Vol. 75 No. 4 -- Fall 2020

     

    75th Anniversary Articles

    Business & Corporate

    The Business Lawyer: 75 Years of Serving the Profession—Reflections

    Karl John Ege

    This article was prepared for the 75th Anniversary Volume of The Business Lawyer to reflect on the development of the journal since its first publication in July 1946. The article focuses on the changing nature of business law practice over the intervening decades as reflected in the articles published in The Business Lawyer covering a broad range of topics of relevance at the time to business lawyers. From the outset The Business Lawyer has been the voice of the ABA Business Law Section, the preeminent legal journal for issues of importance to business practitioners, and a resource for legislatures, regulators, and practitioners to adapt to an ever-changing business environment.

    The UCC and the ABA’s Business Law Section: In Praise of the Omnium Gatherum

    Carl S. Bjerre, Amelia H. Boss, Steven L. Harris, Charles W. Mooney, Jr., Sandra M. Rocks, Edwin E. Smith, and Steven O. Weise

    Most of the Uniform Commercial Code revision and amendment projects of recent decades have drawn invaluable input and energy from the committees, subcommittees, task forces, and working groups of the ABA’s Business Law Section. The projects addressed in this article are the initial promulgation of Article 2A on Leases; the repeal and revision of Article 6 on Bulk Sales; the revisions to Article 8 on Investment Securities; the revision of Article 9 on Secured Transactions; and the “Terrible Two’s” projects involving UETA, the unfulfilled amendments to Articles 2 and 2A on Sales and Leases, and UCITA. Drawing on their first-hand experiences among many other sources, the authors show the wide variety of beneficial forms that the Section’s input has taken.

    Business & Corporate

    The Evolution and 2020 Status of Cooperation in SEC Enforcement Investigations

    Dixie L. Johnson, Carmen J. Lawrence, and Jamie Stinson

    When facing potential enforcement action from the Securities and Exchange Commission (“SEC”), companies often seek to mitigate the consequences by cooperating with the SEC in one or more of the following ways: self-policing, self-reporting, remediation, and cooperation. While a 2001 SEC report of investigation known as the Seaboard Report provides a roadmap for what steps to take in order to earn cooperation credit and describes generally the potential benefits to be received, no such report or guidance exists that details exactly what tangible benefits a company will receive in return for the earned credit and how it will be determined. In addition, outside of narrow exceptions where the SEC engages in self-reporting initiatives, companies looking for publicly available guidance on how best to cooperate face a lack of consistency in the SEC’s settlement documentation describing cooperation factors and what benefits may be earned.

    Business & Corporate

    The Business Lawyer—Seventy-Five Years Covering the Rise of Alternative Entities

    Donald F. Parsons, Jr., R. Jason Russell, and Koah M. Doud

    From its first article in 1946 through the emergence of LLCs in 1977 and on to the present day, The Business Lawyer has charted and helped foster the development of alternative entities and the increase in their complexity over time. This article follows the course of The Business Lawyer’s coverage of these entities, starting with a look at their history and then moving on to their continued development over the last thirty years. This article then briefly identifies a few important substantive issues in alternative entity law that have been covered by The Business Lawyer in recent decades, before considering some “hot topics” currently at issue.

    Square Peg Meets Round Hole: Regulatory Responses to Challenges Created by Innovation in Banking

    Jonice Gray Tucker, Daniel Stipano, Kari Hall, Brendan Clegg, and Anthony Carral

    During the past decade, an underlying tension between the financial sector’s embrace of innovative products and services and the regulatory framework that governs the industry surfaced—and that tension has since become even more acute during the COVID-19 pandemic. Facing pressure from customers’ twenty-first century expectations and competition from emerging fintechs, banks began implementing technological advances into their businesses even before disruptions to the U.S. financial system caused by the coronavirus placed a spotlight on the critical role those advances will play in banking’s future. This article highlights a number of areas of law where the governing framework erected during bygone eras has hindered the industry’s adoption of innovation and proven incompatible with the digital revolution that has changed the business of banking. This article also explores the successes and failures of a range of approaches adopted by the federal regulatory agencies responsible for the framework’s design, implementation and enforcement as they try to mitigate this tension. The degree to which these agencies embrace innovation in the industry, and use the tools at their disposal to encourage its continuation, will go a long way toward determining whether banks can weather this period of economic disruption, meet the changing needs of their customers, and fend off competition from industry upstarts.

