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Volume 46, Issue No. 3 (Summer, 2016)

It is for a court to determine gateway questions in arbitration. However, the contractual natured of an arbitration agreement that requires the parties’ intent was reinforced in First Option of Chicago v. Kaplan, where the Court enforced the parties contractual agreement to have arbitrability determine by an arbitrator so long as there was “clear and unmistakable evidence” that the parties did so agree. The Court enforced the contractual aspects of an arbitration agreement even when the validity of the underlying agreement is in question, requiring that a party specifically challenge the delegation clause in order to revert the question of arbitrability back to the court. In Douglas v. Regions Bank, the fifth circuit adopts a test that addresses the extent of the scope of a delegation clause in an arbitration agreement when the underlying agreement and the disputing claims have no connection.

The origination and expansion of crowdfunding as a capital-raising tool has been a hot topic on the street and in the media and the academy for a few years now. In less than ten years, this fusion of social media and traditional corporate finance—a mode of corporate finance through which firms raise investment capital by reaching out over the Internet to a broad, undifferentiated mass of potential investors —grew from a creative impulse to a movement that catalyzed federal legislative action. Its socio-legal bounds are as yet relatively untested. It seems that crowdfunding offers something to nearly everyone.

In Turner v. NJN Cotton Co., the Eastland Court of Appeals (the Court) affirmed the Dawson County District Court’s (the Trial Court) judgment on a jury verdict for the buyer and against a producer of cotton for the crop year 2010. Specifically, the Court held that the producer, Larry Turner (Turner), was contractually obligated under an oral forward contract to sell his 2010 cotton crop to the buyer, NJN Cotton Company (NJN).

In City of Providence v. First Citizens Bancshares, Inc., the defendant, First Citizens Bancshares, a Delaware corporation (“FC North”), is a bank holding company headquartered in North Carolina that proposed to acquire by merger a bank holding company based in South Carolina, First Citizens Bancorporation, Inc., a South Carolina corporation (“FC South”). On the same day as the proposed merger was announced, the board of directors of FC North (the “Board”) made various revisions to the corporate bylaws, one of which was the addition of a forum selection bylaw (the “Forum Selection Bylaw”). In FC North’s corporate charter, the Board was given the power to make, adopt, or change the bylaws. After the revisions, the new bylaw designated as the forum for intra-corporate disputes “the United States District Court for the Eastern District of North Carolina, or, if that court lacks jurisdiction, any North Carolina state court with jurisdictionFalse” The Forum Selection Bylaw is identical to the one found facially valid in Boilermakers Local 154 Retirement Fund v. Chevron Corporation (“Chevron”), except that the Forum Selection Bylaw designates a court other than the state or federal courts of Delaware.

In 2015, the United States Court of Appeals for the Fifth Circuit (“Fifth Circuit”) held that the preemption provision of the federal Copyright Act preempted state law claims based on ideas fixed in tangible media, including the plaintiff’s technical trade secrets. Spear Marketing, Inc. (“SMI”) created cash management software called VaultWorks, which it licensed to BancorpSouth Bank (“Banccorp”) from 2002 to 2012. VaultWorks was developed by SMI to optimize the amount of cash a banking institution needs on hand at its branch and ATM locations. However, SMI’s customers did not have access to the VaultWorks software itself. Instead, SMI customers logged on to internet user interface screens to manually inter data and receive cash management reports.

Stanford business school Professor Edward P. Lazear observes that “[t]he entrepreneur is the single most important player in a modern economy.” Bruce R. Barringer and R. Duane Ireland state that “[a]n entrepreneur assembles and then integrates all the resources needed the money, the people, the business model, the strategy, and the risk-bearing ability to transform the invention into a viable business.” In addition, “entrepreneurship” has been defined as “the process by which individuals pursue opportunities without regard to resources they currently control.” Lazear has defined an “entrepreneur” as “someone who responds affirmatively to the question ‘I am among those who initially established the business.’ Such individuals, even if they leave the business early, are usually responsible for the conception of the basic product, hiring the initial team, and obtaining at least some early financing.”

The Texas Business Organizations Code (the TBOC or the Code) is a substantive codification of the prior Texas statutes governing non-profit and for-profit private-sector entities, which, for the most part, were repealed effective as of January 1, 2010. These statutes consisted of the Texas Business Corporation Act (TBCA), Texas Miscellaneous Corporation Laws Act (TMCLA), Texas Limited Liability Company Act (TLLCA), Texas Revised Limited Partnership Act (TRLPA), Texas Revised Partnership Act (TRPA), Texas Non-Profit Corporation Act (TNPCA), Texas Real Estate Investment Trust Act (TREITA), Texas Uniform Unincorporated Nonprofit Associations Act (TUUNAA), Texas Professional Corporation Act (TPCA), Texas Professional Associations Act (TPAA), Cooperative Associations Act (CAA) and other existing provisions of Texas statutes governing private entities.

In Shell Oil Co. v. Writt, the Texas Supreme Court grappled with the question of whether providing a report regarding possible criminal activity to a government agency was an absolutely privileged communication or a conditionally privileged communication. The court would determine that the report was given under the specter of impending litigation and should be absolutely privileged. In order to reach this conclusion, the court considered public policy, and compared and contrasted case law.