Trecker v. Scag
United States Court of Appeals for the Seventh Circuit
679 F.2d 703 (1982)
- Written by Steven Pacht, JD
Facts
Wisconsin Marine (Marine) was a closely held Wisconsin-based corporation. Marine’s stock was not freely traded. Trecker (plaintiff) and Scag (defendant) were shareholders in Marine. Trecker believed that Scag caused him to let Marine redeem Trecker’s stock for less than it was worth by withholding key information. Despite the fact that Trecker, Stag, and Marine all were citizens of Wisconsin, Trecker sued Scag in federal court rather than in Wisconsin court, and Trecker only asserted a federal claim pursuant to Securities and Exchange Commission (SEC) Rule 10b-5; Trecker did not assert any Wisconsin-law claims for common-law fraud, Wisconsin’s version of Rule 10b-5, or for breach of fiduciary duty. At oral argument, Trecker explained that he did not sue in Wisconsin court due to the absence of caselaw regarding Wisconsin’s version of Rule 10b-5. The court of appeals decided that Trecker’s claim should not be dismissed.
Rule of Law
Issue
Holding and Reasoning (Cummings, C.J.)
Concurrence (Posner, J.)
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