A Federal Appeals Court has blocked Trinity Wall Street’s shareholder proxy submitted to Wal Mart’s annual meeting calling for the conglomerate to stop selling unwholesome products.
A Federal Appeals Court has overturned a lower court ruling requiring Wal-Mart Stores Inc. to let shareholders vote on a proposal submitted to its annual meeting by from the parish of Trinity Wall Street to halt sales of ammunition clips and explicit rap music in its stores.
On 14 April 2015 Judge Thomas Ambro overturned the decision by District Judge Leonard Stark, who last year ruled Trinity Wall Street’s proposal would be “appropriate for a shareholder vote.” The Appeals Court said “Wal Mart may exclude Trinity’s Proposals from its 2015 proxy materials.”
“The Third Circuit reached the right decision in reversing the district court’s ruling,” Randy Hargrove, a Wal-Mart spokesman, told Arkansas Business. “We appreciate the court’s quick consideration of the issues.”
Attorneys for Wal-Mart had argued that the district court’s ruling would have “far-reaching implications for the entire retail industry because it could force public companies to have a shareholder vote to make decisions on ordinary business matters like what products a retailer sells.”
On 1 April 2014 the parish filed a complaint in the Delaware Federal District Court asking it to compel Wal-Mart to allow materials to be distributed to shareholders that calls for the company’s board to regulate the sale of products that offend “family values.”
The suit was filed after the Securities and Exchange Commission held Wal-Mart management could lawfully exclude Trinity Wall Street’s proposals from the meeting.
In its complaint the church stated the sale of products that were dangerous to the public, may hurt the company’s reputation or offend family values, such as the sale of ammunition clips that hold more than 10 rounds or music that endorses violence and sex harmed the company’s market value.
In a letter to his congregation, the then rector of Trinity Wall Street, the Rev. James Cooper wrote:
As you know, Trinity Wall Street has long recognized that our considerable resources give us both a responsibility and an opportunity to engage constructively with businesses in which we invest where opportunities exist to enhance returns for both shareholders and society.”
“As part of this effort, we recently initiated dialogue with certain companies toward assuring they balance the benefits of selling certain products against the risks these sales pose to the public and to the companies’ reputation and brand value. As responsible investors, not just socially responsible investors, we have done so in a manner which we believe is consistent with the business interests of each company.”
Dr. Cooper said the parish had submitted a proposal to the corporation’s annual meeting asking “that Wal-Mart’s Board of Directors oversee the development of policies and standards to guide management’s decision whether or not Wal-Mart should sell products falling in one or more of three categories: products that are 1) especially dangerous to the public, 2) pose a substantial risk to Wal-Mart’s reputation, and 3) would reasonably be considered offensive to the community and family values that Wal-Mart seeks to associate with its brand. The Proposal provided that it was intended, among other things, to cover policies and standards that would be applicable to determining whether or not Wal-Mart should sell guns equipped with magazines holding more than ten rounds of ammunition (“high capacity magazines”).”
Dr. Cooper argued this was not an “anti-gun proposal”, but a measure allowing shareholders “be allowed to consider whether the Board has an obligation to assure that the company’s standards and values are uniformly considered and applied when the sale of certain products can have momentous consequences.”
Wal Mart v Trinity Wall Street Order Third Circuit Court of Appeal 2015.04.14