This Article offers an innovative cross-field analysis of how control over decision-making is established and regulated within private legal organizations, focusing on business corporations, residential community associations, and labor unions. While diverging in their historical origins, stakeholders’ composition, and specific norms of internal governance, these organizations share an underlying set of challenges regarding both the bottom-up formation of credible coordination to solve collective action problems and the top-down ordering of their legal power and authority. This common ground calls for a unified theoretical analysis that does not merely fall back on simplistic attempts to classify these organizations as either purely-private or quasi-public enterprises.
While private legal organizations implicate various axes of stakeholders’ relations, this Article focuses on modes of control and accountability among direct members: shareholders in the business corporation, homeowners in the residential community, and labor union members.
The Article argues that US law works with a different set of assumptions and modes of intervention in regulating majority-minority relations for each such organization. In business corporations, the law recognizes and to some extent legitimizes potential stratification and power imbalance among different classes of shareholders, while imposing special duties on controlling stockholders. As for labor unions, lawmakers are well aware of power-play dynamics and the lack of markets for union control, but work to flatten internal hierarchies so as to formally eradicate class division. In residential communities, enabling legislation views homeowners as inherently equal in organizational power and remains silent on pre-organized block voting.
Beyond examining the integrity of the law’s work across private legal organizations -- i.e., does the current differential legal treatment of these organizations hold true -- the Article sets the ground for studying how a consolidated theoretical framework for these organizations corresponds with broader social and cultural concepts of power, hierarchy, and accountability in the US and across other societies.