Legal Document

430 U.S. 1 97 Supreme Court Reporter 926 51 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 124 Howard PIPER et al., Petitioners,v.CHRIS-CRAFT INDUSTRIES, INC. The FIRST BOSTON CORPORATION, Petitioner, versus CHRIS-CRAFT BANGOR PUNTA CORPORATION Petitioners, Nos. 75-353, 75-354 and 75-355. Argued Oct. 6, 1976. Decided Feb. 23, 1977. Rehearings Denied April 18, See 976, 1668. Syllabus Respondent Chris-Craft Industries was the unsuccessful tender offeror in a contest for control of corporation. During course takeover contest, brought suit damages injunctive relief against management target corporation, its investment adviser, Bangor Punta Corp., successful competitor, alleging, inter alia, violations § 14(e) other provisions Securities Exchange Act 1934, Rule 10b-6 Commission. Section makes unlawful "any fraudulent, deceptive, or manipulative acts practices, connection with any offer . solicitation security holders opposition to favor such ." prohibits issuers whose stock is process distribution from market tampering by purchasing rights until has been completed. After protracted litigation, Appeals ultimately held that had standing sue under claim established. court stated it would not infer silence statute Congress intended deny federal remedy as "means furthering general objective 14(e). On merits found all defendants competitor. then remanded determination amount instructed District enjoin competitor at least five years voting company's shares acquired through violation 10b-6. Held: 1. A offeror, suing capacity bidder, does have 14(e); hence, erred holding Chris-Craft, defeated an implied cause action provision. Pp. 24-42. (a) legislative history shows sole purpose protection investors who are confronted offer. intent on regulating bidders, previously operated covertly, order protect shareholders companies; offerors, class regulated statute, were beneficiaries legislation. 26-37. (b) creation judicial interpretation, urged necessary effectuate Congress' objectives enacting This conclusion confirmed four factors identified Cort Ash, 422 66, 95 2080, 45 26, "relevant" determining whether private implicit expressly providing one: (i) member activities regulate benefit shareholders, " 'one especial (§ 14(e)) enacted .' "; (ii) although nothing manifests there no material showing intention create remedy, pervasive negates provide offerors additional weapons contests control; (iii) consistent underlying imply especially designed corporations, particularly where award (here $36 million Chris-Craft) favors "injured" target; (iv) one appropriately "relegated state law," extent seeks loss opportunity 37-41. 2. In context this case, account asserted since Chris-Craft's complaint price paid influenced violations, but gain company lost virtue those violations. Thus, implicate concerns 10b-6, which aimed maintaining orderly securities influences. 42-46. 3. circumstances presented here awarding relief. case tried exclusively after waived Under these circumstances, Court's either renders injunction granted inappropriate, premised upon impermissible damages. 47-48. 516 Federal Reporter, 2nd 172, reversed. Lloyd N. Cutler, Washington, D. C., petitioners Number David W. Peck, New York City, petitioner 75-354. Paul G. Pennoyer, Jr., 75-353. Arthur L. Liman, respondents each case. Mr. Chief Justice BURGER delivered opinion Court. We certiorari cases, 425 910, 96 1505, 47 760 (1976), consider, among issues, corporation added 3 Williams 1968, 82 Statutes-at-Large 457, 15 Code KF62 78n(e), Commission (SEC) 17 Regulations 240.10b-6 based alleged antifraud individuals constituting 2 * Background factual background complex control, including litigation culminating cases now before us, essential full understanding contending parties' claims. 4 three petitions present questions first impression, arising out "sophisticated hard fought contest" Piper Aircraft Pennsylvania-based manufacturer light aircraft. Piper's consisted principally members family, owned 31% outstanding stock. Industries, Inc., diversified recreational products, attempted secure cash exchange offers common attempt failed, Corporation (Bangor Punta), support obtained September 1969. 1934 alleging achieved result laws Punta, Punta's underwriter, First Boston together successfully repelled attempt. 5 struggle began December 1968. At time, making purchases By January 22, 1969, 203,700 shares, approximately 13% 1,644,790 shares. next day, following preliminary overtures president, Herbert Siegel, publicly announced up 300,000 shares1 $65 per share, $12 above then-current price. Responding promptly bid, met same day banker, Boston, advisers. 24, family decided oppose As part resistance take-over campaign, sent several letters stockholders during 25-27, arguing acceptance 27, letter T. Piper, president company, Board "has carefully studied convinced inadequate best interests shareholders." 