Task: sc_issue_9

What follows is an opinion from the Supreme Court of the United States. Your task is to determine the issue of the Court's decision. Determine the issue of the case on the basis of the Court's own statements as to what the case is about. Focus on the subject matter of the controversy rather than its legal basis.

Mr. Justice Douglas
delivered the opinion of the Court.
These cases are here on petitions for certiorari and raise one identical question.
These are suits brought in the District Court for the Southern District of New York. Lum’s, one of the respondents in the Lehman Bros. petition, is a Florida corporation with headquarters in Miami. Each W the three petitions, which we consolidated for oral argument, involves shareholders’ derivative suits naming Lum’s and others as defendants; and the basis of federal jurisdiction is diversity of citizenship, 28 "U. S. C. § 1332 (a)(1), about which there is no dispute.
The complaints allege that Chasen, president of Lum’s, called Simon, a representative of Lehman Bros., and told him about disappointing projections of Lum’s earnings, estimates that were confidential, not public. Simon is said to have told an emplayeé of IDS about them. On the next day, it is alleged that the IDS defendants sold 83,000 shares of Lum’s on the New York Stock Exchange for about $17.50 per share. Later that day the exchanges halted trading in Lum’s stock and on the next trading day it opened at $14 per share, the public being told that the. projected earnings Would be “substantially lower” than anticipated. The theory of the complaints was that Chasen was a fiduciary but used the inside information along with others for profit áhd that Chasen. and his group áre liable to Lum’s for their unlawful profits.
Lehman and Simon defended on the ground that the IDS sale was not made through them and that neither one benefited from the sales. Nonetheless plaintiffs claimed that Chasen and the other defendants were liable under Diamond v. Oreamuno, 24 N. Y. 2d 494, 248 N. E. 2d 910 (1969). Diamond proceeds on the theory that “inside” information Of an officer or director of a corporation is an asset of the corporation which had been acquired by th. insiders as fiduciaries, of the company and misappropl ted in violation of trust.
The District Court, looked to the choice-of-law rules of the State of New York, Klaxon Co. v. Stentor Electric Mfg. Co., 313 U. S. 487 (1941) , and held that the law of the State of incorporation'.governs the existence and extent of corporate fiduciary, obligations, as well, as the'liability for violation of them.- - Diamond. did, indeed, so indicate, 24 N. Y. 2d, at 503-504, 248 N. E. 2d, at 915.
-ThéFDistrict Court in examining'Florida law concluded' that, although the highest court in Florida;, has -.not considered the question, several district courts off appeal indicate that a complaint which fails to allege both wrongful gets and damage to the corporation must be dismissed. The District Court went on to consider whether If Florida followed the Diamond- rationale, defendants would be liable. It concluded that the present complaints go beyoijid Diamond, as Chasen, the only fiduciary of Lum’s involved in the suits, never sold any of his holdings on the basis of inside information. The other defendants were not fiduciaries of Lum’s. The’ District Court accordingly dismissed the complaints, 335 F. Supp. 329 (1971).
The Court of Appeals by a divided vote reversed the District Court. 478 F. 2d 817 (CA2 1973). While the Court of Appeals held that Florida law was controlling, it found none that was decisive. So it then turned to the law of other jurisdictions, particularly that of New York, to see if Florida “would probably” interpret Diamond to make it applicable here. The Court of Appeals concluded that the defendants had engaged with Chasen “to misuse corporate property,” id., at 822, and that the theory. of Diamond reaches that situation, “viewing ,the case as the Florida court would probably view it.” Ibid. There were emanations from other Florida decisions that made the majority oh the Court of Appeals feel that' Florida would follow that reading of Diamond. Such a construction of Diamond, the Court of Appeals said, would have “the prophylactic effect of providing a disincentive to insider trading.” Id., at 823. And so it would. Yet under the regime of Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), a State can make just the opposite her law, providing there is no overriding federal rule which pre-empts state law by reason of federal curbs on trading in the stream of commerce.
The, dissenter on the Court of Appeals. urged that that court certify the state-law question to the Florida Supreme Court as is provided in Fla. Stat. Ann. § 25.031 and its Appellate Rule 4.61. 478 F. 2d, at 828. That path-is open to this Court and to any court of appeals of the United States. We have, indeed, used it before as have courts of appeals.
