scholar), and Harvard Law School, but more impressive is the time he spends mentoring students and faculty. He remains committed to the college, university, and state, and we are fortunate he continues to share his time with us.
President Hardesty teaches a course on leadership, called Lawyers as Leaders, which would be highly relevant at any law school, but it especially important at a school like ours where we are the only law school in the state. In addition to serving clients big and small, our students consistently go on to hold public office, advise legislators and regulators, and run large companies in the state. President Hardesty recently wrote an article for the West Virginia Law Review Online that explains part of how he helps prepares lawyers to be leaders. The article is Law Students as Future Leaders: Using Neutral Facilitation Techniques to Teach Leadership Skills, 120 W. Va. L. Rev. Online 1 (2017). The introduction explains:
Lawyers lead in America. They always have. They probably always will. This Article suggests the reasons why. It also argues that if lawyers are destined to lead, then law schools should help law students develop an understanding of leadership theory and foster leadership skill development. The Article describes how a course called “Lawyers as Leaders” is taught at the West Virginia University College of Law, employing neutral facilitation techniques, as well as lectures, group discussions, journaling, and simulation activities. It then describes a powerful pedagogical tool that can be used to develop future leaders: “student-centered neutral facilitation.” It explains why neutral student-centered facilitation is an effective method for teaching leadership skills to law students. The Article begins and ends with two “facilitation stories,” highlighting the use of facilitation by experienced lawyers and law students alike. The first story is about the use of facilitation to help clients achieve their goals. The second is about a student in the midst of learning how to facilitate a discussion.
As we continue to evolve how we think about educating lawyers, and what we hope to accomplish, courses that discuss options and expectation in context can play a significant role in preparing our students. Hardesty explains:
Research has found that the student-centered discussion process enriches student learning. In particular, the incorporation of the student-centered discussion process into the classroom “has the potential of enhancing the level of student learning about the course content and about the way they and others think about difficult issues.” This finding makes sense given that students tend to remember course content based on their level of involvement it. Faculty members have reported that content coverage in their courses has not declined in student-centered classrooms; rather, they have found that their students experience a deeper understanding of the course’s fundamental concepts. One explanation for this deeper level of understanding is that students discover for themselves the essential concepts that would normally be presented through course readings or lecture material. In addition, “[f]aculty report that they have seen students who have not been ‘stars’ in previous classes suddenly ‘blossom’” in the student-centered classroom environment. Because students feel safe and comfortable working with their teammates, student-centered discussions can bring out the potential that some students have but may not otherwise reveal in more traditional classroom environments. (footnotes omitted)
As the semester draws to a close, I thought this one was worth a look as you gear up for next semester's courses. It helped me think about some new ideas, anyway. Happy Thanksgiving!
Monday, November 20, 2017
The Oklahoma Law Review recently published an article I wrote for a symposium the law review sponsored last year at The University of Oklahoma College of Law. The symposium, “Confronting New Market Realities: Implications for Stockholder Rights to Vote, Sell, and Sue,” featured a variety of presentations from some really exciting teacher-scholars, some of which resulted in formal published pieces. The index for the related volume of the Oklahoma Law Review can be found here. I commend these articles to you.
The abstract for my article, "Selling Crowdfunded Equity: A New Frontier," follows.
This article briefly offers information and observations about federal securities law transfer restrictions imposed on holders of equity securities purchased in offerings that are exempt from federal registration under the CROWDFUND Act, Title III of the JOBS Act. The article first generally describes crowdfunding and the federal securities regulation regime governing offerings conducted through equity crowdfunding — most typically, the offer and sale of shares of common or preferred stock in a corporation over the Internet — in a transaction exempt from federal registration under the CROWDFUND Act and the related rules adopted by the U.S. Securities and Exchange Commission. This regime includes restrictions on transferring securities acquired through equity crowdfunding. The article then offers selected comments on both (1) ways in which the transfer restrictions imposed on stock acquired in equity crowdfunding transactions may affect or relate to shareholder financial and governance rights and (2) the regulatory and transactional environments in which those shareholder rights exist and may be important.
Ultimately, the long-term potential for suitable resale markets for crowdfunded equity — whether under the CROWDFUND Act or otherwise — is likely to be important to the generation of capital for small business firms (and especially start-ups and early-stage ventures). In that context, three important areas of reference will be shareholder exit rights, public offering regulation, and responsiveness to the uncertainty, information asymmetry, and agency costs inherent in this important capital-raising context. Only after a period of experience with resales under the CROWDFUND Act will we be able to judge whether the resale restrictions under that legislation are appropriate and optimally crafted.
Those familiar with the literature in the area will note from the abstract that I employ Ron Gilson's model from "Engineering a Venture Capital Market: Lessons from the American Experience" (55 Stan. L. Rev. 1067 (2003)) in my analysis.
I know others are also working in and around this space. I welcome their comments on the essay and related issues here and in other forums. I also know that we all will "learn as we go" as the still-new CROWDFUND Act experiment continues. Securities sold in the early days of effectiveness of the CROWDFUND Act (which became effective May 16, 2016) are just now broadly eligible for resale. Stay tuned for those lessons learned from the school of "real life."
