## Facts

- A Du Pont shareholder, Amelia Roosevelt, submitted (through an environmental group acting on her behalf) a proposal for Du Pont’s 1991 annual meeting concerning ozone-depleting chemicals.
- The proposal asked Du Pont to (1) accelerate the phase-out of chlorofluorocarbons (CFCs) and halons and (2) provide shareholders a report on research and development of substitutes and marketing plans for those substitutes.
- Du Pont sought to omit the proposal from its proxy materials under SEC Rule 14a-8(c)(7), which allowed exclusion of proposals relating to “ordinary business operations.”
- The SEC staff issued a no-action letter indicating it would not recommend enforcement if Du Pont omitted the proposal.
- Du Pont had already adopted a policy to eliminate CFC production “as soon as possible,” with an outside date of 2000, and later accelerated its target to the end of 1995.

## Issues

1. Whether § 14(a) of the Securities Exchange Act of 1934 implies a private right of action to enforce a company’s obligation under Rule 14a-8 to include a shareholder proposal in proxy materials.
2. Whether Du Pont could exclude the proposal under Rule 14a-8(c)(7) as relating to ordinary business operations.

## Decision

- The court held that a private right of action is implied under § 14(a) to enforce Rule 14a-8’s proposal-inclusion obligation.
- The court affirmed judgment for Du Pont because the proposal was excludable under Rule 14a-8(c)(7).
- The court treated the proposal’s requested phase-out timing and requested report as operational matters tied to implementation of an existing management policy.
- The court gave respectful consideration to the SEC’s interpretation of its proxy rules; the staff no-action letter supported exclusion, and the SEC as amicus at least supported exclusion of the reporting component.
- Du Pont was permitted to omit the proposal from its proxy materials.

## Legal Principles

- Section 14(a) may support an implied private cause of action not only for misleading proxy solicitations but also to enforce Rule 14a-8’s duty to include eligible shareholder proposals.
- Under Rule 14a-8’s ordinary-business exception, a company may exclude a proposal that primarily concerns day-to-day operational or managerial decisions, even if the proposal is motivated by significant social or environmental concerns.
- Proposals focused on implementation details of an already-adopted corporate policy—such as specific timetables, internal planning, and requested operational reports—can fall within “ordinary business operations.”
- SEC interpretive positions regarding its own proxy rules, including staff no-action letters (while nonbinding), may be considered in evaluating whether exclusion is permissible.

## Conclusion

The court recognized an implied § 14(a) right for shareholders to sue to compel inclusion of proposals under Rule 14a-8, but it held Du Pont could exclude Roosevelt’s proposal because it targeted operational implementation details—phase-out timing and internal reporting—within the ordinary-business exception.


Roosevelt v. E.I. Du Pont de Nemours & Co., 958 F.2d 416 (D.C. Cir. 1992)