how many stores of wal mart roughly sell high capacity firearms right i believe that the high capacity firearms are limited to probably a third of the stores and there's about three thousand stores in united states the united states no high capacity magazines in terms of separate accessories so it's a limited locations in limited natures of the sales opera singer to very strict guidelines that the company has and who set those guidelines the company has a very rigorous process for deciding which products to sell and where so this is something that's usually done at the ground level and any management of the company it's not a board decision generally this goes selling products goes to the heartland of ordinary business operations for the company and so the store managers from the strong managers up turning to main and determining what customers want determining what makes the most sense for the company there's also look the worker will make decisions in higher breaking officers about what makes sense from from other perspectives but again including as a matter of policy for the company but that goes still oftentimes it'll be a management only decision that will will and i don't have that is don't think it's in the record who made those specific decisions but well mark has a very rigorous process in order to be successful company of having its managers on the ground in the stores all the way up to the home office about determining what makes the most sense to sell in which stores around the country and around the world and that's why i go back to the ordinary business exclusion why is it improper for the board to set forth a cite talked about this issue simply because some things considered by the board doesn't mean it's not an ordinary business operation that doesn't this one transcend the ordinary business operation we're talking about something that's a public debate almost certainly could almost certainly would affect which products the company sells but that's your point there's no question that the question of guns in america and gun safety of those issues are important issues and that's not the question are section fourteen a a i said that there are a couple elements to it here but this proposal goes far beyond just guns it covers all nature products it covers products that might have an effect on the brand  director brought dialogue by phone and a letter with the rector and wal mart takes these issues seriously so just because something doesn't go in the proxy materials doesn't mean that that's not an issue that the company's going to take seriously and look at  consider but this really goes to the balance this is all this really isn't about gun sales it's not it's about the respective roles of shareholders the word in management and how do you balance this in a proxy process in the reconcile this circumstance with the two respects first the f c c this is a line drawing exercise which is one reason i think a strong dose of deference goes to the f c c and its guidance because it's a nuanced factual line going it goes on every year without ask for so it's a very complicated issue but those issues where it's i mean a fracture of the f c c has gone wild because it's so much more closely connected to the company if there's a social issue about napalm and saying to manufacture of napalm do not do this you know produce the nexus is so close and it has such a significant effect in intra relationship to that company it falls outside ordinary business operations the big issue when you're talking about wal mart that sells hundreds of thousands of products around the world pointing towards whether or not to sell one particular product does not rise to that significant policy issue that the f c c has pointed to in here the other problem with the proposal is in the cases that have decided this issue did really there as you probably have noticed there aren't that many circuit court decisions but all three that i've been able to discern support our position here on this significant policy issue then just judge ginsburg now c s which everybody agreed was having a depleting effect on the ozone layer and so it was definitely implicated brought in an important public policy issue and judge ginsburg at the time said the president's talking about this congress is talking about this  it's gotten headline grabbing attention so it's it was a big issue of the time but the the court said they're in the roosevelt because we need a home in on the proposal itself and is it doing something is asking for something so significant for the company and so implementation wanting to speed it up you're absolutely right but i don't think that distinguishes it from here because here it's it's going to the products beyond this it let's just assume that there's a significant social and political issue concerning guns and there is the question is it such a significant issue as it relates to rome or and its business operations that it's an extraordinary thing that takes i think if we can if you were goes down this road what about music lyrics be controversial that are grabbing headlines that implicate products and again going back to your question about manufacturers that's really what the f c c has called the why i think the court should defer to that determination otherwise it opens was a you know stop selling guns proposal and no action letter was granted because with hundreds of thousands of products and maybe even more it's too diffuse it's not the sort of major significant issue that really goes to the new one of the examples the i c c has given in one of its releases which are entitled to control anyway it is a construction of a nuclear power plant by an energy company that's a big issue raises all these issues and it's a big issue for the company because at the core of what the company does well marcel's many many many more products than simply guns and i want to make clear again it's something a company does look at very carefully this is not if it's not enough boxy that doesn't mean the company is not going to think it seriously business operations of a company and so that's when you look at this proposal that's when it goes to the district court noted that it would affect and could affect the products that would be sold the f c c found out and given that it falls squarely in that ordinary to me when i was going through all these no actual matters it's probably closest to the line because it's not i'm not not a ng producer but it's someone who is using eggs in it and they're their business but if  one looks over the history it's been very consistent the american petroleum institute business roundtable chamber of commerce theory goes through the fact that there's been a one hundred fifty no action matters where the question has been which products