New York Church Taking Walmart To Court Over Gun Sales

[The Legion]

http://www.msn.com/en-us/money/companies/new-york-church-taking-walmart-to-court-over-gun-sales/ar-AA9aigc

 

 

Trinity Church sits in the shadow of lower Manhattan’s One World Trade Center, its brownstone Gothic Revival spire dwarfed by the Financial District’s surrounding skyscrapers.

On 9/11, Trinity provided refuge from the plume of debris when the towers fell just three blocks north. The church survived without much damage. Today, it’s a landmark and site of remembrance as much as a place of worship.

It’s also extravagantly wealthy, as far as Episcopalian churches go, thanks to the 215 acres England’s Queen Anne donated to the diocese in 1705, when the area was farmland. Trinity has sold most of that land over the years but remains one of Manhattan’s largest landowners. It estimates the value of its assets at over $2 billion.

One of the smaller investments in Trinity’s diverse portfolio: about $2,000 worth of shares in Walmart. This spring, the church will face off against the big-box giant in a court case that could change the way public companies make business decisions.

At issue, for Trinity: Walmart’s sale of guns with high-capacity magazines of the sort used in mass killings.

The church’s rector, Rev. Dr. James Cooper, says he isn’t seeking a ban on the sale of assault weapons at Walmart. Rather, he’s fighting to force the world’s largest retailer to include a shareholder proposal in this April’s proxy materials, to be voted on at this summer’s annual meeting.

Trinity’s proposal would require Walmart’s board to oversee the sale of “products that especially endanger public safety and well-being, risk impairing the company’s reputation, or offend the family and community values integral to the company’s brand,” as the document first filed with the Security and Exchange Commission last year reads.

“Somebody is making decisions about what they sell,” Rev. Cooper told Forbes in an interview at the church’s well-appointed Wall Street offices, with views over the Hudson River.

“Trinity doesn’t need to. We would just like them to tell us they have a system in place at the board level to protect the reputation of the company, its values, and protect the citizens who live in that community from extreme harm.”

The church has singled out high-capacity assault rifles as the sort of product that should require board approval before hitting store shelves, questioning in its proposal “whether these guns are well suited to hunting or shooting sports” and recalling that such weapons “enabled many mass killings” in Newtown, Aurora, Tucson and elsewhere.

   © Provided by Forbes Trinity Church rector Rev. James Cooper. Photo: Leo Sorel.

It was the 2012 massacre at Sandy Hook Elementary School in Newtown, Conn. that proved the catalyst for Trinity’s legal action, says Rev. Cooper. He recalls having coffee hour chats with parishioners about ways to help, including shareholder activism.

Months after the killings, Cooper and Trinity’s legal counsel Evan Davis took their concerns to Walmart head of investor relations Carol Schumacher. (Schumacher declined to be interviewed for this story.)

Davis was keen to learn how the retailer decides, for instance, that it won’t sell CDs with Parental Advisory warning labels, but will sell assault rifles with the capacity for 30 rounds of ammunition.

“If it were a video with somebody shooting up a school, or a rap song with somebody talking about shooting up a school, they wouldn’t sell it,” he said. “So why sell the gun? It doesn’t make sense.”

During their discussions, Walmart assured Trinity it takes gun safety seriously, echoing those sentiments in a statement to Forbes.

“In areas of the country where we sell firearms, we have a long standing commitment to do so safely and responsibly through trained associates and in compliance with our standards, which greatly exceed what is required by law,” said spokesperson Randy Hargrove.

“For example, we do not sell handguns in the contiguous U.S., and we do not sell high capacity magazines as an accessory or any firearms at Walmart.com. We also conduct background checks, videotape sales of firearms at our stores and exceed the current legal requirements by requiring a ‘proceed’ response on a background check before we transfer a firearm.”

Unable to get a satisfactory response from Walmart on board oversight, Trinity decided to submit a shareholder proposal in December 2013 for inclusion in the company’s 2014 proxy materials.

The retail giant issued a preemptive strike, arguing to the Securities and Exchange Commission that Trinity’s proposal would interfere with the company’s day-to-day operations. The SEC sided with Walmart, issuing a no-action letter permitting the retailer to exclude the church’s submission from its 2014 annual filings.

Davis and Cooper next took their case to Delaware’s federal courts. In November, following months of back-and-forth briefs from both sides, U.S. District Judge Leonard Stark decided in Trinity’s favor, ordering Walmart to let shareholders vote on the church’s proposal. In January, Walmart appealed.

The big-box chain will now face Trinity in Philadelphia’s Third Circuit Court of Appeals in late February or early March. Bentonville, Ark.-based Walmart has hired Los Angeles lawyer Theodore Boutrous, who represented the company in decade-long class action gender discrimination case Dukes vs Walmart. The Supreme Court threw the case out in 2011.

Walmart has support in the form of amicus briefs from, among others, the National Association of Manufacturers, the American Petroleum Institute, the Business Roundtable, the Society of Corporate Secretaries and Governance Professionals and the Retail Litigation Center.

