virginia bankshares sandberg argued october decided june part proposed merger first american bank virginia bank merged petitioner virginia bankshares vbi wholly owned subsidiary petitioner first american bankshares fabi bank executive committee board approved price share minority stockholders lose interests bank merger although virginia law required merger proposal submitted vote shareholders meeting preceded circulation informational statement shareholders petitioner bank directors nevertheless solicited proxies voting proposal solicitation urged proposal adoption stated plan approved opportunity minority shareholders receive high value stock respondent sandberg give proxy filed suit district merger approved seeking damages petitioners inter alia soliciting proxies means materially false misleading statements violation securities exchange act security exchange commission rule among things alleged directors believed alternative recommend merger wished remain board trial obtained jury instruction based language mills electric prevail without showing reliance alleged misstatements long material proxy solicitation essential link merger process awarded amount equal difference offered price stock true value remaining respondents prevailed separate action raising similar claims appeals affirmed holding certain statements proxy solicitation including one regarding stock value materially misleading respondents maintain action even though votes needed effectuate merger held knowingly false statements reasons opinion belief even though conclusory form may actionable misstatements material fact within meaning rule pp statements per se inactionable statement belief corporate directors recommended course action explanation reasons recommending may materially significant since substantial likelihood reasonable shareholder consider important deciding vote see tsc industries northway pp statements reasons opinions beliefs statements respect material fact within meaning rule blue chip stamps manor drug stores support petitioners position statements placed outside rule scope policy grounds right bring suit act limited actual stock buyers sellers risk nuisance litigation sellers buyers manufacture claims hypothetical action unconstrained independent evidence contrast reasons directors recommendations statements belief factual statements directors act reasons given hold belief stated statements subject matter reason belief expressed thus matters corporate record subject documentation supported attacked objective evidence outside plaintiff control conclusory terms commercial context also reasonably understood rest factual basis provable facts either furnish good reasons make conclusory judgment count expressions judgments stated knowledge truth falsity like definite statements defended attacked orthodox evidentiary process respondents presented facts bank assets actual potential level operation prove directors statement misleading stock value false explanation directors beliefs however director disbelief undisclosed motivation standing alone insufficient basis sustain action pp fact proxy material discloses offending statement factual basis limits liability misstatements inconsistency obvious neutralizes misleading conclusion capacity influence reasonable shareholder evidence fell short compelling jury find misleading statement facial materiality neutralized pp respondents show causation damages compensable pp allowing shareholders whose votes required law corporate bylaw authorize corporate action subject proxy solicitation bring implied private action pursuant case borak extend scope borak actions beyond ambit mills electric supra held proxy solicitation essential link transaction links directors proposal votes legally required authorize action proposed serious obstacle expansion borak right manifestation either act legislative history congressional intent recognize cause action broad proposed respondents private right action violating federal statute must ultimately rest congressional intent provide private remedy touche ross redington breadth right recognized general matter grow beyond scope congressionally intended nonetheless faced claim equality rounding scope implied private action look policy reasons deciding outer limits right lie see blue chip stamps manor drug stores supra pp respondents theory rejected link existed essential vbi fabi order avoid minority stockholders ill unwilling proceed merger without approval manifested proxies case blue chip stamps manor drug stores supra threats speculative claims procedural intractability inherent theory linked directors desire cosmetic vote causation turn inferences directors thought done without minority shareholder approval issues hazy litigation protracted resolution unreliable pp respondents rely theory proxy statement essential link case part means avoid suit virginia state law bars shareholder seeking avoid transaction tainted director conflict interest inter alia minority shareholders ratified transaction disclosure material facts transaction conflict indication law facts case proxy solicitation resulted loss need resolve question whether provides federal remedy false misleading proxy statement results shareholder loss state remedy pp souter delivered opinion part rehnquist white marshall blackmun scalia kennedy joined part ii rehnquist white marshall blackmun kennedy joined parts iii iv rehnquist white scalia joined scalia filed opinion concurring part concurring judgment post stevens filed opinion concurring part dissenting part marshall joined post kennedy filed opinion concurring part dissenting part marshall blackmun stevens joined post stephen shapiro argued cause petitioners briefs andrew frey kenneth geller john stump lewis booker joseph hassett argued cause respondents brief john keeney george mernick iii michael dreeben argued cause securities exchange commission et al amici curiae urging affirmance brief acting solicitor general bryson deputy solicitor general shapiro james doty paul gonson jacob stillman joseph franco alfred byrne colleen bombardier briefs amici curiae urging reversal filed american bankers association et al john gill iii michael crotty charles marinaccio richard whiting american corporate counsel association et al nancy nord justice souter delivered opinion section securities exchange act stat authorizes securities exchange