The University of Pennsylvania Law Review Online presents the second installment of “Independent and Accountable Courts in Perilous Times: Perspectives from the Academy, the Bench, and the Bar.” The series continues with Professor Charles Geyh’s response, “Considering Reconsidering Judicial Independence.” Professor Geyh draws on Professor Burbank’s idea that judicial independence and judicial accountability are merely “two sides of the same coin” and goes further, positing that the two‐sided coin and its expected cyclical return to equilibrium is a “Hallmark after‐school special” version of the reality, and that curbing the erosion of the public perception of the judiciary will take more than reliance on that cycle perpetuating.

Primarily, Professor Geyh shows that in order to slow and stop the downward spiral, we must wean ourselves off the “antiquated” approach to judicial independence and accountability—the rule‐of‐law paradigm—by turning toward of a more robust “legal culture” paradigm which takes into account the fact that, indeed, judges’ decisions are necessarily subject to extra‐legal influences.

Political campaigns can get ugly. Today's political candidates must be prepared for mudslinging targeted not just at their professional lives, but also at their private lives, appearance, genealogy, religion, and countless other minutiae. The media has intensified its coverage of negative political advertising in recent years, and this trend has prompted calls for more regulation to deter false statements in political advertising.

Some states have responded. Currently, at least eighteen states have statutes on the books that punish false political statements with civil or criminal penalties. But recent litigation has cast doubt on the statutes' validity: Washington's statute was held unconstitutional by an intermediate Washington court in 2005, and Susan B. Anthony List v. Driehaus (handed down by the Supreme Court in 2014) paved the way for invalidation of Minnesota's and Ohio's statutes.

With the 2016 presidential election on the horizon, will other states' statutes fall in the wake of Susan B. Anthony List? Given the Supreme Court's other recent speech jurisprudence, the answer is probably yes.

Government‐mandated disclosures and warnings aimed at promoting public health are ubiquitous. Alcoholic beverage labels bear government warnings against alcohol consumption during pregnancy. Both prescription and over‐the‐counter drugs must comply with extensive Food and Drug Administration (FDA) labeling requirements. Automobiles carry mandatory safety rating labels. Cigarette packages have included warnings about the dangers of smoking since 1965. Even chain restaurants must now follow the federal nutrition labeling requirements that have applied to food packaging for two decades. Warnings and disclosure requirements are likely to become even more widespread given President Obama's 2011 executive order encouraging administrative agencies to use these “flexible approaches” wherever “relevant, feasible, . . . consistent with regulatory objectives, and . . . permitted by law.”

Despite their widespread use as a regulatory tool, government‐mandated warnings and disclosures are not immune from legal challenge. In the 2012 case of R.J. Reynolds Tobacco Co. v. FDA, the U.S. Court of Appeals for the D.C. Circuit invalidated FDA's graphic cigarette warnings on First Amendment grounds. The tobacco manufacturers' challenge forced the D.C. Circuit to wade into unchartered waters. Although there is a long line of Supreme Court cases addressing First Amendment challenges to commercial speech restrictions (e.g., advertising bans), the Court has heard only two challenges to commercial speech disclosure requirements, neither involving government‐mandated warnings. Further, while the Court has been clear that it reviews commercial speech restrictions under the Central Hudson intermediate scrutiny test, it has applied a standard akin to rational basis review when examining purely factual disclosure requirements targeting consumer deception, without explaining in what other circumstances rational basis review would apply. Thus, faced with a novel question of law, the R.J. Reynolds court concluded that the graphic cigarette warning requirements did not merit rational basis review protection, because (1) they did not seek to cure consumer deception and (2) they were not purely factual and uncontroversial warnings, but rather “admonitions: ‘Don’t buy or use this product.'” After deciding that Central Hudson intermediate scrutiny was the correct standard of review, the court held the warnings unconstitutional because FDA failed to produce sufficient evidence—indeed, “failed to present any data”—that the warnings would directly and materially advance its goal of reducing smoking rates. Although most commentators expected the case to go to the Supreme Court, FDA instead withdrew the proposed images and said it would issue revised graphic warnings.

To the extent that R.J. Reynolds could be read as holding that only commercial speech mandates that are both purely factual and designed to correct consumer deception receive rational basis review, it was overruled by the 2014 en banc decision of the D.C. Circuit, American Meat Institute v. USDA. Aligning the court's position with that of other circuits, the D.C. Circuit held in American Meat Institute that Zauderer v. Office of Disciplinary Counsel, the first Supreme Court case to apply rational basis review to a government‐mandated disclosure requirement, extended “beyond problems of deception”—and thus applied to the U.S. Department of Agriculture (USDA) country‐of‐origin disclosures at issue in the case.

Given that the D.C. Circuit is responsible for reviewing many federal agency regulations, American Meat Institute marks a significant victory for regulators. A contrary holding—one limiting the protection of Zauderer rational basis review to compelled speech aimed at curing deception—would have threatened to unsettle the current regulatory regime, and would have particularly threatened mandates aimed at promoting public health. These disclosure requirements often do not target potentially deceptive commercial speech, and they rarely are supported by the level of evidence R.J. Reynolds deemed necessary to satisfy Central Hudson intermediate scrutiny. (These evidentiary difficulties arise in part because many public health problems are complex and cannot be eradicated by a disclosure requirement alone.) While R.J. Reynolds raised important questions about the effectiveness of disclosure requirements, the First Amendment should not be an insurmountable obstacle when the commercial speaker's constitutionally protected interest is, as the Court has said, “minimal” and the government interest is substantial.

