Three federal district courts have issued the first substantive Rule 14a-8 rulings of the season with mixed results: two courts denied shareholder requests for injunctive relief, and one granted relief subject to a $20,000 bond. As a practical matter, two companies will file their 2026 proxies without the challenged proposals, while the third will include the proposal. None of the three, however, is a final merits decision; each reflects a court’s likelihood-of-success forecast, not a definitive ruling on excludability. Notably, all three decisions turned on Rule 14a-8(i)(7), the “ordinary business” basis, described by one court as a “perplexing” issue and by two courts as the “most perplexing” substantive exclusion ground. This alert walks through what the courts said, what they did not say, and what the rulings suggest for issuers still navigating exclusion decisions.
Overview and Key Themes
In a prior alert, we discussed several early-season cases filed under the SEC’s revised no-action posture, all of which settled before the courts reached the merits of the requested injunctions. The three opinions discussed here, As You Sow v. Chubb (D.D.C. Mar. 31, 2026) and Fonds des Missions v. UnitedHealth (D.D.C. Apr. 15, 2026), both denying preliminary injunctions, and DiNapoli v. BJ’s Wholesale Club (D. Mass. Apr. 22, 2026), granting one, provide the first window this season into how federal judges are evaluating Rule 14a-8 disputes.
A few themes emerge. First, for issuers asserting an exclusion on the basis of ordinary business under Rule 14a-8(i)(7), two courts denied injunctive relief and permitted exclusion where proposals were tied to broad enterprise-level concerns (UnitedHealth’s decade of acquisitions; Chubb’s climate subrogation strategy), while the third court granted injunctive relief and required inclusion in the proxy where a narrowly tailored proposal was anchored to a discrete segment (BJ’s private-label deforestation risk). These were hard calls on novel records—the courts in all three cases described the ordinary business exclusion as “perplexing” and acknowledged thin judicial precedent—so these rulings should not necessarily call into question issuers’ well-documented exclusion decisions supported by a reasonable basis analysis. The table that follows summarizes each proposal and how the courts applied the framework; a case-by-case discussion appears later in this alert.
| Case & Outcome | Proposal | Court’s Subject-Matter Focus Analysis | Court’s Micromanagement Analysis |
|---|---|---|---|
| As You Sow v. Chubb – PRELIMINARY INJUNCTION DENIED. | A third-party report assessing “if and how pursuing subrogation claims for climate-related losses would benefit the Company and its insureds.” | Failed. The court found the operative subject to be subrogation strategy, core insurance business; as the court put it, “implicating [climate change] is not the same thing as focusing on it in a way that causes the proposal to “transcend the day-to-day” matters,” and that “As You Sow has not shown that its proposal focuses on climate change rather than on subrogation.” | Not separately reached; the court resolved the case at the subject-matter focus step. |
| Fonds des Missions v. UnitedHealth – PRELIMINARY INJUNCTION DENIED. | A report “describing the healthcare consequences of [UHG’s] acquisitions over the past 10 years.” | Failed. The proposal’s breadth—all acquisitions over a decade regardless of size—risked sweeping in mundane transactions (including those that did not directly involve healthcare delivery) and did not clearly “focus” on a transcendent policy issue. | Not separately reached; the court resolved the case at the subject-matter focus step. Though merely dicta, the court indicated that it disagreed with UnitedHealth’s argument that the proposal sought to micromanage the company, because the proposal was imprecise as to the nature and amount of information that should be in the report and it was not clear that the report would require the company to scrutinize arcane managerial judgments or issues beyond shareholders’ grasp. |
| DiNapoli v. BJ’s Wholesale Club – PRELIMINARY INJUNCTION GRANTED ($20,000 BOND). | An “assessment of risks of deforestation associated with [BJ’s] private-label brands within one year and . . . a report summarizing the results.” | Passed. The court found the focus to be on a recognized social policy (deforestation) tied to a defined business segment, BJ’s private-label brands. Any effects on day-to-day operations were an “incidental byproduct, rather than the focus,” and decisions about how to address them were left to management. | No micromanagement; the court reasoned that “all the granular considerations about how to conduct the assessment are left to BJ’s discretion, including whether to assess the deforestation risks from a 40,000 foot view or on a microscopic level” and that a one-year time frame alone does not amount to micromanagement. |
Second, although none of the courts held that new exclusion grounds raised during litigation are affirmatively permitted as a rule, these cases indicated that courts did not categorically bar them—BJ’s reached two grounds not cited in the exclusion notice after the proponent conceded no procedural bar, and Chubb listed a reserved Rule 14a‑8(i)(10) substantial implementation position among its open merits issues. That said, omitting a ground from the exclusion notice and expecting it to remain available at the litigation stage is not without risk. As the BJ’s court illustrated, issuers who raise traditionally curable defects for the first time during litigation may find judges unreceptive to exclusion arguments if they made no effort to permit the proponent to cure. The BJ’s court observed that the “better practice” is to raise vagueness in the exclusion notice because the SEC staff would typically (outside this year’s revised process) require revision rather than total exclusion.
