Steven Pearlstein
Another junk lawsuit has landed on the docket of the U.S. Court of Appeals for the District of Columbia, clogging up the judicial process, distracting busy and important defendants and eating up valuable resources that could be used to create a more productive economy.
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This is just the sort of abusive litigation that the business lobby, with good reason, has been complaining about for years. So imagine my shock and dismay to discover that the plaintiffs in this case were none other than those champions of civil justice reform, the Business Roundtable and the U.S. Chamber of Commerce.
The case,
filed late last month, seeks once again to block the Securities and Exchange Commission from enforcing a
new rule designed to give shareholders the right, under carefully prescribed circumstances, to nominate a competing slate of candidates to serve on a company's board of directors and have those candidates listed on the ballots sent out to all shareholders, along with the candidates nominated by the incumbent directors.
Outside of China and North Korea, the American corporation is perhaps the last institution that still relies on Soviet-style elections in which members of the ruling faction are the only ones listed on the ballot. To have contested elections, the Roundtable and the Chamber argue in their brief, would not only trample the companies' First and Fifth Amendment rights but also be a "waste of corporate assets." Moreover, the mere prospect of having to accept "dissident" directors - let alone ones chosen by union pension funds - could disrupt boardroom harmony and distract directors from their vital work.
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