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Broken_Erika
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Nvidia sued after video call mistake showed 'stolen' data
There is a rule for video calls at work - close any files you don't want others to see before sharing your screen.According to a lawsuit filed against tech giant Nvidia, senior staff member Mohammad Moniruzzaman made this error with disastrous consequences.
He was giving an online presentation to a team from his former employer, car technology firm Valeo.
But in the course of it, Valeo claims he accidentally displayed a file proving he stole its tech secrets.
The tech that Valeo claims he took was the source code behind its parking and driving assistance software - an area Nvidia has been trying to expand into.
"So brazen was Mr Moniruzzaman's theft," the complaint alleges, "the file path on his screen still read ValeoDocs" - suggesting it was a folder specifically containing documents taken from Valeo.
Valeo claims Mr Moniruzzaman took gigabytes of data in 2021 when he was working for the German arm of the French firm. He left to join Nvidia later that year.
A letter written by Nvidia's lawyers submitted with the lawsuit said the tech giant was not aware Mr Moniruzzaman had the data.
The firms worked on a joint project, which led to the Microsoft Teams meeting in March 2022 when Mr Moniruzzaman unwittingly revealed the data.
Screenshots
Valeo claims that Mr Moniruzzaman gave a slide presentation and then minimised the app he was using - but crucially, he was still sharing his screen, leaving visible the file which Valeo says contained the source code behind its proprietary software."Valeo participants on the videoconference call immediately recognised the source code and took a screenshot before Mr Moniruzzaman was alerted of his error," the lawsuit claims. "By then, it was too late to cover his tracks."
As a result Mr Moniruzzaman was convicted by German authorities in September 2023 over unlawfully holding the data, the court document says.
"When questioned by the German police, Mr Moniruzzaman admitted to stealing Valeo's software and using that software while employed at Nvidia," the lawsuit claims.
It continues: "In fact, Mr Moniruzzaman did not deny the charge of the crime at any point during the German criminal investigation."
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This conviction has now led to Valeo launching a suit against Nvidia itself, in which it claims the tech giant benefitted financially from its "stolen trade secrets".
"Nvidia has saved millions, perhaps hundreds of millions, of dollars in development costs, and generated profits that it did not properly earn and to which it was not entitled," the complaint alleges.
"In using these stolen trade secrets to develop a competing product, Nvidia has diminished the value of Valeo's trade secrets," it says.
The lawsuit has been filed by Valeo Schalter und Sensoren GmbH, the German arm of French firm.
It is seeking significant damages, and wants the court to make an injunction prohibiting Nvidia and its affiliates from using Valeo's code.
It has been filed in a court in California, which is where Nvidia is headquartered.
In the complaint, Valeo states that after the Teams call in March 2022 it audited its systems and found Mr Moniruzzaman had copied their source code, along with "tens of thousands of files" containing other proprietary information.
His Nvidia-owned computers were then seized by German police as part of the criminal investigation, according to the lawsuit.
'Stored locally'
Meanwhile, as part of the complaint, Valeo also submitted a letter it received from Nvidia in June 2022.In the letter, lawyers representing Nvidia state Mr Moniruzzaman's actions "were entirely unknown" to the firm until May 2022 - the date he told his employer he was under investigation.
According to their letter, Mr Monizruzzaman told Nvidia the code was "stored only locally on his laptop", so it could not be accessed by other people at the company.
"Nvidia has no interest in Valeo's code or its alleged trade secrets and has taken prompt concrete steps to protect your client's asserted rights," the letter reads, adding that the firm has "cooperated fully".
The BBC has approached Valeo for comment. Nvidia declined to comment.
https://www.bbc.com/news/technology-67489495
Dollarization Is About Who Pays to Clean Up Argentina’s Mess
Javier Milei knows how to create a stir. Not only has Argentina’s president- elect shaken up his own country’s politics. He also has sparked a global debate about inflation, economic reform and dollarization— and, even more unusual, an interesting debate about these things. It’s a Thanksgiving-week miracle. Critics of Mr. Milei’s pledge to ditch the dysfunctional peso and embrace the almighty dollar have focused on relatively narrow questions: whether Argentina holds enough dollar reserves to implement such a policy, whether it is likely to have the fiscal discipline to sustain it, whether the banks could survive it, and so on.
