Bankruptcy Court Lacks Power to Substantively Consolidate Nondebtor, Nonprofit Entities With Archdiocese Debtor

Jones Day

Jones Day

In the wake of scandal-driven bankruptcies filed by nearly 20 U.S. Roman Catholic dioceses and religious orders, scrutiny has been increasingly brought to bear on the benefits and burdens that federal bankruptcy laws offer to eleemosynary (nonprofit) corporations. Nonprofits seek bankruptcy protection for a variety of reasons. In the case of the dioceses and religious orders, chapter 11 has been a vehicle to head off (at least temporarily) thousands of pending and potential clergy sexual-abuse cases seeking hundreds of millions of dollars in damages. Other nonprofit filings have been designed to restructure balance sheets bloated with debt, to facilitate sales of nonprofits' assets, to effect orderly liquidations, to give nonprofits a needed breathing spell in a climate of regulatory change and uncertainty, or to more effectively manage claims of fiduciary infractions or fraud.

One issue that commonly arises in nonprofit bankruptcies—the scope of the debtor's bankruptcy estate—was recently addressed by the U.S. Court of Appeals for the Eighth Circuit in Official Committee of Unsecured Creditors v. Archdiocese of St. Paul and Minneapolis (In re Archdiocese of St. Paul and Minneapolis), 888 F.3d 944 (8th Cir. 2018). The court affirmed lower court rulings that the assets of parishes and other entities associated with an archdiocese were not, by means of "substantive consolidation," available to fund bankruptcy settlements with clergy abuse victims. According to the Eighth Circuit, a bankruptcy court's authority to issue "necessary or appropriate" orders does not permit it to order substantive consolidation of the assets and liabilities of a debtor archdiocese with the assets and liabilities of nondebtor entities that also operated as nonprofits because the remedy would contravene the prohibition of involuntary bankruptcy filings against nonprofits.

Eligibility of Nonprofits for Bankruptcy Relief

One of the threshold issues that must be considered is whether a nonprofit can file for bankruptcy in the first place. A related issue is whether a nonprofit's bankruptcy case, once filed, is subject to conversion to a case under another chapter of the Bankruptcy Code.

Section 109 of the Bankruptcy Code sets forth the eligibility requirements for a bankruptcy filing, including requirements for filings under certain chapters. Section 109(a) provides that "only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under [the Bankruptcy Code.]" The Bankruptcy Code defines "person" to include (in addition to certain governmental units) any individual, partnership, or corporation.

Other subsections of section 109 expressly make some entities ineligible for certain kinds of bankruptcy relief, including railroads (which can file only for chapter 11); municipalities (which can file only for chapter 9); and domestic insurance companies, banks, and savings and loan associations, all of which are subject to different legislative schemes enacted for their reorganization or dissolution.

Corporations qualifying for nonprofit status under applicable state law are eligible to file under both chapter 7 and chapter 11 of the Bankruptcy Code. See Collier on Bankruptcy ¶ 109.02 (16th ed. 2018) ("A nonprofit corporation, like a for-profit corporation, is eligible to file for relief under the Bankruptcy Code despite the fact that its assets may be subject to the beneficial ownership of governmental agencies."). Even unincorporated nonprofit enterprises may qualify. However, where a nonprofit enterprise is not organized as a corporation, a business trust, a joint stock company, or an association with the power or privilege of a private corporation, it will not be eligible for relief under the Bankruptcy Code. See 11 U.S.C. §§ 101(9) and 109.

Prohibition of Involuntary Nonprofit Bankruptcies

Section 303 of the Bankruptcy Code provides that an involuntary bankruptcy case may be commenced under chapter 7 or chapter 11 "only against a person, except a farmer, family farmer, or a corporation that is not a moneyed, business, or commercial corporation," if the requisite number of eligible creditors files an involuntary petition against the entity. Although the Bankruptcy Code does not define "moneyed, business, or commercial corporation," the legislative history of section 303 indicates that "churches, schools, charitable organizations and foundations" are exempt from involuntary bankruptcy. H.R. Rep. No. 95-595, 321 (1977); S. Rep. No. 95-989, 33 (1978). Courts, which generally decide whether this exemption applies by examining the charter of the entity, as well as its activities and its characteristics and powers under state law, have interpreted the provision to exclude nonprofits from involuntary bankruptcy filings. See Archdiocese of St. Paul, 888 F.3d at 952 ("We agree with the bankruptcy court's interpretation that 'not a moneyed' is equivalent to the modern-day terms 'not-for-profit' or 'non-profit.' ").

