We at Concurring Opinions are delighted to welcome a dozen luminaries and thousands of readers to this week’s on-line symposium featuring The Essays of Warren Buffett: Lessons for Corporate.  Posts will begin appearing Monday morning at 8:00 a.m. New York City time, starting with a post by Carol Loomis. 

I began studying Warren Buffett’s letters to the shareholders of Berkshire Hathaway in 1992 when researching what became my first scholarly article, tracing the intellectual history of efficient market theory.  The letters went against the grain of prevailing academic work, so they served as a sort of contrary exhibit rather than supporting many standard assertions.  

The letters were smart, witty, arresting and expansive, addressing governance, mergers, investing, accounting, taxes and many other  topics I would spend my [...]]]>

We at Concurring Opinions are delighted to welcome a dozen luminaries and thousands of readers to this week’s on-line symposium featuring The Essays of Warren Buffett: Lessons for Corporate.  Posts will begin appearing Monday morning at 8:00 a.m. New York City time, starting with a post by Carol Loomis. 

I began studying Warren Buffett’s letters to the shareholders of Berkshire Hathaway in 1992 when researching what became my first scholarly article, tracing the intellectual history of efficient market theory.  The letters went against the grain of prevailing academic work, so they served as a sort of contrary exhibit rather than supporting many standard assertions.  

The letters were smart, witty, arresting and expansive, addressing governance, mergers, investing, accounting, taxes and many other  topics I would spend my career teaching and writing about. I could not put them down. Yet nor could I, acting alone, give them a place of respect in the academy that I thought they deserved but had not received.

So I decided to host a symposium featuring the letters, gathering a group of 20 scholars to dissect their content. Through Monroe Price, then Dean of Cardozo Law School, where I worked, I contacted Bob Denham, a close Berkshire adviser then and now, who passed along my proposal, which Warren embraced.

(c) 1996 Cardozo Law School

We held a two-day conference in New York on October 27-28, 1996, with five separate panels of four to six people each. Warren was in the front row participating actively in the discussion throughout, flanked by his wife Susie, son Howard, insurance maven Ajit Jian and business partner Charlie Munger—who also had a lot to say during the conference.

The centerpiece of the conference was a collection of Buffett’s letters, which I had rearranged thematically, and would later publish as The Essays. The arrangement both enabled a correspondence between the collection and the panel topics and papers, as well as the emergence of an unmistakable organizing principle: the fundamental idea that price and value are different things.

That meant that stock markets are not so efficient as to invariably produce a price that is a reliable proxy for value. This idea is so deep, and was so contrary to academic literature and classroom teaching, that it received an entire section of the collection and separate panel at the symposium. But it was even larger because pretty much all the other principles in The Essays—about governance, mergers, accounting and so on—followed from that tenet.

Since the conference edition (1997), we published a revised first edition (2001), a second edition (2008) and now a third edition (2013), in each case maintaining the themes that have animated the material from the beginning while adding discussion of contemporary issues that radiate from them.

We have often thought of hosting a reunion symposium on The Essays and this week, thanks to the generosity of a dozen luminaries, we kick it off.  Following is a run-down of the participants in this week’s symposium, roughly in the order in which their contribution will appear.

BERSKSHIRE/BUFFETT INSIDERS [Early Week]

● Carol Loomis, the 59-year veteran of Fortune magazine, and Warren’s close friend of four decades who has edited his annual shareholders’ letters for 36 years and recently published Tap Dancing to Work, a collection of the magazine’s writings about Buffett

● Simon Lorne, Berkshire/Buffett confidant, who played a vital role alongside Buffett in helping to turn around Salomon Inc back in the 1990s, Sy is an expert on corporate governance now serving as vice chairman of Millennium Management

● Robert Mundheim, another BRK insider, who also worked with Buffett and Lorne on Salomon and is now of counsel at Shearman & Sterling, will post about his role in brokering the deal that brought Benjamin Moore into the Berkshire family

● Donald Graham, Chairman and CEO of The Washington Post Co., one of Berkshire’s earliest significant capital commitments, dating to the 1970s, exhibiting one of the most successful relationships between shareholder and management on record.

● Kelli Alces (Florida State): on the conception of Berkshire as a partnership despite being a corporation

● William Bratton (Penn): on Berkshire’s no-dividend/share buyback policy, how it has evolved and where it seems to be heading

● Deborah DeMott (Duke) on Buffett’s views about using professional advisers in acquisitions

● Jill Fisch (Penn): what Berkshire is and where it will be going post-Buffett

● Steven Davidoff, the New York Times columnist who writes “The Deal Professor” weekly and teaches in both the business and law schools of Ohio State.

INVESTORS AND TEACHERS [Later Week]

● Chris Begg and Ken ShubinStein, two prominent investors who also teach at Columbia University Business School, that magical institution whose graduates include not only Warren Buffett ’51, but also Mario Gabelli ’67, Glenn Greenberg ’73, and Charles Royce ’63

● Mohnish Pabrai and Guy Spier, two contemporary exemplars of the value investing tradition, and both well-known to regular readers of this blog, they are also the two who famously won the opportunity to have lunch with Buffett by making a $625,000 charitable contribution.

Welcome one and all!  We look forward to the posts and hope for further discussion in the comments.

Earlier this year, more than 100,000 citizens petitioned the White House to overturn a copyright rule issued by the Librarian of Congress that made unlocking a cell phone a crime.  The White House responded by promising to seek legislation to overturn the Librarian’s rule.  That was the most the President would or could do because “[t]he law gives the Librarian the authority,” and the Administration would “respect that process,” even though the Librarian acted contrary to the Administration’s views.  See here. As the New York Times reported, “because the Library of Congress, and therefore the copyright office, are part of the legislative branch, the White House cannot simply overturn the current ruling.” See here.

There’s only one problem with all [...]]]> by John Duffy, Peter Strauss and Michael Herz

Earlier this year, more than 100,000 citizens petitioned the White House to overturn a copyright rule issued by the Librarian of Congress that made unlocking a cell phone a crime.  The White House responded by promising to seek legislation to overturn the Librarian’s rule.  That was the most the President would or could do because “[t]he law gives the Librarian the authority,” and the Administration would “respect that process,” even though the Librarian acted contrary to the Administration’s views.  See here. As the New York Times reported, “because the Library of Congress, and therefore the copyright office, are part of the legislative branch, the White House cannot simply overturn the current ruling.” See here.

There’s only one problem with all of this:  The Department of Justice has been vigorously arguing precisely the contrary constitutional position in the federal courts.