commission sec adopt rules solicitation proxies prohibits violation case borak first recognized implied private right action breach implemented sec rule prohibits solicitation proxies means materially false misleading statements questions us whether statement couched conclusory qualitative terms purporting explain directors reasons recommending certain corporate action materially misleading within meaning rule whether causation damages compensable shown member class minority shareholders whose votes required law corporate bylaw authorize corporate action subject proxy solicitation hold knowingly false statements reasons may actionable even though conclusory form respondents failed demonstrate equitable basis required extend private action shareholders indication congressional intent lacking december first american bankshares fabi bank holding company began merger first american bank virginia bank eventually merged virginia bankshares vbi wholly owned subsidiary fabi vbi owned bank shares remaining hands minority shareholders fabi hired investment banking firm keefe bruyette woods kbw give opinion appropriate price shares minority holders lose interests bank result merger based market quotations unverified information fabi kbw gave bank executive committee opinion share fair price minority stock executive committee approved merger proposal price full board followed suit although virginia law required merger proposal submitted vote shareholders meeting meeting preceded circulation statement information shareholders directors nevertheless solicited proxies voting proposal annual meeting set april solicitation directors urged proposal adoption stated approved plan opportunity minority shareholders achieve high value elsewhere described fair price stock although minority shareholders gave proxies requested respondent sandberg approval merger sought damages district eastern district virginia vbi fabi directors bank pleaded two counts one soliciting proxies violation rule breaching fiduciary duties owed minority shareholders state law first count sandberg alleged among things directors believed price offered high terms merger fair recommended merger believed alternative wished remain board trial sandberg invoked language opinion mills electric obtain instruction jury find without showing reliance alleged misstatements long material proxy solicitation essential link merger process jury verdicts sandberg counts finding violations rule defendants breach fiduciary duties bank directors jury awarded sandberg share found received stock valued adequately sandberg case pending separate action similar allegations brought petitioners district district columbia several minority shareholders including respondent weinstein like sandberg withheld proxy case transferred eastern district virginia sandberg action tried weinstein respondents successfully pleaded collateral estoppel get summary judgment liability appeal appeals fourth circuit affirmed judgments holding certain statements proxy solicitation materially misleading purposes rule respondents maintain action even though votes needed effectuate merger granted certiorari importance issues presented ii appeals affirmed petitioners liability two statements found materially misleading violation act one plan merger approved board directors provides opportunity bank public shareholders achieve high value shares app pet cert petitioners argue statements opinion belief incorporating indefinite unverifiable expressions actionable misstatements material fact within meaning rule declaration opinion belief never actionable placed proxy solicitation incorporating statements fact sufficient enable readers draw independent conclusions consider first actionability per se statements reasons opinion belief statement definition purports express consciously speaker mind interpret jury verdict finding directors statements belief opinion made knowledge directors hold beliefs opinions expressed confine discussion statements made statements may materially significant raises serious question meaning materiality requirement liability discussed length tsc industries northway held fact material substantial likelihood reasonable shareholder consider important deciding vote think room deny statement belief corporate directors recommended course action explanation reasons recommending take importance shareholders know directors usually knowledge expertness far exceeding normal investor resources directors perceived superiority magnified even common knowledge state law customarily obliges exercise judgment shareholders interest cf day avery app action misrepresentation naturally shareowner faced proxy request think important know directors beliefs course recommend specific reasons urging stockholders embrace assuming materiality question remains whether statements reasons opinions beliefs statements respect material fact fall within strictures rule petitioners argue invite wasteful litigation amorphous issues outside readily provable realm fact recognize liability proof directors recommend merger stated reason cite authority blue chip stamps manor drug stores urging us recognize sound policy grounds placing statements outside scope rule agree blue chip stamps instructive illustrating line manageable litigation facts read supporting petitioners position issue blue chip stamps scope class plaintiffs entitled seek relief implied private cause action violating act prohibiting manipulation deception purchase sale certain securities contrary commission rules held expanding class actual buyers sellers include rely deceptive sales practices taking action either sell buy observed actual sellers buyers sue compensation must identify specific number shares bought sold order calculate limit ensuing recovery recognizing liability merely investors however exposed courts litigation unconstrained anchor demonstrable fact resting instead plaintiff subjective hypothesis number shares sold purchased hindsight natural temptation hypothesize boldness magnified risk nuisance litigation compounded opportunity prolong discovery capacity claims resting undocumented personal assertion resist resolution short settlement trial premises policy added textual analysis precedent blue chip stamps deflected threat vexatious litigation many rather hazy issues historical fact proof depended almost entirely oral testimony attacks