Sisters of the Precious Blood v. Bristol-Myers
United States Court of Appeals for the Second Circuit
Stories Mediators Tell, 323-329 (Eric Galton & Lela Love eds., ABA Publishing, 2012)
The Sisters of the Precious Blood (plaintiff), a missionary group, opposed infant-formula marketing in developing countries. The sisters had collected affidavits regarding the harm caused by infant formula in places without reliable access to clean water and refrigeration. Formula displaced breast-feeding and contributed to illness, malnutrition, and the death of infants. The sisters owned 500 shares of Bristol-Myers Co. (Bristol) (defendant) stock and submitted a shareholder resolution requesting that Bristol include a proposal in the company’s proxy-solicitation materials. If adopted, the proposal required Bristol to provide a report to shareholders detailing Bristol’s infant-formula marketing practices in developing countries. In the shareholders’ proxy materials, Bristol included an opposition statement that the sisters characterized as a lie, blaming it for the defeat of their resolution. With the assistance of the Interfaith Center on Corporate Responsibility, the sisters sued Bristol-Myers under Section 14(a) of the Securities Exchange Act of 1934. The sisters sought an order forcing Bristol to resubmit a corrected proxy solicitation and call a special meeting of the shareholders to vote on the issue. The trial court granted summary judgment in favor of Bristol. The sisters appealed. The Securities and Exchange Commission considered filing an amicus-curiae brief urging reversal because the district-court decision seemingly created a license for management to lie to defeat proposed shareholder resolutions. Frank Scardilli, chief mediator of the United States Court of Appeals for the Second Circuit, was called in to mediate the dispute.
Rule of Law
Holding and Reasoning ()
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