According to the Administration’s filings in litigation that has now reached the Supreme Court, the Library of Congress is “an executive Department,” and the Librarian himself is “subject to plenary oversight by the President.”  Justice Department lawyers have explained that Congress made a “purposeful decision to place the Library under the President’s direct control and supervision”; that the Librarian of Congress is the “Head” of this “executive Department”; that the President may remove the Librarian “at will” just as he may remove other heads of executive departments; and that this removal power creates the Librarian’s “here-and-now subservience” to the President.  (See pages 16 & 17 of the Government’s Brief in Opposition filed at the Supreme Court, available here and pages 23, 29 & 37 the Government’s Brief for Appellees filed in the Court of Appeals, available here.

In light of that clear legal position, an obvious question arises:  If the Librarian is really a head of an executive Department subject to “plenary oversight by the President,” why hasn’t the President either taken responsibility for criminalizing cell phone unlocking or ordered the Librarian to reverse his decision?

The answer is that no one in the political arena actually believes for one minute that the Librarian is the head of an executive department.  The current Librarian has repeatedly testified to Congress that the Library is “arm of the United States Congress,” “a “branch of the Legislative branch,” and “a unique part of the Legislative Branch of the government.” Members of Congress also understand this to be true.  To take but one prominent example, Senator Orrin Hatch has noted not only that “the Copyright Office is in the legislative branch of the Government” but also that this arrangement presents difficulty because “whenever the Copyright Office is tasked with an executive-type function, [a] constitutional question arises.”

The President’s supposed powers of “plenary oversight” and at-will removal are utter fiction, as the controversy about cell phone unlocking shows.  Indeed, although the legal force of the assertion is doubtful, the Library’s own website states that the precedent has been “established that a Librarian of Congress is appointed for life.” Bold though it seems, that statement is accurate:  Since the current administrative structure for the Library was established in 1897, no President has ever removed a Librarian of Congress, and the Librarians’ average tenure exceeds in duration that enjoyed by Chief Justices of the United States.  The current Librarian is 83 years old and was appointed by President Reagan.

Why then are the Administration’s lawyers arguing that the Librarian is a presidential underling?  The answer is easy.  The Librarian has been vested with the power to appoint all of the officers who execute the copyright laws—including the Registrar of Copyrights and the judges of the Copyright Royalty Board—but the “Appointments Clause” of the Constitution makes clear that such power can be lodged in the Librarian only if he is  the head of an Executive Department.  Indeed, as the Supreme Court has made clear, the Framers of the Constitution wanted to ensure that such important powers would be wielded only by those high officials who were “accountable to political force and the will of the people.”

The Librarian of Congress has thus become a constitutional chameleon.  When testifying before Congress, he calls himself a legislative officer who is part of the Legislative Branch of government.  When the Librarian’s constitutional authority is challenged in court, he morphs into an Executive Branch department head subject to the President’s “plenary oversight.”  And yet when he makes a controversial decision with which the President disagrees, he changes back again to a legislative officer whom the President cannot control except by recommending new legislation.

The importance of this constitutional issue is vividly highlighted by the current controversy over cell phone unlocking.  The Librarian of Congress has made an immensely controversial executive decision that the White House has publicly disavowed.  To whom do the people complain?  Well, more than 100,000 complained to the President, but the President has avoided accountability by blaming the Librarian, who is assumed by everyone (including the New York Times) to be a legislative officer.  Indeed, this President can hardly be held responsible for Librarian’s decision because the Librarian was appointed a President first elected when the current President was a sophomore in college.

The Supreme Court has before it a petition to hear a case in which it could consider the constitutionality of an unaccountable legislative officer running the nation’s copyright system.   The case presents the opportunity to correct a glaring constitutional defect—either by confirming the President’s “plenary oversight” power or by striking down the current arrangement.  It is an opportunity the Court should take.

John F. Duffy is the Samuel H. McCoy II and Armistead M. Dobie Professor of Law at the University of Virginia School of Law.

Peter Strauss is the Betts Professor of Law at Columbia Law School. 

Michael Herz is the Arthur Kaplan Professor of Law at the Benjamin N. Cardozo School of Law. 

The briefs filed at the Supreme Court in this case can be found here.  SCOTUSblog highlighted the petition for certiorari in this case as the “petition of the day” for May 16, 2013 (see here).

A pdf version of this post is available here.

My youngest daughter is in kindergarten.  Here is a list of some of the things that she either cannot do or is not allowed to do: cross a busy street by herself; pour milk from a full gallon jug; ride in a car without a booster seat; and tie her shoes (I know . . . she’s working on that one).  She is, however, a highly capable kid.  So it might be fairer to her if I listed some of what she can do:  get herself ready for school; ride her bike around the block; make [...]]]> That’s not my headline.  It was in the New York Times earlier this month, in the section where the paper provides short blurbs about what is happening around the country.

My youngest daughter is in kindergarten.  Here is a list of some of the things that she either cannot do or is not allowed to do: cross a busy street by herself; pour milk from a full gallon jug; ride in a car without a booster seat; and tie her shoes (I know . . . she’s working on that one).  She is, however, a highly capable kid.  So it might be fairer to her if I listed some of what she can do:  get herself ready for school; ride her bike around the block; make her bed; use a variety of electronic devices that begin with an “i”.

But regardless of whether the list is of “cannots” or “cans,” it does not square with this statement from the county coroner in Kentucky:

 Mr. White said that the .22-caliber rifle had been kept in a corner and that the family had not realized a bullet was left inside it. “It’s a Crickett,” Mr. White said, referring to a company that makes guns, clothes and books for children.  “It’s a little rifle for a kid,” he said, adding, “The little boy’s used to shooting the little gun.”

I grew up in a small Wisconsin town.  At my high school, so many teachers and students were absent on the first day of deer season that school might as well have been cancelled.  Today some of my close relatives keep hunting rifles in their closets.  So while I absolutely do not want to suggest that I know anything about the family that suffered this terrible tragedy, I am familiar with the kind of culture in which a .22-caliber rifle is put in a corner.

Which is not to say that I wasn’t jarred by the phrase “a company that makes guns, clothes and books for children.”  Or that I expected, when I visited Crickett’s website, to see child-sized guns in bright blue and pink.   And watch out Joe Camel, because Crickett’s mascot is a jolly green frog sporting a rifle, boots, and a hunting cap.

Footbinding, smoking, drunk driving—these are all legend among law and norms scholars.  But with few exceptions, almost no one talks about trying to change gun culture through the sort of small, incremental changes that have made such a difference elsewhere.  Certainly it is daunting to even think about how to spark change.  And it’s also true that those whose ideas would make a difference would only receive posthumous gratification, because change might not actually be realized until my kindergartener has great-grandchildren.

