Category: Corporate Law


FAN 200 (First Amendment News) Tamara R. Piety, “A Constitutional Right to Lie? Again?: National Institute of Family and Life Advocates d/b/a NIFLA v. Becerra”

Tamara R. Piety is a professor of law at the University of Tulsa Law Scool. She is the author of Brandishing The First Amendment: Commercial Expression in America, as well as numerous articles and essays about commercial and corporate speech. Her most recent articles include, “Why Personhood Matters,” in Constitutional Commentary  and “The First Amendment and the Corporate Civil Rights Movement” in the Journal of Business & Technology Law. 


Professor Tamara Piety

Imagine the following scenario: a group of people  believe that cancer is punishment for sins and that God gives people cancer in order for them to “get right with the Lord.” Because of these beliefs, group members reject conventional medical treatment for cancer. But they are  concerned that so many other people seek treatment for cancer, rather than looking to God. They believe such people are passing up an opportunity for redemption made especially for them. They also believe that the billions of dollars spent on treating cancer is contrary to God’s will and deprives other needy people, especially children, of government assistance. Because of its concerns, the group is attempting to attract more adherents. In the past, such efforts involved door-to-door solicitations. But this is an excruciatingly slow way of gaining supporters; and because most people do not have cancer, they are not interested in the group’s message. “If only there was a way to make sure that we were only talking to people with cancer!,” leaders said.

The group learns that there is a way to specifically target people with cancer: advertise as a cancer treatment center and most of those responding are likely to be cancer patients. Once potential patients are in the door, they can be told why this dreadful disease hides a special opportunity that God has given them. The group is overjoyed that this stratagem will deliver just the people they need to talk to about this life and death matter. So the group forms a non-profit corporation it calls “AAAmerican Cancer Care.” They choose this name so that it will likely be first in any directory and appear on the first page of any on-line search for cancer treatment. Just to be safe, the group also buys a Google ad guaranteed to appear on the first page.

Now our putative religious group has a built-in stream of potential converts in the form of people who are seeking cancer treatment and imagine that AAAmerican provides it. This is ideal from the group’s perspective; it is far from ideal for cancer sufferers who arrive looking for cancer care and instead get a lecture that their disease is a punishment from God who will very likely let them die if they do not turn their will and their life over to Him and reject all medical treatment.

If you had terminal cancer, had troubled to do a search for a treatment center, perhaps taken time off work, maybe even traveled a substantial distance to come to this center and then were confronted, not only with no services, but with this kind of message, you might feel annoyed at best; and traumatized and angry, at worst. But you would certainly feel misled. You would be right; our hypothetical group not only knows that such mistakes are likely; it is actually counting on them. The whole purpose of the center is to proselytize the group’s message, not to treat cancer. It doesn’t want healthy people. It wants people with cancer.

The above scenario is no mere, abstract hypothetical; it is what many “crisis pregnancy centers” (CPCs) do every day. They engage in advertising calculated to confuse the public about what services they provide, hoping thereby to drive pregnant women seeking abortions to their doors. These are the women the CPCs wish to engage with their message. They are not interested in talking to women who have already decided to proceed with the pregnancy. Their target audience is women who have decided to pursue an option which the CPCs do not provide: abortion. And in order to bring these women to their doors, the CPCs have deliberately obfuscated the matter of what services they provide.Their business model appears to be predicated on luring women into their centers under false pretenses. Because abortions are more difficult to obtain in some states than others, it is not unusual for women seeking abortions to travel long distances; they may have to spend money on childcare, or have forfeited a day’s pay, to make the trip. Because CPCs do not provide abortions, those sacrifices will be for naught if such a woman arrives at a CPC. Worse still, there are reports that some CPCs have promised women that if they choose to carry their pregnancies to term, the center will assist them with after care, adoption services, and financial assistance that they subsequently failed to deliver.

Shouldn’t a state be able to prohibit deception like this? Can’t states regulate false advertising? For most of the 20th century the answer to that question would have been “yes.” After the Supreme Court’s decision in National Institute of Family and Life Advocates d/b/a NIFLA v. Becerrathe answer is probably “No.”

