NEW LAW REVIEW ARTICLE: HATE ON THE BALLOT

 

 

Just in time for election 2020, today I posted Hate on the Ballot addressing the surge in hate crimes during the Trump campaign and presidency as well as its threat to national security. Here is the abstract:

This article demonstrates that Donald Trump normalized hatred and cruelty in our society since his campaign for the presidency in 2016. This hatred and cruelty emboldened, encouraged and empowered those who commit hate crimes. This violence divides Americans and pits them against each other. It allows foreign adversaries to exploit our divisions to weaken us. The article summarizes empirical evidence showing that no President in modern American history has inspired more hatred and cruelty than Donald Trump. This led directly to more hate crimes. The article also relies on the intelligence assessments of the entire intelligence community and the Department of Defense regarding the threat to national security. The article seeks to articulate legal limits on the political use of hate speech which undermines the general welfare and domestic tranquility, and threatens the common defense. First, it argues that impeachment can set an important precedent against political hate speech and the promotion of civil war in furtherance of the intent of foreign powers. Second, the Court needs to impound potential national security concerns and racial hate crimes into its approach to hate speech regulation. Third, the Court needs to rethink its approach to the festering American racial hierarchy which now operates as an open wound and national security threat. That hierarchy must meet its demise, and law must take the lead in undoing the legal handiwork that led to the hierarchy. As more Americans suffer from this hierarchy the more costly the hierarchy becomes. In sum, the legal system and the Court should respond as in the past, to preserve the national security of the United States. Otherwise, the Supreme Court will weaken the U.S. It will permit increasing domestic violence to fracture the United States and morph into a major geopolitical defeat of the United States.

I first presented this article at the LatCrit Conference sponsored by Georgia State University College of Law in October of 2019. It went to the printer in the early summer of 2020. Since then more evidence in support of my thesis emerged.

First, Congressman Seth Moulton, at a hearing before the House Armed Services Committee, asked Gen. Mark Milley, the Chairman of the Joint Chiefs of Staff: "You clearly recognize the value of unity not just in our military but in our country. Do you believe that other countries our various adversaries around the world are interested in taking advantage of divisions and unrest in our country?" Gen. Milley responded: "I not only believe that they would, I know that they are." The highest ranking officer in the U.S. military added that: "I have no doubt in my mind that foreign adversarial countries are trying to take advantage of civil unrest in the United States." (at 1:25:20 of the video). 

Second, former Trump Administration Secretary of Defense, Gen. James Mattis, stated that "Donald Trump is the first president in my lifetime who does not try to unite the American people—does not even pretend to try. Instead, he tries to divide us." Writing in the immediate aftermath of the George Floyd police brutality, he added: "We are witnessing the consequences of three years of this deliberate effort. We are witnessing the consequences of three years without mature leadership,” and  that he "watched this week’s unfolding events, angry and appalled." 

This perfectly supports my thesis: Trump's politics of racial division weakness us and lends aid and comfort to our enemies. That thesis enjoys abundant support in the article itself including from the entire United States Intelligence Community (see footnote 19) as well as the GOP-controlled Senate Intelligence Committee (see footnote 16). Each found that Russia seeks to incite civil war and unrest by inflaming racial divisions.

Trump's politics and rhetoric of racial division present an unprecedented threat to the domestic tranquility and national defense of the United States as already manifest in the surge in hate crimes closely associated with the rise of Trump. His own military experts identify the same national security threat from Trump's divisiveness.

A second Trump term will certainly mean a more violent, more divided and weaker America just as Vladimir Putin intends. In the words of NBC News: Russian Documents Reveal Desire to Sow Racial Discord--and Violence--in the U.S. 

America must take a unified stand against Putin's efforts to incite hate and crush his hopes for an American bloodbath.

California Leads Out Again in Requiring Corporate Boards to Seat Racially or Ethnically Diverse Directors

Yesterday, September 30, 2020, Governor Gavin Newsom (right) of California signed into law legislation that requires California Corporate Boards to include Racially, Ethnically or Otherwise diverse board members by 2021.  This legislation follows the 2018 CA requirement that California Corporations include gender diversity on their Boards.  As reported by Anne Steele in the Wall Street Journal's "California Rolls Out Diversity Quotas for Corporate Boards":

"The new quota is the first of its kind in the U.S. and follows a similar California measure enacted two years ago that mandated female directors on all boards of the state’s public companies. The law is expected to have wide-ranging impact within the state’s borders and beyond, potentially sparking fresh debate and legislative efforts in other parts of the country.  'We have a vision about how this state could be an example for the rest of the country,' said Assemblyman Chris Holden, a co-author of the bill. 'This is an opportunity to get people of color at the table where the decisions are made, where the culture is set.'

