holding Corporation Commission liable for rescission damages for misleading statements regarding regulation of insolvent corporation, which “induced” investors to purchase securities
How later courts described this case
- holding Corporation Commission liable for rescission damages for misleading statements regarding regulation of insolvent corporation, which “induced” investors to purchase securities
- ordinarily no individual cause of action based on breach of duty by public official
Written by the judges who cited it.
Later courts went against this
Overruled on other grounds by State v. Gunnison, 127 Ariz. 110 (1980)
(Davis), 123 Ariz. 324, 599 P.2d 777 (1979), overruled in part on other grounds by State v. Gunnison, 127 Ariz. 110, 618 P.2d 604 (1980).
The opinion
REHEARING DENIED
GORDON, Justice:
In our opinion in State v. Superior Court, 123 Ariz. 324 , 599 P.2d 777 (1979), we denied a motion to dismiss Counts I and II of plaintiffs’ complaint, finding that Count I adequately stated a cause of action pursuant to A.R.S. § 44-1991 and that Count II adequately asserted that the defendants aided and abetted others in violating A.R.S. § 14-1991. In light of this Court’s recent adoption of the Court of Appeals opinion in Greenfield v. Cheek, 122 Ariz. 70 , 593 P.2d 293 (App.1978); Greenfield v. Cheek, 122 Ariz. 57 , 593 P.2d 280 (1979), Counts I and II of plaintiffs’ complaint are dismissed with leave to amend. Language to the contrary in State v. Superior Court, supra, is hereby vacated.
The complaint was filed in November of 1977. The law in Arizona at that time was that scienter was not a necessary element of a cause of action based upon A.R.S. § 44-1991. See Washington National Corp. v. Thomas, 117 Ariz. 95 , 570 P.2d 1268 (App. 1977); Baker v. Walston & Co., Inc., 7 Ariz. App. 590 , 442 P.2d 148 (1968). Washington National, supra, and Baker, supra, were, however, recently overruled by this Court in Greenfield, supra, which held that scienter is a necessary element of A.R.S. § 44-1991.
Because Counts I and II do not assert that the defendants knew their statements were false and acted with an intent to deceive, scienter has not been alleged. See, Greenfield, supra. Counts I and II are, therefore, dismissed with leave to amend the pleadings to conform with the current status of the law.
In view of the modifications of the original opinion made herein, the motion for rehearing is denied.
CAMERON, C. J., STRUCKMEYER, V. C. J., and HAYS and HOLOHAN, JJ., concur.