6 addition communicating entered into agreement Grumman 29, whereby agreed purchase authorized unissued share. increased thus rendered less vulnerable attack. press release transaction failed "put" option sell back cost, plus interest, required maintain proceeds separate fund free liens. 7 Despite opposition, succeeded acquiring 304,606 time expired February To obtain 17% needed make Although filed registration statement prospectus SEC late did go effect May 15, 8 meantime, made open warned officials purchases, when pendency offer, violated 10b-6.2 Siegel's direction, immediately complied SEC's directive canceled orders 9 While registration, March 1969 terminated negotiations Punta. initially contacted about possibility wake initial January. With picture, 8, their stockholdings securities. also use efforts achieve means issued terms agreement, provision forthcoming involve be valued, judgment "at than $80 share."3 10 awaiting effective date mid-May purchased 120,200 privately negotiated, off-exchange transactions large institutional investors. All threepurchases issuance announcing proposed 10b-13, which, becoming November prohibit rule "in effect, codification existing interpretations 10b-6,"4 invoked Siegel month earlier. officials, aware exemption SEC, provided 10b-6(f). however, took concerning respect open-market transactions. 11 block amounting 7% stock, lead contest. centered competing offers. produce tenders specified minimum number (80,000). Meanwhile, became July 18. materials included financial statements, reviewed representing Bangor's subsidiaries, & Aroostock Railroad (BAR), value $18.4 million. valuation 1965 appraisal bankers sale BAR materialize. statements indicate considering railroad $5 received.5 12 final phase see-saw offers, modified more attractive. revised attracting 112,089 while resulted tendering 110,802 August 4, both total 44.5%, 40.6% remainder 14.9%, remained hands public. 13 completion respective companies renewed stock,6 29,200 mid-August, withdrew competition.7 continued 5, majority interest Piper. tally nine-month battle showed over 50% 42% II 14 Before side moved marketplace courts. Then seven growing Aircraft. Atlantic Initial Suit seeking Southern York. release, offered "gun-jumping" provisions, 77e(c), 135, 230.135 (1976). sought accepting tendered pursuant B 16 Decision Preliminary Injunction 19, Bangor. Judge Charles Tenney denied concluded, first, gun-jumping and, second, inconsistent 18 "Bangor ., effected neither nor broker dealer, obviously place pressures so artificially high security." 303 F.Supp. 191, 198. (Emphasis supplied.)8 19 Tenney, accordingly, concluded irreparable injury likelihood probable success established, still open. 20 "(B)oth expired. Neither party gained position do so." Id., 199. Contract 21 Appeals' 28, 1970 22 appeal, Second Circuit, sitting en banc, affirmed Tenney's denial 426 569 (1970). Waterman, properly allowed continue soliciting 23 "Chris-Craft (at decision) compete equally remaining so. understand allege prior misdeeds determined competition placed real disadvantage." 573. 24 unless fell within established Rule.9 25 Lumbard dissent unwarranted, accepted laws.10 579. 26 further proceedings, Bangor, things, could establish Defendant 25, 1971 27 pending, omission statement. rescission violating 1933 Act. 28 Pollack, unintentionally misleading failure disclose fact received BAR. Accordingly, shareholders; refused grant future ground "propensity natural inclination violate law." 331 1154, 1163 (1971). E Liability 10, 29 remand Appeals, came Pollack. second amended complaint, omission, relief, partial hearing abandoned prayer equitable relief; thereafter treated solely 337 1128, 1136 n. 8. 30 Following trial without jury, Pollack dismissed defendants. exhaustive opinion, he seek F.Supp., 1133, unnecessary decide corporate another. 1134.11 31 merits, communications characterizing "inadequate" misleading. "more rational" view referred price, views quality management. 1135. rejected contention injured agreement. complete description listing application Stock Exchange, coupled major acquisitions learning "put," undermined misled otherwise announcement transaction. Ibid. 32 violative rules, technically violation, false Moreover, show disadvantaged acquire 1137. 33 BAR, scienter causation Act's provisions. Scienter "mere negligent misstatement fact." 1140. causation, specifically distinguished decision Mills Electric Auto-Lite Co., 396 375, 90 616, 593 (1970), presumption 14(a) minority challenging proxy materials. reasoned, directly affected behalf brought: 34 "It particular deemed sufficient set facts misled. aid recover because allegedly third parties." 