But Boy, 5, Kills Sister, 2.

If a man in prison claims he was made “to feel like a woman,” this is commonly understood to mean that was degraded, dehumanized, and sexualized. This association of femininity with punishment has significant implications for the way our society understands not only the sexual abuse of men in prison, but sexual abuse generally. These important implications are usually overlooked, however, because law and society typically regard [...]]]> Professor Mary Anne Franks and fantastic guest blogger makes an important contribution with her latest work “How to Feel Like a Woman, or Why Punishment Is A Drag” (forthcoming UCLA Law Review). Professor Franks focuses on the sexual abuse of men in prison to help us better understand sexual and domestic abuse more generally. As Franks writes:

If a man in prison claims he was made “to feel like a woman,” this is commonly understood to mean that was degraded, dehumanized, and sexualized. This association of femininity with punishment has significant implications for the way our society understands not only the sexual abuse of men in prison, but sexual abuse generally. These important implications are usually overlooked, however, because law and society typically regard prison feminization as a problem of gender transposition: that is, as a problem of men being treated like women. This Article argues that feminization is punitive for both men and women: it is as unnatural and as wrong for women to be degraded, dehumanized, and sexualized under coercive circumstances as it is for men to be. This Article suggests that examining the sexual abuse of men in prisons can help disrupt the persistent and uncritical linking of feminization and women. By reading the sexualized abuse of men in prison as a form of forced drag, this Article hopes to expose the artificiality and violence of compelled feminization. The proper approach to assessing forced feminization is to focus on its oppressive structure, not on the gender of its victims. When we do so, we can see what all victims along the spectrum of sexual and domestic abuse have in common, and to form our social and legal responses accordingly. The phenomenon of male sexual abuse in prison thus provides a potentially illuminating opportunity to think about the structure and consequences of sexual abuse in general. This is significant not least because social and legal responses to sexual abuse outside of the prison setting – where sexual abuse is overwhelmingly experienced by women and committed by men – are constrained by pernicious gender stereotypes and a massive failure of empathy. Understanding the phenomenon of male prison sexual abuse is thus essential not only for addressing a specific problem in carceral institutions, but forces law and society to consider sexual abuse in a productively counter-intuitive way.

Also, as my co-blogger Kaimi notes in our Asides, there is a write up of Prof. Franks in Ocean Drive that captures the force of her intelligence and personal strength.

Today it is taken for granted that Congress’s power “to regulate . . . Commerce among the several States” includes the power to shut interstate markets down. That is why, for example, Congress is understood to have the power to ban the possession and use of marijuana, even though twenty states have expressed contrary preferences, either for the medicinal or recreational use of the drug. [...]]]> Professor Barry Friedman and NYU-graduate and Genevieve Lakier have made an important contribution to our understanding of Commerce Clause power in their piece “‘To Regulate,” Not “To Prohibit:’ Limiting the Commerce Clause.” In the piece, just posted on SSRN, the authors debunk the long-standing and critically unexamined assumption that congressional power to regulate commerce entails the power to shut commerce down:

Today it is taken for granted that Congress’s power “to regulate . . . Commerce among the several States” includes the power to shut interstate markets down. That is why, for example, Congress is understood to have the power to ban the possession and use of marijuana, even though twenty states have expressed contrary preferences, either for the medicinal or recreational use of the drug. This Article argues that as a matter of constitutional history and theory both, this familiar assumption about congressional power is wrong. First, the Article demonstrates that the original understanding, which prevailed for over one hundred years, did not grant Congress the power to ban markets. Congress could pass “helper” statutes to facilitate state choices, and it could even ban particular goods (such as diseased cattle) “in service” of the interstate market; but it could not simply prohibit all commerce in products of which it disapproved. Second, the Article demonstrates that although this understanding changed following the 1903 Supreme Court decision in Champion v. Ames, none of the reasons supporting the change justify Congress possessing the power today. Finally, this Article examines theoretical justifications for congressional power grounded in law and economics and constitutional theory to suggest that the power “to regulate” interstate commerce should not be understood to include the power to prohibit it. The argument has implications for national bans on articles and activities such as interstate gambling, drugs, raw milk products and assault weapons.

There are lots of lessons about politics and gay rights to draw from today’s victory. But I want to emphasize a more general lesson about ballot measures.

Two years ago this month, the Minnesota Legislature, then controlled by a newly-installed Republican majority, voted to hold a statewide referendum on marriage. A proposed amendment to the state constitution on the November 2012 ballot would define marriage as between a man and a woman. Unlike many states, Minnesota does not allow citizen-initiated referenda. But [...]]]> I’m proud that my adopted home state of Minnesota became the 12th state to legalize same-sex marriage this afternoon. I’m also proud of my law school colleague Dale Carpenter, who was central to efforts to pass the measure. And I’m looking forward to some weddings.

There are lots of lessons about politics and gay rights to draw from today’s victory. But I want to emphasize a more general lesson about ballot measures.

Two years ago this month, the Minnesota Legislature, then controlled by a newly-installed Republican majority, voted to hold a statewide referendum on marriage. A proposed amendment to the state constitution on the November 2012 ballot would define marriage as between a man and a woman. Unlike many states, Minnesota does not allow citizen-initiated referenda. But a simple majority of the legislature can put proposed constitutional amendments to the voters without the governor’s assent.

Some insiders have claimed that the rationale for doing so was, at least in part, a raw political one. Advancing a measure important to social conservatives would drive up their turnout, helping preserve Republican legislative control. Surely that must have been at least part of it, along with a substantive desire to thwart same-sex marriage in Minnesota.

Whatever the reason, this turned out to be a political strategy failure of epic proportions. In retrospect, the scale of this miscalculation is stunning. Opponents of the amendment organized, raised over $10 million, and coalesced around a new strategy of personalizing marriage issues. The 31-year-old strategist brought on to manage the campaign against the amendment turned out to be a wunderkind. The amendment failed, 52.5% to 47.5%. A month beforehand, I would have predicted the reverse numbers. Not only that, but in a landslide that surprised everyone I know, voters also rejected a voter ID amendment, turned out a Republican U.S. House member, and flipped both chambers of the state legislature back to the Democrats by significant margins. The amendment drove turnout all right — just not the voters its proponents wanted. (The same appears to have happened in neighboring Wisconsin.)

And today was the final kicker. Two years ago, legislation actually allowing same-sex marriage was a pipe dream. Even at the beginning of 2013, it wasn’t clear if a bill would happen. Once again, I would have bet against it. But the sleeping grass-roots giant awakened by the amendment did not go back to bed. By all accounts, the organization that didn’t even exist two years ago pushed the measure through against considerable odds.