truth directors statements reasons belief however need carry threats statements factual two senses statements directors act reasons given hold belief stated statements subject matter reason belief expressed neither sense proof disproof statements implicate concerns expressed blue chip stamps root concerns plaintiff capacity manufacture claims hypothetical action unconstrained independent evidence reasons directors recommendations statements belief contrast characteristically matters corporate record subject documentation supported attacked evidence historical fact outside plaintiff control evidence include corporate minutes statements directors circumstantial evidence bearing facts reasonably underlie reasons claimed honesty statement reasons basis recommendation action point becomes especially clear reasons beliefs go valuations dollars cents answer argue petitioners quoted statement liability predicated express reason dollars cents focused instead indefinite unverifiable term high value much like similar claim merger terms fair shareholders objection ignores fact conclusory terms commercial context reasonably understood rest factual basis justifies accurate absence renders misleading provable facts either furnish good reasons make conclusory commercial judgment count expressions judgments uttered knowledge truth falsity like definite statements defended attacked orthodox evidentiary process either substantiates underlying justifications tends disprove existence addressing analogous issue action misrepresentation day avery app example held statement executive committee law firm partner worse solely impending merger found material misrepresentation cf vulcan metals simmons mfg hand opinion fact parties situated buyer may reasonably rely upon expression seller opinion excuse give false one keeton dobbs keeton owen prosser keeton law torts pp ed case whether high proposal fair minority shareholders depended whether provable facts bank assets actual potential levels operation substantiated value less figure assessed accordance recognized methods valuation respondents adduced evidence facts proving statement misleading subject matter false expression directors reasons whereas proxy statement described price offering premium book value market price evidence indicated calculation book figure based appreciated value bank real estate holdings eliminated premium evidence significance market price showed kbw conceded market closed thin dominated fabi facts omitted statement indeed evidence going concern value bank excess per share common stock another fact never disclosed however conclusory directors statement may open attack evidence subject neither plaintiff control ready manufacture undue risk liability uncontrollable litigation allowing respondents opportunity recovery allegation misleading call high analysis comports holding marked nearest prior approach issue faced tsc industries sure reversed summary judgment borak plaintiff sued description proposed compensation minority shareholders offering substantial premium current market values held case undisputed facts conclusory adjective substantial materially misleading necessary matter law remand trial assumed description materially misleading within meaning rule actionable see tsc industries supra plaintiff permitted prove specific statement reason knowingly false misleadingly incomplete even stated conclusory terms reaching conclusion considered statements reasons sort exemplified misstate speaker reasons also mislead stated subject matter value shares statement belief may open objection former respect however solely misstatement psychological fact speaker belief says case example appeals alluded limited falsity observing jury certainly justified believing directors believe merger per share minority stockholders interest rather voted reasons retaining seats board question arises whether disbelief undisclosed belief motivation standing alone sufficient basis sustain action absent proof sort objective evidence described statement also expressly impliedly asserted something false misleading subject matter think proof mere disbelief belief undisclosed suffice liability nothing required proven case reverse reason one hand rare find case evidence solely disbelief undisclosed motivation without proof statement defective subject matter certainly hold director naked admission disbelief incompetent evidence proxy statement false misleading character unusual admission often stand alone substantially narrow cause action requiring plaintiff demonstrate something false misleading statement expressly impliedly declared subject hand recognize liability mere disbelief undisclosed motive without demonstration proxy statement false misleading subject authorize litigation confined solely one skeptical spoke impurities director unclean heart stedman storer supp sdny dealing think cross line blue chip stamps sought draw true liability recognized rest actual hypothetical psychological fact temptation rest otherwise nonexistent action psychological enquiry alone threaten sort strike suits attrition discovery blue chip stamps sought discourage therefore hold disbelief undisclosed motivation standing alone insufficient satisfy element fact must established petitioners position assumes relationship conclusory judgment underlying facts described part supra thus citing radol thomas supp sd ohio petitioners argue even conclusory statements reason belief actionable confine liability instances proxy material fails disclose offending statement factual basis justification holding shareholders entitled judicial relief given evidence stated reason proxy recommendation misleading opportunity draw conclusion answer argument rests difference merely misleading statement one materially misleading statement always lose deceptive edge simply joinder others true true statements may discredit one obviously risk real deception drops nil since liability must rest deceptiveness materiality well significant enough important reasonable investor deciding vote see tsc industries petitioners perfectly firm ground insofar argue publishing accurate facts proxy statement render misleading proposition unimportant ground liability every mixture true neutralize deceptive take financial analyst spot tension one whatever misleading remain materially liability follow gerstle sufficient overtones might picked