Monthly Archives: January 2015

No One Shareholder Should Have All That Power: When Delaware’s Entire Fairness Standard Applies to Controlling Shareholder Transactions

Author: Dan Stroh, Associate Member, University of Cincinnati Law Review

In recent years, Delaware courts have decided several important cases regarding the appropriate standard of review to apply when minority shareholders challenge actions taken by controlling shareholders.[1] In In re Crimson Exploration, the Delaware Court of Chancery created a clarifying framework for courts to analyze the propriety of shareholder involvement and control in the context of a corporate merger.[2] Merger transactions between large companies occur on a regular basis,[3] making any significant decision in this field very important, because the ability of shareholders to protect their interests is paramount in this area of business. The court’s decision clarified that shareholder “control” will be determined on an ad hoc basis, applying all relevant facts and circumstances, and it provided guidance as to when to apply “entire fairness” scrutiny to a board of directors’ decisions. Because corporate law decisions from Delaware are highly regarded due to the large number of corporations that choose to incorporate within the state,[4] the Court of Chancery’s Crimson decision will likely have significant implications for corporate law across the country.

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Specialty License Plates as Government Speech: How the Supreme Court Is Likely to Resolve a Five-Way Circuit Split

Author: Rebecca Dussich, Associate Member, University of Cincinnati Law Review

Currently, all fifty states in the U.S. require vehicles to be registered and fitted with a unique license plate. Historically, these plates were generic and distinguishable only by the series of letters and numbers used to identify the owner of the vehicle. However, with time, license plates were customized by state with distinctive markers such as state seals, slogans, flags, etc.[1] Beginning around the late 1980’s, states began issuing specialty license plates, decorated with emblems and verbiage designed by non-profit organizations and political groups, as a means to generate additional revenue.[2] As these plates became more popular, litigation around the First Amendment implications of specialty plates increased.[3] But, thirty years later, debate over this issue—whether specialty plates qualify as government or private speech and to what extent states have the right to champion one viewpoint or another via this forum—is anything but settled. In fact, the Supreme Court is set to readdress the matter later this year through review of a dispute out of the Fifth Circuit. And, although license plate text may seem like a mundane legal issue, the Court’s decision here could have potentially far-reaching implications.

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Restricting Content Without Restricting Content: Is Springfield’s Anti-Panhandling Ordinance Truly “Content-Neutral?”

Author: Collin L. Ryan, Associate Member, University of Cincinnati Law Review

Springfield, Illinois enacted an ordinance that prohibits panhandling within the city’s downtown historical district—an area that comprises “less than 2% of the City’s area but contain[s] its principal shopping, entertainment, and governmental areas, including the Statehouse and many state-government buildings.”[1] “The ordinance defines panhandling, in pertinent part, as [a]ny solicitation made in person . . . in which a person requests an immediate donation of money or other gratuity.”[2] The ordinance does, however, permit the use of signs with written requests for donations, as well as requests for donations at a later time.[3]

Plaintiffs, the recipients of citations for violating the ordinance, sought a preliminary injunction to prevent enforcement of the ordinance.[4] When considering whether to grant or deny a preliminary injunction, a court must consider, among other factors, whether plaintiffs are “likely to succeed on the merits.”[5] Here, the question of the plaintiffs’ “likely success on the merits” hinged upon the distinction between content-neutral and content-based restrictions on free speech.

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Are Magistrate Judges’ “Additional Duties” Stinking Up the Courtroom?

Author: Chris Gant, Associate Member, University of Cincinnati Law Review

On July 14, 2014, the Seventh Circuit in United States v. Harden held that the Federal Magistrates Act (FMA) does not permit magistrate judges to accept guilty pleas, even if both the prosecution and defense consent.[1] The decision severely limits a district court’s ability to manage its caseload and conduct business efficiently. Thankfully, this view on the Federal Magistrates Act is not universal: there is an emerging circuit split regarding whether a federal magistrate judge may accept a guilty plea to which all parties consent. The FMA contains a catch all provision that states, “[a] magistrate judge may be assigned such additional duties as are not inconsistent with the Constitution and laws of the United States.”[2] The split arises out of the Supreme Court’s decision in Peretz v. United States and how to interpret the “additional duties” provision of the statute. In Peretz, the Court allowed a magistrate judge to conduct voir dire because both the prosecutor and defense counsel consented. Furthermore, the Court created a test for whether a magistrate judge has jurisdiction to conduct voir dire under the FMA. After Peretz, appellate courts have largely disagreed over what duties can fall under the “additional duties” of the FMA. The Seventh Circuit has held that the acceptance of guilty pleas is “too important” to fall under this provision. In so doing, it disagreed with the Fourth Circuit, which had previously held that the acceptance of guilty pleas is comparable to other duties that magistrates are undoubtedly able to perform.[3] In light of both decisions, it is evident that the Fourth Circuit correctly interpreted the FMA and Peretz because the general language in the statute proves that Congress intended to give federal judges leeway to experiment with possible improvements in the efficiency of the judicial process.[4] Furthermore, the Seventh Circuit’s ruling allows defendants to enter a plea but then revoke it with no consequences, which in turn leads to judicial waste.