What those critics miss is the international example that helps explain what’s really going on in Argentina: Greece. That Mediterranean country hasn’t dollarized, but it did the next best thing when it joined the euro in 2001—it deutsche-mark-ized. The euro constitutes an attempt by the bloc’s membership to piggyback on the monetary stability of the old deutsche mark. In Greece, this first encouraged an overly enthusiastic inflow of investment. Then, triggered by a big dollop of dishonest government accounting, came a crisis. The most startling development of Greece’s post-2010 crisis period is that the country never left the euro. This despite the fact that the inability to devalue its way out of the hole instead forced Athens to accept punishing policy conditions. Those will be familiar to Argentines coping with their own current International Monetary Fund borrowing, because the conditions always are the same no matter the bailout: deep spending cuts (especially to transfer payments), steep tax increases and promises of supply-side reforms that may or may not ever materialize.
This suite of policies wasn’t any more popular in Greece than it is anywhere else. Greeks in 2015 elected a far-left anti-euro government under Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis, who developed a detailed plan to return to the old drachma. This would have allowed Athens to devalue the exchange rate to avoid the “ internal devaluation” of brutal cuts to wages and consumption. Foreign commentators cheered on Messrs. Tsipras and Varoufakis in their war against the euro. Greeks even sort of voted in a botched referendum to leave the currency bloc. Yet Greece stayed with the euro in the end, as Mr. Tsipras apparently came to view the drachma plan as too economically destructive and politically toxic to attempt.
Greek voters had figured out that someone always has to suffer when the economy runs off course. The only question is, who? Devaluation and inflation punish savers and the productive private economy while boosting the fortunes of a bloated government, unproductive enterprises and some asset owners. Greeks apparently decided they wanted to apportion the pain of economic adjustment differently.
And while the euro was restraining in one sense, it proved freeing in another. The dirty secret is that the policy conditions imposed by Greece’s three bailouts were Keynesian flops. No one ever restored an economy to health by taxing it more. Yet it transpires that such conditions are not necessarily requirements for membership in a currency bloc. What is required is a credible commitment to economic growth, and as long as global and domestic investors think the economic plan is plausible they’ll finance it. This is why current Prime Minister Kyriakos Mitsotakis, who ousted Mr. Tsipras in the 2019 election, has focused obsessively on regaining an investment-grade credit rating for Greece—a milestone the country achieved this autumn. That accomplishment required a hefty dose of spending discipline, but also policies to boost productive private investment. The euro has provided a stable foundation.
Which brings us back to Argentina. Mr. Milei’s central insight appears to be that any fix for the perverse mix of economic policies that have produced 140% inflation, soaring poverty and anemic growth will be painful. His dollarization gambit isn’t a promise of an easy way out, but rather a promise to voters about whom he will make to pay for the transition.
Greece’s experience with the discipline of the euro shows why Milei’s plan might appeal to voters.
Forswearing the option of further currency devaluations constitutes a guarantee to Argentines that savers, small entrepreneurs and poor households won’t pay the heaviest price, via inflation, for the government’s policy errors. Instead, bloated and inefficient state-owned companies, the government and politically connected larger firms will bear the brunt of economic adjustment via reforms such as the privatizations that Mr. Milei promises, reforms that are necessary accompaniments to a dollarization policy.
This is the opposite of the manner in which a devalue-and-inflate plan usually distributes the pain of an economic turnaround. Who knows if dollarization will save Argentina. But understand that Argentinian voters haven’t gambled on an outlandish monetary policy. They’ve sent a signal about what they are and aren’t prepared to pay to clean up their economic mess—or rather, who is and isn’t prepared to pay it.
