Spontaneous Esophageal Perforation in a Patient with Mixed Connective Tissue Disease

Spontaneous esophageal perforation is a rare and life-threatening disorder. Failure to diagnosis within the first 24-48 hours of presentation portends a poor prognosis. A patient with mixed connective tissue disease (MCTD) on low-dose prednisone and methotrexate presented moribund with chest and shoulder pain, a left hydropneumothorax, progressive respiratory failure and shock. Initial management focussed on presumed community acquired pneumonia (CAP) in a patient on immunosuppressants. Bilateral yeast empyemas were treated and attributed to immunosuppression. On day 26, the patient developed mediastinitis, and the diagnosis of esophageal perforation was first considered. A review of the literature suggests that the diagnosis and management of spontaneous esophageal perforation could have been more timely and the outcome less catastrophic

Misreading the Williams Act

This Article examines the emerging controversy over preemption of the most potent of recent antitakeover laws, the so-called business combination statutes recently passed by Delaware, New York, and other states, and Pennsylvania\u27s director-approval statute. After examining the strategy employed by the states to shield these statutes from constitutional attack, we consider the issues raised by the preemption claim and the arguments currently being advanced by the SEC and others in favor of preemption. Resolving the preemption controversy requires inquiry into the original meaning and objectives of the Williams Act. We argue that this should involve attention not only to the statute\u27s linguistic context but also to certain critical assumptions about takeovers and corporation law that formed the back-drop against which Congress acted in 1968. We conclude that a proper understanding of the Williams Act offers no credible support for the preemption claim. Not only does a conventional analysis of statutory language and legislative history reveal that Congress did not seek to enact a general federal policy in favor of a robust market for corporate control, but appreciation of the historical context within which Congress acted demonstrates that such arguments are based on a mistaken equation of congressional assumptions with congressional intentions. In 1968 Congress made assumptions about certain core premises of state corporation law and about the macro-effects of takeovers. These assumptions, however, did not amount to intentions about how we ought to regulate takeovers in a markedly different economic and legal environment, an environment in which those assumptions no longer hold true. Congress did no more than address the takeover issue as it existed in 1968. It never addressed the important and distinctive policy questions that occupy us today. Accordingly, rather than claiming to find in the tea leaves of the Williams Act evidence of an intent that does not exist, judges and policymakers should take a fresh look at the costs and benefits of hostile takeovers and the appropriate role of the states in their regulation

