Authors:Grace Thompson Abstract: This Note takes a critical look at Commonsense Consumption Acts and how they are detrimental to the possibility of “Big Food” litigation. The tobacco industry was held accountable through the effective use of tort litigation (commonly referred to as “Big Tobacco” litigation), and the food industry could theoretically be held similarly accountable, but CCAs are preventing the possibility of similar reform. Therefore, in order for health reform to be as effective as tobacco reform, CCAs must be repealed in the states where they exist. Part I of this Note discusses why the food industry needs tort reform. Specifically, it argues that the food industry has engaged in deceitful practices that are directly harming the health of American consumers, just as the tobacco industry did. Class action lawsuits played a vital role in holding the tobacco industry liable for tobacco-related illnesses. If CCAs were removed, class action lawsuits could also make an impact on obesity-related illnesses by holding the food industry accountable. Part II gives an overview of the different CCAs, including the legislative impetus behind their enactment and how they prevent health reform. Part III dives into a variety of foreseeable problems tort reform faces when taking on the powerful food industry, including how litigation against the food industry would differ from the–largely successful litigation against the tobacco industry. Lastly, the Note concludes with the argument that CCAs must be repealed, in order to move toward a healthier, more prosperous America. PubDate: Sun, 25 Feb 2018 18:54:17 PST
Authors:Jonathan Schirmer Abstract: This Note examines the main statutes governing the Outer Continental Shelf (OCS) leasing process, including their interpretation by the courts. The interests of affected states and indigenous people, as well as how courts have minimized these voices will be explored, focusing on the state of Alaska. Finally, this Note argues for statutory reform as well as a change in the leasing process to increase state and indigenous participation. PubDate: Sun, 25 Feb 2018 18:54:14 PST
Authors:Courtney Olson Abstract: During a floor debate in 1976, Representative Henry Hyde explained, “I would certainly like to prevent, if I could legally, anybody having an abortion, a rich woman, a middle class woman, or a poor woman. Unfortunately, the only vehicle available is the [Medicaid] bill.” For a short time after the Supreme Court of the United States established the right to abortion in Roe v. Wade, Medicaid did not distinguish between coverage for abortion and other medical services. That all changed when Congress passed the Hyde Amendment to the Medicaid Act in 1976. This Note will argue that a right to abortion coverage for women who lack the means to access the right can be accomplished not only through the recognition of an intersectional suspect classification but also an interpretation of the Patient Protection and Affordable Care Act (PPACA) as conferring positive rights. In Harris v. McRae, the Court established the Hyde Amendment’s constitutional validity. In doing so, the Court maintained that because Congress did not impinge on a substantive right or purposefully detriment a suspect class through Hyde, the rational relation standard applied. Recognizing a suspect classification that accounts for the intersection of race, sex, and socioeconomic status would be the first step towards triggering a strict scrutiny analysis of Hyde due to the disproportionate impact Hyde has on disadvantaged women of color. Additionally, understanding the PPACA as conferring a positive right to health care could eventually favor a finding of a positive right to abortion coverage, thus changing the Court’s due process analysis in Harris. PubDate: Sun, 25 Feb 2018 18:54:12 PST
Authors:Harold Weston et al. Abstract: One aspect of the problem in trying to align a corporate investment horizon (the time period for return on investment) to that of its shareholders is the enormous range of investor time horizons, which can range from milliseconds to centuries. A second aspect of the problem is whether ownership of shares equates to ownership of the corporation. A third aspect of the problem is that, despite the theories and advocacy of shareholders being owners, based on the agency model of corporate finance first developed in the 1970s, the theory is contrary to corporate law. These three aspects will be developed in this Article to urge that the question of investor time horizons should be largely irrelevant to the corporate investment decisions for publicly-traded corporations. Instead, directors should abide by their corporate-law mandated fiduciary duties to invest and manage the company in the company’s own best interest. This looks more like a conservatorship of the corporation itself and less like a principal–agent relationship. The conservatorship should consider the best interests of the corporation, various classes of shareholders (common and preferred), other investors of capital (debt holders), and other stakeholders. PubDate: Sun, 25 Feb 2018 18:54:08 PST
Authors:Andrew Verstein Abstract: Do investor time horizons lead to inefficient business conduct in the real economy' An extensive finance literature analyzes whether particular practices (e.g., high frequency trading and stock buybacks) lead firms to operate with inefficiently myopic investment horizons, and an extensive legal literature considers the appropriateness of policy interventions. This Article joins those debates by charting the space of possibilities: what might be the causes of problematic time horizons' What solutions are available' One implication of this analysis is that there may be unexplored market-based solutions located on the liability side of investors’ balance sheets. This Article also argues that we should avoid characterizing the time horizon problem in a manner that subtly endorses some contested perspective on the appropriate time horizon. Rather than investigating excessive “short-termism” or “long-termism,” our starting point should be the broader category of “wrong-termism.” PubDate: Sun, 25 Feb 2018 18:54:06 PST
