L. S. ROBINSON, Plaintiff-Appellant, v. CUPPLES CONTAINER CO. Et Al., Defendants-Appellees

Before BARNES, WRIGHT and TRASK, Circuit Judges.

Plaintiff Robinson appeals from an adverse judgment in his suit for damages under § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j, and rescission of a stock exchange contract under Cal.Corp.Code § 26100, based on diversity. We affirm.

The plaintiff and his partner, Paul Merner, operated Magi-Cup, a plastic cup manufacturing company in California. Desiring a broader base of financing and an opportunity to move into a national market, plaintiff approached defendant Cupples Container Company (Container) at a trade meeting in Nevada in November of 1966. He suggested the possibility of a merger and invited Container to examine his plant and financial reports.

After several months of negotiation, Container agreed to purchase Magi-Cup’s stock. Plaintiff demanded Container stock in return for his shares of Magi-Cup while his partner accepted cash and a note. The contract of sale was signed in March of 1967 in Missouri, where Container had its headquarters. The exchange of stock also took place there.

After the exchange of stock, plaintiff acted as head of the former Magi-Cup plant until he was removed in…