Under the new law, individuals who identify as Black, African-American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian or Alaska Native, or who identify as gay, lesbian, bisexual or transgender, would be considered eligible for meeting the requirement."

The bill passed the California House overwhelmingly before being signed into law by Governor Newsom.

hat tip: Austin Reed, 3L-Arkansas Little Rock Bowen School of Law

Democratic Party Moving to Expand Freedom to Use Cannabis & End the War on Drugs

 

In an historic move, the Democratic-controlled U.S. House of Representatives will vote this legislative session to pass the Marijuana Opportunity, Reinvestment, and Expungement Act (the “MORE Act”). The Act removes cannabis from the Controlled Substances Act. Of the 99 co-sponsors in the House, 98 are Democrats.

The MORE Act effectively gets the federal government out of the marijuana policing business and will facilitate expungements for those victimized by its misguided marijuana criminalization policy. Instead, the issue would rest with state governments.

States can more democratically reflect local cultural norms and determine if relatively harmless substances such as cannabis should suffer prohibition with all of its implications in terms of liberty, constricted commerce and providing black-market profits to fuel organized crime. Marijuana consumption totals over $50 billion and can generate substantial job growth.

If enacted, the MORE Act would also tax cannabis at 5% and reinvest the proceeds into the communities that suffered disproportionately from the War on Drugs. That could provide billions for communities of color across the nation to spur growth and development. The Act even permits the Small Business Administration to support marijuana businesses.

The Democrats also approved a similar provision in their party platform for 2020:

Democrats believe no one should be in prison solely because they use drugs. Democrats will decriminalize marijuana use and reschedule it through executive action on the federal level. We will support legalization of medical marijuana and believe states should be able to make their own decisions about recreational use. The Justice Department should not launch federal prosecutions of conduct that is legal at the state level. All past criminal convictions for cannabis use should be automatically expunged. (p. 37).

The party platform also favors diversion and treatment instead of incarceration for all drug offenses. Consequently, the MORE Act can very well constitute just the opening round in a more comprehensive unwinding of the failed War on Drugs.

Joe Biden fully supports this bold effort to finally reform marijuana laws as his campaign website makes clear: “Biden believes no one should be in jail because of cannabis use. As president, he will decriminalize cannabis use and automatically expunge prior convictions.” Biden further supports a general armistice in the War on Drugs, as he seeks to “[e]nd all incarceration for drug use alone and instead divert individuals to drug courts and treatment.” Biden, in short, promises to end the War on Drugs too.

Democratic Vice Presidential nominee Kamala Harris introduced and sponsored the MORE Act in the Senate. That bill boasts seven Democratic co-sponsors (and zero GOP co-sponsors). She stated in her recent book that “it’s past time we [dismantle] the failed war on drugs—starting with legalizing marijuana.”

In 2020, the War on Drugs finally exhausted itself, and the racial injustice that inherently accompanies it displayed itself in the police brutality that too often victimizes communities of color. It always operated as an assault on communities of color and never actually impacted wealthy white neighborhoods where drug consumption ran high. More specifically, according to a recent study: “a Black person is 3.64 times more likely to be arrested for marijuana possession than a white person even though Black and white people use marijuana at similar rates.” Authorities do not systematically collect data regarding arrests of Latinos but all available evidence shows they too suffer disproportionate arrests. Thus, in California, our most populous state, “Hispanics accounted for nearly 42% of [cannabis] arrests, followed by Blacks, at 22%, with whites at 21%.”

Some 6.1 million citizens suffered arrest for marijuana possession over the past eight years. Such arrests can only diminish future potential and productivity. For example, students can lose financial aid eligibility for a drug conviction. A loss of future opportunities translates into future economic loss—a loss our entire society bears.

Any visitor to any prison knows that while we incarcerate more of our co-citizens than any other nation, non-whites make up the vast majority (70 percent) of prison populations. Latinos face three times the rate of incarceration as whites and African Americans face double the rate of Latinos.

The War on Drugs has devastated communities of color and destroyed human potential in such communities on a vast scale. The costs far outweigh any benefit and will only increase as our population becomes more diverse. Over two-thirds of US voters now want this criminal injustice ended. America can now finally reject such manifest injustice and racial brutality.