POLITICAL ECONOMICS
Javier Milei knows how to create a stir. Not only has Argentina’s president- elect shaken up his own country’s politics. He also has sparked a global debate about inflation, economic reform and dollarization— and, even more unusual, an interesting debate about these things. It’s a Thanksgiving-week miracle. Critics of Mr. Milei’s pledge to ditch the dysfunctional peso and embrace the almighty dollar have focused on relatively narrow questions: whether Argentina holds enough dollar reserves to implement such a policy, whether it is likely to have the fiscal discipline to sustain it, whether the banks could survive it, and so on.
What those critics miss is the international example that helps explain what’s really going on in Argentina: Greece. That Mediterranean country hasn’t dollarized, but it did the next best thing when it joined the euro in 2001—it deutsche-mark-ized. The euro constitutes an attempt by the bloc’s membership to piggyback on the monetary stability of the old deutsche mark. In Greece, this first encouraged an overly enthusiastic inflow of investment. Then, triggered by a big dollop of dishonest government accounting, came a crisis. The most startling development of Greece’s post-2010 crisis period is that the country never left the euro. This despite the fact that the inability to devalue its way out of the hole instead forced Athens to accept punishing policy conditions. Those will be familiar to Argentines coping with their own current International Monetary Fund borrowing, because the conditions always are the same no matter the bailout: deep spending cuts (especially to transfer payments), steep tax increases and promises of supply-side reforms that may or may not ever materialize.
This suite of policies wasn’t any more popular in Greece than it is anywhere else. Greeks in 2015 elected a far-left anti-euro government under Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis, who developed a detailed plan to return to the old drachma. This would have allowed Athens to devalue the exchange rate to avoid the “ internal devaluation” of brutal cuts to wages and consumption. Foreign commentators cheered on Messrs. Tsipras and Varoufakis in their war against the euro. Greeks even sort of voted in a botched referendum to leave the currency bloc. Yet Greece stayed with the euro in the end, as Mr. Tsipras apparently came to view the drachma plan as too economically destructive and politically toxic to attempt.
Greek voters had figured out that someone always has to suffer when the economy runs off course. The only question is, who? Devaluation and inflation punish savers and the productive private economy while boosting the fortunes of a bloated government, unproductive enterprises and some asset owners. Greeks apparently decided they wanted to apportion the pain of economic adjustment differently.
And while the euro was restraining in one sense, it proved freeing in another. The dirty secret is that the policy conditions imposed by Greece’s three bailouts were Keynesian flops. No one ever restored an economy to health by taxing it more. Yet it transpires that such conditions are not necessarily requirements for membership in a currency bloc. What is required is a credible commitment to economic growth, and as long as global and domestic investors think the economic plan is plausible they’ll finance it. This is why current Prime Minister Kyriakos Mitsotakis, who ousted Mr. Tsipras in the 2019 election, has focused obsessively on regaining an investment-grade credit rating for Greece—a milestone the country achieved this autumn. That accomplishment required a hefty dose of spending discipline, but also policies to boost productive private investment. The euro has provided a stable foundation.
Which brings us back to Argentina. Mr. Milei’s central insight appears to be that any fix for the perverse mix of economic policies that have produced 140% inflation, soaring poverty and anemic growth will be painful. His dollarization gambit isn’t a promise of an easy way out, but rather a promise to voters about whom he will make to pay for the transition.
Greece’s experience with the discipline of the euro shows why Milei’s plan might appeal to voters.
Forswearing the option of further currency devaluations constitutes a guarantee to Argentines that savers, small entrepreneurs and poor households won’t pay the heaviest price, via inflation, for the government’s policy errors. Instead, bloated and inefficient state-owned companies, the government and politically connected larger firms will bear the brunt of economic adjustment via reforms such as the privatizations that Mr. Milei promises, reforms that are necessary accompaniments to a dollarization policy.
