Gale Encyclopedia Of American Law 3Rd Edition Volume 2 P22 potx

President Reagan announced his intent to
permit the bill to become law without his
signature. The bill became automatically effec-
tive at midnight, August 3, 1988.
The law requires employers with one
hundred or more employees to provide their
workers with sixty days’ layoff notice when fifty
or more workers at a single site will lose their
jobs and when affected workers will constitute
at least one-third of that site’s work force. If 500
or more employees are laid off, however, such
notice is required regardless of the percentage of
site workers involved. Companies failing to
provide the requisite warning face penalties of
compensating each dismissed employee for
wages and fringe benefits for every day the
notice should have been given. Additionally, a
$500 payment per day, up to a maximum of
$30,000, must be made to local communities
when the act’s provisions have not been met .
Analogous requirements exist in 38 other
countries and in five states. At least twenty other
states have proposed such legislation. According
to the federal government’s
GENERAL ACCOUNTING
OFFICE
(GAO) survey, prior to this legislation,
the national median length of advance notice
for the closing of large establishments was seven
days. White collar and union blue collar workers
averaged as much as fourteen days’ termination

notice while non-union blue collar workers only
received two days’ notice. Since 1981 more than
five million Americans have lost their jobs
because plants were shut down or their positions
were eliminated.
Along lines similar to President Reagan’s
reservations,
NATIONAL ASSOCIATION OF MANUFAC-
TURERS
president Alexander B. Trowbridge
maintained that the legislation “damages the
flexibility essential to run a successful business.”
Moreover, Trowbridge noted that advance
notice was not always possible as financially
troubled businesses may not be able to predict
their status with the precision that the legisla-
tion required. To salvage their troubled busi-
nesses, these companies might find themselves
in the midst of difficult debt financing, merging
with another company, selling off assets, or
bidding on a major contract, all of which could
be hampered by the new law’s requirements.
He claimed that the required closing notices
would discourage customers and jeopardize
credit arrangements. A report compiled by the
Congressional Office of Technology Assessment
titled “Plant Closing: Advance Notice and Rapid
Response” (DTA-ITE-321) found contentions
such as Trowbridge’s to be highly exaggerated
because financial emergencies are rarely a factor

in plant closings.
Other critics of the legislation cited an R.
Nathan Associates study which claimed that the
total annual costs for notification would run as
high as $1.8 billion, due to lost profits, penalties,
and additional administrative costs. The Nathan
study found further that about 460,000 lost jobs
would be triggered by unnecessary closings as a
direct result of the act.
The GAO, however, seriously questioned
the Nathan report on the basis of what it
claimed was inadequate and flawed analysis and
methodology. The
DEPARTMENT OF LABOR al so
stated in 1986 that “many of the fears regarding
advance notification have not been realized in
practice.” The National Science Foundation
claimed to have found proof that, in most labor
groups, advance notice significantly shortens
joblessness, which in turn translates into better
earnings for displaced workers and substantial
savings in unemployment insurance. Labor
unions, such as the AFL-CIO, uniformly
acclaimed the Worker Adjustment and Retrain-
ing Notification Act, 29 U.S.C.A. § 2101 et seq.,
claiming that when advance notice is combined
with
SEVERANCE pay, it improves morale and
actually increases worker productivity.
CROSS REFERENCES

Corporations; Employment Law; Labor Law; Unemploy-
ment Compensation.
BUSINESS JUDGMENT RULE
A legal principle that makes officers, directors,
managers, and other agents of a corporation
immune from liability to the corporation for loss
incurred in corporate transactions that are within
their authority and power to make when suff icient
evidence demonstrates that the transactions were
made in good faith.
The directors and officers of a corporation
are responsible for managing and directing the
business and affairs of the corporation. They
often face difficult questions concerning wheth-
er to acquire other businesses, sell assets,
expand into other areas of busines s, or issue
stocks and dividends. They may also face
potential hostile takeovers by other businesses.
To help directors and officers meet these
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
198 BUSINESS JUDGMENT RULE
challenges witho ut fear of LIABILITY, courts have
given substantial deference to the decisions the
directors and officers must make. Under the
business judgment rule, the officers and direc-
tors of a corporation are immune from liability
to the corporation for losses incurred in
corporate transactions within their authority,
so long as the transactions are made in
GOOD

FAITH
and with reasonable skill and prudence.
The rule originated in Otis & Co. v. Pennsyl-
vania R. Co., 61 F. Supp. 905 (D.C. Pa. 1945). In
Otis, a shareholder’s
DERIVATIVE ACTION alleged
that corporate directors failed to obtain the best
price available in the sale of securities by dealing
with only one investment house and by
generally neglecting to “shop around” for the
best possible price, resulting in a loss of nearly
half a million dollars. The federal district court
ruled that although the directors chose the
wrong course of action, they acted in good faith
and therefore were not liable to the share-
holders. The court reasone d that “ mistakes or
errors in the exercise of hones t business
judgment do not subject the officers and
directors to liability for
NEGLIGENCE in the
discharge of their appointed duties.”
Subsequently, the business judgment rule
was applied to directors ’ actions when corpora-
tions were faced with a hostile
TAKEOVER.In
Unocal Corp. v. Mesa Petroleum Co., 493 A.2d
946 (Del. Super. 1985), the Delaware Supreme
Court upheld the defensive actions taken by a
board of directors during a takeover struggle
with a minority shareholder. In this case Mesa