Recalling Why Corporate Officers Are Fiduciaries

For all the recent federal attention to regulating - and differentiating - corporate officer and director functions, a curious fact remains: state fiduciary duty law makes no distinction between the fiduciary duties of these two groups. Instead, courts and commentators routinely describe the duties of directors and officers together, and in identical terms. To lump officers and directors together as generic fiduciaries with no distinction being made between them, suggests - as patently is not the case - that their institutional function and legal roles within the corporation are the same. Such a view, consequently, undermines efforts more sharply to distinguish, not blur, the governance responsibilities of these two groups. Failure to differentiate the duties of officers, who daily manage corporate operations, from directors, who more remotely monitor corporate affairs, stems from a puzzling failure to address an even deeper issue in corporate law: What exactly is the theoretical and conceptual basis for the widespread claim that corporate officers owe fiduciary duties to a corporation and its stockholders? Hardly a week goes by without yet another Delaware decision addressing the subject of director duties. Yet, surprisingly, no Delaware decision ever has clearly articulated the subject of officer duties and judicial standards for reviewing their discharge. For persons occupying such central places of power in corporations, senior officers largely have succeeded in eluding the distinctive attention of state corporation law. The thesis of this article is that corporate officers are fiduciaries because they are agents. The argument is not that agency principles should be introduced formalistically or uncritically into corporate governance. Rather, the claim is that drawing on the fiduciary duties of agents for guidance in fashioning modern understandings of corporate officer duties - and differentiating those duties from those of directors - can provide much-needed structure to what otherwise threatens to be an ad hoc enterprise. There are at least three benefits of our thesis. First, by understanding officer duties and director-officer interaction in this way it can be seen that state law remains the primary source for establishing the basic framework of corporate governance relations, both through corporate statutes and through judge-made fiduciary duty law. With a more highly differentiated state law model of director-officer relations, recent efforts of Congress, the SEC, the NYSE and Nasdaq to impose new responsibilities on directors - in an effort to improve their vital role in monitoring corporate officers - can be seen as congruent with, rather than at odds with, the underlying state framework. The current emphasis on director independence and the special focus on various board committees - audit, nominating/governance and compensation - can be seen as an effort to develop mechanisms to aid the board both in detaching from management and in divvying up the board\u27s key monitoring functions. Moreover, efforts by Congress and the SEC to place additional and different functions on senior officers also can be seen as supplementing, rather than displacing, existing state law-based fiduciary duties of officers. As a second benefit, our thesis clarifies immensely why courts can and should more closely scrutinize officer conduct than they now review director performance - i.e., the fiduciary duties of agents are more demanding than those of directors, especially the duty of care, and officers rightly face a greater risk of personal liability for misconduct. Heightened review of officer performance is especially fitting given that many of the recent corporate scandals involved wrongdoing at the officer level, and given that state law has been eerily silent about why officers owe duties at all, much less holding them to account. It also is important in light of the fact that recent federal initiatives aimed at improving officer performance eventually will be translated into, and will heavily influence, state fiduciary duty analysis. At a theoretical level, the third payoff, our thesis has several implications. These include our belief that we are entering an era when, due to heavier corporate regulation, the entity conception of the firm will be strengthened, as positive law, including agency law, still builds on that understanding of corporate relations. This period follows a span of perhaps twenty years when a highly disaggregated conception of corporate relations - the nexus of contracts theory - has predominated. We also believe that in the policy arguments for and against strong fiduciary duties over the years, virtually no attention has been given to distinguishing whether what is fitting for outside directors in the fiduciary duty area - relatively slack duties - is also fitting for corporate officers. Moreover, although agency law suggests greater liability for officers than directors, widespread (and longstanding) failure to understand officers in those terms means corporate law cannot as confidently assume that existing liability outcomes for officers are optimal, as might be the case with rules governing directors. We believe that, from a policy perspective, the fiduciary duties and liability rules for officers should be analyzed separately from those for outside directors. Contemporary corporate law and fiduciary discourse do not do so, however, thereby hindering attention to this subject. In the terms recently used by Professors Black, Cheffins and Klaussner to describe the state of law governing outside directors, we believe the window of liability risk for inside directors - i.e., officers - is in fact wide open, but it is thought, wrongly, to be virtually shut

