Global Health Research Center of Central Asia
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In-House Master Class: At Columbia, Former GC of Facebook Is Bringing the Real World Into the Classroom
Get PDFIf the purpose of law school is to train eager minds to “think like a lawyer,” then the purpose of a Columbia Law School seminar taught by former Facebook Inc. vice president and general counsel Colin Stretch is to teach them to think specifically like an in-house lawyer
A Mission Statement for Mutual Funds in Shareholder Litigation
Get PDFThis Article analyzes the conduct of mutual funds in shareholder litigation. We begin by reviewing the basic forms of shareholder litigation and the benefits such claims might offer mutual fund investors. We then investigate, through an in-depth docket review, whether and how the ten largest mutual funds participate in shareholder litigation. We find that although shareholder suits offer potential benefits, the largest mutual funds have essentially forfeited their use of litigation. This finding is particularly striking given that index funds and other long-term oriented mutual funds generally cannot sell their shares when they are dissatisfied with company performance, leaving them with only two levers in corporate governance — voting and suing. Mutual funds vote, but they do not sue.
We analyze potential explanations for the failure of mutual funds to litigate on behalf of their investors. Collective action problems and conflicts of interest raise significant obstacles to mutual fund participation in shareholder litigation. Yet, we argue, there are situations in which shareholder litigation could create value for mutual fund investors. We therefore turn to the normative question: How should mutual funds litigate on behalf of their investors? Answering this question allows us to articulate a mission statement for mutual funds in shareholder litigation.
Our mission statement is grounded on the perspective of the broadly diversified “market investor.” The repeat-play incentives and broad diversification of many mutual funds, index funds in particular, suggests that they could create value by focusing principally on deterrence objectives. Mutual funds should bring shareholder suits against portfolio companies when doing so would meaningfully enhance deterrence. They should also scrutinize the litigation brought by other shareholders, objecting to outcomes that fail to promote meaningful deterrence. At the same time, mutual funds should focus on compensatory goals in litigation against nonportfolio defendants because extraportfolio claims do not raise circularity concerns. In addition, mutual funds should consider whether litigation can be used to implement corporate governance reforms. Finally, in all cases, mutual funds should closely monitor litigation agency costs. We close by suggesting ways in which the incentives of mutual funds might be restructured to bring about these changes
People Not Machines: Authorship and What It Means in International Copyright Law
Get PDFThis chapter recapitulates Professor Ricketson’s analysis in his 1992 Manges Lecture at Columbia Law School, presciently titled \u27People or Machines: The Berne Convention and the Changing Concept of Authorship\u27. As Ricketson systematically developed the inquiry, it became clear that ‘People or Machines’ in fact meant ‘People Not Machines’. This chapter considers whether, more than twenty-five years later, subsequent technological developments warrant reconsideration of the human authorship premise underlying the Berne Convention. If that premise holds firm, the next question is whether non-human-generated outputs require some form of intellectual property protection. Any such regime, it should be noted, would fall outside the Berne Convention
Agency Problems and Organizational Costs in Slave-Run Business
Get PDFThis chapter examines the internal economic organization of the peculium servi communis — that is, of separate business assets assigned to a slave — and its (external) relationships with creditors. Literary, legal, and epigraphic evidence points predominantly to businesses of small or medium size, suggesting that there must have been some constraints to growth. We identify both agency problems arising within the business organization (governance problems) and agency problems arising between the business organization and its creditors (limited access to credit). We suggest that, although the praetorian remedies had a remarkable mitigating effect, agency problems operated as a constraint to the expansion of these business organizations, both in terms of the number of individuals involved and in terms of the amount of capital invested
How to Help Small Businesses Survive COVID-19
Get PDFSmall businesses are among the hardest hit by the COVID-19 crisis. Many are shuttered, and far more face cash flow constraints, raising questions about just how many will survive this recession. The government has responded with a critical forgivable loan program, but for many of these businesses, this program alone will not provide the cash they need to retain workers, pay rent, and help their business come back to life when Americans are no longer sheltering in place. This essay calls on regulators to find new and creative ways to work with existing intermediaries, including banks and online lenders, who have the infrastructure and tools needed to help small businesses get the additional loans they need to survive and thrive. Leveraging existing institutions could enhance the speed, scale, and scope of the government’s response, all critical virtues in the efforts to support small business
Bankruptcy’s Role in the COVID-19 Crisis
Get PDFPolicymakers have minimized the role of bankruptcy law in mitigating the financial fallout from COVID-19. Scholars too are unsure about the merits of bankruptcy, especially Chapter 11, in resolving business distress. We argue that Chapter 11 complements current stimulus policies for large corporations, such as the airlines, and that Treasury should consider making it a precondition for receiving government-backed financing. Chapter 11 offers a flexible, speedy, and crisis-tested tool for preserving businesses, financing them with government funds (if necessary), and ensuring that the costs of distress are borne primarily by investors, not taxpayers. Chapter 11 saves businesses and employment, not shareholders. For consumers and small businesses, however, bankruptcy should serve as a backstop to other policies, such as the CARES Act. Consumer bankruptcy law’s primary goal is to discharge debts, but that’s not what most consumers need right now. What they need is bridge financing, and perhaps forbearance, until the crisis ends, they get back to work, and they regain their ability to pay their debts again. These key policy levers – bridge financing and forbearance – are available in theory to small businesses in Chapter 11, especially if the government supplies the bridge financing when credit markets are dysfunctional. The practical reality is that bankruptcy is expensive for small businesses, which may deter them from using it in the first place. Equally important, our courts will be flooded if Chapter 11 is the primary rescue policy for small businesses
COVID-19 as a \u3ci\u3eForce Majeure\u3c/i\u3e in Corporate Transactions
Get PDFThis paper surveys the use of pandemic-related provisions in Material Adverse Effects ( MAE ) provisions in a large data set of publicly disclosed M&A transactions spanning the years 2003-2020. We document a trend towards greater use of such provisions, taking off particularly after the H1N1 crisis in 2009, and spiking again in late 2019 and early 2020. These terms are invariably located in the exclusions/carve-outs to the MAE, and they are overwhelmingly accompanied by disproportionate effects language that tends to dampen the effect of the carve out. There is little discernible statistical relationship between the inclusion of a pandemic-related carve-out and the inclusion of a reverse termination fee ( RTF ) granting optionality to the buyer; but when an RTF is present, its magnitude tends to be smaller in the absence of any pandemic-specific carve-out, suggesting some degree of observational complementarity between these terms
The End of Antitrust History Revisited
Get PDFThis Review engages Tim Wu’s book, The Curse of Bigness, to explain the significance of the current rupture in antitrust and to situate it within a broader intellectual trajectory. Debates over the foundational purpose of antitrust are not new, and examining how this latest clash fits alongside previous contestations is essential for understanding what has yielded the current contestability and assessing the competing visions.
