The Mysteries of Corporate Law: A Response to Brudney and Chirelstein

In 1974, Professors Victor Brudney and Marvin Chirelstein published an article that suggested formulae for deciding whether minority shareholders of a subsidary receive fair treatment in a controlled merger. In 1977, in Mills v. Electric Auto-Lite Co., the Seventh Circuit relied on that article in concluding that the merger terms being reviewed were fair. As Professor Simon Lorne pointed out recently, it is clear from the Seventh Circuit decision in Mills that the court did not fully understand the concepts set forth in the Brudney & Chirelstein article. A least in stock mergers, he explained, the Brudney & Chirelstein approach yielded an ascertainable, satisfying and simple solution. . . . In the context of non-stock mergers the advantages of certainty and simplicity are lost, and the intrinsic appeal of the analysis disappears. Thus, the value of the Brudney & Chirelstein approach may lie more in what it has provoked than in the solution it proposed—but the value of provocation is not inconsiderable

Corporate Finance in the Law School Curriculum

Review of: Corporate Finance: Cases and Materials. By Robert W. Hamilton: West Publishing Co., St. Paul, Minnesota, 1984

Protean Statutory Interpretation in the Courts of Appeals

This Article is the first in-depth empirical and doctrinal analysis of differences in statutory interpretation between the courts of appeals and the Supreme Court. It is also among the first to anticipate how the Supreme Court’s interpretive approach may shift with the passing of Justice Scalia. We begin by identifying factors that may contribute to interpretive divergence between the two judicial levels, based on their different institutional structures and operational realities. In doing so, we discuss normative implications that may follow from the prospect of such interpretive divergence. We then examine how three circuit courts have used dictionaries and legislative history in three subject matter areas over the past decade and compare these findings in detail to the interpretive approach taken by the Roberts Court in the same three fields. We determine that the appeals courts have followed a protean approach, adapting their usage patterns in ways that differ substantially from patterns in the Supreme Court. Court of appeals judges use dictionaries far less relative to legislative history than do the Justices; we found no semblance of the distinctive dictionary culture that is prevalent on the Roberts Court. In addition, the relative frequency of dictionary usage between the two court levels varies considerably depending on the subject area and the type of dictionary (general or legal). With respect to relative frequency for legislative history, the Supreme Court, far more than the circuit courts, invokes the record of changes in statutory text—either modified over multiple Congresses (statutory history) or developed in successive preenactment versions of a bill (drafting history). This “vertical history” is apparently more attractive, or less unattractive, to textualist Justices than is traditional legislative history commentary such as committee reports. More broadly, circuit courts regularly use legislative history to resolve ambiguities, confirm apparent meaning, or simply explicate legislative intent, all without characterizing its legitimacy or systemic value. For both dictionaries and legislative history, the eclectic approach of the appeals courts differs markedly from the Supreme Court’s more self-consciously articulated methodological path. We suggest how certain sources of interpretive divergence contribute to these differences, notably the Justices’ interaction with their colleagues in every case and their experience as objects of continuing media and congressional attention, some of which reflects attention that carries over from the judicial confirmation process. We conclude that the eclecticism of the appeals courts is likely to limit judicial discretion more effectively than the Supreme Court’s current approach, which favors clear interpretive rules or priorities that are applied on a presumptively consistent basis

The Effective Use of Volunteers: Best Practices for the Public Sector

Brudney posits a relationship between the best practices and the benefits realized from volunteer involvement. A volunteer program in the public sector is sponsored by a government agency and, thus, occurs in an organizational context; remuneration is not provided for volunteers\u27 contributions, but reimbursement for their expenses is permitted; the time is given freely, yet volunteers may certainly benefit as well, and the work fulfills ongoing responsibilities of the host agency

Card Check Recognition: New House Rules for Union Organizing?

MISSIN

Leveraged Buyout, Management Buyout, and Going Private Corporate Control Transactions: Insider Trading or Efficient Market Economics?

