Deborah A. DeMott

Culpable participation in fiduciary breach

This essay makes a case for the salience of tort law to fiduciary law, focusing on actors who culpably participate in a fiduciarys breach of duty, whether by inducing the breach or lending substantial assistance to it. Although the elements of this accessory tort are relatively settled in the United States, how the tort applies to particular categories of actors-most recently investment bankers who serve as M&A advisors-provokes controversy. The paper also explores the less developed terrain of primary actors who breach governance duties that are not fiduciary obligations because the entitys organizational documents eliminate fiduciary duties, as Delaware law permits for LLCs and partnerships. When an accessory actor induces or otherwise assists a primary actors breach of a non-fiduciary governance obligation, the accessory tort likely to be relevant is wrongful interference with contract. The essay notes parallels and overlaps that connect wrongful interference to culpable participation in a fiduciarys breach. Both are intentional torts for which liability turns on whether an actor in some fashion chose to participate in another actors breach of duty, as well as whether the secondary actor acted with knowledge of the primary actors duty and made a causally significant contribution to the breach. Both torts illustrate the foundational significance of duty within tort law: actors subject to liability on accessory theories do not owe duties that replicate those of the primary wrongdoer, who is linked by contract or a fiduciary relationship to the beneficiary. By committing an intentional tort, accessory actors breach duties they themselves owe. Framed within the ambit of tort law more generally, the outcomes in controversial M&A cases do not represent departures from well-established doctrine. These cases do help illustrate whats distinctively wrongful about lending substantial (and knowing) assistance to another actors breach of duty. The accessory tortfeasors in the essay represent inversions of a well-known set of actors in tort doctrine, rescuers. Rescuers intervene as strangers to a situation in which another is in peril with the objective of preventing harm or mitigating its consequences for the person in peril. Like reflected figures in a warped mirror, the essays accessory wrongdoers choose to intervene in situations in which one actor owes a duty to another but, if the intervention succeeds, the person to whom the primary was duty is left worse off than had the accessory had not caused the breach of the underlying or primary duty.

Restatements and Non-State Codifications of Private Law

This paper offers a vantage point through which to assess the phenomenon of projects codifying private law that are undertaken by private persons or institutions, distinct from legislatures and state-sponsored codification and law-revision projects. The private institution on which this paper focuses is the American Law Institute (ALI). ALI works in statutory form—most notably the Uniform Commercial Code and the Model Penal Code—as well as through projects that generate “Principles” to guide legal development within their specific fields and “Restatements” that authoritatively cover the law in a field.