Business Law Prof Blog

American Business Law Journal Currently Accepting Submissions

Dear BLPB Readers:

"The American Business Law Journal (ABLJ) is currently accepting submissions for Volume 62 (2025).  

The ABLJ is a faculty-edited, double blind peer-reviewed journal, continuously published since 1963. The journal is ranked is ranked #2 in the 2023 Washington & Lee Law Journal Rankings for journals in Business, Corporations and Securities Law. It is ranked as an “A” journal by the Australian Business Deans Council.

Our mission is to publish only top quality law review articles and essays that make a scholarly contribution to all areas of law that impact business theory and practice, either U.S. or comparative in scope. We search for those articles that articulate a novel research question and make a meaningful contribution directly relevant to scholars and practitioners of business law. The blind peer-review process means legal scholars well-versed in the relevant specialty area have determined selected articles are original, thorough, important, and timely, and peer editors provide expert feedback and support throughout the editorial process. 

The ABLJ is published quarterly. Articles should be between 16,000 and 20,000 words (inclusive of footnotes). Essays should be between 7,000 and 10,000 words (inclusive of footnotes). 

 

Authors may submit their manuscripts and CVs/resumes through Scholastica or directly via email to Ruth Jebe, Managing Editor at [email protected]. 

 

For more information on submissions, please review Author Guidelines information on the ABLJ Wiley website."

In Which Elon Musk Once Again Becomes a Classroom Hypothetical

This time, it’s Brazil.

If you’re not following the saga, the story is apparently that ex-Twitter, now controlled by Elon Musk (not the CEO, though; you can’t even really say he’s the owner without qualifying about the interests of other investors and – don’t forget – the debtholders), ignored the order of Brazilian Supreme Court Justice Alexandre de Moraes to remove certain accounts associated with hate speech and misinformation.  Apparently out of fear that Twitter’s Brazilian employees would be arrested, Twitter shut down its Brazilian offices.  At that point, Twitter was out of compliance with a Brazilian requirement that a legal representative be present in the country.  So, Justice de Moraes ordered that access to Twitter be blocked throughout Brazil.  (Legal challenges to that order continue)

That’s not great for Twitter, but it turns out, it was even worse for Starlink, a wholly-owned subsidiary of Musk-controlled SpaceX, because the Justice ordered that Starlink’s financial accounts be frozen in order to force payment of fines owed by Twitter.  Musk at first insisted that he would not block access to Twitter via Brazilian Starlink, then – on that point – relented.  Shortly thereafter, it was reported SpaceX was evacuating its personnel from the country.  As the Wall Street Journal put it, “Starlink’s entanglement in a dispute originally about X is a stark illustration of how some government officials around the world may draw few distinctions between enterprises that Musk runs.”

So, all of this has the makings of a great introductory classroom discussion of corporate separateness, enterprise liability, and veil-piercing.  I have no idea what the law on this is in Brazil, but let’s talk about how we’d analyze this under American law.

(more under the jump)

Continue reading

2025 AALS Pedagogy Panel -- Transactional Law and Skills

The AALS Section on Transactional Law & Skills is pleased to announce a session at the 2025 AALS Annual Meeting in San Francisco, C.A.

Pedagogy Panel on Experiential Exercises in Business Law

We invite submissions for a panel that highlights experiential exercises in business law. Exercises might include, for example, contract drafting, transactional research, mock negotiations, or other exercises that would fit into a law school course. We invite speakers to share exercises with the panel, to discuss how they facilitate and/or grade the exercises, and/or to teach a short mock version of their exercise during the panel.

Please submit a short proposal and/or a draft of the exercise you would like to present to Professor Benjamin Edwards ([email protected]) on or before Friday, September 20th.  Authors should include their name and contact information in their submission email but remove all identifying information from their submission.  Please include the words “AALS – Transactional Pedagogy” in the subject line of your submission email. Papers will be selected after review by members of the Executive Committee of the Transactional Law & Skills Section. Presenters will be responsible for paying their registration fee, hotel, and travel expenses.

Please direct any questions to Benjamin Edwards.

Virtual ESG and Compliance Conference- November 7

 The Society of Corporate Compliance and Ethics is hosting a virtual ESG and Compliance Conference on November 7.  I love to hear academics talk about these issues at conferences but because I still engage in the practice of law and I teach about compliance, governance, and sustainability, I find the conversations are very different when listening to practitioners.

My panel is titled ESG Due Diligence Across the Corporate Lifecycle From Start-Up to Maturity: The Roles of Compliance, Ethics, Legal, and the Board. My co-panelists, Ahpaly Coradin, Partner, Pierson Ferdinand, and Eugenia di Marco, a startup founder and international legal advisor, and I will focus on:

•  how to measure and prioritize ESG factors at different stages of a company's life cycle, according to a company's industry, and technology use.
•  how ESG creates value in M&A  beyond risk mitigation and learn the impact of ESG on target selection, valuation, and integration.
• board and management responsibilities in overseeing and managing ESG-related risks, particularly in light of Caremark duties and Marchand.

Date & Time: Thursday, November 7 from 12:45 PM – 1:45 PM central time

Other topics that speakers will discuss include:

• Supply chains and European due diligence 
• Global regulatory and legislative developments
• Sustainable governance in a global landscape
• Materiality assessments
• The intersection of governance and ESG
• OECD Guidelines

Who should attend?  (from the brochure)

• Compliance officers
• ESG, sustainability, and CSR professionals
• Audit professionals
• CFOs
• General counsel
• Corporate secretaries
• Risk managers
• Investment managers
• Supply chain and due diligence professionals
• Outside advisors

Although the official brochure clearly doesn't target academics, I strongly recommend that my peers attend. It may help inform your research and teaching, and I know that my students are very interested in these issues. 

Are you teaching on any of these areas? And what do you think practitioners should be focusing on that they aren't?