Sunday, November 19, 2017
"In reaction to political censorship on social media, many populist conservatives, including Tucker Carlson, Ann Coulter, and Steve Bannon, have called for the platforms to be publicly regulated." https://t.co/p8TFGENjE8 #corpgov— Stefan Padfield (@ProfPadfield) November 17, 2017
"from the perspective of moral relativism [corporate social responsibility] would seem rather pointless, as what is right for one is not necessarily right for another" https://t.co/G732AuVB08 #corpgov— Stefan Padfield (@ProfPadfield) November 18, 2017
"Social media companies..are vulnerable to federal criminal prosecution under 18 U.S.C. §2339B, the material support to terrorism statute, for providing a means for terrorists & their sympathizers to glorify & pursue their violence on social media." 39 Cardozo L. Rev. 1 #corpgov— Stefan Padfield (@ProfPadfield) November 19, 2017
Saturday, November 18, 2017
Quietly, just over two months ago, we got our Lady Vols back. As you may recall, back in 2014, The University of Tennessee, Knoxville decided to consolidate its athletic branding behind the ubiquitous orange "Power T." The women's basketball team was exempted from the brand consolidation and retained the Lady Vol name and old-school logo in honor of our beloved departed coach, Pat Head Summitt. (See here.)
Many can be credited with the revival of the Lady Vols brand (and I do consider it to be an accomplishment), although perhaps these five heroic women are owed the largest debt of gratitude for the achievement. I guess my earlier envisioned dreams of profiting from the abandonment of the trademarked Lady Vols logo will not soon be realized . . . .
There are lingering lessons in this affair for businesses and their management--and universities (as well as their athletic departments) are, among other things, businesses. Knoxville's former Mayor weighed in with comments on the matter in a recent local news column, advising "you need to be sensitive to what the customer likes." He concludes (bracketed text added by me):
People will speculate for a long time on how UT let itself get caught up in this unfortunate situation for three years. It did not have to happen. It can be a valuable lesson, if once leaders realize a mistake has been made, postponing a resolution does not improve it. Better to make amends and move on.
Hopefully, DiPietro [the university's President] has learned from this that it is better to get ahead of a volatile issue than to be consumed by it. Currie [the university's new Director of Athletics] and Davenport [the campus's new Chancellor] solved it for him. They have won considerable good will for themselves and the university.
From Coca-Cola and its disastrous New Coke introduction (mentioned in the article) to Google Glass (which may have better applications, for the moment, than the general consumer market), businesses and their management have learned these lessons over and over. Listen to the customer, and if you make a miscalculation, admit it and move on.
As law schools and law instructors continue to innovate to serve students, our universities (for those who are part of one), and the profession (among other constituencies), we may be able to learn a lesson or two from some of the broader experimentation in the business world in the introduction of new products and services. Change for the sake of change or for the sake of branding simplicity, without an understanding of the relevant constituents, certainly is a risky proposition. I hope that we can be thoughtful and consider all affected interests as we innovate. And I also hope that when we fail in our change efforts (and some of us will fail) we can cut our losses and re-appraoch change with new knowledge and renewed energy to succeed.
Getting back to those Lady Vols, our women's basketball team is now 2-0 with convincing wins over ETSU and James Madison. The next game is Monday against Wichita State, followed by a Thanksgiving evening match against Marquette. Go Lady Vols!
Friday, November 17, 2017
Paul Caron (Pepperdine) reports that Wake Forest Law has become the 10th law school to accept the GRE. The law school will continue to accept the LSAT.
Those ten law schools (in chronological order, from earliest adopter to most recent adopter) are:
- Washington University,
- St. John's,
- Texas A&M,
- Wake Forest
This shift to accepting the GRE at Wake Forest Law has, apparently, been in the works for over 18 months, and Christine Hurt (BYU) had a nice post on some of the early discussion. Around that time, in February of 2016, Arizona became the first law school to accept the GRE.
Like Christine Hurt, I think this move to including the GRE is probably a good thing, especially if the GRE is shown to be just as predictive as the LSAT. The GRE is offered much more frequently than the LSAT and some pre-law students will have already taken the GRE. Also, I am generally in favor of competition, and the LSAC/LSAT has had a monopoly on law school admissions tests for quite a long time.
It looks like U.S. News is already converting GRE scores into comparable LSAT scores for ranking purposes. If U.S. News had not acted, this would have been a pretty big loophole for law schools to exploit.
For pre-law advisors, like me, I think we should definitely let students know of the GRE option at some schools. The GRE may be an especially good option for students who are likely to go to graduate school, but are not yet entirely sure which direction they will go. It also may give students more options if the LSAT's limited testing dates do not work for them. Finally, I don't think the GRE has logic game questions, which some students really struggle with, and therefore students could avoid those questions with the GRE. On the downside, only about 5% of ABA-accredited schools currently accept the GRE. That said, I expect the number of law schools accepting the GRE to rise rapidly over the next few years.
Thursday, November 16, 2017
"This article ... highlights key issues that corporations ... may face in the course of sustainability reporting ...." Jerry K C Koh, Victoria Leong, The Rise of the Sustainability Reporting Megatrend: A Corporate Governance Perspective, 18 Bus. L. Int'l 233, 234 (2017). #corpgov— Stefan Padfield (@ProfPadfield) November 14, 2017
"Six of the 13 current and immediate past 'public governors' supposedly representing investor interests on the Board of Governors overseeing FINRA ... appear to have conflicts of interest" https://t.co/0NRRGpTmdy #corpgov— Stefan Padfield (@ProfPadfield) November 16, 2017
Wednesday, November 15, 2017
Call For Papers-3rd Global Meeting Indiana University Europe Gateway, Berlin, Germany July 10 & 11, 2018
I'm passing this on from Karen Bravo at IU given all of the ESG disclosures on slavery, supply chains, and human trafficking.
