Institutional Shareholder Services, Inc. v. SEC

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 2, 2025 Decided July 1, 2025

No. 24-5105

INSTITUTIONAL SHAREHOLDER SERVICES, INC.,

APPELLEE

v.

SECURITIES AND EXCHANGE COMMISSION AND PAUL S.

ATKINS, IN HIS OFFICIAL CAPACITY AS CHAIR OF THE

SECURITIES AND EXCHANGE COMMISSION,

APPELLANTS

NATIONAL ASSOCIATION OF MANUFACTURERS,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 1:19-cv-03275)

Paul W. Hughes argued the cause for appellant. With him

on the briefs were Michael A. Tilghman II, Andrew A. Lyons-

Berg, and Emmett Witkovsky-Eldred.

Elaine J. Goldenberg was on the brief for amici curiae

Former Commissioners and Staff of the Securities and

Exchange Commission in support of appellant.

2

Niels C. Holch was on the brief for amici curiae Society

for Corporate Governance and National Investor Relations

Institute in support of appellant.

Jordan L. Von Bokern and Jeffrey B. Wall were on the brief

for amici curiae Chamber of Commerce of the United States of

America, et al. in support of appellant.

Jeffrey M. Harris argued the cause for appellee

Institutional Shareholder Services, Inc. With him on the brief

were Mari-Anne Pisarri and James F. Hasson. Matthew R.

Pociask entered an appearance.

Ryan P. Bates and Matthew Jacobs were on the brief for

amici curiae the Council of Institutional Investors, et al. in

support of appellee.

Before: HENDERSON, RAO and GARCIA, Circuit Judges.

Opinion for the Court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: This case

involves a challenge to the Securities and Exchange

Commission’s (SEC) interpretation of the word “solicit” in

section 14(a) of the Exchange Act of 1934. In the context of

corporate governance, shareholders vote on various proposals

that shape a company’s strategic direction and operations.

Given the volume and complexity of those shareholder votes,

institutional investors—which hold numerous shares across

numerous companies—often retain proxy advisory firms to

research proposals and issue voting recommendations tailored

to each investor’s specific criteria and investment strategy.

Beginning in 2019, the SEC began regulating proxy advisory

firms through an interpretation of section 14(a) that treated

their recommendations as “solicitations” of the proxy votes of

3

institutional investors. Institutional Shareholder Services

(ISS), a leading proxy advisory firm, sued, arguing that it does

not “solicit” within the meaning of the Act. The district court

agreed and entered summary judgment for ISS. The National

Association of Manufacturers (NAM), an intervenor on behalf

of the SEC’s position, appeals. We affirm.

I. BACKGROUND

A. Statutory & Regulatory Background

Section 14(a) of the Securities Exchange Act prohibits

“any person, . . . in contravention of such rules and regulations

as the [SEC] may prescribe as necessary or appropriate in the

public interest or for the protection of investors, to solicit . . .

any proxy” regarding registered securities. 15 U.S.C.

§ 78n(a)(1). Since its enactment in 1934, that provision has

formed the statutory basis for a comprehensive set of SEC

regulations governing proxy solicitations. The Congress did

not define “solicit” in the Exchange Act. The SEC has thus

defined the term for itself. Since 1956, it has generally

described “solicit” and “solicitation” to include any

“communication to security holders under circumstances

reasonably calculated to result in the procurement, withholding

or revocation of a proxy.” 17 C.F.R. § 240.14a-1(l)(1)(iii);

Amendments to Proxy Rules, 21 Fed. Reg. 577-78 (Jan. 26,

1956). This case involves whether proxy voting advice

“solicits” a proxy within the meaning of section 14(a) of the

Exchange Act. Proxy voting advice is often given by proxy

advisory firms, which offer their clients research, analysis and

voting recommendations on shareholder proposals. See

Exemptions from the Proxy Rules for Proxy Voting Advice,

85 Fed. Reg. 55,082, 55,083 (Sept. 3, 2020). Proxy advisory

firms play a significant role in the modern securities industry.

