Source: http://supreme.nolo.com/us/443/173/case.html
Timestamp: 2020-03-29 10:04:26
Document Index: 61761334

Matched Legal Cases: ['§ 27', '§ 27', '§ 28', '§ 1391', '§ 27', '§ 28', '§ 27', '§ 28', '§ 27', '§ 1391', '§ 27']

LEROY V. GREAT WESTERN UNITED CORP., 443 U. S. 173 - Volume 443 - 1979 - Full Text - US Supreme Court Center - USSC Cases - Nolo
US Supreme Court Center > Volume 443 > LEROY V. GREAT WESTERN UNITED CORP., 443 U. S. 173 (1979) > Full Text
After publicly announcing its intent to make a tender offer to purchase shares of stock of a company having substantial assets in Idaho, appellee, a Texas-based corporation which is also engaged in business in New York and Maryland, filed the informational schedule with the Securities and Exchange Commission required by the Securities Exchange Act of 1934 (1934 Act), as amended by the Williams Act, and also filed documents in Idaho in an attempt to satisfy that State's takeover statute. When Idaho officials objected to the filing and delayed the effective date of the tender offer, appellee brought an action in the Federal District Court for the Northern District of Texas against the officials responsible for enforcing Idaho's takeover law, seeking a declaration that the state law was invalid insofar as it purported to apply to interstate tender offers to purchase securities traded on a national exchange. The District Court held that personal jurisdiction over the Idaho defendants had been obtained under the Texas long-arm statute, and that venue could be sustained under the special venue provision in § 27 of the 1934 Act giving federal district courts exclusive jurisdiction of actions brought to enforce "any liability or duty created" by the Act. The court then went on to hold that the Idaho takeover statute was preempted by the Williams Act and placed an impermissible burden on interstate commerce. The Court of Appeals affirmed, holding, inter alia, that venue was authorized by § 27 of the 1934 Act, because Idaho's enforcement attempt, by conflicting with the Williams Act, constituted a violation of a "duty" imposed by § 28(a) of the 1934 Act (which provides that nothing in the Act shall affect a state securities regulatory agency's jurisdiction over any security or person insofar as it does not conflict with the Act), and that venue was also proper under 28 U.S.C. § 1391(b) (which permits actions not founded solely on diversity of citizenship to be brought in the district where all defendants reside or "in which the claim arose") because the allegedly invalid restraint against appellee occurred in the Northern District of Texas, and that was accordingly the district "in which the claim arose."
STEVENS, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, BLACKMUN, POWELL, and REHNQUIST, JJ., joined. WHITE, J., filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 443 U. S. 187.
Sunshine Mining and Metal Co. (Sunshine) is a "target company" within the meaning of the Idaho Corporate Takeover Act -- statute designed to regulate takeovers of corporations that have certain connections to the State. [Footnote 3] Sunshine's principal business is a silver mining operation in the Coeur
On March 28, 1977, Great Western filed this action in the United States District Court for the Northern District of Texas, naming as defendants the state officials responsible for enforcing the Idaho, New York, and Maryland takeover laws. The complaint prayed for a declaration that the state laws were invalid insofar as they purported to apply to interstate cash tender offers to purchase securities traded on the national exchange. App 1-36. The claims against the Maryland and New York defendants were dismissed because the former did not attempt to enforce their statute against Great Western and the latter expressly stated that they would not assert jurisdiction over the proposed tender offer. 439 F.Supp. at 428-429. The two Idaho defendants -- McEldowney, the Director of Finance, and Wayne Kidwell, then Attorney General of the State [Footnote 5] -- appeared specially to contest jurisdiction and
jurisdiction on the same four grounds relied upon by the District Court. See n 6, supra. It then advanced alternative theories in support of both its determination that the District Court had personal jurisdiction over the defendants and its conclusion that venue lay in the Northern District of Texas. First, it noted that the Texas long-arm statute authorized the assertion of personal jurisdiction over nonresidents to the fullest extent allowable under the Due Process Clause of the Fourteenth Amendment. It then held that an Idaho official who seeks to enforce an Idaho statute to prevent a Texas-based corporation from proceeding with a national tender offer has sufficient contacts with Texas to support jurisdiction. Second, it held that jurisdiction was available under § 27 of the 1934 Act, [Footnote 9] which gives the federal district courts exclusive jurisdiction over suits brought "to enforce any. . . duty created" by the Act. It based this holding on the theory that Idaho's enforcement attempts, by conflicting with the Williams Act, constituted a violation of a "duty" imposed by § 28(a) of the 1934 Act. [Footnote 10] It relied on the same reasoning to support
Such a justification exists in this case. Although for the reasons discussed in 443 U. S. infra, it is clear that § 27 of the 1934 Act does not provide a basis for personal jurisdiction, the
to possible actions brought by the Government, the Securities and Exchange Commission, or private litigants. [Footnote 12] Section 28(a) is not such a provision. There is nothing in its text or its legislative history to suggest that it imposes any duty on the States or that indicates who might enforce any such duty. The section was plainly intended to protect, rather than to limit, state authority. [Footnote 13] Because § 28(a) imposed no duty on appellants, the argument that § 27 establishes venue in the District Court is unsupportable. [Footnote 14]
We therefore reject the Court of Appeals' reasoning that the "claim arose" in Dallas because that is where Great Western proposed to initiate its tender offer, and that is where Idaho's statute had its impact on Great Western. Aside from the fact that these "contacts" between the "claim" and the Texas District fall far short of those connecting the claim and the Idaho District, we note that this reasoning would subject the Idaho officials to suit in almost every district in the country. For every prospective offeree -- be he in New York, Los Angeles, Miami, or elsewhere, rather than in Dallas -- could argue with equal force (or Great Western could argue on his behalf) that he had intended to direct his local broker to accept the tender, and was frustrated in that desire by the Idaho law. [Footnote 22] As we noted above, however, such a reading of § 1391(b) is inconsistent with the underlying purpose of the provision, for it would leave the venue decision entirely in the hands of plaintiffs, rather than making it "primarily a matter
Ritter v. Zuspan, 451 F.Supp. 926, 928 (ED Mich.1978). Given the underlying policy of § 27 to confer venue in a wide variety of districts in order to ease the task of enforcement of federal securities law, it would be anomalous indeed if venue were not available in the Northern
That the duty alleged to have been violated in this case would not exist in the absence of the Supremacy Clause does not make the duty any less a creation of the Williams Act. "[A]ll federal actions to enjoin a state enactment rest ultimately on the Supremacy Clause," Swift & Co. v. Wickham, 382 U. S. 111, 382 U. S. 126 (1965), whether the substantive federal
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