BR&B Submits Third Circuit Amicus Brief on Behalf of the Robert F. Kennedy Center for Justice and Human Rights

2/11/2015 - On February 11, 2015, Barrack, Rodos & Bacine submitted an amicus brief on behalf of the Robert F. Kennedy Center for Justice and Human Rights, also known as Robert F. Kennedy Human Rights, in Trinity Wall Street v. Wal-Mart Stores, Inc., a dispute arising from Wal-Mart’s refusal to include a shareholder proposal in its 2014 proxy materials.

In December 2013, Trinity Wall Street, a church parish located at the corner of Broadway and Wall Street in New York City, and a shareholder of Wal-Mart Stores, Inc., submitted a shareholder proposal for inclusion in Wal-Mart’s proxy materials for its 2014 annual shareholder meeting.  The proposal was submitted in the wake of the unspeakable tragedy involving the mass killing at the Sandy Hook Elementary School in Newtown, Connecticut, and was intended to cover policies and standards that would be applicable to determining whether Wal-Mart should continue to sell assault-style firearms with high-capacity magazines.  The proposal sought to be presented for approval by Wal-Mart’s shareholders, would require Wal-Mart’s board to provide specific oversight “concerning the formulation and implementation of, and the public reporting of the formulation and implementation of, policies and standards that determine whether or not the Company (i.e., Wal-Mart) should sell a product that: (1) especially endangers public safety and well-being; (2) has the substantial potential to impair the reputation of the Company; and/or (3) would reasonably be considered by many offensive to family and community values integral to the Company’s promotion of its brand.” 

After Wal-Mart refused to include the proposal in its 2014 proxy materials, Trinity brought suit in the U.S. District Court in Delaware.  On November 26, 2014, the District Court determined that Wal-Mart had wrongfully excluded the proposal from its proxy materials, and ordered the Company to include the proposal in the proxy materials for its upcoming 2015 annual shareholder meeting.  The District Court ruled that the proposal did not relate to Wal-Mart’s “ordinary business operations,” which would have allowed the Company to exclude it, but rather raised policy issues that are appropriate for shareholder consideration.  As the District Court wrote: “The significant social policy issues on which the Proposal focuses include the social and community effects of sales of high capacity firearms at the world’s largest retailer and the impact this could have on Wal-Mart’s reputation, particularly if such a product sold at Wal-Mart is misused and people are injured or killed as a result.”

Wal-Mart appealed the District Court’s decision to the U.S. Court of Appeals for the Third Circuit.  In support of Trinity’s position on the appeal, Barrack, Rodos & Bacine submitted an amicus brief on behalf of the Robert F. Kennedy Human Rights.  The brief filed by BR&B takes the position that upholding the District Court’s decision is necessary to protect and facilitate the use of the Sustainable Investing investment philosophy as a best practice in the financial evaluation of a company and the role of shareholders. Sustainable Investing, where shareholders integrate Environmental, Social, and Governance (“ESG”) factors into their financial objectives, has been gaining visibility for its utility in evaluating the long-term financial health of a company and shareholder value. The brief filed by the Firm includes extensive research and findings concerning gun violence and mass killings, examples of boards of other companies having taken actions in response to social and public health imperatives, and a series of shareholder proposals that have been offered to ensure that companies are abiding by the Sustainable Investing factors in light of changing societal demands for companies to engage in socially responsible behavior.  The brief concludes that the sale of products that are dangerous to public health is a serious policy and human rights issue, and that upholding the District Court’s decision is necessary to protect Sustainable Investors’ attempts to ensure that Wal-Mart is appropriately and effectively applying the relevant Sustainable Investing factors.

Click here for a copy of the amicus brief submitted by BR&B on behalf of Robert F. Kennedy Human Rights.  BR&B is gratified and proud to have filed the amicus brief on behalf of this important organization.  A ruling on this case is expected in the coming months.