AFSCME v. AIG, Inc.
United States Court of Appeals for the Second Circuit
462 F.3d 121 (2d Cir. 2006)
The American Federation of State, County & Municipal Employees (AFSCME) (plaintiff) is a shareholder of American International Group (AIG) (defendant). AFSCME submitted a proposal to AIG that AFSCME wanted to be included in AIG’s proxy materials. The proposal was to amend AIG’s bylaws to establish a procedure by which certain shareholders are entitled to include in the proxy materials their nominees for the board of directors. Under SEC rules, subject to certain exceptions, shareholder proposals must be included in a corporation’s proxy statement. However, one of those exceptions is if the proposal “relates to an election for membership” on the corporation’s board. Based on that exception, AIG refused to include the proposal in its proxy materials. AFSCME claimed that because of the article “an,” before the word election, the exception applies only to proposals that address single elections. AFSCME brought suit in the United States District Court for the Southern District of New York, seeking a court order to include the proposal. The claim was denied and dismissed. AFSCME appealed.
Rule of Law
Holding and Reasoning (Wesley, J.)