Category Archives: Corporate Law

Article: What Diversity Contributes to Equal Opportunity

Article: Stephen M. Rich, What Diversity Contributes to Equal Opportunity, 89 S. Cal. L. Rev. 1111 (2016).

The ideal of diversity so pervades American public life that we now speak of diversity where we once spoke of equality. Yet we seldom pause to consider the costs that have accompanied this shift. In Grutter v. Bollinger, the Supreme Court held that a public university’s use of racial preferences in student admissions will not violate equal protection if the challenged admissions policy is narrowly tailored to achieve the university’s compelling interest in student body diversity. Rather, however, than quieting public controversies about affirmative action, the decision has been a frequent target of legal and political attack. Grutter and the Court’s subsequent decisions in Fisher v. University of Texas at Austin have established the dominant legal conception of diversity, but they have also left many questions unanswered concerning the applicability of Grutter’s diversity rationale outside of the educational context. This Article rejects Grutter’s rationale, but not the relevance of diversity to the goal of equal opportunity. It demonstrates that Grutter’s rationale underserves equal opportunity by deferring to institutional constructions of diversity’s benefits, naively equating the achievement of numerical diversity with the accomplishment of those benefits, and failing to distinguish between exploitative and egalitarian uses of diversity. This Article uses the popular conception of diversity found in business settings and managerial literature as a foil for the legal conception. On the one hand, by conceiving of diversity as a business resource, managerial discourse advocates for exploitative uses of diversity, thereby widening the gap between diversity and equal opportunity. On the other hand, because the value of diversity as a business resource turns in part on the professional growth and achievement of individual workers, managerial discourse sometimes invokes the concept of diversity in order to promote new institutional practices that extend professional opportunities to all persons, regardless of social status. Managerial discourse thus reveals important dangers and possibilities inherent within the concept of diversity that have yet to be explored in legal discourse. This Article marshals those lessons to propose a reconstruction of Grutter’s diversity rationale to fulfill its potential as an instrument of equal opportunity, even outside of the educational context and even when an institution does not rely on affirmative action.

News Article: “Portland Adopts Surcharge on C.E.O. Pay in Move vs. Income Inequality”

News Article: Gretchen Morgenson, “Portland Adopts Surcharge on C.E.O. Pay in Move vs. Income Inequality,” N.Y. Times, Dec. 7, 2016.

(Texas Size) Texas Law Review Symposium: “The Constitution and Economic Inequality”

Texas Law Review Symposium: “The Constitution and Economic Inequality”

New Article: “Market Power and Inequality: The Antitrust Counterrevolution and its Discontents”

New Article: Lina Khan & Sandeep Vaheesan, Market Power and Inequality: The Antitrust Counterrevolution and its Discontents, Harv. L. & Pol’y Rev. (forthcoming).  Abstract below:

One unexplored theme in the debate around economic inequality is the role of monopoly and oligopoly power. Despite the relative lack of attention to this topic, there is sound reason to believe that pervasive market power in the economy has contributed to extreme economic disparity in the United States today. Given the affluence of shareholders and executives compared to consumers in most markets as well as the power dynamics inside large corporations, market power, in general, can be expected to have significant regressive distributional effects. Case studies of anticompetitive practices and uncompetitive market structures in several key industries illustrate how large corporations have come to dominate the U.S. economy. On top of their market power, monopolistic and oligopolistic companies translate their economic power into political influence, often successfully pushing for laws and regulation that further enhance their clout and transfer wealth upwards. Pervasive market power in the economy, which appears to be contributing to economic inequality, is the result of an intellectual and political revolution in the 1980s that dramatically reoriented and narrowed the goals of antitrust law. Importantly, this counterrevolution can be reversed. We present a vision of antitrust that accords with what Congress intended in enacting “this comprehensive charter of economic liberty” and offer specific policy prescriptions.

New Article: “Hobby Lobby and Social Justice: How the Supreme Court Opened the Door for Socially Conscious Investors”

New Article: Michele Benedetto Neitz, Hobby Lobby and Social Justice: How the Supreme Court Opened the Door for Socially Conscious Investors, 64 SMU L. Rev. 243 (2015).  Abstract below:

In Burwell v. Hobby Lobby, the Supreme Court upended the traditional foundations of corporate law. By allowing corporations to exercise legally recognized religious rights, the Court changed the very nature of a corporate entity. Moreover, the Court defied the conventional doctrine providing that the purpose of a corporation is to make profit for its shareholders. The case is being both praised and denounced by observers, but no one has yet fully analyzed how the Court’s reasoning paved the way for social impact investors to use the corporate form as a vehicle to achieve their objectives.

This Article is the first to connect the Hobby Lobby case to shareholder activism for social justice causes. The Article considers the existing methods by which advocates can use shareholder activism to create meaningful social change. The Article next examines how the Court’s expansion of the rights of corporate “persons” in Hobby Lobby created new legal arguments for corporate social responsibility advocates. For example, after Hobby Lobby, corporations can be considered moral “persons” who do not need to consider shareholder wealth maximization as the highest priority. This reasoning presents an exciting opportunity for investors trying to influence corporations to act in socially or environmentally beneficial ways. Accordingly, the Article will propose two ways social investors can act now to take advantage of Hobby Lobby’s extraordinary impact on corporate law doctrines: (1) Creating an innovative classification of stock to expand the voting rights of socially conscious investors, and (2) Shifting investments away from benefit corporations to larger and more influential companies. In the wake of Hobby Lobby, this Article forecasts the emergence of a new legal chapter in corporate social responsibility: Corporations as tools for generosity, not greed.