Corporate Law Doctrine and the Legacy of American Legal Realism

In this contribution to a symposium on Legal Realism and Legal Doctrine, I examine the role that jurisprudence plays in corporate law doctrine. Through an examination of paired cases from the United States and United Kingdom, I offer a case study of the contrasting influence on corporate law judging of American Legal Realism versus traditional U.K. Doctrinalism. Specialist judges in both systems, aided by specialist lawyers, clearly identify and understand the core policy issues involved in a dispute and arrive at sensible results. Adjusting for differences in background law and institutions, it seems likely that the disputes would ultimately be resolved in more or less the same way in each system. This is unsurprising in a field such as corporate law, where market and institutional pressures demand practical solutions to practical problems. On the other hand, the differences in style are inescapable. While Delaware corporate law judges openly identify gaps and resolve them by reference to policy, U.K. judges employ a traditional historical/doctrinal approach, working through precedent and, in doing so, developing principles to resolve the case at bar. These differences in style, it seems to me, are a legacy of the impact of American Legal Realism on legal education in the United States, in contrast to the more traditional approach dominant in the United Kingdom. Explicit policy analysis is far more acceptable and natural in the Delaware approach than in the United Kingdom, and this difference in legal culture has effects on how lawyers present cases

Corporate Law Through an Antitrust Lens

Antitrust law provides a better framework than corporate law for analyzing issues at the boundary between firms and markets. Such issues arise when shareholders are also competitors. For example, antitrust analysis calls into question the practice of joint bargaining by shareholders targeted by tender offers. Other issues illuminated by antitrust analysis include stakeholder coalitions and state antitakeover statutes

Corporate Law Doctrine and the Legacy of American Legal Realism

In this contribution to a symposium on Legal Realism and Legal Doctrine, I examine the role that jurisprudence plays in corporate law doctrine. Through an examination of paired cases from the United States and United Kingdom, I offer a case study of the contrasting influence on corporate law judging of American Legal Realism versus traditional U.K. Doctrinalism. Specialist judges in both systems, aided by specialist lawyers, clearly identify and understand the core policy issues involved in a dispute and arrive at sensible results. Adjusting for differences in background law and institutions, it seems likely that the disputes would ultimately be resolved in more or less the same way in each system. This is unsurprising in a field such as corporate law, where market and institutional pressures demand practical solutions to practical problems. On the other hand, the differences in style are inescapable. While Delaware corporate law judges openly identify gaps and resolve them by reference to policy, U.K. judges employ a traditional historical/doctrinal approach, working through precedent and, in doing so, developing principles to resolve the case at bar. These differences in style, it seems to me, are a legacy of the impact of American Legal Realism on legal education in the United States, in contrast to the more traditional approach dominant in the United Kingdom. Explicit policy analysis is far more acceptable and natural in the Delaware approach than in the United Kingdom, and this difference in legal culture has effects on how lawyers present cases

Shareholder Eugenics in the Public Corporation

In a world of active, empowered shareholders, the match between shareholders and public corporations can potentially affect firm value. This article examines the extent to which publicly held corporations can shape their shareholder base. Two sorts of approaches are available: direct/recruitment strategies; and shaping or socialization strategies. Direct/recruitment strategies through which “good” shareholders are attracted to the firm include: going public; targeted placement of shares; traditional investor relations; the exploitation of clientele effects; and de-recruitment. “Shaping” or “socialization” strategies in which shareholders of a “bad” or unknown type are transformed into shareholders of the “good” type include: choice of domicile; choice of stock exchange; the new “strategic” investor relations; and capital structure. For each type of strategy, I consider the extent to which corporate and securities law facilitates or interferes with the strategy, as well as the ways in which it controls abuse. In paying close attention to the relationship between shareholder base and firms, this article attempts to merge investor relations, very broadly construed, with corporate governance