Becerra involved an attempt by California to address the public harms of the CPCs’ deceptive business model by requiring CPCs to provide women with information about where they could obtain (among many other services) abortions. The law was only a partial measure. It did not forbid the deceptive advertising itself (which, arguably, it should have been able to do). So it would not have prevented women from being deceived. And it could not prevent those who were deceived from having to endure unwanted lectures and pleas. But it would have mitigated the harm by at least presenting women who had arrived at the CPC under a misunderstanding about the services it provided, with truthful information about where the services they were seeking could be had.

The disclosure provided:

California has public programs that provide immediate free or low-cost access to comprehensive family planning services (including all FDA-approved methods of contraception), prenatal care, and abortion for eligible women. To determine whether you qualify contact the county social services office at [telephone number of relevant office]. §123472(a) (1). (Breyer, J. dissenting Slip op. at 2).

The Supreme Court held that California’s law requiring such notices was unconstitutional because it constituted “compelled” speech which violated the First Amendment rights of these crisis pregnancy centers. The Court held that these notices, which offered true, factual information about where women could obtain abortions, and which were devoid of argument about the merits of any choice, were “content based” and “controversial”; the warning constituted a “script,” the Court said, which someone opposed abortion should not be compelled to say.

These characterizations are – and there is just no delicate way to put this – nonsense.

Abortion is controversial: a true statement about where one may be obtained is not. And the characterization of this truthful, factual disclosure as anathema to abortion opponents overlooks the fact that they would not be in the position to have to make these hated disclosures had they not intentionally lured pregnant women to their centers under false pretenses in the first place, because, make no mistake, the pregnant woman seeking an abortion is the CPCs’ target audience. The CPCs have nothing to offer to women who were already planning to carry their pregnancies to term if their mission is to discourage abortion. At best, they may offer some health screenings, pregnancy tips, and the like. But that is not the reason for their existence. The reason they exist is to try to convince women who have chosen to have an abortion, or women who are not sure what they want to do, not to have an abortion.

Probably most people would have no problem with the state forbidding our hypothetical cancer “treatment” center from advertising, let alone requiring it to provide truthful information about where such treatment was available. The state has long been given the authority, authority which has been relatively uncontested for decades, to regulate most false advertising. Why is this different?

It may be that the Becerra decision is an outlier, that it is an example of  “abortion exceptionalism.” Certainly the Supreme Court has been willing to make astonishing exceptions to ordinary First Amendment doctrine when it comes to abortion: upholding rules prohibiting doctors from offering true information (the availability of abortion) and to require them to provide false “information” (abortion is linked to breast cancer) or requiring procedures that are not medically necessary (ultrasounds). But in some ways it is mainstream and consistent with the Court’s other First Amendment decisions which have injected confusion into the commercial speech doctrine by increasingly relying on a “content neutrality” requirement for speech covered by the doctrine. This is an oxymoronic requirement in the context of a doctrine defined by its content: it is the commercial speech doctrine. It has also been expanding the definition of what speech is protected far beyond its previous boundaries. This imperils regulation of false advertising.

Given that in the Stolen Valor case the Court also discarded the decades-old understanding that false speech had no intrinsic First Amendment value, it seems we once again are confronted with a claim for a constitutional right to lie. This time, unlike in the Nike v. Kasky case, the Supreme Court majority has apparently agreed that there should be such a right.  It remains to be seen whether this is simply another example of abortion exceptionalism, or if it presages a finding that commercial speech is to be treated like other protected speech. In New York Times v. Sullivan, Justice William Brennan proposed that when it comes to freedom of expression, the First Amendment requires some “breathing space” for false speech. (p. 272). I doubt he or any other member of the Court thought false advertising required similar latitude. Does commercial speech really require such “breathing space”? We may be about to find out.


FAN 200 (First Amendment News) Sarah C. Haan, “Facebook and the Identity Business”

Sarah C. Haan is an Associate Professor of Law at Washington and Lee School of Law.  Professor Haan writes about corporate political speech and disclosure. Her most recent article is “The Post-Truth First Amendment,” forthcoming in the Indiana Law Journal.


Facebook revealed in September 2017 that Russian-linked groups had waged a disinformation campaign on its platform to influence the 2016 election. The news caused public outcry and led to a series of self-regulating responses from Facebook and other social media companies.  In a new work-in-progress, I will examine Facebook’s regulation of political speech and, more broadly, what it means for political discourse to be regulated through private ordering by a global, profit-seeking, public company. My conclusions are different from those of some other scholars, in part because I give sharp focus to Facebook as a business actor.

