Apache Corporation v. The New York City Employees' Retirement System

621 F. Supp. 2d 444 (2008)

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Nature of the Case

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Facts

P is an independent energy company that explores for, develops, and produces natural gas, crude oil, and natural gas liquids. Ds are five New York pension funds and New York's chief fiscal and chief auditing officer, the custodian and trustee of the Funds. D submitted a shareholder proposal for inclusion in the company's proxy statement. The proposal was based on sexual orientation but also included provisions that went to advertising policy, marketing policy, in the sales of goods and services, and charitable contributions. P refused under Rule 14a-8(j) and requested a no-action letter from the SEC. P asserted that the Proposal relates to the company's ordinary business operations and, therefore, is properly excludable pursuant to Rule 14a-8(i)(7). The SEC's Division of Corporation Finance issued a no-action letter. It found that the proposal requests that management implement equal employment opportunity policies based on principles specified in the proposal prohibiting discrimination based on sexual orientation and gender identity and that some of the principles relate to P's ordinary business operations. P beat Ds to court first and filed this declaratory action.