Freedom of Corporate Purpose

Every few decades there erupt political and academic debates over the proper nature and purpose of the corporation It is black letter law according to most scholars that corporations exist to maximize shareholder wealth Others maintain that the corporation should exist for the benefit of multiple constituencies regardless of what current black letter law may say The current discourse of corporate purpose however is incomplete and misleading The disarray has resulted from insufficient reliance on historical context in 1 analyzing the firm under modern theories of corporate governance and 2 interpreting the ÔÇ£purposeÔÇØ language in corporate charters and corporationlaw statutesModern conceptions of corporate governance and by extension corporate purpose have failed to account for the historical evolution of the firm Significantly they characterize the corporation along too few dimensions typically treating the firm as merely and exclusively a contract or propertybased entity and they neglect to treat the later stage corporation as a historical entity that inherits characteristics and restrictions including its purpose from the time of its founding Corporations are a triality of property contractual and associational rights Firms can simultaneously and independently be described along each dimension The triality of rights should entitle shareholders to form general corporations to pursue the ends of their choosing \u27 shareholder wealth maximization or otherwise Focusing on one aspect of the firm at the expense of the other two however obscures the central place of shareholder ends in the corporation At its inception the corporation is nearly indistinguishable from its shareholders who possess the special talents or resources around which the enterprise is started They possess all the property financial and control sticks in the corporate bundle of rights They associate via the corporate form to better achieve some end than they could without it Shareholders necessarily give up ever more control as the firm grows But even at later stages in a firm\u27s life shareholders retain enough rights to entitle them to have their corporations run in pursuit of the purposes they established at the firm\u27s founding or later modified via the proper proceduresThis Article distinguishes two understandings of the corporate ÔÇ£purposeÔÇØ language that is a statutorily required component of every corporate charter The first is what the Article terms the corporation\u27s ÔÇ£tacticalÔÇØ or operating purpose A corporation engages in its operations as it pursues its ÔÇ£strategicÔÇØ purpose The strategic purpose is the telos of the corporation or its board of directors Shareholder wealth maximization is the archetypical strategic purpose and the one most naturally derived from the corporate bundle of rightsThe Article addresses the assertion that corporate law does not at least by default require directors to maximize shareholder wealth and concludes that this claim is indefensible when viewed in proper context This fundamental stockholder right established the Article proposes expanding existing law to allow stockholders to charter corporations for any lawful strategic purpose given sufficient notice to potential midstream shareholders It thus argues for a clarification of the marked uncertainty in corporate law as to whether nonwealth corporate ends are cognizable Corporate law provides the pieces to maximize the social benefit enabled by the corporate form This Article offers a flexible yet simple way to join those pieces together by permitting but not requiring stockholders to depart from the wealth maximization nor

A Close Reading of an Excellent Distant Reading of Heller in the Courts

This invited Comment examines the quantitative analysis of postiDistrict of Columbia v Heller icommon law performed by Professors Eric Ruben and Joseph Blocher in iFrom Theory to Doctrine An Empirical Analysis of the Right to Keep and Bear Arms Afteri Heller Their groundbreaking and provocative work seeks to advance Second Amendment scholarship in two important ways First it aims to describe Second Amendment doctrine by quantifying aspects of that constitutional provision\u27s common law Second it challenges the view that lower courts have deliberately and systematically undercut both the right to bear and the right to keep arms as articulated by the US Supreme Court in iHelleri and officially declared fundamental and applicable to the states in iMcDonald v City of ChicagoibrbrProfessors Ruben and Blocher present a ÔÇ£distant readingÔÇØ of postHeller Second Amendment doctrine An examination of iHelleri\u27s impact \u27 and the particular proposition that courts are defying that landmark decision \u27 based on scientific analysis of aggregate hard data on judicial rulings rather than a parsing of the language of individual opinions Scholars and practitioners alike would do well to pay close attention to the authors\u27 descriptive findings They perform a valuable service by both confirming conventional wisdom and upending common misapprehensionsbrbrBut the authors\u27 secondary albeit generally tentative implication that courts are not underenforcing iHelleri requires further analysis This conclusion is driven primarily by the authors\u27 decision not to measure the final outcomes of Second Amendment challenges It is heightened by the limitations of empirical studies the knowledge that judges with even a modicum of selfcontrol are capable of masking their hostility to arms rights and my desire for information to complement that which is reported in the study Professor Ruben and Professor Blocher\u27s study also presents evidence of judicial defiance that merits further investigatio

Monopoly of Violence

Review of Robert Churchills iTo Shake Their Guns in the Tyrant\u27s Face Libertarian Political Violence and the Origins of the Militia Movementi 2008iTo Shake Their Guns in the Tyrant\u27s Facei is a work in three acts each a snapshot of a period in our collective memory of the American Revolutio

