» Latest Post: November 07, 2015 June 23, 2017 

Wal-Mart's Gun Rack: Military Style Rifles
Posted By: Scott Weber 03/24/2015 @ 08:16 AM

Wal-Mart Fights Bid to Curb Gun Sales of Military Style Rifles

 By Joann S. Lublin, WSJ

      A U.S. appeals court showdown looms next month for Wal-Mart Stores Inc. in a case with potentially broad impact on how much influence investors can have over their companies.

     The dispute concerns Wal-Mart’s sales of assault rifles with high-capacity magazines. New York’s Trinity Wall Street church wants shareholders to vote on a resolution calling on Wal-Mart’s board to review management decisions to sell the weapons, as well as other products that could harm the company’s reputation.

     A district court sided with Trinity in November and said that Wal-Mart has to include the proposal on the corporate ballots it will send out this spring. Wal-Mart appealed, arguing that the shareholder resolution meddles in regular business decisions and is at odds with decades of guidance from the Securities and Exchange Commission that such affairs are off limits.

     The gun issue is controversial. But it is the corporate-governance question that has elevated the case from a politicized dispute between the company and a tiny shareholder into one that has drawn widespread attention from prominent law professors and big-business groups. They hope the proposal will answer a question that rarely reaches the federal court system’s upper levels: How much influence should investors have over a company’s day-to-day operations?

     Such questions were once confined to theoretical debates between corporate boards and a small community of governance experts. They have become more important with the rise of activist investors who have leveraged new shareholder powers to press their agendas at big companies.

     “There is a fundamental governance principle at stake—the right for shareholders to communicate with directors about important policy matters,’’ said Lynn Stout, a Cornell University professor of corporate and business law. She and about three dozen other law professors submitted a friend of the court brief in support of Trinity.

     Wal-Mart believes a court defeat next month could force companies to help circulate all sorts of investor proposals that interfere with basic business decisions, spokesman Randy Hargrove said. The broader business community shares that concern.

      “If not reversed, the district court’s decision could precipitate an avalanche of shareholder proposals and related litigation,’’ the Business Roundtable said in a court filing. The group represents chief executives of the largest U.S. corporations.

     Exactly which issues companies may omit from their annual-meeting ballots as “ordinary business” has been batted around by the SEC and federal courts for decades, governance experts said. The SEC generally allows companies to exclude more business-oriented proposals, including those that involve their choices of what to sell. But it has an exception for “sufficiently significant social policy issues,” which could in theory include guns.

     “It’s a ping pong ball,’’ said Charles Elson, head of the Weinberg Center for Corporate Governance at the University of Delaware’s business school and a director of HealthSouth Corp. and Bob Evans Farms Inc. “This will be an important ruling, because the court could determine the boundaries of excluding resolutions as ordinary business.’’

     Trinity, a 318-year-old Episcopal church where George Washington once worshiped, has historically involved itself in instances where corporate policy and social issues intersect. It owned 3,500 Wal-Mart shares as of Jan. 31 and initially submitted its nonbinding resolution in December 2013, following the massacre of children at a Newtown, Conn., school.

     Wal-Mart sells firearms at less than half of its 4,500 U.S. stores. “Over the years we’ve been very purposeful about finding the right balance between serving hunters and sportsmen and ensuring that we sell firearms responsibly,” Mr. Hargrove said. He declined to discuss whether the company thinks that selling high-capacity assault rifles poses a risk to the company’s reputation.

     The retailer doesn’t sell items such as adult films, or music with warning labels or, outside of Alaska, handguns, and Trinity considered its willingness to sell the assault rifles a departure from those values.

     Wal-Mart asked the SEC to allow the company to leave the resolution off its proxy materials because it dealt with “ordinary business operations.” In March 2014, the Securities and Exchange Commission agreed, because the proposal related to products offered for sale.

     Trinity filed suit in April in the U.S. District Court in Delaware but failed to win an injunction that would have put the measure on the ballot. After months of further deliberation, the court sided with Trinity, saying the resolution didn’t interfere with the company’s day-to-day management and addressed significant social-policy issues.

     A three-judge panel in Philadelphia has scheduled an April 8 hearing on Wal-Mart’s appeal. The judges will likely act swiftly. Wal-Mart’s 2015 proxy materials are due to come out by late April, for the annual shareholder meeting in June.

     Regardless of the court outcome, Trinity’s resolution wouldn’t likely win a majority of the vote. Wal-Mart’s founding Walton family owns about 50% of the company’s shares. The church is hoping to win enough support to prompt the board to look more closely at the issues.

     “What’s wrong in their governance is the inconsistency,” Rev. Dr. William Lupfer, Trinity’s rector, said of Wal-Mart’s board. “We want to work with the board to challenge them in a positive way.”


