Thursday, May 10, 2018
Earlier today, I received this call for submissions from the American Business Law Journal ("ABLJ"). I published with the ABLJ in 2017 and had a fabulous experience. The manuscripts are blind/peer-reviewed, something we need more of in the legal academy, in my opinion. I found the substantive comments to be of a much higher quality than one gets from a typical law review, and, unlike the practice of some peer-reviewed journals, the ABLJ published my manuscript in a timely manner.
The American Business Law Journal is seeking submissions of manuscripts that advance the scholarly literature by comprehensively exploring and analyzing legal and ethical issues affecting businesses within the United States or the world. Manuscripts analyzing international business law topics are welcome but must include a comprehensive comparative analysis, especially with U.S. law.
As most of you know, the ABLJ is a triple-blind, peer-reviewed law journal published by the Academy. The ABLJ is available on Westlaw and Lexis, and ranks in the top 6% of all publications in the Washington & Lee Submissions and Ranking list by Impact Factor (2016) and in the top 1% of all peer-edited or refereed by Impact Factor (2016). The Washington & Lee list ranks the ABLJ as the Number One Refereed/peer-edited “Commercial Law” and “Corporations and Associations” journal.
Because of a physical page limit imposed by our publisher Wiley, we ask that manuscripts not exceed 18,000 – 20,000 words (including footnotes). Submissions in excess of 25,000 words (including footnotes) may be returned without review. We also require that manuscripts substantially comply with the Bluebook: A Uniform Method of Legal Citation, 20th ed. For more details, please review our Author Guidelines at: http://onlinelibrary.wiley.com/journal/10.1111/%28ISSN%291744-1714/homepage/ForAuthors.html
Because the peer-review process takes from four to six weeks to complete, we strongly suggest that you submit to the ABLJat least a few weeks prior to submitting to other journals. The peer-review process is not conducive to expedite requests (though we will attempt to honor them if possible), so if you give us a head start we will more likely be able to complete the review process.
While we gladly accept submissions through ExpressO and Scholastica, save yourself the submission fee and submit directly to the ABLJ at email@example.com.
If you have any questions or need additional information, please contact the Managing Editor, Julie Manning Magid, at firstname.lastname@example.org.
Thank you and we look forward to reviewing your scholarly work.
Monday, May 7, 2018
I was fascinated by Ann Lipton's post on April 14. I started to type a comment, but it got too long. That's when I realized it was actually a responsive blog post.
Ann's post, which posits (among other things) that corporate chief executives might be required to comply with their fiduciary duties when they are acting in their capacity as private citizens, really made me think. I understand her concern. I do think it is different from the disclosure duty issues that I and others scope out in prior work. (Thanks for the shout-out on that, Ann.) Yet, I struggled to find a concise and effective response to Ann's post. Here is what I have come up with so far. It may be inadequate, but it's a start, at least.
Fiduciary duties are contextual. One can have fiduciary duties to more than one independent legal person at the same time, of course, proving this point. (Think of those overlapping directors, Arledge and Chitiea in Weinberger. They're a classic example!) What enables folks to know how to act in these situations is a proper identification of the circumstances in which the person is acting.
So, for example, an agent’s duty to a principal exists for actions taken within the scope of the agency relationship. The agency relationship is defined by the terms of the agreement between principal and agent as to the object of the agency. The principal controls the actions of the agent within those bounds based on that agreement.
Similarly, a director’s or officer's conduct is prescribed and proscribed within the four corners of the terms of their service to the corporation. They owe their duties to the corporation (and in Revlon-land or other direct-duty situations, also to the stockholders). The problem then becomes defining those terms of service. For directors, a quest for evidence of the parameters of their service should start with the statute and extend to any applicable provisions of the corporate charter, bylaws, and board policies and resolutions more generally. For officers, the statute typically doesn’t provide much content on the nature or extent of their services. The charter may not either. Typically, the bylaws and board policies and resolutions, as well as any employment or severance agreement (the validity of which is largely a matter outside the scope of corporate law), would define the scope of service of an officer.
I have trouble envisioning that the scope of service (and therefore, reach of fiduciary duties) for a typical director or officer would extend to, e.g., private ownership of other entities and decisions made in that capacity. Yet, even where there is no technical conflicting interest or breach of a duty of loyalty, there is a clear business interest in having corporate managers—especially highly visible ones—act in a manner that is consistent with corporate policy or values when they are not “on the job.” While voluntary corporate policy or private regulation may have a role in policing that kind of director or officer activity (through service qualifications or employment termination triggers, e.g.), I do not think it is or should be the job of corporate law—including fiduciary duty law—to take on that monitoring and enforcement role.