1139. original.) (Footnote omitted.) 35 Given differences between instant Mills, went hold proof actual required: 36 "There single exchanging shareholder refrained taken his instead damage suit, distinct sustain 10b-5 claim." 37 claim, that, fall Rule, right recovery: 38 "Even granting arithmetically achievement basis concluding absent acquisition blocks, goal control." 1142. 39 Based findings Boston; exonerated firm having "committed, engaged conduct fraud deceit public Piper." 1145. F 16, 1973 40 appealed, review panel wrote separately. However, Judges Gurfein Mansfield, Timbers' dissent, sustained Majority Opinion 41 answered question 14(e), decided.12 "on itself decisional law touched question." 480 341, 358. noted Circuit occasions13 addressed issue might acknowledging represented square respect, interpreted intimate "that reasonable." F.2d, 360. likely common-law tort "interference 'prospective advantage.' 42 "We will extinguish liability principles law, normally attends doing proscribed act." 360-361. 43 acknowledged focus congressional concern shareholders. purpose, concluded: 44 can conceive victim Particularly enforcement rationale (J. I. Case v.) Borak (377 426, 84 1555, 423 (1964),) we believe appropriate (Chris-Craft) should damages." 361. contrast conclusions, constituted actionable 364-365. Pollack's 8; hand, actionable. "unintentionally error." contrary, officers "showed reckless disregard" failing negotiations, conceded shown "intent defraud." 369. likewise culpable certification "amounted almost abdication responsibility (as underwriter) 373. 46 disagreed analysis causation. agreeing won battle,14 relied establishing reliance applicable Chris-Craft. Mills,, held, "we must presume (Bangor's) appealing, loss, attracted takers." 375. "Since (Bangor) eventually only 51% clear critical success. Reliance shown." 48 violations; "presumptively stimulating public." 378. Since amounted "(e)ven arithmetically, apparent (by Punta) 379. 49 directions "the reduction (Chris-Craft's) holdings attributable Punta's) taking reducing 380. Damages awarded jointly severally. addition, discussing abandonment period 50 Finally, Timbers, writing issue, Mansfield request refused. view, employed improper legal standard denying Gurfein's Concurring concurred "generally" court. standing, approach matter "causation standing." 393. approach, control. scienter, negligence" suffice 'recklessness equivalent wilful fraud' (Citation 52 disagreed, He indulge "stimulating effect" embraced Timbers rather (illegal) 53 Gurfein, himself upheld refusal permanent injunction. Applying "abuse discretion" standard, substitute our experienced below sat chancellor equity." 54 Mansfield's Dissenting 55 "results" reached except family's liability. prove resulting infractions. supra, stated: 56 "(Chris-Craft) suffered some loss. do." 401. 57 issues rested policy vigorous 396. defraud shown. formulated test scienter: 58 "In short, requirement if officer (1) knew them, (2) refused, being put notice possible disclosure, apprise reasonably ascertained disclosed them extraordinary effort." 398. 59 actions complained satisfied standard. 60 Like declined actually deceptively attractive; achieves laws, liable competitor.15 G Relief 1974 61 Pursuant remand, evidence mandate "hypothetical figures," measured comparing subsequent achieving 384 507, 512 (1974). Employing method, expert testimony fair $48 517. ascertaining 5% $2.40 id., 523, 697,495 $1,673,988. prejudgment injunction, barring illegally years. 526. H 11, 1975 62 reversed calculated fixed difference what sold earliest point Application formula produced $36.98 share $25,793,365. 190 (1975). recompute award. 191. new computation $600,000 $10 63 It review. III 64 turn examination Act, adopted 1968 response takeovers.16 Prior 1960's, attempts typically involved solicitations, 78n, securities, subject requirements 77e. proliferation publicized requests intensive campaigns conducted removed substantial reach disclosure laws. generally S.Rep.No.550, 90th Cong., 1st Sess., 2-4 (1967) (hereinafter Senate Report); H.R.Rep.No.1711, (1968) House U.S.Code Cong. Admin.News Page 2811. 65 gap regulation, Senator Harrison introduced bill October advance requirements. original proposal, S. 2732, evolved two positions expressed interested parties industry Exchange. 113 Cong.Rec. 854 (remarks Sen. Williams). subsequently enacted, legislation requires bidders file indicating, "background identity" source funds consideration used offeror's plans corporation's business structure. 78m(d)(1). 66 requirements, provides benefits elect First, accept given withdraw days commencement 78n(d)(5). Second, requested tendered, pro rata 78n(d)(6).17 provision, according Williams, reduce deposit hastily bidder first-come, first-served basis. 