They primarily serve institutional investors, which collectively

own a large proportion of the market value of publicly traded

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companies. See 85 Fed. Reg. at 55,123. The proxy advisory

market is largely shaped by only two firms, ISS and Glass

Lewis. See 85 Fed. Reg. at 55,127. As the district court

explored in greater detail, the SEC has issued various opinions

at different times regarding whether proxy-voting advice

constitutes “solicitation” under its definition. See ISS v. SEC,

718 F. Supp. 3d 7, 12-15 (D.D.C. 2024).

In September 2019, the SEC distributed guidance

suggesting that proxy advisory services constituted

“solicitation” under the proxy rules. Commission

Interpretation and Guidance Regarding the Applicability of the

Proxy Rules to Proxy Voting Advice, 84 Fed. Reg. 47,416,

47,417 (Sept. 10, 2019) (2019 Guidance) (citing 17 C.F.R.

§ 240.14a-1(l)(1)(iii)). The SEC then issued a notice of

proposed rulemaking to codify that interpretation.

Amendments to Exemptions from the Proxy Rules for Proxy

Voting Advice, 84 Fed. Reg. 66,518, 66,522 (Dec. 4, 2019).

The Commission issued its rule in September 2020.

85 Fed. Reg. at 55,082 (2020 Rule). It explained that the 2020

Rule was intended to “help ensure that investors who use proxy

voting advice have access to more complete, accurate, and

transparent information and are able to benefit from a robust

discussion of views” when voting. Id. at 55,122-23. The SEC

correspondingly amended its regulations to define “solicit” and

“solicitation” as:

[a]ny proxy voting advice that makes a

recommendation to a security holder as to its

vote, consent, or authorization on a specific

matter for which security holder approval is

solicited, and that is furnished by a person that

markets its expertise as a provider of such proxy

voting advice, separately from other forms of

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investment advice, and sells such proxy voting

advice for a fee.

Id. at 55,154; 17 C.F.R. § 240.14a-1(l)(1)(iii)(A). It excluded

from that definition advice given in response to an unprompted

request. 17 C.F.R. § 240.14a-1(l)(2)(v).

The SEC’s new interpretation meant that proxy advisory

firms had to file their proxy recommendations with the SEC as

proxy solicitations unless they could claim an exemption. The

Rule provided an exemption if a firm complied with three

conditions: (1) disclosing conflicts of interest and the steps

taken to address them; (2) adopting procedures to make their

proxy advice available to the companies that are the target of

that advice at least by the time the advice is disseminated to the

adviser’s clients; and (3) establishing a mechanism to inform

clients of the company’s response to the firm’s advice before

the applicable shareholder meeting. See 85 Fed. Reg.

at 55,154. The SEC amended the rule in 2022 to rescind the

latter two conditions. Proxy Voting Advice, 87 Fed. Reg.

43,168, 43,174 (July 19, 2022). 1 The 2020 Rule also amended

the Notes to the antifraud provision of the regulations to

1

NAM and the U.S. Chamber of Commerce separately challenged

that volte face in the Western District of Texas and the Middle

District of Tennessee, respectively, arguing that the SEC’s 2022

rescission was arbitrary and capricious under the APA. Both district

courts disagreed. See Nat’l Ass’n of Mfrs. v. SEC, 644 F. Supp. 3d

342 (W.D. Tex. 2022); Chamber of Com. v. SEC, 670 F. Supp. 3d

537 (M.D. Tenn. 2023). The Fifth and Sixth Circuits split on the

question: the Fifth held that the rescission violated the APA and

partially vacated the 2022 Rule but the Sixth upheld the rule, finding

no violation. Contrast Nat’l Ass’n of Mfrs. v. SEC, 105 F.4th 802

(5th Cir. 2024) (partly invalidating rescission), with Chamber of

Com. v. SEC, 115 F.4th 740 (6th Cir. 2024) (upholding rescission).

That divide does not affect our analysis because neither decision

dealt with the SEC’s definitional rule at issue here.

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provide that a firm’s “failure to disclose material information”

about its proxy-voting advice can constitute a false or

misleading statement. 85 Fed. Reg. at 55,155; 17 C.F.R.

§ 240.14a-9.

