Volume 167

Essays

The debate over staggered boards is heating up, largely because of the appearance of novel studies—including our own prior research—that challenge the results of earlier works documenting a negative impact of staggered boards on firm value. Meanwhile, a third way has appeared in this debate. In a recent article in the University of Pennsylvania Law Review, Settling the Staggered Board Debate, Professors Amihud, Schmid, and Davidoff Solomon (ASDS) purport to settle this debate, arguing that neither the position in favor or against staggered boards “has empirical support and, on average, a staggered board has no significant effect on firm value.”

This Essay addresses the ASDS study and shows that the staggered board debate is very much alive rather than settled. It does so in two ways. First, it shows that our prior result that the adoption of a staggered board is associated with a positive increase in firm value is robust to the criticism in ASDS. Second, this Essay shows that ASDS’s conclusion that staggered boards have no significant association with firm value is based on statistical tests that have “poor power,” that is, tests that are unlikely to find a robust association even if such association is actually supported by the data. In contrast, the tests that indicate that our earlier results are robust have both much better statistical power and good “size,” making it unlikely that we can find a positive association between staggered boards and firm value if no such association exists in the data.

In July 2011, Georgia executed Andrew DeYoung for murdering his parents and sister. Pursuant to a motion to preserve evidence brought by counsel for Gregory Walker, another man on Georgia’s death row, DeYoung’s execution produced the only existing video of a lethal injection in the United States, which remains under seal in a Georgia courthouse. This effort to record an execution runs against the historical trend of making executions less visible by bringing them inside prison walls and limiting eyewitnesses. Unlike similar cases, the successful motion to preserve DeYoung’s execution and autopsy on video did not litigate the public’s right to see executions; it instead argued that visual evidence of a botched execution was necessary to support another condemned man’s Eighth Amendment claim.

In September 2017, an American citizen known as John Doe, who had been fighting for ISIL in Syria, was turned over to the American military. With the support of the ACLU, he challenged his detention and filed a habeas petition in the District Court of the District of Columbia. Faced with the prospect of defending in court its contention that the fight against ISIL was authorized by either Congress or the President’s inherent constitutional authority, the government elected to release an ISIL fighter it had been holding in military custody in Iraq.

While many factors likely played into this decision by the government, the significant risk of defeat in the courts was almost certainly a major one. This Comment seeks to address the full scope of the justifications put forward for the fight against ISIL and evaluate the likely outcome the government would have considered if it had to defend its justification for the war against ISIL in court.

Patent trolls account for most patent assertions and are often blamed for the increased costs of patent litigation. Congress and the courts have tried to wrangle the abusive practices of trolls. Through a post‐grant review system, Congress tried to combat the growing litigation costs by streamlining invalidity challenges. The Supreme Court has also tackled the patent‐troll problem in seminal remedy and venue cases, hampering trolls’ ability to get injunctions and use certain venues. Yet the problem persists. Although Congress and federal courts recognize and sometimes try to alleviate the patent‐troll problem, what can states do to protect small‐ and medium‐sized businesses from these pesky trolls? For now, probably nothing. The Federal Circuit, through a preemption analysis influenced by the First Amendment’s Petition Clause, often invalidates state laws that could regulate the problem. Still, states continue to try: most states have passed statutes regulating demand letters asserting patent infringement. These state anti‐patent laws’ goal is to protect companies and consumers from patent trolls. Regardless of whether the current state anti‐patent laws will effectively deter egregious patent‐troll behavior, the Federal Circuit’s current preemption doctrine doesn’t seem to let states promote a legitimate state interest— protecting businesses from bad‐faith behavior so that the businesses can innovate.

But is the Federal Circuit properly reading Supreme Court precedent on preemption and the Petition Clause? Or are they unnecessarily developing a rigid rule to help ex ante patentholder decisionmaking? As this Comment argues, even though the Federal Circuit has improperly morphed the Noerr test into conflict preemption and doesn’t effectively analyze whether Noerr applies to prelitigation communication and non‐antitrust claims, the Federal Circuit’s results aren’t far off. There’s good reason for petition immunity to apply to prelitigation activity, like demand letters, but the analysis should be separate from conflict preemption. It turns out that the Supreme Court’s rigid approach to the sham exception is partly to blame.

This Comment makes three contributions. The first contribution is putting a state anti‐patent law through a full implied‐preemption analysis in accordance with Supreme Court precedent. The second contribution is giving and applying a proper framework to determine whether the Petition Clause applies to prelitigation communication and non‐antitrust claims. The third contribution is suggesting a flexible petitioning‐immunity framework that will leave states room to regulate patent‐troll demand letters.

