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LEROY V. GREAT WESTERN UNITED CORP., 443 U. S. 173 (1979)

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U.S. Supreme Court

Leroy v. Great Western United Corp., 443 U.S. 173 (1979)

Leroy v. Great Western United Corp.

No. 78-759

Argued April 17, 1979

Decided June 26, 1979

443 U.S. 173

Syllabus

After publicly announcing its intent to make a tender offer to purchase shares of stock of a company having substantial assets in Idaho, appellee, a Texas-based corporation which is also engaged in business in New York and Maryland, filed the informational schedule with the Securities and Exchange Commission required by the Securities Exchange Act of 1934 (1934 Act), as amended by the Williams Act, and also filed documents in Idaho in an attempt to satisfy that State's takeover statute. When Idaho officials objected to the filing and delayed the effective date of the tender offer, appellee brought an action in the Federal District Court for the Northern District of Texas against the officials responsible for enforcing Idaho's takeover law, seeking a declaration that the state law was invalid insofar as it purported to apply to interstate tender offers to purchase securities traded on a national exchange. The District Court held that personal jurisdiction over the Idaho defendants had been obtained under the Texas long-arm statute, and that venue could be sustained under the special venue provision in § 27 of the 1934 Act giving federal district courts exclusive jurisdiction of actions brought to enforce "any liability or duty created" by the Act. The court then went on to hold that the Idaho takeover statute was preempted by the Williams Act and placed an impermissible burden on interstate commerce. The Court of Appeals affirmed, holding, inter alia, that venue was authorized by § 27 of the 1934 Act, because Idaho's enforcement attempt, by conflicting with the Williams Act, constituted a violation of a "duty" imposed by § 28(a) of the 1934 Act (which provides that nothing in the Act shall affect a state securities regulatory agency's jurisdiction over any security or person insofar as it does not conflict with the Act), and that venue was also proper under 28 U.S.C. § 1391(b) (which permits actions not founded solely on diversity of citizenship to be brought in the district where all defendants reside or "in which the claim arose") because the allegedly invalid restraint against appellee occurred in the Northern District of Texas, and that was accordingly the district "in which the claim arose." chanroblesvirtualawlibrary

Page 443 U. S. 174

Held:

1. There is a sound prudential justification in this case for reversing the normal order of considering personal jurisdiction in advance of venue, since otherwise this Court would have to decide a constitutional law question not previously decided as to whether personal jurisdiction was properly obtained under the Texas long-arm statute. Pp. 443 U. S. 180-181.

2. Venue was improper under § 27 of the 1934 Act because § 28(a) of that Act imposed no duty on the Idaho officials. Pp. 443 U. S. 181-182.

3. Nor was venue available in the Northern District of Texas under 28 U.S.C. § 1391(b). The District of Idaho, where the actions forming the basis for appellee's claim took place, is the only one in which "the claim arose" within the meaning of § 1391(b). Pp. 443 U. S. 183-187.

577 F.2d 1256, reversed.

STEVENS, J., delivered the opinion of the Court, in which BURGER, C.J.,and STEWART, BLACKMUN, POWELL, and REHNQUIST, JJ., joined. WHITE, J., filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 443 U. S. 187. chanroblesvirtualawlibrary

Page 443 U. S. 175





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