Peace Corps and Legal Services

By Professor Stephen Gottlieb

This commentary originally aired on WAMC’s Northeast Report and was posted to Professor Gottlieb’s Constitutionalism & Democracy blog.

The Trump Administration hasn’t included the Peace Corps in its proposal for fiscal year 2018. It proposed cutting the international affairs budget by nearly a third.[1] It struck funding for the Legal Services Corporation which provides funds for poor people to defend what little they have. And, as we are all aware, it has advanced its war on truth by trying to cut the budget of National Public Radio. None of that will save much in the budget but it will damage the country and make life coarser and less secure for the people in it.

On Feb. 27, 2017 “retired three and four star flag and general officers from all branches of the armed services” wrote congressional leadership “to share our strong conviction that elevating and strengthening diplomacy and development alongside defense are critical to keeping America safe.”

These generals and admirals told Congress from their own experience “that many of the crises our nation faces do not have military solutions alone – from confronting violent extremist groups like ISIS in the Middle East and North Africa to preventing pandemics like Ebola and stabilizing weak and fragile states that can lead to greater instability” as well as “refugee flows that are threatening America’s strategic allies in Israel, Jordan, Turkey, and Europe.”

These military officers made it plain that “The military … needs strong civilian partners in the battle against the drivers of extremism– lack of opportunity, insecurity, injustice, and hopelessness.” From their experience, “The State Department, USAID, Millennium Challenge Corporation, Peace Corps and other development agencies are critical to preventing conflict and reducing the need to put our men and women in uniform in harm’s way.…”

The Trump Administration’s blueprint for FY2018 for 150 international affairs budget functions included no budget proposal for the Peace Corps. According to the Congressional Research Service, the nearly quarter of a million Peace Corps Volunteers who have served in 141 countries provide a form of “public diplomacy” for America, not to mention the “short-term … [postings for] emergency, humanitarian, and development assistance at the community level … including post-tsunami Thailand and Sri Lanka and post-earthquake Haiti.”. And they bring back with them and help the rest of us understand other parts of the world that few of us get to see. Both the specific attack on the Peace Corp and the general attack on diplomacy are part of the foolish short-sightedness of the current Administration.

Apparently the Administration doesn’t like poor people in the United States any more than abroad, as it made clear by trying to end the Legal Services Corporation. In commentary in the Times Union, Dean Alicia Ouellette of Albany Law School just stuck to the facts:

“People facing life-altering crises — parents losing custody of their children, families facing wrongful foreclosures, veterans wrongly denied benefits, the elderly scammed of life savings by fraudulent businesses, farmers struck by natural disaster — need the help of lawyers.”[2]

But for the Trump Administration, if you’re too poor to hire an attorney, you don’t deserve justice.  It’s not just the people who are deprived of their rights; it’s the public as well. According to a Massachusetts study, government funding of various types of legal representation showed returns of from two to five times the amount expended on counsel, depending on the area of legal services, not including the very significant benefits to state residents.[3] Those benefits can be very significant. Dean Ouellette cited a study by the New York City Bar Association showing savings to the city of more than half again the cost of providing legal help to people who can’t afford it in a variety of non-criminal matters. Other studies similarly show that the cost of erroneous convictions vastly exceeds the cost of providing counsel.[4]

For this president, no injury to the public or to the vulnerable is too great.

[1] Congressional Research Service, https://fas.org/sgp/crs/misc/RS21168.pdf.

[2] http://www.timesunion.com/tuplus-opinion/article/Funding-legal-services-for-the-poor-benefits-all-11049978.php.

[3] INVESTING IN JUSTICE A ROADMAP TO COST-EFFECTIVE FUNDING OF CIVIL LEGAL AID IN MASSACHUSETTS, A REPORT OF THE BOSTON BAR ASSOCIATION STATEWIDE TASK FORCE TO EXPAND CIVIL LEGAL AID IN MASSACHUSETTS, at 19-24 (2014) available at http://www.bostonbar.org/docs/default-document-library/statewide-task-force-to-expand-civil-legal-aid-in-ma—investing-in-justice.pdf.

[4] James R. Acker, The Flipside Injustice Of Wrongful Convictions: When The Guilty Go Free, 76 ALB. L. REV. 1629, 1631-36, 1708-09 (2012/2013).