Nevertheless, I remain convinced that better (more accurate ad complete) disclosure of (at least) inherent conflicts of interest may be needed so investors and other stakeholders can evaluate the potential for undesirable conduct that may impact the nature or value of their investments in the firm. As Ann notes, significant privacy rights exist in this context, too. There's more work to be done here, imv.
Thanks for making me think, Ann. Perhaps you (or others) have a comment on this riposte? We shall see . . . .
Monday, April 30, 2018
My essay on the use of traditional for-profit corporations as a choice of entity for sustainable social enterprise firms was recently published in volume 86 of the UMKC Law Review. I spoke on this topic at The Bryan Cave/Edward A. Smith Symposium: The Green Economy held at the UMKC School of Law back in October. The essay is entitled "Let's Not Give Up on Traditional For-Profit Corporations for Sustainable Social Enterprise," and the SSRN abstract is included below:
The past ten years have witnessed the birth of (among other legal business forms) the low-profit limited liability company (commonly known as the L3C), the social purpose corporation, and the benefit corporation. The benefit corporation has become a legal form of entity in over 30 states. The significant number of state legislative adoptions of new social enterprise forms of entity indicates that policy makers believe these alternative forms of entity serve a purpose (whether legal or extra legal).
The rise of specialty forms of entity for social enterprise, however, calls into question, for many, the continuing role of the traditional for-profit corporation (for the sake of brevity and convenience, denominated “TFPC” in this essay) in social enterprises, including green economy ventures. This essay argues that TFPCs continue to be a viable—and in many cases desirable or advisable choice of entity for sustainable social enterprise firms. The arguments presented are founded in legal doctrine, theory, and policy and include both legal and practical elements.
Somehow, I managed to cite to four BLPB co-bloggers in this single essay: Josh, Haskell, Stefan, and Anne. Evidence of a business law Vulcan mind meld? You decide . . . .
Regardless, comments, as always, are welcomed as I continue to think and write about this area of law and practice.
April 30, 2018 in Anne Tucker, Business Associations, Corporate Governance, Corporations, Haskell Murray, Joan Heminway, Joshua P. Fershee, Social Enterprise, Stefan J. Padfield | Permalink | Comments (2)
Monday, April 23, 2018
Call for Papers for the
Section on Business Associations Program on
Contractual Governance: the Role of Private Ordering
at the 2019 Association of American Law Schools Annual Meeting
The AALS Section on Business Associations is pleased to announce a Call for Papers from which up to two additional presenters will be selected for the section’s program to be held during the AALS 2019 Annual Meeting in New Orleans on Contractual Governance: the Role of Private Ordering. The program will explore the use of contracts to define and modify the governance structure of business entities, whether through corporate charters and bylaws, LLC operating agreements, or other private equity agreements. From venture capital preferred stock provisions, to shareholder involvement in approval procedures, to forum selection and arbitration, is the contract king in establishing the corporate governance contours of firms? In addition to paper presenters, the program will feature prominent panelists, including SEC Commissioner Hester Peirce and Professor Jill E. Fisch of the University of Pennsylvania Law School.
Our Section is proud to partner with the following co-sponsoring sections: Agency, Partnership, LLC's and Unincorporated Associations; Contracts; Securities Regulation; and Transactional Law & Skills.
Please submit an abstract or draft of an unpublished paper to Anne Tucker, email@example.com on or before August 1, 2018. Please remove the author’s name and identifying information from the submission. Please include the author’s name and contact information in the submission email.
Papers will be selected after review by members of the Executive Committee of the Section. Authors of selected papers will be notified by August 25, 2018. The Call for Papers presenters will be responsible for paying their registration fee, hotel, and travel expenses.
Any inquiries about the Call for Papers should be submitted to: Anne Tucker, Georgia State University College of Law, firstname.lastname@example.org or (404) 413.9179.
[Editorial note: As some may recall, the BLPB hosted a micro-symposium on aspects of this issue in the limited liability company context in anticipation of a program held at the 2016 AALS annual meeting. The initial post for that micro-symposium is here, and the wrap-up post is here. This area--especially as writ broadly in this proposal--remains a fascinating topic for study and commentary.]
April 23, 2018 in Anne Tucker, Business Associations, Call for Papers, Conferences, Contracts, Corporate Finance, Corporate Governance, Corporations, Joan Heminway, LLCs, Nonprofits, Partnership | Permalink | Comments (0)
Monday, April 2, 2018
In recent weeks, the Tennessee General Assembly has been wrestling with a bill (house and senate versions here and here) that changes the governing board of The University of Tennessee (UT), where I teach. Non-controversially, the UT FOCUS Act, as it is commonly called (Focusing on Campus and University Success at UT), decreases the size of UT's board of trustees. Currently, the board of trustees comprises 27 members--five ex officio members and 22 appointed members. Tenn. Code Ann. § 49-9-202. Most would agree that 27--or even 22--is a relatively unmanageable number of board members, without good cause, for most governing boards. But the composition requirements for the board (with this newly reduced number of trustees) are where the rubber hits the road.
