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What Twenty-First-Century Free Speech Law Means for Securities Regulation
Get PDFSecurities law has long regulated securities-related speech--and until recently, it did so with little, if any, First Amendment controversy. Yet the antiregulatory turn in the Supreme Court\u27s twenty-first-century Free Speech Clause doctrine has inspired corporate speakers\u27 increasingly successful efforts to resist regulation in a variety of settings, settings that now include securities law. This doctrinal turn empowers courts, if they so choose, to dismantle the securities regulation framework in place since the Great Depression. At stake are not only recent governmental proposals to require companies to disclose accurate information about their vulnerabilities to climate change and other emerging risks, but also longstanding governmental efforts to inform and protect investors while serving broader public interests.
This Article takes seriously this threat to the securities law framework, and defends that framework\u27s constitutionality. It describes why and how securities law regulates speech to inform and protect investors--functions that also achieve public regarding goals by facilitating stable and efficient markets, encouraging corporate accountability, and ameliorating the systemic economic risks of market collapse. As we\u27ll see, key differences between securities and other goods and services leave the securities market especially vulnerable to asymmetries of information, thus intensifying the importance of accurate securities-related information to investors as listeners. The Article then maps this securities law framework onto First Amendment law, demonstrating why and how this regulatory framework aligns with Free Speech Clause theory and doctrine. Key to this alignment are securities law\u27s listener-centered functions.
More specifically, this Article makes the case for identifying securities-related speech as a category of speech unprotected by the First Amendment. The Court has long considered the regulation of certain categories of speech as exempt from First Amendment review, and it has more recently announced a backwards-facing methodology for determining these categories that turns on identifying a longstanding regulatory tradition of restricting speech within a category without triggering traditional First Amendment scrutiny. We can trace a lengthy regulatory tradition of responding to the informational asymmetries endemic to securities markets by prohibiting companies from making false and misleading statements and by requiring them to make certain accurate disclosures.
Securities law remains faithful to this tradition when it regulates securities-related speech to serve these listener-centered functions. For this reason, securities law stays consistent with this regulatory tradition (and thus regulates within a category of unprotected speech) when it responds to the realities that the risks to investors change over time, and that investors evaluate those risks through a variety of methodologies. Think, for instance, of disclosures that inform investors about risks and methodologies that were unknown to, or unrecognized by, past generations--think of asbestos and fentanyl, and also of climate change and cybersecurity. That new risks to investors will arise (as well as new investor approaches to evaluating those risks) is foreseeable, even if the specific content of those risks and methodologies is not. In other words, today\u27s securities laws address problems of informational asymmetries that are far from new. So too do they deploy a set of solutions, like mandatory disclosures, to those problems that are also far from new.
This Article asserts that the securities market is sufficiently distinct from other markets in its susceptibility to information asymmetries to justify recognizing securities related speech as its own category of unprotected speech. Nevertheless, it also considers the possibility that the Court will instead turn to an entirely separate doctrine for considering the constitutionality of securities law: the very different rules that apply to the government\u27s regulation of commercial speech. Here too securities regulation\u27s listener-centered functions do important First Amendment work, as much of the securities law framework satisfies review under commercial speech doctrine so long as we continue to tether commercial expression\u27s constitutional protection to that expression\u27s capacity to inform listeners\u27 decisionmaking
Inside Out (or, One State to Rule Them All): New Challenges to the Internal Affairs Doctrine
No full textThe internal affairs doctrine provides that the law of the organizing state will apply to matters pertaining to a business entity\u27s internal governance, regardless of whether the entity has substantive ties to that jurisdiction. The internal affairs doctrine stands apart from other choice of law rules, which usually favor the jurisdiction with the greatest relationship to the dispute and limit parties\u27 ability to select another jurisdiction\u27s law. The doctrine is purportedly justified by business entities\u27 unique need for a single set of rules to apply to governance matters, and by the efficiency gains that flow from allowing investors and managers to select the law that will govern their relationship.
The contours of the internal affairs doctrine have never been defined with precision, but several recent developments have placed new pressures on the doctrine\u27s boundaries. These include: (1) states\u27 attempts to regulate the governance structures of businesses that operate within their borders in order to benefit non-investor constituencies, such as diversity requirements for corporate boards; (2) the growing prevalence of LLCs, which-because of their flexible, contractual structure-blur the lines between investment relationships and employment relationships; (3) the increasing use of shareholder agreements, which are governed by contractual rules, and not infrequently the rules of a jurisdiction other than the one in which the business entity is organized; and (4) jurisprudence permitting the charters and bylaws of Delaware corporations to include provisions that govern litigation based on non-Delaware law.
