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Retconning The Law: A Reply To Prof. Nelson

Introduction

I want to start by thanking Caleb Nelson for his deep engagement with my article. Scholars always hope that people will read their work, but I did not anticipate that I would have a fellow traveler on my strange dive into the particularities of nineteenth-century land law. “The details of organization of the land system,” the historian Henry Adams wrote in 1879, “implied much labor and minute attention, but they are not interesting.”1 1.Henry Adams, The Life of Albert Gallatin 299 (Peter Smith 1943) (1879).Show More

I was ambivalent whether to reply to Nelson’s response for the reason that Adams flagged—who would find it interesting or worthwhile? I was not surprised that my evidence failed to persuade Nelson; indeed, I anticipated this outcome in my original piece.2 2.See Gregory Ablavsky, Getting Public Rights Wrong: The Lost History of the Private Land Claims, 74 Stan. L. Rev. 277, 347–48 (2022).Show More Equally unsurprisingly, I stand by my original conclusions. But scholars claiming that they are right is decidedly “not interesting.”3 3.Adams, supra note 2, at 299.Show More

I was surprised, and impressed, by the seriousness with which Nelson took my critique and the history I cited. Surprised, because, though I invoked Nelson’s work as the best example of a framework that I thought my evidence questioned,4 4.Ablavsky, supra note 3, at 282.Show More most of the article was targeted at statements by the Supreme Court, and I only cited Nelson nine times.5 5.Id. at 282 nn.16–18, 283 n.23, 288 n.48, 320 n.236, 322 n.254, 323 nn.255 & 259.Show More Impressed because I know firsthand the “labor and minute attention”6 6.Adams, supra note 2, at 299.Show More this research requires, and so I genuinely appreciate Nelson’s willingness to follow me into this tangled history. Moreover, as Nelson himself notes, he and I actually agree about much of the history, even if we disagree about some of the conclusions it supports.7 7.See, e.g., Caleb Nelson, Did I Get Public Rights Wrong?, 112 Va. L. Rev. 661, 724 (2026).Show More But admiration and agreement are perhaps even more tedious to read.

Finally, much of this debate turns on obscure law and technical legal distinctions. Relitigating each historical example in the same detail as either my original 30,000-plus-word article or Nelson’s 30,000-plus-word reply—even if I had the room to do so, which I don’t—would not make for gripping reading, either.

I am also not naïve about the broader stakes or context. I had little expectation at the outset that my history would meaningfully unsettle a hardening originalist consensus around the meaning and significance of public and private rights. I have even less hope that an exchange with Nelson will change many minds in what has become yet another polarized public law conversation: I see little cause for optimism in the interminable debates over the historical pedigree of, say, the non-delegation doctrine.8 8.This literature is too vast to comprehensively survey. For an overview of the debate, see Julian Davis Mortenson & Nicholas Bagley, Essay, Delegation at the Founding: A Response to the Critics, 122 Colum. L. Rev. 2323, 2324 nn. 1–2 (2022).Show More

I nonetheless decided to write this response for three reasons. First, I felt it important to repay the courtesy that Nelson showed in taking my arguments seriously.9 9.Space, as well as inclination, means that I cannot emulate Nelson’s fondness for parentheticals. In any event, I think the key disagreements between us are not about the weight of the evidence but its interpretation and significance.Show More Second, I thought that our conversation might highlight important methodological disagreements in thinking through historical evidence. Third, several scholars said they found my original article useful as a guide to nineteenth-century property doctrine, and so perhaps further spelunking in the historical intersection between property and public law might be helpful.

If you’ve gotten this far, you’re presumably aware of the private land claims, as both my original article and Nelson’s response describe them in detail. If you’re just joining this conversation, very briefly, the claims were land grants from prior European empires and Mexico that the United States promised to honor when those sovereigns ceded territory to the United States. The federal government generally resolved them through boards of commissioners that, depending on the statute, either reported on them to Congress, provided for federal court involvement, or made the boards’ determinations final. The core of the dispute between Nelson and me is that I argue that these procedures question the assertion that core vested rights to property could not be subject to administrative resolution; he disagrees.

I aim to do two things in this response. First, I want to expand beyond my original article and offer some broader thoughts on the place of history in constitutional debate more generally. Second, I will flag where, despite important agreements on much of the law governing the private land claims, Nelson and I still disagree about the evidence and its import. Here, I’ll focus on three questions: Were the private land claims vested? What is the significance that the private land claims were not judicially cognizable absent congressional action? And how should we interpret the California Land Act of 1851? In each of these instances, I find Nelson’s efforts to explain away contrary evidence implausible.

I also have two more general points of disagreement with the framing of Nelson’s response. First, his approach fits within a well-established game—the game of doctrine and litigation.10 10.I borrow the “game” metaphor from my colleague Jonathan Gienapp. SeeJonathan Gienapp, The Second Creation: Fixing the American Constitution in the Founding Era 8–9 (2018).Show More In that game, you advance a theory of the case that supports your position, adduce evidence, and attempt to distinguish the evidence that seems to contradict your position. Hence why Nelson repeatedly says that various pieces of historical evidence are “consistent” with the framework in his original article, in that they don’t contradict it.11 11.See, e.g., Nelson, supra note 8, at 695, 698 n.136, 718, 720, 722; see also id. at 711 (describing the effect of land confirmations on later federal grants as “not inconsistent with the framework I described”).Show More And the thing about litigation is that, if the litigants have done their jobs well, both positions are plausible. Here, I will happily concede that, if you accept all the distinctions that Nelson has crafted and resolve all evidentiary ambiguities in his favor, the history I recounted can be massaged to fit his earlier account.

That result would be fine if Nelson’s framework was, indeed, his framework: that is, rooted in what he regards as the best reading of the applicable law. And perhaps he’d be right: I am no expert on what the correct law governing non-Article III adjudication should be.

The problem, however, is that he argues that this approach is not actually his framework, but that of nineteenth-century American jurists, legislators, and lawyers. This requires a slightly different game—the game of history. It, too, involves making claims that best fit the evidence. But to play this game, you must do more than just show that current law is consistent with the history; you have to show that what you’re recounting is, in fact, their law, not your law.12 12.I articulated this concern in my original article, too. Ablavsky, supra note 3, at 348 (expressing concern about “attempt[ing] to cram the past into present-day jurisprudential assumptions”).Show More

And here, in my view, is where Nelson’s account fails to persuade. His historical account does not seem to me a plausible explanation of the evidence. Nelson is unquestionably correct when he suggests that most mid-nineteenth-century jurists thought that some category of legal rights could not be subject to administrative adjudication. But what those rights were, how they were defined, what the relevant limitations were, and how the rules changed over the nineteenth century were all hotly contested, with little resembling a coherent framework. Indeed, instead of providing clarity, Nelson’s response now proposes new, further distinctions and exceptions to try to explain away my evidence.

Hence why I have entitled this response “retconning the law,” a perhaps unfamiliar title that may reveal the generational divide between Nelson and me. The term “retcon”—short for retroactive continuity—describes when authors go back and alter the past to make it fit current narrative needs.13 13.A Short History of ‘Retcon,’ Merriam-Webster, https://www.merriam-webster.com/word‌play/retcon-history-and-meaning [https://perma.cc/YH3X-VHH3] (last visited Sep. 30, 2026).Show More Though the term largely arose in the context of comic books and television shows,14 14.Id.Show More law engages in its own form of retconning, in which judges and lawyers who want to construct a story about the connection between past and present construct their own stylized narratives. But “retcon” is rarely a term of approbation, and for good reason: as Merriam-Webster notes, a retcon facilitates “a general disregard for reality.”15 15.Id.Show More We should be still more concerned about efforts to rewrite historical categories to serve present narrative needs when it involves real power and actual people, not just Chewie and Han Solo.

The second divergence concerns how Nelson characterizes my intervention. He casts the private land claims as a “pocket of law”;16 16.Nelson, supra note 8, at 725.Show More he also describes them as different from “normal vested rights.”17 17.Id. at 681.Show More The implication is that I have unearthed a minor “alleged counterexample”18 18.Id. at 665.Show More to his overall framework.

This, in my view, is doubly wrong. First, it is anachronistic. I have a pet peeve about the term “normal” in characterizing law, since it arrogates to the interpreter the power to decree the norm and then to cast less helpful material as exceptional.19 19.Gregory Ablavsky, Sovereign Metaphors in Indian Law, 80 Mont. L. Rev. 11, 40 (2019) (“[T]he language of exception and anomaly does more: it smuggles in ideas about legitimacy.”).Show More To be sure, just like every area of law, the private land claims were distinctive. But they were both highly important and one of the key ways that the federal government governed property in the nineteenth century. You cannot sideline hundreds of Supreme Court decisions, let alone the enormous amount of legislative and congressional attention that they consumed, as a minor part of nineteenth-century American jurisprudence. I may be wrong about their meaning, but I don’t think there is a serious question about their significance.

