American Business Law Journal最新文献

The Outer Space Treaty (OST) is the foundation of all international space regulation. It establishes space as the province of all humankind and promotes its peaceful use and exploration for the benefit and in the interests of all countries. In 2020, the FCC released its “Mitigation of Orbital Debris in the New Space Age” guidelines for commercial satellite applicants. While these guidelines appear to substantively address the risks posed by orbital debris to Earth and space industries, they fail to do so in two key areas: (1) by not adopting specific requirements for applicants to share data needed to effectively establish space situational awareness (SSA); and (2) by not requiring applicants to prepare an Environmental Assessment on low Earth orbits (LEO). This article exposes fatal flaws in how the FCC regulates satellite operator access to LEO by examining how the regulation of satellite constellations enables the creation of orbital debris and occupation of orbital shells in a manner that may compromise Earth's satellite-based information infrastructure and violate the OST, and it recommends legislative language that will ensure FCC regulations are in compliance with the OST and are sufficient for establishing SSA. Given the Supreme Court's 2022 ruling in West Virginia v. EPA, adopting such language constitutes a clear congressional authorization to protect Earth's orbital environment and helps operationalize the OST's proclamation that spacefaring activities be for the benefit and in the interests of all countries.

Climate change is the existential issue of our age. Its challenges are massive, its science is ever-developing and most now agree that its demands are immediate. How society deals with the immensity and immediacy of the challenge in the face of incomplete, immature, and sometimes inconclusive data is a question playing out now in our capital markets. Bending to demand from green investors and environmental activists, the United States Securities and Exchange Commission (SEC) proposed new rules on March 21, 2022, “to enhance and standardize climate-related disclosures” to better inform investors' decision-making. How should reporting companies, already obligated to report on material risks to their businesses, “enhance and standardize” climate-related disclosure when the data are ambiguous or in conflict? This article proposes one possible and currently available solution: use satellite-based data. By requiring the use of available satellite data, regulators can protect investors from being misled by cherry-picked emissions data. We begin with a case for standardization and a brief history of environmental, social, and governance (ESG) reporting and metrics, both in the United States and internationally, as well as SEC efforts regarding climate change disclosures. We then explore the precedent for satellite use and space-based technology in monitoring and regulatory compliance and argue that satellite and space data can be instrumental to help investors make more informed investment decisions based on reporting companies' true environmental impact.

Financial markets are increasingly developing innovative, ESG-related derivatives and relying upon these instruments to hedge ESG-related risks. The global derivatives markets are among the largest, most consequential financial markets in the world. Derivatives are financial contracts that derive their value from an underlying reference entity which can be almost anything, including interest rates, credit, equities, foreign exchange, the weather, or the price of carbon. They provide for hedging, investment (speculation), and arbitrage, and trade on regulated exchanges and in over-the-counter markets. Derivatives can also facilitate access to the tremendous amounts of capital necessary for the transition to a cleaner energy future and to the objective of net zero emissions by 2050 of governments around the world. Through an exploration of recent innovations and developments in the exchange-traded and over-the-counter derivative markets, this article explores the role of the derivatives ecosystem—the instruments themselves, trading exchanges, and clearinghouses—in promoting ESG objectives.

Over the past decade, a consensus has emerged among academics and policy makers that climate change could threaten the stability of banks, insurers, and the broader financial system. In response, regulators from around the world have begun implementing policies to mitigate emerging climate risks in the financial sector. The United States, however, lags significantly behind other countries in addressing such risks. This article argues that the United States' sluggishness in responding to climate-related financial risk is problematic because the U.S. banking system is uniquely susceptible to climate change. The United States' vulnerability stems, in part, from a little-known statutory provision that prohibits U.S. regulators from relying on external credit ratings in bank capital requirements. Because of this deviation from internationally accepted capital standards, when a credit rating agency downgrades a “dirty” company, U.S. banks that lend to that company need not compensate by maintaining a bigger capital cushion. Over time, this dynamic will likely incentivize “dirty” companies to borrow more from U.S. banks, intensifying the U.S. banking system's exposure to climate risks. This article contends that the United States must overcome this unusual weakness by taking bold steps to safeguard the domestic financial system from the climate crisis.

Investment practices can support sustainability efforts or undermine them. As one of the world's largest capital pools, pension funds have a particularly important role to play in sustainable investing practices. In this article, I examine the U.S. requirement that fiduciaries of private-sector pension plans must maximize financial returns without regard to the negative externalities those investments may create. Other countries, including South Africa, the original leader in sustainable pension investments, take a different approach. I make four major contributions in this article. First, I engage in a thorough literature review and identify the major strands of disagreement on whether U.S. fiduciaries may integrate ESG (environmental, social, and governance) factors into investment decision making. Second, I analyze whether the very different applications of fiduciary obligations (the implementing rules) on ESG investing in the United States and South Africa are attributable to the underlying legal systems. Comparison of common law and civil law shows that the underlying systems do not explain the differences in implementing rules. Third, I trace the source of the U.S. implementing rules to understand the motivations of the U.S. applications, and I do the same for South Africa. I determine that differences in the development of those rules provide the best explanation for their approaches. I conclude that legislative change is needed in the United States to provide stable guidance to U.S. pension plan fiduciaries. I offer a package of suggested reforms that could garner sufficient support for enactment.

