575 F.2d 237 (9th Cir. 1978), 75-1285, Lewis v. Transamerica Corp.

Docket Nº75-1285.
Citation575 F.2d 237
Party NameHarry LEWIS, Plaintiff-Appellant, v. TRANSAMERICA CORP. et al., Defendants-Appellees.
Case DateApril 19, 1978
CourtUnited States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 237

575 F.2d 237 (9th Cir. 1978)

Harry LEWIS, Plaintiff-Appellant,

v.

TRANSAMERICA CORP. et al., Defendants-Appellees.

No. 75-1285.

United States Court of Appeals, Ninth Circuit

April 19, 1978

Lester L. Levy, New York City (argued), of Garry, Dreyfus, McTernan, Brotsky, Herndon & Pesonen, San Francisco, Cal., for plaintiff-appellant.

Louis E. Walcher (argued), and John M. Anderson (argued), Landels, Ripley & Diamond, San Francisco, Cal., for defendants-appellees.

Appeal from the United States District Court For the Northern District of California.

Before BROWNING and WALLACE, Circuit Judges, and EAST, [*] Senior District Judge.

EAST, Senior District Judge:

The plaintiff-appellant Harry Lewis (Lewis) appeals from an order entered by the District Court on November 21, 1974 dismissing the action with prejudice on the grounds "Section 206 of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-6) (Advisers Act) affords no private right of action, and that consequently the Court has no jurisdiction of the plaintiff's claims . . . ." We vacate the order and remand.

Lewis' Complaint:

Lewis is a shareholder of the defendant-appellee Mortgage Trust of America (Trust), and his complaint presents three shareholder derivative and three class actions for violation of the Advisers Act and common law fiduciary duties. He alleges in substance:

The Trust was organized as a California business trust and is qualified as a real estate investment trust under the Internal Revenue Code. It invests primarily in construction and development first mortgage loans. None of its investments have been listed on any national or local securities exchange or offered for trading in any over-the-counter market. The original officers and employees of the Trust were formerly

Page 238

associated with the defendant-appellee Transamerica Land Capital, Inc. (TALC), a "first tier" subsidiary of the defendant-appellee Transamerica Corp. (Transamerica). The Trust purchased from TALC its original portfolio of mortgages. The defendant-appellee Transamerica Mortgage Advisors, Inc. (Mortgage Advisors), a Delaware corporation and a "third tier" subsidiary of Transamerica, is retained as the Trust's mortgage adviser. It advises the Trust on various real estate investments and administers its day-to-day operations. The Trust is and always has been Mortgage Advisors' only client. Transamerica is the parent of Mortgage Advisors and the sponsor of the Trust. Nine individual defendants-appellees are trustees of the Trust.

Lewis' Issue on Review:

Does the Advisers Act give rise to an implied private right of action for injunctive relief and damages on behalf of persons injured by violations of its provisions?

Defendants-Appellees' Issues on Review:

In view of the naked holding of a lack of jurisdiction, the District Court did not reach the following issues which the defendants present for review:

(1) Whether the several defendants fall within the scope of the Advisers Act.

(2) Whether the class action claims are proper.

(3) Whether Lewis has standing to maintain a derivative action without having made a demand upon the trustees to act.

DISCUSSION:

Since the District Court did not first consider and adjudicate those issues raised by the defendants, we decline to now do so. Singleton v. Wulff,428 U.S. 106, 120, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976); Hector v. Wiens,533 F.2d 429, 433 (9th Cir. 1976).

At the time of the District Court's consideration of its ultimate order of dismissal of the action for lack of jurisdiction, the circuit case law on the issue was nil. At that time only the following District Court decisions were available for consideration: Bolger v. Laventhol, Krekstein, Horwarth &...

