Charles R. Korsmo*
The events of May 6, 2010 took high-frequency trading from the edges of public consciousness to being front page news. American stock markets had opened that morning to unsettling rumblings from Europe. The previous day had seen violent protests in Greece against proposed austerity measures designed to avert a default on Greek government debt. The ongoing riots seemed likely to scupper a proposed European Union bailout of Greece, potentially touching off a chain-reaction debt crisis with disastrous consequences for the entire euro zone. Given these inauspicious augurs, it is hardly surprising that investor sentiment was somewhat jumpy and decidedly gloomy for much of the day. Over the course of the morning, prices slid in increasingly volatile trading. By 1:00 p.m., the Standard & Poor’s 500 (“S&P 500”), a well-known index of stock prices for 500 top American companies, had fallen by about 1%—a significant drop, to be sure, but not yet particularly alarming.
Around 1:00 p.m., the dollar value of the Euro started to decline precipitously, and the sell-off in the broader market began to accelerate. The volatility of stock prices increased sharply, triggering automatic slowdowns in trading for numerous stocks traded on the New York Stock Exchange (“NYSE”). By 2:00 p.m., the S&P 500 had fallen a total of 2.9% for the day. Such a large drop is unusual, and undoubtedly cause for consternation, but was nowhere near as severe as the multiple 5%+ daily swings seen at the height of the 2008 financial crisis. Few would have guessed that the stage was now set for the most extraordinary hour in the history of the American stock market.
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*Assistant Professor, Case Western Reserve University School of Law. J.D., Yale Law School.
Viva R. Moffat*
In passing the Copyright Act in 1976, Congress provided that “pictorial, graphic, and sculptural works” were to be protected, but at the same time made clear that works of industrial design, as opposed to works of applied art, were not to be protected by copyright law. Put simply, “useful articles” are not copyrightable. This is so because useful things belong in the patent realm, if they are to receive protection at all. Seemingly straightforward, this distinction—between applied art and industrial design, between copyright law and patent law—has long perplexed policymakers, courts, and academics.
While the law and the language, as shall be seen, can be jargon-filled and obscure, at issue is a straightforward and real-world concern: whether and to what extent items like bicycle racks, smartphones, belt buckles, mannequins, and all manner of everyday products ought to be protected by some kind of exclusive right. Put another way, the question is whether copyright provides the proper form of protection for items of industrial design.
This article concludes emphatically that, while some kind of protection—that is, some kind of restriction on copying, be it design patent, trade dress, or a sui generis form of protection—may be appropriate, copyright law is not the right approach. More specifically, “not copyright” for industrial design is sufficiently important that a bright-line rule excluding industrial design from copyright, in contrast to the nuanced standards currently employed, should be adopted.
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*Associate Professor, University of Denver Sturm College of Law.
Jennifer O’Hare*
Following the financial crisis, the synthetic collateralized debt obligation (“CDO”)—a complex derivative that received little mainstream attention prior to the housing meltdown—became big news. Journalists wrote numerous articles explaining how synthetic CDOs spread the contagion of toxic assets throughout the financial system, nearly bringing down the global economy. Government hearings exposed the ugly conflicts of interest inherent in the structuring of synthetic CDOs, as big investment banks created, sold, and invested in synthetic CDOs and often bet against their clients. Some of the world’s largest financial institutions, who faced bankruptcy when their investments lost value, bitterly complained that these synthetic CDOs had been “designed to fail” so that the investment banks could profit at their expense. Greedy investment banks were seen as the problem, not the synthetic CDOs themselves.
As a result, the Securities and Exchange Commission (“SEC”) sued several of the highest profile investment banks for fraud, and some investors in synthetic CDOs brought their own private actions for fraud against the investment banks. Calls for increased regulation of synthetic CDOs resulted in legislation prohibiting investment banks from engaging in certain conflicts of interest in the sale of synthetic CDOs.
This article shows that focusing primarily on the misconduct by investment banks or on the corresponding harm suffered by investors has caused regulators to miss the real issue: the sale of the synthetic CDO. Outrage over the extraordinary greed and sometimes outrageous misconduct by investment banks in the sale of synthetic CDOs is understandable. However, it was not the bad behavior of the investment banks that furthered the financial crisis; it was the use of the synthetic CDO itself. Because the regulators focused on the wrong problem, the dangers caused by synthetic CDOs still exist and must be addressed through additional regulation.
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*Professor of Law, Villanova University School of Law. J.D., 1990, The George Washington Law School; B.S.E., 1986, The Wharton School of the University of Pennsylvania.
Lawrence Ponoroff*
The oxymoronically titled Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA” or “2005 amendments”) has received considerable attention since its passage, and considerably less than all of it is positive. By even a neutral account, the bill is clumsily drafted, unnecessarily prolix, internally inconsistent, and annealed in a cauldron of special interest pressures. The legislative history is scant and what does exist is less than altogether clear or helpful. Together, these factors have frequently rendered the traditional judicial function in application of the law; namely, ascertaining (or at least beginning by ascertaining) congressional intent, an exercise in futility. To say the least, it is difficult to discern that which, in all likelihood, does not and has never existed in a uniform or coherent fashion.