So, one other moral of this story: when it comes to referenda, be careful what you wish for.

How did we get to this point? It’s a long story.

For a while now, I’ve been keeping tabs on the discussion about practice-readiness. Numerous writers have urged that law school include more hands-on, skills training. After reading yet-another such article just after the start of the semester, I decided to take some steps. But first I’d check in with the class.

And so this semester, I [...]]]> I held another “Wills Lab” (voluntary out-of-class practice-focused exercises) a few weeks ago. This time around, I was Andy Nicole Smith, and I needed someone to write my will for me. I did my best to blunder into the exact issues that caused so much confusion with the real Anna Nicole Smith will. My students set me straight. Nicely done.

How did we get to this point? It’s a long story.

For a while now, I’ve been keeping tabs on the discussion about practice-readiness. Numerous writers have urged that law school include more hands-on, skills training. After reading yet-another such article just after the start of the semester, I decided to take some steps. But first I’d check in with the class.

And so this semester, I asked my Wills and Trusts class here at Thomas Jefferson Law School for their input. I said, lots of observers have said that legal education needs more exercises, more skills training, more practice readiness. I’m willing to do this. If you want, I’ll tear up the existing reading list, heavy on traditional doctrinal Wills law, and instead we’ll bring in lots of practitioners, run group exercises, talk to mock clients, draft practice wills. It will require that we condense a lot of the doctrinal matter, and skip some topics that aren’t really relevant in practice today, but it will make space for a new practice-readiness focus. Who’s with me?

The class vote was overwhelming: NO.

That’s right, no. The students did _not_ want to cut any doctrinal instruction in order to add in exercises, mock clients, and the like.

This surprised me. I had read article after article extolling a switch to more practical approach. But the class felt strongly otherwise. About 3/4 of the students voted against any change.

In follow-up conversations with students, I began to realize why. There are, broadly speaking, two constituencies in a Wills class. 70% of the class is there for bar prep. They want to know all of the black letter law on Wills, but they are planning to ultimately practice law in another area — criminal law, or IP, or whatever else — and so these students really aren’t interested in going through will-drafting exercises. On the flip side, the other 30% of the class consists of students who _do_ plan to go into Wills, either specializing in it or as part of a general solo practice. And those students really _do_ want to go through some exercises to prepare them for practice.

So to try to meet the needs of both groups, I instituted a voluntary “Wills Lab” — like going to Chemistry Lab in college or the like, to put into practice things covered in lecture. It’s not graded, and not required. But it is a chance for students who want more practically-focused exercises to get experience.

I’ve tried to make it a much more practical experience. Like real life, it’s open-book. The students work together in “law firms.” And like real life, the students do _not_ get the info ahead of time.

The classic Wills test gives the students a lot of facts and then asks them to apply law. “Al is married to Betty. They have three children, Charlie, Dana and Elise. Al’s will says, ‘I leave Greenacre to the kids, but only if they marry nice Jewish spouses . . . ‘”

In contrast, for the first Wills Lab, I showed up as the mock client and said, “my father just passed away, and I’m not sure what to do next. I found a stack of papers on his desk. [Hands over papers.] What do I do now?”

And the student “law firm” had to figure it out.

It took a minute for them to adjust their approach.

“Did your father have a will?” I have no idea. You’re the lawyers. These papers are all I found. “Is there community property?” I’m not sure, you’re the lawyers. You tell me.

It took them a minute or two to shift gears from traditional law-student mode, and then they did a great job, asking questions, going over documents, establishing that there was no will (at least in the papers found), explaining intestacy to the mock client, sketching out the family tree and determining deceased-dad’s intestate heirs. The next Wills Labs included a couple of different will- drafting exercises for different clients, as well as a complicated trustee-duty situation.

The students did excellent work, and I think they really enjoyed the Lab option. I’m already planning on using it again next semester, and tinkering with the exercises to make them more effective. I may try something similar with Business Associations as well.

There are complicated tensions in the figuring out the best pedagogical approach. I don’t think this approach is for everyone. But for my class this semester, it worked really well.

From filibustered nominees to recess appointments, the D.C. Circuit has been much in the news lately. But for all the blood sport involved in confirming a nominee to the D.C. Circuit, the judges there are surprisingly collegial (a quality that, when I clerked, trickled down to their employees as well).

So it was with some interest that I read Judge David Tatel’s recent speech at the portrait hanging of (now former) Chief Judge David Sentelle. (I’ve received permission to post it in full here). The speech underscores how, for all the political tumult surrounding the D.C. Circuit, the Circuit itself is almost a world apart.

Judge Tatel begins by noting an observer’s likely surprise that a Clinton appointee would speak at the portrait unveiling [...]]]>

Chief Judge David Sentelle

From filibustered nominees to recess appointments, the D.C. Circuit has been much in the news lately. But for all the blood sport involved in confirming a nominee to the D.C. Circuit, the judges there are surprisingly collegial (a quality that, when I clerked, trickled down to their employees as well).

So it was with some interest that I read Judge David Tatel’s recent speech at the portrait hanging of (now former) Chief Judge David Sentelle. (I’ve received permission to post it in full here). The speech underscores how, for all the political tumult surrounding the D.C. Circuit, the Circuit itself is almost a world apart.

Judge Tatel begins by noting an observer’s likely surprise that a Clinton appointee would speak at the portrait unveiling of Sentelle, Reagan’s choice to replace Justice Scalia. But over the past nineteen years, it turns out that Tatel and Sentelle have “disagreed less than 3% of the time,” an astounding statistic given the common (mis)conception of how the Courts of Appeals operate.

In other words, the vast majority of judges agree on the vast majority of issues the vast majority of the time.

Judge Tatel chalks this up to “restrained decision-making,” or (more familiarly) “judicial restraint.” He relates a few stories about Sentelle to underscore his point, including one about how the two judges tried to write a joint op-ed, but failed because “unconstrained by the rules that bring us together as judges” they were “unable to agree on how to portray certain historical aspects of the issue.”

In fairness, Judge Tatel doesn’t pretend life is always roses. He notes that he and Sentelle “have had our disagreements,” (emphasis in original), and that “despite our best efforts at neutrality, we cannot but see the world – and the law – through the lens of who we are and what we’ve been through.” But even in those circumstances, the D.C. Circuit lives by a “proudly nurtured tradition of collegiality.” Judge Tatel gives special thanks for the particularly good job Chief Judge Sentelle did of “navigating [these] sometimes sensitive waters with a firm but gentle oar.”

