applying the Article III standing inquiry to the Declaratory Judgment Act’s “actual controversy” requirement
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- applying the Article III standing inquiry to the Declaratory Judgment Act’s “actual controversy” requirement
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The opinion
Case: 13-20336 Document: 00512532100 Page: 1 Date Filed: 02/13/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 13-20336
Fifth Circuit
FILED
Summary Calendar February 13, 2014
Lyle W. Cayce
WASTE CONNECTIONS, INCORPORATED, Clerk
Plaintiff - Appellee
v.
JOHN CHEVEDDEN; JAMES MCRITCHIE; MYRA K. YOUNG,
Defendants - Appellants
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:13-CV-176
Before WIENER, OWEN, and HAYNES, Circuit Judges.
PER CURIAM:*
Plaintiff–Appellee Waste Connections, Inc. (“WCN”) sued John
Chevedden, James McRitchie, and Myra K. Young (the “Defendants”) under
§ 14(a) of the Securities and Exchange Act of 1934 seeking a declaratory
judgment that Securities and Exchange Commission (“SEC”) Rule 14a-8, 17
C.F.R. § 240.14a-8 (“Rule 14a-8”), permits WCN to exclude the Defendants’
proposed shareholder resolution from its proxy material. The Defendants
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 13-20336 Document: 00512532100 Page: 2 Date Filed: 02/13/2014
No. 13-20336
moved to dismiss the suit, and WCN moved for summary judgment. The
district court denied the Defendants’ motion and granted summary judgment
for WCN. The Defendants appeal only the district court’s denial of their motion
to dismiss. We AFFIRM.
Chevedden submitted a shareholder proposal to WCN on behalf of
McRitchie and Young. The Defendants sought to include their proposal in
WCN’s proxy materials that were to be provided to WCN’s shareholders in
advance of the 2013 shareholder meeting. In light of the need to timely release
its proxy materials, WCN filed suit against the Defendants seeking a
declaratory judgment that the proposal could properly be excluded from its
proxy materials pursuant to Rule 14a-8. WCN sought declaratory relief to
ensure that it would not be subject to an SEC enforcement action or
shareholder lawsuit alleging an improper exclusion of the proposal.
The Defendants moved to dismiss WCN’s suit, arguing that their
irrevocable and unconditional covenant not to sue WCN if it excluded their
proposal from its proxy materials deprived WCN of standing to seek
declaratory relief. WCN moved for summary judgment. After a hearing, the
district court denied the Defendants’ motion to dismiss and granted summary
judgment for WCN, thereby holding that WCN could exclude the Defendants’
proposal pursuant to Rule 14a-8.
We review de novo a district court’s denial of a motion to dismiss for lack
of subject matter jurisdiction. See Choice Inc. of Texas v. Greenstein, 691 F.3d
710, 714 (5th Cir. 2012). As the party asserting jurisdiction, WCN bears the
burden of proof, but we accept as true the allegations and facts as presented in
its complaint. See id. WCN seeks relief under the Declaratory Judgment Act,
which permits a federal court to “declare the rights and other legal relations”
of parties in “a case of actual controversy.” See 28 U.S.C. § 2201(a).
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To establish standing, WCN must demonstrate that it suffered an “injury
in fact—an invasion of a legally protected interest which is (a) concrete and
particularized . . . and (b) actual or imminent, not conjectural or hypothetical.”
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (internal citations and
quotation marks omitted); see also MedImmune, Inc. v. Genentech, Inc., 549
U.S. 118, 120–21 (2007) (applying the Article III standing inquiry to the
Declaratory Judgment Act’s “actual controversy” requirement). WCN must
also show a causal connection between the conduct complained of and the
injury suffered, as well as that it is “likely, as opposed to merely speculative,
that the injury will be redressed by a favorable decision.” Id. at 561 (internal
citations and quotation marks omitted.
The Defendants argue that WCN lacks standing because WCN’s injury
is not “certainly impending,” WCN’s claim became moot as a result of the
Defendants’ promise not to sue WCN if it excluded their proposal, and WCN’s
alleged injury cannot be redressed through this suit. Chevedden presented
similar arguments to this court in KBR v. Chevedden, 478 F. App’x 213 (5th
Cir. 2012) (unpublished). Indeed, as the Defendants concede, KBR involved
substantially the same fact pattern—KBR sought declaratory relief that it was
entitled to exclude Chevedden’s proposal from its proxy materials under Rule
14a-8. See id. at 214. In KBR, we rejected Chevedden’s argument that his
stipulation not to sue KBR for excluding his proposal deprived the company of
standing. Id. at 215. We explained that Chevedden’s request to include his
proposal placed KBR in the position of “spending a significant sum to revise its
proxy statement, or excluding Chevedden’s proposal and exposing itself to
potential litigation.” Id. As a result, KBR had standing because its decision
whether to exclude the shareholder proposal would “implicate KBR’s duties to
all of its shareholders . . . [and] could expose KBR to an SEC enforcement
action.” Id.
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While KBR is unpublished and, therefore, is not binding precedent in the
case at bar, we find the reasoning in KBR persuasive and adopt it here.
Defendants offer no meritorious arguments for distinguishing KBR.
The Defendants’ argument that KBR has been implicitly overruled or is
no longer persuasive in light of recent Supreme Court decisions is without
merit. First, Clapper v. Amnesty International USA simply confirms “the well-
established requirement that threatened injury must be ‘certainly impending.’”
133 S. Ct. 1138, 1143 (2013) (emphasis added). Unlike the plaintiffs in Clapper
whose alleged injury depended on a “chain of events” and, therefore, was not
“certainly impending,” WCN explained to the district court that the exclusion
of the Defendants’ proposal could lead directly to an SEC enforcement action
or liability from other shareholders. 1 See Clapper, 133 S. Ct. at 1148–50. 2
As the Defendants expressly recognize, the case at bar is substantially
identical to the situation presented in KBR. After carefully considering the
Defendants’ arguments, we find no reason to diverge from our prior holding in
KBR and, therefore, we AFFIRM.
1 Contrary to the Defendants’ suggestion, Sullo & Bobbitt P.L.L.C. v. Abbott, 536 F.
App’x 473 (5th Cir. 2013) (unpublished), does not represent a change in this circuit’s standing
inquiry in light of Clapper. As an initial matter, our analysis in Sullo continued to rely on
Lujan’s well-settled standing inquiry. See id. at 475. Further, citing to Clapper, we
concluded that the plaintiff in Sullo lacked standing when “[t]here [was] nothing in [the]
record to suggest that any suit will be filed. There [was] no evidence that any [similarly
situated plaintiff] has ever been sued under the civil barratry statute, nor was any assertion
to that effect made to the district court.” Id. at 476. WCN does not rely on a similar
theoretical possibility of an SEC enforcement action. Indeed, unlike Sullo where there was
no evidence that a claim was ever brought against a similarly situated plaintiff under the
civil barratry statute, WCN presented uncontested evidence to the district court that a
company’s exclusion of a shareholder proposal absent a request for a no-action letter from
the SEC or lawsuit would lead to an “almost-certain” probability of an investigation by the
SEC’s Division of Enforcement.
2 Already, LLC v. Nike, Inc., 133 S. Ct. 721, 728–29 (2013), is inapposite because it
involves the situation of a patent owner and alleged infringer, not a party issuing a proxy to
multiple potential parties.
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