American Business Law Journal最新文献

The effects of climate change on the natural, economic, political, and social environments of business will be broad and substantial. The legal environment of business is not immune from these forces. In fact, as this article explores, law is both a necessary means to address climate change disruption and itself a source of disruption. Regulatory measures to buffer the shocks of climate change and facilitate the innovation necessary to mitigate and adapt to it are likely to disrupt industries and firms. Drawing on legal and management theory, the field of legal strategy identifies the conditions and actions through which firms can engage with the legal environment to protect as well as enhance their value. However, as this article shows, the legal strategy literature does not adequately account for the legal, regulatory, and other transition risks arising from the expanding scope and changing modes of regulatory responses to climate change. Accordingly, to adapt legal strategy to the impending age of regulatory change and transformation, this article advances a conception of legal strategy that embraces resilience as an indicator of firm value.

This article advances a public health model of ethics and compliance. It argues that corporate leaders should draw from the successful lessons of public health to promote ethical behavior more effectively in their companies. With its attention to data-driven risk mitigation and behaviorally cognizant processes, a public health model can move compliance from the faulty assumption on which it is based, that is, that organizational wrongdoing can be deterred solely through appeals to the rational decision-making processes of employees, to a more accurate understanding of the situational and social influences that foster noncompliance. The article supports its thesis in three parts. It begins by explaining the evolution of compliance and its transition from overly legalistic to behaviorally aware. Next, it draws on behavioral ethics and network research to make the connection between public health and compliance. Third, it explores how corporate leaders can meld the insights from these two disciplines, offering a new way of approaching ethics and compliance that is focused on behavioral ethics conduct risk and the practical application of behavioral science within the firm—the best way to improve the legal, ethical, and financial health of companies.

The COVID-19 pandemic showed how vulnerable workers in global supply chains are to adverse human rights impacts. Protecting such workers must be a primary policy goal in the efforts to “build back better” from the crisis, and businesses conducting human rights due diligence (HRDD) is a primary means to do so. In Europe, there is a fast-moving trend toward legislatively mandating HRDD, and there is potential for similar movement in the United States. Whether HRDD will significantly improve human rights conditions, however, is an open question. Based on our experience with corporate compliance programs, it is clear that the management and oversight of HRDD is an essential factor in ensuring meaningful implementation, as opposed to corporations focusing on form over substance. This article identifies those key internal governance issues and provides advice on how best to ensure effective implementation. The article argues that for most corporations, the day-to-day management of HRDD best fits with the compliance function—not the legal function—and this new role could be part of the next step in the evolution of the compliance function. This article also discusses the role of the board of directors and how HRDD combined with recent developments in the law of fiduciary duties can push directors to engage in more rigorous oversight. In addition, it discusses the types of information that are essential for supporting the management and oversight of HRDD.

The COVID-19 pandemic caused both a surge in technology use and a deterioration in government finances. At the same time, big tech companies are under scrutiny by lawmakers for tax avoidance, antitrust issues, and other concerns. These realities call for governments to reassess tax policy toward tech companies and for tech companies to reassess legal strategy toward taxes. State and federal governments' tax bases are eroding because of the noncash, barter nature of modern transactions. When a taxpayer uses “free” digital services such as e-mail, social media, or search engines, she pays via access to her personal data or attention. From a legal and policy standpoint, these barter transactions should be taxed just as if cash had changed hands, but because it is not practicable to identify, value, and tax the data and time of each user, they have escaped taxation, giving many tech companies an unintended tax advantage. To address this unfairness, this article proposes a surrogate tax, through which the tech company acts as a proxy to pay the tax that is technically the liability of its users. In contrast to Digital Services Taxes (DSTs), which have been the main focus of policy makers and the extant literature, surrogate taxes adhere closely to standards of good tax policy, providing an administrable means of capturing untaxed digital barter while advancing fairness across the industry's business models. From a legal strategy standpoint, this article argues that tech companies themselves should support surrogate taxes, to avoid facing more onerous, “sin”-like taxes, such as DSTs.

SEC v. Telegram and SEC v. Kik, both decided in 2020, establish some ground-breaking rules about how the federal securities laws apply to cryptotransactions. In both cases, the court concluded that a large, reputable social media company had conducted a crypto offering in violation of federal law. In neither case was fraud or other criminal conduct an issue; the sole problem was failure to register the sales or comply with an exemption from registration. To find a violation, both opinions collapsed a two-phase offering into a single, integrated scheme. This approach appears to be an unnecessarily overbroad application of the law, protecting neither investors nor capital markets. A cost of this approach is that crypto entrepreneurs are being forced away from the United States, and American investors are denied opportunities to participate in a potentially desirable technological revolution. This article examines the rationale employed in these two decisions in light of the existing statutory and regulatory framework. It also considers recent amendments to federal rules defining the “integration doctrine,” which was relied on explicitly in the Kik decision. This article suggests how future crypto offerings might be structured to avoid the pitfalls created by the Kik and Telegram opinions. It advocates a more limited approach than the one urged by regulators. Its suggestions depend not on a change in law but only a change in understanding what is required in order to conduct a compliant crypto offering.