Call for Papers:
SLAVERY PAST, PRESENT & FUTURE: 3rd Global Meeting
Indiana University Europe Gateway, Berlin, Germany
July 10 & 11, 2018
Throughout history, slavery (the purchase and sale of human beings as chattel), enslavement (through conquest, and exploitation of indebtedness, among other vulnerabilities), and similar extreme forms of exploitation and control have been an intrinsic part of human societies.
Is slavery an inevitable part of the human condition?
Controversial estimates indicate that up to 35 million people worldwide are enslaved today. This modern re-emergence of slavery, following legal abolition over two hundred years ago, is said to be linked to the deepening interconnectedness of countries in the global economy, overpopulation, and the economic and other vulnerabilities of the individual victims and communities.
This conference will explore slavery in all its dimensions and, in particular, the ways in which individual humans and societies understand and attempt to respond to it.
The varieties of contemporary forms of exploitation appear to be endless. Consider, for example, enslavement or mere “exploitation” among:
- fishermen in Thailand’s booming shrimping industry,
- children on Ghana’s cocoa plantations,
- immigrant farmworkers on U.S. farms,
- truck drivers in the port of Los Angeles.
- prostituted women and girls on the streets and in the brothels of Las Vegas,
- the dancing boys (bacha bazi) of Afghanistan,
- the sex workers of The Netherlands’ Red Light Districts and in Italian cities,
- Eritrean and other sub-Saharan Africans fleeing to Israel and trafficked and exploited in the Sinai,
- Syrian refugees in Jordan, Turkey, and Lebanon, and
- migrant workers from Southeast Asia and other countries who flock to the oil rich Gulf States for work.
Does the persistence and mutations of different forms of extreme human-of-human exploitation mean that the world may not have changed as much as contemporary societies would like to believe since worldwide abolition and the recognition of universal individual and collective human rights? Like the ‘consumers’ of past eras, such as early industrialization, are we dependent on the abhorrent exploitation of others?
Potential themes and sub-themes of the conference include but are not limited to:
- Defining Slavery:
- What do we mean when we talk about “slavery”
- Using “slavery” to obscure other endemic forms of exploitation
- Teaching and learning about historic slavery and contemporary forms of exploitation
- Slaveries of the Past
- Classical (Egyptian, Greco-Roman, etc.) slavery
- Conquests and colonizations – Aboriginal Australians, indigenous peoples of the New World, dividing and colonizing Africa and Asia
- Slaveries in Europe before the Trans-Atlantic Slave Trade and Industrialization, such as villeinage and serfdom
- Trans-Atlantic Slavery and the trans-Atlantic Slave Trade
- Systems of slavery in tribal and traditional societies
- WWII and post-WWII forced labor camps
- Human Trafficking and other Forms of Contemporary Exploitation
- Types of human trafficking
- Organ trafficking
- The focus on sex trafficking: reasons, purpose, effects
- Can nation states enslave?
- Is human trafficking “slavery”
- Contemporary usage and depictions of slavery
- Civil society anti-trafficking activism:
- Anti-trafficking policies and legislation
- Assessing contemporary anti-trafficking and/or anti-“slavery” Initiatives
- Systems and Structures of Enslavement and Subordination (historic and contemporary)
- Role of slavery in national and global economies
- Economic, political, legal structures – their role in enslavement and exploitation
- Slavery’s impact on culture
- Cultural impacts of historic slavery
- Voices of the Enslaved
- Slave narratives of the past and present
- Descendants’ interpretation of their enslaved and slave-holding ancestors
- Legacies of slavery
- Identifying and mapping contemporary legacies – economic, social, cultural, psychological
- Assessment of slavery’s impact – economic, political, other
- Commemorations of enslavers and/or the enslaved
- Debating reparations
- Anti-slavery movements:
- Economic compensation
- Restorative justice
- Teaching and learning about slavery
- Relationship to the global racial hierarchy
- Abolitionism and law: effects and (in)effectiveness
- The role of media and social media
Submissions to this conference are sought from people from all genders and walks of life, including academics (from multiple disciplines, such as art, anthropology, sociology, history, ethnic studies, politics, social work, economics) and non-academics; social workers, activists, and health care professionals; government representatives and policy makers; former slaves and indentured laborers; members of at-risk populations such as migrant and guest workers, non—regularized immigrants, and refugees.
Karen E. Bravo (Indiana University Robert H. McKinney School of Law, IN, USA)
David Bulla (Augusta University, GA, USA)
Sheetal Shah (Webster University, Leiden, The Netherlands)
Polina Smiragina (University of Sydney, Australia)
Submitting Your Proposal
Proposals should be submitted no later than Friday, March 2, 2018 to:
Karen E. Bravo, Indiana University Robert H. McKinney School of Law, Indianapolis: email@example.com
E-Mail Subject Line: Slavery Past Present & Future 3 Proposal Submission
File Format: Microsoft Word (DOC or DOCX)
The following information must be included in the body of the email:
2. Affiliation as you would like it to appear in the conference program
3. Corresponding author email address
The following information must be in the Microsoft Word file:
1. Title of proposal
2. Body of proposal (maximum of 300 words)
3. Keywords (maximum of ten)
Please keep the following in mind:
1. All text must be in Times New Roman 12.
2. No footnotes or special formatting (bold, underline, or italicization) must be used.
Evaluating Your Proposal
All abstracts will be double-blind peer reviewed and you will be notified of the Organizing Committee’s decision no later than Friday, 16 March 2018. If a positive decision is made, you will be asked to promptly register online. You will be asked to submit a draft paper of no more than 3000 words by Friday, 01 June 2018.