B. Procedural Background

ISS initiated this action in October 2019 after the SEC

issued its 2019 Guidance, arguing that the agency had

unlawfully expanded “solicit” to encompass proxy-voting

advice and that the 2019 Guidance was improperly issued

without notice and comment. See J.A. 13-37. The district

court stayed the case at the parties’ request pending completion

of the SEC’s related rulemaking. See J.A. 6. After the SEC

adopted its 2020 Rule, the court lifted the stay and ISS filed an

amended complaint asserting six claims based on the

Administrative Procedure Act (APA), arguing that: proxy

advice is not solicitation under Section 14(a) (Count 1); the

SEC lacks statutory authority to regulate proxy advisers

(Count 2); both the 2019 Guidance and the 2020 Rule are

arbitrary and capricious (Counts 3 and 4); the two new

disclosure requirements infringe the First Amendment

(Count 5); and the 2019 Guidance is procedurally invalid

(Count 6). See J.A. 43-72. Later, the district court also granted

NAM’s motion to intervene. J.A. 10-11.

In June 2021, the SEC sought to hold the case in abeyance,

announcing its intention to revisit the 2020 Rule and suspend

its enforcement in the interim. The court again held the case in

abeyance. See J.A. 9. In November 2021, the SEC proposed

rescinding two of the 2020 Rule’s three exemption

conditions—those requiring advance disclosure of voting

advice to issuers (i.e., companies that issue publicly traded

securities) and access to issuer responses—while preserving

the definitional amendment and the conflict-disclosure

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provision. See Proxy Voting Advice, 86 Fed. Reg. 67,383,

67,387 (Nov. 26, 2021).

By March 2022, the SEC had yet to complete its

rulemaking process and sought a further stay, which ISS

opposed. The district court lifted the stay as to the definitional

amendment (as it was not expected to change in the new

rulemaking). See J.A. 10. The SEC later rescinded the two

exemption conditions, mooting two of ISS’s claims (Counts 3

and 5). See 87 Fed. Reg. at 43,174; ISS, 718 F. Supp. 3d at 17.

ISS’s challenges to the definitional amendment remained. The

district court later raised sua sponte whether ISS still had

standing and whether its claims were ripe for review. Id. The

SEC, NAM and ISS all moved for summary judgment.

The district court first determined that ISS had standing to

pursue its claims and those claims were ripe for review. Id. at

18-20. On the merits, it found that the SEC’s definitional

classification of proxy advice as solicitation was foreclosed by

the text of section 14(a). Id. at 20-24. Rejecting the SEC’s

reliance on a broad regulatory definition and more expansive—

and, as the court noted, “now rare”—dictionary meanings, the

court concluded that the term “solicit” could not reasonably be

stretched to include disinterested voting advice. Id. at 23, 29. 2

Accordingly, it granted summary judgment to ISS on Counts 1

and 2 of the complaint. Id. at 29. It did not reach ISS’s

arbitrary-and-capricious claims (Counts 3 and 4). Id. at 29

n.10.

2

The district court used step one of the Chevron framework to review

the pertinent language. See id. at 21. Chevron has since been

overruled. Loper Bright Enters. v. Raimondo, 603 U.S. 369, 412

(2024). That change, however, does little to disturb the district

court’s decision because it found no statutory ambiguity and thus did

not accord the agency’s interpretation deference.

8

Initially, both NAM and the SEC timely appealed.

J.A. 204, J.A. 205. The SEC dismissed its appeal in August

2024 (without explanation), leaving NAM as the sole appellant

defending the definitional change in the amended rule. The

district court had jurisdiction under 28 U.S.C. § 1331 and we

have jurisdiction under 28 U.S.C. § 1291.

II. JURISDICTION

Although not questioned by the parties, we have an

“independent obligation to assure ourselves that jurisdiction is

proper before proceeding to the merits.” Plains Com. Bank v.

Long Family Land and Cattle Co., 554 U.S. 316, 324 (2008).

Article III grants federal courts the power to adjudicate

only “Cases” and “Controversies.” U.S. Const. art. III, § 2.

“That power includes the requirement that litigants have

standing.” California v. Texas, 593 U.S. 659, 668 (2021). The

requirement “must be met by persons seeking appellate review,

just as it must be met by persons appearing in courts of first

instance.” Arizonans for Off. Eng. v. Arizona, 520 U.S. 43, 64

(1997). “[F]ederal courts of appeals lack jurisdiction if the

appellant has not shown standing to pursue the appeal.” Lewis

v. Becerra, 111 F.4th 65, 69 (D.C. Cir. 2024). A party that

properly intervenes “becomes a full participant in the lawsuit

and is treated just as if it were an original party.” Schneider v.

Dumbarton Devs., Inc., 767 F.2d 1007, 1017 (D.C. Cir. 1985).