sensitive antennae investment analysts cf milkovich lorain journal defamatory assessment facts actionable even facts underlying assessment accurately presented point proxy statement inform challenge reader critical wits inconsistency exhaust misleading conclusion capacity influence reasonable shareholder action fail element materiality suffice say evidence invoked petitioners instant case fell short compelling jury find facial materiality misleading statement neutralized directors claim example made explanatory disclosure reasons recommendation said keep seats following merger failed mention least one admitted testimony expectation without supporting proposal app although proxy statement speak factually merger price describing higher share prices recent sales failed even mention closed market dominated fabi none disclosures directors point anything record shows another fact statement invoke arguably even worse claim merger price exceeded book value controverted seen already evidence higher book value directors conceded reflecting appreciation bank real estate portfolio finally solicitation omitted mention bank value going concern share merger price sum compelling case statement immateriality accuracy iii second issue us left open mills electric whether causation damages compensable implied private right action demonstrated member class minority shareholders whose votes required law corporate bylaw authorize transaction giving rise claim case borak address requisites causation define class plaintiffs eligible sue general holding private cause action available shareholder class acquired greater clarity definite concept causation mills addressed sufficiency proof misstatements proxy solicitation responsible damages claimed merger subject complaint although majority stockholder mills controlled half corporation shares vote needed approve merger proposal proxies obtained merger carried minority shareholders brought borak action mills question arose whether plaintiffs burden demonstrate causation damages traceable violation required proof defect proxy solicitation decisive effect voting mills avoided evidentiary morass followed requiring individualized proof enough minority shareholders relied upon misstatements swing vote instead held causation damages material proxy misstatement established showing minority proxies necessary sufficient authorize corporate acts given accordance tenor solicitation described causal relationship calling proxy solicitation essential link accomplishment transaction ibid case found solicitation essential contrasted one addressed class minority shareholders without votes required law bylaw authorize action proposed left another day decide whether minority shareholder demonstrate causation case respondents address mills open question proffering two theories proxy solicitation addressed essential link mills causation test argue first link existed essential simply vbi fabi unwilling proceed merger without approval manifested minority shareholders proxies obtained without solicitation express misstatements misleading omissions reasoning causal connection depend desire avoid bad shareholder public relations essential character causal link stem enforceable terms parties corporate relationship one party apprehension ill alternative respondents argue proxy statement essential link directors proposal merger means satisfy state statutory requirement minority shareholder approval condition saving merger voidability resulting conflict interest part one bank directors jack beddow voted favor merger also serving director fabi brief respondents terms code ann minority approval disclosure material facts transaction director interest one three avenues insulate merger later attack conflict two others ratification bank directors like disclosure proof merger fair corporation theory causation depend use proxy statement purpose obtaining votes sufficient bar minority shareholder commencing proceedings declare merger void although respondents proffered theories establishing chain causal connection proxy statement claimed essential link neither theory presents proxy solicitation essential sense mills causal sequence solicitation links directors proposal votes legally required authorize action proposed consequence theory adopted extend scope borak actions beyond ambit mills expand class plaintiffs entitled bring borak actions include shareholders whose initial authorization transaction prompting proxy solicitation unnecessary assessing legitimacy extension expansion calls application fundamental principles governing recognition right action implied federal statute first fact considered focus borak opinion rule emerged years since borak mills came recognition private right action violating federal statute must ultimately rest congressional intent provide private remedy touche ross redington corollary follows breadth right recognized general matter grow beyond scope congressionally intended rule corollary present respondents serious obstacle find manifestation intent recognize cause action class plaintiffs broad respondents theory causation entail first blush might seem otherwise borak certainly ignore matter intent opinion adverted statutory object protection investors animating congress intent provide judicial relief necessary quoted evidence intent house senate committee reports borak probe congressional mind however never focused squarely private rights action distinct substantive objects legislation one member borak later characterized implication private right action resting modestly act exclusively procedural provision affording access federal forum bivens six unknown fed narcotics agents harlan concurring judgment internal quotation marks omitted see generally loss fundamentals securities regulation ed see also touche ross supra fact importance enquiring specifically intent authorize private cause action became clear later see cort ash later still touche ross intent accorded primacy among considerations might thought bear decision recognize private remedy dealing claimed private right act explained central inquiry remains whether congress intended create either expressly implication private cause action looking act text legislative history mindful heightened concern reveals little help toward understanding intended scope private right according house report congress meant promote free exercise