This case was last updated from U.S. District Courts on 09/20/2023 at 16:16:07 (UTC).

National Association of Manufacturers et al v. United States Securities and Exchange Commission et al

Case Summary

On July 21, 2022, National Association of Manufacturers (NAM) and Natural Gas Services Group, Inc., (together, “Plaintiffs”), represented by Debbie E. Green of McDermott Will & Emery LLP, filed a civil action against the United States Securities and Exchange Commission (SEC) and Gary Gensler, in his official capacity as Chair of the SEC, (together, “Defendants”), seeking declaratory and injunctive relief, for allegedly harming publicly traded companies and their shareholders. This case was filed in the U.S. District Court in the Western District of Texas, with Judges David Counts and Ronald C. Griffin presiding.

In the complaint, the plaintiffs alleged, “United States Securities and Exchange Commission (SEC) extensively investigated—over a period of a decade, and under Presidents and SEC Chairs of both political parties—whether it should implement basic safeguards with respect to proxy voting advice. After collecting numerous examples of voting advice offered notwithstanding an undisclosed conflict of interest, as well as examples of routine inaccurate information and of companies’ inability to meaningfully respond to proxy advisory firms’ reports, the SEC in 2020 promulgated a workable compromise rule to impose modest protections for investors and issuers alike. Indeed, the 2020 Rule imposed significantly less onerous obligations on proxy advisory firms than the SEC’s original proposal from 2019; the SEC reduced the obligations specifically in response to concerns voiced by proxy advisory firms.”

The plaintiffs further alleged, “Following the confirmation of a new Chair in April 2021, however, the SEC abruptly changed course. After first suspending the requirement that proxy advisory firms comply with the 2020 Rule while it remained on the books—an unlawful action that Plaintiffs have separately challenged in court—the agency has now rescinded two critical pieces of the 2020 Rule: (1) the requirement that proxy advisory firms provide their analyses to the subject companies at least at the same time that said analyses are made available to their clients, and provide a mechanism by which those clients can become aware of any responses from the subject companies; and (2) a note to the antifraud rule clarifying the ways in which proxy advisory firms, depending on the facts and circumstances, may be liable for misrepresentations in connection with proxy solicitation.”

The plaintiffs also alleged, “The 2022 Rescission is both procedurally defective and arbitrary and capricious, and therefore must be set aside under the Administrative Procedure Act (APA). The agency has come to a completely opposite outcome to that reached only two years ago, and it has done so on the basis of the exact same factual record that drove the SEC to adopt the 2020 Rule in the first place. The SEC does not—no doubt because it cannot—offer any compelling justification for why the exact same factual record requires a different result this time around.”

The plaintiffs presented two claims for relief for Defendant’s alleged violation of the Administrative Procedure Act– unlawfully arbitrary and capricious agency action and failure to follow notice and comment procedures.

In the prayer for relief, the plaintiffs requested to set aside the 2022 rescission in its entirety and a declaratory judgment declaring that the 2022 rescission is unlawful and void. The plaintiffs also requested to enjoin Defendants from enforcing or otherwise carrying out the 2022 rescission, and an award of their attorneys’ fees.

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    7:22-CV-00163

  • Filing Date:

    07/21/2022

  • Case Status:

    Disposed - Other Disposed

  • Case Type:

    Other - Administrative Procedure Act

Judge Details

Presiding Judge

David Counts

 

Party Details

Plaintiffs

National Association of Manufacturers

Natural Gas Services Group, Inc.

Defendants

United States Securities and Exchange Commission

Gary Gensler

Attorney/Law Firm Details

Plaintiff Attorneys

Paul Whitfield Hughes, III

Debbie E. Green

Defendant Attorneys

B. David Fraser

Daniel Matro

Keefe Bernstein

Tracey A. Hardin

 

Court Documents

#25

(#25) TRANSCRIPT REQUEST by National Association of Manufacturers, Natural Gas Services Group, Inc.. (Hughes, Paul) (Entered: 12/15/2022)

#24

(#24) Appeal of Final Judgment #23 by National Association of Manufacturers, Natural Gas Services Group, Inc.. ( Filing fee $ 505 receipt number ATXWDC-16826725) (Hughes, Paul) (Entered: 12/06/2022)

#23

(#23) FINAL JUDGMENT. Signed by Judge David Counts. (jb3) (Entered: 12/06/2022)

#22

(#22) ORDER CANCELLING HEARING ON ALL PENDING MOTIONS. Signed by Judge David Counts. (jb3) (Entered: 12/05/2022)

