A New Direction for LLC Research in a Contractarian Legal Environment – Article by Sandra K. Miller

From Volume 76, Number 2 (January 2003)
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This Article discusses a survey on limited liability companies (LLCs) to which 770 attorneys responded in California, Delaware, New York, and Pennsylvania. Of the 770 attorneys who responded in these states, Delaware respondents reported a higher rate of experience with disputes than respondents in New York and Pennsylvania, and reported a higher rate of lawsuits filed than the respondents from California, New York, and Pennsylvania who stated they had handled majority/minority disputes. The findings challenge the view that greater contractual flexibility will necessarily lead to a decrease in disputes and/or judicial intervention. Many respondents lacked a basic understanding of the LLC members’ statutory default buy-out rights, and only fourteen percent said their usual LLC agreement included the minority contractual protection of a dissolution for illegal, fraudulent, or oppressive majority conduct. The Article analyzes the survey results in light of recent LLC litigation, discusses the important role that courts can be expected to play in the articulation of standards of LLC member and manager conduct, and makes several policy recommendations regarding the course of future business entity education and research.

 

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Arbitration of “Public Injunctions”: Clash Between State Statutory Remedies and the Federal Arbitration Act – Note by Thomas A. Manakides

From Volume 76, Number 2 (January 2003)
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In 1924, proponents of the Federal Arbitration Act (“FAA”) believed arbitration was an amicable way to resolve disputes between business professionals: Arbitration “preserves business friendships. . . . It raises business standards. It maintains business honor.” This indeed may be true, but judicial opinions interpreting the FAA have transcended the realm of legal reasoning, becoming hostile and antagonistic not toward a party’s improper action, but toward judges.

 

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New York’s Controversial Ethics Code Changes: An Attempt to Fit Multidisciplinary Practice Within Existing Ethical Boundaries – Note by Laura Noroski

From Volume 76, Number 2 (January 2003)
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Whether and to what extent multidisciplinary practices should be allowed in the United States has recently been described as the “‘most important issue facing the legal profession today.’” Multidisciplinary practices, or “MDPs,” emerged as an important ethical issue more than ten years ago when the accounting profession began to offer businesses a wide variety of professional services they had not traditionally offered. Consulting and other professional service firms followed suit, and began promoting services similar to those traditionally offered by law firms. The growth of these nonlegal firms led such firms to hire an increasing number of lawyers. Not surprisingly, this trend raised concerns about the unauthorized practice of law, conflicts of interest, and lawyer independence. Since the distinctions between legal and nonlegal professions have become muddled, the American Bar Association (“ABA”) has devoted significant resources to addressing the MDP issue.

While both supporters and adversaries of MDPs assert that protecting the client’s interest is of utmost concern, each side differs in its interpretation of what is best for the client. Supporters often point out efficiency and client demand for integrated services as central reasons to embrace MDPs as an inevitable practice structure. On the other hand, many lawyers believe MDPs are properly banned by Rule 5.4 of the Model Rules of Professional Responsibility, and are inherently dangerous to clients and the public because of potential conflicts of interest and compromises of client confidentiality. MDP adversaries also argue that the client is best served by lawyers, rather than collaborations of lawyers and non-lawyers, since lawyers must comply with a stringent ethical code that preserves confidentiality, loyalty, and independence of judgment, which other professions do not.

 

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Volume 76, Number 1 (November 2002)

Volume 76, Number 1 (November 2002)

Private Justice – Article by Pamela H. Bucy

From Volume 76, Number 1 (November 2002)
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New crimes require new thinking about regulation. Because of computerization and globalization, today’s world faces new crimes and new ways of committing old crimes. Because of the interconnectedness of our global financial markets, this evolving criminal activity has unprecedented power to wreak havoc on every aspect of modern life. Law enforcement has no choice but to respond effectively.