The New Job Market Needs ‘Social’ Innovation

By Professor Ray Brescia

A recent article in the New York Times explores how we can prepare the workers of the future for the jobs of the future.  One important component of that effort will be teaching any worker “soft” skills—working in teams, communication, empathy.  As the Times piece states:

Educators should focus on teaching technical skills, like coding and statistics, and skills that still give humans an edge over machines, like creativity and collaboration, experts say. And since no one knows which jobs will be automated later, it may be most important to learn flexibility and how to learn new things.

(emphases in original)

This is consistent with research from David Deming of the Harvard School of Education that stresses the importance of these types of skills in the workforce of tomorrow.

In the prescient A Whole New Mind: How Right-Brainers Will Rule the Future, published in 2005, Dan Pink argued that:

Mere survival today depends on being able to do something that overseas knowledge workers can’t do cheaper, that powerful computers can’t do faster, and that satisfies one of the nonmaterial, transcendent desires of an abundant age.

He identified six “aptitudes” he believes are necessary for those whose jobs are threatened by automation and outsourcing:

Design: Creating something beautiful or engaging.

Story: Telling a compelling narrative.

Symphony: Seeing the big picture/coordinating resources.

Empathy: Forging relationships.

Play: Engaging lightheartedly.

Meaning: Pursuing fulfillment.

In my class “Law and Social Innovation: Creative Problem Solving,” I try to offer students the opportunity to develop these aptitudes as they tackle thorny collective action problems like the thousands of vacant and abandoned homes that plague post-industrial cities in the wake of the Financial Crisis of 2008.  Read more about the class here.

This post originally appeared on The Future of Change blog.

The 9th Circuit’s Ruling Against Trump: An Outline

By Professor Vincent Bonventre

The decision in one sentence:

The Trump administration failed to show that the country was in grave danger unless the Executive Order was allowed to go into effect immediately.

A step by step outline of the 9th Circuit Decision:
  • What does President Trump’s executive order do? It suspends for 90 days the entry of non-citizens from seven countries; suspends for 120 days the United States Refugee Admissions Program; and suspends indefinitely the entry of all Syrian refugees.
  • Do the states (Washington and Minnesota) have a right to challenge the executive order? YES. The states have “standing” because non-citizens who live and work in those states will be seriously harmed by the executive order, and so will educational, business, and other institutions in those states that rely on those non-citizens.
  • Does the President have the power to issue such an executive order? YES. On matters of immigration and national security, the President has wide-ranging authority, and the judicial branch should almost always defer to presidential judgments in these matters.
  •  But is the President’s executive order entirely immune from judicial review? NO. To quote from the decision, the “fundamental structure of our constitutional democracy” provides for a judicial check on the other branches of government to insure that they do not violate the Constitution, and executive orders such as this one are no exception.

Read the full article at NewYorkCourtWatcher.com.

The Chancery Court’s Latest Take On Demand Refusal

By Professor Christine Sgarlata Chung

With the press of the last semester, I find myself in catch up mode.  (I suspect I am not alone!)  This post — which discusses a recent Delaware Chancery Court case involving Rule 23.1 and shareholder derivative actions — is the first a series of posts designed to bring us up to date on recent developments in corporate governance litigation and financial market regulation.  For faculty using Business Organizations in Focus, this post supplements the discussion of derivative actions and Rule 23.1 in Chapter 9 — particularly pp. 481-484.

Summary:  In Andersen v. Mattel, Inc., C.A. No. 11816-VCMR (Del. Ch. Jan. 19, 2017), a shareholder alleged that Mattel’s board improperly investigated and wrongfully refused to bring suit to recover up to $11.5 million paid to the former chairman and CEO of the company as part of a severance package and consulting agreement.  On January 19th, the Delaware Chancery Court granted the director defendants’ motion to dismiss under Delaware Chancery Court Rule 23.1.

The Demand Requirement/ Rule 23.1:  As the caption reflects, this case was filed as a derivative action — i.e., a lawsuit brought by one or more shareholders to enforce a right or cause of action owned by the corporation, but one that the corporation will not enforce.  Because derivative actions, by their very nature, impinge on the board’s authority to decide whether and when to institute litigation, derivative actions are subject to procedural and substantive requirements not applicable to direct actions, including the so-called demand requirement.  For actions in the Delaware Chancery Court, the demand requirement is set forth in Chancery Court Rule 23.1.

Read the full article at the Forum on Financial Market Regulation blog.

Lessons from a Century of Voting Reforms

By Professor Stephen Gottlieb

This commentary originally aired on WAMC’s Northeast Report and was posted to the Constitutionalism & Democracy blog.