Recalling Why Corporate Officers are Fiduciaries

For all the recent federal attention to regulating - and differentiating - corporate officer and director functions, a curious fact remains: state fiduciary duty law makes no distinction between the fiduciary duties of these two groups. Instead, courts and commentators routinely describe the duties of directors and officers together, and in identical terms. To lump officers and directors together as generic fiduciaries with no distinction being made between them, suggests - as patently is not the case - that their institutional function and legal roles within the corporation are the same. Such a view, consequently, undermines efforts more sharply to distinguish, not blur, the governance responsibilities of these two groups. Failure to differentiate the duties of officers, who daily manage corporate operations, from directors, who more remotely monitor corporate affairs, stems from a puzzling failure to address an even deeper issue in corporate law: What exactly is the theoretical and conceptual basis for the widespread claim that corporate officers owe fiduciary duties to a corporation and its stockholders? Hardly a week goes by without yet another Delaware decision addressing the subject of director duties. Yet, surprisingly, no Delaware decision ever has clearly articulated the subject of officer duties and judicial standards for reviewing their discharge. For persons occupying such central places of power in corporations, senior officers largely have succeeded in eluding the distinctive attention of state corporation law. The thesis of this article is that corporate officers are fiduciaries because they are agents. The argument is not that agency principles should be introduced formalistically or uncritically into corporate governance. Rather, the claim is that drawing on the fiduciary duties of agents for guidance in fashioning modern understandings of corporate officer duties - and differentiating those duties from those of directors - can provide much-needed structure to what otherwise threatens to be an ad hoc enterprise. There are at least three benefits of our thesis. First, by understanding officer duties and director-officer interaction in this way it can be seen that state law remains the primary source for establishing the basic framework of corporate governance relations, both through corporate statutes and through judge-made fiduciary duty law. With a more highly differentiated state law model of director-officer relations, recent efforts of Congress, the SEC, the NYSE and Nasdaq to impose new responsibilities on directors - in an effort to improve their vital role in monitoring corporate officers - can be seen as congruent with, rather than at odds with, the underlying state framework. The current emphasis on director independence and the special focus on various board committees - audit, nominating/governance and compensation - can be seen as an effort to develop mechanisms to aid the board both in detaching from management and in divvying up the board\u27s key monitoring functions. Moreover, efforts by Congress and the SEC to place additional and different functions on senior officers also can be seen as supplementing, rather than displacing, existing state law-based fiduciary duties of officers. As a second benefit, our thesis clarifies immensely why courts can and should more closely scrutinize officer conduct than they now review director performance - i.e., the fiduciary duties of agents are more demanding than those of directors, especially the duty of care, and officers rightly face a greater risk of personal liability for misconduct. Heightened review of officer performance is especially fitting given that many of the recent corporate scandals involved wrongdoing at the officer level, and given that state law has been eerily silent about why officers owe duties at all, much less holding them to account. It also is important in light of the fact that recent federal initiatives aimed at improving officer performance eventually will be translated into, and will heavily influence, state fiduciary duty analysis. At a theoretical level, the third payoff, our thesis has several implications. These include our belief that we are entering an era when, due to heavier corporate regulation, the entity conception of the firm will be strengthened, as positive law, including agency law, still builds on that understanding of corporate relations. This period follows a span of perhaps twenty years when a highly disaggregated conception of corporate relations - the nexus of contracts theory - has predominated. We also believe that in the policy arguments for and against strong fiduciary duties over the years, virtually no attention has been given to distinguishing whether what is fitting for outside directors in the fiduciary duty area - relatively slack duties - is also fitting for corporate officers. Moreover, although agency law suggests greater liability for officers than directors, widespread (and longstanding) failure to understand officers in those terms means corporate law cannot as confidently assume that existing liability outcomes for officers are optimal, as might be the case with rules governing directors. We believe that, from a policy perspective, the fiduciary duties and liability rules for officers should be analyzed separately from those for outside directors. Contemporary corporate law and fiduciary discourse do not do so, however, thereby hindering attention to this subject. In the terms recently used by Professors Black, Cheffins and Klaussner to describe the state of law governing outside directors, we believe the window of liability risk for inside directors - i.e., officers - is in fact wide open, but it is thought, wrongly, to be virtually shut

Corporate Law After \u3cem\u3eHobby Lobby\u3c/em\u3e

We evaluate the U.S. Supreme Court’s controversial decision in the Hobby Lobby case from the perspective of state corporate law. We argue that the Court is correct in holding that corporate law does not mandate that business corporations limit themselves to pursuit of profit. Rather, state law allows incorporation for any lawful purpose. We elaborate on this important point and also explain what it means for a corporation to “exercise religion.” In addition, we address the larger implications of the Court’s analysis for an accurate understanding both of state law’s essentially agnostic stance on the question of corporate purpose and also of the broad scope of managerial discretion

The Case Beyond Time

The Delaware Supreme Court\u27s opinion in Paramount Communications, Inc. v. Time, Inc.\u27 treats several important questions that arise in connection with hostile corporate takeovers. At the same time, it leaves three critical issues unanswered. In this article, we first briefly describe what the Time decision did, comparing Chancellor William Allen\u27s somewhat discursive Chancery Court opinion with the more peremptory ruling of the Supreme Court. Next, we identify three unarticulated but potentially far-reaching implications of both the Supreme Court\u27s and Chancellor Allen\u27s reasoning that threaten to destabilize seemingly settled doctrine governing the conduct of target company management