856 (1967). if, increased, receive consideration, even they increase announced. 78n(d)(7). Bromberg, Law: Fraud 6.3(551), 120.2 67 Besides requiring specific contains broad prohibition, claim. provides: 68 shall person untrue omit made, misleading, engage invitation tenders, request, invitation." 69 directed range persons, opposing influence outcome Report 11. 70 threshold frustrated bidder's Without reading none need reached. IV 71 Our begins, course, itself. like 10(b), whatever action, explicitly sections Acts. E. g., §§ 12, 77k, 77l, 77o ; 9, 78i, 78p, 78r, 78t. nonetheless though relevant silent remedies. Borak, 377 (1964) 14(a)); Superintendent insurance Bankers Life Cas. 404 92 165, 169, 128 (1971) 10(b)). 72 reasoning purposes enforcement, remedies may protected statute. For example, recognizing complaining solicitation, shareholder's right: 73 "While 14(a)) reference chief 'the investors,' certainly implies availability result." U.S., 432, S.Ct., 1560. supplied.) 74 Indeed, practical limitations capabilities, "(p)rivate supplement action." added.) Similarly, Blue Chip Stamps Manor Drug Stores, 421 723, 730, 1917, 1922, 539 (1975), reaffirming alluded language necessity supplemental defeated. Rondeau Mosinee Paper 49, 62, 2069, 2078, 75 Against consider entirely remedies, permits read offerors. resolve discern statutory prohibition Once identify determine interpretation goals. 76 divining is, often observed, step cautiously. Department Air Force Rose, 352, 388-389, 1592, 1611-1612, (1976) (Blackmun, J., dissenting); Public Utilities Comm'n, 345 295, 319, 706, 719, L.Ed. 1020 (1953) (Jackson, concurring); Scripps-Howard Radio FCC, 316 875, 880, 86 1229 (1942). sides much explain meaning absence express Frankfurter reminded us: wary interpolating notions interstices provisions." 880. caveat, 77 introducing floor, sponsor, 78 "This close significant investor pertinent information persons negotiated securities." 79 theme emphasized eight months later measure passed Senate: 80 "(The laws) millions American offering trading These worked well adequate base intelligent decisions. 81 are, areas law. One area direct blocks companies. "S. 510 areas." 24664. 83 finally styled provision: "A equity ownership 1934." 6.3(121), 116.2. Confirming fill "a statutes," Manuel Cohen, Chairman testified Subcommittee Securities: 85 "(T)he investor, decision, examine assess Hearings 15. suggestion tend entrenched warding off potentially beneficial bids, Cohen testified: 87 "But principal concerned assisting hurting side. today just pawn form industrial warfare. somewhere shuffle. concern." 178. 88 theretofore operating That graphically illustrated Kuchel, cosponsor legislation, whom described "corporate raiders" "takeover pirates," activities. 89 "Today community proudest businesses shells. They seize unknown assets, trade away sources, split remains themselves. tragedy collusion financially raped knowledge acquisitions. raider act cloak secrecy obtaining him road capture company." 857-858 different stages debate, Kuchel called Senate's attention floor debate passed, contest: 91 "If succeeded, (the company) combination foreign interests, surrounding regard stockholders." 24665. heard Professor Hayes, speaking co-author comprehensive study attempts,18 93 "The protagonists defending protection, opinion. resources arsenal moves countermoves adequately interests. Rather, entreaties needs champion 57. 94 face history, understandably rely Court, contend clearly "pervasive scheme regulation offers." emphasize, even-handedness regulation. anxious, argues, 'to avoid tipping balance indeed committed neutrality evenhandedness Neutrality rather, characteristic toward neutral posture contained section entitled, "Protection Investors." Taken totality, confirm mind "pawn(s) warfare." "plac(ing) equal footing bidder," favoring scarcely suggests confer highly important, participants prompted instance. closer "equal footing" observations strong criticisms unduly inhibit offers.19 originally introduced, proposals embodied 2731 avowedly pro-management defeat bids. Note, Amendments: An Evaluation Early Returns, Vand.L.Rev. 700 Subsequent committee hearings, indicated, bids serve useful function, management, equipped considerable battles tended fending possibly attempts. Several witnesses efficacy question, "scales pretty unbalanced moment, very management." 117. sponsors plainly sensitive contests; get constant focal hearings. articulated singleness advocating neutrality: 98 extreme care scales require investors." 24664 99 "evenhandedness" nonprobative quite disparate proposition money bidder. 100 evenhandedness, emphasizes causes raised written submissions Subcommittee. Specifically, points Professors Israels Painter, (1964). contends, therefore, 101 But places weight passing carried. Even comment cross-examination,20 refer offeror-bidders. Israels' reads: 102 "(A) litigant similar 67. 