The opinion of the court was delivered by: DUMBAULD
Defendant, Sharon Steel Corporation, is apparently about to be gobbled up in one of the "conglomerate mergers" so prevalent today. One potential acquisitor is plaintiff, NVF, connected with the enterprises of one Victor Posner. Another is Cyclops, another steel company. The management of defendant, perhaps rightly, favors Cyclops, and opposes NVF so resolutely that it wishes to have no part in forwarding NVF's efforts, even by making available to NVF the shareholder list of Sharon in order that NVF might communicate its offer to Sharon's stockholders.
NVF, owning 5000 shares of Sharon, applied to Sharon for the stockholders' list of Sharon, and upon refusal, brought suit in this Court pursuant to Pennsylvania statutory corporation law. The pertinent provision is Act No. 216, July 20, 1968, sec. 11, amending sec. 308 of the Business Corporation Law of May 5, 1933, as amended, 15 P.S. § 1308.
The Pennsylvania statute authorizes a stockholder access to the list for any proper purpose. Proper purpose is defined as "a purpose reasonably related to such person's interest as a shareholder".
The statute thus provides that such relief is to be given "summarily",
and that the burden of proof with respect to propriety of purpose is on the defendant.
Defendant contends, first, that this Court has no jurisdiction, by reason of the exclusive jurisdiction of the Court of Common Pleas conferred by the statute.
However, we believe that this provision is remedial or procedural, and that a federal court may furnish its own equitable remedy. Stern v. South Chester Tube Co., 390 U.S. 606, 609-610, 88 S. Ct. 1332, 20 L. Ed. 2d 177 (1968). The statutory remedy is not part of or a limitation upon the scope of the substantive right itself. By analogy to wrongful death act cases, federal jurisdiction is proper. Dumbauld, The Constitution of the United States (1964) 392.
Defendant next contends that the purpose for which NVF seeks the list is improper, and is not related to a stockholder's legitimate interests.
NVF's purpose is to circulate to Sharon stockholders an offer on the part of NVF to buy Sharon stock in exchange for debentures and warrants to be issued by NVF.
Defendant cogently argues that this effort to peddle NVF securities is just like using a stockholders' list to sell life insurance or magazine subscriptions
or other commodities or services unrelated to NVF's status as a stockholder. If NVF owned no Sharon stock, it could not obtain use of the list for such purposes. Can it better its hold by buying a few shares of stock?
We begin with the proposition that Pennsylvania law, both statutory and decisional, requires such stockholders' requests to be disposed of summarily. We take it this is substantially equivalent to the speed of granting an injunction pendente lite without the complete adjudication of complex issues. The law looks more favorably upon requests for access to the stock register than for access to other company records. Goldman v. Trans-United Industries, Inc., 404 Pa. 288, 292-293, 171 A.2d 788 (1961).
It must be remembered that like jury trial or the right to vote, the right to a stockholders' list is an incidental or preliminary right which stands sentinel over other rights.