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On September 30th, the NAM filed an amicus brief urging the Middle District of Tennessee to vacate the SEC’s recission of the rule. As in our case, plaintiffs U.S. Chamber of Commerce, Business Roundtable, and Tennessee Chamber of Commerce and Industry, brought this challenge to the 2022 rescission arguing that it is both substantively arbitrary and capricious several times over and was adopted without good-faith observance of the Administrative Procedure Act’s mandated rulemaking procedures. Both cases seek to have the 2022 recission vacated ahead of the 2023 proxy season. Our amicus brief expands on the plaintiffs’ position that the concerns about proxy firms that animated the 2020 proxy firm rule have not abated, that the SEC failed to provide meaningful opportunity for comment prior to rescission of the 2020 rule, and that the SEC’s policy reversal is arbitrary and capricious.

Unfortunately, on April 24, 2023, the court denied the plaintiffs' motion for summary judgment and granted the SEC's cross-motion.

On June 24, 2024, the NAM filed an amicus brief urging the 8th Circuit to vacate the SEC’s final climate disclosure rule. Back in March, the SEC voted to approve the final rule instituting new climate disclosure requirements on public companies. As requested by the NAM, the final rule omitted the onerous and unworkable Scope 3 supply chain emissions reporting mandate the SEC included in its original proposal. Although the final rule is significantly more workable for manufacturers than the proposal, questions remain about the SEC’s authority to adopt it in the first place. In this case, several groups sued challenging the final rule as exceeding the SEC’s authority and those cases were consolidated in the 8th Circuit.

We argue in our amicus brief that even though the SEC has authority to require a public company to disclose information that would be material to a reasonable investor and climate information can be material, provisions of the rule suggest the SEC is prescribing climate policy. The EPA, not the SEC, has authority to make climate policy.

On November 15, 2024, the NAM asked the D.C. Circuit to overturn the lower court’s decision finding that the SEC lacks authority to regulate proxy advisory firms. This appeal is the latest development in our ongoing fight to ensure reasonable regulation of proxy firms—unregulated third parties with outsized influence on shareholder votes and manufacturers’ corporate governance policies. In July 2020, after years of advocacy from the NAM and a deliberative, bipartisan process, the SEC finalized a new rule increasing transparency and accountability of proxy firms. The final rule—issued under Section 14(a) of the Securities and Exchange Act of 1934—required proxy firms to disclose their conflicts of interest, provide voting recommendations to companies after they are finalized, and notify investors of company perspectives on their recommendations. Section 14(a) of the Exchange Act makes it unlawful to “solicit” proxies “in contravention of such rules and regulations as the [Securities and Exchange] Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors[.]”

The NAM intervened in proxy firm Institutional Shareholder Services’ challenge to the rule in the D.C. District Court—the present case, Institutional Shareholder Services v. SEC. ISS is one half of the duopoly operating in the proxy advisory space. Unfortunately, the district court granted judgment for ISS after concluding that the SEC lacks authority to regulate proxy advisory firms. The district court sided with ISS and held that “the ordinary meaning of ‘solicit’ at the time of Section 14(a)’s enactment does not reach proxy voting advice for a fee”; therefore, “[b]y defining the terms ‘solicit’ and ‘solicitation’ in the proxy rules to include proxy voting advice for a fee, . . . the SEC acted contrary to law and in excess of statute authority."

We argue in our opening brief that the district court misread the record in determining what proxy advisory firms do, which is “solicit” proxies under any reasonable definition. The district court also disregarded the explicit authority provided to the SEC in the Exchange Act for it to define terms like “solicit,” rejecting the SEC’s reasonable interpretation of the term and adopting an artificially narrow definition. Notably, the SEC declined to pursue an appeal in this case, abdicating its well-established and long-standing authority and leaving the NAM as the last bulwark standing between America’s public markets and proxy firms’ unchecked influence.

This case was brought in the 5th Circuit by activist group NCPPR challenging an SEC no-action letter--stating that it would not recommend enforcement action against Kroger if Kroger excluded NCPPR's proposal from its proxy ballot--and accusing the SEC of applying its Rule 14a-8 in an inconsistent and politically motivated manner. Under SEC Rule 14a-8, public companies are required to include certain shareholder proposals on their proxy ballot. Activist groups from across the ideological spectrum are increasingly using shareholder proposals to inject contentious ideological policy fights into corporate governance. We intervened in this case to raise two arguments not addressed by the parties: (1) Rule 14a-8 violates the First Amendment by compelling a company to include shareholder-selected proposals unrelated to the company’s core business or the creation of shareholder value on the company’s own proxy statement at the company’s own expense; and (2) the SEC lacks authority to compel company speech on its own proxy statement.