1. Scholarship by Sarah C. Haan Cited in Fifth Circuit Opinion

Scholarship by Sarah C. Haan Cited in Fifth Circuit Opinion The Court cited Haan's article "Voting Rights in Corporate Governance: History and Political Economy."

By Law Communications
November 18, 2024

The U.S. Court of Appeals for the Fifth Circuit ruled last week that it lacked jurisdiction in a case brought by the National Center for Public Policy Research (NCPPR) against the Securities and Exchange Commission. The decision cited the scholarship of Washington and Lee law professor Sarah C. Haan, a corporate law expert.

In the case, NCPPR, a shareholder of the Kroger Company, sought to have Kroger include a proposal in proxy materials for a shareholder meeting, requesting that the company issue a public report "detailing the potential risks associated with omitting 'viewpoint' and 'ideology' from its written equal employment opportunity (EEO) policy." Kroger initially declined to include the proposal on the ground that it was related to ordinary business matters. In a "no-action" letter, the SEC agreed that Kroger had some basis for excluding the proposal. After the SEC declined to reconsider this guidance, the NCPPR appealed to the Fifth Circuit alleging the SEC had engaged in viewpoint discrimination and failed to maintain neutrality. The National Association of Manufacturers (NAM) later intervened in the case to argue that the SEC's Shareholder Proposal Rule, Rule 14a-8, violates the First Amendment.

In the introduction to the opinion discussing the evolution of voting by corporate shareholders, the Court cited Haan's article "Voting Rights in Corporate Governance: History and Political Economy," which was published in the Southern California Law Review in 2023. The article provides a history of the development of shareholder voting rights. Haan's article was also cited by the Delaware Chancery Court last year in Colon v. Bumble, Inc., 305 A.3d 352 (Del. Ch. 2023). The article "present[s] nineteenth-century shareholder voting rights in a new light, expanding the conventional account from one dimension of legal change to three," Haan writes. Haan's new account "helps us understand present-day currents that are shaping corporate law," such as multi-class voting structures.

The case is National Center for Public Policy Research v. Securities and Exchange Commission, No. 23-60230 (5^th Cir., Nov. 14, 2024). Haan's article is available here.

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