stockholders voting rights protect air corporate suffrage abuses exemplified proxy solicitations concealed senate report called real nature issues settled subsequent votes true reports like language act carry clear message congress meant protect investors misinformation rendered unwitting agents damage true congress reticent indications far protection might depend private action response reticence may course claim enforced effectively sake intended beneficiaries without participation private litigants borak supra force argument inferred congressional intent depends degree need perceived congress trouble inferring congressional urgency depend implied private actions deter violations congress expressly provided private rights action act see congressional silence thus serious obstacle expansion cognizable borak causation however necessarily insurmountable barrier first effort recent years expand scope action originally inferred act without conclusive guidance congress see blue chip stamps manor drug stores may look earlier case proper response plea expansion accepted proposition legal structure private statutory rights developed without clear indications congressional intent contours structure need frozen absolutely result demonstrably inequitable class plaintiffs claims comparable previously recognized faced case claim equality rounding scope implied private statutory right action looked policy reasons deciding outer limits right lie may less face respondents pleas private remedy place footing shareholders votes necessary initial corporate action blue chip stamps set example worth recalling preface specific policy analysis consequences recognizing respondents first theory desire avoid minority shareholders ill suffice justify recognizing requisite causality proxy statement needed garner minority support recalled blue chip stamps raised concerns practical consequences allowing recovery act rule evidence merely hypothetical buyer seller might done set facts never occurred foresaw expanded liability turn hazy issues inviting testimony strike suits protracted discovery little chance reasonable resolution pretrial process good reasons deny recognition claims absence apparent contrary congressional intent threats speculative claims procedural intractability inherent respondents theory causation linked directors desire cosmetic vote causation turn inferences corporate directors thought done without minority shareholder approval unneeded authorize action subsequently dissatisfied minority shareholder virtual license allege managerial timidity doomed corporate action ostensible approval induced misleading statement opposing claims hypothetical diffidence hypothetical boldness part directors probably provide enough depositions usual case preclude judicial resolution short credibility judgments come trial reliable evidence seldom exist directors understand prudence making statements plans proceed even without minority endorsement discovery quest recollections oral conversations odds official pronouncements hopes finding support ex post facto guesses much heat directors stood absence minority approval issues hazy litigation protracted resolution unreliable given choice reject theory causation raised prospects reject one theory causal necessity derived requirements virginia law dealing postmerger ratification seeks identify essential character proxy solicitation function obtaining minority approval preclude minority suit attacking merger since link said step process barring class shareholders resort state remedy otherwise available theory causation rests upon proposition policy provide federal remedy whenever false misleading proxy statement results loss state law shareholder plaintiff state remedy enforcement state right respondents agree suggestions counsel sec fdic causation recognized example minority shareholder induced misleading proxy statement forfeit right appraisal remedy voting approve transaction cf swanson american consumers industries shareholder deterred obtaining order enjoining damaging transaction proxy solicitation misrepresents facts injunction properly issued cf healey catalyst recovery pennsylvania alabama farm bureau mutual casualty american fidelity life ins cert denied respondents claim case predicate recognizing causal link exists code ann sets conditions merger may insulated suit minority shareholder seeking void account beddow conflict case however require us decide whether provides cause action lost state remedies since indication law facts us proxy solicitation resulted loss contrary appears case assuming soundness respondents characterization proxy statement materially misleading terms virginia statute indicate favorable minority vote induced solicitation suffice render merger invulnerable later attack ground conflict statute bars shareholder seeking avoid transaction tainted director conflict inter alia minority shareholders ratified transaction following disclosure material facts transaction conflict code ann assuming material facts merger beddow interests accurately disclosed minority votes inadequate ratify merger state law loss state remedy connect proxy solicitation harm minority shareholders irredressable state law claim statement misled respondents entertaining false belief chance upset merger time bringing suit run iv judgment appeals reversed ordered footnotes shall unlawful person use mails means instrumentality interstate commerce facility national securities exchange otherwise contravention rules regulations commission may prescribe necessary appropriate public interest protection investors solicit permit use name solicit proxy consent authorization respect security exempted security registered pursuant section title rule provides relevant part solicitation subject regulation shall made means proxy statement containing statement time light circumstances made false misleading respect material fact omits state material fact necessary order make statements therein false misleading cfr directors chosen issue statement instead proxy solicitation subject sec antifraud provision analogous rule see cfr see also appeals reversed district however refusal certify class minority shareholders sandberg action consequently ruled petitioners liable bank former minority shareholders per share tsc industries northway reserved question whether scienter necessary liability generally