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In 1969, National Industries, Inc. acquired 34 percent of the stock of TSC Industries, Inc. (defendant). Several executives from National were then placed on the board of directors of TSC. Later that same year, National and TSC planned to merge. A joint-proxy statement was issued to shareholders. Northway, Inc. (plaintiff), a TSC shareholder, brought suit against TSC, alleging that TSC committed fraud by not disclosing the fact that National was already highly involved in TSC in its proxy statement. The district court denied Northway’s motion for summary judgment. Northway appealed to the court of appeals, which granted partial summary judgment. TSC then petitioned for certiorari to the United States Supreme Court.