ARTICLES

The Brouhaha Over Intra-Corporate Forum Selection Provisions:A Legal, Economie, and Political Analysisjoseph A. Grundfest and Kristen A. Sa veile

From Regulation to Prosecution to Cooperation: Trends in CorporateWhite Collar Crime Enforcement and the Evolving Role of theWhite Collar Criminal Defense AttorneyRobert S. Bennett, Hilary Holt LoCicero, and Broohs M. Hanner

Artiele 9 of the UCC: Reconciling Fundamental PropertyPrinciples and Plain LanguageThomas E. Planh

Summary of Mendes H'ershman Student Writing Contest Prize Essay-The SupremeCourt Should Hold that Secured Creditors Have an Absolute Right to Credit BidHannah Y Lee

SURVEy-MERGERS AND ACQUISITIONS

Annual Survey of Judicial Developments Pertaining lO Mergers and AcquisitionsAnnual Survey Worhing Group of the M&Ajurispl'udence Subcommittee, Mergers andAcquisitions Committee, ABA Section of Business Law

SURVEY-CONSUMER FINANClAL SERVICESCommittee on Consumer Financial Services, ABA Section of Business Law

Introduetion to the 2013 Annual Survey of Consumer Financial Services LawTherese G. Franzén, Alvin C. Harrel/, Nicole Frush Munro, andjohn L. Ropiequet

The First Year of the Consumer Financial Proteetion Bureau: An OverviewEric]. Mogilnichi and Melissa S. Malpass

Mortgage Servicing DevelopmentsArthul' B. Axelson and Heather C. Hutchings

2012 Survey of RESPAand TILA Regulatory DevelopmentsSanford Shatz andjonathan Cannon

Fair Credit Reporting Act Update-20l2Andrew M. Smith and Peter Gilbert

Current Developments in Deposit Products and Payment SystemsLaura Hobson Brown, Candace Modlin Davis, Lois S. Woodward, and Ryan S. Stinneford

continued on bach cover

Contents

ARTICLES

325 The Brouhaha Over Intra-Corporate Forum Selection Provisions:A Legal, Economie, and Political Analysisjoseph A. Grundfest and Kristen A. Savelle

Three hundred publicly traded en tities have adopted intra-corporateforum selection ("ICFS") provisions either in their charters or as bylawamendments, often without prior stockholder approval. These pro-visions have been adopted in response to a sharp increase in intra-corporate litigation outside the state of incorporation. The academieliterature suggests that this increase is animated by economie incen-tives of the plaintiffs' bar that can be inimical to stockholder inter-ests. ICFS provisions are an effective private ordering mechanism forad dressing this trend in a marmer that responsibly protects stockholderrights.

Plaintiffs have nonetheless brought suit in Delaware challenging thevalidity of ICFS provisions. We review the governing law and demon-strate that ICFS provisions are valid subject matter for charters andbylaws. Stockholders are also on notice that boards have the authorityto amend bylaws without prior stockholder consent, and the "vestedrights" theory is long repudiated. Assertions that stockholders cannotbe bound by ICFS bylaw provisions adopted without prior stockholderconsent are thus incorrect. Speculative claims that ICFS provisionsmight later be exercised in a manner that violates a fiduciary duty orcauses injustice will also not cause them to be invalidated: charter andbylaw provisions are presumed to be validly adopted and hypotheticalspeculation regarding instanees of potential future abuse are insufficientto invalidate the provisions as adopted. This presumption is particularlypowerful in the case of ICFS provisions where boards retain the optionnot to enforce them if enforcement is later deemed inconsistent withfiduciary obligations.

ICFS provisions are also not self-enforcing. Foreign courts hearing pe-titions to enforce ICFS provisions will most frequently apply the ruleestablished by the Supreme Court's Bremen decision to proteet the inter-ests of foreign-filing stockholders. Absent a finding that plaintiffs' rightsunder the chartering state's laws cannot be adequately protected bycourts in the chartering state, ICFS provisions are likely to be enforcedin the very large majority of circumstances.

411 FIOm Regulation to Prosecution to Cooperation: Trends inCorporate White Collar Crime Enforcement and the EvolvingRole of the White Collar Criminal Defense AttorneyRobert S. Bennett, Hilary Holt LoCicero, and Brooks M. Hanner

This artiele traces the steady growth of criminallaw into fields that hadpreviously been addressed by civil statutes, particularly in relation tothe concept of corporate criminal liability. The artiele also describes themeans through which the federal government has encouraged coopera-tion between corporations that are being investigated and their investi-gators. This fundamental shift in how corporate mis conduct is treatedby the federal government has reframed the role of a criminal defenseattorney who defends corporations and executives. Any lawyer facingsuch a task must be willing to incorporate new strategies into daily prae-tice while also evaluating the theoretical considerations governing whatit means to "bet the company."

