The Journal of the Business Law Society

The Journal Completes its 2006-2007 Publication Year, Begins Summer Hiatus

The Journal of the Business Law Society has concluded its regular publication cycle for the Spring 2007 semester. Final exams are upon us and summer break will begin shortly. While there may be periodic posts during this period, the Journal will resume its full publication schedule in the Fall when classes begin.

Please join us in Congratulating the Editorial Board for the 2007-2008 publication year!

• Editor in Chief: Alicia Filter
• Managing Editor: Collin Delaney
• Executive Editors: Christopher Minelli & Thomas DeSplinter
• Articles Editors: Naureen Amjad, Katherine Croswell, Jennifer Kolton & Karen Lee

We thank you for visiting the Journal and encourage you to explore our archives.  Please feel free to post your comments or send us questions at buslaw@law.uiuc.edu.

We continue to accept articles submissions from students, professors, and practitioners. If you are a student at the University of Illinois College of Law and are interested in joining the BLS Journal, please contact us at buslaw@law.uiuc.edu.

The Hurdle of "Loss Causation"

Loss causation is one of the elements that have to be satisfied in a securities fraud action under § 10(b) of the Securities Exchange Act and Rule 10b-5. [1] The Supreme Court in Dura Pharmaceuticals, Inc. v. Broud, set up six elements of a securities fraud claim "involving publicly traded securities and purchases or sales in public securities." [2] Among those elements, the loss causation element seems to be one of the most difficult hurdles that a plaintiff in a securities fraud action needs to overcome. If a plaintiff cannot show that there is a genuine issue of material fact as to the loss causation element, he or she won't have a chance to go beyond a summary judgment stage. [3] Not only is this element a great hurdle for a plaintiff, but also the difficulty of showing it can keep many securities fraud claims from moving forward beyond summary judgment. The Seventh Circuit in a recent case, Ray v. Citigroup Global Markets, Inc., was able to grant a summary judgment in favor of the defendants just by looking at the loss causation element without further addressing other elements. [4]

Get off the Radar of Sarbanes-Oxley: NYSE’s Merger of Equals with Euronext

    Hank Paulson, the US Treasury Secretary, started his speech at the Economic Club of New York in November, 2006, saying, “it’s good to be in New York City, the financial capital of the world,” which was well taken by the audience as a joke. [1]  Indeed, in 2005 only one of the top 25 IPOs by value took place in New York. [2] In the year to October 19, 2006, London Stock Exchange and Alternative Investment Market raised almost $40bn from the IPOs of 172 companies. [3]  In comparison, NYSE and Nasdaq only raised short of $30bn from 137 IPOs in the same period. [4] Concern haunted Wall Street: have the Big Apple’s glory days passed?  [5]

First Year, Second Chance

For eleven stellar seasons, the CBS hit “The Jeffersons” told the hilarious story of George and Weezie, who had moved on up the socio-economic ladder to “a deluxe apartment in the sky.” [1]  In contemporary legal education, a growing phenomenon parallels George and Weezie’s desire to get a “piece of the pie.” [2] This article will examine the trend of the transfer law student in addition to the successes, complications, and possible prejudices experienced by transfer students in securing employment.

Cuomo's Code of Conduct: Troubled Times for the Student Loan Industry

In November of 2006, the office of the New York State Attorney General initiated an investigation into the financial agreements between New York universities and student loan providers as part of an effort to eliminate practices that created conflicts of interests in the lucrative $85 billion student loan industry. [1]  However, this investigation did not receive a high degree of publicity or momentum until February of 2007 when the newly appointed New York Attorney General Andrew M. Cuomo expanded the investigation to include more than 60 universities nationwide and major student loan providers and banks. [2]  Attorney General Cuomo's investigation revealed questionable practices within the student loan industry whereby universities were receiving illegal kickbacks for including certain lenders in their "preferred lender" list.  [3] This discovery has led to a nationwide reaction and the student loan industry has been under significant probing from several lawmakers as well as the U.S. Education Department. [4]

Accessing Unclaimed TIF Funds

Developers looking for a new source of revenue during the housing slump should not overlook municipal redevelopment programs. Developing the right kind of project at the right location may qualify one for millions of dollars in government subsidies. Forty-nine states and the District of Columbia have some variation of Tax Increment Financing. [1] More commonly known as TIF, the program lets local municipalities subsidize projects in designated redevelopment areas. 

To Lose or Not To Win, That is the Question

The National Basketball Association (NBA) draft is coming and according to many sports pundits, including ESPN’s Bill Simmons, it will be ‘ridiculously deep.’ [1]  Thus, teams can find potential superstar players lower in the draft and do not necessarily need to have a top lottery pick in order to improve their ball club.  However, before the arrival of the draft, comes the NBA lottery, which determines the order of selection for those teams who did not make the playoffs, or those teams that are holding those spots due to prior trades.  As with any lottery, the teams that are participating really want to win.  In fact, according to the ‘Cause and Effect’ article on NBA.com, in the past twenty years the team with the first overall pick has had a better record the next all but three times. [2] But with any prize of this much value; there is a possibility of those playing the system to best win the top pick, a.k.a. losing on purpose.

