I am a nerd. I’ve admitted as much in the past. It’s a point of pride for me, and I express my fondness for all things nerdy in a wide range of fashions. I’m a board game nerd, a Star Wars nerd, a Lord of the Rings nerd, and a science nerd. I developed those propensities all in my spare time though. Only one version of my nerdiness originated in formal academic study – that of the legal nerd.
That’s right, this blog post is all about the law! Aaaaaaaaaaaaaaand there goes 90% of my readership.
Everyone who goes to law school in the United States studies a handful of the same exact classes, usually in the first year of study. After that, students can specialize in whatever field they like. Those core classes, though, are universal. They include, for instance, Constitutional Law, Contracts, Property and Civil Procedure.
Now, I have happily forgotten most of what I learned in those classes. I was particularly pleased to leave Civil Procedure in the rearview mirror. But for me, and I think for every law student, a few things will always be burned in my memory.
One example of this is in Constitutional Law and our study of the Commerce Clause. I distinctly remember that the Commerce Clause is exactly 16 words long, granting the Federal government the power “to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." That tiny bit about regulating “commerce … among the several States”? That has been the basis for about a bajillion Federal laws. Quite often, our Constitution is not terribly…specific.
A more entertaining example is the doctrine of adverse possession. In Property, students spend a couple of classes learning that, if all of the nitty-gritty elements are satisfied, one person who is trespassing on another person’s property can LEGALLY ACQUIRE TITLE TO THAT PROPERTY. Now, one of those elements is that the trespassing has to go on for years and never be challenged by the owner, so the doctrine is rarely invoked. Still, ask any law student about adverse possession and I guarantee you they’ll give you a wry smile.
The last example I will give, before making a point that is relevant to environmentalism, is what we learned in Corporations (not a required class, but one that most students take).
In addition to being the first state to ratify the Constitution, Delaware is a special state for another reason. More than half of all publicly traded corporations are incorporated in Delaware. When it comes to corporate law, Delaware state law matters. A lot.
I won’t bore you with the reasons why (ask anyone who took Corporations if you want to know). Instead, my relevant point is that something important happened in Delaware five years ago. On August 1, 2013, Delaware’s Public Benefit Corporations laws took effect. Up to that point, if you wanted to have a Delaware corporation and try to make a profit at the same time, you had to be an ordinary corporation. Legally, the board of directors of a corporation owes a fiduciary duty to shareholders, which has generally been interpreted by courts to mean that directors must place a corporation’s profitability as their highest concern.
That has created a bit of tension for us environmentalists. History is littered with examples of corporations that have harmed the environment in the name of earning a profit. Wouldn’t it be nice if a corporation could simultaneously seek a profit while balancing that goal with environmental and social concerns? That’s exactly what a benefit corporation does. It is a legal structure that requires businesses to “operate in a responsible and sustainable manner.”
I’ll pause there and pick this up next week, because benefit corporations go hand in hand with another category of corporations – B Corps. See y’all next week.