18 #12

Matro Decl. Ex. 11

15 #40

Chisholm Decl. Ex. G

15 #31

Netram Decl. Ex. R

15 #22

Netram Decl. Ex. I

15 #10

Hughes Decl. Ex. I

#8

(#8) NOTICE of Attorney Appearance by B. David Fraser on behalf of United States Securities and Exchange Commission. Attorney B. David Fraser added to party United States Securities and Exchange Commission(pty:dft) (Fraser, B.) (Entered: 08/09/2022)

#7

(#7) SUMMONS Returned Executed by National Association of Manufacturers, Natural Gas Services Group, Inc.. Gary Gensler served on 7/25/2022, answer due 8/15/2022. (Green, Debbie) (Entered: 07/25/2022)

#6

(#6) SUMMONS Returned Executed by National Association of Manufacturers, Natural Gas Services Group, Inc.. United States Securities and Exchange Commission served on 7/25/2022, answer due 8/15/2022. (Green, Debbie) (Entered: 07/25/2022)

#5

(#5) Summons Issued as to All Defendants. (kg) (Entered: 07/21/2022)

#4

(#4) RULE 7 DISCLOSURE STATEMENT filed by Natural Gas Services Group, Inc.. (Green, Debbie) (Entered: 07/21/2022)

#3

(#3) RULE 7 DISCLOSURE STATEMENT filed by National Association of Manufacturers. (Green, Debbie) (Entered: 07/21/2022)

#2

(#2) REQUEST FOR ISSUANCE OF SUMMONS by National Association of Manufacturers, Natural Gas Services Group, Inc.. (Green, Debbie) (Entered: 07/21/2022)

1 #1

Civil Cover Sheet

#1

(#1) COMPLAINT ( Filing fee $ 402 receipt number 0542-16286045), filed by National Association of Manufacturers, Natural Gas Services Group, Inc.. (Attachments: #1 Civil Cover Sheet)(Green, Debbie) (Entered: 07/21/2022)

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Docket Entries

  • 01/06/2023

  • DocketCertification of the Electronic Record on Appeal has been accepted by the 5th Circuit re Notice of Appeal. Attorneys are advised that they may now download the EROA from the Fifth Circuit CM/ECF site by following these instructions #here (jb3) (Entered: 01/06/2023)

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  • 12/15/2022
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  • Docket(#25) TRANSCRIPT REQUEST by National Association of Manufacturers, Natural Gas Services Group, Inc.. (Hughes, Paul) (Entered: 12/15/2022)

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  • 12/06/2022
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  • DocketNOTICE OF APPEAL following #24 Notice of Appeal (E-Filed) by National Association of Manufacturers, Natural Gas Services Group, Inc. Filing fee PAID $ 505. Per 5th Circuit rules, the appellant has 14 days, from the filing of the Notice of Appeal, to order the transcript. To order a transcript, the appellant should fill out a # (Transcript Order) and follow the instructions set out on the form. This form is available in the Clerk's Office or by clicking the hyperlink above. (jb3) (Entered: 12/07/2022)

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  • 12/06/2022
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  • Docket(#24) Appeal of Final Judgment #23 by National Association of Manufacturers, Natural Gas Services Group, Inc.. ( Filing fee $ 505 receipt number ATXWDC-16826725) (Hughes, Paul) (Entered: 12/06/2022)

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  • 12/05/2022
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  • Docket(#23) FINAL JUDGMENT. Signed by Judge David Counts. (jb3) (Entered: 12/06/2022)

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  • 12/05/2022
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  • Docket(#22) ORDER CANCELLING HEARING ON ALL PENDING MOTIONS. Signed by Judge David Counts. (jb3) (Entered: 12/05/2022)

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  • 12/04/2022
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  • Docket(#21) ORDER DENYING #15 Motion for Summary Judgment; GRANTING #18 Motion for Summary Judgment. Signed by Judge David Counts. (jb3) (Entered: 12/05/2022)

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  • 11/04/2022
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  • Docket(#20) REPLY to Response to Motion, filed by National Association of Manufacturers, Natural Gas Services Group, Inc., re #18 Cross MOTION for Summary Judgment filed by Defendant United States Securities and Exchange Commission, Defendant Gary Gensler, #15 MOTION for Summary Judgment filed by Plaintiff National Association of Manufacturers, Plaintiff Natural Gas Services Group, Inc. (Hughes, Paul) (Entered: 11/04/2022)