or services a company you draw the line i would draw why if it were talking about a retailer if the proposal would or could affect the products that the company would sell that falls squarely in the heartland of the ordinary business exclusion that's exactly what we have here the late later be agency that has to deal with that statute on a regular basis goes the other way courts should defer unless  three states review the task force during a proxy season and there's a meeting in the summer where investors and companies come in and meet with the i c c to talk about the process so it's a very intimate we want fact process that is guided policy statements that are entitled to die so let's go back to the line drawing so you're saying that anytime there is take product to be sold this ordinary business but then you would distinguish days as they're selling a product eggs and kroger's or selling a product which may be genetically altered again i guess i would say because it's a line drawing process the court should defer should defer and i know i'm not saying to all the no action letters but there are going to be some outliers for sure this case is not an outlier this goes right to the products  not to sell particular products would be excluded all but i don't think it changes the equation because of the one hundred seventy six and nine hundred eighty three releases and we cite the c c legal staff bulletin from two thousand and nine it says you have to look think it's perfectly consistent and if anything tightens up the significant policy exception because it causes possible focusing on a significant policy issue but decisions i mention the roosevelt decision from the d c circuit there's the grinds decision which was decided but there were two rhymes decisions that that are one sided by the parties the d c circuit where it was a proposal about capital expenditure significant capital expenditures both the second circuit in the d c circuit said well that might be significant might be a significant policy issue separate proposal goes beyond that but that significant policy issue that's what we have here the fact that guns as one example doesn't suddenly trigger this policy exception if because there are other ordinary business operations that are in compassed and the apache decision we cite makes that point that even if you assume that i didn't say even if we assume that they'd gotten in concert or got in the door once the well is tainted by the purposes whether matter involving significant social policy issue would be excluded or not that's correct rather they are not squarely authoritatively made that point i think it  flows from the analysis that we look at what is shal meijer to the company i think the major is one of the words used in the one hundred seventy six release and the examples that are given if you look at the one thousand nine hundred eighty release it wasn't a reaction to the cracker barrel proceedings which it said that employment discrimination was not a significant policy issue an act out x and they changed their position on that and the examples they gave though were very significant to the company big issues that would have a significant effect on back up the thrust captured some social policy issue we don't have that here because we're talking about a company that sells hundreds of thousands of products and it's maybe there could be a couple of questions one what is the subject matter that's up there review the calls were put by the staff and then want you to trim the subject matter does it have all of the company's ordinary business operations i mean is that a good way to analyze this i'm trying to get sure i'm going to get the same questions for you as i had for most tasks that are so fundamental to management's ability to run the company on a day to day business that a shareholder vote would be inappropriate and on the other hand we're proposals that transcend the day to day business matters and ways policy issues the staff i think it's just what does he see chaired mary jo white said in a speech last month the staff strives to be consistent and they try to be consistent they try to be corrected but these are informal responses they're not  guidance interpretation or rule changes as necessary when when as they see the run of proposals over a period of years so that at any one individual point the staff will be guided by what they did last year the year before but it's unclear to what extent they're there publish or or if they were ever reviewed by the board or adopted by the board or how they're formulated for instance or published policies about opera until advisories on word assessment and evaluation of rest and the board's duties in relation to risk assessment and that sometimes the board's roles in relation to certain kinds of press and raise issues that transcend the day to day business of the was micromanagement it was conceded there's an issue of micro management because we're not asking the board one management to survey every single item that is sold and to classify it one way or the other well marc has tools at its disposal to see well a filtering you have to say what products really matter and over the history of a company periodical there are debates over really prominent cultural socio political debates over certain items which while not finds itself at the center of and that leads to the evolution of policy said the principal advisory labels on music could be a great example but there are others over the years where well mark because of its prominence gets thrust into the public  has to make a decision and what we're saying is this is the kind of thing because this happens to wal mart because wal mart so prominent because it's the nation's largest retailer of guns and with instance that it's important that certain types of products if it  have be rifle overboard oversight and may not be just be something done on a management level that we don't know more importantly that the stockholders have input so and the rest are sort of court cases of employment related matters should not be automatically excluded there should be a bright line rule saying for it relates to employment it's excludable similarly there should be a bright line rule for retailers but there's an automatic if it somehow business is the subject matter here the merchandising decisions made by wal mart of the products it sells in certain of its stores certain products it sells other ways like the numbers about half of its stores like about half of decisions as to which products to sell and which stores it's as it's true word review about whether to sell products that pose a special danger to the  ok here's this things are going on people were upset about the bushmaster rifle and we're not going to solve it in one hundred