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True Threats and the First Amendment: Objective vs. Subjective Standards of Intent to Be Revisited in Elonis v. United States

Author: Rebecca Dussich, Associate Member, University of Cincinnati Law Review

Last month, the Supreme Court heard oral arguments in an appeal of the Third Circuit’s decision in United States v. Elonis.[1] Anthony D. Elonis was convicted under 18 U.S.C. § 875(c), a federal statute that prohibits making “any threat to injure the person of another” via the internet.[2] Elonis does not dispute that he posted Facebook status messages regarding his desire to kill his wife, detonate bombs in the presence of law enforcement, and shoot up a local elementary school (among other threats).[3] Rather, he disputes that these were intended as threats, stating that he was merely “expressing frustration.”[4] At trial, the jury was instructed to apply an objective standard and construe the threats as they would be perceived by a “reasonable person,” not according to the standard requested by Elonis, which would have asked the jurors to look at the subjective intent of the speaker.[5] After the Third Circuit affirmed Elonis’ conviction, the Supreme Court granted certiorari on the issue of whether an objective or subjective standard is required by the statute under which Elonis was charged and, if the former, whether such a standard is constitutionally permissible as part of any “true threat” statute that regulates pure speech.[6]

In being asked to clarify this matter, the Court has an opportunity to extend protection for victims of stalking, harassment, and violence often associated with these crimes by permitting the objective standard of intent applied by the Third Circuit. Alternatively, if the Court finds that the First Amendment requires a subjective intent standard with respect to these laws, this ruling could further insulate the perpetrators of such crimes from prosecution by making conviction more difficult than the actual statute and principles of justice require. These divergent possibilities have garnered the attention of free speech activists and victims’ rights advocates alike, both of whom are concerned by a potential change in the law. But their concerns are likely unnecessary. Although it is possible that the Court will dramatically change the way lower courts review “true threat” statutes, it is more likely that the standard will stay exactly the same.

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Filing Time-Barred Claims in Bankruptcy Subjects Creditors to FDCPA Sanctions in the Eleventh Circuit (and Maybe the Seventh)

Author: A.J. Webb, Articles Editor, University of Cincinnati Law Review

Another clash between the Fair Debt Collection Practices Act[1] and the Bankruptcy Code[2] is on the horizon. A recent decision by the Eleventh Circuit Court of Appeals might lead to additional liabilities against creditors seeking to collect on debts from consumers who file for bankruptcy. In July, the Eleventh Circuit held that debt collectors are barred from filing proofs of claims in bankruptcy when those claims are based on unenforceable consumer debts under state law.[3] This issue is likely to be addressed by the Seventh Circuit Court of Appeals in a separate proceeding currently underway in the District Court of the Southern District of Indiana.[4] In order to fulfill the policy aims of the FDCPA and protect consumer debtors from abusive and deceptive debt collection practices, the Seventh Circuit should follow suit and adopt the holding of the Eleventh Circuit.

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Phone Frustration: FTC Files Suit against AT&T for Deliberately Slowing Phone Speeds of “Unlimited” Plan Users

Author: Ashley Clever, Contributing Member, University of Cincinnati Law Review

Frustration with technology often causes one to wonder if there is an electronic conspiracy raging war against technology users. Usually these thoughts are ridiculous, fabricated only by an overly-unreliable copy machine that seems to always jam minutes before an important deadline or by an iPhone that works perfectly until the day the newest version is released and then mysteriously begins to freeze, making the owner want to upgrade. But some worries about an elaborate electronic conspiracy might actually be well-founded, and the Federal Trade Commission (FTC) recently filed a complaint against AT&T Mobility Company (AT&T) for reducing the data speeds of users who had an “unlimited” phone plan.[1]

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