---

 

Dayton Law Faculty Openings

Position Summary:	The University of Dayton School of Law invites applications for multiple tenure-track Assistant Professor positions to begin August 16, 2025. Areas of need include contracts, business organizations, torts, criminal law, criminal procedure, evidence, family law, property, wills and trusts, secured transactions, and tax. The School of Law has a history of innovation and is a leader in international education. We have one of the first online JD programs, several successful non-JD programs, and fourteen law school partners around the world. Located in Dayton, Ohio, our university offers more than just a rewarding career. Dayton boasts extensive green space, providing ample opportunities for outdoor recreation and relaxation. With a low cost of living, you can enjoy a comfortable lifestyle while pursuing your passion for teaching and research. Additionally, Dayton's dynamic arts scene offers a rich cultural experience, making it a great place to live, work, and thrive. Go to daytoncvb.com daytoncvb.com for more information about the area. UD is one of the nation’s largest Catholic universities, and the largest private university in Ohio. Embedded in the dynamic city of Dayton, OH, and grounded in its Catholic, Marianist tradition, UD provides education to develop the whole student and is committed to experiential learning. The University of Dayton is nationally recognized among the top 2 percent of all AASHE STARS-rated schools and is the only Midwestern educational institution in the top 20 of Sierra Club’s Cool Schools for Sustainability. At the University of Dayton, we value inclusive excellence because we recognize that diversity, equity and inclusion are fundamental to academic and institutional excellence. Inclusive excellence requires a comprehensive, cohesive and collaborative alignment of infrastructure, resources and actions. We strive to be active, intentional, and sustain engagement with and celebration of diversity in every dimension of institutional life. Because we seek a workforce with a wide range of perspectives and experiences, we encourage all candidates to apply.
Minimum Qualifications:	J.D. or equivalent degree from a foreign institution Demonstrated potential to publish scholarly works. Interest or experience teaching contracts, business organizations, torts, criminal law, criminal procedure, evidence, family law, property, wills and trusts, and/or tax.
Preferred Qualifications:	While not everyone may meet all preferred qualifications, the ideal candidate will bring many of the following: A record of original scholarship and potential to be an expert in one’s field; Demonstrated potential to be an outstanding teacher; Potential to successfully mentor students from underrepresented groups; Successful experience working with people from socially and culturally diverse backgrounds; Prior experience in law practice; Outstanding academic record; An expressed willingness and enthusiasm to teach in and develop UDSL's hybrid online J.D. program; Effective interpersonal communication skills; Effective oral communication skills; Effective classroom management skills; and Commitment to breadth of education including educating the whole person in the Marianist tradition and a commitment of service to the community, university and profession
Special Instructions to Applicants:	Please upload your letter of interest addressing all of the minimum and any of the preferred qualifications met and your CV. Applicants must be currently authorized to work in the United States on a full-time basis. We will not sponsor applicants for work visas for this position. Posting closes at 11:55 PM EDT September 20, 2024
Closing Statement:	The University of Dayton is a top tier, Catholic research university with offerings from the undergraduate to the doctoral levels. Founded in 1850 by the Society of Mary, the University is a diverse community committed to advancing the common good through intellectual curiosity, academic rigor, community engagement and local, national and global partnerships. Guided by the Marianist educational philosophy, we educate the whole person and link learning and scholarship with leadership and service. Informed by its Catholic and Marianist mission, the University is committed to the principles of diversity, equity, and inclusion. Informed by this commitment, we seek to increase diversity, achieve equitable outcomes, and model inclusion across our campus community. As an Affirmative Action and Equal Opportunity Employer, we will not discriminate against minorities, women, protected veterans, individuals with disabilities, or on the basis of age, race, color, national origin, religion, sex, sexual orientation or gender identity. The University is also pleased to provide support for spouses of prospective and newly hired faculty through its dual career program. While we cannot guarantee placement, we serve as an effective resource and support system for your spouse. Information can be found at https://udayton.edu/hr/dual-career-resources.php

2025 Law and Society Association Annual Meeting

The following comes to us from friends-of-the-BLPB J.S. Nelson and Geeyoung Min:

Dear Business Law Professor Blog readers,

This is a call to participate in Law & Society CRN 46's programming. CRN 46 broadly covers Corporate and Securities Law in Society.

The 2025 Law & Society Association (LSA) Annual Meeting is scheduled for Chicago, Illinois, USA from May 22-25, 2025. The meeting will be hosted at the Hyatt Regency. This year’s sessions will take place in-person.

If you are a member of our CRN and on our CRN email list, we will send you several reminders of deadlines as they approach from our CRN's email list. Of course, if you would like to be removed from these emails at any point, simply let us know.

If you have been forwarded this message, are not on our direct CRN 46 mailing list and want to be, please fill out your information here.

Meanwhile, the 2025 LSA Call-for-Participation submission window is now open. 

Submissions Now Open!

>> Click Here to Visit the 2025 Conference Website!

>> Submit an Abstract or Session!

The deadline for our Call for Submissions is October 15, 2024 at 5:00 p.m. ET (USA and Canada).

There are three types of sessions: (1) Paper Presentations; (2) Author-Meets-Reader Sessions; and (3) Roundtable Sessions.  Please note that you are limited to participating only once at LSA as a paper presenter, book author, or roundtable participant (full rules here). 

Please feel free to reach out if you have any questions. J.S. happens to be organizing both our LSA CRN and the ComplianceNet2025 conference in NYC that will be held the end of the same week as LSA so that international scholars can travel easily from one conference to another. If you are writing, please include "LSA CRN 46" in the title of your email.

We look forward to seeing you next summer! 

Best,

J.S. and Geeyoung  

Paper Presentations 

If you would like to present a paper (either completed or in progress) as part of one of our CRN’s paper sessions, please:  

(1) By October 15, 2024 at the very latest, submit your paper title and abstract directly to LSA via this link.

• • • Choose "Individual Paper” in the "Submission Type" drop down menu. 
    • Paste your abstract in the "Proposal" portion of the submission form.  Your abstract must be under 2000 characters. 

• • [VERY IMPORTANT] Select CRN 46 where prompted.

(2) Also by October 15, 2024, please send an email to [email protected] or [email protected] with your paper title and abstract, notifying us that you have submitted your paper directly to LSA. This will help us track your submission and make sure we can find your paper if it doesn’t appear on the list of CRN 46 papers provided by LSA.

(3) Please only submit a paper if you plan to the conference. When paper authors drop out post-submission, it can put the entire panel at risk of cancellation. 

Chair/Discussant Once we have a list of paper presentations associated with CRN 46, we will organize those presentations into paper sessions. Each paper session will need a Chair and a Discussant (who can be the same person). If you would be willing to serve in one or both of those roles, please let us know by October 15, 2024.