    The Business Lawyer at 75: The Annual Survey of Consumer Financial Services Law

    John L. Ropiequet

    Over its forty-two year history in The Business Lawyer, the Annual Survey on Consumer Financial Services Law, written by numerous members of the Consumer Financial Services Committee, has chronicled the developments in an ever-changing area of law that deals with the regulation of credit products for personal, family, and household purposes. From the enactment of the Truth in Lending Act in 1974 to the enactment of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act in 2010 to the present, the alphabet soup of new federal statutes and their alphabetized federal regulations has created an astonishingly complex legal structure that has in turn led to the establishment of an army of compliance lawyers and litigators who are devoted to dealing with it. This article describes what the Annual Survey has done to keep the profession abreast of the twists and turns in this fascinating field during several different eras that reflect larger economic developments like the go-go eighties and the housing foreclosure crisis that followed it, and the congressional reactions to perceived abuses.

    Compliance and Ethics Programs: What Lawyers Need to Know to Understand the Development of This Field

    Steven A. Lauer and Joseph E. Murphy

    Corporate compliance programs, a relatively new phenomenon in the corporate arena, have evolved over the past few decades. What challenges have compliance professionals encountered during that short history? What issues might they face in the coming years? The authors review that history and render some educated guesses as to the answers to that last question in this article.

    Discussion

    Business & Corporate

    Profound Change: The Evolution of ESG

    E. Christopher Johnson, Jr., John H. Stout, and Ashley C. Walter

    This article has been abstracted from a series of telephone conference discussions among E. Christopher Johnson, Jr., John H. Stout, and Ashley C. Walter, each of whom has chaired committees of the Business Law Section and served as a member of the Council. The discussion focused on the evolution, meaning, and critical importance of the ideas, meanings, and principles embodied in the terms “sustainability,” “CSR” (corporate social responsibility), and ESG (environment, social, and governance). The discussion began before the novel coronavirus and the killing of George Floyd impacted our lives—our country’s and the world’s social, political, and economic well-being and order. The discussion and preparation of this article was heavily influenced by these events as they forced not only an examination of the history of the above terms but also a reflection on their application to, and relevance for, strategically charting a path forward.

    Report

    Survey

    Business & Corporate

    Survey - Uniform Commercial Code

    Uniform Commercial Code Committee, ABA Business Law Section

    The survey that follows highlights the most important developments of 2019 dealing with domestic and international sales of goods, personal property leases, payments, letters of credit, documents of title, investment securities, and secured transactions. Along with the usual descriptions of interesting judicial decisions highlighted in the survey, there has also been legislative progress in several areas.

    Business & Corporate

    The Uniform Commercial Code Survey: Introduction

    Jennifer S. Martin, Colin P. Marks, and Wayne Barnes

    The survey that follows highlights the most important developments of 2019 dealing with domestic and international sales of goods, personal property leases, payments, letters of credit, documents of title, investment securities, and secured transactions. Along with the usual descriptions of interesting judicial decisions highlighted in the survey, there has also been legislative progress in several areas.

    Business & Corporate

    Article 7: Documents of Title

    Anthony B. Schutz

    This year, there were very few cases dealing with Article 7. Only two cited its provisions within the reporting period. In the first, Southwest Refrigerated Warehousing Services Joint Venture v. M.A. & Sons, Inc.,2 a warehouse sought recovery of unpaid storage and warehousing charges under a storage agreement with a storer who stored chile product in the facility. The storer counterclaimed for damage to the product caused by employees that punctured the bags containing the chile product.

    Business & Corporate

    Investment Securities

    Carl S. Bjerre

    The Investment Securities portion of this year’s Uniform Commercial Code Survey is devoted to a recent state supreme court ruling that warrants detailed attention because of the number of significant issues involved. The case primarily involves whether state-law causes of action relating to securities—in this case the alleged breach of a trust indenture—are automatically assigned to a later purchaser of the securities. In other words, loosely speaking, does the cause of action “run with the security”? Along the way, the case highlights a basic distinction between the direct and indirect holding systems as well as several interesting aspects of statutory interpretation.

    Book