Moreover when state law does not make the certification procedure available, a federal court not infrequently will stay, its hand, remitting the parties to the state court to resolve the controlling state law on which the federal rule may turn. Kaiser Steel Corp. v. W. S. Ranch Co., 391 U. S. 593 (1968). Numerous applications of that practice are reviewed in Meredith v. Winter Haven, 320 U. S. 228 (1943), which teaches that the mere difficulty in- ascertaining local law is no excuse for remitting the parties to a state tribunal for the start of another lawsuit. We do not suggest that where there is doubt as to local law and where the certification procedure is available, resort to it is obligatory. It does, of course, in the long run save timé, energy, and resources and helps build a cooperative judicial federalism.' Its use in a given case rests in the sound discretion of the federal court.
Here resort to it would seem particularly appropriate in view of the novelty of the question and the great unsettlement, of Florida law, Florida being a distant State. When federal judges in New York attempt to predict uncertain Florida law, they act, 3s we have referred to ourselves on this Court in matters of state law, as “oufc siders” lacking the common exposure to local law .which comes from sitting in the jurisdiction.
“Reading the Texas statutes and the Texas decisions as outsiders without special competence in Téxas law, wé would have little confidence in our independent judgment regarding the application of that law to the present situation. The lower court did deny, that the Texas statutes sustained the Commission’s assertion of power. And this represents the view of an able and experienced circuit judge of the circuit which includes Texas and of two capable district judges trained in Texas law.” Railroad Comm’n v. Pullman Co., 312 U. S. 496, 499 (1941).
See also MacGregor v. State Mutual Life Assur. Co.; 315 U. S. 280, 281 (1942); Reitz v. Mealey, 314 U. S..33, 39 (1941).
The judgment of the Court of Appeals is vacated arid the cases are remanded so that that court may reconsider whether the controlling issue of Florida law should be certified to the Florida Supreme Court pursuant to Rule 4.61 of the Florida Appellate Rules.
So ordered.
Investors Diversified Services, Inc., Investor^ Variable Payment Fund, Inc., and IDS New Dimensions Fund, Inc., were defendants in the Schein case. Of those, only. Investors Diversified Services, Inc., is a defendant in the other derivative action brought by Gregorio. The dismissal of the third derivative action (GiLdenhorn) was not pursued on appeal.
One Sit and one Jundt, defendants alleged to be employees of IDS, Inc., were dismissed from the case by the District Court for lack of personal jurisdiction. There was no appeal from that' dismissal.
E. g., Palma v. Zerbey, 189 So. 2d 510, 511 (Fla. App. 1966).
The District Court also held that whether Chasen would be liable not for profiting himself from the inside information but for revealing it to' others could not be reached as Chasen, a nonresident of New York, had not been properly served.
See, e. g., Quinn v. Phipps, 93 Fla. 805, 113 So. 419 (1927).
Aldrich v. Aldrich, 375 U. S. 249 (1963); Dresner v. City of Tallahassee, 375 U. S. 136 (1963).
Trail Builders Supply Co. v. Reagan, 430 F. 2d 828 (CA5 1970); Gaston v. Pittman, 413 F. 2d 1031 (CA5 1969); Martinez v. Rodriquez, 410 F. 2d 729 (CA5 1969); Moragne v. States Marine Lines, Inc., 409 F. 2d 32 (CA5 1969), rev’d on other grounds, 398 U. S. 375 (1970); Hopkins v. Lockheed Aircraft Corp., 394 F. 2d 656 (CA5 1968); Life Ins. Co. of Virginia v. Shifflet, 380 F. 2d, 375 (CA5 1967); Green v. American Tobacco Co., 325 F. 2d 673 (CA5 1963); Sun Insurance Office v. Clay, 319 F. 2d 505 (CA5 1963) The Fifth Circúit’s willingness to certify is in part a product of frequent state court repudiation of its interpretations of state law. See the cases summarized in United Services Life Ins. Co. v. Delaney, 328 F. 2d 483, 486-487 (CA5 1964) (Brown, C. J., concurring).
