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Akron Law Café

Holding Corporate Directors Liable for the Financial Crisis

By Stefan Published: February 26, 2009

This past Tuesday, the Delaware Chancery Court dismissed a number of claims in Citigroup Inc. Shareholder Derivative Litigation.  The decision has generated quite a bit of commentary in the blogosphere (see here, here and here).  Rather than regurgitate what has already been posted elsewhere, I just want to add this one take: The plaintiffs alleged that the board failed to satisfy its oversight duties (often referred to as "Caremark" duties, after the case by that name which set forth the relevant standards) by "failing to properly monitor and manage the risks the Company faced from problems in the subprime lending market."  The court ultimately dismissed this claim because "[o]versight duties under Delaware law are not designed to subject directors, even expert directors, to personal liability for failure to predict the future and to properly evaluate business risk."  Rather, "[d]irector oversight duties are designed to ensure reasonable reporting and information systems exist that would allow directors to know about and prevent wrongdoing that could cause losses for the Company."  In other words, oversight duties relate to catching fraud, not poor business decisions.

The potential problem I see with this analysis is that the subprime lending debacle arguably is rooted in fraud--as opposed to simply poor business decisions.  As a recent post on put it:

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Chief Wahoo and the First Amendment

By Wilson Huhn Published: February 24, 2009

     Stefan's recent post about Chief Wahoo and antitrust law got me to wondering whether it would be constitutional for the City of Cleveland or the State of Ohio to enact a law prohibiting the Cleveland major league baseball club from calling itself the "Indians" or from using the Chief Wahoo logo.  Does the First Amendment protect the right of a ball club to use names or images that offend people?

     I think the Cleveland Indians probably have a constitutional right to continue to use the moniker "Indians" and display and sell the totem of "Chief Wahoo," but first let's consider the moral ramifications.

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Akron Law to Hold Discover Law Day on Feb. 28

By Diana Published: February 23, 2009

The Law School Admission Council has designated February as Month. As part of a continuing commitment to diversity, Akron Law and the Law School Admission Council will co-sponsor Discover Law Day.

Prospective law students can learn about the opportunities at Akron Law by attending an open house from 1 - 3 p.m. on Saturday, Feb. 28.

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How to find county and city ordinances on the web

By Lynn Published: February 20, 2009

I think my apartment is unsafe.  Where can I find the unsafe building standards?

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Does Chief Wahoo Deserve an Antitrust Exemption?

By Stefan Published: February 19, 2009

Spring training got into full swing this week.  For most of my adult life, the return of baseball was like a ray of sunlight breaking through grey skies because I love to watch and score the game.  But since I moved to Cleveland four years ago, the return of baseball has left me tense--dealing with the conflict between my love of the game and the image of Chief Wahoo.  At times like these, I am repeatedly reminded of a poster I saw in Sports Illustrated when I was in grade school that had pictures of fictitious and patently offensive mascots for teams named the "New York Negroes" and the "Boston Jews," along with those of the Cleveland Indians and Washington Redskins.  At the bottom of the poster it read: "If any one of these is offensive to you, then they all should be."  I have yet to hear a good explanation for why that statement is not correct.

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Forensic Science System Needs Overhaul

By Jane Published: February 19, 2009

On Wednesday, Feb. 18, the National Academy of Sciences issued a ground-breaking report titled, Strengthening Forensic Science in the United States: A Path Forward.  This report quite clearly sets forth the substantial shortcomings of forensic sciences, including the lack of standardization and overall quality among local, state, and federal providers of forensic science evidence. 

The Report highlights concerns about lack of laboratory accreditation and certification, the complicated problems inherent in "matching" a specific to an individual source, the lack of independent oversight of laboratories, and the dangers of many of the terms forensic scientists use to describe a match, such as "consistent with" or "similar in all respects tested."  Among the exceptionally troubling statements about the state of forensic science, the Report states the following:

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Ohio Supreme Court Considers Cost-Shifting in Public Records Request

By Bernadette Published: February 17, 2009

     The Ohio Supreme Court recently ordered county commissioners to recover and provide previously deleted e-mails in response to a public records request, but the Court also indicated that, in some cases, those requesting deleted materials may have to pay the costs of forensic recovery.  The Court, in State ex rel. Toledo Blade Co. v. Seneca Cty. Bd. of  Commissioners, emphasized that a public office violates the Ohio public records statute when it deletes e-mails that it has a statutory obligation to maintain.  The Court further noted that the expense of recovering the deleted materials will not prohibit a court from ordering recovery of deleted information:  "No pleading of too much expense, or too much time involved, or too much interference with normal duties, can be used . . . to evade the public's right to inspect and obtain a copy of the public records within a reasonable time." 

