Securities litigation and corporate tax avoidance Arena, Matteo P.; Wang, Bin; Yang, Rong
Journal of corporate finance (Amsterdam, Netherlands),
February 2021, 2021-02-00, Letnik:
66
Journal Article
Recenzirano
We examine whether litigation risk is systematically related to corporate tax avoidance. We find that the exogeneous reduction in the threat of securities class action litigation due to the 1999 ...ruling of the Ninth Circuit Court of Appeals effectively increases corporate tax avoidance, which is consistent with the notion that the threat of shareholder litigation plays a disciplinary role in curbing managerial rent extraction from tax avoidance activities. This finding is robust to alternative model specifications including two placebo tests and propensity score matching. We further find that labor union and alternative external governance mechanisms such as analyst coverage and institutional ownership mitigate this effect. Overall, our paper provides a significant contribution to the understanding of the relation between corporate governance and tax avoidance.
•Using the DID method, we find that the threat of securities litigation is negatively associated with tax avoidance.•The negative effect is attenuated in the presence of alternative governance mechanisms.•The negative effect is attenuated in the presence of labor union.
This is the first study of Canadian thyroid and parathyroid surgery legal decisions, and the first study of surgical malpractice using the Canadian Legal Information Institute (CanLII) database. The ...objective was to identify quality improvement opportunities in surgical practice, to increase patient safety and satisfaction.
Legal decisions relating to thyroid and parathyroid surgery in the CanLII database were screened. Cases were included if a surgeon was listed as applicant or respondent; they related to pre-, intra-, or post-operative management of thyroid or parathyroid disease; and malpractice was alleged. Cases were excluded if surgery was mentioned incidentally or for non-surgical focus.
Of the 347 unique legal decisions screened, 14 met inclusion and exclusion criteria. Surgeries occurred between 1976 and 2012, with 13 thyroid surgeries, 1 parathyroidectomy, and 4 mortalities.
Quality improvement lessons include communication, pre-operative patient education and documentation of risks discussed, and in-person assessment of complications.
Display omitted
•The first review of thyroid and parathyroid surgery malpractice cases in Canada.•14 thyroid surgery and 1 parathyroid surgery malpractice cases were identified.•Complications include death, hematoma, nerve injury, and unnecessary surgery.•Communication, timely follow-up and assessment, and documentation can be improved.•Recommendations could improve patient safety, satisfaction, and reduce litigation risk.
In this study, we examine the impact of class action litigation shocks on corporate innovation. Our experimental design is based on an unanticipated court ruling that reduces the risk of shareholder ...class action lawsuits for firms located within the jurisdiction of the US Ninth Circuit. Innovation output by firms headquartered in this area increased significantly after this decision compared with that of firms elsewhere. This result is consistent with our trading hypothesis, which states that the threat of litigation leads to managerial myopia. The increase in innovation is more pronounced at high-tech firms and firms operating in a competitive environment. Other measures of ex ante litigation risk indicate that firms with the greatest litigation risk experience the greatest increase in innovation after this decision. We conclude that a reduction in the threat of class action litigation leads firms to increase innovation.
•We examine the change in firm innovation around a Ninth Circuit Ruling.•Firm innovation in the Ninth Circuit increased following this Ruling.•Firms with greater litigation risk see greater innovation increases after the Ruling.•The innovation increase is relative to both the prior period and other U.S. firms.•Firms in industries with more litigation risk see larger innovation increases.
Exploiting the staggered adoption of universal demand (UD) laws as exogenous shocks to filing derivative lawsuits, we find that weakened shareholder litigation rights cause a significant increase in ...the cost of debt. Deteriorated corporate governance, increased information asymmetry, and heightened managerial risk-taking are the underlying channels. Shareholders respond to weakened litigation rights by providing managers with less risk-taking incentives. Overall, our findings suggest that the shareholder litigation rights are important to debtholders.
