William & Mary Environmental Law and Policy Review


David Groshoff


This Article builds on my prior publications employing case studies that serve as the prisms through which this Article applies a legal analysis to a newly trending problem in social entrepreneurship.

Specifically, this Article reviews the financial and property interests implicated when, in the milieu of an aging baby-boomer demographic likely to display decaying neurocognitive abilities, ostensibly socially beneficent limited liability companies (“LLCs”) pretextually pose as small businesses with a desire to serve people suffering from particular alleged mental disorders. In reality however, these brand-managed social entrepreneurs may represent conveniently detachable arms of integrated corporate enterprises that have hundreds of millions of dollars and hundreds of employees backing them.

Thus, the integrated corporate enterprise uses the LLC and an associated small-business-owner tale to manipulate antidiscrimination law through which the integrated corporate enterprise can (i) exploit (a) small municipalities’ zoning ordinances, and (b) relative funding and legal specialization deficiencies; and (ii) threaten municipalities with costly legal action, should the municipality fail to change its zoning ordinances to permit the integrated corporate enterprise to operate a twenty-four-hour commercial business deep in the heart of real property historically zoned for single-family residential use. As a result, the integrated corporate enterprise’s actions leave all but itself drowning in the spillover effects of the enterprise’s negative externalities, including the risks of material (i) physical harm to existing real property owners and residents—whether young children or the elderly—and (ii) financial losses to (a) existing real property owners and (b) municipalities who must internalize the integrated corporate enterprise’s externalities, thereby leading to a forced socialization of what would otherwise be a private cost.

Because this Article concerns an area of the law that lacks uniform or model legal codes from which one could otherwise address this problem and propose a broad-brush and purely theoretical solution, this Article employs a case study method to dissect trending issues too nascent and interdisciplinary to be covered in existing legal literature. As a result, the Article employs a granular, fundamental, bottom-up analysis to serve as a microcosm through which the Article arrives at its broader descriptive understandings and prescriptive solutions and conclusions that should spark further debate on this growing area of concern.

As the nation’s age demographic shifts, the Article’s analysis should educate and advance dialogue among interdisciplinary scholars, legal tribunals, and municipalities relative to this emergence in social entrepreneurship. The Article also serves to assist legitimate healthcare providers in avoiding the errors made by certain large corporate integrated enterprises so that people suffering from disabilities indeed receive the care and the housing that they may seek. The Article proposes ways in which municipalities can ensure that they do not become the victim of purported social entrepreneurs attempting to extract literal and figurative economic rent-seeking, which then leads the municipality and existing property owners to seek declaratory relief from the courts, thus engaging in their own mental health-based quiet riot.