Certification procedures are available in several States, including Colorado, Colo. Appellate Rule 21.1 (1970); Hawaii, Haw. Rev. Stat. §602-06 (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 (Supp. 1973); Massachusetts, Mass. Sup. Jud. Ct. Rule 3:21 (1973); Montana, Mont. Sup. Ct. Rule 1 (1973); New Hampshire, N. H. Rev. Stat. Ann. §490 App. R. 20 (Supp. 1973); and Washington, Wash. Rev. Code Ann. §§ 2.60.010-2.60.030 (Supp. 1972).
See Wright, The Federal Courts and the Natiire and Quality of State Law, 13 Wayne L. Rev. 317 (1967); Kurland, Toward a Co-Operative Judicial Federalism: The Federal Court Abstention Doctrine, 24 F. R. D. 481 (1960); Note, Inter-Jurisdictional Certification: Beyond Abstention Toward Cooperative Judicial Federalism, 111 U. Pa. L. Rev. 344 (1963); Note, Florida’s Interjurisdietional Certification:- A Reexamination To Promote Expanded National Use, 22 U. Fla. L. Rev. 21 (1969).

Question: What is the issue of the decision?
年. involuntary confession
数. habeas corpus
日. plea bargaining: the constitutionality of and/or the circumstances of its exercise
的. retroactivity (of newly announced or newly enacted constitutional or statutory rights)
月. search and seizure (other than as pertains to vehicles or Crime Control Act)
用. search and seizure, vehicles
成. search and seizure, Crime Control Act
名. contempt of court or congress
时. self-incrimination (other than as pertains to Miranda or immunity from prosecution)
件. Miranda warnings
一. self-incrimination, immunity from prosecution
请. right to counsel (cf. indigents appointment of counsel or inadequate representation)
中. cruel and unusual punishment, death penalty (cf. extra legal jury influence, death penalty)
据. cruel and unusual punishment, non-death penalty (cf. liability, civil rights acts)
码. line-up
不. discovery and inspection (in the context of criminal litigation only, otherwise Freedom of Information Act and related federal or state statutes or regulations)
新. double jeopardy
文. ex post facto (state)
下. extra-legal jury influences: miscellaneous
分. extra-legal jury influences: prejudicial statements or evidence
入. extra-legal jury influences: contact with jurors outside courtroom
人. extra-legal jury influences: jury instructions (not necessarily in criminal cases)
功. extra-legal jury influences: voir dire (not necessarily a criminal case)
上. extra-legal jury influences: prison garb or appearance
户. extra-legal jury influences: jurors and death penalty (cf. cruel and unusual punishment)
为. extra-legal jury influences: pretrial publicity
间. confrontation (right to confront accuser, call and cross-examine witnesses)
号. subconstitutional fair procedure: confession of error
取. subconstitutional fair procedure: conspiracy (cf. Federal Rules of Criminal Procedure: conspiracy)
回. subconstitutional fair procedure: entrapment
在. subconstitutional fair procedure: exhaustion of remedies
页. subconstitutional fair procedure: fugitive from justice
字. subconstitutional fair procedure: presentation, admissibility, or sufficiency of evidence (not necessarily a criminal case)
有. subconstitutional fair procedure: stay of execution
个. subconstitutional fair procedure: timeliness
作. subconstitutional fair procedure: miscellaneous
示. Federal Rules of Criminal Procedure
出. statutory construction of criminal laws: assault
是. statutory construction of criminal laws: bank robbery
失. statutory construction of criminal laws: conspiracy (cf. subconstitutional fair procedure: conspiracy)
表. statutory construction of criminal laws: escape from custody
除. statutory construction of criminal laws: false statements (cf. statutory construction of criminal laws: perjury)
加. statutory construction of criminal laws: financial (other than in fraud or internal revenue)
败. statutory construction of criminal laws: firearms
生. statutory construction of criminal laws: fraud
信. statutory construction of criminal laws: gambling
类. statutory construction of criminal laws: Hobbs Act; i.e., 18 USC 1951
置. statutory construction of criminal laws: immigration (cf. immigration and naturalization)
理. statutory construction of criminal laws: internal revenue (cf. Federal Taxation)
本. statutory construction of criminal laws: Mann Act and related statutes
息. statutory construction of criminal laws: narcotics includes regulation and prohibition of alcohol
行. statutory construction of criminal laws: obstruction of justice
定. statutory construction of criminal laws: perjury (other than as pertains to statutory construction of criminal laws: false statements)
改. statutory construction of criminal laws: Travel Act, 18 USC 1952
市. statutory construction of criminal laws: war crimes
期. statutory construction of criminal laws: sentencing guidelines
以. statutory construction of criminal laws: miscellaneous
修. jury trial (right to, as distinct from extra-legal jury influences)
元. speedy trial
方. miscellaneous criminal procedure (cf. due process, prisoners' rights, comity: criminal procedure)
录. voting
区. Voting Rights Act of 1965, plus amendments
单. ballot access (of candidates and political parties)
位. desegregation (other than as pertains to school desegregation, employment discrimination, and affirmative action)
型. desegregation, schools
法. employment discrimination: on basis of race, age, religion, illegitimacy, national origin, or working conditions.