reserve still petitioners also wrong argue construing statute allow recovery misleading statement merger fair minority shareholders tantamount assuming federal authority bar corporate transactions thought unfair group shareholders course true said santa fe industries green orporations creatures state law investors commit funds corporate directors understanding except federal law expressly requires certain responsibilities directors respect stockholders state law govern internal affairs corporation quoting cort ash impose responsibility false misleading proxy statements although corporate transaction fairness federal concern proxy statement claim fairness presupposes factual integrity federal law expressly concerned preserve cf craftmatic securities litigation kraftsow petitioners fail dissuade us recognizing significance omissions arguing effectively require accuse breach fiduciary duty subjection liability misleading others raise duty enforces duty refrain misleading occasion decide whether directors obligated state reasons support merger proposal question statement make carried option deceive cf berg first american bankshares app proxy statement purported disclose factors considered obligation portray accurately respondents argue issue raised appeals however addressed availability right action minority shareholders respondents circumstances concluded respondents entitled sue suffices purposes passed issue presented stevens department treasury cf cohen cowles media ante particularly issue believe state evolving definition uncertainty louis praprotnik plurality opinion quoting newport fact concerts one importance administration federal law praprotnik supra citing decision schlick cement petitioners characterize respondents proffered theories examples sue facts shame facts theories brief petitioners reply brief petitioners sue fact general fact material sue decision sue decision decision shareholder whether institute representative derivative suit alleging cause action gelb rule santa fe herein sue facts shame facts matters rev quoting borden sue fact rule mandates disclosure avoid litigation state courts sec pp see also note causation liability private actions proxy violations yale discussing theories causation shame facts said facts disclosed shamed management abandoning proposed transaction see schlick supra see also gelb supra district appeals grounded causation theory virginia law required solicitation proxies even minority shareholders condition consummating merger see app provisions code ann said required bank solicit minority proxies actually compelled submission merger vote shareholders meeting preceded issuance informational statement thus need statute solicit proxies although undisputed proxy solicitation sufficed satisfy statutory obligation provide statement relevant information theory causation depend use proxy statement satisfy statutory obligation even though proxy solicitation required respondents disclaimed reliance theory object enquiry extend question holding either case borak mills electric date done past see touche ross redington point simply recognize hurdle facing litigant urges us enlarge scope action beyond point reached mills parting company us point justice kennedy emphasizes respondents particular case substantiated plausible claim petitioners proceeded without minority approval fabi attempted merger maryland subsidiary failed year events question subsidiary directors rejected proposal inadequate share price evidence fabi desire avoid renewal adverse comment issue us however whether recognize theory causation generally decision rests apprehension ensuing litigation exemplified cases far less tractable respondents burden justify recognition causation beyond scope mills must addressed emphasizing instant case confronting risk inherent cases expected characteristic causal theory adopted opinion dissenting point justice kennedy suggests materiality virginia law might defined differently materiality standard cases resulting denial state remedy even solicitation materially misleading federal law respondents however present nothing suggest might respondents claim application theory lost state remedies avail clear example state appraisal remedy lost violation case respondent weinstein others seek appraisal virginia law virginia courts claims rejected explicit grounds although tatutory appraisal considered exclusive remedy stockholders opposing merger app pet cert see adams distributing cert denied dissenting stockholders bank mergers even solitary remedy available code specifically excludes bank mergers application virginia appraisal statute app pet cert weinstein claim virginia wrong rely claim way thus violation effect availability appraisal remedy never one justice scalia concurring part concurring judgment understand opinion statement opinion directors high value shares produce liability fact high value directors knew produce liability fact high value directors honestly believed otherwise statement directors voted accept proposal believe offers high value produce liability fact directors genuine motive quite different except produce liability proposal fact offer high value directors knew agree however every sentence word opinion refers motivation directors actions leads us psychic thicket sometimes sentence actually represents facts facts rather opinions event need done apply normal rules liability think situation view statement issue case fairly read affirming separately fact directors opinion accuracy facts upon opinion assertedly based reads follows plan merger approved board directors provides opportunity bank public shareholders achieve high value shares app pet cert present case proceed therefore think normal principles governing misrepresentation fact apply ii recognize disallowance part action misrepresentation belief entirely contrary modern law torts authorities cited make plain see vulcan metals simmons mfg keeton dobbs keeton owen prosser keeton law torts ed cited ante problem departing modern tort law regard think federal cause action issue never enacted congress see thompson thompson scalia concurring judgment hence narrow make within bounds rationality faithful task justice stevens justice marshall joins concurring part dissenting part agree substance parts ii opinion agree reasoning part iii mills electric held finding terms merger fair constitute defense