Petroleum Company made an offer that would
have made it the majority shareholder in Unocal
Corporation. Under the offer, shareholders who
sold their Unocal stock would receive $54 a
share until Mesa acquired the 37 percent it
sought and then would receive highly specula-
tive Mesa securities instead of cash for any stock
sold beyond that 37 percent. To counteract the
takeover bid Unocal’s directors announced that
if Mesa obtained 51 percent of its shares,
Unocal would purchase the remaining 49 per-
cent for an exchange of debt securities (securi-
ties reflected as debt on the books of the
corporation) with an aggregate par (or face)
value of $72 a share, but the offer would not be
extended to the 51 percent of stock held by
Mesa. Mesa filed suit, allegin g that the directors
had violated their
FIDUCIARY duty by excluding
Mesa from the exchange. The court concluded
that the directors’ actions were protected by the
business judgment rule. The court recognized
that in responding to hostile takeover bids the
directors of a corporation can face a conflict
between their own interests and the interests of
the corporation and its shareholders. The court
stated that the Unocal directors had reasonable
grounds to believe that a danger to the
corporation existed because of Mesa’s actions
and that the defensive actions they took were

reasonable in relation to the threat they
“rationally and reasonably” believed the offer
posed.
Despite the seemingly broad scope of the
business judgment rule, corporate directors
have not always been able to rely upon it as a
way to escape liability for their actions. In Smith
v. Van Gorkom, 488 A.2d 858 (Del. 1985), the
Supreme Court of Delaware held that the
directors of a corporation failed to exerci se
informed business judgment and instead acted
in a grossly negligent manner by agreeing to sell
the company for only $55 a share. The court
looked to evidence indicating that the directors
reached their decision to sell at that price after
hearing only a 20-minute oral presentation
concerning the sale. The court also noted that
the directors had received no documentation
indicating that the sale price was adequate and
had not requested a study to help them
determine whether the price was fair. Although
the directors were not accused of acting in
BAD
FAITH
, the court stated that the directors’
fiduciary duty toward their shareholders re-
quired more than merely an absence of bad
faith. The directors, according to the court, had
an affirmative duty to protect the shareholders
by obtaining and reviewing information neces-

sary to help the directors make sound business
decisions. By failing to inform themselves they
were therefore liable to the shareholders for
their bad business decision.
Even when a corporation faces a hostile
takeover, the business judgment rule may not
insulate its directors from liabili ty. In Revlon v.
MacAndrews & Forbes Holdings, 506 A.2d 173
(Del. 1985), the company attempting a takeover
sought a
PRELIMINARY INJUNCTION to prevent the
corporation that was the target of the takeover
from granting a
LOCKUP option, which gives a
friendly
THIRD PARTY the right to purchase part of
the target company to help thwart a takeover.
The Delaware Supreme Court held that the
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
BUSINESS JUDGMENT RULE 199
directors failed to fulfill their duty to preserve
the company by not maximizing the sale value
of the company for the benefit of its share-
holders. According to the court, by instituting
the lockup option and halting the bidding, the
directors allowed “considerations other than the
maximization of shareholder profits to affect
their judgment” and thus acted to the detriment
of the shareholders. Once the directors deter-
mined to sell the corporation, the court held,

their role changed from that of “defenders of the
corporate bastion to auctioneers charged with
getting the best pric e for the stockholders at the
sale of the company.” As a result, the court held
that the directors were not entitled to the
protection of the business judgment rule.
Courts have further held that the business
judgment rule will cover the actions of directors
only when the directors are disinterested and
independent with respect to the action that is at
issue. A director is independent when she or he
is “in a position to base [ her or his] decision on
the merits of the issue rather than being
governed by extraneous considerations or
influences”; conversely, a director is considered
to be interested if she or he appears to be on
both sides of a transaction or expects to derive
personal financial benefit from it, as opposed to
a benefit to be realized by the corporation or all
shareholders generally (Aronson v. Lewis, 473
A.2d 805 [Del. 1984]). Thus, if one director
stands to receive a substantial financial benefit
from the issuance of stock nonetheless designed
to counteract a takeover threat, the business
judgment rule may not apply to the board of
directors’ actions. Such allegations of bias, lack
of independence, or disinterest must be sup-
ported by
TANGIBLE evidence.
FURTHER READINGS