县. affirmative action
存. slavery or indenture
品. sit-in demonstrations (protests against racial discrimination in places of public accommodation)
前. reapportionment: other than plans governed by the Voting Rights Act
称. debtors' rights
注. deportation (cf. immigration and naturalization)
值. employability of aliens (cf. immigration and naturalization)
输. sex discrimination (excluding sex discrimination in employment)
建. sex discrimination in employment (cf. sex discrimination)
能. Indians (other than pertains to state jurisdiction over)
大. Indians, state jurisdiction over
例. juveniles (cf. rights of illegitimates)
度. poverty law, constitutional
始. poverty law, statutory: welfare benefits, typically under some Social Security Act provision.
到. illegitimates, rights of (cf. juveniles): typically inheritance and survivor's benefits, and paternity suits
面. handicapped, rights of: under Rehabilitation, Americans with Disabilities Act, and related statutes
载. residency requirements: durational, plus discrimination against nonresidents
点. military: draftee, or person subject to induction
密. military: active duty
动. military: veteran
果. immigration and naturalization: permanent residence
图. immigration and naturalization: citizenship
提. immigration and naturalization: loss of citizenship, denaturalization
发. immigration and naturalization: access to public education
式. immigration and naturalization: welfare benefits
国. immigration and naturalization: miscellaneous
登. indigents: appointment of counsel (cf. right to counsel)
错. indigents: inadequate representation by counsel (cf. right to counsel)
者. indigents: payment of fine
认. indigents: costs or filing fees
误. indigents: U.S. Supreme Court docketing fee
接. indigents: transcript
关. indigents: assistance of psychiatrist
重. indigents: miscellaneous
第. liability, civil rights acts (cf. liability, governmental and liability, nongovernmental; cruel and unusual punishment, non-death penalty)
地. miscellaneous civil rights (cf. comity: civil rights)
如. First Amendment, miscellaneous (cf. comity: First Amendment)
设. commercial speech, excluding attorneys
目. libel, defamation: defamation of public officials and public and private persons
开. libel, privacy: true and false light invasions of privacy
事. legislative investigations: concerning internal security only
可. federal or state internal security legislation: Smith, Internal Security, and related federal statutes
要. loyalty oath or non-Communist affidavit (other than bar applicants, government employees, political party, or teacher)
代. loyalty oath: bar applicants (cf. admission to bar, state or federal or U.S. Supreme Court)
小. loyalty oath: government employees
选. loyalty oath: political party
标. loyalty oath: teachers
明. security risks: denial of benefits or dismissal of employees for reasons other than failure to meet loyalty oath requirements
编. conscientious objectors (cf. military draftee or military active duty) to military service
求. campaign spending (cf. governmental corruption):
列. protest demonstrations (other than as pertains to sit-in demonstrations): demonstrations and other forms of protest based on First Amendment guarantees
网. free exercise of religion
万. establishment of religion (other than as pertains to parochiaid:)
最. parochiaid: government aid to religious schools, or religious requirements in public schools
器. obscenity, state (cf. comity: privacy): including the regulation of sexually explicit material under the 21st Amendment
所. obscenity, federal
内. due process: miscellaneous (cf. loyalty oath), the residual code
体. due process: hearing or notice (other than as pertains to government employees or prisoners' rights)
通. due process: hearing, government employees
务. due process: prisoners' rights and defendants' rights
此. due process: impartial decision maker
商. due process: jurisdiction (jurisdiction over non-resident litigants)
序. due process: takings clause, or other non-constitutional governmental taking of property
化. privacy (cf. libel, comity: privacy)
消. abortion: including contraceptives
否. right to die
保. Freedom of Information Act and related federal or state statutes or regulations
使. attorneys' and governmental employees' or officials' fees or compensation or licenses
次. commercial speech, attorneys (cf. commercial speech)
机. admission to a state or federal bar, disbarment, and attorney discipline (cf. loyalty oath: bar applicants)
对. admission to, or disbarment from, Bar of the U.S. Supreme Court
量. arbitration (in the context of labor-management or employer-employee relations) (cf. arbitration)