Conversion of Nonprofit Chapter 11 Case to Chapter 7 Liquidation Prohibited

The Bankruptcy Code provides for the conversion of a chapter 11 case to a chapter 7 liquidation upon demonstration of "cause," including continuing loss to or diminution of the estate, the absence of a reasonable likelihood of rehabilitation, and the inability to effectuate substantial consummation of a confirmed chapter 11 plan. However, section 1112(c) of the Bankruptcy Code prohibits the involuntary conversion of a case from chapter 11 to chapter 7 if the debtor is not a "moneyed, business, or commercial corporation." Courts have interpreted these terms to refer to nonprofit entities. See, e.g., In re Cult Awareness Network, Inc., 151 F.3d 605, 609 (7th Cir. 1998); In re Forum Health, 444 B.R. 848, 860 n.13 (Bankr. N.D. Ohio 2011).

What Qualifies as Property of a Nonprofit's Bankruptcy Estate?

Among the issues most frequently litigated in bankruptcy cases filed by nonprofit corporations is whether assets, money, or other property in the debtor's possession (or nominally under its control) at the time it files for bankruptcy should be included in the debtor's bankruptcy estate, such that they are available in whole or in part for distribution to creditors. This is so because assets held by nonprofits are frequently acquired by means of government grants or bequests from private individuals or foundations that are subject to use limitations.

Section 541(a)(1) of the Bankruptcy Code broadly defines property of a debtor's bankruptcy estate to include "all legal or equitable interests of the debtor in property as of the commencement of the case." Although the scope of section 541 is broad, applicable non-bankruptcy law defines the debtor's property interests and thereby determines the extent of the bankruptcy estate. See Butner v. U.S., 440 U.S. 48, 55 (1979).

Pre-bankruptcy restrictions on property held by a nonprofit debtor, such as those associated with donor-restricted funds, can significantly limit the broad grasp of section 541. See In re Joliet-Will County Community Action Agency, 847 F.2d 430 (7th Cir. 1988) (federal and state agency grants to nonprofits that imposed restrictions on use were made to the organization as a trustee, such that the debtor lacked beneficial title to the funds, and hence they were not property of the estate); In re Roman Catholic Archbishop of Portland in Oregon, 345 B.R. 686, 705 (Bankr. D. Or. 2006) (a charitable trust of which the debtor was not the sole beneficiary was not the property of the bankruptcy estate, as the debtor held legal but not entire equitable title to the fund, but the debtor's interest in the trust as the beneficiary was part of its estate); Parkview Hospital v. St. Vincent Medical Center, 211 B.R. 619 (Bankr. N.D. Ohio 1997) (because the debtor hospital's contributors manifested an intent that the hospital's development fund would be used for specific charitable purposes, an express charitable trust was created that excluded the funds from the bankruptcy estate). Accordingly, section 541(d) of the Bankruptcy Code provides that:

[p]roperty in which the debtor holds, as of the commencement of the case, only legal title and not an equitable interest ... becomes property of the estate ... only to the extent of the debtor's legal title to such property, but not to the extent of any equitable interest in such property that the debtor does not hold.

A related issue that has received a great deal of coverage in connection with the Catholic archdiocese chapter 11 filings is the conflict between federal bankruptcy law and canon law in determining what qualifies as estate property. See generally Religious Organizations and the Law § 13:22 (2018); Justin Baumgartner, Remedying Scandal: Pooling the Assets of Catholic Entities to Pay Off Tort Creditors Through Substantive Consolidation in a Bankruptcy Proceeding, 18 Rutgers J. L. & Religion 388 (2017). Within the Catholic Church, dioceses, i.e., geographic districts established by the church, control local parishes, i.e., congregations. Each diocese is governed by a bishop (or an archbishop, if the area is extensive enough to be designated an archdiocese).