Author-Meets-Reader Sessions 

If you have a book (excepting edited volumes or textbooks) that has been, or will be, published in 2024, please consider whether you’d like to arrange an “Author-Meets-Reader” Session around your book!  Here is how LSA describes AMR Sessions: 

“An Author-Meets-Reader (AMR) is a session in which discussion is focused on one to three recently published scholarly books. The session must include the author(s) of the book, three designated “readers” per book (as applicable) who provide comments, and a session chair (who may be one of the readers). AMR panels are limited to books published in the year prior to the LSA Annual Meeting. For the 2025 Meeting, the books must have a publication date in 2024.”

If you are interested in organizing an AMR Session, please contact us by October 1, 2024, and we will work together to submit an AMR Session as part of the CRN. 

Roundtable Sessions 

If you would like to propose a theme for a Roundtable Session, please contact us by October 1, 2024, and we will work together to submit a Roundtable Session as part of the CRN. Here is how LSA describes Roundtable Sessions: 

“A Roundtable is a discussion-centered session that is organized around a common theme and does not have papers presented. Roundtables are the most flexible format offered at the meeting. Participants might organize debates, visual and musical performances, workshops, films, and other innovative formats.”

Estate Planning and Tax Faculty Sought at Louisville (Brandeis) Law

The University of Louisville's Brandeis School of Law invites applications for tenure-track full-time faculty positions at the Assistant/Associate level position to commence on July 1, 2025.  Specific curricular needs are for estate planning and tax. Academic rank and salary will be commensurate with qualifications and experience.

The Louis D. Brandeis School of Law: The Brandeis School of Law is committed to excellence in preparing lawyers for productive careers. The school boasts an excellent faculty with a deep commitment to teaching and academic support, and a low student-faculty ratio.  Our smaller class sizes foster close interaction between students and faculty, nurture a culture of collegial learning, and provide opportunities for individualized attention.  In addition to teaching excellence, our faculty is deeply committed to producing excellent scholarship and to community engagement.  Our faculty boasts many engaged scholars.

The School of Law strives to promote collegiality and professionalism, and its culture is based on civility and respect for all students, faculty, and staff. The school also seeks to admit and support a diverse law school population and provides opportunities to share and discuss differing opinions. 

Applicants: Applicants for this position should have distinguished academic credentials, a record of scholarship, and a strong commitment to scholarship, teaching, service, professional ethics, and collegiality. The School of Law values the diversity of its faculty and encourages applications from persons who will contribute to that diversity.

Documents Requested: Letter of interest – CV – Teaching Philosophy – Teaching evaluations (if applicable) – Draft of article in progress

Submit to: [email protected]

and apply at https://uofl.wd1.myworkdayjobs.com/en-US/UofLCareerSite/details/Professor--Open-Rank-_R105554?q=R105554

The Committee will begin reviewing applications immediately and continue to review until hiring needs are met. 

Vermont Law is Seeking Income Tax, Estates, and Business Law Faculty

Vermont Law and Graduate School (VLGS), invites applications for multiple tenure-track faculty positions for required JD and upper-level JD courses including Income Tax, Estates, and Business Law courses.  Entry-level, junior, and senior lateral candidates will be considered. The school's curricular needs include both residential and online courses.  Candidates should demonstrate evidence of, or potential for, outstanding scholarly achievement and strong, innovative, and engaged residential and/or online teaching. In addition to teaching, faculty provide service to VLGS and engage with other professionals and the public to contribute to the intellectual exchange of ideas, improve the law, and educate the public about the law, with an eye towards social justice.

Applicants must complete an online application and electronically submit (1) a cover letter; (2) a curriculum vitae; (3) a research agenda; and (4) the names and contact information of three references at recruiting.paylocity.com/recruiting/jobs/Details/2659572/....

 VLGS will only contact references for finalists. VLGS strongly encourages applications from those who would bring increased diversity to our community.

Direct inquiries about the position to Faculty Appointments Committee Chair, Anna Connolly at [email protected]

The positions will remain open until filled.  

Faculty Openings at Loyola, Los Angeles Law

LOYOLA LAW SCHOOL, LOS ANGELES

Location: Los Angeles, CA

Subjects: All subject areas but particularly interested in torts, property, and contracts

Date: August 20, 2024

Loyola Law School, Los Angeles (LLS) invites applications for full-time tenure-track and tenured faculty positions to begin in the 2025-2026 academic year. We seek applicants who will excel in scholarship, teaching and service. We are especially interested in applicants who have impactful research agendas and who desire to attend to systemic injustice in their teaching, regardless of the legal subject area. Applicants must have a degree from an ABA-accredited law school (or foreign equivalent), excellent academic credentials, demonstrated achievement or potential as a scholar and teacher, and a commitment to our social justice mission.

The selected candidates will join our diverse community of leading scholars in the areas of criminal law and criminal law reform, intellectual property, tax law, civil litigation, business and innovation law, employment and labor law, and immigration and civil rights law, among others. We boast over twenty live-client clinics, a robust business, law and technology program, and an award-winning trial advocacy program. Our location in downtown Los Angeles complements our global and cutting-edge approach to scholarship and education. Our network of almost twenty-thousand alums has consistently yielded the highest number of Superior Court judges in the state and Southern California's highest number of Super Lawyers.

As part of Loyola Marymount University, a Jesuit, Carnegie-classified R2 institution, LLS seeks outstanding applicants who share its commitment to inclusive excellence and the promotion of justice. We are an equal opportunity employer committed to providing an environment free from discrimination and harassment. We welcome and invite all persons of diverse and intersectional identities, life experiences, and beliefs to apply.

Candidates may apply through the Faculty Appointments Register or by submitting application materials through the LMU Loyola Workday portal here. 

Please feel free to reach out with questions by email to Professor Marcy Strauss, Appointments Committee Chair, at [email protected].  

Toussaint's Law Teaching Tips and Strategies - The Labor of Law Teaching

On this Labor Day, some of us business law profs are about to start our semesters, while others are already a few weeks into the fall term.  However, we all understand that our profession involves labors of many kinds.  Seldom do we reflect on those labors with the thought of planning for a positive experience for all.  Today seems like a good time to do that.

