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As described in greater detail in this Jones Day memo, the federal district court for the District of Montana relied on certain SEC formal releases and federal case law - but not recent staff guidance (SLB No. 14H) - in ruling in a company's favor to exclude a climate-related shareholder proposal. Importantly, the court determined that the SEC's formal releases warranted agency deference, but that its informal staff pronouncements, including SLBs and no-action letters, warranted only "consideration" rather than "persuasive weight." As a result, the Trinity Wall Street approach to the Rule 14a-8 ordinary business exclusion in the face of a proposal that raises a significant policy issue played a decisive role in the decision notwithstanding the SEC staff's position in SLB 14H that proposals that raise a significant policy issue may transcend a company’s ordinary business operations and thus not be excludable even if the significant policy issue relates to the “nitty-gritty" of the company's core business.

Jones Day elaborates:

On the merits, the Court determined that Tosdal's proposal was "too entwined with the fundamentals of the daily activities of a public utility running its business" and would "shape how [NWE] goes about resource planning," which "lies at the core of [its] ordinary business operations." NWE had already committed to reduce the carbon intensity of its electric generation; Tosdal's proposal sought to dictate when and how the company would accomplish its goal. Thus, the Proposal did not "transcend" NWE's day-to-day business, even though it raised significant policy issues (precisely the analysis that the SEC had disavowed in Staff Legal Bulletin 14H, in which it stated that proposals focusing on significant policy issues necessarily "transcend day-to-day business matters"). The Court concluded that "[f]or a policy issue to transcend [NWE's] ordinary business operations, it must focus on something larger than shutting down a specific plant by a specific target date."