“The Supreme Court has therefore concluded that an intervenor

may maintain an appeal even if the original party does not

appeal, as long as the intervenor has standing to invoke the

appellate court’s jurisdiction.” Ameren Servs. Co. v. FERC,

893 F.3d 786, 791 (D.C. Cir. 2018) (citing Diamond v. Charles,

476 U.S. 54, 68 (1986)).

The district court granted NAM’s motion to intervene as a

defendant based, in part, on its determination that NAM was

not required to establish its own Article III standing because it

9

was seeking the same relief as the SEC. 3 In this court, the SEC

dismissed its appeal, leaving NAM as the sole appellant.

Accordingly, NAM is now required to show it has

constitutional standing to invoke our jurisdiction. See Ameren

Servs. Co., 893 F.3d at 791.

Because NAM asserts associational standing on behalf of

its members, it must show that “(1) at least one of its members

3

Intervenors seeking relief broader than or different from that sought

by existing parties must possess constitutional standing, see Town of

Chester v. Laroe Ests., Inc., 581 U.S. 433, 440 (2017), but

intervenors that seek the same relief sought by at least one existing

party need not do so, see Little Sisters of the Poor Saints Peter &

Paul Home v. Pennsylvania, 591 U.S. 657, 674 n.6 (2020)

(explaining that the circuit court “erred by inquiring into

[intervenors’] independent Article III standing” when they sought the

same relief as the federal government, which “clearly had standing”).

That distinction is in tension with some of our court’s precedent

requiring an intervenor to demonstrate Article III standing even if

pursuing the same relief as an existing party. See, e.g., Yocha Dehe

v. Dep’t of the Interior, 3 F.4th 427, 430-32 (D.C. Cir. 2021)

(applying circuit precedent predating Little Sisters); Old Dominion

Elec. Coop. v. FERC, 892 F.3d 1223, 1232 n.2 (D.C. Cir. 2018)

(noting that Town of Chester alone did not require overruling circuit

precedent as to other types of intervenor); Crossroads Grassroots

Pol’y Strategies v. Fed. Election Comm’n, 788 F.3d 312, 316 (D.C.

Cir. 2015); Deutsche Bank Nat’l Tr. Co. v. FDIC, 717 F.3d 189, 193

(D.C. Cir. 2013); Fund for Animals, Inc. v. Norton, 322 F.3d 728,

732-33 (D.C. Cir. 2003). That tension has led to some confusion at

the district court level. E.g., Signal Peak Energy, LLC v. Haaland,

No. 24-cv-366, 2024 WL 3887386, at *3-4 (D.D.C. Aug. 21, 2024)

(discussing the conflict). The district court in this case did not

grapple with the issue and simply found that, because NAM sought

the same relief as the SEC, it did not need to establish Article III

standing. See Hearing Tr. at 38-39, ISS, No. 19-cv-3275 (D.D.C.

Oct. 29, 2024), Dkt. 77. We need not resolve that question because

NAM plainly must establish its own standing to press this appeal.

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has standing to sue in her or his own right, (2) the interests it

seeks to protect are germane to its purpose, and (3) neither the

claim asserted nor the relief requested requires the participation

of an individual member in the lawsuit.” Wash. All. of Tech.

Workers v. DHS, 50 F.4th 164, 175 (D.C. Cir. 2022) (quoting

Save Jobs USA v. DHS, 942 F.3d 504, 508 (D.C. Cir. 2019)).

There is no question that NAM satisfies the latter two

components; thus, we focus on the first.

To establish Article III standing on appeal, NAM must

demonstrate that at least one of its members has an injury fairly

traceable to the district court’s judgment that could be

redressed by a favorable ruling from this court. See West

Virginia v. EPA, 597 U.S. 697, 718 (2022) (quoting Food Mktg.

Inst. v. Argus Leader Media, 588 U.S. 427, 433 (2019)). To

qualify as an injury-in-fact, a harm must be “concrete and

particularized” and “actual or imminent.” Lujan v. Defs. of

Wildlife, 504 U.S. 555, 560 (1992) (citation modified). In

determining whether a harm is sufficiently concrete, “history

and tradition offer a meaningful guide to the types of cases that

Article III empowers federal courts to consider.” Sprint

Commc’ns Co. v. APCC Servs., Inc., 554 U.S. 269, 274 (2008).