The bishop holds title to all parish properties in the name of the church. However, under canon law, such properties are held in trust for parishioners. Church officials commonly argue that only the bishop's direct holdings, as opposed to properties held in trust for parishes, should be included in an archdiocese's bankruptcy estate. See In re Catholic Diocese of Wilmington, Inc., 432 B.R. 135 (Bankr. D. Del. 2010) (funds that a debtor-diocese received from different parishes for investment in a pooled investment fund were held in the resulting trust, but because the funds were held in the debtor's general account and the parishes could not trace them, they were estate property; funds deposited in a separate account pursuant to an express trust agreement were not estate property); Comm. of Tort Litigants v. Catholic Diocese of Spokane, 364 B.R. 81 (E.D. Wash. 2006) (issues of fact existed as to whether the debtor-diocese was the unencumbered owner of parish properties or whether the parishes were the beneficial owners of the real properties upon which their churches and schools were located, precluding summary judgment for either the diocese or for the committee of tort litigants and the claimant on the issue of whether the properties belonged to the chapter 11 estate); In re Roman Catholic Archbishop of Portland in Oregon, 335 B.R. 842, 861 (Bankr. D. Or. 2005) ("[I]f defendants can show that, under state law, the disputed properties are held by the Archdiocese in trust for the parishes and schools, § 541 would recognize that trust relationship, subject to the avoidance provisions of § 544(a)(3).").

In light of these issues, claimants and their representatives have sought to avail themselves of the assets of entities affiliated with a nonprofit to satisfy claims by means of alter ego-type theories or "substantive consolidation."

Substantive Consolidation

Substantive consolidation is an equitable remedy pursuant to which a bankruptcy court may order that the assets and liabilities of separate entities be treated as if they belonged to a single, combined entity.

The Bankruptcy Code does not expressly authorize substantive consolidation, but it recognizes that a chapter 11 plan may provide for the "consolidation of the debtor with one or more persons" as a means of implementation. See 11 U.S.C. § 1123(a)(5)(C). In addition, Fed. R. Bankr. P. 1015(b) provides that a bankruptcy court may direct that cases involving affiliated debtors be jointly administered, but the rule is silent regarding substantive consolidation.

A majority of courts have concluded that bankruptcy courts have the power to substantively consolidate debtor entities under section 105(a) of the Bankruptcy Code, which provides that a court "may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions" of the Bankruptcy Code. However, because forcing the creditors of one entity to share equally with the creditors of a less solvent entity is not appropriate in many circumstances, courts generally hold that substantive consolidation is an extraordinary remedy that should be used sparingly. See Buridi v. KMC Real Estate Investors, LLC (In re KMC Real Estate Investors, LLC), 531 B.R. 758 (S.D. Ind. 2015).

Different standards have been employed by courts to determine the propriety of substantive consolidation. For example, in Eastgroup Properties v. Southern Motel Assoc., Ltd., 935 F.2d 245 (11th Cir. 1991), the Eleventh Circuit adopted a modified version of the standard articulated by the District of Columbia Circuit in Drabkin v. Midland Ross Corp. (In re Auto-Train Corp., Inc.), 810 F.2d 270, 276 (D.C. Cir. 1987). According to this standard: (i) the proponent of consolidation must demonstrate that there is substantial identity between the entities to be consolidated and that consolidation is necessary to avoid some harm or to realize some benefit; and (ii) a creditor may object on the grounds that it relied on the entities' separate credit and will be prejudiced by consolidation, in which case the court can order consolidation only if it determines that the benefits of consolidation "heavily" outweigh the harm.

The Second Circuit established a somewhat different two-part disjunctive standard for gauging the propriety of substantive consolidation in Union Savings Bank v. Augie/Restivo Baking Co., Ltd. (In re Augie/Restivo Baking Co., Ltd.), 860 F.2d 515, 518 (2d Cir. 1988). There, the court concluded that the factual elements considered by the courts are "merely variants on two critical factors: (i) whether creditors dealt with the entities as a single economic unit and did not rely on their separate identity in extending credit, ... or (ii) whether the affairs of the debtors are so entangled that consolidation will benefit all creditors."

