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Business Associations Keyed to Coffee, 9th Ed.
Medical Committee for Human Rights v. Securities and Exchange Commission
Citation:
432 F.2d 659 (1970)Facts
In March 1968, the Medical Committee for Human Rights, which had received several shares of Dow Chemical Company stock as a gift, submitted a proposal requesting that Dow’s charter be amended to prohibit the sale of napalm unless the buyer gave reasonable assurance it would not be used against human beings. The proposal was motivated by humanitarian concerns and potential negative business impacts. After correspondence between the parties, Dow informed the Medical Committee in January 1969 that it would omit the proposal from its proxy materials. The Medical Committee revised its proposal to request that the board consider adopting a resolution to amend the certificate of incorporation to prohibit napalm production entirely. Dow again refused to include the proposal, citing two grounds under SEC rules: that the proposal related to ordinary business operations and that it was primarily submitted to promote general political or social causes. The SEC staff and subsequently the full Commission approved Dow’s decision to omit the proposal without providing detailed reasoning. The Medical Committee then petitioned for judicial review of the SEC’s decision.
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