Skaflestad v. Huna Totem Corp.

Summary

The Supreme Court of Alaska affirmed judgment for Huna Totem Corporation in a shareholder class action challenging disclosures concerning creation and review of a settlement trust. The court held that the superior court applied the correct objective materiality standard under Alaska securities law and that any omissions or ambiguities were not materially misleading when considered in light of the total mix of information provided to shareholders. The court did not reach the superior court's alternative ruling that the requested remedies would be inequitable.

Holdings

1. The superior court did not improperly impose a scienter requirement. Alaska's objective materiality test does not require proof of an intent to deceive, and the superior court correctly applied that test.
2. The alleged omissions and ambiguities were not materially misleading because, considering the total mix of information available to shareholders, a reasonable shareholder would not have been substantially likely to consider the omitted trustee-recommendation requirement important in deciding how to vote.

Questions Presented

1. Whether the superior court applied an improper scienter or intent-to-deceive requirement in evaluating the alleged proxy misrepresentations and omissions.
2. Whether the omissions and ambiguities in Huna Totem's preliminary shareholder materials and directors' oral statements were materially misleading under Alaska securities law when considered in light of the total mix of information available to shareholders.
3. Whether the superior court's alternative ruling rejecting declaratory relief, injunctive relief, and nominal damages as inequitable should be reviewed.

Disposition

affirmed