This is the opposite of the manner in which a devalue-and-inflate plan usually distributes the pain of an economic turnaround. Who knows if dollarization will save Argentina. But understand that Argentinian voters haven’t gambled on an outlandish monetary policy. They’ve sent a signal about what they are and aren’t prepared to pay to clean up their economic mess—or rather, who is and isn’t prepared to pay it.
POLITICAL ECONOMICS
How does this work? Who is state-owned companies and the government if not taxpayers?
I don't know. Both Greece and Argentina's economic situation are unknown to me. I was hoping some smart person would clue me in on how to understand what I posted.
I am most certainly not "smart" when it comes to economics, but I would read that as the author is economically on the side of Milei and goldbugs and others who think that governments not having the power to control the money supply is an inherently good thing and will have these magic effects, without any actual evidence that that is a likely outcome.I don't know. Both Greece and Argentina's economic situation are unknown to me. I was hoping some smart person would clue me in on how to understand what I posted.
I note you do not reference the source, so I cannot really be sure.
Source; WSJ opinion piece from today
POLITICAL ECONOMICS
By Joseph C. Sternberg
POLITICAL ECONOMICS
By Joseph C. Sternberg
He wrote "The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future" which blames it all on low interest rates. I suspect I was right.
Well then, I'm sure he is a quack! 
EDIT: He was born in 1982 so he is a boomer hating millennial!!
EDIT: He was born in 1982 so he is a boomer hating millennial!!
Other than the employees of the company, taxpayers don't automatically benefit if a company is state owned.
As consumers they might benefit more from competition and better services than from having a national champion.
If they don't benefit from competition they might benefit from stopping subsidies.
Having said that if he sells off a monopoly or mine or whatever to cronies without opening up the market to competition that isn't going to benefit taxpayers, it will probably cost them.
They do not automatically benefit from success, but they pretty much always lose with failure, whether that is keeping it going with taxpayers money or that service not being there.
That's true.
The specific example is a state airline. If privatisation fails service is reduced or removed.
In that example though is that automatically a bad thing?
A quick bit of googling suggests Aerolinas Argentinas has received subsidies of USD 8,000,000,000 since it was renationalised in 2008.
I wouldn't be a follower of Melei's politics but I would have cut it off long ago.
Probably not, but I see no obvious reason to link that to dollarisation, unless it is just that they will not have any taxes to spend on anything so they will not be able to support this. It does not seem that this going under is going to do much to protect "savers, small entrepreneurs and poor households", which was the claim.
First order effects are pretty clear. It will hurt those who are getting money too cheaply (like the state or maybe large banks, very likely not "savers, small entrepreneurs and poor households ) and will benefit those who carry the burden of inflation right now (which savers, small entrepreneurs and poor households are a part of). Second order effects are less clear. A state with no access to cheap money anymore will have to cut services or raise taxes, who pays and who benefits depends entirely on how the state does that. Third order effects are then how the economy reacts to that and that is anyone's guess.
One thing is clear though: In the next economic crisis, the state will have no tools to do anything and then everyone pays.
Small entrepreneurs are the group who most obviously need cheap money, as in relatively easy to get and low interest rate loans to get their business going.
Yes, but usually they cannot borrow from the central bank, but get it from an intermediary. At 140% inflation that is going to be either very expensive or they don't get it at all.
Delaware Is Trying Hard to Drive Away Corporations
CROSS COUNTRY By William P. Barr and Jonathan Berry
Delaware wasn’t always the go-to state for corporate law. And if it escalates its flirtation with environmental, social and governance investment principles, the First State might end up losing its privileged status, just like its neighbor once did. New Jersey became “the mother of trusts” in the late 19th century by pioneering incorporation laws that gave companies unprecedented freedom. But the Garden State lost that title in 1913 when Gov. Woodrow Wilson set out to correct perceived abuses by making executives liable for corporate “irresponsibility.” Companies responded by fleeing the state. Wilson’s successor repealed his changes, but the damage was done. As Ralph Nader and co-authors later put it: “Any state that could elect Wood-row Wilson as Governor could never be fully trusted by big business again.”
