Comment on the Definition of Eligible Organization for Purposes of Coverage of Certain Preventive Services Under the Affordable Care Act

This comment letter was submitted by U.C. Berkeley corporate law professors in response to a request for comment by the Health and Human Services Department on the definition of eligible organization under the Affordable Care Act in light of the Supreme Court\u27s decision in Burwell v. Hobby Lobby. Eligible organizations will be permitted under the Hobby Lobby decision to assert the religious principles of their shareholders to exempt themselves from the Affordable Care Act\u27s contraceptive mandate for employees. In Hobby Lobby, the Supreme Court held that the nexus of identity between several closely-held, for-profit corporations and their shareholders holding “a sincere religious belief that life begins at conception” was sufficiently close to justify granting such corporations an exemption from the Affordable Care Act\u27s contraceptive mandate pursuant to the Religious Freedom Restoration Act of 1993. More specifically, the Court ascertained that the overall interests of the corporations and their natural-person shareholders were sufficiently identical to warrant ascribing the religious commitments of the shareholders to their corporations. Notably, the Court stopped short of articulating a diagnostic test for determining when a sufficient overlap of interests exists; instead, it concluded that well-established principles in state corporate law should provide such guidance. We believe that state corporate law does in fact provide the diagnostic test the Court desires for determining when it is appropriate to disregard the distinct identity of a corporation for the identity of its shareholders. This test is rooted in the long-standing case law that constitutes the alter ego doctrine (commonly referred to as “veil piercing”). To sustain a claim of veil piercing, state corporate law uniformly requires there to be “unity of ownership and interest” between the corporation and its shareholders. If a corporation is operated as the effective alter ego of its shareholders to such an extent that its separate corporate existence ceases to exist as a practical matter, then a veil piercing claim can be established that effectively attributes the corporation’s legal rights and obligations to its shareholders, and vice versa. A veil piercing conclusion effectively holds that there is no practical difference between the corporation and the shareholders themselves. We therefore propose that for purposes of defining an “eligible organization” under Hobby Lobby, the HHS and other federal organizations should follow the corporate law doctrine of veil piercing. Indeed, to make this doctrine administratively feasible, we further suggest that shareholders of a corporation should have to certify that they and the corporation have a unity in identity and interests, and therefore the corporation should be viewed as the shareholders’ alter ego

Comment on the Definition of Eligible Organization for Purposes of Coverage of Certain Preventive Services Under the Affordable Care Act

This comment letter was submitted by U.C. Berkeley corporate law professors in response to a request for comment by the Health and Human Services Department on the definition of eligible organization under the Affordable Care Act in light of the Supreme Court\u27s decision in Burwell v. Hobby Lobby. Eligible organizations will be permitted under the Hobby Lobby decision to assert the religious principles of their shareholders to exempt themselves from the Affordable Care Act\u27s contraceptive mandate for employees. In Hobby Lobby, the Supreme Court held that the nexus of identity between several closely-held, for-profit corporations and their shareholders holding “a sincere religious belief that life begins at conception” was sufficiently close to justify granting such corporations an exemption from the Affordable Care Act\u27s contraceptive mandate pursuant to the Religious Freedom Restoration Act of 1993. More specifically, the Court ascertained that the overall interests of the corporations and their natural-person shareholders were sufficiently identical to warrant ascribing the religious commitments of the shareholders to their corporations. Notably, the Court stopped short of articulating a diagnostic test for determining when a sufficient overlap of interests exists; instead, it concluded that well-established principles in state corporate law should provide such guidance. We believe that state corporate law does in fact provide the diagnostic test the Court desires for determining when it is appropriate to disregard the distinct identity of a corporation for the identity of its shareholders. This test is rooted in the long-standing case law that constitutes the alter ego doctrine (commonly referred to as “veil piercing”). To sustain a claim of veil piercing, state corporate law uniformly requires there to be “unity of ownership and interest” between the corporation and its shareholders. If a corporation is operated as the effective alter ego of its shareholders to such an extent that its separate corporate existence ceases to exist as a practical matter, then a veil piercing claim can be established that effectively attributes the corporation’s legal rights and obligations to its shareholders, and vice versa. A veil piercing conclusion effectively holds that there is no practical difference between the corporation and the shareholders themselves. We therefore propose that for purposes of defining an “eligible organization” under Hobby Lobby, the HHS and other federal organizations should follow the corporate law doctrine of veil piercing. Indeed, to make this doctrine administratively feasible, we further suggest that shareholders of a corporation should have to certify that they and the corporation have a unity in identity and interests, and therefore the corporation should be viewed as the shareholders’ alter ego

A Perivascular Origin for Mesenchymal Stem Cells in Multiple Human Organs

Mesenchymal stem cells (MSCs), the archetypal multipotent progenitor cells derived in cultures of developed organs, are of unknown identity and native distribution. We have prospectively identified perivascular cells, principally pericytes, in multiple human organs including skeletal muscle, pancreas, adipose tissue, and placenta, on CD146, NG2, and PDGF-Rβ expression and absence of hematopoietic, endothelial, and myogenic cell markers. Perivascular cells purified from skeletal muscle or nonmuscle tissues were myogenic in culture and in vivo. Irrespective of their tissue origin, long-term cultured perivascular cells retained myogenicity; exhibited at the clonal level osteogenic, chondrogenic, and adipogenic potentials; expressed MSC markers; and migrated in a culture model of chemotaxis. Expression of MSC markers was also detected at the surface of native, noncultured perivascular cells. Thus, blood vessel walls harbor a reserve of progenitor cells that may be integral to the origin of the elusive MSCs and other related adult stem cells. © 2008 Elsevier Inc. All rights reserved