Second, I understood the claims not as a counterexample but as a test case: a deep dive into one important area where federal adjudication intersected with property to see how this distinction between public and private rights held up. As both of our articles suggest, getting this material right takes lots of work and careful attention. Nelson seems to interpret this targeted approach as an acceptance of the validity of his framework applied to other areas. In fact, I’m skeptical. A large literature, including Nelson’s own work, exists to try to make sense of the so-called “historical exceptions” to the limits on non-Article III federal tribunals, a category that conventionally includes courts-martial, the territorial courts, and perhaps bankruptcy and tax courts, but also encompasses a whole host of less familiar courts, that all adjudicated private rights.20 20.Overviews of non-Article III courts appear in William Baude, Adjudication Outside Article III, 133 Harv. L. Rev. 1511 (2020); Laura K. Donohue & Jeremy McCabe, Federal Courts: Article I, II, III, and IV Adjudication, 71 Cath. U. L. Rev. 543 (2022); John M. Golden & Thomas H. Lee, Congressional Power, Public Rights, and Non-Article III Adjudication, 98 Notre Dame L. Rev. 1113 (2023); James E. Pfander, Article I Tribunals, Article III Courts, and the Judicial Power of the United States, 118 Harv. L. Rev. 643 (2004). On military courts, see Stephen I. Vladeck, Military Courts and Article III, 103 Geo. L.J. 933, 939–45 (2015); David A. Schlueter, The Court Martial: An Historical Survey, 87 Mil. L. Rev. 129, 145–50 (1980). On international tribunals, see Marco Basile, Lincoln’s Commissioners on the International Slave Trade Courts at Sierra Leone, 10 J. Civ. War Era 160 (2020); Eugene Kontorovich, The Constitutionality of International Courts: The Forgotten Precedent of Slave-Trade Tribunals, 158 U. Pa. L. Rev. 39, 43–44 (2009); Jenny S. Martinez, International Courts and the U.S. Constitution: Reexamining the History, 159 U. Pa. L. Rev. 1069, 1075–80 (2011); Henry Paul Monaghan, Article III and Supranational Judicial Review, 107 Colum. L. Rev. 833 (2007). On the consular courts, see Donohue & McCabe, supra, at 601–02; Eugene Kontorovich, Essay, Three International Courts and Their Constitutional Problems, 99 Cornell L. Rev. 1353, 1375–76 (2014). On territorial courts, see Gary Lawson & Guy Seidman, The Constitution of Empire: Territorial Expansion and American Legal History 139–50 (2004). On federal commissioners under the Fugitive Slave Act of 1850, see Baude, supra, at 1555; Jeffrey M. Schmitt, The Antislavery Judge Reconsidered, 29 Law & Hist. Rev. 797, 803–09 (2011). On non-Article III adjudication in federal enclaves, see Stephen I. Vladeck, Petty Offenses and Article III, 19 Green Bag 2d 67, 74–78 (2015).Show More And this perspective does not include additional courts that barely feature in the current literature on non-Article III tribunals like the courts of Indian offenses,21 21.SeeDenezpi v. United States, 142 S. Ct. 1838, 1849–51 (2022) (Gorsuch, J., dissenting) (recounting the late nineteenth-century creation of the courts and querying “how an executive agency can claim the exclusive power to define, prosecute, and judge crimes”). On the history of these courts, see William T. Hagan, Indian Police and Judges: Experiments in Acculturation and Control (1966); Alexandra Fay, Courts of Indian Offenses, Courts of Indian Resistance, 124 Mich. L. Rev. 777 (2026). In my research on the history of federal Indian law, I have in fact encountered other non-Article III tribunals that arguably adjudicated private rights, most notably the Department of the Interior’s tribunal to adjudicate Native allottees’ probate rights, see Hallowell v. Commons, 239 U.S. 506 (1916). Whether the Choctaw-Chickasaw Citizenship Court involved private rights seems a closer question. See Wallace v. Adams, 204 U.S. 415, 422–23 (1907) (suggesting that in determining citizenship the court was not deciding a “vested right” but merely “privileges”).Show More Freedmen’s Bureau Courts,22 22.Amalia D. Kessler, Inventing American Exceptionalism:The Origins of American Adversarial Legal Culture, 1800–1877, at 263–322 (2017); John M. Bickers, The Power to Do What Manifestly Must Be Done: Congress, the Freedmen’s Bureau, and Constitutional Imagination, 12 Roger Williams U. L. Rev. 70, 75, 84 (2006); Bernice B. Donald & Pablo J. Davis, “To This Tribunal the Freedman Has Turned”: The Freedmen’s Bureau’s Judicial Powers and the Origins of the Fourteenth Amendment, 79 La. L. Rev. 1, 16–17 (2018); Zachary Newkirk, A Brief Moment in the Sun: The Reconstruction-Era Courts of the Freedmen’s Bureau, 101 Judicature, no. 4, 2017, at 49, 52.Show More and federal commissioners under the Fugitive Slave Act.23 23.I had long been surprised by the absence of substantial attention to the Fugitive Slave Act in this context—and then, while I was crafting this response, two important articles appeared. A student note explored the Act’s implications for the public rights doctrine, noting that the Act authorized non-Article III federal commissioners to finally adjudicate “an individual’s liberty and a slaveholder’s asserted property right.” Scott Jones, Note, The Fugitive Slave Act of 1850: A Public-Rights Paradox, 135 Yale L.J. 1768, 1811 (2026). And a forthcoming law review article suggests that Justice Curtis’s opinion in Murray’s Lessee was motivated partly to vindicate the Fugitive Slave Act’s adjudicatory provisions. Ryan C. Williams, Murray’s Lessee, Non-Article III Adjudication, and the Fugitive Slave Act of 1850, 102 Notre Dame L. Rev. (forthcoming), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7541683 [https://pe‌rma.cc/L8FY-S7W8].Show More

Whether all these courts are consistent with Article III is hotly contested, with arguments back and forth. My view of this debate echoes my concerns with Nelson’s response. Of course clever scholars can craft all sorts of present-day explanations as to why these historical examples are consistent with a formalist vision of Article III (or are perhaps just outliers that can be ignored). But in every instance in which I have dug into the underlying evidence, the effort to make these courts fit a formalist account felt, at best, a partial and tendentious interpretation of the historical record. At some point, these attempts to cram unruly history into tidy categories start to seem like so many just-so stories motivated less by a desire to understand the past than by a vision of how scholars wish the law to be now. Perhaps, if you’re spending all your time distinguishing away contrary evidence on all sides, you should start to wonder if the framework is all that plausible in the first place.

  1.  Henry Adams, The Life of Albert Gallatin 299 (Peter Smith 1943) (1879). ↑
  2.  See Gregory Ablavsky, Getting Public Rights Wrong: The Lost History of the Private Land Claims, 74 Stan. L. Rev. 277, 347–48 (2022). ↑
  3.  Adams, supra note 2, at 299. ↑
  4.  Ablavsky, supra note 3, at 282. ↑
  5.  Id. at 282 nn.16–18, 283 n.23, 288 n.48, 320 n.236, 322 n.254, 323 nn.255 & 259. ↑
  6.  Adams, supra note 2, at 299. ↑
  7.  See, e.g., Caleb Nelson, Did I Get Public Rights Wrong?, 112 Va. L. Rev
    .

    661, 724 (2026). ↑

  8.  This literature is too vast to comprehensively survey. For an overview of the debate, see Julian Davis Mortenson & Nicholas Bagley, Essay, Delegation at the Founding: A Response to the Critics, 122 Colum. L. Rev. 2323, 2324 nn. 1–2 (2022). ↑
  9.  Space, as well as inclination, means that I cannot emulate Nelson’s fondness for parentheticals. In any event, I think the key disagreements between us are not about the weight of the evidence but its interpretation and significance. ↑
  10.  I borrow the “game” metaphor from my colleague Jonathan Gienapp. See Jonathan Gienapp, The Second Creation: Fixing the American Constitution in the Founding Era
    8–9

    (2018). ↑

  11.  See, e.g., Nelson, supra note 8, at 695, 698 n.136, 718, 720, 722; see also id. at 711 (describing the effect of land confirmations on later federal grants as “not inconsistent with the framework I described”). ↑
  12.  I articulated this concern in my original article, too. Ablavsky, supra note 3, at 348 (expressing concern about “attempt[ing] to cram the past into present-day jurisprudential assumptions”). ↑
  13.  A Short History of ‘Retcon,’ Merriam-Webster, https://www.merriam-webster.com/word‌play/retcon-history-and-meaning [https://perma.cc/YH3X-VHH3] (last visited Sep. 30, 2026). ↑
  14.  Id. ↑
  15.  Id. ↑
  16.  Nelson, supra note 8, at 725. ↑
  17.  Id. at 681. ↑
  18.  Id. at 665. ↑
  19.  Gregory Ablavsky, Sovereign Metaphors in Indian Law, 80 Mont. L. Rev. 11, 40 (2019) (“[T]he language of exception and anomaly does more: it smuggles in ideas about legitimacy.”). ↑
  20.  Overviews of non-Article III courts appear in William Baude, Adjudication Outside Article III, 133 Harv. L. Rev. 1511 (2020); Laura K. Donohue & Jeremy McCabe, Federal Courts: Article I, II, III, and IV Adjudication, 71 Cath. U. L. Rev. 543 (2022); John M. Golden & Thomas H. Lee, Congressional Power, Public Rights, and Non-Article III Adjudication, 98 Notre Dame L. Rev.
    1113 (2023);

    James E. Pfander, Article I Tribunals, Article III Courts, and the Judicial Power of the United States, 118 Harv. L. Rev. 643 (2004). On military courts, see Stephen I. Vladeck, Military Courts and Article III, 103 Geo. L.J. 933, 939–45 (2015); David A. Schlueter, The Court Martial: An Historical Survey, 87 Mil. L. Rev. 129, 145–50 (1980). On international tribunals, see Marco Basile, Lincoln’s Commissioners on the International Slave Trade Courts at Sierra Leone, 10 J. Civ. War Era 160 (2020); Eugene Kontorovich, The Constitutionality of International Courts: The Forgotten Precedent of Slave-Trade Tribunals, 158 U. Pa. L. Rev. 39, 43–44 (2009); Jenny S. Martinez, International Courts and the U.S. Constitution: Reexamining the History, 159 U. Pa. L. Rev. 1069, 1075–80 (2011); Henry Paul Monaghan, Article III and Supranational Judicial Review, 107 Colum. L. Rev. 833 (2007). On the consular courts, see Donohue & McCabe, supra, at 601–02; Eugene Kontorovich, Essay, Three International Courts and Their Constitutional Problems, 99 Cornell L. Rev. 1353, 1375–76 (2014). On territorial courts, see Gary Lawson & Guy Seidman, The Constitution of Empire: Territorial Expansion and American Legal History 139–50 (2004). On federal commissioners under the Fugitive Slave Act of 1850, see Baude, supra, at 1555; Jeffrey M. Schmitt, The Antislavery Judge Reconsidered, 29 Law & Hist. Rev. 797, 803–09 (

    2011).

    On non-Article III adjudication in federal enclaves, see Stephen I. Vladeck, Petty Offenses and Article III, 19 Green Bag 2d 67, 74–78 (2015). ↑

  21.  See Denezpi v. United States, 142 S. Ct. 1838, 1849–51 (2022) (Gorsuch, J., dissenting) (recounting the late nineteenth-century creation of the courts and querying “how an executive agency can claim the exclusive power to define, prosecute, and judge crimes”). On the history of these courts, see William T. Hagan, Indian Police and Judges: Experiments in Acculturation and Control (1966); Alexandra Fay, Courts of Indian Offenses, Courts of Indian Resistance, 124 Mich. L. Rev.
    777

    (2026). In my research on the history of federal Indian law, I have in fact encountered other non-Article III tribunals that arguably adjudicated private rights, most notably the Department of the Interior’s tribunal to adjudicate Native allottees’ probate rights, see Hallowell v. Commons, 239 U.S. 506 (1916). Whether the Choctaw-Chickasaw Citizenship Court involved private rights seems a closer question. See Wallace v. Adams, 204 U.S. 415, 422–23 (1907) (suggesting that in determining citizenship the court was not deciding a “vested right” but merely “privileges”). ↑

  22.  Amalia D. Kessler, Inventing American Exceptionalism:

    The Origins of American Adversarial Legal Culture, 1800

    –1877

    , at 263–322 (2017); John M. Bickers, The Power to Do What Manifestly Must Be Done: Congress, the Freedmen’s Bureau, and Constitutional Imagination, 12 Roger Williams U. L. Rev. 70, 75, 84 (2006); Bernice B. Donald & Pablo J. Davis, “To This Tribunal the Freedman Has Turned”: The Freedmen’s Bureau’s Judicial Powers and the Origins of the Fourteenth Amendment, 79 La. L. Rev. 1, 16–17 (2018); Zachary Newkirk, A Brief Moment in the Sun: The Reconstruction-Era Courts of the Freedmen’s Bureau, 101 Judicature, no. 4, 2017, at 49,

    52.

    ↑

  23.  I had long been surprised by the absence of substantial attention to the Fugitive Slave Act in this context—and then, while I was crafting this response, two important articles appeared. A student note explored the Act’s implications for the public rights doctrine, noting that the Act authorized non-Article III federal commissioners to finally adjudicate “an individual’s liberty and a slaveholder’s asserted property right.” Scott Jones, Note, The Fugitive Slave Act of 1850: A Public-Rights Paradox, 135 Yale L.J. 1768, 1811 (2026). And a forthcoming law review article suggests that Justice Curtis’s opinion in Murray’s Lessee was motivated partly to vindicate the Fugitive Slave Act’s adjudicatory provisions. Ryan C. Williams, Murray’s Lessee, Non-Article III Adjudication, and the Fugitive Slave Act of 1850, 102 Notre Dame L. Rev. (forthcoming), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7541683 [https://pe‌rma.cc/L8FY-S7W8]. ↑

On Standing, Sovereignty, and Constitutional Awkwardness

Introduction

The object of the grant of exclusive legislation over the district was, therefore, national in the highest sense, and the city organized under the grant became the city, not of a state, not of a district, but of a nation.

– William Howard Taft, in Grether v. Wright, 75 F. 742, 757 (6th Cir. 1896).