Insuring the Unthinkable

Recent mass shootings have led to public and private responses implicating insurance The public response consisted of calls to require firearm owners to purchase liability insurance and has been discussed at length elsewhere This article examines the private response the steady proliferation of ÔÇ£active shooter insuranceÔÇØ more recently called ÔÇ£active assailant insuranceÔÇØ collectively ASAA insurance Although these policies cover the forprofit businesses nonprofit institutions and even municipalities that purchase them rather than shooting victims or others impacted by a tragic event benefits would flow through to these individuals if a covered event occursbr brThis article assays ASAA insurance along several dimensions Part II considers factors impacting the effectiveness of the insurance in compensating insureds for losses stemming from ASAA incidents Part III reviews the ways in which ASAA insurers can provide loss prevention services enable insureds to prevent or mitigate losses and efficiently manage claims and resulting litigation Part IV concludeshttps://scholarship.law.uwyo.edu/book_chapters/1001/thumbnail.jp

Explaining Away the Obvious: The Infeasibility of Characterizing the Second Amendment as a Nonindividual Right

Although the Second Amendment of the U.S. Constitution has guaranteed the right to keep and bear arms for more than 200 years, the U.S. Supreme Court has never formally declared to whom the right belongs. Each side of the gun debate--one holding that the Amendment guarantees a right to individuals, the other that states possess the right--supports its position with ostensibly solid precedential, historical, and textual arguments. This Note approaches the issue from the opposite direction, asking how many precedential, historical, and textual obstacles each side must explain away and examining the relative strength of those explanations. Under this analysis, the individual right prevails

Insuring Against Guns?

This Article examines whether mandating liability insurance for firearm owners would meet its avowed goals of efficiently compensating shooting victims and deterring unlawful and accidental shootings without creating a net social loss by chilling socially beneficial gun use In the process the Article also examines whether nonmandatory liability insurance may enable socially desirable but potentially risky firearmrelated activitiesThe analysis indicates that a compulsory firearmliability insurance regime is unlikely to attain its goals and may in fact exacerbate the problems it seeks to solve by incentivizing firearm owners to take less care with their weapons It also shows that it is markedly unlikely that such a mandate would achieve a significant level of compliance Optional forms of firearmliability insurance can however enable socially desirable activities by those who would otherwise be unable to bear the risks inherent in those activitiesOne of the best ways to incentivize an activity is to compensate it or to remove its financial consequences Wellmeaning legislators regulators and industry members would therefore best serve their constituencies by encouraging optional insurance that covers liability risks arising from socially useful activities rather than pushing for unhelpful mandates that may aggravate the firearm violence that they seek to remed

Statistically Insignificant Deaths: Disclosing Drug Harms to Investors (and Patients) Under SEC Rule 10b-5

This Article using statistical tools and theory in conjunction with more standard legal approaches argues that pharmaceutical manufacturers should disclose all cases of illness or injury associated with their products because this data is material to patients and their doctors and therefore to Securities and Exchange Commission Rule 10b5\u27s ÔÇ£reasonable investorÔÇØ Patient and investor interests complement each other in this context so each will benefit from disclosures that interest the other Because individuals process more information than traditional statistical tests convey they act reasonably in expanding their treatment and investment criteria beyond statistical data Moreover two sets of expert intermediaries \u27 doctors and professional investors \u27 will be involved Their expertise will contribute to a more accurate assessment of the risks that adverseevent reports may suggest a drug presents and of the significance of these risks to shareholders The Supreme Court\u27s reasons for not requiring full disclosure are out of place in the context of adverseevent reporting given Rule 10b5\u27s prodisclosure mandate and the fact that even seemingly singular and unconnected facts can substantially move investors\u27 and patients\u27 opinions about a drug\u27s safety and thus its maker\u27s viability A fulldisclosure rule would place the determination of which facts are important into the hands of parties with ÔÇ£skin in the gameÔÇØ rather than regulators or selfinterested drug maker

Insuring against Guns Symposium Article

This Article examines whether mandating liability insurance for firearm owners would meet its avowed goals of efficiently compensating shooting victims and deterring unlawful and accidental shootings without creating a net social loss by chilling socially beneficial gun use. In the process, the Article also examines whether nonmandatory liability insurance may enable socially desirable, but potentially risky, firearm-related activities. The analysis indicates that a compulsory firearm-liability insurance regime is unlikely to attain its goals, and may in fact exacerbate the problems it seeks to solve by incentivizing firearm owners to take less care with their weapons. It also shows that it is markedly unlikely that such a mandate would achieve a significant level of compliance. Optional forms of firearm-liability insurance can, however, enable socially desirable activities by those who would otherwise be unable to bear the risks inherent in those activities. One of the best ways to incentivize an activity is to compensate it or to remove its financial consequences. Well-meaning legislators, regulators, and industry members would therefore best serve their constituencies by encouraging optional insurance that covers liability risks arising from socially useful activities, rather than pushing for unhelpful mandates that may aggravate the firearm violence that they seek to remedy