“Owners of dogs will have noticed that, if you provide them with food and water and shelter and affection, they will think you are god. Whereas owners of cats are compelled to realize that, if you provide them with food and water and shelter and affection, they draw the conclusion that they are gods.”--Christopher Hitchens.
In In re China Agritech Inc. Shareholder Derivative Litigation, C.A. 7163-VCL (May 21, 2013), Delaware VC Travis Laster has put forward a factually rich and legally detailed analysis of how 220 books ands records inspections, Caremark claims, demand futility, and 102(b)(7) exculpation clauses fit together. I'll never convine Bill and Mark to put it in the case book, but I will probably use it as a supplement to review and pull together the doctrines. As such, I'll slot it into the syllabus after I've covered derivative suits, oversight, and shareholder inspection rights. (HT: McNally) Kevin Brady's detailed post on the case can serve in lieu of a teacher's manual entry.
It is interesting to note, however — by way of analogy only — that under the DOJ’s standard of “responsibility,” if President Obama were the head of a corporation, he would be responsible and could be prosecuted.
The Responsible Corporate Officer Doctrine allows federal prosecutors to criminally prosecute business owners and officers for the criminal activity of their businesses, regardless of whether they had knowledge of the illegal activity. The only requirement for criminal liability is “some relationship between the executive’s supervisory responsibilities and the underlying misconduct.” Put another way, in order to obtain a conviction, the government need only prove (1) illegal conduct occurred, and (2) the corporate officer had authority to exercise control over the activity.
The DOJ has used the Responsible Corporate Officer Doctrine to make criminals out of many well-meaning business people. In United States v. Park, the Food and Drug Administration (FDA) prosecuted the president of a corporation under the theory that his subordinates committed violations of the Food, Drug, and Cosmetic Act that the president had the ability to prevent or correct. Park, the company president, had delegated responsibility to correct the violations to one of his employees, who, regrettably for Park, did not follow through on his responsibilities. Park was convicted for FDA violations that he did not commit, order committed, or conspire to commit.
Just to be clear, there is no evidence in the recent Obama Administration scandals that criminal behavior took place, but the executive branch should stick to one definition of “responsible.” The DOJ definition of “responsible” is especially troubling in the context of a criminal prosecution where a person’s individual liberty is at stake—not just news stories that make the President look bad.
I recently bought an AcuRite 75077 Wireless Weather Forecaster with Remote Sensor and Atomic Clock. I've got that one upstairs telling me the inside temperature and time in the kitchen and the outside temperature on the sun deck. I love this thing so much I bought a second one to put downstairs in my study with the outside sensor down at the bottom of the yard by the pool, so I can tell at a glance whether it's warm enough for a swim.
Catholic Charities of Oklahoma City announces that:
In response to the rash of tornadic activity that central
Oklahoma has suffered over the past 48 hours, including the communities of Carney,
Moore and Shawnee, Catholic Charities of the Archdiocese of Oklahoma City is offering
help to those affected. Catholic Charities’ Disaster Recovery Services will offer aid with
immediate and long-term needs during the recovery process. ...
Catholic Charities will provide critical, immediate needs to all regardless of race, gender
or religion. Services to be offered include: emergency assistance funds for food, shelter,
clothing and other necessities; financial assistance vouchers; networking with other
agencies serving those affected; and, counseling services. ...
In an effort to help with the long-term recovery process, Catholic Charities OKC has set-
up a disaster relief fund. All donations made to this fund will support recovery for victims,
such as temporary housing, food, medical bills and more. Catholic Charities OKC will not
divert these funds to other purposes or administrative costs. To donate to the Catholic
Charities Disaster Recovery Fund, visit www.catholiccharitiesok.org or call 405-523-
The U.S. Navy has created its first aviation squadron that includes both manned (eight Seahawk) and ten unmanned (MQ-8B Fire Scout UAVs) helicopters. The new unit (HSL-35, or Helicopter Maritime Strike Squadron 35) will use its aircraft on various warships (LCS for the UAVs and destroyers and cruisers for the Seahawks.) These mixed squadrons are the future as far as the navy is concerned.
