Brief Fact Summary. Plaintiff, the New York City Employees’ Retirement System, sought an injunction against Defendant, Dole Food Co., in order to insert a proposal in a proxy statement concerning the research of congressional health plan proposals.
Synopsis of Rule of Law. A registrant’s proposal can not be denied insertion into a proxy statement if the registrant has met the burden of demonstrating that the proposal pertains to a significant strategic business decision.
A party seeking a preliminary injunction must show (1) irreparable harm, and (2) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits of the case to make them a fair ground for litigation, and a balance of hardships tipping decidedly in its favor.View Full Point of Law
Issue. The issue is whether Plaintiff’s proposal can be denied insertion into a proxy statement under Rule 14(a)-8(c) exceptions.
Held. The court held that Plaintiff met their burden in proving that their proposal would be successful in being required insertion into the proxy statement, and therefore the injunction was ordered. Although health care issues are typically issues under the ordinary business operations, this proposal concerned the research of the impact of various proposals, wherein the impact could be significant. Because the impact could be significant, there is no question that there is a nexus between Dole’s business and the proposal, and there is no question that the costs at issue would be greater than the 5% statutory requirement to be with the power to effectuate.
Discussion. The court understood that there were political implications, but the court felt it was outweighed by actual significance to the company. The court was also dismayed that Defendant offered no rebuttal other than a conclusory rejection under Rule 14(a)-8(c).