103 Painter submission "injured 140. discussed available bidders. 104 More afforded 14(a), investors," 1559, relief.21 difficulty identifying "to purpose." 433, involve, implicate, offeror-bidders outside scope evolution legislation.22 105 suggest, demonstrate adopting emphasis "shareholders concerned." From statement, argue sphere concern. colloquy, referring disclosure: 106 "As soon everybody gets excited. There people themselves professional amateur arbitragers, begin play games permits." 107 actors marketplace, disclosure. 108 perceives Commission's plight faced "unfair tactics speak "regulate practices others 184. doing, pleading bidders; imposing duties "make easier evaluate merits." 109 extending statute's coverage solicitations broaden fully contestants shareholders: 110 situation exposed bewildering variety conflicting appeals arguments persuade reject experience fights ample type controlled, most informed, argument rules laws." 855-856 111 Furthermore, passages relies evidencing criticized focused legislation's impact bidder: 112 "Moreover, lays exclusive stress stockholders, left pawns elaborate game perhaps interests." 58, 2075: insure respond find hint respondent heavily relies, contemplated losing contender 114 suggests, injuries status shareholder, offeror. Post, 56-59. suggestion, narrow rival well. Brief 36-40, 43, 46-48, 50-54. clear, therefore shareholder. reason divine. actively retain Consequently, disclosures mandated necessarily adds arguments.23 probably explains why intimated stockholder. Its hardly clearer: 115 impression adversary. And belief harm done contestant pay got 362. 116 items cited post, 57-58, analysis, related "loss premium," presumably enjoyed, relates face, se, "locked-in," "exceptionally block" kind namely company. regard, plausibly assumed dispose 188-189. ordinary comply typical "an issuer, dealer." 77d(1). 117 elements mentioned peculiar "target shareholder" adversaries' laws.24 118 There, one. plaintiff 78, 2087. genesis beneficiary surely "for enacted." class, shareholder-offerees. unregulated purposefully lay "beneficiary" considered protection. 119 Ash inquired indication intent, explicit implicit, one." historical barren noted, loser Fairly read, think documents evince curb expression pervades damages, confers advantage shareholder-offerees, discuss later. Infra, 39. 120 encompass unlike contain limiting language, sale" Instead, broadly fraudulent 121 purchaser-seller mean, desired protect, others, shareholder-offerees due misrepresentations opposed 6.3 (1021), 122.17 (1969). 2; enjoy 10(b) Drugs securities.25 any, conferred elimination restriction giving unrelated regulate. 122 Third, tells us ascertain "consistent plaintiff." 2088. conclude not. mechanism protecting cannot consistently conferring monetary parties, redound class. correct say indirectly true injures exchanged who, bear burden corporation; hence said served curb; 123 Nor agree ever-present threat general. deterrent value, awards never precision. likely, prospect prejudiced massive claims courts 14(e).26 "wins battle" wind costly "war" defense victory. Or worst theory victorious substantive judgment, costs litigation. enhanced contends for, other, drastic closely tailored precise 125 Fourth, (is) traditionally relegated pervasiveness give rise interference prospective commercial advantage. remedial conclude, "it instance relegate offeror-bidder) (that) created 84, 2091, wrongfully "fair opportunity" another 126 What far judicially creating ensure fulfillment operates restraints recognized alone bidder.27 Friendly observed Electronic Specialty International Controls 409 937, 947 (C.A.2 1969), stage post-contest lawsuits, "is given." remote, bearing implementing stock.28 suggested earlier, nature many indirect contestant. 127 V imposed joint occasioned Part IV, lies ChrisCraft, removes potential cases. latter's 129 10b-629 antimanipulative orderliness distributions essence market-tampering prevent stimulative issuer own unnatural unwarranted appearance activity. Aranow Haw. Hawai‘i KFH45 A2 Einhorn, Tender Offers Corporate Control 131 (1973). Here, unchallenged, "right(s) purchase" 10b-6.30 130 questioning finding strenuously argues fails applied (1975).31 foreclose affect distributed Because foreclosed, If entire namely, bought "rights" distribution. would, theory, have, raising rights. foreclose, acquisitions; reflect effects off-market, purchases. readily distinguishable Chip, complainants all; situation, purchaser 132 call definitive resolution do. unusual here. Birnbaum resolving issue. States, amicus brief certiorari, 14(e)'s "manipulative practices" embraces 56; Amicus Curiae 16-17. explored misconception 133 reserve broader factor: framed assert shareholder; because, Assuming correctness technical narrowly artificial framed, come hoodwinked victimized manipulation; chance beyond bounds 134 buttressed relationship 78i. forbidden regulations, stabilize issuer's 78i(a)(6). promulgated authority 9(a)(6),32 bifurcated origin, aggrieved security" violation. 