Friday, November 22, 2013

Rauchman v. Mobil Corp. case brief

Rauchman v. Mobil Corp. case brief summary
739 F.2d 205 (1984)


CASE SYNOPSIS
Plaintiff appealed a judgment from the United States District Court, Southern District of Ohio, that granted defendant summary judgment in plaintiff's action, under 15 U.S.C.S. § 78n(a), arising from defendant's refusal to include plaintiff's proposed by-law amendment in defendant's proxy statement as the proposal related to an election to office.

CASE FACTS
Plaintiff, a holder of voting shares of defendant's stock, submitted a proposed amendment to defendant's by-laws for inclusion in defendant's proxy statement for defendant's annual meeting, pursuant to 17 C.F.R. § 240.14a-8(a). The proposal, if adopted, intended to prevent a citizen of an OPEC country from sitting on defendant's board of directors. Upon defendant's request, the Securities Exchange Commission issued a no-action letter, agreeing with defendant that plaintiff's proposal related to an election to office and was therefore excludable by defendant under § 14a-8(c)(8). Plaintiff initiated a private action, under 15 U.S.C.S. § 78n(a), to force defendant to include the proposal in the proxy statement. The trial court granted defendant summary judgment.

DISCUSSION
On appeal, the court affirmed, holding that plaintiff's proposal did in fact relate to an election to office and thus, under 17 C.F.R. § 14a-8(c)(8), defendant was fully within its rights in declining to submit the proposed proxy material.

CONCLUSION
The summary judgment was affirmed. The trial court properly concluded that plaintiff's proposal related to an election to an office, and thus under federal securities law and regulations, defendant was fully within its rights in declining to submit plaintiff's proposed by-law amendment in its proxy material.

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