I think that the most important aspect of corporations is limited liability and that is barely mentioned in the article - but maybe that’s a narrow way of thinking about it.
There is a nice and very long comment in the post regarding limited liability corporations. They existed for a before limited liability, especially through common law structures. Interestingly they were largely banned in UK after the bubble referred to in the article: https://en.wikipedia.org/wiki/Bubble_Act
> And people should be able to say things about people or companies that might cause a crazy person to do something crazy.
Yeah sure, but that's not the issue here.
> If the parents of Sandy Hook were harassed then the issue here is surely the harassers?
False dilemma.
> The reason I worry about this is because if I believe someone is doing something evil does that mean I now have to stay silent in case some crazy person agrees with what I'm saying and does something crazy?
AJ was accused of defamation. There is free speech protection for alleged defamatory statements. If statement regards a public figure, must be knowing or reckless with regard to truth. If not a public figure, must be at least negligent.
> I suppose I don't really understand what was illegal here.
He defamed the parents by claiming they were crisis actors in the Sandy hook shooting. While perhaps not criminal, it is damaging to their reputation and the victims are entitled to compensation.
> I also think $50m is simply an insane amount of money.
(1) Sure, the defense bar would love you and (2) that what the jury found and (3) those are punitive damages - i.e. damages set to punish the defamer. $50m in damages need not be done and can be multiples of actual without any constitutional issues.
> What damages were actually done here?
Alex Jones harmed the reputation of the parents and families related to the Sandy Hook shooting.
> $50m for "emotional distress" is ridiculous in any context.
This is more of punishment than compensation. Personally, I can get on board for especially bad actors, but to each their own.
> To those who agree with this, could you help me understand what Alex Jones did here that's any difference to what someone like Joe Rogan does when he accuses individuals like Klaus Schwab of being involved in some global conspiracy?
I mean to start, Klaus Schwab is a public figure so the bar for fault is higher. Also, Schwab might figure that it is not worth suing.
> Is it simply that Joe Rogan tends to accuse people with some meaningful about of fame evil conspiracies?
Idk I don't listen to Joe Rogan lol.
> And if so, what level of fame does someone have to have before it's legal to say what you think about them in public?
I mean if you are flat out lying and know you are lying - basically never. But if you are acting in good faith you have some protection. Just look up defamation on wikipedia - it's not rocket science.
Thanks for the detailed reply. I'm kind of shocked that so many people agree with this so it's really helpful to better understand peoples perspectives on this.
I think part of the issue here is probably that we hold different views in regards to freedom of speech, and my mine are admittedly quite extreme. I disagree with libel laws, for example. I don't believe anyone has a right to a reputation, but I do think they have a right to speech. To address some of the points you made in regards to legality, I do understand that what Alex Jones did could be seen as illegal in the US, I think what I'm less clear on is where the lines are drawn and why what he done specifically is so bad that it warranted a $50m fine.
Alex Jones, like or not, owns a media company and media companies often do lie about people. An example that comes to mind is that Kyle Rittenhouse had some very subjective and nasty things said about him by the media and by people with large followings online (perhaps deservingly, idk). Many media orgs implied, or outright said that he was a white supremacist. And I think we can probably agree that isn't good for Rittenhouse's reputation. So I what I don't understand how it's okay for a large authoritative media company like MSNBC to imply Kyle Rittenhouse is a white supremacist without evidence, but Alex Jones with his relatively small following can't suggest Sandy Hook was a hoax?
Am I miss-understanding something here, or were these media orgs also potentially breaking libel law?
Did those media outlets state that Rittenhouse was a white supremacist as a factual statement? Admittedly I don’t follow the mainstream news outlets that much, but I never recall seeing that. Some opinion columnists might have wrote an opinion that he was a white supremacist, but that is protected speech. It’s also protected for news organizations to report when other notable people call Rittenhouse a white supremacist. They’d also be protected if they called him a white supremacist and they had evidence, like finding him writing the 14 words. But stating lies as facts when you either know their lies or have reason to suspect they’re lies and don’t check (reckless disregard for the truth) opens you up to defamation.
