Dyer v. Securities and Exchange Commission

• Decision Date: 12 April 1961
• Docket Number: No. 15765.,15765.
• Citation: 287 F.2d 773
• Parties: Nancy Corinne DYER and J. Raymond Dyer, Petitioners, v. SECURITIES AND EXCHANGE COMMISSION, Respondent, Union Electric Company, Intervenor-Respondent.
• Court: U.S. Court of Appeals — Eighth Circuit

287 F.2d 773 (1961)

Nancy Corinne DYER and J. Raymond Dyer, Petitioners, v. SECURITIES AND EXCHANGE COMMISSION, Respondent Union Electric Company, Intervenor-Respondent.

No. 15765.

United States Court of Appeals Eighth Circuit.

February 27, 1961.

Rehearing Denied April 12, 1961.

J. Raymond Dyer, St. Louis, Mo., filed brief and made argument for petitioners.

Aaron Levy, Special Counsel for Securities & Exchange Commission made argument for the respondent, Securities & Exchange Commission and Thomas G. Meeker, Daniel J. McCauley, Jr., and Joseph S. Mitchell, Jr., Securities & Exchange Commission, Washington, D. C., were with him on the brief.

Robert J. Keefe, St. Louis, Mo., made argument in behalf of Union Electric Co., intervenor-respondent and William H. Ferrell, St. Louis, Mo., and J. M. Lashly, St. Louis, Mo., were with him on the brief.

Before JOHNSEN, Chief Judge, and VAN OOSTERHOUT and BLACKMUN, Circuit Judges.

JOHNSEN, Chief Judge.

I.

This proceeding is one under 15 U.S. C.A. § 79x(a), for review of an order of the Securities and Exchange Commission, which permitted a declaration, as amended, filed by the management of Union Electric Company, of St. Louis Missouri, to become effective as a basis for the solicitation of proxies from stockholders for the corporation's 1957 annual meeting.

A requirement had precedingly been made by the Commission, on the basis of section 12(e) of the Public Utility Holding Company Act of 1935, 15 U.S.C.A. § 79l(e), and Rule U-62 of the Commission's regulations, 17 CFR § 250.62, that anyone intending to solicit proxies for the meeting should file a declaration of the materials desired to be used and obtain the Commission's approval thereof, before such solicitation could be engaged in.

Petitioners, J. Raymond Dyer and his daughter Nancy Corinne Dyer, were owners at the time of 250 shares of Union Electric stock, in the 11¼-million shares outstanding. They have been engaged in controversy with management regarding every annual meeting of stockholders and management's proxy solicitations therefor, as well as over other corporate incidents, since 1956, as indicated by the successive review proceedings which have been and are now pending before us. They have not undertaken to submit any declaration to make proxy solicitations of their own but have primarily directed their efforts at challenging each year the form and substance of management's proxy material and insisting that there be included therein various statements and proposals authored by them.

Thus, in the immediate situation, petitioners had lodged with the Commission a long list of objections to the declaration filed by management and had sought to have various resolutions and by-law amendments prepared by them added as matters for proxy indication or expression. In the circumstances, the Commission chose to deal with the matter through the process of a hearing, under its Rule U-62(e), supra, allowing the Dyers to participate therein, under Rule 17(c) of the Commission's Rules of Practice, 15 U.S.C.A. following section 78u, with the privilege accorded to them of cross-examining witnesses, offering evidence, submitting briefs, etc. It was after a hearing so held that the order of approval here being challenged was made.

This is the second time that the present controversy is before us. When the matter was initially submitted to us, we dismissed the petition for review, Dyer v. Securities and Exchange Commission, 8 Cir., 251 F.2d 512, viewing it as having in practical significance become moot, since we had theretofore denied a request for a stay of the Commission's order and the 1957 meeting had by that time been held — with such personal feelings as might be prompted in the preliminaries to a meeting having ordinarily in that situation run their course.

The Dyers, however, as was their right, were not willing to permit any cooling-off to occur in the situation and, as subsequent events showed, they had already begun to assert contentions and engage in controversy as to the then-approaching 1958 annual meeting. They promptly petitioned the Supreme Court for a writ of certiorari from our order of dismissal as to the 1957 situation. And thereafter, they diligently brought before us for review the order which the Commission made on management's proxy-solicitation declaration as to the 1958 annual meeting.

