Glass Lewis has announced that it is taking legal action following the enactment of Senate Bill 2337, which I blogged about back in June. Glass Lewis noted in an email sent to clients:

Glass Lewis always tries to work constructively with policy makers. We attempted that here, but Texas legislators chose not to engage with us or the broader institutional investor community in developing their new, unprecedented law.

Therefore, on July 24, 2025, Glass Lewis filed a complaint in the U.S. District Court for the Western District of Texas against Ken Paxton, the Texas Attorney General. The complaint seeks an order declaring S.B. 2337 unlawful and an injunction against its enforcement by the Attorney General. At the same time, Glass Lewis filed a motion for preliminary injunction asking the court to enjoin, or stop, enforcement of the law before it becomes effective on September 1, 2025.

We assure you that this decision was not made lightly. However, given the law’s extreme measures and serious flaws, we believe that trying to comply with it would impose significant and pointless costs on us and our clients, force us to provide highly misleading warnings to our clients, as well as subject Glass Lewis and its clients to the risk of unwarranted litigation by private parties and the Texas Attorney General. We therefore felt compelled to take this step to defend our ability to continue to serve our clients in the manner they expect.

It is perhaps not too surprising that yet another effort to regulate proxy advisory firms will become mired in litigation.

– Dave Lynn