History stands to repeat itself in Delaware. New Jersey fell prey to Wilson’s trust-busting progressivism. Today, Delaware is falling in line with other blue states in embracing ESG, which rejects shareholder value as corporate law’s lodestar. Meanwhile, red states are developing potentially attractive alternatives. The federal government and many blue states are using ESG to inject the progressive political agenda on climate, race, and other issues into corporate governance. Joe Biden’s native Delaware, where state government is controlled by Democrats, isn’t immune to this trend. Indeed, the outsize importance of Delaware’s corporate law makes it a valuable asset for enterprising officeholders. Look no further than the example of former Delaware Supreme Court Justice Tamika Montgomery-Reeves, who in 2021 declared that state law allows directors “to consider interests of broader constituents,” such as “stakeholders other than stockholders.” President Biden named her to the federal appellate bench in 2022.
Newly assertive progressive politics threatens to upset the time-honored legal formula that helped Delaware maintain its corporate-law monopoly for a generation. Delaware earned its reputation by scrupulously deferring to companies’ good-faith pursuit of shareholder value, freeing up executives to focus on business.
That era may soon be over. Not only Delaware’s politicians, but even its corporate-law elder statesmen today advocate that the state should adopt a more assertive and explicitly pro-ESG corporate law. The watchword is Delaware’s Care-mark doctrine, which makes executives liable for failures in risk management. Once reserved for outright corporate crime, this notable exception to Delaware’s signature deference to executives has demonstrated expansive potential. Two former Delaware Supreme Court justices have stated that, under the doctrine, ESG issues should become more than optional social-responsibility topics. They should be “risks” that boards are required to oversee. The influential former Delaware Supreme Court Chief Justice Leo Strine has coauthored several papers—including one titled “Caremark and ESG: Perfect Together”—addressing how the doctrine invites companies to undertake ESG initiatives.
Recent trends at Delaware’s highly specialized business court, the Court of Chancery, follow this change in the political wind. Claims under Caremark— which a leading chancellor once called “the most difficult theory in corporation law” for plaintiffs to win on—are increasingly succeeding, and thus have proliferated on the court’s docket. Companies have noted the shift’s legal import, but less so its political implications. It is no coincidence that the board-level Caremark “risks” that both the plaintiffs’ bar and companies’ legal advisers stress correspond to du jour ESG issues like climate change, DEI, and #MeToo—or even the 2020 presidential election. Activists wield Caremark to pressure companies on ESG initiatives. But it won’t stop there. As the logic of ESG-inspired “risk management” takes hold, expect Delaware law to elevate issue activism steadily over old-fashioned shareholder value throughout corporate law. Witness the recent case rejecting a Disney shareholder’s request for corporate records after the company’s stock plummeted following its opposition to Florida’s Parental Rights in Education Act. The Court of Chancery held that the shareholder’s motivation was improperly “political,” but Disney management’s campaign to improve its image with progressives at the expense of alienating its customers was “an ordinary business decision.”
A flirtation with ESG is jeopardizing its status as a preferred destination for corporate headquarters.
While batting away a shareholder lawsuit might score temporary points with executives, wise leaders will look closer. The Disney case is significant because it foreshadows the completed evolution of Delaware corporate law. Companies not in step with ESG will have litigation risk under Caremark; companies that go overboard will be free from accountability. Politicizing corporate law will be far more costly in the end. The clear signal is that Delaware’s commitments to both board-level deference and shareholder value will bend to accommodate ESG. That is bad news for management and shareholders alike. Delaware’s weakness presents an opportunity for red states that oppose ESG. This year Texas elected to set up its own designated business court. Georgia, Utah and Wyoming recently did the same. Ambitious legislators and attorneys in these states and others can capitalize by developing an efficient alternative that upholds shareholder value.