“[T]raditional tangible harms, such as physical harms and

monetary harms” are paradigmatic concrete Article III injuries.

TransUnion LLC v. Ramirez, 594 U.S. 413, 425 (2021). “[A]

material risk of future harm can [also] satisfy the concrete-

harm requirement” if equitable relief is sought. Id. at 435.

Here, NAM asserts that its members “suffer a direct,

concrete harm from the vacatur of regulations promoting proxy

voting based on accurate and reliable information,” which

allows members to gain more information from proxy advisers

and position themselves to respond to it. See Appellant Br. 4.

In district court, NAM submitted a declaration prepared by its

vice president of tax and domestic economic policy, which

stated that, among various purported harms, in 2018 “56% of

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[its members] . . . were having to divert resources from their

core business functions in order to respond to the actions of

proxy advisory firms” when seeking market investments.

J.A. 76. That was necessary, he said, because proxy advisory

recommendations could be “misleading or inaccurate,” lack

transparency, involve “undisclosed conflicts of interest,” and

effectively exclude NAM’s members from the decisionmaking

process of shareholder voting. J.A. 78-79. But according to

the declaration, “[t]he regulatory restraints imposed by the

[2020 Rule] would address the harms NAM members have

experienced,” J.A. 79, because the 2020 Rule would virtually

force any proxy adviser to seek an exemption under the Rule

(rather than become subject to the SEC filing requirements),

which in turn would require significant disclosures to NAM’s

members about their recommendations ahead of any vote. See

85 Fed. Reg. at 55,154. ISS agrees that, if the Rule were in

effect, it would be forced to seek an exemption to stay in

business. Oral Argument at 31:11.

That showing is sufficient to satisfy the requirements of

Article III. The vacatur of the 2020 Rule removes disclosure

obligations that NAM contends directly mitigated misleading

proxy advice, thereby reimposing the same monetary and

operational burdens its members previously faced. 4 Those

harms are not intangible or only informational but have a direct

impact on NAM’s members’ businesses—a prototypical

injury-in-fact. Cf. TransUnion, 594 U.S. at 425. A decision

from this court reinstating the Rule would alleviate those harms

by restoring the framework that NAM alleges required proxy

advisers to provide timely, transparent disclosures.

Accordingly, NAM has standing to pursue its appeal.

4

Those obligations include disclosing conflicts of interest as adopted

by the 2020 Rule and left undisturbed by the 2022 amendment. See

85 Fed. Reg. at 55,154; 87 Fed. Reg. at 43,174.

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III. MERITS

NAM makes two claims on appeal. First, it contends that

the district court’s definition of “solicit” was overly narrow and

the SEC’s reading was within the bounds of its interpretive

authority. Second, it asserts that even if the district court’s

definition is correct, because “solicit” can mean “endeavor to

obtain,” advisory firms solicit proxies by seeking to obtain

client votes aligned with their recommendations.

We review a district court’s grant of summary judgment

de novo and, like the district court, will set aside the agency

action if it is arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law. 5 U.S.C. § 706(2)(A).

In considering whether an agency’s interpretation of its

governing statute is contrary to law, we must “exercise

independent judgment in determining the meaning of statutory

provisions.” Loper Bright, 603 U.S. at 394, 412-13; see also

Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 328 (2014) (“[A]n

agency may not rewrite clear statutory terms to suit its own

sense of how the statute should operate.”). 5

5

Additionally, if an “agency is authorized to exercise a degree of

discretion” in defining statutory terms, our role under the APA is “to

independently interpret the statute and effectuate the will of

Congress subject to constitutional limits” by “recognizing

constitutional delegations, fixing the boundaries of the delegated

authority, and ensuring the agency has engaged in reasoned

decisionmaking within those boundaries.” Loper Bright, 603 U.S.

at 394-95 (citation modified). NAM argues that the SEC was

delegated authority to define the term “solicit” by a provision

empowering it to “define technical, trade, accounting, and other

terms used in this chapter, consistently with the provisions and

purposes of this chapter.” 15 U.S.C. § 78c(b); Appellant Br. 39-43.

