Saturday, December 28, 2013

Surowitz v. Hilton Hotels Corp. case brief

Surowitz v. Hilton Hotels Corp. case brief summary
383 U.S. 363 (1966)

CASE SYNOPSIS
Petitioner appealed the decision of the United States Court of Appeals for the Seventh Circuit, which dismissed petitioner's derivative suit against respondents for submitting a false affidavit.

CASE FACTS
Petitioner shareholder brought a derivative suit against respondent corporate officers and directors for defrauding the corporation through an illegal scheme to enrich respondents at the corporation's expense. Petitioner's son-in-law began an investigation of the corporation following a formal offer by the corporation to buy-back outstanding stock. As required by Fed. R. Civ. P. 23(b), petitioner submitted an affidavit stating that some of the allegations in the complaint were true and that on information and belief that she thought the other allegations were also true. During an oral examination of petitioner by respondents' counsel, it became clear that petitioner did not understand the complaint.

DISCUSSION

  • Reversing the lower court's dismissal of the case, the court held that Fed. R. Civ. P 23(b) did not justify dismissal of petitioner's case merely because petitioner was uneducated about the nature of the suit and lacked an understanding of English. 
  • The court reversed and remanded, holding that the case should not be dismissed because the charges of fraud were shown by the record to be based on reasonable belief from a careful investigation.


CONCLUSION
The court reversed the judgment and remanded for a trial on the merits.

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