The Power of Process: Two Test Cases for the Great Lakes Compact

Great Lakes CompactProcess, in its various forms, is foundational to our legal system.  Water law is no exception.  For thousands of years, transboundary waters have been the root of conflict and even war.  A recent report commissioned by the State Department concluded that many more such disputes are likely in the future.  The Great Lakes Compact, a binding regional agreement between Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, and Wisconsin, has so far at least provided an interesting counter-example to this trend, in large part because the signatories were able to agree on a common decision-making process.

In many ways, in fact, the Compact is a process-driven document.  Substantively, it generally prevents new or increased diversions of Great Lakes water outside the Great Lakes Basin.  Member states must use a common, consistent decision-making standard to evaluate proposed uses of Basin water in their jurisdictions.  Some more controversial proposals, such as diversions of water to communities in “straddling” counties (more on this later) are subject to a regional review process requiring unanimous consent of the member states.  The Compact’s ultimate impact will not be known for years to come, but two early Wisconsin test cases provide interesting data points demonstrating how the process works on both state and regional levels.

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The Securities Act: Does It Permit Companies To Cheat Investors?

New_York_Stock_Exchange_EntranceAuthor’s Note: This post is taking an economic and investor approach to The Securities Act of 1933. This is not to ignore the time and monetary cost of information. It is merely a critique of one portion of a larger regulatory scheme and its effects.

The purpose of the 1933 Securities Act was to protect investors by providing them with information in order to make a sound investment decision. Albeit not articulated at the time of The Securities Act’s inception, the modern application of the Securities Act reflects the Capital Asset Pricing Model and the Efficient Capital Market Hypothesis. Roughly, the efficient capital market hypothesis assumes that the market and the stock prices are a reflection of information available about that security.(1)  As the original standards for reporting requirements and disclosure requirements of the Securities Act have loosened in recent years, have we cheated investors? Are investors not being fairly compensated or informed for the risks they have assumed?

When a security becomes available to the public for the first time, the SEC requires certain disclosures through its registration statement. The registration statement provides basic information about the company and basic financial information. During this process, there are underwriters who analyze and then provide the first price for the security. They will consider the projections of the company, the segment in which it operates, as well as general global and national market conditions. Their ultimate goal, however, is to sell the securities. The underwriters receive a percentage of the final sales price, which incentivizes them to have a higher price than potential fair market value. The SEC helps to regulate this process and civil liabilities and administrative action can provide a disincentive to be overly optimistic about the security’s prospects.

Since 2005, there has been a movement towards reducing the information required from issuers prior to offering securities to the public.

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In Memory of Justice Patrick Crooks

Justice CrooksJustice N. Patrick Crooks was the epitome of a lawyer and judge who lived to serve. In his fifty-two-year legal career, he served as a captain in the office of the Judge Advocate General at the Pentagon and then as a lawyer in private practice in Green Bay, before becoming a Brown County circuit court judge and then justice of the Wisconsin Supreme Court. In 1994 he was named Wisconsin Trial Judge of the Year by the Wisconsin Chapter of the American Board of Trial Advocates. Justice Crooks served on the trial bench for nineteen years and on the Wisconsin Supreme Court from 1996 to his passing, in chambers, last week on September 21.

I was honored to work for Justice Crooks as his clerk during the Wisconsin Supreme Court’s 1999-2000 term.

Justice Crooks approached each case with fresh eyes and an impartial mind. He reasoned through cases carefully and understood that he had a solemn role in deciding a case. Justice Crooks believed in the law and the justice system. Every case was fully analyzed and researched before oral argument. Opinions were to be written to guide lawyers, judges, and Wisconsin citizens. Justice Crooks was proud of his work on the trial bench and felt that his knowledge of the trial courtroom was important to his understanding of cases on appeal.

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