Authors:Lynn Stout et al. Abstract: In this Article, we show how our society can use corporate governance shifts to address, if not entirely resolve, a number of currently pressing social and economic problems. These problems include: rising income inequality; demographic disparities in wealth and equity ownership; increasing poverty and income insecurity; a need for greater innovation and investment in solving problems like disease and climate change; the “externalization” of many costs of corporate activity onto third parties such as customers, employees, creditors, and the broader society; the corrosive influence of corporate money in politics; and discontent and loss of trust in the capitalist system among a large and growing segment of the population. We demonstrate how, to a very significant extent, these problems can be traced to the way shares in business corporations are currently owned, traded, and voted. We also offer a plausible plan for shifting the structure of share ownership, trading, and voting to create a more democratic and sustainable capitalism that allows business corporations to better serve humanity. Our proposal, which envisions developing a new form of institutional shareholder, does not rely either on market forces or government interventions. Rather, it relies on voluntary cooperation and the private ordering of free individuals using modern information technologies. It operates to reduce inequalities not only in wealth and income but also in influence over business corporations. PubDate: Sun, 25 Feb 2018 18:54:02 PST
Authors:Rachelle Sampson et al. Abstract: The rise in quarterly capitalism in corporate America—increased pressure to meet quarterly earnings predictions and cater to shareholder preferences for short-term returns—has gained significant coverage in the business world and popular press in recent years. Increasingly, popular opinion suggests that firms bow to shareholder pressures, taking steps to smooth earnings and boost share prices in the short-term; firms do so by cutting Research and Development (R&D) investment, engaging in extensive cost-cutting, or increasing dividends and share buybacks. Recent estimates at the industry level show that investor discount rates have increased in recent years, supporting the notion that shorttermism is on the rise. However, we do not have evidence at the firm level documenting whether and how market discounting is changing over time or how such discounting differs between firms according to firm behavior and characteristics. A recent article by Sampson and Shi estimates market discounting at the firm level as a proxy for investor time horizons, which not only reveals how time horizons have changed but also how they vary between firms. Below, we discuss some observations on changing investor behavior, followed by a review of the evidence presented by Sampson and Shi. We conclude with a brief evaluation of why increased market discounting suggests that investor time horizons are shortening as well as what this means for firms. PubDate: Sun, 25 Feb 2018 18:53:59 PST
Authors:Frank Partnoy Abstract: This Essay argues that the short-termism debate would benefit from greater clarity and specificity regarding time horizons. I make four points. First, optimal time horizons vary in discernible ways. Second, the potential mismatch between actual and optimal time horizons should generate a range of responses. Third, investors and managers can discern and disclose estimates of actual and optimal time horizons (e.g., using categories such as preconscious, fast conscious, slow conscious, and discounting). Fourth, market participants, policy makers, and scholars should use such estimates to be more precise about time horizons. For example, critics of hedge fund activism could recognize that activists’ time horizons have been in the range of one or more years, instead of simply describing them generically as short-term. PubDate: Sun, 25 Feb 2018 18:53:56 PST
Authors:Jennifer G. Hill Abstract: Shareholder participation in corporate governance and investor activism are topics du jour in the United States and around the world. In the early part of the 20th century, Professors Berle and Means considered that shareholder participation was impossible in the transformed commercial world that they described in The Modern Corporation and Private Property. This was a world characterized by dispersed and vulnerable shareholders, in which owners do not manage, and managers do not own, the corporation. In such an environment, the goal of corporate law became one of protecting shareholder interests rather than providing shareholders with participation rights. The structure of capital markets and profile of shareholders in the United States today is dramatically different from that time. The rise of institutional investors challenged the idea that the only possible paradigm in corporate law is one of shareholder protection. Shareholder participation in corporate governance is not only feasible but a contemporary reality. As this Article demonstrates, however, there are competing narratives about shareholders and their right to participate in corporate governance around the world. Although a negative view underpins much recent debate in the United States, a diametrically opposite view of shareholder power and activism has gained traction in many jurisdictions outside the United States. This Article focuses on one manifestation of this positive view of shareholders, namely shareholder stewardship codes, which originated in the United Kingdom following the 2007–2008 global financial crisis and are now proliferating throughout the world. These competing narratives concerning the role of shareholders in corporate governance have significant regulatory implications. In particular, the narratives pose challenges to regulators, who attempt to differentiate between “good activists” and “bad activists.” PubDate: Sun, 25 Feb 2018 18:53:54 PST