A bit more than two weeks ago (August 15), as many of us were beginning to teach for the semester, our law professor colleague Etienne Toussaint (University of South Carolina Joseph F. Rice School of Law, @ProfToussaint) posted a set of tips and strategies for law professors on Twitter (rebranded as X).  His counsel is so wonderful--so apt.  I asked if I could re-publish his post here, and he gave me permission to do that.  So, here are Etienne's words of advice, introduced as he introduced them in his original post.

I always get nervous, so planning helps.

Here are ten tips and strategies to help you (and me) get mentally prepared and set a positive tone in the classroom to ensure a great experience for both you and your students this upcoming academic year.

1/ Set Clear Expectations: Start strong by clearly outlining your course policies on Day 1. This includes attendance, participation, assignments, and exams. When students know what’s expected of them, they’re better equipped to succeed and feel secure in the learning environment.

2/ Foster a Supportive Environment: Law school can be overwhelming, especially for 1Ls. Create a classroom where questions are encouraged and mistakes are seen as learning opportunities. Empathy goes a long way in building students' confidence and fostering a growth mindset.

3/ Incorporate Active Learning: Go beyond lectures with case studies, discussions, and problem-solving. Engaging students in active learning not only makes the material more interesting, it also helps them retain information better. Participation leads to deeper understanding.

4/ Be Approachable: Make it clear that you’re available to help outside of class through office hours, email, or online forums. When students know they can reach out, it builds trust and encourages them to seek help when they need it. This is crucial for student success.

5/ Connect the Material to Real-World Applications: Show students how the legal principles they’re learning play out in real-world scenarios. Whether it’s current events or your experiences, relatable examples keeps students engaged and helps them see the practical value.

6/ Encourage Critical Thinking: Push students to think critically about the cases and materials. Encourage them to question assumptions, explore different perspectives, and develop well-reasoned arguments. Critical thinking is essential for their development as future lawyers.

7/ Balance Rigor with Compassion: Maintain high academic standards while recognizing the pressures that 1L law students face. Compassionate teaching doesn’t mean lowering the bar; it means providing the support and encouragement students need to meet and exceed expectations.

8/ Promote Collaboration: Foster a collaborative classroom culture where students can learn from one another. Group projects, peer reviews, and study groups not only enhance learning but also build a sense of community, which is vital for their success and well-being.

9/ Reflect & Adapt: Continuously reflect on your teaching methods and be open to adapting them based on student feedback. This shows students that learning is a dynamic process, and it allows you to improve the classroom experience for everyone. Continuous improvement is key.

10/ Take Care of Yourself: Teaching is a demanding profession, especially in law school. Prioritize your own well-being so you can bring your best self to the classroom. A balanced and centered teacher is essential for creating a positive and productive learning experience.

I hope that Etienne's words have as much meaning for you as they do for me.  I find them both resonant and highly motivational.  Do take care of yourselves, and enjoy the holiday break for Labor Day.  

14a-8 alternatives

Not a whole lot going on this week in terms of legal developments, so I thought I'd reach back to an older post of mine, where I talked about a case pending before the Fifth Circuit regarding 14a-8.  The original petitioner, the National Center for Public Policy Research, argued that the SEC engages in viewpoint discrimination when it issues no-action letters; an intervenor challenged the entire basis for Rule 14a-8 as unauthorized by statute and unconstitutional to boot.  The SEC, for its part, addressed these substantive arguments but concentrated most of its energies on arguing that no-action letters are not final orders subject to challenge in the first place.

Normally, I'd assume a case like this wouldn't have much chance of succeeding, but it's the Fifth Circuit, which tends to take an entrepreneurial approach to issues like corporate rights, standing, and administrative authority.  Even then, I'd say the petitioners were likely out of luck, because the panel turned out to be Jones, Douglas, and Dennis - meaning, two Democrats and a Republican - and, indeed, only Judge Jones demonstrated any sympathies for the petitioners during oral argument.  But! The last time sec reg ended up before a 2-1 Democratic panel of the Fifth Circuit, the Democrats' ruling in favor of the NASDAQ's diversity rule was taken en banc where its prospects apparently are rather dim.

So what happens if Rule 14a-8, at least in the form we know it, dies?

Well, that brings me to the United Mine Workers' tactic against Warrior Met.  As Mike Levin described in his Activist Investor blog here, United Mine Workers took advantage of the universal proxy rule to run a shareholder proposal proxy contest.  That is, because it can now list incumbent director candidates on its own proxy card, that's just what it did - it offered several shareholder proposals (14a-8 would limit it to just one), ignored all of Rule 14a-8's other strictures, filed its own proxy materials, sent out proxy cards, and hired a vendor to collect them.  Having done that, Warrior Met was backed into a corner and forced to include the proposals in its own proxy materials - because otherwise it risked losing control over, and insight into, how proxy cards collected by Mine Workers were being voted or if they were being returned at all.  The expenses for this entire effort by the Mine Workers totaled just $15,000, which sounds very feasible for at least some repeat-player proposal proponents.  It also may just scratch the surface of what the universal proxy enables in the future.

But that, of course, assumes the proposal is one that United Mine Workers can, in fact, bring to the floor - i.e., state corporate law has to allow shareholders to raise these proposals at a shareholder meeting and vote on them, before anything else can happen.  Mohsen Manesh lays out the argument for how corporations can - via bylaw or charter provisions - limit shareholders' power to make proposals in the first place, which would not only prohibit United Mine Workers' tactic, but also limit the use of 14a-8 (which is only supposed to enable shareholders to exercise their state-law created governance rights).  If he's right, and if companies/management take advantage of that ability, we could lose a lot of shareholder proposals entirely (and a major source of entertainment for corporate academia).  Prof. Manesh explains that companies might not want to limit shareholders' ability to bring proposals - maybe investors would be annoyed if their rights were curtailed that way - but, as I previously observed, there wasn't much pushback when Exxon sued its own shareholders over a proposal, so maybe there's space for companies to rid themselves of proposals entirely.

The Continuing Unpaid Award Problem

For decades, we've known that many arbitration awards in the FINRA arbitration forum go unpaid.  This happens because many brokerage firms collapse after liability for abusive sales practices comes home.  Last Friday, arbitrators rendered an award finding SW Financial liable for over $13 million in damages to a group of dozens of investors.  SW Financial was expelled by FINRA in 2023 for, among other things, making false statements to customers and failing to supervise its personnel.  

