Business Law Prof Blog

More Pro-Business Decisions From the Roberts Court

The question of whether the Roberts Court can properly be characterized as pro-business is back in the news, with four recent cases taking center stage.  In Wal-Mart v. Dukes and AT&T v. Concepcion the Court limited the availability of class actions.  As my colleague Will Huhn notes, in American Electrical Power Co. v. Connecticut:

[T]he Supreme Court held that the Clean Air Act preempts the federal common law of nuisance, and accordingly the states lost on that point.  The Court did not reach the question of whether the state law of tort is preempted by the Clean Air Act, and the case was remanded to the lower courts for a ruling on that issue.

(For an arguably related story, see: "Nuclear Regulatory Commission Colluded with Industry to Weaken Safety Standards.")

Finally, in Janus Capital the Court again chipped away at Rule 10b-5.  As Jay Brown describes it: "The opinion ... is a piece of political decision making, more in line with a legislature than a court."

An Associated Press story noted:

Robin Conrad, the head of the legal arm of the U.S. Chamber of Commerce, dismissed the notion of a pro-business court as "a silly myth" that was undercut by a record of as many victories as losses in cases of interest to the Chamber of Commerce. Yet Conrad acknowledged that the group won the three cases — the class-action disputes and a successful effort to block a climate change suit by six states — that were "easily the most important business cases of the term."

SJP

Article: Understanding Exclusion of the CISG

If you are interested in international business involving sales of goods, my friend and colleague Bill Johnson's article, Understanding Exclusion of the CISG: A New Paradigm of Determining Party Intent, 59 Buff. L. Rev. 213 (2011), is worth a look.  Here's an excerpt:

One increasingly important body of law that governs certain international sale of goods transactions is the United Nations Convention on Contracts for the International Sale of Goods (“CISG”). The CISG is an international treaty that has been ratified by the United States and is part of U.S. law. It automatically applies to certain sale of goods transactions. But when it applies or more specifically how it can be excluded has befuddled U.S. courts for the CISG’s entire history.

. . . .

This Article seeks to bring understanding where there is misunderstanding regarding effective exclusion of the CISG, including with respect to (i) the role that a choice­of­law clause ought to play in the analsyis and (ii) the obligation under the CISG to consider extrinsic evidence to determine the parties’ actual intent. To achieve that goal, this Article primarily analyzes four related but distinct items: (1) the text of the CISG itself, (2) the  travaux préparatoires, or drafting history, of the CISG, (3) the American Biophysics decision and the five cases cited as authority by the  American Biophysics court to support its incorrect conclusion, and (4) illustrative reasoning of U.S. courts that have engaged in analysis, some sound and some faulty, of a variety of other issues under the CISG.

--JPF

Does Your Law School Need More Celebrities?

One of the benefits of blogging for a relatively popular blog like this one is that I actually get pitched with various books, etc., to blog about.  One recent such pitch involved the book "Celebritize Yourself" by Marsha Friedman.  At first, my reaction was a negative one because I must admit to not having the greatest opinion of celebrity status in our modern world.  But then the following line caught my eye:

"To celebritize oneself is not merely to gain fame or fortune.  It’s to share one’s life experiences with other who may be in search of, and in need of, your wisdom.  That’s the guiding philosophy for becoming a celebrity."

While I have not read the book, I have taken a closer look at the content and felt like it may well be something worth sharing with our readers.  In particular, I thought about the need for many law faculties to promote themselves in a world where, for better or worse, USNWR rankings rule and reputations may not properly reflect actual productivity.  You can browse the table of contents here ("Look Inside") -- I think it's worth a look.

SJP

Would You Hire a Disbarred Attorney to Mediate Your Case?

That's just what former securities class action lawyer Melvyn I. Weiss is hoping, according to the New York Times Dealbook. Mr. Weiss was disbarred after pleading guilty in 2008 to making illegal kickback payments to his plaintiff-clients in securities litigation.

There are some possible ethical concerns with Mr. Weiss working as a mediator because he would be drawing on his legal experience. I have not done much research in that area, but I can see both sides of the issue.  I could imagine someone wanting Mr. Weiss's input, given his experience, but I just can't see hiring him as a mediator. Even if it's permissible for him to act as a mediator, it just doesn't seem like a good idea.  

