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Under the Golden Arch: Permanent Neutrality and Authoritarian International Law in Turkmenistan
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The End of Arbitrage: Recent Chancery Court Decisions Highlight Delaware’s Need to Overturn Transkaryotic
Full text linkAppraisal is a legislatively created right that affords a shareholder the ability to seek a judicial ruling on the fair value of their stock when their corporation undergoes a merger that they do not support. While this remedy is intended to protect shareholders from faulty merger negotiating, in the 2010s hedge fund petitioners in Delaware flooded the Delaware Chancery Court to use the remedy to make a profit—a tactic called appraisal arbitrage. While appraisal arbitrage theoretically acts as a back-end market check on controller abuses, appraisal litigation is lengthy and requires court resources. Further, appraisal arbitrage allows hedge fund petitioners, many of whom purchased shares of a target corporation after the merger announcement, to profit needlessly.
In response to increased appraisal litigation in the late 2010s, the Delaware legislature reacted with new statutory solutions, and the Delaware Supreme Court issued three critical opinions; all in an attempt to curb appraisal arbitrage in the Delaware Chancery Court. While these actions seem to limit the aggregate number of appraisal cases in the Delaware courts and influence the outcome of appraisal decisions, two recent Delaware Chancery Court decisions indicate that appraisal arbitrage has not quite left Delaware. This Comment focuses on the history of Delaware’s appraisal statute and its use by appraisal arbitrageurs. Through analysis of the rise of appraisal arbitrage, the efforts from the Delaware legislature and Supreme Court to curb it, and two recent Delaware Chancery Court decisions, this Comment argues that appraisal arbitrage still plagues Delaware.
This Comment asserts that Delaware must overturn a 2007 Chancery Court decision that allows shareholders who bought shares of a company undergoing a merger after the transaction’s record date to claim appraisal rights even though they may not have voted with those shares. Moreover, the Delaware legislature must codify this change and amend its appraisal and merger statutes to correct a share-tracing problem that the 2007 decision resolved. Through these measures, Delaware can keep appraisal arbitrage out of its courts while maintaining the spirit of the appraisal remedy
The Unconstitutional Conditions Vacuum in Criminal Procedure
Full text linkFor more than a century, the Supreme Court has applied the unconstitutional conditions doctrine in many contexts, scrutinizing government efforts to condition the tradeoff of rights for benefits with regard to speech, funding, and takings, among others. The Court has declined, however, to invoke the doctrine in the area of criminal procedure, where people accused of crime are often asked to—and often do—surrender their constitutional rights under the Fourth, Fifth, and Sixth Amendments in return for some benefit. Despite its insistence that the unconstitutional conditions doctrine applies broadly across the Bill of Rights, the Court’s jurisprudence demonstrates that the doctrine functions as a selective shield that offers no support for certain rightsholders.
We argue that the Court’s approach undermines vital rights, with especially harmful consequences for people who most need judicial protection. Since individuals accused of crime are often extremely vulnerable to coercive government measures, the important safeguards offered by the unconstitutional conditions doctrine should be at their height in the criminal procedure setting. Indeed, lower federal courts and some state courts have applied the doctrine to criminal procedure issues, demonstrating the doctrine’s utility in this domain. We conclude that the Supreme Court’s aversion to leveraging the unconstitutional conditions doctrine in its criminal procedure docket rests not on a principled doctrinal distinction, but on a failure to take seriously the constitutional predicaments facing those charged with crimes. In accordance with its obligation to render equal justice under law, the Court must apply the unconstitutional conditions doctrine in this most critical area
Mythical Adverse Effect
Full text linkThe material adverse effect (MAE) definition in mergers and acquisitions agreements is one of the most intensely negotiated, litigated, and studied contract provisions ever. Practitioners and scholars alike encourage attorneys to bargain extensively over these definitions, which have inexorably grown in length and complexity over the past two decades.
Challenging this longstanding conventional wisdom, this Article shows that endemic efforts to customize MAE definitions’ language are in fact inefficient and counterproductive. Each of the purported benefits commonly attributed to extensive MAE negotiation—most notably, risk allocation and renegotiation incentives—is illusory under Delaware law, which governs most major M&A agreements. Careful analysis of that state’s jurisprudence, including recent cases emerging from the COVID-19 pandemic, reveals that standardized definitions could provide all the same benefits without any of the substantial but overlooked costs of protracted negotiations.