According to one commentator, a particularly troublesome form of insider trading abuse has developed in the past decade without full public discussion of its ethics or its legality. This abuse has spurred significant commentary. Corporate control transactions of this type, known as insider leveraged buyouts, management buyouts, and going private, have totaled billions of dollars. On their face, these deals, regardless of their specifics, raise the most basic questions of whether security holders are getting the legal and ethical protection they require and, by law, deserve. It is a fundamental precept of the theory of going private that different groups of security holders of the same class will be treated differently. Furthermore, the arm\u27s-length bargaining that is present in the majority of intercorporate transactions is absent. Accordingly, going private transactions are often attended by uncertainty and legal risks. For these reasons, among others, substantive and administrative law are beginning to place limitations on the ability of corporations to engage in going private transactions. For example, under recent federal securities regulations, management must publicize its opinion as to the fairness or unfairness of certain going private transactions. Yet, there are those who question the effectiveness of these limitations. One commentator argues that persons who participate in a leveraged buyout have better knowledge of the true value of a parcel of real estate, an invention, a pending contract, or a competitor\u27s problems than do the security holders to whom they make their leveraged buyout offer. This commentator concludes that those who initiate leveraged buyout, management buyout, and going private transactions are inevitably acting on inside information for profit. This Note first examines the historical development and modern application of judicial decisions and statutes concerning insider trading. This Note then discusses the phenomena of leveraged buyout, management buyout, and going private transactions with emphasis on their structure, fairness to security holders, and a possible breach of fiduciary duty to shareholders in the case of management buyouts. Following a discussion of recommendations and policy arguments proferred by other commentators and scholars, this Note recommends that a remedy be afforded to minority security holder who feel they are being grossly undercompensated, while allowing leveraged buyout, management buyout, and going private transactions to continue in such a way that the principle of fiduciary duty remains untarnished

Fair Trade-mark: Proposing an Affirmative Duty on Licensors to Enforce Their Corporate Social Responsibility Codes

Modern consumers are increasingly interested in seeing the brands they love commit to corporate social responsibility (CSR), including fair labor practices and environmental sustainability throughout their supply chains. Many corporations capitalize on this demand through branding strategies that highlight their commitment to CSR. Branding of CSR can include publishing codes of conduct on corporate websites, incorporating a value of doing good while doing well in print and video advertisements, or even publicly partnering with nonprofit organizations. The Lanham Act, the primary federal trademark statute in the United States, articulates federal laws pertaining to branding and advertising, and is rooted in a significant policy interest to keep consumers informed and to prevent consumer deception. Two doctrines of law that stem from the Lanham Act substantiate this policy consideration: the naked licensing doctrine, which imposes an affirmative duty on trademark licensors to supervise their licensees’ quality control standards, and false advertising law, which prevents corporations from espousing false or misleading advertising in connection with their trademarks or brands. An analysis of each of these bodies of law, along with the overall policy underpinnings of the Lanham Act, poses the concern that corporations who incorporate CSR into their branding strategies run the risk of deceiving consumers if in reality they do not supervise their supply chain sufficiently to ensure the truth of their public CSR statements. This Note analyzes the naked licensing doctrine and false advertising laws, and proposes an affirmative duty on corporations to monitor and enforce their CSR codes, in compliance with the Lanham Act

