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Defendants-appellants, Maxus Energy Corporation ("Maxus Energy") and Maxus Corporate Company ("Maxus Corporate"), appeal from a judgment entered in the United States District Court for the Southern District of New York (Pollack, J.), declaring that Maxus Energy and Maxus Corporate may not assert claims under sections 10(b) and 14(e) of the Securities Exchange Act of 1934 ("1934 Act"), 15 U.S.C. §§ 78j(b), 78n(e) (1988), and that the exchange ratios of a stock for stock distribution between the two merging corporations are not subject to retroactive adjustment and, in any event, may not be challenged by Maxus Energy or Maxus Corporate because they suffered no cognizable injury. Appellants also appeal from an order enjoining them from asserting claims in a pending Texas court proceeding commenced on the same day that the declaratory judgment action was instituted. Appellants contend that the federal claims were mooted by their numerous representations to the court that they would not assert claims under the 1934 Act and that the pendent state law claims should have been dismissed after the 1934 Act claims were mooted. Finally, appellants assert that it was improper for the court to enjoin the state court proceedings. We hold that the judgment declaring that Maxus Energy and Maxus Corporate may not assert claims under the 1934 Act was proper but that the district court erred in exercising pendent jurisdiction over state law claims after declining to do so. We also hold that the injunction exceeded the scope of the declaratory judgment.


25 F.2d 556 (1991)



MAXUS ENERGY CORPORATION and Maxus Corporate Company, Defendants-Appellants, Martin A. Siegel, Ivan F. Boesky and John Does 1-10, Defendants.

Nos. 324, 524, Dockets 90-7487, 90-7657.

United States Court of Appeals, Second Circuit.

Argued October 1, 1990. Decided February 6, 1991.

New York Law School location: File #1077, Box #126