Authors:Claire A. Hill Abstract: Economics famously treats market actors as homogeneous. People are homo economicus, rational self-interested maximizers of their own utility. So far, so good, notwithstanding supposed behavioral “deviations” from rationality (more on those later). That people can view their own utility very differently from one another is recognized in theory, but not so much in practice. Also not sufficiently recognized is the extent to which people’s views of their own utility reflect their theories of who they are and how the world works, and that they hold such views and theories not just atomistically, but also collectively—that is, socially. PubDate: Sun, 25 Feb 2018 18:53:50 PST
Authors:Jim Hawley et al. Abstract: The heavy shadow of modern portfolio theory (MPT) has had a massive impact on everything from market structure, investment philosophy, and investor behavior, to the research that examines those disciplines. Researchers believe that they are casting light onto investment issues (including, for this purpose, specifically investor time horizons), but generalized acceptance of MPT allows it to continue to darken what should be enlightened. PubDate: Sun, 25 Feb 2018 18:53:47 PST
Authors:Elisabeth de Fontenay Abstract: Critiques of specific investor behavior often assume an ideal investor against which all others should be compared. This ideal investor figures prominently in the heated debates over the impact of investor time horizons on firm value. In much of the commentary, the ideal is a longterm investor that actively monitors management, but the specifics are typically left vague. That is no coincidence. The various characteristics that we might wish for in such an investor cannot peacefully coexist in practice. If the ideal investor remains illusory, which of the real-world investor types should we champion instead' The answer, I argue, is none. The corporate finance ecosystem evolves at such a rapid pace that interventions specifically designed to encourage particular types of investors are increasingly likely to be ineffective or even counterproductive: we are destined to place our bets on the wrong horse, time and again. To illustrate the difficulty, this Article briefly sketches the evolution of three types of shareholders frequently advanced as exemplars based on their time horizons: major mutual fund groups, activist hedge funds, and private equity funds. Based on their behavior to date, there is little support for policies aimed either at favoring or penalizing such investors’ participation in the capital markets generally, and corporate governance specifically. PubDate: Sun, 25 Feb 2018 18:53:44 PST
Authors:Caroline Flammer Abstract: It is often argued that corporations are too focused on the short term (i.e., they are “short-termist”). For example, during the 2016 U.S. presidential campaign, candidate Hillary Clinton urged companies to escape the tyranny of short-termism. Similarly, in the recent policy debate in the United Kingdom on the need to reform corporate governance and executive compensation, Bank of England’s Chief Economist Andy Haldane stated that “[e]xecutive pay is a matter of profound and legitimate public interest. Pay practices can encourage short-term behaviour in ways which harm both firms and the economy.” In this context, a recent article by Flammer and Bansal (FB) published in the Strategic Management Journal argues that long-term executive compensation can help mitigate short-termism. More precisely, FB show that the (quasi-random) adoption of long-term executive compensation leads to an increase in firm value, an increase in long-term profits, and is conducive to long-term investments such as investments in innovation and stakeholder relationships. In this Article, I briefly review the core arguments and main results of FB. PubDate: Sun, 25 Feb 2018 18:53:41 PST
Authors:K.J. Martijn Cremers et al. Abstract: In the corporate governance debate, the short-term versus longterm contention has grown into perhaps today’s most controversial topic. In this debate, descriptions of institutional investors tend to present a dichotomic nature. These investors are alternatively portrayed as homogenously short-termist or as consistent “forces for good,” focused on targeting underperforming companies. This Article moves beyond this dichotomy. It shows empirically that aggregate institutional investor behavior presents nuances that depend on a variety of factors, including individual firm characteristics, institutional ownership levels, and institutional propensity toward activism. PubDate: Sun, 25 Feb 2018 18:53:37 PST
Authors:William A. Birdthistle Abstract: In this Article, I consider possible approaches that attempt to improve the plans through which millions of Americans tend to their life savings. I begin by considering the inadequacies of our current system of defined contribution accounts and then address two possible alternatives: the first being a federal account universally available to Americans based largely on the model of the Thrift Savings Plan; the second being a system of statebased retirement accounts like those that have already been developed in a handful of states. Though I conclude that a single, federal plan would be superior, either alternative approach would be an improvement over our current system. PubDate: Sun, 25 Feb 2018 18:53:34 PST
