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December 30, 1969

Brooks, Plaintiff,
Standard Oil Company (New Jersey), et al., Defendants

Lasker, District Judge.

The opinion of the court was delivered by: LASKER

LASKER, District Judge:

Defendant Standard Oil Company (New Jersey) ("Jersey") moves, pursuant to Fed. R. Civ. Proc. § 12(b) (6), to dismiss plaintiff's complaint on the ground that it fails to state a claim upon which relief can be granted. In the alternative, Jersey moves for summary judgment under Rule 56, Fed. R. Civ. Proc.

 The complaint seeks a declaratory judgment that a shareholder resolution proposed by plaintiff is a proper subject for action by security holders, that Jersey could not legally omit the proposal and a statement in support of it from the proxy statement which it planned to mail in connection with its annual meeting for 1969, *fn1" and that Jersey must include plaintiff's proposal and the supporting statement in its own proxy material. The complaint also seeks to enjoin Jersey from mailing any proxy material unless the plaintiff's proposal is included. There being no genuine issue of material fact, and the law entitling defendant to judgment, summary judgment for the defendant is granted.

 Plaintiff, an attorney, has written at least two articles on international policy aspects of the utilization of underwater natural resources. He became the holder of record of ten shares of Jersey common stock on November 26, 1968. Less than a month later he called Jersey to inquire about the mechanics of submitting a resolution for inclusion in the proxy material which Jersey mails to its shareholders in advance of their annual meeting. After receiving the relevant information from Jersey, plaintiff on January 15, 1969, submitted the following proposed resolution to Jersey:

Resolved that the Standard Oil Company of New Jersey continue and intensify its efforts to encourage the exploration and development of petroleum reserves beneath the world's continental shelves, continental slopes and deep ocean bottoms; that the Company in order to insure the protection of capital investment in these underseas areas, encourage the creation of a stable international regime having jurisdiction over the petroleum and other mineral resources of underseas areas beyond the limits of national jurisdiction.

 Plaintiff also submitted the following statement in support of the above resolution:

The world's population increase means that the demand for fossil fuels will rise correspondingly.
Recoverable reserves in the world's underseas areas will help keep pace with world petroleum needs. But the major portion of these underwater areas is the ocean bottom beyond the limits of national jurisdictions. No governing body now exists to settle conflicts and regulate production in underwater areas beyond national jurisdictions.
Standard Oil should stimulate development of petroleum products beneath the world's waters. The Company should, additionally, promote a stable international regime to encourage international access to the deep sea bottom and to avoid economic anarchy.

 Jersey decided that the proposal was not appropriate for inclusion on its agenda for stockholder action or in its proxy statement. Accordingly, pursuant to Proxy Regulation 14a-8(d), *fn2" it filed with the Securities and Exchange Commission ("S.E.C.") the proposed resolution and plaintiff's supporting statement, as well as its own reasons for omitting the proposal. As stated in Jersey's January 17, 1969 letter to the Commission, those reasons were: first, that "the proposal as submitted is not a proper subject for action by security holders"; second, that the "proposal constitutes a recommendation or request that the management take action with respect to a matter relating to the conduct of the ordinary business operations of the Company"; third, that "the proposal clearly appears to be primarily for the purpose of promoting a general economic or political cause, although the general subject is obviously one of vital interest to the Company." Paragraph (c) of Rule 14a-8, promulgated by the Commission pursuant to Section 14(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(a) (1964), entitles management to omit a proposal from its proxy material for any of the above stated reasons. *fn3"

 The Division of Corporate Finance of the S.E.C. advised both plaintiff and defendant, by separate letters dated January 24, 1969, that it

"will not recommend any action to the Commission if this proposal is omitted from the management's proxy soliciting material for the company's annual meeting . . . pursuant to Rule 14a-8(c) (1) . . . For this reason the Division does not believe it is necessary to consider the other reasons cited by management for omitting the proposal."

 The provision referred to by the Division of Corporate Finance is the one allowing management to omit a proposal from its proxy statement if " . . . as submitted it is, under the laws of the issuer's domicile, not a proper subject for action by security holders." Rule 14a-8(c) (1), 17 C.F.R. § 240.14a-8(c) (1).

 Plaintiff responded to Jersey's January 17th letter to the S.E.C., a copy of which he had received, by writing to the S.E.C. himself, on the same day on which the Division of Corporate Finance advised the parties of its decision not to recommend action. In his letter to the Commission, plaintiff noted that before listing its objections to his proposed resolution Jersey in its letter to the Commission had stated that "the management is in full agreement with the first half of the proposal" and had further stated that "some form of international regime is an avenue that deserves thoughtful investigation," although it expressed doubts about the second half of the proposal "owing to the vagueness of the term 'international ...

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