Document: 416 U.S. 386 94 S.Ct. 1741 40 L.Ed.2d 215 LEHMAN BROTHERS, Petitioners,v.Jacob SCHEIN et al. Benjamin SIMON, Petitioner, v. Jacob and Marvin H. Schein. INVESTORS DIVERSIFIED SERVICES, INC., al., Petitioners, Nos. 73—439, 73—440, 43—495. Argued March 19, 1974. Decided April 29, Syllabus Shareholders' derivative diversity suits were brought in federal court New York, alleging that the president of a Florida corporation as fiduciary, with others, used inside information about projected corporate earnings for profit hence wsa liable to unlawful profits. The District Court, looking York's choice-of-law rules, held under law, which it governed, defendants not liable, dismissed complaints. Court Appeals reversed, finding though controlling, was decisive, this situation, 'would probably' apply certain York decision impose liability. Held: While resort an available certification procedure, such is Florida, obligatory where there doubt local its use given case discretionary, procedure seems particularly appropriate here view novelty question, unsettled state fact when judges attempt predict uncertain they act 'outsiders' exposed law. Hence, remanded reconsider whether controlling issue law should be certified Supreme Court. Pp. 389—392. 2 Cir., 478 F.2d 817, vacated remanded. James J. Hagan, City, petitioners. Donald N. Ruby, respondents. Mr. Justice DOUGLAS delivered opinion 1 These cases are on petitions certiorari raise one identical question. Southern York. Lum's, respondents Lehman Bros. petition, headquarters Miami. Each three petitions, we consolidated oral argument, involves shareholders' naming Lum's others defendants; basis jurisdiction citizenship, 28 U.S.C. § 1332(a)(1), no dispute. 3 complaints allege Chasen, called Simon, representative Bros., told him disappointing projections earnings, estimates confidential, public. Simon said have employee IDS1 them. On next day, alleged IDS sold 83,000 shares Stock Exchange $17.50 per share. Later day exchanges halted trading stock opened at $14 share, public being would 'substantially lower' than anticipated. theory Chasen fiduciary but along his group their 4 defended ground sale made through them neither benefited from sales. Nonetheless plaintiffs claimed other Diamond Oreamuno, 24 N.Y.2d 494, 301 N.Y.S.2d 78, 248 N.E.2d 910 (1969). proceeds 'inside' officer or director asset had been acquired by insiders fiduciaries company misappropriated violation trust. 5 looked rules State Klaxon Co. Stentor Electric Mfg. Co., 313 487, 61 1020, 85 L.Ed. 1477 (1941), incorporation governs existence extent obligations, well liability did, indeed, so indicate. 503—504, N.Y.S.2d, 85—86, N.E.2d, 915. 6 examining concluded that, although highest has considered several district courts appeal indicate complaint fails both wrongful acts damage must dismissed.2 went consider if followed rationale, liable. It present beyond Diamond, only involved suits, never any holdings information. Lum's.3 accordingly complaints, Gildenhorn Inc., 335 F.Supp. 329 (1971). 7 divided vote reversed Schein 817 (CA2 1973). found none decisive. So then turned jurisdictions, see interpret make applicable here. engaged 'to misuse property.' id., 822, reaches 'viewing probably it.' Ibid. There emanations decisions4 majority feel follow reading Diamond. Such construction said, 'the prophylactic effect providing disincentive insider trading.' Id., 823. And would. Yet regime Erie R. Tompkins, 304 64, 58 82 1188 (1938), can just opposite her overriding rule pre-empts reason curbs stream commerce. 8 dissenter urged certify state-law question provided Fla.Stat.Ann. 25.031 Appellate Rule 4.61, 32 F.S.A. F.2d, 828. That path open appeals United States. We have, before5 appeals.6 9 Moreover does available,7 infrequently will stay hand, remitting parties resolve may turn. Kaiser Steel Corp. W. S. Ranch 391 593, 88 1753, 20 835 (1968). Numerous applications practice reviewed Meredith Winter Haven, 320 228, 64 7, (1943), teaches mere difficulty ascertaining excuse tribunal start another lawsuit. do suggest available, obligatory. does, course, long run save time, energy, resources helps build cooperative judicial federalism.8 Its rests sound discretion court. 10 Here seem great unsettlement distant State. When act, referred ourselves matters lacking common exposure comes sitting jurisdiction. 11 'Reading Texas statutes decisions outsiders without special competence little confidence our independent judgment regarding application situation. lower did deny sustained Commission's assertion power. represents able experienced circuit judge includes two capable trained law.' Railroad Comm'n Pullman 312 496, 499, 643, 644, 971 (1941). 