The conference registration fee is Euro (€) 200. Please note that we are not in a position to provide funding to facilitate your participation.
A selection of papers will be published in an edited volume, to be submitted to Brill’s ‘Studies in Global Slavery’ book series.
Tuesday, November 14, 2017
Plaintiff alleges that Sinsky violated 15 U.S.C. § 1125(a)(1)(A) and engaged in unfair and deceptive trade practices, in violation of Maryland common law. ECF 1, ¶¶ 17-22, 23-26. At its core, plaintiff's contention is that “Sinsky is the resident agent and incorporator” of Farm Fresh Home (ECF 1, ¶¶ 12-13), and in that capacity she “filed” the articles of organization for Farm Fresh Home, creating a name for the “competing company” that is “intentionally confusing” because of its similarity to Farm Fresh Direct. ECF 1, ¶ 12.
. . . .
*4 Farm Fresh Home is a limited liability company. As a threshold matter, I must determine whether Sinsky is subject to suit in light of Farm Fresh Home's status as a limited liability company.
The question here is not whether plaintiff will ultimately prevail. Its allegations as to Sinsky border on thin. But, for purposes of the Motion, plaintiff adequately alleges sufficient facts and inferences that Sinsky participated in the creation of Farm Fresh Home for the purpose of using a confusingly similar name to compete with Farm Fresh Direct. See A Society Without a Name, 655 F.3d at 346. Therefore, plaintiff is not entitled to the protection of the corporate shield at this juncture.
Monday, November 13, 2017
Sunday, November 12, 2017
I am putting together a panel or discussion group (depending on how many folks respond positively) for the SEALS conference for next summer, which is scheduled to be held August 5-11, 2018, at the Marriott Harbor Beach Resort & Spa in Fort Lauderdale, Florida (details here).
Here is the proposed title and a brief draft description (which may have to be shortened for the submission):
The Role of Corporate Personhood in Masterpiece Cakeshop
The United States Supreme Court is scheduled to hear arguments in the case of Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission on Dec. 5, 2017 (SCOTUSblog summary here). The issue presented in that case is: “Whether applying Colorado's public accommodations law to compel the petitioner to create expression that violates his sincerely held religious beliefs about marriage violates the free speech or free exercise clauses of the First Amendment.” A group of corporate law professors have filed an amicus brief in support to the CCRC (available here). One of the two arguments in that brief is: “Because Of The Separate Legal Personality Of Corporations And Shareholders, The Constitutional Interests Of Shareholders Should Not Be Projected Onto The Corporation.” This [panel] [discussion group] features [paper presentations] [a dialogue] on the pros and cons of this argument, together with related analysis and observations. Please note that the Supreme Court will likely have issued its opinion in the case by the time of the panel/discussion.
Please email me at firstname.lastname@example.org if you would like to participate in this program, letting me know if you are interested in presenting a paper, participating in a discussion, or both. Also, let me know if you know of anyone else who may want to participate—or just pass this on to others. I must file the proposal soon in order to ensure its consideration (the “best practices” deadline for submissions has already passed).
November 12, 2017 in Business Associations, Call for Papers, Conferences, Constitutional Law, Corporate Governance, Corporate Personality, Corporations, Current Affairs, Family Business, Stefan J. Padfield | Permalink | Comments (0)
Saturday, November 11, 2017
SEC Commissioner Jay Clayton recently gave a speech where he remarked:
I have become increasingly concerned that the voices of long-term retail investors may be underrepresented or selectively represented in corporate governance. For instance, the SEC staff estimates that over 66% of the Russell 1000 companies are owned by Main Street investors, either directly or indirectly through mutual funds, pension or other employer-sponsored funds, or accounts with investment advisers… And, if foreign ownership is excluded, that percentage approaches approximately 79%.
… A question I have is: are voting decisions maximizing the funds’ value for those shareholders?
In situations where the voting power is held by or passed through to Main Street investors, it is noteworthy that non-participation rates in the proxy process are high. … This may be a signal that our proxy process is too cumbersome for retail investors and needs updating.
What’s interesting is that there are two different ideas here. One concerns the voting power of mutual funds and pension funds; the other concerns the votes of retail shareholders themselves.
As for retail votes, Jill Fisch has an article on this very subject forthcoming in the Minnesota Law Review. She recommends that retail shareholders be given access to electronic platforms, similar to those available to institutions, that allow them to set advance voting instructions without requiring them to make a company by company decision.
The broader question, though, is whether we do in fact want to encourage greater retail participation, and what the effects are likely to be. There’s long been an argument that retail investors should not invest directly, and the rules governing securities markets have, to a greater and greater extent, become less hospitable to them. (Stephen Choi, for example, has argued that investors should only be allowed to participate in capital markets if they demonstrate a certain degree of sophistication.) If that’s right, it makes little sense to encourage their participation in corporate governance.