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Facebook Owns You

By Brant Published: February 17, 2009

This article in the New York Times caught my attention today:

The fuss conjures up worries that Facebook users will wind up like the fashion designer Halston, who lost the right to use his own name, having conveyed that right to Revlon.

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Lincoln and the Constitutionality of Emancipation

By Wilson Huhn Published: February 17, 2009

     Abraham Lincoln opposed slavery as strongly as any abolitionist: he said, "If slavery is not wrong, then nothing is wrong."  But did he possess the power to end slavery?

     The fundamental point of disagreement that Lincoln had with Stephen Douglas in their debates during the summer of 1858 stemmed from Douglas' refusal to admit that slavery was wrong, while Lincoln contended that slavery was inconsistent with the fundamental principle of the Declaration that "all men are created equal."  Accordingly, Douglas believed that the white people of America were free to extend slavery to the territories of the United States, while Lincoln opposed the extension of slavery.  In his "House Divided" speech Lincoln said:

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Free Ohio law resources on the web

By Lynn Published: February 13, 2009

Have you ever wanted to read for yourself the exact wording of an Ohio law?  Do you want to be a more informed citizen?

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Whose business is it anyway? Ohio bankers allegedly short-change shareholders to profit themselves.

By Stefan Published: February 12, 2009

A recent decision by the Delaware Supreme Court involving an Ohio business has received quite a bit of attention this past week.  The case of Gantler v Stephens involved a shareholders' challenge of a decision by the board of First Niles Financial, Inc. (a bank holding company incorporated in Delaware whose sole asset is the Home Federal Savings and Loan Association of Niles, Ohio), to "privatize" the company--that is, to delist as a public company and reclassify non-management affiliated common stockholders as non-voting preferred shareholders.  Specifically, the shareholders alleged that the directors and officers of First Nile "sabotaged" attempts by other companies to buy First Nile, even though those deals would have created the most value for the shareholders, in order to avoid losing their positions and business relationships with First Nile.  The Delaware Supreme Court overruled the Chancery Court and concluded that the shareholders had stated a claim sufficient to withstand a motion to dismiss.

Reactions to the decision run the gamut from Professor Cunningham's conclusion that the decision says "little or nothing new," to Francis Pileggi's description of the case as representing "a major decision on important matters of Delaware corporate law."

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Obama poster artist a copyright thief!?

By Brant Published: February 10, 2009

Yes, it's the Associated Press v. Shepard Fairey. Turns out that the famous poster by artist Shepard Fairey (is that a great name or what?) was confessedly based on a photograph by freelance photographer Mannie Garcia.  The AP is claiming that the poster violates their copyright in the photo.

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Lincoln: The Gettysburg Address

By Wilson Huhn Published: February 10, 2009

    The Gettysburg Address is widely considered to be the greatest speech in American history.  In this essay both the style and the substance of the Address are analyzed.

     On November 19, 1863, Lincoln delivered this brief speech at the dedication of the cemetery at Gettysburg, Pennsylvania.  Gettysburg was the site of the most important battle of the Civil War - the turning point of the war, in which the southern army was decisively defeated and the South lost all hope of securing foreign assistance in support of seccession.  Lincoln used the occasion of the dedication not to glorify his role or the role of his military commanders nor did he vilify the rebels.  Instead, in the words of the historian Garry Wills, he "remade America" by redefining why we love this country - why it is worth fighting for and dying for.

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Akron Law Symposium on Intellectual Property Law and Policy To Be Held March 9

By Diana Published: February 9, 2009

The University of Akron School of Law and Sughrue Mion PLLC law firm will sponsor the 11th annual Richard C. Sughrue Symposium on Intellectual Property Law and Policy on Monday, March 9 from 8 a.m. to 5:30 p.m. at the John S. Knight Center in Akron.

Prominent leaders in the field of intellectual property and policy will speak at this year's symposium titled "Old Problems, New Directions." The symposium will feature a review of recent developments in patent, trademark and copyright law by noted experts in the field. It will also include a review of the PTO's new disciplinary rules and a panel discussion on the likely impact of the Obama administration on IP policy. The featured luncheon speaker will be Chief Judge Paul R. Michel of the U.S. Court of Appeals for the Federal Circuit.

