American Business Law Journal最新文献

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.

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.

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.

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.

This article examines how the law can help reduce retail vacancy rates in volatile urban real estate markets. Two potential drivers of high vacancy rates along retail corridors in otherwise healthy real estate markets are identified: (1) location risk, and (2) positive feedback effects. This article suggests that local governments can pursue a nudge-based approach to encourage landlords and retail tenants, especially small business owners, to adopt percentage rent or some other form of profit-sharing to more efficiently allocate location risk. To address positive feedback effects in which each storefront vacancy increases the likelihood of an additional storefront vacancy, a case is made for stronger government intervention.

Given the narrow framing of the Supreme Court's decision in Bostock v. Clayton County, that employers cannot fire someone simply for being gay or transgender, numerous questions persist as to whether and to what extent LGBTQ Americans are protected against employment discrimination. Resolving these issues is likely to require years, if not decades, of litigation, leaving LGBTQ workers and their employers without meaningful guidance in the interim. This article contends that the most efficient means of clarifying these uncertainties is for Congress to enact a new employment statute known as the Title VII Amendments Act. As proposed, the Act would resolve each of Bostock's ambiguities in favor of affording greater protections to workers generally and LGBTQ persons specifically while avoiding the controversies that have derailed LGBTQ civil rights legislation in the past. Thus, the Title VII Amendments Act represents LGBTQ persons' best hope of attaining immediate, comprehensive employment protections and employers' best prospect of securing definitive, timely legal guidance post-Bostock.

This article analyzes a significant Supreme Court securities law decision from the 2020 term, Goldman Sachs v. Arkansas Teachers Retirement System (Goldman). Goldman was a blockbuster class action, brought by shareholders seeking $13 billion in damages from Goldman Sachs based on claims that date back to the 2008 financial crisis. This article proceeds by taking an in-depth look at the case history of Goldman from start to finish. In the process, it shows that the Supreme Court's recent decision was more impactful than has been widely appreciated. Rather than being a recap of existing precedents, the Court's holding in Goldman made significant changes to some of the core doctrines in securities law that were first set forth in 1988 when the modern securities class action was created by Basic v. Levinson. This article also looks beyond doctrinal categories to assess how the Goldman decision can be understood as the latest chapter in the Supreme Court's longstanding role as a leading policy maker in the law of securities class actions. Lastly, the article explains how the precedent set in Goldman will affect securities litigation on the ground going forward. As a result of Goldman, it will be argued, the class certification stage in shareholder securities fraud suits has been moved closer to an open-ended totality of the circumstances test, in which the federal courts have an increasing number of tools to act as gatekeepers on the merits of a litigation.