Sadler v. NCR Corporation

NCR Corporation (NCR) (defendant) was incorporated in Maryland with a principal place of business in Ohio, but conducted considerable business in its eight New York offices. AT&T was a New York corporation. The Sadlers (plaintiffs) were New York residents who owned more than 6,000 shares of NCR. AT&T began a tender offer for shares of NCR. NCR mailed the offer to all NCR shareholders, but the NCR board rejected the offer. After the rejection, AT&T and the Sadlers (at AT&T’s request) asked NCR for a list of its stockholders in order to more effectively communicate with them. The Sadlers also asked for NCR’s non-objecting beneficial owners (NOBO) list, a list of those individuals owning beneficial interests in shares of NCR. Under NCR’s corporate charter, the shares of these individuals count as a vote in favor of management if the shares are not voted at a meeting. The Sadlers were not able to obtain the lists under Maryland law. NCR denied these requests and the Sadlers brought suit based on a New York law that allowed New York residents that for more than six months had owned shares in a foreign corporation doing business in New York to obtain the corporation’s list of stockholders. AT&T had recently obtained 100 shares of NCR, but had not held the shares for more than six months. NCR thus argued that the Sadlers did not qualify under the New York law because of their arrangement with AT&T. The United States District Court for the Southern District of New York found in favor of the Sadlers on both of their requests. NCR appealed.