Balotti, R. Franklin, and Jesse A. Finkelstein. 2006. The
Delaware Law of Corporations and Business Organiza-
tions. Frederick, MD: Wolters Kluwer Law & Business.
Baynes, Leonard M. 2003. “Racial Stereotypes, BroaD.C.ast
Corporations, and the Business Judgment Rule.” Univ.
of Richmond Law Review 37, no. 3 (March).
Branson, Douglas M. 2002. “The Rule That Isn’t a Rule—
The Business Judgment Rule.” Valparaiso Univ. Law
Review 36 (summer).
Brown, Meredith M., and William D. Regner. 2003. “What’s
Happening to the Business Judgment Rule?” Insights:
The Corporate & Securities Law Advisor 17, no. 8
(August).
Clark, Frank, G. W. Dean, and K. G. Oliver. 1997. Corporate
Collapse: Regulatory, Accounting, and Ethical Failure.
New York: Cambridge Univ. Press.
Gervurtz, Franklin A. 1994. “The Business Judgment Rule:
Meaningless Verbiage or Misguided Notion?” Southern
California Law Review 67.
Velasquez, Manuel G. 2005. Business Ethics: Concepts and
Cases. 6th ed. Upper Saddle River, NJ: Pearson/
Prentice-Hall.
CROSS REFERENCES
Immunity; Negligence.
BUSINESS RECORD EXCEPTION
A rule of evidence that allows routine entries
made customarily in financial records, or business
logs or files kept in the regular course of business,
to be introduced as proof in a lawsuit when the
person who made such notations is not available

to testify.
This rule, also called the business entry rule,
is an exception to the
HEARSAY rule. Business
records are considered to have a greater degree
of reliability and trustworthiness than personal
records because of the regular and systematic
way in which they are kept and the reliance that
a business places on them. State and
FEDERAL
RULES OF EVIDENCE
specify what records qualify
for this exception to the hearsay rule.
BUSINESS ROUNDTABLE
The Business Roundtable is an association of
chief executive officers (CEOs) representing the
top corporations in the United States, joined
together to examine and advocate for
PUBLIC
POLICY
that will “foster vigorous economic
growth and a dynamic global economy.”
Established in 1972 by 200 leading executives
from major U.S. cor porations, the Roundta ble
was founded upon the idea that business
executives should take an increased role in
public policy that affects the economics of
Americans. The belief is that the basic interests
of business closely parallel the interests of
average citizens, who are directly involved in

the economy as employees, investors, suppliers,
and consumers. Thus, business leaders have a
responsibility to actively influence the economic
wellbeing of the country.
The Business Roundtable is an association
whose members are the chief executive officers
(CEOs) of those U.S. companies with more
than $5 trillion in yearly revenues. The member
companies make up almost one-third of the
value of the U.S. stock markets. As the Round-
table sees it, one of its principal strengths “is the
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
200 BUSINESS RECORD EXCEPTION
extent of participation by the chief executive
officers of the member companies.” CEOs work
in task forces on specific topics and issues that
currently impact the social and economic well-
being of the United States. For example, in 2003
task forces were in place to focus on such issues
as civil justice reform, the digital economy, the
environment, and security. Each task force is
headed by a chief executive and is assisted by a
support staff composed of employees from task
force member companies who are experts in the
field. Task force members conduct research,
craft policy recommendations, and create action
plans. They also draft position papers on major
issues, which are used in a variety of ways,
including congressional testimony.
Activities of the task forces are reviewed by

the Roundtable Policy Committee, which is the
governing body of the organization. The Policy
Committee is composed of all Roundtable
CEOs. At the helm of the Roundtable is a chief
executive who serves as chairman. The chair-
man is elected for a one-year term. He or she is
assisted by two to four co-chairpersons. These
executive chairmen, combi ned with the task
force chairmen make up the Planning Commit-
tee for the organization. The Planning Com-
mittee provides general strategy and guidance.
In an effort to ensure that a broad base of
information is represented in all decision
making, membership in the organization is
diversified. Thus, CEOs come from all areas of
business and all areas of the United States. Such
diversity ensures a cross section of thinking on
national issues. Roundtable members also have
a continuing liaison with other organizations
that are directly involved with the concerns
at hand.
Since 2000, the Roundtable has carried out
significant
LOBBYING efforts before the U.S.
Congress for passage of the presidential trade
negotiating authority (2001); proposed to the
GEORGE W. BUSH administration a $300 billion
incentive package for economic growth (2002);
and announced an unprecedented Climate
RESOLVE initiative calling for voluntary action

by all businesses to reduce greenhouse gas
emissions (2003). It also supported the Senate’s
Initiative to End lawsuit Abuse (2005) and, in
2009, filed an amicus brief with the U.S.
Supreme Court supporting deferential treat-
ment for company ERISA plan administrators
who must interpret plan provisions to the
maximum benefit of all plan participants
(Conkright v. Frommert, No.08-810).
FURTHER READINGS
Business Roundtable. Available online at http://www.
businessroundtabletable.org/ (accessed August 19,
2009).
Business Roundtable. 2003. “The Business Roundtable
Announces Its Resolve to Voluntarily Control Green-
house Gas Emissions.” Press Release, February 12,
2003.
Business Roundtable. 2002. “The Business Roundtable Calls
for $300 Billion Growth Package.” Press Release,
November 21, 2002.
Koffer, Keith. 2001. “BRT Mobilizes Lobbyists, Funds
for Trade Negotiating Authority.” CongressDaily AM
(May 9).
BUSINESS TRUST
An unincorporated business organization created
by a legal document, a declaration of trust, and
used in place of a corporation or partnership for
the transaction of various kinds of business with
limited liability.
The use of a business trust, also called a