439 Artiele 9 of the UCC: Reconciling Fundamental PropertyPrinciples and Plain Language 4

Thomas E. Plank

Artiele 9 of the Uniform Commercial Code, which governs (i) the grant of asecurity interest in personal property to secure payment or performance of anobligation-a "true security interest"-and (ii) the sale of receivables, incor-porates the primary property law principle of nemo dat quod non habet-one cannot transfer an interest in property that one does not have-and itscorollary-a transferee can receive what the transferor has and no more. Forgood policy reasons, however; Artiele 9 also enacts the innovative exception tonemo dat, the Filing Priority Principle codified in the ''first-to-file-or-perfectrule," that permits a secured party who first files a financing statement toobtain a superior security interest over a secured party who first obtains asecurity interest and would otherwise prevail under nemo dat. For true secu-rity interests, the plain language of Artiele 9 effectuates the policies of nemodat and the Filing Priority Principle. For the sale of receivables under Artiele 9,however; the plain language of Artiele 9 preeludes application of the FilingPriority Principle to many buyers of receivables, and this result has led somescholars and? practitioners to advocate the application of the Filing PriorityPrinciple to these buyers by implication despite the plain language of thestatute. This artiele analyze: the interplay in Artiele 9 among nemo dat,the Filing Priority Principle, and the important policy of respecting the plainlanguage of a statute and argues that when the plain language of the statuteprotects the interests of buyers of receivables under nemo dat, the FilingPriority Principle should not be imp lied as a matter of policy to defeat thoseinterests, but wh en the language of the statute is ambiguous, the Filing PriorityPrinciple should be applied to further the policy reasons for this exception tonemo dat.

x

507 Summary of Mendes HershnuEssay-The Supreme Court SHave an Absolute Right to Cr,Hannah Y Lee

SURVEY-MERGERS

509 Annual Survey of Judicial De,Mergers and AcquisitionsAnnual Survey Working Group ofMergers and Acquisitions Commit

SURVEY-CONSUMER

Committee on Consumer Financia

553 Introduction to the 2013 AnmServices LawTherese G. Franzén, Alvin C. Harand john L. Ropiequet

557 The First Year of the ConsurneAn OverviewEric]. Mogilnicki and Melissa S. 11

571 Mortgage Servicing DeveloprruArthur B. Axelson and Heather C.

583 2012 Survey of RESPA and TIlSanJord Shat; andjonathan Cann,

593 Fair Credit Reporting Act UpdAndrew M. Smith and Peter Gi/bel

603 Current Developments in DeptLaura Hobson Brown, Candace Meand Ryan S. Stinneford

613 Credit Card Act DevelopmentsObrea O. Poindexter

619 CFPB Developments: Coordinaand Non-Depository InstitutioiMichael A. Benoit andjeffrey P Ta}

xi

;ecution to Cooperation: Trends in.Crime Enforcement and the Evolvmgr Criminal Defense Attorneylolt LoCicero,and Brooks M. Hannerady growth of criminallaw into fields that haded by civil statutes, particularly m relation tocriminalliability. The artiele also descnbes the

te federal government has encouraged coopera-ns that are being investigated and their mvesn-11 shift in how corporate misconduct is treatedent has reframed the role of a criminal defense:orporations and executives. Any lawyer facinging to incorporate new strategies mto daily prae-.g the theoretical considerations govermng whatpany."

econciling Fundamental Propertynguage

Commercial Code, which govems (i) the grant of aal property to secure payment or performance of an'ty interest"-and (ii) the sale of rewvables, mcor-erty law principle of nemo dat quod non habet~terest in property that one does not have-and ltsan receivewhat the transferor has and no more. Forver.Article 9 also enacts the innovative exception torit~ Principle codified in the ''first-to-file-or-perfectured party who first files a financing statement to

interest over a secured party who first obtains ald otherwise prevail under nemo dat. For true secu-nguage of Article 9 effectuates the policies of nemoPrinciple.For the sale of receivables under Arncle 9,age of Article 9 precludes application of the Flhngy buyers of receivables, and this result has led somers to advocate the application of the Fûtng Pnontys by implication despite the plain language of thelyzes the interplay in Article 9 among. nemo dat,iple, and the important policy of respectLng the plamd argues that when the plain language of the statutebuyers of receivables under nemo dat, the Flhngnot be implied as a matter of policy to defeat those

nguageof the statute is a.mbiguous, the Filing Pnontylied to further the policy reasons for thls exceptwn to

x

507 Summary of Mendes Hershman Student Writing Contest PrizeEssay- The Supreme Court Should Hold that Secured CreditorsHave an Absolute Right to Credit BidHannah Y Lee