In the first year of his second term, President Trump deployed the National Guard in twenty-one states and the District of Columbia.1 1.Tracking Domestic Deployments of the U.S. Military, Lawfare, https://www.lawfaremed‌ia.org/projects-series/trials-of-the-trump-administration/tracking-domestic-deployments-of-t‌he-u.s.-military [https://perma.cc/TZ89-CC49] (last updated Mar. 24, 2026). This count includes all “federally supported National Guard, Reserve, and Active-Duty deployments for operational non-disaster missions” after President Trump’s second inauguration. Id.Show More The goal of these deployments was to support law enforcement activities, particularly those of Immigration and Customs Enforcement2 2.See, e.g., Memorandum on Department of Defense Security for the Protection of Department of Homeland Security Functions, 2025 Daily Comp. Pres. Doc. 672 (June 7, 2025).Show More and local police.3 3.See, e.g., Memorandum on Restoring Law and Order in Memphis, 2025 Daily Comp. Pres. Doc. 916 (Sep. 15, 2025).Show More However, the sense of additional, more latent motivations persisted throughout the deployments.4 4.See Remarks to the Department of War in Quantico, Virginia, 2025 Daily Comp. Pres. Doc. 970, at 12 (Sep. 30, 2025) (“And I told Pete we should use some of these dangerous cities as training grounds for our military . . . .”); Remarks Following a Briefing on the Atlantic Hurricane and Wildfire Season and Preparedness Efforts, 2025 Daily Comp. Pres. Doc. 679, at 6 (June 10, 2025) (“And in Minneapolis, that city was burning down. It was 7 days. And I said, ‘I don’t care.’ The Governor, . . . that just happened to be running for Vice President—a total—you talk about an incompetent Governor.”).Show More

Several of the states quickly filed suit in federal court. To establish their standing to sue, each state alleged that the deployments caused a similar panoply of harms.5 5.See Complaint for Declaratory and Injunctive Relief at 25–29, Oregon v. Trump, 802 F. Supp. 3d 1277 (D. Or. 2025) (No. 25-cv-01756) [hereinafter Oregon Complaint]; Complaint for Declaratory and Injunctive Relief at 14–15, Newsom v. Trump, 797 F. Supp. 3d 1092 (N.D. Cal. 2025) (No. 25-cv-04870) [hereinafter California Complaint]; Complaint for Emergency, Declaratory, and Injunctive Relief at 46–53, Illinois v. Trump, 2025 WL 2886645 (N.D. Ill. Oct. 10, 2025) (No. 25-cv-12174) [hereinafter Illinois Complaint]; Complaint for Declaratory and Injunctive Relief at 32–51, Minnesota v. Noem, 818 F. Supp. 3d 1030 (D. Minn. 2026) (No. 26-cv-00190) [hereinafter Minnesota Complaint]. Because Governor Bill Lee affirmatively requested the deployment to the City of Memphis, the State of Tennessee has not filed suit, though there is a pending challenge in state court brought by Mayor Lee Harris of Shelby County. See Complaint at 1–2, Harris v. Lee, No. 25-1461-I (Tenn. Ch. Ct. Oct. 17, 2025), https://www.nilc.org/wp-content/uploads/‌2025/10/Harris-v.-Lee_Complaint.pdf [https://perma.cc/23YZ-VR25]. Likewise, Louisiana Governor Jeff Landry requested and helped coordinate the deployment to New Orleans. See Gov. Jeff Landry Announces Extension of Louisiana National Guard Security Mission in New Orleans, La. Off. of the Governor (Mar. 2, 2026), https://gov.louisiana.gov/news/5069 [https://perma.cc/J3BU-JNSU].Show More On one end of the spectrum, they alleged harm to their proprietary interests.6 6.See, e.g., Minnesota Complaint, supra note 5, at 38–40; see also Seth Davis, The New Public Standing, 71 Stan. L. Rev. 1229, 1242–50, 1292–98 (2019) (discussing state standing based on monetary injuries that “mirror those to private parties”).Show More Harms of this sort are no different from those “pocketbook” injuries routinely asserted by private parties in litigation.7 7.See Katherine Mims Crocker, Not-So-Special Solicitude, 109 Minn. L. Rev. 815, 838 (2024) [hereinafter Crocker, Not-So-Special] (“Pocketbook injuries for individuals, economic injuries for organizations, and proprietary injuries for states are all the same thing.”).Show More But on the other end of the spectrum, the states also availed themselves of the unique categories of injuries cognizable under the doctrine of state standing: injuries to their “sovereign” and “quasi-sovereign” interests.8 8.See, e.g., Illinois Complaint, supra note 5, at 46–48 (sovereign harms); id.at 51–52 (quasi-sovereign harms). See generallyAnn Woolhandler & Michael G. Collins, Reining in State Standing, 94 Notre Dame L. Rev. 2015, 2016–17 (2019) [hereinafter Woolhandler & Collins, Reining in State Standing] (succinctly categorizing the types of harms that give rise to state standing); Crocker, Not-So-Special, supranote 7, at 835–37 (going into greater depth on these categories).Show More As the perceived role of the states as institutional actors has expanded—and as standing doctrine has evolved in general—these sovereign-based harms have assumed an “extraordinary scope,”9 9.Crocker, Not-So-Special, supra note 7, at 894; see also Ann Woolhandler & Michael G. Collins, State Standing, 81 Va. L. Rev. 387, 393–94, 459–64 (1995) [hereinafter Woolhandler & Collins, State Standing] (tying the development of modern state standing doctrine to the “general change from a common-law, rights-based jurisprudence to a more positivist, interest-based one in which governmental power and private rights became increasingly commensurable”).Show More though they remain controversial.10 10.See Missouri v. Biden, 52 F.4th 362, 369 (8th Cir. 2022) (“Whether and when alleged sovereign injuries can constitute the concrete and particularized injury in fact required for Article III standing is a controversial, unsettled question . . . .”).Show More

The D.C.11 11.Regarding terminology: “District” or “District of Columbia” refers to the entity mentioned in Article I, Section 8, Clause 17 of the Constitution, whereas “D.C.” or “D.C. government” refers to the city of the District of Columbia and the local government thereof. As will be shown, this distinction is important. See infra Part III.Show More government filed its own challenge to the National Guard deployment in the District. Filing in the U.S. District Court for the District of Columbia, D.C. sought declaratory and injunctive relief for an array of harms similar to those alleged by the states, including an “irreparable sovereign injury” to its rights of self-governance under the D.C. Home Rule Act.12 12.Complaint for Declaratory and Injunctive Relief at 35, District of Columbia v. Trump, 810 F. Supp. 3d 19 (D.D.C. 2025) (No. 25-cv-03005) [hereinafter D.C. Complaint]; District of Columbia Home Rule Act, Pub. L. No. 93-198, 87 Stat. 774 (1973) (codified as amended at D.C. Code §§ 1-201.01–207.71 (2026)).Show More D.C.’s increasing participation in litigation against the federal government13 13.See, e.g., District of Columbia v. Trump, 291 F. Supp. 3d 725, 732–36 (D. Md. 2018) (challenging, with Maryland, President Trump’s ownership stake in D.C.-area hotels and restaurants as violative of the Emoluments Clause), rev’d sub nom. In re Trump, 928 F.3d 360 (4th Cir. 2019), rev’d en banc,958 F.3d 274 (4th Cir. 2020), cert. granted and vacated as moot sub nom. Trump v. District of Columbia, 141 S. Ct. 1262 (2021) (mem.); District of Columbia v. U.S. Dep’t of Agric., 496 F. Supp. 3d 213, 219 (D.D.C. 2020). D.C. commonly participates in state-led lawsuits as a non-named plaintiff as well. See Dep’t of Com. v. New York, 139 S. Ct. 2551, 2563 (2019); New York v. U.S. Dep’t of Lab., 363 F. Supp. 3d 109, 116–17 (D.D.C. 2019); U.S. House of Representatives v. Price, No. 16-5202, 2017 WL 3271445, at *1 (D.C. Cir. Aug. 1, 2017); Complaint for Declaratory, Injunctive, and Mandamus Relief at 2, California v. McMahon, No. 25-cv-00329 (D.R.I. July 14, 2025).Show More may obscure the significance of this alleged “sovereign injury.” However, the Administration’s staunch resistance to D.C.’s claim in federal court—including its decision to increase the deployment following the complaint14 14.Compare D.C. Complaint, supra note 12, at 29 (reporting a presence of 2,290 Guardsmen by September 2025), with Letter from Phillip L. Swagel, Dir., Cong. Budget Off., to the Hon. Jeff Merkley, Ranking Member, U.S. Senate Comm. on Budget 8 (Jan. 28, 2026) (reporting a presence of 2,950 Guardsmen in the District by the end of December 2025).Show More while withdrawing from other cities and abandoning its appeals—provides the first reason to view D.C.’s claims with skepticism.15 15.Specifically, after a setback in the Supreme Court, the Administration agreed to withdraw the National Guard from Chicago, Los Angeles, and Portland. See Trump v. Illinois, 146 S. Ct. 432, 434 (2025) (“[A]t least in this posture, the Government has not carried its burden to show that [10 U.S.C.] § 12406(3) permits the President to federalize the Guard in the exercise of inherent authority to protect federal personnel and property in Illinois.”); Rob McLean, Trump Says He’s Removing National Guard Troops from Chicago, Los Angeles and Portland, NBC News (Dec. 31, 2025, at 20:38 ET), https://www.nbcnews.c‌om/politics/trump-administration/trump-removing-national-guard-troops-chicago-los-angele‌s-portland-rcna251746 [https://perma.cc/6BHF-FQWF]. The Oregon litigation resolved soon thereafter, except for some ancillary issues. See, e.g., Response to State of Oregon’s Motion to Modify Protective Order and Clarify the Confidentiality Status of Certain Deposition Videos, Oregon v. Trump, No. 25-cv-01756 (D. Or. Mar. 24, 2026). The suits in Illinois and California continued regarding whether the withdrawals mooted the claims. See Plaintiffs’ Response in Opposition to Defendants’ Motion to Dismiss for Lack of Subject Matter Jurisdiction Under Rule 12(b)(1), Illinois v. Trump, No. 25-cv-12174 (N.D. Ill. Mar. 10, 2026); Plaintiffs-Appellees’ Opposition to Motion to Dismiss, Newsom v. Trump, No. 25-3727 (9th Cir. Jan. 28, 2026); see also Memorandum of Law in Support of Motion to Dismiss at 4–15, Minnesota v. Noem, No. 26-cv-00190 (D. Minn. Mar. 16, 2026) (arguing for dismissal of Minnesota and the Twin Cities’ complaint on standing and mootness grounds). In addition to D.C., the Administration declined to withdraw the Guardsmen from New Orleans and Memphis; but recall that those deployments were uncontested by the states of Louisiana and Tennessee, respectively. See supra note 5.Show More

I argue that D.C. lacks Article III standing to assert sovereign harms. More broadly, using its challenge to President Trump’s National Guard deployment as an illustration, I argue that D.C.’s fundamentally non-sovereign status—derived entirely from and subordinate to Congress’s power—makes its requested extension of state standing principles both doctrinally unsound and institutionally problematic. Doctrinally, such an extension would dilute the conceptual dimensions of both the “District” and “sovereignty” under the Constitution. Institutionally, it would exacerbate the increasing politicization of public law litigation and invite the emergence of a uniquely powerful municipal “omniplaintiff.”16 16.Ann Woolhandler & Julia D. Mahoney, State Standing After Biden v. Nebraska, 2023 Sup. Ct. Rev. 303, 303.Show More And these costs in doctrinal clarity and institutional stability would be entirely unnecessary; despite its non-sovereignty, D.C. is by no means powerless to challenge executive action in the District, such as the National Guard deployment. Rather, it remains a viable plaintiff under the same theories that non-sovereigns routinely assert in public interest litigation.