At the same time, though, public companies love retail investors, because they are less likely to coordinate with pesky activists, and are assumed to be more supportive of management. I’ve often wondered if that was the motivating force behind Loyal3 (which recently folded shop), providing a free online brokerage for retail investors that wanted stock in their favorite brands.
Given what appears to be the general Republican preference, I rather suspect that they believe shareholder involvement in corporate governance is a net negative, and I wonder if Clayton’s newfound push for retail investor involvement is actually a stealth attempt to provide management with a bulwark against activist challenges.
Certainly, that appears to be the theme of Clayton’s actions: the rest of his speech expresses concern about shareholder proposals, and a recent SEC staff opinion suggests a shift to more deference to corporate boards when deciding excludability. In that context, his conflation of retail investor voting with mutual fund voting seems like something of a shot across the bow targeting mutual fund voting power. I can imagine, for example, a push to transition to pass-through voting for mutual funds, combined with a few measures that encourage retail investor participation.
But if that’s the kind of thing Clayton is hinting at – and to be sure, no one has suggested it so far, but it would make sense as an endgame – I do wonder how much it (and other efforts to involve retail shareholders) will backfire. I imagine retail investors, if seriously encouraged to participate, might be more – not less – likely to vote for social proposals and other less-than-wealth-maximizing actions that, these days, mutual funds tend to avoid unless pressed. And as Jill Fisch points out, retail investors might adopt advance voting instructions that set automatic triggers to challenge management when certain underperformance benchmarks are met. If the default assumption is that retail investors are less informed and less attentive, encouraging their greater participation may be something of a double-edged sword, from management’s perspective.
Moreover, if we have greater retail involvement in the voting process, Delaware might have to revisit decisions like Corwin v. KKR, 125 A.3d 304 (2015), which rest - at least implicitly - on the assumption of a sophisticated (institutional) shareholder base. And that’s something I'm pretty sure management would not want.
Friday, November 10, 2017
After my daughter Allie's first stay at Vanderbilt Children’s hospital, with what we think was a virus that attacked her lungs, Allie seemed to return to normal for a couple weeks before having another episode. This time, we spent 4 days in the hospital. The praise I lavished on Vanderbilt last time was less deserved on this trip, mostly blamed, staff repeatedly claimed, on a new computer system. (Note: In a place like a hospital, don’t you think you should provide adequate training and work out the bugs before launching a new computer system?)
In any event, Allie is back home again, though we are still working with doctors to uncover the precise cause.
Obviously, my daughter’s health is much more important than work, but I do need to continue to work (if for no other reason than health insurance...we would be bankrupt without health insurance). Given that my focus has been diverted, I have had to push on quite a number of deadlines -- 4 writing assignments and 2 speaking engagements -- and have been slower than normal in returning graded work. Thankfully, students, editors, and colleagues have been quite understanding.
As a professor and a person, I am a big believer in meeting deadlines, so it has been difficult for me to ask for extensions. When asking for extensions, I do think students and professors can “cry wolf” too often, and then, when true emergencies do arise, it becomes harder for the other side to happily grant the extension. This situation has made me even more committed to hitting every deadline I can, so that when I do ask for an emergency extension, people know it is for a valid reason.
Also, this situation has reminded me of the need to create some margin in my life. This past month was going to be a busy one, even without my daughter’s situation. It was doable, but all time needed to be available and efficiently used. Without margin, many projects were impacted, in domino fashion. Now, this situation with my daughter was unexpected and extraordinary and difficult to plan for, and I am not suggesting that we all run at 50% capacity in case of an emergency, but I do think I could have benefited from having built a bit more flexibility into my schedule. (Note: As a law review adviser, I recommended that my students to build some of this margin into their publishing schedule for professors. For example, tell the professors you need the article about a month before you actually do because various issues almost invariably arise.)
In any event, I am quite appreciative to all those who have been so understanding, and I am catching up. Barring any future issues, I think I will be back in the grove and on schedule in about 10 days or so, just in time to gear up for finals.
Thursday, November 9, 2017
Hey @Twitter, can you at least provide badges for those of us who can still manage to get to the point in 140 characters?— Stefan Padfield (@ProfPadfield) November 9, 2017
Wednesday, November 8, 2017
Last week, I posted about the Trump Administration's hypocritical policy toward Cuba and how the U.S. embargo hurts American businesses (not to mention the Cuban people). The embargo, among other things, focuses on preventing human rights violators in Cuba from profiting from Americans. Wednesday, the Administration significantly rolled back some of the Obama-era changes making it much harder for Americans to travel and making it certain that even fewer U.S. airlines will try to make their fledgling Cuba itineraries work.
Ironically, the Administration released the new regulations while the President is in China and within days of his meeting with the President of Russia in Communist Vietnam. Both China and Russia have a significant number of state-owned enterprises and very few restrictions on U.S. firms conducting business with them. The new policy, which goes into effect Thursday, once again requires people under U.S. jurisdiction to travel under the OFAC license of U.S. tour groups. As anyone who has traveled to Cuba before the Obama liberalization knows, this significantly increases the cost of the trip. The Trump Administration may not realize that those U.S. tour companies have no choice but to work with the Cuban government, which controls the tourism industry, so I'm not sure how this achieves the objectives of keeping American money out of the pockets of the government. The new rules also ban dozens of hotels, but not Starwood, which is run by the Cuban government. Although the policies aim to support the Cuban people directly, this will be difficult if Americans find it too onerous to get to the island.
