SUROWITZ v. HILTON HOTELS CORP. 383 U.S. 363 (1966) CASE BRIEF

SUROWITZ V. HILTON HOTELS CORP.

383 U.S. 363 (1966)

NATURE OF THE CASE: This was a derivative action for damages. The complaint was dismissed with prejudice.

FACTS: Surowitz (P) invested a little more than $2,000 in Hilton Hotels (P). P had a limited education and could not understand English very well. P was an elderly Polish immigrant with very little formal education and even less of an understanding of the English language. P received a notice from D announcing a stock repurchase plan. P inquired about the plan with her son in law who was a professional business advisor and a graduate of Harvard Law School. P's son in law soon believed that D was involved in a fraudulent scheme. P agreed to file suit and an extensive complaint was given to P for signature, explained to her, and she signed it. The complaint was a class action against D charging it with violations of the Securities Act of 1933. The complaint alleged that D defrauded stockholders of millions of dollars and illegally cheated and depleted corporation assets to enrich individual defendants. The attorney also verified the complaint as required by Fed. R. Civ. P. 11. D motioned for P to submit to an oral examination. It was shown that P did not understand the complaint. D moved for dismissal. P's attorney then filed affidavits showing the extensive investigation. The judge held that P did not understand the complaint and therefore her verification was not valid. The complaint was dismissed as a sham complaint. The court of appeals affirmed.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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