查. union antitrust: legality of anticompetitive union activity
部. union or closed shop: includes agency shop litigation
性. Fair Labor Standards Act
和. Occupational Safety and Health Act
更. union-union member dispute (except as pertains to union or closed shop)
后. labor-management disputes: bargaining
证. labor-management disputes: employee discharge
题. labor-management disputes: distribution of union literature
确. labor-management disputes: representative election
格. labor-management disputes: antistrike injunction
了. labor-management disputes: jurisdictional dispute
于. labor-management disputes: right to organize
金. labor-management disputes: picketing
公. labor-management disputes: secondary activity
午. labor-management disputes: no-strike clause
円. labor-management disputes: union representatives
片. labor-management disputes: union trust funds (cf. ERISA)
空. labor-management disputes: working conditions
态. labor-management disputes: miscellaneous dispute
管. miscellaneous union
主. antitrust (except in the context of mergers and union antitrust)
天. mergers
自. bankruptcy (except in the context of priority of federal fiscal claims)
我. sufficiency of evidence: typically in the context of a jury's determination of compensation for injury or death
全. election of remedies: legal remedies available to injured persons or things
今. liability, governmental: tort or contract actions by or against government or governmental officials other than defense of criminal actions brought under a civil rights action.
来. liability, other than as in sufficiency of evidence, election of remedies, punitive damages
正. liability, punitive damages
说. Employee Retirement Income Security Act (cf. union trust funds)
意. state or local government tax
送. state and territorial land claims
容. state or local government regulation, especially of business (cf. federal pre-emption of state court jurisdiction, federal pre-emption of state legislation or regulation)
已. federal or state regulation of securities
结. natural resources - environmental protection (cf. national supremacy: natural resources, national supremacy: pollution)
会. corruption, governmental or governmental regulation of other than as in campaign spending
段. zoning: constitutionality of such ordinances, or restrictions on owners' or lessors' use of real property
计. arbitration (other than as pertains to labor-management or employer-employee relations (cf. union arbitration)
源. federal or state consumer protection: typically under the Truth in Lending; Food, Drug and Cosmetic; and Consumer Protection Credit Acts
色. patents and copyrights: patent
時. patents and copyrights: copyright
交. patents and copyrights: trademark
系. patents and copyrights: patentability of computer processes
过. federal or state regulation of transportation regulation: railroad
电. federal and some few state regulations of transportation regulation: boat
询. federal and some few state regulation of transportation regulation:truck, or motor carrier
符. federal and some few state regulation of transportation regulation: pipeline (cf. federal public utilities regulation: gas pipeline)
未. federal and some few state regulation of transportation regulation: airline
程. federal and some few state regulation of public utilities regulation: electric power
常. federal and some few state regulation of public utilities regulation: nuclear power
条. federal and some few state regulation of public utilities regulation: oil producer
当. federal and some few state regulation of public utilities regulation: gas producer
情. federal and some few state regulation of public utilities regulation: gas pipeline (cf. federal transportation regulation: pipeline)
口. federal and some few state regulation of public utilities regulation: radio and television (cf. cable television)
合. federal and some few state regulation of public utilities regulation: cable television (cf. radio and television)
车. federal and some few state regulations of public utilities regulation: telephone or telegraph company
实. miscellaneous economic regulation
组. comity: civil rights
版. comity: criminal procedure
周. comity: First Amendment
址. comity: habeas corpus
记. comity: military
二. comity: obscenity
同. comity: privacy
业. comity: miscellaneous
权. comity primarily removal cases, civil procedure (cf. comity, criminal and First Amendment); deference to foreign judicial tribunals
其. assessment of costs or damages: as part of a court order
进. Federal Rules of Civil Procedure including Supreme Court Rules, application of the Federal Rules of Evidence, Federal Rules of Appellate Procedure in civil litigation, Circuit Court Rules, and state rules and admiralty rules
