In the case of Securities and Exchange Commission v. Medical Committee for Human Rights (1971), the Supreme Court addressed whether shareholders had a right to force a corporation to include their proposals in proxy materials. The Medical Committee for Human Rights, a shareholder in Dow Chemical Company, wanted Dow to cease manufacturing napalm during the Vietnam War and sought inclusion of its proposal in Dow's proxy statement. However, SEC allowed Dow not to include it on grounds that it dealt with ordinary business operations rather than policy issues. The Supreme Court ruled 6-3 against MCHR stating that courts should defer to SEC’s expertise when interpreting what constitutes "ordinary business". It held that SEC was correct in allowing exclusion because management decisions about which products or services a company should offer are part of “ordinary business operations”. This ruling clarified how far shareholders could go using Rule 14a-8 under Securities Exchange Act - they can influence corporate policies but cannot interfere directly with management decisions.

In the dissenting opinion for SECURITIES AND EXCHANGE COMMISSION v. MEDICAL COMMITTEE FOR HUMAN RIGHTS, Justice Douglas argued that shareholders should have the right to propose resolutions on any topic they choose, not just those related directly to business operations. He believed that corporations are powerful entities with significant influence over public policy and societal issues; therefore, their actions should be subject to scrutiny by shareholders. In his view, limiting shareholder proposals only to matters of corporate governance or financial performance unduly restricts democratic participation in corporate decision-making processes. Furthermore, he contended that such limitations could potentially shield corporations from accountability for socially harmful practices or policies.