Part I of this Review summarizes Wu’s chief contributions in his recent work, focusing on three tenets that form the basis of the book. Part II offers an analytic breakdown of the overhaul in antitrust doctrine that is the subject of Wu’s critique, tracing the transformation of antitrust to changes in descriptive claims and normative assumptions that the Chicago School introduced. I argue that framing Chicago’s interventions this way lets us map the current antitrust debate with greater coherence. Doing so, moreover, reveals the limits of proffered correctives to the Chicago School and underscores the need for what has been called a “Neo-Brandeisian” program in law and political economy. Part III argues that a central component of the Neo-Brandeisian project should include reforming the institutional structure of antitrust law and policy. Although most critiques of present-day antitrust focus on doctrinal rules and the substantive legal framework that governs antitrust analysis, the exclusive reliance on a common law approach to antitrust is a key source and enabler of current dysfunctions. Complementing this common law structure with an administrative approach and adopting clear rules that curb judicial discretion would help democratize antitrust in the ways that Wu and other reformers champion
Fixing America\u27s Founding
Get PDFThe forty-fifth presidency of the United States has sent lawyers reaching once more for the Founders’ dictionaries and legal treatises. In courtrooms, law schools, and media outlets across the country, the original meanings of the words etched into the U.S. Constitution in 1787 have become the staging ground for debates ranging from the power of a president to trademark his name in China to the rights of a legal permanent resident facing deportation. And yet, in this age when big data promises to solve potential challenges of interpretation and judges have for the most part agreed that original meaning should at least count for something, a historian named Jonathan Gienapp in the Stanford University History Department has returned from the archives with a paradigm-shifting proposition. Not only were the intentions of the drafters of the Constitution diverse, as scholars have long recognized. Not only were the meanings of their chosen words uncertain, as others have since emphasized. Instead, the very thing that we might think of as the U.S. Constitution simply did not yet exist in that storied moment when ink met parchment and we the people said aye
Who’s Afraid of Section 1498? A Case for Government Patent Use in Pandemics and Other National Crises
Get PDFCOVID-19 has created pressing and widespread needs for vaccines, medical treatments, PPE, and other medical technologies, needs that may conflict – indeed, have already begun to conflict – with the exclusive rights conferred by United States patents. The U.S. government has a legal mechanism to overcome this conflict: government use of patented technologies at the cost of government-paid compensation under 28 U.S.C. § 1498. But while many have recognized the theoretical possibility of government patent use under that statute, there is today a conventional wisdom that § 1498 is too exceptional, unpredictable, and dramatic for practical use, to the point that it ought to be invoked sparingly or not at all, even in extraordinary circumstances such as a pandemic.
Yet that conventional wisdom is a recent one, and it conflicts with both history and theory. This Article considers the role of § 1498 in the context of national crises and emergencies like COVID-19, a context so far not addressed substantially in the literature on the statute. We find that government patent use is not nearly as exceptional as it is commonly made out to be, and indeed has been not only used but expanded through statutory amendment over the last century. Review of the development and use of the statute during both world wars and the post–September 11 period reveals widespread acceptance of government patent use as a tool for addressing imminent national problems, and it illuminates particular features of government patent use that become especially pertinent in times of crisis. In the United States, government patent use and national emergencies have a close and special relationship; each has shaped the other.
Drawing from the lessons of history and analysis of the statute, we develop a novel framework for comparing § 1498 to other policy tools, including prizes, research grants, and patent buyouts. Under this framework, four features of § 1498 stand out: speed of invocation, flexibility in the scope of its use, post-crisis determination of compensation, and use of an impartial adjudicator. Whenever these four features are advantageous – which will be true in most national emergency situations, as we demonstrate – the U.S. government should strongly consider government patent use over patent buyouts and other policy tools. We show the advantages of these four features in a case study: government patent use to expand supply and access to the COVID-19 treatment remdesivir. Accordingly, and contrary to the conventional view of § 1498, we conclude that government patent should be an ordinary tool of government policy