A trio of proponent lawsuits have sprung up in the past week, which was one of the predicted outcomes for this year’s Rule 14a-8 process. This Cleary memo summarizes the complaints and potential consequences. Here’s an excerpt:

On February 17, 2026, two separate lawsuits were filed challenging company decisions to exclude shareholder proposals from their 2026 proxy materials. A third lawsuit followed just two days later, on February 19, 2026. These cases mark the earliest examples of litigation under this season’s revised Rule 14a-8 no-action letter process.

The first two lawsuits, filed in federal courts in New York and Washington, D.C., both challenge exclusions based on the ordinary business exception under Rule 14a-8(i)(7). One involves a group of New York City pension funds challenging AT&T Inc.’s exclusion of an EEO-1 workforce diversity disclosure proposal; the other involves the Nathan Cummings Foundation challenging Axon Enterprise, Inc.’s exclusion of a political spending disclosure proposal. The third lawsuit, also filed in federal court in New York, involves a procedural dispute over whether PepsiCo, Inc. properly notified an individual shareholder represented by People for the Ethical Treatment of Animals (PETA) of alleged deficiencies in the proposal submission.

All three companies filed exclusion noticesi with the SEC and included the unqualified representation required by the Commission—namely, that each company has a reasonable basis to exclude the proposal based on the provisions of Rule 14a-8. While the SEC has yet to react, and may not given prior statements, these lawsuits offer useful lessons for companies navigating exclusion decisions this season. This alert focuses on the first two lawsuits, though the emergence of a procedural challenge underscores that litigation risk extends beyond substantive questions of excludability.

I blogged about one of the initial lawsuits last week on the Proxy Season Blog – along with other risks that companies may want to consider when deciding which path to take this year on Rule 14a-8 shareholder proposals. The Cleary memo details the parade of horribles that companies could have to contend with if a court grants a mid-season injunction to order inclusion of a previously excluded proposal in a proxy statement. It also looks at the procedural history of the cases to-date, to try to draw lessons for the rest of us. Here are the high points of the suggested takeaways:

– Provide detailed, company specific analysis in (j) notices – but know it’s not a complete shield

– Consult data to inform your exclusion strategy – how close does your situation track with no-action precedent?

– Track past settlements, withdrawals or commitments made to proponents

– Engage with proponents before excluding

– Consider the full spectrum of risks

As the Cleary team notes, the SEC’s lighter touch this year has not made the exclusion calculus any simpler. We’re continuing to track updates on the Proxy Season Blog and in our “Proxy Season” Practice Area.

– Liz Dunshee