Stanford Law School Felix Mormann
Faculty Fellow


Home | Teaching | Publications | Press
     
Articles

  • Enhancing the Investor Appeal of Renewable Energy

    42 Environmental Law 681 (2012)
    (Full Text at SSRN)

    Abstract: This article introduces an investor-oriented framework for the evaluation of renewable energy policy, applies the developed criteria to a qualitative comparison of the primary policy instruments and offers recommendations to enhance the investor appeal of renewable energy in the United States. The multi-trillion dollar task of scaling renewable energy technologies to mitigate climate change, ensure energy security, and create green jobs is one of the most daunting challenges of the 21st century. It is, in fact, too great a challenge for either the public or private sector to shoulder alone. Rather, public policy must catalyze private investment in renewable energy. Empirical evidence of deployment support for renewables from thirty-five countries reveals enormous differences in policy performance. Remarkably, some policies leverage four times as much investment in renewable energy as others, despite offering only half as much compensation. These results point to other forces at play than policy remuneration and generation cost alone. To better understand these forces, this article develops a framework of criteria to guide the evaluation of deployment policies beyond remuneration. Unlike previous studies, the article assumes an investor perspective to explore how investment-based, market-based, and behavioral "soft-cost" factors determine a policy's ability to spur investment in renewable energy. Application of these "soft-cost" factors to analyze the primary policy instruments across the globe sheds light on their conceptual capacity to promote the deployment of renewable energy technologies. The results offer an explanation for the observed weak correlation between policy performance and remuneration. Indeed, the most successful and cost-effective deployment policies are those with the most favorable impact on the examined "soft-cost" factors and, hence, with the greatest conceptual appeal to renewable energy investors. Drawing on these insights, the article develops recommendations for the design and implementation of policies that offer greater appeal to renewable energy investors and allow for faster deployment of renewables - at less cost to American ratepayers and taxpayers.  

  • Requirements for a Renewables Revolution

    38 Ecology Law Quarterly 903 (2011)
    (Full Text at SSRN)

    Abstract: This Article identifies and analyzes the obstacles presently barring the rise of renewables, evaluates the role of the current policy favorite emission pricing, and offers design recommendations for a comprehensive U.S. renewables policy. Successful climate change mitigation requires a timely shift to renewable sources of energy, such as sunlight, wind or tides, to decarbonize today's high-carbon electricity sector. But market pull alone is not strong enough. This Article discusses the most widely cited economic barriers and identifies and evaluates additional obstacles related to the electricity sector's regulatory framework. Emission pricing is largely considered the most efficient policy to drive the timely transition to a renewables-based electricity sector. This Article argues that, for political, conceptual, and, most of all, regulatory reasons, emission pricing will not fuel the rise of renewables at the speed necessary for successful climate change mitigation. Rather, a comprehensive renewables policy is required to address each and every one of the existing barriers. Drawing on the policy experience of other sectors and nations, I offer recommendations for the design of a comprehensive U.S. renewables policy. Many of the proposed policy recommendations aim at non-economic barriers, which can be overcome through regulatory intervention. Once these barriers have been removed, policy support for renewables can focus on the remaining economic barriers and, hence, becomes far less costly. In light of the plethora of obstacles to a timely transition to renewables, this Article calls for concerted policy action by scientists, engineers, economists, lawyers, marketers, and educators to fuel the renewables revolution.  

  • Between Partiality and Democratic Glamour - the American Civil Jury

    "Zwischen Parteilichkeit und gelebter Demokratie - die Civil Jury im amerikanischen Zivilprozess"
    58 Recht der Internationalen Wirtschaft 515 (2011 in German)

    Abstract: This Article evaluates the role of the American civil jury from a comparative and empirical point of view to challenge the most common arguments of its critics and advocates. The United States of America is one of the last developed nations to employ juries in civil proceedings. While its supporters celebrate the civil jury as a symbol of democracy, critics on both sides of the Atlantic raise accusations of impartiality and arbitrariness. A California jury's recent damages award against SAP in the record amount of $ 1.3 billion provides further fuel to the heated debate. Despite its critics, the Supreme Court has consistently expanded the scope of the VIIth Amendment's right to a civil jury. This Article discusses this jurisprudence, the civil jury's composition, the rights and obligations of its members, as well as their verdict and its scope for judicial review. A careful review of empirical data fails to confirm many of the jury's alleged biases, including the plaintiff-bias or the bias against defendants with deep pockets. Jury participation in civil cases, however, imposes a far greater procedural burden on the parties - both in time and money - than trial by judge alone. This burden weighs all the heavier as the American rule of cost does not normally allow the victorious party to recover its legal expenses.

  • Forum-Selection Clauses for Investment Fraud Claims under the European Union's Brussels-I Regulation

    "Satzungsmäßige Gerichtsstandsklauseln für informationsbedingte Kapitalanlegerklagen im europäischen Zuständigkeitsregime"
    56 Die Aktiengesellschaft 10 (2011 in German)