It having thus become obvious that the controversy had a personal aspect so far as petitioners were concerned, and that it was likely to remain of a continuing nature, we undertook to engage in a full examination and consideration of all of petitioners' contentions as to the Commission's 1958 order. See Dyer v. Securities and Exchange Commission, 8 Cir., 266 F.2d 33. As we expressed it in our opinion, 266 F.2d at page 47, "it is apparent, from the three-year history which has up to this point preceded, that the fight of petitioners against the management of Union Electric is one that is going to have an unremitting and indefinite duration", and "In this situation, not merely from the standpoint of petitioners, but as well from the standpoint of the Commission, the corporation, and the other stockholders, it is desirable to get the questions here involved leveled off, so that the controversy can begin to have some settling in its course."

After engaging in examination of all of petitioners' numerous, compounded and detailed contentions, we were of the firm opinion that the Commission's order of authorization as to management's amended proxy-solicitation statement for the 1958 annual meeting could not be held in any respect to be an improper exercise of the Commission's power of judgment and discretion, under the statute's scope and purpose, either in relation to the general field or in application to the particular situation; and also that there existed no basis for any claim on the part of petitioners of lack of fair play having been involved, either in the processes or the attitudes or the results of the hearing, which the Commission in the circumstances had chosen to hold.

Following our resolution of the 1958 situation on its merits, the Supreme Court vacated the mootness dismissal which we had made of the 1957 case and remanded it to us for further consideration in the light of our expression and decision in 266 F.2d 33. See Dyer v. Securities and Exchange Commission, 359 U.S. 499, 79 S.Ct. 1115, 3 L.Ed.2d 973; 361 U.S. 803, 80 S.Ct. 40, 4 L.Ed.2d 52. Thus, the matter is now again before us and, for the reasons which led us to go into the 1958 situation on its merits, we shall deal with the present controversy in the same manner.

II.

A number of the contentions urged as to the 1957 situation had been made the subject of reassertion against the Commission's order in the 1958 controversy and so have been answered by our opinion in 266 F.2d 33. We adhere to that opinion and shall therefore not further discuss or restate such contentions here. Of the rest of petitioners' contentions, some are so frivolous, in the realities necessary to be accorded the statute, as not to entitle them to request for judicial consideration.

Among these are such contentions as (a) that it was improper to permit management to express the opinion in its proxy statement that the most important thing to come before the meeting was the election of directors; (b) that the Commission should have required the information given as to the shares of stock held by each of management's candidates for director, in connection with his biographical sketch, to be columned on the left-hand side instead of the right-hand side of the page in the proxy statement, to assure more natural notice, since the American eye always reads from left to right; (c) that in management's statement that it recommended against all of the proposals submitted by the Dyers except one, the word "against" should not have been allowed to be put in capital letters; (d) that it was unfair to petitioner J. Raymond Dyer to allow the recentness of the date on which he had become a stockholder to be pointed out in the proxy statement; and (e) that similarly, while it was true that petitioner Nancy Corinne Dyer was a minor, it was not proper for that fact to be stated in the proxy material, because this was "implanting the thought in the minds of the stockholders that she was both legally and factually incapable of responsible action" and amounted to a violation of the prohibition in Rule X-14A-9 of the Commission's regulations, 17 CFR § 240.-14a-9, against statements which are "misleading with respect to any material fact".

The foregoing contentions are merely illustrative and not exhaustive of matters urged upon us which patently are without any substance as a basis for seeking judicial review. Neither inherently nor on any demonstration in the record is there ground legally to contend that such incidental or collateral details could have any substantiality as factors in proxy-solicitation results. These things thus constituted in the situation mere administrative elements which were in the Commission's domain exclusively, and of which judicial scrutiny was not entitled to be asked, whether the Commission's disposition of them had been one way or the other.

III.

This lack of objectivity on the part of petitioners permeates their contentions also in other areas of their sought review. Apparently, their feeling against the management of Union Electric has evolved into an attitude, so as instinctively to make of almost everything a crusader's cause. Thus, any suggestion on the part of management is to them suspect and must prima facie be made the subject of challenge, against either its substance or its form or both. And in this frame of mind, it is of course not possible for them to understand how anyone can fail to agree with the merit and significance of what they ask to have done, unless there be present some personal bias against them. Thus, they seem to...