American Business Law Journal最新文献

Access to credit in the United States is contingent upon an individual obtaining the “right” credit score. Yet the opaque scoring system makes it nearly impossible for an individual to break out of a cycle of low credit ratings and participate in the benefits of the American economy. Partially as a response, alternative credit rating products now use personal nonfinancial data for automated credit decision-making, purportedly intended to expand access to credit. Social media activity, college grades, and even what time of day a person applies for a loan are examples of data points used for this purpose. However, these and other alternative data can be highly correlated with protected traits, such as race and national origin. While extending access to credit equitably across society is an important goal, the cure should not exacerbate the same inequalities that it is designed to address. The necessity of credit for the modern consumer compels continued oversight of the credit infrastructure to ensure fair data practices and to hold participants accountable. This article contends that consumer access to a fair credit score is a necessity, and that the consumer credit infrastructure should be viewed as a modern utility and subject to additional oversight. A proposal is then advanced that establishes fair data duties for credit scoring entities.

Can IP rights be lost? That is, once IP rights are acquired, what—if anything—must owners do to keep those rights or risk forfeiting them. The answer varies widely across the IP landscape and has important consequences for follow-on innovation, competition, and the public domain. This article takes the first close look at forfeiture mechanisms throughout the five major IP regimes—utility patent, trade secret, copyright, design patent, and trademark. I demonstrate how IP forfeiture mechanisms (e.g., maintenance fees, monitoring obligations, and use requirements) have weakened or narrowed over time. Building on prior scholarship, I also delineate the important functions that IP forfeiture mechanisms serve. By forcing IP owners to decide if the cost and effort of maintaining IP rights are worthwhile, forfeiture mechanisms help eliminate low-value IP rights and enlarge the public domain, benefiting follow-on innovators and society at large. In addition, forfeiture mechanisms serve an important notice or signaling role by forcing owners to engage in acts that inform second comers about the existence and scope of IP rights. These functions are particularly important when it comes to functional or useful subject matter (e.g., innovations that make a product work). Given forfeiture's role and its problematic narrowing across the IP landscape, I suggest the need for reform—particularly in design patent and copyright law, two areas that increasingly cover functional subject matter but lack any forfeiture mechanism.

The recent disbursement of COVID-19 pandemic-related federal relief funds to businesses and individuals under the CARES Act exposed significant problems in the U.S. system of money and payments. U.S. banks' wealth maximization objectives clashed with the federal government's goals of diversity, equity, and inclusion (DEI). The discriminatory, self-interested behavior of banks, which essentially served as the federal government's long arm in these transactions, worsened the pandemic-induced economic crisis for many, especially women and minorities, and intensified racial injustice. The U.S. government's inability in 2020 to successfully execute its stimulus plan and give all its intended recipients the benefits it had designated due to the role played by banks begs the question: Should U.S. banks be subject to any legal obligations when they help the government execute its fiscal goals? This article argues that U.S. banks should help advance the federal government's fiscal policy, including the DEI social agenda, especially during critical junctures such as the economic crisis instigated by COVID-19, and proposes an agency theory approach to mandate the implementation of government social policy goals among commercial banks via a CAMELS rating-like system that includes social goals, such as DEI. This DEI rating system would create public consequences for noncomplying banks, including depositors withdrawing their funds from lower-rated banks and redepositing them in top-rated banks, resulting in higher-rated DEI banks overtaking lower-rated banks. This DEI rating system will also provide an incentive for banks to compete for more diversity and inclusion, which would solve many of the systemic discrimination-related issues that led to economic inequality and intensified the 2020–2021 crisis. Lastly, DEI-based scores could help prevent banks from finding themselves on the losing side of the growing public banking movement in the United States, enabling banks to reposition themselves and avoid future radical changes in the banking industry.

This article uses computational text analysis to study the form and content of more than 3000 recommendation letters submitted on behalf of applicants to a major U.S. anesthesiology residency program. The article finds small differences in form and larger differences in content. Women applicants' letters were more likely to contain references to acts of service, for example, whereas men were more likely to be described in terms of their professionalism and technical skills. Some differences persisted when controlling for standardized aptitude test scores, on which women and men scored equally on average, and other applicant and letter-writer characteristics. Even when all explicit gender-identifying language was stripped from the letters, a machine learning algorithm was able to predict applicant gender at a rate better than chance. Gender stereotyped language in recommendation letters may infect the entirety of an employer's hiring or selection process, implicating Title VII of the Civil Rights Act of 1964. Not all gendered language differences were large, however, suggesting that small changes may remedy the problem. The article closes by proposing a computationally driven system that may help employers identify and eradicate bias, while also prompting a rethinking of our gendered, racialized, ableist, ageist, and otherwise stereotyped occupational archetypes.

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.