The speech is a short five pages and is definitely worth a read.  It underscores the noncontroversial nature of the vast amount of Courts of Appeals work, and how much pride the D.C. Circuit takes in its spirit of collegiality even when disagreement surfaces.

The Supreme Court issued its decision in Kiobel v. Royal Dutch Petroleum a few weeks ago, and it has raised more questions than it has answered. Commentators and scholars have puzzled over what the Court did and what it means – all we really know is that the Court did not expressly rule on whether corporations could be sued for human rights abuses under the Alien Tort Statute (ATS) (the original question certified), and only began to elaborate under what circumstances an ATS suit could be brought for injuries arising in a foreign country (the question certified for reargument).

As [...]]]> (Marco Simons is Legal Director of EarthRights International.  He is a graduate of Yale Law School, where he received the Robert L. Bernstein Fellowship in International Human Rights.)

The Supreme Court issued its decision in Kiobel v. Royal Dutch Petroleum a few weeks ago, and it has raised more questions than it has answered. Commentators and scholars have puzzled over what the Court did and what it means – all we really know is that the Court did not expressly rule on whether corporations could be sued for human rights abuses under the Alien Tort Statute (ATS) (the original question certified), and only began to elaborate under what circumstances an ATS suit could be brought for injuries arising in a foreign country (the question certified for reargument).

As to the extraterritoriality question, the Court held that some sort of presumption against extraterritoriality applied to ATS claims. Unlike the usual application of such presumptions, however, the Court did not suggest that this meant that no claims arising in foreign countries could be heard. Instead, the Court’s five-justice majority said that claims needed to be assessed on the basis of the extent to which they “touch and concern” the United States, and that where the only connection to the U.S. is the “mere corporate presence” of a foreign multinational, that is insufficient to allow an ATS claim to proceed.

This raises an interesting question of how this presumption is being applied. As the Supreme Court ruled in Sosa v. Alvarez-Machain, the ATS is a purely jurisdictional statute – claims under the statute come from federal common law. Ordinarily, the presumption against extraterritoriality does not apply to jurisdictional provisions; it only applies to substantive provisions. So Kiobel did not decide that the ATS is not an extraterritorial statute – it decided that the presumption against extraterritoriality applies to claims brought under the ATS.

Support for this conclusion is found in several places in the Kiobel majority opinion. Chief Justice Roberts did not expressly state that the presumption against extraterritoriality applied to the ATS, but rather that “the principles” underlying the presumption “constrain courts considering causes of action that may be brought under the ATS.” And the concluding section of the opinion further suggests that the presumption will be applied on a case-by-case basis: “[W]here the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application.”

As far as I know, that’s different from all prior applications of the presumption against extraterritoriality; it’s a new presumption created for the ATS and assessed for each claim at issue. It’s fact-dependent. And it should be understood to not be a question of subject matter jurisdiction, but, in the words of Sosa, a question of whether the courts should “recognize certain causes of action” in particular cases. This confirms what Howard Wasserman argued in his post after the argument – that none of this is about jurisdiction at all, but “that all of these arguments about the scope and application of federal common law are, properly, arguments about the merits of the claim.”

Why does this matter? It’s more than just a question of whether motions challenging extraterritoriality of ATS claims are filed under Rule 12(b)(1) or 12(b)(6). It also raises questions of the viability of the Second Circuit’s decision in Kiobel, finding no corporate liability. This requires a bit of explanation.

If Kiobel extraterritoriality is a question of the scope of the cause of action, then the Supreme Court necessarily, if implicitly, determined that jurisdiction was present in Kiobel. This follows from the decision in Steel Co. v. Communities for a Better Environment, in which the Court rejected the notion that it could decide the cause of action before subject matter jurisdiction. (Other threshold issues – such as forum non conveniens – can be decided before jurisdiction in some cases, but not the cause of action.)

But the Second Circuit’s decision was not about the scope of claims brought under the ATS; it was that the ATS “simply does not confer jurisdiction over suits against corporations.” If my analysis of Kiobel is correct, then the Second Circuit’s decision cannot be – because the Supreme Court could not have reached the extraterritoriality issue without assuring itself of its own jurisdiction.

Thus, despite the fact that the majority opinion professed not to decide the corporate liability issue, it implicitly rejected the Second Circuit’s analysis. (This is further supported by majority’s statement that “mere corporate presence” is an insufficient connection to allow an ATS claim, which obviously assumes that there is jurisdiction to hear cases against corporations.) The Supreme Court affirmed the judgment of dismissal, but undermined the reasoning that dismissal was based on a lack of subject matter jurisdiction.

The Second Circuit’s decision on corporate liability remains an outlier, with four other circuits ruling that corporations can be sued. And the Second Circuit will soon have an opportunity, in several cases, to revisit this question. Of course, the court could always take the issue en banc and resolve the circuit split. But it probably doesn’t need to. Since the Supreme Court’s decision is inconsistent with the notion that courts lack jurisdiction to hear ATS claims against corporations, any panel of the Second Circuit could – and probably should – disregard that court’s prior decision in Kiobel.

The court, sitting with 10 judges, issued 7 separate opinions spanning 135 pages. The court only agreed upon a very brief – 55 words – per curiam opinion affirming the district court ruling that the asserted patents were invalid. The per curiam opinion explained that the “method” and “computer readable media” claims were deemed not patent eligible by the Federal Circuit, while the [...]]]> This post reflects my initial impressions of an important Federal Circuit development in patent law, which is my primary area of scholarly focus. On Friday, the Federal Circuit, sitting en banc, ruled on a controversial and divisive patent law issue, whether software inventions are patent eligible subject matter. Unfortunately, I find the decision in this case, CLS Bank v. Alice Corp., quite unsatisfying.

The court, sitting with 10 judges, issued 7 separate opinions spanning 135 pages. The court only agreed upon a very brief – 55 words – per curiam opinion affirming the district court ruling that the asserted patents were invalid. The per curiam opinion explained that the “method” and “computer readable media” claims were deemed not patent eligible by the Federal Circuit, while the court was equally divided on the status of the “system” claims. (Basically, there are several different ways that a software invention can be claimed in a patent, including as a process/method of performing steps; as software embedded upon a computer readable medium (i.e., a DVD); and as a system (i.e., software running on a machine/computer).) None of the remaining substantive opinions garnered more than 5 votes – thus, none are binding precedent. Although a majority of the Federal Circuit judges found the method and media claims invalid, a majority could not agree upon the reasoning. Below I will briefly provide a few preliminary observations about the opinions.