If you don't have time to read the new regulations, I have cut and pasted some of Embassy's key points below:
- In accordance with the NSPM, the State Department is publishing a list of entities and subentities that are under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services or personnel and with which direct financial transactions would disproportionately benefit the Cuban military, intelligence, or security services or personnel at the expense of the Cuban people or private enterprise in Cuba – the State Department’s List of Restricted Entities and Subentities Associated with Cuba (“Cuba Restricted List”). The Cuba Restricted List is maintained by the State Department and will be published and periodically updated as necessary in the Federal Register.
- Persons subject to U.S. jurisdiction will now be prohibited from engaging in certain direct financial transactions with entities and subentities identified by the State Department on the Cuba Restricted List. Certain transactions will be excluded from this prohibition pursuant to exceptions detailed in the NSPM.
- Consistent with the Administration’s interest in avoiding negative impacts on American business and travelers, commercial engagements in place prior to the State Department’s listing of any entity or subentity will continue to be authorized, as will most previously arranged travel. For example, businesses will be permitted to continue transactions outlined in contingent or other types of contractual arrangements agreed to prior to the issuance of the new regulations, consistent with other regulatory authorizations.
Trade and Commerce
- In accordance with the NSPM, BIS is establishing a general policy of denial for license applications to export items for use by entities and subentities on the Cuba Restricted List unless the transaction is otherwise consistent with the NSPM.
- Consistent with the Administration’s policy to support free enterprise in Cuba, BIS is simplifying and expanding its license exception that authorizes certain license-free exports to the Cuban private sector.
- In accordance with the NSPM, OFAC is requiring that (1) all people-to-people nonacademic educational travel be conducted under the auspices of an organization that is subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact, and (2) such travelers be accompanied by a person subject to U.S. jurisdiction who is a representative of the sponsoring organization. Individual people-to-people nonacademic educational travel will no longer be authorized as announced by the President.
- Consistent with the Administration’s interest in avoiding negative impacts on Americans for arranging lawful travel to Cuba, certain people-to-people travel that previously was authorized will continue to be authorized where the traveler had already completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation) prior to the President’s June 16, 2017 announcement.
- In accordance with the NSPM, Americans engaging in certain authorized educational travel will now be required to do so under the auspices of an organization that is a person subject to U.S. jurisdiction.
- These authorized educational travelers will now also be required to be accompanied by a person subject to U.S. jurisdiction who is a representative of the sponsoring organization, unless the traveler is the representative and obtains a certification letter from the sponsoring organization.
- Consistent with the Administration’s interest in avoiding negative impacts on Americans for arranging lawful travel to Cuba, certain educational travel that previously was authorized will continue to be authorized where the traveler has completed at least one travel-related transaction prior to the publication of the regulations on November 9.
Support for the Cuban People Travel
- In accordance with the NSPM, OFAC is requiring that each traveler under this travel category engage in a full-time schedule of activities that result in meaningful interaction with individuals in Cuba. Such activities must also enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities. Renting a room in a private Cuban residence (casa particular), eating at privately owned Cuban restaurants (paladares), and shopping at privately owned stores run by self-employed Cubans (cuentapropistas) are examples of authorized activities; however, in order to meet the requirement of a full-time schedule, a traveler must engage in additional authorized Support for the Cuban People activities.
- In accordance with the NSPM, OFAC is amending the definition of the term prohibited officials of the Government of Cuba to include certain additional individuals. BIS is making conforming changes to three license exceptions that include the same definition. This definitional change will affect certain otherwise-authorized transactions with the expanded group of such officials.
Given the meetings in Asia this week, we won't likely see any sanctions, trade or travel restrictions against countries with similar human rights records. We will, however, see fewer Americans traveling to Cuba, and fewer U.S. businesses having the opportunity to export their products to the people that the President is trying to help.
My friend and colleague at West Virginia University, Jena Martin, has posted her new paper, Hiding in the Light: The Misuse of Disclosure to Advance a Business and Human Rights Agenda. The paper is forthcoming in the Columbia Journal of Transnational Law and can be accessed at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3028826
It's worth a read. Here's the abstract:
In June 2017, Waitrose, a top UK supermarket, pulled its cans of corned beef off the shelves after an investigation revealed that the meat might have been produced with slave labor. At the time of the recall, Waitrose was in compliance with the UK Modern Slavery Act (MSA), a 2015 law enacted to prevent human trafficking and modern-day slavery. Under the MSA, corporations are required to file annual reports disclosing what action they had taken to eradicate slavery and human trafficking in their supply chains. The Modern Slavery Act, in turn, was a much-lauded law that is part of the growing trend of States to move the international business and human rights agenda forward. A key component of that agenda involves disseminating the UN’s Protect, Respect and Remedy Framework and implementing the UN Guiding Principles, which have been praised by States around the world as a framing mechanism for issues of corporate accountability for negative human rights impacts in a corporation’s operations and relationships with its suppliers.