The Bill Summary for the measure, as reported on the Tennessee General Assembly website, succinctly describes the current board composition, which is established by statute. I include the relevant text from the Bill Summary here.
The ex officio members are: the governor, the commissioner of education, the commissioner of agriculture, and the president of the university, who are voting members; and the executive director of the Tennessee higher education commission (THEC), who is a nonvoting member. Of the 22 additional members: one must be appointed from each congressional district (presently there are nine congressional districts); two additional members each must reside in Knox and Shelby counties; one additional member each must reside in Weakley, Hamilton, and Davidson counties; one additional member must reside in Anderson, Bedford, Coffee, Franklin, Lincoln, Moore or Warren County; one additional member is a non-Tennessee resident; two additional members, one voting and one non-voting, must be members of the faculty of the University of Tennessee who served as faculty senate president, or the equivalent, at a University of Tennessee institution during the academic year immediately preceding appointment as a trustee, appointed according to a sequence detailed in present law; and two additional members who are students at a UT institution, one voting and one nonvoting, appointed from the various institutions on a rotating basis pursuant to present law.
Present law requires that at least one third of the appointive members be members of the principal minority political party in the state and that at least one third of the appointive members must be alumni of the University of Tennessee. All appointive members are appointed by the governor subject to confirmation by the senate, but appointments are effective until adversely acted upon by the senate. In making appointments to the board of trustees, the governor must strive to ensure that at least one person appointed to serve on the board is 60 years of age or older, and that at least one person appointed to serve on the board is a member of a racial minority. Present law requires that the membership of the board reflect the percentage of females in the population generally. Appointive members serve terms of six years beginning June 1 of the year of appointment, and members are eligible to succeed themselves.
(emphasis added) Of particular importance for purposes of this post are the italicized portions of the description. The UT FOCUS Act calls for no faculty or students--no state employees altogether--on the board as voting or non-voting members. I am concerned about this aspect of the bill because of its effect on the expertise of UT's board. No amount of board orientation can imbue board members with the knowledge that faculty and students have.
The apparent tension here is between the value of that expertise--boots-on-the-ground knowledge of shared governance, curriculum design and execution, the role of co-curricular and extra-curricular programming, faculty/staff/student relations, and other matters unique to current participation in the university's campus communities--and a perceived conflict of interest (since faculty and students would be effectively governing themselves).
The Association of Governing Boards of Universities and Colleges (AGB) and the American Association of University Professors (AAUP) agree that university governing boards generally lack knowledge of faculty affairs. A 2017 publication of the AGB notes in this regard:
Participants in all three categories in our listening sessions (board members, presidents, and faculty) acknowledged—and indeed emphasized—that there is a huge information gap between boards and faculty. They noted that board members often have very little— if any—understanding of the nature of faculty work, of the nature of academic culture, of the real meaning of academic freedom, and of the history and importance of faculty self-governance and the faculty role in shared governance. . . .
The AAUP website features a report on a 2012 Cornell University study of faculty trustees that includes a related observation.
Discussions of “best practices” for governing boards consistently cite improved relationships with the faculty as one of the characteristics of highly effective boards. We are in an era of increasingly “activist” boards, leading to significant mutual distrust between boards and faculty members and creating an impetus for improving faculty-board relations.
As a former faculty senate president at UT Knoxville, I understand and appreciate all of this.
Monday, March 26, 2018
I am committed to introducing my business law students to business law doctrine and policy both domestically and internationally. The Business Associations text that I coauthored has comparative legal observations in most chapters. I have taught Cross-Border Mergers & Acquisitions with a group of colleagues and will soon be publishing a book we have coauthored. And I taught comparative business law courses for four years in study abroad programs in Brazil and the UK.
In the study abroad programs, I struggled in finding suitable texts, cobbling together several relatively small paperbacks and adding some web-available materials. The result was suboptimal. I yearned for a single suitable text. In my view, texts for study abroad courses should be paperback and cover all of the basics in the field in a succinct fashion, allowing for easy portability and both healthy discussion to fill gaps and customization, as needed, to suit the instructor's teaching and learning objectives.
And so it was with some excitement--but also some healthy natural skepticism--that I requested a review copy of Corporations: A Comparative Perspective (International Edition), coauthored by my long-time friend Marco Ventoruzzo (Bocconi and Penn State) and five others (all scholars from outside the United States), and published by West Academic Publishing. I am pleased to say that if/when I teach international and comparative corporate governance and finance (especially in Europe) in the future, I will/would assign this book. It is a paperback text that, despite its 530 pages, is both reasonably comprehensive and manageable.