We need not resolve whether “solicit” is the sort of term that

provision empowered the SEC to define. Regardless, the SEC’s

definition is not only incorrect as a matter of de novo statutory

13

“We begin, as in any case of statutory interpretation, with

the language of the statute.” CSX Transp., Inc. v. Ala. Dep’t of

Revenue, 562 U.S. 277, 283 (2011) (citation omitted). Again,

section 14(a) prohibits “any person, . . . in contravention of

such rules and regulations as the [SEC] may prescribe as

necessary or appropriate in the public interest or for the

protection of investors, to solicit . . . any proxy” regarding

registered securities. 15 U.S.C. § 78n(a)(1). The Act itself

does not define “solicit” so we look to the “word’s ordinary

definition” at the time the Exchange Act was enacted in 1934.

CSX Transp., 562 U.S. at 284. “To determine the ordinary

meaning of a legal term, we may look to contemporaneous

dictionaries.” Greenbaum v. Islamic Republic of Iran, 67 F.4th

428, 432 (D.C. Cir. 2023) (citing Taniguchi v. Kan Pac.

Saipan, Ltd., 566 U.S. 560, 566-68 (2012)).

Contemporaneous dictionaries suggest that “to solicit” and

“solicitation” entail seeking to persuade another to take a

specific action. For example, Webster’s Dictionary defined

“solicit” to mean “[t]o make petition to; to entreat;

importune . . . now, often, to approach with a request or plea,

as in selling, begging, etc.” and “[t]o endeavor to obtain by

asking or pleading; to plead for . . . to seek eagerly or actively.”

Webster’s New International Dictionary of the English

Language 2393 (2d ed. 1934). It also could mean “to endeavor

to obtain by asking or pleading; to plead for; as, to solicit an

office, a favor, alms.” Id. The Oxford English Dictionary

defined the term as “[t]o entreat or petition (a person) for, or to

do, something; to urge, importune; to ask earnestly or

persistently.” 10 The Oxford English Dictionary 395 (1933).

An “obscure” secondary definition was “[t]o urge or press (a

matter).” Id. Other dictionaries gave “solicit” the same

understanding. See, e.g., 2 The New Century Dictionary 1764

interpretation but also beyond “the boundaries of [any] delegated

authority.” Loper Bright, 603 U.S. at 395 (citation modified).

14

(1927) (“To make petition or request, as for something

desired.”). Legal dictionaries similarly reflected a sense that

solicitation involves advocacy on one’s own behalf. See, e.g.,

Solicit, Black’s Law Dictionary (3d ed. 1933) (“[t]o ask for

with earnestness, to make petition to, to endeavor to obtain, to

awake or excite to action, to appeal to, or to invite”);

A Dictionary of the Law 959 (1913) (“[t]o importune, entreat,

implore, ask, attempt, try to obtain”). In short, extending the

term “solicit” to encompass voting recommendations requested

by another would go beyond the 1934 meaning.

And the same is true today. Between a proxy adviser and

its client, it might be reasonable to say that the client “solicits”

the adviser’s recommendation but that interpretation does not

suggest that, in providing that recommendation, the adviser has

“solicited” the client’s vote. The adviser, although it holds

itself out to attract clients, does not initiate the exchange; it

provides advice only in response to the client’s request. In

other words, the solicitation runs in the opposite direction to

the one suggested by NAM. By contrast, a company director

who hopes to obtain a particular outcome from a particular vote

might “solicit” the proxy votes of shareholders in order to

achieve his goal. Based on that understanding, we conclude

that the ordinary meaning of “solicit” does not include entities

that provide proxy voting recommendations requested by

others, even if those recommendations influence the

requestors’ eventual votes.

Our conclusion is reinforced by the structure of the statute.

Section 14 supplies a broader set of provisions designed to

ensure the integrity of shareholder voting processes by

regulating the exercise of proxy authority. See generally 15

U.S.C. § 78n. The statute presupposes that proxy solicitation

involves parties actively seeking to secure votes or voting

authority. See id. Nothing in section 14 indicates that it was

intended to reach those entities that merely advise others how

15

to vote, without themselves seeking votes or acting on behalf

of those who do. See id.

“[O]ther contextual clues” add to NAM’s problems.

Henson v. Santander Consumer USA Inc., 582 U.S. 79, 85

(2017). If the Congress in one provision uses a specific term—

in this case, “solicit”—and in neighboring provisions regulates

broader or different conduct using broader language, we may

infer that the Congress meant something different in its choice

of the specific term. Cf. id. at 85-86. That inference is

permissible here because the Exchange Act does contain more

expansive formulations in regulating other kinds of conduct.

