National Center for Public Policy Research v. Securities and Exchange Commission
Description: The U.S. Securities and Exchange Commission relies on so-called "significant social policy" rule to discriminate against conservative, religious viewpoints advanced in shareholder resolutions.
SEC throttling conservative, religious shareholders based on viewpoints
WASHINGTON – 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.
As the ADF brief underscores, the SEC’s targeting of proposals from NCPPR is part of a larger trend of viewpoint-based censorship where “the SEC greenlights ESG proponents’ submissions while screening ‘disfavored subjects’ important to religious shareholders.” ADF cites 13 issues the SEC deemed “significant social policy” that originated from progressive viewpoints—including the effect of state abortion laws on stakeholders and animal rights—while the SEC consistently ruled that companies could ignore proposals on topics like viewpoint discrimination in employment and limiting customer speech, issues of intense interest to religious shareholders.
“People of faith are not second-class citizens,” said ADF Legal Counsel Michael Ross. “The SEC’s decision-making processes favor progressive causes today, but political winds change. That’s why it’s important to everyone that the SEC stick to viewpoint neutrality in its rules and decision-making. We’re optimistic that the court will provide this much needed correction to the SEC.”
Alliance Defending Freedom is an alliance-building, non-profit legal organization committed to protecting religious freedom, free speech, parental rights, and the sanctity of life.
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ABOUT Jeremy Tedesco
Jeremy Tedesco serves as senior counsel and senior vice president of corporate engagement for Alliance Defending Freedom. In this role, Tedesco leads ADF’s efforts to combat corporate cancel culture and build a business ethic that respects free speech, religious freedom, and human dignity. Immediately preceding his current role, Tedesco served as senior vice president for communications, during which time he was a lead convener of the Philadelphia Statement, a movement dedicated to restoring free speech and civil discourse. Previously, Tedesco litigated First Amendment cases at the highest levels. He was part of the legal team that represented cake artist Jack Phillips in Masterpiece Cakeshop v. Colorado Civil Rights Commission before the U.S. Supreme Court and argued Phillips’ case at the Colorado Court of Appeals. He was also the lead brief writer in two other U.S. Supreme Court wins, Reed v. Town of Gilbert and Arizona Christian School Tuition Organization v. Winn. Tedesco has also argued six times before five different federal appellate courts and founded and directed the ADF Center for Conscience Initiatives, where he led efforts to protect individuals from government-coerced speech. Tedesco earned his Juris Doctor in 2004 from the Regent University School of Law.
ABOUT Michael Ross
Michael Ross serves as legal counsel for the Corporate Engagement Team with Alliance Defending Freedom, where he assists in developing and implementing successful legal solutions and corporate engagement strategies to neutralize mounting corporate hostility to people of faith and to encourage corporations to respect free speech, religious freedom, and life. Ross previously served on the Center for Academic Freedom Team, defending the First Amendment freedoms of college students and student organizations on university campuses. Ross earned his Juris Doctor in 2016 from Vanderbilt Law School, where he served as president of the Christian Legal Society and executive authorities editor for the Vanderbilt Transnational Law Journal. He obtained B.A. degrees in mathematics and religious studies from Vanderbilt University in 2010. Ross is a member of the bar in Tennessee.