MASSACHUSETTS TRUST or a COMMON-LAW TRUST,
originated years ago to circumvent restrictions
imposed upon corporate acquisition and devel-
opment of
REAL ESTATE while achieving the limited
LIABILITY aspect of a corporation. A business trust
differs from a corporation in that it does not
receive a charter from the state giving it legal
recognition; it derives its status from the volun-
tary action of the individuals who form it. Its
use has been expanded to include the purchase
of securities and commodities.
A business trust is similar to a traditional
trust in that its trustees are given
LEGAL TITLE to
the trust property to administer it for the
advantage of its beneficiaries who hold equitable
title to it. A written
DECLARATION OF TRUST
specifying the terms of the trust, its duration,
the powers and duties of the trustees, and the
interests of the beneficiaries is essential for the
creation of a business trust. The beneficiaries
receive certificates of
BENEFICIAL INTEREST as
evidence of their interest in the trust, which is
freely transferable.
In some states, a business trust is subject to
the laws of trusts while, in others, the laws of
corporations or partn erships govern its exis-

tence. The laws of each state in which a business
trust is i nvolved in transactions must be
consulted to ensure that the trust is treate d as
an entity whose members have limited liability.
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
BUSINESS TRUST 201
If the laws of a particular state consider a
business trust to be a partnership, the bene-
ficiaries may be fully liable for any judgments
rendered against it. The trustees of a business
trust are liable to third parties who deal with the
trust unless there is a contract provision to the
contrary, since they hold legal title to the trust
property and may sue and be sued in actions
involving the trust. They may, however, seek
INDEMNITY from the trust property and possibly
from the beneficiaries.
The property of a business trust is managed
and controlled by trustees who have a
FIDUCIARY
duty to the beneficiaries to act in their best
interests. In many states, the participation of the
beneficiaries in the management of the property
destroys their limited liability, and the arrange-
ment will usually be treated as a partnership.
Profits and losses resulting from the use and
investment of the trust property are shared
proportionally by the beneficiaries according to
their interests in the trusts.
A business trust is considered a corporation

for purposes of federal
INCOME TAX and similarly
under various state income tax laws.
BUSING
See SCHOOL DESEGREGATION.
“BUT FOR” RULE
In the law of negligence, a principle that provides
that the defendant’s conduct is not the cause of an
injury to the plaintiff, unless that injury would not
have occurred except for (“but for”) the defen-
dant’s conduct.
In order to be liable in
NEGLIGENCE,the
defendant’s conduct must constitute the
PROXI-
MATE CAUSE
, or direct cause, of the plaintiff’s
injury. The concept of proximate cause encom-
passes both
LEGAL CAUSE and factual cause, and
the “but for” rule pertains to the latter. It is also
referred to as the
SINE QUA NON rule, which
means “without which not,” or an indispensable
requirement or condition. The “but for” rule is
a rule of exclusion, in that the defendant’s
conduct is not a cause of the event, if the event
would have occurred without it.
The “but for” rule explains most cases when
limited solely to the issue of causation, but it

does not resolve one type of situation: if two
causes concur to bring about an event, and
either one of them, operating independently,
would have been sufficient to cause the identical
result, some other test is required. This situation
arises, for example, when the
DEFENDANT sets a
fire that unites with a fire from some other
source, and the combined fires burn the
plaintiff’s property, although either fire alone
would have been sufficient to do so. In such
cases, each cause has actually played so signifi-
cant a role in achieving the result that
responsibility must attach to it. Neither may
be relieved from that responsibility on the basis
that identical harm would have occurred
without it, or no
LIABILITY at all would ensue.
In order to rectify the frequently problem-
atic application of the “but for” rule, some
jurisdictions have applied a broader rule, which
provides that the defendant’s conduct is a cause
of the event if it was a material element and a
substantial factor in bringing about the event.
The jury ascertains whether such conduct
constitutes a substantial factor, unless the issue
is so unambiguous that it is appropriate for
judicial determination. The prevailing view is
that “substantial factor” is a phrase sufficiently
comprehensible to the layperson to supp ly an