At bottom, this Note respects our Constitution’s deliberate distinctions between sovereignty and functional autonomy, and between the District of Columbia and every other constitutional entity. Far from resting on constitutional line drawing, however, this Note undertakes to delineate the concept of “sovereignty” and explain why D.C. lacks it. In so doing, it adds clarity to the doctrine of sovereign state standing. More importantly, it serves to remind us that the separation of powers exists precisely to prevent well-intentioned exceptions to constitutional structure in times of perceived crisis.17 17.See New York v. United States, 505 U.S. 144, 187 (1992) (“Much of the Constitution is concerned with setting forth the form of our government, and the courts have traditionally invalidated measures deviating from that form. The result may appear ‘formalistic’ in a given case . . . because . . . of the era’s perceived necessity. But the Constitution protects us from our own best intentions: It divides power among sovereigns and among branches of government precisely so that we may resist the temptation to concentrate power in one location as an expedient solution to the crisis of the day.”).Show More

This Note advances in four main parts. Part I, by way of background, outlines the D.C. National Guard litigation and the doctrine of state standing that D.C. attempts to invoke. Part II explains the intricate and anomalous nature of the District under the Constitution, considering its status in its own right and in relation to its oft-asserted analogues: the territories and the federal enclaves. It also briefly explores the constitutional status of the American Indian tribes to illustrate a particular point on the nature of “sovereignty.” Understanding the District’s status, in my view, is a precondition to understanding why D.C. lacks sovereign standing.

After establishing this proper framing, this Note argues in Part III that the District of Columbia is fundamentally non-sovereign, and thus, that D.C. lacks the capacity to suffer sovereign harms, regardless of the breadth of its home rule authority. It makes this argument in two steps. First, by proving that the D.C. government is municipal in the ordinary sense, exercising power that is permissive, revocable, and fully subordinate to Congress’s plenary authority—closely analogous to the authority of any local government. Second, by establishing that Congress, as the source of sovereignty in the District, did not (and could not) delegate to D.C. any sovereign power in the D.C. Home Rule Act—here too being closely analogous to a state’s grant of home rule to its local subdivisions. It explains how “sovereignty” in the American constitutional order is nondelegable and tied to status. Entities are not given sovereignty by a superior government; they become sovereign through a preordained process. Part III concludes by addressing an emerging theory that, if accepted, would raise an ambiguity with a specific subset of sovereign-based harms. It explains, however, that this Note’s central thesis remains undisturbed irrespective of this theory’s validity.

Returning to the National Guard case study, Part IV elaborates on the pragmatic interests implicated by D.C.’s lack of sovereignty and suggests other potential avenues D.C. may use to challenge the National Guard deployment—and, derivatively, federal executive action in general.

  1.  Tracking Domestic Deployments of the U.S. Military, Lawfare, https://www.lawfaremed‌ia.org/projects-series/trials-of-the-trump-administration/tracking-domestic-deployments-of-t‌he-u.s.-military [https://perma.cc/TZ89-CC49] (last updated Mar. 24, 2026). This count includes all “federally supported National Guard, Reserve, and Active-Duty deployments for operational non-disaster missions” after President Trump’s second inauguration. Id. ↑
  2.  See, e.g., Memorandum on Department of Defense Security for the Protection of Department of Homeland Security Functions, 2025 Daily Comp. Pres. Doc. 672 (June 7, 2025). ↑
  3.  See, e.g., Memorandum on Restoring Law and Order in Memphis, 2025 Daily Comp. Pres. Doc. 916 (Sep. 15, 2025). ↑
  4.  See Remarks to the Department of War in Quantico, Virginia, 2025 Daily Comp. Pres. Doc. 970, at 12 (Sep. 30, 2025) (“And I told Pete we should use some of these dangerous cities as training grounds for our military . . . .”); Remarks Following a Briefing on the Atlantic Hurricane and Wildfire Season and Preparedness Efforts, 2025 Daily Comp. Pres. Doc. 679, at 6 (June 10, 2025) (“And in Minneapolis, that city was burning down. It was 7 days. And I said, ‘I don’t care.’ The Governor, . . . that just happened to be running for Vice President—a total—you talk about an incompetent Governor.”). ↑
  5.  See Complaint for Declaratory and Injunctive Relief at 25–29, Oregon v. Trump, 802 F. Supp. 3d 1277 (D. Or. 2025) (No. 25-cv-01756) [hereinafter Oregon Complaint]; Complaint for Declaratory and Injunctive Relief at 14–15, Newsom v. Trump, 797 F. Supp. 3d 1092 (N.D. Cal. 2025) (No. 25-cv-04870) [hereinafter California Complaint]; Complaint for Emergency, Declaratory, and Injunctive Relief at 46–53, Illinois v. Trump, 2025 WL 2886645 (N.D. Ill. Oct. 10, 2025) (No. 25-cv-12174) [hereinafter Illinois Complaint]; Complaint for Declaratory and Injunctive Relief at 32–51, Minnesota v. Noem, 818 F. Supp. 3d 1030 (D. Minn. 2026) (No. 26-cv-00190) [hereinafter Minnesota Complaint]. Because Governor Bill Lee affirmatively requested the deployment to the City of Memphis, the State of Tennessee has not filed suit, though there is a pending challenge in state court brought by Mayor Lee Harris of Shelby County. See Complaint at 1–2, Harris v. Lee, No. 25-1461-I (Tenn. Ch. Ct. Oct. 17, 2025), https://www.nilc.org/wp-content/uploads/‌2025/10/Harris-v.-Lee_Complaint.pdf [https://perma.cc/23YZ-VR25]. Likewise, Louisiana Governor Jeff Landry requested and helped coordinate the deployment to New Orleans. See Gov. Jeff Landry Announces Extension of Louisiana National Guard Security Mission in New Orleans, La. Off. of the Governor (Mar. 2, 2026), https://gov.louisiana.gov/news/5069 [https://perma.cc/J3BU-JNSU]. ↑
  6.  See, e.g., Minnesota Complaint, supra note 5, at 38–40; see also Seth Davis, The New Public Standing, 71 Stan. L. Rev. 1229, 1242–50, 1292–98 (2019) (discussing state standing based on monetary injuries that “mirror those to private parties”). ↑
  7.  See Katherine Mims Crocker, Not-So-Special Solicitude, 109 Minn. L. Rev. 815, 838 (2024) [hereinafter Crocker, Not-So-Special] (“Pocketbook injuries for individuals, economic injuries for organizations, and proprietary injuries for states are all the same thing.”). ↑
  8.  See, e.g., Illinois Complaint, supra note 5, at 46–48 (sovereign harms); id. at 51–52 (quasi-sovereign harms). See generally Ann Woolhandler & Michael G. Collins, Reining in State Standing, 94 Notre Dame L. Rev. 2015, 2016–17 (2019) [hereinafter Woolhandler & Collins, Reining in State Standing] (succinctly categorizing the types of harms that give rise to state standing); Crocker, Not-So-Special, supra note 7, at 835–37 (going into greater depth on these categories). ↑
  9.  Crocker, Not-So-Special, supra note 7, at 894; see also Ann Woolhandler & Michael G. Collins, State Standing, 81 Va. L. Rev. 387, 393–94, 459–64 (1995) [hereinafter Woolhandler & Collins, State Standing] (tying the development of modern state standing doctrine to the “general change from a common-law, rights-based jurisprudence to a more positivist, interest-based one in which governmental power and private rights became increasingly commensurable”). ↑
  10.  See Missouri v. Biden, 52 F.4th 362, 369 (8th Cir. 2022) (“Whether and when alleged sovereign injuries can constitute the concrete and particularized injury in fact required for Article III standing is a controversial, unsettled question . . . .”). ↑
  11.  Regarding terminology: “District” or “District of Columbia” refers to the entity mentioned in Article I, Section 8, Clause 17 of the Constitution, whereas “D.C.” or “D.C. government” refers to the city of the District of Columbia and the local government thereof. As will be shown, this distinction is important. See infra Part III. ↑
  12.  Complaint for Declaratory and Injunctive Relief at 35, District of Columbia v. Trump, 810 F. Supp. 3d 19 (D.D.C. 2025) (No. 25-cv-03005) [hereinafter D.C. Complaint]; District of Columbia Home Rule Act, Pub. L. No. 93-198, 87 Stat. 774 (1973) (codified as amended at D.C. Code §§ 1-201.01–207.71 (2026)). ↑
  13.  See, e.g., District of Columbia v. Trump, 291 F. Supp. 3d 725, 732–36 (D. Md. 2018) (challenging, with Maryland, President Trump’s ownership stake in D.C.-area hotels and restaurants as violative of the Emoluments Clause), rev’d sub nom. In re Trump, 928 F.3d 360 (4th Cir. 2019), rev’d en banc, 958 F.3d 274 (4th Cir. 2020), cert. granted and vacated as moot sub nom. Trump v. District of Columbia, 141 S. Ct. 1262 (2021) (mem.); District of Columbia v. U.S. Dep’t of Agric., 496 F. Supp. 3d 213, 219 (D.D.C. 2020). D.C. commonly participates in state-led lawsuits as a non-named plaintiff as well. See Dep’t of Com. v. New York, 139 S. Ct. 2551, 2563 (2019); New York v. U.S. Dep’t of Lab., 363 F. Supp. 3d 109, 116–17 (D.D.C. 2019); U.S. House of Representatives v. Price, No. 16-5202, 2017 WL 3271445, at *1 (D.C. Cir. Aug. 1, 2017); Complaint for Declaratory, Injunctive, and Mandamus Relief at 2, California v. McMahon, No. 25-cv-00329 (D.R.I. July 14, 2025). ↑
  14.  Compare D.C. Complaint, supra note 12, at 29 (reporting a presence of 2,290 Guardsmen by September 2025), with Letter from Phillip L. Swagel, Dir., Cong. Budget Off., to the Hon. Jeff Merkley, Ranking Member, U.S. Senate Comm. on Budget 8 (Jan. 28, 2026) (reporting a presence of 2,950 Guardsmen in the District by the end of December 2025). ↑
  15.  Specifically, after a setback in the Supreme Court, the Administration agreed to withdraw the National Guard from Chicago, Los Angeles, and Portland. See Trump v. Illinois, 146 S. Ct. 432, 434 (2025) (“[A]t least in this posture, the Government has not carried its burden to show that [10 U.S.C.] § 12406(3) permits the President to federalize the Guard in the exercise of inherent authority to protect federal personnel and property in Illinois.”); Rob McLean, Trump Says He’s Removing National Guard Troops from Chicago, Los Angeles and Portland, NBC News (Dec. 31, 2025, at 20:38 ET), https://www.nbcnews.c‌om/politics/trump-administration/trump-removing-national-guard-troops-chicago-los-angele‌s-portland-rcna251746 [https://perma.cc/6BHF-FQWF]. The Oregon litigation resolved soon thereafter, except for some ancillary issues. See, e.g., Response to State of Oregon’s Motion to Modify Protective Order and Clarify the Confidentiality Status of Certain Deposition Videos, Oregon v. Trump, No. 25-cv-01756 (D. Or. Mar. 24, 2026). The suits in Illinois and California continued regarding whether the withdrawals mooted the claims. See Plaintiffs’ Response in Opposition to Defendants’ Motion to Dismiss for Lack of Subject Matter Jurisdiction Under Rule 12(b)(1), Illinois v. Trump, No. 25-cv-12174 (N.D. Ill. Mar. 10, 2026); Plaintiffs-Appellees’ Opposition to Motion to Dismiss, Newsom v. Trump, No. 25-3727 (9th Cir. Jan. 28, 2026); see also Memorandum of Law in Support of Motion to Dismiss at 4–15, Minnesota v. Noem, No. 26-cv-00190 (D. Minn. Mar. 16, 2026) (arguing for dismissal of Minnesota and the Twin Cities’ complaint on standing and mootness grounds). In addition to D.C., the Administration declined to withdraw the Guardsmen from New Orleans and Memphis; but recall that those deployments were uncontested by the states of Louisiana and Tennessee, respectively. See supra note 5. ↑
  16.  Ann Woolhandler & Julia D. Mahoney, State Standing After Biden v. Nebraska, 2023 Sup. Ct. Rev. 303, 303. ↑