Whistleblowing is a critical component of corporate integrity and economic stability in the United States. It is unsurprising, then, that policy makers and observers have directed considerable attention to the improvement of whistleblower laws. This article assesses potential improvements to the most visible recent addition to the federal whistleblower regime—the Dodd-Frank Act, passed in the wake of the Great Recession to combat securities fraud. The article makes two overarching claims. First, the Securities and Exchange Commission's (SEC) recently adopted changes to the administrative rules governing the Dodd-Frank whistleblower program (WBP) are incomplete since they were formulated without reference to the experiences of whistleblowers and their counsel. Moreover, at least three of the SEC's adopted changes will undermine the WBP and should be repealed. Second, the time is right to experiment with improvements to the WBP. If the SEC's new rules are not the optimal path forward, the question remains what alternative changes should be adopted. To that end, the article utilizes an original qualitative data set consisting of in-depth interviews with two dozen whistleblower counsel, two whistleblowers, a former SEC commissioner, and a former chief of the SEC's Office of the Whistleblower to propose its own set of changes. Congress and the SEC should embrace these changes to reform Dodd-Frank from the whistleblower's vantage and to move the WBP closer to its full potential as a deterrent and remedy for securities fraud.

Policy makers and international institutions have long maintained that the global business environment is best supported when countries harmonize by adopting substantially uniform legal structures. This is particularly true in the context of intellectual property rights. When such national systems are similar, we believe that investment is undergirded and market participation is facilitated. However, this assumption may be incorrect in some cases. Marginal disharmony in certain intellectual property rights may provide countries space for experimentation while not impeding effective management of global intellectual property portfolios at the firm level. As evidence, we look to the utility model. This long-standing form of invention right is conspicuously and surprisingly unstandardized across the world, yet our analysis, using PATSTAT data, reveals that firms are able to negotiate this disharmony effectively. We employ a novel empirical method that tracks U.S.-priority patents to establish that firms use utility models to optimize their overall appropriability needs by region. Our study finds evidence that a firm may choose standard patent protection in one region and utility model protection in another, even though standard patent protection is available in both settings. We propose that a “zone of appropriability preference” exists when utility models and standard patents overlap, and this zone provides important strategic opportunities to firms with global intellectual property portfolios. Our study thus provides an important counter-case for harmonization of national intellectual property laws. As a result, we suggest that such efforts be undertaken with more caution; in some cases, harmonization may do more harm than good.

Imposing legal liability on corporations for their involvement in human rights violations remains problematic. In the United States, civil liability in such circumstances developed in a series of Alien Tort Statute cases. This evolution came to an abrupt end with the cases of Kiobel v. Royal Dutch Petroleum and Jesner v. Arab Bank. As corporate human rights litigation declined in the United States, courts in Europe were presented with their first civil cases, and plaintiffs had some successes. Legal remedies for corporate human rights violations also made it onto the agenda of policy makers at the European Union and national European governments with laws requiring companies to conduct human rights due diligence throughout their operations. Against this background, this article investigates the current state and potential future development of corporate human rights litigation in the United States and Europe. It seeks to answer the following questions: Is the United States losing its prominent place as a preferred forum for human rights litigation against corporate defendants, as recent Supreme Court decisions suggest? What made the U.S. courts attractive in the first place? Is Europe taking over this role, and if so, should the United States be concerned about these developments? Are recent doctrinal and legislative trends in Europe transferable to the U.S. legal system and suitable to fill the gaps left by Kiobel and Jesner? Finally, what do these shifts on both sides of the Atlantic mean for victims of human rights violations and their prospects of effectively pursuing their rights?

For years, products liability law has failed to provide a remedy for consumers who suffer financial injury as a result of purchasing defective products manufacturers place and keep in the marketplace. The economic loss rule and defect manifestation requirements have, to date, foreclosed products liability claims when consumers suffer only economic injury and severely hampered recovery through other claims. Prior discussion of consumer economic loss litigation has been critical and embraced the necessity of the injury-based economic loss rule and defect manifestation requirements to protect manufacturers from perceived endless liability. While a few scholars have addressed some of the deficiencies behind the economic loss rule, this article builds on those discussions, addressing for the first time the flawed rationales behind defect manifestation requirements, and deconstructs in detail the outdated and flawed assumptions or fallacies upon which the rationales behind both doctrines are based. After deconstructing and exposing the, at best, questionable assumptions behind the economic loss rule and defect manifestation requirements, the article advocates a novel expansion of products liability law that provides a remedy for consumer economic loss caused by dangerously defective products. This proposed framework provides the proper demarcation between contract and tort, is consistent with earlier justifications eliminating privity and negligence, better aligns consumer safety with manufacturers' economic interests, bridges the current liability gap, and streamlines existing litigation.