BLT: November 2017

     

    Feature Articles

    Business & Corporate

    An Introduction to Behavioral Economics and Negotiations

    Warren E. Agin

    In his latest book, The Undoing Project, author Michael Lewis introduces us to the fathers of behavioral economics, Amos Tversky and Daniel Kahneman. Its first chapter describes how Houston Rockets General Manager Daryl Morey used behavioral economics to rebuild the team beginning in 2007. The key, Daryl Morey noticed, was that his recruiters and coaching staff invariably fell prey to specific errors in their decision making when selecting players. For example, recruiters who found a candidate they liked tended to overvalue information reinforcing their decision and ignore information suggesting that the player should not, in fact, be drafted. Eliminate these errors in judgment, replacing “judgment calls” with hard data, and they could pay less for better players. This was the same approach the Oakland A’s used to achieve success during their famous 2002 baseball season and the subject of Michael Lewis’ prior book, Moneyball.

    Business & Corporate

    Separability and Statutory Interpretation: Star Athletica and the Copyright Act of 1976

    Patrick T. Clendenen

    On March 22, 2017, the U.S. Supreme Court addressed and decided whether features incorporated into the design of a useful article are eligible for protection under federal copyright law. In a 6-2 decision, and in an opinion written by Justice Thomas, the court held in Star Athletica, LLC v. Varsity Brands, Inc. that such features are protectable under federal copyright law only if: (i) they can be perceived as a two- or three-dimensional work of art separate from the useful article, and (ii) they would qualify as protectable pictorial, graphic, or sculptural work separately from the useful article into which they are incorporated. In the case, which concerned graphic design features of cheerleading uniforms, the court held that the conjunctive test announced in its decision had been met and that the designs at issue were protectable.

    Business & Corporate

    Litigators Must Be Mindful of Discovery Compliance under the Revised Federal Rules

    Federal courts are now handing down firm decrees, stating that although “old habits die hard,” counsel must revise their “form” discovery responses immediately to comply with the Federal Rules of Civil Procedure. In two recent orders, courts have decried the “widespread addiction” lawyers have with the “menacing scourge” of “boilerplate” objections. Liguria Foods, Inc. v. Griffith Laboratories, Inc., 14-3041-MWB (D. Iowa Mar. 13, 2017); Fischer v. Forrest, 1:14-CV-1304-PAE-AJP (S.D.N.Y. Feb. 28, 2017). Because no litigator wants to be the subject of a strongly worded discovery order, it would benefit counsel to heed these courts’ warnings. This is especially so because both make clear: “admonitions from the courts [are] not . . . enough . . . only sanctions will stop this nonsense.”

    Business & Corporate

    Banking Marijuana Businesses-Understanding the Challenges and Opportunities

    Andrew Bigart

    So long as marijuana remains illegal at the federal level, many financial institutions (FIs) will remain wary of the industry, no matter how many states legalize marijuana. However, there may be changes on the horizon for dispensaries and other marijuana-related businesses (MRBs) seeking access to banking services. According to a recent report from the Financial Crimes Enforcement Network (FinCEN), 368 banks and credit unions are providing services to MRBs. For MRBs, this is undoubtedly a positive, if still nascent, development. For this growth to continue, FIs and MRBs must work together to ensure that financial services are provided to, and used by, the marijuana industry in a responsible, safe, and sound manner.

    Business & Corporate

    Cybersecurity Issues in PPP

    Carla Potter

    A public/private partnership (“PPP”) is a cooperative arrangement between the public sector and the private sector for the delivery of a specific infrastructure project or service. The public and private sectors each have strengths and weaknesses relative to each other with regard to the performance of certain tasks. A PPP seeks to exploit those strengths while mitigating the weaknesses. Typically, the public sector sets out the goals and objectives for the project by defining the level, quality, and scope of the required service or project while ultimately retaining ownership and, consequently, a measure of oversight over the finished asset. The private sector brings its managerial, technical, and financial expertise to the venture and is responsible for delivering an output which satisfies the goals and objectives defined by the public sector.

    Business & Corporate

    Cyber Risk in the Vendor Ecosystem

    Paige M. Boshell

    The past several years have demonstrated a transition from enterprise-wide cyber-risk management to ecosystem-wide cyber-risk management. In enterprise-wide cyber-risk management, each individual company protects the security of its own information assets and systems. The ecosystem approach recognizes that other parties outside of the company may increase or reduce the company’s cyber-risk exposure and attempts to manage this external risk. This article provides an overview of the vendor ecosystem, addresses cyber risk assessment, and concludes with a discussion of cyber risk mitigation by contract.

    Business & Corporate

    The Second Circuit’s Marblegate Decision and Third Party Legal Opinions in Debt Restructurings

    Ettore A. Santucci

    Is it premature for lawyers who are asked to give closing opinions on complex debt restructurings to breathe a complete sigh of relief now that the Second Circuit’s decision in Marblegate Asset Management, LLC v. Education Management Corp., 846 F.3d 1 (2d Cir. 2017) has confirmed the narrow scope of section 316(b) of the Trust Indenture Act of 1939, as amended (TIA)?

    Business & Corporate

    Securities Regulators Warn That Certain "ICOs" May Be Subject to Securities Laws

    The U.S. Securities and Exchange Commission (SEC) recently dampened the market for initial coin offerings (ICOs). This action may have been an opening salvo in what appears to be a growing consensus of securities regulators globally about the application of the securities laws to certain aspects of the ICO marketplace, driven in part by the potential for fraud, money laundering, and circumvention of securities laws in the ICO marketplace.

    Business & Corporate

    Don't Blow It: Avoiding Pitfalls under the SEC's Whistleblower Regime

    In the six years since the U.S. Securities and Exchange Commission adopted rules implementing the new whistleblower program required by the Dodd-Frank Wall Street Reform Act and Consumer Protection Act of 2010, the program has gone from a fledgling experiment to a central part of the Commission’s enforcement program. The SEC now receives thousands of tips per year, has doled out more than $160 million in rewards, and has brought multiple enforcement actions based on, or substantially assisted by, information it received from whistleblowers.

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