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Lincoln and Secession: Address of July 4, 1861

By Wilson Huhn Published: February 6, 2009

     The essay posted Tuesday described the arguments that Abraham Lincoln made against secession in his First Inaugural Address of March 4, 1861.  Four months later on Independence Day, 1861, Lincoln returned to this subject and expanded upon his position in a special address to Congress.

     In the first passage from this speech Lincoln introduces a theme which he will return to in the Gettysburg Address - whether or not it is possible for a democracy ("a government of the people, by the same people") to survive:

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A New Standard for Executive Compensation?

By Stefan Published: February 5, 2009

The blogosphere is full of commentary on the serious executive compensation limitations to be imposed on certain recipients of government bailout money.  (Here is a list of links to business law blogs that should provide you with access to all the commentary you desire.)  One of the aspects of this I find interesting is the possible federalization of what is traditionally a matter of state corporate law.  Over at The Race to the Bottom, Prof. Brown has opined that:

However, the fact that at least some corporations are seemingly being shamed into pulling back on some of their lavish extravagances made me wonder about a possible alternative standard the Delaware courts might apply in order to cut off further challenges to their authority in this area.

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Prosecutions delayed

By Brant Published: February 5, 2009

On Wednesday, the military's highest court on war crimes prosecutions gave the Obama Administration a requested 120-day delay of a pending case to allow a new study of the fate of prisoners at Guantanamo Bay.

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UA to Celebrate the 200th Anniversary of Lincoln's Birth

By Diana Published: February 4, 2009

The University of Akron will commemorate the 200th anniversary of President Abraham Lincoln's birth with a celebration on Feb. 12 at noon at The University of Akron Student Union in the Student Theater. The event is free and open to the public.

The celebration will be a birthday celebration featuring light refreshments and an appearance from President Lincoln himself, as well as short presentations by the following Lincoln scholars:

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Lincoln and Secession - The First Inaugural

By Wilson Huhn Published: February 3, 2009

     As Commander-in-Chief Abraham Lincoln opposed the secession of the southern states militarily and under his leadership the armed forces of the United States defeated the secessionist movement on the battlefield.  In his addresses to the American people, Lincoln mounted powerful arguments opposing secession on all fronts - on legal grounds, on political grounds, on economic grounds, on patriotic grounds, and most importantly, on moral grounds.   Lincoln addressed secession at length in two speeches: his First Inaugural Address and his address to Congress on July 4, 1861.  In this post I describe the arguments that Lincoln made against secession in his First Inaugural. 

     On March 4, 1861, in his First Inaugural Address, Lincoln made three legal arguments against secession and closed with an appeal to the common heritage of the North and the South in the Revolution.  The first legal argument stemmed from the fact that the Articles of Confederation, our first Constitution which was written in 1778 and adopted in 1781, had declared the Union to be "perpetual."  Lincoln contended that all governments consider themselves to be perpetual, and that in any event the Constitution itself did not contemplate or provide for secession:

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Courtroom dogfight

By Brant Published: February 2, 2009

I loved this story about a dog owner and his fight against the condominium association. Typically, a state will have a Condominium Act that governs the various kinds of rules and restrictions a homeowners association can impose on owners of individual condominium units. Apparently this condo association had a rule prohibiting dogs over 12 pounds. Poor C.C., the Whippet/Lab mix featured in the story, reportedly weights about 30.

Condo association rules often rankle. Some prohibit such ordinary actions as parking your pickup truck in the driveway. Doonesbury once ridiculed widespread homeowners association efforts to restrict clotheslines. And the X-Files did an episode where homeowners who dared flout the authority of the homeowners association were done away with by the Slime Monster.

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Ohio Innocence Project Director to Discuss DNA Exonerations

By Diana Published: February 2, 2009

Mark A. Godsey, professor of law at the University of Cincinnati College of Law and director of the Ohio Innocence Project will visit Akron Law on Wednesday, Feb. 4 at 4:30 p.m. in Room W206. Professor Godsey will deliver a presentation on DNA Exonerations. Joining him will be recent DNA exoneree Robert McClendon, who was released this past August after spending 18 years in prison for a crime he did not commit. This lecture is free and open to the public.

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