Rather than finetune and fight over MAE definitions, lawyers could achieve their underlying goals more effectively by devoting their limited leverage to other contract provisions. By refocusing the conversation from failure to success, this alternative approach should eventually facilitate contractual innovations that promote deal completion without the wasteful brinksmanship that pervades today’s transactions. In fact, analogous analysis extends beyond M&A to all types of business contracts. Finally, this Article’s findings regarding MAE definitions cast doubt on a basic tenet of orthodox contract theory, revealing that front-end transaction costs and back-end enforcement costs have a more intricate relationship than scholars have long supposed
Data in Distress: Effectuating State Data Privacy Laws During Bankruptcy
Full text linkIn 2000, an online toy retailer, Toysmart.com, attempted to liquidate consumer data to pay creditors in its bankruptcy case. The attempted sale drew objections from the Federal Trade Commission and forty-seven state attorneys general. Five years later, Congress attempted to resolve privacy concerns in bankruptcy, amending the Bankruptcy Code to provide clear procedures for the liquidation of “personally identifiable information.” Recently, scholars have criticized these amendments, characterizing them as “limited,” “outdated,” and “privacy theater.” This Comment adds to these criticisms, arguing the amendments’ failure to mandate consideration of relevant nonbankruptcy law puts these permissive sales procedures on a collision course with state data privacy laws. These new state data laws will complicate and disrupt the liquidation of personally identifiable information during bankruptcy by decreasing asset values and threatening costly litigation from improper data practices. If Congress or bankruptcy courts do not act quickly to ensure these state privacy laws are properly effectuated during bankruptcy, another case like Toysmart.com will expose the inadequacy of the Bankruptcy Code’s privacy framework.
This Comment offers a critical assessment of the current Bankruptcy Code procedures for the sale of personally identifiable information. It begins with a discussion of the process required under the Bankruptcy Code for sales of personally identifiable information, focusing on the deficiencies in the data sales provision and the privacy practices of bankruptcy courts. Following discussion of the current Bankruptcy Code framework, this Comment outlines the most important aspects and enforcement of new state data laws. Next, this Comment anticipates and explains the likely future conflicts between current bankruptcy procedures and new state data laws. Lastly, this Comment proposes solutions for Congress and bankruptcy courts to ensure the efficiency and efficacy of corporate bankruptcy while preserving the privacy rights of consumers
Bad Attempts
Full text linkWe assume that legal concepts are generic and indifferent to facts. But bad attempts at crime (something always unlawful) and bad attempts at art (something almost always lawful) are potentially treated very differently in many U.S. jurisdictions. Surprisingly, the bad attempt at art might be more likely to result in punishment. I draw on notions of capacity and responsibility to suggest why the amateur rapper should be excused for genuine aesthetic attempts that are perceived as threatening. In doing so, I comment on form and formalism in public law, and how principles of criminal law can help to maintain the integrity of our constitutional law doctrine
Second-class Administrative Law: \u3cem\u3eLincoln v. Vigil\u3c/em\u3e\u27s Puzzling Presumption of Unreviewability
Full text linkAdministrative law ordinarily presumes that someone hurt by “arbitrary and capricious” agency action may seek relief in federal court unless Congress says otherwise. Administrative law does the opposite, however, when the harmful agency action happens to be one “allocating a lump-sum appropriation” (whatever that means). When it comes to spending programs that courts deem to fit in this ill-defined category, agency actions are presumptively immune from judicial review, insulated from the safeguards of administrative law no matter how arbitrary.
This Article looks behind the superficial, technocratic simplicity of the presumption of unreviewability through a novel, person-sensitive study of its origins and effects driven by the subordination question—“who pays?” This study reveals that the presumption is founded on a historical fiction—a “tradition” of refusing review that the Supreme Court invented thirty years ago (in Lincoln v. Vigil) in order to reverse district court and appellate rulings invalidating the termination of the Indian Children’s Program by President Reagan’s Department of Health & Human Services. The Vigil presumption is far from self-executing. Instead lower courts, following the Supreme Court’s lead, have in practice targeted the Vigil presumption toward Native Americans. Thirty-seven percent of cases to which courts apply the presumption are brought by Tribes. Fifteen percent are brought by prisoners. No other group faces the presumption with any regularity. Moreover, because the presumption is limited to discretionary spending programs, it is inherently targeted toward those who rely on such programs rather than the market or mandatory entitlements, that is, the nation’s most vulnerable.
In light of the Article’s findings about the origins and disparate impacts of the Vigil presumption, the presumption should be considered an Indian Law doctrine, not just an administrative law doctrine—and it should be abandoned. The policy justifications that the Supreme Court offered alongside its fictitious historical claim in inventing it (which scholars have previously cited approvingly) do not actually turn out to be persuasive on their own terms, let alone in the face of the lopsided practical operation revealed by the Article. Scholars may debate how much protection administrative law should provide to people injured by agency action, but there is no good reason that we should have one administrative law for most everyone and another, second-class administrative law for Tribes, prisoners, and others who rely on discretionary federal spending programs