adequate guide in instructions to the jury, and
that it is neither possible nor beneficial to
simplify it.
In addition to resolving the aforementioned
case, the subst antial factor test resolves two
other types of situations that have proved
troublesome, where a similar, but not identical,
result would have followed the defen dant’s act
or where one defendant has made an obvious
but insignificant contribution to the result. The
application of the two rules can achieve the
same result in some instances, because, except
as indicated, no case has been encountered
where the defendant’s act co uld be deemed a
substantial factor when the event would have
transpired without it. In addition, cases seldom
arise where the defendant’s conduct would not
be such a substantial factor yet was so
indispensable a cause that the result would not
have ensued without it.
If the defendant’s conduct was a substantial
factor in causing the plaintiff’s injury, he or she
will not be absolved from liability simply
because other causes have contributed to the
result, because such causes are always present.
However, a defendant is not necessarily relieved
of liability because the negligence of another
person is also a contributing cause, and that
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
202 BUSING

person, too, is to be held liable for the harm
inflicted. The principle of joint tortfeasors is
based primarily upon recognition of the fact
that each of two or more causes may be charged
with a single result.
v
BUTLER, BENJAMIN FRANKLIN
(1795–1858)
Benjamin Franklin Butler was born December
14, 1795, in Kinderhook Landing, New York.
He was admitted to the New York bar in 1817,
and established a legal pract ice with
MARTIN VAN
BUREN
in Albany, New York. From 1821 to 1824
Butler performed the duties of district attorney
for Albany County.
Butler entered politics in 1827, serving in
the New York State Legislature for six years. He
subsequently acted as U.S. attorney general
from 1833 to 1838; during this time he also
fulfilled the duties of secretary of war from 1836
to 1837.
In 1838, Butler returned to New York and
served as U.S. district attorney from 1838 to
1841 and from 1845 to 1848.
Butler died November 8, 1858, in Paris,
France.
v
BUTLER, BENJAMIN FRANKLIN

(1818–93)
Benjamin Franklin Butler achieved prominence
as a politician and military officer.
Butler was born November 5, 1818, in
Deerfield, New Hampshire. After graduating in
1838 from Waterbury College, now known as
Colby College, Butler was admitted to the
Massachusetts bar in 1840. Elected to the
Massachusetts House of Representatives in 1853
and the Massachusetts Senate in 1859, he also
served atour of military duty during the Civil War.
At the outbreak of the war, Butler entered
the Massachusetts militia as a brigadier general.
He participated in the capture of Baltimore,
Maryland, in 1861 and led forces against New
Orleans, Louisiana, in 1862. After the conquest
of New Orleans, Butler became military gover-
nor of that city, but his administration was
charged with severity, corruption, and graft.
After six months, Butler was reassigned to
the Eastern Virginia-North Carolina area and
commanded the Army of the James in 1863.
Butler acted as administrator for the return
of prisoners in 1864, and was assigned to New
Benjamin Franklin Butler 1795–1858
❖
❖
◆
1795 Born,
Kinderhook

Landing, N.Y.
◆
◆
◆
◆
◆
1817 Established legal
practice with Martin
Van Buren in Albany
1833 Appointed U.S. attorney
general by President Jackson
1821–24 Served as district
attorney of Albany County
1827–33
Member of
New York state
legislature
1836 Martin Van Buren
elected president
1838 Appointed U.S. district attorney in New York
1845 Reappointed to U.S. district
attorney post by President Polk
1841
Returned
to private
practice
1848 Retired
from public
service
1858 Died,

Paris,
France
1861–65
U.S. Civil War
▼▼
▼▼
1775
1825
1850
1875
1800
◆
Benjamin Franklin
Butler (the younger).
BRADY NATIONAL
PHOTOGRAPHIC ART
GALLERY, LIBRARY OF
CONGRESS
NEVER HOLD OFFICE.
H
OLD YOURSELF
ABOVE IT [BECAUSE]
AN OFFICER IS A
SERVANT
.
—BENJAMIN FRANKLIN
BUTLER (B.1818)
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
BUTLER, BENJAMIN FRANKLIN 203
York to enforce order during the election held

in that same year.
After the war, Butler served in the federal
government, representing Massachusetts in the
U.S. House of Representatives from 1867 to
1875, and from 1877 to 1879. He returned to
Massachusetts in 1882 to perform the duties of
governor and in 1884 was an unsuccessful
nominee for the U.S. presidency, representing
two independent parties—the Anti-Monopoly
party and the Greenback party.
Butler died January 11, 1893, in Washington,
D.C.
v
BUTLER, CHARLES HENRY
Charles Henry Butler served as the Supreme
Court reporter of decisions from 1902 to 1916.
Butler was born June 18, 1859, in New York
City. He was the son of William Allen Butler, a
lawyer, and the grandson of
BENJAMIN F. BUTLER,
U.S. attorney general during the administration
of
MARTIN VAN BUREN. Butler attended Princeton
University but left school before graduating. He
then studied law in his father’s New York office
for several years, and often accompanied his
father to Washington, D.C., when the elder
Butler appeared before the U.S. Supreme Court
to argue cases. Butler was admitted to the New
York state bar in 1882 and subsequently