Factors that may be relevant in satisfying these requirements include the following:

  1. Fraud or other complete domination of the corporation that harms a third party;
  2. The absence of corporate formalities;
  3. Inadequate capitalization of the corporation;
  4. Whether funds are put in and taken out of the corporation for personal rather than corporate purposes;
  5. Overlap in ownership and management of affiliated corporations;
  6. Whether affiliated corporations have dealt with one another at arm's length;
  7. The payment or guarantee of debts of the dominated corporation by other affiliated corporations;
  8. The commingling of affiliated corporations' funds; and
  9. The inability to separate affiliated corporations' assets and liabilities.

Id. at 518–19. The Augie/Restivo test was adopted by the Ninth Circuit in Bonham v. Compton (In re Bonham), 229 F.3d 750 (9th Cir. 2000). Many other circuit and lower courts have adopted tests similar to the Augie/Restivo and Eastgroup standards. In In re Owens Corning, 419 F.3d 195, 210 (3d Cir. 2005), however, the Third Circuit opted for an "open-ended, equitable inquiry" rather than a factor-based analysis, as employed by many courts, in reversing lower court rulings approving "deemed" consolidation of 18 debtors and three nondebtor subsidiaries under a plan.

Substantive Consolidation of Debtors and Nondebtors

Although most courts have held that the substantive consolidation of debtor entities is permitted, they disagree as to whether the substantive consolidation of debtors and nondebtors should be allowed. Some courts have concluded that such substantive consolidation is appropriate on the basis of: (i) section 105's broad grant of authority; (ii) a bankruptcy court's ability to assert personal and subject matter jurisdiction over nondebtors; and/or (iii) a bankruptcy court's mandate to ensure the equitable treatment of all creditors. See, e.g., Bonham, 229 F.3d at 769–71; Lassman v. Cameron Constr. LLC (In re Cameron Constr. & Roofing Co.), 565 B.R. 1, 10 (Bankr. D. Mass. 2016); In re S&G Fin. Servs., 451 B.R. 573, 579–82 (Bankr. S.D. Fla. 2011); Simon v. ASIMCO Techs., Inc. (In re Am. Camshaft Specialties, Inc.), 410 B.R. 765, 786 (Bankr. E.D. Mich. 2009); Walls v. Centurion Asset Mgmt., Inc. (In re Bolze), 2009 BL 157145, *4 (Bankr. E.D. Tenn. July 23, 2009); Dominion Fin. Corp. v. Morfesis (In re Morfesis), 270 B.R. 28, 31 (Bankr. D.N.J. 2001); see also Clark's Crystal Springs Ranch, LLC v. Gugino (In re Clark), 692 Fed. Appx. 946, 2017 BL 240043 (9th Cir. July 12, 2017) (because the Bankruptcy Code does not expressly forbid the substantive consolidation of debtors and nondebtors, the U.S. Supreme Court's decision in Law v. Siegel, 134 S. Ct. 1188 (2014), does not bar bankruptcy courts from ordering the remedy).

Other courts have held that the substantive consolidation of debtors and nondebtors is inappropriate because, among other things, it circumvents the procedures concerning involuntary bankruptcies set forth in section 303 of the Bankruptcy Code. See, e.g., Audette v. Kasemir (In re Concepts America, Inc.), 2018 WL 2085615, *6 (N.D. Ill. May 3, 2018); In re Pearlman, 462 B.R. 849, 854 (Bankr. M.D. Fla. 2012); Helena Chem. Co. v. Circle Land & Cattle Corp. (In re Circle Land & Cattle Corp.), 213 B.R. 870, 877 (Bankr. D. Kan. 1997); In re Hamilton, 186 B.R. 991, 993 (Bankr. D. Colo. 1995).

In Archdiocese of St. Paul, the Eighth Circuit considered whether an archdiocese debtor could be substantively consolidated with more than 200 nonprofit, nondebtor parishes and other related entities.

Archdiocese of St. Paul

The nonprofit Archdiocese of St. Paul and Minneapolis (the "debtor") includes 187 parishes as well as several schools, cemeteries, and related organizations. After the State of Minnesota enacted legislation in 2013 extending the statute of limitations for clergy sexual-abuse lawsuits, hundreds of claimants filed claims against the debtor. To address the claims, the debtor filed a chapter 11 case in 2015 in the District of Minnesota.

