Martin-Marietta Corp. v. Bendix Corp.
| Decision Date | 22 September 1982 |
| Docket Number | MARTIN-MARIETTA,Nos. 82-1677,82-1678,s. 82-1677 |
| Citation | 690 F.2d 558 |
| Parties | Blue Sky L. Rep. P 71,762, Fed. Sec. L. Rep. P 98,822 CORPORATION, Plaintiff-Appellant, v. BENDIX CORPORATION, et al., Defendants-Appellees. UNITED TECHNOLOGIES, Plaintiff-Appellant, v. BENDIX CORPORATION, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
John C. Elam, Vorys, Sater, Seymour & Pease, Columbus, Ohio, for United Technologies.
Russel H. Beatie, Jr., Dewey, Ballantine, Bushby, Palmer & Wood, New York City, for Martin-Marietta Corp.
James K. Robinson, Stephen Wasinger, Detroit, Mich., for Bendix Corp.
Joe D. Sutton, Lansing, Mich., for Michigan defendants-appellees.
Before ENGEL, KEITH and KENNEDY, Circuit Judges.
Appellants Martin-Marietta and United Technologies appeal a decision of the District Court refusing their request for a preliminary injunction against the enforcement of the anti-fraud provisions of the Michigan Take-Over Offers Act, Mich.Comp.Laws Ann. §§ 451.901-917, and the Michigan Uniform Securities Act, Mich.Comp.Laws Ann. §§ 451.501-818, on the grounds that the issuance of an injunction is prohibited by the Anti-Injunction Act, 28 U.S.C. § 2283, and the abstention doctrines, and because appellants have not satisfied the prerequisites for the issuance of a preliminary injunction. Appellants had alleged in their actions for declaratory and injunctive relief that the entire Take-Over Offers Act and, more particularly, the anti-fraud and enforcement provisions of both the Take-Over Offers Act, id., §§ 451.910, .914, .917, and the Uniform Securities Act, id., §§ 451.501, .808, violated the Commerce and Supremacy Clauses of the United States Constitution in that they regulated interstate take-overs, conflicted with the Williams Act, 15 U.S.C. §§ 78m(d)-(e), 78n(d)-(f), and imposed a burden on interstate commerce that was excessive in light of the local interests purportedly protected by the provisions. 42 U.S.C. § 1983, 28 U.S.C. §§ 1331, 1337, 1343, 2201.
The present actions, consolidated for expedited appeal, arise out of the tender offer battle among appellants Martin-Marietta and United Technologies and appellee Bendix Corporation. The four state appellees are Kelley, the Michigan Attorney General, Berman, the Director of the Michigan Department of Commerce, Mackey, the Director of the Corporation and Securities Bureau and Patterson, the Prosecuting Attorney for the County of Oakland, Michigan. These individual appellees are responsible for the enforcement of the two Michigan statutes which are at issue on this appeal.
On August 25, 1982, Bendix announced a nationwide tender offer for up to 48% of the outstanding shares of Martin-Marietta for $42 a share. The terms of this offer were subsequently amended to permit it to acquire 54% of Martin-Marietta's shares at $48 a share.
Martin-Marietta contemplated a counter tender offer to acquire a controlling interest in Bendix. Prior to announcing its tender offer, Martin-Marietta contacted Mackey, the Director of the Michigan Corporation and Securities Bureau and was informed by him that the anti-fraud provisions of the two Michigan statutes at issue were applicable to the proposed tender offer and that Martin-Marietta would be required to comply with these provisions. Martin-Marietta was advised that it was required to file with the Bureau all the materials that were required under the Williams Act. Without having complied with these provisions, Martin-Marietta commenced a tender offer on August 30, for approximately 50% of the outstanding shares of Bendix at $75 per share. Only about 5% of Bendix stock is owned by Michigan residents, although there is some suggestion in statements of Martin-Marietta's counsel before this panel, before the District Court and in its briefs that some Michigan employees of Bendix are beneficial owners of stock in an employees stock option plan which is administered in New York. The same day Martin-Marietta's tender offer was announced, it filed suit in the United States District Court for the Eastern District of Michigan seeking declaratory and injunctive relief against the enforcement of the Michigan Take-Over Offers Act in conjunction with its interstate tender offer. 1 The District Court refused Martin-Marietta's request for a temporary restraining order that same day and scheduled a hearing on the motion for a preliminary injunction for September 2. At the September 2 hearing, the District Court denied Martin-Marietta's request for injunctive relief on the ground that Martin-Marietta had failed to make the requisite showing of threatened irreparable harm and Martin-Marietta had not demonstrated probable success on the merits of its claim that the Take-Over Offers Act was totally invalid. On September 3, the Bureau notified Martin-Marietta that it would enforce the anti-fraud provisions of the Take-Over Offers Act and gave Martin-Marietta forty-eight hours to secure compliance with its disclosure provisions which Martin-Marietta did not do.