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10 practice notes
  • 79 F.R.D. 246 (N.D.Cal. 1978), C-76-1783-CBR, Sullivan v. Chase Inv. Services of Boston, Inc.
    • United States
    • Federal Cases United States Bankruptcy Courts Ninth Circuit
    • June 6, 1978
    ...advisers in the commission of frauds which violate s 206 of the Investment Advisers Act, 15 U.S.C. s 80b-6. Lewis v. Transamerica Corp., 575 F.2d 237 (9 Cir. 1978) (implied private cause of action against investment advisers). The Court dismissed the claims against some defendants under the......
  • 627 F.2d 942 (9th Cir. 1980), 77-2812, Davis v. United States Dept. of Housing and Urban Development
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Ninth Circuit
    • August 25, 1980
    ...have not been considered by the district court and we decline to consider them in the first instance. Lewis v. Transamerica Corp., 575 F.2d 237, 238 (9th Cir. 1978), aff'd in part, rev'd in part on other grounds, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979); Hector v. Wiens, 533 F.2d 4......
  • 441 U.S. 677 (1979), 77-926, Cannon v. University of Chicago
    • United States
    • Federal Cases United States Supreme Court
    • May 14, 1979
    ...439 U.S. 927 (1978); Riggle v. California, 577 F.2d 579 (CA9 1978) (Rivers and Harbors Appropriation Act); Lewis v. Transamerica Corp., 575 F.2d 237 (CA9) (§ 206 of Investment Advisers Act of 1940), cert. granted, 439 U.S. 952 (1978); Davis v. Southeastern Community College, 574 F.2d 1158 (......
  • 444 U.S. 11 (1979), 77-1645, Transamerica Mortgage Advisors, Inc. v. Lewis
    • United States
    • Federal Cases United States Supreme Court
    • November 13, 1979
    ...protect investment advisers' clients does not require the implication of a private cause of action for damages on their behalf. Pp. 19-24. 575 F.2d 237, affirmed in part, reversed in part, and STEWART, J., delivered the opinion of the Court, in which BURGER, C.J., and BLACKMUN, POWELL, and ......
  • Free signup to view additional results
10 cases
  • 79 F.R.D. 246 (N.D.Cal. 1978), C-76-1783-CBR, Sullivan v. Chase Inv. Services of Boston, Inc.
    • United States
    • Federal Cases United States Bankruptcy Courts Ninth Circuit
    • June 6, 1978
    ...advisers in the commission of frauds which violate s 206 of the Investment Advisers Act, 15 U.S.C. s 80b-6. Lewis v. Transamerica Corp., 575 F.2d 237 (9 Cir. 1978) (implied private cause of action against investment advisers). The Court dismissed the claims against some defendants under the......
  • 627 F.2d 942 (9th Cir. 1980), 77-2812, Davis v. United States Dept. of Housing and Urban Development
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Ninth Circuit
    • August 25, 1980
    ...have not been considered by the district court and we decline to consider them in the first instance. Lewis v. Transamerica Corp., 575 F.2d 237, 238 (9th Cir. 1978), aff'd in part, rev'd in part on other grounds, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979); Hector v. Wiens, 533 F.2d 4......
  • 441 U.S. 677 (1979), 77-926, Cannon v. University of Chicago
    • United States
    • Federal Cases United States Supreme Court
    • May 14, 1979
    ...439 U.S. 927 (1978); Riggle v. California, 577 F.2d 579 (CA9 1978) (Rivers and Harbors Appropriation Act); Lewis v. Transamerica Corp., 575 F.2d 237 (CA9) (§ 206 of Investment Advisers Act of 1940), cert. granted, 439 U.S. 952 (1978); Davis v. Southeastern Community College, 574 F.2d 1158 (......
  • 444 U.S. 11 (1979), 77-1645, Transamerica Mortgage Advisors, Inc. v. Lewis
    • United States
    • Federal Cases United States Supreme Court
    • November 13, 1979
    ...protect investment advisers' clients does not require the implication of a private cause of action for damages on their behalf. Pp. 19-24. 575 F.2d 237, affirmed in part, reversed in part, and STEWART, J., delivered the opinion of the Court, in which BURGER, C.J., and BLACKMUN, POWELL, and ......
  • Free signup to view additional results