The Democratic party promises fundamental and dramatic change if it prevails in the election of 2020. Its party platform can provide leverage against every Democratic office holder. Its control of Congress will see the MORE Act passed and Joe Biden will sign it. That makes this election an historic opportunity to vote for expanded freedom and to end the racial injustice inherent in the War on Drugs.

 

Predatory Lending and the Destruction of the African-American Dream

Professors Cheryl Wade and Janis Sarra have just published "Predatory Lending and the Destruction of the African-American Dream" through the Cambridge University Press.  Cheryl Wade, a Corporate Justice Blog founder and contributor, and Janis Sarra chronicle the destructive predatory lending in the home mortgage context that led to the destruction of black wealth dating back to the Great Recession of 2008. 

"Since the Great Recession of 2008, the racial wealth gap between black and white Americans has continued to widen. In Predatory Lending and the Destruction of the African-American Dream, Janis Sarra and Cheryl Wade detail the reasons for this failure by analyzing the economic exploitation of African Americans, with a focus on predatory practices in the home mortgage context. They also examine the failure of reform and litigation efforts ostensibly aimed at addressing this form of racial discrimination. This research, augmented by first-hand narratives, provides invaluable insight into the racial wealth gap by vividly illustrating the predation that targets African-American consumers and examining the intentionally obfuscating settlement terms of cases brought by the U.S. Department of Justice, states attorneys, and municipalities. The authors conclude by offering structural, systemic changes to address predatory practices. This important work should be read by anyone seeking to understand racial inequality in the United States."

Re-Imagining the Corporate Justice Blog

 Greetings Readers and Followers,

We at the Corporate Justice Blog have taken a two year hiatus to focus on book projects, professional moves and ever-increasing social justice issues.  Five of us have now agreed to re-imagine the Corporate Justice Blog with timely posts, incisive (hopefully) commentary, and a dedicated approach to the "Justice" portion of Corporate Justice, including Professors Steven Ramirez, Cheryl Wade, Joseph Grant, Todd Clark and andré douglas pond cummings.

Thank you to our faithful readers and followers for your patience as we've retrenched.  We invite you now to re-join us as we strive to confront issues of inequality and unfairness in the Corporate law context.  We look forward to the re-engagement.

Social Issues Come Up Big in 2018 Proxy Season

In evaluating shareholder proposals from this past 2018 proxy season, it is clear that social and environmental issues dominated proxy cards this year.  While social and environmental issues made up more than 50% of shareholder proposal submissions, corporate governance and board diversity were also top of mind for shareholder's submitting proposals.  Evidence indicates that social and environmental concerns are finding support among fellow shareholders with many winning shareholder support and other proposals being withdrawn based on management concessions to those shareholder's proposing action.  Pensions & Investments reports:

"According to Institutional Shareholder Services' Voting Analytics database, environmental and social concerns accounted for just more than half of shareholder proposals submitted at U.S. companies for the 2018 season, but with an increase in the number of withdrawn proposals and proposals receiving majority support."

Climate-change related proposals have won majority shareholder support at companies like Exxon-Mobile and Occidental Petroleum, while shareholder proposals have been withdrawn at Chesapeake Energy Corp., Dominion Energy Corp. and DTE Energy Co., following company concessions to enhance their climate related disclosures. 

Other social concern proposals have centered on gun violence and the opioid crisis.  Successful shareholder proposals that won a majority of support from shareholders in 2018 included "68% of Sturm Ruger & Co. shareholder votes supported a proposal calling on the gun manufacturer to report on its efforts to make guns safer and mitigate gun violence. Gun safety proposals filed at Sturm Ruger in 2001 and 2002 were supported by 5.43% and 4.26% of investors, respectively.  The same month, 61% of Depomed Inc. investors supported a shareholder proposal from the Investors for Opioid Accountability coalition calling on the pharmaceutical company to report on how it is responding to the opioid crisis."

Finally, Facebook, Alphabet, Amazon, Netflix, Tesla and others have faced shareholder scrutiny for lack of boardroom diversity, lack of board chair independence, gender pay disparities, and other issues through the form of shareholder proposals.  Some of these proposals have found receptive corporate leadership audiences as "[t]here were some tangible changes following the companies' May meetings — Amazon and Facebook adopted formal policies to consider diversity when filling vacant director positions and Facebook expanded the risk oversight duties of its audit committee." 