  17.  See New York v. United States, 505 U.S. 144, 187 (1992) (“Much of the Constitution is concerned with setting forth the form of our government, and the courts have traditionally invalidated measures deviating from that form. The result may appear ‘formalistic’ in a given case . . . because . . . of the era’s perceived necessity. But the Constitution protects us from our own best intentions: It divides power among sovereigns and among branches of government precisely so that we may resist the temptation to concentrate power in one location as an expedient solution to the crisis of the day.”). ↑

Corporate Value(s)

Introduction

Politics and values have critical importance in corporate decision-making, from questions at the core of a company’s existence, like whether it is morally appropriate to make and sell cigarettes or guns, to the routine, like whether to package products in plastic or paper. Long latent, values now take center stage as society has become more polarized, and issues such as diversity, clean energy, and charitable donations have become increasingly politicized. The growing salience of values poses challenges for corporate managers1 1.In the corporation, operational decisions are made by corporate officers under the direction and supervision of the board of directors. See, e.g., R. Franklin Balotti & Megan W. Shaner, Safe Harbor for Officer Reliance: Comparing the Approaches of the Model Business Corporation Act and Delaware’s General Corporation Law, 74 Law & Contemp. Probs., Winter 2011, at 161, 169 (“[G]iven the size and complexity of many modern corporations, actual operational control by the board of directors, itself, is frequently not feasible. . . . [As a result, t]he primary functions of management of the corporation generally are delegated to [senior officers].”). For purposes of simplicity, we will use the term “management” in this Article to refer to both officers and directors.Show More and corporate governance because economic value, not societal values, has long been the corporation’s raison d’être. In this Article, we provide a theory for how managers should confront values and how corporate governance can flex to accommodate values, in particular shareholder values, within its framework. The policy implications of this theory run counter to the key policy initiatives and marketplace innovations poised to reshape shareholder democracy.

Our view is contrary to those who argue that managers should put values first2 2.This perspective is perhaps most explicitly embraced in the corporate social responsibility movement, which argues that “corporations have a moral responsibility to voluntarily integrate . . . [ESG] improvements into their business operations for the benefit of shareholders, other stakeholders, society as a whole, and the environment.” Lynn M. LoPucki, Repurposing the Corporation Through Stakeholder Markets, 55 U.C. Davis L. Rev. 1445, 1447 (2022).Show More and who look to corporations as moral leaders that can potentially drive social change.3 3.See, e.g., Jennifer S. Fan, Woke Capital: The Role of Corporations in Social Movements, 9 Harv. Bus. L. Rev. 441, 487 (2019) (“Corporations’ continued involvement in social movements is thus necessary both for the good of the corporations and for accomplishing the goals of the social movements themselves.”).Show More Corporations and corporate governance are ill-equipped for moral leadership.4 4.There are some exceptions to this principle, including public benefit corporations; corporations that are controlled by a nonprofit or similar entity; corporations that incorporate a distinctive social mission into their business model, such as Patagonia; and private for-profit corporations, where all shareholders agree on the corporation’s mission. See generally Ofer Eldar & Mark Ørberg, The Anatomy of Nonprofit Control of Business Enterprise, 43 Yale J. on Regul. 335 (2026) (discussing the control by nonprofits of for-profit businesses).Show More Managers lack the expertise and legitimacy to select which values to back, and corporate governance lacks adequate accountability tools. As a result, corporate values commitments are often transient, inauthentic, and problematic.5 5.See, e.g., Jill E. Fisch & Jeff Schwartz, How Did Corporations Get Stuck in Politics and Can They Escape?, 3 U. Chi. Bus. L. Rev. 325, 349–51 (2024) [hereinafter Fisch & Schwartz, Corporations in Politics] (describing corporate willingness to withdraw from controversial statements of values).Show More Recent history is rife with examples of corporate clumsiness and hypocrisy. Executives who lambasted President Trump and his policies a few years ago now line up to praise him.6 6.For example, Tim Cook, the CEO of Apple, condemned President Trump’s responses to white nationalist rallies in Virginia in 2017. Apple Boss Tim Cook Joins Donald Trump Condemnation, BBC (Aug. 17, 2017), https://www.bbc.com/news/business-40958559 [https:‌//perma.cc/ZM64-LBVM]. In August 2025, however, Mr. Cook presented Mr. Trump with “a customized plaque with a 24-karat gold base.” Yasmin Khorram, ‘Kiss the Ring’: Silicon Valley CEOs Struggle to Respond to Trump’s Involvement in Their Businesses, Politico (Sep. 16, 2025, at 08:00 ET), https://www.politico.com/news/2025/09/16/silicon-valley-ceo-‌trump-business-00564524 [https://perma.cc/Q7PC-JSWJ]. At a White House dinner, he thanked the President nine times in two minutes. Id.Show More Corporate stalwarts of diversity now disclaim it.7 7.See, e.g., Siddharth Cavale, Target Ending DEI Initiatives Amid Trump’s Order on Diversity Programs, Reuters (Jan. 24, 2025, at 19:20 ET), https://www.reuters.com/business/‌retail-consumer/target-ends-its-3-year-diversity-equity-inclusion-initiatives-2025-01-24 [http‌s://perma.cc/2F73-N8NF] (describing Target’s decision to end its diversity, equity, and inclusion (“DEI”) program); Conor Murray & Molly Bohannon, IBM Reportedly Walks Back Diversity Policies, Citing ‘Inherent Tensions’: Here Are All the Companies Rolling Back DEI Programs, Forbes (Apr. 11, 2025, at 11:27 ET), https://www.forbes.com/sites/con‌ormurray/2025/04/11/ibm-reportedly-walks-back-diversity-policies-citing-inherent-tensions-here-are-all-the-companies-rolling-back-dei-programs/ (listing companies that are “rolling back” their DEI programs).Show More

At the same time, however, the ubiquity of values-based considerations in ordinary operational decisions means that managers cannot ignore values or plausibly position their judgments as values-neutral. Another potential way to address values, as some have advocated, is to privilege shareholder views.8 8.See, e.g., Oliver Hart & Luigi Zingales, Companies Should Maximize Shareholder Welfare Not Market Value, 2 J.L. Fin. & Acct. 247, 260–61 (2017); Oliver Hart & Luigi Zingales, The New Corporate Governance, 1 U. Chi. Bus. L. Rev. 195, 204 (2022) [hereinafter Hart & Zingales, The New Corporate Governance]; Caleb N. Griffin, Humanizing Corporate Governance, 75 Fla. L. Rev. 689, 720–21 (2023).Show More Since shareholders are the holders of the residual profit interests and voting rights, and the closest thing there are to “owners” of the firm, this makes some sense. But officer and director fiduciary duties run to the corporation, not to shareholders.9 9.See, e.g., McRitchie v. Zuckerberg, 315 A.3d 518, 557 (Del. Ch. 2024) (“[D]irectors do not become fiduciaries for the stockholders as individuals. . . . The directors’ task is to grow . . . the value of the firm.”); N. Am. Cath. Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92, 99 (Del. 2007) (rejecting argument that director fiduciary duties should be expanded to creditors).Show More Shareholders have no special claim to values supremacy. Further, shareholders have heterogeneous values,10 10.See, e.g., Robert P. Bartlett III & Ryan Bubb, Corporate Social Responsibility Through Shareholder Governance, 97 S. Cal. L. Rev. 417, 446 (2024) (“[T]he social preferences of shareholders . . . are conflicted, muted, and often prefer less protection of stakeholder interests than provided by law.”). See generally Scott Hirst, Kobi Kastiel & Tamar Kricheli-Katz, How Much Do Investors Care About Social Responsibility?, 2023 Wis. L. Rev. 977 (conducting and describing an experiment demonstrating investor heterogeneity with respect to social preferences).Show More meaning that deference to shareholder values will frequently fail to provide a decisional tool, and implementing the will of the majority disserves those shareholders who disagree. Finally, shareholders lack the operational expertise to know how and when to incorporate values into business decisions. Deference to shareholders in this respect would usurp the role of management and upend corporate governance.

We also part ways with those, like current Securities and Exchange Commission (“SEC”) Chairman Paul Atkins, who discount the economic relevance of values.11 11.See, e.g., Paul S. Atkins, Chairman, Sec. & Exch. Comm’n, Keynote Address at the John L. Weinberg Center for Corporate Governance’s 25th Anniversary Gala (Oct. 9, 2025) [hereinafter Atkins, Keynote Address], https://www.sec.gov/newsroom/speeches-statements/‌atkins-10092025-keynote-address-john-l-weinberg-center-corporate-governances-25th-anniv‌ersary-gala [https://perma.cc/H5ZF-B63Z] (arguing that environmental and social shareholder proposals “frequently involve issues not material to the company’s business”); Vivek Ramaswamy, The ESG Fiduciary Gap, Harv. L. Sch. F. on Corp. Governance (Oct. 25, 2022), https://corpgov.law.harvard.edu/2022/10/25/the-esg-fiduciary-gap/ [https://perma.‌cc/56ZJ-8UD7] (arguing that asset managers’ promotion of ESG agendas is not in the interests of shareholders).Show More Instead, we argue that corporate values are inexorably linked to economic value and that managers should calibrate the corporation’s values to maximize the long-term value of the firm.12 12.Empirical work on the link between ESG and financial performance is mixed. See, e.g., Luis Jacob Escobar-Saldívar, Dacio Villarreal-Samaniego & Roberto J. Santillán-Salgado, The Effects of ESG Scores and ESG Momentum on Stock Returns and Volatility: Evidence from U.S. Markets, 18 J. Risk & Fin. Mgmt., no. 7, 2025, at 1, 2 (noting inconclusive findings with respect to the relationship between ESG ratings and financial performance). Aggregate statistics, however, mask the importance of values choices for individual firms.Show More A corporation’s position on values-related issues—even a position it has taken unintentionally by choosing to sell a product or hiring a spokesperson—may influence its reputation and, in turn, affect its cost of capital, the willingness of stakeholders, such as customers and employees, to engage with it, and its vulnerability to government regulation. Moreover, how values choices impact value is difficult to predict, and miscalculations may have significant economic consequences, as evidenced by the recent experiences of Bud Light,13 13.According to one report, Bud Light lost over $1 billion in sales as a result of the backlash resulting from its partnership with a transgender influencer. Hanna Ziady, Bud Light Boycott Likely Cost Anheuser-Busch InBev Over $1 Billion in Lost Sales, CNN Bus. (Feb. 29, 2024, at 12:05 ET), https://www.cnn.com/2024/02/29/business/bud-light-boycott-a‌b-inbev-sales [https://perma.cc/DG7R-CTJ9].Show More Target,14 14.Target lost $10 billion in market capitalization after customers boycotted in reaction to its sale of LGBTQ+-themed clothing. Ronny Reyes, Target Loses $10B in 10 Days as Stocks Fall Following Boycott over LGBTQ-Friendly Kids Clothing, N.Y. Post (May 28, 2023, at 22:08 ET), https://nypost.com/2023/05/28/target-loses-10b-following-boycott-calls-‌over-lgbtq-friendly-clothing/ [https://perma.cc/Q2M4-JTSC].Show More and Cracker Barrel,15 15.Cracker Barrel’s stock fell nearly sixteen percent in the month following the controversy surrounding its rebranding. Juveria Tabassum, Cracker Barrel Shares Drop as Logo Change Blowback Dents Restaurant Traffic, Reuters (Sep. 18, 2025, at 14:39 ET), http‌s://www.reuters.com/business/cracker-barrel-shares-slump-logo-change-blowback-dents-rest‌aurant-traffic-2025-09-18/ [https://perma.cc/5B4T-7AVE]. Critics described the new logo as “woke.” Suzanne O’Halloran, Cracker Barrel Loses $143 Million in Market Value After Woke Brand Fiasco, Fox Bus. (Aug. 25, 2025, at 19:21 ET), https://www.foxbusiness.com/‌markets/cracker-barrels-loses-143-million-market-value-after-woke-brand-fiasco [https://per‌ma.cc/2J7T-S835].Show More all of which saw significant economic consequences from being caught wrong-footed on values issues.