This Article explores modern challenges to the coherence of the internal affairs doctrine and recommends alternatives
Oppression in American, Islamic, and Jewish Private Law
Get PDFAmerican, Islamic, and Jewish law all limit the enforcement of private law agreements incases of oppression and exploitation. But each system uses a different justification. The common thread among the three legal systems is the opposition from jurists to enforce contracts with a fundamental aspect of oppression. The reasoning for preventing oppression within the law is distinct to each legal system. The American legal system roots the justification in preserving free will and ensuring actual consent to contract. Islamic l provides justifications based on the divine vision for an equitable and just society articulated in the Quran. Jewish law argues for such protections based on the halachic duties of caret hat everyone is obligated to uphold toward their fellow humans.
While each system seeks to protect vulnerable parties from oppression and exploitation, they all have weaknesses. This Article, for the first time, puts these legal traditions into conversation with each other to identify how the strengths of each system can create more robust protections within the other legal traditions. Specifically, this Article identifies the development of economic duress in American law, the subjective standard of Islamic law, and the societal duties of Jewish law as providing rich elements of how legal systems can develop to ensure private law is not used as a means of oppression. The Article concludes by applying each doctrine to demonstrate the way in which the juristic chemistry of comparative legal application can lead to a more just society for all
All the News that\u27s Fit to be Identified: Facilitating Access to High Quality News through Internet Platforms
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Regulating the Risks of AI
Get PDFCompanies and governments now use Artificial Intelligence (“AI”) in a wide range of settings. But using AI leads to well-known risks that arguably present challenges for a traditional liability model. It is thus unsurprising that lawmakers in both the United States and the European Union (“EU”) have turned to the tools of risk regulation in governing AI systems.
This Article describes the growing convergence around risk regulation in AI governance. It then addresses the question: what does it mean to use risk regulation to govern AI systems? The primary contribution of this Article is to offer an analytic framework for understanding the use of risk regulation as AI governance. It aims to surface the shortcomings of risk regulation as a legal approach, and to enable readers to identify which type of risk regulation is at play in a given law. The theoretical contribution of this Article is to encourage researchers to think about what is gained and what is lost by choosing a particular legal tool for constructing the meaning of AI systems in the law.
Whatever the value of using risk regulation, constructing AI harms as risks is a choice with consequences. Risk regulation comes with its own policy baggage: a set of tools and troubles that have emerged in other fields. Risk regulation tends to try to fix problems with the technology so it may be used, rather than contemplating that it might sometimes not be appropriate to use it at all. Risk regulation works best on quantifiable problems and struggles with hard-toquantify harms. It can cloak what are really policy decisions as technical decisions. Risk regulation typically is not structured to make injured people whole. And the version of risk regulation typically deployed to govern AI systems lacks the feedback loops of tort liability. Thus the choice to use risk regulation in the first place channels the law towards a particular approach to AI governance that makes implicit tradeoffs and carries predictable shortcomings.
The second, more granular observation this Article makes is that not all risk regulation is the same. That is, once regulators choose to deploy risk regulation, there are still significant variations in what type of risk regulation they might use. Risk regulation is a legal transplant with multiple possible origins. This Article identifies at least four models for AI risk regulation that meaningfully diverge in how they address accountability
Climate Change and Modern State Common Law Nuisance and Trespass Tort Claims
Get PDFThis Comment examines the use of state common law tort claims to address climate change. The aim of this work is not to provide an in-depth examination of these issues, but rather to provide a contextualized and comprehensive overview of some of the most important issues in this field using modern cases actively being litigated. This Comment comes to the conclusion that the future of common law nuisance and trespass claims in the context of climate change is, for now, unclear. Given the national and global implications of climate change, courts may find that isolated states cannot set binding precedents and abate climate change alone. Yet this outcome is hardly assured, and would be a mistake, because state common law claims may potentially help states prepare for climate change in useful ways.
This Comment is divided into four Parts. Part I seeks to explain nuisance and trespass tort claims more generally before explaining their use in the context of air pollution. Part II discusses how the courts have treated state common law pollution tort claims in light of the federal environmental regulatory scheme. Part III discusses how court cases featuring common law claims against fossil fuel producers in the last few years have made their way through the courts and the current status and outcomes of these efforts. Finally, Part IV seeks to collect the lessons gleaned from the preceding Parts to discuss the utility of these actions, their downsides, their benefits, and their potential futures
