New York City Employees' Retirement System v. Dole Food Company, Inc.

Facts

P is a public pension fund that owns approximately 164,841 shares of common stock in D. P requested that D include P's proposal in D's proxy statement prior to its annual meeting. P wanted the shareholders to request the Board of Directors to establish a committee of the Board consisting of outside and independent directors for the purpose of evaluating the impact of a representative cross section of the various healthcare reform proposals being considered by national policymakers. Tibbitts, deputy general counsel of D, wrote to the office of chief counsel of the Securities & Exchange Commission's (SEC) division of corporation finance and stated D's position that D could exclude P's proposal from its proxy statement because the proposal concerned employee benefits, an assertedly 'ordinary business operation,' and both SEC regulations and the law of the D's state of incorporation relegate such ordinary business operations to management, not shareholder, control. John Brousseau, special counsel to the SEC's division of corporation finance, gave the following written statement: The proposal relates to the preparation of a report by a Committee of the Company's Board of Directors to evaluate various healthcare proposals being considered by national policymakers. 'This proposal may be excluded pursuant to rule 14a-8(c)(7) because the proposal is directed at involving the Company in the political or legislative process relating to an aspect of the Company's operations. Accordingly, we will not recommend enforcement action to the Commission if the proposal is omitted from the Company's proxy materials.' Brousseau reported to D that the SEC had denied D's request for the SEC to review the SEC staff determination on the D proposal. P sued D seeking an injunction and asking D to show cause for excluding the proposal. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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