American Business Law Journal最新文献

This article develops the concepts of regulatory legal strategy, a resource-based view of government agencies, and regulatory entrepreneurship. These ideas are explored through a case study of the limited (if any) access that legal cannabis-related businesses have to the banking system due to the clash between federal law and laws in those states that have legalized some uses of cannabis. This article argues that regulators’ entrepreneurial regulatory legal strategies can have a material impact on regulated entities and give them a competitive advantage. To demonstrate, this article claims that regulators’ adoption of permissive regulatory legal strategies has facilitated access of some cannabis-related businesses to the banking system. Conversely, if regulators adopted obstructive regulatory strategies, this would act as a constraint on such access in the future, even if Congress resolves the federalism issue largely responsible for the current limitations these businesses face.

This article explores cannabis regulation in Canada and the United States and examines how recent legalization efforts have manifested differently in each country. Although some of these differences are explained by uncompromising constitutional structures, this comparative exercise examines each system's political choices. While emphasis is placed on the Canadian experience, this article seeks to inform and enhance policy and regulation in both countries in addition to highlighting inherent ethical issues.

When Google went public with a dual-class capital structure in which shares owned by the founders confer greater voting rights than shares issued to public investors, its cofounders, Larry Page and Sergey Brin, promised to provide investors with high-quality information about the company. Using the words of Warren Buffett, the chairman and CEO of Berkshire Hathaway, another dual-class firm, they promised shareholders, “We won’t ‘smooth’ quarterly or annual results: If earnings figures are lumpy when they reach headquarters, they will be lumpy when they reach you.” Page, Brin, and Buffett definitely understood the importance of quality information to their investors, especially in dual-class structures. But do dual-class companies really provide investors with credible financial information? Contrary to the assumption of agency theory that dual-class firms are less transparent, we find empirically that these companies do provide credible information to their investors. Our results suggest that the quality of financial reports, as measured by their ability to predict change in future earnings, is higher for dual-class companies than for their single-class counterparts. These findings may be explained by the unique relations created in dual-class firms in which the founders provide investors with higher-quality information in exchange for superior voting rights. The article contributes to the heated debate about the transparency of dual-class companies by providing policy makers with important insights on the quality of information provided by these companies. Our findings suggest that there is no need for stricter regulation with regard to disclosure of financial information by dual-class firms.

Organizations like 350.org, Insure Our Future, and DivestInvest are leading campaigns to urge boycott and divestment from fossil fuels as a means to address climate change. Increasingly, they are finding success, from individual consumers to massive pension and sovereign wealth funds. However, as organized group boycotts, divest campaigns may be vulnerable to prosecution under antitrust law. This article explores the likelihood of success in such a case, considering the history of the legal treatment of organized boycotts, the scope and purpose of antitrust law, and the possible application of the First Amendment to the divestment context. The article finds that fossil fuel boycotts straddle a number of contradictory characteristics, making application of existing theories inadequate. In particular, existing precedent protects political boycotts, but not those with primarily economic objectives, and fails to definitively address whether a noncompetitive actor may undertake concerted action under antitrust law. In the context of climate change, where the political is economic, and political goals may seek significant economic changes (such as undermining an entire industry), existing theories may lead to a result that threatens both free expression and the health of the planet. The essential flexibility of the Sherman Act, however, provides room for protection of political activity, even where the ultimate objective is economic in nature.

The field of law and strategy (LAS) has advanced our understanding of the law's role in competitive advantage. To date, however, LAS has neglected low rule of law environments—countries characterized by expansive degrees of legal uncertainty. LAS should account for these settings, too, since environmental uncertainty is a strategically significant factor for any company. This article situates the strategic relevance of legal uncertainty in the Chinese context and fills an important gap by illustrating how LAS principles apply in low rule of law jurisdictions. Specifically, this article develops the construct of legal entrepreneurship—the notion that attorneys may apply an entrepreneurial mind-set and skill set to position the client favorably and legitimately within the uncertainties of the legal landscape, thereby creating legal competitive advantages for the client. Drawing upon interviews with expert attorneys and executives, this article presents a typology of legal strategies available to U.S. companies in China, uniquely modeling these approaches along the two fundamental dimensions of legal strategy. Additionally, this article identifies two basic types of legal uncertainty in the cross-border context and offers guidelines for the exercise of legal entrepreneurship. Together, these arguments demonstrate that legal entrepreneurship is an empirically viable construct within the LAS project. In low rule of law jurisdictions that have embraced foreign enterprise, legal entrepreneurship will generally optimize the American company's pursuit of both legal value creation and legal risk management.

Scholars, antitrust agencies, and policy makers have historically paid little attention to anticompetitive practices in labor markets. This was largely due a misconception that antitrust law is meant to govern conventional markets in which goods and services trade, rather than govern labor markets. Antitrust law may also offer a poor remedy to redress employers who enter no-poaching agreements or otherwise impair competition. The primary tension involves antitrust's purpose, which is to promote “consumer welfare.” To identify whether conduct eroded consumer welfare, courts tend to scrutinize whether prices increased. But here, lessening wages can enable firms to sell goods at cheaper prices, benefiting consumers. Another issue is that the typical restraint affects only a smattering of workers instead of lessening wages throughout the greater market. This article uses empirical analyses to show that antitrust should promote labor's welfare as it does consumer welfare, and it argues that enforcement must condemn labor cartels as per se illegal. The research demonstrates that labor cartels are more pernicious than restraints in product markets, as employers can lessen wages with less effort than in product markets. Antitrust should even proscribe no-poaching agreements formed for a legitimate purpose (e.g., to protect trade secrets) because employers could have achieved the same goals using less coercive means; the noncompete agreement, at least, provides labor with a semblance of notice and bargaining power without drawing antitrust scrutiny. The prohibition of labor cartels would thus promote competition and consumer welfare, especially in minimum wage labor markets.

In this article we examine the rate at which patent applications are granted as a function of the inventor's race and gender. Empirical analysis of more than 3.9 million U.S. applications finds minority and women applicants are significantly less likely to secure a patent relative to the balance of inventors. Further analysis indicates that a portion of this bias is introduced during prosecution at the Patent Office, independent of the quality of the application. Mechanisms underlying these disparities are explored. The article concludes with a discussion of our results and their interaction with patent law, innovation policy, and employment trends.

In 2014, New Jersey passed the Sports Wagering Act, permitting sports betting at state casino and racetrack venues, in direct conflict with the federal Professional and Amateur Sports Protection Act. In 2017, South Dakota passed Senate Bill 106, requiring that certain e-commerce retailers collect and remit sales tax, in violation of federal law. The two U.S. Supreme Court decisions arising from challenges to these state statutes—South Dakota v. Wayfair and Murphy v. NCAA—exemplify U.S. Supreme Court “case baiting.” Case baiting is a tactic states implement to challenge federal directives by passing state legislation that directly conflicts with federal law to lure the Court into granting certiorari and ruling in their favor. This article argues that South Dakota's and New Jersey's triumphs pave the way for other jurisdictions to pursue similar strategies across multiple legal issues such as abortion restrictions and immigration law. In addition, this article suggests that case baiting invites further scholarly exploration of important policy considerations, including the use of this tactic as a novel approach to the application of law and strategy, whether case baiting promotes the Court's progression toward a more quasi-legislative role, and whether passing conflict legislation violates state legislators’ oaths of office.