Two bedrock principles of American jurisprudence collide when courts are called upon to decide whether to seal confidential awards that prevailing arbitration parties petition to confirm in court. On the one hand, the strong public policy in favor of arbitration dictates that courts should honor arbitration parties' confidentiality agreements by sealing confidential awards that are the subject of confirmation petitions. On the other hand, the public interest in court proceedings suggests that motions to seal should be infrequently granted. Courts continue to struggle with how to harmonize these two important values when they conflict with each other in actions to confirm confidential arbitration awards. To clarify and improve the law in this area, this article proposes the following rule to guide the adjudication of motions to seal confidential arbitration awards in confirmation actions: deny the motions when the losing arbitration party challenges the underlying award and grant the motions when the award is uncontested. Such a rule would provide arbitration parties with clarity, consistency, and the confidence to submit their confidential disputes to arbitration without risking public disclosure in the event they lose and their adversary initiates a confirmation action. It also would prevent prevailing arbitration parties from misusing the confirmation process to engage in undesirable strategic behavior, and empower arbitration parties to request that their arbitrators issue reasoned awards without fear that those awards will end up in the public domain whenever the prevailing party petitions to confirm them.

This article examines how the organizational structures and purposes of securities regulators affect securities law and its enforcement. Securities regulators in different jurisdictions can have either hierarchical or horizontal organizational structures, and their mission can be either policy-implementing or dispute-resolving. The securities regulators in China and the United States are two typical examples. The two countries can be roughly categorized as activist and reactive states, respectively. This article shows that the organizations of regulators and the disposition of governments affect the ends of securities regulation and provides some evidence that they also affect the means, which would explain the express differences in securities enforcement as well as those applied in practice. While a reactive state mainly seeks to protect investors and facilitate capital formation, an activist state tends to consider other state goals, including industrial policies and redistribution of wealth. Additionally, hierarchically organized securities regulators tend to focus more on technical rules and routines, whereas horizontally organized regulators employ more flexible standards and are better equipped to deliver substantive justice. This article contributes to the literature of law and finance and cautions against the “capital-market-centrist” view.

Transparency on ESG (environmental, social, and governance) is an important, if imperfect, step in striving for sustainability. Because a constellation of nonprofit organizations created voluntary reporting frameworks with little government involvement, ESG reporting governance is institutionally dense and fragmented. Reporting companies and information users have both expressed dissatisfaction. In 2020, standard-setting organizations indicated their intent to cooperate to simplify ESG reporting rules. In a different yet similar context, scholars utilize regime theory to understand institutional density and the potential for international cooperation, primarily among states. This article is the first to apply regime theory to ESG reporting governance architecture to better understand this unusual arena of rulemaking. It identifies key obstacles to global consolidation of ESG reporting governance and predicts that differences between the reporting philosophies in the European Union and the United States are among the factors that will prevent global consolidation of ESG reporting governance. This article concludes with advice for practitioners. It draws on law and strategy and proactive law literature to propose approaches for reporting companies navigating the complex landscape of ESG reporting governance.

Patent examination should ensure that only novel and nonobvious technologies are patented. This evaluation requires comparing the invention to technologies described in public documents—called “prior art.” Examiners and applicants have obligations to cite known prior art that is material to whether the patent is issued. Beyond documenting examination, citations are used as metrics in a significant body of research. The importance of citations as a predictive metric rests on the assumption that they provide evidence of continued development in the relevant field. Research indicates that some citations are, however, made for reasons beyond technological similarity. This undermines the notion that citations show continued growth of a technology. We analyze this assumption—and correct for inaccuracies—by employing similarity metrics to characterize the “relatedness” of technologies described in two patent documents (i.e., citing and cited references). To this end, we use a “Jaccard Index” to quantify textual similarity—and thus technological relatedness—of two documents. Using this method, we empirically analyze strategic behaviors in patent law that were previously only theoretically described in the literature. For example, some patent applicants “bury” relevant references—submitting many irrelevant references and a few relevant ones to hinder review of the important ones. Our Jaccard Index analysis is the first to empirically evaluate whether this practice benefits the applicant. Moreover, we improve upon patent value and grant rate analyses and demonstrate that citation relevance has a significant impact above and beyond a count of citations made.