Corporate Law after Hobby Lobby

THE BUSINESS LAWYER, Vol 70 - November 2014 Forthcoming

Washington & Lee Legal Studies Paper No. 2014-19

33 Pages Posted: 10 Oct 2014 Last revised: 30 Jan 2015

See all articles by Lyman Johnson

Lyman Johnson

Washington and Lee University - School of Law; University of St. Thomas, St. Paul/Minneapolis, MN - School of Law

David Millon

Washington and Lee University - School of Law

Date Written: October 8, 2014

Abstract

We evaluate the U.S. Supreme Court's controversial decision in the Hobby Lobby case from the perspective of state corporate law. We argue that the Court is correct in holding that corporate law does not mandate that business corporations limit themselves to pursuit of profit. Rather, state law allows incorporation 'for any lawful purpose.' We elaborate on this important point and also explain what it means for a corporation to 'exercise religion.' In addition, we address the larger implications of the Court's analysis for an accurate understanding both of state law's essentially agnostic stance on the question of corporate purpose and also of the broad scope of managerial discretion.

Keywords: Corporate purpose, Corporate personhood, Shareholder wealth maximization, Shareholder primacy, Corporate social responsibility

JEL Classification: K10, K20, K22

Suggested Citation

Johnson, Lyman P. Q. and Millon, David K., Corporate Law after Hobby Lobby (October 8, 2014). THE BUSINESS LAWYER, Vol 70 - November 2014 Forthcoming; Washington & Lee Legal Studies Paper No. 2014-19. Available at SSRN: https://ssrn.com/abstract=2507406

Lyman P. Q. Johnson

Washington and Lee University - School of Law ( email )

Lexington, VA 24450
United States
540-458-8515 (Phone)
540-458-8488 (Fax)

University of St. Thomas, St. Paul/Minneapolis, MN - School of Law

MSL 400, 1000 La Salle Avenue
Minneapolis, MN Minnesota 55403-2005
United States

David K. Millon (Contact Author)

Washington and Lee University - School of Law ( email )

Lexington, VA 24450
United States
540-458-8993 (Phone)
540-458-8586 (Fax)

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