The book is divided into ten chapters, starting with basic "building blocks" of comparative corporate law and ending (before some brief final thoughts) with unsolicited business combinations. U.S. law is, for the most part, the centerpiece of the chapters, which consist principally of original text, cases, statutes, law journal article excerpts, and (in certain circumstances) helpful diagrams. The methodological introduction, which I found quite helpful and user-friendly, notes that the coauthors "often (not always) start our analysis with the U.S. perspective." (xxvi) Yet, despite the anchoring use of U.S. law throughout the book, it somehow has a very European feel. The coauthors note the emphasis on "U.S., U.K., major European continental civil law systems (France, Germany, Italy) and European Union law, and Japan," (id.) but my observation is that the words and phrasing also have a European flair. Of course, this is unsurprising, given that all but one of the coauthors hail from European universities. I note this without praise or criticism, but I mention it so others can assess its impact in their own teaching environments.
I recommend that those teaching in study abroad (or other courses focusing on comparative corporate law) review a copy of this book. I will look forward to teaching from it the next time I need an international or comparative law teaching text for use in or outside the United States.
March 26, 2018 in Business Associations, Comparative Law, Corporate Finance, Corporate Governance, Corporations, International Business, International Law, Joan Heminway, Teaching | Permalink | Comments (0)
Tuesday, March 6, 2018
Monday, February 26, 2018
Professional Responsibility in an Age of Alternative Entities, Alternative Finance, and Alternative Facts
Like my fellow editors here at the BLPB, I enjoyed the first Business Law Prof Blog conference hosted by The University of Tennessee College of Law back in the fall. They have begun to post their recently published work presented at that event over the past few weeks. See, e.g., here and here (one of several newly posted Padfield pieces) and here. I am adding mine to the pile: Professional Responsibility in an Age of Alternative Entities, Alternative Finance, and Alternative Facts. The SSRN abstract reads as follows:
Business lawyers in the United States find little in the way of robust, tailored guidance in most applicable bodies of rules governing their professional conduct. The relative lack of professional responsibility and ethics guidance for these lawyers is particularly troubling in light of two formidable challenges in business law: legal change and complexity. Change and complexity arise from exciting developments in the industry that invite—even entice—the participation of business lawyers.
This essay offers current examples from three different areas of business law practice that involve change and complexity. They are labeled: “Alternative Entities,” “Alternative Finance,” and “Alternative Facts.” Each area is described, together with significant attendant professional responsibility and ethics challenges. The essay concludes by offering general prescriptions for addressing these and other professional responsibility and ethics challenges faced by business lawyers in an age of legal change and complexity.
I do not often write on professional responsibility issues. However, I do feel an obligation every once in a while to add to the literature in that area addressing issues arising in transactional business law. In essence, it's service through scholarship.
I hope you read the essay and, if you do, I hope you enjoy it. I also can recommend the commentary on it published by my UT Law faculty colleague George Kuney and my student Claire Tuley. Both comments will be available electronically in the coming months. I will try to remember to post links . . . .
Tuesday, February 13, 2018
I suspect click-bait headline tactics don't work for business law topics, but I guess now we will see. This post is really just to announce that I have a new paper out in Transactions: The Tennessee Journal of Business Law related to our First Annual (I hope) Business Law Prof Blog Conference co-blogger Joan Heminway discussed here. The paper, The End of Responsible Growth and Governance?: The Risks Posed by Social Enterprise Enabling Statutes and the Demise of Director Primacy, is now available here.
To be clear, my argument is not that I don't like social enterprise. My argument is that as well-intentioned as social enterprise entity types are, they are not likely to facilitate social enterprise, and they may actually get in the way of social-enterprise goals. I have been blogging about this specifically since at least 2014 (and more generally before that), and last year I made this very argument on a much smaller scale. Anyway, I hope you'll forgive the self-promotion and give the paper a look. Here's the abstract:
Social benefit entities, such as benefit corporations and low-profit limited liability companies (or L3Cs) were designed to support and encourage socially responsible business. Unfortunately, instead of helping, the emergence of social enterprise enabling statutes and the demise of director primacy run the risk of derailing large-scale socially responsible business decisions. This could have the parallel impacts of limiting business leader creativity and risk taking. In addition to reducing socially responsible business activities, this could also serve to limit economic growth. Now that many states have alternative social enterprise entity structures, there is an increased risk that traditional entities will be viewed (by both courts and directors) as pure profit vehicles, eliminating directors’ ability to make choices with the public benefit in mind, even where the public benefit is also good for business (at least in the long term). Narrowing directors’ decision making in this way limits the options for innovation, building goodwill, and maintaining an engaged workforce, all to the detriment of employees, society, and, yes, shareholders.