In 2016, the unsecured creditors' committee sought an order from the bankruptcy court substantively consolidating the debtor with the more than 200 related nonprofit entities, none of which had filed for bankruptcy. Whereas the debtor had only $45 million in unencumbered assets, the related nondebtors' assets were reportedly worth as much as $1 billion. In its complaint, the committee alleged that the debtor "had direct control and supervision in all material aspects" of the nondebtor entities and that their assets should be treated as assets of the debtors.

The bankruptcy court ruled that it lacked the authority to substantively consolidate the debtor with its nonprofit, nondebtor affiliates because it violated section 303(a)'s exemption of nonprofits from involuntary bankruptcy. The court also held that, even if it had the authority to grant the remedy, the committee failed to allege facts sufficient to support substantive consolidation of the entities. The district court affirmed the bankruptcy court's dismissal of the committee's complaint, and the committee appealed to the Eighth Circuit.

The Eighth Circuit's Ruling

A three-judge panel of the Eighth Circuit affirmed.

Citing Bonham, the panel noted that, to date, only the Ninth Circuit has directly addressed the substantive consolidation of debtors with nondebtors at the court of appeals level and that "[n]o appellate court has recognized the substantive consolidation of a debtor and a non-profit debtor, let alone a debtor and over 200 non-profit non-debtors."

Next, the Eighth Circuit panel cited Law v. Siegel, 134 S. Ct. 1188 (2014), for the proposition that, in exercising its broad equitable powers under section 105, "a bankruptcy court may not contravene specific statutory provisions" of the Bankruptcy Code. Concluding that the plain and ordinary meaning of "corporation that is not a moneyed, business, or commercial corporation" is the equivalent of "non-profit," the panel ruled that a bankruptcy court does not have the power to order substantive consolidation of a nonprofit entity because it would directly contravene section 303(a) of the Bankruptcy Code. According to the court:

Section 303(a) prevents the use of § 105(a) to force truly independent non-profit entities into involuntary bankruptcy.

We leave for another day the issue of whether a non-profit non-debtor that is the alter ego, under state law, of the debtor, or has been formed as part of a fraudulent scheme, such as a Ponzi scheme, can be consolidated.

The Eighth Circuit panel held that, even taken as true, the facts alleged by the committee in its complaint—"isolated incidents of lack of corporate formality and commingling of assets"—fell far short of the requirement for alter ego status under Minnesota law. Moreover, the court explained, the debtor's effective control over the related nondebtor entities is a function of Minnesota statutory law governing the operation of religious organizations, and the committee's arguments "would apply to virtually any non-profit organization" incorporated in Minnesota, thereby effectively "nullify[ing] the protections of § 303(a)."


The Eighth Circuit panel in Archdiocese of St. Paul was mindful of the plight of clergy abuse victims affected by its ruling, writing that "[w]e understand the Committee's sincere attempts at recovery for a class of creditors who have suffered clergy abuse." Even so, the court concluded that a bankruptcy court's equitable (i.e., nonstatutory) powers—here, the power to order substantive consolidation—cannot be deployed in a way that contradicts an express provision of the Bankruptcy Code. In the absence of any substantiated allegations that the nondebtor entities were alter egos of the debtor or that the separateness of the entities should be disregarded for other reasons, the Eighth Circuit was constrained to affirm lower court rulings denying the committee's attempt to enlarge the asset pool available for abuse-victim recoveries.

The decision is emblematic of the reluctance of some courts to order substantive consolidation of nondebtors with debtors because the remedy end-runs the general procedures governing involuntary bankruptcy cases in section 303 and, in this case, the specific prohibition of involuntary filings against nonprofit entities. It also indicates that, as in other contexts, the evidentiary showing needed to support alter ego-type claims in cases involving dioceses and other related entities organized under applicable state and canon law is more demanding than "isolated incidents of lack of corporate formality or commingling of assets."

In May 2018, the debtor reached a $210 million settlement with abuse victims—the largest ever by a Catholic diocese in bankruptcy. In June, the debtor and the committee filed a new joint chapter 11 plan providing that $40 million of the settlement amount not covered by insurance will be paid by means of budget cuts, asset sales, donations, and voluntary contributions from parishes.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jones Day | Attorney Advertising

Written by:

Jones Day

Jones Day on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.