Like corporations, corporate law itself competes in a market. Some companies have learned the hard way that embracing ESG can boost their competitors. Delaware may soon learn that lesson too.
Mr. Barr served as the U.S. attorney general, 1991-93 and 2019-20, and is managing partner of Torridon Law PLLC. Mr. Berry served as head of policy at the U.S. Department of Labor, 2018-20, and is managing partner of the law firm Boyden Gray PLLC.
WSJ
CROSS COUNTRY By William P. Barr and Jonathan Berry
Delaware wasn’t always the go-to state for corporate law. And if it escalates its flirtation with environmental, social and governance investment principles, the First State might end up losing its privileged status, just like its neighbor once did. New Jersey became “the mother of trusts” in the late 19th century by pioneering incorporation laws that gave companies unprecedented freedom. But the Garden State lost that title in 1913 when Gov. Woodrow Wilson set out to correct perceived abuses by making executives liable for corporate “irresponsibility.” Companies responded by fleeing the state. Wilson’s successor repealed his changes, but the damage was done. As Ralph Nader and co-authors later put it: “Any state that could elect Wood-row Wilson as Governor could never be fully trusted by big business again.”
History stands to repeat itself in Delaware. New Jersey fell prey to Wilson’s trust-busting progressivism. Today, Delaware is falling in line with other blue states in embracing ESG, which rejects shareholder value as corporate law’s lodestar. Meanwhile, red states are developing potentially attractive alternatives. The federal government and many blue states are using ESG to inject the progressive political agenda on climate, race, and other issues into corporate governance. Joe Biden’s native Delaware, where state government is controlled by Democrats, isn’t immune to this trend. Indeed, the outsize importance of Delaware’s corporate law makes it a valuable asset for enterprising officeholders. Look no further than the example of former Delaware Supreme Court Justice Tamika Montgomery-Reeves, who in 2021 declared that state law allows directors “to consider interests of broader constituents,” such as “stakeholders other than stockholders.” President Biden named her to the federal appellate bench in 2022.
Newly assertive progressive politics threatens to upset the time-honored legal formula that helped Delaware maintain its corporate-law monopoly for a generation. Delaware earned its reputation by scrupulously deferring to companies’ good-faith pursuit of shareholder value, freeing up executives to focus on business.
That era may soon be over. Not only Delaware’s politicians, but even its corporate-law elder statesmen today advocate that the state should adopt a more assertive and explicitly pro-ESG corporate law. The watchword is Delaware’s Care-mark doctrine, which makes executives liable for failures in risk management. Once reserved for outright corporate crime, this notable exception to Delaware’s signature deference to executives has demonstrated expansive potential. Two former Delaware Supreme Court justices have stated that, under the doctrine, ESG issues should become more than optional social-responsibility topics. They should be “risks” that boards are required to oversee. The influential former Delaware Supreme Court Chief Justice Leo Strine has coauthored several papers—including one titled “Caremark and ESG: Perfect Together”—addressing how the doctrine invites companies to undertake ESG initiatives.
Recent trends at Delaware’s highly specialized business court, the Court of Chancery, follow this change in the political wind. Claims under Caremark— which a leading chancellor once called “the most difficult theory in corporation law” for plaintiffs to win on—are increasingly succeeding, and thus have proliferated on the court’s docket. Companies have noted the shift’s legal import, but less so its political implications. It is no coincidence that the board-level Caremark “risks” that both the plaintiffs’ bar and companies’ legal advisers stress correspond to du jour ESG issues like climate change, DEI, and #MeToo—or even the 2020 presidential election. Activists wield Caremark to pressure companies on ESG initiatives. But it won’t stop there. As the logic of ESG-inspired “risk management” takes hold, expect Delaware law to elevate issue activism steadily over old-fashioned shareholder value throughout corporate law. Witness the recent case rejecting a Disney shareholder’s request for corporate records after the company’s stock plummeted following its opposition to Florida’s Parental Rights in Education Act. The Court of Chancery held that the shareholder’s motivation was improperly “political,” but Disney management’s campaign to improve its image with progressives at the expense of alienating its customers was “an ordinary business decision.”