The potential harm from social benefit entities and eroding director primacy is not inevitable, and the challenges are not insurmountable. This essay is designed to highlight and explain these risks with the hope that identifying and explaining the risks will help courts avoid them. This essay first discusses the role and purpose of limited liability entities and explains the foundational concept of director primacy and the risks associated with eroding that norm. Next, the essay describes the emergence of social benefit entities and describes how the mere existence of such entities can serve to further erode director primacy and limit business leader discretion, leading to lost social benefit and reduced profit making. Finally, the essay makes a recommendation about how courts can help avoid these harms.
February 13, 2018 in Business Associations, Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Delaware, Joshua P. Fershee, Law and Economics, Lawyering, Legislation, LLCs, Management, Research/Scholarhip, Shareholders, Social Enterprise, Unincorporated Entities | Permalink | Comments (0)
Monday, February 12, 2018
Just a quick post today about a teaching technique I have been using that offers significant opportunities for exploration, especially in small class environments.
I am again teaching Advanced Business Associations this semester. The course allows students to review and expand their knowledge of business firm management and control issues in various contexts (public corporations, closely held corporations, benefit corporations, and unincorporated business entities), mergers and acquisitions, and corporate and securities litigation. I have reported on this course in the past, including in this post and this one.
At the conclusion of each unit, I have students locate (go off on a treasure hunt, of sorts) and post on the course management website (I use TWEN) a practice document related to the matters covered in that unit. Today we concluded our unit on benefit corporations. Each student (I only have five this semester) was required to, among other things, post the actual corporate charter (not a template or form) of a benefit corporation. Although the Advanced Business Associations course features training presentations by representatives of Lexis/Nexis, Westlaw, and Bloomberg that include locating precedent documents of various kinds, the students have not yet had this training.
In our discussions about this part of today's assignment, we learned a number of things. Here are a few:
- New articles, blog posts, and other secondary materials can be a good starting place in locating firms with particular attributes.
- The word "charter" can mean different things to different people.
- Journalists do not understand the difference between a benefit corporation and a B corporation.
- In research geared toward locating precedents for planning and drafting, googling descriptive terms is likely to yield fewer targeted results than googling the terms used an actual exemplar document.
- Corporate charters for privately held firms can be difficult to find--especially in certain specific jurisdictions, even when you know the firm's name and other identifying attributes.
- "If at first you don't succeed, try, try, again." Three of the five students posted more than one document before they found an appropriate example.
- The corporate charters the students posted include exculpation and indemnification.
- Patagonia's charter is pretty cool. It has a detailed, specific benefit purpose, a prohibition on redemptions, and a right of first offer. It also requires a unanimous vote on certain fundamental/basic corporate changes, redemptions, and bylaw amendments.
- There is a law firm in California that is a professional corporation organized as a benefit corporation "to pursue the specific public benefit of promoting the principles and practices of conscious capitalism through the practice of law." Also pretty cool.
The discussion was rich. The students accomplished the required task and reflected responsibly and valuably on their individual search experiences during our class meeting. They learned from each other as well as from me; benefit corporations seemed to come alive for them as we spoke. We accomplished a lot in 75 minutes!
Do any of you use a similar teaching technique? Have you adapted it for use in a large-class (over 50 students) environment? If so, let me know. I would like to evolve my "treasure hunt" for business law drafting precedents for use in a larger class setting.
Monday, January 29, 2018
Indiana University legal studies professor Abbey Stemler sent along this description of an article she co-wrote with Harvard Business School Professor Ben Edelman. They recently posted the article to SSRN and would love any feedback you may have, in the comments or via e-mail.
Perhaps the most beloved twenty-six words in tech law, Section 230 of the Communications Decency Act of 1996 has been heralded as a “masterpiece” and the “law that gave us the modern Internet.” While it was originally designed to protect online companies from defamation claims for third-party speech (think message boards and AOL chat rooms), over the years Section 230 has been used to protect online firms from all kinds of regulation—including civil rights and consumer protection laws. As a result, it is now the first line of defense used by online marketplaces to shield them from state and local regulation.
In our article recently posted to SSRN, From the Digital to the Physical: Federal Limitations on Regulating Online Marketplaces, we challenge existing interpretations of Section 230 and highlight how it and other federal laws interfere with state and local government’s ability to regulate online marketplaces—particularly those that dramatically shape our physical realities such as Uber and Airbnb. We realize that the CDA is sacred to many, but as Congress pays renewed attention to this law, we hope our paper will support a richer discussion about what the CDA should and should not be expected to do.
Friday, December 29, 2017
We are at a time of year where schools are starting to make offers for professor position.
In business schools, the hiring process is more of a year-round affair than it is in law schools, but business schools have started to learn that they need to hire on the same schedule as law schools if they want to compete for the best legal academic talent. Also, a few business schools, such as the University of Georgia this year, have started to attend the AALS hiring conference.
As I explained a few years ago, working as a law professor in a business school can be a good bit different than working in a law school.
