Alliance Defending Freedom submitted a friend-of-the-court brief Friday in National Center for Public Policy Research v. Securities and Exchange Commission asking the court to hold the SEC accountable for engaging in viewpoint discrimination against religious shareholders of publicly traded companies.
Filed with the U.S. Court of Appeals for the 5th Circuit, the ADF brief explains that the court should provide constitutionally required guardrails on SEC rulemaking and application, which in recent years has been abused to censor religious shareholder proposals based on viewpoint.
“Americans count on the SEC to be a viewpoint-neutral referee, but officials are showing up wearing one of the team’s jerseys,” said ADF Senior Counsel and Senior Vice President for Corporate Engagement Jeremy Tedesco. “As a government agency, the SEC is bound by the First Amendment. It can’t pick and choose which viewpoints get a hearing in the public square. Every shareholder deserves a voice—not just those who happen to agree with the government’s current views on a hot-button issue.”
Courts require “narrow, objective, and definite” limitations to protect viewpoint neutrality when government officials have the power to grant or deny “prior permission,” as with shareholder proposals. But the SEC has created its own “significant social policy” test to determine which proposals reach ballots at annual shareholder meetings. As the ADF brief points out, since 2018, the SEC has allowed corporations to keep conservative proposals off the ballot 72% of the time—26% more frequently than those originating from progressive viewpoints.
Although the SEC denied requests from JPMorgan Chase and PayPal to keep shareholder resolutions on viewpoint diversity off the 2023 ballots, the agency’s decision to grant similar requests to multiple companies—including Kroger, American Express, Apple, Alphabet, and Walgreens—prompted a lawsuit from the National Center for Public Policy Research and other individual shareholders.
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