On September 7, United Technologies, in cooperation with Martin-Marietta, commenced a tender offer for Bendix stock. United Technologies filed under protest a copy of its tender offer materials with the Bureau, expressly reserving its rights without prejudicing or waiving its claim that the Take-Over Offers Act was unconstitutional. The same day as the announcement of the tender offer and the filing under protest, United Technologies brought suit in the same District Court seeking declaratory and injunctive relief on identical grounds as Martin-Marietta. In the absence of the District Judge handling the Martin-Marietta suit, a request for a temporary restraining order was presented to the presiding judge who refused the request but scheduled a preliminary injunction hearing before the original judge on September 9. On September 9, the preliminary injunction hearing was adjourned and rescheduled for September 17. On the afternoon of September 9, the Michigan Corporation and Securities Bureau, pursuant to its statutory authority, issued a Cease and Desist Order directed to Martin-Marietta and United Technologies regarding their tender offers for Bendix stock. The Cease and Desist Order required Martin-Marietta and United Technologies to cease and desist from making allegedly false statements, and committing other allegedly unlawful acts in connection with their tender offers for Bendix stock. The allegedly misleading statements were that Martin-Marietta and United Technologies failed to state that the Martin-Marietta and United Technologies' offers were so closely intertwined as to constitute one offer, that Martin-Marietta and United Technologies failed to state in an (intelligible) format the conditions to which the offers were subject, and that the United Technologies' offer failed to state that United Technologies may lack the power under state law and fiduciary principles to sell Bendix assets to Martin-Marietta. The Cease and Desist Order cites as other unlawful acts Martin-Marietta's willingness to pay broker-dealers a $.60 per share fee for soliciting shares on Martin-Marietta's behalf and both Martin-Marietta and United Technologies' failure to file their tender offer solicitation documents with the Michigan Corporation and Securities Bureau as required by the Michigan Take-Over Offers Act and the Michigan Uniform Securities Act. The Cease and Desist Order stated that unless Martin-Marietta or United Technologies requested a hearing within fifteen days, the Order would stand as final. On September 10, counsel for Martin-Marietta, United Technologies and Bendix appeared before the District Court. Martin-Marietta and United Technologies renewed their motions for temporary restraining orders and further requested preliminary injunctive relief against any enforcement in state court of the Cease and Desist Order. The District Court denied these renewed motions, making the finding that it did not find that the "MITE " decision (Edgar v. MITE Corp., --- U.S. ----, 102 S.Ct. 2629, 73 L.Ed.2d 269 (1982) )
On September 14, Martin-Marietta and United Technologies each filed amended complaints seeking declaratory and injunctive relief against enforcement of the Cease and Desist Order in state enforcement proceedings based on the unconstitutionality of both the Take-Over Offers Act and the anti-fraud provisions of both the Take-Over Offers Act and the Uniform Securities Act as applied to interstate tender offers.
Kelley and Mackey brought an action in the Michigan Circuit Court for the County of Oakland on September 15 against Martin-Marietta and United Technologies seeking an injunction prohibiting Martin-Marietta and United Technologies from violating the Cease and Desist Order, violating the anti-fraud provisions of the Take-Over Offers Act or the Uniform Securities Act or acquiring or attempting to acquire shares of Bendix from any Michigan resident. Kelley v. Martin-Marietta Corp. & United Technologies Corp., No. 82-247335-AZ (Oakland County Circuit Court). Bendix simultaneously moved to intervene in that action. An Order to Show Cause issued by the Oakland County Circuit Court required Martin-Marietta and United Technologies to show cause why an order should not be entered granting the relief sought in the complaint, except that the Order to Show Cause differed from the complaint for the injunction in that it contained a proposed prohibition against Martin-Marietta or United Technologies from purchasing any shares of Bendix common stock pursuant to their tender offers.
The District Court heard Martin-Marietta and United Technologies' motions for preliminary injunction on September 17, after Bendix had...
To continue reading
Request your trial
-
Tedder v. Housing Authority of Paducah
...the plaintiffs have stated a cause of action for damages and equitable relief under 42 U.S.C. § 1983. See Martin-Marietta Corp. v. Bendix Corp., 690 F.2d 558, 562 (6th Cir.1982) (applying the rule in Maine v. Thiboutot to federal statutory rights under the Williams Act as predicated on 1983......
-
National Solid Waste Management Ass'n v. Voinovich
...92 S.Ct. 1749, 32 L.Ed.2d 257 (1972); accord United States v. Anderson County, 705 F.2d 184 (6th Cir.1983), Martin-Marietta Corp. v. Bendix Corp., 690 F.2d 558, 563 (6th Cir.1982). The Court must abstain from review of cases which would unduly interfere with legitimate activities of the sta......
-
Baltimore Gas and Elec. Co. v. Heintz
...v. MITE Corp., 457 U.S. at 644, 102 S.Ct. at 2642; Telvest v. Bradshaw, 697 F.2d 576, 581 (4th Cir.1983); and Martin-Marietta Corp. v. Bendix, 690 F.2d 558, 566 (6th Cir.1982). Those cases all involve challenges to state anti-takeover legislation, and in each case, the statute was struck do......
-
Dennis v. Higgins
...838 F.2d 457, 458 (CA11 1988), vacated on other grounds, 494 U.S. 472, 110 S.Ct. 1249, 108 L.Ed.2d 400 (1990); Martin-Marietta Corp. v. Bendix Corp., 690 F.2d 558, 562 (CA6 1982); and Kennecott Corp. v. Smith, 637 F.2d 181, 186, n. 5 (CA3 1980). See also Private Truck Council of America, In......
-
The Validity of Washington's Antitakeover Act Under the Commerce and Supremacy Clauses
...Dynamics Corp. of Am. v. CTS Corp., 794 F.2d 250, 261 (7th Cir. 1986), rev'd, 481 U.S. 69 (1987); Martin-Marietta Corp. v. Bendix Corp., 690 F.2d 558, 565-66 (6th Cir. 1982). 101. CTS, 481 U.S. at 80-82. 102. Id. at 82. 103. See supra notes 11-15 and accompanying text. 104. CTS, 481 U.S. at......