Proxy season 2018 has been interesting indeed.



hat tip to Tadarious Hawkins, 3L, University of Arkansas at Little Rock William H. Bowen School of Law

California Requires Gender Diversity on Corporate Boards

The state of California has just passed legislation requiring that California corporations include female board members amidst their board leadership teams, following in the footsteps of Norway and Germany.  Governor Jerry Brown signed the California statute yesterday, Sunday, September 30th, 2018, marking the first time that a state in the United States is requiring gender diversity amongst its corporate board members.

CNN Money reports that California now requires "publicly traded firms in the state to place at least one woman on their board of directors by the end of 2019 -- or face a penalty.  It also requires companies iwth five directors to add two women by the end of 2021, and companies iwht six or more directors to add at least three more women by the end of the same year.  It's the first such law on the books in the United States, though similar measures are common in European countries."

The Corporate Justice Blog has long advocated for greater board diversity within corporate leadership in United States corporations.  Additionally, proponents of this legislation argue that the U.S. has waited too long to bring the weight of the law to bear on long-lasting discrimination against women in the corporate leadership arena.  Further, supporters point out that European nations have established gender diversity quotas that has lead to greater performance and profitability for such firms for years.  Critics argue, of course, that setting quotas will lead to "unqualified" female board members.  Opponents further argue that setting quotas might act as a discrimination against male candidates and might chill male board member interest.  These age-old critiques hark back to tired arguments made in the wake of 1960s affirmative action passage and turn of the century women's suffrage opponents.  To date, of the Fortune 500, only 24 are led by female CEOs (4.8%).


hat tip to Janelle Cline, 2L University of Arkansas at Little Rock William H. Bowen School of Law

LEHMAN 10 YEARS LATER: LESSONS LEARNED?

On September 14, 2018, Loyola University Chicago School of Law will host a conference taking a 10 year look-back at the failure of Lehman Brothers and its impact on the law and regulation. Here is a description of the program:

On September 15, 2008, Lehman Brothers filed for bankruptcy protection. Soon thereafter, markets around the world suffered major disruptions as global financial institutions suddenly became financially vulnerable and subprime debt exploded. In the ensuing 10 years, Eurozone debt became suspect, the concept of too-big-to-jail took hold, the megabanks continued their lawlessness, politics took unpredictable turns, and global financial regulation changed forever. This conference, which will feature special presentations from former Congressman Barney Frank, Anton Valukas, Jeffrey Cohodes, and the Honorable Jed Rakoff, will take stock of legal and regulatory changes in the 10 years since the failure of Lehman and assess whether the system has been made safe for investors and the public.

The agenda, and list of speakers is available here: https://www.luc.edu/law/events/lehman-lessons-learned/ 

To RSVP and reserve a spot at the conference use this email address: lawinvestorprotection@luc.edu

The program has been approved for 7.75 hours of CLE credit and the event is free and open to the public.

Hope to see you on September 14, in the Ceremonial Courtroom on the 10th floor of the Corboy Law Center, 25 East Pearson St., Chicago, IL, 60611.

July 18, 1918: The US Turns the Tide Against the Monarchies

ONCE UPON A TIME, the US sent 2 million troops to Europe to make the world safe for democracy. The German Empire gambled that they could move divisions from the Eastern Front to the Western Front faster than the US could bring its troops into the maelstrom. They lost their gamble, and by July 18, 1918, the monarchies knew the war was lost.

As President Wilson, told Congress on April 2, 1917, seeking a declaration of war:

The world must be made safe for democracy. Its peace must be planted upon the tested foundations of political liberty. We have no selfish ends to serve. We desire no conquest, no dominion. We seek no indemnities for ourselves, no material compensation for the sacrifices we shall freely make. We are but one of the champions of the rights of mankind. We shall be satisfied when those rights have been made as secure as the faith and the freedom of nations can make them.

This was exceptional. Before America's entry into World War I empires competed to extend their dominions and even nations such as France and Great Britain fought to acquire lost lands or protect their geopolitical positions. The US fought for democracy.

The US lost 50,000 boys and young men in WWI. Pictured above is the Meuse-Argonne American Cemetery where over 14,000 American soldiers rest; it is the largest US overseas cemetery in the world.

By the summer of 1918, we were sending over 250,000 boys and young men into harms way per month. These troops saved the French and British from impending collapse. By July 15, 1918, the US troops contributed mightily to stopping the final German offensive of the war. US Troops stopped the German offensive in its tracks and took the offensive at places like Chateau-Thierry.