509SURVEy-MERGERS AND ACQUISITIONS

Annual Survey of Judicial Developments Pertaining toMergers and AcquisitionsAnnual Survey Working Group of the M&Ajurisprudence Subcommittee,Mergers and Acquisitions Committee, ABA Section of Business Law

SURVEY-CONSUMER FINANCIAl SERVICES

Committee on Consumer Financial Services, ABA Section of Business Law

553 Introduetion to the 2013 Annual Survey of Consumer FinancialServices LawTherese G. E/ranZén,Alvin C. Harrell, Nicole Frush Munro,andjohn L Ropiequet

557 The First Year of the Consumer Financial Proteetion Bureau:An OverviewEric]. Mogilnicki and Melissa S. Malpass

57l Mortgage Servicing DevelopmentsArthur B. Axelson and Heather C. Hutchings

583 2012 Survey of RESPA and TILA Regulatory DevelopmentsSanford Shatz andjonathan Cannon

593 Fair Credit Reporting Act Update-2012Andrew M. Smith and Peter Gilbert

603 Current Developments in Deposit Products and Payment SystemsLaura Hobson Brown, Candace Modlin Davis, Lois S. Woodward,and Ryan S. Stinneford

613 Credit Card Act Developments in 2012Obrea O. Poindexter

619 CFPB Developments: Coordinating the Supervision of Depositoryand Non-Depository InstitutionsMichael A. Benoit andjeffrey P Taft

xi

625 The Supreme Court Settles a Decade-Long Debate-2012Survey of RESPA Developmentsjohn R. Chiles and Zachary D. Miller

637 Fair Lending Developments: Enforcement Intensifies,Class Actions Diminishjohn L Ropiequet, Christopher S. Naveja, and L jean Noonan

649 Arbitration Developments: Post-Concepcion-The DebateContinuesAlan S. Kaplinsky, Mark]. Levin, and Martin C. Bryce, jr.

659 Say What You Mean: The FDCPA and Problems of InterpretationLaurie A. Lucas, Donaid S. Maurice, and Tomio B. Narita

669 Reckless Abandon: Vacant Property Ordinances Create LegalUncertainties /Richard E. Gottlieb, Margaret]. Rhiew, and Brett]. Natarelli

677 Update on Tribal Loans to State ResidentsRichard PEckman, Catherine M. Brennan, H. Blake Sims,and jus tin B. Hosie

xii

The Brouhaha Over Intra-CSelection Provisions: A Legand Political Analysis

By joseph A. Grundfest and Kristen A. Sav

Three hundred publicly traded entities havo("lCFS") provisions either in their chartersprior stockholder approval. These provisionsincrease in intra -corporate litigation outside thature suggests that this increase is animated Ithat can be inimical to stockholder interests. lClmechanism for addressing this trend in a manne

Plaintiffs have nonetheless brought suit inprovisions. We review the goveming law avalid subject matter for charters and bylaws.have the authority to amend bylaws withoutrights" theory is long repudiated. Assertions tbylaw provisions adopted without prior stockh(claims that lCFS provisions might later be exeduty or causes injustice will also not cause thelvisions are presumed to be validly adopted ancces of potential Juture abuse are insufficient tcpresumption is particularly powerful in the ccthe option not to enforce them if enforcementobligations.

lCFS provisions are also not self-enforcing.lCFS provisions will most frequently apply thBremen decision to proteet the interests of Jethat plaintiffs' rights under the chartering stat,courts in the chartering state, lCFS provisionsmajority of circumstances.

* joseph A. Grundfest is the William A. FrankeSchool and Senior Faculty at the Rock Center far Cofessar Grundfest was a Commissioner at the Unitebetween 1985 and 1990. Kristen Savelle is a Researcemance at Stanford University. The authors wauldNeal Gerber & Eisenberg LLP for her own independtian of intra-corporate forum selection provisians. Massistance in reviewing earlier drafts of this article. 1Oarwish for her assistance in data collectian in conr