No man is an island, entire of itself; every man is a piece of the continent, a part of the main.
- John Donne, Meditation XVII
Donne’s seventeenth century wisdom is encapsulated in one of the fundamental principles of statutory construction – the maxim that statutory language is not to be interpreted in isolation, but in the context to the statutory scheme as a whole. I’ve been looking for a nice illustration of the application of this principle in practice, and the Law Court filled the void yesterday with its decision in Beaudry v. Harding, 2014 ME 126.
The central issue in Beaudry was whether an administratively dissolved LLC – one dissolved by the Secretary of State for failure to comply with certain statutory requirements, such as filing annual reports – has the legal capacity to prosecute a lawsuit. The Plaintiff pointed to 31 M.R.S. § 1596(2)(B), as supporting his claim that Maine law has answered that question in the affirmative. That section, entitled “Effect of dissolution,” expressly provides that dissolution does not
“[p]revent the commencement of a proceeding by or against the limited liability company in its limited liability name.” (Emphasis added).
The Law Court, though, pointed out that the Legislature had also included within the Limited Liability Company Act provisions dealing specifically with the effects of administrative dissolution. In this regard, the Court noted that 31 M.R.S. § 1592(4)(C) provides that the administrative dissolution of an LLC “does not impair … [t]he right of the limited liability company to defend any action, suit, or proceeding in any court of this State.” The Court reasoned that Section 1592(4)(C), which deals specifically with administrative dissolution, not Section 1596(2)(B), which deals with dissolution generally, controls (another canon of construction – the specific prevails over the general – as a bonus).
The fact that Section 1592(4)(C) was found to control, however, did not end the matter. Standing alone, that section does not ambiguously resolve the issue in question because it does not necessarily follow from the fact that administrative dissolution does not impair an LLC’s right to defend a suit brought against it that administrative dissolution does impair an LLC’s right to prosecute a suit against someone else. At best, there is only a negative implication to that effect. Ultimately, it was the guidance gleaned from its contrast with Section 1596(2)(B)’s language expressly permitting post-dissolution actions by LLCs that led to the Court to conclude that Section 1592(4)(C)’s silence on the matter means that administratively dissolved LLCs lack the capacity to bring suit.
The Court actually appears to have provided a “two-fer” in Beaudry. Not only did it provide the illustration of the maxim in practice that I had been looking for, it actually employed that maxim twice – once to look beyond the text of a statutory section that would, in isolation, appear to be controlling, and again to use the contrast provided by that very same section to resolve the ambiguity inherent in what it found to be the controlling section.