corporation shareholder action alleging merger accomplished using misleading proxy statement fairness transaction according mills matter considered remedy stage litigation question causal connection proxy solicitation harm plaintiff shareholders say need supplement requirement appeals requirement proof whether defect actually decisive effect voting finding materiality shareholder made sufficient showing causal relationship violation injury seeks redress proves proxy solicitation rather particular defect solicitation materials essential link accomplishment transaction objective test avoid impracticalities determining many votes affected resolving doubts favor statute designed protect effectuate congressional policy ensuring shareholders able make informed choice consulted corporate transactions cf union pac chicago supp loss securities regulation ed supp need decide case whether causation shown management controls sufficient number shares approve transaction without votes minority even situation management finds necessary legal practical reasons solicit proxies minority shareholders least one held proxy solicitation might sufficiently related merger satisfy causation requirement see laurenzano einbender supp justice kennedy justice marshall justice blackmun justice stevens join concurring part dissenting part general agreement parts ii majority opinion agree views expressed part iii regarding proof causation required establish violation respect dissent part iii opinion review jury finding causation complicated distinction reliance causation addressed explicit terms earlier stages litigation petitioners effect though recognized distinction accepted district essential link instruction reliance causation agree issue preserved review appeals considered essential link presumption rejecting petitioners argument sandberg must show reliance demonstrating read proxy voted favor proposal took specific action reliance upon appeals parties brief panel address possibility nonvoting causation theories suffice allow recovery petitioners argue sandberg must demonstrate reliance part part shareholders matter causation however must addressed ii severe limits places upon possible proof nonvoting causation private action justified neither precedents case courts appeals limits said flow shift approach implied causes action occurred since recognized implied private action case borak ante acknowledge exercise caution creating implied private rights action must respect primacy congressional intent inquiry see ante implied cause action well accepted cases become established part securities laws however enforce meaningful remedy unless eliminate altogether phrases must consider causation question light underlying policy reasons deciding outer limits right lie ante see blue chip stamps manor drug stores according acceptance nonvoting causation theories extend scope borak actions beyond ambit mills ante mills electric purport limit scope borak actions mills indicates courts applied nonvoting causation theories borak actions least past years see also loss fundamentals securities regulation ed extent analysis considers purposes underlying avowed aim limit cause action undue emphasis upon fears speculative claims procedural intractability ante result sort guerrilla warfare restrict implied right action analysis adopted today guide congress charged enforcement securities laws stand forewarned unresolved questions concerning scope causes action likely answered favor defendants seems assume based upon mills reserving question sandberg bears special burden demonstrate causation public shareholders held percent stock first american bank virginia bank justice stevens right reject theory first american bankshares fabi virginia bankshares vbi retained option back transaction dissatisfied reaction minority shareholders concerned merger result liability violation duties minority shareholders merger agreement conditioned upon approval shareholders app vbi voted shares merger decided extent distinction cases minority shareholders voted transaction causation must proved nonvoting theories suspect minority shareholders identified post hoc inquiry real question whether injury shown effect nondisclosure entire merger process including period votes cast distinction presumes majority shareholder vote favor management proposal even proxy disclosure suggests transaction unfair minority shareholders board directors majority shareholder breach fiduciary duties minority majority shareholder votes transaction order comply duties fear liability upon concluding transaction injure reputation business characterized nonvoting causation course majority shareholder dominates voting process case may prefer avoid embarrassment voting proposal may cancel meeting shareholders vote taken practical purposes result full disclosure transaction go forward resulting injury minority shareholders avoided distinction voting nonvoting causation create clear legal categories iii decision mills electric supra rested upon impracticality attempting determine extent reliance thousands shareholders alleged misrepresentations omissions misstatement omission proxy statement violate unless substantial likelihood reasonable shareholder consider important deciding vote tsc industries northway minority shareholders hold sufficient votes defeat management proposal misstatement omission likely considered important deciding vote exists likely causal link proxy violation enactment proposal one justify recovery minority shareholders damages resulting enactment management proposal sake argument accept distinction voting nonvoting causation must determine whether mills essential link theory applies majority shareholder holds sufficient votes force adoption proposal merit essential link formulation rests upon likelihood causation eliminates difficulty proof even minority lacks votes defeat proposal factors weigh favor finding causation long solicitation proxies essential link transaction argues nonvoting causation theory turn hazy issues inviting testimony strike suits protracted discovery little chance reasonable resolution pretrial process ante citing blue chip stamps description fit case sound objection event causation inquiry requires consider hypothetical universe adequate disclosure made indeed analysis inevitable almost suit invited compare causation inquiry intractable balance convinced