“We believe that the SEC staff was correct in finding that Walmart was allowed to exclude Trinity’s shareholder proposal from its 2014 annual meeting proxy materials,” said Walmart in a statement to Forbes.

“The District Court’s ruling has 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, such as what products a retailer sells. The ruling reverses 40-year old SEC guidance allowing shareholder proposals to be excluded if they involved a company’s ordinary business operations.”

“Trinity’s proposal would interfere with Walmart’s ordinary business operations by seeking to regulate Walmart’s daily decisions on the hundreds of thousands of products sold in our stores, wholesale warehouse clubs, and online. Trinity’s proposal would also be difficult to implement because it is vague and indefinite, refers to highly subjective and loosely defined categories of products and is unclear on which of the hundreds of thousands of different products sold in our stores, wholesale warehouse clubs, and online would be covered.”

In the next few days, Cornell University Law School professor of corporate and business law Lynn Stout will file an amicus brief in support of Trinity Church on behalf of more than 20 of her fellow corporate law professors from various universities, all experts in corporate governance.

“Trinity isn’t asking for an expansion of shareholder rights,” said Stout, author of The Shareholder Value Myth. “Walmart is asking for a restriction. It would be a dramatic new restriction in shareholder rights if the Third Circuit were to reverse the district court’s decision.”

Rev. Cooper is set to retire as Trinity’s rector on February 15. He’s already briefed his successor, Rev. Dr. William Lupfer of Portland, Oregon’s Trinity Episcopal Cathedral, on the case. Legal counsel Evan Davis — also a church warden — plans to stick with it, even if the appeals process proves arduous.

“Trinity has been here for 318 years,” Cooper said. “We have some things that we can keep doing for a pretty long period of this time and this will be one of them.”

[john455]

bha churches should stick to doing Gods work, and if they don't like Wal-marts policy they have the option of selling there shares. 

[Grand Torino]

Walmart doesn't tell the Pastor how or what to preach. The Pastor shouldn't be telling Walmart how to run their business.

[DaveTN]

Trinity’s proposal would require Walmart’s board to oversee the sale of “products that especially endanger public safety and well-being, risk impairing the company’s reputation, or offend the family and community values integral to the company’s brand,”

Wal-Mart sells many foreign made products that impair the company’s reputation and damage community values through lost jobs. Of course if you removed all the bottom feeder products it wouldn’t be Wal-Mart; would it?

This is a different approach on gun control by the church; but it is still laughable.

[10-Ring]

As if Walmart had any care in the world if they were selling something that could harm people.  Walmart has one concern and one concern only and that is making money, be it at the cost of slavery or child labor they don't care, and they certainly will tell anyone trying to regulate their sell of firearms that accept high capacity magazines to go pound sand.

[hipower]

On a different tack here...Did the comment about video taping sales raise any goosebumps on you?

[monkeylizard]

They're videotaping you from the moment you enter their parking lot until the moment you leave. The real questions are how long do they keep their surveillance video and do they keep it longer from the sporting goods register?

[-boatman-]

On a different tack here...Did the comment about video taping sales raise any goosebumps on you?

I'm not crazy about the idea but I figure I'm taped from the time I walk in until I walk back out anyway without buying a gun.

[hipower]

True, I hadn't thought of that. But still don't like the idea of being taped buying a firearm.

[monkeylizard]

I'd be surprised to know that I wasn't being videotaped. That includes an LGS. Most have security video aimed at the door and the register if not the whole sales floor.

[daddyo]

But, but, but.... whatever happened to so-called "separation of church and state" that the progressives like to scream about? Oh, that's right, it doesn't apply when they're pushing their agenda on the rest of us.

[Mike.357]

I don't care about the video recording.

 

Where I work we video every single thing that goes on in the store.

[E4 No More]

But, but, but.... whatever happened to so-called "separation of church and state" that the progressives like to scream about? Oh, that's right, it doesn't apply when they're pushing their agenda on the rest of us.

Walmart is not the state, but the church is free to sell their stocks at any time.

[JayC]

I hate to say it, but the Church is in the right here...  They are a shareholder, and followed all the rules laid out in the bylaws to submit a proposal to a vote by all share holders, WalMart is violating it's bylaws trying to keep this from coming to a vote.

 

This has virtually nothing to do with guns, except WalMart doesn't want the bad PR they will receive either way this vote goes.  It's a simple corporate governance issue, and WalMart is in the wrong IMHO.

[E4 No More]

I hate to say it, but the Church is in the right here...  They are a shareholder, and followed all the rules laid out in the bylaws to submit a proposal to a vote by all share holders, WalMart is violating it's bylaws trying to keep this from coming to a vote.

 

This has virtually nothing to do with guns, except WalMart doesn't want the bad PR they will receive either way this vote goes.  It's a simple corporate governance issue, and WalMart is in the wrong IMHO.

Perhaps, but did Walmart sell these items before the church bought stock? Do you expouse buying controlling, or major, shares to force a business to change its business model based upon emotion rather than business needs?