Although American Meat Institute lessened the blow R.J. Reynolds dealt to regulators, both decisions left open important questions about the First Amendment treatment of government‐mandated warnings that are neither “purely factual and uncontroversial” disclosures nor overt government‐sanctioned opinions, and about whether graphic cigarette warnings belong in this middle ground. R.J. Reynolds only addressed the constitutionality of the nine warnings before it, and left unanswered whether another graphic warning depicting the negative health consequences of smoking could be constitutional. But, in characterizing FDA's graphic warnings as “a much different animal” than the mandated statements to which the Supreme Court has previously applied rational basis review, and in viewing them as “intended to evoke an emotional response, or, at most, shock the viewer into retaining the information in the text warning,” R.J. Reynolds strongly implied that no graphic cigarette warning could ever receive rational basis review protection. Not only did the court seem to demand Central Hudson intermediate scrutiny review for all government‐mandated graphic warnings, it created an overly burdensome intermediate scrutiny test by misapplying the Administrative Procedure Act's (APA) “substantial evidence” standard to its First Amendment analysis, and by failing to look beyond the Court's abstract statements about Central Hudson to its application of the test.

Part I of this Note outlines the Supreme Court's commercial speech jurisprudence. It explains the Court's differential treatment of commercial speech restrictions and compelled commercial speech, and it outlines the open question of whether Zauderer, and its accompanying rational basis review protection, is limited to mandates aimed at correcting deception. Part II discusses the various interpretations of Zauderer advanced by circuit courts. It defends the broader interpretation of Zauderer adopted by the First Circuit, Second Circuit, and, most recently, the D.C. Circuit in American Meat Institute, and it criticizes the narrow interpretation articulated in R.J. Reynolds. Part II likewise outlines the doctrinal support and policy justifications for a broader interpretation of Zauderer, with particular focus on the importance of recognizing the government's interest in promoting public health as worthy of rational basis review. Part III then looks at how FDA could issue revised graphic cigarette warnings that would pass constitutional muster. It examines the type of graphic cigarette warnings that could potentially merit review under the Zauderer standard, argues that R.J. Reynolds misapplied the Central Hudson intermediate scrutiny standard, suggests a better view of Central Hudson as applied to graphic cigarette warnings, and describes post‐Reynolds scientific research supporting the effectiveness of graphic warnings.

In February 2011, Vice Chancellor Laster held in In re Del Monte Foods Co. Shareholders Litigation that the Del Monte Foods board of directors breached its duty of care to the Del Monte stockholders by failing to identify and guard against its investment banker Barclays' conflicts in a merger transaction with Blue Acquisition Group. The court identified four instances of misbehavior throughout the sale process: (1) Barclays met secretly with potential bidders to solicit interest in acquiring Del Monte before the company was up for sale, and prior to being hired as the company's sell‐side advisor; (2) once the company was up for sale, Barclays facilitated a relationship between two competing bidders in violation of confidentiality agreements between the bidders and the company; (3) Barclays planned to and in fact did obtain the company's permission to provide the acquirers' financing; and (4) subsequent to the approval of the merger agreement, Barclays conducted the go‐shop despite an agreement to finance the acquirers. And how did the Del Monte board breach its duty? It didn't stop Barclays.

What could the board have done differently? The court explained that, despite having relied in good faith on Barclays' independence and expertise, the Del Monte board breached its duty of care by failing to realize that Barclays had pieced together a deal resulting in its earning more than forty million dollars in fees from its dual role. The board, according to the court, should have recognized that Barclays suffered from a conflict of interest as it stood on both sides of the transaction by providing both sell‐side advice and buy‐side financing. I argue in this Note, however, that Barclays, and indeed all sell‐side advisors, face a serious conflict of interest in standing on even one side of the transaction—by receiving success fees contingent on the consummation of a merger. For that reason, it is unclear whether the Del Monte decision imposed on boards of directors a duty to identify conflicts that are more serious than those ordinarily accepted in the investment banking industry, or merely a duty to fully disclose all conflicts. But considering the facts of Del Monte, I argue that the possibility of obtaining permission to provide buy‐side financing is just another conflict shared by all full‐service investment banks, and that additional disclosure would not have changed the outcome of the case. As a result, I conclude that Delaware courts should either (1) accept that investment bankers are necessarily conflicted when working on the sale of a corporation or (2) require a fundamentally different fee structure for investment bankers working on such a sale, and ultimately advocate for the elimination of success fees and staple financing.

This Note proceeds as follows: In Part I, I describe investment banking services provided in the sale of a corporation and common fee structures used in those services. In Part II, I contextualize Del Monte with respect to relevant case law, and in Part III, I describe the facts of the case. In Parts IV and V, respectively, I present the claims brought against the Del Monte board as well as the Delaware Court of Chancery's response to those claims. Part VI describes the consequences of the court's holding for Del Monte and Blue Acquisition Group. Finally, in Part VII, I argue that Barclays' conflicts were no more significant than the conflicts that exist for nearly all full‐service investment banks, and that, for this reason, additional disclosure would not have affected the outcome. I do make the caveat that the Del Monte board did breach its duty of care by permitting Barclays to conduct the go‐shop after Barclays had committed to provide the acquirers' financing. Finally, I analyze the standard for investment bank conflicts going forward and advocate for eliminating success fees and staple financing altogether.