Finally, but importantly, of the three courts, only one—the BJ’s court—reached the question of whether proposal exclusion automatically causes irreparable harm sufficient to warrant preliminary injunctive relief; it found harm based on timing-specific facts, leaving the broader question open, as discussed below.
The Litigation Environment: Practical Takeaways
These Rulings are Preliminary, Not Final
A preliminary injunction requires the moving shareholder to make a “clear showing” on four factors: likelihood of success, irreparable harm, balance of the equities, and the public interest. In two cases, the court never reached factors two through four because the shareholder failed on the first. In all three, the court left the merits open, meaning the ultimate question of whether each proposal is excludable has not been decided. The Chubb and UnitedHealth courts flagged “significant and potentially outcome-determinative interpretive questions” for later briefing, and the BJ’s court set a status report deadline of May 6, 2026 to chart the path to final judgment.
What Courts Relied on, and What They Didn’t
While the degree of reliance courts should give to SEC guidance when interpreting Rule 14a-8 remains an open question, all three opinions based their approach on the parties’ submissions. All three opinions organized the ordinary-business analysis around the SEC’s interpretive releases: the 1976 Release, the 1983 Release, and the 1998 Release. The 1998 Release’s two considerations, whether the subject-matter has an overriding “focus” on significant social policy and whether the practical application would result in micromanagement, were the primary issues discussed. The courts treated Staff Legal Bulletins as Division guidance that may persuade, a characterization shaped in part by the parties’ own framing. As the BJ’s court put it, “[i]n light of both parties’ reliance on the Staff Legal Bulletins, the Court agrees to consider them.” The courts in Chubb and UnitedHealth acknowledged the SLBs but declined to fix their persuasive weight at this stage, noting the parties had not fully developed the issue. In BJ’s, both parties relied on SLB 14H (2015) and SLB 14M (2025), and the court engaged with both as part of its reading of the 1998 Release. Prior no-action letters received little independent weight; in BJ’s, the parties agreed they warrant “minimal reliance,” and the court addressed them only “as mere illustrative tools, rather than as agency interpretations requiring deference.”[1]
Exclusion Grounds Raised for the First Time in Litigation Were Not Barred
Under the revised SEC proposal review process for 2025-2026, issuers have largely shifted to citing a single primary basis for exclusion, with roughly 80% of the approximately 158 submissions we reviewed through April 20, 2026 identifying only one ground—a marked departure from prior seasons. Some issuers have wondered whether this would limit arguments they could raise if later challenged in court.
On these records, the courts did not default to treating litigation‑raised grounds as categorically barred, but did not hold that new grounds are affirmatively permitted as a rule, either. BJ’s raised only Rule 14a-8(i)(7) in its exclusion notice but later added arguments under (i)(1) and (i)(3) in court. The BJ’s court emphasized the procedure prescribed by Rule 14a-8(j), under which a company must provide “an explanation of why the company believes that it may exclude the proposal” in its original notice. Nonetheless, the court agreed to consider those additional grounds after noting that “the Fund’s counsel conceded that BJ’s failure to raise this exclusion in its letter to the SEC poses no bar to BJ’s invocation of the exclusion in this federal case.” Relatedly, the Chubb court expressly reserved an (i)(10) argument, which was not originally raised by Chubb in its exclusion notice, among open issues.
That said, the BJ’s court observed, with respect to the added Rule 14a-8(i)(3) argument, that “[t]he better practice would have been for BJ’s to raise vagueness as a basis for exclusion in its letter to the SEC, especially because the SEC does not view blanket exclusion as the only remedy for impermissibly vague proposals.” As the court explained, when a company invokes Rule 14a-8(i)(3), “the SEC staff will usually require the proponent to revise its proposal to remove any vague or misleading statements,” and BJ’s “has not argued or shown why these alleged defects could not have been cured through modification, rather than total exclusion.” The court’s reasoning implies a process in which the SEC would actively evaluate a vagueness objection and potentially require the proponent to revise, a process that is largely dormant this season. Even so, there is a practical takeaway here: notwithstanding the SEC’s willingness to accept a letter on one reasonable ground, the most prudent approach may be to raise all viable exclusion grounds in the initial notice rather than hold any substantial arguments in reserve. This is particularly so for potentially curable defects, where issuers may find judges unreceptive to exclusion arguments if they made no effort to permit the proponent to cure. As we noted in our prior alert, early engagement with proponents remains worth considering, particularly where the objection involves a potentially curable defect, to avoid facing this potential judicial skepticism.