Intentionalism\u27s Revival

This essay responds to an article by Professors Boudreau, Lupia, McCubbins, and Rodriguez (hereinafter BLMRod ) that was posted in Legislation and Statutory Interpretation Abstracts on July 26, 2007, (http://ssrn.com/abstract=997924) and that will appear in the San Diego Law Review, vol.44, no.2, 2007. The essay situates BLMRod\u27s article in the context of recent efforts by a number of scholars to reclaim foundational legitimacy for intentionalism as an approach to construing statutes. The essay first applauds BLMRod\u27s use of insights from communication theory to conceptualize statutes as compressed substantive or procedural commands that cannot be adequately understood without an appreciation for the compression process that generated them. The essay explores certain implications of this thematic focus. It discusses how the authors\u27 approach may help clarify the status of legislative history as evidence of ascribed or imputed intent. It also suggests how that approach may enhance the value of legislative history when contrasted with key interpretive resources generated by the two other branches of government - i.e., the canons of construction and agency rules or adjudications. The essay then adopts a more critical perspective toward BLMRod\u27s treatment of the compression (lawmaking) and expansion (law-interpreting) processes. It suggests that by viewing the compression process as essentially a majority party domain, the authors undervalue important congressional conversations involving minority party members, especially although not exclusively in the Senate. Further, the essay discusses how the architecture of congressional conversations may differ across subject matter areas more than the authors\u27 basic model seems to contemplate. Finally, the essay addresses the process of expansion, particularly BLMRod\u27s approach to conversations among a bill\u27s coalition of supporting members. It suggests ways in which the authors\u27 analysis of what motivates ardent and pivotal supporters, and how courts should treat these two key groups when elaborating the meaning of text, may be in need of some refinement

Oasis or Mirage: The Supreme Court\u27s Thirst for Dictionaries in the Rehnquist and Roberts Eras

The Supreme Court’s use of dictionaries, virtually non-existent before 1987, has dramatically increased during the Rehnquist and Roberts Court eras to the point where as many as one-third of statutory decisions invoke dictionary definitions. The increase is linked to the rise of textualism and its intense focus on ordinary meaning. This Article explores the Court’s new dictionary culture in depth from empirical and doctrinal perspectives. We find that while textualist justices are heavy dictionary users, purposivist justices invoke dictionary definitions with comparable frequency. Further, dictionary use overall is strikingly ad hoc and subjective. We demonstrate how the Court’s patterns of dictionary usage reflect a casual form of opportunistic conduct: the justices almost always invoke one or at most two dictionaries, they have varied individual brand preferences from which they often depart, they seem to use general and legal dictionaries interchangeably, and they lack a coherent position on citing to editions from the time of statutory enactment versus the time the instant case was filed. The Article then presents an innovative functional analysis of how the justices use dictionaries: as way stations when dictionary meanings are indeterminate or otherwise unhelpful; as ornaments when definitions are helpful but of marginal weight compared with more traditional resources like the canons, precedent, legislative history, or agency deference; and as barriers that preclude inquiry into or reliance on other contextual resources, especially legislative history and agency guidance. Ornamental opinions (the largest category) typically locate dictionary analysis at the start of the Court’s reasoning, subtly conveying that the lexicographic method should matter more than other interpretive resources. Barrier opinions would have been inconceivable prior to 1987 but now occur with disturbing frequency: they elevate the justices’ reliance on definitions in a radically acontextual manner, ignoring interpretive evidence from the enactment process and from agency experience. Finally, the Article analyzes whether the Court’s patterns of inconsistent dictionary usage, and its tendency to cherry-pick definitions that support results reached on other grounds, distinguish dictionaries from high-profile interpretive resources such as canons and legislative history that have been criticized on a similar basis. We contend that dictionaries are different from a normative vantage point, essentially because of how both wings of the Court have promoted them by featuring definitions frequently and prominently in opinions, and also how dictionaries are effectively celebrated as an independently constituted source of objective meaning (unlike the canons as judicial branch creations and legislative history as a congressional product). Yet our findings demonstrate that the image of dictionary usage as authoritative is a mirage. This contrast between the exalted status ascribed to dictionary definitions and the highly subjective way the Court uses them in practice reflects insufficient attention to the inherent limitations of dictionaries, limitations that have been identified by other scholars and by some appellate judges. The Article concludes by offering a three-step plan for the Court to develop a healthier approach to its dictionary habit