Let’s discuss voting issues today.  Well more than a century of experience has gone into the way we vote. That century should be a source of confidence and concern because none of us is old enough to remember why all the rules are in the statutes.

If you’ve seen the 19th century election day paintings, people came to the polls with pieces of paper and dropped them in the ballot box. That made voting very public. Some states required an open, public ballot. That can be a protection but it also made voters vulnerable. Employers and landowners could and did retaliate economically. As political machines took root, they bribed, threatened and attacked voters to get what they wanted. Parties produced colored ballots that voters carried to the polls. They held their ballots up on their way so everyone could see and then dropped their colored ballots into the box. That satisfied the local machines. And it meant that elections were widely corrupted. Can you imagine a local gang, party operative or factory boss telling you whom you had to vote for and backing that up with beatings and bribes? Unfortunately that’s well-documented, both in big cities and small towns.

The secret ballot was developed around the turn of the 20th century to help solve that problem. It put the names of all the candidates on a single piece of paper so it wasn’t obvious who the voters supported. The idea was imported and known as the Australian ballot. Coupled with it was the development of election machinery, hardware like the lever machines we used in New York for quite a long time. But the election statutes reflect lengthy experience with attempts to defeat the secrecy and the security of the machines. So rules required inspecting, securing and sealing the machines, and identifying the voters at the polls based on permanent books of signatures. We had moved quite far from the chaotic march to the polls with random pieces of paper.

Some lessons from that history: It is easier to control the polling place itself than what happens at home or at work, where people might confront orders backed with threats or bribes on how to vote. But that doesn’t work without a way to verify what you did, and enforcing the secret ballot makes it hard to tell how you voted. Thank heavens most of us now have secure polling places. The secrecy and security of the ballot are essential.

The problem of imposters at the polls has largely been solved. But absentee ballots remain a security concern because of the opportunity for others to see, bribe, trick or intimidate the voter. Obviously there are some people who need absentee ballots, but early voting is a safer procedure for those who can get to the polls.

Now in the age of computers we seem to be trying to reinvent the wheel because we have forgotten what the problems were. But programmers, computer engineers and indeed their professional association, the IEEE, has made clear that touch-screen and internet voting cannot be secured given what we know now. Therefore, given current technology, New York’s choice of scanners with paper ballots is the safest available choice IF we do sample post-election checks of the machines against the paper ballots. We should not shift to a new system given the existing state of knowledge and tools. But sample checks should be universally required to keep the system honest, and Jill Stein is right to demand recounts to check the integrity of the system.

Selfies, on the other hand, are a problem. They create the ability to verify who one voted for. That, of course, is why people take them. But it makes it possible for nefarious groups to bribe or intimidate voters. We developed the secret ballot to protect voters and keep elections clean and honest. We need to stick to it.

Playbook for Student Resistance

This post originally appeared on Medium.

By Professor Ray Brescia

The results of the recent election have triggered much soul searching, perhaps no more so than with students enrolled in colleges, law schools, and other institutions of higher education, wondering what kind of world awaits them. Many are frustrated, asking if there is more that could have been done to change the outcome of the election, or what can be done now to protect our most vulnerable communities from harm, discrimination, and the fear of persecution. I teach now, in a law school, and I have heard the anxiety and confusion in my students’ voices, and seen it in their eyes. But I’ve also seen something else: a desire to get involved, to do something, to play a part in something bigger than themselves, to have a role in combatting discrimination and the forces of fear.

I was a student once too, and my fellow students and I saw injustice in the world and wanted to correct it. It was why many of us had gone to law school in the first place. This was in the middle of the first Bush Administration, when a so-called New World Order meant disruption throughout the world and a new American dominance on the global stage. When a coup in Haiti ousted the democratically elected president, Jean-Bertrand Aristide, thousands of political refugees fled the country, many by boat, and fears of an influx of these refugees in the battleground state of Florida (the 1992 election was looming), set the Bush Administration to open a camp for them at a place few had heard of before: the U.S. Naval Base on Guantánamo Bay, Cuba. At first, the camp became a staging ground, where refugees would be assessed for their claims of political asylum. Consistent with the U.S. government’s international obligations, if the refugees were found to have a credible asylum claim, they would be taken to the United States for processing of that claim, with full due process protections.

But this was also a time of AIDS hysteria, and the Haitian refugees were screened for their HIV status. If a refugee tested positive, he or she was detained, indefinitely, in the camp. Given their health status, one government official even said they would likely die there.

Click here to read the entire column at Medium.com. 