Defamation is actually very hard to prove. News organizations have been hit for defamation before but they typically don’t report in a way that they make factual claims they can’t prove. That’s why you often see news call politicians lies “incorrect statements” rather than lies.
Now, Jones elected to not comply with discovery and, as a result, defaulted on his lawsuit. Therefore we don’t know if he would have been found liable for defamation had he made a good faith effort to comply with the court. But we do know that the Sandy Hook conspiracy theories were lies, and we have good reason to believe Alex knew or suspected that based on his own statements and evidence produced during the depositions.
> Alex Jones, like or not, owns a media company and media companies often do lie about people. An example that comes to mind is that Kyle Rittenhouse had some very subjective and nasty things said about him by the media and by people with large followings online (perhaps deservingly, idk). Many media orgs implied, or outright said that he was a white supremacist.
I just searched for anyone here mentioning about the establishment, mainstream media, politician(s) (including a democrat presidential candidate at the time) posting libellous remarks about Kyle Rittenhouse without evidence, even before the trial and was afterwards acquitted and of all comments, only yours came up highlighting this.
Interesting isn't it how everyone mysteriously and instantly forgotten about that since now Alex Jones is the villain of the week?
> So I what I don't understand how it's okay for a large authoritative media company like MSNBC to imply Kyle Rittenhouse is a white supremacist without evidence, but Alex Jones with his relatively small following can't suggest Sandy Hook was a hoax?
> Am I miss-understanding something here, or were these media orgs also potentially breaking libel law?
You are not mis-understanding anything. The hypocrisy of the mainstream media around defamation of Rittenhouse shows that once they believe they can get away with it, they will do it again and again to anyone else. They are looking for villains to make stories out of others and will spread those lies or defamation for profit. In general, No-one should be able to get away with that without paying fines or damages for defamation.
For smaller media companies like Jones's Infowars was sued for this and his response to Sandy Hook was indefensible to begin with so he should just pay the fine and it should also apply even to mainstream media who should not get away with their unfounded libellous nonsense towards Rittenhouse. I'd expect him to be filing defamation cases against them.
He was obviously arguing from a standpoint that there shouldn't be a law against that specifically (there isn't), due to the implications such a law would have.
Yes, but I think I probably could have been clearer. I don't think drug companies should be able to lie about the effectiveness of their products, for example.
What I mean is that I don't think it should be illegal to say what you think about something as an individual, even if you're lying. If you're trying to sell a product then you I don't think you should be able to lie about what the product does, but you should be free to lie about how much you like it.
If you look at the - sometimes dreaded - Bluebook, "signals" play a large role in indicating the relevance of the cited source to the argument.
See generally Peter W. Martin, Introduction to Basic Legal Citation: § 6-300 Signals, Legal Information Institute (last visited July 10, 2022), https://www.law.cornell.edu/citation/6-300.
The legal example is actually maybe even more interesting than you may think. The big traditional databases have always employed human reviewers to identify cases that overrule or question other cases. Attempts to automate this process by e.g. Casetext have had somewhat limited success, despite the fact that this is a restricted context with formal language. It’s getting better, but whether it will ever be good enough is still an open question.
(By the way, signals are not much used in opinion writing; that aspect of the Bluebook is geared more towards law reviews. Approval or disapproval of prior authority is in the opinion text itself, as this is a formal activity of the court. Notation as to whether a given cited case approves or disapproves another case would be in a parenthetical after the citation, e.g. “Smith v. Jones 123 Foo2d 456 (1999) (overruling Jones v. Smith 12 Foo2d 345 (1989)).”)
It's a bit complicated. The "market price" isn't really the target here, if you are talking about the price of the stock on stock exchanges. It's accepted that there is a thing called a "control premium" - basically it is more valuable to own >50% of a company because in addition to having an economic stake, you can now control the company. So when you are buying a company, you generally have to pay more (20%+) than the "market price" because you are also purchasing the "control premium".
