Court Opinion

ID: 9471469
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:33:12.167366+00
Date Added: 2024-06-11T17:42:25.527574
License: Public Domain

VAN GRAAFEILAND, Circuit Judge, concurring:
I agree with the majority that Judge Conner’s well-reasoned opinion accurately *32states and applies the law of both Kern County Land Co. v. Occidental Petroleum Corp., 411 U.S. 582, 93 S.Ct. 1736, 36 L.Ed.2d 503 (1973), and American Standard, Inc. v. Crane Co., 510 F.2d 1043 (2d Cir.1974), cert. denied, 421 U.S. 1000, 95 S.Ct. 2397, 44 L.Ed.2d 667 (1975). However, I part company with my colleagues when they profess to interpret Judge Conner’s holding.
Judge Conner said:
Thus, under the instant facts, there exists nothing to suggest that General Cinema had access to material inside information. 539 F.Supp. at 705.
Judge Oakes says:
We pause to note only that neither the district court’s opinion nor our own should be read to suggest that, in fact, General Cinema possessed no material inside information pertaining to Old Heu-blein or, more generally, that General Cinema’s actions are beyond reproach, moral or legal.
One need only contrast the majority and dissenting opinions in Kern to appreciate that in “unorthodox” transactions, such as the one which gave rise to the instant litigation, there must be a showing of possible speculative abuse of inside information before section 16(b) liability will be imposed. Judge Conner correctly applied this rule when he held:
Because General Cinema had absolutely no control over the course of events chosen by Old Heublein’s management, and because it was unlikely that General Cinema could have received any advance, inside information concerning these events, this is not the sort of transaction that could give rise to the type of speculative abuse against which § 16(b) is directed. Accordingly, the Court concludes that General Cinema’s exchange of Old Heublein stock for Reynolds stock was not a “sale” under § 16(b) of the Act. 539 F.Supp. at 705.
To the extent that my colleagues affirm that holding, I concur.