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Teaching Slavery in Commercial Law
Get PDFPublic status shapes private ordering. Personhood status, conferred or acknowledged by the state, determines whether one is a party to or the object of a contract. For much of our nation’s history, the law deemed all persons of African descent to have a limited status, if given personhood at all. The property and partial personhood status of African-Americans, combined with standards developed to facilitate the growth of the international commodities market for products including cotton, contributed to the current beliefs of business investors and even how communities of color are still governed and supported. The impact of that shift in status persists today. The commodities markets and the nations that rose and prospered would not be possible without the slave trade, and that trade would not be possible without the legal, business, and social norms in place to facilitate private ordering and growth while reinforcing the subjugation of African-Americans. Yet, many business and commercial law professors devote class time to teaching foundational and historical material, without any consideration of the impact of slavery. To avoid slavery in business and commercial law courses is to ignore an institution that plays a pivotal role in much of what we do today. Slavery is not a frolic, it is foundational.
Many American universities played a role in the slave trade—either by receiving funds from the enterprise or receiving the enslaved as donations and using their labor or disposing of them for the financial advancement of the institution. In my Core Commercial Concepts course, a Uniform Commercial Code (UCC) survey class covering Articles 2, 3, 4, and 9, I devote time and space to discussions of race and the law by making the connection between the history of commercial concepts, slavery, and the role of the cotton industry in the shaping of international commercial law norms. In my simulation, described in this Essay, I teach the story of Washington and Lee University’s sale of individuals for the purpose of ensuring the institution’s financial survival, then extrapolate from the facts to review the high points of commercial law. I incorporate materials on the legacy of slavery at my own institution to provide students with a scenario based on the acquisition of real property and construction of buildings they engage with on campus. In this Essay I explain the methods I use to explore these concepts. Working in a framework that focuses on classification and status, my students consider issues of federalism and the impact of statutory definitions on private ordering, while discussing how these definitions shape the relationship of African-Americans to commerce
Voting Rights in Corporate Governance: History and Political Economy
Get PDFPolitical voting rights have become the subject of sharp legal wrangling in American political elections and the focus of headlines and popular debate. Less attention has focused on American corporate elections, where something similar has been happening: the last two decades have witnessed significant unsettling of basic shareholder voting rights, including laws and practices that were mostly stable throughout the twentieth century. Today, shareholder voting rights are in flux and, increasingly, in controversy. This Article connects the current moment of instability to the last significant era of change in shareholder voting rights—the nineteenth century—and brings historical context to a new era of dynamic change.
A small but potent literature has explored the historical evolution of nineteenth-century shareholder voting rights in corporate law, establishing that per-share vote allocations changed significantly over that century. This literature, which focuses on the shift from “democratic” vote allocations (one-person-one-vote and restricted voting) to “plutocratic” voting (one-share-one-vote), has treated vote allocations as the exclusive determinant of shareholder voting power. The literature has raised as many questions as it has answered, and it ultimately has failed to produce agreement among scholars or a cohesive narrative to explain how or why the modern framework for shareholder voting rights emerged.
This Article presents an alternative account of transformations in shareholder voting rights that tracks three evolving sets of legal rules. It shows how the voting-rights framework that was cemented by the end of the century—the framework that would go on to define twentieth-century corporate control—was determined by the interrelation of the three. One regulated the shareholder’s right to delegate votes (proxy voting), another set per-share vote allocations, and a third addressed the shareholder’s right to cumulate votes (cumulative voting). The Article shows why these three sets of rights must be understood as coactive and interdependent. It contributes new ideas to the longstanding debate about why American corporate law shifted to the rule of one-share-one-vote and concludes by returning to the present moment, arguing that shareholder voting rights have become newly unsettled through shifts along these same fault lines
Amicus Curiae Brief of Law Professor Suzette Malveaux in Support of Plaintiff’s Opposition to Defendant Ultragenyx’s Motion to Dismiss: \u3cem\u3eLacks v. Ultragenyx Pharmaceutical, Inc.\u3c/em\u3e
Get PDFPlaintiff alleges that Ultragenyx was conferred the benefit of Henrietta Lacks’s cell line, that Ultragenyx knew of this benefit, and that Ultragenyx unfairly retained the benefit without providing payment to the Lacks family. Moreover, Plaintiff contends that this wrongful conduct has been going on for years, within the three-year limitations period and beforehand. Thus, on the face of the complaint, Plaintiff’s unjust enrichment claims would be viable. Alternatively, Plaintiff may proceed on a theory that an unjust enrichment claim does not ripen until an accumulation of wrongful acts has occurred, which pushes accrual within the limitations period
Making Virtual Things
Get PDFPeople value virtual things—such as NFTs—because such assets trigger and satisfy deep-seated narratives of property and ownership. The cause of the recent series of failures to regulate virtual assets, and the resulting crashes, has been a failure to take seriously the ways people perceive and use the assets. Current legal frameworks fail to support buyers’ and users’ expectations of ownership in virtual things they purchase.
Making virtual things is a matter of social construction of value. Virtual things, like real-world things, have value because a community values them for a purpose. It therefore makes no sense to discount how and why people purchase virtual things in favor of regulation based on the misguided search for the technological essence of something. If a Bitcoin is used as money, it is money. If an NFT is valued, bought, and sold as a thing within a community of collectors, the law ought to and inevitably will support that characterization
\u3cem\u3eCaremark\u3c/em\u3e\u27s Butterfly Effect
Get PDFIn 1996, the Delaware Court of Chancery detailed the minimum standard for corporate boards of directors (“board”) with regard to corporate compliance programs and monitoring protocols. The landmark Caremark decision held that directors would not face liability for a breach of fiduciary duties unless they failed to implement a system of controls and compliance, or knowingly failed to monitor that system. In order to bring a successful Caremark claim, plaintiffs must prove that the board operated in bad faith by failing to exercise oversight in a sustained or systemic way. The Delaware Court of Chancery opinion noted that the theory underpinning a Caremark claim is one of the most difficult for plaintiffs to prove. As a result, boards have enjoyed nearly unlimited protection, regardless of events occurring at the company on their watch. However, this longstanding protection has begun to wane in the past four years.
This Article contributes to the analysis of the recent shift in Caremark claims in three ways. First, the Article details the recent evolution of the Caremark standard for corporate compliance required by corporate board members. Second, the Article analyzes how Caremark’s evolution will impact the Directors & Officers (“D&O”) insurance market and what that means for corporate executives. D&O insurance plays a critical role in protecting directors and officers, who have until recently been seemingly beyond the reach of successful shareholder litigation. While the success of bringing a Caremark claim is still very much an uphill battle, the risk calculus has shifted, and this shift is seen in D&O insurance. Finally, the Article discusses the impact of the Caremark standard within current regulatory trends that corporate executives need to continue to monitor. Given the likelihood of increasing regulations in new areas, including environmental, social, and corporate governance (ESG) and cybersecurity, the pressure for corporate compliance and board action will continue to increase. The result: an increase in the number of Caremark claims, further oversight expectations on directors and officers, and additional pressure on D&O insurance coverage