Congress has noticed the problem.  The Senate Committee on Appropriations recently found that “FINRA has failed to undertake steps to address unpaid arbitration awards by its members.”  It directed the SEC to "continue to engage with FIRNA to identify ways to reduce and eliminate the occurrence of unpaid awards."  This comes after a 2018 bipartisan proposal to create a recovery pool failed to pass.

FINRA has tracked this issue for some time and keeps statistics on unpaid awards.  That an award goes unpaid, does not mean that every customer with an unpaid award recovers nothing.  FINRA explains it this way:

At times when an arbitration panel does award monetary damages to the claimant, the respondent may fail to pay the awarded damages. If a customer is not able to recover monetary damages awarded in the FINRA arbitration forum, that does not always mean that a customer did not receive any monetary payment in connection with the underlying dispute. In many cases that result in unpaid awards, a customer settles with one or more parties pre-award, but proceeds to obtain an award against other parties named in the case, who then fail to pay the award. 

Ultimately, this is a problem that has lingered for far too long.  Although FINRA has made some moves on the issue, including requiring certain "restricted firms" to keep more money on deposit, too many investors get stuck with the short end of the stick. Part of the problem is that a small firm can cause big damages for a large number of people.   For investors with claims against smaller brokerage firms, I'd encourage them not to dawdle on seeking justice.  Whether they get paid at all may depend on when they get in line.

 

SEALS Conference Reflection -- Mind, Soul, and Body?

Last month, I was able to attend the SEALS Conference for the first time in a few years. It was good to see a number of old friends and meet some new ones. And I really enjoyed the many discussions on a wide variety of legal topics. 

While most academic panels are understandably focused on the mind, it was interesting to see a number of discussions focus on soul-related issues, including a couple on mindfulness/meditation and a few focused on religiously affiliated law schools. 

Traditionally, legal academics do an excellent job sharpening the mind. “Think like a lawyer” is a phrase even my colleagues across campus know. The soul gets much less attention at most schools, but that seems to be changing a bit, especially with increasing concerns for lawyer well-being. 

The body, however, seems almost entirely neglected both at the SEALS Conference and at law schools nationwide. Yes, there were tennis and pickleball tournaments, but I don’t think there was a single panel related to the physical health of our students, faculty, and staff.

At the undergraduate level, many universities have one or more required fitness classes, but I don’t know of any law school with similar requirements. And most law schools, frankly, require so much time devoted to mental exercise that they leave very little time for physical fitness. I probably wouldn’t advocate for requiring fitness classes at law schools, but I do think they could make more effort to reduce friction and create opportunities for physical health. A few possible examples:

• Healthier food than pizza and doughnuts at campus events (of course these have the benefit of ease and relatively low expense, but law schools could (and sometimes do) make a more conscious effort to order more nutritious snacks and meals). 
• Encourage walking office hours (often there is no need to sit during these meetings)
• Promote intramural teams (I know some law schools have softball and flag football teams).
• Corporate challenge 5K teams for the law school (we have one at Belmont, which competes against area nonprofits and businesses).
• A gym on or near the law school campus (even if just a few treadmills and hand weights. Just the friction of going across campus can deter exercise, especially when pressed for time.) 
• A pickleball court near the law school.

What other examples? Or do folks think that law schools are best to stay out of the business of promoting physical health for faculty, staff, and students?

Lebovitch on DGCL § 122(18)

As you may recall, Ann and I got a bit wound up last summer about the Delaware General Assembly's consideration of Delaware S.B. 313 (and, within it, the proposed addition of § 122(18) of the General Corporation Law of the State of Delaware ("DGCL")). We each offered brief oral testimony and even wrote letters to the Delaware House Judiciary Committee, which you can find here and here.

A comrade in that effort, Mark Lebovitch, has taken time to reflect a bit on the crazy summer that brought a new and troubling corporate purpose to Delaware's venerable corporate law and to prognosticate about the future impact of DGCL § 122(18).  The result?  Soap Opera Summer: Five Predictions About DGCL 122(18)’s Effect on Delaware Law and Practice.  The abstract follows.

Predictability and stability are often cited as leading reasons for why Delaware’s corporate law system is world renowned and widely emulated, giving the First State dominance in the competition for domiciling business entities. The first half of 2024 was anything but predictable and stable in Delaware’s legal community. Rarely has an amendment to the Delaware General Corporation Law (“DGCL”) triggered as much public debate as SB 313, which became effective as of August 1, 2024. The crux of the dispute turned on identifying the greater risk to Delaware’s standing as the global leader in corporate law – a few recent judicial opinions that would have forced certain market practices to change, or the legislative fix seeking to nullify those opinions.

This article focuses on the most controversial aspect of SB 313. New DGCL Section 122(18) overrides the Court of Chancery’s February 23, 2024, Opinion in West Palm Beach Firefighters’ Pension Fund v. Moelis & Company ("Moelis"), by broadly allowing corporate boards to contractually delegate to any stockholder or prospective stockholder the power to cause the company to act or refrain from acting in almost any manner, including many decisions normally reserved for the board itself. Now that the debate about recent cases and new legislation is over, this article takes the opportunity to assess how the new law will actually affect Delaware’s corporate law doctrine and litigation practice. Looking beyond the atypical drama of the past six months, this article offers five subtle (but hopefully not boring) predictions and observations about how new Section 122(18) is likely to affect the corporate world going forward.

Time will tell whether Mark gets the predictions "right" or not.  In the meantime, I am prepared for the eventual advent of legal challenges.  Like Mark, I see them coming . . . .

Three Things Make a Post

Thing One:  I jotted!  Which is to say, I wrote a Jotwell review of Hilary Allen’s Interest Rates, Venture Capital, and Financial Stability, forthcoming in the University of Illinois Law Review.  Her paper is here, and you can find my review here.

Thing Two:  I have a new paper-ish thing.  As y’all know, I’ve been keeping an eye on litigation-limiting bylaw and charter provisions, including – as I previously posted – the Ninth Circuit’s en banc decision in Lee v. Fisher, which permitted The Gap to enforce a forum selection bylaw directing derivative Section 14(a) claims to Delaware’s Court of Chancery – even though that court has no jurisdiction to hear Section 14(a) claims.  In practical effect, then, the bylaw operated as a waiver of the federal claim.