Teaching to the Traumatized

By Professor Mary A. Lynch, Kate Stoneman Chair in Law and Democracy

This past week has been a difficult one for law teachers and law students alike. The National Law Journal reported efforts made by law schools to support shocked students amidst “an emotionally charged and grim atmosphere” while taking “pains to ensure their election–related events are nonpartisan and respectful of all political positions.”  The Journal noted that the legal academy has a “well-established liberal bent” and quoted a California law professor who opined that perhaps some students were shocked because “the media and the polls did not prepare them for the actual result.” I can attest that what my colleagues and experienced this week was not the whining of a “liberal elite,” nor the unexpected disappointment of those certain their candidate who upheld their beliefs was sure to win.  What we experienced was having to teach and mentor the traumatized.

First, let me give you some background. I teach at a small, private, law school in upstate New York where one is just as likely to teach a former farmer who has never stepped foot in New York City as a New York City native who thinks Albany, New York is cow country. Often, you are teaching both together in the same class. Located in a capital city, we are very used to having students actively involved in opposing campaign teams sitting side by side in class and sharing notes.  As New York lawyers, we do not take offense at direct, unembellished, sometimes abrasive language.   A large number of our students wear business attire to class because many of them are working while attending law school; another group are primarily caring for children while enrolled in classes. There are very few trust-fund babies. Our students have an old-fashioned work ethic and are generally more civil, polite and deferential to elders than one might expect in 2016.  We emphasize open office doors and immersive faculty-student contact in good times and in bad.  Historically, we have been known to have a law and order bent and most years produce more prosecutors than the national average. Our students are also more diverse and female than when I started teaching in 1989.

As a professor who currently teaches students to prosecute domestic violence abusers and sexual assaulters and who has had countless listening sessions with victims and survivors of sexual assault and intimate partner abuse, I found that I was asked to call upon that knowledge to support, counsel, and simply listen to students. Trauma- informed lawyering calls for connecting “a person’s behavior to their trauma response rather than isolating their actions to the current circumstances and assuming a character flaw.” Sarah Katz, Deeya Haldar, The Pedagogy of Trauma-Informed Lawyering, 22 Clinical L. Rev. 359 n5  (2016) citing Sandra L. Bloom, Why Should Philadelphia Become a Trauma-Informed City, Briefing Paper Prepared for the Philadelphia Mayoral Forum, sponsored by the Scattergood Foundation (2015), 

First, I acknowledged that most of the fears expressed were not unreasonable or “crazy”. And man o man, are their fears reasonable.

  • It was reasonable for female students to fear that their birth control coverage could or would be eliminated and that their personal control over their own bodies could be eliminated again during their careers. (Note that while I was typing this blog post line the following New York Times article popped up on my computer trying to analyze whether the new President and his team will do just that. http://www.nytimes.com/2016/11/12/us/politics/trump-birth-control-climate.html?_r=0)
  • It was reasonable to fear for immigrant family members who might need to make a safety plan and keep documentation very secure because of the rhetoric around immigration.   (Our Immigration Clinic Professor Sarah Rogerson has had to quickly pivot to address the uncertainties her students face in trying to properly advise clients with immigration issues in the face of what has been threatened during the campaign)
  • It was reasonable for students to fear that younger family members would be more at risk because of the President-elect’s inflammatory language targeted at communities of color, Mexicans, and Muslims or that they would be more at risk because of their transgender identity.   https://twitter.com/i/moments/796417517157830656
  • It was reasonable for my prosecution students to fear that working at the Department of Justice in the new era included might mean threatening and jailing political opponents. See Legal Intelligencer (A presidential candidate, in a script written and performed by despots everywhere, threatens to lock up his political opponent if he prevails. Of all the feared abuses of government power, isn’t this the most frightening of all-the power to falsely accuse and wrongly imprison?)

Second, I deferred to the expertise of my students on non-gender issues. And man oh man, are they experts. In anti-domestic violence work, we often say “She is the expert on the abuser.” That analogy was apt here.  Our students who have faced hateful racial or sexual orientation/identity slurs, illegal stop and frisks, and unwarranted suspicion because of their Muslim religion understand in a visceral and concrete way the signals and the risks for safety that I can only imagine and predict intellectually.  And just like survivors of abuse, they were right about predicting the coming violence. The Southern Poverty Law Center has counted at least 200 incidents since the election and the list keeps growing. https://www.splcenter.org/hatewatch/2016/11/11/we-counted-over-200-incidents-hateful-harassment-and-intimidation-election-day. These incidents include a Victory parade by the KKK and children being exposed to racial epithets in public school.