One aspect of this new thinking is revising our concept of crime. Complex, economic wrongdoing is difficult to categorize as criminal primarily because it is enormously difficult to prove the high level of mens rea traditionally and appropriately required in criminal law. Proving this requisite mental state by the heightened burden required in criminal cases is even more difficult. Moreover, even when proof of criminal intent beyond a reasonable doubt is possible, conducting the investigation and proving a case by these standards is so expensive and time-intensive for both the executive and judicial branches that the costs often outweigh any benefit achieved. Lastly, imposing the criminal sanction of imprisonment on defendants whose wrongdoing, however destructive to society, may be malum prohibitum, is morally and practically questionable for a criminal justice system and is often economically inefficient.

 

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Lurking in the Shadow: The Unseen Hand of Doctrine in Dispute Resolution – Article by Ray D. Madoff

From Volume 76, Number 1 (November 2002)
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Mediation—the process through which a third party neutral assists parties in reaching their own agreement—has achieved a prominence in our legal system that belies its youth. Earlier in the twentieth century, the use of mediation was limited almost entirely to small disputes (which did not justify the expense of litigation) and labor disputes (which required quick resolution in order to avoid costly strikes and shutdowns.) By contrast, mediation today is touted for disputes of all sizes and in all areas of the law, including probate, family, commercial lending and business, criminal, employment discrimination, environmental, legal malpractice, medical malpractice, and maritime law. Indeed, such is the enthusiasm for mediation, that one is hard pressed to find a legal area in which mediation is not actively encouraged. Despite such broad encouragement, its success varies widely in different fields of law. While in some areas of law it has achieved dominance, in others its development has been far slower. Two areas where this disparity is particularly puzzling are divorce and will contests.

 

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Islamic Marriage Contracts in American Courts: Interpreting Mahr Agreements as Prenuptials and Their Effect on Muslim Women – Note by Lindsey E. Blenkhorn

From Volume 76, Number 1 (November 2002)
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In 1958 in Pakistan, Parveen Chaudry’s parents introduced her to Hanif Chaudry, the man they had chosen to be her husband. In accordance with Islamic tradition, Parveen’s parents negotiated the terms of her marriage contract with Hanif, consenting to and even signing the contract on Parveen’s behalf. According to Islamic law, Parveen’s marriage contract included a mahr provision, or dower, in the amount of 15,000 rupees (approximately $1,500), to protect Parveen if Hanif suddenly divorced her. Islamic law provides that couples retain their assets before, during, and after marriage, and because Parveen would likely not be permitted to work outside the marriage home without her husband’s permission, the mahr was a nest-egg in case the marriage soured.

One year after their marriage, Hanif moved to London to pursue a career in medicine, leaving Parveen behind in her native Pakistan with her parents and one-year-old child until her parents were able to pay for plane tickets to London. Once Parveen joined Hanif in London, he moved his family to New Jersey, where Parveen gave birth to their second child. Five years later, Hanif sent his wife and children back to Pakistan with the understanding that he would join them shortly. During the next five years, Parveen, who by now had three young children, attempted to rejoin Hanif in New Jersey, while Hanif took affirmative action to prevent her return and ultimately responded with divorce proceedings.

 

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Walker v. Cheney: Politics, Posturing, and Executive Privilege – Note by Jeffrey P. Carlin

From Volume 76, Number 1 (November 2002)
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On February 22, 2002 the General Accounting Office (“GAO”) filed an unprecedented lawsuit against Vice President Richard Cheney, seeking an injunction requiring him to produce certain records relating to the National Energy Policy Development Group (“NEPDG”), which he chaired at the behest of President George W. Bush. For the first time in its eighty-one year history, the GAO has filed suit against a federal official in relation to records access.

The suit is the result of a GAO inquiry begun at the request of Representatives Henry Waxman and John Dingell, who were concerned about the potential influence Enron and other special interest groups had over the NEPDG’s activities. The Vice President has so far refused to meaningfully acquiesce to any of the GAO’s information requests or attempts at accommodation, and has argued that the GAO does not have the statutory authority to obtain the records requested. More significantly, he has hinted at—though not formally asserted—executive privilege, setting the stage for a legal showdown that could make its way to the Supreme Court.

 

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