[Smith]

 

“If it were a video with somebody shooting up a school, or a rap song with somebody talking about shooting up a school, they wouldn’t sell it,” he said. “So why sell the gun? It doesn’t make sense.”

During their discussions, Walmart assured Trinity it takes gun safety seriously, echoing those sentiments in a statement to Forbes

 

For the same reason they don't quit selling all music and videos. There are books they don't carry but they don't quite carrying all books. They sell clothes that some drug dealers wear but they don't quite selling clothes. They sell food that wife abusers, child molesters, killers, and all sorts of vermin probably eat, but they haven't stopped selling food.

 

The "rational logic" some people use is beyond my level evidently. 

[JayC]

Shareholders are allowed to do all of these things as long as they follow the bylaws...

 

If you owned a minority share in a business shouldn't you be able to suggest to the other owners they change business practices?  Even if the change is something they've been doing for years or decades?

 

The Church is a minority owner in the company, and they have followed all the rules set by the companies bylaws to place an item of the shareholders meeting for a vote.  I think what they're asking for is stupid, and if I owned any WalMart stock I'd vote against it...

 

But they are within their rights, and WalMart is trying to violate it's own bylaws to prevent the vote from happening.

 

Perhaps, but did Walmart sell these items before the church bought stock? Do you expouse buying controlling, or major, shares to force a business to change its business model based upon emotion rather than business needs?

[E4 No More]

Shareholders are allowed to do all of these things as long as they follow the bylaws...

 

If you owned a minority share in a business shouldn't you be able to suggest to the other owners they change business practices?  Even if the change is something they've been doing for years or decades?

 

The Church is a minority owner in the company, and they have followed all the rules set by the companies bylaws to place an item of the shareholders meeting for a vote.  I think what they're asking for is stupid, and if I owned any WalMart stock I'd vote against it...

 

But they are within their rights, and WalMart is trying to violate it's own bylaws to prevent the vote from happening.

I didn't claim that they weren't following their bylaws although I doubt you've read them to know that as fact just as I haven't, but I do know that the board is responsible for doing what's best for the share holders. I see this a no different than buying a share of stock in HP and then demanding a vote on stopping the sales of computers because they are used for Internet pornography.

[DaveTN]

Let’s see…. The last time I was in a Wal-Mart I’m pretty sure I saw beer...And...Oh my gosh...(dare I even type the word) Cigarettes.

Is the church sure they are done with their “lets vote on this” list?

Wal-Mart needs to tell the church in a very respectable way...to go pound sand.

[hipower]

I don't believe that a $2000 stock investment will garner much voting pressure. Maybe some publicity though.

[JayC]

And the shareholders are free to vote down this or any other crazy idea...  but if they follow the bylaws they should be allowed to bring the motion to the floor.

 

And you're right I didn't read the bylaws, but I did read the lower courts ruling, and it's pretty clear WalMart management is on the wrong side of the law here.

 

I didn't claim that they weren't following their bylaws although I doubt you've read them to know that as fact just as I haven't, but I do know that the board is responsible for doing what's best for the share holders. I see this a no different than buying a share of stock in HP and then demanding a vote on stopping the sales of computers because they are used for Internet pornography.

[jtmaze]

I own a great deal more stock than that in the Fortune 100 company that I work for and I doubt that I could get softer toilet paper in the bathrooms at our 2000 locations. Let them vote. Walmart just doesn't want to aleinate any customers by the vote going one way or another. I am almost willing to bet that after the vote THE CHURCH sells its stock and goes after Walmart for a payoff donation like Al Sharpton.

[10-Ring]

They're videotaping you from the moment you enter their parking lot until the moment you leave. The real questions are how long do they keep their surveillance video and do they keep it longer from the sporting goods register?

 

I did a stint in asset protection at Wally World.  I left almost 5 years ago (good choice.)  Back then we were running ~150 cameras per store and could retain all of that video for about 6 months.  Whenever you walk into or out of a Walmart entrance there is a camera about 4 feet high on the edge of each door frame, that gives a really good face shot.  There is also a camera that records every singe item scanned at every register and they have the ability to see that each item was paid for, how it was paid for, and a picture of who paid for it.  I highly doubt that any of this is used maliciously, we just used it to gather evidence in theft and fraud cases.

[R_Bert]

I did a stint in asset protection at Wally World.  I left almost 5 years ago (good choice.)  Back then we were running ~150 cameras per store and could retain all of that video for about 6 months.  Whenever you walk into or out of a Walmart entrance there is a camera about 4 feet high on the edge of each door frame, that gives a really good face shot.  There is also a camera that records every singe item scanned at every register and they have the ability to see that each item was paid for, how it was paid for, and a picture of who paid for it.  I highly doubt that any of this is used maliciously, we just used it to gather evidence in theft and fraud cases.

Nuts.  Now I will be compelled to mug for the camera.  Twice.  Left, then right.  Double the previous effort. (already pick my nose at the register).

Edited February 13, 2015 by R_Bert