Dillon v. Berg, Civ. A. No. 3967.

CourtUnited States District Courts. 3th Circuit. United States District Court (Delaware)
Writing for the CourtLATCHUM
Citation347 F. Supp. 517
PartiesLen J. DILLON et al., Plaintiffs, v. F. Steven BERG et al., Defendants.
Decision Date29 August 1972
Docket NumberCiv. A. No. 3967.

347 F. Supp. 517

Len J. DILLON et al., Plaintiffs,
v.
F. Steven BERG et al., Defendants.

Civ. A. No. 3967.

United States District Court, D. Delaware.

August 29, 1972.


David T. Dana, III, of Richards, Layton & Finger, Wilmington, Del., Francis

347 F. Supp. 518
E. Koch and Andrew N. Grass, Jr., of Windels, Merritt & Ingraham, New York City, of counsel, for plaintiffs

Bruce M. Stargatt and Jack B. Jacobs, of Young, Conaway, Stargatt & Taylor, Wilmington, Del., for defendants.

OPINION AND ORDER

LATCHUM, District Judge.

This civil action is before the Court on the defendants' motion to strike the plaintiffs' motion for an injunction for want of federal subject matter jurisdiction. In this suit originally brought pursuant to Section 14(a) of the Securities Exchange Act of 19341 (the "Act"), this Court held that the action taken during the 1970 annual shareholders' meeting of Scotten, Dillon Company, including the election of several directors to a staggered board, was void on the ground that the results were obtained by the use of false and misleading proxy statements. Dillon v. Berg, 326 F.Supp. 1214 (D.Del.1971).

Pursuant to that finding, on June 10, 1971 the Court ordered the corporation as soon as practicable to resolicit proxies and reconvene the 1970 annual shareholders' meeting to elect directors in the places of those found to have been invalidly elected. The Court retained jurisdiction of the action and the parties for further proceedings not inconsistent with its opinion and order. Pursuant to that order new elections to the board of directors were held at the reconvened meeting on October 27, 1971. Subsequently, at a directors' meeting held on December 13, 1971, the board allegedly voted to remove the defendant Berg as Chief Executive Officer and Summers as Executive Vice President of the corporation and installed new officers. The plaintiffs allege that, despite the board's action, Berg and Summers have continued operating as corporate officers and have refused to allow the newly elected officers access to the corporate books and records and in addition have resisted the efforts of the board and the executive committee to call a 1972 annual meeting.

The plaintiffs maintain that these actions by the defendants Berg and Summers contravene and frustrate the effect of this Court's June 10, 1971 order entered in Dillon v. Berg, supra, requiring new elections, and that this Court has continuing jurisdiction (a) to enjoin Berg and Summers from interfering with the orders of the board and the executive committee, and (b) to require them to deliver the corporate books and records to the newly installed officers.

The plaintiffs contend that this Court has ancillary jurisdiction and hence power to grant the relief sought, citing J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964). In Borak, the Supreme Court stated: "It is for federal courts `to adjust their remedies so as to grant the necessary relief' where federally secured rights are invaded. `And . . . where legal rights have been invaded, and a federal statute provides for a general right to sue for such invasion, federal courts may use any available remedy to make good the wrong done.'" Id. at 433, 84 S.Ct. at 1560.

That federal courts have broad powers to effectuate their judgments in enforcing federal rights in corporate matters has long been recognized. See Deckert v. Independence Shares Corp., 311 U.S. 282, 61 S.Ct. 229, 85 L.Ed. 189 (1940). This includes the exercise of

347 F. Supp. 519
equitable powers as well. Porter v. Warner Holding Co., 328 U.S. 395, 66 S. Ct. 1086, 90 L.Ed. 1332 (1946)

However, this Court is of the opinion that the relief presently sought goes far beyond even the broad standards of Borak. In Dillon v. Berg, supra, this Court ordered a reconvened 1970 annual shareholders' meeting and the election of certain board members. The elections were held and the directors were installed. The Court's jurisdiction to hear complaints of deceptive proxy materials was grounded on Section 14(a) of the Act. Upon finding that the disseminated materials violated Section 14(a), the Court had broad remedial powers to purge the effects of that violation which it undertook to do by its June 10th order. Once the reconvened 1970 annual meeting and the elections were held, the Court's order was fully effectuated. When the Court retained jurisdiction in that case, it was only for the purpose of...