Perhaps I am wrong and he brings something so unique to the table that it would make it worth hiring him.  I don't know what that would be, but I welcome any thoughts.

--JPF

When the SEC Should Apologize

Walter Pavlo has this to say at Forbes.com about the SEC's recent insider trading case against Dr. Sebastian De La Maza, which the SEC lost:

Look, you win some and you lose some.  When a defendant loses a case they stand before the judge and usually apologize for their behavior in order to get a lighter sentence.  It provides a sense of closure and respect for justice being served.  The SEC should issue its own apology to Dr. Sebastian De La Maza for wrongly accusing, and then defaming, an innocent man.  The jury has spoken….all we’re asking for is a little justice, to go with our justice system.  Dr. De La Maza has done nothing wrong and the record now reflects that.  All I’m asking is that the SEC’s website reflect that as well.

I am inclined to agree.  If the SEC wants to make bold statements about people before they prove the case, the SEC should correct the statements if a jury acquits. The SEC shouldn't need to apologize for what they allege in court; that's where they need to prove their case.  But pretrial media statements are not about proving their case. If they want to talk before the case, get it right, or fix it.   

--JPF

Practical Law Company Materials

A few months ago, I began receiving weekly updates on finance and corporate and securities law produced by the Practical Law Company. I’m sure the company sent me advertising at some point, but I didn’t check it out until one of our librarians convinced me to take a look. (The librarian in question also happens to be my fiancée, so I tend to listen to her a little more than our other librarians.) I was hesitant to add yet another service to the many products that already stream through my in-box: various daily and weekly updates on the law, blog posts, RSS feeds from newspapers and magazines. But this is something different, and I like it.

In addition to information on regulatory and other legal changes, the PLC update includes various checklists, practice notes, and samples from current deals. For example, my most recent Corporate and Securities Weekly Update includes practice notes on (1) reverse mergers, (2) structuring waterfall provisions in partnership and LLC agreements, and (3) merchant banking. My favorite recurring feature is something PLC calls the “risk factor of the week,” with actual risk factor language pulled from public filings. The weekly updates also include summaries of both public and private acquisition agreements, often featuring some of the contractual provisions in those deals.

Some of the practice notes, such as a recent due diligence checklist, don’t add much to what I already know, but would be very useful to students or inexperienced lawyers. Some of them, like the one on waterfall provisions, deal with topics I never touch on. But most of them are pretty interesting and, for a weekly, the quality is surprisingly good.

If you haven’t seen these, you might want to check them out. The Practical Law Company web site is here. In addition to the weekly updates, the web site has a variety of other content, including webinars, model documents, and handbooks. (As an academic, I don’t pay for the content I receive, so I’m not sure what PLC charges.)

-Steve Bradford

Elsaman on Corporate Social Responsibility in Islamic Law

Radwa S. Elsaman has posted Corporate Social Responsibility in Islamic Law: Labor and Employment on SSRN with the following abstract:

Islam is not only a way of worship; but also, an entire legal, economic, social, political, and commercial system. Hence, it affects every day behavior of its followers including business transactions. Also, Islamic law, almost, dominates most of the Muslim countries’ internal legal systems. Considering how Islamic business ethics affect corporate social responsibility can be useful to multinational corporations making their investment decisions in Muslim countries. This article discusses the general framework governing business ethics in Islamic law, giving perspective to labor standards.

-Eric C. Chaffee

Teaching Banking Law/Financial Institutions

The Glom has been hosting a fascinating Banking Roundtable.  While I have not yet read all the posts, I thoroughly enjoyed (and highly recommend) the one put up by Anna Gelpern.  She starts with a bang:

My version of letting no crisis go to waste is to assert that The Crisis is attributable entirely to the formerly niche status of banking and financial institutions in the law curriculum, which misled some of the best minds in the country to things like the Constitution and SOX, when we all should have been thinking about capital adequacy and systemic risk. But I digress. Bye-bye seminar caps, hello first-year lecture halls!

And then there are movie recommendations, which I am a huge fan of.  (Am I the only one that thinks the original Wall Street still has a place in a Sec Reg class?  Gekko: "The most valuable commodity I know of is information.")

SJP