Business school legal studies positions have become more popular in recent years as law school hiring has diminished and as many law schools face financial difficulties. Personally, I have fielded dozens of calls from prospective academics and current law school professors, asking advice about getting a job teaching law in a business school.
The business school legal studies positions are quite diverse – vastly different pay scales, vastly different teaching loads, vastly different research expectations, and some are tenure-track and some are not. As such, I think it is smart to explore some of the following before accepting a legal studies professor position in a business school.
- What are the research expectations, especially how does the school view law reviews? (Some business schools disregard or heavily discount law reviews because they are not “peer-reviewed” in the traditional sense. There are peer-reviewed legal journals, like the American Business Law Journal, the Journal of Legal Studies Education, and the regional ALSB related journals, but there are relatively limited publication slots. Also, business schools may use metrics for scholarship not common among law schools, and you should attempt to uncover the formal and informal tenure requirements before accepting a job.)
- Does the business school provide WestLaw/Lexis access? (Most schools at least have Lexis, but they may or may not have access to all the law resources you need for your research.)
- Does the business school have an ExpressO and Scholistica accounts? If not, will they reimburse for your submissions?
- What is the teaching load/schedule? Ask not only about the number of hours, but also the number of courses, as business schools seem to have more 2-credit courses, especially at the MBA level than law schools. Also, business schools have night, weekend, and online classes, especially at the MBA level, more frequently than law schools.
- Are there other tenure-track legal studies faculty members? If so, those faculty members likely will have fought most of the research battles mentioned above, though standards do change over time and resources are cut, so it is still worth asking those questions. I am the only tenure-track legal studies faculty member at the Massey College of Business at Belmont University, and I do miss discussing my research with knowledgeable colleagues on my hall. That said, having a law school at Belmont and nearby Vanderbilt has helped some, though I don’t make it over to either school nearly enough.
- What is the policy on research stipends? (This varies significantly at business schools).
- What is the policy on travel? (If you do not have legal studies colleagues in the school or nearby, you will definitely want to travel to the various ALSB conferences for work-shopping your articles and for exchanging ideas with fellow legal academics).
- What administrative responsibilities will you have? At some schools, full-time legal studies professors are responsible for managing the legal studies adjuncts, which can take a considerable amount of time. (I do not). At some schools, legal studies professors serve as pre-law advisers to undergraduate business students. (I do, and I enjoy it, though it does mean quite a number of extra meetings and reference letters, especially in the late fall and early spring.)
- Does the school have a pre-law major or minor or certificate program? (If so, this may give you some additional job security and may allow you to teach a variety of courses, instead of section after section of Business Law/Legal Environment).
- Is the school AACSB accredited? There are multiple accrediting bodies in the business school space, but AACSB is clearly the best and most of the non-AACSB schools do have a bit of a second-class reputation. Also, I believe Business Law/Legal Environment is generally a required course at most (if not all) AACSB schools.
Always happy to discuss teaching law in a business school with those who have additional questions. Good luck to everyone on the market.
Friday, December 8, 2017
I have had an opportunity to read the oral argument transcript (112 pages) from Tuesday's oral argument in the Masterpiece Cakeshop case.
One of the first things that struck me was that it seemed pretty clear that most of the justices have already taken sides. This is not surprising, but it does sadden me.
I wish that judges, especially justices on the Supreme Court of the United States, were really trying to get the "correct" answer rather than reasoning backward from some predetermined outcome. Perhaps that is naive. Perhaps that is not possible. My former Constitutional Law professor warned of some of the political issues with the Supreme Court and recently wrote about the issues in his book Supreme Myths: Why the Supreme Court Is Not a Court and Its Justices Are Not Judges.
Only Justice Kennedy is thought to be "in play" in this case. All intelligent people of integrity, however, should be aware of their biases, open to the possibly that their initial thoughts are wrong, and open to persuasion based on the law and the facts. Maybe that is too much to ask. Or maybe on of the "reliably conservative" or "reliably liberal" justices will surprise us in this case. In any event, I am definitely looking forward to reading this opinion; it will undoubtedly bring significant consequences.
(As an aside, corporate law scholars may be interested in pages 96-98 regarding who is speaking - Masterpiece Cakeshops (the entity) or Jack Phillips (the individual)).
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 email@example.com 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)
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.
Friday, October 27, 2017
A former student brought this fundraising website to my attention: To the Stars Academy of Arts and Sciences ("TTS Academy). (Image above from a Creative Commons search).
This article describes TTS Academy as follows: "Former Blink-182 singer and guitarist Tom DeLonge is taking his fascination with/conspiracy theories about UFOs to their logical conclusion point: He's partnering with former government officials on a public benefit corporation studying 'exotic technologies' from Unidentified Aerial Phenomenon (UAP) that the consortium says can 'revolutionize the human experience.'"
