LOCATION: Hoopa Valley Indian Reservation
DOCKET NO.: 86-805
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: United States Court of Appeals for the Fifth Circuit
CITATION: 486 US 622 (1988)
ARGUED: Dec 09, 1987
DECIDED: Jun 15, 1988
Braden W. Sparks - on behalf of the Petitioners
John A. Spinuzzi - on behalf of the Respondents
Richard G. Taranto - as amicus curiae, supporting Petitioners
Facts of the case
Media for Pinter v. DahlAudio Transcription for Oral Argument - December 09, 1987 in Pinter v. Dahl
Audio Transcription for Opinion Announcement - June 15, 1988 in Pinter v. Dahl
Harry A. Blackmun:
The other case, Pinter against Dahl, comes to us from the Court of Appeals for the Fifth Circuit.
The petitioner, Pinter, is an oil and gas producer and securities dealer, and he sold unregistered securities consisting of fractional undivided interests in oil and gas leases to the respondent, Dahl, was experienced in oil and gas ventures.
And Dahl told friends and family and business associates about the venture and assisted them in completing the subscription agreement forms.
He received no commission from Pinter when they invested.
The venture failed and Dahl and his groups sued Pinter in federal courts seeking rescission under Section 12(1) of the 1933 Securities Act.
A bench trial was held and the Court granted judgment for the plaintiff's rejecting Pinter's defense to Dahl's suit that we call in pari delicto and the Fifth Circuit affirmed.
It ruled that that defense was not available in a Section 12(1) action.
And it also ruled that Dahl was not a seller within the meaning of the statute and therefore, he could not be held liable in contribution.
We vacate that judgment and remand the case.
We hold that the in pari delicto defense is available in a Section 12(1) private rescission action.
We also hold that a nonowner of a security must solicit to purchase motivated at least in part by a desire to benefit himself before he qualifies as a seller within the meaning of the statute.
The term seller is not limited to an owner who passes title or other interest in the security to a buyer for value.
At the same time, the term offer in Section 2(3) of the Act does not include every possible solicitation.
Here, the record is insufficient to determine whether Dahl maybe liable as a statutory seller.
There are no findings below that focus on whether he urged the other respondents to invest in order to further some financial interests of his own or at Pinter.
Justice Stevens has filed a dissenting opinion and Justice Kennedy took no part.