We ask whether four of the most important U.S. patent system reforms of the last 20 years—elimination of presumptive injunctive relief for victorious patent enforcers in eBay Inc. v. MercExchange, ...LLC, 547 U.S. 388 (2006); creation of the Patent Trial and Appeal Board (PTAB) in the America Invents Act; restriction of software’s eligibility for patent protection in Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014); and limitation of patent enforcers’ choice of forum in TC Heartland, LLC v. Kraft Foods Grp. Brands, LLC, 137 S. Ct. 1514 (2017)—had a measurable impact on innovation in the U.S. Specifically, we use a sample of publicly traded firms to construct firm-level measures of innovation and exposure to each reform and adopt a variety of difference-in-differences approaches that assesses how innovation-related activities changed post-reform at relatively exposed versus relatively unexposed firms. We find: a positive association between eBay and R&D spending by firms that were relatively more exposed to patent litigation prior to the Court’s decision; a positive association between the introduction of PTAB proceedings and R&D expenditures by firms that innovate in tech classes where PTAB has been most active; a positive association between Alice and R&D spending by software firms; and a positive association between TC Heartland and R&D spending by firms that thereafter could not be sued in the Eastern District of Texas, a court long associated with opportunistic forum shopping.
•Empirical analysis of four major changes to the U.S. patent system and their impact on U.S. innovation as measured by R&D investment.•SCOTUS’s 2006 decision in eBay v. MercExchange is associated with an increase in R&D investment among firms with greater exposure to patent litigation.•The introduction of PTAB proceedings in 2012 is associated with an increase in R&D investment among firms with patent portfolios that are technologically similar to the set of patents challenged at PTAB.•SCOTUS’s narrowing of software patent eligibility in Alice v. CLS Bank (2014) is associated with an increase in R&D investment among software firms (SIC 737).•SCOTUS’s 2017 decision in TC Heartland v. Kraft Foods is associated with an increase in R&D investment among firms that no longer can be sued for patent infringement in the Eastern District of Texas.
In 1935, a Chinese woman by the name of Shi Jianqiao murdered the notorious warlord Sun Chuanfang as he prayed in a Buddhist temple. This riveting work of history examines this well-publicized crime ...and the highly sensationalized trial of the killer. In a fascinating investigation of the media, political, and judicial records surrounding thiscause célèbre,Eugenia Lean shows how Shi Jianqiao planned not only to avenge the death of her father, but also to attract media attention and galvanize public support. Lean traces the rise of a new sentiment-"public sympathy"-in early twentieth-century China, a sentiment that ultimately served to exonerate the assassin. The book sheds new light on the political significance of emotions, the powerful influence of sensational media, modern law in China, and the gendered nature of modernity.
ABSTRACT
Prior research documents a negative stock price reaction to initial securities lawsuit filings, on average. Prior research provides no evidence, however, regarding whether and how the market ...prices information subsequently generated by the litigation process. We examine the market response to a large sample of initial plaintiff complaints and subsequent docket events. Our results are consistent with the market pricing information about issues both systemic to the firm and specific to the pending lawsuit from federal court filings. First, we find the market response to the initial lawsuit filing varies significantly with information about governance and control problems signaled by details of the plaintiff's complaint. Second, we find a significant market response to subsequent court filings that increases with measures of litigation severity and decreases as the litigation progresses over time. Overall, our results highlight the role of federally accessible court filings in facilitating the market's pricing of defendant firms.
JEL Classifications: K41; M40; M41; M48.
University settles Title IX lawsuit for $6.85 million
CDC considering ending five‐day COVID quarantine
Clery Act fines adjusted for inflation
Two people found dead inside dorm rooms at Colorado ...university
From the Editor-in-Chief Doroghazi, John M
Franchise law journal,
04/2024, Letnik:
43, Številka:
2
Journal Article
Recenzirano
First up is an article from Jeffrey Mandell, Isaac Brodkey, and James Egle entitled Understanding the Grantors Burden: Good Cause Under the Wisconsin Fair Dealership Law. ...Thomas Telesca, Rachel ...Morgenstern, and Briana A. Enck-Smith have catalogued common contractual provisions that have outsized effects in franchise disputes and provide advice on best practices for these provisions in Contract Provisions That Can Make or Break Your Case. ...new authors Tyler Hartney and Silar Petersen provide readers with some uncommon strategies for recovering attorneys' fees in franchise disputes in the aptly titled article Attorney Fees in Franchise Disputes: Atypical Mechanisms for Obtaining a Fee Award Finally, we end with a discussion of every defendant's greatest fear: punitive damages.
