the Court found that the property right that is to be protected by Section 308 of the Pennsylvania Business Corporation Law is the shares of the shareholder. There is no evidence that Section 308 was enacted to aid persons in their takeover efforts and, therefore, the takeover, if it could ever be viewed as a property right, cannot be seen here as the property right which a plaintiff seeks to protect in an action under this law. Thus, the value of the plaintiff's shares equaled the amount in controversy in this action.
Plaintiff argued that in Alex Brown & Sons v. Latrobe Steel Co., 376 F. Supp. 1373 (W.D. Pa. 1974), the court rejected the approach that this Court adopted and measured the amount in controversy by the value of the tender. This Court could not accept the plaintiff's reading of the Latrobe decision. In Latrobe, an action under Section 308 of the Pennsylvania Business Corporation Law where the plaintiff sought a shareholder list, the plaintiff owned 100 shares in the defendant corporation valued at $11.00 per share. However, while the court apparently proceeded to the merits of the action, it did not raise or address the issue of jurisdictional amount. There is no indication of why the court allowed the case to proceed. This Court believed that it could not follow the plaintiff's interpretation of the decision in Latrobe and disregard what it believed to be the sound analysis employed in the second approach on the basis of a decision where the issue of jurisdictional amount never appeared to be raised.
Having decided to employ the second approach and to calculate the jurisdictional amount by the value of the plaintiff's shares, the Court allowed the parties to present testimony on the value of the shares. At this preliminary hearing, the plaintiff testified to owning 100 shares in the defendant corporation. He also stated that if the takeover effort did not succeed the shares would be worth $20.00 per share, and if it did succeed, the shares would be worth $30.25 per share. Obviously, then, even the plaintiff did not value his shares to be in excess of the $10,000. jurisdictional amount. Concluding that the jurisdictional prerequisite was not satisfied, this Court was compelled to grant the defendant's motion to dismiss.
One further comment is necessary. While the approach taken by this Court has led to the dismissal of plaintiff's case from federal court, this Court believes that such action does not frustrate any state or federal policy and does not lead to an unjust result. When the Pennsylvania legislature enacted Section 308 of the Pennsylvania Business Corporation Law and gave shareholders a remedy for their corporations' failures to disclose certain information, it envisioned, as evidenced by the terms of the law, that plaintiffs would seek redress in the courts of common pleas of Pennsylvania. By reason of the federal diversity statute, such actions have been brought into federal court when the jurisdictional prerequisites have been satisfied. Congress has allowed actions based on state law to be taken into federal courts when the jurisdictional requirements are met, even though the states that provide the remedy contemplated that the lawsuits involving the remedy would be brought in state courts. However, as Congress has only allowed those actions that would ordinarily be destined for state court to be brought into federal court when certain jurisdictional requirements are present, those jurisdictional requirements must be taken seriously. The decision in this case did no more than that. It was an attempt to distinguish between those cases which Congress has allowed into federal court and those which it has decided must remain in state court. The rule adopted here for making that distinction will perhaps allow parties to know where to commence their actions in the future and therefore, hopefully, avoid the possible prejudice that results from a delay in an action that is dismissed for lack of jurisdiction. A clear rule of thumb, such as the one adopted here, would seem to enhance justice by clearly providing plaintiffs with direction. And as the plaintiff, here, can now return to the proper forum, this Court does not believe injustice has been worked by this Court's decision.
Clarence C. Newcomer, J.
AND NOW, to wit, this 9th day of February, 1978, for the reasons stated in the accompanying memorandum, it is hereby ORDERED that Defendant's Motion to Dismiss is GRANTED.
AND IT IS SO ORDERED.
Clarence C. Newcomer, J.
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