Authors:Owen D. Jones Abstract: I want to start off with what I consider to be the statement of the problem. As I understand it, you’re concerned that the time horizons for maximizing the value of an investment vary among individuals in surprisingly wide, imperfectly predictable, and often seemingly irrational ways. And, if I understand your target here, the idea is that a deeper understanding of the causes of this variation might aid in the planning and design of legal and corporate policies. To jump into this, I’m going to give a little bit of an introduction about behavioral biases, and something that I’ve called “time-shifted rationality.” I’ll then back up to provide some basic context about where behavior comes from, from a brain science perspective, and then talk about two key things. First: Why does the brain discount time' Second: How does the brain discount time' I’ll then spend a few minutes, toward the end, talking about prospects for interdisciplinary consilience, in furtherance of a more accurate and robust model of time discounting. PubDate: Sun, 25 Feb 2018 18:53:32 PST
Authors:Anne Tucker Abstract: What is an optimal investment time horizon—for institutions, individual shareholders and corporations' This question can evoke emotional, ideological, and theoretical responses. The answers usually deeply entrenched debates over the fundamental roles of markets versus regulation and between the appropriate loci of corporate power: the board of directors versus the shareholders. Too long-term and it is myopia; too near-term and is it short-termism. Neither label is inconsequential, so the debates are not tepid, academic, or marginal. PubDate: Sun, 25 Feb 2018 18:53:29 PST
Authors:Kara M. Van Slyck Abstract: This Note seeks to address the issues concerning the FDA’s approval of genetically modified salmon for consumption, arguing that the FDA did not properly vet AquAdvantage salmon, as well as relied on inappropriate criteria in their approval of its market use. Part I provides a brief history of AquAdvantage salmon’s introduction to U.S. markets and the legal actions taken in response to the FDA ruling. Part II discusses the statutes and regulations fundamentally relevant to GE products, as well as a critique of the way each regulation was used to approve AquAdvantage. Part III offers a comparison to the European Union’s methods of tackling GE regulation and details why the EU decided to ban AquAdvantage salmon. Part IV offers an analysis of the current issues surrounding the production of AquAdvantage salmon and explores the potential consequences following the FDA ruling. This Note concludes with a suggestion to parallel the U.S. regulatory system to the more succinct and rigorous process the European Union relies on to regulate GE animals, a system that operates under the precautionary principle. This Note will recommend that the FDA adhere to the crucial precautionary principle to ensure the effects of a new GE product, such as AquAdvantage, are safe for the environment before the effects of an unknown product cause irreversible damage. PubDate: Sun, 22 Oct 2017 09:17:48 PDT
Authors:Drew Sena Abstract: Individuals who have lost everything—their homes, jobs, and dignity—are often forced to live on the street. Those with no reasonable alternative can find themselves relying on the generosity of others just to survive. In response, citizens petition, legislatures enact, and officers enforce laws that criminalize signs of visible poverty. Municipalities have made considerable attempts to remove visible poverty from their cities by drafting legislation that disproportionately punishes people experiencing homelessness. This Note focuses on a particular subset of such legislation, laws that criminalize panhandling. Section I of this Note provides an overview of the First Amendment and the protection of free speech. Section II provides a brief history of panhandling laws generally and a description of the path to second generation aggressive panhandling laws. Section III illustrates the language and structure of aggressive panhandling laws in Washington State, using Seattle and Tacoma’s panhandling ordinances as examples. Section IV provides a three-part critique of aggressive panhandling laws. In response to the critique, this Note concludes by proposing that legislatures either repeal or substantially modify their panhandling laws. First, legislatures should repeal provisions that provide vague, perception-based components that criminalize panhandling in a manner that causes “reasonable fear” or “compulsion.” Such provisions fail to provide reasonable notice of what conduct is prohibited and cater to established societal biases and prejudices about people experiencing homelessness and poverty. Second, legislatures should repeal time, place, and distance restrictions on panhandling that resemble provisions courts have already invalidated as unnecessary to serve a compelling public safety interest. Third, legislatures should repeal panhandling provisions that restrict conduct already prohibited by existing laws that cover the same conduct without restricting protected speech. Panhandling laws are, at their very core, content-based discriminations on protected speech. Accordingly, legislatures and readers are encouraged to question whether these strategic, constitutionally suspect components of aggressive panhandling laws are justified. PubDate: Sun, 22 Oct 2017 09:17:45 PDT
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