practiced law in New York City. In 1898 he
served as the legal expert for the Fairbanks-
Herschell Commission, which was convened to
adjust the boundary of Alaska and Canada.
In December 1902 Butler left the
PRACTICE OF
LAW
to accept an appointment as reporter of
decisions for the U.S. Supreme Court, a position
created by Congress in 1816. In the early days of
the Court, the reporter had been primarily
responsible for editing, publishing, and distrib-
uting the Court’s opinions; beginning in 1874,
however, Congress provided money for the
government to publish the Court’s opi nions,
and thus by the time Butler became reporter, his
role was limited to editorial tasks.
While reporter, Butler edited and published
volumes 187 to 241 of the United States Reports,
the official publication of the opinions of the
U.S. Supreme Court. During his tenure with the
Court, he also was a delegate to the Hague Peace
Benjamin Franklin Butler 1818–1893
1818 Born,
Deerfield, N.H.
1838 Graduated from
Waterville (now
Colby) College
1840 Admitted to
Massachusetts

bar
1852 Elected to
the Mass. House
of Representatives
1861–65 Served as general in the Union
Army; poor performance led him to be
relieved from command more than once
1877–79 Served in
U.S. House of
Representatives
1867–75 Served
in U.S. House of
Representatives
1882–83 Served as
governor of Mass.
1884 Ran unsuccessful presidential
campaign on the Greenback and
Anti–Monopoly tickets
1893 Died,
Washington,
D.C.
❖
◆
◆
❖
◆
◆
▼▼
▼▼
1800

1850
1875
1900
1825
Charles Henry Butler 1859–1940
❖
◆
1859 Born,
New York City
◆
◆
1890 The
Voice of the
Nation
published
1898 Served as
legal expert for
Fairbanks-
Herschell
Commission;
Cuba Must be
Free published
1902 Appointed
reporter of decisions
for U.S. Supreme
Court; Treaty-
Making Power of
the United States
published
1916 Returned to

private practice
partnership with
John Krantz
1914–18
World War I
1861–65
U.S. Civil War
◆
◆
1942 A Century at the
Bar of the Supreme
Court of the United
States published
posthumously
1939–45
World War II
1933 Son Henry
replaced John Krantz
in partnership
▼▼
▼▼
1850
1900
1925
1950
1875
1940 Died,
Washington,
D.C.
◆

❖
CITIZENS OF THIS
COUNTRY ARE
ESSENTIALLY LOYAL
;
BUT THEY ARE MORE
LOYAL TO PRINCIPLES
THAN THEY ARE TO
MEN
.
—CHARLES BUTLER
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
204 BUTLER, CHARLES HENRY
Conference in 1907. He later authored A
Century at the Bar of the Supreme Court of the
United States (1942), a sometimes lighthearted
account of the Court’s inner workings and his
experiences as reporter. In the book, published
two years after his death, Butler described his
dealings with the justices as “delightful and
congenial.” He wrote that the work was “very
interesting. It was not difficult and did not take
all of my time. The salary afforded me a
comfortable income.” Butler also described in
some detail the various rules and customs of the
Court, including the writ of
CERTIORARI and the
social etiquette of the Court, and shared
anecdotes about lawyers who had argued before
the Court. With respect to the reporter’s

position, Butler discussed the process of pre-
paring headnotes, the paragraphs that appear at
the beginning of opinions to summarize the
major points of law contained in the opinions.
During Butler’s tenure, the Court made clear
that headnotes were not to be construed as part
of the opinions and were instead only the
expressions of the reporter ab out the holdings
of the Court.
Butler eventually found his position to be
“somewhat monotonous” and noted that
“[t]here was nothing constructive about it so
far as my part was concerned.” In addition,
Butler was frustrated by the anonymity of the
post and by frequent misunderstandings about
his role and duties; he wrote that he was once
introduced as the “Head
STENOGRAPHER of the
United States Supreme Court.” As a result,
Butler resigned from the Court in October
1916, to return to private practice in Washing-
ton, D.C. He also wrote extensively about
INTERNATIONAL LAW, including several works on
U.S. relations with Spain and Cuba. He died in
1940, at the age of 81.
FURTHER READINGS
Butler, Charles Henry. 1902. The Treaty Making Power of the
United States. Reprint, 2008. Charleston, SC: BiblioLife.
———. 1942. A Century at the Bar of the Supreme Court of
the United States. New York: Putnam.

Congressional Quarterly. 2004. Guide to the U.S. Supreme
Court. 4th ed. Washington, D.C.: Congressional
Quarterly.
CROSS REFERENCE
Law Reports.
v
BUTLER, PIERCE
Pierce Butler served as ASSOCIATE JUSTICE of the
Supreme Court from 1923 to 1939. Known for
his conservative views, Butler advocated a laissez-
faire (French for “let [people] do [as they
choose])” philosophy that sought to minimize
government interference in the economy. In the
1930s, when Franklin D. Roosevelt’s
NEW DEAL
policies sought to increase the power of govern-
ment in U.S. life, Butler voted against the consti-
tutionality of every New Deal measure that came
before the Court. By the end of his tenure, Butler
was one of the few conservatives on an increas-
ingly liberal Supreme Court, and he became
distraught by changes in the Court’s interpreta-
tion of the Constitution. “This is not government
by law, but by caprice,” he wrote in a 1939
dissent. “Whimseys may displace deliberate
action by chosen representatives and become
rules of conduct. To us the outcome seems
wholly incompatible with the system under
which we are supposed to live” (United States v.
Rock Royal Co-op, 307 U.S. 533, 59 S. Ct. 993, 83