For example, section 10(b) prohibits “any person . . . [t]o use

or employ . . . any manipulative or deceptive device or

contrivance” in connection with the purchase or sale of

securities. 15 U.S.C. § 78j(b) (emphasis added). Section 14(a),

in comparison, limits its reach to those who “solicit” proxy

votes, not simply those who might influence those votes or

provide recommendations. 15 U.S.C. § 78n(a)(1). More

broadly, as ISS accepts, see Appellee Br. 27, proxy advisers

also are subject to a different statute—the Investment Advisers

Act of 1940—which separately amended the statutory scheme

to include different standards for investment advisers who “for

compensation and as part of a regular business” issue “analyses

or reports concerning securities.” 15 U.S.C. § 80b-2(a)(11);

see generally 15 U.S.C. §§ 80b-1 et seq.

The role of a proxy in the context of shareholder voting is

also informative. A proxy is a formal authorization given by a

shareholder to another person to vote on his behalf. See Proxy,

Black’s Law Dictionary (3d ed. 1933) (“a writing authorizing

one to vote for another”). The concept entails agency: a person

solicits a proxy when he seeks to be, or to place someone else

in the position of being, an agent empowered to cast votes.

Communications that provide analysis or guidance upon

request, by contrast, do not involve such a relationship. They

16

may affect how the principal votes but they do not seek to

supplant his authority to vote.

It is thus no answer to say, as the SEC did in its rulemaking

and NAM repeatedly emphasizes, that proxy advisers

“influence” shareholder votes or that they “affect” voting

outcomes. See 85 Fed. Reg. at 55,086; Appellant Br. 27-32.

That argument has surface appeal, particularly when

considering the modern proxy voting system. But it fails as a

matter of statutory interpretation. The question is not whether

proxy advisers are influential—that point is undisputed—but

whether the Congress chose to regulate influence or

solicitation. Influence, even substantial influence, is distinct

from solicitation.

NAM also argues that the district court improperly

injected an extratextual “interest-in-the-outcome requirement”

into section 14(a). Appellant Br. 52-58. Not so. The district

court properly interpreted the term “solicit” to reach only

conduct that involves seeking a shareholder’s vote, rather than

providing advice requested by a client. It did not introduce a

“test” for the intent of solicitors.

Nor do NAM’s alleged “dire consequences” result from

that clear definition. First, the SEC remains free to regulate

false or misleading information in solicitations. See 17 C.F.R.

§ 240.14a-9. That the term’s scope does not encompass

everything that might be persuasive to a shareholder is a

consequence of the statute’s reach, not a result of the district

court’s improper interjection. Second, there is nothing unusual

about the Congress limiting the scope of a statute to reach only

certain kinds of conduct—here, solicitation rather than

influence. Third, the SEC is separately empowered to regulate

the provision of proxy-voting advice through the Investment

Advisers Act, 15 U.S.C. §§ 80b-1 et seq., which imposes

fiduciary duties on most proxy advisory firms. See Appellee

17

Br. 57-63. Fourth, inducing a shareholder to cast, withhold or

revoke a vote can still constitute solicitation if it meets the

statutory requirement of obtaining that action for the would-be

solicitor’s separate purpose. See 17 C.F.R. § 240.14a-

1(l)(1)(ii)-(iii). Fifth, NAM’s invocation of the rules governing

broker-dealers holding legal title to “street name” securities is

irrelevant—those rules simply ensure that proxy materials

reach a beneficial owner of securities—unless they become

active solicitors themselves. See 17 C.F.R. § 240.14a-2(a)(1);

see also 3 Thomas Lee Hazen, Treatise on the Law of

Securities Regulation § 10:68 (May 2025 update).

In sum, the best reading of section 14(a), grounded in the

ordinary meaning of “solicit” in its statutory context, is that the

term refers to a request for proxy authority or a directed plea to

exercise such authority in a particular manner. Proxy-voting

advice rendered by a third party for a fee falls outside that

definition. It is simply a recommendation. The SEC’s effort

to expand “solicitation” to include such advice cannot be

reconciled with the statutory text and its adoption of that

definition in the 2020 Rule was contrary to law.

* * *

For the foregoing reasons, the judgment of the district

court is affirmed.

So ordered.