## Facts

- Chris-Craft Industries, Inc. launched open-market purchases and tender offers to obtain control of Piper Aircraft Corporation.
- Chris-Craft stopped additional open-market purchases after SEC officials advised that continued buying while its exchange offer was pending would violate SEC Rule 10b-6 (restricting purchases during a securities distribution).
- Piper’s management and controlling shareholders resisted the takeover and, along with Piper’s investment adviser (First Boston) and a rival bidder (Bangor Punta), engaged in conduct Chris-Craft alleged was deceptive or manipulative.
- Bangor Punta prevailed and acquired a controlling interest in Piper; Chris-Craft became the unsuccessful tender offeror.
- Chris-Craft sued for damages and injunctive relief, alleging violations of § 14(e) of the Securities Exchange Act (Williams Act) and Rule 10b-6, among other theories, claiming the misconduct caused its defeat.

## Issues

1. Whether a defeated tender offeror has an implied private cause of action for damages under § 14(e) of the Securities Exchange Act for alleged fraud or manipulation in connection with a tender offer.
2. Whether a defeated tender offeror may recover damages through an implied private action based on alleged violations of SEC Rule 10b-6 by a competing bidder.
3. Whether recognizing bidder-versus-bidder damages remedies is consistent with the Williams Act’s structure and enforcement scheme.

## Decision

- The Supreme Court reversed the court of appeals.
- A tender offeror suing as a takeover bidder does not have standing to pursue a damages remedy under § 14(e); no implied damages action exists for a defeated bidder under that provision.
- Chris-Craft could not recover damages based on alleged Rule 10b-6 violations; the Court declined to recognize an implied private damages remedy for a competing bidder under the rule and its statutory basis.
- The damages and injunctive relief ordered in Chris-Craft’s favor were set aside insofar as they rested on § 14(e) and Rule 10b-6 bidder-standing theories.

## Legal Principles

- Section 14(e) of the Williams Act is directed to protecting investors—particularly target-company shareholders confronted with tender offers—rather than protecting competing bidders’ economic interests.
- Courts should not infer a private damages remedy absent persuasive evidence that Congress intended to create one; the existence of SEC enforcement and shareholder/investor remedies weighs against implying additional bidder-versus-bidder damages actions.
- Members of the class regulated by a statute (here, takeover bidders) are generally not the intended beneficiaries for purposes of implying a private damages remedy.
- SEC rules such as Rule 10b-6 are not automatically privately enforceable for damages by any party affected; implied private remedies depend on statutory purpose, structure, and congressional intent.

## Conclusion

The Court held that an unsuccessful tender offeror lacks an implied private right to recover damages under § 14(e) or Rule 10b-6 for alleged misconduct during a control contest, because the Williams Act’s protections center on investors and its enforcement design does not contemplate bidder-versus-bidder damages litigation.


Piper v. Chris-Craft Indus., Inc., 430 U.S. 1 (1977)