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Conceptualizing Caremark
Full text linkWho is accountable for corporate compliance failures? The issue of compliance has emerged as one of the most significant developments in corporate governance over the past decades. However, until recently, corporate law has had surprisingly little to say about the question, leaving the policing of issues such as toxic pollution, product safety, or data privacy, to other regulators. This situation has changed dramatically over the past few years. Today, virtually every corporate fiasco is followed by an oversight duty lawsuit against the company’s directors and officers for not doing enough to prevent the debacle. But the rapid resurgence of oversight duties has created a mismatch: The doctrine has become one of the most important in corporate law yet remains underarticulated. This Article bridges this mismatch by conceptualizing the doctrine (often dubbed Caremark, after Delaware’s leading precedent). In particular, the Article makes the following four contributions.
First, the Article clarifies what determines a breach of oversight duties. The standard of liability across all types of oversight duty claims is bad faith. Failureof- oversight claims thus usually boil down to what courts can infer about directors’ mental state from external evidence about directors’ actions and the circumstances in which they took them. The Article identifies the external “markers” that courts use to infer directors’ bad faith: from the centrality of the compliance risk in question, to the relationship between past warnings and current problems, to the clarity of the legal obligations that were violated. Second, the Article articulates the main policy arguments behind each Caremark claim, namely, combatting “willful blindness,” “cosmetic compliance,” corporate recidivism, and managerial shorttermism. Third, the Article highlights several ostensibly procedural aspects of oversight duty litigation that have a disproportionate impact on corporate behavior: from privileges to “laches” (when are Caremark claims time-barred?), to how to respond to findings by noncorporate legal forums. In a series of rulings of first impression in 2023, corporate law courts adopted a “liberal” approach across all these issues that boosts the ability to hold individual decision-makers accountable. Finally, the Article evaluates the overall desirability of the resurgence in oversight duty litigation and identifies concrete policy implications, such as how to calculate damages when the company profited from skirting regulations, and what deference to give to the company’s own investigation of failure-of-oversight claims
Open Banking Framework, A Comparative Study of Evolving Law in the Kingdom of Saudi Arabia and The United States of America
No full textOpen banking is reshaping the financial sector by enabling third-party access to consumer financial data and; fostering innovation while raising regulatory challenges. This study compares the legal frameworks that governs open banking in the Kingdom of Saudi Arabia (KSA) and the United States (US), focusing on consumer protection, data privacy, and compliance.
KSA adopts a centralized regulatory model under the Saudi Central Bank (SAMA), ensuring uniform compliance, while the US follows a fragmented, market-driven approach with multiple regulators. Through a comparative legal analysis, the study identifies key differences, regulatory gaps, and areas for improvement in transparency, dispute resolution, and responsible data-sharing practices.
The findings of this dissertation highlight the need for balanced regulatory frameworks that promote financial innovation while safeguarding consumer rights. This research provides insights for policymakers and industry stakeholders that; advocate for legal reforms that enhance security, efficiency, and consumer trust in open banking ecosystems
Teaching Awards presented to 11 faculty members
Full text linkEleven faculty members at the Indiana University Maurer School of Law were honored today (March 28) for their outstanding contributions to academic life in and outside the classroom.
“This is a moment where we get to reflect and be thoughtful about what happens inside our classrooms,” said Indiana Law Dean Christiana Ochoa, introducing the event. “One of the non-negotiables of teaching is showing up every day with energy and enthusiasm, ready to inspire our students in ways that help them learn and understand complicated subjects. This year’s recipients are outstanding examples of teaching excellence.”
The award nominations were reviewed and winners recommended by a three-member student advisory committee, Samantha Jean, Nicholle Vandy, and Kate Leahey. We are proud to recognize the 2024-25 Teaching Award honorees
Fariss, Peters, Singleton, and Strain to be inducted into Academy of Law Alumni Fellows
Full text linkThe Indiana University Maurer School of Law Academy of Law will welcome four new members into its Academy of Law Alumni Fellows this spring with the inductions of Linda Fariss, Agnes Peters, Earl Singleton, and James Strain.
Induction into the ALAF is the highest honor the Law School can bestow upon an alumnus. This year’s ceremony will take place April 11 in the Indiana Memorial Union in Bloomington.
“Linda, Agnes, Earl, and James have made extraordinary contributions to their local communities, the legal profession, and the Law School,” said Indiana Law Dean Christiana Ochoa. “Their stories are remarkable testaments to the impact our alumni have around the world and we couldn’t be more proud to honor them this spring.
Buxbaum elected to AJIL Editorial Board
Full text linkIndiana University Maurer School of Law Professor Hannah L. Buxbaum has been elected to the American Journal of International Law’s Board of Editors.
She will serve a four-year term running through April 2029.
The AJIL is a leading peer-reviewed journal, published quarterly since 1907, that serves as the flagship publication of the American Society of International Law
Can AI, as Such, Invade Your Privacy? An Experimental Study of the Social Element of Surveillance
Full text linkThe increasing use of AI rather than human surveillance puts pressure on two long-used cultural and (sometimes) legal distinctions: as between human and machine observers and as between content and metadata. Machines do more and more watching through advancing technology, rendering AI a plausible replacement for humans in surveillance tasks. Further, machines can commit to surveil only certain forms of information in a way that humans cannot, rendering the distinction between content and metadata increasingly relevant too for crafting privacy law and policy. Yet despite the increasing importance of these distinctions, their legal importance remains in four key domains of privacy law: Fourth Amendment law, wiretap law, consumer privacy law, and the privacy torts. Given the failure of privacy law to settle conclusively the import of the human/AI and content/metadata distinctions, this Article proposes looking to empirical measures of the judgments of ordinary people to better understand whether and how such distinctions should be made if law is to be responsive to reasonable expectations of privacy.
There is incomplete empirical evidence as to whether the AI/human surveillance and content/metadata distinctions hold weight for ordinary people, and if so, how. To address this empirical gap, this Article presents the results of a vignette study carried out on a large (N = 1000), demographically representative sample of Americans to elicit their judgments of a state surveillance program that collected either content or metadata and in which potential surveillants could be either human or AI. Unsurprisingly, AI surveillance was judged to be more privacy preserving than human surveillance, empirically buttressing the importance of a human/AI distinction. However, the perceived privacy advantage for an AI surveillant was not a dispositive factor in stated preferences regarding technology use. Accuracy—a factor rarely discussed in defenses of state surveillance —was more influential than privacy in determining participants’ preferences for a human or AI surveillant. Further, the scope of information surveilled (content or metadata) strongly influenced accuracy judgments in comparing human and AI systems and shifted surveillance policy preferences as between human and AI surveillants. The empirical data therefore show that the distinction between content and metadata is important to ordinary people, and that this distinction can lead to unexpected outcomes, such as a preference for human rather than AI surveillance when contents of communications are collected