Latest Headlines
11/07 - Grizzly. Delist. Hunt.
10/11 - A Black Man Reflects On Gun Ownership
07/09 - Obuma STILL Best Guns Salesman!
06/04 - Rural Idaho School Arms Up
06/03 - USA Olympic Shooters Earn 4 Medals
06/02 - Movie Star Expounds on 2nd Amendment
05/28 - Pilot Receives Fine For Elk Hazing
05/28 - U.S. Senate: 'Global Whining' NOT Real
05/27 - A Lesson On The Origin of Left & Right
05/25 - CA Coyote Attacks 3-Year Old In Park
05/06 - Colorado Prom Photo Is A Classic!
04/29 - Traveling Aboard With Hunting Firearms
04/24 - Bill Proposes To Alter 4473 Form Questions
04/22 - Chicago Uber Driver Defends With Concealed Carry
04/22 - First Shots: Overcoming the Fear Factor
04/22 - Earth Day 1970 'Predictions' - Ha!
04/22 - U.S. Congressman In Hot Water Over AR-15
03/30 - SCI Reports Trophy Import Rules
03/26 - Avian Influenza Detected In Wyo Geese
03/26 - Chicken Liberal's Weather Report
03/24 - Wal-Mart's Gun Rack: Military Style Rifles
03/22 - Tough NJ Gun Laws Snare Legal Gunners
03/22 - Sheriff Mack: Guns Up, U.S. Safer
03/21 - Hunt For Testosterone and Love!
03/18 - SCI's Lobby Day Is May 7
03/17 - Bipartisan Sportsmen's Act Moving
03/14 - Anti-Gun Dems Push For Ammo Ban
03/11 - U.S. Senator Letter To ATF
03/11 - ATF Pulls Proposed .223 Ammo Ban
02/28 - .223 cal. Ammo Sales Surge!
02/28 - NRA: Wyo HB 114 Gutted - No Go
02/26 - My Insurance Went Up From $189-$403
02/26 - So Very True...
02/26 - Yes Liberals, Yes...
02/26 - Author John Lott Testifys on HB114
02/18 - Concealed Carry On College Campuses
02/18 - PA Town Packin' Heat Signs!
02/16 - Animal Planet Follows Wyo Game & Fish
02/16 - NSSF - Latest Firearms News
02/15 - ATF Rules on Firearm Mfg.
02/15 - Banks Can No Longer Deny Gun Dealers
02/15 - ATF May Ban Common AR-15 Ammo
02/15 - Wyo: Repeal Gun Free Zones Act
02/15 - NRA Supports S. 498
02/05 - Crime Down In 2014 Despite Record Gun Sales
02/05 - Jan. 2015 NICS 2nd Highest In History!
02/01 - Armed Teachers Defend Schools
01/29 - DEA Had Planned Car Plate Data Base
01/28 - Fun Facts You Don't Know!
01/27 - Court Rules with SCI On Lead Ammo
01/27 - Lawsuit To Repeal I-594
01/26 - SHOT Show 2nd Largest EVER!
01/26 - Canada's Top List of USA Stupidity
01/25 - As Always, Women Big Gun Buyers
01/25 - Oh That Obuma... Yet Again So Foolish...
01/24 - Oregon Gun Buyback Big Joke
01/23 - The Girl, Glock and Gunny
01/23 - 'Elephant and the Pauper' Video
01/21 - Kid Rock Scores on nice Mt. Lion
01/20 - Abandoned Winchester 1873 Sparks Research
01/19 - New Book Sheds Light on School Murderers
01/19 - Liberal Dopes: 'Gun Ban'
01/18 - Wyoming 4th Safest State - We're Armed!
01/15 - NRA/SCI Elephant Ivory Litigation Update
01/15 - The Endangered Species Act
01/15 - Safari Club International's Litigation Roster
01/14 - No More Sean Penn Movies For Me!
01/11 - Here We Come Obuma! Sign it!
01/06 - NICS Checks 2nd Highest In December 2014
01/06 - Quick Gun & Ammo News
12/31 - Happy New Year From The Gunrunner!
12/31 - Liberal Anti-Gun Maryland - Watch Out!
12/31 - A Concealed Carry Handgun Lesson
12/31 - Fight Against WA I-594
12/31 - One More 2014 Gun-Related Joke
12/30 - NRA & SCI Ivory Ban Update
12/30 - 2015 Good Year For Wyo Hunting/Fishing
12/30 - Doormat of the Year: See ya!
12/29 - Cody Wolf Shot In Utah
12/26 - Wayne LaPierre: 'When The Glass Breaks'
12/25 - Today's Kids: Lost In Videoland
12/24 - SCI Lawyer Team Fighting For YOU!
12/24 - SCI Files A Motion For Park Elk Hunt
12/24 - Dec. Appeals Filed In Wyo Wolf Delisting
12/22 - MT Self-Defense Verdict: MURDER
12/19 - 200 Lawmakers Band Together Against 2nd Amd
12/19 - 14-Year Old NC Boy Shoots Home Invader
12/17 - Liberal VA Gov Wants More 'Gun Control'
12/17 - Banks Refusing Business With Gun Dealers
12/16 - Liberal Idiots: Blame The Gun!
12/16 - When FREE Stuff From The Gov Is Not Enough...
12/16 - Get your X-Mas Presents FREE In Ferguson!
12/16 - Solution To Ferguson's Rioting
12/15 - Control Dogs Around Wintering Wildlife
12/15 - Ohio Concealed Carry Wish List Passes
12/15 - Texas Lawmakers Move To Open Carry
12/13 - World Murder Stats- Where NOT To Visit!
12/07 - New International Bunkers Propel Team To Victory
12/01 - USA National Shooting Teams On Fire!
11/30 - Florida 'Stand Your Ground' - A Court Test