The importance of values and the complexity of values-related decisions have structural implications for corporate governance. Like operational decisions, managers should be afforded great deference with respect to their values-related choices.16 16.See, e.g., Stephen M. Bainbridge, Response, Director Primacy and Shareholder Disempowerment, 119 Harv. L. Rev. 1735, 1739–40 (2006).Show More As long as managers act in good faith on an informed basis, and in an effort to promote corporate value, their decisions are protected by the business judgment rule.17 17.See Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984) (“The business judgment rule is . . . a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.”).Show More Under Delaware law, how and the extent to which managers incorporate values into those decisions are treated no differently.18 18.See, e.g., Simeone v. Walt Disney Co., 302 A.3d 956, 969–70 (Del. Ch. 2023) (“Although choosing to speak (or not speak) on public policy issues is an ordinary business decision, this case exemplifies the challenges a corporation faces when addressing divisive topics—particularly ones external to its business.”).Show More That is as things should be, and, as with other business decisions, managers should not face liability when, in hindsight, they miscalculated.

Because values decisions are so fraught, however, management cannot make them in a vacuum. The most important input comes from the company’s key stakeholders. Management’s job is to attune the corporation’s values to those of its stakeholders in a way that best serves the firm’s economic interests. We do not argue that managers should owe a fiduciary duty to stakeholders. Rather, they should take stakeholder views into account because they can significantly impact the company’s economic prospects. Employees quit and customers boycott when values are misaligned.19 19.See Alex Christian, Are Workers Really Quitting Over Company Values?, BBC (Feb. 28, 2022), https://www.bbc.com/worklife/article/20220223-are-workers-really-quitting-over-‌company-values [https://perma.cc/2NB8-ZP3N] (discussing the importance of corporate values to workers and assessing how common it is for employees to quit over values); Ziady, supra note 13; Reyes, supra note 14; O’Halloran, supra note 15.Show More

The job of selecting a corporation’s values has become even more critical and difficult as the government has increasingly weighed in. In the last few years, state and federal authorities have targeted companies based on their political views and values.20 20.See infra text accompanying notes 64–67.Show More Managers now must consider the potential fallout from positioning the company’s values to oppose—or align with—those of the state.

Like other stakeholders, shareholders can inform management’s deliberations. Although shareholders have a common interest in firm value, both economic and noneconomic considerations affect shareholders’ investment decisions, as well as their participation in the governance of their portfolio companies. Their interest in both values and value makes them uniquely positioned to aid management in evaluating the impact of values-related decisions on firm value. Shareholder attitudes give insight into public values and the extent to which the embrace of values might involve a value tradeoff.

Because shareholders represent a cross-section of the public, they can enable management to more effectively gauge how the various stakeholders with which the firm interacts will view its decisions. Importantly, however, unlike outside stakeholders, shareholder concern for values is tempered by their concern for economic value, providing management with insight into how emphasizing certain values may impact returns. Finally, the ambiguity of how values impact value creates space for managers to insert their own values rather than deferring to corporate interests. Shareholder input can reduce this agency cost. In these ways, shareholder input is a valuable supplement to the communication by other stakeholders of their values-related preferences.

Yet it is difficult for shareholders to express their values to management. Exit and voice are the typical ways shareholders communicate their views, enabling management to distinguish between the concerns of special interest groups and the concerns of the broader shareholder base.21 21.Albert O. Hirschman, Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States 4 (1970).Show More The nature of share ownership today, however, makes both exit and voice difficult. The vast majority of economic owners invest through intermediaries,22 22.80% of Equity Market Cap Held by Institutions, Pensions & Invs. (Apr. 25, 2017, at 01:00 ET), https://www.pionline.com/article/20170425/INTERACTIVE/170429926/80-of-e‌quity-market-cap-held-by-institutions/.Show More and many adhere to index-based investment strategies,23 23.Richard A. Booth, Index Funds and the Duty to Diversify, Oxford Bus. L. Blog (Feb. 26, 2025), https://blogs.law.ox.ac.uk/oblb/blog-post/2025/02/index-funds-and-duty-diversify [https://perma.cc/22E7-A2FF] (“As of year-end 2023, index funds held 18% of the US stock market as compared to 13% held by actively managed mutual funds.”).Show More reducing their ability to exercise influence through exit, thus limiting the disciplinary effect of the capital markets. And although scholars have argued that institutional ownership enables investors to influence corporate decisions through voice,24 24.E.g., Eleonora Broccardo, Oliver Hart & Luigi Zingales, Exit Versus Voice, 130 J. Pol. Econ. 3101, 3102–04 (2022); John C. Coffee, Jr., Liquidity Versus Control: The Institutional Investor as Corporate Monitor, 91 Colum. L. Rev. 1277, 1366 (1991).Show More as we argue in other work, institutional voice is not a satisfactory solution when it comes to values.25 25.See generally Jill Fisch & Jeff Schwartz, Corporate Democracy and the Intermediary Voting Dilemma, 102 Tex. L. Rev. 1, 21 (2023) [hereinafter Fisch & Schwartz, Intermediary Voting Dilemma] (arguing that the increased focus on corporate values begets a need for input from fund shareholders in casting votes in portfolio firms).Show More Institutional intermediation of the public equity market obscures shareholder values, and what we have termed “beneficiary primacy” makes it more difficult for institutional investors to express the values of their shareholders.26 26.Jill Fisch & Jeff Schwartz, The Singular Role of Public Pension Funds in Corporate Governance, 104 Tex. L. Rev. 735, 738–39 (2026) [hereinafter Fisch & Schwartz, Singular Role].Show More We term these obstacles to shareholder voice “shareholder-side impediments.”

“Corporate-side impediments” further impede the ability of shareholders, even when they act as principals, to communicate on values. The director primacy model of corporate governance, which centers power in the board and leaves shareholders largely passive, is designed to exclude shareholders from operational decisions but also provides little space for the communication of shareholder values.27 27.Stephen M. Bainbridge, Director Primacy: The Means and Ends of Corporate Governance, 97 Nw. U. L. Rev. 547, 559 (2003).Show More Moreover, because the board’s consideration of values is within the scope of the business judgment rule, even a gross miscalculation cannot readily be addressed through litigation.28 28.See, e.g., Simeone v. Walt Disney Co., 302 A.3d 956, 971 (Del. Ch. 2023) (explaining that it is not the court’s role to “question rational judgments about how promoting non-stockholder interests . . . ultimately promote stockholder value”).Show More

Not only are these limitations problematic because they deprive management of valuable shareholder input, but they disadvantage shareholders relative to other stakeholder groups. Customers, employees, suppliers, the government,29 29.Including the government as a stakeholder is consistent with how the term is typically defined, as any party that can affect, or is affected by, the activities of the corporation. R. Edward Freeman, Strategic Management: A Stakeholder Approach 46 (1984); see, e.g., Aneil Kovvali & Joshua C. Macey, Private Profits and Public Business, 103 Tex. L. Rev. 711, 714 (2025) (describing significant government interventions into corporate affairs).Show More and even local communities30 30.See, e.g., Karen Kim, The Importance of Community Involvement, Frisco Chamber of Com. (Dec. 20, 2023), https://friscochamber.com/blog/the-importance-of-community-involv‌ement/ [https://perma.cc/FTM5-HK9T] (articulating the value to a corporation from engaging with the local community).Show More regularly engage with corporations on values-related issues, and that engagement is an important component of management’s decision-making process.31 31.See, e.g., Heiko Spitzeck & Erik G. Hansen, Stakeholder Governance: How Stakeholders Influence Corporate Decision Making, 10 Corp. Governance 378, 380 (2010) (describing case studies demonstrating the impact of stakeholder engagement on operations).Show More These non-shareholder stakeholders are increasingly flexing their power when they disagree with a corporation’s values. Disney employees staged a series of walkouts and successfully persuaded the company to take a public stance opposing Florida’s so-called “Don’t Say Gay” legislation,32 32.Joe Hernandez, Disney Workers Walk Out Over the Company’s Response to So-Called ‘Don’t Say Gay’ Bill, NPR (Mar. 22, 2022, at 12:23 ET), https://www.npr.org/2022/03/22/1‌088048998/disney-walkout-dont-say-gay-bill [https://perma.cc/A9FR-ASY9]. Disney management subsequently opposed the bill publicly. Sarah Whitten, Disney Vows to Help Repeal ‘Don’t Say Gay’ Law, Says Florida Gov. DeSantis Shouldn’t Have Signed It, CNBC (Mar. 28, 2022, at 20:24 ET), https://www.cnbc.com/2022/03/28/disney-vows-to-help-repeal‌-dont-say-gay-law.html [https://perma.cc/4XV8-UKF5].Show More a stance that led to costly economic sanctions by Governor Ron DeSantis and embroiled the company in litigation.33 33.See, e.g., Associated Press, Settlement Reached in Lawsuit Between Florida Gov. Ron DeSantis Allies and Disney, NBC News (Mar. 27, 2024, at 11:30 ET), https://www.nbcnews‌.com/business/business-news/disney-desantis-allies-reach-settlement-disney-district-control-‌rcna145289 [https://perma.cc/8D69-QCEZ] (describing background to settlement of litigation over legislation adopted “[a]s punishment for Disney’s opposition”).Show More Customers are also activists. According to a LendingTree survey, thirty-one percent of people have boycotted a company.34 34.Betty Lin-Fisher, Consumer Boycotts Continue: 31% Are Participating. See Where and Why, USA Today (July 6, 2025, at 17:06 ET), https://www.usatoday.com/story/money/2025‌/07/02/shoppers-boycott-retailers-dei-study/84388672007/ [https://perma.cc/28ZH-S98R].Show More Shareholders provide an important additional voice and should not face greater obstacles to engagement.