Both before and after the revelation about Russian disinformation, public statements by Facebook spokespeople and its CEO, Mark Zuckerberg, have invoked a commitment to “basic principles of free speech.”  Here is a recent example:

This tweet suggests that Facebook seeks to uphold “basic principles of free speech.” The company’s offhand speech is full of such references to “free speech” and “freedom of expression,” but you won’t find those terms in Facebook’s securities filings, its Community Standards, or in the sworn testimony of company executives before Congress. Kate Klonick has argued that to the extent that platforms like Facebook moderate content, they rely on a foundation in American free speech norms. But what, precisely, do Facebook’s executives think that “free speech” means?

Speaker Discrimination

Professor Sarah C. Haan

I will argue that although most scholarly attention has focused on Facebook’s regulation of content, in fact Facebook’s regulation of political speech relies heavily on speaker discrimination. The company regulates content, reluctantly, at the margins; it plainly prefers to regulate identity. It does this by distinguishing between “authentic” and “inauthentic” user identity. Facebook allows speakers to post nearly anything if they present an “authentic” identity, but completely prohibits the speech of “inauthentic” speakers. As Sheryl Sandberg has admitted publicly, virtually none of the offending Russian content would have violated Facebook’s rules if it had been published by an “authentic” speaker.

Facebook explains:

Authenticity is the cornerstone of our community. We believe that people are more accountable for their statements and actions when they use their authentic identities. That’s why we require people to connect on Facebook using the name they go by in everyday life.

There might be another reason, too.

Facebook’s business model focuses on the sale of advertising. Although the company describes its “mission” differently, its business purpose is to profit from selling ads. It is this business model that justifies a preference for regulating identity over content.

Facebook needs to know who its users are for at least two reasons. First, it needs to be able to tell an advertiser how many unique individuals its advertising can reach. Thus, under Facebook’s rules, it is a violation to create multiple accounts or to share accounts, ensuring that each human user has just one account.

Second, Facebook needs to know who you are so that its customization and microtargeting features will work. Those features set Facebook apart from its competitors and justify its ad revenue. This explains why, for example, the company refuses to prohibit false content (“fake news”), yet prohibits the use of a “false date of birth” as an aspect of identity.  As part of your expressive identity, you may feelyounger than you are, but Facebook prohibits you from actually identifyingas a younger person. Your Facebook identity is what distinguishes you from other ad targets.

The public may have wrongly concluded that Facebook’s authentic/inauthentic rules were designed specifically for the purpose of culling foreign propagandists from its platform. This is not so. Since it went public in 2012—long before Russian agents sought to influence the 2016 election—the company’s filings with the U.S. Securities and Exchange Commission consistently have discussed “authentic identity” as a business policy linked to user metrics. Facebook’s business risks associated with user identity go well beyond concerns about electoral integrity.

Mark Zuckerberg

When Facebook determines that a speaker is “inauthentic,” it shuts down the speaker’s account, removes all traces of its speech from Facebook, and prevents the speaker from engaging in future speech on Facebook.

On May 22, Mark Zuckerberg testified to the European Parliamentthat Facebook shut down about 580 million fake accounts in the first quarter of 2018—nearly six million fake accounts per day. Perhaps the scale of foreign electoral interference around the world is so vast that only algorithmic identity licensing can save us.  I am skeptical.

Two additional things are worth noting about Facebook’s identity-based speech regime.

Identity Verification

First, since April, Facebook has doubled down on identity policing, employing identity licensing in a way that, I will argue, is a form of prior restraint. Under new rules, which are already shaping political discourse about the 2018 midterm elections, an individual in the U.S. who wants to use Facebook’s paid tools to communicate about “national issues of public importance” must verify his or her identity ex anteby submitting private information, such as passport, driver’s license and Social Security information, to the company for approval. In a second step, Facebook mails a special code to the individual at a physical address in the U.S., and this must be input into the verification system to confirm that Facebook has that person’s working address.

In May, Facebook clarified that it would apply its identity verification rules to all publishers of paid content, including news publishers. In other words, news outlets that use Facebook’s paid tools to boost content must go through identity verification, and must also label the content with a “paid for by” label. This, of course, represents a clear break between Facebook’s notion of “free speech” and recognized press freedoms in the First Amendment canon. Global media groups have called on Facebook to exempt news publishers from the new rules, but Facebook has so far refused. The company’s speaker discrimination does not go so far as to discriminate between the press and other speakers, even though our Constitution takes this for granted.

