Overview
In an opinion today, Judge Nathan refused to issue a preliminary injunction that would required Aetna to alter the proxy materials by which it opposes two upcoming shareholder proposals seeking to require Aetna to provide more detail about its political contributions. The complaint alleges that Aetna’s prior opposition to similar proposals falsely claimed that Aetna already provided “robust” and “extensive” disclosure, when, in fact, Aetna omitted or misstated various political donations. Judge Nathan found that the plaintiff could not show “irreparable harm”:
Plaintiff does contend, in his only gesture at real-world consequences for Aetna's shareholders, that money spent on political contributions "cannot be retrieved and its impact on political elections cannot be undone." Pl. Br. at 18. Maybe so. But Plaintiff never asks the Court to enjoin Aetna's spending -- he asks only that an allegedly uninformed vote not go forward at the 2014 shareholders' meeting. Were the Court to enter a preliminary injunction, that vote would not occur until Aetna distributes a proxy statement accurately disclosing its record of political contributions and correcting any relevant misstatements or omissions. Armed with that information, the company's shareholders might well adopt a proposal similar to the ones they rejected -- mistakenly, in Plaintiffs view -- in 2012 and 2013. But an informed vote still would not go forward at the 2014 meeting, because what qualifies as an informed vote would be the very subject of ongoing litigation. Plaintiff himself suggests that determining Aetna' s actual record of contributions -- the record he asks the Court to make the company disclose before a vote can take place -- requires further discovery. And while his counsel suggested at oral argument that Aetna could correct its earlier misstatements and omissions quickly enough to distribute accurate materials before the 2014 meeting, the parties dispute what changes, if any, would have to be made. The Court would be required to make that decision, and will not be in a position to do so until a final merits determination is reached. As a result, allowing the meeting to take place will not affect Aetna's near-term disclosure and oversight policies -- unless shareholders ratify any resolutions even on (what Plaintiff alleges is) an uninformed basis. Indeed, this nuance further distinguishes much of the authority on which Plaintiff relies, because in the typical Rule 14a-9 case, the plaintiff seeks a preliminary injunction against a shareholder vote that, if successful, will result in some undesirable change to the status quo. Here, by contrast, Plaintiff is seeking to change policies currently in place -- that is, no "eggs" will be "scrambled" in the first place. As a result, the only harm that will occur absent a preliminary injunction is the legal harm flowing from an allegedly uninformed vote. And as explained above, that is insufficient to justify the extraordinary remedy of a preliminary injunction.