Third, it was appropriate for my students to be stunned by the Jekyll and Hyde quality of America. Survivors of abuse talk about being stunned when the first time the abuser raises a hand or when the violence dramatically escalates is during pregnancy. It seems counter-intuitive.  Similarly, my students married themselves to the American dream of fairness. They worked hard, they thought their race or gender or ethnicity or religion would not bar them from reaching their dreams. Students interpreted the voting statistics understandably as a hateful, fearful rejection of them and their dreams.  A wide swath of the American populace – the folks that as lawyers they want to represent and serve – failed to stand up at the polls and say NO to hate and bias.

Fourth, although on paper our Constitution and civil rights protection are terrific, in practice they are only as good as the human beings who are elected to uphold them. Just as it is counterproductive and dangerous to advise survivors of violence that the legal system will be fair, protect the innocent and hold the abusive accountable, so too it would be fool hardy and dangerous for me to try to comfort my students by minimizing their concerns and assuring them everything will be fine.

Fifth, my colleagues and I had to find ways to empower students, just as a client-centered lawyering or victim-centered prosecution would. Some of us spent much time doing this through faculty office conversations, checking in with students in clinic workspaces or in hallways or the cafeteria. I sent e-mails quoting Tolkien, Harry Potter, Langston Hughes, and Leslie Knope and video clips of Maya Angelou’s “Still I Rise” and welcomed suggestions back regarding James Baldwin and Van Jones.  On threads on our faculty e-mails, we shared advice and ideas and reactions.  Two of my colleagues decided to take the trauma and fold it into an empowering teaching activity about lawyering. Professor Christian Sundquist  reacted to the upset and depressed-looking faces in front of him on Wednesday in his Tech and Privacy Law class by asking the students to engage in a short reflection exercise on how they would describe the impact a Trump presidency may have on the status of privacy law and rights (e.g., surveillance, health decisional rights, etc.). The students thanked him for artfully addressing the “elephant in the room.” Another colleague, Professor Keith Hirokawa, who teaches Environmental Law, noted the “awkwardness in the air” and the distracted human beings sitting in front of him given that a climate change denier is the lead Environmental voice on the transition team. He adapted his teaching this week using a class design model provided by Professor Victor Flatt assigning students to think through and draft memoranda to the Presidential transition team on Environmental Issues.  A faculty peer observer noted

One takeaway from observing this class was that Keith was able to hold space for students with diverse opinions, while also providing a cathartic space for students who are grieving the outcome of the election. By engaging the students in the work that real lawyers are doing as we speak in Washington, DC and New York (the two host sites of the transition team), students were able to process their reactions through tangible legal research and policy analysis, developing their skills as emerging attorneys and (hopefully) finding some comfort in the law.

Sixth, we focused on self-care for students, staff, alums, colleagues and ourselves. We gave out hugs and food, took walks with students, and discussed exercise, nature, loved ones, favorite comfort activities. We explored how to create boundaries with those who were jubilant about their candidate’s victory.  I thought about the readings I provide students on vicarious trauma and how to overcome it and about Professor Jill Engle’s wonderful article “Taming the Tigers: Domestic Violence, Legal Professionalism, and Well-Being,” 4 Tenn. J. Race, Gender & Soc. Just. 1 (2015) describing how she and her clinic students struggled with the trauma induced by the death of their client at the hands of her abuser, just three days after they had served him with a divorce complaint. Professor Engle focused on her role as a “self-aware mentor” focusing and modeling self-care, balance and mindfulness. She reached out to other law professors and colleagues for help in navigating teaching through the crisis and she allowed the students to move from the stage of engaging in healthy professional self-awareness to using the emotions and trauma as a catalyst for social justice activity.

I also recalled the advice of well-respected researchers in the area of lawyer and law student mental health. Professor Engle aptly notes, “[G]reat teachers care how students are doing in life. Teachers that care about people help counter declining civility in the legal profession and convey the idea that people and their feelings matter.”  NANCY LEVIT & DOUGLAS O. LINDER, THE HAPPY LAWYER: Making a Good Life in the Law, 54 (2010). Professor Lawrence Krieger’s research leads him to assert that, “[f]aculty modeling is an indirect, but pervasive and powerful source of messaging to students about the appropriateness of authenticity, conscience, interpersonal awareness, and humility,” and that, “[s]elf-reflection . . . should lead us to conscious modeling of authenticity, inspiration, and the holistic personality our students will need as professionals dealing every day with the complex interpersonal situations typical of law practice”. Human Nature as a New Guiding Philosophy for Legal Education and the Profession, 47 WASHBURN L.J. 247, 289-90 (2008)

Seventh, we have started to assemble good information to provide for those students who want to use their legal skills, their empathy, their passion and their hurt as a catalyst for change. Just as good client-centered lawyers provide information about the law and the legal system to clients, in a hopefully non-judgmental way, so too we need to be resources for those students whose traumatic reaction progresses to energy around creating change. (More about that in my next post).

