Interference with Voting Rights: the Metaphysics of Blasius Industries v. Atlas Corp.
David C. McBride and Danielle Gibbs
This article reviews the cases applying the Blasius doctrine in an effort to find some definable patterns, and to assess whether the doctrine serves a useful purpose. Part H focuses on the proscribed effect of thwarting the shareholder vote or impeding the shareholder franchise, concluding that: conduct, which has a proscribed effect, often involves weighing the imminence ofshareholder action and the degree to which the director’s action precludes, delays or renders the shareholder action more difficult; the court is much more likely to find that action having the proscribed effect was undertaken for that purpose if the board action does not involve a business decision; and the evidence of the proscribed motive must be particularly strong. Part li discusses whether the board could ever take action for the primary purpose of thwarting the shareholder franchise under the “compelling justification” standard, and concludes that no director has ever established a compelling justification. Part IV examines the usefulness ofthe Blasius doctrine because ofthe substantial overlap with Unocal. The article concludes that Blasius serves a purpose not served by Unocal, it applies when the board action at issue does not involve a contest for control or a defensive action, but does involve the requisite purpose and effect, which is particularly true where the board action does not involve a business transaction, but relates solely to the governance or electoral process.