SCOTUScast 2-24-16 featuring George Conway
On January 25, 2016, the Supreme Court decided Amgen Inc v. Harris without oral argument. Former employees of an Amgen subsidiary had participated in a benefit plan that offered ownership of Amgen stock. When the value of Amgen stock fell in 2007, stockholders filed a class action against plan fiduciaries alleging a breach of fiduciary duties, including the duty of prudence, under the Employee Retirement Income Security Act of 1974. Although the U.S. Court of Appeals for the Ninth Circuit initially reversed a district court decision dismissing the class action complaint, the U.S. Supreme Court then vacated the Ninth Circuit’s judgment and remanded the case in light of the Supreme Court’s then-recent decision Fifth Third Bancorp v. Dudenhoeffer, which set forth the standards for stating a claim for breach of the duty of prudence against fiduciaries who manage employee stock ownership plans.
On remand, the Ninth Circuit reiterated its conclusion that the plaintiffs’ complaint stated a claim for breach of fiduciary duty, and the Supreme Court again granted certiorari. In a per curiam opinion the Court reversed the judgment of the Ninth Circuit by a vote of 9-0, holding that the Circuit had failed to properly evaluate the complaint. In its current form, the Supreme Court concluded, the complaint failed to state a claim for breach of the duty of prudence. In remanding the case, however, the Court indicated that the district court could decide in the first instance whether the stockholders might amend their complaint in order to adequately plead a claim for breach of the duty of prudence.
To discuss the case, we have George T. Conway III, who is Partner, Litigation at Wachtell, Lipton, Rosen & Katz. Administrative Law & Regulation Practice Group Podcast
Corporate inversions are transactions, such as mergers or acquisitions, that involve a U.S. and foreign headquartered firm and result in the newly formed firm being headquartered outside the U.S. As a result, it can legally lower its U.S. taxes and enjoy parity with its foreign based competitors. Noting the resulting erosion to the U.S. tax base, critics argue that absent Congressional action the U.S. Treasury has a responsibility to fully utilize its existing authorities to combat this practice. But others are concerned that attempting to do so without addressing the underlying problems with the U.S. tax code will create even greater harm to the U.S. economy. Stephen Shay, Senior Lecturer on Law at the Harvard Law School and until recently the Deputy Assistant Secretary of the Treasury for International Tax Affairs and Mihir Desai, who holds appointments at both the Harvard Business School and Law School, provided perspectives from legal and economic vantage points.
2015 National Lawyers Convention
- Prof. Mihir A. Desai, Mizuho Financial Group Professor of Finance, Harvard Business School and Professor of Law, Harvard Law School
- Prof. Stephen E. Shay, Senior Lecturer on Law, Harvard Law School
The Securities and Exchange Commission (SEC) has recently increased its use of administrative proceedings, before Administrative Law Judges (ALJs), to seek civil penalties, as an alternative to proceeding in an Article III court. Other federal regulatory and enforcement agencies use ALJs for various purposes at various rates. Although no single set of rules governs all ALJs, they typically differ from Article III courts in important ways, bringing their use under recent criticism. As two examples, ALJs do not enjoy life tenure and they are sometimes employed by and answerable to the agency itself. Our panel will discuss the pros and cons of the use of ALJs at the SEC and other agencies.
Corporations: Constitutionality of Administrative Law Judges at the Securities and Exchange Commission and Elsewhere
2:00 p.m. – 3:30 p.m.
- Prof. John S. Baker, Jr., Visiting Professor, Georgetown University Law Center
- Mr. Stephen J. Crimmins, Shareholder, Murphy & McGonigle PC
- Prof. Todd E. Pettys, H. Blair and Joan V. White Chair in Civil Litigation, University of Iowa College of Law
- Prof. Tuan Samahon, Villanova University School of Law
- Moderator: Hon. F. Scott Kieff, Commissioner, International Trade Commission
The Mayflower Hotel Criminal Law & Procedure Practice Group Podcast
On September 15, 2015, Deputy Attorney General Sally Yates issued a much-talked about memo, directing federal prosecutors to focus their efforts on individual corporate wrong-doers, not just corporate entities. Unclear in the minds of many is just how much effort will now be expended on corporate entities vs. individuals. Some assert that prosecution of corporate entities is rarely a good idea, since the punishment negatively effects the shareholders, who were often the victims of the initial wrongdoing. Others note that it can be near impossible to prove what should be a required guilty state of mind in an individual operating within a corporate structure. More complications arise when individuals rely in good faith on legal advice from in-house or outside counsel.
2014 National Lawyers Convention
- James R. Copland, Director, Center for Legal Policy, Manhattan Institute for Policy Research
- Paul J. Larkin, Senior Legal Research Fellow, Edwin Meese III Center for Legal and Judicial Studies, The Heritage Foundation
- Moderator: John G. Malcolm, Director, Edwin Meese III Center for Legal and Judicial Studies, and Ed Gilbertson and Sherry Lindberg Gilbertson Senior Legal Fellow, The Heritage Foundation
For thirty years, the economic analysis of corporate law has been based on the assumption that shareholder value is a reliable proxy for social welfare. However, for some time now, the large majority of the shares in some public companies have been held by institutional investors, including pension funds and mutual funds. These investors have some incentive to favor short-term profits at the expense longer-term benefits. Can shareholder value still be reliably equated with social welfare? Or does the current incentive structure encourage the misallocation of resources and a net social loss?
The Federalist Society's Corporations, Securities & Antitrust Practice Groups presented this panel on "The Short-Termism Debate" on Thursday, November 13, during the 2014 National Lawyers Convention.
- Prof. Lucian A. Bebchuk, William J. Friedman and Alicia Townsend Friedman Professor of Law, Economics, and Finance and Director of the Program on Corporate Governance, Harvard Law School
- Prof. Jonathan R. Macey, Sam Harris Professor of Corporate Law, Corporate Finance, and Securities Law, Yale Law School
- Prof. Robert T. Miller, Professor of Law and F. Arnold Daum Fellow in Corporate Law, University of Iowa College of Law
- Mr. Steven A. Rosenblum, Wachtell, Lipton, Rosen & Katz
- Moderator: Hon. E. Norman Veasey, Former Chief Justice, Delaware Supreme Court