Pierce Butler 1866–1939
❖
◆
1866 Born,
Dakota County, Minn.
◆
◆
◆
1891 Became
assistant to the
Ramsey County
(Minn.) attorney
1893 Began first term
as Ramsey County
attorney; founded law
firm that became Butler,
Mitchell & Dougherty
1908 Elected
president of
Minnesota Bar
Association
1928 Wrote dissenting opinion
in Olmstead v. United States
1922 Nominated
to U.S.
Supreme Court
by President
Harding
1914–18
World War I

1939 Died,
Washington, D.C.
1861–65
U.S. Civil War
◆
1907 Began 17-year tenure on the
University of Minnesota's Board of Regents
◆
◆
1932 Wrote dissenting
opinion in Powell v. Alabama,
which overturned convictions
in the Scottsboro case
1939–45
World War II
▼▼
▼▼
1900
1925
1950
1850
1875
❖
◆
1932 Franklin D.
Roosevelt elected president
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
BUTLER, PIERCE 205
L. Ed. 1446). Butler dissented in several Supreme
Court decisions that overturned laws discrimi-

nating against African Americans, and he rarely
supported the rights of those with dissenting or
radical opinions in society. He did, however,
argue consistently for the rights of those accused
of
CRIMES.
Those who knew him commented on
Butler’s stubbornness and occasional bullying,
traits that often made his relations with others
on the Court less than amicable. Once, after
persuading all on the Court but Justice Oliver
Wendell Holmes Jr., of the rightness of his
opinion on a particular matter, Butler said to
Holmes, “I am glad we have finally arrived at a
just decision.”“Hell is paved with just deci-
sions,” Holmes responded. Commenting on
Butler’s conservatism, Holmes characterized
Butler as a “monolith” with “no seams the frost
can get through.” Butler resolutely stuck to his
conservative principles even in the depths of the
Depression. Something of those views is found
in remarks he made in 1916: “Too much
paternalism, too much wet-nursing by the state,
is destructive of individual initiative and devel-
opment. An Athlete should not be fed on pre-
digested food nor should the citizens of
tomorrow be so trained that they will expect
sustenance from the public ‘pap.’”
Many of Butler’s later views were shaped by
his frontier childhood. Butler was born on

St. Patrick’s Day, March 17, 1866, in a log cabin
in Dakota County, Minnesota. His parents had
emigrated from County Wicklow, Ireland, to
escape the potato famine of 1848, and eventu-
ally established their farm only a few miles from
Carleton College, in Northfield, Minnesota,
where Butler was admitted in 1883. To help
pay his college expenses, he worked in a local
dairy. He graduated from Carleton in 1887 with
both a bachelor of arts degre e and a bachelor of
science degree.
After college, Butler moved to St. Paul and
studied law at the firm of Pinch and Twohy. He
passed the Minnesota bar in 1888 and estab-
lished a law practice with an associate, Stan
Donnelly. In 1891 Butler became assistant to the
county attorney for Ramsey County, and in
1893 and 1895 he was elected, as a Democrat, to
the office of county attorney, the only elective
public office he ever held. While in office, he
secured more criminal convictions than any
county attorney had done before. Butler ran for
the state senate in 1906 but was narrowly
defeated. In 1908 he was elected president of the
Minnesota State
BAR ASSOCIATION. In St. Paul,
Butler also met his future wife, Annie Cronin,
whom he married in 1891. The couple had eight
children.
In 1893 Butler helped establish a St. Paul

law firm that evolved into Butler, Mitchell, and
Doherty, one of the most successful corporate
law firms of its time in what was then called the
Northwest. The firm had several railroads as its
major clients, including those of James J. Hill,
one of the great rail barons. During his career
Butler earned a reputation as the foremost
railroad lawyer in the Northwest. His work in
railroad litigation eventually brought him to
national attention, and allowed him to become
friendly with President
WILLIAM HOWARD TAFT,
who served on the Supreme Court as chief
justice from 1921 to 1930 and was later
instrumental in securing Butler’s nomination
to the Court.
On November 23, 1922, President
WARREN G.
HARDING nominated Butler to succeed retiring
justice
WILLIAM R. DAY on the Supreme Court.
Although Butler was a Democrat, the Republi-
can Harding approved of his laissez-faire
economic philosophy and conservative social
views. Harding also believed that it would be
politically astute to nominate the Roman
Catholic Butler to the Court. The last Roman
Pierce Butler.
LIBRARY OF CONGRESS
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION

206 BUTLER, PIERCE
Catholic to serve on the Court had been
replaced by Taft in 1921.
Butler’s nomination caused a great outcry
in liberal circles, particularly from Senators
GEORGE W. NORRIS and ROBERT M. LA FOLLETTE, and
senator-elect Henrik Shipste ad, of Minnesota.
They pointed to Butler’s ties to big business
during his legal career, claiming that these
would bias his decisions on the bench. They also
objected to Butler’s actions as a regent of the
University of Minnesota, a position he held
from 1907 to 1924. Butler, they argued, had
used his influence to have several faculty
members dismissed. Despite the objections of
La Fo l lette and o thers, the
SENATE JUDICIARY
COMMITTEE
unanimously confirmed Butler’snom-
ination on December 13, 19 2 2. O n January 2,
1923, the Senate appointed Butler to the Court
by a vote of 61–8.
While serving on the Court, Butler fulfilled
predictions that he would become a pillar of
conservatism. Butler often voted with three other
conservatives, Justices
JAMES C. MCREYNOLDS,
GEORGE SUTHERLAND, and WILLIS VAN DEVANTER,
himself a former railroad lawyer. Because they
consistently voted as a conservative bloc, obser-

vers nicknamed this group the Four Horsemen.
Butler’s conservatism manifested itself par-
ticularly in his emphasis on limiting the power
of government. For example, he voted whenever
possible against state and federal taxes . In
Coolidge v. Long, 282 U.S. 582, 51 S. Ct. 306,
75 L. Ed. 562 (1931), writing the Court’s
opinion, Butler argued that a state inheritance
tax was unconstitutional because it violated
the Due Process Clause of the
FOURTEENTH
AMENDMENT
, which proclaims that the state shall
not deprive a person of liberty without
DUE
PROCESS OF LAW
.
Butler also consistently argued against the
rights of government to regulate prices, partic-
ularly through his narrow in terpretation of the
phrase “business affected with a public interest.”
At the time, it was common for governments,
when they sought to regulate prices charged by
businesses, to argue that certain industries had
more of the
PUBLIC INTEREST involved in their
affairs than others; businesses that were affected
with a public interest could therefore be
regulated by the government. In Wolff Packing
Co. v. Court of Industrial Relations, 262 U.S. 522,

43 S. Ct. 630, 67 L. Ed. 1103 (1923), Butler
voted with the Court in deciding that the
packing industry was not affected with a public
interest and therefore could not be made subject
to price-control legislation.
Butler and the Court made the same
decision with regard to employment agencies
in Ribnik v. McBride, 277 U.S. 350, 48 S. Ct. 545,
72 L. Ed. 913 (1928). In both Wolff and Ribnik,
the Court found that the laws under consider-
ation violated the Due Process Clause of the
Fourteenth Amendment. In Nebbia v. New York,
291 U.S. 502, 54 S. Ct. 505, 78 L. Ed. 940
(1934), when an increasingly liberal Court
decided to do without the ph rase “affected with
a public interest” in making its dec ision and
ruled that the state may regulate milk prices,
Butler, along with the rest of the Four Horse-
men, dissented. This was just one of many
dissents Butler and his conservative colleagues
would make during the 1930s.
Butler’s opinions in the area of civil liberties
are less easy to categorize. He argued persua-
sively for the rights of those accused of crimes,
arguing in one opinion, “Abhorrence, however
great, of persistent and menacing crime will not
excuse transgression in the courts of the legal
rights of the worst offenders.” He opposed
national prohibition and criticized federal
agents several times for violating the

FOURTH
AMENDMENT
in their searches and seizures. In a
case involving wire tapping by Prohibition
agents,
OLMSTEAD V. UNITED STATES, 277 U.S.
438, 48 S. Ct. 564, 72 L. Ed. 944 (1928), Butler
found himself in the unusual company of the
more liberal justices
LOUIS D. BRANDEIS, HARLAN F.
STONE, and Holmes. In his dissenting opinion,
Butler argued that during the transmission of
messages, the exclusive use of any wire belonged
to the persons served by it. Law enforcement
WIRETAPPING therefore constituted an illegal
search for evidence.
In Aldridge v. United States, 283 U.S. 308, 51
S. Ct. 470, 75 L. Ed. 1054 (1931), Butler voted
with the majority in holding that an African
American being tried for the
MURDER of a white
man was entitled to have the prospective jurors
asked whether they had a racial prejudice that
would prevent a fair trial. Butler also supported
the rights of disabled persons, casting a lone
dissenting vote, without opinion, in
BUCK V. BELL,
274 U.S. 200, 47 S. Ct. 584, 71 L. Ed. 1000
(1927), which upheld a 1924 Virginia law
allowing for the sterilization of mentally handi-

capped individuals.
ABHORRENCE,
HOWEVER GREAT, OF
PERSISTENT AND
MENACING CRIME
WILL NOT EXCUSE
TRANSGRESSION IN
THE COURTS OF THE
LEGAL RIGHTS OF THE
WORST OFFENDERS
.
—PIERCE BUTLER
GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION
BUTLER, PIERCE 207