Wayne Inv., Inc. v. Gulf Oil Corp., No. 84-1099

CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)
Writing for the CourtBefore COFFIN and BOWNES; COFFIN
Citation739 F.2d 11
Docket NumberNo. 84-1099
Decision Date18 July 1984
Parties, Fed. Sec. L. Rep. P 91,577 WAYNE INVESTMENT, INC., Plaintiff, Appellant, v. GULF OIL CORPORATION, et al., Defendants, Appellees.

Page 11

739 F.2d 11
39 Fed.R.Serv.2d 795, Fed. Sec. L. Rep. P 91,577
WAYNE INVESTMENT, INC., Plaintiff, Appellant,
v.
GULF OIL CORPORATION, et al., Defendants, Appellees.
No. 84-1099.
United States Court of Appeals,
First Circuit.
Argued May 11, 1984.
Decided July 18, 1984.

Page 12

Susan F. Brand, Boston, Mass., with whom Alfred J. O'Donovan, III, Boston, Mass., was on brief, for appellant.

John W. Castles 3d, New York City, with whom William P. Casella, Banks Brown, Ellen M. Saideman, New York City, John E. Bailey, Kenneth C. Keener, Houston, Tex., Eleanor D. Acheson, Ropes & Gray, Boston, Mass., and Lord, Day & Lord, New York City, were on brief, for appellees.

Before COFFIN and BOWNES, Circuit Judges, and PETTINE, * Senior District Judge.

COFFIN, Circuit Judge.

Appellant Wayne Investment brought an action against Gulf Oil Corporation (Gulf) alleging that Gulf had violated Sec. 17(a) of the Securities Act of 1933, 1 Secs. 10(b) and 14(e) of the Securities Exchange Act of 1934, Mass.Gen.Laws Ann. ch. 93A, and the common law of fraud by making false and misleading statements in connection with a tender offer. The district court dismissed the complaint on the ground that appellant had not met the requirement of Fed.R.Civ.P. 9(b), which provides, "In all averments of fraud ..., the circumstances constituting the fraud ... shall be stated with particularity." Appellant argues that its complaint and an affidavit it filed in opposition to Gulf's motion to dismiss did set out the fraud claim with sufficient particularity. In addition, appellant argues that its claim under Mass.Gen.Laws Ann. ch. 93A was not subject to the requirements of Fed.R.Civ.P. 9(b), and that it should have been allowed to amend its complaint to allege diversity jurisdiction for this claim. We find that the district court ruled correctly on both of these issues, and we affirm.

On June 17, 1982, Gulf and Cities Service Company (Cities Service) entered into a merger agreement under which Gulf agreed to make an offer of $63.00 per share for approximately 54 percent of the Cities Service common stock. If the offer was successful, Gulf planned to merge Cities Service with a wholly-owned subsidiary of Gulf. Gulf's Offer to Purchase (the Offer) expressly warned, "There can be no assurance that a challenge to the Offer on antitrust grounds will not be made, or if such a challenge is made, what the result will be." The Offer stated that each party would "use its best efforts to cause the Merger to occur." The Offer also provided, however, that Gulf reserved the right to terminate the offer if certain conditions (including an adverse action by a governmental authority) arose, "regardless of the circumstances giving rise to such condition (including any action or inaction by ... Gulf)."

Gulf began to purchase shares of Cities Service on June 22, 1982. During June and July appellant sold a number of put and call options with a September expiration date. On July 29, 1982, the Federal Trade Commission (FTC) obtained a temporary restraining order enjoining the transaction on antitrust grounds. Gulf issued a press release on July 30, 1982, announcing that it intended "to contest the FTC action vigorously,

Page 13

but at the same time [to] seek to discuss whether there is a reasonable basis for prompt settlement of the action." Appellant closed some of its call options, purchased shares to cover other call options that had been exercised, and left open its position in some of its put options. On August 6, 1982, Gulf announced that it was exercising its right to terminate the merger agreement and tender offer. The price of Cities Service stock fell sharply, and appellant suffered a considerable loss when the September put options were exercised.

Appellant filed a complaint on July 26, 1983, alleging on information and belief that after the Offer to Purchase had been made, various legal and financial developments had made the acquisition of Cities Service a less attractive proposition for Gulf. In consequence, the complaint alleged, Gulf

"pursued a course of fraudulent and unlawful conduct designed to precipitate events which Gulf could argue constituted sufficient conditions to permit Gulf to terminate its obligations under the Merger Agreement and Offer to Purchase. Toward that end, Gulf refused to negotiate or cooperate in good faith with the Federal Trade Commission ("FTC"), as it was required to do under the terms of the Merger Agreement, in order to provoke a lawsuit by the FTC to enjoin the proposed merger and to cause the entry of a court order preventing Gulf from consummating its acquisition of Cities Service stock."

