On December 1, 2004, American Federation of State, County & Municipal Employees (AFSCME) submitted to American International Group, Inc. (AIG) a shareholder proposal for inclusion in the 2005 proxy statement.  The proposal called for an amendment to AIG's bylaws that would require the company to include in its proxy statement the nominees for the board of directors submitted by certain shareholders.  AIG excluded the proposal after receiving a no action letter from the Division of Corporation Finance and AFSCME filed suit.  Disagreeing with the position taken by the SEC in its amicus brief, the Second Circuit found that the prohibition on shareholder elections contained in Rule 14a-8(i)(8) applied only to proposals "used to oppose solicitations dealing with an identified board seat in an upcoming election."  AFSCME v. AIG, 462 F.3d 121 (2nd Cir. 2006).  The proposal, therefore, allows shareholders to use Rule 14a-8 to obtain approval of a mechanism for including shareholder nominees in management's proxy statement. 

Primary materials for this case may be found on the DU Law Corporate Governance website.