Description: Challenge to the U.S. Securities and Exchange Commission’s (SEC’s) adoption of amendments to Rule 14a-8, which governs the submission of shareholder proposals for inclusion in a company’s proxy statement.
Interfaith Center on Corporate Responsibility v. U.S. Securities and Exchange Commission
Filing Date Type File Action Taken Summary 06/15/2021 Complaint Download Complaint filed. Plaintiffs Alleged that True Reason for SEC Shareholder Proposal Rule Amendments Was Management Opposition to Environmental and Social Issue Proposals. A lawsuit filed in federal district court in the District of Columbia challenged the U.S. Securities and Exchange Commission’s (SEC’s) adoption of amendments to Rule 14a-8, which governs the submission of shareholder proposals for inclusion in a company’s proxy statement. The plaintiffs—a coalition of institutional investors, an individual shareholder advocate, and a nonprofit corporation described as “one of the nation’s leading practitioners of corporate engagement and shareholder advocacy”—asserted that the SEC violated the Administrative Procedure Act because the amendments were arbitrary, capricious, and not in accordance with law; because the SEC acted in excess of its statutory authority and failed to observe required procedures; and because the SEC used a pretextual justification for the amendments (reducing costs) when its “true reason … was corporate management opposition to the substance of many types of shareholder proposals, particularly those addressing environmental and social issues.” The complaint alleged that climate change had become “an increasing focus” of shareholder proposals.