The aim of this article is to analyze whether the business and human rights agenda (as embodied by the Three Pillar Framework and UN Guiding Principles) is well served with national laws that focus on disclosure. The article will focus primarily on rules being implemented in the United States at both the subnational and national level, however, it will also discuss approaches being used in European jurisdictions such as the United Kingdom and France and the overall trend towards a transparency model for human rights protection from business activities. The increased use of disclosure-based regulation (and the resulting compliance efforts by corporations) seems to come, at least in part, as a result of the efforts by States to address the duties laid out for them in the UN Guiding Principles. As such, it seems appropriate to undertake an analysis regarding whether these laws are in fact effective at implementing the Guiding Principles.
For decades now, disclosure has been held out as the ultimate curative for every corporate woe. The expansion of disclosure initiatives from mere investment-related issues to increasingly social policy issues would indicate that this trend will continue. Yet as this article demonstrates, disclosure to right now is at best a temporary stop gap measure that can lead to limited corporate change on the issue of business and human rights. At worst, disclosure is being used by corporations as a way to obtain a reputational advantage without actually making substantive changes – by simply hiding in the light.
Monday, November 6, 2017
The Harvard Law School Program on Corporate Governance and Financial Regulation is pleased to announce the availability of positions of Post-Graduate Academic Fellows in the areas of corporate governance and law and finance. Qualified candidates who are interested in working with the Program as Post-Graduate Academic Fellows may apply at any time and the start date is flexible.
Candidates should be interested in spending two to three years at Harvard Law School (longer periods may be possible). Candidates should have a J.D., LL.M., or S.J.D. from a U.S. law school, or a Ph.D. in economics, finance, or related areas by the time they commence their fellowship. Candidates still pursuing an S.J.D. or Ph.D. are eligible so long as they will have completed their program’s coursework requirements by the time they start. During the term of their appointment, Post-Graduate Academic Fellows work on research and corporate governance activities of the Program, depending on their skills, interests, and Program needs. Fellows may also work on their own research and publishing in preparation for a career in academia or policy research. Former Fellows of the Program now teach in leading law schools in the U.S. and abroad.
Interested candidates should submit a CV, transcripts, writing sample, list of references, and cover letter to the coordinator of the Program, Ms. Jordan Figueroa, at email@example.com. The cover letter should describe the candidate’s experience, reasons for seeking the position, career plans, and the kinds of projects and activities in which he or she would like to be involved at the Program. The position includes Harvard University benefits and a competitive fellowship salary.
I had the privilege of being invited again this year to present at the 2017 LLC Institute, an annual program produced by the LLC, Partnership and Unincorporated Entities Committee of the American Bar Association's Business Law Section. As part of a panel discussion on LLC fiduciary duties (with friend-of-the-BLPB Mohsen Manesh and others), I sang a few bars of Rocky Top (!) and talked about the fiduciary duty waiver issue that we faced in Tennessee in revamping our limited partnership law this past year. But that was far from the highlight of the program!
Luckily, friend-of-the-BLPB Tom Rutledge--a leader in (and former chair of) the LLC, Partnership and Unincorporated Entities Committee--has captured the essence of the two-day event in blog posts here and here. He notes in sum:
Over the last two days we have . . . , by means exceptional panels, considered and informed the participants on the broadest range of issues materially important to our shared area of interest and practice. That is the mission of the LLC Institute, and hopefully it has again delivered on its objective. The materials are posted and available for anyone, and in a few weeks the audio recordings will as well be posted. While we recommend them to you, if you did not attend you missed out on the opportunity to ask questions as the programs were in progress and perhaps even more importantly the opportunity to meet new and liaison with old friends. Those relationships are one of the great values of our Committee, the means by which we lean on and assist one another.
This is so true. The relationships--built through banter between and among panelists and audience members before, during, between, and after the sessions are what make this event special. Of course, the subject matter also is phenomenally interesting.
Co-blogger Josh Fershee also presented at the Institute this year. Other BLPB readers and friends who attended (some of whom also presented) included:
- Suffolk Law's Carter Bishop (who moderated and led our panel);
- Colorado's infamous consummate practitioners and thought-leaders Bill Callison (who gave an amazing luncheon talk on Thursday regarding his work in establishing a model entity law statute for use in developing countries*) and Bob Keatinge;
- Glommer and BYU Law Associate Dean Christine Hurt; and
- Baylor Law's Beth Miller (a/k/a the walking, talking guru of Texas business associations law and Queen of LLC caselaw--who, it was announced, will soon have a Committee content award named after her).
I am sure that I am missing someone . . . . Needless to say, a good time was had by all. And let me know if you'd like to be part of the program next year. I know that the folks who organize the event like to have new presenters come every year, to keep the banter going. I am happy to pass your name along.
*Specifically, as noted in his firm biography: "He is the American Bar Association's delegate to the United Nations Commission on International Trade Law Working Group I (Micro, Small and Medium Enterprises), which is focusing on law reforms enabling adoption of simplified business entity structures by micro-, small- and medium-sized businesses in developing countries. He serves on the UNCITRAL Secretariat's expert group in this process."
Sunday, November 5, 2017
Saturday, November 4, 2017
A lot to like and a lot to dislike in the Republican tax bill: “The tax bill aggressively takes on deductions in the individual income tax code, and channels the proceeds towards across-the-board cuts in income tax. Unfortunately, that good work is undone by expensive giveaways to the owners of firms, and unnecessary windfalls to the heirs of the rich.”
