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Charlotte City Council vs. General Assembly

Posted by on 8:40 pm in Uncategorized | 0 comments

By: Jennifer Stevens

 

On Monday, February 22, the Charlotte City Council approved an ordinance that expanded protection to the Lesbian, Gay, Bisexual, and Transgender Community (LGBT). The change in ordinance means that businesses may not discriminate against the LGBT community. The ordinance also reached public forums, such as bars, restaurants, and stores. Although the ordinance in itself sparked some tension, the most controversial part of the ordinance allows transgender people to use either a male or female bathroom, dependent on what gender with which they identify. The main concern from those who opposed the ordinance was the safety of women and girls sharing a public bathroom with someone born male. The main concern for supporters was the risk of violence to transgender people in the bathroom.

Many citizens of Charlotte spoke out about the issue. In fact, so many people showed up to the council meeting that firefighters had to stop allowing people to enter due to the capacity of the building being full. Opinions ranged from people saying the ordinance was “filthy and wicked” to “I only want to be treated equally.”

Asheville’s City Council decided to address the pubic directly on Charlotte’s ordinance. The council addressed the ordinance directly and stated that it was absolutely unnecessary. The council made it a point to say that Asheville and many areas of the like do not have rules about who can and can’t use bathrooms available to the public in public places. Asheville has no intention to create an ordinance like that of Charlotte.

Governor Pat McCrory made the assumption that the bathroom provision would likely cause immediate action by legislators. The General Assembly of North Carolina has the ultimate say over city municipalities, and legislators could easily strike down the entire ordinance or eliminate provisions that were unwanted. A year ago, a similar ordinance failed in a 6-5 vote. Members of the council in Raleigh have mixed feelings about the ordinance and it is likely a decision will be made in the near future. With new members on the board, both of whom support the ordinance, the fate of the ordinance is up in the air. The Council has plenty of avenues to proceed, and with Charlotte being a progressive city; it is unlikely the entire ordinance will be struck down.

 

REFERENCES:

[1] http://www.charlotteobserver.com/news/politics-government/article61786967.html

[2] http://www.citizen-times.com/story/news/local/2016/03/08/city-officials-asheville-doesnt-need-charlotte-style-lgbt-ordinance/81509114/

Federal Judges Reportedly Being Considered for a Supreme Court Nomination

Posted by on 4:47 pm in Uncategorized | 0 comments

BY: WLLIAM G. HODGE

As the election season continues to heat up, one of the most important pending issues in our nation has played second fiddle to talk of small fingers and a wall that seems to grow by ten feet every day. The term “nomination” is coupled with words like authoritarianism and socialism rather than what it should be coupled with – justice.

With whom will President Obama replace the late Justice Scalia in the Supreme Court? In a recent article posted on the ABA Journal, Debra Weiss reported that President Obama is considering several federal judges that have served little time on the bench and have less of a track record that could subject them to criticism.

Among those candidates, it has been reported that the White House prefers nominees “with few ideological fingerprints” such as Judge Sri Srinivasan and Judge Merrick Garland that both serve as federal appeals judges in Washington, D.C. Federal appeals Judge Jane Kelly and U.S. District Judge Ketanji Brown Jackson have also been mentioned as potential nominees.

Here is a brief synopsis of these potential nominees, according to the Washington Post:

Judge Sri Srinivasan, 49, was confirmed to the U.S. Court of Appeals for the D.C. Circuit in 2013. Judge Srinivasan has served both Democrats and Republicans in his career and was a law clerk for Justice Sandra Day O’Connor. If appointed, he would be the Supreme Court’s first Asian American and first Hindu, further diversifying the Supreme Court bench.

Judge Merrick Garland, 63, currently serves as the Chief Justice of the U.S. Court of Appeals in Washington D.C. According to the New York Times, Judge Garland was confirmed with “substantial Republican support” back in 1997.

Judge Jane Kelly has served as a clerk for two judges in the past, one appointed by a Republican and the other appointed by a Democrat. Judge Kelly received backing from U.S. Senator Charles Grassley, a Republican, during her confirmation hearing for the 8th Circuit Court of Appeals.

U.S. District Judge Ketanji Brown Jackson of Washington D.C. was appointed in 2013 and is married to the twin brother of the brother-in-law of Republican House Speaker Paul Ryan. Judge Brown’s most notable opinion has been that the District of Columbia has shown a “willful blindness” to a deaf inmate’s need for accommodation and had violated the inmates’ disability rights.