percent of the stores we made a decision management be micromanaging from a the board member to tell you that you can sell it is roll higher but you can't sell it in new york city so that's why we're dealing with this at the level of  oversight period and then the board can decide with the substance of what the policy guidance will be is this a product that we don't sell at all or is this a product that sell in only certain locations take into account all the cost benefits so some managers for good reasons might want to sell a public saying hey we can sell a lot of this product we go so what does and the word scum say well let's look at the company's reputation as a whole let's think of how this affects the company in toto there's a challenge increase talks about potential impact on the company's reputation and number three talks about that would reasonably be considered by many offensive to the family and community values integral to the company's motion of its brand it has a brand the company has certain values which are pronounces and says these are our values including family community and and others which they talk about in some level of generality but then specifics initiatives along those lines and and then reasonably considered by many or all to be offensive to that is well is there some saving the population because for bass or the potential customer base sticks at wal mart wants to move into new areas research for instance if they were to say you know i'll bet we can sell a lot of music with the parental advisory labels if hey i'm thank you that there's probably one of them we could sell but doing that if we made limits where it it's we're talking about it's not a subjective test this reasonably considered by many songs like a significant portion of the customer base but as a customer base it's linked to the company's promotion of its own brand the board is the guides from different types of management in terms of sales process mind if it is and how successful they are where they want to be and how they're positioning themselves so it's a way to give that flexibility to work in terms of its own brand whether a company can continue to sell a product for which there is consumer demand exemption in the ordinary business of explosion there is no product sale exclusion anything related to the sale of products is automatically excluded it has to do with national service of the ninety nine year lease does this micro manage does this train signed it day to day business doesn't involve important significant policies such that it's appropriate for shelter in pretty way which goes back to the one nine hundred seventy decision about the sale of napalm under vietnam but saying this is something the socceroos can weigh in on probably like when the decision was made to submit this particular type of proposal which any explanation of it cost about firearms why was there not a specific proposal to deal with high capacity firearms as opposed to a generalized proposal that talks about a corporate governance committee that deals with influences on bread et shortfalls question would reasonably be considered by many offensive to the family and community values in row to the company's promotion of its brand i mean that could cover so so many different products as well  these issues do recur whether it's the music and the labeling controversies in eighty's and early ninety's about video games or music or contraceptives or or guns or high capacity magazines it is a recurring issue  drawing that you would do were you writing this opinion would be what the tween what is acceptable and what is not i think the important thing is is this is this a dated there's a day to day business matter or does a word to raise a help pouring of similar types of proposals we already saw the write a proposal which was very much tracked i almost identical except on tobacco and this is a real problem the side of the from the side of corporate secretaries it's a real practical problem and  the products that itself issues that are raised regarding those products but that means it's excludable b the other point i wanted to make you know you asked me about that on the page thirty two our brief in there we were focusing on the focus language that because that third in particular that third disjunctive goes so far beyond gun sales or anything like that or even dangerous products that it does not the proposal does not focus on a significant policy retailers again i don't think that should should be because that is an ordinary business decision a company determining what's good for my reputation what our customers are going to respond to me so i can be profitable and also a good corporate citizen that's what companies do so then so then what is not excludable i gave the example of where the sustainability issue front and suppliers i think your are trivial but you put your finger on one distinction here where it's not a direct significantly less concern to me why a board member than the reputation of the company that i am on that whose work i am on there's no question around that the reputation of the company and it's the views of consumers and the public of the company is an important issue but that doesn't mean that any proposal that comes forward and says the board should consider whether it's certain sales of products will have an effect on the reputation of the company that's an ordinary core issue of social significance plus is it such an interim goal closely connected to the company and this goes to the manufacturer retailer distinction that it's an epic issue for the company that transcends day to day business council loading up merchandising decisions that stated a business do issues in controversies come up with a big retailer yes that's well that's what the managers on the ground and the officers and the people running the company confront every day that is ordinary for it and i think to follow up on your question to i my friend on the other side the test i would propose is that the court would say larry we were talking about a proposal that indisputably would affect either directly or indirectly the products that a company would sell that clearly falls within the ordinary business language if this is a significant policy issue that is somehow implicated or folded into that if the proposal itself goes beyond a significant policy issue and would affect ordinary business operations that are not in compassed so for example go beyond gun sales then the the significant policy exception does not apply the crimes case i mentioned from the d c circuit is a good example of that and so i think here we have this long history of how the f c c has looked at these issues counsel relied on me two thousand and nine s c c legal board ten it says the opposite of what