A flirtation with ESG is jeopardizing its status as a preferred destination for corporate headquarters.
While batting away a shareholder lawsuit might score temporary points with executives, wise leaders will look closer. The Disney case is significant because it foreshadows the completed evolution of Delaware corporate law. Companies not in step with ESG will have litigation risk under Caremark; companies that go overboard will be free from accountability. Politicizing corporate law will be far more costly in the end. The clear signal is that Delaware’s commitments to both board-level deference and shareholder value will bend to accommodate ESG. That is bad news for management and shareholders alike. Delaware’s weakness presents an opportunity for red states that oppose ESG. This year Texas elected to set up its own designated business court. Georgia, Utah and Wyoming recently did the same. Ambitious legislators and attorneys in these states and others can capitalize by developing an efficient alternative that upholds shareholder value.
Like corporations, corporate law itself competes in a market. Some companies have learned the hard way that embracing ESG can boost their competitors. Delaware may soon learn that lesson too.
Mr. Barr served as the U.S. attorney general, 1991-93 and 2019-20, and is managing partner of Torridon Law PLLC. Mr. Berry served as head of policy at the U.S. Department of Labor, 2018-20, and is managing partner of the law firm Boyden Gray PLLC.
WSJ
This all sounds like a kind of good thing, but it is interesting that it seems all the political change is being carried out by judges. Is this how it is supposed to work? How come there is this big change and no mention of any politician doing anything except appointing judges?Delaware Is Trying Hard to Drive Away Corporations
CROSS COUNTRY By William P. Barr and Jonathan Berry
Delaware wasn’t always the go-to state for corporate law. And if it escalates its flirtation with environmental, social and governance investment principles, the First State might end up losing its privileged status, just like its neighbor once did. New Jersey became “the mother of trusts” in the late 19th century by pioneering incorporation laws that gave companies unprecedented freedom. But the Garden State lost that title in 1913 when Gov. Woodrow Wilson set out to correct perceived abuses by making executives liable for corporate “irresponsibility.” Companies responded by fleeing the state. Wilson’s successor repealed his changes, but the damage was done. As Ralph Nader and co-authors later put it: “Any state that could elect Wood-row Wilson as Governor could never be fully trusted by big business again.”
History stands to repeat itself in Delaware. New Jersey fell prey to Wilson’s trust-busting progressivism. Today, Delaware is falling in line with other blue states in embracing ESG, which rejects shareholder value as corporate law’s lodestar. Meanwhile, red states are developing potentially attractive alternatives. The federal government and many blue states are using ESG to inject the progressive political agenda on climate, race, and other issues into corporate governance. Joe Biden’s native Delaware, where state government is controlled by Democrats, isn’t immune to this trend. Indeed, the outsize importance of Delaware’s corporate law makes it a valuable asset for enterprising officeholders. Look no further than the example of former Delaware Supreme Court Justice Tamika Montgomery-Reeves, who in 2021 declared that state law allows directors “to consider interests of broader constituents,” such as “stakeholders other than stockholders.” President Biden named her to the federal appellate bench in 2022.
Newly assertive progressive politics threatens to upset the time-honored legal formula that helped Delaware maintain its corporate-law monopoly for a generation. Delaware earned its reputation by scrupulously deferring to companies’ good-faith pursuit of shareholder value, freeing up executives to focus on business.
