Greenspan v Crosbie

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Date23 November 1976
United States, District Court, Southern District New York

(Goettel, District Judge)

Greenspan and Others
Crosbie and Others

Sovereign immunity Foreign governments and their officials Government of political subdivision of foreign State Province of Newfoundland Alleged violation by Province and its officials of United States securities laws Whether officials entitled to immunity Whether Province entitled to immunity Role of the United States Department of State Conclusiveness of suggestion of immunity by Department of State Whether United States Securities Exchanage Act 1934 applies to foreign governments Service of process The law of the United States

Summary: The facts:In 19723 the Government of Newfoundland, a Province of Canada, sold to the public in Canada and New York its stock in a Canadian corporation, Canadian Javelin. The plaintiffs, who had purchased some of this stock in the United States, brought an action against the Province and some of its officials, alleging injury as a result of a failure by the Province and its officials to disclose, when offering the stock for sale, that the Province intended to preclude further participation by Canadian Javelin in government projects. The United States Department of State filed a suggestion of immunity on behalf of the individual defendants and a partial suggestion of immunity on behalf of the Province.1

Held:The action was dismissed.

(1) The Department of State's suggestion of immunity was conclusive as regards the individual defendants. The Court was not entitled to exercise jurisdiction over a defendant when the Department had made a suggestion of immunity.

(2) Section 10(b) of the Securities Exchange Act 1934 did not apply to foreign governments, so that the action against the Province failed.

(3) Constructive delivery of process upon officials of the Province on a visit to the United States was an improper method of serving process upon the Province.

The following is the text of the judgment of the Court:

Plaintiffs bring this class action on behalf of stockholders, purchasers, and sellers of securities of Canadian Javelin, Limited. Defendants are the Province of Newfoundland and Labrador, and three of its highest officials. Plaintiffs seek compensatory and punitive damages for an alleged violation of 10b of the Securities Exchange Act of 1934, 15 U.S.C. 78j(b), and Rule 10b5, promulgated thereunder.

Canadian Javelin, a publicly held Canadian corporation, held concessions for development of...

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