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9 practice notes
  • Florida Medical Ass'n v. DEPARTMENT OF HEALTH, ETC., No. 78-178-Civ-J-S.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • July 11, 1978
    ...L.Ed.2d 108 (1974); N. W. Controls, Inc. v. Outboard Marine Corp., 349 F.Supp. 1254, 1257 (D.Del.1972); Dillon 454 F. Supp. 331 v. Berg, 347 F.Supp. 517, 519 (D.Del.1972); Wilgus v. Peterson, 335 F.Supp. 1385, 1389 (D.Del.1972). Ancillary jurisdiction, in short, is the "common sense solutio......
  • Bankers Trust Co. v. Worldwide Transp. Services, No. LR-C-80-31.
    • United States
    • U.S. District Court — Eastern District of Arkansas
    • April 29, 1982
    ...a single dispute should be resolved in the original forum. Morrow v. District of Columbia, 417 F.2d 728 (D.C.Cir. 1969); Dillon v. Berg, 347 F.Supp. 517 (D.Del.1972). The overriding concern, however, should be to insure that complete justice is done. Id.; State of Iowa v. Union Asphalt & Ro......
  • United States v. Gold Mountain Coffee, Ltd., Court No. 84-4-00858.
    • United States
    • U.S. Court of International Trade
    • December 17, 1984
    ...of the main proceeding will not be frustrated. Morrow v. District of Columbia, 417 F.2d 728, 740 (D.C.Cir.1969); Dillon v. Berg, 347 F.Supp. 517, 519 (D.Del. Although it may be appropriate in some instances for this court to exercise ancillary jurisdiction, the court will not exercise those......
  • National Home Products, Inc. v. Gray, Civ. A. No. 4256.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Delaware)
    • May 18, 1976
    ...brought in the battle for control of Scotten, Dillon. See Dillon v. Scotten, Dillon Co., 335 F.Supp. 566 (D.Del.1971); Dillon v. Berg, 347 F.Supp. 517 (D.Del.1972); Schroder v. Scotten, Dillon Co., Del.Ch., 299 A.2d 431 (1972). After control was finally resolved in favor of the Berg faction......
  • Request a trial to view additional results
9 cases
  • Florida Medical Ass'n v. DEPARTMENT OF HEALTH, ETC., No. 78-178-Civ-J-S.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • July 11, 1978
    ...L.Ed.2d 108 (1974); N. W. Controls, Inc. v. Outboard Marine Corp., 349 F.Supp. 1254, 1257 (D.Del.1972); Dillon 454 F. Supp. 331 v. Berg, 347 F.Supp. 517, 519 (D.Del.1972); Wilgus v. Peterson, 335 F.Supp. 1385, 1389 (D.Del.1972). Ancillary jurisdiction, in short, is the "common sense solutio......
  • Bankers Trust Co. v. Worldwide Transp. Services, No. LR-C-80-31.
    • United States
    • U.S. District Court — Eastern District of Arkansas
    • April 29, 1982
    ...a single dispute should be resolved in the original forum. Morrow v. District of Columbia, 417 F.2d 728 (D.C.Cir. 1969); Dillon v. Berg, 347 F.Supp. 517 (D.Del.1972). The overriding concern, however, should be to insure that complete justice is done. Id.; State of Iowa v. Union Asphalt & Ro......
  • United States v. Gold Mountain Coffee, Ltd., Court No. 84-4-00858.
    • United States
    • U.S. Court of International Trade
    • December 17, 1984
    ...of the main proceeding will not be frustrated. Morrow v. District of Columbia, 417 F.2d 728, 740 (D.C.Cir.1969); Dillon v. Berg, 347 F.Supp. 517, 519 (D.Del. Although it may be appropriate in some instances for this court to exercise ancillary jurisdiction, the court will not exercise those......
  • National Home Products, Inc. v. Gray, Civ. A. No. 4256.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Delaware)
    • May 18, 1976
    ...brought in the battle for control of Scotten, Dillon. See Dillon v. Scotten, Dillon Co., 335 F.Supp. 566 (D.Del.1971); Dillon v. Berg, 347 F.Supp. 517 (D.Del.1972); Schroder v. Scotten, Dillon Co., Del.Ch., 299 A.2d 431 (1972). After control was finally resolved in favor of the Berg faction......
  • Request a trial to view additional results

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