In the past few years, Facebook has acquired a number of companies that specialize in biometric identity verification technology, suggesting that Facebook is at least leaving open the possibility of pursuing identity verification as a stand-alone product or feature.  The tech industry press occasionally suggests that Facebook’s end game may be to monetize identity itself. In other words, Facebook’s choice to regulate political speech primarily through identity licensing and verification may be driven, not by “free speech” or democracy concerns at all, but rather by its desire to pursue identity verification as a business opportunity.

No More Pseudonyms

Second, Facebook’s authentic/inauthentic identity rules conflate two important types of identity—false identity and anonymous identity—treating them identically because this is convenient for Facebook’s business. False identity means pretending to be someone you’re not. The Mueller Indictment alleged that Russian actors adopted false identity on Facebook and other social media platforms in order to trick people into thinking they were U.S. citizens. If true, this was a crime.

Anonymous identity is something else. Americans have traditionally used anonymous speech to express unpopular political views; The Federalist Papers, for example, were originally published by Alexander Hamilton, John Jay, and James Madison under a pseudonym, Publius. Had they attempted such a trick in 2018 on Facebook, the company would have faulted them for “inauthentic behavior” and restricted their speech. Facebook’s choice to prohibit speech, including political speech, from individuals who choose anonymity (but do not claim false identities) represents another important break between the company’s concept of “free speech” and the First Amendment’s.

Although Silicon Valley tech companies often embody a libertarian spirit—and Facebook’s resistance to policing content or to distinguishing between the press and other speakers seems consistent with that view—the company’s decision to prohibit both false identity and anonymous identity is decidedly notlibertarian. The libertarian view is that speech should be evaluated purely on its merits. A regulatory regime that must authorize your identity before it lets you speak shares little in common with a philosophy that emphasizes freedom and individuality.

* * *

In Citizens United v. FEC, the Supreme Court observed that speaker-based distinctions are often a form of content control. It asserted that the State may not “deprive the public of the right and privilege to determine for itself what speech and speakers are worthy of consideration.” Although scholars were quick to point out that Justice Kennedy’s opinion overstated the First Amendment’s hostility to speaker-based discrimination, these two points resonate when we consider how Facebook is regulating political discourse primarily through identity.  In my view, the issues don’t come fully into focus until we consider Facebook’s business motives.

Even if Facebook eventually loses ground to other speech-regulating competitors, these issues of private ordering are not going away.


Contract (as) Social Responsibility (Part 2): Defined Terms

An earlier post set up the month’s agenda:  explore theoretical, doctrinal, and empirical opportunities presented by “contract (as) social responsibility” (KSR).  Before going further, it may be useful to provide some examples and define what I mean by KSR.


Labor-related terms in supply chain contracts, discussed in the prior post, are a well-known example of KSR, but not the only ones.  Michael Vandenbergh, for example, has argued that supply chain agreements can also be used to advance environmental goals.

But there is a world of KSR beyond supply chain contracts.  Frances McDormand’s speech at the Academy Awards, for example, implored the A-listers in the audience to negotiate for “inclusion riders,” contract terms that would require movie productions to have a certain level of social diversity (e.g., race, gender).  “Impact investing,” according to one enthusiast, “could be one of the most important social innovations in our lifetimes, leveraging the massive power of the capital markets to a higher purpose than maximizing returns for shareholders.” The oldest example I have found so far—and I suspect there are still older ones—is the Beatles’ early performance agreement, which apparently required venues to integrate racially.

Don’t let it be.

KSR can be seen as part of a longer arc of social activism through market action.  From the contested notion that African Americans could use market power to counter the pernicious effects of racism, to Cesar Chavez’s lettuce boycotts of the 1960s, to the South African divestment campaigns of the 1980s, the socially active have long believed that money can do more than talk: it may compel others to walk.  Sometimes, as in apartheid, they may have been right. In other cases, such as black banking, they may not.