Nonetheless, since enactment of BAPCPA, courts have labored gamely to make sense of its provisions, which, in any number of instances, are inscrutably obscure, and seem to lack any inherently clear reason. Thoughtful commentators have undertaken to offer useful insight and analysis to help guide that effort. Overall, however, these efforts have fallen, and will continue to fall, short in relation to any number of provisions of BAPCPA. This is because they entail a stoic and estimable, but ultimately vain, attempt to interpret statutory text that is, in some instances, impenetrably vague or simply incomplete, or, in other instances, confounds essential bankruptcy policy. A coherent and intelligible expression of legislative intent that might have shed some light in the process is nowhere to be found. Although the competition is unquestionably stiff, in perhaps no substantive area of the field have these observations been truer than in the efforts to deconstruct and rationally apply the changes BAPCPA wrought on an area of commercial law and practice that was already embroiled in confusion and controversy; namely, sellers’ right of reclamation.
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*Samuel F. Fegtly Chair in Commercial Law, The University of Arizona James E. Rogers College of Law.
Ashley Peterson*
More than forty-three million adult Americans are cigarette smokers. Cigarette smoking accounts for 400,000 deaths annually—more than AIDS, alcohol, cocaine, heroin, homicide, suicide, motor vehicle crashes, and fires combined—making cigarettes the leading preventable cause of death in the United States. Tomorrow, approximately 4,000 children under the age of eighteen will experiment with cigarettes for the first time and another 1,500 will become regular smokers. Of those that smoke regularly, about half will eventually die from tobacco use. Tobacco-related illnesses in the United States alone cost approximately $193 billion each year in lost productivity and health care expenditures. These sobering statistics have encouraged public health officials and lawmakers to take drastic action designed to encourage smokers to quit and to prevent young adults from ever lighting up. The Family Smoking Prevention and Tobacco Control Act (“FSPTCA” or “the Act”) and its implementing regulations promote the government’s anti-smoking agenda—at the expense of tobacco companies’ constitutionally protected free speech.
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*J.D. Candidate 2014, University of Richmond School of Law; M.T., 2006, B.A., 2005, University of Virginia.
Andrew P. Sherrod *
Jaime B. Wisegarver **
This article surveys recent significant developments in Virginia civil practice and procedure. The article discusses opinions of the Supreme Court of Virginia from June 2012 through June 2013 addressing civil procedure topics, significant amendments to the Rules of the Supreme Court of Virginia concerning procedural issues during the same period, and legislation enacted by the Virginia General Assembly during its 2013 session that relates to civil practice.
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Laurence V. Parker, Jr. *
In the 2011 session, the Virginia General Assembly passed House Bill 2358, Benefit Corporations, to be codified as article 22 (the “Benefit Corporations Article”) of the Virginia Stock Corporation Act (“VSCA”). The Benefit Corporations Article is largely based on legislation prepared in other states and allows a Virginia corporation to elect in its articles of incorporation to be treated as a “benefit corporation.” These for-profit corporations are required to pursue not only profitability but also a general public benefit and, if one so elects, one or more specific public benefits. In Section II of this article, the author discusses the Benefit Corporations Article in detail. Section III examines some aspects of the Benefit Corporations Article for social entrepreneurs and practitioners to consider before making the benefit corporation election. In Section IV, the author asks whether practitioners and social entrepreneurs can achieve some of the same corporate governance objectives by private ordering without electing to be treated as benefit corporations. Finally, Section V concludes with some observations about the Benefit Corporations Article itself.
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* Partner, Williams Mullen, Richmond, Virginia; J.D., 2003, University of Richmond School of Law; M.B.A., 2003, The Robins School of Business, University of Richmond; B.A., 1995, University of Virginia.
Aaron Campbell*
Kathleen B. Martin**
D. Patrick Lacy, Jr.
Kathleen S. Mehfoud
Sharon K. Lieblich *
That the Court of Appeals of Virginia has reached its maturity is evident from the court’s recent decisions, which rarely break significant new ground. The last two years have seen the court mainly applying established principles in new contexts, and the most interesting cases tend to be the ones whose unusual facts make them stand out. Consider, for example, L.F. v. Breit, in which a mother who had acknowledged the paternity of the biological father of her child argued—unsuccessfully—that because they had used in vitro fertilization the father had no parental rights. At the other end of the spectrum are the many cases that do not even reach the merits because of some procedural failing on the part of the appealing party, such as not preserving the issue for appeal or failing to include the issue in the opening brief.
The General Assembly and court of appeals have attempted to dig out of the hole created by the decision in Hoy v. Hoy by amending Virginia Code section 20-113 to give Virginia courts the authority to enter a qualified domestic relations order (“QDRO”) or other order enforcing a support order and attaching any pension, profit-sharing, or deferred compensation plan as permitted by the Internal Revenue Code or other federal law. But there seems to be no escape from the rule that the designation of a beneficiary of federal life insurance prevails over all legislative efforts to require the beneficiary to convey the proceeds to the widow of the deceased.
The court of appeals continues to issue mostly unpublished decisions, many of which seem appropriate for publication. Sometimes an unpublished decision will address a legal issue of first impression, and even if the facts are quite unusual, it seems unduly reticent of the court not to publish the case.
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