That decision cited a draft version of an article by Professors Mohsen Manesh and Joseph Grundfest, Abandoned and Split But Never Reversed: Borak and Federal Derivative Litigation, in which they defended such bylaws.  The article was published in the Business Lawyer late last year, and is available here.

Anyhoo, I now have a (very short) reply to Professors Manesh and Grundfest, also forthcoming in the Business Lawyer, called Not Dead Yet.  The Reply is available here, and this is the abstract: 

In their article, Abandoned and Split, But Never Reversed: Borak and Federal Derivative Litigation, Professors Mohsen Manesh and Joseph Grundfest argue that corporations should be permitted to waive derivative Section 14(a) claims in their constitutive documents, partly because such claims are duplicative of other causes of action, and partly because of the weakness of the original Supreme Court case to recognize them. In this Reply, I defend the continuing vitality of the derivative Section 14(a) cause of action, and its necessity as a source of investor protection

But! Mine is not the last word; Mohsen and Joe will have a reply to my reply in the same issue.  When that’s public, I’ll edit this post with a link.

Thing Three:  The Lee v. Fisher case was one of a series of cases arguing that companies were lying about their efforts to diversify their boards.  Another such case was brought against Qualcomm, and it was dismissed by a federal district court in 2021.

The plaintiff in that case then sought books and records in Delaware, and relied on those to file a state law complaint, which once again alleged that the company lied about its efforts to diversify when seeking director candidates.  This time, however, the complaint was brought for breach of state law fiduciary obligations rather than federal proxy fraud, and the claim was direct rather than derivative.  Not long ago, Vice Chancellor Laster dismissed that claim in a bench ruling. 

The transcript is worth a read.  Among other things, VC Laster explicitly (though not unsurprisingly) held that directors only have a duty to maximize firm value.  Demographic diversity may further that goal by fostering innovation; demographic diversity may also further that goal by inspiring the confidence of stakeholders, who would otherwise lose faith if they “only see very few people who look like them.”  But boards have discretion to make their own judgment as to the financial value that diversity provides.

What they can’t do, of course, is explicitly lie to shareholders in their proxy statement, or omit material information, which is what the plaintiff was alleging.  And here was the second interesting point: VC Laster noted that a voting rights claim based on a misleading or incomplete proxy statement is not, per se, subject to the business judgment rule.  As he put it, “Directors have a duty to disclose material information, but there is no separate standard of review that overlays that obligation, such as the business judgment rule…. [I]n a case involving stockholder action, a plaintiff need only plead two elements: First, that there was a request for stockholder action, and certainly there was here.  These were elections of directors. And second, that there was a material misrepresentation or omission.”

With that set up, however, he found that Kiger had not in fact stated facts that made it reasonably conceivable that Qualcomm misled shareholders about its diversity efforts, and that was the end of that.

Duncan (Lincoln Memorial) Law Faculty Openings

Lincoln Memorial University Duncan School of Law in Knoxville, TN, seeks entry-level and lateral candidates for full-time, tenure-track faculty positions starting July 2025. LMU Law aims to provide legal education to students from underserved regions, focusing on practice-oriented training for diverse backgrounds. The goal is to produce graduates who will pass the bar and serve their communities, particularly addressing the legal needs of Appalachia and other underserved areas.

We welcome applications from all subject areas, with particular need for expertise in business associations, civil procedure, evidence, property, constitutional law, and criminal law and procedure. As we expand our predominantly online hybrid program, we seek candidates across all doctrinal areas and are particularly interested in those who would enjoy the challenges of online teaching.

Educating the next generation of lawyers is our top priority. Faculty members are committed to supporting students in their academic, professional, and personal development. Our campus design ensures faculty accessibility and active engagement in law school life. We work collaboratively to provide innovative legal education, incorporating skill-based and experiential learning and best practices from academic and bar success. We seek candidates who share this ethos and are excited to contribute.

Candidates must have a J.D. or equivalent, strong academics, and a commitment to legal education. We value diverse experiences, including teaching, scholarship, legal practice, clerkships, and post-law-school work. Candidates without teaching experience but showing promise in teaching and scholarship are welcome. This can be evidenced by involvement in student-focused activities, mentoring, educational presentations, writing for legal publications, or leadership in professional or community organizations.

This position offers a twelve-month contract with teaching responsibilities in alternate summers. Our tenure and promotion policies consider this when determining scholarship requirements.

We are committed to diversity and actively seek applications from underrepresented groups, including people of color, women, individuals with disabilities, LGBTQ+ individuals, and veterans. We value candidates who can enrich our community, program, and mission through their diverse life experiences, perspectives, and philosophies.

Our law school is located in downtown Knoxville, offering vibrant city life, a rich cultural scene, and stunning natural beauty with the Great Smoky Mountains as a backdrop. Knoxville has been recognized as one of the top 25 places to live in the United States.

Inquiries may be directed to Sydney Beckman, Chair of the Faculty Appointments Committee, at [email protected]. Applications can be submitted here and must include a cover letter detailing your interest in LMU Law, a CV, and a list of three professional references. Candidates are welcome, but not required, to provide a statement of teaching philosophy, research agenda, or diversity statement. Candidates invited for campus visits will be requested to provide teaching evaluations from the past three years, if available. The committee anticipates beginning application review immediately.

Emory Law Named Professorship Seeks Applicants

Hiring Announcement: Emory University School of Law

Robert T. Thompson Professorship in Business Law

Emory University School of Law seeks applications from outstanding tenured scholars for the Robert T. Thompson Professorship in Law. This professorship recognizes outstanding achievement in scholarship and teaching in disciplines related to business law, including mergers & acquisitions, securities regulation, corporate finance, and other related business law fields.  Candidates should have exceptional records in research, teaching, and service and have attained a J.D., Ph.D., or equivalent degree. Candidates should currently hold a tenured academic appointment and should be eligible for appointment as a full professor at Emory. 

Candidates must complete the online application which requires creating an account, uploading a resume or CV, and providing basic demographic information. In addition, applicants should submit a cover letter, a current CV, a published or unpublished academic article, a brief research agenda, and an indication of teaching interests (if not listed on the CV) to the chair of the Appointments Committee: Professor Joanna Shepherd, at [email protected]. Applications will be considered on a rolling basis. 

