Cortec Industries, Inc. v. Sum Holding L.P.

949 F.2d 42 (2d Cir. 1991) · United States Court of Appeals for the Second Circuit · November 8, 1991

Summary

The United States Court of Appeals for the Second Circuit addresses what materials a court may consider on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). It holds that the district court could consider documents known to and relied upon by the plaintiffs, even though the documents were neither attached to nor incorporated into the complaint. The court affirms dismissal of the Securities Act § 12(2) seller-liability claim against Westinghouse but reverses the denial of leave to replead allegations that Westinghouse solicited the purchase.

Holdings

  1. A court may consider documents outside the complaint on a Rule 12(b)(6) motion when the plaintiff had actual notice of the documents, relied on them in framing the complaint, and the documents were integral to the claim, even if they were neither attached to nor incorporated by reference in the complaint.
  2. A purchaser may not maintain § 12(2) seller liability against a remote seller or a seller's seller. Because Westinghouse sold its warrant to old Cortec rather than selling securities directly to plaintiffs, plaintiffs could not state a § 12(2) claim against Westinghouse on a seller-liability theory.
  3. The district court abused its discretion by denying plaintiffs leave to replead their § 12(2) claim insofar as it alleged that Westinghouse successfully solicited plaintiffs' purchase for its own financial benefit.

Questions Presented

  1. Whether a district court may consider documents attached to a Rule 12(b)(6) motion when the plaintiff had actual notice of the documents, relied on them in framing the complaint, and the documents were integral to the claim, even though they were not attached to or incorporated by reference in the complaint.
  2. Whether Westinghouse could be liable under Securities Act § 12(2) as plaintiffs' statutory seller when it owned an unexercised warrant, surrendered it to facilitate the transaction, and did not transfer Cortec shares directly to plaintiffs.
  3. Whether plaintiffs should have been granted leave to replead a § 12(2) solicitation-liability theory against Westinghouse.

Disposition

reversed_and_remanded

Cases Cited (19)

  • Pinter v. Dahl, 486 U.S. 622, 108 S. Ct. 2063, 100 L. Ed. 2d 658 (1988)(followed)
  • Cosmas v. Hassett, 886 F.2d 8, 13 (2d Cir. 1989)(discussed)
  • Field v. Trump, 850 F.2d 938 (2d Cir. 1988), cert. denied, 489 U.S. 1012 (1989)(discussed)
  • Samara v. United States, 129 F.2d 594, 597 (2d Cir.), cert. denied, 317 U.S. 686 (1942)(followed)
  • Boro Hall Corp. v. General Motors Corp., 124 F.2d 822, 823 (2d Cir. 1942), cert. denied, 317 U.S. 695 (1943)(followed)
  • Carter v. Stanton, 405 U.S. 669, 671, 92 S. Ct. 1232, 1234, 31 L. Ed. 2d 569 (1972) (per curiam)(followed)
  • Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957)(followed)
  • Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229, 2232, 81 L. Ed. 2d 59 (1984)(followed)
  • Ryder Energy Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984)(followed)
  • Goldman v. Belden, 754 F.2d 1059, 1065-66 (2d Cir. 1985)(followed)

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