## Facts

- Richard D. Gittlin, a Studebaker shareholder, owned 5,000 shares and claimed written authorizations from 42 other shareholders holding over 145,000 shares (more than 5% of the company’s stock).
- Gittlin and others sought changes to Studebaker’s board and stated they intended to solicit proxies for the upcoming annual meeting if management did not agree.
- After Studebaker refused to provide the shareholder list, Gittlin filed a New York state-court proceeding under N.Y. Business Corporation Law § 1315 seeking inspection of the list, relying on the 42 authorizations to satisfy the statutory ownership threshold.
- Studebaker filed a federal action alleging Gittlin obtained the authorizations in violation of SEC proxy rules under § 14(a) of the Securities Exchange Act by failing to file required proxy materials before soliciting those authorizations.
- The district court issued an injunction barring Gittlin from using the authorizations in the state inspection proceeding unless and until he complied with the SEC proxy rules.

## Issues

1. Whether a federal court may enjoin a shareholder’s use of authorizations in a pending state-court shareholder-list inspection proceeding to enforce compliance with § 14(a) and SEC proxy rules.
2. Whether obtaining shareholder “authorizations” to meet a state-law threshold for inspecting a shareholder list constitutes proxy “solicitation” covered by § 14(a) when undertaken as part of a planned proxy contest.

## Decision

- The Second Circuit affirmed the injunction.
- The federal court had authority to grant injunctive relief enforcing § 14(a) and the proxy rules even though the conduct related to a state inspection proceeding, because the injunction targeted federally proscribed conduct rather than halting the state case.
- The court upheld the district court’s handling of the expedited pleadings, allowing treatment of the supporting affidavit and order to show cause as sufficient to proceed promptly given the timing pressures of a control contest.
- The court held that Gittlin’s acquisition of authorizations was within the proxy rules because it was part of a continuous plan to culminate in proxy solicitation and to prepare for success in that solicitation.
- The injunction was limited: it did not bar inspection permanently, but conditioned use of the authorizations on prior compliance with SEC filing and disclosure requirements.

## Legal Principles

- Federal courts may enjoin conduct that violates § 14(a) and SEC proxy rules even when the conduct is being used to support relief in state corporate-law proceedings, so long as the order enforces federal obligations rather than restraining the state tribunal.
- “Solicitation” under § 14(a) extends beyond an explicit request for a proxy; communications and steps taken as part of a continuous plan intended to culminate in proxy solicitation, and to prepare the way for that effort, fall within the proxy rules.
- Shareholder assistance in obtaining tools for a proxy contest—such as authorization to obtain a shareholder list—triggers federal disclosure protections when sought in furtherance of a planned solicitation.
- Injunctive relief conditioning continued activity on compliance with proxy rules is an appropriate remedy where timing pressures could otherwise permit circumvention of required disclosures.

## Conclusion

The court upheld an injunction preventing a shareholder from using other shareholders’ authorizations to obtain a shareholder list through state procedures until he complied with federal proxy rules, holding that preparatory steps taken as part of a planned proxy contest qualify as regulated solicitation under § 14(a).


Studebaker Corp. v. Gittlin, 360 F.2d 692 (2d Cir. 1966)