Overview

• Judge Alan Albright issued a preliminary injunction on August 29, halting enforcement of S.B. 2337 against Institutional Shareholder Services and Glass Lewis.
• The ruling bars the Texas Attorney General and his staff from acting under the law against the firms, including intervening in private lawsuits.
• The court found the challengers likely to succeed on claims that the statute compels speech and discriminates by viewpoint, is preempted by ERISA, and is unconstitutionally vague.
• Set to take effect September 1, S.B. 2337 would have required proxy advisers to flag recommendations not based solely on financial factors, including those incorporating ESG and DEI considerations.
• The law also would have mandated prominent website notices and detailed economic analyses for recommendations opposing management, and the litigation now continues with the injunction in place.