Twin Rivers Paper Co., LLC v. SEC, No. 18-1213 (D.C. Cir. 2019)Annotate this Case
The DC Circuit denied a petition for review challenging the Commission's 2018 rule allowing investment companies to post shareholder reports online and mail paper copies to shareholders upon request. Petitioners argued that the SEC did not adequately consider the interests of shareholders who prefer reports in paper form. The court held, however, that the consumer organization lacked Article III standing. In this case, the organization could not reasonably have believed that its barebones affidavit, vaguely describing the preferences and burdens of unnamed members and others, sufficed to prove its representational standing; nor could it reasonably have believed that its standing was self-evident from the rulemaking record.
The court also held that the paper-industry representatives asserted interests beyond those protected or regulated by the securities laws. Applying Hazardous Waste Treatment Council v. Thomas, 885 F.2d 918, 921–22 (D.C. Cir. 1989), the court held that the conflict between the interests of paper sellers and those of shareholders is likely to increase over time, and this suggests a systematic misalignment with shareholder preferences, which makes paper companies distinctly unqualified to advance the interests of shareholders.