To provide some context, in the 1970s and 1980s, it was unclear whether software was patent eligible. However, by the mid- to late-1990s, the U.S. Patent Office and the Federal Circuit both decided that software was patent eligible, so long as it was properly claimed and it satisfied the other requirements of patentability (i.e., the invention was novel, non-obvious, etc.) More recently, the Supreme Court and many in the software community pushed back. In several cases not involving software, the Supreme Court disagreed (here, here, and here) with the Federal Circuit’s permissive standards regarding patent eligible subject matter, causing a gradual reconsideration of the doctrine. Opponents of software patents publicly argued that software was different from other inventions for several reasons, including because product life cycles were shorter and the claimed inventions would have been developed without the incentive of a patent. 

After a series of split Federal Circuit panel decisions, the entire Federal Circuit agreed to consider the issue of patentability of software en banc in late 2012. The CLS Bank case was closely watched by the software industry and practicing bar. Last Friday’s decision contains 6 written opinions totaling over 130 pages, all of which are important but technically dicta. These include a concurring opinion (joined by 5 judges); a concurrence-in-part, dissent-in-part (joined by 4 judges); a dissent-in-part (joined by 4 judges); a concurrence-in-part (1 judge); a dissent (2 judges); and “additional reflection” (1 judge).

The opinions are long and will require some time to digest and study. However, I offer the following initial observations:

1. The en banc ruling came fast by historical standards. It took slightly over 3 months from oral argument to written opinion. This is faster than the typical precedential panel opinion, let alone one with 6 separate written opinions on an important issue. It is somewhat surprising that the court issued such a splintered and long opinion in a short time period. Since a majority of judges agreed that certain patent claims were patent ineligible, it would be have preferable if they agreed upon an opinion that explained a common rationale. Without a majority opinion, the future impact of the majority’s ruling is less clear.

2. The Federal Circuit was originally created in part to create uniformity in patent law. Unfortunately, the Federal Circuit itself seems internally conflicted on the limits of patent-eligible subject matter, including of software patents. As the CLS Bank case illustrates, a majority of the Federal Circuit can’t agree on how to approach software. Absent Supreme Court intervention, whether a particular software invention will be knocked out or upheld apparently will depend upon the panel assignment on appeal. This is a particularly bad sort of uncertainty since it requires litigation through appeal for the result to be predictable.

3. The divisions in the court, along with particularly sharply worded dissents and the importance of software patents more generally, may peak the Supreme Court’s interest. For example, in her dissent, Judge Moore stated that if the 5-judge concurring opinion were adopted as the law, then every patent covering “inventions directed to computer software or to hardware that implements software” would be not patent eligible. According to Judge Moore’s math, that includes over 300,000 patents in total and nearly 20% of the total number of patents issued in 2011. She argued that the opinion “would decimate the electronics and software industry… There has never been a case which could do more damage to the patent system than this one.”

4. It is also somewhat surprising that the Federal Circuit decided this case without waiting for the Supreme Court’s pending decision in another case involving the issue of patent eligibility. That case (Association for Molecular Pathology v. Myriad Genetics) does not deal with computer software, but rather inventions related to human genes. It is quite possible that the Supreme Court may GVR (grant, vacate, and remand) CLS Bank after a cert petition is filed in light of its decision in Myriad.

5. The Patent Office follows the Federal Circuit’s opinions for guidance on patent examination. Given that lawyers will have difficulty determining the state of the law after CLS Bank, the Patent Office also likely will struggle to provide useful examination guidelines to patent examiners on software patents.

6. The Federal Circuit’s membership is rapidly changing. The newest Federal Circuit judge, Judge Taranto, was not confirmed until after the oral argument. He did not participate in the case. Furthermore, there are two pending nominees to the Federal Circuit, Raymond Chen and Todd Hughes. Assuming Chen and Hughes are confirmed at some point, these three judges may hold the balance of power on software patentability. Furthermore, Senior Judge Richard Linn participated on the CLS Bank en banc panel because he was a member of the original 3-judge panel for the case. He was one of the 5 judges believing that the system claims were patent eligible. As a senior judge, it is unlikely that he will be on any future en banc decisions regarding patent eligibility.

7. The underlying ruling is that the software claims at issue are not patent eligible. This case runs against the view of most academics (myself excluded) that the Federal Circuit is reflexively pro-patentee.

The story, in a nutshell: a Bloomberg terminal like the one in the picture sits on every trading desk. It is the central platform for managing a constant stream of information about market activity, financial news, economic data, and much more. [...]]]> The privacy scandal of the week involves Bloomberg terminals, reporters, and Wall Street traders. It started making the rounds of the financial press in the last couple of days and today reached the New York Times, which led its story by declaring that a “shudder went through Wall Street” in response to the revelations. But as with many of the periodic Facebook privacy scandals, this one is only surprising if you haven’t been paying attention. And it distracts the press and the public from more serious matters.

The story, in a nutshell: a Bloomberg terminal like the one in the picture sits on every trading desk. It is the central platform for managing a constant stream of information about market activity, financial news, economic data, and much more. By making this very expensive equipment a necessity, Michael Bloomberg (now New York’s mayor, of course) built a multibillion-dollar empire and made himself fabulously wealthy.

From the beginning, company employees have been able to look up individual Bloomberg subscribers and scrutinize their most recent activity in the system. That may make some sense for sales and technical personnel (although even then it probably ought to have been more anonymized than it seems to have been). Unfortunately, that access also extended to journalists at the many news outlets that have been added to the Bloomberg corporate family over the years. And these reporters appear to have mined that data routinely for tidbits that might have helped with their stories.

Don’t get me wrong, this is not an example of good privacy practices. But it ain’t exactly the allegations of pervasive bribery, eavesdropping, and hacking by journalists in the employ of Rupert Murdoch. Quartz has a pretty good explanation of the data that was available. Primarily, it boils down to the last time a person logged in, the “functions” used (essentially, what general categories of information services were accessed, such as reports of corporate bond trades), and the transcript of any online customer service chats. Crucially, Quartz notes, “Employees can see how many times each function was used but not further details, like which company’s bonds were being researched.” In other words, a lot of it resembles information that many web sites, including news sites, can already glean about most of their customers, particularly those who are logged in. At most, Bloomberg journalists might have obtained some slight lead that would send them on the hunt for more solid information, much as a tip from a source might. In the incident that brought the practice to light, for example, a reporter surmised that a Goldman Sachs partner might have left the firm because he stopped using his Bloomberg terminal.