Irreparable Harm Turned on Timing, Not Exclusion Alone
A threshold question at the preliminary injunction stage is whether a proponent necessarily suffers irreparable harm simply because its proposal is excluded from that year’s proxy materials. Issuers have understandably wondered whether courts will answer yes across the board now that one injunction has been granted. Among these cases, only BJ’s reached the question, and its analysis suggests the answer is not automatic. The court called it a “close issue” and found harm on case-specific facts: the fund filed suit two weeks after exclusion and over a month before the anticipated proxy mailing, and neither party was prepared to commit to an expedited trial. The court distinguished prior cases where delay undercut the harm argument, including one[2] where the proponent waited weeks after the proxy had already been distributed to seek an injunction and, separately, had expressed its “intent to renew the proposal every year” without explaining why inclusion in that particular year’s proxy was essential. The analysis turned heavily on timing; we do not think BJ’s should be read as creating a default presumption that exclusion alone produces irreparable harm. That said, depending on the window of time between submission of a proposal and distribution of proxy materials, other courts may find irreparable harm in similar situations.
Ordinary Business Exclusion: How the Standard Played Out
To obtain a preliminary injunction, each proponent had to show a likelihood of success on the merits of its claim that the company had improperly excluded the proposal under Rule 14a-8(i)(7)—the “ordinary business” exclusion. That merits inquiry is what required the courts to apply, and engage at length with, the ordinary business standard discussed below. As with the other issues in these decisions, however, the courts’ application of that standard is a likelihood-of-success forecast and could look different on a fuller record.
When assessing the likelihood of success, all three opinions applied the same standard from the 1998 Release, which has two parts: a subject-matter inquiry and a micromanagement inquiry. While the courts in Chubb and UnitedHealth noted some tension between the 1976 and 1998 Releases—the former asks whether a proposal “involve[s] any substantial policy,” while the latter asks whether it “focus[es] on sufficiently significant social policy issues”—the practical analysis in all three cases turned on the 1998 Release framework.
Subject-matter focus. The first inquiry asks whether the proposal’s subject matter is so fundamental to day-to-day management that it cannot, as a practical matter, be subject to direct shareholder oversight. Even where it is, a proposal can still avoid exclusion if it focuses on a sufficiently significant social policy issue that transcends those day-to-day matters. As the 1998 Release puts it, and as quoted by each of the three opinions:
“Certain tasks are so fundamental to management’s ability to run a company on a day-to-day basis that they could not, as a practical matter, be subject to direct shareholder oversight. . . . However, proposals relating to such matters but focusing on sufficiently significant social policy issues . . . generally would not be considered to be excludable, because the proposals would transcend the day-to-day business matters and raise policy issues so significant that it would be appropriate for a shareholder vote.”
How courts apply that “focus” inquiry has been shaped by the Third Circuit’s 2015 decision in Trinity Wall Street v. Wal-Mart, cited by all three opinions and called by the Chubb court “perhaps the leading case on Rule 14a-8(i)(7) (though again, the pickings are slim).” The Trinity majority held that, to “transcend” ordinary business, a proposal’s significant policy issue must be “divorced from how a company approaches the nitty-gritty of its core business.” The Division responded with SLB 14H (2015), which expressed the view that the Trinity majority’s “divorced from” formulation went beyond the SEC’s prior statements and could lead to the unwarranted exclusion of proposals. SLB 14H instead endorsed the Trinity concurrence’s view that a proposal can transcend ordinary business even when the underlying policy issue relates to the “nitty-gritty of [the company’s] core business.” SLB 14M (2025) reaffirmed the case-by-case nature of the inquiry and emphasized a “company-specific approach in evaluating significance,” recognizing that a policy issue significant to one company may not be significant to another. The BJ’s court adopted the SLB 14H/concurrence view that a proposal can transcend ordinary business even though it relates to the “nitty-gritty” of a company’s business and engaged with SLB 14M’s company-specific framing.[3] The Chubb and UnitedHealth courts did not need to resolve the Trinity split because the proposals failed the focus inquiry on either reading.[4] SLB 14H remains in effect, and issuers should be aware that some courts will follow it.