W&L Law Hiring Announcement - Business Law Focus

Description

The Washington and Lee University School of Law warmly invites applications for up to two tenure-track or tenured faculty positions that will begin on July 1, 2025. We are excited to advance our trajectory of outstanding scholarship and teaching with these new hires. A central aspect of the mission of our Law School is to promote a diverse, equitable, and collaborative intellectual community. To do so, we continually strive to foster an inclusive campus community that recognizes the value of all persons regardless of identity. In keeping with the University’s Strategic Plan, we welcome applications from candidates belonging to communities traditionally underrepresented in the legal academy.

Qualifications

A J.D. from an ABA-accredited law school or equivalent is required. We particularly encourage applications from entry-level and junior lateral candidates (either pre-tenure or recently tenured) to join our faculty at the Assistant or Associate Professor level, but we welcome applications from candidates at all levels of experience. Candidates should have a distinguished record of scholarly achievement or demonstrated potential for high scholarly achievement, effective teaching, active service, and a record of inclusion. Our search will focus on applicants whose research and teaching interests include corporate and business law (including commercial law) and/or tax law.

Application Instructions

Applicants should submit the following materials through Interfolio at apply.interfolio.com/152352: (1) a cover letter describing their interest in the position; and (2) a current curriculum vitae, including references. Please address these materials to Professor Chris Seaman, Chair, Faculty Doctrinal Appointments Committee. Additionally, we encourage prospective applicants to contact Prof. Seaman ([email protected]) with any questions.  All inquiries will be treated as confidential.  Review of applications will begin immediately and continue on a rolling basis. 

Equal Employment Opportunity Statement

Washington and Lee is an Equal Opportunity Employer.  As such, we are interested in candidates who are committed to high standards of scholarship, performance and professionalism and to the development of a campus climate that supports equality and diversity in our faculty, staff and student body. Job description requirements are representative, but not all‐inclusive of the knowledge, skill, and abilities needed to successfully perform this job. Reasonable accommodations may be made to enable qualified individuals with disabilities to perform essential functions.

NVIDIA

In 1995, Congress passed the Private Securities Litigation Reform Act (PSLRA), which dramatically heightened the pleading burden for plaintiffs bringing securities fraud cases.  At the same time, the PSLRA also instituted a mandatory stay on discovery until resolution of any motions to dismiss, which means plaintiffs have to use their own investigation – relying on public information, confidential sources, and the like – to draft a complaint that is sufficiently particular to satisfy PSLRA standards.

In 2002, Steve Bainbridge and Mitu Gulati published How Do Judges Maximize? (The Same Way Everybody Else Does – Boundedly): Rules of Thumb in Securities Fraud Opinions.  The paper explained that, given the high pleading standards of the PSLRA, judges deciding motions to dismiss lighten the workload by coming up with various rules of thumb for determining whether a complaint pleads materiality or scienter.  For example, they identified the puffery doctrine (presuming that investors treat vague statements of optimism as immaterial), the bespeaks caution doctrine (predictions of the future are immaterial if they are caveated by warnings of future uncertainty), and fraud by hindsight (refusing to draw inferences about what the company knew at an earlier time due to negative disclosures at a later time), as new bright line rules that judges employ to dismiss complaints, disconnected from the general fact pattern.

I can add a bunch more.  For example, a refusal to infer knowledge from one’s position in the company (except in generally rare instances where the “core operations” doctrine kicks in), a refusal to treat bonuses and similar compensation as a motive for fraud, a refusal to treat corporate departures as indicative of fraud unless there are “particularized allegations connecting the departures to the alleged fraud,” In re Hertz Global Holdings, 905 F.3d 106 (3d Cir. 2018), and a refusal to treat insider trades by non defendants as indicative of scienter (an issue I blogged about here).  These are more “rules” for complaints that, I’d argue, contradict our common sense understanding of how to go about inferring other people’s states of mind on a day to day basis just, you know, as a consequence of living as human beings on this planet.

Additionally, a couple of years ago, I published Fact or Fiction: Flawed Approaches to Evaluating Market Behavior in Securities Litigation, which identified still more rules of thumb that judges have developed over time.  For example, when addressing loss causation, courts often require revelation of the fact of falsity (rather than a revelation of problems traceable to the fraud), and will further hold that notice of an investigation, without more, categorically cannot cause a loss. 

You see the problem.  The question whether a complaint pleads falsity or a strong inference of scienter or loss causation or materiality is a holistic factual inquiry; but as these rules build up, pleading or litigating a securities case becomes about whether plaintiffs have complied with an increasingly arcane set of rules.  I like to quote then-Chief Judge William Young from 1999, describing the PSLRA as a “Byzantine pleading code …for securities actions.”  In re Number Nine Visual Tech. Corp., 51 F. Supp. 2d 1 (D. Mass. 1999).

Which is what I was thinking about when going over NVIDIA’s opening brief in NVIDIA Corporation v. E. Ohman J:or Fonder AB, currently pending before the Supreme Court. 

The plaintiffs pled falsity by relying, in part, on an expert report that drew inferences based on market information.  The assumptions and inferences on which the report was based were in the complaint.  Nonetheless, NVIDIA seeks to have the Supreme Court adopt a bright line rule that an expert opinion does not constitute an allegation of fact sufficient to satisfy PSLRA pleading standards.  NVIDIA also challenges the market evidence and factual assumptions that underlay the report as too generic.  Finally, NVIDIA admits that sometimes expert reports may be helpful, but here, the complaint rests too much on the expert report alone, so that the other facts surrounding it are not sufficient.

I see no way the Supreme Court can give NVIDIA what it wants without either acting as a district court and weighing this specific complaint and these specific allegations without regard for future cases, or - more likely - adding more artificial rules to securities pleadings.  Expert reports are still pretty rare in complaints, but if the rule is you can’t have them be the sole support of a complaint, then we’ll see endless litigation over what counts as “sole” (especially since, in this very case, the plaintiffs offer additional allegations).  And if plaintiffs can’t use expert reports that draw inferences based on detailed market information, can they use short seller reports that do the same?  (The Ninth Circuit, for example, has held that short seller reports analyzing public information may be a basis for alleging loss causation if they involve “extensive and tedious research involving the analysis of far-flung bits and pieces of data.” In re BofI Holding, Inc. Securities Litigation, 977 F.3d 781 (9th Cir. 2020)).