Concededly, shareholders retain the ultimate power to address management’s values choices with which they disagree through their ability to replace directors. Some commentators describe Engine No. 1’s success in replacing three directors at Exxon as an example of shareholder backlash against misaligned values with respect to climate change.35 35.See, e.g., Dan W. Puchniak & Umakanth Varottil, Climate-Related Shareholder Activism as Corporate Democracy: A Call to Reform Acting in Concert Rules, 50 J. Corp. L. 617, 618–19 (2025) (explaining that Engine No. 1’s successful proxy contest was “lauded by the ‘responsible investment community’”).Show More Such a response is, however, a blunt and expensive remedy. It is far more efficient to allow shareholders input into whether Starbucks charges a premium for nondairy milk, for example, than for the issue to be the subject of a contested director election.36 36.Geeyoung Min, Shareholder Direct Democracy, 74 Emory L.J. 381, 422 (2024) (stating that in 2024, following the submission of two shareholder proposals, “Starbucks announced the removal of the surcharge for non-dairy milk substitutes”).Show More

Because shareholders offer valuable information about how management should position corporate values, corporate law should facilitate values-related communications. Instead, there is significant contrary momentum. Rule 14a-8, the shareholder proposal rule, allows public company shareholders to submit proposals to an issuer and requires the issuer to include the proposals in its proxy materials provided certain conditions are met.37 37.17 C.F.R. § 240.14a-8 (2025).Show More The rule has traditionally been the primary mechanism for shareholders to communicate their values to management.38 38.See, e.g., James D. Cox & Randall S. Thomas, The SEC’s Shareholder Proposal Rule: Creating a Corporate Public Square, 2021 Colum. Bus. L. Rev. 1147, 1147–48 (defending the shareholder proposal rule as enabling shareholders to communicate their views to management and to each other).Show More Yet the SEC is poised to limit Rule 14a-8,39 39.Agency Rule List – Spring 2025: Securities and Exchange Commission, Off. of Info. & Regul. Affs., https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_G‌ET_AGENCY_RULE_LIST¤tPub=true&agencyCode=&showStage=active&agency‌Cd=3235 [https://perma.cc/URR3-6URR] (last visited May 15, 2026) (listing “Shareholder Proposal Modernization” as in the proposed rule stage); View Rule – Shareholder Proposal Modernization, Off. of Info. & Regul. Affs. [hereinafter Shareholder Proposal Modernization], https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202504&RI‌N=3235-AN47 [https://perma.cc/B7M4-FCEY] (last visited May 15, 2026) (stating that the rules would “modernize the requirements of Exchange Act Rule 14a-8 to reduce compliance burdens for registrants and account for developments since the rule was last amended”).Show More and Congress is considering repeal.40 40.Prioritizing Economic Growth Over Woke Policies Act, H.R. 4790, 118th Cong. § 3201 (2024).Show More Finally, in an October 2025 speech, Chairman Atkins called into question the continued viability of the shareholder proposal rule, endorsing a controversial theory challenging the state law basis for precatory (non-binding) shareholder proposals41 41.Atkins, Keynote Address, supra note 11.Show More—the form taken by nearly all such proposals.42 42.‘We Will Get By, We Will Survive’—The Future of Shareholder Proposals, Cooley (Dec. 3, 2025) [hereinafter Future of Shareholder Proposals], https://www.cooley.com/news/‌insight/2025/2025-12-03-we-will-get-by-we-will-survive–the-future-of-shareholder-propos‌als [https://perma.cc/HS7R-U3UR] (“In the last three years, nearly 3,000 shareholder proposals were submitted to Russell 3000 companies, and fewer than 20 were binding proposals.”); Sanford Lewis & Khadija Foda, The SEC, Delaware and the High Stakes for Investors on Advisory Shareholder Proposals, Harv. L. Sch. F. on Corp. Governance (Nov. 20, 2025), https://corpgov.law.harvard.edu/2025/11/20/the-sec-delaware-and-the-high-stakes‌-for-investors-on-advisory-shareholder-proposals/ [https://perma.cc/54BR-HNFE] (“A 2007 Institutional Shareholder Services report noted that non-binding proposals accounted for 98% of the total shareholder resolutions in the US in that year. In our experience, that ratio remains approximately the same today.”).Show More

We argue that dismantling the shareholder proposal rule would be a mistake because it would destroy corporate value.43 43.Although commentators disagree on the extent to which precatory proposals have an economic impact on issuers, there is evidence that such proposals, including ESG proposals, are correlated with increased firm economic value. See Interfaith Ctr. on Corp. Resp. v. SEC, 786 F. Supp. 3d 97, 129 (D.D.C. 2025) (describing data presented to SEC on the economic value of ESG proposals).Show More Given the increased significance of values to corporate decision-making, the shareholder proposal rule is more important today than ever. Current efforts to revise the rule are rooted largely in the perception that it is overly permissive, particularly with respect to environmental and social issues, allowing for proposals that are, in some cases, overly prescriptive, economically immaterial to an issuer, and unpopular with other shareholders. We acknowledge these concerns and identify modest safeguards to address them, such as invigorating the prohibition on proposals that attempt to micromanage issuers and imposing more significant limitations on repeat proposals.

We also criticize the current trend of mutual fund sponsors toward implementing voting choice programs through which they shift voting responsibility to proxy advisors and shareholders. While these programs are promoted as mechanisms to enhance corporate democracy, they are crude instruments for conveying shareholder values, and they lessen the effectiveness of intermediaries in addressing the collective action challenges individual fund shareholders face. Instead, we argue that mutual funds and other financial intermediaries should retain voting power but be required to solicit and reflect the views of their shareholders on values-related matters.

This Article proceeds as follows. In Part I, we explain the economic importance of values to corporate operations. Part II considers how managers should weigh values into corporate decisions, concluding that they should be included as part of the long-term value calculus. Part III shows how the communication of shareholders’ values-based preferences—as with the communication of other stakeholder values—can improve the ability of directors to enhance corporate value. Part IV describes the role of shareholder-side impediments and corporate-side impediments in constraining shareholders from communicating and effectuating their value choices on the corporation. Part V demonstrates the implications of our analysis for reform of the shareholder proposal rule and voting choice programs.

  1.  In the corporation, operational decisions are made by corporate officers under the direction and supervision of the board of directors. See, e.g., R. Franklin Balotti & Megan W. Shaner, Safe Harbor for Officer Reliance: Comparing the Approaches of the Model Business Corporation Act and Delaware’s General Corporation Law, 74 Law
    &

    Contemp. Probs., Winter 2011, at 161, 169 (“[G]iven the size and complexity of many modern corporations, actual operational control by the board of directors, itself, is frequently not feasible. . . . [As a result, t]he primary functions of management of the corporation generally are delegated to [senior officers].”). For purposes of simplicity, we will use the term “management” in this Article to refer to both officers and directors. ↑

  2.  This perspective is perhaps most explicitly embraced in the corporate social responsibility movement, which argues that “corporations have a moral responsibility to voluntarily integrate . . . [ESG] improvements into their business operations for the benefit of shareholders, other stakeholders, society as a whole, and the environment.” Lynn M. LoPucki, Repurposing the Corporation Through Stakeholder Markets, 55 U.C. Davis L. Rev. 1445, 1447 (2022). ↑
  3.  See, e.g., Jennifer S. Fan, Woke Capital: The Role of Corporations in Social Movements, 9 Harv. Bus. L. Rev. 441, 487 (2019) (“Corporations’ continued involvement in social movements is thus necessary both for the good of the corporations and for accomplishing the goals of the social movements themselves.”). ↑
  4.  There are some exceptions to this principle, including public benefit corporations; corporations that are controlled by a nonprofit or similar entity; corporations that incorporate a distinctive social mission into their business model, such as Patagonia; and private for-profit corporations, where all shareholders agree on the corporation’s mission. See generally Ofer Eldar & Mark Ørberg, The Anatomy of Nonprofit Control of Business Enterprise, 43 Yale J. on Regul. 335 (2026) (discussing the control by nonprofits of for-profit businesses). ↑
  5.  See, e.g., Jill E. Fisch & Jeff Schwartz, How Did Corporations Get Stuck in Politics and Can They Escape?, 3 U. Chi. Bus. L. Rev. 325, 349–51 (2024) [hereinafter Fisch & Schwartz, Corporations in Politics] (describing corporate willingness to withdraw from controversial statements of values). ↑
  6.  For example, Tim Cook, the CEO of Apple, condemned President Trump’s responses to white nationalist rallies in Virginia in 2017. Apple Boss Tim Cook Joins Donald Trump Condemnation, BBC (Aug. 17, 2017), https://www.bbc.com/news/business-40958559 [https:‌//perma.cc/ZM64-LBVM]. In August 2025, however, Mr. Cook presented Mr. Trump with “a customized plaque with a 24-karat gold base.” Yasmin Khorram, ‘Kiss the Ring’: Silicon Valley CEOs Struggle to Respond to Trump’s Involvement in Their Businesses, Politico (Sep. 16, 2025, at 08:00 ET), https://www.politico.com/news/2025/09/16/silicon-valley-ceo-‌trump-business-00564524 [https://perma.cc/Q7PC-JSWJ]. At a White House dinner, he thanked the President nine times in two minutes. Id. ↑
  7.  See, e.g., Siddharth Cavale, Target Ending DEI Initiatives Amid Trump’s Order on Diversity Programs, Reuters (Jan. 24, 2025, at 19:20 ET), https://www.reuters.com/business/‌retail-consumer/target-ends-its-3-year-diversity-equity-inclusion-initiatives-2025-01-24 [http‌s://perma.cc/2F73-N8NF] (describing Target’s decision to end its diversity, equity, and inclusion (“DEI”) program); Conor Murray & Molly Bohannon, IBM Reportedly Walks Back Diversity Policies, Citing ‘Inherent Tensions’: Here Are All the Companies Rolling Back DEI Programs, Forbes (Apr. 11, 2025, at 11:27 ET), https://www.forbes.com/sites/con‌ormurray/2025/04/11/ibm-reportedly-walks-back-diversity-policies-citing-inherent-tensions-here-are-all-the-companies-rolling-back-dei-programs/ (listing companies that are “rolling back” their DEI programs). ↑
  8.  See, e.g., Oliver Hart & Luigi Zingales, Companies Should Maximize Shareholder Welfare Not Market Value, 2 J.L. Fin. & Acct. 247, 260–61 (2017); Oliver Hart & Luigi Zingales, The New Corporate Governance, 1 U. Chi. Bus. L. Rev. 195, 204 (2022) [hereinafter Hart & Zingales, The New Corporate Governance]; Caleb N. Griffin, Humanizing Corporate Governance, 75 Fla. L. Rev. 689, 720–21 (2023). ↑
  9.  See, e.g., McRitchie v. Zuckerberg, 315 A.3d 518, 557 (Del. Ch. 2024) (“[D]irectors do not become fiduciaries for the stockholders as individuals. . . . The directors’ task is to grow . . . the value of the firm.”); N. Am. Cath. Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92, 99 (Del. 2007) (rejecting argument that director fiduciary duties should be expanded to creditors). ↑
  10.  See, e.g., Robert P. Bartlett III & Ryan Bubb, Corporate Social Responsibility Through Shareholder Governance, 97 S. Cal. L. Rev. 417, 446 (2024) (“[T]he social preferences of shareholders . . . are conflicted, muted, and often prefer less protection of stakeholder interests than provided by law.”). See generally Scott Hirst, Kobi Kastiel & Tamar Kricheli-Katz, How Much Do Investors Care About Social Responsibility?, 2023 Wis. L. Rev. 977 (conducting and describing an experiment demonstrating investor heterogeneity with respect to social preferences). ↑
  11.  See, e.g., Paul S. Atkins, Chairman, Sec. & Exch. Comm’n, Keynote Address at the John L. Weinberg Center for Corporate Governance’s 25th Anniversary Gala (Oct. 9, 2025) [hereinafter Atkins, Keynote Address], https://www.sec.gov/newsroom/speeches-statements/‌atkins-10092025-keynote-address-john-l-weinberg-center-corporate-governances-25th-anniv‌ersary-gala [https://perma.cc/H5ZF-B63Z] (arguing that environmental and social shareholder proposals “frequently involve issues not material to the company’s business”); Vivek Ramaswamy, The ESG Fiduciary Gap, Harv. L. Sch. F. on Corp. Governance (Oct. 25, 2022), https://corpgov.law.harvard.edu/2022/10/25/the-esg-fiduciary-gap/ [https://perma.‌cc/56ZJ-8UD7] (arguing that asset managers’ promotion of ESG agendas is not in the interests of shareholders). ↑
  12.  Empirical work on the link between ESG and financial performance is mixed. See, e.g., Luis Jacob Escobar-Saldívar, Dacio Villarreal-Samaniego & Roberto J. Santillán-Salgado, The Effects of ESG Scores and ESG Momentum on Stock Returns and Volatility: Evidence from U.S. Markets, 18 J. Risk & Fin. Mgmt., no. 7, 2025, at 1, 2 (noting inconclusive findings with respect to the relationship between ESG ratings and financial performance). Aggregate statistics, however, mask the importance of values choices for individual firms. ↑
  13.  According to one report, Bud Light lost over $1 billion in sales as a result of the backlash resulting from its partnership with a transgender influencer. Hanna Ziady, Bud Light Boycott Likely Cost Anheuser-Busch InBev Over $1 Billion in Lost Sales, CNN Bus. (Feb. 29, 2024, at 12:05 ET), https://www.cnn.com/2024/02/29/business/bud-light-boycott-a‌b-inbev-sales [https://perma.cc/DG7R-CTJ9]. ↑
  14.  Target lost $10 billion in market capitalization after customers boycotted in reaction to its sale of LGBTQ+-themed clothing. Ronny Reyes, Target Loses $10B in 10 Days as Stocks Fall Following Boycott over LGBTQ-Friendly Kids Clothing, N.Y. Post (May 28, 2023, at 22:08 ET), https://nypost.com/2023/05/28/target-loses-10b-following-boycott-calls-‌over-lgbtq-friendly-clothing/ [https://perma.cc/Q2M4-JTSC]. ↑
  15.  Cracker Barrel’s stock fell nearly sixteen percent in the month following the controversy surrounding its rebranding. Juveria Tabassum, Cracker Barrel Shares Drop as Logo Change Blowback Dents Restaurant Traffic, Reuters (Sep. 18, 2025, at 14:39 ET), http‌s://www.reuters.com/business/cracker-barrel-shares-slump-logo-change-blowback-dents-rest‌aurant-traffic-2025-09-18/ [https://perma.cc/5B4T-7AVE]. Critics described the new logo as “woke.” Suzanne O’Halloran, Cracker Barrel Loses $143 Million in Market Value After Woke Brand Fiasco, Fox Bus. (Aug. 25, 2025, at 19:21 ET), https://www.foxbusiness.com/‌markets/cracker-barrels-loses-143-million-market-value-after-woke-brand-fiasco [https://per‌ma.cc/2J7T-S835]. ↑
  16.  See, e.g., Stephen M. Bainbridge, Response, Director Primacy and Shareholder Disempowerment, 119 Harv. L. Rev. 1735, 1739–40 (2006). ↑
  17.  See Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984) (“The business judgment rule is . . . a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company.”). ↑
  18.  See, e.g., Simeone v. Walt Disney Co., 302 A.3d 956, 969–70 (Del. Ch. 2023) (“Although choosing to speak (or not speak) on public policy issues is an ordinary business decision, this case exemplifies the challenges a corporation faces when addressing divisive topics—particularly ones external to its business.”). ↑
  19.  See Alex Christian, Are Workers Really Quitting Over Company Values?, BBC (Feb. 28, 2022), https://www.bbc.com/worklife/article/20220223-are-workers-really-quitting-over-‌company-values [https://perma.cc/2NB8-ZP3N] (discussing the importance of corporate values to workers and assessing how common it is for employees to quit over values); Ziady, supra note 13; Reyes, supra note 14; O’Halloran, supra note 15. ↑
  20.  See infra text accompanying notes 64–67. ↑
  21.  Albert O. Hirschman, Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States 4 (1970). ↑
  22.  80% of Equity Market Cap Held by Institutions, Pensions & Invs. (Apr. 25, 2017, at 01:00 ET), https://www.pionline.com/article/20170425/INTERACTIVE/170429926/80-of-e‌quity-market-cap-held-by-institutions/. ↑
  23.  Richard A. Booth, Index Funds and the Duty to Diversify, Oxford Bus. L. Blog (Feb. 26, 2025), https://blogs.law.ox.ac.uk/oblb/blog-post/2025/02/index-funds-and-duty-diversify [https://perma.cc/22E7-A2FF] (“As of year-end 2023, index funds held 18% of the US stock market as compared to 13% held by actively managed mutual funds.”). ↑
  24.  E.g., Eleonora Broccardo, Oliver Hart & Luigi Zingales, Exit Versus Voice, 130 J. Pol. Econ. 3101, 3102–04 (2022); John C. Coffee, Jr., Liquidity Versus Control: The Institutional Investor as Corporate Monitor, 91 Colum. L. Rev. 1277, 1366 (1991). ↑
  25.  See generally Jill Fisch & Jeff Schwartz, Corporate Democracy and the Intermediary Voting Dilemma, 102 Tex. L. Rev. 1, 21 (2023) [hereinafter Fisch & Schwartz, Intermediary Voting Dilemma] (arguing that the increased focus on corporate values begets a need for input from fund shareholders in casting votes in portfolio firms). ↑
  26.  Jill Fisch & Jeff Schwartz, The Singular Role of Public Pension Funds in Corporate Governance, 104 Tex. L. Rev. 735, 738–39 (2026) [hereinafter Fisch & Schwartz, Singular Role]. ↑
  27.  Stephen M. Bainbridge, Director Primacy: The Means and Ends of Corporate Governance, 97 Nw. U. L. Rev.
    547,
    559
    (2003).