    Abstract: This Article challenges the deficiencies of the European Union's jurisdictional regime for investment fraud claims, explores their resolution through forum-selection clauses, and offers design recommendations for such clauses to be included in articles of incorporation. The European Union's Brussels-I Regulation sets out a framework for the jurisdiction of its member states' courts that, where applicable, supersedes national rules of jurisdiction. Following the European Court of Justice's Group Josi and Owusu decisions, the Regulation is construed to apply to civil lawsuits against an E.U. domiciliary provided that the underlying facts or the parties' domiciles establish a link to another state with or within the E.U. The Brussels-I Regulation's precedence is of particular importance for investment fraud claims, where factual or personal multi-state connections are commonplace. In the absence of a specific jurisdictional mandate for investor claims, the Regulation establishes a multitude of competing jurisdictions. This Article illustrates the resulting risk of fragmented and overlapping international multiple-fora disputes - to the detriment of defendants, courts, capital markets, and in some cases plaintiffs. I explore the possibility to attain jurisdictional clarity through forum-selection clauses in articles of incorporation. To do so, the Article investigates whether existing boilerplate clauses for lawsuits between a corporation and its shareholders can, in accordance with the Regulation's specificity requirements, be construed to include investor fraud claims. Based on the European Court of Justice's reasoning in Powell Duffryn, I compare the doctrinal nature of classic shareholder suits and investment fraud claims to conclude that the latter fall outside scope of boilerplate forum-selection clauses for shareholder lawsuits. Accordingly, the Article offers recommendations for the proper drafting and notice of forum-selection clauses in articles of incorporation so as to cover all investment fraud claims against the respective corporation and its officers. In closing, I proceed to extend these recommendations from corporations to limited liability companies and limited partnerships.

  • The Trinity of Exclusive Jurisdiction for Investor Claims under Section 32b of the German Code of Civil Procedure

    "Die Gerichtsstand-Dreifaltigkeit der ausschließlichen Zuständigkeit für Kapitalanlegerklagen nach § 32b ZPO"
    32 Zeitschrift für Wirtschaftsrecht 1182 (2011 in German)

    Abstract: This Article evaluates the practical relevance, judicial treatment and legislative success of the recently established exclusive jurisdiction for investor claims to offer recommendations for direly needed reform. In late 2005, Germany enacted a new framework of exclusive jurisdiction for investor claims, codified in section 32b of the German Code of Civil Procedure. Since its inception, the law has triggered controversial reactions among scholars of corporate and securities law. Mindful of section 32b's experimental character, the legislative originally included a five-year sunset provision. As the sunset term approaches its end, this Article offers a critical review and suggestions for reform of the newly created jurisdictional framework for investor claims. A careful survey of more than two dozen appellate and supreme court decisions yields valuable insights into the enormous practical relevance of section 32b and its interpretation and application by the judiciary. I juxtapose this jurisprudence with the legislative's intent of channeling and concentrating litigation in a single forum to strengthen investor rights, conserve court resources, and to facilitate supervision of capital markets following the U.S. private attorney general model. The Article acknowledges the judiciary's overall success in shaping the scope of the new jurisdictional regime but criticizes inconsistencies in its handling and application as a cause of considerable legal uncertainty and a threat to the legislative's goals. In particular, the relationship between the trinity of jurisdictional minimum contacts demands clarification. To this end, I offer recommendations for amendment of section 32b to carve out its international scope and clarify its domestic application.

  • Brokerage Clauses and Rights of Pre-emption

    "Maklerklauseln und Vorkaufsrechte"
    61 Monatsschrift für Deutsches Recht 1113 (2007 in German with H. Lindemann)

    Abstract: This Article explores the intricate relationship between brokerage clauses and rights of pre-emption, sets out a framework to determine the pre-emptor's liability toward the broker, and offers a solution for conflicts of interest between broker, seller, and pre-emptor. Under German contract law, the exercise of a contractual right of pre-emption establishes a binding contract between the seller and the pre-emptor, based on the terms negotiated between the seller and the original buyer. Over the past fifty years, Germany's Federal Court of Justice (Bundesgerichtshof) has issued a series of decisions to clarify under what conditions the pre-emptor is liable for third-party brokerage fees established under the contract between the seller and original buyer. Following the most recent of these decisions, this Article surveys and analyzes the existing jurisprudence to develop a doctrinal framework to determine the pre-emptor's liability under such brokerage clauses. Against this background, I discuss the legal and economic incentives for the pre-emptor and seller to eliminate the former's liability to the broker. Based on statutory interpretation, contract theory, and general principles of equity, I argue that a release of liability without the broker's approval, e.g., through a partial rescission of the pre-emption contract's brokerage clause would be unconscionable.

     
Book

  • Jurisdictional Protection against Investor Claims in the United States

    "Zuständigkeitsrechtlicher Schutz vor Kapitalanlegerklagen in den USA"
    Sellier European Law Publishers 2010 (508 pages, in German)



    Felix

    The United States of America and Germany have long enjoyed strong trade relations and close political ties. In a legal context, however, the two nations' relationship is not always as harmonious. American lawyers criticize Germany's rules of civil procedure as overly defendant-friendly. Their German counterparts' critique focuses on the U.S. judiciary's alleged excessive exercise of personal jurisdiction and the system's structural bias in favor of plaintiffs' interests. In an unprecedented act of legal protectionism, Germany recently enacted a new jurisdictional regime that grants German courts domestically and internationally exclusive jurisdiction over investor claims against German corporations. This treatise challenges the underlying rationale of Germany's new jurisdictional regime as well as its prospects of practical success. To assess German corporations' alleged need for protection from the U.S. legal system, the author examines the traditional points of contention in the two nations' international legal relations in a comparative context - the courts' exercise of personal jurisdiction, the American and German rules of cost, the pretrial discovery, the role of the civil jury, and the class action. To evaluate the practical relevance of Germany's claim to exclusive jurisdiction, the author analyzes the new regime in its context of international legal cooperation. Where applicable, the Lugano Convention and the European Union's Brussels-I Regulation take precedent and thus severely diminish the German jurisdictional regime's scope for international application. In proceedings before U.S. courts, Germany's claim to exclusive jurisdiction is unlikely to carry any weight, except under very special circumstances, such as for the doctrine of forum non conveniens or for certification of a class action, when there is little to no prospect that an eventual judgment will be enforced by German authorities.