So what makes this story the source of “shudders” on Wall Street? Not really the magnitude of the privacy invasion, I would argue, but a lot of secondary atmospheric factors that help contribute to the making of a good newspaper story and, thus, a privacy scare. For one thing, as in kerfuffles about Facebook or Google, we have big names (not just Bloomberg, but also the complaining victims who include employees at Goldman Sachs, JPMorganChase, and possibly even the Federal Reserve). We have a ubiquitous technology that everyone has come to rely on, at least within the world of finance, which adds a nice pinch of helplessness to the narrative. We have those terminals, physical presences in the center of the work day, that perhaps can seem a touch more sinister than virtual data mining. Finally, and probably most importantly, we have the Wall Street obsession with information — with keeping your own secrets while ferreting out every bit of information that could affect the price of anything. Ironically, it’s the very same obsession that made the Bloomberg terminal a necessity in the first place. And it isn’t really about privacy in the conventional sense, but about control and competitive advantage.

There are real privacy threats when companies or the government have access to the information we read. Neil Richards has written eloquently and extensively (most recently in this Georgetown Law Journal piece) about the importance of intellectual privacy and its fragility in a world where DRM, targeted advertising, social media, and subscriber analytics all push against the presumptive solitude of browsing and reading. Others, including me, have chimed in. But the genuine threat to intellectual privacy from the Bloomberg blooper seems quite small to me. It’s like somebody knowing you used a library card but not what books you checked out. The real problem with these teapot tempests is their capacity to direct attention to the wrong issues. There is a finite amount of attention for privacy, and I hate to see it wasted on this incident — or on the phantom threat of employers supposedly demanding applicants’ Facebook passwords despite the nearly total lack of evidence that they do.

Bloomberg LP CEO Dan Doctoroff has admitted the company’s mistake, revoked journalists’ access to the data, and hired a new chief data security officer to boot. Speculation about this incident as a real threat to the company appears overblown. Alas, the prospect that such a minor scandal might cause any reevaluation of more serious intellectual privacy concerns seems even more remote.

Photo Credit: Jack the Scribbler, from Flickr, under CC BY-NC-SA 2.0 license.

True, Wachtell’s position concurs with my view that such payments are lawful, contrary to the position urged by my esteemed fellow corporate law Prof., Stephen Bainbridge.  But that’s where Wachtell and I part company, first because Wachtell’s proposal is myopically universal and second because it errs on a basic legal point about board and shareholder power.

In my view, not only are the arrangements lawful, but shareholder bodies ought to have the choice to embrace or reject them.  My guess is that they are desirable for some corporations in some settings and not so [...]]]> Amid debate over shareholders offering contingent payments to directors, Wachtell Lipton recommends an option that may be tempting for incumbent boards: unilaterally adopting a bylaw banning the arrangements.  Boards should be wary of this advice.

True, Wachtell’s position concurs with my view that such payments are lawful, contrary to the position urged by my esteemed fellow corporate law Prof., Stephen Bainbridge.  But that’s where Wachtell and I part company, first because Wachtell’s proposal is myopically universal and second because it errs on a basic legal point about board and shareholder power.

In my view, not only are the arrangements lawful, but shareholder bodies ought to have the choice to embrace or reject them.  My guess is that they are desirable for some corporations in some settings and not so for others.  Therefore, the use or rejection of these ought to be determined, as with much else in corporate life and law, in context by business people participating in particular governance situations.

The eight lawyers at Wachtell signing a Firm “Shareholder Activism Alert,” in contrast, urge universal and complete abolition. The lawyers do not appear concerned with context or the range of situations in which the arrangements might come up.  Instead, they see them as “egregious” under all circumstances, branding the devices “Dissident Director Conflict/Entrenchment Schemes.” 

Wachtell condemns the idea as posing numerous threats in all cases.  It does not matter, for instance, whether a bonus is earned based on a stock price that out-performs a peer-group over the 3-year term of service on a staggered board.  (That is the example in the pending Hess case that has stoked academic debate on this topic; curiously, Wachtell’s memo cites 2 profs who have criticized the plan but does not mention the 5 who have okayed it.)   

Instead, Wachtell warns of threats, in several overlapping bullet-points: undermining board prerogatives on time-frame, creating a multi-tiered board with sub-classes and creating specific economic incentives in which director and shareholder interests are in conflict.  

The more basic error Wachtell makes is when it says that directors of Delaware corporations can simply amend the bylaws to make such arrangements a disqualification for board service.  It says boards “can adopt this bylaw under the authority of Section 141(b) of the Delaware General Corporation Law which provides that ‘the certificate of incorporation or bylaws may prescribe other qualifications for directors.’”  

But 141(b) is not a grant of authority to amend bylaws, only a statement of where such director qualifications may appear (either the certificate or bylaws).  Section 109 of the Delaware General Corporation Law is where the statute grants the authority to amend bylaws, and it gives shareholders, not boards, that power.   DGCL 109(a).  A Delaware corporation’s shareholders can opt to share power to amend bylaws with directors, but only by including such a provision in the certificate of incorporation.  DGCL 109(a).  

So any Delaware corporate board planning to consider Wachtell’s idea must first ask their lawyer to review their certificate to find out if it would be lawful for a board to adopt such a bylaw (and those incorporated elsewhere must checking local statutes, which vary on the point.)  As my Corporations students learn every year, boards that pass ineffective bylaws face embarrassment and even risk losing the outcome of a contest for corporate control. See Datapoint v. Plaza Securities, 496 A.2d 1031 (Del. 1985) (board adopted bylaw was ineffective because it addressed a topic that the Delaware General Corporation Law required to be in the certificate).

Boards and shareholders weighing the merits or demerits of any corporate governance device, including shareholder bonuses for director performance, should be prepared to address legal questions such as who has the authority to speak for the corporation on a given topic.  Boards must make such business judgments as they believe best advance the interests of the corporation and its shareholders given the particular context in which the decision is made.

Directors doing so must, above all, appreciate that they are making a business judgment, not a legal judgment, one for boards, not lawyers. Cf. Ace Limited v. Capital Re, 747 A.2d 95 (Del. Ch. 1999).  We law professors and lawyers sometimes have strong opinions on the attractiveness of given governance devices, but such opinions are irrelevant to the decision whether to embrace or reject a lawful one. That logic of the business judgment rule extends to us.

By my count, post number 10,000 was a pointer to a new essay about the Kirtsaeng decision in the Stanford Law Review Online. That’s appropriate, because spreading the word about interesting and timely legal scholarship — especially stuff that appears in less traditional places like the journals’ online supplemnets — has been one of ConOp’s many services to the rest of us for years [...]]]> I was just working on my next guest post when I noticed a little statistic in the dashboard: there have been 10,007 posts to Concurring Opinions. Which means this lil’ ol’ “blawg” passed a significant milestone about a week ago that deserves some celebration — and heartfelt  thanks to Dan Solove and the cadre of other permanent bloggers who keep it going.