Remember the Blink-182 song Aliens Exist?
I couldn't make this up. And I did spend some time trying to determine if it was a joke, but TTS Academy's 63-page offering circular suggests that it is no joke. And TTS Academy appears to have already raised over $500,000.
According to the organization's website, Tom DeLonge of Blink-182 fame is in fact the CEO and President. Supposedly, DeLonge has teamed with former Department of Defense official Luis Elizondo who confirmed to HuffPost that the TTS Academy is planning to "provide never before released footage from real US Government systems...not blurry, amateur photos, but real data and real videos." Rolling Stone reports that "DeLonge has long been interested in UFO and extraterrestrial research. After parting ways with Blink-182 in 2015, he delved deeper into the subject, releasing the book Sekret Machines: Gods earlier this year and he's also working on a movie that is related to those interests called Strange Times." TTS Academy is a Public Benefit Corporation, formed in Delaware.
The TTS Academy website states: "To The Stars Academy is a Public Benefit Corporation (PBC), which means our public benefit purpose is a core founding principle of our corporate charter alongside the traditional goal of maximizing profit for shareholders." Hmm... How does one pursue a public benefit purpose and seek to maximize profit for shareholders? A main point of benefit corporations is liberate companies from the perceived restrictions of shareholder wealth maximization.
The website continues: "Our public purpose: Education - Community - Sustainability - Transparency. PBCs have enjoyed a surge in popularity as the public becomes more interested in corporate responsibility, transparency, and more recently, the concept of impact investing.* It’s clear that an expanding portion of the general population is looking to make an impact on the world around them, not only through volunteering, or speaking out on social media, but through financial decision making.** We believe raising resources through Regulation A+ crowdfunding will allow us to expedite expansion of TTS Academy’s PBC initiatives, like promoting citizen science, enhancing traditional education with science, engineering and art-related programming, supporting veterans and their families, and promoting underrepresented people in film." Color me skeptical.
As Professor Christine Hurt noted way back in 2014/15, the crowdfunding and social enterprise circles may overlap significantly. Professor Hurt wrote, "for-profit social entrepreneurship may find equity crowdfunding both appealing and available. For-profit social entrepreneurs may be able to use the crowdfunding vehicle to brand themselves as pro-social, attracting individual and institutional cause investors who may operate outside of traditional capital markets and may look for intangible returns. Just as charitable crowdfunders rebut the conventional wisdom that donors expect tax-deductibility, prosocial equity crowdfunders may rebut the conventional wisdom that early equity investors expect high returns or an exit mechanism." Not sure if she, or any of us, predicted exactly this type of company.
Friday, October 20, 2017
Below the line is a call for papers that I just received.
The Atlantic Law Journal is a double-blind peer-reviewed law journal, and it is one of the regional publications of the Academy of Legal Studies in Business.
The Atlantic Law Journal is now open for submissions and is soliciting papers for its upcoming Volume 20 with an expected publication date in summer 2018. The Atlantic Law Journal is listed in Cabell's, fully searchable in Thomson-Reuters Westlaw, and listed by Washington & Lee. The journal is a double-blind peer-reviewed publication of the Mid-Atlantic Academy of Legal Studies in Business (MAALSB). Acceptance rates are at or less than 25%, and have been for all our recent history. We publish articles that explore the intersection of business and law, as well as pedagogical topics. Please see our website at http://www.atlanticlawjournal.org/submissions.html for the submission guidelines, the review timeline, and more information regarding how to submit. Submissions or questions can be sent to Managing Editor, Evan Peterson, at petersea [at] udmercy.edu.
The Harvard Law School Forum on Corporate Governance and Financial Regulation recently contained a notice about the Delaware Corporate Law Resource Center, which I thought might interest our readers as well. The post is reproduced below the line.
The oral histories of iconic Delaware cases are the most interesting, and useful, part of the website to me, though some of the cases do not appear to have materials yet. In addition to the cases, there is an oral history on 102(b)(7) to which my judge (VC Stephen Lamb) and others contributed. I hope the existing materials will be added to and expanded over time.
The University of Pennsylvania Law School Institute for Law and Economics (ILE) is pleased to announce the creation and public availability of a new website devoted to resources relating to the development of the Delaware General Corporation Law and related case law. This website (the Delaware Corporation Law Resource Center) has two principal components. The first is a compilation of resources relating to the Delaware General Corporation Law itself, including a link to the text of the statute, and links to the bills to amend the statute since its general revision in 1967. This portion of the website also includes links to annual commentaries on those amendments, the reports and minutes generated in the 1967 revision process, and memoranda disseminated by the Council of the Delaware State Bar Association Corporation Law Section describing some of the more significant and controversial amendments to the statute.
