Benefit Corporations

  • February 8, 2012

    by Nicole Flatow

    The U.S. Supreme Court’s decision last term rejecting a class action gender discrimination lawsuit against Wal-Mart was seen as a major blow to corporate accountability in discrimination cases. But the case is also proving its impact in areas outside of the employment or discrimination context.

    As Greenwire’s Lawrence Hurley reports, the Wal-Mart v. Dukes decision has been cited in several environmental decisions in both federal and state court, in just the first seven months since the case came down.

    Hurley provides details on three of the decisions, all of which deny class certification to plaintiffs attempting to band together to sue large companies that they allege had contaminated their water supplies.

    “The post-Wal-Mart court rulings so far also illustrate how keen the defense bar is to make the most of the Supreme Court case,” Hurley writes, quoting Richard Samp, a lawyer at the conservative Washington Legal Foundation.

    "The decision is being cited by virtually every defendant who is opposing class certification," Samp said.

    During a Senate Judiciary Committee hearing in June on the impact of Wal-Mart and a second case decided last term, AT&T v. Concepcion, University of Colorado law professor Melissa Hart warned:

  • January 24, 2011
    Guest Post

    By Jamie Raskin. Mr. Raskin is a Maryland State Senator, a constitutional law professor at American University, and a Senior Fellow at People for the American Way. He introduced SB 690, which became in April 2010 the first Benefit Corporation law in America. This post is part of an ACSblog symposium marking the one-year anniversary of the landmark decision Citizens United v. FEC.
    You never change things by fighting the existing reality. To change something, build a new model that that makes the existing model obsolete. -- Buckminster Fuller

    The modern American corporation is bound by law to pursue a single objective in everything it does: increasing company profit. If it deviates from profit maximization, shareholders can bring the house down in a derivative suit.

    This relentless profit motivation works wonders financially but is dangerous to the common good. For what is profitable for one company may not be beneficial for everyone. This is why popular forces in America have always tried to build regulatory fences around corporations to contain the damage of their "externalities," such as catastrophic oil spills in the ocean, collapsing oil mines that kill the parents of small children, consumer fraud, sickening peanut butter and food-borne diseases, economic monopolies, mortgage scams, stock market rip-offs, economic crashes and so on.

    Perhaps the most important fence hemming in corporate power has been the ban on corporate political spending. This is the first line of defense for popular democracy because it allows our representative institutions sufficient freedom from corporate influence to set up the other fences that we need. To get meaningful food and drug safety laws, consumer protection laws, workplace equity laws, and clean water laws, we need campaign finance laws that permit representatives in Congress and the state legislatures to be elected in a way that is free of corporate control and manipulation.

    The Supreme Court in Citizens United v. FEC demolished our first line of defense against corporate control of our representative institutions. Five corporate-minded justices -- let's call them "Justices United" -- not only tore down the fence guarding popular democracy but seriously trashed the fence protecting the "free market," which is democracy's next-door neighbor.