For a complete list of nominees, please visit the Washington Post.

http://www.abajournal.com/news/article/these_federal_judges_are_reportedly_being_considered_for_a_supreme_court_no

An Issue of Security that Will Inevitably Bring Insecurity

Posted by on 4:45 pm in Uncategorized | 0 comments

By Ryan Vince

 

Months after the tragic terrorist shooting in San Bernardino, California, Apple Inc. (“Apple”) and the Federal Bureau of Investigation (“FBI”) continue their legal skirmish over whether Apple should be forced to create new “backup” technology. After successfully thwarting one of the San Bernardino terrorists, Syed Rizwan Farook, law enforcement officials discovered the killer’s Apple iPhone 5c. The government, thinking it could gain access to a goldmine of terrorist information, issued an order requiring Apple to write software for “breaking” into Farook’s phone. At first glance you may think, “Yes! Find the terrorists!” However, this situation involves issues of both national security and personal security. If Apple creates software capable of breaking into an iPhone, the trusted security of the iPhone may forever be jeopardized.

First, Apple ordinarily has the ability to access information on a used iPhone through standard iCloud backups. In order to comply with law enforcement investigations, Apple has left one door open for access into a locked iPhone: through the iCloud. Unfortunately, according to the FBI, the San Bernardino County Department of Public Health changed the iCloud password associated with Farook’s phone. As a result, the typical means for accessing the terrorist’s phone are no longer feasible. Apple’s only door of entry has essentially been closed because the iCloud password has been altered. This alleged incident may seem trivial, but determining who is responsible for the password alterations may be strongly influential. If the government had an opportunity to backup Farook’s phone but botched it when it reset the password, a court may not compel Apple to comply with the order.

Second, with compelling arguments on both sides, Apple probably holds the stronger hand. Regarding the All Writs Act of 1789, courts may “issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.” The discernible limitation to this rule is that “unreasonable burdens may not be imposed.” Much debate rests on the true definition of an “unreasonable burden,” where in U.S. v. NY Telephone, the Court ruled that the FBI could require NY Telephone, a “highly regulated public utility with a duty to serve the public,” to provide the FBI with pen registers (a list of dialed phone numbers) to assist in an investigation. Relating this ancient case to the current issue, Apple does have a duty to serve the public, Apple may be highly regulated in business and communication matters, but Apple is not a public utility. “Public utilities” are roughly defined as a set of services provided by organizations consumed by the public: electricity, natural gas, water, sewage, and more recently, broadband Internet. In U.S. v. NY Telephone, the Court ordered a public utility company to “provide” the FBI with pen registers, items already in use and in possession of the utility company. In the San Bernardino case, Apple, a publicly traded company, will be required to create and develop brand new software. At an unbiased vantage point, the facts in California are highly distinguishable to the facts in New York because of the disparate level in “burdens.”

The Ninth Circuit, which governs the district courts of California, has ruled that code is “protected speech” under the First Amendment. Whether or not this case goes to the Supreme Court, this Ninth Circuit ruling gives strong precedence to a First Amendment defense made by Apple. If writing new code is inconsistent with Apple’s vision, and/or the code threatens the safety of its consumers, a court will not require compliance with the order. Yet, this ruling does not resonate through all U.S. courts and this argument may not work in a situation such as this.

Arguments for a Fourth and Fifth Amendment defense come down to the murky legal jargon of “reasonableness” and “just compensation.” In making a Fourth Amendment defense, Apple will argue that when the government executes a search warrant, it needs to be done in a “reasonable manner,” and that forcing the company to develop software is unreasonable. Similarly, under the Fifth Amendment, the government must give “just compensation” when it takes private property for public use. Is unlocking a terrorist’s iPhone for purposes of national security truly public use? And if so, how do you justly compensate a company for fashioning software capable of breaching its own security? Regardless of how much the government would pay Apple, it would neither be just nor compensation of actual loss.

Apple’s emphasis of concern has been to protect the privacy and security of the users of its products. Throughout its existence, Apple has been able to achieve this goal by the consistent development of secure products. If the government successfully compels compliance with its order, Apple will be forced to create its own Achilles heel, a product capable of breaching its own secure products. Nevertheless, as long as the government acts “reasonably” or Apple is “justly compensated” for its time, then I guess all is well.

 

References

http://motherboard.vice.com/read/apple-legal-defense-against-fbi-phone-unlock-san-bernardino

http://recode.net/2016/02/21/fbi-says-resetting-san-bernardino-shooters-apple-id-password-not-a-screwup/

http://www.bloomberg.com/news/articles/2016-02-25/apple-s-best-arguments-against-the-u-s-over-iphone-access

http://motherboard.vice.com/read/who-changed-the-san-bernardino-shooters-icloud-password

https://www.washingtonpost.com/world/national-security/us-wants-apple-to-help-unlock-iphone-used-by-san-bernardino-shooter/2016/02/16/69b903ee-d4d9-11e5-9823-02b905009f99_story.html

http://legal-dictionary.thefreedictionary.com/Public+Utilities

Paying Tribute to Justice Scalia

Posted by on 9:13 pm in Uncategorized | 0 comments

By: Audrey Henderson

 

