Patagonia Cites B-Corp Status in Suit to Protect National Monuments

December 27, 2017
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Patagonia Has Joined Nonprofit Environmental Groups and Native American Tribes in Challenging the Trump Administration’s Decision to Reduce the Size of Certain National Monuments

Patagonia has joined nonprofit environmental groups and Indian tribes in challenging the Trump Administration’s decision to reduce the size of Bears Ears and Grand Staircase-Escalante National Monuments. When you visit the outdoor retailer’s website, a black screen now appears with the words “The President Stole Your Land.”

Patagonia Cites B-Corp Status In Suit to Protect National Monuments

Photo courtesy of Ales Krivec (Unsplash.com)

According to Patagonia, it has a vested interest in preserving the monument. It previously donated $800,000 to advocacy groups that helped establish Bears Ears. The company has also conducted employee retreats at the monument and performed product testing there. This spring, the retailer released a film that provides a virtual tour of Bears Ears.  

The company also maintains that its environmental preservation efforts give it standing to sue. In a statement published in Time Magazine, CEO Rose Marcario emphasized that Patagonia is a benefit corporation and its articles of incorporation mandate that it confronts environmental threats.

Patagonia also maintains that the suit is necessary to protect its business interests. “Patagonia’s business relies directly on public lands, like Indian Creek in Bears Ears, which hosts world-class climbing,” Marcario wrote. “Powered by national monuments, national parks and other special public lands that draw millions of visitors a year, outdoor recreation is America’s fourth-largest industry — driving $887 billion in annual consumer spending and 7.6 million jobs, according to the Outdoor Industry Association.”

Unique Characteristics of Benefit Corporations 

Patagonia’s suit is novel in that the company is relying on its corporate structure to challenge the monument reversal. Benefit corporations allow businesses to consider profit as well as society and the environment. The special form of incorporation is available in more than 20 states, including New Jersey.

The primary advantage of incorporating as a benefit corporation is flexibility. The directors of the company are not required to exclusively focus on financial interests. In addition, they are free to address social and environmental impacts without fear of facing legal liability.

Becoming a benefit corporation can also enhance a company’s bottom-line. Consumers increasingly prefer to purchase products and services from businesses that are perceived to be “good citizens.” Including social accountability in the very fiber of the company is a great way for companies to differentiate themselves in a crowded marketplace and can also help attract employees.

President’s Authority to Reduce Size of National Monuments

In addition to determining whether Patagonia has the standing to sue, the case will ultimately decide whether the President has the legal authority to abolish or reduce national monuments created by past presidents. The Antiquities Act of 1906 expressly authorizes the President to “declare by public proclamation historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest that are situated upon the lands owned or controlled by the Government of the United States to be national monuments.” On September 24, 1906, President Roosevelt designated Devils Tower in Wyoming as the country’s first national monument. Sixteen other presidents have relied on the Antiquities Act to establish more than 100 national monuments.

Upon taking office, President Trump issued an executive order directing Interior Secretary Zinke to review monuments created by Presidents Bill Clinton, George W. Bush, and Barack Obama. Earlier this month, President Trump signed two proclamations reducing the size of Utah’s Bears Ears National Monument and Grand Staircase Escalante National Monument.

Presidents have modified the boundaries to remove lands from monuments 18 times in the past. However, as the Congressional Research Service concluded in a 2016 report, it is unclear if presidents have the power to rescind designations made by their predecessors.

Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Robert Levy, at 201-806-3364.