On July 18, 1918, the US and its allies began the first of essentially continuous offensives that ultimately broke the German Army, leading to mass surrenders of German soldiers, a nervous breakdown for the German commander of the army, General Erich Ludendorff, and massive civil unrest and rebellion on the home-front of Germany.

German chancellor Georg Hertling confirmed the impact of the US and how it changed the war:

At the beginning of July, 1918, I was convinced, I confess it, that before the first of September our adversaries would send us peace proposals. . . . We expected grave events in Paris for the end of July. That was on the 15th. On the 18th even the most optimistic of us knew that all was lost. The history of the world was played out in three days.

In coming days and months, I will trace the sacrifices of the heroes of WWI, who did indeed end the scourge of the monarchies and make the world safe for democracy. We cannot honor these loyal soldiers of yesteryear enough, for we enjoy the fruits of the freedom they fought and died for.

It is the height of irony that exactly 100 years later a US President, Donald Trump, should go to Europe and insult our best democratic allies who bled with us after 9/11 in far off places like Afghanistan, and then embrace an autocrat like Vladimir Putin who subverts democracy and funds the Taliban against our soldiers. Trump displayed weakness, subservience and even cowardice in failing to deal with Putin as the enemy of the US. Some call it treason, but I need more evidence to support that conclusion.

It is, however, a betrayal of every member of the US armed services fighting in Afghanistan today, as well as those honorable soldiers of wars past who fought, bled, and died for democracy. The soldiers who died in France 100 years ago were not fighting for just Blue states or just Red states. They fought and died for an American value--democracy--that today our President is too feeble and weak-minded to understand or defend. What a difference 100 years makes.

Is democracy still a bi-partisan value, or is a majority of Americans now OK with autocracy?

Disney Gets Down

The Walt Disney Co. (DIS) has gone "rogue" in the way it intends to roll out "The Last Jedi" as evidenced by the abnormally "onerous" terms that it is mandating upon theater owners across the country in connection with the much-anticipated December 2017 release.  The Wall Street Journal reports that Disney is contractually requiring the following: (a) a 65% cash return from ticket sales from all theaters showing the sure-to-be blockbuster (the industry norm is a 55-60% return); (b) a four-week commitment to mandatorily show the motion picture in a theater's largest-seat auditorium (rankling competing studios that will release their own hoped for blockbusters in the weeks following "The Last Jedi"); (c) requiring no cancellations of any advertised show time; and (d) a 5% return "penalty" on any theater owner that breaks the mandatory terms (for example not showing The Last Jedi in the largest-seat auditorium) driving the potential cash-on-ticket sales return up to 70%.  Disney has become a motion picture juggernaut in recent years, with its acquisition of the LucasFilm franchise in 2012 and the Marvel Comics line in 2009. 

While some corporations might be reticent to require such onerous terms upon a motion picture release, Disney now commands 26% of the motion picture market share (as compared to the second-place Time Warner Inc's Warner Bros. at 17%) and can demand such terms if theater owners want to play ball.  Such "onerous" terms make little sense for small theater owners in small-town America, some of whom are choosing to pass on booking "The Last Jedi."  Per the WSJ article "Disney Lays Down the Law for Theaters on 'Star Wars: The Last Jedi':

"Few operators can afford to turn away a Disney windfall.  But some independent theaters have decided against screening 'Last Jedi' when it is released, saying the company's disproportionate share of ticket sales and four-week hold make little economic sense--especially in small towns.  'There's a finite number of moviegoers in my market, and I can service all of them in a couple of weeks,' said Lee Akin, who operates a single-screen theater in Elkader, Iowa (population: 1,213)." 

image courtesy of Wikimedia Commons/
MathKnight

"If he were to sign up for the movie under Disney's terms, Mr. Akin said he would be stuck playing "Last Jedi" to near-empty auditoriums toward the end of a monthlong run while still giving Disney 65% of those paltry sales.  The studio is applying the 65% split across all weeks of the film's release, rather than some studios' practice of beginning a split at a high figure then lowering it in subsequent weeks.  'When [studios] get much bigger than the other guys, that's when all these wacky rules come into place,' said Mr. Akin."

From a contract law and corporate law perspective, Disney is doing its thing by seeking to wring every possible profit avenue out of its upcoming Star Wars release.  From a business perspective is this always the best strategy?





hat tip:  Bryan Higgins, 1L, The John Marshall Law School