Friday, November 22, 2013

Studebaker Corp. v. Gittlin case brief

Studebaker Corp. v. Gittlin case brief summary
360 F.2d 692 (1966)


CASE SYNOPSIS
Respondent stockholder contested an order of the United States District Court for the Southern District of New York enjoining, as violative of § 14a of the Securities Exchange Act of 1934, use of stockholders' authorizations in a New York state court proceeding to obtain inspection of petitioner corporation's list of shareholders.

CASE FACTS
Acting on his own behalf and on written authorization of 42 other shareholders, respondent stockholder served papers on petitioner corporation to inspect petitioner's record of shareholders. Petitioner claimed that respondent obtained the authorizations in violation of the proxy rules issued by the Securities and Exchange Commission (SEC) under § 14a of the Securities Exchange Act of 1934 (the Act), in that respondent had made no filing of proxy material with the SEC prior to obtaining the authorizations. The trial court judge enjoined the use of the authorizations in the state court proceeding.

DISCUSSION

  • The court affirmed the order and held that corporations, as well as stockholders, had standing to enjoin violations of the proxy rules. 
  • Furthermore, the injunction did not violate the anti-injunction statute, 28 U.S.C.S. § 2283, because § 21e of the Act permitted a court to enjoin actions that constituted violations of the Act's provisions.
CONCLUSION
The court affirmed the order enjoining the use of stockholders' authorizations where proxy rules were violated, petitioner corporation had standing to enjoin violation of the proxy rules, and the injunction did not violate the anti-injunction statute.


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