Tax Bill May Deal a Body Blow to LBOs: “The legislation includes a provision that would cap interest deductibility at 30 percent of adjusted taxable income, a dramatic shift from the 100 percent allowed now.”
Sports Stadiums Would Lose Access to Tax-Exempt Bonds Under House Tax Plan: “Lawmakers of both parties have long sought to limit the use of municipal bonds to benefit sports teams.”
Apple Among Giants Due for Foreign Tax Bill Under House Plan: “Earnings held in cash would be taxed at 12 percent while profits invested in less liquid assets like factories and equipment face a 5 percent rate.”
Proposal Aims to Eliminate Tax Break Linked to Performance-Based Pay for Executives: “The proposed changes would eliminate the tax break linked to performance-based pay for senior executives, raising some $9.3 billion in additional tax revenue over the next decade...”
Republican Tax Plan May Leave Future of Stock Options in Flux: “Under the GOP’s bill, option owners would be required to pay income taxes immediately when the contracts can be used to buy shares, instead of when they are actually purchased.”
US tax reform will boost innovation and entrepreneurship: “We will defer the tax on private stock gains until employees can actually realise those gains by selling the stock, or at least give them a reasonable amount of time to pay the tax bill.”
The GOP tax plan has a tiny 'bubble tax' that could end up raising taxes on the rich: “Every dollar after $1 million of income for an individual or $1.2 million for a couple would incur a surcharge. It would add $6 in taxes for every $100 of taxable income earned above those thresholds — essentially, an extra 6% tax.”
Senate Democrats falsely claim GOP tax plan will raise taxes for most working-class families: “The original report referred to 8 million households receiving a $794 tax increase. Somehow, when it got communicated down the line, that nuance was lost and it was translated into a talking point referring to all working-class families.”
How a Tax Cut Turns Into a Tax Increase: “In rolling out their plan, House Republicans focused on an example family — a married couple making $59,000 per year and with two kids. They said that family would get a tax cut of over $1,182 in 2018 (compared to what they paid in 2017). But, what they didn’t say is that a family making $59,000 would face a tax increase by 2024 relative to current law, with the tax increase potentially rising to nearly $500 by 2027.”
Republicans Bank on Future Congresses to Keep Family Tax Credit: “Taxpayers shouldn’t worry, Republicans say, because future Congresses will prevent the tax credit from vanishing. ... Rep. Carlos Curbelo (R., Fla.), said he thought members of both parties would ultimately support extending the break. 'That family credit is de facto permanent and you can take that to the bank,' Mr. Curbelo said.”
The GOP Tax Plan and Divorce: “The summary estimates that eliminating the deductibility of alimony payments will increase revenues by $8.3 billion over ten years.”
Republican Tax Proposal Gets Failing Grade From Higher-Ed Group: “In broad terms, the bill would eliminate or consolidate a number of tax deductions meant to offset the costs of higher education for individuals and companies, including the Lifetime Learning Credit, which provides a tax deduction of up to $2,000 for tuition, a credit for student-loan interest, and a $5,250 corporate deduction for education-assistance plans. The bill proposes new taxes on some private-college endowments and on compensation for the highest-paid employees at nonprofit organizations, including colleges and nonprofit academic hospitals. The plan would also tax the tuition waivers that many graduate students receive when they work as teaching assistants or researchers. Perhaps most significant, the bill would result in many fewer people itemizing their deductions for charitable gifts.”
Teachers spend nearly $1,000 a year on supplies. Under the GOP tax bill, they will no longer get a tax deduction: “Unlike other professionals, teachers are regularly expected to furnish their own supplies. They are often filling in gaps where students are unable to afford supplies — and where districts are unable to furnish them.”
House tax plan allows unborn children to have college savings accounts: “The tax-advantaged accounts, called 529s, help people save for future college expenses. Anyone -- a relative, a friend, or yourself -- can be named as a beneficiary at the time the account is opened. The House legislation unveiled Thursday would allow unborn children to be named as a beneficiary as well. It defined an unborn child as a 'child in utero' and further as 'a member of the species homo sapiens, at any stage of development, who is carried in the womb.'”
Why top tax writer Rep. Kevin Brady, father of two adopted kids, didn’t protect the adoption tax break: “Brady defended the decision to cut the adoption tax credit by pointing out that some families can't claim the credit because they don't pay enough in taxes or they don't itemize their tax bill.”
The Johnson Amendment Under GOP Plan: “The main concern of the repeal of the Johnson Amendment is churches will effectively turn into giant super PACs.”
Homebuilders tank as the GOP's tax plan caps a big benefit for homeowners: “the tax plan caps the mortgage-interest deduction, which subtracts interest payments from homeowners' taxable income, on new homes at $500,000.”
I'm actually in favor of capping mortgage interest deduction, but it has to be tied to median home prices on market by market basis— Tanya Marsh (@TMAR22) November 2, 2017
Not high-profile,but GOP tax bill ends mortgage interest deduction for 2nd homes. That's great but it'll start a war in vacationer districts pic.twitter.com/9clOagFdyw— David Dayen (@ddayen) November 3, 2017
1. So here are a couple of ways people will abuse the new passthrough rules. The guardrails are shaky, as @DanielShaviro has pointed out.— Victor Fleischer (@vicfleischer) November 3, 2017
And, umm, an outraged twitter thread with associated R-language is here, but I will not embed it because this is a family blog.