Still, we (want to believe that we) can achieve social justice through the beer and coffee we choose to purchase.  Who we see in the media may affect what we believe to be possible in reality, in terms of gender and racial diversity.  Eric Posner and Glen Weyl argue that the “emancipatory force” of “radical markets” “can reawaken the dormant nineteenth-century spirit of liberal reform and lead to greater equality, prosperity, and cooperation.”  Whether or not that is true, there is little doubt that there is demand for social change through market participation.

Because contracting is an important mechanism in market function, the rise of KSR seems, from this perspective, inevitable.  Yet, not all market participation involves contract in any formal sense, and of course most contracting probably does not purport to be socially responsible in the sense that interests me.  So, KSR is at most a (small?) (very small?) subset of contract-based market activity.

Business lawyers love their defined terms–and I am at heart a business lawyer–so what might a definition of KSR look like? Read More


Contract (as) Social Responsibility (Part 1): Revenge of the Nerds

On a sunny Saturday morning in April I found myself in an airless room in an exceptionally beige Orlando conference hotel discussing what would, to many, be the nadir of contract nerd-dom:  model supply chain terms.

Supply chain agreements set forth the rights and responsibilities of buyers and sellers of goods that lead to products that affect just about everyone who participates in the market economy.  It reportedly takes about 200 contracts to make an iPhone—a number that strikes me as pretty low.

These contracts are important, of course, but only in the same sense that contract terms on indemnification, ERISA, and choice-of-law are important: they are the province of hardcore law junkies because they are so boring no one would really want to spend time thinking about them unless paid to do so.

And, yet, the Orlando conference room was electric.  That’s because these were not the usual supply chain terms dealing with, e.g., quantity, price, delivery, etc.  Instead, this was a meeting of the Working Group to Draft Human Rights Protections in Supply Contracts of the Business Law Section of the American Bar Association (“Working Group”), and the terms we were talking about seek to solve some of the most troubling ethical problems presented by market globalization:  baseline human rights protections for those who work for or with companies in the modern global supply chain.

I will call these terms one of many examples of “Contract (as) Social Responsibility”: efforts to achieve social justice through contract as a formal, legal instrument.

I find just about every word in the preceding paragraph (including “I” and “will”) to be problematic—in an interesting sort of way—and am grateful to the keepers of Concurring Opinions for permitting me to spend the month of May trying to develop my thoughts on this.


Read More


Cunningham “Buffett Shareholder” Omaha Events 2018

Following are the public events during this year’s Berkshire Hathaway Annual Meeting surrounding the launch of our new book, The Warren Buffett Shareholder.  Hope to see some of you there, and regrets that our New York book launch event is already sold out.

Thursday Friday — Daytime Friday — Evening Saturday Sunday
U. Nebraska Mammel Hall

Berkshire System Summit

11:40 to 12

(talk 11 to 11:40)

CenturyLink Center

Shareholder Shopping Day


11 to 6


Embassy Suites

Yellow BRKers

4 to 7

(greetings at around 5)


CenturyLink Center

BRK Annual Meeting


7 to 4 pm

Hilton Hotel

Markel Brunch

8:30 to 10:30 a.m.

U. Nebraska Mammel Hall

Value Investor Conference

3 to 4 & 6 to 6:30


Creighton University

Value Investing Panel

2 to 3 & 5 to 6

(panel 3 to 5)


Hilton Hotel

Tilson/Kase Reception

8 to 12 midnight


Hilton Hotel

Tilson/Kase Reception

4 to 6


 ALSO: Visit the Bookworm in town and the Hudson bookstore in the airport for special displays and offerings around the book.

New Book: Jack Bogle Appreciates Warren Buffett’s Surprise Shout Out

From this morning’s Omaha World Herald.  Editor’s note: In a new book, “The Warren Buffett Shareholder,” Buffett-watchers Lawrence Cunningham and Stephanie Cuba have compiled essays by 43 people about Berkshire Hathaway’s shareholder meetings, which now draw more than 40,000 people to Omaha each year. We will excerpt some of those essays each Sunday in print before this year’s May 5 annual meeting. Today’s comes from Vanguard Group founder Jack Bogle.

Late in December 2016, I received a note from my good friend Steve Galbraith asking me to put a “save-the-date” marker on my calendar for the weekend of May 6, 2017. He and his wife, Lucy, had a plan, undisclosed, to celebrate my 88th birthday on May 8.

