Source: http://law.justia.com/cases/federal/appellate-courts/F2/527/880/309911/
Timestamp: 2013-05-20 08:45:40
Document Index: 771996645

Matched Legal Cases: ['§ 4886', 'art:\n7', '§ 1419', '§ 876', '§ 1704', '§ 8', '§ 8', 'art, 506']

527 F.2d 880: Rochez Brothers, Inc., a Pennsylvania Corporation, Appellant, v. Charles R. Rhoades et al :: US Court of Appeals Cases :: Justia
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527 F.2d 880: Rochez Brothers, Inc., a Pennsylvania Corporation, Appellant, v. Charles R. Rhoades et al
United States Court of Appeals, Third Circuit. - 527 F.2d 880
Argued May 16, 1975.Decided Sept. 29, 1975
1 Rochez Bros., Inc. v. Rhoades, 353 F.Supp. 795 (W.D.Pa.1973)
2 The order of the district court dismissing MS&R stated:
3 Opinion of the district court, Rochez v. Rhoades, 390 F.Supp. 470 (W.D.Pa.1974)
4 10 Fletcher, Cyclopedia Corporations § 4886 at 298 (rev. ed. 1970)
5 Id. at 299
6 Section 20(a) provides in pertinent part:
7 458 F.2d 255 (3d Cir. 1972) (Adams dissenting and concurring) cert. denied, 409 U.S. 874, 93 S.Ct. 120, 34 L.Ed.2d 126 (1972)
8 382 F.2d 689 (9th Cir. 1967), cert. granted, 390 U.S. 942, 88 S.Ct. 1021, 19 L.Ed.2d 1129, cert. dismissed, 393 U.S. 801, 89 S.Ct. 40, 21 L.Ed.2d 85 (1968)
9 The Ninth Circuit recently reaffirmed the 'Kamen Rule,' holding that secondary liability is measured by applying the 'controlling person' and good faith standards of Section 20(a) and not the doctrine of respondeat superior. Zweig v. Hearst Corp., 521 F.2d 1129 (9th Cir. 1975)
10 As one commentator observed:
11 See Landy v. FDIC, 486 F.2d 139 (3d Cir. 1973), cert denied, 416 U.S. 960, 94 S.Ct. 1979, 40 L.Ed.2d 312 (1974). This was also the case in SEC v. First Securities Co. of Chicago, 463 F.2d 981 (7th Cir. 1972), cert. denied, sub nom. McKy v. Hochfelder, 409 U.S. 880, 93 S.Ct. 85, 34 L.Ed.2d 134 (1972)
12 The proposed Federal Securities Code, § 1419(b)(1) is modeled after § 876(b) of the Restatement of Torts. The Code would impose liability for securities law violations if one 'gives substantial assistance to conduct by another person . . . with knowledge' that the conduct was proscribed. The American Law Institute, Federal Securities Code, Tentative Draft No. 3, Part XVII, General, § 1704(b)(3)(4)(b), (Aiders and Abettors)
13 2 Bromberg, Securities Law: Fraud §§ 8.5(582), 208.45 (1971); See also SEC v. Coffey, 493 F.2d 1304, 1316 (6th Cir. 1974)
14 This has led one writer to comment that the knowledge requirement may depend on whether the defendant's act was a misrepresentation or a nondisclosure. 2 Bromberg at §§ 8.5(582), 208.43 (1970)
15 Rule 52(a) of the Federal Rules of Civil Procedure governs appellate review of the trial court's findings of fact. Rule 52(a) in pertinent part states: 'Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.'
16 As one commentator stated:
17 Opinion of the district court, Rochez v. Rhoades at 390 F.Supp. 470 (W.D.Pa.1974)
18 366 F.Supp. 156 (S.D.N.Y.1973); rev'd in part, 506 F.2d 1080 (2d Cir. 1974)
19 '(W)hen reference is made to 'control,' the term is intended to include actual control as well as what has been called legally enforceable control. . . . It was thought undesirable to attempt to define the term. It would be difficult if not impossible to enumerate or to anticipate the many ways in which actual control may be exerted.' H.R.Rep.No.1383, 73d Cong., 2d Sess. 26 (1934)