78i(e). irrelevant, 9. 135 Unlike Yet, not, seen, gravamen complaint. recovery premium exacted stock; desires compensation claimed avail VI 136 address certiorari. calculation imposition liability, underwriters actions, interest. 137 Apart ordered compliance directive, remain 1974, entered. 528-529. portion order. 138 here, granted. 1137, 1141-1142, 1146. Accord, 355, inappropriate damages.33 inappropriateness acute ended award.34 139 140 Reversed. 141 BLACKMUN, concurring judgment. 142 N Dec. Immigration Nationality Decisions concur reasons STEVENS' dissenting 53, am willing premise "standing" sense possessed 78n(e). dissenters, this, affirmed. petitioners' caused injury, reversed.1 143 sake clarity, briefly violators. 144 Three isolated Appeals. occurred therein "inadequate Petitioner letter. fact. omitted reveal Boston's fair, pending Corporation. 145 29. sins omission: Grumman, Grumman's return cost obligation keep 146 relating (BAR) papers carried books million, appeared forthcoming. 147 240.10b.6 148 summary reveals premises, Pipers guilty misstatements omissions; omitting facts; facts, negotiations. 149 Standards proving Affiliated Ute Citizens 406 128, 1456, 741 (1972). "material." term recently defined mean significance deliberations reasonable shareholder." TSC Incorporated Northway, 438, 449, 2121, 2133, 757 materiality proved "essential link accomplishment transaction." 385, 622. 150 involving omissions difficult problems reliance, elaborated : 151 "Under primarily disclose, positive prerequisite recovery. withheld important decision. withholding requisite element 153-154, 1472. 152 Citizens, abolish failure-to-disclose simply causal selling 153 competitors, enough competitor's certain way. shareholders' reactions demands remuneration. Mills-Affiliated satisfies altered leave me unable disappointed contestant's ultimate 154 injury. releases omissions, presumed January, occurred. further, assume succeed contrary facts. completely successful, insofar invited tendered. strained limit. retained existed committed. complains. 155 rejecting Pipers, apply force role releases. Slightly considerations materials, looked somewhat better was. presumes known truth, way knowing onward. negative elected incumbent appeared. secured program. uncertainties presumption, logically compelled. follows nondisclosure 156 considered. conclusive fact, ante, 45, "(a)t violations."2 uninfluenced, Cf. 64, 157 reasons, Court.3 158 STEVENS, BRENNAN joins, dissenting. 159 holder protect. 160 concentrating proceedings review.1 When occurred, 556,206 attempting constitute ways: impaired,2 Piper.3 holds how flagrant been, serious disagree holding. 161 No seriously implicitly 1968.4 Also invoke nevertheless include implicitly, avoid. persuaded erroneous. my 26. 162 Shareholders ways. misrepresentation. harmed induced surrender unworthy newcomers. persuades harms.5 latter harm,6 163 patterned regulates contests.7 deceived misrepresentation.8 narrower construction.9 least, allow wrongdoer. size few months, deprive 164 disregard invaded defendants' compelled evaluation 423, opinions numerous judges little restatement broadened litigants challenge defective 165 unanimous bring 14(a). Such regarded investors10 impossible enforce effectively.11 applies greater processed expedited schedule.12 166 contests, effectively deter unquestionably action.13 stressed duty alert 167 vitally enforcement. quotation Deckert Independence Shares 311 282, 288, 229, 233, 189: 168 'The power utilize procedures exigencies case.' 433-434, 1560 (emphasis original). 169 lose ignored impunity contestants. Surely incentive mere detect prohibited recognizes method seems exclude seem logical fundamental adversary system selfish guarantee asserted.14 see losses suffered. all, insiders regulate.15 170 inclusion. indicates misconduct outsiders. invader, zealous guardian outsiders contenders 14(e).16 171 lower courts, along 172 appeal memorandum argued "if recent Congressional assure fairness struggles hampered Memorandum 72-1064 (CA2), 12. continues insist (than ) Act," devotes pages intent. expertise field, involvement passage entitle respect. 173 Courts expansive Shortly pointed section's indicated nontendering 940-941, 946 (CA2 1969). Smallwood Pearl Brewing 489 579, 596 (CA5, 1974). commented "should doubts forced seller." Crane Westinghouse Brake 419 787, 798-799 sharply standing. explained: 174 party's sue. purchasers, sellers, exchangers long recognize CCI's anti-fraud calls implication section, willingness permit 14(e)." 