Micromanagement. The second inquiry asks whether the proposal seeks to “micro-manage” the company “by probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed judgment.” A proposal can clear the focus step by targeting a significant social policy issue and still fail here if it dictates specific methods, timelines, or operational details beyond shareholders’ competence. The 1998 Release cautions, however, that not every proposal “seeking detail, or seeking to promote time-frames or methods” amounts to micromanagement, because timing and methodology questions can themselves involve significant policy where large differences are at stake. As shown in the summary table above, the micromanagement question proved decisive only in BJ’s, where the court found the proposal left sufficient discretion to management.
Why BJ’s Came Out Differently
Proposals that center on day-to-day mechanics or cast too wide a net appear more likely to be excludable, while narrowly tailored, policy-anchored proposals aimed at a discrete business segment may be harder to exclude, though these preliminary rulings could look different once the cases are fully litigated. The BJ’s court itself addressed Chubb and UnitedHealth and explained why the BJ’s proposal came out differently: it treated UnitedHealth as a cautionary example of a proposal whose breadth defeated focus, observing that the BJ’s deforestation proposal targets only deforestation-related features of a defined business segment rather than sweeping in unrelated issues. It distinguished Chubb on the ground that the subrogation proposal had a “clear focus . . . on the company’s decisions about whether to subrogate claims—hitting the very core of an insurance company’s day-to-day business determinations,” whereas the BJ’s proposal “focuses on a potential generalized risk . . . posed by one aspect of BJ’s business” and does not direct product or sourcing decisions. To the extent the proposal’s requested assessment may impact BJ’s supply-chain decisions, the court found this an “incidental byproduct—rather than the focus—of the Proposal, and a matter committed to the discretion of management.”
What is Next for These Three Cases
While these decisions show how federal judges are approaching Rule 14a-8 disputes at the injunction stage, none is a final ruling, and any could shift on a fuller record or be mooted by settlement.
- BJ’s: Inclusion ordered; parties to file a joint status report by May 6, 2026. With the proposal now set to appear in BJ’s 2026 proxy and potentially be voted upon, the path to final judgment may turn on whether the parties see value in continued litigation.
- Chubb: Preliminary injunction denied; motion to dismiss denied without prejudice. The court flagged a substantial set of issues for later merits briefing, including the level of deference owed to SEC interpretive releases, how to reconcile the 1976 and 1998 Releases, the micromanagement principle, and Chubb’s reserved Rule 14a-8(i)(10) substantial-implementation argument.
- UnitedHealth: Preliminary and permanent injunctions denied; permanent relief denied without prejudice. The court flagged the 1976/1998 Release tension for further development. On April 28, 2026, the shareholder filed a notice voluntarily dismissing the case.
[1] This treatment is consistent with the SEC’s longstanding view, reiterated this season, that prior staff responses are not binding and reflect only informal staff views, and that neither the presence nor the absence of a prior NAL is dispositive of a company’s reasonable basis to exclude—even though the Division’s decision to step back from the no-action process this season rested in part on “the extensive body of guidance from the Commission and the staff available to both companies and proponents.”
[2] Doris Behr 2012 Irrevocable Trust v. Johnson & Johnson, No. 19-cv-8828, 2019 WL 1519026 (D.N.J. Apr. 8, 2019).
[3] As stated in the BJ’s opinion: “The Court is persuaded by the approach advanced by the concurring opinion in Trinity and the Staff Legal Bulletin,” noting that “[n]owhere does the SEC’s interpretation of Rule 14a-8 indicate that the proposal must also be ‘divorced’ from the day-to-day business operations of a company, as the Trinity majority contends.” When engaging with SLB 14M’s “company-specific approach in evaluating significance” the BJ’s court explained: “Namely, the Proposal focuses on the deforestation risks associated with BJ’s private-label brands—a growing portion of BJ’s business that already accounts for a quarter of the company’s sales. Indeed, BJ’s acknowledges that its private-label brands amount to ‘a sizeable portion of BJ’s business.’” On that basis, the court concluded that the Fund “is likely to succeed in establishing that the Proposal focuses on ‘sufficiently significant social policy issues’ such that it ‘transcend[s] [BJ’s] day-to-day business matters.’”
[4] As stated in the Chubb opinion, “[T]he inquiry is not whether a proposal addresses a significant policy issue. Instead, it is whether the proposal ‘focus[es] on’ such an issue. And for now, even under As You Sow’s preferred interpretive approach, As You Sow has not shown that its proposal focuses on climate change rather than on subrogation.” Similarly, from the UnitedHealth opinion: “The Court need not delve into this issue now because, in any event, it has not found that Mission Fund’s proposal focuses on a significant policy issue.”