Eagle v. Horvath
Decision Date | 01 March 1965 |
Citation | 241 F. Supp. 345 |
Parties | Sidney EAGLE, Plaintiff, v. George A. HORVATH et al., Defendants. |
Court | U.S. District Court — Southern District of New York |
Louis Kipnis, New York City, for plaintiff.
Ballon, Stoll & Shyman, New York City, for defendants George A. Horvath, Ernest V. Horvath, Samuel Rubin, Buckeye Corp. and Massachusetts Mohair Plush Co., Inc.; Donald A. Jelinek, New York City, of counsel.
Rosenman, Colin, Kaye, Petschek & Freund, New York City, for defendants Charles H. Penneys and Samuel R. Penter.1
Defendants move pursuant to F.R. Civ.P. 12(b) to dismiss the complaint for lack of jurisdiction over the subject matter.1
Without going into detail, plaintiff's complaint alleges that he is seeking relief for violations of sections 10 and 14 of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78j, 78n). The complaint is not quite clear as to whether it alleges a representative or derivative claim.
Defendants rely on Howard v. Furst, 238 F.2d 790 (2d Cir. 1956), cert. denied, 353 U.S. 937, 77 S.Ct. 814, 1 L.Ed.2d 759 (1957). That case held that section 14(a) did not create a substantive civil right on behalf of the corporation which may be enforced in a derivative action by an individual stockholder. The court left open the question of whether section 14(a) created substantive rights in an individual stockholder. Finally, the court found that the complaint really depended upon the common law and statutes of New York and that the allegations with reference to the proxy statements "constitute a mere excrescence or superfluity" (238 F.2d at 794), so that section 14(a) was not basic but collateral to plaintiff's case. The court therefore found lack of subject matter jurisdiction.
Finally, on the question of whether the allegations under section 14(a) are merely superfluous to the common law action, it is for the federal courts to adjust their remedies to grant necessary relief where federally secured rights are invaded. The Court stated:
"But we believe that the overriding federal law applicable here would, where the facts required, control the appropriateness of redress despite the provisions of state corporation law, for it `is not uncommon for federal courts to fashion federal law where federal rights are concerned.'" 377 U.S. at 434, 84 S.Ct. at 1561.
Insofar as section 10(b) is concerned, ...
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Haberman v. Murchison
...proxy statement and the damage sustained must be alleged. See Barnett v. Anaconda Co., 238 F.Supp. 766 (S.D.N.Y.1965); Eagle v. Horvath, 241 F.Supp. 345 (S.D.N.Y. 1965); Hoover v. Allen, supra. No damage to the corporation was alleged. See Vine v. Beneficial Finance Co., 374 F.2d 627, 637 (......
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Smith v. Murchison
...proxy statement and the damage sustained must be alleged. See Barnett v. Anaconda Co., 238 F.Supp. 766 (S.D.N.Y.1965); Eagle v. Horvath, 241 F.Supp. 345 (S.D.N.Y. 1965); Hoover v. Allen, 241 F.Supp. 213 The complaint in this case fails to allege either of these essential elements. There is ......
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Lester v. Preco Industries, Inc., 64 Civ. 3754.
...of action created by the Securities Exchange Act. To that extent, the case did overrule Howard v. Furst, supra. See Eagle v. Horvath, 241 F.Supp. 345 (S.D.N.Y.1965). But the Howard case was not cited by this Court for the proposition that no cause of action in favor of the plaintiff could e......
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Evans v. Armour and Company
...injunctive relief despite state statutes which declare a remedy exclusive, and Borak has been so interpreted. See Eagle v. Horvath, 241 F.Supp. 345 (S.D.N.Y. April 22, 1965); Fleisher, "Federal Corporation Law": An Assessment, 78 Harv.L.Rev. 1146, 1168-72 In this case, however, the Court ne......