If plaintiffs can’t use short seller reports, what happens if the plaintiffs’ attorneys draw inferences based on public information – does that go too far?  Suddenly what started out as a simple rule about experts becomes whole new categories of prohibited inferences being added to the list.  And ruleification ends up obscuring the ultimate inquiry, namely, whether there is a sufficient basis to infer that the defendants’ statements were false.

There’s a similar issue with respect to the other question presented in this case, which is about pleading scienter.  In NVIDIA, the plaintiffs offer a lot of circumstantial evidence of scienter, plus make allegations regarding the existence of documents allegedly reviewed by the defendants, but the plaintiffs haven’t seen the documents so they can’t plead their exact contents.  NVIDIA wants the Court to adopt a bright line rule that the contents of the documents must be described, because “Plaintiffs built their entire scienter case around NVIDIA’s internal documents and data.  By choosing this route, Plaintiffs were required by the PSLRA’s pleading standards to allege with particularity what those documents and sources said and how they supported Plaintiffs’ preferred inference of scienter.”  Which means, were the Court to accept NVIDIA’s argument, the next step is litigation over what counts as the “entire” case, and how much description of a document is enough, and how much support a generally-described document can provide when there are other allegations of scienter.  The argument becomes about the contours of the rule, not whether the substantive standard for pleading scienter is met.

Securities complaints are now hundreds of pages long – and sometimes, ironically, dismissed for being too long and confusing, because Goldilocks-like, they must be just right.  See, e.g., Macovski v. Groupon, Inc., 2021 WL 1676275 (N.D. Ill., Apr. 28, 2021).  (Apparently, plaintiffs must also take a class in narrative exposition before they can survive a motion to dismiss.)  Selecting a lead plaintiff takes months, drafting an amended complaint typically is 60 days or so after that, plus another 60 for the motion to dismiss, 60 for the opposition, and 30-60 for a reply – weeks or months before an oral argument and god knows how long before a decision, and all of this before there’s been any discovery.  By the time you get to depositions, witnesses will be able to say “I don’t remember” and be completely credible.  The last thing this system needs is more up front rules about what plaintiffs can and cannot plead.

Dell Decision Out

Yesterday, the Delaware Supreme Court released its decision in the Dell fee award appeal.  It's available here.  The Dell case presents a question for blockbuster shareholder litigation--when the damages numbers in dispute grow particularly large, should courts apply a declining percentage when setting the attorneys' fees?  (Disclosure, I joined an amicus brief on this issue at the trial level.)  The Dell plaintiffs secured a billion dollars in settlement.  Delaware's Chancery Court opted to give the lawyers $267 million in fees.  

Ultimately, funds holding about 24% of the class objected to the fee award.  This is how the Delaware Supreme court stated their argument:

Pentwater argued that awarding a percentage of the settlement sought without considering the size of the settlement was unfair to the class. They contended that, in this case, the proposed fee was disproportionate to the value of the settlement. The objectors urged the court to apply a declining percentage to the fee award, which is similar to the approach used by federal courts in large federal securities law settlements. The declining percentage method reduces the percentage of the fee awarded to counsel as the size of the recovery increases. According to Pentwater, fee awards “are meant to reasonably incentivize the attorneys taking these cases,” and, in its view, “the amount of work, time, and effort spent on a case does not grow proportionately with the transaction size.”10 In other words, “it is not a hundred times more difficult (or riskier) to litigate and try a $10 billion case than it is to litigate and try a $100 million case.” They argued that the Delaware Supreme Court and Court of Chancery have applied the declining percentage method in other cases. (footnotes omitted)

In these cases, the trial court's fee awards are reviewed under a deferential abuse-of-discretion standard.  After Dell, the basic framework remains unchanged.  Delaware courts consider five factors to decide fee awards:  "(1) the results achieved; (2) the time and effort of counsel; (3) the relative complexities of the litigation; (4) any contingency factor; and (5) the standing and ability of counsel involved."  

But the devil is always in the details.  How should courts, after Dell, apply the five factors?  The decision has some language indicating to me that courts need to consider declining percentages in mega-settlements.  Consider these statements and a quotation:

• Given the equitable principles underpinning fee awards in common fund cases, and this Court’s concern for excessive compensation or windfalls, it is entirely appropriate, and indeed essential, for the court to consider the size of the award in a megafund case when deciding the fee percentage. An award can be so large that typical yardsticks, like stage of the case percentages, must yield to the greater policy concern of preventing windfalls to counsel.
• At some point, the percentage of fees awarded in a megafund case exceed their value as an incentive to take representative cases and turn into a windfall.
• But a point exists at which these incentives are produced, and anything above that point is a windfall. In other words, if a fee of $500,000 produces these incentives in a particular case, awarding $1 million is a windfall, serving no other purpose than to siphon money away from stockholders and into the hands of their agents. Thus, it is important that we attempt, in a self-conscious and transparent manner, to estimate the point at which proper incentives are produced in a particular case. (favorably quoted from Seinfeld v. Coker)

What will this mean for future fee awards?  My thought here is that it seems likely that Chancellor McCormick will read the decision closely as she considers fee awards in the two outstanding Tesla cases. 

The Delaware Supreme Court approved the Dell award as within the bounds of discretion.   Yet how wide will the discretion be in the future?  As the numbers go up to the billions as in the Tornetta case, the math changes.  There, attorneys blocked a $56 billion dollar compensation plan.  They've requested about $6-7 billion in compensation.  (The numbers change depending on the stock price.). Although it's not even 15% of the benefit they obtained for the class, $6-7 billion is still a staggering amount.  It works out to about $300k+/hour for the attorneys involved.  

Ultimately, the question remains:  where is the line between adequate compensation to ensure skilled litigation in challenging cases and a windfall to the attorneys involved?  Now, we wait to see where Chancellor McCormick draws that line in awarding fees.  The Dell lawyers collected about $5,000 per hour worked.  It's a big jump from $5,000/hour to $300,000/hour.  I don't envy her job to settle on the right number.

Allison Frankel also has covered this case here.