President Obama ordered flags be flown at half-mast in honor of Justice Antonin Scalia:

As a mark of respect for Antonin Scalia, Associate Justice of the United States, I hereby order, by the authority vested in me by the Constitution and laws of the United States of America, including section 7 of title 4, United States Code, that the flag of the United States shall be flown at half-staff at the White House and on all public buildings and grounds, at all military posts and naval stations, and on all naval vessels of the Federal Government in the District of Columbia and throughout the United States and its Territories and possessions until sunset, on the day of interment.  I also direct that the flag shall be flown at half-staff for the same period at all United Stages embassies, legations, consular offices. and other facilities abroad, including all military facilities and naval vessels and stations.

 

On February 13, 2016, Justice Antonin Scalia passed away at age 79. For approximately 30 years, Scalia served as a Supreme Court Justice. He was a conservative icon who had a brilliant mind, energetic style, incisive wit, sharp tongue, and colorful opinions. He was a devout Catholic, “a proud father of nine children, and grandfather to many loving grandchildren.” And while many did not agree with him, Justice Scalia “loved to call it as he saw it.”

Antonin Scalia was born on March 11, 1936 in Trenton, New Jersey, as an only child to Italian immigrants. He attended St. Francis Xavier High School where he graduated as the class valedictorian. He went on to study history at Georgetown University where, once again, he graduated as valedictorian in 1953. His love for education led him to attend Harvard Law School, where he met his wife, and for the third time in his life, he graduated as class valedictorian.

Justice Scalia only practiced law for six years before deciding that he wanted to teach rather than practice. He taught at the University of Virginia for four years before being appointed as general counsel for President Richard Nixon. After the Watergate scandal, however, Scalia went back to teaching at the University of Chicago Law School in 1977. In 1982, President Ronald Reagan nominated him for the United States Court of Appeals for the District of Columbia Circuit. Four years later, Chief Justice Warren Burger retired from the Supreme Court bench and Justice William Rehnquist was named as the new Chief Justice. President Reagan nominated Scalia and the senate unanimously voted in favor of Scalia in a ninety-eight to zero vote.

While serving on the bench, Justice Scalia was never at a loss for words in both oral arguments and his expertly written opinions. “He wrote more concurring opinions than any other justice in Supreme Court history, and is the third for most dissenting opinions.” He stated that “[d]issents are where you can really say what you believe and say it with the force you think it deserves. And if they prove correct years later . . . it makes you feel good.” He consistently made headlines with phrases such as “legalistic argle-bargle,” “pure applesauce,” “jiggery-pokery,” and “SCOTUScare.”

“As a Supreme Court Justice, Scalia was considered to be one of the more prominent legal thinkers of his generation. It was also through his blunt (some would say scathing) dissents that he earned a reputation as combative and insulting.” Many people to this day do not agree with him and they criticized him stating that he allowed his personal views to get in the way of his legal judgment. Scalia continued to support state’s rights, did not believe there was a constitutional right to abortion, believed in the constitutionality of the death penalty, and endorsed an individual’s right to carry firearms.

But what many people do not seem to understand is that Justice Scalia’s views were based on his belief in originalism. He believed that the United States Constitution should be interpreted based on what the words and phrases meant to the ordinary member of the public in 1789. This is known as the public meaning thesis where “[c]onstitutional meaning is fixed by the understandings of words and phrases and the grammar and syntax that characterized the linguistic practices of the public and not by the intention of the framers.” Justice Scalia believed that the Constitution was not a living document and that if people wanted to implement change, they needed to do it through the legislature, not the court systems.

I had the honor of meeting Justice Scalia during the summer of 2015 when I took a class at Georgetown University on Constitutional Interpretation: Originalism in Theory and Practice. My class had the privilege of asking Justice Scalia questions on his theory of originalism. While I have not always agreed with his opinions, I have always been entertained by reading them. However, meeting him in person did not disappoint. As the questions kept coming, I found that he was indeed very forward and blunt, which is something I tend to respect. I learned that he is very passionate about an individual’s right the carry firearms. He even made the comment that he kept weapons on every floor of his residence.

Subjectively, one of the most interesting questions asked was whether there was ever a case where Justice Scalia applied his public meaning theory, but did not like the outcome of the case. Without hesitation he replied, Texas v. Johnson. In Johnson, a Texas law convicted a man for burning the United States flag, but the Supreme Court found the law unconstitutional stating that the defendant’s conduct was expressive conduct as part of a political demonstration. Scalia sided with the majority finding that flag-burning is protected under the First Amendment. He reasoned that historically, looking at the public meaning of free speech, society was allowed to criticize the government, and thus, burning the flag was just another criticism. However, turns out, Justice Scalia hated the result in Johnson.

But besides being known for his conservative views, Justice Scalia was also known for his witty comments and sarcasm. In a recent study conducted by Richard Hasen, a law professor at the University of California at Irvine, Hasen found all examples of sarcastic Supreme Court opinions from 1986 to 2013. Out of the 134 examples of sarcasm, 75 of then came from Justice Scalia.

For Example, in City of Erie v. Pap’s A.M., Scalia stated that “I am highly skeptical, to tell the truth, that the addition of pasties and g-strings will at all reduce the tendency of establishments such as Kandyland to attract crime and prostitution, and hence to foster a sexually transmitted disease.” In NLRB v. Canning, Scalia stated, “[y]et on the majority’s view, when the first Senate considered taking a 1-month break, a 3-day weekend, or half-hour siesta, it had no way of knowing whether the President would be constitutionally authorized to appoint officers in its absence.” Lastly, in Citizens United v. FEC, Scalia noted “[a]ll the provisions of the Bill of Rights set forth the rights of individual men and women — not, for example, of trees or polar bears.”

Justice Scalia was a remarkable justice with a love for his country. Despite his conservative and originalist view of the law, he will always be known as having a tremendous impact on our legal system.

 

Sources:

http://www.cnn.com/2016/02/13/politics/supreme-court-justice-antonin-scalia-dies-at-79/

http://www.biography.com/people/antonin-scalia-9473091#synopsis

http://www.scotusblog.com/2016/02/presidents-tributes-to-justice-scalia/

https://www.oyez.org/justices/antonin_scalia

http://www.nytimes.com/2015/01/20/us/scalia-lands-at-top-of-sarcasm-index-of-justices-shocking.html?_r=0

https://www.washingtonpost.com/news/wonk/wp/2016/02/13/the-snarky-lines-that-made-justice-scalia-the-king-of-supreme-court-sarcasm/

http://www.usatoday.com/story/news/2016/02/13/justice-scalia-found-dead-texas-ranch/80347474/

Robert W. Bennett & Lawrence B. Solum, Constitutional Originalism: A Debate 1 (2011).

Texas v. Johnson, 491 U.S. 397 (1989).

City of Erie v. Pap’s A.M., 529 U.S. 277, 310 (2000).

NLRB v. Canning, 134 S. Ct. 2550, 2598 (2014).

Citizens United v. FEC, 558 U.S. 310 391-92 (2010).

 

 

A squatter and her religion

Posted by on 6:38 pm in Uncategorized | 0 comments

By Jennifer Stevens

 

A squatter is defined as, “a person who unlawfully occupies an uninhabited building.” Charlotte-Mecklenburg police officers were notified that a woman had been living in a $600,000 house in a South Charlotte neighborhood. The house was previously foreclosed and is now owned by a bank. Ninti El Bey has been arrested for breaking and entering, along with second- degree trespass, but continues to keep living in the foreclosed home. As to date, there is no future court date set for El Bey, but authorities say they are working diligently to get her out of the house for good.

The main defense of El Bey is that she belongs to a branch of religion under the Moorish Science Temple of America, which protects her from having to leave the house. A Durham native founded this religion in 1939. This religion believes that African Americans are descended from the Moors or North West Africa and are therefore, Islamic by faith. The purpose of this religion was to give African Americans an identity and promote involvement in their society. The movement of this religion varies through time, but has now taken a turn for the worse in the twenty-first century. People that claim to follow Moorish Science are now known to file false legal documents, including: fake liens, deeds, and property claims. Although this popular trend has now reached the Moorish Science religion, the Moorish Science Temple has claimed they have no affiliation with these false documents and state that people who file these false documents are not following the true way of the religion.

The first attack El Bey made was on a realtor who was to show the house to potential buyers of the house. When he entered the house, he found numerous people living in the house. El Bey then filed a temporary restraining order on the realtor. Once El Bey was first arrested, she was back living in the house the next day. El Bey is using the tactics of her “special” religion to support her. Neighbors cannot believe the amount of work it is taking in order to get her removed from the house, especially because the house is not her house.

As to date, neighbors saw work crews brining wooden sheets and boards into the home to keep the squatters out. Meanwhile, squatters at the house are still fighting against authorities and are continuing to work to secure the property. It is unclear whether the authorities will be able to overcome El Bey’s religious protest and permanently secure the house.

 

Sources:

[1] Google Definitions

[2] http://www.wsoctv.com/news/news/local/woman-accused-squatting-piper-glen-home-arrested/npP6z/

[3] https://en.wikipedia.org/wiki/Moorish_Science_Temple_of_America

[4] http://www.wsoctv.com/news/news/local/squatter-says-religion-protects-her-prosecution/npMzQ/

Supreme Court to Hear Texas Abortion Law Case

Posted by on 6:56 pm in Uncategorized | 0 comments

By William G. Hodge

For the first time since 2007, the Supreme Court has agreed to hear its first major abortion case that would affect millions of women as it pertains to the constitutional provisions governing abortion rights.

The case in question concerns a challenge to Texas law that would force the nation’s second-most-populous state to close a majority of its forty-two clinics because of the strict requirements imposed on abortion providers. The law would require abortion clinics to meet the same standards as hospital-style surgical centers and mandates that a doctor have admitting privileges at a hospital within thirty miles of the facility where he or she performs.

The Texas lawmakers reason that the measures would ensure that Texas women are not subjected to substandard conditions at abortion facilities. Meanwhile, the abortion providers contest that the regulations are expensive, unnecessary, and intended to put many of the providers out of business. Furthermore, abortion advocates say that the regulation would create an undue burden on the constitutional right to abortion because, the regulation would close all of the facilities west of San Antonio and cluster the facilities in four metropolitan areas: Austin, Dallas-Fort Worth, Houston, and San Antonio.

This case’s decision, which should be expected in June of 2016, could turn out to be the third installment in a legal trilogy on the scope of the constitutional right to abortion after Roe v. Wade in 1973 and Planned Parenthood v. Casey in 1992.

The lower courts are divided over whether they should accept lawmakers’ assertions about the health benefits of abortion restrictions at face value or investigate to determine whether the assertions are backed by evidence.

In June, the United States Court of Appeals for the Fifth Circuit, in New Orleans, largely upheld the contested provisions of the Texas law, using the more deferential approach. A panel of the court ruled that the law, with minor exceptions, did not place an undue burden on the right to abortion.

This case’s decision is important because of its legal implications on a constitutional right but also political as the presidential campaign enters its final stretch, thrusting the divisive issue of abortion to the forefront of public debate.

 

Source: http://www.nytimes.com/2015/11/14/us/politics/supreme-court-accepts-texas-abortion-law-case.html?_r=0

 

Protecting the Unprotected: States Pass Laws to Control Wildlife Trade

Posted by on 6:47 pm in Uncategorized | 0 comments

By: Stacey Amanda Cargile

 

The state of Washington just passed a new wildlife trafficking law that makes the purchase, sale, or distribution of parts or products made from ten endangered animals a Class C felony.[1] Protecting rhinos, tigers, lions, elephants, leopards, cheetahs, marine turtles, sharks, rays, and pangolins, this new law packs a hefty punch, with violators facing up to five years in prison and a $10,000 fine.[2] Passed with “overwhelming support,” Washington’s new law is a sign of a possible shift in the public’s perspective of wildlife trade issues.[3] While in the past many people were likely unaware of the extent of wildlife trafficking or its associated problems, events such as the killing of Cecil the lion on July 1, 2015, have brought the issue to public light.

 

Cecil the lion became a household name when he was illegally shot and killed by an American visitor to Zimbabwe who paid $50,000 for the hunt.[4] The United States Fish and Wildlife Service (FWS) has recommended that the African lion be protected as a threatened species under the Endangered Species Act.[5] If this listing is approved, the lion will be protected through restrictions on trade and taking—defined as “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.”[6] This protection would prevent trophy hunters from legally importing the spoils of overseas hunts of lions such as Cecil.

 

Washington’s new law, however, helps provide these protections for endangered animals without relying on action by the FWS. Cecil was hunted for a personal trophy, but many animal parts and products are imported for further trade for everything from souvenirs, trinkets, medicinal ingredients, fashion, and food products.[7] By prohibiting the sale or trade of these products within the state’s borders, regardless of the legality of the importation, these laws can virtually eliminate the market and give importers no place to sell their animal product wares. While the wildlife black market still presents an enormous problem—valued at $10billion USD in 2009 and ranking as the third largest black market behind guns and drugs—eliminating the legal market for these products will go a long way towards protecting these species.[8]

 

Washington is not the only state to have passed this type of legislation. California, New Jersey, and New York have similar, though less stringent, laws, and an Oregon law is in the works.[9] North Carolina, however, has nothing of the kind. North Carolina General Statute §113-294 addresses the sale and trade of wildlife, specifically outlining fines and penalties for several species, including beaver, deer, elk, bear, and wild turkey.[10] As a Class 2 misdemeanor, the unlawful sale or trade of these species is punishable by a fine of not less than $250.[11] The sale or trade of endangered species, a Class 1 misdemeanor, is addressed in N.C.G.S. §113-337.[12] Although Article 25 of the North Carolina General Statutes is entitled “Endangered and Threatened Wildlife and Wildlife Species of Special Concern,” the prohibition on sale or trade only applies to those species included on a protected wild animal list.[13] While lions such as Cecil would seem to be a “species of special concern,” NCGS §113-331(8) restricts this designation to those species native or once-native to North Carolina. This leaves species such as African lions—those not yet listed as threatened or endangered but —to fall through the gap and remain essentially unprotected.

 

Sources:

 

[1] http://www.theolympian.com/news/local/politics-government/election/article42498507.html

[2] Id.

[3] Id.

[4] http://www.cbsnews.com/pictures/cecil-the-lion-killed-by-hunter/

[5] http://www.fws.gov/endangered/what-we-do/african_lion.html

[6] http://www.fws.gov/endangered/what-we-do/listing-overview.html, 16 U.S.C.S. §1532

[7] http://www.traffic.org/trade/

[8] http://www.smithsonianmag.com/people-places/wildlife-trafficking-149079896/?no-ist

[9] http://www.theolympian.com/news/local/politics-government/election/article42498507.html

[10] N.C.G.S. §113-294

[11] N.C.G.S. §113-294(a)

[12] N.C.G.S. §113-337(b)

[13] N.C.G.S §113-337(a)

A Stockholder’s (Non-Existent) Right to Receive Dividends

Posted by on 7:16 pm in Uncategorized | 0 comments

By Ryan Vince

A dividend is a special type of distribution made by a corporation to its shareholders—the owners. These payments (dividends) are typically taken out of the corporation’s current or retained earnings and given to shareholders in proportion to the number of shares that each shareholder owns. However, contrary to common belief, a shareholder will probably never see a return on his or her investment through a receipt of corporate dividends.

A corporation’s board of directors normally has the sole authority to decide whether to issue dividends to the shareholders. Unless the articles of incorporation or a certain statute says otherwise, payment of dividends will not be required. Regardless of the wisdom or fairness in the decision to pay dividends, the board will usually be protected by the business judgment rule. The business judgment rule is the presumption that the board of directors acted under sound business judgment and in good faith. In the absence of fraud, bad faith, or other misconduct, courts will decline to interfere with a decision made by the board of directors.

Courts have recognized that the board of directors owes fiduciary duties of good faith and fair dealing toward minority shareholders. When it comes to the initial payment of dividends, the board of director’s only duty is to make a good-faith decision that reflects legitimate business purposes rather than the private interests of the directors. In other words, a board of directors can always choose not to pay dividends to the owners of the corporation as long as the board does not act in bad faith or abuse its discretion. This provides the board with a wide range of discretionary power in regards to issuing dividends. Generally, the board of directors must act in the best interests of the corporation, but in most instances, this precludes the shareholders’ ability to receive or compel the payment of dividends.

When a person invests in a corporation by purchasing stock, that person becomes a “part-owner.” This investor has a general expectancy to receive a return on his or her investments, and as a new owner, may want his or her fair share of corporate profits. Unfortunately, the board of directors decides on whether to issue dividends, and most times, will not do so. The board of directors’ desire for company growth is often contrary to the shareholder’s interest in receiving corporate profits, and the business judgment rule provides almost infinite protection to the board’s dividend policy. Because of the extreme difficulty in proving a fraudulent dividend policy, self-interest in the decision by the board, or some other breached duty, a shareholder’s legal action to compel payment of dividends is virtually designed to fail.

The desired benefit of bringing a direct suit against a corporation for its dividend policy will rarely outweigh the costs of bringing the action. Thus, in most cases, the shareholder will bring a derivative suit for the purpose of enforcing a corporate right. Because of the supposed “harm” to the corporation, the corporation will bring the action and bear the costs of litigation, making this type of action more suitable to the complaining shareholder. However, a derivative suit has several strict procedural limitations, one being the act of making a demand on the board. In some jurisdictions, a demand may be excused when the demand would have been “futile,” or useless, because directors were actually self-interested or there is evidence clearly showing misconduct by the board. Nevertheless, a high degree of self-interest is required to excuse demand, and in most cases, the board of directors will request that the derivative suit be dismissed based on the findings of a special litigation committee. The members of this committee are typically disinterested, and if so, the court will give deference to the committee’s decision not to bring the derivative suit because doing so would not be in the best interests of the corporation.

As a result, a shareholder with a legitimate complaint may be denied the opportunity to compel dividends. Not only is an attempt to compel the declaration of dividends very burdensome, gaining access to the courts may be just as difficult. The strict procedural requirements of a derivative suit, the business judgment rule, and the special litigation committees, have all been effective in precluding the consideration of shareholders’ actions for payment of dividends. It is important that the board of directors be given free-reign when making managerial decisions. Conversely, the power of the owners to enforce the corporation’s and their own rights should become more flexible. The business judgment rule provides a nearly impenetrable wall of protection to the decisions of the board, but the strict procedures of a derivative suit seek to thwart any shareholder’s chances in receiving a share of the corporation’s profits.

 

 

References

  1. http://www.hofstralawreview.org/wp-content/uploads/2013/08/09_4HofstraLRev731975-1976.pdf
  2. https://www.sdcba.org/index.cfm?pg=BusinessandCorporateArtice7142014
  3. http://digitalcommons.pace.edu/cgi/viewcontent.cgi?article=1589&context=plr
  4. Textbook: Business Structures (4th Edition) by David G. Epstein, Richard D. Freer, Michael J. Roberts, and George B. Shepherd

NEW NC LAW CHANGES THE SALE OF HARD LIQUOR

Posted by on 7:08 pm in Uncategorized | 0 comments

By: Audrey Henderson

 

On October 1, 2015, a new set of laws came into effect in North Carolina ranging from abortion to same-sex marriages to medical marijuana. Needless to say, the 2015 North Carolina legislative session was a successful year for conservatives. However, one of these laws in particular affected the sale of spirituous liquor at distilleries. [1].

“ABC” stands for Alcohol Beverage Control. The ABC Board was established in North Carolina in 1937 after the repeal of Prohibition, and after realizing that a total ban on alcohol was ineffective. The state gave local jurisdictions the opportunity to vote on whether alcohol should be sold in their area, as well as what types should be sold. Some counties voted to create the ABC controlled system, while others were created at the city level. Mecklenburg county, for instance, voted to have the ABC controlled system. It was further decided that hard liquor was only to be sold in ABC stores, not wine and beer. [2]. According to the National Alcohol Beverage Control Association, there are seventeen states and jurisdictions in Alaska, Maryland, Minnesota, and South Dakota that have some type of a controlled alcohol system. [3].

North Carolina’s laws regarding liquor are as follows: you are not allowed to buy alcohol on Sundays; you cannot purchase alcohol from restaurants or bars on Sundays until noon; and you can only purchase hard liquor from ABC stores. For a long time now, North Carolina has tightly controlled the sale of hard liquor through state-run ABC stores. However, the new North Carolina law allows for the sale of spirituous liquor outside of those stores. This has not been allowed since the time of Prohibition.

The change in the law allows North Carolina distilleries to sell exactly one bottle of its product, per calendar year, to customers. In order to regulate this, distilleries are now required to maintain records of the purchase date and driver’s license of each customer. See HB-909: ABC Omnibus Legislation.

North Carolina has been lagging, for many years, behind other states who allow the sale of hard liquor at distilleries. While this new change may be small to some, it is in fact a significant benefit to distilleries. The North Carolina Distillery Association believes the passage of the law “will grow sales for [the] young industry, expand North Carolina agriculture, create new job opportunities, and encourage tourism across the state.” [4]. Additionally, some owners believe that getting people acquainted with a bottle of hard liquor through distillery tours will result in more profits for them, but also more sales from ABC stores.

On the other hand, critics of the new legislation believe this is a gateway to the privatization of hard liquor. Reverend Mark Creech of the Christian Action League says, “once you start allowing the sale of liquor outside our ABC stores by anybody, you will be hard-pressed to deny that right to others.” [5]. Needless to say, it looks as though North Carolina is taking a small step forward in privatizing the sale of alcohol, thus joining the majority of other states with such systems.

 

Sources:

[1] https://www.brnow.org/News/October-2015/2015-N-C-Legislature-scores-high-for-conservative

[2] http://www.meckabc.com/About-Us

[3] http://www.nabca.org/States/States.aspx

[4] http://ncdistillersassociation.org/sales/

[5] http://www.charlotteobserver.com/living/food-drink/article42583773.html

Dirty Tricks Duke Energy’s Attempt to Sweep All Coal Ash Litigation into a Single Settlement Agreement

Posted by on 6:41 pm in Uncategorized | 0 comments

By: Stacey Amanda Cargile

 

In February of 2014, the Dan River in northern North Carolina was inundated by an estimated 50,000 to 82,000 tons of coal ash.[1] For two weeks, the coal ash flowed seventy miles downstream before settling to the riverbed.[2] Arsenic levels soared to four times the levels allowed by state water quality standards.[3] The city of Danville, which relies on the Dan River as a water source, is located only twenty miles downstream of the spill site.[4]

The source of this toxic pollution was a faulty impoundment lagoon at Duke Energy’s Dan River Power Station.[5] Coal ash is created when coal is burned to generate electricity. At its fourteen power facilities in North Carolina, Duke Energy[6] stores millions of tons of coal ash in unlined pits or lagoons and behind earthen dams.[7] These lagoons often leak, allowing the toxic chemicals to seep into groundwater, rivers, lakes, and drinking water reservoirs.[8] Sometimes the lagoon suffers a complete failure, as in Kingston, Tennessee, where in December of 2008, an earthen dam broke, dumping 1.1 billion gallons of coal as into the Emory and Clinch Rivers.[9] Despite containing twenty-five heavy metals, other toxic chemicals, and being stored in a manner known to be faulty and dangerous, coal ash is currently less regulated than household garbage.[10]

Several conservation nonprofit organizations[11] banded together to initiate and intervene in lawsuits meant to hold Duke Energy accountable, require that it clean up contamination caused by faulty lagoons, and change storage practices to prevent future spillages.[12]  While four of these cases were pending in North Carolina Superior Court (allegedly due to stalling by the North Carolina Department of Environmental Quality (“DEQ”) and a failure to prosecute[13]), in March of 2015, the DEQ fined Duke Energy Progress $25.1 million for violations at its Sutton facility near Wilmington, NC.[14] Duke Energy Progress appealed this fine to the Office of Administrative Hearings.[15] Neither Duke Energy Carolinas, nor any of the interested conservation nonprofit organizations, were parties to the penalty case.[16] The only parties were Duke Energy Progress and the DEQ.[17] Ultimately, the penalty case ended in a settlement on September 29, 2015, with the settlement approved by the Administrative Law Judge the very same day the order was filed.[18]

Under this settlement agreement, the $25.1 million was reduced to $7 million.[19] More troubling to the conservation organization parties who had cases pending in Superior Court, however, certain language in the agreement grabbed far more power than was appropriate. Although not parties to the penalty case, the organizations filed a petition for judicial review on October 13, 2015, alleging that the agreement far exceeded its scope and authority and is thus void.[20]

First, in addition to the dramatic decrease of the fine, the settlement agreement expressly states that the agreement fully resolves “all issues related to groundwater contamination with coal ash facilities . . . including all groundwater violations alleged in the state enforcement actions currently pending in Superior Court in Wake and Mecklenburg County.”[21] By doing so, Duke Energy Progress and the DEQ attempted to sweep a judicial matter under an executive rug. The pending cases were stalled in Superior Court, while the penalty case was an administrative matter being resolved through hearings before an Administrative Law Judge. This attempt to do away with a judicial matter in an administrative court is a clear overstepping of authority and a separation of powers issue. At the same time, the settlement agreement was made entirely independent of multiple parties to the Superior Court cases. The conservation organizations and Duke Energy Carolinas were not parties to the penalty case, yet the resulting settlement agreement purports to resolve the issues for those entities without having provided notice or opportunity to even participate. A basic understanding of high school civics should be sufficient to trigger cause for concern.

Second, Administrative Law Judge’s determination that the settlement agreement is “fair and comprehensive” was based on a record devoid of substantial evidence.[22] While administrative agencies are generally afforded a level of deference as experts in the field, this deference must be supported by actual evidence and data. Here, however, with such a sparse record, the conservation organizations argue that the resulting agreement is arbitrary and capricious, as well as the result of just the sort of closed-door, secretive deal that administrative processes are intended to avoid. Especially in environmental law matters, where scientific information and very specific pollutant measurements can make or break a case, a record is essential to educate the court and parties and to support and justify the result. Without any sort of record on which the decision rests, the Administrative Law Judge’s approval of the settlement agreement has no foundation and cannot stand.

Allowing the judicial approval of this settlement agreement to stand without careful review will undermine protections and procedures intended to prevent the very sort of collaboration between polluters and government seem here.

 

Sources:

[1] http://blog.cleanenergy.org/2014/02/04/dan-river-coal-ash-disaster-near-eden-north-carolina/

[2] Id.

[3] http://appvoices.org/2014/02/07/coal-ash-spill-pollutes-dan-river/

[4] Id.

[5] Id.

[6] “Duke Energy” is used collectively to refer to two separate Duke Energy entities: Duke Energy Progress and Duke Energy Carolinas.

[7] http://appvoices.org/coalash/; https://www.southernenvironment.org/uploads/words_docs/2015-10_DENR-Duke_Coal_Ash_Timeline.pdf

[8] https://www.southernenvironment.org/uploads/words_docs/2015-10_DENR-Duke_Coal_Ash_Timeline.pdf

[9] http://appvoices.org/coalash/tva-spill/

[10] http://appvoices.org/coalash/

[11] Cape Fear River Watch, MountainTrue, Roanoke River Basin Association, Sound Rivers, The Waterkeeper Alliance, and Winyah Rivers Foundation

[12]https://www.southernenvironment.org/uploads/words_docs/Petition_for_Judicial_Review_Wake_County_File_Stamped.pdf

[13] Id. at 2.

[14] Id. at 12.

[15] Id. at 15.

[16] Id.

[17] Id.

[18] Id. at 14.

[19] Id.

[20] Id. at 15.

[21] Id. at 17.

[22] Id. at 19.