The complaint alleged that the FTC informed Gulf that it had only limited objections to the proposed merger, but that Gulf continued to refuse "to engage in meaningful negotiations with the FTC." The complaint alleged:

"On or...

To continue reading

Request your trial
127 practice notes
  • Lessler v. Little, No. 88-1015
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • June 10, 1988
    ...in conclusional form." Report at 14-15 (citing Hayduk v. Lanna, 775 F.2d 441 (1st Cir.1985); Wayne Investment, Inc. v. Gulf Oil Corp., 739 F.2d 11 (1st Cir.1984); McGinty v. Beranger Volkswagen, Inc., 633 F.2d 226 (1st Cir.1980)). Finally, the magistrate recommended that Lessler's state law......
  • Kronfeld v. First Jersey Nat. Bank, Civ. No. 85-2929.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • June 20, 1986
    ...Halpert, Oberst and Co., et al., at pp. 13-14; see, e.g., Goldman v. Belden, 754 F.2d at 1069-70; Wayne Inv., Inc. v. Gulf Oil Corp., 739 F.2d 11, 13 (1st Cir.1984); Barclays Bank of New York v. Goldman, 517 F.Supp. 403, 415 (S.D.N.Y.1981). A great deal of caselaw adopts such requirements. ......
  • Dowling v. Narragansett Capital Corp., Civ. A. No. 87-0213-T.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island
    • April 17, 1990
    ...that are asserted solely for tactical reasons or for purposes of extracting nuisance settlements. Wayne Investment v. Gulf Oil Corp., 739 F.2d 11, 13 (1st Cir.1984); Philippe v. Shape, 688 F.Supp. 783, 786 Generally speaking, the rule requires "specification of the time, place, and content ......
  • Framingham Union Hosp., Inc. v. Travelers Ins. Co., Civ. A. No. 89-0209-S.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • September 27, 1989
    ...v. Becher, 829 F.2d 286, 288 (1st Cir.1987); Hayduk v. Lanna, 775 F.2d 441, 443 (1st Cir.1985); Wayne Investment, Inc. v. Gulf Oil Corp., 739 F.2d 11, 14 (1st The purposes behind the requirement of particularity are (1) to place defendants on notice and enable them to prepare meaningful def......
  • Request a trial to view additional results
127 cases
  • Lessler v. Little, No. 88-1015
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • June 10, 1988
    ...in conclusional form." Report at 14-15 (citing Hayduk v. Lanna, 775 F.2d 441 (1st Cir.1985); Wayne Investment, Inc. v. Gulf Oil Corp., 739 F.2d 11 (1st Cir.1984); McGinty v. Beranger Volkswagen, Inc., 633 F.2d 226 (1st Cir.1980)). Finally, the magistrate recommended that Lessler's state law......
  • Kronfeld v. First Jersey Nat. Bank, Civ. No. 85-2929.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • June 20, 1986
    ...Halpert, Oberst and Co., et al., at pp. 13-14; see, e.g., Goldman v. Belden, 754 F.2d at 1069-70; Wayne Inv., Inc. v. Gulf Oil Corp., 739 F.2d 11, 13 (1st Cir.1984); Barclays Bank of New York v. Goldman, 517 F.Supp. 403, 415 (S.D.N.Y.1981). A great deal of caselaw adopts such requirements. ......
  • Dowling v. Narragansett Capital Corp., Civ. A. No. 87-0213-T.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island
    • April 17, 1990
    ...that are asserted solely for tactical reasons or for purposes of extracting nuisance settlements. Wayne Investment v. Gulf Oil Corp., 739 F.2d 11, 13 (1st Cir.1984); Philippe v. Shape, 688 F.Supp. 783, 786 Generally speaking, the rule requires "specification of the time, place, and content ......
  • Framingham Union Hosp., Inc. v. Travelers Ins. Co., Civ. A. No. 89-0209-S.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • September 27, 1989
    ...v. Becher, 829 F.2d 286, 288 (1st Cir.1987); Hayduk v. Lanna, 775 F.2d 441, 443 (1st Cir.1985); Wayne Investment, Inc. v. Gulf Oil Corp., 739 F.2d 11, 14 (1st The purposes behind the requirement of particularity are (1) to place defendants on notice and enable them to prepare meaningful def......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT