## Facts

- Crane Company and American Standard, Inc. competed to acquire Westinghouse Air Brake, Inc. (Air Brake), whose board supported a merger with Standard subject to shareholder approval.
- Crane made a competing offer to Air Brake shareholders.
- On the final day of Crane’s offer, Standard bought large quantities of Air Brake stock on the exchange at increasing prices, while secretly arranging contemporaneous off-market dispositions at substantially lower prices.
- Crane alleged Standard’s trading created an artificially high market price for Air Brake to influence shareholder decision-making in the control contest.
- Air Brake shareholders approved the Standard merger; Crane received Standard shares in exchange for its Air Brake holdings.
- After Standard threatened antitrust litigation, Crane sold most of its Standard shares, alleging its trading losses were linked to Standard’s manipulative conduct.

## Issues

1. Whether Piper v. Chris-Craft Industries, Inc. (denying damages standing to an unsuccessful tender-offeror under § 14(e)) bars a tender-offeror’s damages claims under Exchange Act § 10(b) and Rule 10b-5 when the plaintiff is a purchaser or seller of securities.
2. Whether Crane had standing to seek damages under Exchange Act § 9(f) for alleged market manipulation under § 9(a).
3. Whether the district court could revisit earlier appellate determinations of standing based on Piper under the law-of-the-case and mandate rules.

## Decision

- The Second Circuit reversed the district court’s judgment for Standard and Blyth.
- The court held Crane had standing to pursue damages under § 10(b) and Rule 10b-5 because it alleged it was a purchaser and seller who traded at prices affected by manipulation and nondisclosure.
- The court held Crane also had standing under § 9(f) because it alleged purchases or sales at prices affected by manipulative acts proscribed by § 9(a).
- The court concluded Piper’s limits on § 14(e) tender-offeror standing did not extend to foreclose § 10(b)/Rule 10b-5 and § 9(f) claims by a trading plaintiff.
- The case was remanded for further proceedings on liability and damages.

## Legal Principles

- Piper’s denial of damages standing to an unsuccessful tender-offeror under § 14(e) does not eliminate standing under other Exchange Act provisions when the plaintiff satisfies the purchaser-seller requirement and alleges trading injury from fraud or manipulation.
- A private plaintiff has standing under § 10(b) and Rule 10b-5 if it is a purchaser or seller and alleges injury in connection with a purchase or sale caused by manipulative conduct or nondisclosure affecting market price.
- Section 9(f) provides a damages remedy to a person who purchased or sold a security at a price affected by conduct violating § 9(a), if the plaintiff alleges injury by reason of that manipulation.
- Under the mandate rule and law-of-the-case doctrine, a district court generally may not depart from an appellate court’s prior standing ruling absent clearly controlling intervening authority that squarely requires a different result.

## Conclusion

The Second Circuit held that an unsuccessful bidder in a takeover contest may still sue for damages under § 10(b)/Rule 10b-5 and § 9(f) when it alleges purchaser-seller status and trading losses from market manipulation, and that Piper’s § 14(e) standing limitation does not compel dismissal of those distinct claims.


Crane Co. v. Am. Standard, Inc., 603 F.2d 244 (2d Cir. 1979)