At a dinner in Omaha with Warren and his new team of money managers (as Steve later told me), he had mentioned our friendship. Steve offered to bring me to the upcoming annual meeting of Berkshire Hathaway shareholders. Warren thought that was a great idea, and so the plot was hatched.

Unbeknownst to me, Steve had checked with Emily Snyder, my assistant at Vanguard, and with my wife, Eve, and told them of his plan to fly me out to Omaha and attend the annual meeting, something I had never done before.

So when the morning of May 5, 2017, arrived, Eve and I, with daughter Barbara and son-in-law Scott Renninger in tow, drove to Atlantic Aviation, Philadelphia’s terminal for private planes.

No sooner had we arrived than a Citation jet with Steve and Lucy aboard swooped down and scooped up our quartet. We were on our way! (Son Andrew and his friend Kathryn would meet us in Omaha on Saturday morning.)

After a short hop (that jet is fast!), we landed in Omaha. As Vanguard’s founder, I’d attained a modest celebrity status in the world of investing, but that hardly prepared me for the reception I received when we entered the Omaha Hilton.

At least 10 guests, armed with camera-ready iPhones, immediately snapped away at the new arrival.

Later, when our sextet dined at the hotel, scores of celebrity hunters continued to take photos, asking politely and working smartly. (I quickly learned that saying “yes” was infinitely more efficient then saying “no” and then arguing about it.)

When I awakened on Saturday morning and looked out of my hotel room window, I could hardly believe what I saw. A line, maybe four people wide, stretched from the CenturyLink Center, site of the annual meeting, to as far as I could see.

All told, 40,000 people would attend the 2017 annual meeting, almost half of whom were in the arena, with the rest of the throng watching on video from a remote site. Our now octet was ushered to premier seating in the arena, right behind the space reserved for Berkshire Hathaway longtime shareholders, and next to the company’s directors.

Warren and Charlie Munger were seated on the stage immediately before us.

As Warren gave his opening remarks — a summary of Berkshire’s 2016 results — I couldn’t help wondering why Steve had brought us to Omaha. My question was soon answered, as these excerpts from the meeting transcript reflect:


“Jack Bogle has done probably more for the American investor than any man in the country. Jack, could you stand up? There he is.

“Jack Bogle many years ago, he wasn’t the only one talking about an index fund, but it wouldn’t have happened without him. …

“I estimate that Jack, at a minimum, has saved, left in the pockets of investors without hurting them overall in terms of performance, gross performance, he’s put tens, and tens, and tens, of billions into their pockets.

“And those numbers are going to be hundreds and hundreds of billions over time. It’s Jack’s 88th birthday on Monday. So I just say, Happy Birthday, Jack. And thank you on behalf of American investors.”

Despite my surprise and delight, I was able to stand up and wave to Warren, Charlie and the cheering crowd. I confess to being deeply and emotionally touched by Warren Buffett’s generous words — a “red-letter” day in my now 67-year career.

After Warren’s shoutout, the number of photo seekers soared, to the point where I found it useful to leave each session 5 or 10 minutes before the intermission.

Even then, I began to understand why rock stars among our entertainers are so eager to avoid the paparazzi who follow their every move.

But I confess that, on this one grand occasion, I found huge satisfaction in being recognized for my contribution to the world of investing, and to the wealth of the human beings who have entrusted their assets to Vanguard’s index funds. (I’m only human!) …

This was hardly the first indication that Warren and I operated on investment principles that, while a long way from identical, have a certain commonality. …

Accolades are nice, and endorsements are, too, but human connections are what life is largely about. I celebrate the friendship and mutual admiration that I’ve shared with Warren Buffett and Steve Galbraith, men of integrity, wisdom and class.

Excerpted exclusively for The World-Herald from “The Warren Buffett Shareholder: Stories From Inside the Berkshire Hathaway Annual Meeting,” edited by Lawrence Cunningham and Stephanie Cuba. (Cunningham Cuba LLC & Harriman House Ltd., 242 pages, $25)


UCLA Law Review Vol. 64, Issue 3

Volume 64, Issue 3 (March 2017)

Contagion Without Relief: Democratic Experimentalism and Regulating the Use of Antibiotics in Food-Producing Animals  Emilie Aguirre 550
Too Big to Disclose: Firm Size and Materiality Blindspots in Securities Regulations George S. Georgiev 602
The Stream of Violence: A New Approach to Domestic Violence Personal Jurisdiction Cody J. Jacobs 684
Rethinking Misdemeanor Neglect Irene Oritseweyinmi Joe 738



Thirty Years After Al-Khazraji: Revisiting Employment Discrimination Under 1981 Sarah Khangahi 794

Berkshire’s Blemishes: Lessons for Buffett’s Successors, Peers, and Policy

Columbia University has published my most recent research paper, available free on SSRN (registration required): “Berkshire’s Blemishes: Lessons for Buffett’s Successors, Peers, and Policy.” Here is the abstract.

