Amicus brief in Wal-Mart Stores Inc. v. Trinity Wall Street | Business Roundtable


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An important function of the API, BRT, and the Chamber (collectively, “amici curiae”) is to represent the interests of their members in matters before Congress, the Executive Branch, and the courts. To that end, the amici curiae regularly file briefs in cases raising issues of concern to the nation’s business community.

This is one such case. The well-established “ordinary business exclusion” permits a public company to exclude from its proxy materials any shareholder proposal that seeks to interfere with the company’s ordinary business matters. 17 C.F.R. § 240.14a-8(i)(7). Consistent with its longstanding recognition that a retailer’s selection of which products to sell is an ordinary business matter, the staff of the Securities Exchange Commission (“SEC”) agreed with Wal-Mart that the proposal of Trinity Wall Street (“Trinity”) falls within the scope of this exclusion. The district court, however, ruled that Wal-Mart could not exclude Trinity’s proposal from its proxy materials because Trinity’s proposal is framed as a request that Wal-Mart’s board review its selection of products to sell. This decision effectively nullifies the ordinary business exclusion, conflicts with the SEC’s longstanding interpretations of that exclusion, and disregards three decades of consistent SEC staff guidance. In particular, the district court’s analysis is diametrically opposed to the SEC’s 1983 interpretation of the ordinary business exclusion, which provides that a proposal seeking board or committee review of a matter may be excluded from a company’s proxy materials under the ordinary business exclusion if the subject matter of the board or committee review concerns ordinary business matters. If not reversed, the district court’s decision could precipitate an avalanche of shareholder proposals and related litigation. As representatives of many corporations subject to the shareholder-proposal process, the amici curiae speak on behalf of many of those likely to be most affected by the outcome of this appeal.

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