12 See also MacGregor Mutual Life Assur. 315 280, 281, 62 607, 86 846 (1942); Reitz Mealey, 314 33, 39, 24, 28, 21 13 pursuant 4.61 Rules. 14 ordered. 15 Judgments 16 REHNQUIST, concurring. 17 says procedures 'does, federalism.' Ante, 391. observes '(w)e obligatory,' further states '(i)ts court.' I agree each these propositions, think emphasize scope deciding procedures. 18 Petitioners court, applying decided and, respondents' requested relief extend substantive even apparently novel (1969), merits. agreed applied, permit recovery claim stated dissenting Appeals, disagreeing majority's analysis added concluding paragraph light uncertainty hve utilized Appeals. rehearing, petitioners utilize concede first request made. Thus seek upset result more years trial appellate litigation point presented upon petition rehearing. Cf. Hostetter Idlewild Bon Voyage Liquor Corp., 377 324, 329, 84 1293, 1296, 350 (1964). 19 authority Congress granted review judgments undoubtedly vests us correct errors prescribe method those go before Western Pacific 345 247, 73 656, 97 986 (1953). But sensible respect experience various integral parts system suggests slowly telling how based decide far often do. This remit plaintiff merely because (1943); unusual circumstances require having action nonetheless abstain doubtful questions e.g., Louisiana Power & Light City Thibodaux, 360 25, 79 1070, 1058 (1959); (1968) (per curiam). In situations, dealt reconcile exercise conferred important considerations comity federalism inherent system, subject single national policy within judiciary. At end spectrum, however, assume unthinkable Members process researching arises case. Presumably least determining what particular 22 very desirable means ascertain undecided especially where, directly last purely one, considerable going decisionmaking choice trenching fundamentals federal-state jurisprudence. 23 engender less delay create fewer additional expenses litigants abstention, entails expense ordinary merits Clay Sun Insurance Office, Ltd., 363 207, 226—227, 80 1222, 1233—1234, 1170 (1960) (dissenting opinion). promulgated rule, Fla.Appellate (1967), provides shall file briefs according specified briefing schedule, argument application, pay costs certification.* while likely produce determination time money required achieve determination. If believes research materials already makes effort so, disturbed simply existed used. facts case, lateness suggestion petitioners, advanced goal correctly disposing leave, understand making initial choice. since today expressed courts, vacate remand order Court's opinion. Investors Diversified Services, Variable Payment Fund, Dimensions Of those, defendant Gregorio. dismissal third (Gildenhorn) pursued appeal. One Sit Jundt, employees IDS, lack personal dismissal. Palma Zerbey, 189 So.2d 510, 511 (Fla.App.1966). profiting himself revealing could reached nonresident properly served. Quinn Phipps, 93 Fla. 805, 113 So. 419 (1927). Aldrich Aldrich, 375 249, 305, (1963); Dresner Tallahassee, 136, 235, 208 (1963). Trail Builders Supply Reagan, 430 828 (CA5 1970); Gaston Pittman, 413 1031 1969); Martinez Rodriquez, 410 729 Moragne States Marine Lines, 409 1969), rev'd grounds, 398 375, 90 1772, 26 339 (1970); Hopkins Lockheed Aircraft 394 656 1968); Ins. Virginia Shifflet, 380 1967); Green American Tobacco 325 673 1963); Office Clay, 319 505 1963). Fifth Circuit's willingness part product frequent repudiation interpretations summarized Services Delaney, 328 483, 486—487 1964) (Brown, C.J., concurring). Certification States, including Colorado, Colo. 21.1 Hawaii, Haw.Rev.Stat. 602—36 (1969); Louisiana, La.Rev.Stat.Ann. 13:72.1 (Supp.1973); Maine, Me.Rev.Stat.Ann., Tit. 4, 57 (1964); Maryland, Md.Ann.Code, Art. 26, 161 Massachusetts, Mass.Sup.Jud.Ct.Rule 3:21 (1973); Montana, Mont.Sup.Ct.Rule Hampshire, N.H.Rev.Stat.Ann. 490 App.R. Washington, Wash.Rev.Code Ann. §§ 2.60.010 2.60.030 (Supp.1972). Wright, Federal Courts Nature Quality Law, Wayne L.Rev. 317 (1967); Kurland, Toward Co-Operative Judicial Federalism: Abstention Doctrine, F.R.D. 481 (1960); Note, Inter-Jurisdictional Certification: Beyond Cooperative Federalism, 111 U.Pa.L.Rev. 344 Florida's Interjurisdictional A Reexamination To Promote Expanded National Use, U.Fla.L.Rev. * (1967) part: 'f. Costs Certificate. certificate filing fee equally between unless otherwise ordered 'g. Briefs Argument. appellant moving party serve adversary brief 30 days after appellee responding receipt appellant's party's reply filed thereafter. 'h. Oral good cause shown enlarged prior hearing thereon, allowed same causes merits.'

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