Undocumented Taxation: More Illegal Immigrants Likely to File Returns

The historic case of James v. United States held that illegal gains constitute income that must be reported, despite any legal obligation which might arise to make restitution. [1] However, a whole different tax question arises for collecting legally earned income from residents illegally in the country. While the issue may not be clear to the millions of immigrants illegally residing in the country, the issue is clear to the Internal Revenue Service. “Everybody is a citizen for tax purposes,” remarks one Baltimore tax-preparer. [2]

Evolution of Maternalism in Corporate Law

I: Introduction

During the uncertain times of World War II, Harvard University’s president was interviewed concerning the condition of the law school. He stated that it wasn’t bad as he had expected, given the war-time circumstances: “We have 75 students, and we haven’t had to admit any women.” [1]

One would think that the legal industry would have made giant strides towards remedying such primitive opinions. On the contrary, a recent Harvard Law survey of large corporate firms found that some male lawyers still drop pencils under boardroom tables as an excuse to look at women’s legs, and take clients to strip clubs where their female colleagues feel unwelcome. [2] Fortunately, not all firms tolerate such behavior. This article aims to examine the obstacles facing women and mothers in the field of corporate law, and what actions some firms are taking to alleviate their unique burdens. For additional information on mothers in the corporate hiring process, refer to the related article by Tina Liang located here. [3]

Anchors Aweigh! The U.S. Navy, the U.S. Coast Guard, and Regulating International Shipping on the High Seas

Law students enrolled in a “substantive” criminal procedure course frequently sweat over the intricacies of search and seizure law within contexts familiar to the average land-lubber attorney – the home, the automobile, and the person strolling down the street.  Perhaps some die-hard students will take the time to learn more obscure aspects of the Fourth Amendment such as administrative searches and the law of satellite reconnaissance.  But who really bothers to learn anything about maritime search and seizure law?  The idea of pirates, smugglers, and privateers in the twenty-first century is absurd to most people, including many attorneys.  But, be forewarned!  In the post 9/11 world the men and women in the United States Navy and United States Coast Guard are on call twenty-four hours a day monitoring commercial and private vessels on the high seas.  [1]  They are enforcing regulatory legislation developed by Congress and applicable to all tankers, container ships, and other vessels that are vital links between the United States and other markets around the world.  [2]

Not so Funny Funny Business

     Open your local paper and you will see advertisements, turn on your car radio and you will hear advertisements.  Small business owners typically use newspapers and radio ads to sell their products and services, but the process of selecting the proper advertisement is often difficult.  [1]  Selection of the proper media is not the only decision the business owner faces.  The advertisement’s content is also important.   Off the wall advertisements can be beneficial to a business because they can make a business stand out.  [2] Recently a local Champaign-Urbana radio station has spread two wacky ads through the airwaves.  Both radio advertisements imitate famous movie characters in an attempt to entice listeners to go tanning.   What characters you ask, why “Bormat” and “Neapolitan” of course.  Surely, these simple name changes will shield the business that ran the ads from legal liability, right?  This article will briefly analyze these radio ads under the privacy law tort of misappropriation. 

Anatomy of a Tax Protester

      To a certain extent, most everyone becomes a tax protestor of sorts come tax season.  The goal in filling out one's tax return is to ensure that one receives every penny back that can possibly be justified -- not that one pays the appropriate amount of tax given one's circumstances.  And yet, most of us do indeed pay.  Among those that do not pay in full can be found at least two distinct categories of shirkers: the tax evader, and the tax protestor.  The tax evader is content to freeride off of the compliance of the rest of society, choosing not to pay taxes but not without tacit reliance on a system that requires taxation.  The tax protestor, on the other hand, eschews taxation as a matter of course, proclaiming his distaste for this or any system of taxation by not taking part therein.  While the net effect for both the tax evader and the tax protester is the non-or-under-payment of tax, the tax protester feels doctrinally empowered where the tax evader just feels wily.  This article is concerned with the tax protester, and will examine first three broad categories into which arguments for the non-payment of the federal income tax fall, and then it will discuss a few different methods through which the tax protester achieves his ends.

The Dark Side of Land Use Restrictions

     Residential land use restrictions are part of life in most areas in the United States.  There may be land-use restrictions regarding “building height, architectural styles, materials, orientation, view preservation” [1] and even the color of your home. [2] These restrictions may have benefits, to essentially assure quality homes are being built as well as maintain property values by preventing doublewides from being built next to mansions.  However, what happens when these restrictions go too far?  For example, the government may reject a landowner’s building plan not because it fails to meet the technical requirements of local building and zoning codes, but because the board simply does not like what the structure will look like. [3]   Along more disturbing lines, land use restrictions can (and have) made it difficult for hundreds of natural disaster victims to construct decent temporary housing. [4] Welcome to this, the dark side of land-use restrictions. 

EPA Forced To Reconsider Greenhouse Gas Regulation

            A recent United States Supreme Court decision has forced the United States to take a hard look at the worldwide global warming phenomenon, and the U.S.’s contributions thereto. [1] In Massachusetts v. EPA, the Supreme Court ruled the EPA has the authority to regulate carbon dioxide and other greenhouses gases under the Clean Air Act. [2] The EPA had long fought against such a determination on a number of grounds, including that it would run against the Bush administration’s policies toward global warming, and present only a “piecemeal solution” to the worldwide global warming phenomenon. [3]

A Penny for Your Pounds: U.S. Companies are Paying Overweight Employees to Get into Shape

The Zone, Atkins, liposuction, colonics, the liquid diet...  Many people have tried and failed at losing those last five pounds.  However, would the effort be less frustrating if someone offered you money to lose weight?  Employers across the U.S. have noticed problems associated with overweight employees, and they are hoping that monetary incentives will solve the problems.  This article will first examine the rising healthcare costs in the workplace.  It will then focus on employer efforts to combat these costs.  Finally, the article will explain some cautionary steps that employers should take when implementing weight loss efforts.