This provocative book brings together twenty-plus contributors from the fields of law, economics, and international relations to look at whether the U.S. legal system is contributing to the country’s long postwar decline. The book provides a comprehensive overview of the interactions between economics and the law—in such areas as corruption, business regulation, and federalism—and explains how our system works differently from the one in most countries, with contradictory and hard to understand business regulations, tort laws that vary from state to state, and surprising judicial interpretations of clearly written contracts. This imposes far heavier litigation costs on American companies and hampers economic growth.
"Buckley has assembled essays by many, perhaps most, of the best economic and legal scholars in the Anglo-American world to consider seriously the ways in which the American legal system burdens our citizens and our economy and puts us at an international competitive disadvantage. The "rule of law" we so earnestly commend to other countries is clearly in need of serious reform at home. The rigor of these historical, economic, and comparative studies, and the logic of the framework within which Buckley presents them, make a compelling case for law reform scaled to our needs for the 21st Century."—Judge Douglas H. Ginsburg, U.S. Court of Appeals and NYU Law School
"This book presents strong evidence of American hyper-litigiousness and the social costs it creates. The editor has assembled an impressive array of authors, who attack these issues with rich empirical evidence."—Eugene Kontorovich, Northwestern University School of Law
"This authoritative collection of essays draws a vivid portrait of a legal system that is out of control. The Rule of Law in America has become a kind of Frankenstein’s monster, bashing indiscriminately both good and bad conduct without proportion or self-awareness. These vivid essays let the facts drive you to this unavoidable conclusion: American law is indeed “exceptional”—but no longer in a way that supports either freedom or regulatory protection."—Philip K. Howard, author of The Death of Common Sense and Chair of Common Good
I was privileged to be one of those asked to contribute an essay to the project. My offering is entitled "How American Corporate and Securities Law Drives Business Offshore," a preview of which is available here.
I've been reading the other essays in the volume and each is a gem. Collectively, they are essential reading for anyone interested in how law is choking our economy and society.
My essay from 2004 on immigration reform is obviously dated, but I think the main points still hold true, especially with respect to the question of whether calling reform amnesty is accurate or Orwellian and heartless.
It's been a very long time since U.S. politicians addressed illegal immigration in anything approaching a comprehensive way. President Bush came into office planning to change that through negotiations with Mexico and new legislation. Those plans got derailed by 9-11, but last week the President put illegal immigration back on the policy front burner with a major policy address.
The reactions across the political spectrum were predictable but still disappointing. The extreme left dismissed President Bush's plan as an effort to revive the controversial post-World War II bracero program. The Democratic presidential candidates mostly supported the idea of immigration reform, while claiming they would do it better, fairer, or whatever. And, not surprisingly, many voices on the right condemned the plan as an amnesty that will encourage even more illegal immigration. The National Review Online's Corner blog, to cite a particularly prominent example, has been dominated by vehement attacks on Bush's plan, such as Rich Lowry's call for "conservatives [to] go to the mattresses on this one."
Granted, the devil is in the details, but the broad outline set out by President Bush deserves praise rather than censure. The plan is good for the economy. It will contribute to our national security. It will address pressing humanitarian problems posed by the current system. ...
There are somewhere between 8 and 12 million undocumented aliens in the U.S. At least three quarters of a million more arrive each year. Stepped up border enforcement hasn't stopped people from coming to this country. It just made it harder, forcing them to try more hazardous routes and to rely on exploitative smugglers. If people are willing to die to come work in this country, how are we going to close our borders -- let alone deport all the undocumented aliens who are already here -- without becoming a de facto police state?
Our current immigration policy is badly broken. It has failed to stop illegal immigration, succeeding only in creating a shadow economy and a humanitarian crisis along the border.
In fixing our immigration system, conservatives should take heed of Russell Kirk's famous dictum that conservatives are wary "of 'sophisters, calculators, and economists' who would reconstruct society upon abstract designs." Instead, as Kirk explained: "All that we reasonably can expect is a tolerably ordered, just, and free society, in which some evils, maladjustments, and suffering will continue to lurk." President Bush has come forward with a pragmatic and realistic proposal that will enhance orderliness, justice, and freedom. Instead, it is his critics on the right who are pursuing the utopian dream that we can deport and deter all illegal immigrants.
Once again, the "A word" is what passes with too many of my fellow conservatives for reasoned argument.