Responses

Bankruptcy scholars spend too much time thinking about distributional norms and not enough assessing the impact of bankruptcy rules on the quality of governance in Chapter 11. That, in short, is the thesis of The Bankruptcy Partition, the contribution of Professors Baird, Casey, and Picker to this symposium. Of course, the authors being who they are, the Article is about much, much more. This brief response seeks to draw out some of the article’s themes and, in the last Part, to suggest an approach to thinking about the nature of the bankrupt firm that could deepen and extend a conversation the authors usefully begin.

In his book, The Logic and Limits of Bankruptcy Law, Thomas Jackson asserts that bankruptcy law should approximate the bargain creditors would strike at the initiation of the firm (T1) regarding the possibility that the firm might later fail and default on its debts (T2). Jackson reasons that the firm’s creditors would choose a collective remedy that limits the power of individual creditors to force an inefficient liquidation. They would agree to stop the race of diligence.

In his thoughtful and provocative contribution to this symposium, The Creditors’ Bargain Revisited, Barry Adler asks whether, in the current world of finance and bankruptcy, creditors would choose the same collective remedy? His answer is, “No.” As he sees it, creditors would prefer the unfettered right to exercise their negotiated remedies. Barry offers three pieces of evidence: (1) sophisticated creditors frequently say that they would prefer to opt out of collective bankruptcy in favor of individual collection; (2) creditors frequently seek to adopt bankruptcy remote structures such as securitization through special purpose vehicles to avoid the bankruptcy process; and (3) blanket (often second) lien financing is frequently used by undersecured creditors to control and implement an all asset sale. Instead, he posits his preferred, noncollective, approach to insolvency: an express bargain based in creditor autonomy, or as he puts it, “a contractual alternative to bankruptcy.”

My response proceeds in three steps. First, I channel Inigo Montoya from The Princess Bride to suggest that the “Creditors’ Bargain” does not mean what Barry thinks it means. Second, I situate Barry’s contractualism in relation to the alternate “collective” theories of bankruptcy value distribution: the relativism of Baird and Casey; and a more rigorous version of the creditors’ bargain articulated by me and Melissa Jacoby in previous work. Third, I argue for the normative superiority of the collective approach, both for its fidelity to the Creditors’ Bargain heuristic and because of its consistency with a broader set of corporate governance norms that seek to encourage adequate capitalization and risk internalization.

Joseph Fishman and Deepa Varadarajan address a critical question in their new article, Similar Secrets: should trade secret law prohibit substantially dissimilar uses of trade secret information by those who took that information through improper means or in violation of a duty of confidentiality to the information’s owner, particularly when those dissimilar uses result in innovative new pursuits of high social value? Under current doctrine such an action would likely lead to a viable claim of trade secret misappropriation. But should this type of “retooling” really be discouraged by trade secret law?

This Response shows that the article’s thesis—that trade secret law should imitate copyright law’s willingness to permit substantially dissimilar uses of content—conflicts with trade secret law’s fundamental purpose: to protect the integrity of secret information. Whereas Fishman and Varadarajan have turned to copyright law for help, it makes more sense to focus on improving the doctrines we already have. Improving existing doctrines will do more to ameliorate concerns about hindering innovative new uses, while maintaining trade secret law’s fundamental goals.

Comments

Sharing-economy companies vigorously fight any suggestion that their workers are employees rather than independent contractors. The arguments on which they rely vary, including the heightened flexibility for workers that their platforms provide, as well as contending that they represent a form of supplemental income instead of full-time work. Academics and worker advocates alike believe that these companies currently misclassify employees as independent contractors in order to exploit them. Others argue these companies cannot even afford to treat their workers as employees and pay them at least minimum wage. The debate around the employment status of sharing-economy workers largely concentrates on the financial aspects of the issue. Yet, another critical question looms in the background: is it even logistically feasible to give platform workers the rights that come with employee status? This Comment will focus primarily on one aspect of this question: Are workers, platforms, and the government in a position to exchange the information needed to enforce employment rights? In particular, are Uber and its drivers capable of providing the information to the government and each other that would allow for the enforcement of wage- and-hour laws in court?
In the context of domestic criminal surveillance, law enforcement agencies have historically relied on the practice of obtaining user information from traditional third-party intermediaries in order to uncover incriminating evidence on their true targets. For decades, those intermediaries were phone companies, and the actual targets were the individuals who used those companies’ services to communicate. Over time, this practice, which implicates both privacy and speech rights, has become more prevalent—and arguably more problematic—in the online world, where there are now a growing number of intermediaries collecting staggering amounts and kinds of user information. But while it appears that the government can, at least for now, constitutionally access communications held by intermediaries without probable cause thanks to the Fourth Amendment’s controversial third-party doctrine, the Stored Communications Act (SCA), which was enacted in 1986, attempts to restore by statute certain protections to individuals’ right to privacy in their electronic communications.
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