Organized: The Business Law Breakdown

Shareholder Litigation – Episode 4: Discovering the Evidence

In this fourth episode of the shareholder litigation series on Organized: The Business Law Breakdown, Professor Seth C. Oranburg explores the discovery phase, where evidence is gathered to substantiate claims in direct and derivative actions. Learn how discovery promotes transparency under Federal Rule of Civil Procedure 26, focusing on relevance and proportionality, while addressing agency costs by uncovering managerial misconduct. For direct suits, discovery targets proof of personal harms like material misstatements; for derivative claims, pre-suit inspections under DGCL Section 220 enable access to books and records to establish demand futility, with recent amendments like Senate Bill 21 balancing access against abuse. The episode examines technology's impact—AI for efficient document review, blockchain for data validation—and challenges such as high costs, privileges, motions to compel, and protective orders for trade secrets. Through hypotheticals and practical tips, Professor Oranburg illustrates how discovery can drive settlements or strengthen trials. Tailored for law students, business owners, and corporate professionals, this installment advances the civil procedure playbook with checklists for effective evidence gathering.

Meyer v. Uber Techologies, Inc. - A Case About Modern Contract Formation

In this episode, I read aloud Judge Chin’s majority opinion in Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir. 2017), a foundational online-assent case about whether Uber’s mobile “sign-in-wrap” created a binding arbitration agreement. The Second Circuit vacates a district-court denial of arbitration and remands on waiver, holding that the app’s registration screen gave “reasonably conspicuous” notice and that tapping “Register” unambiguously manifested assent to the linked Terms of Service. Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir. 2017). Why this case matters * It sets a widely cited standard for mobile contract formation: the “reasonably prudent smartphone user,” notice via hyperlink, and spatial/temporal coupling of terms with the act of registration. * It anchors the taxonomy of online agreements (clickwrap, browsewrap, scrollwrap, sign-in-wrap) in Second Circuit doctrine and integrates Specht and Nicosia. See Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002); Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016). * It’s also a clean vehicle to teach FAA vs. state contract law: arbitration is enforced only if a contract exists under state law (here, California), reviewed de novo on undisputed facts. * For contrast, pair it with Sgouros v. TransUnion, 817 F.3d 1029 (7th Cir. 2016) (design misled users) and Cullinane v. Uber Techs., Inc., 893 F.3d 53 (1st Cir. 2018) (Uber lost on a different screen design). What to listen for (learning targets) 1. Procedural posture and standards of review. Identify where the case sits (appeal from denial of motions to compel arbitration), what is reviewed de novo, and what is reviewed for clear error. Be ready to explain why de novo applies here. 2. Governing law pathway. Track the move from the FAA policy favoring arbitration to the threshold state-law contract question: Was there a contract at all? Note the court’s reliance on Specht for assent principles. 3. Interface facts that mattered. Listen for the precise design features the court credits: uncluttered screen; dark text on white; blue, underlined hyperlinked “TERMS OF SERVICE & PRIVACY POLICY”; placement directly below “Register”; no scrolling needed. Ask yourself which of these are necessary vs. merely persuasive. 4. “Reasonably prudent smartphone user.” Catch how the court uses background facts about smartphone adoption and common web conventions to support constructive notice. Could similar reasoning cut the other way if conventions evolve? 5. Assent without an “I agree” button. The court treats tapping “Register” as assent when paired with clear notice. Contrast with designs where the same tap serves a different, misleading purpose (Sgouros). 6. Issue reserved on remand. The panel leaves waiver (litigation conduct) for the district court. Flag how and why waiver can be decided by a court rather than the arbitrator. 7. Comparative authority. Be prepared to compare Meyer with Nicosia (hyperlink too distant and cluttered context) and Cullinane (First Circuit finds Uber’s design inadequate). What concrete drafting/UX lessons emerge? Learning prompts * If you were Uber’s product counsel in 2014, what one change would most fortify assent? If you represent riders, which single design change would most undermine assent? Ground answers in the record facts the court emphasizes. * Draft a one-sentence notice that’s more conspicuous than Uber’s but still realistic on a phone. * Apply Meyer’s framework to a modern OAuth/SSO “Sign in with X” flow. Does a federated-login button complicate notice and assent? Which screen owns the duty to warn? Primary sources * Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir. 2017) (opinion). * Meyer v. Kalanick, 200 F. Supp. 3d 408 (S.D.N.Y. 2016) (district court opinion cited by the panel). * Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002) * Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016). * Sgouros v. TransUnion Corp., 817 F.3d 1029 (7th Cir. 2016) * Cullinane v. Uber Techs., Inc., 893 F.3d 53 (1st Cir. 2018)

Shareholder Litigation – Episode 3: Pleading the Case

In this third episode of the shareholder litigation series on Organized: The Business Law Breakdown, Professor Seth C. Oranburg examines pleading standards as essential gatekeepers in direct and derivative actions. Discover how federal rules under Twombly, Iqbal, and the Private Securities Litigation Reform Act demand plausible, detailed complaints for direct claims involving material misstatements, scienter, reliance, and causation under SEC Rule 10b-5. For derivative suits in Delaware or under the Model Business Corporation Act, learn the rigorous requirements for alleging demand futility via the Zuckerberg test, continuous ownership, and breaches of fiduciary duties like care and loyalty. Through practical examples, hypotheticals, and ties to agency costs, the episode highlights how these standards prevent frivolous suits while enabling accountability. Emerging issues, such as cybersecurity disclosure failures, illustrate evolving challenges. Perfect for law students, business owners, and corporate practitioners, this installment advances the civil procedure playbook with checklists for crafting robust complaints.

Shareholder Litigation – Episode 2: Direct versus Derivative

In this second episode of the shareholder litigation series on Organized: The Business Law Breakdown, Professor Seth C. Oranburg delves into the critical distinctions between direct and derivative shareholder actions. Learn how direct suits address personal harms to shareholders, such as reliance on material misstatements under securities laws, while derivative actions tackle injuries to the corporation itself, often involving breaches of fiduciary duties like loyalty and care. The discussion explores procedural hurdles, including standing requirements (e.g., continuous share ownership) and the demand futility test from the Zuckerberg case, which assesses director benefits, liability risks, and independence. Through relatable analogies, hypotheticals, and insights into agency problems, Professor Oranburg illustrates how these mechanisms balance accountability with corporate efficiency. Emerging trends, such as SEC cyber disclosure rules, highlight evolving complexities. Ideal for law students, business owners, and corporate professionals, this episode provides practical checklists and builds toward a full civil procedure playbook for shareholder disputes.

Shareholder Litigation – Episode 1: Why Business Owners Sue Themselves

In this inaugural episode of the season on shareholder litigation, Professor Seth C. Oranburg introduces listeners to the fundamentals of corporate accountability through a civil procedure playbook. Explore why shareholders might sue their own companies, the core agency problems in corporations, and the key distinctions between direct and derivative actions—with real-world analogies and examples. The discussion covers strategic forum choices, such as Delaware's Court of Chancery versus federal courts, and emerging trends like SEC cybersecurity disclosure rules, AI in legal discovery, and blockchain for evidence. Designed for law students, business owners, and corporate enthusiasts, this episode outlines the season's structure, providing step-by-step insights into the litigation process to ensure transparency and fairness in business. Join Professor Oranburg for a comprehensive guide to protecting investments and enforcing ethical leadership.