Many of our readers this week have done all I describe above and probably much more. If you are in the stage of the process in which you need to exercise self-care to truly be an authentic self-aware mentor, I encourage you to attend to that restorative need. If you have already moved into action on social justice, I applaud you. If you are thinking about the many lessons which are critical for legal education at this moment and how to teach them without reference to particular political outcomes, I invite you to post a comment below.  You are Great Teachers All.

This post originally appeared on the Best Practices for Legal Education blog.

Woefully Poor Performance of the United States on Global Access to Justice Ranking

By Professor Ray Brescia

Recently, the World Justice Project (WJP) released its 2016 Rule of Law Index.  The research initiative assesses the performance of 113 nations across the world on a range of metrics related to the rule of law.

According to the WJP:

The country scores and rankings for the WJP Rule of Law Index 2016 are derived from more than 110,000 households and 2,700 expert surveys in 113 countries and jurisdictions. The Index is the world’s most comprehensive data set of its kind and the only to rely solely on primary data, measuring a nation’s adherence to the rule of law from the perspective of how ordinary people experience it.

The United States did moderately well in a range of categories, as follows:

18th in the overall Rule of Law ranking;

12th for “open government”;

13th in the “constraints on government powers” ranking;

20th for “absence of corruption” ranking;

31st for “order and security”.

Where it performed terribly was in the “accessibility and affordability” of civil justice.  Out of the 113 nations ranked, the U.S. came in at a woeful 94, nearly thirty slots lower than last year, tying nations like Egypt and Tanzania, and coming in just ahead of Afghanistan and Uzbekistan.  Read the full report here.

This post originally appeared on The Future of Change blog.

Delaware Court Dismisses Challenge to Going Private Transaction

By Professor Christine Sgarlata Chung

Last month, I received my copy of Business Organizations in Focus in the mail from Wolters Kluwer.  I am incredibly grateful to have had the opportunity to work on this book with my wonderful co-author Deborah Bouchoux.  Every so often, I will post about recent developments relevant to the book and to the teaching of business organizations.  Please let me know if you have any questions or comments!

This purpose of this book update post is to alert readers to  In re Books-A-Million, Inc. Stockholders Litigation, C.A. No. 11343-VCL (Del. Ch. Oct. 10, 2016), a recent decision from the Delaware Chancery Court in which Vice Chancellor Laster addressed issues relating to the obligations of a controlling stockholder in so-called going private transactions.  The post relates to the material discussed in Chapter 11 (Changes in Corporate Structure and Corporate Combinations), and specifically to the discussion  at pp. 664-679 concerning Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014).

In a going private transaction, a corporation’s controlling shareholder seeks to buy out minority shareholders via a statutory merger.  See Del. Code Ann. tit. 8, § 251(a)–(c). Traditionally, Delaware courts subjected going private transactions to review under the entire fairness standard.  The entire fairness standard is the highest level of scrutiny applicable to takeover challenges under Delaware law.  It requires a reviewing court to evaluate the fairness of both the price (via the court’s own valuation assessment) and the process/course of dealing (focusing on the timing, structure, negotiation and disclosures, approval process, etc.) leading up to a challenged transaction.  See Weinberger v. UOP, Inc., 457 A.2d 701, 711 (Del. 1983).  Delaware courts initially placed the burden of demonstrating entire fairness upon the controlling shareholder-defendant.  In its 1994 decision Kahn v. Lynch Commc’n Sys., Inc., 638 A.2d 1110, 1117 (Del. 1994), however, the Delaware Supreme Court left the entire fairness in place, but held that controller-defendants could shift the burden of persuasion under entire fairness review to plaintiffs by showing that the transaction was either (i) negotiated by a well-functioning special committee of independent directors or (ii) conditioned on the approval of a majority of the minority shareholders.  The applicable standard of review for transactions employing both procedural devices remained an open question.

Read more at Forum on Financial Market Regulation