* * * * * * * * * *

Berkshire Hathaway’s unique managerial model is lauded for its great value; this article highlights its costs. Most costs stem from the same features that yield such great value, which boil down, ironically, to Berkshire trying to be something it isn’t: it is a massive industrial conglomerate run as an old-fashioned investment partnership. An advisory board gives unchecked power to a single manager (Warren Buffett); Buffett makes huge capital allocations and pivotal executive hiring-and-firing decisions with modest investigation and scant oversight; Berkshire’s autonomous and decentralized structure grants operating managers enormous discretion with limited second-guessing; its trust-based culture relies on a cultivated vision of integrity more than internal controls; and its thrifty anti-bureaucracy means no central departments, such as public relations or general counsel.

Delineating the visible costs of Berkshire’s model confirms the desirability of tolerating many of them, given the value concurrently generated, but also reveals ways to improve the model—a few while Buffett is at the helm but mostly for successors. Current reform suggestions include hiring a full-time public relations professional at headquarters and more systematically developing senior executives; suggestions for future reform include enhanced subsidiary compliance resources and separating the identity and personal opinions of top executives from the corporation and its official policy.

Besides helping Berkshire, the review and suggestions will help managers of other companies inspired by Buffett’s unique managerial model and policymakers who should study it. Implications for peers and policymakers include highlighting flexibility in corporate governance, the efficacy of the conglomerate form, and especially the value of strategies that produce long-term thinking among shareholders and managers alike.


UCLA Law Review Vol. 64, Discourse

Volume 64, Discourse

Citizens Coerced: A Legislative Fix for Workplace Political Intimidation Post-Citizens United Alexander Hertel-Fernandez & Paul Secunda 2
Lessons From Social Science for Kennedy’s Doctrinal Inquiry in Fisher v. University of Texas II Liliana M. Garces 18
Why Race Matters in Physics Class Rachel D. Godsil 40
The Indignities of Color Blindness Elise C. Boddie 64
The Misuse of Asian Americans in the Affirmative Action Debate Nancy Leong 90
How Workable Are Class-Based and Race-Neutral Alternatives at Leading American Universities? William C. Kidder 100
Mismatch and Science Desistance: Failed Arguments Against Affirmative Action Richard Lempert 136
Privileged or Mismatched: The Lose-Lose Position of African Americans in the Affirmative Action Debate Devon W. Carbado, Kate M. Turetsky, Valerie Purdie-Vaughns 174
The Right to Record Images of Police in Public Places: Should Intent, Viewpoint, or Journalistic Status Determine First Amendment Protection? Clay Calvert 230
A Worthy Object of Passion Seana Valentine Shiffrin 254
Foreword – Imagining the Legal Landscape: Technology and the Law in 2030 Jennifer L. Mnookin & Richard M. Re i
Imagining Perfect Surveillance
Richard M. Re 264
Selective Procreation in Public and Private Law Dov Fox 294
Giving Up On Cybersecurity Kristen E. Eichensehr 320
DNA in the Criminal Justice System: A Congressional Research Service Report* (*From the Future) Erin Murphy 340
Utopia?: A Technologically Determined World of Frictionless Transactions, Optimized Production, and Maximal Happiness Brett Frischmann and Evan Selinger 372
The CRISPR Revolution: What Editing Human DNA Reveals About the Patent System’s DNA Robin Feldman 392
Virtual Violence Jaclyn Seelagy 412
Glass Half Empty Jane R. Bambauer 434
Social Control of Technological Risks: The Dilemma of Knowledge and Control in Practice, and Ways to Surmount It Edward A. Parson 464
Two Fables Christopher Kelty 488
Policing Police Robots Elizabeth E. Joh 516
Environmental Law, Big Data, and the Torrent of Singularities William Boyd 544