A Broadening of Diversity Jurisdiction

Students of civil procedure—which should mean just about everybody interested in using the formal processes of the law to vindicate rights—will be interested in a decision today by the United States Supreme Court. The opinion concerned the provision in the statutory grant of diversity jurisdiction that deems a corporation “to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.” 28 U. S. C. §1332(c)(1) (emphasis added). There has been a longstanding imprecision—a lack of unanimity—within the lower federal courts as to whether a corporation’s “principal place of business” is its “nerve center,” “locus of operations,” “center of corporate activities,” “muscle center” (none of these latter four terms being statutory), or some otherwise determined place. In Hertz Corp. v. Friend, the Court resolved the matter.

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The Second Law of Thermodynamics and “Say on Pay”

sharris-deptofentropyIn one of his characteristically thoughtful blog postings (available here), Ed Fallone argues that market regulation follows the Second Law of Thermodynamics, which states (to paraphrase) that in any closed system, disorder will reign over time.  Ed argues that this principle holds true for federal securities regulation, where technological and market changes have made the comprehensive statutory scheme of market regulation obsolete.  With respect to non-financial institutions, he proposes (consistent with the Obama administration’s proposal) replacing our current scheme of detailed disclosure rules with regulation that focuses on the consumer (the investor), and the consumer’s need for multiple products to choose from as well as information to make product comparisons.

It does seem to make sense to consider the needs of investors in creating legislation aimed at protecting investors.  But in my view, any new regulatory scheme aimed at protecting investors should leave to the states the regulation over business organizations’ internal affairs.

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Just a Thank You

This semester, I am offering a new course in Election Law. It’s work in progress, but one of the things that I have tried to do is bring in speakers from the local political world to react to the material we have covered. So far, students have heard from Jim Troupis, a nationally renowned expert on redistricting and Madison based lawyer to Republicans, and Mike Tate, currently chair of the state Democratic Party and, even at what seems to me to be his impossibly young age, a very seasoned political operative with a strikingly broad range of experience , i.e., a pretty good example of a client for election  lawyers.

Both Mike and Jim were extraordinarily candid and I believe that what happens in Room 210 stays in Room 210.  So I will simply say that both enhanced our educational experience. The purpose of this post is simply to thank them and to let them know that their MULS pens are in the mail.

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