So, there is a zero sum game going on here. That control premium is going to be divided up between the buyer and the seller based on the strength of their bargaining positions. For various reasons (poison pill included) board has a stronger negotiating position in extracting the "control premium" than do individual investors. If you weaken the current shareholder's bargaining position (by for example not allowing the board to negotiate price) you increase the share of the control premium going to the purchaser and decrease the share going to the current shareholders.
FWIW the poison pill is controversial. But from a "Law and Econ" perspective - this is the main justification.
Also - since I'm on a bit of a roll - there are definitely other stories for what is going on here.
One is that poison pills kind of soften the edges of capitalism a bit by allowing directors to decide if they want to the company to be sold or not. Call it crocodile tears by entrenched management, but there is something to be said for keeping a company off the market if the hostile bidder is going to just fire workers and scrap the company for parts. Fairly, this view is not consistent with "shareholder primacy" but it has to be said that not everyone sees the world that way.
Corporate governance looks absolutely exciting at first glance, because so much of our lives are determined by it. (We spend a lot more time buying products than we do voting for politicians or filing taxes, same with spending money.)
Under DE law, my understanding is that you are slightly off on this.
Boards do have a duty to maximize shareholder value. THAT SAID, the business judgement rule provides that judges will not second guess the board absent evidence of gross negligence or total disregard of duty. This is because the Delaware court has decided that judges are not better than boards at evaluating business decisions.
BUT! Overcoming the BJR is very difficult unless management stupidly says the quiet part out loud.
Dodge v. Ford is a celebrated case in this regard because Ford basically said at trial "Yeah my main consideration in taking [specific action] is not maximizing shareholder value" and the judge was like "Haha no, that's not how any of this works - you can't do [specific thing] now." But if Ford was like "Yeah [specific thing] would be GREAT for shareholders" under the BJR the judge would have been like "Okay, great, keep doing what you are doing. How could I possibly know better than you?"
Also there is no "need to do right by the company" - squeezing value out of the company and all of its stakeholders is completely consistent with the duties of the board members. How else would the private equity industry exist? (jk!)
I said this below but I don't think Dodge v. Ford is particularly really plays much into modern case law outside of the judgement rule. To my knowledge, it's never been cited in Delaware (against the board at least).
A case that stands out more to me (being both more modern as well as at the federal level) is Burwell v. Hobby Lobby: "While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so." in reference to furthering religious goals instead of profit. (https://supreme.justia.com/cases/federal/us/573/682/#tab-opi...)
I hear what you are saying. Hobby Lobby is an important case but to me Hobby Lobby doesn't really implicate the same policy concerns. Hobby Lobby was a closely held (read family held) private corporation. I agree that the language is dramatic, but I don't really think it the case has much to say about the duty to maximize shareholder value in widely held or public companies.
I read that quote from Hobby Lobby as saying "Sure, where you own the whole thing you can do what you want, whatever, it's not like you are hurting any other shareholders" but I would hesitate in relying on getting that type of language in other fact patterns.
Note that the plaintiff in Hobby Lobby was the secretary health - not a disgruntled shareholder.
Right, though I don't think it is so vague as to be meaningless. The stakeholder / shareholder value debates in corporate governance play on the extremities of this distinction a lot, with the current koan being that what is good for stakeholders is good for shareholders.
It's not, particularly in the context of takeover defenses. There were cases in the 80s where Delaware ruled that only shareholder interests--not all stakeholders'--can be considered when a Board uses its "business judgment" to deploy a poison pill. But shareholders can have aims other than maximizing profit, and companies are free to respond to them.
Right, though it is an interesting question of whether those values either have to be (1) directly fiducial (2) couched in some theory of fiducial return or (3) can be entirely non-fiducial. Doesn't really mean much in practice because management can always just cover their ass by saying that the other aims are also good for the bottom line - even if it is nonsense.
Tender offers can be hostile - a "hostile tender offer" is an offer directly to shareholders to buy shares at a certain price, without getting the blessing of the board.