That era may soon be over. Not only Delaware’s politicians, but even its corporate-law elder statesmen today advocate that the state should adopt a more assertive and explicitly pro-ESG corporate law. The watchword is Delaware’s Care-mark doctrine, which makes executives liable for failures in risk management. Once reserved for outright corporate crime, this notable exception to Delaware’s signature deference to executives has demonstrated expansive potential. Two former Delaware Supreme Court justices have stated that, under the doctrine, ESG issues should become more than optional social-responsibility topics. They should be “risks” that boards are required to oversee. The influential former Delaware Supreme Court Chief Justice Leo Strine has coauthored several papers—including one titled “Caremark and ESG: Perfect Together”—addressing how the doctrine invites companies to undertake ESG initiatives.
Recent trends at Delaware’s highly specialized business court, the Court of Chancery, follow this change in the political wind. Claims under Caremark— which a leading chancellor once called “the most difficult theory in corporation law” for plaintiffs to win on—are increasingly succeeding, and thus have proliferated on the court’s docket. Companies have noted the shift’s legal import, but less so its political implications. It is no coincidence that the board-level Caremark “risks” that both the plaintiffs’ bar and companies’ legal advisers stress correspond to du jour ESG issues like climate change, DEI, and #MeToo—or even the 2020 presidential election. Activists wield Caremark to pressure companies on ESG initiatives. But it won’t stop there. As the logic of ESG-inspired “risk management” takes hold, expect Delaware law to elevate issue activism steadily over old-fashioned shareholder value throughout corporate law. Witness the recent case rejecting a Disney shareholder’s request for corporate records after the company’s stock plummeted following its opposition to Florida’s Parental Rights in Education Act. The Court of Chancery held that the shareholder’s motivation was improperly “political,” but Disney management’s campaign to improve its image with progressives at the expense of alienating its customers was “an ordinary business decision.”
A flirtation with ESG is jeopardizing its status as a preferred destination for corporate headquarters.
While batting away a shareholder lawsuit might score temporary points with executives, wise leaders will look closer. The Disney case is significant because it foreshadows the completed evolution of Delaware corporate law. Companies not in step with ESG will have litigation risk under Caremark; companies that go overboard will be free from accountability. Politicizing corporate law will be far more costly in the end. The clear signal is that Delaware’s commitments to both board-level deference and shareholder value will bend to accommodate ESG. That is bad news for management and shareholders alike. Delaware’s weakness presents an opportunity for red states that oppose ESG. This year Texas elected to set up its own designated business court. Georgia, Utah and Wyoming recently did the same. Ambitious legislators and attorneys in these states and others can capitalize by developing an efficient alternative that upholds shareholder value.
Like corporations, corporate law itself competes in a market. Some companies have learned the hard way that embracing ESG can boost their competitors. Delaware may soon learn that lesson too.
Mr. Barr served as the U.S. attorney general, 1991-93 and 2019-20, and is managing partner of Torridon Law PLLC. Mr. Berry served as head of policy at the U.S. Department of Labor, 2018-20, and is managing partner of the law firm Boyden Gray PLLC.
WSJ
This is radical economics. I really like it. I cannot find the advert on youtube.
France warns people off Black Friday clothes deals
The French government has launched a campaign encouraging people not to buy new clothes in Black Friday sales.
The advert shows a man asking for advice in a shop before an assistant tells him not to buy anything, to help the planet and his finances.
The minister for ecological transition - responsible for promoting sustainability - Christophe Béchu, is behind the campaign.
France warns people off Black Friday clothes deals
The French government has launched a campaign encouraging people not to buy new clothes in Black Friday sales.
The advert shows a man asking for advice in a shop before an assistant tells him not to buy anything, to help the planet and his finances.
The minister for ecological transition - responsible for promoting sustainability - Christophe Béchu, is behind the campaign.
Estebonrober
Deity
- Joined
- Jan 9, 2017
- Messages
- 6,062
I have very strong feelings about this entire garbage editorial in general but as way of not just coming in guns blazing on this post, I will say two things... Law is political always, its fudging dumb (two lawyers wrote this mind you) to even write this sentence. Second, Bill Barr and Jon Berry are former Trump officials. They would spit on their grandmothers if they thought it would get them another dollar.