1973). (Citations 175 relying decisions, extended K. Porter Nicholson File 482 421, 424-425 (1973), Fifth approval. 596, 20.17 176 Petitioners foreclosing belong "especial class" benefit. convinced, controlling Cort, supra. derivative 431, primary individual corporations. meet majority's test.18 grounds inferring civil sort someone," 79, 2088; governing defendant regard," 82, 2090, goal, accordingly hindered 85, 2091. considered; nowhere factor essential. factor, existence scheme" alternative "articulated plaintiff," 2090. bar viable precedent. II-H, supra; compels 177 argument, besides misreading mistaken desire 178 deeply stockholder discussion 56-57, 5; 62-63, seen integrity process. explaining bill, 179 "I legitimate impeding Every effort regulatory fairly case.19 Experience amply demonstrated transactions, hindrance." 854-855 added). 180 "(This on) able deal markets available." 856. 181 indispensable Individual lack litigate effectively. Few afford pursue hiring counsel litigate, discovery, realistic disallowing suits creates retaliation available, self-help corporations thereby become 24. risk Only whole expectations vindicated.20 182 Petitioners' answer former unsatisfactory reasons. unpersuaded incapable structuring problem. (CA1 problem arise, small relation distinguishing plaintiffs. Any decreases stock.21 183 sum, disposition decisions Circuits. error permitted color basic construing liberally investors, motivated decades, repudiated affirmance. 184 petitions, must, register volunteering deciding incorrectly parties. reversal direction determine, totally unprecedented. 185 frankly leads "premised" Ante, 47. independent Setting aside permitting effect; whatsoever assumes, arguendo, proved. 186 My portions record binding election waive relief,22 kept available.23 waiver, Court.24 reaching unargued takes liberal "plain error" doctrine unacceptable. 187 Court,25 respectfully reserved excess amount. part: "(a) 'manipulative deceptive device contrivance' person, "(1) Who underwriter "(2) "(3) broker, participate participating distribution, indirectly, instrumentality interstate commerce, mails, facility national exchange, bid series, security, induce right, completed participation distribution." Less weeks later, charging stating dollar unregistered admitting allegations, consented Release 8595, Commerce Clearing Fed.Sec.L.Rep. P 77,706, 83,617. completed, $13.8 book point, legality unchallenged. withdrawal dispute. According espoused ensuing 'shot bolt' early .. appreciable offer." 402 earlier challenged stopped behest. Supra, 6. 2, Eleven exemptions created, "unsolicited (of stock) dealer. 240.10b-6(a)(3)(ii) Two Moore conclusions pass propriety Anderson, concurring, estimate release. avoided ruling 10b-5, assumed. 1134. "assumed" 937 (1969) (suit relief); Butler Aviation Int'l, Comprehensive Designers, 842 (1970) offeror); 787 (action corporation); Iroquois Syracuse China 417 963 (1969), cert. denied, 399 909, 2199, 561 corporation). securing abided "failed certainty Boston. Nonetheless, found. Chris-Craft: Uncertain Evolution Colum.L.Rev. 634, 650-658 Certiorari denied. 414 231, 232, devices analyzed detail Hayes Taussig, Tactics Cash Takeover Bids, Harv.Bus.Rev. (Mar.-Apr. 1967). 2-10 throughout duration Committee Banking Currency, 200 Hearings). Note Bids Purchases Stock, Bus.Law. 149, 153-154 (1966). Loss, Regulation 3662 (Supp.1969). open-ended proposal criticism 10-day limitation requirement. identical practice followed 76. 16. Requiring detailed outset quest critics' fortify management's rebuffing contestants' efforts. last Term limited value. "Remarks hearings responsible preparation drafting entitled weight." Ernst Hochfelder, 185, 204 1375, 1386, 668 2A C. Sands, Sutherland Statutes Statutory Construction 48.06, 203 (4th ed. action. concludes Ash. 66-67. there, injure sense: results practiced shareholder) group." focusing owners Stockholders enacted. comports case: authorizes consummated merger 428, 1558. connection, treat since, insurgents fight, occasion dissent's goals inquiry Borak. Both were, sure, once embarked offeror-bidder stood shoes beneficiaries. "(T)his (designed) overlooks meaningful bid. infra, 30. it. instructive regard. judges, inevitably pervade "deterrence" lawful. misconduct, apt occur frequency, obvious serious, efficacious remedy. "intimate entitle(s) respect." 