27 U.S.C. § 208 — Interlocking directorates

submitted 91 years ago by ch. 814 to r/title-27-INTOXICATING-LIQUORS · 570 words · no verdicts yet

in plain englishAI-generated · not legal advice

This law stops one person from being an officer or director of more than one liquor-distilling company at the same time, unless the Treasury Secretary approves it first. There are listed exceptions, and breaking the rule without approval or an exception can bring a fine up to $1,000.

(a) Since August 29, 1935, it is against the law for a person to take a job as an officer or director of a company if that would make them an officer or director of more than one company in the business of distilling, rectifying, or blending distilled spirits — or of one such company and an affiliate of another, or of more than one affiliate. There is an exception: the person can apply to the Secretary of the Treasury in advance. If the Secretary reviews the proof submitted and finds that holding both jobs won't substantially restrain or prevent competition in interstate or foreign commerce in distilled spirits, the Secretary grants the application by written order. Anyone who disagrees with the Secretary's final decision on an application can sue in federal district court (or the relevant territorial court) to enjoin, cancel, or suspend it. (b) A person does not need the Secretary's approval if the companies are already affiliates at the time the person takes the new office, and at least one of these is true: the companies were affiliates on August 29, 1935; each company was organized under state law because state law required that kind of organization to do business there; one or more companies were organized to meet that kind of state requirement, and the other company or companies simply existed on August 29, 1935; or one or more companies were organized to meet that state requirement, and no more than one of the group was not organized that way and was formed after August 29, 1935. (c) In this section, "company" means a corporation, joint stock company, business trust, or association. It does not include a state government agency or its officers or employees. (d) Anyone who takes office in violation of this section can be fined up to $1,000.

the actual law source: uscode.house.gov ↗public domain

(a) Offenses

Except as provided in subsection (b), it shall be unlawful for any individual to take office, after August 29, 1935, as an officer or director of any company, if his doing so would make him an officer or director of more than one company engaged in business as a distiller, rectifier, or blender of distilled spirits, or of any such company and of a company which is an affiliate of any company engaged in business as a distiller, rectifier, or blender of distilled spirits, or of more than one company which is an affiliate of any company engaged in business as a distiller, rectifier, or blender of distilled spirits, unless, prior to taking such office, application made by such individual to the Secretary of the Treasury has been granted and after due showing has been made to him that service by such individual as officer or director of all the foregoing companies of which he is an officer or director together with service in the company with respect to which application is made will not substantially restrain or prevent competition in interstate or foreign commerce in distilled spirits. The Secretary of the Treasury shall, by order, grant or deny such application on the basis of the proof submitted to him and his finding thereon. The District Courts of the United States, and the United States court for any Territory shall have jurisdiction of suits to enjoin, annul, or suspend in whole or in part any final action by the Secretary upon any application under this subsection.

(b) Conditions of lawfully taking office

An individual may, without regard to the provisions of subsection (a), take office as an officer or director of a company described in said subsection while holding the position of officer or director of any other such company if such companies are affiliates at the time of his taking office and if—

(1)

Such companies are affiliates on August 29, 1935; or

(2)

Each of such companies has been organized under the law of a State to comply with a requirement thereof under which, as a condition of doing business in such State, such company must be organized under the law of such State; or

(3)

One or more such companies has been organized under the law of a State to comply with a requirement thereof under which, as a condition of doing business in such State, such company must be organized under the laws of such State, and the other one or more of such companies not so organized, is in existence on August 29, 1935; or

(4)

One or more of such companies has been organized under the law of a State to comply with a requirement thereof under which, as a condition of doing business in such State, such company must be organized under the law of such State, and not more than one of such companies is a company which has not been so organized and which has been organized after August 29, 1935.

As used in this section, the term “company” means a corporation, joint stock company, business trust, or association, but does not include any agency of a State or political subdivision thereof or any officer or employee of any such agency.

(d) Penalty

Any individual taking office in violation of this section shall be punished by a fine of not exceeding $1,000.

Source credit: (Aug. 29, 1935, ch. 814, title I, § 108, formerly § 8, 49 Stat. 986; June 25, 1936, ch. 804, 49 Stat. 1921; 1940 Reorg. Plan No. III, § 2, eff. June 30, 1940, 5 F.R. 2108, 54 Stat. 1232; June 25, 1948, ch. 646, § 32(b), 62 Stat. 991; May 24, 1949, ch. 139, § 127, 63 Stat. 107; renumbered title I, § 108, and amended Pub. L. 100–690, title VIII, § 8001(a)(1), (2), (b)(2), Nov. 18, 1988, 102 Stat. 4517, 4521.)

history & why it existsrecord from the source credit

1935Enacted · Act of Aug. 29, 1935, ch. 814 · 49 Stat. 986
1936Amended · Act of June 25, 1936, ch. 804 · 49 Stat. 1921
1948Amended · Act of June 25, 1948, ch. 646 · 62 Stat. 991
1949Amended · Act of May 24, 1949, ch. 139 · 63 Stat. 107
1988Amended · Pub. L. 100-690 · 102 Stat. 4517, 4521

A history note hasn’t been published yet. The record shows enactment by ch. 814 on 1935-08-29.

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