The second component of the website is a repository for materials constituting oral histories of iconic corporate law decisions of the Delaware courts since 1980, dealing with the director’s fiduciary duty of care, duties in takeovers, and freezeouts by controlling stockholders. This portion of the website is a work in progress, but for some of the cases it already contains the opinions in the case, briefs, selected transcripts of oral arguments, and selected key documents from the record. Most notably, the oral history compilation includes high quality videotaped interviews of lawyers and judges involved in the case, who describe the back story of the case with details not available through review of the courts’ opinions.
The oral history portion of the website also includes the first in a series of composite videos setting forth the background of each case. That premiere video describes the background of Smith v. Van Gorkom and presents, in narrative fashion, selected excerpts from the video interviews of the participants.
ILE hopes and expects that this website, which is freely available to the public, will prove to be a valuable resource for the teaching and development of Delaware corporate law. ILE welcomes suggestions for ways in which the website can be made even more useful to those interested in its subject.
The new website is available here.
Tuesday, October 17, 2017
The information below the line is from an e-mail I received about the SEALSB Conference. The SEALSB conference is the southeastern regional conference for law professors in business schools, but we have had practicing lawyers (especially those hoping to break into academia) and law school professors participate in the past.
The conference rotates locations in the southeast, and this year the conference will be held in Atlanta, GA from November 9-11.
SEALSB Conference 2017
The deadline to upload papers for inclusion in the conference materials has been extended to this Friday, October 20th. You may upload your paper by clicking on the following link: Paper Upload. Otherwise, please bring 25 copies to the meeting.
Friday, October 20th is also the conference registration deadline, so if you are planning to attend the conference but have not yet registered please make sure you do so sometime this week!
Additional information is available on the Conference Website. We look forward to seeing you at the Georgian Terrace!
Friday, October 13, 2017
Earlier this week, my two-year old daughter was in the pediatric ICU with a virus that attacked her lungs. We spent two nights at The Monroe Carell Jr. Children's Hospital at Vanderbilt (“Vanderbilt Children’s). Thankfully, she was released Wednesday afternoon and is doing well. Unfortunately, many of the children on her floor had been in the hospital for weeks or months and were not afforded such a quick recovery. There cannot be many places more sad than the pediatric ICU.
Since returning home, I confirmed that Vanderbilt Children’s is a nonprofit organization, as I suspected. I do wonder whether the hospital would be operated the same if it were a benefit corporation or as a traditional corporation.
Some of the decisions made at the hospital seems like they would have been indefensible from a shareholder perspective, if the hospital had been for-profit. Vanderbilt Children’s has a captive market, with no serious competitors that I know of in the immediate area. Yet, the hospital doesn’t charge for parking. If they did, I don’t think it would impact anyone’s decision to choose them because, again, there aren’t really other options, and the care is the important part anyway. The food court was pretty reasonably priced, and they probably could have charged double without seriously impacting demand; the people at the hospital valued time with their children more than a few dollars. The hospital was beautifully decorated with art aimed at children – for example, with a big duck on the elevator ceiling, which my daughter absolutely loved. There were stars on the ceiling of the hospital rooms, cartoons on TVs in every room, etc. All of this presumably cost more than a drab room, and perhaps it was all donated, but assuming it actually cost more, I am not sure those things would result in any financial return on investment.
As we have discussed many times on this blog, even in the traditional for-profit setting, the business judgment rule likely protects the decisions of the board of directors, even if the promised ROI seems poor. But at what point – especially when the board knows there will be no return on the investment at all - is it waste? (Note: Question sparked by a discussion that Stefan Padfied, Josh Fershee, and I had in Knoxville after a session at the UTK business law conference this year). And, in any event, the Dodge and eBay cases may lead to some doubt in the way a case may play out. And even if the law is highly unlikely to enforce shareholder wealth maximization, the norm in traditional for-profit corporations may lead to directorial decisions that we find problematic as a society, especially in a hospital setting.
Now, maybe the Hippocratic Oath, community expectations, and various regulations make it so nonprofit and forprofit hospitals operate similarly. As a father of a patient, however, even as a free market inclined professor, I would prefer hospitals to be nonprofit and clearly focused on care first. Also, some forprofit hospitals are supposedly considering going the benefit corporation route, which may be a step in the right direction – at least they have an obligation to consider various stakeholders (even if, currently, the statutory enforcement mechanisms are extremely weak) and at least there are some reporting requirements (even if , currently, reporting compliance is miserable low in the states I have examined and the statutory language is painfully vague).
I am not sure I have ever been in a situation where I would have paid everything I had, and had no other good options for the immediate need, and yet I still did not feel taken advantage of by the organization. There is much more that could be said on these issues, but I do wonder whether organizational form was important here. And, if so, what is the solution? Require hospitals to be nonprofits (or at least benefit corporations, if those statutes were amended to add more teeth)?