64. note, agency spoke voice, "expertise" securities-law field peculiarly resolution, litigants. "administrative deference" rule, supported (1964); instances where, binding, consistent, official time. National Assn. Dealers, 694, 2427, 2442, 486 (1975); Udall Tallman, 380 1, 16-17, 792, 801-802, 616 (1965). Whether matter. disposes dissent. "exclusion" "persons enforcement," today's forth question. secondary importance, 10b-13 covers Newport Steel 193 461 (C.A.2), 343 956, 1051, 1356 (1952), purchasers sellers 9(a)(6) mails "(6) series and/or registered pegging, fixing, stabilizing contravention regulations prescribe lie separately enumerate preclude exercise discretion examined matters importance assigned Carpenters Joiners America 330 395, 412, 775, 784, 973 (1947); Sibbach Wilson 312 422, 427, 479 (1941); Mahler Eby, 264 32, 283, 549 (1924). 40(d)(2); Oregon ex rel. State Land Corvallis Sand Gravel 429 363, 582, 550 (1977); Mapp Ohio, 367 643, 1684, 1081 (1961). Exercise sweeping petitioning raise deals manipulation. feature, presumptions enter dissenters note dependent frustration cf. merely diminished success, inadequate. practically exhausted, rebutted. chances lessened uninfluenced diminished-opportunity failure-to-succeed theory. chapter monumental trials, appeals, groups petitions. 1976, 760, us. analyzing alleged: foregoing courses decreased App. F-26. noted: (its) A-60. "but herein, Piper," acquire. 65, allegations 35-37, correctly rejection impaired holdings. Acts itself, foreclosed today. statutes awareness policed SEC. Nevertheless, noteworthy militates implying dispute 431-433, 1559-1560, "primary goal" severely information, take. alternatives. hope purchased. taken. instances, helped install good bad alternative, wait develops, late, runs best. do, informed take chance. does, enable rationally precisely dilemma prevent. competence positions, vital stockholders. Secrecy invest impairs confidence medium investment." 2-3 Admin. News 2812. discouraged check inefficient always improve avoids case." 4; 2813. commanded locked-in exceptionally block. relate measurable characterize 36-37. owner market, suffer hostile hands. instance, "actually italicized phrase so, (The paragraph lends "typical," "ordinary" blocks.) unsound. anything whole" infra 67-68, 593, merger; plaintiffs misrepresentation, voted merger, 403 429, 435 (C.A.7 1968), despite votes. specifying "(m)onetary will, possibility." 388, 623. defect accounting "receive coming them"; otherwise, earnings holdings." 624. 423: suffers ordinarily flows inflicted species group Power destiny proxies themselves, casting misguided vote ill-advised sale, importantly entity consequences procured fraud. word "investors" "shareholders" describe group. sweep tantamount Private antitrust treble serves weapon advises examines 2,000 annually expedited. Time representations respondent's manipulation Tractor Corp.) merger. "We, 432-433, staff delay essence. event disseminated solicit approved Report). weapon" Civil Rights "private attorneys general" rests premise. pari delicto defense, "were recognition insuring anyone contemplating behavior reaps reward morally reprehensible defendant, encourages overriding competition. fastidious relative moral worth undermining usefulness bulwark enforcement." Perma Mufflers Parts 392 134, 139, 1981, 1984, 982. constitutional aspect. Baker Carr, 369 186, 204, 691, 703, 663. draftsmen it, "there policeman pocketbook degree enforces Practices, S.Res. (72d Cong.) (73d 73d pt. 6518 (1934). Consider coauthor yet, intentions, commitments, identities Not prevented easily unknowing victims so-called raider. "Today, Using vehicle, street names or, commonly, Swiss banks undisclosed number. liquidation 42-43 raider" "take-over pirate" thing abundantly tip restricting 14(e): Klaus Hi-Shear 528 225, 232 (CA9 1975); Sargent Genesco, 492 750 (CA5 harmful misrepresentation Hence, "whether (s) 14(e)," violated. 770 28. 232. commentators See, e. Law Offers, N.Y.L.F. 459, 554 (1969); Hamilton, Some Reflections Offer Legislation, 269, 291-292 Loss Opportunity Control: Lost Opportunity, Ford.L.Rev. 820, 821 Comment, Remedies Defrauded Offerors Geo.L.J. 1693, 1695-1696 (1974); Harv.L.Rev. 377, 398-399 Offers: Liberalization Standing Requirements U.San Fran.L.Rev. reads 32-33, 21. exists causes." 1559. i. e., blocks. Reports. "ordinarily stockholder," 1560, slight extension 1559-1560. suing, illegal Likewise, legally expectation cuts too far. locate colloquy pretrial conference 1970: "MR. LIMAN: your Honor. shouldn't woman transcript unclear refers to), managed year I'm wouldn't don't now. You concerned. RYAN: Do irrevocable position, Liman? here." 1105A. place: "THE COURT: thought you wanted rescind 112,000 want now, know talked rescind. yes, getting. exercising consolidated think, powers has, That's left. 1106A-1107A. follows: ever again swing seller, buy buying "So difficulties work decree frozen told 'You everything else them,' seemed appropriate. "However, restore was, Tr. Oral Arg. Somewhat repeated: fashioned. enjoined controlled putting they, object that." motion Pages 24-25: assuming moving preparing trial, compensate 107,574 Punta." oral includes affirm

Classification Label: 7