William F. Shidler, et al., Appellant, v. All American Life & Financial Corp., etc., et al. Appellees, 775 F.2d 917

Summary

The corporation entered a merger agreement whereby the shareholders' stock would be purchased for cash. The shareholders refused to tender their stock and brought an action contending that the merger violated the voting requirements of the Iowa Business Corporations Act, Iowa Code Ann. § 496A.70. The district court found that a private cause of action did not exist under § 496A.70. On appeal the court reversed the district court's order finding that an implied cause of action existed under § 496A.70. The court applied a four factor test and determined that because the language of § 496A.70 demonstrated an expectation of enforcement through a variety of legal channels judicial implication of a private cause of action posed no threat to federal sovereignty or administrative autonomy. The court concluded that a private right of action for damages was necessary to make the injured shareholders whole and to discourage future unlawful conduct in freeze-out mergers. Finally, the court ...