By my count, post number 10,000 was a pointer to a new essay about the Kirtsaeng decision in the Stanford Law Review Online. That’s appropriate, because spreading the word about interesting and timely legal scholarship — especially stuff that appears in less traditional places like the journals’ online supplemnets — has been one of ConOp’s many services to the rest of us for years now.

Vanderbilt Law Review En Banc is pleased to present our Spring 2013 Roundtable, which considers the SEC’s rulemaking authority under the JOBS Act of April 2012.

Practicing securities attorney Douglas Ellenoff, and Professors Usha Rodrigues and Andrew Schwartz each consider the public policy rationales of the JOBS Act, its legislative history, congressional intent, and practical considerations in order to offer some friendly advice to new Chairman Mary Jo White and the Commission.

Mr. Ellenoff and Prof. Schwartz focus on the rules required or allowed relating to crowdfunding under Title III of the Act, while Prof. Rodrigues examines the lifting of the ban on solicitation and advertising of securities offered to accredited investors under Title II. We hope you find this Roundtable informative and engaging.

Making [...]]]>

Vanderbilt Law Review En Banc is pleased to present our Spring 2013 Roundtable, which considers the SEC’s rulemaking authority under the JOBS Act of April 2012.

Practicing securities attorney Douglas Ellenoff, and Professors Usha Rodrigues and Andrew Schwartz each consider the public policy rationales of the JOBS Act, its legislative history, congressional intent, and practical considerations in order to offer some friendly advice to new Chairman Mary Jo White and the Commission.

Mr. Ellenoff and Prof. Schwartz focus on the rules required or allowed relating to crowdfunding under Title III of the Act, while Prof. Rodrigues examines the lifting of the ban on solicitation and advertising of securities offered to accredited investors under Title II. We hope you find this Roundtable informative and engaging.

Roundtable Essays

Making Crowdfunding CREDIBLE
Douglas S. Ellenoff · 66 Vand. L. Rev. En Banc 19 (2013)

In Search of Safe Harbor: Suggestions for the New Rule 506(c)
Usha Rodrigues · 66 Vand. L. Rev. En Banc 29 (2013)

Keep It Light, Chairman White: SEC Rulemaking Under the CROWDFUND Act
Andrew A. Schwartz · 66 Vand. L. Rev. En Banc 43 (2013)

BRK Letters & Compilations

Berkshire Hathaway used to compile bound volumes of Warren Buffett’s letters to its shareholders but stopped that practice years ago.  Only collectors could put their hands on such a thing.  Until now. A young fan of the man and company has published a full compilation and put it on sale for $24.50 plus shipping.  It is a good service and I am grateful to the fan, Max Olson, for sending me a comp copy (pictured at right; he sent them because I published The Essays of Warren Buffett: Lessons for Corporate America).

Berkshire annual reports of the late 1980s and early 1990s (some pictured at left), all stated that compilations of letters from earlier annual reports, dating to [...]]]>

Max Olson, Compiler (700 pp.) $24.50

BRK Letters & Compilations

Berkshire Hathaway used to compile bound volumes of Warren Buffett’s letters to its shareholders but stopped that practice years ago.  Only collectors could put their hands on such a thing.  Until now. A young fan of the man and company has published a full compilation and put it on sale for $24.50 plus shipping.  It is a good service and I am grateful to the fan, Max Olson, for sending me a comp copy (pictured at right; he sent them because I published The Essays of Warren Buffett: Lessons for Corporate America).

Berkshire annual reports of the late 1980s and early 1990s (some pictured at left), all stated that compilations of letters from earlier annual reports, dating to 1977 (also pictured), were available on request from the company without charge.  By the mid-1990s demand had begun to rise, prompting a new policy: continuing to offer the historical compilations to shareholders for free, but charging non-shareholders $15 (for production and shipping).

Beginning with the 1997 report, the letters, again dating to 1977, were made freely available on the internet (and they still are there).  The two-volume historical compilation remained available, but now at a charge of $30, payable by non-shareholders and shareholders alike (shipping included).  In 1999, the printed set became a three-volume issue and the charge was raised to $35 for all.

Those printed volumes have not been available for several years (and I feel lucky to have some in my library). That’s been a relief to staff at Berkshire’s famously minimalist headquarters, a handful of people with no time to process payments and stuff envelopes.  It is this lacuna that Max Olson’s alternative fills, a good job, especially at the price of $24.50 (plus shipping).

Olson’s volume is not exactly like what the company used to publish but it is close.  There is no varnish, no commentary or much context, and little but the letters.  Olson adds two interesting charts. One shows the historical relationship between Berkshire’s cost of using customer insurance premiums (called float) and the prevailing cost of money (proxied by government bonds).  That difference has been a source of Berkshire’s impressive financial success. The other interesting chart shows the acquisitions Berkshire has made over the years, a useful image.  

There are four other notable differences between the new result and the historical corporate compilations.   First, the Olson volume includes letters, from 1966-1969, signed by Buffett’s predecessors, members of the Chace family; there is a notation reading [Letter written by Warren E. Buffett] but no explanation. It would be interesting to know why Buffett wrote but did not sign those letters.  On the other hand, these letters are short and, particularly compared to the letters Buffett would write from 1977 on, dull.

Second, the Olson compilation contains letters for 1970-1976.  Though signed by Buffett, letters from those years were omitted from all versions of the company’s various compilations.  As far as I can tell, and as far as references appear in the annual reports dating to the late 1980s, all compilations begin with 1977; the internet menu dates only to 1977 as well.   Again, these early letters are comparatively short, less colorful than those that follow and seem to contain information that later letters also present in superior ways.

Third, the official Berkshire corporate compilations also contained letters of Charlie Munger about important Berkshire subsidiaries, Blue Chip Stamps from 1981 and 1982  and WESCO Financial Corp. from 1989 and 1990. These are not part of the Olson volume. But some of these offer nice contributions to the overall state of Berkshire and its thinking in any given year.  (I excerpt from these in my selective and thematic arrangement, The Essays of Warren Buffett: Lessons for Corporate America.)

Fourth, and most important, the company’s historic compilations always warned in the table of contents: “All of the letters are reprinted exactly as written and, therefore, considerable repetition of basic business information occurs in this compilation.”  Eliminating the repetition was one of my goals in The Essays of Warren Buffett; for this full compilation, carrying over the old warning might have been a good idea. 

Quibbles aside, Max Olson had a good idea and provides a useful service. I look forward to dog-earing and highlighting this tome.   Thanks Max!

Here, by the way, is the Amazon ad for the Bingham book.