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  • 10/21/2022
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  • Docket(#19) Response in Opposition to Motion, filed by Gary Gensler, United States Securities and Exchange Commission, re #15 MOTION for Summary Judgment filed by Plaintiff National Association of Manufacturers, Plaintiff Natural Gas Services Group, Inc. (Attachments: #1 Declaration of Daniel E. Matro, #2 Matro Decl. Ex. 1, #3 Matro Decl. Ex. 2, #4 Matro Decl. Ex. 3, #5 Matro Decl. Ex. 4, #6 Matro Decl. Ex. 5, #7 Matro Decl. Ex. 6, #8 Matro Decl. Ex. 7, #9 Matro Decl. Ex. 8, #10 Matro Decl. Ex. 9, #11 Matro Decl. Ex. 10, #12 Matro Decl. Ex. 11, #13 Matro Decl. Ex. 12, #14 Matro Decl. Ex. 13, #15 Matro Decl. Ex. 14, #16 Matro Decl. Ex. 15, #17 Matro Decl. Ex. 16, #18 Matro Decl. Ex. 17)(Matro, Daniel) (Entered: 10/21/2022)

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  • 10/21/2022
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  • Docket(#18) Cross MOTION for Summary Judgment by Gary Gensler, United States Securities and Exchange Commission. (Attachments: #1 Declaration of Daniel E. Matro, #2 Matro Decl. Ex. 1, #3 Matro Decl. Ex. 2, #4 Matro Decl. Ex. 3, #5 Matro Decl. Ex. 4, #6 Matro Decl. Ex. 5, #7 Matro Decl. Ex. 6, #8 Matro Decl. Ex. 7, #9 Matro Decl. Ex. 8, #10 Matro Decl. Ex. 9, #11 Matro Decl. Ex. 10, #12 Matro Decl. Ex. 11, #13 Matro Decl. Ex. 12, #14 Matro Decl. Ex. 13, #15 Matro Decl. Ex. 14, #16 Matro Decl. Ex. 15, #17 Matro Decl. Ex. 16, #18 Matro Decl. Ex. 17)(Matro, Daniel) (Entered: 10/21/2022)

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12 More Docket Entries
  • 08/09/2022
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  • Docket(#9) NOTICE of Attorney Appearance by Keefe Bernstein on behalf of United States Securities and Exchange Commission. Attorney Keefe Bernstein added to party United States Securities and Exchange Commission(pty:dft) (Bernstein, Keefe) (Entered: 08/09/2022)

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  • 08/09/2022
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  • Docket(#8) NOTICE of Attorney Appearance by B. David Fraser on behalf of United States Securities and Exchange Commission. Attorney B. David Fraser added to party United States Securities and Exchange Commission(pty:dft) (Fraser, B.) (Entered: 08/09/2022)

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  • 07/25/2022
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  • Docket(#7) SUMMONS Returned Executed by National Association of Manufacturers, Natural Gas Services Group, Inc.. Gary Gensler served on 7/25/2022, answer due 8/15/2022. (Green, Debbie) (Entered: 07/25/2022)

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  • 07/25/2022
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  • Docket(#6) SUMMONS Returned Executed by National Association of Manufacturers, Natural Gas Services Group, Inc.. United States Securities and Exchange Commission served on 7/25/2022, answer due 8/15/2022. (Green, Debbie) (Entered: 07/25/2022)

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  • 07/21/2022
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  • Docket(#5) Summons Issued as to All Defendants. (kg) (Entered: 07/21/2022)

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  • 07/21/2022

  • DocketCase assigned to Judge David Counts and Judge Ronald C. Griffin. CM WILL NOW REFLECT THE JUDGE INITIALS AS PART OF THE CASE NUMBER. PLEASE APPEND THESE JUDGE INITIALS TO THE CASE NUMBER ON EACH DOCUMENT THAT YOU FILE IN THIS CASE. (kg) (Entered: 07/21/2022)

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  • 07/21/2022
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  • Docket(#4) RULE 7 DISCLOSURE STATEMENT filed by Natural Gas Services Group, Inc.. (Green, Debbie) (Entered: 07/21/2022)

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  • 07/21/2022
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  • Docket(#3) RULE 7 DISCLOSURE STATEMENT filed by National Association of Manufacturers. (Green, Debbie) (Entered: 07/21/2022)

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  • 07/21/2022
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  • Docket(#2) REQUEST FOR ISSUANCE OF SUMMONS by National Association of Manufacturers, Natural Gas Services Group, Inc.. (Green, Debbie) (Entered: 07/21/2022)

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  • 07/21/2022
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  • Docket(#1) COMPLAINT ( Filing fee $ 402 receipt number 0542-16286045), filed by National Association of Manufacturers, Natural Gas Services Group, Inc.. (Attachments: #1 Civil Cover Sheet)(Green, Debbie) (Entered: 07/21/2022)

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