    ↑

  28.  See, e.g., Simeone v. Walt Disney Co., 302 A.3d 956, 971 (Del. Ch. 2023) (explaining that it is not the court’s role to “question rational judgments about how promoting non-stockholder interests . . . ultimately promote stockholder value”). ↑
  29.  Including the government as a stakeholder is consistent with how the term is typically defined, as any party that can affect, or is affected by, the activities of the corporation. R. Edward Freeman, Strategic Management: A Stakeholder Approach 46 (1984); see, e.g., Aneil Kovvali & Joshua C. Macey, Private Profits and Public Business, 103 Tex. L. Rev. 711, 714 (2025) (describing significant government interventions into corporate affairs). ↑
  30.  See, e.g., Karen Kim, The Importance of Community Involvement, Frisco Chamber of Com. (Dec. 20, 2023), https://friscochamber.com/blog/the-importance-of-community-involv‌ement/ [https://perma.cc/FTM5-HK9T] (articulating the value to a corporation from engaging with the local community). ↑
  31.  See, e.g., Heiko Spitzeck & Erik G. Hansen, Stakeholder Governance: How Stakeholders Influence Corporate Decision Making,
    10

    Corp. Governance 378, 380 (2010) (describing case studies demonstrating the impact of stakeholder engagement on operations). ↑

  32.  Joe Hernandez, Disney Workers Walk Out Over the Company’s Response to So-Called ‘Don’t Say Gay’ Bill, NPR (Mar. 22, 2022, at 12:23 ET), https://www.npr.org/2022/03/22/1‌088048998/disney-walkout-dont-say-gay-bill [https://perma.cc/A9FR-ASY9]. Disney management subsequently opposed the bill publicly. Sarah Whitten, Disney Vows to Help Repeal ‘Don’t Say Gay’ Law, Says Florida Gov. DeSantis Shouldn’t Have Signed It, CNBC (Mar. 28, 2022, at 20:24 ET), https://www.cnbc.com/2022/03/28/disney-vows-to-help-repeal‌-dont-say-gay-law.html [https://perma.cc/4XV8-UKF5]. ↑
  33.  See, e.g., Associated Press, Settlement Reached in Lawsuit Between Florida Gov. Ron DeSantis Allies and Disney, NBC News (Mar. 27, 2024, at 11:30 ET), https://www.nbcnews‌.com/business/business-news/disney-desantis-allies-reach-settlement-disney-district-control-‌rcna145289 [https://perma.cc/8D69-QCEZ] (describing background to settlement of litigation over legislation adopted “[a]s punishment for Disney’s opposition”). ↑
  34.  Betty Lin-Fisher, Consumer Boycotts Continue: 31% Are Participating. See Where and Why, USA Today (July 6, 2025, at 17:06 ET), https://www.usatoday.com/story/money/2025‌/07/02/shoppers-boycott-retailers-dei-study/84388672007/ [https://perma.cc/28ZH-S98R]. ↑
  35.  See, e.g., Dan W. Puchniak & Umakanth Varottil, Climate-Related Shareholder Activism as Corporate Democracy: A Call to Reform Acting in Concert Rules, 50 J. Corp. L
    .

    617, 618–19 (2025) (explaining that Engine No. 1’s successful proxy contest was “lauded by the ‘responsible investment community’”). ↑

  36.  Geeyoung Min, Shareholder Direct Democracy, 74 Emory L.J. 381, 422 (2024) (stating that in 2024, following the submission of two shareholder proposals, “Starbucks announced the removal of the surcharge for non-dairy milk substitutes”). ↑
  37.  17 C.F.R. § 240.14a-8 (2025). ↑
  38.  See, e.g., James D. Cox & Randall S. Thomas, The SEC’s Shareholder Proposal Rule: Creating a Corporate Public Square, 2021 Colum. Bus. L. Rev. 1147, 1147–48 (defending the shareholder proposal rule as enabling shareholders to communicate their views to management and to each other). ↑
  39.  Agency Rule List – Spring 2025: Securities and Exchange Commission, Off. of Info. & Regul. Affs., https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_G‌ET_AGENCY_RULE_LIST&currentPub=true&agencyCode=&showStage=active&agency‌Cd=3235 [https://perma.cc/URR3-6URR] (last visited May 15, 2026) (listing “Shareholder Proposal Modernization” as in the proposed rule stage); View Rule – Shareholder Proposal Modernization, Off. of Info. & Regul. Affs. [hereinafter Shareholder Proposal Modernization], https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202504&RI‌N=3235-AN47 [https://perma.cc/B7M4-FCEY] (last visited May 15, 2026) (stating that the rules would “modernize the requirements of Exchange Act Rule 14a-8 to reduce compliance burdens for registrants and account for developments since the rule was last amended”). ↑
  40.  Prioritizing Economic Growth Over Woke Policies Act, H.R. 4790, 118th Cong. § 3201 (2024). ↑
  41.  Atkins, Keynote Address, supra note 11. ↑
  42.  ‘We Will Get By, We Will Survive’—The Future of Shareholder Proposals, Cooley
    (

    Dec. 3, 2025) [hereinafter Future of Shareholder Proposals], https://www.cooley.com/news/‌insight/2025/2025-12-03-we-will-get-by-we-will-survive–the-future-of-shareholder-propos‌als [https://perma.cc/HS7R-U3UR] (“In the last three years, nearly 3,000 shareholder proposals were submitted to Russell 3000 companies, and fewer than 20 were binding proposals.”); Sanford Lewis & Khadija Foda, The SEC, Delaware and the High Stakes for Investors on Advisory Shareholder Proposals, Harv. L. Sch. F. on Corp. Governance (Nov. 20, 2025), https://corpgov.law.harvard.edu/2025/11/20/the-sec-delaware-and-the-high-stakes‌-for-investors-on-advisory-shareholder-proposals/ [https://perma.cc/54BR-HNFE] (“A 2007 Institutional Shareholder Services report noted that non-binding proposals accounted for 98% of the total shareholder resolutions in the US in that year. In our experience, that ratio remains approximately the same today.”). ↑

  43.  Although commentators disagree on the extent to which precatory proposals have an economic impact on issuers, there is evidence that such proposals, including ESG proposals, are correlated with increased firm economic value. See Interfaith Ctr. on Corp. Resp. v. SEC, 786 F. Supp. 3d 97, 129 (D.D.C. 2025) (describing data presented to SEC on the economic value of ESG proposals). ↑

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