试. judicial review of administrative agency's or administrative official's actions and procedures
验. mootness (cf. standing to sue: live dispute)
料. venue
传. no merits: writ improvidently granted
述. no merits: dismissed or affirmed for want of a substantial or properly presented federal question, or a nonsuit
集. no merits: dismissed or affirmed for want of jurisdiction (cf. judicial administration: Supreme Court jurisdiction or authority on appeal from federal district courts or courts of appeals)
多. no merits: adequate non-federal grounds for decision
无. no merits: remand to determine basis of state or federal court decision (cf. judicial administration: state law)
员. no merits: miscellaneous
报. standing to sue: adversary parties
他. standing to sue: direct injury
無. standing to sue: legal injury
服. standing to sue: personal injury
线. standing to sue: justiciable question
这. standing to sue: live dispute
制. standing to sue: parens patriae standing
将. standing to sue: statutory standing
处. standing to sue: private or implied cause of action
高. standing to sue: taxpayer's suit
子. standing to sue: miscellaneous
道. judicial administration: jurisdiction or authority of federal district courts or territorial courts
章. judicial administration: jurisdiction or authority of federal courts of appeals
手. judicial administration: Supreme Court jurisdiction or authority on appeal or writ of error, from federal district courts or courts of appeals (cf. 753)
库. judicial administration: Supreme Court jurisdiction or authority on appeal or writ of error, from highest state court
三. judicial administration: jurisdiction or authority of the Court of Claims
从. judicial administration: Supreme Court's original jurisdiction
支. judicial administration: review of non-final order
家. judicial administration: change in state law (cf. no merits: remand to determine basis of state court decision)
长. judicial administration: federal question (cf. no merits: dismissed for want of a substantial or properly presented federal question)
付. judicial administration: ancillary or pendent jurisdiction
秒. judicial administration: extraordinary relief (e.g., mandamus, injunction)
路. judicial administration: certification (cf. objection to reason for denial of certiorari or appeal)
完. judicial administration: resolution of circuit conflict, or conflict between or among other courts
象. judicial administration: objection to reason for denial of certiorari or appeal
则. judicial administration: collateral estoppel or res judicata
现. judicial administration: interpleader
京. judicial administration: untimely filing
转. judicial administration: Act of State doctrine
辑. judicial administration: miscellaneous
限. Supreme Court's certiorari, writ of error, or appeals jurisdiction
力. miscellaneous judicial power, especially diversity jurisdiction
学. federal-state ownership dispute (cf. Submerged Lands Act)
外. federal pre-emption of state court jurisdiction
调. federal pre-emption of state legislation or regulation. cf. state regulation of business. rarely involves union activity. Does not involve constitutional interpretation unless the Court says it does.
项. Submerged Lands Act (cf. federal-state ownership dispute)
北. national supremacy: commodities
工. national supremacy: intergovernmental tax immunity
笑. national supremacy: marital and family relationships and property, including obligation of child support
监. national supremacy: natural resources (cf. natural resources - environmental protection)
任. national supremacy: pollution, air or water (cf. natural resources - environmental protection)
相. national supremacy: public utilities (cf. federal public utilities regulation)
微. national supremacy: state tax (cf. state tax)
册. national supremacy: miscellaneous
联. miscellaneous federalism
平. boundary dispute between states
增. non-real property dispute between states
听. miscellaneous interstate relations conflict
解. incorporation of foreign territories
等. federal taxation, typically under provisions of the Internal Revenue Code
得. federal taxation of gifts, personal, business, or professional expenses
收. priority of federal fiscal claims: over those of the states or private entities
安. miscellaneous federal taxation (cf. national supremacy: state tax)
价. legislative veto
藏. executive authority vis-a-vis congress or the states
命. miscellaneous
应. real property
看. personal property
索. contracts
资. evidence
产. civil procedure
串. torts
布. wills and trusts
原. commercial transactions
Answer:

Answer: 权