Federal judges struck down state proxy advisor disclosure laws in Kansas and Indiana within four days of each other in late June 2026, handing Institutional Shareholder Services (ISS) and Glass Lewis their second and third consecutive court victories against such laws.
On June 24, U.S. District Court Judge Holly L. Teeter of the U.S. District Court for the District of Kansas — an appointee of President Donald Trump (R) — issued a preliminary injunction halting Kansas' Proxy Advisory Transparency Act (SB 375). The law would have required proxy advisors to disclose when their voting recommendations broke from company management's position without a supporting written financial analysis. ISS and Glass Lewis sued separately, arguing the law violated their First Amendment rights through viewpoint discrimination.
Judge Teeter agreed, writing that the law "regulates speech based on whether the expressed opinion is for or against company management," and found it failed strict scrutiny, the standard courts apply to laws restricting protected speech. The injunction blocked the law just before it was set to take effect July 1.
Four days later, on June 28, U.S. District Court Judge Matthew Brookman of the U.S. District Court for the Southern District of Indiana — a Joe Biden (D) appointee — blocked Indiana's HB 1273 on the same First Amendment grounds. That law, also set to take effect July 1, would have required proxy advisors to disclose a written financial analysis (or state that none existed) when recommending votes against management.
ISS and Glass Lewis together account for more than 90% of the proxy advisory market, providing voting recommendations to millions of institutional investors. The back-to-back rulings matter beyond these two states: according to Bloomberg Law, at least a dozen states introduced proxy advisor regulation bills this year, and both decisions signal that viewpoint-based disclosure mandates are likely to keep losing in court.
Kansas Attorney General Kris Kobach (R), defending his state's law, stating he "values First Amendment rights and would not argue that SB 375 satisfies strict scrutiny should the Court agree with Plaintiffs that SB 375 discriminates based on viewpoint."
Glass Lewis said the rulings "safeguard core First Amendment principles by rejecting speaker and viewpoint discrimination and ensure we can continue to deliver the objective research that our clients have come to expect." ISS called Indiana's law "an unconstitutional exercise of power over the free market."
Both laws are part of a broader Republican-led push to regulate proxy advisors over environmental, social, and governance (ESG) voting recommendations. Kansas lawmakers passed SB 375 in April 2026 after overriding Gov. Laura Kelly's (D) veto. ISS and Glass Lewis also challenged a similar law in Kentucky and face separate litigation in Florida over consumer protection and antitrust allegations, which both companies deny.
The firms' legal campaign began in July 2025 with a still-pending lawsuit over Texas's SB 833, which targets disclosures tied to non-financial factors like diversity, equity, and inclusion (DEI) and ESG. The litigation also follows a Dec. 11, 2025, executive order from President Trump directing the Securities and Exchange Commission to expand oversight of both firms and revisit proxy-advisor rules touching DEI and ESG.
Ballotpedia tracks support for and opposition to the environmental, social, and corporate governance (ESG) investing movement. To learn more about arguments for, against, and about ESG, click here. For more information on reform proposals related to ESG policy, click here.
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