The Future Direction of Delaware Law (Including a Brief Exegesis on Fee Shifting Bylaws)

Delaware sets the governance standards for most public companies. The ability to attract corporations could not be explained solely by the existence of a favorable statutory regime. Delaware was not invariably the first or the only state to implement management friendly provisions. Given the interpretive gaps in the statute and the critical importance of the common law in the governance process, courts played an outsized role in setting legal standards. The management friendly nature of the Delaware courts contributed significantly to the state’s attraction to public corporations. A current example of a management friendly trend in the case law had seen the recent decisions setting out the board’s authority to adopt bylaws under Section 109 of the Delaware General Corporation Law (DGCL), particularly those involving the shifting of fees in litigation against the corporation or its directors. The DGCL allows bylaws that address “the business of the corporation, the conduct of its affairs, and its rights or powers or the rights or powers of its stockholders, directors, officers or employees.” The broad parameters are, however, subject to limits. Bylaws cannot be inconsistent with the certificate of incorporation or “the law.” Law includes the common law. The Delaware courts have used the limitations imposed by “the law” to severely restrict the reach of shareholder inspired bylaws. The courts have not used the same principles to impose similar restraints on bylaws adopted by the board of directors. This can be seen with respect to bylaws that restrict or even eliminate the right of shareholders to bring actions against management and the corporation. In ATP Tour, Inc. v. Deutscher Tennis Bund the court approved a fee shifting bylaw that had littl relationship to the internal affairs of the corporation. The decision upheld the bylaw as facially valid.The decision ignored a number of obvious legal infirmities. Among other things, the decision did not adequately address the requirement in Section 109(b) that bylaws be consistent with “the law.” The decision obliquely acknowledged that the provisions would “by their nature, deter litigation” but otherwise made no effort to assess the impact of this deterrence on shareholders causes of action. The provision in fact had the practical effect of restricting, if not eliminating, litigation rights granted by the DGCL and the common law. Perhaps most significantly, however, the bylaws significantly limited common law rights of shareholders to bring actions against the corporation and the board. Given the high dismissal rates for these actions, fee shifting bylaws imposed a meaningful risk of liability on plaintiffs. Moreover, because judgments in derivative suits were paid to the corporation, shareholders serving as plaintiffs confronted the risk of liability without any offsetting direct benefit. By preventing suits in this area, the bylaw effectively insulated the behavior of boards from legal challenge. The ATP decision was poorly reasoned and overstepped acceptable boundaries. The management friendly decision threatened the preeminent role of Delaware in the development of corporate law. The decision raised the specter of federal intervention and the potential for meaningful competition from the states. Because the opinion examined the bylaw in the context of non-stock companies, the reasoning may remain applicable only to those entities and never make the leap to for-profit stock corporations. Nonetheless, the analysis reflects a management friendly approach that does not adequately take into account the impact of the provision on the rights of shareholders.

Staying in the Delaware Corporate Governance Lane: Fee Shifting Bylaws and a Legislative Reaffirmation of the Rules of the Road

The Delaware legislature has taken steps towards the adoption of amendments to the Delaware General Corporation Law (DGCL) that would prohibit fee shifting provisions in the articles and bylaws. The language in the legislative proposal, however, addresses fee shifting provisions only in the context of "internal corporate claims." Some have raised concerns that this language would allow for fee shifting provisions that applied to other types of actions, including at least some cases brought under the securities laws. This piece suggests that in fact the Delaware General Corporation Law already prohibits the adoption of bylaws and certificate provisions that apply to causes of action unrelated to internal corporate claims. As a result, there was no reason for the Delaware legislature to expressly bar fee shifting provisions in these types of actions.

The fashionable horse : Ute saddlebags and saddle blankets 1870-1925

This research paper examines the creation, design, and functions of ten Ute double saddlebags and four beaded Ute saddle blankets fabricated between 1870 and 1925. Based on this sample and comparison with additional Basin and Plains tribal dressings, it appears that Ute saddlebags and blankets possess a combination of characteristics that reflect Ute territory, lifestyle, and aesthetics. These attributes, including fabrication from hide; similar rectangular dimensions; simple geometric beadwork patterns that emphasize triangles; preference for blue, white, and yellow beads; largely solid colored backgrounds; and back entries into the bags, work together to create a style that is specifically Ute.

Postmortem/postpartum : the intersection between fertility and Mochican ancestral power

With no written record, the religious beliefs of the Pre-Columbian Mochica civilization are much of a mystery. This paper attempts to decipher the position of the deceased Mochicans, also known as ancestors, within the society as a whole. It discusses the ways in which we can use multiple sources of information, archaeological, iconographic, ethnohistoric and ethnographic to learn about the various aspects of Mochican culture. Specifically I will use these methods for collecting data to examine at how the Mochica viewed their deceased and to argue that part of the Mochica religious system granted their dead a supernatural ability to control human and agricultural fertility. This power would give Mochican ancestors a significant place within the society.

The presence of a woman : images of La Malinche in el Lienzo de Tlaxcala

La Malinche’s serene face and beautifully dressed figure dominates the first half of the lost sixteenth century manuscript El Lienzo de Tlaxcala, which exists today in the form of a copy made after the original. In this paper I propose an expanded study of these twenty-one representations of La Malinche as they offer insight into the Tlaxcalan’s reverence, respect, and spiritual belief in La Malinche. The Tlaxcalan leaders recognized her influence on both the Spanish and indigenous leaders during the conquest and cleverly designed a painted narrative to reinforce their connection with La Malinche to enhance their position with the Spanish. Through a multi layered study that consists of a detailed account of her biography in contrast to gender roles in Pre-Hispanic America, as well as formal and iconographic analysis of rarely examined images from the Lienzo de Tlaxcala that link La Malinche to the Virgin Mary, and a review of the ethnographic research on religious beliefs among contemporary Tlaxcalans, I will demonstrate that the mutable history of this woman made her the ideal supernatural protagonist for the people of Tlaxcala.