likelihood causation exists supports elimination requirement plaintiff prove material misstatement omission caused transaction go forward otherwise halted voted usual rule mills difficulties proving disproving causation anything greater minority lacks sufficient votes defeat proposal presumption assist courts managing circumstance direct proof rendered difficult see basic levinson discussing presumptions securities law authority whatsoever limiting protecting minority shareholders whose numerical strength permit vote proposal one chief purposes protection investors case borak lack strength vote proposal need disclosure voting process involves casting ballots also formulation withdrawal proposals minority right block vote action threat adverse consequences negotiation increase price proxy rules support deliberative process practicalities result causation sufficient support recovery facts case us prove point sandberg argues material facts disclosed fabi bank likely withdrawn revised merger proposal evidence record might available upon remand see infra meets reasonable requirement specific nonspeculative proof fabi wanted friendly transaction price viewed high reasonable shareholder accept app management expressed concern transaction result loss support bank community important although fabi votes push proposal wanted favorable response minority shareholders human element involved transaction nature fabi attempted show minority shareholders fair theory fabi pursued transaction full disclosure provided shareholders realized inadequacy price supported trial testimony also notes meeting bank board approved merger inquiry causation proceed opposing claims hypothetical diffidence hypothetical boldness ante examination evidence type finds acceptable determination directors statements reasons lead liability discussion board meeting focused upon matters keep pr afloat prevent adverse reac tion app demonstrating directors concern unpopular merger proposal injure bank year virginia merger fabi failed almost identical transaction attempt freeze minority shareholders maryland subsidiary fabi retained keefe bruyette woods kbw transaction well kbw given opinion fabi price fair subsidiary board directors retained adviser concluded price offered fabi inadequate maryland transaction failed directors maryland bank refused proceed despite minority inability outvote fabi pressed deal virginia transaction fabi decided retain kbw beddow sat boards fabi bank discouraged bank hiring financial adviser fear maryland experience repeated bank received independent advice directors bank testified voted approve transaction price demonstrated unfair minority approval bank board directors facilitated fabi representation transaction also approved minority shareholders facts alone suffice support finding causation sandberg might yet evidence link nondisclosure completion merger fabi executive robert altman bank chairman drewer met day shareholders meeting vote taken notes produced petitioners suggested drewer received shareholder objections price considered postponing meeting obtaining independent advice valuation altman persuaded go forward without cautionary measures information produced course discovery kept jury grounds privilege sandberg attacked privilege ruling five grounds appeals light ruling favor sandberg however panel occasion consider admissibility evidence though require shareholder present evidence causation case demonstrates nonvoting causation theories quite plausible misstatement omission material damages sustained minority shareholders serious professor loss summarized holdings substantial number cases even minority alone vote transaction minority stockholders better position protect interests full disclosure unfavorable minority vote might influence majority modify reconsider transaction question schlick cement stockholders appraisal rights state law stock listed new york stock exchange advanced two additional considerations market informed even rapacious controlling management might modify terms merger want hang dirty linen line thereby expose suit securities commission action terms reputation future takeovers fundamentals securities regulation omitted iv majority avoids question whether plaintiff may prove causation demonstrating misrepresentation omission deprived remedy think question difficult whole point federal proxy rules support principles corporate governance think avoid issue orders judgment petitioners majority asserts respondents show loss remedy material facts merger beddow interests accurately disclosed minority votes inadequate ratify merger state law ante theory requires us conclude virginia statute governing director conflicts interest code ann incorporates definition materiality federal proxy rules find support proposition definitions sandberg may lost remedy know disclosure minority shareholders price per share may satisfy virginia requirement case approval minority without full disclosure may deprived sandberg ability void merger events theory merger voidable absent minority shareholder approval far speculative theory fabi bank called transaction even possibility support remand lower courts yet consider question well positioned institution provide definitive resolution questions kind difficulty knowing happened hypothetical universe full disclosure suggests resolv doubts favor statute designed protect order effectuate congressional policy ensuring shareholders able make informed choice consulted corporate transactions mills affirm judgment appeals district petitioners asked jury instructions requiring respondent sandberg prove causation element cause action app district gave instruction close substance requested fourth element count sandberg must establish conduct defendants proximately caused damage plaintiff order act omission considered proximate cause damage must substantial factor causing damage damage must either direct result reasonably probable consequence act omission order satisfy element plaintiff need prove defendants conduct cause plaintiff damage sufficient find actions defendants substantial significant contributing cause damage plaintiff asserts suffered find necessary bank solicit proxies minority shareholders order proceed merger may find proxy solicitation essential link accomplishment transaction instructed defense votes minority stockholders needed approve transaction