Herpich v. Wilder, 27385.

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtAINSWORTH, DYER and SIMPSON, Circuit
Citation430 F.2d 818
PartiesEdwin J. HERPICH, on behalf of himself and all other stockholders, etc., Plaintiffs-Appellants, v. Robert E. WILDER et al., Defendants-Appellees.
Docket NumberNo. 27385.,27385.
Decision Date14 July 1970

F. Don Siegal, J. Vernon Patrick, Jr., Howard P. Walthall, Birmingham, Ala., for appellants; Berkowitz, Lefkovits, Vann & Patrick, Birmingham, Ala., of counsel.

B. M. Waller, Jack Crenshaw, Truman Hobbs, Montgomery, Ala., John L. Hay, John P. Frank, Phoenix, Ariz., Crenshaw & Waller, Montgomery, Ala., for appellee Robert E. Wilder.

Hobbs, Copeland, Franco, Riggs & Screws, Montgomery, Ala., Seale, Smith, Baine & Phelps, by A. G. Seale, Baton Rouge, La., Lewis Roca Beauchamp & Linton by Michael J. LaVelle, Phoenix, Ariz., for appellee National American Life Ins. Co.

Before AINSWORTH, DYER and SIMPSON, Circuit Judges.

AINSWORTH, Circuit Judge:

As in Herpich v. Wallace,1 decided today, we must determine in this case whether minority shareholders of a Louisiana corporation have stated a claim for relief under various sections of the federal securities laws2 so as to entitle them to challenge in federal court, this time in Alabama, the way in which control of their corporation was sold. Herpich v. Wallace was directed primarily against the purchasers of control, the so-called Arizona Group. This case is directed against the seller, Robert E. Wilder. The District Court dismissed plaintiffs' complaint against Wilder on the pleadings. With respect to claims under section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and, more particularly, SEC Rule 10b-5, 17 C.F.R. § 240.10b-5, we conclude that the District Court erred. Therefore, for reasons set forth in our opinion in the Wallace case, we hold that the judgment appealed from must be reversed in part.3 The case is remanded for further proceedings not inconsistent with the opinion in Wallace, and plaintiffs shall be afforded an opportunity to amend their complaint against Wilder to reflect additional information they say they have obtained since the complaint, as amended, was filed herein.

The principal difference between this case and Wallace is that defendants in Wallace are the present management of National American Life Insurance Company, but Wilder, to some extent, has departed the scene. The complaint against Wilder, however, alleges that he has committed overt acts in furtherance of the conspiracy between him and the Arizona Group defendants in Wallace. Consequently, having allegedly joined the conspiracy and taken steps to assure its success, Wilder may be held responsible for the acts of his coconspirators in furtherance of their scheme. Dasho v. Susquehanna Corporation, 7 Cir., 1967, 380 F.2d 262, 267 n. 2; accord, Shell v. Hensley, 5 Cir., 1970, 430 F.2d 819.4

On remand, we leave to the determination of the District Court whether any nonfederal claims presented lie within that Court's pendent jurisdiction, and the wisdom of exercising such pendent jurisdiction as is found to exist. See Kletschka v. Driver, 2 Cir., 1969, 411 F.2d 436, 450.

The judgment is affirmed in part and reversed in part, and the case is remanded for further proceedings in accordance with this opinion.

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14 cases
  • Herpich v. Wallace
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • July 14, 1970
    ...situated National American shareholders, and derivatively on behalf of National American. It is a companion to Herpich v. Wilder, 5 Cir., 1970, 430 F.2d 818 No. 27385, also decided today by this Court. The principal defendants, referred to as the "Arizona Group," control the present managem......
  • Kirshner v. U.S.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • July 19, 1979
    ...which is in no way tied to a specific duty of disclosure. See Ferguson v. OmniMedia, 469 F.2d 194 (1st Cir. 1972); Herpich v. Wilder, 430 F.2d 818 (5th Cir. 1970), Cert. denied, 401 U.S. 947, 91 S.Ct. 935, 28 L.Ed.2d 230 (1971). 6 See also, Newman v. Prior, 518 F.2d 97 (4th Cir. 1975); Suro......
  • Gilbert v. Bagley
    • United States
    • U.S. District Court — Middle District of North Carolina
    • June 2, 1980
    ...1122, 25 L.Ed.2d 397 (1970). Second, plaintiff must allege acts by the defendant in furtherance of the conspiracy. Herpich v. Wilder, 430 F.2d 818, 819 (5th Cir. 1970), cert. denied 401 U.S. 947, 91 S.Ct. 935, 28 L.Ed.2d 230 (1971); Ross v. Licht, 263 F.Supp. 395, 411 Aiding and abetting li......
  • Shell v. Hensley
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • July 14, 1970
    ...meant to provide.13 The orders in Nos. 27447 and 27514 are affirmed. 1 Herpich v. Wallace, 5 Cir., 1970, 430 F.2d 792; Herpich v. Wilder, 5 Cir., 1970, 430 F.2d 818. 2 The District Judge, H. H. Grooms, determined that an immediate appeal from his order overruling defendants' motions to dism......
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